Magic Power Coffee Compensation Plan Review
The Magic Power Coffee compensation plan offers five ways for independent associates to earn revenue.
Retail commissions, a product order bonus, matrix commissions a check match bonus and leadership pools.
Before we start looking at the various components of the Magic Power Coffee compensation plan, here are some definitions of some of the terms used later in this article.
Personal Volume (PV)
Personal Volume (PV) are either product sales or purchases that you make personally. If you directly purchase any Magic Power Coffee products or directly sell any products, these sales/purchases count towards your PV.
Business Volume (BV)
Business Volume (BV) is a point value that each Magic Power Coffee product pack has assigned to it. BV is used to calculate commissions for each product sold.
The BV values for the Magic Power Coffee product line are as follows;
- Magic Power Coffee box of 2 serves – 10 BV
- Magic Power Coffee carton of 12 serves – 60 BV.
- Magic Power Coffee promotional carton of 30 serves – 60 BV.
Personal Group Volume (PGV)
Your group is made up of directly enrolls associates under you and your Personal Group Volume (PGV) is the combination of your PV and group’s BV.
PV of course being your own product purchases ans sales and your group’s BV being the points earned via your group’s own product sales.
Group Volume (GV)
Every associate you personally enrol has their own Personal Group Volume (PGV) which, as explained above, is the combination of their own PV and your entire group’s BV.
Your own personal Group Volume (GV) is then calculated by taking your Personal Volume amount and combining it with the total sum of PGV for each of your personally sponsored associates.
For example if your PV is 20 and you have 3 associates you’ve personally sponsored each with a PGV of 10 each, your Group Volume would then be 20 + 10 + 10 + 10 = 50 PGV.
20 is your PV and the three 10’s come from each of your personally sponsored associate’s unique PGV amount.
Associates need to be active to sell Magic Power Coffee and qualify for any commissions they earn.
To become Active, Associates must pay the monthly Associate fee of $14.99 a month. The $14.99 fee might as well be called a membership fee as there are no other requirements to qualify as an Active Associate.
Qualified Associates are associates that generate at least 60 personal volume points or 60 points of BV by selling products to other associates or retail customers.
Associates must be qualified and active to earn any commissions and bonuses they might be eligible for.
Retail customers are those customers that purchase the Magic Power Coffee product off you but are non enrolled in the business itself. There’s no qualification or ‘active’ requirement for associates to earn retail commissions either.
Commissions earned from retail sales of Magic Power Coffee are as follows;
- $5 on a 2 serving package of Magic Power Coffee which retails for $12
- $20 on a 12 serving package of Magic Power Coffee which retails for $60
Retail sales commissions are paid out monthly, the compensation plan states that it’s paid ‘per month’. I assume this is per retail order per month as I don’t see how capping the monthly commission on all products, seeing as there’s only two different packages available, is feasible.
Retail sales of Magic Power Coffee also count towards any matrix bonuses and retail commissions you may be eligible for (see below).
Product Order Bonus
The Product Order Bonus is paid out monthly and is made up of two components.
1. The first component is a $15 commission paid out for each personally sponsored associate you enrol.
The compensation plan doesn’t explicitly mention it but I assume there in a requirement for these personally enrolled associates to remain active during the commission month.
2. The second component is a once off per order bonus of $30 whenever any associate you’ve directly enrolled places an order for a of Magic Power Coffee 30 serving promotional carton.
There is no restriction on the amount of commission you can earn via product order bonuses. There’s also no explanation why Magic Power Coffee calls the first component a ‘product order bonus’ when associates are paid out for simply having personally sponsored other associates under them.
Magic Power Coffee uses a matrix based commission plan. The matrix offered is 3 levels wide by 9 deep for a total of 29,523 potential spots in your organisation.
The level split is as follows;
1st level = 3
2nd level = 9
3rd level = 27
4th level = 81
5th level = 243
6th level = 729
7th level = 2187
8th level = 6561
9th level = 19683
You start enrolling associates on your first level and as you enrol more they begin to fill up the other levels of your organisation. This is referred to as spillover and can occur retroactively above you.
For example say you’re recruited by an existing associate and placed in the first spot of their 3rd level. Once the associate that enrolled you has filled all 27 spots of the third level they’ll start to fill their fourth level, the first three spots which if you have not filled yourself qualify as your own first level and so on.
From here on out the more spots the associate that enrolled you fills, the more you benefit from their spillover. This goes for any enrolled associates in the 2nd and 3rd level of the original associates organisation. As they too fill spots on their own matrices, spillover will eventually occur into your own organisation.
Associates enrolled below you too can spillover into your organisation as spots they fill in their own matrices will fill up spots in your own matrix by progression.
