Lifestyles International Review: A lack of retail
Lifestyles International was founded in 1989 and operates as an MLM company within the health niche.
Lifestyles was founded by Chairman and CEO David DeBora. Having started Lifesyles well before the internet age as we know it today, details of DeBora’s history prior to Lifestyles come from the company itself:
David has enjoyed successful careers in real estate and construction, working long hours to build family homes.
(David) was introduced to Network Marketing by a friend. Within a year after he began to work in Network Marketing, David was the company’s number one Distributor in Canada.
David soon realized the extraordinary power of Network Marketing, and his focus turned to building a Network Marketing company of his own.
In 1989, David founded Lifestyles International.
Not strictly business but money related nonetheless, it seems Debora (photo right, looking slightly creepy) holds the distinguished record for having been ordered to pay out ‘the largest legal awards in Canadian divorce history‘.
Mr. Debora, who failed to fully disclose his assets to former wife Miriam Graham, was ordered to pay her $2.55 million to cover her legal and forensic accounting expenses.
Together with the matrimonial property award, the amount is close to $12 million.
(Debora) failed to make financial disclosure, which persisted to the end of the trial. He was deliberately untruthful both on discovery and at trial,” Judge Backhouse noted.
12 million? Ouch! One would hope Debora doesn’t run Lifestyles in the same way he ran his 9 year long divorce proceedings.
Aside from divorce proceedings, Lifestyles International (under ‘Lifestyles Canada’) themselves as a company were convicted in 2001 for ‘failure to disclose important information to the participants in their recruitment efforts in 1999-2000‘.
This conviction resulted in Lifestyles being
fined $95,000 after pleading guilty, in the Ontario Superior Court of Justice, to four criminal charges under the Competition Act‘s multi-level marketing plan provisions.
From what I can gather, the conviction (scroll down to the middle of the page for court documents) primarily revolves around Lifestyles and its members making “unfair and unreasonable” representations of the company’s compensation plan and a Lifestyle member’s income potential.
Legal dramas aside, after initially selling high-fibre cookies and based out of Canada, over the next twenty two years Lifestyles expanded their product range and available markets, primarily into Asia, and slowly evolved and developed into the company as it’s known today.
Read on for a full review of the Lifestyles International MLM business opportunity.
The Lifestyles International Product Line
Lifestyles International claim their
products are tested by independent ISO-certified laboratories to ensure safety, purity and reliability.
Lifestyles products are proudly made in Canada under the world’s most stringent quality controls, regulated by Health Canada and measured by GMP and HACCP standards.
The company’s products, which come in (varieties) primarily target the health, weight-loss and anti-aging niches.
Intra is Lifestyles flagship product and is a “natural food supplement” juice the company states is made from
proprietary formulation of 23 time-tested and trusted botanical extracts that provide the body with antioxidants, flavonoids, lignins, polysaccharides and other health enhancing nutrients specific to each herbal extract.
Intra was added to the Lifestyles product range in 1992 and ‘has remained unchanged since’.
Intra comes in 950ml bottles and retails for $35 USD.
Other Lifestyles International products include –
- Nutria – an anti-oxidant dietary supplement containing ‘green tea, grape seed and blueberry extracts’
- FibreLife – a fibre supplement that contains ‘soluble fibre derived from concentrated, natural sources such as Konjac Glucomannan, Guar Gum, Xanthan Gum with added cinnamon extract‘
- Calcium Formula – a calcium supplement containing ‘betaine hydrochloride (acid producing compound), vitamin C, zinc, copper, silicon, horse tail, coix seed and betaine hydrochloride‘
The Lifestyles International Compensation Plan
The Lifestyles compensation plan revolves around a unilevel commissions structure.
A unilevel structure places you at the top of a team, with all each personally recruited member placed directly underneath you (forming your level 1). Any members your level 1 recruit form your level 2 and so on and so forth.
Using this structure, Lifestyles International pay out retail commissions and a number of bonuses to their distributors.
Personal and Group Volume
Group Volume and Personal Volume are used in the Lifestyles International compensation plan to keep track of a member’s sales volume throughout a given commissions period.
Personal Volume (PV) is defined as sales volume generated by a member through personal purchases of product from Lifestyles.
Group Volume is defined as the total sales volume made by a Lifestyles member and their downline.
Lifestyles International Membership Ranks
There are nine membership ranks within the Lifestyles International compensation plan. Along with their respective qualifications, they are as follows:
- Distributor 1 – entry-level distributor level
- Distributor 2 – generate over 601 accumulated GV
- Distributor 3 – generate over 1501 accumulated GV
- Direct Distributor – generate over 2800 accumulated GV (of which 1000 must be PV), and be generating at least 1200 GV a month
- Regional Director – generate at least 1200 GV a month with a Direct Distributor in at least two unilevel legs
- Executive Director – generate at least 1200 GV a month with a Direct Distributor in at least four unilevel legs
- National Marketing Director – generate at least 1200 GV a month with a Direct Distributor in at least six unilevel legs, and have at least two unilevel legs that have generated over 25,000 GV cumulatively
- International Marketing Director – generate at least 1200 GV a month with a Direct Distributor in at least six unilevel legs, and have at least four unilevel legs that have generated over 25,000 GV cumulatively
- Global Marketing Director – generate at least 1200 GV a month with a Direct Distributor in at least six unilevel legs, and have at least six unilevel legs that have generated over 25,000 GV cumulatively
Retail commissions in the Lifestyles compensation plan are defined as Lifestyles affiliates ‘purchasing products from Lifestyles at wholesale pricing‘ and then making ‘20-30% on retail sales to their customers‘.
