Mannatech is an established player within the MLM industry and with that experience comes the weight of a company that is nearly two decades old.
Primarily trading in glyconutrient based products (plant sugars) and existing in an age where longevity is fast becoming a scarce commodity in the MLM world, today we take a look at the Mannatech MLM business opportunity and review it – warts and all.
Mannatech was launched in 1993 by founder Samuel L Caster and is a US based MLM company.
Since then Mannatech has spread globally and currently counts the United States, Canada, Australia, the United Kingdom, Japan, New Zealand, Republic of Korea, Taiwan, Denmark, Germany, Mexico, South Africa, Singapore, Sweden, Norway, Austria, the Netherlands, Ireland, Estonia, Finland and Czech Republic as active marketplaces.
Currently Mannatech is headed up by co-CEOs Stephen D. Fenstermacher and Robert A. Sinnott.
Mannatech’s eighteen year history is well documented and not without its eyebrow raisers.
In 2005 Mannatech stock holders filed a class action lawsuit against the company, alleging that the company made
a series of material misrepresentations; specifically: failing to control its sales associates and allowing them to make false claims concerning the efficacy of Mannatech products.
Mannatech settled in 2008 for $11.25 million USD but maintained the company participated in no wrongdoing.
In 2006 the Texas Attorney General began investigating the company and
on July 5, 2007, Texas Attorney General Greg Abbott formally charged Mannatech, Sam Caster, and several related entities with operating an illegal marketing scheme in violation of state law.
Mannatech settled the civil complaint on February 26, 2009 by agreeing to pay $4 million in restitution to clients who purchased products and $2 million to the state to cover its costs in the case.
In addition, Sam Caster agreed to pay a $1 million civil penalty and steer clear of any type of leadership position or employment relationship with Mannatech for five years.
These very public lawsuits and investigations into Mannatech tarnished their image subsequently the company’s stock price;
After profits of $32 million in 2006 and $6.6 million in 2007, Mannatech reported a $12.6 million loss in 2008 and a $17.3 million loss in 2009.
By mid-year 2010, one quarter of Mannatech’s sales were gone. 2010 losses were 10.6 million.
As the company’s market capitalizations continued to fall, S&P Indices dropped it from the S&P 600 Index, stating “They are no longer representative of the small cap market space.”
From the sounds of it, Mannatech was a company that encouraged its members to make all sorts of claims about glyconutrients without any tangible backing.
Since then the company appears to have cleaned up its act, but questions are naturally always going to persist as these are not minor small matters we’re talking about here.
The Mannatech Product Line
Mannatech retail a series of health, weight, fitness and skin care products that come in a variety of powders, slim sticks, chews, capsules, creams, serums and lotions.
At the centre of these products are what Mannatech refers to as ‘glyconutrients’. These glyconutrients allow Mannatech to use ‘plant-based, naturally occurring ingredients to create nutritional supplements‘.
I’m no scientist so my opinion of glyconutrients is fairly limited. Wikipedia’s entry for Mannatech however states that
Glyconutritionals were formulated to support cellular communication by positively impacting human glycoforms, a claim that has generated controversy among some members of the scientific community but has since been validated by two human clinical studies.
Mannatech itself has funded studies into the viability of glyconutrients, but perhaps of more interest are the studies that aren’t funded by the company.
Independent researchers in Washington, D.C. and Australia have conducted human clinical studies investigating the effect of Ambrotose complex on brain function. Mannatech provided the products at no charge, but did not fund these studies.
A study funded by Kraft Foods, Inc. reported that a single one-tablespoon serving of Ambrotose complex can significantly improve visual discrimination and working memory.
Dr. Talitha Best and Flinders University, Adelaide, Australia) and fellow scientists from Flinders University and the University of South Australia showed, in a trial of 109 healthy middle-aged male and female adults, that Ambrotose complex powder (4 grams/day for 12 weeks) significantly improved memory and improved psychological well-being.
The opinion of independent glycobiologists is that the body cannot digest Ambrotose, as it lacks the enzymes needed.
