Mannatech Compensation Plan Review v2.0

BehindMLM first reviewed Mannatech back in 2011.

Key areas of improvement I identified were the headache-inducing complexity of Mannatech’s compensation plan, mandatory affiliate autoship and high start-up costs ($3800!).

Earlier this year a Mannatech affiliate left a comment on our review, advising that there was no longer a $3800 affiliate membership.

The compensation plan has been changed so a lot of what you talk about (star bonuses for example) are gone.

Today we take a look at what’s changed over at Mannatech since 2011.

The Mannatech Compensation Plan

The Mannatech compensation plan pays retail commissions and residuals through a unilevel compensation structure.

Much of the upper tiers of the compensation plan are based on All-Star and rank qualification, with an emphasis on requiring downline affiliates to achieve certain ranks.

Mannatech Affiliate Ranks

There are nine ranks within the Mannatech compensation plan.

Ranks are obtained via Group Volume (GV), which is sales volume generated by an affiliate’s downline.

GV is tracked through a unilevel compensation structure, which places every personally recruited affiliate on level 1 of a unilevel team:

If any level 1 affiliates recruit new affiliates of their own, they are placed on level 2 of the original affiliate’s unilevel team.

If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.

Rank qualification in Mannatech sees affiliates required to hit the following GV quotas through their unilevel team:

• Qualified Associate – have a downline generating at least 600 GV each pay period, with no more than 65% of the total required GV (390) sourced from any one unilevel leg
• Regional Director – have a downline generating at least 1500 GV each pay period, with no more than 65% of the total required GV (975) sourced from any one unilevel leg
• National Director – have a downline generating at least 6000 GV each pay period, with no more than 65% of the total required GV (3900) sourced from any one unilevel leg
• Executive Director – have a downline generating at least 20,000 GV each pay period, with no more than 65% of the total required GV (13,000) sourced from any one unilevel leg
• Presidential Director – have a downline generating at least 60,000 GV with no more than 65% of the total required GV (39,000) sourced from any one unilevel leg and no more than 90% (54,000) sourced from any two legs
• Bronze Presidential – maintain Presidential Director rank and have at least one Presidential Director or higher ranked affiliate in your downline
• Silver Presidential – maintain Presidential Director rank and have at least one Presidential Director or higher ranked affiliate in at least two unilevel legs
• Gold Presidential – maintain Presidential Director rank and have at least one Presidential Director or higher ranked affiliate in at least three unilevel legs
• Platinum Presidential – maintain Presidential Director rank and have at least one Presidential Director or higher ranked affiliate in at least four unilevel legs

All-Star Qualification

A significant number of components within the Mannatech compensation plan require All-Star qualification.

To qualify as an All-Star, a Mannatech affiliate can either purchase the rank or generate a required amount of PV in any given pay period (four weeks, dates slightly change from year to year).

There are two All-Star affiliate packs available; an All-Star Pack costs $499 and a Premium All-Star Pack costs $999.

Alternatively if in  pay period an affiliate can generate 500 recruited All-Star affiliate GV and 500 recruited non-All-Star affiliate GV (1000 GV total), they also qualify as an All-Star.

To maintain All-Star qualification annually, Mannatech force affiliates to purchase products:

If you are an All-Star Associate, you will receive a renewal offer approximately 50 days prior to close of your anniversary.

For your All-Star Associate commissions to continue generating, your renewal
payment must be received before the close of your anniversary.

Upon purchase of your Leadership Renewal Product Pack, your Associate agreement is automatically renewed for 13 business periods at the All-Star level you have achieved.

The cost of a Leadership Renewal Product Pack is not disclosed in Mannatech’s official compensation plan documentation. Nor is it publicly disclosed on the Mannatech website.

Retail Commissions

Retail commissions in Mannatech appear to only be conductible via phone.

Associates can refer customers to Mannatech’s tollfree number to place retail product orders directly with the company.

The retail commission paid out is the difference between the retail and wholesale price of the ordered product.

Note that the Mannatech compensation plan incorrectly attempts to include affiliates purchasing and then reselling products as Mannatech retail sales.

What an affiliate does outside of Mannatech’s compensation plan has no bearing on the compensation plan itself. As it stands, the only way to generate retail sales within Mannatech appears to be getting retail customers to phone the company.

Recruitment Commissions

Mannatech affiliates are paid to recruit new affiliates who sign up with an affiliate pack.

