A few years ago my wife was approached by someone to buy $45 bottles of juice called MonaVie. As a personal finance writer, I felt I had to research how this company could stay in business pricing the product at 10x more than competition with no proven benefits. Turns out the answer was that MonaVie is really selling people on a business recruiting others and requiring them to buy the juice as an ongoing expense to continue with the business opportunity. In the process, so much was about MonaVie was uncovered that I had to create MonaVie Scam. The website has provided tons of irrefutable evidence supported by reputable third parties that MonaVie is a grossly overpriced product, with little nutritional value, wrapped in a poor business opportunity that the FTC guidelines say is an illegal pyramid scheme, which is itself wrapped in illegal medical claims, supported by nonsensical “scientific” studies, and tied to a fraudulent charity. Fortunately there is now a class-action lawsuit against MonaVie as others have seen the evidence.
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In that MonaVie discussion, another MLM distributor introduced me to another MLM. It turns out that one was just as bad as MonaVie
Lastly, a couple of distributors mentioned One24 – a company that bills itself as a way to retire in 24 months – as long as you recruit enough people. It’s a classic pyramid scheme according to the FTC guidelines. So I wrote an article warning people that One24 is a scam.
On that One24 article a distributor brought up the name of ViSalus and the performance of their distributors. The name was familiar to me, so I searched through my email. I had one back from June from an Aretus Smith who asked me if it was legit or not. I get a couple of these requests a month for various companies and I don’t have the time to research them, so my answer wasn’t very good. Then six weeks ago Troy Brian sent an spam email to about 250 people “involved” in MonaVie (somehow the person selling this list has added my name and bunch of others illegally) telling them about a ViSalus challenge. So when Todd Hirsch brought up ViSalus on the One24 thread, I decided to spend a few minutes looking into it.
It didn’t take me long to find a lot of deceptive marketing designed to take advantage of consumers.
The first place on ViSalus’ website that got my attention was the section of white papers. The section above says, “Our white papers are designed to share the science behind our breakthrough products, methods, and sales innovations in order to help you become a more informed consumer.” I looked through the white papers and all but were by one guy: Michael Seidman. This fits the MonaVie mold of using Alexander Schauss to create research to market their products.
This is probably the time to point out that Michael Seidman has a past history of selling the public on products that aren’t shown to work. Here’s a quote from ScienceBlogs.com about a foot detox system, Aqua-Chi:
“When you ask me, ‘Does it sound crazy?’ My answer is ‘Yes,’ ” says Seidman. “But my response is also that it doesn’t necessarily mean it’s wrong just because we don’t understand it.”
I did a little more digging and found the rest of his quote here:
“Seidman adds that there could be a psychosomatic element, that ‘if you believe that you’re going to feel better and reduce your stress, then you probably will.'”
In other words, “if I lie to you and tell you this is going to help it probably will due to placebo effect.” This is the same thing we’ve seen MonaVie and just about every health MLM you can think of. Here’s another “doctor” with a checkered past essentially spilling the beans about scams like these.
I looked at a random white paper sample: “Age-related Hearing Loss and its Association with Reactive Oxygen Species and Mitochondrial DNA damage*” and I couldn’t find anything in it where a ViSalus product was tested in any way. As best I can tell there’s no product between this white paper and any ViSalus product. I clicked on a couple more and glanced through them and didn’t see any connection either. If there are any white papers on the list that are related to any ViSalus products, I hope someone will use the comments to point out the connection to me. More importantly, I hope someone writes ViSalus and tells them to clearly explain the significance of these papers to the products.
Update: CBC News in Canada has looked into ViSalus’ deceptive marketing claims and Canada regulatory boards are looking into it.
The Value of ViSalus Vi-Shake
I also looked into the value of the ViSalus Vi-Shake product. ViSalus gives a comparison chart here. It looks pretty convincing, doesn’t it. ViSalus makes it look even more convincing with a chart comparing a ViSalus Shake to nutrients found in everyday foods. Not surprising, it would cost nearly $103 in various foods to match the $1.85 cost of Vi-Shape and milk. The point is emphasized with this video:
This reminds of those Total commercials where you have eat 20 bowls of another cereal to match the nutrition in one bowl of Total. This YouTube video explains with a spreadsheet the deceptive marketing in detail.
However, much like those Total commercials when you dig a little deeper into Vi-Shape isn’t all that impressive. In fact, it looks like a poor purchasing decision. Take a look at the ingredients. It’s essentially a blend of protein (including soy, more on that later), the “fake” fiber that MonaVie adds, and a pretty good multi-vitamin.
As a personal finance writer, I want to get the most value for my dollar. So I was wondering if I could create something pretty close to the same for a cheaper cost. The price per serving of the ViSalus Vi-Shape mix is $1.50. Let’s look at what we can do for each of the main three areas (protein, fiber, and multi-vitamin):
- Protein – I was at Costco the other day and found this 6lb Bag of Muscle Milk for $37. It is 78 servings of 27g of protein. That’s a total of 2106 grams of protein in the bag. Vi-Shape has 12g of protein so this bag would provide you a little more than 175 servings of protein. If you have a Costco member, this amounts to $0.21 for the protein portion of the ViSalus. If you don’t have a Costco membership, the Amazon price is less than 28.5 cents for the same amount of protein in the Vi-Shape shake.
- Fiber – Doing a little more shopping on Amazon, I found Metamucil Clear and Natural Powder, which is a product that I have and use. It’s tasteless and can be added to just about anything. This 11.7 ounce bottle has 57 servings of 5 grams of fiber – the same amount in a ViSalus shake. The $11.84 price on Amazon boils down to 21 cents a serving – the same amount as the protein from Costco.
- Multivitamin – You can find multivitamins anywhere and they differ greatly in what they offer. You’ll almost never two that are exactly alike, so it is impossible to compare in the same way we compare 5 grams of fiber or 12 grams of protein. However, the body can only process so much of a vitamin at any given time and the rest goes out through the urine. I found a Centrum Multivitamin on Amazon for 7 cents a pill that has 30 vitamins and minerals compared to the 23 in a ViSalus shake mix. It’s worth noting what Consumer Reports says about vitamins: “But many people taking the pills don’t need to. Despite their popularity there’s virtually no evidence that they improve the average person’s health.”For all practical purposes, we’ll have to consider this equal, especially since they may be completely unnecessary to begin with. The same Consumer Reports article mentions that Kirkland (Costco’s brand) can bring the price down to under a nickel.
It’s very easy to mix the protein and fiber to make a shake mix. Get a gallon bag, pour the Metamucil Clear into it… then put 25 scoops of the Muscle Milk into it. You now have 57 servings of 12g protein and 5g fiber. Take a multivitamin with the shake… done. I answer to the name Lazy Man and not even I am that lazy. If you are a member of Costco, the homemade version will cost you $0.47 a serving ($0.21 + $0.21 + 0.05). If you are not a member of Costco and just want to buy off of Amazon it will cost you $0.57 ($0.29 + $0.21 + $0.07).
I’d rather pay about 50 cents a serving than $1.50 wouldn’t you? It may only seem like a dollar a day, but it adds up to $365 a year. That’s very little work for a large payoff.
The Value of ViSalus Vi-Crunch Cereal
In the comments below, Vogel did some good analysis on Vi-Crunch, the ViSalus cereal. In particular there was a comparison with Kashi GoLean cereal one that I brought on as I consider it to be a relatively healthy cereal with 9 gram of protein and 8 grams of fiber. Vi-Crunch has more protein (12g) and less fiber (5g), so I consider essentially a wash nutritionally. I will admit that Vi-Crunch has lower sugar and salt, so it probably takes like dirt… we’ll get back to this in a bit. For now, let’s leave it as a minor difference that at one serving per day isn’t going to make or break your diet. A serving of Vi-Crunch is 3/4 cup vs. a serving of Kashi that is 1 cup… so this is going to make Kashi seem like a lower calorie option, but it is simply less food.
Now let’s get a little “mathy.” Vogel breaks down the total weight of Vi-Crunch cereal noting that it is $50 (minus a penny) for 630g of cereal. A 23.1 ounce box of Kashi GOLEAN Crunch! Cereal is 604g and that’s going for $5.69 per box on Amazon (Vogel does similar math for Wal-Mart if that’s your store of choice). Doing the math it turns out that ViCrunch is 8.42 times more expensive than Kashi GoLean. Choosing Vi-Crunch is like going to the grocery store, seeing two similar products with similar nutrition, and grabbing the $25 one vs. the $3 one right next to it.
But it gets worse. Remember the part about Vi-Crunch having lower sugar and salt and probably not tasting as well. Well ViSalus solves that by creating ViCrunch Fusions, a topping that you can add to make it taste better. They are $11 for 7 servings… or $1.57 per serving, and that’s extra.
To do a little more math, let’s say that you eat 50g of cereal per serving (a number between ViCrunch’s and Kashi GoLean’s serving size). Standardizing on a serving size allows us to compare apples to apples. A 50g serving of ViCrunch is going to cost you $3.97 while a 50g serving of GoLean is going to cost you $0.47. If you add the ViCrunch Fusion topping, you’ll get a little more food, but it pushes your cost up to $5.54, which is well over ten times the cost of GoLean now.
Eat that bowl of ViCrunch everyday for a year and you’ll spend $2,022. Eat a bowl of GoLean Crunch and you’ll spend $171.55. If you were thinking about buying ViCrunch, reading this article just saved you $1850 this year alone. If you are a family of four, it saved you $7,401. For most people, if their boss gave them a $10,000 raise today, they’d take somewhere around that $7,401 after taxes. Do you want to blow $10,000 of your salary this year on cereal?
Oh one more thing. Amazon will give you free shipping if you spend $25. ViSalus can’t match that… shipping is extra.
Visalus Distributor: “But Our Product is Higher Quality”
This is what every MLM distributor says to justify the artificially high price of the product (see the aforementioned $45 bottle of MonaVie juice). It’s one thing to claim a product is high quality, but it is another thing to prove it. The blog Living la Vida Low Carb takes an in-depth look – it is well worth reading before you try the product. ViSalus contains soy, which is a controversial ingredient, especially for men. The blog asks the doctor who literally wrote the book on soy and she says that ViSalus’ response to why it uses soy is completely wrong. Furthermore, ViSalus uses the artificial sweetener sucralose and the company’s response on the blog is ridiculously convoluted.
In addition to the point about soy, it is an even cheaper ingredient that the whey protein. So if you are a female and determine that soy is a better option for you, substitute that in the above shake and you’ll save even more money.
The blog Young and Raw examines the ingredients of ViSalus and comes to the conclusion that “this product is total crap.”
ViSalus’ Illegal Health Claims
As I’ve found with the other health-based MLMs that I’ve followed, it’s quite common for the company and/or distributors to illegal push their food/supplement as medicine, by saying that it helps with some health condition. This illegal and misleading marketing isn’t the kind of thing that you see from companies selling products in your grocery store or supplement companies selling at GNC.
I had thought that ViSalus was fairly safe from these things. After all, the products are mostly for weight loss. So any kind of health claim could be easily traced to a person losing weight, which, as a reminder, can happen with any number of products (ViSalus brings nothing special or unique to the table). However, in watching this YouTube video about ViSalus allegedly clearing up a person’s kidney problems in days, it is quite clear that ViSalus is marketing their product illegally. The video is an episode of The Pyramid Thing, which is a series of videos following ViSalus distributors including their co-founder Nick Sarnicola. (Keep reading and you’ll find that the video is accurately named as Sarnicola is running an illegal pyramid scheme according to the FTC’s guidelines.)
Lest you be tempted to try the product for any health condition, I caution you against it. After all MLM health products don’t work and if you think that’s just my opinion, a non-profit consortium of doctors asked me if they could republish my article on their site: You can read it here.
The ViSalus BMW Scam
Whenever you hear about the business of ViSalus, you’ll like come across three letters: BMW. Prospective distributors are getting pitches of “free BMWs.” However, that could be further from the truth. The BMWs are not free. If you were to qualify for a BMW from ViSalus, you’d be wise to refuse it. Why? I’ll get to that in a second. First, let me cover…
The ViSalus BMW Pitch
This is the pitch straight from the compensation plan:
“Since ViSalus™ knows our distributors are people who align themselves with only the BEST, and aspire to live the ‘Vi–Life’, it is only fitting that our producers be recognized in a way that echoes their commitment to excellence: The ViSalus Bimmer Club!