Prominent glycobiologist Dr. Ronald Schnaar, PhD of Johns Hopkins School of Medicine told 20/20 in a June 1, 2007 interview, “All of the sugar building blocks that we need in our body are made from the most common foods we eat.”
Hudson Freeze, PhD, leading glycobiologist at the Sanford-Burnham Medical Research Institute said this about glyconutrients: “There are authentic, scientific studies that have looked at people drinking these kinds of materials, and it doesn’t really do anything except increase flatulence.”
Again I’m not a scientist but there appears to be a lot of divided opinion even within the scientific community on the benefits of glyconutrients.
To their credit, it is worth noting that Mannatech back their product line with a 6 month money-back guarantee and claim to have spent $50 million dollars in research and product development.
Obviously I’m only able to comment on glyconutrients with limited authority, but I’ll revisit glyconutrients within the context of the
Mannatech product line in the conclusion of this article.
The Mannatech Compensation Plan
Mannatech claim to pay out ‘approximately 44%’ of the company’s revenue from retail in commission to members. To do this, the company pays out on what it calls ‘Immediate Personal Production’, ‘Accelerated Leverage Bonuses’ and ‘Long Term Bonuses’.
In more commonly used MLM terminology, these can simply be renamed ‘retail profits’, ‘recruitment bonuses’ and ‘residual income’.
Here’s a breakdown of the commission streams Mannatech offer their members.
Direct Retail Commissions
As a Mannatech member, when you sell Mannatech’s products at a retail level, you pocket the difference between the wholesale and retail prices as a commission.
A direct retail commission is also paid on all member orders (customers who pay a one time $10 admin fee). Members earn a 5% discount on retail prices and if they sign up on autoship, a further 10%.
As a qualified Mannatech Associate, if you sign up a customer as a member (note, this is not the same as being an associate), you will earn a flat 20% commission on all their orders.
The Direct Bonus
Mannatech’s products can be retailed individually on in what they call packs. Each time you as a Mannatech Associate sell one of these packs, you earn a Direct Bonus commission.
This commission is paid out at $25 if you are a ‘Preferred Associate’ and $75 if you are an ‘All-Star Associate’.
The Team Bonus
Mannatech’s Team Bonus is designed to encourage you to grow your business by providing you with a minimum $100 commission check each month. Note that an Associate is only paid the Team Bonus whilst their monthly income is less than $100.
In order to qualify for the Team Bonus, an Associate must they themselves be qualified ($100 minimum monthly spend) and has two options available to them;
- personally recruit 4 new qualified associates or
- recruit two teams of six qualified associates (you can help your team members recruit to make up your six).
Either of these options maintained from month to month will guarantee a qualified Associate a $100 Team Bonus until they are earning more than $100 through the compensation plan.
Team Development Bonus
Open to Regional Directors and above, the Team Development Bonus pays the upline of any Associate claiming the Team Bonus each month.
If an Associate you’ve sponsored successfully qualifies for the Team Bonus in any given month, you as their sponsor will earn $15 and so will your own sponsor.
Personal Power Bonus
The Team Development Bonus pays out $425 and is only available to Associates who are All-Star or Premium Associates (referred to hereafter as Premium Associates).
With each product pack sold, qualified Associates receive what are called ‘Pack Qualifying Credits’ (PQC). The Personal Power Bonus revolves around these credits.
Using the same configuration as the Team Bonus (4 directly sponsored members or two groups of 3), the Personal Power Bonus pays out when you generate either 8000 PQC with the first option or 12,000 PQC with option 2 (with no more than 6,000 PQC counted from each team).
Each time an Associate earns a Personal Power Bonus, their upline also receives a $200 one time commission.
The Unilateral Bonus pays out a monthly commission varying from 2-4% of monthly product orders generated by your downline.
As you new members to your Mannatech business they are placed in a unilevel organisational structure.
A unilevel organisation means that each member you recruit is placed directly underneath you in a new leg (your first generation). Any members they then recruit are placed in a new leg under them (forming your second generation).
The Unilateral Bonus pays out five levels deep using this configuration. Qualified Associates will receive a 2% commission on product sales on levels 1 and 2, and 4% on levels 3-5.
