Vidacup International is the latest MLM company launch hoping to capitalize on the widespread use of coffee and combination of a MLM based compensation plan.
Over the past few years I’ve seen a few MLM coffee company startups which have launched with various levels of success ranging from “where are they now?” to the upper reaches of moderate.
With most of these already launched companies having some variation of mushroom coffee as their primary product or mixed into their range of coffee products, I’m not all that sure there’s demand enough for yet another mushroom coffee offering in the MLM industry.
Obviously of a different opinion, the people behind Vidacup seem to think otherwise and so today we take a look at the recently launched Vidacup MLM business opportunity. Read on for a full review.
Vidacup was launched around mid 2012 and is based out of North Carolina in the US.
Heading up Vidacup is CEO Jeff Mack (photo right). Mack is credited in his Vidacup executive bio with generating “multimillion-dollar earnings from total sales of nearly $100,000,000″ within the MLM industry.
Company wise, Mack comes most recently from Waiora where he reached the membership rank of “Double Diamond”. Mack also a prominently featured success story in Waiora marketing material and training tools.
I wasn’t able to track down when exactly Mack joined Waiora, but he’d been with the company for at least a few years (2009 was as far back as I was able to trace). Also missing was why Mack left the company, however MLM wise when a top leader leaves a company history tells us it usually comes down to one of two things: floundering business (and earnings) or a problem with management.
Whether or not one or both of these applies to Mack leaving Waiora I’m not sure, however there’s no mention of Waiora in Mack’s Vidacup bio, nor any official reason cited for him leaving the company.
Looking at the corporate team for Vidacup, another name caught my attention – Donna Valdes. Valdes first popped up on my radar in 2010 as a frontline distributor of LiveSmart 360.
Upon joining LiveSmart 360, Valdes declared that the company would be her “last network marketing company”, only to leave LiveSmart 360 shortly after their official launch and taking home a $57,600 in prelaunch commissions.
Valdes again popped up on my radar as part of the announced corporate team for MLM coffee startup Javita. Valdes became involved with Javita shortly after leaving LiveSmart 360 in late 2010, only to leave the company a year later in October 2011.
The kicker? Javita is an offshoot of Waiora, the same company Jeff Mack was involved in and the company Donna Valdes was in prior to joining LiveSmart 360.
Sometime after quitting Javita in October 2011 and registering the vidacup.com domain name (registered in Donna Valdes’ name on February 23rd 2012, Valdes also had a brief stint in Serenigy (yet another MLM mushroom coffee company).
No idea what the story was with Serenigy as there’s virtually no information online about it. Given the recency of Valdes joining and quitting Serenigy though, I can only assume it was the briefest of distributorships.
The Vidacup Product Line
Sounding more like an Asian borne virus than ingredient you’d find in coffee, Vidacup credit the mushroom “H1X1″ as being the cornerstone ingredient in their coffee range.
Vidacup state that H1X1 is ‘a specialized strain of the Agaricus Blazei Murill mushroom‘ and that ‘this patent-pending mushroom has much higher levels of beta glucans, enzymes, and other life-enhancing nutrients than many other mushrooms’.
Using a H1X1 concentrate, Vidacup have three coffee based offerings:
- Ageless Brew – ‘a creamy, slightly sweet, low calorie latte‘
- Xtreme – an ‘energy drink loaded with effective herbs and vitamins’
- Mo-Joe – a ‘product designed to give you more of what you want in a morning coffee, giving an extra jolt of caffeine (and) also providing additional nutrients and herbs to increase energy, mental clarity, and an overall feeling of well being‘.
Retail wise I was only able to find Vidacup’s products bundled together in what were called “Bronze – No Kit” packs:
- “Bronze1 – No kit” - 2 boxes of Xtreme, 1 box of Mo-Joe and 1 box of Ageless Brew
- “Bronze2 – No kit” - 1 box of Xtreme, 2 boxes of Mo-Joe, 1 box of Ageless Brew
- “Bronze3 – No kit” - 1 box of Xtreme, 1 box of Mo-Joe, 2 boxes of Ageless Brew
All three packs were available at the same $111.80 pricepoint. I did note this was the same price as Vidacup’s autoship offerings so I’m not sure if this was a true retail offering to customers or simply wholesale product offerings for Vidacup distributors to purchase.