A completely filled matrix with the Magic Power Coffee compensation plan will net you $25,108 a month ($100,434 if you include the check match bonuses too). Whilst this certainly isn’t anything to sneeze at, as mentioned earlier a completed Magic Power Coffee matrix requires 29,523 active associates.
How many organisations, MLM, network marketing or otherwise do you know that are this large. Realistically when marketing coffee as a consumable the odds of enrolling 29,523 people under you, even after taking into consideration they don’t have to be all personally enrolled by yourself, is no doubt slim.
Not impossible but numbers wise a hell of a lot of hard work. This ventures into ludicrous territory when you consider that you’re essentially retailing just one product with a extremely targeted demographic.
Check Match Bonus
The Check Match bonus offered by Magic Power Coffee is a 100% match on any matrix commissions of the associates you’ve personally enrolled.
If one personally sponsored associate of yours makes $20 in matrix commissions a month then you’re entitled to a 100% check match bonus at the end of the commission month.
The check match bonus applies to all directly sponsored associates you enrol into company. There is no limit on the amount of enrolled associates the check match bonus applies to.
Unfortunately however, due to the low payouts of the matrix commissions until you get into the upper levels of the compensation plan, the check match bonus is quite useless at the lower levels.
Ironically at most levels of the compensation plan you’d be hard pressed just covering your monthly personal coffee drinking expenses with it.
I’ll go into this in a bit more detail in my conclusion of the compensation plan.
Finally you have the Magic Power Coffee Pro leadership pools. Magic Power Coffee’s leadership pools comprise of 3% of the company’s total Business Volume and are split into two individual pools.
The Diamond Leadership Pool
The Diamond pool comprises of 1% of the company’s total BV and eligible associates can increase their stake in the pool by sponsoring other associates in their organisation to the Diamond rank of the compensation plan.
Unfortunately to reach the Diamond rank you need to have personally sponsored 24 associates which means your own matrix will be at a minimum of 3 levels deep.
The catch however is that you need to be pulling in 250,000 points per month of group volume in your organisation. Remembering that Group volume is only calculated off the associates you’ve directly enrolled achieving Diamond level in the compensation plan is quite the challenge.
The Double Diamond Leadership Pool
The Double Diamond Leadership pool comprises of 2% of the total company BV per quarter and is paid out to all associates who have reached Double Diamond rank in the compensation plan. Shares in the Double Diamond leadership pool are increased based on the number of Double Diamond associates you’ve personally enrolled.
The requirements for achieving Double Diamond level on the compensation plan are 30 personally sponsored associates and a staggering 500,000 points in GV.
It’s a bit hard to take the Magic Power Coffee compensation plan seriously for the sole reason that the matrix commission payouts are so paltry below the 7th level.
At the 7th level based on matrix commissions alone you’d be taking home $2145.
The amount of associates you need (personally enrolled or via spillover) to fill level 7 on the matrix? 2,187.
You can judge for yourself whether the work required to build an organisation of 2,187 associates is worth a yearly salary of $25740. Obviously the check match bonus is the other big player in bumping up this salary and can bump it up if the numbers are there.
Unfortunately however the check match bonus is hamstrung by relying on matrix commissions. With 2187 associates needed per associate to reach level 7 and earn you a $2145 check match bonus, it’s easy to see the massive number of associates needed to make any decent residual income via Magic Power Coffee.
This in itself is the biggest drawback of the company’s compensation plan.
Not withstanding the fact that realistically until you’ve built an organisation running into the thousands you’re going to be primarily relying on upfront retail sales and non-matrix dependent commissions for a salary.
Remembering that you’ve only got one product to sell your marketing efforts are going to have to be extremely specific and well targeted. The question then becomes whether or not there’s enough of a market to sustain the large numbers required to advance up the Magic Power Coffee compensation plan.
The biggest challenge I’d imagine in growing your organisation would be keeping associates going seeing as the initial revenue coming in is abysmally low.
I probably wouldn’t be relying on the Magic Power Coffee as primary source of income any time soon but in the long term if you’ve got the energy (and creativity) to market the product to its targeted demographic, then the Magic Power Coffee business could be a nice little monthly earner for you.
Pls I need a detailed explanation on the cost prices for products for distributors, pv allotted to each product and the benefit for taking them. thanks.
This review is from June 2010, 3 years old. Magic Power Coffee was banned by the FDA only 9 days later, because of illegal Viagra-like ingredients.
A quick Google search mostly shows entries from 2010, up to the date when it was banned. It was rebranded to “Magic Power Drink” in October 2010.
We have a newer article from October 2010 …
That article received a few comments (less than 10), up until February 2011.
The other articles I found were these:
May 06 2010
June 30 2010
Oz is more familiar with the companies he’s reviewing than I am, so maybe he can add some information.
Probably best to contact the company itself with those specific queries.