Automatic Order Bonus
For each Associate’s autoship order placed with Mannatech the recruiting Associate, providing they are both qualified, at least a Regional Director and a Premium Associate, will receive a 3% commission on the order.
A 0.5% Automatic Order Bonus is also paid out to the sponsor of the Associate receiving the Automatic Order Bonus, providing they themselves are qualified, at least a Regional Director and a Premium Associate.
Leadership Development Bonus
The Leadership Development Bonus is a monthly bonus paid out to qualifying National Directors or above, based on the amount of National Directors or Executive Directors they themselves have sponsored.
For each National Director personally sponsored, a $100 monthly commission is paid out and for each Executive Director, $450.
Leg Star Bonus
The Leg Star bonus is a commission paid out whenever you recruit somebody to Mannatech as a Premium Associate (meaning they buy a Premium product pack).
The Leg Star Bonus pays out various amounts depending on which star rank you are (there are four in total).
The Leg Star Bonus rank requirements and their corresponding payouts are as follows;
- 1 Star – You must have a unilevel leg with at least 12 Premium Associates in it. Once this is achieved you then receive a $20 Star Leg Bonus for each new Premium Associate you recruit. You also receive a $13 commission on all annually renewing Premium Associates (excluding any in your initial qualifying leg).
- 2 Star – Once you have two legs in your unilevel organisation with 12 Premium Associates, the second is capped at only being able to earn the 1 Star bonus. All your remaining legs will now pay out a $40 commission on each Premium Associate you recruit and $26 in Premium Associate renewals.
- 3 Star – Again, once a third leg reaches 12 Premium Associates within your unilevel, it is capped at 2 Star Bonuses and your remaining legs are commissioned at $60 for Premium Associate signup and $39 for a renewal.
- 4 Star – Your fourth qualifying 12 Premium Associate leg is capped at 3 Star bonuses and all future signups and renewals are paid out at the 4 Star level of $80 for a Premium Associate signup and $52 for a renewal.
The Leg Star bonus will also pay 25% on each Premium Associate enrolment to the first 1 Star, 2 Star, 3 Star and 4 Star ranked Associate (25% each Star rank) in the upline of the Associate receiving the initial Star Bonus.
Presidential Development Bonus
The Presidential Development Bonus is made up of a pool of 5% of Mannatech’s retail product sales revenue.
Qualified Presidential Directors receive a share when they obtain the rank of Presidential Director, with additional shares being earnt for each Presidential Director they have in their unilevel organisation.
This Presidential Development Bonus also can be earnt up to 11 generations deep within your unilevel, but is dependent on how many Presidential Directors you have in your unilevel width wise. One Presidential Director will pay you out 2 levels deep and this extends up to 8 Presidential Directors wide paying out 11 generations deep.
Note that each generation knocks 15% of the share value of gained from each Presidential Director. One generation is 85% of 1 share, 2 generations is 72% of a share etc.
In calculating how many actual shares a Presidential Director has, each of the share percentages are tallied up and rounded down to the nearest whole number.
Global Share Pool Bonus
The Global Share Pool Bonus is made up of 3% of autoship orders. 1% is allocated to National Directors, 1% to Executive Directors and 1% to Presidential and Bronze Presidential Directors.
National and Executive Directors each receive one equal share of their 1% pools respectively, whilst the Presidential 1% is divided up as follows
- 1 share to each Presidential Director
- 1.5 shares to each Bronze Presidential Director
Note that for some reason autoship sales generated in Korea do not count towards the Global Share Pool Bonus.
The Silver and Gold Bonus Pool
The Silver and Gold Bonus Pool is made up of 1% of the global autoship orders (again excluding Korea).
The Silver and Gold Bonus pool is divided into two sub pools with the first pool making up 75% of the total Pool value. This first portion pays out a flat 1 share to Silver Presidential Directors and 2 shares to each Gold Presidential.
The remaining 25% sub pool is split between both Silver and Gold Presidentials and is based on sales volume.