By reaching the level of Regional Director or higher, ViSalus Distributors qualify to join the prestigious Bimmer Club and become eligible for a monthly BMW Bonus that goes toward a ViSalus–branded black BMW.”
Take a minute and notice the language here: “the BEST”, the “aspire to live the ‘Vi-Life'”, “the prestigious Bimmer Club.” How could you not want to be a part of that, right?
So why should you refuse the BMW? The fine print shows that they’ll give you the $600/mo. only if you maintain the level of sales in your downline. If you understand the churn rate in MLM, you know that somewhere between 60% and 90% of your downline will drop out each year. Thus maintaining the level for the BMW is difficult. That itself wouldn’t be a problem, except for one little thing, The BMW is in your name.
If sales drop, you need to come up with the payments on the car. This can be especially difficult because, well, your sales have dropped so you are earning less. Distributors are finding that their credit gets ruined because the BMW got them saddled with an expense that they couldn’t afford. The alternative to the BMW is to take a $300/mo. bonus in cash. It isn’t the flashy BMW, but you avoid the strings attached.
It reminds me of the mortgage lenders in 2004 and 2005 offering people adjustable rate loans to give them low initial payments. Many people found that this allowed them to afford their dream house (i.e. “the BEST”, the “prestigious house”), but when the rates re-adjusted they had big financial problems. The people who were smart didn’t get seduced by the dream and made the wise financial decision with minimal risk.
If ViSalus was a reputable company looking to do the right thing for its distributors, they’d offer them the option to assume the lease if their sales don’t qualify. They don’t do that. Instead the plan seems to saddle distributors with an expensive BMW so that they have extra motivation to make sure that their sales don’t drop. Finally, you don’t have to drive around in a big advertisement.
The ViSalus Challenge
A lot of commenters have suggested that ViSalus creates a community with a common goal and that buddy helps people lose weight. They specifically point to the ViSalus 90-Day challenge. I don’t argue that point at all… but I have a better way.
There’s a free website called SparkPeople that is health community and it has challenges as well. Additionally you could also use another site StickK.com (my article on it: StickK to Your Goals) to keep you motivated.
There’s no need to overpay for product or be an accomplice in a pyramid scheme to reach your health goals.
Is ViSalus a Pyramid Scheme?
The answer, in my opinion, is yes! I realize this is a serious accusation, but follow me on this. First watch this video about the “ViSalus Refer 3, Get Next Month Free!” program:
Before I get to the pyramid scheme part let’s get to the false claim made in the first 20 seconds, “It allows everybody… do it at absolutely no cost.” It is mathematically impossible for everybody to do it at no cost. For every single person doing it at no cost, there must be at least 3 times the product paid for from others. There is no situation where everyone gets the product for free. Of course, it would put the company out business, so that’s not to be expected, but this false marketing shouldn’t be allowed.
If you understand how it works, you end up referring other people to buy product. In the video, the spokesman makes a special point of saying that you are referring “customers, not distributors” to buy kits. However, those “customers” are in fact distributors as they can do the same. At the 3:30 mark it is confirmed by the spokesperson saying (paraphrasing) “if one of your customers refers three customers and get their kit for free, you still get yours.” In other words, ViSalus has just confused the traditional definition of an MLM distributor with a customer in this video. It still hits what the FBI says about pyramid schemes:
“At the heart of each pyramid scheme is typically a representation that new participants can recoup their original investments by inducing two or more prospects to make the same investment.”
There’s also this from the FTC:
“Not all multilevel marketing plans are legitimate. Some are pyramid schemes. It’s best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products.”
In referring people you have not made a sale to someone outside of ViSalus, but recruited what amounts to a distributor who can refer others as well. This person is now considered “within ViSalus” rather than outside ViSalus. It is a very, very tricky thing for most people to understand without having experience in looking into these schemes.
The FTC has put out a lot of documentation on this. I’ve compiled it into a guide at MLMs Vs. Pyramid Schemes. The thing that dooms this ViSalus program to being a pyramid scheme is that sales aren’t to end customers, but to people who are essentially distributors since they too can refer others.
Update 1: From ViSalus’ IPO filing, CNBC found this beauty: “we do not believe that we are subject to laws regulating pyramid schemes… there is a risk that a governmental agency or court could disagree with our assessment…”
If there wasn’t a very real risk of ViSalus being a pyramid scheme, there would be no need to warn about it. Do you think IBM or McDonalds has such disclosures in their SEC filings? Hint: They don’t.
Update 2: On January 28, 2013, the FTC Halted the Fortune Hi-Tech Marketing Scam Halted as a Pyramid Scheme. In doing so the FTC and three states listed a number of reasons why they went to a federal court to shut Fortune Hi-Tech Marketing (FHTM) down. Big thanks goes to Jeff who outlined a few the similarities using the documentation from the FTC (PDF) and what is publicly known about ViSalus (citations valid at time of publishing, ViSalus may move and/or change their marketing):
- FTC on FHTM: “Defendants target consumers with an entrepreneurial spirit, emphasizing that FHTM provides an opportunity to build a business which can rapidly provide financial independence”
ViSalus’s Rewards page (first video): “To be able to become financially free from just partying with our friends, there’s nothing like it.” - FTC: “FHTM routinely touts six and seven-figure incomes to new recruits, assuring them that they will be able to achieve these results as long as they are willing to work hard.”
ViSalus’s Rewards page (first video): “Challenge promoters can earn anywhere from a few hundred of dollars per month to hundreds of thousands of dollars per month… There’s opportunity here that you can make a lot of money and you can change your lifestyle in a big, big way… If it’s just to cut down at work or if it’s to leave your job altogether like I did, this business will allow you to do that.”As we’ll cover below, the average ViSalus distributor barely makes $250 a month and those are best case scenarios. Given the skewed money at the top, the people at the bottom lose money.
- FTC: “As with any pyramid scheme, FHTM’s defining characteristic is a compensation plan that is skewed heavily in favor of recruitment over sales.”
Visalus has 8 ways to earn money in the compensation plan. 7 of those ways require that you recruit people. Visalus’ “Getting Started Training” doesn’t focus on selling product, it focuses on becoming a “Director in 7 Days” which means you have to recruit 3 people. - FTC: “Plaintiffs have submitted overwhelming evidence demonstrating both FHTM’s deceptive earnings claims and its operation of a pyramid scheme—either of which alone is sufficient grounds… FHTM dangles the promise of riches in order to lure consumers into joining its scheme. FHTM makes these promises in a variety of ways—though in person presentations, pre-recorded presentations, webcasts, and live and pre-recorded conference calls—but no matter what the medium, the company’s rags to riches tales are patently false for nearly everyone who joins… At FHTM’s most recent national convention, FHTM paraded its top thirty earners on stage with mock-up of a $64 million check.”
Visalus does the big-check at their national convention and Nick and Ashley Sarnicola holding up a $1,000,000 big check here.
One more thing that FHTM marketing and ViSalus have in common… they both emphasized a free BMW as a promoter reward.
Update 3
Recently ViSalus put out an interesting press release. It starts off with, “ViSalus… has added 10 new top industry professionals to the roster of Vi Promoters. Veteran heavy hitters Patrick Ashby, C. Anthony Harris, Ron & Tony Jarrah, Chris & James Levins, Tina Lewis, Steve & Yvette Mitchell, and Charles Monk all paved the way to success with ViSalus in 2014.”
It proceeds to list them and give a little profile. Here’s part of one example, “C. Anthony Harris attributes his success and attaining the rank of 2-Star Ambassador in just 45 days* to teamwork and his commitment to continuously challenging others.”
The “*” is an important disclaimer. In the press release it means, “* Results not typical. Achievement in rank and income depends upon many factors such as hard work, determination, financial resources and social contacts.”
Personally, I find the “hard work” and “determination” characteristics utter bullshit, when a person reaches one of the top levels in just 45 days. The fact is C. Anthony Harris was already a “Double Platinum Senior Vice President” in 5LINX. So it was the contact list that made him a 2-Star Ambassador at ViSalus.
Now do you think C. Anthony Harris’ money is based on him selling a ton of product to people outside of ViSalus? Keep in mind that’s a lot of product to sell in 45 days. I hope he’s got a really popular booth at a very popular sporting event, because he’s going to need it to make all those sales.
The bringing on “veteran heavy hitters” who quickly achieve the ranks that few long-time ViSalus distributors ever receive is yet another giant red flag that ViSalus is a pyramid scheme.
The Business of ViSalus
“The women I interviewed for “The Pink Pyramid Scheme” told me stories about struggling to patch together daycare or to survive high-risk pregnancies while working long hours scouting prospects and hosting parties without any guarantee of a sale. Debts mounted, marriages failed. They couldn’t have it all because Mary Kay’s business model (like that of any multilevel-marketing enterprise) is designed primarily to profit from, rather than enrich, its workforce.”
That’s from a Harper’s Magazine report on Mary Kay, one of the most “respected” MLMs. I highlighted the key point as this article is about ViSalus and not Mary Kay.
A Former Distributor Busts Some ViSalus Myths
We had the fortune of a “successful” former distributor, Joy, has given us some insight.
Money Back Guarantee is Bogus – According to her, “the ‘money back guarantee’ that means nothing and here is the reason why. If you lose 1 pound you can not get your money back. So if you are a little bloated the first day you weigh in or maybe constipated then you weigh in at losing 1LB you in fact have not lost anything but yet you are out of you money.”
An Imploding Business – “I was ‘smart’ enough and ‘worked hard enough’ to get to RD and continued to ‘follow the system,’ ‘force my calender’ and be at challenge parties almost every night. I had over 900 active customers in the beginning of June (2012), by September I had less then 40!! So how was that my fault, when I followed the system to a T? I use to (unknowingly) tell people the same lie you are currently telling others.”
Getting Product for Free – “I should also mention that out of 900 customers I only had about 10 getting theirs free.” – January 30, 2013 at 8:08 am
ViSalus’ Imploding Business
The commenter’s story above about ViSalus’ imploding business is backed up by their own press releases.
May 8, 2013 Press Release:
“At the end of the first quarter, qualified independent North American Promoters totaled more than 70,000 versus more than 92,000 Promoters at the end of the prior year’s first quarter.”
“ViSalus had over 57,000 qualified independent promoters in North America at the end of the second quarter compared to over 70,000 promoters at the end of the first quarter. The Company also has nearly 4,000 qualified promoters internationally. Prior year second quarter ending promoter count was over 114,000.”
For those following, that’s exactly a drop in half in one year (>114K to >57K).
“At the end of the fourth quarter, qualified independent North American promoters totaled approximately 35,000 versus 76,000 promoters at the end of the prior year’s fourth quarter.”
For those still following, that’s ANOTHER more than half drop in one year (>76K to >35K).
ViSalus and their representatives make it sound like it easy to build your own pyramid scheme recruit a team, but with many more people leaving than joining, clearly getting people to join is a very difficult task. If everyone in was able to recruit only one person, distributors would double, but instead it is going in half. They can’t even keep the people they have, much less grow. What are the odds that you are going to be able to recruit 3 who will also recruit 3 who recruit 3, etc.? Remember that their “plan” illustrates you building a pyramid team of HUNDREDS to earn a full-time income and most ViSalus people can’t even maintain their pyramid team.
Vi-Net Pro and Vi-Net Swipe
When you become a ViSalus distributor you are automatically enrolled in Vi-Net Pro subscription for $29 a month… unless you choose to upgrade that to Vi-Net Swipe for $39 a month.
Lets look into Vi-Net Pro’s value. Vi-Net Pro consists of a website and a magazine. The website is a place where you can send prospective ViSalus buyers to. ViSalus maintains it and updates it with videos, a way to capture contact information, and a few other features. I won’t say that this has zero value because it clearly is useful, but ViSalus shouldn’t be charging distributors for it. Remember that MLM distributors are commissioned employees. This is like your company charging you to use their corporate email system to work for them. Websites are incredibly cheap to produce (get a free Tumblr or WordPress blog for instance), and the development of the tools they are providing appears to be minimal. WordPress blogs can do all this for free with little or no programming.
