Forever Living Products Review: Aloe products
Forever Living Products was founded in 1978 and operate in the health and nutrition, cosmetics, personal care, weight management and household products MLM niches.
Based out of the US state of Arizona, Forever Living Products is headed up by Founder and CEO, Rex Maughan.
Maughan (right) came from a real-estate, accounting and construction background prior to launching Forever Living Products, but has remained with the company since launch.
In contrast to what I’ve typically found with long-running and well established MLM companies, Forever Living Products has had a relatively quiet and straightforward history.
In 2004 Forever Living was fined $280,000 fine after it was found to have breached Hungary’s laws regarding advertising, registration of nutritional products, and the use of cosmetics as medicinal agents.
There was also a bit of controversy over Forever Living’s original seagull-themed logo, with author Richard Bach successfully suing Forever Living for
the character, storyline, and copyrighted excerpts from the novel Jonathan Livingston Seagull to promote its marketing plan (for over 20 years).
This was extended out to include the use of
images from the motion picture and novel as its corporate logo, and reproducing it on merchandise, jewelry, products, packaging, and promotional materials.
I couldn’t find any specific information pertaining to a settlement, however Forever Living did change their logo from the seagull to the current eagle design they use today.
Those two legal issues aside, Forever Living Products recorded $2.5 billion USD in revenue for the year 2010.
Read on for a full review of the Forever Living Products MLM business opportunity.
The Forever Living Products Product Line
The bulk of Forever Living Products’ product line is based on aloe-vera, with the company claiming its products are
infused with 100% pure aloe vera gel and many other beneficial botanicals.
There are far too many products to go through here, however a full catalogue of Forever Living Products’ products are available on their website (including retail pricing and full product descriptions).
To give you some idea of what’s available, after perusing the catalogue I found the cheapest product available to be Forever Living’s “Aloe2Go” drink pouch, priced at $2.54 (single-serve).
At the top end of the pricing scale was the company’s “Business Packs” (that come with a variety of products), coming in at just over $400.
The Forever Living Products Compensation Plan
The Forever Living Products compensation plan revolves around the purchase of the company’s products. Retail commissions are paid out upfront and team volume is used to calculate residual monthly commissions.
Forever Living Products Affiliate Membership Ranks
There are twelve affiliate membership ranks within the Forever Living Products compensation plan and, along with their respective qualification criteria they are as follows:
- New Distributor – sign up as an affiliate
- Assistant Supervisor – generate at least 2 cc of sales volume
- Supervisor – generate at least 25 cc of sales volume
- Assistant Manager – generate at least 75 cc of sales volume
- Manager – generate 120 cc of volume over two consecutive months
- Senior Manager – personally recruit at least 2 Manager ranked affiliates
- Soaring Manager – personally recruit at least 5 Manager ranked affiliates
- Sapphire – personally recruit at least 9 Manager ranked affiliates
- Diamond Sapphire – personally recruit at least 17 Manager ranked affiliates
- Diamond – personally recruit at least 25 Manager ranked affiliates
- Double Diamond – personally recruit at least 50 Manager ranked affiliates
- Triple Diamond – personally recruit at least 75 Manager ranked affiliates
- Diamond Centurion – personally recruit at least 100 Manager ranked affiliates
Note that “cc” stands for “case credits”, which are awarded at a rate of 1 cc per $132 of wholesale personal volume generated by an affiliate and their downline.
Retail commissions are paid out on the sale of Forever Living Products’ products at a rate of 15 to 30%.
How much of a retail commission is earnt depends on the product being purchased, with retail markup ranging from between 17 to 43%.
Personal Volume Bonus
The Personal Volume Bonus is a commission paid out specifically on an affiliate’s own product purchases (an effective discount). How much is paid out depends on an affiliate’s membership rank:
- Assistant Supervisor – 5%
- Supervisor – 8%
- Assistant Manager – 13%
- Manager – 18%
Note that even though an affiliate purchases their products at wholesale cost, the Personal Volume Bonus is paid out on the retail cost of the purchased products.
New Distributor Bonus
When a Forever Living Products Assistant Supervisor or higher ranked affiliate recruits a new affiliate, they are paid a New Distributor Bonus on the sales volume generated by that affiliate (including personal purchases).
How much of a percentage is paid out depends on affiliate’s affiliate membership rank:
- Assistant Supervisor – 5%
- Supervisor – 8%
- Assistant Manager – 13%
- Manager – 18%
Group Volume Bonus
When a recruited affiliate reaches the Assistant Supervisor affiliate rank, their sales volume is then paid out via the Group Volume Bonus
The Group Volume Bonus pays out the difference between an affiliate’s Personal Volume Bonus percentage, and that of the recruited affiliate:
- Assistant Supervisor – 5% on Assistant Supervisor volume
- Supervisor – 8% on Supervisor volume and 3% on Assistant Supervisor volume
- Assistant Manager – 13% on Assistant Manager volume, 5% on Supervisor volume and 8% on Supervisor volume
- Manager – 18% on Manager volume, 5% on Assistant Manager volume, 10% on Supervisor volume and 13% on Assistant Supervisor volume
Note that in order to qualify for the Group Volume Bonus, an affiliate must generate at least 4 cc’s of volume for any given month. At least 1 cc of this volume ($132 in wholesale product purchases) must come from an affiliate’s own spend, with the other 3 ccs of volume able to be sourced from retail volume and an affiliate’s immediate downline purchases.