The Vidacup Compensation Plan
The Vidacup compensation plan pays out distributors upfront via recruitment and retail commissions, residually via binary and unilevel compensation structures and includes a bonus pool distributors can qualify for shares in.
Upon joining Vidacup distributors need to qualify themselves for commissions before they can earn anything. Commissions qualification within Vidacup must be met each month and can be achieved in one of three ways:
- a distributor signing up to an autoship order equal to 80 personal volume (PV)
- a distributor cumulatively purchasing Vidacup products (non-autoship) equal to at least 120 PV
- generating at least 120 PV in customer orders
Vidacup define retail commissions within their compensation plan as being ‘the difference in price (between the) wholesale and retail‘ cost of their products. Vidacup state this price difference is ‘40% above the wholesale price‘.
Preferred Customer Commissions
Preferred customers are what Vidacup calls it’s autoship customers, that being customers who sign up for a monthly minimum order and in turn receive wholesale pricing on their products.
There are no upfront commissions paid out on Preferred Customer orders, however volume from the sale of Preferred Customer orders is counted within the Vidacup compensation plan.
Upon recruiting new distributors into Vidacup, said recruited distributors have the option of purchasing a “Starter Pack”. Essentially, a Starter Pack is the combination of Vidacup products with a “Business Kit” (required purchase to join Vidacup as a distributor).
There are four Starter Packs new Vidacup distributors can join with and along with their paid out commissions they are as follows:
- Bronze ($149.99) – $27.50
- Silver ($369.99) – $82.50
- Gold ($699.99) – $165
- Founders Pack ($999.99) – $230
Vidacup Membership Ranks
There are several components of the Vidacup compensation plan where commission payment percentage amounts are decided using a Vidacup distributor’s membership rank.
There are nine membership ranks within the Vidacup compensation plan and, along with their respective qualification requirements, they are as follows:
- Associate – be active and generate $1000 in team volume and $500 from all your unilevel legs (excluding volume from the strongest)
- Silver Associate - generate $5000 in team volume and $2500 from all your unilevel legs (excluding volume from the strongest)
- Gold Associate - generate $10,000 in team volume and $5000 from all your unilevel legs (excluding volume from the strongest)
- Director - generate $25,000 in team volume and $12,500 from all your unilevel legs (excluding volume from the strongest)
- Silver Director - generate $50,000 in team volume and $25,000 from all your unilevel legs (excluding volume from the strongest)
- Gold Director - generate $75,000 in team volume and $37,500 from all your unilevel legs (excluding volume from the strongest)
- Ambassador - generate $100,000 in team volume and $50,000 from all your unilevel legs (excluding volume from the strongest)
- Silver Ambassador - generate $150,000 in team volume and $75,000 from all your unilevel legs (excluding volume from the strongest)
- Gold Ambassador - generate $300,000 in team volume and $150,000 from all your unilevel legs (excluding volume from the strongest)
Binary Residual Commissions
Residual commissions in Vidacup are paid out using a binary compensation structure. A binary compensation structure places a distributor at the top of the structure with two legs branching out from under them.
These two legs form the start of two teams, a left and right team, and continue on down a theoretical infinite number of levels. Of these two teams, the team that generates more sales volume than the other is referred to as an distributor’s “stronger leg” and the other their “pay leg”.
Depending on distributor’s membership rank, when an distributor’s “pay leg” generates a specified amount of sales volume Vidacup pay out a percentage commission of the volume generated by the pay leg.
Vidacup state this happen when two binary teams ‘accumulate equal amount of volume on each side of your organization’, however they don’t specify what this amount is.
Typically in a binary compensation structure a minimum is required in a weaker leg before commissions are calculated. With none specified however it appears that whatever volume the weaker leg manages to generate is what’s deducted from a distributor’s stronger leg each month and paid out on.