With the Vi-Net Pro comes a magazine called Success. Like ViSalus’ business opportunity it is a sheep in wolves clothing. Success pitches MLM in the most positive light and never mentions the negatives. The reason for that? Success Magazine is owned by VideoPlus. The title of the VideoPlus website is “VideoPlus was founded as a media and marketing communications company offering innovative, turnkey solutions for the direct selling industry.” (Note: Direct Selling is falsely used as a replacement for “MLM” by MLM distributors because “MLM” has a bad connotation: MLM vs. Network Marketing vs. Direct Selling.) A large percentage of VideoPlus’ clients are indeed MLM companies (some examples: Usana, HerbaLife, Noni, Shaklee, Nu Skin, Ambit Energy, Monavie, Amway, Vemma, and yes, ViSalus).
In short the Vi-Net Pro subscription for nearly $350 a year gives ViSalus distributors a website that should be free and monthly propaganda paid for by ViSalus. Remember that Harper’s quote above about MLMs being designed primarily to profit from, rather than enrich, its workforce. If you do an Internet search, you can learn how to cancel Vi-Net Pro and go to Vi-Net Lite.
A distributor in the comments raved about Vi-Net Pro Swipe saying that the ability to take credit cards right from a smart phone was worth $39 a month. If you watch this ViSalus promotional video you’d think they’d have been working on this technology for some time and that it is true innovation. However, like every MLM “innovation” I’ve come across (see MonaVie Perks), it’s a white label solution – a product that ViSalus didn’t develop. ViSalus Swiper is simply a branded solution from Roam Data, where they ” outfit everything from the app, to the swipe, to the collateral for you.”
The $10 a month extra that ViSalus charges is actually a fair price. That’s what this this merchant charges (see monthly plan fee). You could get your own Swiper without ViSalus. The value in Vi-Net Swipe for ViSalus is two-fold. First, they deceive distributors into thinking they are doing all this work. Second, in order to get the $10 Swiper technology, a distributor has to pay for the $29 Vi-Net Pro, that ViSalus should give distributors for free.
If ViSalus was looking to increase it’s sales of product and help distributors, they would give you all the website tools for free, switch the propaganda magazine to a nationally recognized brand like Entrepreneur, and offer Swiper at a maximum of $10/mo. Ideally, they would completely cover, or at least split that cost with distributors and make up the difference increased sales.
How Much Money Does the Average ViSalus Distributor Make?
Thanks to some great sleuthing by commenter Brandon, we can crunch some numbers and find out how much the average ViSalus distributor makes. According to ViSalus’ May 4th, 2012 press release, ViSalus brought in $136.7 million with “over 92,000 distributors” in the most recent quarter. That’s $1485.87 per distributor. Since a quarter is three months, it comes out to about $495 a month per distributor. That’s Visalus sales.
The commissions paid out to distributors has to be a fraction of that since ViSalus needs money to produce the product and pay corporate. If we were to be extremely generous and presume that ViSalus pays out half of the $495 number to distributors, each distributor would average around $250 in revenue a month… not profit. The distributors themselves have to buy $125 worth of the product per month unless they sell $200 worth of product per month (cue the unnecessarily complex compensation plan intended to confuse the average distributor) or else they sacrifice their commission. Because selling $200 a month is hardly guaranteed, most buy the $125 a month and use it themselves.
The $250/mo. revenue is $3000 a year. However, they give up $125/mo. The actual profit is much lower after spending $125 for the product, the Vi-Net Pro subscription, tools such as brochures, and travel costs for conferences like the recent one in Miami.
It’s worth noting that if those 92,000 are all on the default Vi-Net Pro (I expect a small amount will be on Swipe and Lite, balancing them out a bit), ViSalus is booking some $32 million ($348 * 92,000) of it’s $136 million in sales of websites and Success magazine just to its distributor base.
Finally, there’s this bombshell… the founder of ViSalus “generates” more than 50% of the sales and make money than all other distributors:
ViSalus supporters claim that Nick Sarnicola (the founder in question) resigned from the company to be a distributor and show that anyone can be successful in ViSalus. Unfortunately, ViSalus just poached other MLM company downlines getting many high ranking distributors to each bring over thousands of distributors under Sarnicola. How did Sarnicola recruit all these people? MLMs often offer private signing bonuses to those who have created a substantial pyramid. Nick Sarnicola admitted to putting together some “investors” to lure Robert Dean to Visalus. Of course he only admitted this behind the scenes deal because Robert Dean took the money and then left ViSalus. It’s speculation on my part, but the most logical explanation for how these people got recruited to ViSalus was a signing bonus as well.
So sure you could have the same success as Sarnicola in ViSalus, but only if you are given both the means and the connections to poach top people from numerous MLM downlines. Don’t think that you can recruit all these people one-by-one from talking to your friends, family, or even your social groups. Also, according to the FTC guidelines on MLMs and pyramid schemes Sarnicola would have to be selling quite a lot of product to people not involved in ViSalus or else his “business” is running a pyramid scheme:
“Avoid any plan where the reward for recruiting new distributors is more than it is for selling products to the public. That’s a time tested tip-off to a pyramid scheme.”
When you read that ViSalus is paying out a majority of commissions, keep in mind that it’s keeping a good portion of the money itself and of the portion that it actually pays out, a good chunk goes to Nick Sarnicola, who still owns millions of dollars worth of ViSalus shares when it goes public at a $175 million value. Update: ViSalus canceled their IPO citing market conditions… which seems disingenuous because the Dow Jones was at a 4-year at the time and ViSalus was claiming great growth. I’m not sure they could ask for better market conditions.
ViSalus IPO Filing
Though I mentioned it above in the pyramid scheme section, this article from CNBC warning Beware the Get Rich Quick IPO has a lot of great information about ViSalus. In addition to the pyramid scheme stuff ViSalus says its “marketing system depends upon the successful recruitment, retention and motivation of a large number of individual promoters to offset frequent turnover.” In other words, due to the high churn rate in MLM, they have to resort to motivation techniques like the crazy cult seminars in Miami.
ViSalus’ Project 10 Kids
I received a comment about Project 10 Kids. The idea behind this program is to give overweight or obese children 30 ViSalus meals when a ViSalus distributor or customer loses 10 pounds or gains 10 pounds of muscle.
This is a very classic MLM charity scam. It’s designed to make people feel good through self-licensing, so that they continue to stay in the scam, paying month after month. The commenter made the point that the kids are getting kid-sized shakes that are half the already diminutive shakes mentioned above… 45 calories. Using the above numbers of it costing a consumer about 50 cents per Vi-Shake serving, the kids shake, at half size, would be 25 cents. That amounts to the donation being $7.50 of consumer cost and probably close to $3.75 for the cost to ViSalus.
So if you lose 10 pounds on ViSalus products, ViSalus will kick back around $4 to help an obese child. I’m all for helping obese children. When you read this article and realize that you can save $2000 a year by substituting Vi-Shakes and Vi-Cereal for essentially equivalent options, won’t you please donate $50 to help the fight against child obesity? You’ll still be saving over $1950 a year, you’ll be putting between 5 and 10 times more money to work, and most importantly, you can rest easy knowing that the organization will teach the kids nutrition from real food (not a shake), all while avoiding what appears to be a pyramid scheme. That’s what I call a win-win-win-win.
ViSalus Bottom Line
The title of this article made the point that ViSalus was a scam. ViSalus distributors and supporters take exception of the use of the word scam with ViSalus. Wikipedia defines scam as a confidence trick. At a minimum, the marketing around ViSalus Vi-Shape Shake is clearly designed to deceive… to a level that the Canadian regulator boards are looking into it.
Beyond the deceptive marketing (which should be enough) there’s:
- ViSalus Vi-Shakes have some very questionable ingredients from soy protein to artificial sweeteners.
- ViSalus’ “Free BMW” program (which isn’t free) uses tactics similar to the mortgage lenders that got people locked into payments they couldn’t afford. The ViSalus IPO filing of noting the “frequent turnover” makes it especially dangerous as the bonus relies on a consistent downline of people.
And let’s not forget:
A “business opportunity” that appears to be a pyramid scheme. Not only that, but it also charges ~$30 a month for a cookie-cutter website that should be free along with a propaganda-based magazine disguised as a legitimate business publication. The business opportunity on average grosses people very little money and likely puts people at a loss when accounting for buying product, website costs, and other marketing materials. The ViSalus IPO filing cites the marketing system is dependent on recruitment (yet another sign of a pyramid scheme according to the FTC)
My Gift to You
If you’ve read this far, I appreciate your dedication. Whether you found what you were looking for or not in the article above, I want to help you with your financial situation. It’s what I do.
Here are two things you can do to put yourself in a better financial position:
- Create an Emergency Fund – Dobot squirrels small amounts of money from your checking account to its FDIC-insured account. It’s 100% free. You simply have to create a goal of having an emergency fund. You don’t have to think about it and you’ll likely never notice the small amount of money being moved. I’ve squirreled away more than $1100. You can read my Dobot review here.
- Track Your Money – Over the years, I’ve gathered so many financial accounts. Banks, Brokerages, Loans, I got multiple of them all. The best software for tracking them all is Personal Capital. You can’t get to your destination if you don’t know where you are to start. Personal Capital gives you that… and, like Dobot, it is completely free.
For more visit my five minute financial fixes article. If neither of the above is helpful, I’m sorry. I appreciate you for just being here. The person recruiting you has a financial incentive to present only one side of the story. Kudos to you for searching for more information to make an informed decision.
ViSalus Additional Viewing and Reading
Here’s a great, humorous video, explaining many of the issues with ViSalus:
In addition to that, this investigative report from SIRF Online about ViSalus is not to be missed. Outstanding investigative work!
I also liked this article: Pill Power – ViSalus has taken root in Silicon Valley. Is it a brave new world of health and success, or just a pyramid scheme?
Originally published: Published on: Nov 7, 2011
Excellent article!!! Very well articulated and research to support! I have some friends involved in this and I have stayed well clear! It is almost like a cult the way these people sell using a form of scare tactics! Just another example of a company selling it’s products by preying on the insecurities of others.
Great article, thank you!
They’re pretty actively spreading into Germany and Austria and had an official launch in the UK… It’s pretty strange how many young and pretty normal people “work” there… What kind of cult is it?
I don’t really classify cults into different types.
so.. Why all these young and active people work there?
Did they borrow their “Told you so” from Limbaugh Rush??
They recruited young people through their marketing and these people are more likely to recruit to other young people.
I don’t know anything about the origin of “Told you so.”
I had a Visalus recruiter tell me that if I was financially wise, I would realize that profits are better than hourly wages. (I have a salaried career that pays over $150,000 a year for the past 7 years). I’m 30. I am debt free with savings of over $500,000 and this man is telling me that if I WAS FINANCIALLY WISE I would go work for his company?!! LOL – what a HOOT! He is spewing some garbage he heard at a convention that I’m sure he paid big bucks to attend. The husband and wife claimed all over Facebook that they would be getting their 1,000,000 bonus check soon and would not only be taking care of their own family of 6 but their mothers as well. They quit their jobs with health care benefits and secure salaries. They claimed the husband would be able to stay home and not have to work on the road anymore. I said, give it 6 months to a year. Then tell me who’s wise. Let’s see… it’s a couple years later. Guess who didn’t ever get their bonus check. Guess who is still in debt and living above their means. Guess who got smart and stopped going to these expensive meetings. Guess who is back on the road, working. Don’t buy into the get rich quick hype. Get a job that pays consistently and doesn’t make money off of you losing money.
Thanks Texas Gal. This is why I write about MLM. They just rip off consumers right and left. Fortunately, you are educated and know better… but there are a lot of people who are not. Some have lost their jobs and are looking for any kind of income opportunity. It is just very sad.