Forever Living Products’ Leadership Bonus is available to all Manager and above ranked affiliates and uses a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1).
If any of these level 1 affiliates go on to recruit new affiliates they are placed on level 2 and so on and so forth down a theoretical infinite number of levels.
In Forever Living Products each one of these affiliate legs is treated individually, with the Leadership Bonus paid out according to “generations” of Managers in each leg.
A generation is defined as the affiliate’s between the top position and the first found Manager or higher ranked affiliate found in an individual recruitment leg. After this affiliate is found the next generation begins, and ends when another Manager or higher affiliate is found in the leg.
If no Manager or higher ranked affiliate exists thereafter, then the generation is defined as infinite, extending down to the very end of the leg (irrespective of how many levels deep it runs).
Using this generation model, Forever Living Products pay out on up to three generations of Managers. The Leadership Bonus is paid out as a percentage of the volume generated by all affiliates within a generation, with the percentage determined by an affiliate’s own membership rank:
- Manager, Senior Manager and Soaring affiliates – 6% on the first generation, 3% on the second and 2% on the third
- Sapphire – 7% on the first generation, 4% on the second and 3% on the third
- Diamond Sapphire – 8% on the first generation, 5% on the second and 4% on the third
- Diamond and above – 9% on the first generation, 6% on the second and 5% on the third
A cc volume bonus also exists, paying out 40% of the generated cc wholesale dollar value of the first generation, 20% of the second and 10% of the third.
In order to qualify for the Leadership Bonus, an affiliate must be at least Manager ranked and generate at least 12 cc of volume each month. This volume can be generated by retail sales, an affiliate’s own purchases and the volume of their downline (up to but not including the first ranked Manager in each individual unilevel leg).
If an affiliate has 2 Managers in their downline (in two individual unilevel legs) who together generated at least 25 cc of volume for the previous month, the above Leadership Bonus qualification criteria is reduced to 8 cc of volume.
If an affiliate has 3 Managers in their downline (in three individual unilevel legs) who together generated at least 25 cc of volume for the previous month, the Leadership Bonus qualification is further reduced to just 4 cc of volume.
Joining Forever Living Products
Affiliate membership to Forever Living Products is free.
With a robust product offering Forever Living Products presents a solid business opportunity that, at least in theory, should be rooted firmly in the sale of products to retail customers.
Commissions are paid higher on retail sales which is great to see, and with every product being a repeat consumable there should be no excuses.
Presentation wise I was initially pleased to see Forever Living Products’ compensation plan fit onto just 1 page, but after thinking I understood it I later realised that further research was required (after I got about halfway through writing the review!).
The Forever Living Products compensation plan is presented clearly, however how it pays out is not immediately clear. For example I initially mistook the generation bonus to refer to unilevel levels, and though the Group Volume Bonus was some sort of diminishing unilevel that paid out on less levels as an affiliate achieved rank promotion.
That might just have been me but I do think a page or so of accompanying explanation wouldn’t hurt. Two or even three pages of compensation plan is still a perfectly acceptable length.
Additionally I thought slight improvement could be made within the plan itself, including an increase in retail values for case credit generation (maybe 125% – 150% of the dollar value).
Retail sales volume requirements could also be introduced to the upper levels of the compensation plan (or at least the first few levels past Manager), as I wasn’t a fan of strict affiliate recruitment qualification criteria.
A wholesale customer class wouldn’t go astray either. Currently someone who wishes to place a regular order at wholesale can do so as an affiliate at no cost, however the company cuts itself off from a potentially substantial retail revenue source by not having offering a non-participant wholesale option.
The weak point of Forever Living Products’ business model was that of the possibility that retail can be ignored and the opportunity can be reduced to a $132 a month recruitment focused scheme.
If an affiliate joins at no cost, buys $132 a month in products and sets about recruiting others who do the same, it is possible to wind up with a business effectively working as a pyramid scheme.
Granted it makes little sense to do so in the face of what are obviously retailable products which are readily consumed (and appear to be quite reasonably priced at a glance), it’s still possible.
The lack of an affiliate fee, whilst attractive from a marketing standpoint is also a double-edged sword, in that it can encourage people to focus on affiliate recruitment and ignore retail sales.
An affiliate can also self-qualify for commissions entirely via their own purchases, meaning there’s the potential for inventory loading each month. This potentially raises the question of motive behind product purchases by affiliates (actual use or to qualify for commissions that month).
The standard check with a potential upline should clear away getting sucked into a situation where you’re feeling pressure to focus on recruitment over retail though, and/or buy your way into commission qualification each month. If your potential upline has more personally recruited affiliate volume over retail sales volume, then you might have a problem.
Also pay attention to how they answer the question “so what do I have to do to get paid”. Affiliate recruitment isn’t a bad thing, but it shouldn’t be the core of your business.
Other than that, I think the revenue figures Forever Living Products are generating (at least in 2010) speaks for itself. Make sure you don’t sign up under someone playing a recruitment numbers game and if you can carve out a market for the product line I see no additional barriers that could hold you back.