Is Lifeplus a Pyramid Scheme? – A Slap of Truth

The Basics

• Company: Lifeplus
• Founder: Bob Lemon
• Products: personal care and nutritional supplement products
• Website: ww2.lifeplus.com
• Cost to be Considered an Active Member: 40 International Points

Lifeplus is an international MLM company that sells products like vitamins, antioxidants, nutritional shakes and supplements, and weight loss management products.

The company was founded by Bob Lemon in 1992 when he was still working as a pharmacist in the United States. After seeing “patterns in the customers at his pharmacies; often one treatment led to the need for another,” Lemon found himself devoted to nutritional science that soon drove him to formulate and manufacture his personalized supplements.

Lemon was then joined by Dr. Dwight McKee, a specialist in oncology. The two became firm friends and soon led to their collaboration on nutritional formulations.

After the duo’s collaboration that was further joined by others, the company soon became an MLM business company supplying nutritional products in various countries.

Nevertheless, the company’s products have been criticized by consumer advocates claiming that the products are “superfluous” so as the use of recommendation marketing (also known as MLM) in promoting its products in the market.

The company had also faced various scandals that rooted from some of the company’s Associates (consultants) that allegedly claimed that the products had capabilities of curing or alleviating diseases. Lifeplus Associates were also accused of recommending the company’s products for the treatment of cancer patients. The company, on the other hand, responded saying that “alleged product recommendations for people with cancer were not known to the company. Misconduct by Lifeplus partners is immediately sanctioned accordingly.”

Nevertheless, is it the only concern that you should think about before diving into this opportunity?

The Products

Lifeplus offers a wide variety of products promoting personal care and nutrition. Its products are in two categories: Nutritional Supplements and Personal Care. Some of the products that Lifeplus offers are Aloe Vera Caps, Anti-Stress Formula, Daily BioBasics, Slenderlean, Colon Formula, Daily Biobasics sachets, Vegan Vanilla Shake, and Digestive Formula.

The company claims that the products are made of “nature’s most effective combinations” and highlights that they are “all about the fusion of science and nature.”

Lifeplus further states on its website that “taking our lead from nature we use only the finest ingredients, applying our unique insight to combine them in a way that allows the nutrients to work in synergy and to increase their overall effectiveness. We take great care with every product, manufacturing them sensitively and sustainably, ensuring that their potency is retained throughout the process.”

Nevertheless, despite these claims and after the controversial claims made by the company’s Associates, the products are, of course, unproven. Since the US Food and Drug Administration (FDA) is not authorized to check dietary supplements and vitamins for safety before they are in the marketplace being used by consumers, products like Lifeplus’ are still considered unproven.

How Do I Join? How Do I Earn?

Unlike any other MLM opportunities that require individuals to have inventories, Lifeplus purely relies on literally “recommendation” marketing. The company’s products are not available on high streets and don’t circulate on market like any other MLM products being offered by various MLM folks personally. You can just purchase it through the company’s website. With this, Lifeplus brags that you don’t need to pay a single dollar for its membership as anyone can be an Independent Associate.

By purchasing any products that would give you 40 International Points (IP or the pointing system Lifeplus uses to designate value points to each of its products worldwide and acts like the company’s own currency), you would automatically be eligible to be an Associate wherein you would be provided your own Pin Number. Using this pointing system makes it easier for any Associates in different countries to determine the amount of required sales needed to make instead of using various currencies as a basis for sales quotas. Nevertheless, determining the IP value of each product could be confusing since there are lots of Lifeplus products. With this, Associates use a system called “Golpi” to keep track of their monthly IPs.

Once you accumulated the required 40 IP for a month, you would be eligible for commissions by “recommending” the products to three individuals that have to, of course, buy products worth 40 IP every month. The monthly 40 IP purchases would make your recruits active and, obviously, turns them into Associates as well. To secure your commission ALL your three recruits must remain active by purchasing 40 IP every month or you would lose out on commissions.

This is where the entire system turns into something questionable. Though you don’t have to pay for a monthly fee to be considered as an active Associate, have the option to refuse the monthly auto-ship to get your 40 IP, and the freedom to say no in fulfilling the needed 40 IP to earn commissions, many find the entire deal absurd.

Buying the products for yourself is truly a good thing if you really want the products. However, the fact that Lifeplus requires their own Associates to purchase products to be able to earn commissions is truly troubling.  It’s as if pushing office workers to buy their company’s products just to keep their jobs and continue. Again, anyone purchasing Lifeplus’ products has the option to pursue the path of being an Associate to earn commissions or not. Nevertheless, is it fair?

