The LiveSmart 360 ‘Smartline’ – How does it work?
Update 30th May, 2010: Since writing this article LiveSmart 360 have updated their compensation plan. /end update
I’ve since taken another look at the Smartline System and attempted to dissect how much money LiveSmart members can expect to earn from the Smartline System.
From now until May 15th, you can join an exclusive, limited opportunity to profit from every person that joins our company after you, whether you referred them OR NOT!
That’s right. Earn money from product purchases of everyone who joins after you… FOREVER!
-LiveSmart 360 Pre-launch promotional video, 2010.
Without a doubt one of the most hyped aspects of LiveSmart 360 during pre-launch was the Smartline. Marketed as a truly passive income stream the idea is that you generate income based on the work of everyone who joins after you (hence the term ‘smartline‘).
Now obviously this was never intended to be a major income earner for LiveSmart 360 members. I mean if everyone just sat around waiting to generate the bulk of their income of the work of others, then nobody would be actually generating any income to share around.
With the prominence with which the Smartline system was marketed though, you’d be forgiven for thinking so. Today I’m going to take a look at the Smartline system and hopefully clear up how it actually works and exactly what kind of money you can expect to make from it.
The premise behind the Smartline system is simple, when someone joins LiveSmart 360 they are assigned a tracking position within the Smartline. People who join after you are assigned a tracking position below you and it is these people you eligible to receive a Smartline system monthly commission off of.
Business Volume (BV)
The Smartline system consists of 2% of the total monthly company business volume (BV). BV is a value put on the products when working out commissions and bonuses directly related to sales volume. It is used instead of the wholesale or retail price of LiveSmart 360’s products.
For example let’s say product A retails at $10 and has a BV of $1. You’re entitled to make 10% commission whenever one of your downlines sells product A. If one of your downlines then sells product A, you make 10c commission which is 10% of the BV value of $1, not the $10 retail sale.
I’m not entirely sure what the BV value in the dollar is for LiveSmart 360 at this stage as I haven’t been able to find a fixed number. Parts of the LiveSmart 360 compensation plan seem to assume it’s $1 for every 1 BV. Take for example the following;
On all volume after the first 100 BV (Personal/Retail/Customer) during a calendar month, we will pay a 50% Bonus on volume generated by each (Personal/Retail/Customer) order with 50% of the BV rolling into Dual-Team Commissions. This is inclusive of the retail profit.
For example, if you enroll a Preferred Customer with a product order containing 100 BV, you would earn a $50 Retail Bonus.
The above is taken from the Retail customer bonus section of the compensation plan and on a 100 BV order seems to place a $50 value on the retail customer bonus. This indicates that 50% of 100 BV has a dollar value of $50, or $1 = 1 BV.
Elsewhere in the compensation plan however it is mentioned;
The credits can be used on any product that carries a 70% BV ratio or higher.
This indicates that not all products have a BV of $1:1. I’m not entirely sure what the values are as the compensation plan is not clear in this regard. For the sake of this article I’ve gone with the first quote above from the compensation plan and will assume that $1 of product has a BV of 1.
The Smartline System Pools
The 2% of BV that goes directly into the Smartline System is broken up into three pools. The first pool is made up of 1% of the 2% BV and the second and third 0.5% respectively (1% Pool 1 + 0.5% Pool 2 + 0.5% Pool 3 = 2%).
Pool 1 (1% of company BV)
The Smartline System Pool 1 is made up of 1% of the 2% total company BV set aside and is open to both customers and LiveSmart 360 members who personally generate a minimum of 25 BV in one month.
Admittedly I’m not exactly sure how customers become part of this pool, the compensation plan does not make this clear at all. Presumably customers are not given tracking points as they don’t join the company (at least that’s how I read it).
Requiring members to join the company before purchasing would be illegal as it’s definitely pyramid scheme territory. Again, the compensation plan isn’t clear on this so unless someone else can clear it up below (please leave a comment) I’m just going to ignore customers and focus on LiveSmart members who join after you.
To date the number of people in the LiveSmart 360 Smartline System is about 160,000. Note that LiveSmart 360 have set a deadline of May 22nd, 2010 for people to either lock their spot in the Smartline or lose it so the 160,000 Smartline number will change this Saturday. For the sake of this article though I’m going to assume LiveSmart 360 convince everyone to lock their spot in the company.
Let’s be generous and say that LiveSmart 360 generates 50 million dollars in sales in its first month, this will equate to 50 million total BV. Out of this total BV, Pool 1 accumulates 1% or $500,000.
This $500,000 is then split via ratio. For example if you were the first person to join LiveSmart 360 you’d be entitled to the largest share of this $500,000 pool. Split evenly between 160,000 members this would be $3.12 each. Due to the ratio effect of only being paid proportionately to how many people joined after you in the Smartline though, this means the early joiners will get more then $3.12 and those that joined later progressively less.
I’ve sat here for the last 30 minutes trying to work out exactly how much the proportions are, say for the first member to join LiveSmart 360, the person at 50% and then 25% but the math is doing my head in. I keep getting stuck at calculating exactly how much of a percentage of the $500,000 each person gets from being eligible for commission on 159,999 LiveSmart members (first person t0o join) to being eligible on just one member (the last person to join).
Maths isn’t my super strong point but there must be a formula for this as it’s ratio based. Unfortunately though I’m not seeing it. If anyone works it out feel free to let me know and I’ll update the article.
Pool 2 and 3 (0.5% of company BV)
According to the LiveSmart 360 compensation plan, pools 2 and 3 are identical payout and qualification wise. Both pools are only open to LiveSmart 360 members and require a monthly contribution of 50BV for a member to be eligible for a payout.
At 50 million dollars in monthly company revenue, pools one and two come in at $250,000 each.
Again, trying to calculate the percentage paid out to each Smartline member retrospective to their position in the line is doing my head in maths wise, any help will be appreciated.
Meanwhile I’m not entirely sure what the point is for having 3 pools when 2 of them appear to be the same and have identical qualification rules.
As you can see the money side of the Smartline System is a lot more complicated then the premise of simply receiving a monthly share in revenue from those who join after you in the Smartline.
Either way even with the final maths missing and a generous estimate of monthly total company revenue of 50 million (I’ll add some more figures once the math is figured out), it’s easy to see that with large LiveSmart 360 member numbers the payout isn’t going to be that great for a lot of members.
Although nice as a novelty, the LiveSmart 360 Smartline System isn’t really going to compare to the income generated directly by your own sales and that of your personal team.
I guess it’s back to the drawing board for anyone who thought they were getting an easy ride on LiveSmart’s Smartline idea…