@ Texas Gal Excellent post, and you made the right decision. I did same. Teh fellow who sollicited me was at the rank of BMW = 12500$ in sales. Working 7 days / week preaching and running all over. One week-end up north ( 600 miles ) hotel+ meals. mid week another 200 miles, next week end another 600 miles, east this time + meetings and bla bla bla. All this for, at his rank 5% commission (625$) How much did he spend? Oh yeah the BMW. You need 51 REGULAR clients/distributors spending 249$/mth to achieve this. Have you noticecd the pricing is set at 49’s and comissions at round figures. You always need to buy that extra dollar, at 12500 it means ONE extra client/distributor or you buy the extras needed.( very often with a phoney client’s name. By the way when I met him 6 mths later he went back to his job claiming “Oh I now do this pt.” From his plan B as tehy call which was to become his plan A, he’s back to square one and in deficit. Ave Visalus yeah sure,
@Ernest. Yes, thank you. I was seeing the same thing with Visalus recruiters around 2 years ago. Funny though, they’ve all vanished into thin air since then. Can’t find anyone promoting Visalus every day like they used to. One couple was driving to Arkansas, Louisiana, western oklahoma, just to host one of these parties in hopes that someone signs up under them. It was sad that they were 1 yr in and already having to drive that far to find people to recruit. That should have told them something. They were lying about their income to everyone they could on Facebook and other social media platforms, in hopes of tricking people looking for a better job to sign up with them. I asked them, are these figures before or after expenses and taxes? Oh they were before ! They forgot to let everyone know that. Uh-huh.
I follow some Visalus promoters on Facebook just to humor myself and they are just becoming more and more cultish. These people think god has shown them the way to save the world with this awful, ridiculously-overpriced garbage. They are really pushing this project 10 marketing campaign, which just makes me sick. For every 10 pounds a person loses or gains 10 pounds of “lean” muscle on their vi-crap, they will be so generous to donate 30 kid-size shake “meals” to an obese child. The kid-size meals are half the size of the adult shakes, so they are 45 calories, 3g Carbs, and a whopping 6g of protein. Why teach kids about proper nutrition and exercise? Let’s just starve them. That should work, right? It just boggles my mind how many uneducated people they reel in with this stuff. It’s so sad how many people genuinely think they are doing the right thing to help reduce obesity, but then are actually being completely irresponsible and reckless and promoting a terrible message to these kids.
BC, do you have more information on the shakes being kid-size and half the adult shakes. I was trying to find that in writing and I couldn’t.
This is from an official Vi document:
It’s simple! ViSalus Matched Giving gives your donation even more of an impact. Each $24 donation buys 30 kid-sized Vi-Shape shake meals. ViSalus will match you meal for meal,
automatically doubling your donation to one full pouch of 60 meals (which is also 30 adult-sized shake meals).
http://myvi.net/Resource/DbFile/?f=community_challenge_faq.pdf
Thanks BC, my searches only came up with the website. I updated the article with the information.
I think we will see another big drop in distributors when they release 4th quarter financials (should be within days)….. unless they continue to cherry pick big distributors from other MLMs… I can’t find the press release now but did anybody see how they grabbed some diamond/platinum from another MLM that had an enormous following? (actually did it a few times)… I feel like at this point the only way they can satisfy shareholders is by doing some back door deals convincing top distributors to bring over their network. Im not sure how they structure it, but i would assume they give them some crazy incentive to move to Visalus.
Didn’t realize the FTC was going after Herbalife.
http://bigstory.ap.org/article/herbalife-facing-ftc-inquiry-shares-plunge
Yep, new development today. If you follow me on Twitter, you could catch me “flipping out” a bit.
I didn’t realize you were on Twitter! Thanks for the info. I just saw that article and thought of this site.
I’m usually not very active, but today was a busy day with lots of news.
”I follow some Visalus promoters on Facebook just to humor myself…”. I do exactly the same. I listed to their weekly call and it’s funny, but close to sad to heard what I do. I agree that it’s no sane, and they keep telling them to not listen to people who don’t believe in the product, that they are haters but we know is not the case. It’s relative with commen sense who try to wake them up before it’s too late.
And on their facebook page, they keep congratulations each other on how they are ”People of heart”, wonderful and inspirating person with a great goal in life to help other…bla…bla…bla… Most of them are overwheight anyway. And they are very pushy about the fact to attempt meetings in all kind of city accross the US. And I would like to say to them :”Told you so…that you were going to lose some money over it”… ViLosers!!!
The news is out, Visalus is down 50% again last quarter compared to 2012. I was approached by one of the top guys a few months ago claiming how fast they were growing. Lies! Lies! Lies!
http://www.prnewswire.com/news-releases/blyth-inc-reports-4th-quarter-and-2013-sales-and-earnings-250384721.html
Thankfully, Visalus will never recover. At best, they will be able to slow the decline for a short time before it bottoms out. You are witnessing a pyramid implosion.
Wow, that is bad: “In the Health & Wellness segment, ViSalus’s fourth quarter net sales were $62.9 million versus $126.6 million for the same period last year, a decline of 50%, largely reflecting the reduced promoter base in North America. At the end of the fourth quarter, qualified independent North American promoters totaled approximately 35,000 versus 76,000 promoters at the end of the prior year’s fourth quarter.”
It seems their pyramid collapses by 50% ever quarter.
I couldn’t help but notice that they were pushing the growth in the UK (from 0 to 2500 distributors) and the entry into 5 other markets as the ultimate “Pop and Drop.” It is essentially a plan of, “Let’s begin the scheme in a new country so it appears that we are growing again.”
Another day another investigation ………..
http://empowerednews.net/nysebth-investor-alert-investigation-over-potential-wrongdoing-at-blyth-inc/1848451/
The Shareholders Foundation announces that an investigation on behalf of investors in Blyth, Inc. (NYSE:BTH) shares was initiated over potential breaches of fiduciary duties by certain officers and directors at Blyth, Inc.
Greenwich, CT based Blyth, Inc. designs and markets home fragrance products and decorative accessories, as well as weight management products, nutritional supplements and energy drinks.
Investors who purchased shares of Blyth, Inc. (NYSE:BTH, have certain options and should contact the Shareholders Foundation at mail(at)shareholdersfoundation.com or call +1(858) 779 – 1554.
The investigation by a law firm concerns whether certain Blyth officers and directors breached their fiduciary duties and caused damage to the company and its shareholders.
Blyth, Inc. reported that its Total Revenue rose from $738.95 million for the 12 months period that ended on January 31, 2011 to over $1.17 billion for the 12 months period that ended on December 31, 2012 and that its Net Income for those time periods increased from $16.23 million to $44.00 million.
Shares of Blyth, Inc. (NYSE:BTH) declined from as high as $42.34 per share in August 2012 to $9.09 per share on March 14, 2014.
Those who purchased shares of Blyth, Inc. (NYSE:BTH) have certain options and should contact the Shareholders Foundation.
If Visalus is a pyramid scheme, then how do I make more than some of my active upline? In fact, there are several in my downline that make more than I do. In traditional pyramids, the upline would be benefitting from the downline’s success even more. That is not the case in Visalus.
It is possible to make more than your upline in pyramid schemes. Please re-read the FTC guidelines that I’ve linked to in this article multiple times. You’ll see that the factors that play into pyramid schemes are sales to those who are recruited vs. retail sales to those who are not ViSalus distributors. It has nothing to do with who makes more money than who.
Please quit recruiting people until you at least have a basic understanding of what a pyramid scheme is.
Just another scam, use common sense people and do a little research. It’s okay to admit you made a mistake, I did, I was sold on the idea also.
Had to ad my two pennies from here in blight
http://youtu.be/-5dr07OkahY
That is a brilliant video. The best I’ve seen in a long, long time. I can’t wait for the second part.
Brilliant! Thank you for that Billy. I’m a huge fan already. Can’t wait for part 2.
Thanks for the feedback – if people like it and we can get this to go viral I have a whole load in the pipeline
Heres a re-edit of Episode 1 – I think it’s shorter and sweeter (I’ll pick up on the numbers in another episode)
http://youtu.be/TKPKPY9qnew
Here’s Episode 2 just for you…
http://youtu.be/z2nEe3GpnC8
Episode three is in production ;)
Thanks Billy. I’ve included the first video in the original article. I need to update the article and organize it a lot better, but that’s something for another day.
I like that you were able to shorten the video, but now it doesn’t make sense that Lorris would go meet Steve at the challenge party. The other thing that I really liked about the first one is how you’d have to talk to 15,000 to get a few to actually sign-up. I think it was an important point that hasn’t been made very often elsewhere. I touched on it to a degree here: MLM and the Reality of Saturation
Finally, while this is great for ViSalus, many of the points can and do apply to all MLMs. The part about the corporation structure shape and pyramid schemes is one common lie. The obvious big difference is that in a pyramid scheme everyone makes money via recruitment. In a corporate structure, people make money for work done. Only HR makes money from recruitment and it is a salary and clearly not an endless chain of continual recruitment. At a basic level they are confusing a http://en.wikipedia.org/wiki/Pyramid_scheme and a http://en.wikipedia.org/wiki/Hierarchical_organization.
WHOOP WHOOP, lol I love this post!!!!!!! Im nominating Lazy Man for the PULITZER on this one. First let me ne very forthcoimg and say I am with Lazy man and innocent bystander on this for sure. You see I was engaged and planning my wedding. Enter the Vi LIfe baby. I start complaining about bfs time away and he gave me an ultimatum………”not even God coming down can stop me from doing my 90 day run and further more in 90 days I will be a millionaire with or without you”. Okkkkkayyy its gonna be without me. My thoughts are this:
Lord knows those VV (Vi Vultures) will do and say ANYTHING for a dollar. Ive had them tell me how it cures diabetes and heals fibromyalgia. If its really that great then why isn’t it on a store shelf in the retail segment? These distributor people as they are called just look like sick , greedy , scammers and all trying to lead folks to the kool aid partys , the big regional drunk fests, blah blah. Im just waiting for them to bring in Criss Angel to raise Jim Jones from the dead and levitate him with the final finale being Jim Jones getting all the sheeple to drink Vi rather than the kool aid. There are numerous stories of Vi drinkers developing kidney stones, the soy causing women to stop or start periods, thyroid patients becoming very ill, blurred vision, dizziness, enormous complaints on stomach issues due to the pile of fiber in the shakes and we all know the general consensus is that Splenda is bad for you and this shake is definitely loaded up with sucralose. One can opt to run from the MLM scammers and just eat celery, take vitamins and drink Gatorade instead. Probably be a hell of a lot healthy and it wont cost you 499.00 and you wont be hounded to promote and recruit and MAINLY sit on call after call listening to fake people tell about their big life change and fake cry about how their kids had no shoes or clothes until Vi came into their life. Its just pathetic to me. One last note…………Vi and many other MLMs have ruined marriages, relationships, families, friendships and people have quit their jobs after buying into the kool aid kingdom only to go under. hard to believe in 2014 there are that many naïve people. There is no such thing as quick money with the exception of inheritance, the lottery, a lawsuit or selling off your company………………like Fyan Blair (the owner) did. That is , after he left the gang he was in and was arrested for murder. I personally have no desire to line the pockets of Ryan Blair nor Nick Sarnicola. Who would??????????? Greed. Pure and simple. A big HUGE thank you to Lazy man for exposing scammers. PLEASE DONT STOP.
Thanks ViRuinedMyLife. It isn’t that unusual for MLM to ruin people’s lives, especially their relationships. I still remember getting this comment that starts with “So here I am… husbandless! He wanted the business so bad because they cheered him on as he dummped all our money into it. He failed to pay the mortgage and used the money to buy his way up.” : http://www.juicescam.com/my-experience-with-monavie-and-team/#comment-38694.
Like any other cult, they are extremely destructive. My hope is to show people this before they get involved. It saves everyone a lot of pain.
Well said!!!
I see some people are dropping Visalus and getting into something called KaratBars another MLM. Have you heard of this one Lazyman?
I have not heard of that one. I will look into it.
I’ve heard that ViSalus people are going to Nerium and ViSi.