According to the Federal Trade Commission (FTC), “Product that is purchased and consumed by participants to satisfy their own genuine product demand – as distinct from all products purchased by participants that are not resold – is not in itself indicative of a problematic MLM compensation structure.” That is just purely true. Any Lifelplus’ Associates purchasing the products could use them to satisfy themselves. Nevertheless, is it fair to use this concept as one of the Associate’s requirements before receiving commissions? And most of all, doesn’t it make their Associates the main source of the company’s continuous income?

Compensation Plan

If there is one thing that I applaud about Lifeplus, it is the simplicity in its compensation plan. As many MLM companies nowadays try to coat their compensation plans in pure complexity just to mislead individuals into thinking that they could compensate well, it is impressive that there are still MLM companies out there like Lifeplus that use simple structure in compensation plans.

According to the company, here are the ways an Associate could earn.

• Referral Bonuses

Since there is no need for an Associate to store items for his or her inventory, the only main way for an Associate to earn is through referrals. This is where Lifeplus differs from other MLM companies in the market that let you receive bonuses through retail sales.

To be eligible for Referral Bonus (RB), you need to be considered active by purchasing products worth 40 IP for your Personal Volume (PV or your personal purchases that give you IP). Then, to gain the RB, you need to directly recruit three other individuals who would purchase 40 IP every month as well. These three individuals would be your Level 1 that would give you 25 percent commission from their collective IP.

Obviously, in order for your Level 1 to receive their own commissions as well, your personal direct referrals in that level must recruit three individuals each. This would then form your Level 2 and gives you 10 percent commission.

As your downline grows, individuals in your Level 2 would recruit three individuals each and your Level 3 would later form and you would receive your 5 percent commission. Hence, you could earn at least 40 percent commissions from all the collective IPs of your downline.

• Leadership Bonus

Receiving bonus from your referrals is a good thing. Nevertheless, if you want to continue benefiting beyond your Level 3, you need to exceed the required 40 IP. Also, you need to produce more numbers of personal or direct recruits and increase the IP Group Volume (GV or the collective IP of your downline members). By doing this, you would be eligible for Leadership Bonus (LB).

LB is divided into four levels: Bronze (requires 100 IP PV, three active legs, and 3000 IP GV), Silver (requires 100 IP PV, six active legs, and 6000 IP GV), Gold (requires 150 IP PV, nine active legs and 9000 IP GV) and Diamond (requires 150 IP PV, 12 active legs and 15,000 IP GV).

This makes it possible to earn more commissions beyond your Level 3. The commission percentage starts at 3 percent for the Bronze Level up to 12 percent for the Diamond Level.

• Monthly Pool Bonus

You could also benefit by continuously bringing new recruits every month. This is where Monthly Pool Bonus (MPB) works.

In order to get this bonus, you need to help your personal recruits in “remaining” active. Thus, if you have three active recruits, they need to stay active or you’ll lose the chance to have this bonus.

You get the MPB by personally sponsoring three or more individuals in one calendar month. Hence, if you would be able to produce three new recruits while maintaining your current three Level 1 recruits active, you would get MPB which is a monthly pool consisting of 1 percent of company sales.

• Leadership Development Bonus

If you want to continue nurturing your downline, you should also help your downline to be promoted to higher ranks. By doing it, you wouldn’t just go beyond the first three levels but you could go further than the compensations being served by LB. This is the Leadership Development Bonus (LDB).

Compared to other MLM compensation plans, LDB somehow acts as your generation bonus. In order to do it, you must further help your downline to branch out by helping your recruits to be promoted in higher ranks.

LDB has three levels: the 1 Star Diamond rank (requires 150 IP PV, 12 active legs, 1 Diamond leg, 2 Bronze legs, and 15,000 IP GV), 2 Star Diamond rank (requires 150 IP PV, 12 active legs, 2 Diamond legs, 1 Bronze leg, and 20,000 IP GV) and 3 Star Diamond rank (requires 150 IP PV, 12 active legs, 3 Diamond legs, and 25, 000 IP GV).

With that, the 1 Star Diamond rank gets 3 percent bonus, 2 Star Diamond rank gets 3 percent bonus, and 3 Star Diamond rank gets 2 percent bonus as an extension bonus of the previous level of LB.

Income Disclosure Statement

So, you’re probably thinking now of the estimated earnings of a Lifeplus Associates. Unfortunately, Lifeplus’ income disclosure statement isn’t available for the public to scrutinize. I know just how frustrating that is. Nevertheless, it is not new in the industry as there are other MLM companies that refuse to disclose the figures of their consultants. But why? Why do companies hide such information if it could help them prove how prosperous life is under them? Well, that’s the thing. Income disclosure statements can prove two things: a promising life in an MLM company or a disastrous marketing journey in the field. So why would a company refuse to show its figures if it serves a prosperous life to its members? You know what the answer is.