Volume included under the binary residual commissions component of the compensation plan includes purchased starter pack volume and the first two months of orders (autoship and retail orders, as well as recruited distributor orders). After two months repeat orders from customers and distributors do not count towards generated binary commission volume.
Note that a distributor’s downline volume is also included in this counted volume, subject to the same counted volume qualifications above.
How much of percentage earnt on this volume depends on three levels of qualification:
- 10% on the weaker leg volume – buy a Bronze Starter Pack or qualify for commissions and have personally recruited at least 2 distributors
- 15% on the weaker leg volume – buy a Silver Starter Pack or qualify for commissions, be generating at least 240 Group Volume (GV) and have personally recruited at least 3 distributors
- 20% on the weaker leg volume – buy a Gold or Founder Starter Pack or qualify for commissions, be generating at least 480 GV and have personally recruited at least four distributors
Additionally, how much a distributor can earn each week via the binary residual commissions is capped depending on a Vidacup distributor’s membership rank:
- Associate – $100
- Silver Associate – $300
- Gold Associate – $500
- Director – $1000
- Silver Director – $1500
- Gold Director – $2500
- Ambassador – $5000
- Silver Ambassador – $10,000
- Gold Ambassador – $15,000
Unilevel Residual Commissions
Whereas the binary residual commissions above counts customer volume, Vidacup’s unilevel residual commissions only pays out on the volume of a distributor’s recruited downline.
To do this, Vidacup use a unilevel compensation structure. A unilevel compensation structure places a distributor at the top of a unilevel team, with each personally recruited distributor placed directly under them in a new leg of recruitment (level 1).
If any level 1 distributors recruit new distributors of their own, they are then placed on level 2 of the team. If any level 2 distributors recruit new distributors, they are placed on level 3 and so on and so forth.
Using this compensation structure Vidacup pay out monthly residual commissions, with how many levels a distributor getting paid out on dependent on their Vidacup membership rank:
- Associate – 5% on levels 1 to 3
- Silver Associate – 5% on levels 1 to 4
- Gold Associate – 5% on levels 1 to 5
- Director – 5% on levels 1 to 6
- Silver Director – 5% on levels 1 to 7
- Gold Director – 5% on levels 1 to 7 and 2% on level 8
- Ambassador – 5% on levels 1 to 8
- Silver Ambassador – 5% on levels 1 to 8 and 2% on level 9
- Gold Ambassador – 5% on levels 1 to 8 and 2% on levels 9 and 10
Unilevel Commissions Check Match Bonus
A check match bonus is made available to each distributor, paid out on the unilevel residual commissions earnt (as above) down 3 generations of recruitment.
How many levels and how much of a check match bonus percentage is earnt by distributors again depends on their membership rank:
- Associate – 5% on level 1
- Silver Associate – 5% on level 1 and 2% on level 2
- Gold Associate – 7% on level 1 and 5% on level 2
- Director – 7% on level 1, 5% on level 2 and 2% on level 3
- Silver Director – 10% on level 1, 5% on level 2 and 2% on level 3
- Gold Director – 10% on level 1, 7% on level 2 and 2% on level 3
- Ambassador – 10% on level 1, 7% on level 2 and 5% on level 3
- Silver and Gold Ambassadors – 10% on levels 1 and 2 and 5% on level 3
The Ambassador Infinity Bonus
Used as a way to pay out Silver and Gold Ambassador ranked distributors on their unilevel team, the Ambassador Infinity Bonus pays out an additional 1% on the earnings of unilevel team members starting at level 11.
The payout counts all distributors in any given unilevel leg starting at level 11 of the unilevel structure, and pays out until another Ambassador ranked level is found in the downline. If no ranked Ambassador exists, then the Ambassador Infinity Bonus pays out down an infinite number of unilevel levels past 11.
Upon reaching the Gold Ambassador membership rank, distributors are able to earn an additional 1% (for a total of 2%) on qualified unilevel team member earnings past level 11.