I find it interesting that you think its your job to “protect” people from Visalus. I personally joined because I was “tricked” into trying the shakes by my room mate. I work from home and sit behind a desk way too often, and he told me I needed to try SOMETHING or die of a heart attack because of my weight. He started bringing me shakes and telling me….”Here is your breakfast” and I would drink it. It tastes good, and it was filling. That was what I noticed at first. The fact that I lost 14 pounds the first two weeks was a shock. Overall I lost 56 pounds in 90 days, and I’ve kept it off. As for being an illegal “pyramid” scheme….get your facts staight, Lazy. Apparently you’re also too lazy to check them out. After reading your BS article I DID have my lawyer check them out. NOTHING prohibitive about Visalus’ way of doing business in the law. You are misleading people, and should be sued yourself…..in fact….I think I’ll recommend that to nick when I see him this weekend. Slander can be seriously expensive!
I find it interesting that you think your job is to sell people really crappy shakes via a pyramid scheme instead of trying to help people.
Maybe you should get a standing desk or a treadmill desk and get exercise instead of complaining about your sedentary lifestyle. Maybe you should take an interest in your health and not let your roommate run your life.
I did get my facts straight about ViSalus being an illegal pyramid scheme and even cited the FTC’s definition. I’ll stick to trusting the FTC as they are the definitive authority on pyramid schemes. It’s quite a bit reputable than a perhaps fictional story of an anonymous lawyer’s opinion.
I’m pretty sure that Nick already knows of this site. It’s not like 1300 comments happen under the radar. If they don’t, they are more inept that I imagined. Tara Wilson has commented here before and I talked her just last week (via email). I presume Nick is smart enough to know that is a bad idea to put me in a courtroom discussing ViSalus and pyramid schemes. FTC investigations like what is going on with HerbaLife right now is much more expensive.
I doubt Nick pays much attention to you at all. I won’t after this post. I’ve always heard that its pointless to get into a battle of wits with an unarmed man. 77,000 Visalus reps….I guess the FTC just decided to look the other way? I really have to wonder at the intelligence of ANYONE that buys the lies you’re selling. For the record, the HerbalLife investigation ended a long time ago, and they are still going strong. As for Visalus….if they are so full of the terrible criminal element….why don’t you do your civil duty and press charges. Until you have law enforcement back up your ridiculous claims, remember what I said about slander….and trust me….your garbage WILL come to the light soon.
Pretty clever with the battle of wits comment. You are the one that Money Magazine calls gullible for participating in such a scheme. I’ve eviscerated every pro-ViSalus comment here and it is well-documented. Mensa has armed me with their membership card.
By 77,000 you mean 37,000 right? Here is Blyth’s press release from a month ago, “North American promoters totaled approximately 35,000 versus 76,000 promoters at the end of the prior year’s fourth quarter. International promoters totaled nearly 2,500 at the end of 2013, reflecting the entry into the U.K.”
The FTC’s funding for the year is around $300 million dollars for everything that they need to do. It isn’t even enough to fight FreeCreditReport’s deceptive advertising. It took them a decade to shut down the MLM, Fortune High Tech Marketing as a pyramid scheme saying that it cost consumers hundreds of millions of dollars over the decade. Two years earlier the most popular newspaper in the country, USA Today asked the company’s president if it was a pyramid scheme. His response was, “If it were illegal, I wouldn’t be standing here.” It was illegal and yes the FTC decided to look the other way because they simply don’t have the funding to actively police thousands of MLMs/pyramid schemes. The bigger ones, like HerbaLife are even more difficult
You know that the FTC just announced that they started their investigation last month, right? Have you even followed the news at all? In the last few days, the Financial Times says that the Department of Justice and the FBI are now in on the investigation: http://www.ft.com/cms/s/0/a9833e96-c198-11e3-b95f-00144feabdc0.html#axzz2zI4QO992.
If you find me a lawyer who will take the case and cover the costs, I have no problem heading up a lawsuit against them. I haven’t bought any product, so I’m not sure any lawyer will take the case on my behalf since I have no “damages” to show personally.
Which claims do you find “ridiculous?” I source everything meticulously including the ones where the FTC explains what constitutes a pyramid scheme. I openly ask people including yourself to point out any incorrect statements and why they are incorrect. In this case, you’d need to explain why the FTC’s guidelines to MLMs and pyramid schemes don’t apply to ViSalus. It has to be more convincing than, “my anonymous lawyer said so.”
I haven’t posted here in months but felt I could chime in after James Sarvers post.
I’ve been using visalus now for 13 months. I’ve gone from 310 to a new low of 234. That’s right…76 pound loss:? Last time I talked here I think I was appx at a 50lb loss.
My 1 or 2 shakes a day are my favorite meals of the day. I absolutely love the product.
My last blood work showed all my numbers perfect with only a little more work needed to raise my good cholesterol…which can be improved, according to my doc, with just a little aerobic exercise.
I’m 60 and I believe visalus saved my life or at least added years onto it which is a good thing seeing as my wife is 5 months pregnant:) not bad for an old man eh?
Now the down side of my message. The visalus marketing plan is a joke. It is unsustainable which scares me. It almost has to self implode and then what will I do? I don’t want to have to find another meal replacement especially when these taste amazing and work.
I’ve already sampled quite a few others and they’re nasty. The GMC Swiss chocolate one is best of the group but even that one I can hardly stomach.
I wish visalus would go legit and get on store shelves in the 30.00 range. That’s all I pay now cause I don’t use those poor gullible distributors. I low ball auctions or ask auction sellers for bulk buys like 10 bags at a time and never pay over 30.00.
One last complaint. Visalus claims to have 30 shakes per bag and they encourage not to be afraid to round up the scooper. Well my last three bags I used perfectly flat scooper portions and only ended up with 25, 26, and 26 1/2 shakes. That’s over 10% less than promised which gets expensive…for me I lose 16.00 a month or about 200.00 since I started:(
Now I know both sides will probably jump on me for something that doesn’t perfectly fit their viewpoint. It happened to me here when I posted before which I felt was too bad because most the people here you would think are truly interested enough to try to get a complete picture with all the parameters.
My story may be different but it is absolutely true and one of significant success.
Thanks for the comment Gary.
I think you are giving ViSalus too much credit for your weight loss. I’m reminded of the human nutrition professor who lost 27 pounds (going from 201 to 174lbs) in two months eating Twinkies and other crap: http://www.cnn.com/2010/HEALTH/11/08/twinkie.diet.professor/. His blood numbers all improved too.
So while I applaud your weight-loss, I can’t credit the product and more than I would credit Twinkies. Instead I applaud your ability to limit portions.
I’ll make no comment on the taste because that’s very subjective. Someone could say they like the taste of dog poop literally and then suggest that it is worth it to them to buy it at $10 a pound. To each their own on that.
I have shown that the product is way, way overpriced, and it is even worse if what you say about the portions not being what’s advertised. The unsustainable marketing is already rearing its ugly head as Visalus distributors are 75% fewer than what they used to be. It should be clear to everyone that it is a pyramid scheme with that kind of implosion with no change in the actual business model or economy to spur it.
Let me quote the FTC web site exactly as to the definition of a pyramid scheme…..since you continue to perpetuate your lie. “A pyramid scheme is an unsustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.” According to the FTC as of yesterday, Visalus is NOT under investigation. As Visalus has a sustainable business model, if you understand at all how it works, AND they do not only have retail sales, but in EVERY convention, meeting, and website the encourage retail sales strongly. You claim to be MENSA material, yet you continue to push the lie that Visalus is an illegal pyramid scheme. Amway uses the same MLM structure. They were founded in 1959, and have grown to a multi-billion dollar industry leader. Their owners also own the Orlando Magic NBA basketball team (or at least one of their owners. The other has passed away. Legitimate network marketing companies provide a way for people to enter into the business world with minimal investment, and if they are willing to work, they have a chance to succeed. People that fail usually are not following the guidance of the successful people that offer it free in most cases. The industry has about a 93% attrition rate for one reason. “Little Bobby” signs up, he gets all excited….he sponsors Mom, Dad, Uncle Joe, Sister Sue, Brother Billy, and 7 or 8 cousins, and he is feeling like he is about to set the world on fire! He builds his team to 15, which is the number most MLM’s will say is a launching point. The problem is that the ones he sponsored never REALLY got into the business because they intended to work it….they just did it to support Little Bobby! They do nothing….he makes no money….and the next thing you know, he is dropping out because his “team let him down.” The other difficulty is people that get into the business and spend ALL of their time recruiting, and not enough time training.
Visalus has some of the best business training tools I have seen in 32 years of being in business for myself. I am already successful, and in fact I am fairly wealthy. I have extra rooms in my house, and I let young men from my church live here that need a fresh start, and help in finding a new job. One of the “room mates” is the one that got me started on the product….not the business. Once I experienced the product for myself, I fell in love with it, and began to research the company. Absolutely NOTHING you have asserted about their business is true…..except that you could duplicate the basic product for less….as far as the nutritional value. So what? You can buy soap cheaper than you can from Amway…..but that would NOT leave enough profit to be able to pay everyone responsible for their organization to move it the way they do, or provide the opportunity they have for so many. Visalus products are high quality, they taste better than anything you will be able to duplicate….AND THEY WORK! Talk all you want about your “Twinkie diet” but until you bring hundreds of people together that have lost as much as Visalus has (Including MY loss of 56 pounds in 90 days), your opinion is really of little concern to anyone that matters.
Additionally….Visalus has created more legitimately independant business owners that are PAYING THEIR BILLS WITH THEIR VISALUS CHECKS than any business I have ever seen as quickly as it has.
Lastly….the report you mentioned about the 30 some thousand promoters only showed promoters that were actively purchasing NOW. They DO have over 77 thousand that have signed up. Unfortunately, “Little Bobby” wasn’t happy that it wasn’t GIVEN to him, and doesn’t buy the product any more. Maybe that’s my fault for not training him….maybe its his for not working hard enough, or listening to the people that are ready to teach him….either way….one of the most successful “pyramids” that I know of (McDonalds) STILL has locations that fail! Every business that fails doesn’t constitute an illegal operation.
Don’t be so LAZY, Lazy-man! Do the REAL homework! Talk to the FTC yourself! I HAVE! Talk to SUCCESSFUL Ambassadors in Visalus and find out why they are successful! TRY THE PRODUCT!!!
Last but not least….I don’t feel “eviscerated” in the least! In fact, its guys like you that make me feel EMPOWERED, because when I take the time to check out your statements, and I find out the REAL answers…it just makes my faith in what I am doing stronger….so thanks for the boost! Keep up the “lazy” work!
James Sarver said,
Can you provide a link on the FTC’s site that says it. When I searched Google that was the exact quote on the Wikipedia definition and it wasn’t quoted or cited as being attributed to the FTC. If they truly are the FTC’s words give me a link, because we should fix Wikipedia, so that it properly cites the source you seem to have.
On the other hand, I’ve given you direct information about what the FTC says on pyramid schemes as it related to MLMs here: http://business.ftc.gov/documents/inv08-bottom-line-about-multi-level-marketing-plans. You don’t seem to debate this document. Instead you want to claim that I’m “perpetuating a lie” when I cite the document. Again, I’m only presenting the FTC’s document and making the only logical conclusion about Nick Sarnicola’s business based on his recruiting. Whether other representatives in ViSalus are making retail sales to people outside the scheme is interesting to me. It doesn’t seem we have reliable, independently audited information one way or the other.
My point is simply that for Nick’s business to not be an illegal pyramid scheme according to the FTC’s definition I cited, he has to be making a ton of retail sales himself. Otherwise his income, which I think is estimated to be more than a million a year (at least at one point) is based on recruiting and not retail sales. If he wants to sue me for defamation, is he prepared to show data of all those retail sales? I find it hard to believe he’s making all these sales himself to people outside the scheme while recruiting, and being a top aid at conferences and such.
James Sarver said,
Nice strawman falacy. I never said that ViSalus was under any investigation by the FTC. I said that HerbaLife was. You claimed it wasn’t. I showed you that it was. Rather than admit fault, you misrepresent what I’ve said to make it easier for you attack. However, if you read the rest of what I’ve said, the FTC’s budget doesn’t allow it to investigate the thousands of MLM companies that are going unregulated right now.
James Sarver said,
It certainly doesn’t appear to be a sustainable business model or half the people wouldn’t be leaving or becoming inactive every year. If everyone was just making money retailing product, they wouldn’t leave.