Nevertheless, let us try to have theoretical calculations of an average Associate’s earning and see if it would somehow break the assumptions we have.

Lifeplus uses its pointing system IP by designating value points in each product it has. Each average Associate, to be considered active and eligible for compensation, needs to at least produce 40 IP. So, how much does an Associate need to spend to get the 40 IP needed? Let use the Lifeplus’ Be Focused – Mixed Berry Flavor which, according to Lifeplus’ price list, has 40 IP and costs $51.30. Hence, the Associate needs to purchase a product that at least costs $51.30.

The company’s compensation plan indicates that an active Associate can get 25 percent commission on his or her Level 1, 10 percent on Level 2 and 5 percent on Level 3. If we would say that all of this Associate’s downline managed to produce three recruits each, he or she would have three Associates on his Level 1, nine Associates on Level 2, and 27 Associates on Level 3. This would give him a total of 39 Associates under him. If each would spend $51.30 a month to get the required 40 IP, that Associate would have $153.9 on his Level 1, $461.7 on Level 2, and $1,385.1 on his Level 3. Using the RB, the Associate at the top of the system would have $38.475 (25 percent commission) from his or her Level 1, $46.17 (10 percent commission) from his or her Level 2, and $69.255 (5 percent commission) from his or her Level 3. Hence, an average Associate that is able to reach the first three levels of RB earns $153.9 a month in RB if and only IF that Associate has a set of complete members in his or her downline. Again, $153.9 and that’s just an estimation. There is a possibility of your downline members purchasing products with higher IP and prices. Again, possibility. Nevertheless, the real question is how long would it take before your team branches out? Would you be able to do it in a month? And most of all, can you survive as an average Associate earning $153.9 a month?

Diving in: Is Lifeplus a Pyramid Scheme?

Before we get into this, we must first identify the difference between a legit MLM and an illegal pyramid scheme. So, really, what are the differences between the two?

Pyramid scheme relies on the investment coming from the streams of recruits. Believing that there is profit being made through non-existing products and services being promised by the scheme, these recruits would also recruit other individuals to earn back their investments. This would then make a big pyramid structure as flow of recruits continues to expand the bottom of the pyramid. The investment being brought in would then support the system with the money starting at the bottom and flowing to the top of the structure. However, such an idea is disastrous as there is a limitation of possible recruits especially when the market gets saturated. This would soon cause the predictable fall of the scheme with those at the top of the pyramid escaping with large sums of commissions and those at the bottom getting little to nothing.

On the other hand, MLM produces profit by selling products and services. However, the fact that its structure reflects the same form of pyramid scheme makes it an awful business model. Just like a pyramid scheme, MLM compiles its recruits by forming a pyramid structure. In this, those at the top of the system suck away portions of earnings of those at the bottom by calling it “commission.” Despite the fact that the word is branded as one of the perks in the MLM industry, it actually serves as a burden for those who are getting robbed of their hard-earned sales.

There are also pyramid schemes hiding under the shadow of MLM by using products and services as a disguise. Such companies are recruitment-driven wherein the participants are being forced to purchase the products of the company to produce the steady flow of income. This is where these participants act as customers themselves. Apparently, this is not a sustainable way for any company as the system itself serves as a burden for all participants. This would soon end with MLM individuals to quit and would, most possibly, cause the fall of the MLM structure.

So, is Lifeplus a pyramid scheme? Well, I can’t tell you the thing you want to hear no matter how blunt I want to say it. Anyway, if Lifeplus is illegal, it would have been shut down by FTC now, right? Well, if you still have your doubts, I’ll leave it to you. After all, facts don’t lie, do they?

Weighing Things: Pros and Cons

Before you make your decision of diving into this opportunity, let us first list the pros and cons you might want to consider.

Pros

1. Lifeplus offers a wide variety of products. This means that you and your prospects have a lot to offer in the market.
2. Lifeplus has a very comprehensible compensation plan. It is one of the good points of a decent MLM company.
3. You don’t need to pay for a membership to join. You just need to meet the required 40 IP by purchasing the products yourself.
4. There is no need for you to have your inventory as the sales are made online.

Cons

1. Consumer advocates claim that Lifeplus’ products are “superfluous.” You might find it hard to convince people to buy your products. Remember, individuals tend to buy products that have relevance to them.
2. You need to purchase the products yourself just to be eligible for commissions. Hence, you need to spend in order to earn.
3. You need to convince your downline members to spend as well to make your commissions possible.
4. Though Lifeplus isn’t providing its income disclosure statement, just the theoretical estimations is enough to tell you what to expect once you join this opportunity.
5. Lifeplus is an MLM. Though it’s legal, do consider the fact that as a new recruit, your uplines would leech on your earnings through those so-called “commissions.”

Conclusion: The Verdict