How much of a commission is paid out is determined by which affiliate pack a new recruit purchases, as well as whether or not the recruiting affiliate is All-Star qualified:

• Basic Pack purchase – $10 regular commission, $15 All-Star commission
• All-Star Pack purchase – $50 regular commission, $75 All-Star commission
• Premium All-Star Pack – $100 regular commission, $150 All-Star commission

If a newly recruited affiliate purchases a Basic or Premium All-Star pack, a two-level residual commission is also paid out:

• Basic Pack – $8 on level 1 (direct upline of the recruiting affiliate) and $5 on level 2
• Premium All-Star Pack – $8 on level 1 and $5 on level 2

Team Bonus (up to Regional Director)

Mannatech’s Team Bonus is a $60 commission paid to Qualified Associates and Regional Directors.

The bonus is paid every four weeks, as long as either Qualified Associate or Regional Director rank is maintained.

There is also a residual component to Team Bonus, with $10 paid up two levels of the upline ($10 each level)

Unilevel Overrides

Starting from the sixth unilevel leg, Regional Director and higher ranked affiliates can earn an override on team sales volume.

• Regional Director ranked affiliates receive a 6% override on GV generated by the sixth level of their unilevel legs.
• National Director ranked affiliates receive a 6% override on GV generated by the sixth level of their unilevel legs and 7% on the seventh level
• Executive Director ranked affiliates receive a 6% override on GV generated by the sixth level of their unilevel legs, 7% on the seventh level and 6% on the eighth level

Member Bonus

The Member Bonus pays 15% commission on purchases made by personally recruited affiliates.

If the recruiting affiliate is All-Star qualified, this bonus is increased to 20%.

Personal Power Bonus

The Personal Power Bonus rewards All-Star qualified affiliates when they recruit affiliates who sign up with an All-Star Pack.

• recruit four All-Star affiliates = $400 commission
• recruit two All-Star affiliates who recruit at least two All-Star affiliates themselves = $400 commission

Autoship Commission

If a Mannatech affiliate is All-Star qualified and at the Regional Director or higher rank, they earn a 3% commission on all autoship orders placed by personally recruited affiliates.

Generation Bonus

Mannatech’s Generation Bonus starts at the Regional Director rank, with it using the same unilevel compensation structure it tracks affiliate ranks with.

A generation within a unilevel leg is defined when an affiliate in the leg of equal or higher rank to the qualifying affiliate is found.

Eg. If you are a Regional Director, the first Regional Director or higher in a unilevel leg will cap off your first generation.

Up to six generations can be earned on, with commissions paid out as a percentage of a unilevel team’s sales volume.

How much of a percentage is paid out is determined by a Mannatech affiliate’s rank:

• Regional Director – 6% on their first generation, 5% on the second generation and 4% on the third
• National Director – 12% on their first generation, 10% on the second generation and 8% on the third
• Executive Director – 18% on their first generation, 15% on the second generation and 12% on the third
• Presidential Executive – 26% on their first generation, 21% on the second generation and 16% on the third

Leadership Development Bonus

The Leadership Development Bonus rewards Mannatech affiliates when their recruited downlines qualify at the National Director or Executive Director ranks.

Every personally recruited affiliate who qualifies at the National Director rank generates a $100 bonus each pay-period (4 weeks).

Every personally recruited Executive Director generates a $350 bonus.

Note that to qualify for the Executive Director bonus, the qualifying affiliate themselves must be at the Executive Director or higher rank.

If they aren’t, the bonus is paid out to the first upline Executive Director or higher ranked affiliate.

Presidential Development Bonus

The Presidential Development Bonus is only available to Presidential Director ranked affiliates.

The bonus itself is paid out on generations of Presidential Directors in any given unilevel leg.

$450 is paid out on personally recruited Presidential Directors, with each subsequent generation payout a dilution of 75%.

Eg. Generation 1 pays out 100%, generation 2 pays out 75% (75% of 100%), generation 3 pays out 56.25% (75% of 75%) etc.

How many generations the Presidential Development Bonus pays out on, is determined by how many personally recruited Presidential Director affiliates are present in a downline:

• 1 personally recruited Presidential Director affiliate = 2 generations
• 2 personally recruited Presidential Director affiliates = 4 generations
• 3 personally recruited Presidential Director affiliates = 6 generations
• 4 personally recruited Presidential Director affiliates = 7 generations
• 5 personally recruited Presidential Director affiliates = 8 generations
• 6 personally recruited Presidential Director affiliates = 9 generations
• 7 personally recruited Presidential Director affiliates = 10 generations
• 8 personally recruited Presidential Director affiliates = 11 generations

Lifestyle Bonus

THe Lifestyle Bonus is a periodic bonus for All-Star qualified affiliates, beginning at the National Director rank:

• National Director = $300 each pay period
• Executive Director – $650 each pay period
• Presidential Director – $1500 each pay period

Silver and Gold Presidential Pool

The Silver and Gold Presidential Pool is made up of 1% of Mannatech’s company-wide autoship sales volume.