James Sarver said,
Again, going back to the FTC document, “Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”
I’m not saying that Amway is legitimate or not. They’ve settled lawsuits alleging they are a pyramid scheme for hundreds of millions. Here’s an example of one such case: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=arGRzOMOW3X4. Seems like if you aren’t a running a pyramid scheme, you wouldn’t agree to a settlement where it costs you $155 million of business.
However, none of this has any impact on whether ViSalus is legitimate or not. The FTC says some are and some are not and gives a very simple test. From what we know of Nick Sarnicola’s business it seems very obvious ViSalus is a pyramid scheme.
James Sarver said,
Your whole Little Bobby example is one of a someone who failed to build a pyramid scheme. It shouldn’t matter if he never recruits a single person, Mom/Dad/Uncle Joe/Sister Sue/any cousins at all. If he’s selling them retail product, that’s nearly 15 customers that you point out. That’s how a legitimate business should be run. It should not be his expectation that recruiting those 12-15 people are also going to recruit 12-15 people. If those people aren’t trying, it simply isn’t sustainable for everyone to recruit at that level. This is what makes it an illegal pyramid scheme. It doesn’t matter if Sister Sue isn’t really into the business… even if she was it isn’t mathematically sustainable, because she runs into the same problem that Little Bobby did, except she can’t even depend on Mom/Dad/Bobby/Billy/or any of the cousins to sign up… they already signed up under Bobby.
James Sarver said,
Any MLM saying this, which according to you would be “most MLMs”, is essentially admitting that it is a pyramid scheme. It is saying that you launch a business with retailing products in mind. You really need to recruit 15 people. As we can see from the image on Wikipedia’s page on pyramid schemes even recruiting 6 people is more than the population of the world at the 13th level. Suggesting that recruiting 15 people as a launching point is laughable.
James Sarver said,
What you mean is that they pyramid he built crumbles because it wasn’t sustainable. Mathematically it wasn’t possible for all the people below to endlessly recruit 15 people each. MLMers are quick to use the word “team”, when they should use “pyramid.” It’s a shame that they aren’t wise enough to recognize this Doublespeak
James Sarver said,
Can you point out any specific examples of what I said that is false? Please explain why it is false? You will never win a debate by saying, “Nothing that my opponent says is true” and then ending it without support. That’s what you are trying to do.
James Sarver said,
MLMers always try to say their product is of the highest quality. Elsewhere in the article, I’ve showed that it simply isn’t the case for Visalus. They use cheap soy protein. They use artificial sweeteners. The quality is lacking.
So you are admitting that MLM is a poor distribution method that raises the costs for consumers. You are one of the first to do that. It doesn’t seem like even with the increased pricing it is enough to pay ViSalus distributors or they wouldn’t have left in droves. It should tell you something that Nick Sarnicola makes his millions and tens of thousands of people are leaving. It isn’t rocket science.
James Sarver said,
This isn’t a diet website and isn’t intended to be, I’ve brought over 3.5 million readers together who have saved untold millions of dollars, including, but not limited to, helping them avoid being taken by pyramid schemes. I did this without asking for a single dime of their money.
James Sarver said,
Unfortunately they are doing it on the backs of thousands and thousands of people who overpaid for product, because they thought it was a legitimate business opportunity. If I rob a bank of a billion dollars and then use a million of it to hire 10 people to legitimate $100,000 jobs, it doesn’t make me some kind of angel for creating ten jobs of 6-figure incomes. You seem to be failing to see the big picture. And let’s not beging to count the millions that Blyth shareholders have lost.
James Sarver said,
Someone could have signed up years ago, realized that it was a scheme and left. They’ll still count as someone signed up. They don’t really matter other than to illustrate how bad the “business opportunity” is. It is fair to use the numbers that ViSalus themselves thought it was fair to report.
James Sarver said,
McDonalds doesn’t do endless recruitment as a means to make money. It is 100% retail sales. Like many MLMers, you have confused hierarchical organization, that is not dependent on recruiting, with a pyramid scheme.
James Sarver said,
Don’t use such ridiculous ad hominem fallacies. Who did you talk to at the FTC specifically? Will they go on record? I’ll be happy to contact them. Let’s do this. Again, I’ve talked to Tara Wilson one of the top ViSalus distributors just last week. I can tell you she wasn’t successful because she’s making many retail sales each month. She’s successful because she’s built a very large pyramid… as she’s done with other companies.
Interesting. I posted a long response detailing the FTC definition of “Pyramid Scheme”, showing how Visalus does not fit that definition, explaining that I have in fact talked to the FTC….etc…etc….
Somehow THAT reponse isn’t showing up. C’mon Mr. “Mensa”….censoring response that have to much credibility?
I stand corrected…..the response just posted.
I do wish to add something to my earlier post. I, too, was offered a membership to Mensa. Its not that uncommon, and it only labels you are someone intelligent enough to know how to learn….to research! The truth is I’ve lectured in 22 colleges and business schools and have no degree. I lecture on the Free Enterprise system that made this country what it is…and what we as modern Americans have done to destroy it. People like you do more damage than good by attacking companies offering legitimate opportunities. Personally, I offer a contract in addition to the Visalus contract I call the “Jericho Guarantee.” I’ll even offer it to you! If you sign up, and you do what I instruct you to do (and I list those things in my guarantee….nothing difficult at all) for ten hours a week (you name the hours) for one year…..at the end of the year, if you have not averaged at least $20.00 per hour for your efforts, I will personally write a check for the difference. I have the money to back it up. I give you simple instructions, a contractual guarantee, and offer any advice and counsel you need.
Unlike you, I don’t sit “lazily” around and attack what has proven to make MANY MANY people successful. I investigate why it works, instead of looking for reasons it might not. In this case I’ve taken it a step further. On my Visalus website, http://www.jhsarver.bodybyvi.com you can leave your contact info, and get in touch with me as well. At the risk of being “eviscerated” (no risk at all as I see it) feel free to contact me and take advantage of the offer. Obviously if at the end of the year, you’ve made nothing….I’m out about $10,400.00. However, if you make not only the $20.00 per hour, but much more….be prepared to make a public apology on stage at our convention in October.
C’mon Lazy…..lets see if you have the guts to PROVE what you’re saying is true!
First….the FTC link: http://www.ftc.gov/public-statements/1998/05/pyramid-schemes
Not MY definition….THEIRS.
Lets talk about pyramids for a second. The term came from the model showing one at the top, recruiting a few underneath, them doing the same, and so on. If you chart the growth it looks like a pyramid. Let me see….IBM, MICROSOFT, HOME DEPOT, etc…etc…..they all have HOW MANY Presidents? How many Senior Vice Presidents? How many Vice Presidents? How many division managers? The thing is EVERY successful business is a “Pyramid scheme”! WAKE UP! The difference in IBM and my VISALUS business is that I am at the TOP of my own pyramid….AND….so is every single promoter in the business!!! Can you go to work for IBM and get to the top of THAT pyramid? What are your chances? Add up the number of total employees….at last count 431,212 (http://www.ibm.com/ibm/us/en/) and your chances are EXACTLY….according to that figure….ONE IN 431,212!!! Okay….how many IBM employees make over a million? Less than 10!?!?! IN HOW MANY YEARS??? How many people in Visalus have made over a million dollars? More than ten by far! IN FACT MORE THAN 50! IBM has less than 10 out of 431,212…..we have more than 50 out of 77,000 (or less than 35,000 by your “active” figure). Sounds to me like my odds are better with VISALUS!
Okay…if everyone only buys the product wholesale and uses it themselves…and THAT makes it a pyramid scheme….I guess someone should report SAMS WHOLESALE….or COSTCO! The fact is that retail business DOES go on in Visalus!!! We have a buy 3 and get yours for free program where a person can refer three customers….AS a customer….and get theirs for free…>WITHOUT BECOMING A PROMOTER!!! Its a very successful program!
The thing that kills me is that you can’t get the fact that you’re knocking the very thing that made this country great….an opportunity to be financially independant. Everyone that tries doesn’t make it. FACT.
As for my McDonalds analogy….how many Presidents? How many Vice Presidents? Need I go on? They DO recruit “Promoters” just like any other franchize!!! The difference is ours will cost you around 500 dollars…..theirs will cost you much more than 500 thousand!!!
As for Little Bobby….you totally missed the point….but somehow that seems to be your norm. Little Bobby was not told that recruiting his warm market is the way to go. In fact, most successful people in our business SELL RETAIL to their warm market. I know promotors that have whole families family is on the shakes….and they buy from the promoter….RETAIL! I don’t have a single family member in my downline, and if I do bring them in I’ll pay their way and build it FOR them to help them out. That’s an option I have.
As for the attrition rate…I admitted that….and its not an issue. An investor in a McDonalds franchise has absolutely no GUARANTEE that his business will succeed, but he DOES have a guarantee that if he fails he is going to lose a heck of a lot more than 500 dollars!!!
Sorry Mr. Lazy….still not feeling eviscerated!
Regarding the Mensa thing. I brought it up not to brag or say that I’m smarter than you, but as a very simple proof that you are dealing with someone in the top 2% of intelligence (their definition)… the furthest from your “unarmed man in a battle of wits” comment. As I’m anonymous this is the easiest and quickest way to illustrate intelligence considering that you ignored the abundant display of the intelligence in the article itself.
Regarding the “Jericho Guarantee.”
I’d like to see the contract. Please post a link to where everyone can examine it and see what you are offering.
I laugh at the idea of $20 an hour. It may be good for some people, but I was making that 6 months out of college and double that with full health, vacation, and other benefits another 6 months later.
James Sarver said,
I don’t sit lazily around. Not sure where you got that impression. When you investigated why it “works”, did you come across the fact that it is a money transfer scheme from the people at the bottom to the top? You should have. You should have realized that the overpriced products are intentionally overprised, because the schemes REQUIRE people interested in the business opportunity to buy them. They can price at almost anything as long they convince people that it will make them money. That’s why you don’t see people successful retailing MLM products, only recruiting people and transferring their money to themselves.
James Sarver said,
Your reading comprehension really needs help. Here are just a few of your errors here:
1) I said that your exact quote comes from Wikipedia. I never said it was your definition.
2) Your quote contained the words ‘unsustainable business model’ which are not in the link that you gave. I searched the document and didn’t find any instances of the word “unsustainable” at all. So I ask you once again to cite EXACTLY where you found that EXACT quote from the FTC.
3) What you quotes was somewhat close to the sentence in the document, “They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.”, but you failed to include the very next, very important sentence, “Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure.”
4) At the bottom of the article, “1. The views I give, of course, are my own and do not reflect the official views of the Commission or any particular Commissioner.” This does not reflect the FTC’s views on pyramid schemes.
5) The document that you state is from 1998 and again, does not reflect the official views of the Commission. The one that I state is from November 2012. Your old out-dated, non-official document does not carry near the same weight as my link to their official and current document on the topic.
James Sarver said,
Hmmm, after I say that you make the mistake that MLMers make of confusing a heirarchical organization that doesn’t depend on recruiting with a pyramid scheme, that relies on recruiting. It’s hard to believe that you could be Mensa material without understanding the very basic difference. Put another way, Corporate America is Not a Pyramid Scheme. If you are software engineer for Microsoft, you’ll probably make $100,000 and likely never recruit a single person.
James Sarver said,
Are you including total compensation at IBM like stock options and such? It sounds like you are comparing what people make in IBM in a single year with what people made in ViSalus in their entire career there. Do you give ViSalus credit for “making millionaires” of people who were already very well paid in other MLM schemes like the people Nick recruited?
How many of IBM employees lose money because they are required to buy IBM products? What percentage of them in the United States net over $15,000 a year? I bet it would be around 99% of their full-time employees. What percentage of MLMers net over $15,000 a year… around 0.01% if you follow the income disclosures from various MLM companies. It seems like ViSalus is too embarrassed by their particular numbers and don’t even make this information available like other MLM companies do.