The Vidacup Global Bonus is made up of 4% of the global volume of sales within Vidacup. Paid out monthly, Vidacup distributors are able to earn shares in the pool dependent on their Vidacup membership rank and specified personal sales volume targets:
- Silver Associate (1 share) – 80 PV
- Gold Associate (2 shares) - 100 PV
- Director (3 shares) - 140 PV
- Silver Director (4 shares) - 180 PV
- Gold Director (5 shares) - 200 PV
- Ambassador (6 shares) - 240 PV
- Silver Ambassador (7 shares) - 280 PV
- Gold Ambassador (8 shares) - 300 PV
Membership to Vidacup comes in at $39.95, with new distributors able to purchase product “starter packs” (which include company membership) ranging in price from $149.99 to $999.
Compensation plan wise I feel that Vidacup’s offering is a bit of a mixed bag. The recruitment commissions are an obvious recruitment driven incentive, as new company distributors are the only “customers” able to purchase the starter packs.
The binary residual commissions look good on the surface, however in an oddball move the two month volume cap totally shifts the focus on maintaining long-term relationships with customers to continuously finding new ones and recruiting new distributors (startup pack purchases count).
Given that the binary residual commission is the only residual offering that uses a distributor’s personal customer volume to calculate a commission off of, this is a bit of a let down.
The unilevel commissions are solid but are based off the earnings of those you’ve recruited, which be default shifts an distributor’s focus away from their own customer sales.
Looking at the two residual commission offerings, I feel the binary commissions might actually hamstring the unilevel commissions in that organically they’ll encourage a focus on distributor recruitment over customer orders.
With only a two month period to generate qualifying volume, it’s a much more attractive prospect to recruit new distributors and whack them on autoship than go to the effort of finding customers (unilevel commissions aren’t capped at 2 months of volume), earn your once-off retail commission and then only 2 months of residual commissions on their orders.
Trouble is though that if the unilevel commissions ideally would be padded out with customer orders, which aren’t attractive to generate and we’re back to square one.
On the management side of things personally I’ve got nothing against Donna Valdes but I strictly MLM industry wise I do find her recent history intriguing and I do feel that any Vidacup review would be incomplete without at least touching on it.
When analysing the MLM coffee niche as a whole, the skeptic in me finds it hard to ignore the obvious question of why would a high-profile distributor find the need to hop between no less than three MLM coffee companies within roughly a year and a half.
Quite obviously in their latest venture Mack and Valdes are building on their time together in Waiora and that’s how Vidacup came about, but given Valdes’ track record with MLM coffee companies you’d want to hope this isn’t just another company that’s going to be abandoned a few short months after launch.
That said whether Valdes leaves or joins the company shouldn’t have much of an impact on your own success within Vidacup. As with all coffee based MLM companies, considerations to take into account here are going to be the high cost of sample based marketing.
By and large the best way to market coffee is going to be getting people to drink it so keep in mind you’re most likely going to find yourself purchasing a decentish volume of coffee each month that you’re not going to be earning anything on.
If the business isn’t there, this could quickly turn into a loss that over time becomes too large to ignore, but due to its size keeps people going in the company trying to recoup their losses on sales they’ll never generate.
Furthermore it goes without saying that any prospective distributors will naturally be encouraged to try Vidacup’s coffee themselves before committing to company membership. I don’t know what it is about mushrooms and coffee but it seems every single MLM coffee company I’ve seen can’t help but launch without some sort of mushroom coffee product.
On that note, it doesn’t hurt to help check out the local competition in your area too. That’d mean a trip to some supermarkets and coffee retailers to see what prices and products you, as a Vidacup distributor, will be up against.
I’ll stress again that these are general caveats with MLM coffee companies and not just specific to Vidacup.
Given the questionable focus of the Vidacup compensation plan, I also feel it’d be worth checking up on the distributor/customer ratio of an distributor’s prospective upline. Not only will this give you some insight into how the company works internally, but it also acts as a guide in showing prospective distributors what they’ll most likely be doing upon joining the company (recruiting new distributors or finding customers).
Looking at the two month volume restriction on customer orders (which sticks out like a sore thumb) and apparent lack of retail on distributor’s replicated sales pages things aren’t currently looking good but as they say, when it comes to compensation plans that could go either way it’s the distributors who make or break a company.