Direct Distributor Override
If a Lifestyles member has not qualified as a “Direct Distributor”, the first qualified Direct Distributor in their upline receives a 20% override commission on any product purchases the non-qualified members makes.
Note that Direct Distributors earn the full 40% retail commission (offered as a product discount when they purchase products directly from the company).
Fast Track Bonus
Lifestyle’s Fast Track Bonus pays out an 8% recruiter’s commission on the personal product orders of any newly recruited Lifestyles members within their first two calendar months of business.
The Lifestyles Generation Bonus pays out an additional commission to Lifestyles members who are at the Direct Distributor level or higher.
A “generation” in the bonus is defined as personally recruited Direct Distributor or higher members in your downline. Any directly recruited Direct Distributors in your downline are your first generation, any Direct Distributors your level 1 have recruited are your level 2 and so on and so forth.
For the purposes of qualification, each unilevel leg operates independently of the rest (generations are defined uniquely in each leg).
Starting at the Direct Distributor membership level, the Generation Bonus pays down up to six generations as follows:
- Direct Distributor – 4% three generations deep
- Regional Director – 4% on the first three generations and 5% on the fourth
- Executive Director – 4% on the first three generations and 5% on the fourth and fifth
- National Marketing Director – 4% on the first three generations, 5% on the fourth and fifth and 2% on the sixth
- International Marketing Director – 4% on the first three generations, 5% on the fourth and fifth and 4% on the sixth
- Global Marketing Director – 4% on the first three generations, 5% on the fourth and fifth and 6% on the sixth
The Lifestyles Organisational Bonus is paid out to National Marketing Directors and Higher as a percentage commission based on their organisation’s GV.
- National Marketing Directors qualify by generating an accumulated 75,000 GV and earn 1% of their organisation’s monthly GV
- International Marketing Directors qualify by generating an accumulated 150,000 GV and earn 2% of their organisation’s monthly GV
- Global Marketing Directors qualify by generating an accumulated 225,000 GV and earn 3% of their organisation’s monthly GV
Joining Lifestyles International
Membership to Lifestyles International is $40 and then $20 per year thereafter.
With a tangible product line there’s no question of whether or Lifestyles International is a product based MLM opportunity.
Examination of the compensation plan however reveals several red flags in terms of money flow from retail sales and autoship orientated marketing of the business opportunity by the company itself.
First and foremost, retail sales as defined by Lifestyles aren’t really retail sales at all, at least not within the company’s compensation plan.
As per the Lifestyles compensation plan, products are only purchased from Lifestyles by members. Members are then able to sell these products to customers but these customers don’t deal directly with the company.
Mechanically, this means that 100% of the money flowing into Lifestyles is coming from company members.
Given this, whether the products are sold, stored in a basement or simply thrown out after purchase seems irrelevant. Of course selling the products to customers after you’ve purchased them yourselves would be the way to go, but mechanically this is still reselling of the products, as opposed to members generating retail sales within the company itself.
My autoship concerns with Lifestyles began when I noted a strong push in the company’s compensation plan material (not publicly available on their website), for members to purchase large amounts of product to qualify themselves as “Direct Distributors” upon joining the company, or shortly thereafter.
As per the Lifestyles compensation plan,
The quickest way to start earning and taking advantage of our career plan is to become a Direct Distributor. Here are the various ways in which you can attain this status and start reaching your dreams!
which is then followed by a series of options:
- Cumulative Direct – generate 2800 accumulated GV with at least 1000 must be PV) within 60 days of joining the company (do this in 30 days and they’ll throw in a free case of Intra juice)
- Instant Direct – Purchase 2800 volume points of product in a single order
- LifeBuilder – Purchase 1000 volume points of product in a single order, recruit two new distributors who also purchase 1000 volume points of product in a single order – all within 60 days of joining the company
As you can see, each option is a combination of purchasing product yourself (realistically new members are going to struggle to reach those product sales targets unless they’re importing a customer/distributor downline from another company), and recruiting others and convincing them to do the same.
Perhaps even more worrying though is Lifestyle’s description of the above ‘career options‘ as “investments”:
Tied in with the fact that retail sales by definition don’t exist, it indicates that at a company level recruiting new distributors and getting them on an autoship order appears to be the focal point of the business model and how it’s marketed.
And keep in mind, this is how Lifestyles themselves are marketing their business to prospective members. Naturally it follows anyone recruited with this material is going to go out and market the company in the same manner it was marketed to them.
In all honesty I’d expect much better for a MLM company that’s been in business for twenty-two years. One possible explanation could be Lifestyles aggresive push into Asian markets over the past decade or so.
Notably if you browse the 2011 Lifestyle’s “Awards and Recognition” page, nine out of the ten featured members are from Asia. The exception being ‘Yong Li Ai Mo Wang’, who is cited as being from Canada.
Regardless of the state of MLM in Asia and how they see might see retail customer sales though, at the end of the day you need to have customers purchasing products which in turn generate commissions within the company’s compensation plan itself.
“Wholesale profit” is not the same as genuine retail commissions.
With 100% of the money coming into the company being paid by members and thus being used to pay out commissions, ultimately whatever happens afterwards doesn’t really matter as it is the act of members paying money to Lifestyles that generates company revenue.