James Sarver said,
I’ve been to Sam’s and Costco numerous times and they’ve never once tried to recruit me to open up my own Sam’s or Costco. Not only that, but I’ve NEVER heard of them ever trying to recruit ANY of their customers. They certainly don’t say that you have open up 15 stores as a “launching point.” Costco and Sam’s make 99.9999% of their money selling product to people who do not own Costco and Sam warehouses.
James Sarver said,
You should follow this website and read a lot more of writing if you think that’s what I’m knocking. I teach people how to manage their finances and maximize opportunities to be financially independent.
The lottery is “an opportunity to be financially independant.” I’m not going to tell people to put their life savings in it and then feel proud that I gave them that “opportunity.” I’m certainly not going to justify it to the people who lose the next day by saying, “Everyone that tries doesn’t make it. FACT.”
James Sarver said,
Wow you just fell into the McDonalds franchising example that is one of the misleading irrelevant analogies of MLM. “Here’s where things are different. I have been a customer of McDonalds and Subway many times and never has the owner of the franchise approached me about buying a franchise. Owners of a franchise do not earn on-going commissions or percentages of sales of people they recruit.”
Again, the franchises clearly make their money with retail sales, not recruiting others and convincing people that there’s an unlimited opportunity to earn money this way.
Once you understand MLM better James, you’ll realize that McDonalds also limits competition so that two franchises don’t compete against each other. With MLM, there is no limiting of competition to ensure that there’s a viable retail sales opportunity. They don’t match supply with demand and have appropriate checks and balances in place. There’s a great article on it here: http://www.vandruff.com/mlm.html. The fact that the ViSalus “opportunity” “only” costs $500 is a negative because it isn’t a barrier to keep out the competition. Not only that, but the The business of MLM is terrible, because you don’t have full control of “product decisions, research and marketing, marketing restriction, rules, cost analysis or any other activity fundamental to owning a business.” (Credit author MJ DeMarco with that awesome realization.)
James Sarver said,
So where’s the page on ViSalus’ official website warning Little Bobby that he shouldn’t recruit his warm market? If he shouldn’t be doing that, and a lot of distributors are making a mistake of doing that, then it should be clearly spelled out and promonately highlighted in a key public FAQ.
You seemed to missed the point that when you say that building a team of 15 people is a “launching point”, you admitted that MLMs are unsustainable illegal pyramid scheme built on recruiting. Mathematically after a few interations you run out of people to recruit and can not “launch” your MLM business.
James Sarver said,
There’s a lot of conflicting information about McDonalds franchising failing. I’ve read that only one has ever gone out of business. I’ve personally never seen one go under. There’s a thread here where people say they may remember one in the 70’s and stuff like that. Then there’s information that McDonalds has closed 175 under-performing restaurants in a year. I’ve read that these are franchises they buy back and close them to relocate them in a better location. They don’t just say, “We are pulling your franchise and you are out of your investment. Tough luck.”
In any event, it’s an interesting subject, but I have yet to find anyone who has ever lost their money in a failed McDonalds. You are comparing something that may never have happened (McDonalds) to something that happens to over 99% of the people in MLM (lose money). It doesn’t make you look any better to have a bunch of people lose a small amount of money.
In MLM, there’s usually a lot more money lost the initial cost. There’s subscriptions to the marketing website (Vi-Net, I think you call it), there’s lead generation software and subscriptions that people. There’s hotel, airfare, and conference tickets. It may not be typical, but it can add up to $20,000 as illustrated in this Forbes article: http://www.forbes.com/forbes/2008/0811/050.html.
You may not feel eviscerated by now, but you should.
Haven’t posted here in quite some time, but I’ve enjoyed watching the comments.
I also enjoyed this recent article: http://www.freep.com/article/20140406/BUSINESS06/304060058/ViSalus-revenues-and-promoters-spiral-down
In one of his recent comments concerning pyramid vs legitimate businesses, James Sarver makes an asinine statement. He says that in his business, he and everyone else is at the top of their own pyramid. But if you signed up for Visalus under someone else, then no, you aren’t at the top of your own pyramid. That person makes money off of your efforts just as much as you make money off of the efforts of those below you.
If his logic made sense, than any manager at McDonald’s could say that he is at the top of his pyramid because he has people underneath him and is, like James Sarver, choosing to ignore those above him.
And he also makes the claim that 10 or less employees at IBM make a million dollars or more per year, but does not back that up with any real source. I am sure the number is higher, though it has no bearing on this conversation at all. No one is claiming that the people at the top of the pyramid in Visalus make a ton of money. In fact, I think that is one of the two main points about the company that all of the critics are trying to point out. The second is that the people at the bottom are making little to no money. And that’s where it differs from IBM. An entry level engineering at IBM probably brings home AT LEAST $50,000 a year. How many Visalus reps can claim to make that much a year after expenses?
And like I did a year ago or so on this site, let’s look at the latest quarterly results from Visalus available, 2013 Q4 in this case. http://www.prnewswire.com/news-releases/blyth-inc-reports-4th-quarter-and-2013-sales-and-earnings-250384721.html $62.9 million in sales from 35,000 promoters. Let’s do the complicated math of dividing those two numbers and we see the average Visalus rep sold $1800 in product that quarter, or $600 per month. That’s revenue, not profit. So for Visalus to make any money (and they do have to pay their regular employees too) they have to pay out less than the $600 per month to the distributors. Yep, sounds like an amazing opportunity!
Really enjoying following this series of comments. James Sarver, you are way out of your league up against Lazy Man and Brandon.
Afew links to check out:
http://criminal.findlaw.com/criminal-charges/pyramid-schemes.html?DCMP=GOO-CRIM_PyramidSchemes-Gen&HBX_PK=pyramid+scheme+definition
(Pay particular attention to what it say specifically about MLM’s)
On the link I initially gave you as the FTC definition of a Pyramid scheme, I was writing my response while eating and getting dressed for a meeting, so I apologize for confusing the two links….but if you read down to the fourth paragraph concerning what constitutes a pyramid scheme, the FTC is pretty clear that if there are sales being made OUTSIDE the distributor chain, and there is no requirement for “inventory loading”, then it doesn’t fit the definition. Visalus strongly encourages and DOES make retail sales outside the distributor network….and there is NO inventory requirement at all!
I’ll address Brandon (commented above) for one moment. I AM at the top of MY pyramid. I OWN my own distributorship. The OWNER of a McDonalds franchise OWNS HIS BUSINESS. McDonalds makes money on his business….its the advantages of starting your own franchise company, but it does NOT make the local McDonalds owner any less an owner of HIS pyramid. The people that make money off of my sales don’t tell me what to do, require me to work any set hours….or have any real say in what I do or do not do as long as I don’t do anything unethical and say I represent them. I used McDonalds as an example because they are one of the most successful franchises in history….despite the fact that they are probably singlehandedly responsible for more obesity issues than any other food company. Franchisees are at the TOP of their own pyramid….just like me!
Lazy, I’ll gladly send a copy of my guarantee to anyone that goes to my website (listed in previous comment) and fills out the information. That doesn’t require you to sign up at all.
As for the “additional costs” you mentioned at the end of your last post, those are NOT requirements of the company. If they want to go to the convention, GREAT! No one tells them they have to….but I know I’d pay a LOT more to go to seminars put on by the people they feature in the convention that they charge less than $100 for a ticket to. I’ve traveled with the best in the “motivational speaking” business, and I know what THEY charge per hour for attendees to their seminars….and the average person on the streets would not want to pay it.
As for the $20,000….you would really have to make some ridiculous purchases, and never use the products you bought for personal use to get to that figure. I have two friends that got out. Total, each, they lost less than the initial $500, because they both received partial refunds…..and in both cases they actually used some of the products that were part of the $500 investment. Both, by the way, are now retail customers….you know…those people YOU think don’t exist.
Let me just say that if you haven’t tried the products, tasted why they are different, checked to see what the results are….you really don’t have the right to knock them. My guarantee stands for itself, and you’re welcome to put it to the test. More than half of the people in my downline got it for free, because I wanted to help them, and NO ONE in my downline has lost a dime.
You’re saving no one, Lazy. All you’re doing is fluffing your feathers and screaming “look at me….I’m the smartest guy in the room!”
I’ll challenge anyone to fill out the information on MY site, let me sponsor YOU in…WITH my guarantee to back it up….and I’ll even tell you that if you do what I say and you LOSE any money, I’ll personally pay THAT back as well! Print this….leave it on your site….I’ll stand behind my words.
Have a nice day people…..I know I will!
Thanks for the Findlaw.com link. I’m sure that a government organization like the FTC is going to change their policy because of something a commercial organization has published on their website. It’s a wonder that Fortune High-Tech Marketing got shut down by the FTC when they could have simply pointed to this page on FindLaw.com and said, “See, we are an MLM, not a pyramid scheme.” You should be legal council for these companies because you could save them dozens of millions of dollars with the FindLaw.com defense.
I hope you recognize the sarcasm there. I tried to lay it on pretty thick because sometimes tone isn’t obvious on the Internet.
If you read that FindLaw.com link, it says, “they [MLMs] don’t rely on an unsustainable stream of new recruits to make their money.” We’ve got a direct correlation from their quarterly releases that as the number of their recruits have left the company, they’ve made proportionally less money. So I hope you work a little harder on the FindLaw.com defense.
Once again, your link to other out-dated, non-official FTC document about inventory-loading is just that out-dated and non-official. Inventory-loading is clearly a red flag, but it isn’t the only one.
So now that you’ve tried the pass the back to other out-dated, non-official FTC documents and commercial organizations who don’t define pyramid schemes, why don’t you finally address the official information that the FTC gives consumers:
“Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money… Avoid any plan where the reward for recruiting new distributors is more than it is for selling products to the public. That’s a time-tested and traditional tip-off to a pyramid scheme.”
I’m well aware that the FTC require sales OUTSIDE the distributor chain. The point is that most of the money for a distributor should be made from those sales using what the FTC has said above. It isn’t fair to say the 37,000-ish active distributors made OUTSIDE sales to 100 people and hence there are OUTSIDE sales. That’s exaggeration for sake of argument. So what exactly are the independent audited figures of OUTSIDE sales so we can determine if ViSalus is a pyramid scheme. Surely ViSalus wants to show that its business is legal, so it provides them right? Can you link me to that page?
While there, I’m still looking for you to link me to the page where they tell Little Bobby not to recruit his warm market. And this is probably a good time to admit that you were wrong in saying that the FTC isn’t investigating HerbaLife.
My point very simply was that Nick Sarnicola makes a lot of money from his recruiting. I can’t imagine that he does enough in OUTSIDE sales to say that his money is based on those sales. Anyone with common sesne knows it is based on the recruiting. According to the FTC’s guidelines, his independent business (not necessarily all of ViSalus) would be characterized as an illegal pyramid scheme. Now considering that CNBC showed his business is more than 50% of sales, it stands to reason that more than 50% of ViSalus’ business is fraudulent. I feel pretty confident in the rest of my call that it is a pyramid scheme considering how 75% of people left the company after a short time… it shows that they didn’t have sustainable retail sales business. Otherwise they would still be there.
You are making the McDonalds thing more complicated than it has to be. McDonalds is not a pyramid, because franchisees don’t recruit other franchisees getting a cut of sales infinitely deep. You’ll never see the cashier, fry cook, or dishwasher try to recruit someone to open up a McDonalds franchise. On the contrary a typical franchise will serve millions of orders and recruit no one. So to recap, McDonalds has no multi-level commission structure like MLMs, doesn’t have recruiting, and does 100% (or 99.99999999%) retail sales.
You would have to work pretty hard to come up with a worse analogy.
Fittingly when you recruit people, which is the key characteristic of a pyramid scheme, you call it “building a team.” Funny how McDonalds franchises don’t recruit other franchises and it is a pyramid, while you do recruit other distributors and it is “building a team.”
Gary Haase hit the nail on the head when you balked at showing your “Jericho Guarantee” here. You don’t need people to fill out information to give us the information. Put it on your website and give us a link.
I never suggested the “additional costs” were requirements. I just said that they were common losses. Since 99.5% of people lose money in MLM (and the ones that make money are typically those who moved from another MLM where they were already at top), it is almost a guarantee the new distributor is going to start losing money right away. When they do, they ask, “What am I doing wrong?” The upline sells them tools such as motivational tapes, conferences, lead generation software, etc. They were sold a fraud business in the first place, and then as that fraud business fails, it bleeds the victim dry of even more money.