Starting with 1.5 points, members are incrementally increased by 0.5 points based on sales volume and ranked accordingly from the largest sale volume to the lowest (with these members remaining on 1.5 points).
Shares are then calculated based off the amount of points generated and the 25% sub pool is then divided out accordingly.
Global Volume Bonus Pool
The Global Volume Bonus Pool is made up of 1% of Mannatech’s global product sales. This pool is also only available to Platinum Presidentials who have recruited a minimum of four qualified Presidential Director legs within their unilevel organisation.
Again, the Global Volume Bonus Pool is divided into two sub pools consisting of 75% and 25% of the total pool volume.
Shares in the 75% sub pool are awarded based on the amount of Presidential Director legs developed within a member’s unilevel organisation. One Presidential Director leg is equal to one share.
Shares in the 25% are awarded based on the sales volume made by all non-Presidential Director Legs within member’s unilevel organisation. Each member starts at 1.5 points and is then awarded 0.5 to sort members from those with the most sales to the lowest.
Once done, each member is awarded a share value and the 25% sub pool is then divided up.
Interestingly, the Global Volume Bonus Pool payments are tied into something called the ’Platinum Presidential Ambassador Loyalty Agreement’. I was unable to find the specifics of this agreement but from what I gather, it basically forces Mannatech Platinum Presidential members to promise the company they won’t cross sponsor other MLM opportunities to their downline.
The penalty for breaching this agreement is a two-year ban on Global Volume Pool Bonus commissions or in more extreme circumstances, termination from Mannatech altogether.
Membership Ranks of Mannatech
I was going to include these membership ranks before going into the compensation plan, but with Mannatech each membership rank unlocks more of the compensation plan so I figured it best to put the ranks at the end.
Here are the Mannatech memebrship ranks and their accompanying compensation plan perks;
To qualify as a Regional Director, an Associate must be producing a total of 1500 group volume with no more than 1000 of this volume coming from any one leg within their unilevel organisation.
The additional bonuses and commissions available to Regional Directors are
- the Unilateral Bonus being opened up to level 6 and paying 6%
- 6% of their strongest unilevel organisation level’s group commissions
- 4% of their first sponsored Regional Director’s strongest unilevel leg’s group commissions
To qualify as a National Director, members need to be generating a total of 6000 group volume with no more than 4000 of this volume coming from any one leg within their unilevel organisation.
The additional bonuses and commissions available to National Directors are
- the Unilateral Bonus being opened up to level 7 and paying 6%
- 6% of their strongest unilevel organisation level’s group commissions
- 4% of their first sponsored National Director’s strongest unilevel leg’s group commissions
- 2% of their first second generation National Director’s strongest unilevel leg’s group commissions
To qualify as an Executive Director, members need to be generating a total of 20,000 group volume with no more than 14,000 of this volume coming from any one leg and 18,500 coming from any two legs within their unilevel organisation.
The additional bonuses and commissions available to Executive Directors are
- the Unilateral Bonus being opened up to level 8 and paying 6%
- 6% of their strongest unilevel organisation level’s group commissions
- 4% of their first sponsored Executive Director’s strongest unilevel leg’s group commissions
- 2% of their first second generation Executive Director’s strongest unilevel leg’s group commissions
To qualify as a Presidential Director, members need to be generating a total of 60,000 group volume with no more than 40,000 of this volume coming from any one leg and 54,000 coming from any two legs within their unilevel organisation.
The additional bonuses and commissions available to Presidential Directors are
- 7% of their strongest unilevel organisation level’s group commissions
- 4% of their first sponsored Presidential Director’s strongest unilevel leg’s group commissions
- 2% of their first second generation Presidential Director’s strongest unilevel leg’s group commissions
Extending the Presidential Director Membership are the ranks of Bronze, Silver, Gold and Platinum Presidentials. To qualify at one of these levels a Presidential Director must have either one, two, three or four Presidential Directors or higher respectively in separate legs of their unilevel organisation.