As for the two people you know who got out and became retail customers, clearly that’s not the norm. If it was ViSalus would still be selling just as much product. If people really love the product they’d still be buying with or without the opportunity like our friend Gary Hassse here. So how did ViSalus go from $190M in revenue in the 2nd quarter of 2012 when they had 114,000 promoters to 62.9M in revenue in last quarter with 37,500 promoters (Source: this graph of ViSalus public disclosures: http://www.freep.com/article/20140406/BUSINESS06/304060058/ViSalus-revenues-and-promoters-spiral-down). Clearly those promoters didn’t just become retail customers or else ViSalus would still have been doing 190M per quarter. If a promoter left their retail sales customers would be filled by one of the remaining promoters.
James Sarver said,
If you’ve never jumped off a bridge, you have no right to knock anyone else who has. Sorry, but this argument isn’t about the taste of the product. That’s subjective. I know what the results are because I’ve read the nutritional label. That tells me exactly what the results will be of the product. If you are talking about other things related to the “Vi Life,” I’ve already discussed those things in the article. I know the results for a number promoters who had the Vi Life of being a BMW and are now stuck making the payments because the whole ViSalus pyramid collapsed. I’ve seen those results and I certainly can knock ViSalus for that.
I’m the one who has used this great product for 13 months but don’t participate in the sales side of it cause it’s very clearly a loser for the giant percentage of participants.
I pay my 30.00 a bag delivered, along with my chocolate mixin and that’s it.
You had me interested in your guarantee though until you balked at showing it publicly here. Something that good should be publicly shown cause…why not?
I’m down to 4 bags right now and would take 10 more if you or any of your people need to move any.
Gary, I have no problem sharing the guarantee. I don’t post it publicly simply because right now I am the only one using it, and I don’t want others trying to use it without having the funds to back it up. I could just about guarantee if I posted it, some distributor for another company would steal it, OR some green VISALUS promoter that really had no idea how to use it would start having people sign up. Not everyone can do what I’m doing. I put enough money in escrow to back up 150 people collecting full value….even though I can guarantee that if they follow my instructions, they will not fail. If you want to see it just leave your contact info at [Edit: contact information redacted]
I’m not going to waste but very little more of my time on this, but I’ll leave you with one last attempt at explaining my point about McDonalds…..and I’ll type slow….so maybe you can keep up!
One CEO….who doesn’t flip or sell a burger(probably never has)! 4 Presidents of different regional divisions….none of whom have a background flipping OR selling burgers….and definitely don’t do retail sales now….6 Executive Vice Presidents…..6 Senior Vice Presidents. The CEO is at the top of the Pyramid (are you keeping up?), and there are SEVERAL levels between these higher level corporate guys before you get down to the around 5000 individual franchise owners. EVERYONE above the franchise owners gets paid….off of the sales of the bottom rung of the pyramid….and THEY are in fact at the top of their own! Then come managers, clerks, fry cooks….etc. Was this too complicated? The money flows all the way up!
I’m going to leave this and go on about my business…..the one I OWN….MY OWN LITTLE PYRAMID…..and I will UN-follow this thread, as your arguments are wasted on me, because of personal experience…..NOT by listening to people that never gave it a real shot….and failed because they didn’t listen to the people that are available to help them. You’ll find them in every walk of life, failing in every type of job or business….because that’s what they do….and you’re the one they seek out to rationalize their failure….either that, or writing about it! I have already enjoyed success at every level of business, so I don’t NEED to do this….but I will climb to the top of the VISALUS “Pyramid” because that is what I do. I don’t look for or accept excuses, and I CERTAINLY don’t waste my days running down the people that do the same.
Have a nice life!
You still mistake a hierarchical organization where there is no recruiting (i.e. McDonalds fry cooks and such) with illegal pyramid schemes, where recruiting is central to your spot on the pyramid.
I noticed you tried to say that McDonalds and ViSalus are similar in that the money flows up, but the fry cooks’ money doesn’t flow up. They get their wage and are not required to buy any product. They don’t even make any retail sales.
The two businesses have very little in common except for the hierarchical structure. It’s similar to comparing Mother Teresa and Hitler on the basis that they were both humans with two arms, legs, and eyes. When you get stuck trying to show that they were the same, you miss all the many, obvious, and very important reasons that they were different.
Yes, my arguments are wasted on you, because you are too brainwashed to understand them. You have been brainwashed that such arguments are “negative thinking” and only intend to bring your “business” down. Sorry to disappoint, I’m a champion of entrepreneurism and help people with their businesses as evidenced by my 1700 articles here. I don’t waste my time with clearly mathematically proven unsustainable businesses and “giving it a shot.” I simply show that failure is a mathematical certainty, it’s built into the compensation plan itself.
I am confused as to why you think a promoter does not make money on sales to customers? You could only sign up customers with Visalus and still make money. After $2500 in sales = 25% of commission. Meaning that if you promote the challenge and sign 30 customers a month…and they use the shape kit $99 per month – you would still generate income of over $700 per month…and this is residual income meaning that just like other companies that sell make up, or skin care in the same manner…customers will get their products each month. So each month you add customers you add additional income.
I don’t think I said that a promoter doesn’t not make money on sales on customers. I certainly don’t believe that. What I’ve said is that with a 75% reduction in promoters leaving ViSalus over the last year or two, it clearly wasn’t the opportunity they thought it was. This is further exacerbated by the fact that the current promoters were recruiting people during that time.
The average promoter wasn’t able to recruit one person in a year, which would mean a doubling of ViSalus distributors. They couldn’t hold their own and just keep the people they have. They were worse than letting half of their people go. Yet, the ViSalus compensation plan still ranks promoter status on recruiting.
Be careful when you think that income is residual. Customers can and will quit over time… especially with the prices that ViSalus’ charges. If you aren’t bringing in people I can guarantee you it will atrophy over time. Finally, and most importantly, if people were really able to sign up 30 customers earning that $700 in income a month, 75% of them wouldn’t have left the company.
I would imagine that it is exceedingly difficult to sign up 30 people to spend $99 every month. It’s doable in theory but the amount of time and effort it would take would result in an hourly wage far below the Federal minimum. That’s why people quit — they realize that they are killing themselves to make chicken scratch or, typically, lose money.
Even that overly optimistic scenario of generating $700 a month amounts to below subsistence wages. As Lazyman points out, there is no such thing as residual income given the extraordinarily high attrition rate. Most of the downline distributors and customers will quit soon after joining. So replenishing the downline becomes a never-ending process. Not to mention that signing people up merely passes the buck because they too will be faced with the task of continually trying replenish their dwindling downline, only the task for each successive person who sign up will be incrementally more difficult.
It’s a scam based on never-ending recruitment.
To take it one step further, if promoters can do so well simply retailing the products, let’s see them end all pyramid scheme questions by eliminating the ability to earn commissions from people who are recruited.
Let’s scrub the compensation plan clean of the talk of “Power of 3” that illustrates 3 people recruiting 3 more people in 9 levels so that one person has built a pyramid of 6561 people. Clearly, this is not providing new comers an accurate picture of the typical results of the business, a requirement by the FTC. Such depictions can easily be found as fraudulent on its own.
Nalalie, I challenge ViSalus to scrub anything from its compensation that has to do with recruiting. See what I did there? ;-)
Wow, I honestly can’t believe one would take so much time to bash a great company and a many great people who simply choose an alternative way of making a living why not bask corporate business the ultimate scam who pay you to work 40 hours a week but require you to work 50 or more with no overtime and or additional time off. A ton of your facts are outdated and no longer apply. As well as your product comparisons are way off. Muscle milk is packed with heavy metals as well as padded with protein the body can not absorb, I truly feel sorry for you and anyone who would spend so much time and energy creating an article full of lies and false information. It is up to each promoter to work their business and when effort is put in we are compensated for that work fairly. Vi is simple replace crap food with a healthy shake that actually tastes good, why would you ever want to talk someone out of a great product that has proven its self to work over and over and over again? Most do not have the discipline to eat clean on a daily basis and you know this, you should be ashamed and think of the harm you are doing by talking those out of something that may actually help them!
Well, it clearly isn’t a great company from almost any angle you look at it. They calling off the spin-off IPO and the subsequent decline of the parent company certainly paints a different picture. Additionally the fact that 75% of the promoters have left shows that they don’t agree with you.
The “alternative way of making a living” appears to be an illegal pyramid scheme using the information we have about Nick Sarnicola business. From all the information I have available to me, this is not outdated and still does apply. Worst case, please don’t use #10 Associate opponent charges with old news of the Rules of Disinformation to support your argument. At the very least give detailed information on why the facts no longer apply. I will read and update my post.
As for the corporate businesses that require you to work 50 or more hours with no overtime or additional time off… remember that ViSalus gives you neither of these even at 100 hours a week. In addition around 99.5% of people LOSE money in MLM. That is to say that they not only make a salary (be it minimum wage or more), but that they do much worse.
Muscle Milk is not packed with heavy metals or protein that body can’t absorb. This is a libelous accusation and one they could (should) sue you out of house and home for. If you don’t like the Muscle Milk example, there are many, many others that are available… it was just one concrete example.
If this article is full of lies and false information, please point it out. The fact that you included it with the sentence about Muscle Milk implies that they are somewhat related to it. How did I lie about Muscle Milk? What is the false information I gave. How did I lie about ViSalus? What is the false information that I gave? Can you give specifics or are you just pointing the finger saying, “Liar!”
Jan said, “It is up to each promoter to work their business and when effort is put in we are compensated for that work fairly.”
So you are saying that if someone spends hundreds of hours trying to get people to buy the product and fails, it is fair that Nick Sarnicola makes a few phone calls and recruits heavy hitters with extensive downlines and makes millions. That doesn’t seem to compensate work fairly. That seems to like a pyramid scheme.
Jan said, “Vi is simple replace crap food with a healthy shake that actually tastes good, why would you ever want to talk someone out of a great product that has proven its self to work over and over and over again?”
Why not replace crap food with good food and not a crap shake? Drink shakes is not a long term health solution. Eating well and exercising is.
Hi Jan.
I’ve been a loyal and happy user of vi shakes since March 11, 2013.
Unlike what many here think…it tastes great and works for me.
The problem is the business side of it. Its, quite frankly, dishonest and unsustainable.
How about…get this nice product on store shelves like Walmart so us users don’t have to hassle with the silly business side of it? It would bring the prices down to a fair amount. It could match other diet products then in the 15.00 to 20.00 range per bag.
Remember, this is coming from someone who loves the product but is not so blinded as to not recognize a pyramid scheme.
In closing…quit ripping us off put these on store shelves at a reasonable price where even more people can reap the benefits of it.
The founders cashed out a while ago. They don’t care what happens from here. Their incestuous buddies at Blyth gave them all millions while the company burns down. (Read the SEC filings)
You will be holding the bag very soon.
“Nothing to Lose” as Ryan would say.
It’s all fast cars and women from here on out.
Thanks for the link Telluric. It came up saying that the content had been removed. Here’s an archived version.
https://web.archive.org/web/20130216041645/http://lifedosingdrugs.blogspot.com/2013/02/in-resignation.html?m=1
In the Health & Wellness segment, ViSalus’s first quarter net sales were $57.4 million versus $104.3 million for the same period last year, a decline of 45%, largely reflecting the reduced promoter base in North America. At the end of the first quarter, qualified independent North American promoters totaled approximately 36,100 versus approximately 35,900 at year-end, and approximately 70,200 at the end of the prior year’s first quarter. International promoters totaled approximately 3,400 at the end of the first quarter, reflecting the recent entry into the U.K., Germany and Austria. Health & Wellness first quarter segment operating loss was $3.7 million this year versus operating profit of $4.2 million last year. Excluding allocated corporate expenses of $1.2 million this year and $2.2 million last year, first quarter operating loss for ViSalus was $2.5 million this year versus $6.4 million operating profit in the first quarter of 2013. The decrease in ViSalus’s operating profit was due primarily to the sales reduction and costs associated with its global expansion initiatives.