Those wishing to join Mannatech have three options available to them, they can either join Mannatech
- as an Associate ($610)
- as a Preferred Associate ($1565)
- as a Premium/All-Star Associate ($3800)
Note that certain components of the compensation plan are only available to Premium/All-Star associates, but new Preferred and regular Associates are able to upgrade at any time by purchasing a Preferred or Premium product pack ($1565-$3800 respectively).
First and foremost I want to state that the Mannatech compensation plan is utterly confusing and unnecessarily lengthy. I’ve been studying and writing about MLM compensation plans for a few years now and Mannatech’s was the first in a while to give me headaches.
I don’t know who the blockhead was that designed it but I think it’s a safe bet that only the stringent of members conducting their due diligence on Mannatech are going to bother fully understanding all aspects of it.
I personally believe given that a compensation plan is how you’re going to make your money with any MLM opportunity, that those wishing to join one should familiarize and understand all aspects of a company’s compensation plan. Mannatech make this ridiculously hard to get your head around and their compensation plan reeks of something long carried over from the 1990′s that should have been updated and streamlined years ago.
As it stands now it reads like a house that has been continually built upon and now goes off on all manner of tangents, all of which are being barely held together with duct tape.
With that out of the way, the actual mechanics of the compensation plan are actually quite disappointing. There is a decent amount of integration of product sales but right from the start with the Direct Bonus, new members are actively encouraged to recruit new members and put them on autoship.
This then continues on with all of Mannatech’s commissions (barring the retail commissions) having some sort of recruitment requirement tied into them. That said, there’s nothing stopping you from just earning commissions on your retail customers but with so much of the compensation plan tied into recruitment, there’s virtually no way to progress beyond simple retail sales without recruiting people.
No doubt the prospect of having to directly recruit four new members or build a team of six right out of the gate will be a steep learning curve for those new to MLM and network marketing.
And not only that, but after doing so they then have to help those they’ve recruited do the same… all the while trying to rack up retail sales just to earn something (with $100 required for autoship, the Direct Bonus’ $100 guaranteed monthly minimum commission just turns Mannatech into a zero sum opportunity).
Product wise there’s a lot of information out there regarding glyconutrients and glycobiology. As a prospective Mannatech member I’d highly encourage you to read up as much as you can on this. I’ve previously written an article on a Mannatech co-op which generated quite a lengthy 300+ comment discussion on the pros and cons of glyconutrients and glycobiology that’d make for a great start.
This I mention not as an option but rather a requirement for anyone looking at joining Mannatech as it’s hard to go past the company’s products without entering into a glyconutrient discussion, even if it’s just a further explanation and clarification of what exactly they are.
Then there are the startup costs. Even the basic Associate joining option comes in at over $500 and if we start talking about Premium/All-Star membership, we’re talking thousands of dollars!
That’s a pretty steep entry price for a consumable product based MLM opportunity by any stretch of the imagination. Not to mention the fact that you cannot advance beyond Regional Director without making a near $4000 product purchase (being a Premium/All-Star Associate is compulsory to advance beyond RD).
Mix this all together with the fact that Mannatech is now eighteen years old and I get the sense that the market itself for Mannatech’s products is probably going to be ridiculously hard to crack into for someone joining today.
You’ve got a ridiculously complex compensation plan (not helped by a compensation plan guide that is written like an academic paper), products of questionable value and a company history fraught with no less than two lawsuits that have been settled out of court with Mannatech having to pay out in both instances.
None of these look good when it comes to MLM and whilst they might not be deal breakers, be aware that you’ll most likely be facing a rather steep uphill battle to get your Mannatech business off the ground. And whilst that alone shouldn’t discourage you, be aware that you’re then not really going to get anywhere with Mannatech unless you get out there and build yourself a rather large team.
No easy task for the reasons outlined above.
Still, it’s not impossible and if you do truly believe in the benefits of Mannatech’s products, are prepared to try to create your own market, have answers to questions about the company’s legal problems and use of glyconutrients you’re going to get, and don’t mind a compensation plan that is heavily tilted towards recruitment, you might just have a chance.
As always, good luck – probably more so with Mannatech than I usually prescribe as it sounds like you’re definitely going to need it!