Silver Presidential Directors receive one share in the pool, Gold Presidential Directors receive two.

Platinum Presidential Global Volume Bonus Pool

The Platinum Presidential Global Volume Bonus Pool is made up of 1% of Mannatech’s company-wide sales volume.

Only Presidential Director ranked affiliates who maintain at least four personally recruited Presidential Director affiliates are able to earn shares in the pool.

The Platinum Presidential Global Volume Bonus Pool is split into two sub-pools, a loyalty pool and a side volume pool.

The loyalty pool is made up of 75% of the Platinum Presidential Global Volume Bonus Pool, with Platinum Presidential Director affiliates earning one share in the pool per personally recruited Presidential Director ranked affiliate.

The side volume pool makes up the remaining 25% of the Platinum Presidential Global Volume Bonus Pool.

Shares in the side volume pool are allocated pro-rata, based on volume generated by an affiliate’s non-Presidential unilevel legs (a leg that doesn’t yet have a personally recruited Presidential Director affiliate at the top of it).

Joining Mannatech

Basic Mannatech affiliate membership is $48.

An affiliate can also elect to sign up with one of the following affiliate packs:

• Basic Pack – $99 to $169
• All-Star Pack – $499
• Premium All-Star Pack – $999

The primary differences between these packs are bundled products and income potential through the Mannatch compensation plan.

Conclusion

Mannatech’s compensation plan is still confusing at first, but it’s a vast improvement from the mess I had to go through back in 2011.

Gone is the max $3800 buy-in, with the new maximum affiliate membership buy-in now $999.

A lot of the confusion in the plan stems from Mannatech’s use of non-standard industry terms, which requires someone trying to understand the compensation plan look up and keep track of ten to fifteen acronyms.

For example, rather than just use the term “generations”, Mannatech instead use the acronym “GAPO”.

Sixth level and beyond unilevel overrides are referred to as APOs, and surely there’s a more concise name for the “Platinum Presidential Global Volume Bonus Pool”?

But I digress.

The Mannatech compensation plan itself presents several red-flags, primarily All-Star pay to play concerns and direct recruitment commissions.

All-Star qualification without the purchase of an All-Star pack is possible but unlikely.

An affiliate requires All-Star’s in their downline to generate volume in order to qualify as an All-Star themselves. Which begs the question how are they going to convince others to purchase an All-Star pack if they themselves haven’t.

Much emphasis is placed on All-Star qualification:

The Personal Power Bonus is designed to award significant, immediate income to those who choose to achieve the status of All-Star Associate.

All-Star qualification also rewards an affiliate with an increase to the Member Bonus and recruitment commissions paid out.

All of which likely lends itself to most Mannatech affiliates wanting to be All-Star qualified as quickly as possible.

Typically in MLM if a company permits an affiliate to purchase a rank or qualification, no matter what alternative qualification criteria exists, it is the purchase method that prevails.

In that sense I suspect the vast majority of All-Star qualified Mannatech affiliates did so by spending $499 to $999 when they signed up.

This deems the alternative volume qualification pseudo-compliance.

Furthermore the mere fact that affiliates can purchase All-Star qualification is straight play to play, irrespective of whether alternative qualification criteria exists or not.

Commission and bonus qualification in MLM should always be based on sales performance, not how much money an affiliate spends when they sign up.

Regarding the recruitment commissions offered, they are pretty straight forward.

Retail customers aren’t going to be purchasing affiliate packs, which means commissions offered on the packs are only paid when newly recruited affiliates sign up.

Ergo Mannatech affiliates are paid to recruit new affiliates.

This comes at the expense of retail focus, which is already quite weak within Mannatech’s compensation plan.

Case in point, there are no retail volume qualifiers anywhere to be seen, with a Mannatech affiliate able to earn commissions based on recruitment alone.

Qualified Associates must generate 100 PV every four weeks, which is easily obtainable via autoship.

To encourage this, Mannatech offer a 3% bonus on recruited affiliate autoship orders.

Again this can be achieved through retail sales. But if it’s easier to just put in an autoship order each month and then recruit other affiliates who do the same, then that’s probably what the vast majority of Mannatech affiliates are doing.

This can be verified with a potential upline by enquiring as to how they themselves generate the required 100 PV each month.

If it’s through an autoship order, then you yourself are likely going to have to do the same. Which means you’ll also probably be focusing on recruiting affiliates onto autoship too.

At the expense of retail sales, this potentially drags Mannatech into product-based pyramid scheme territory.

Certainly definitions like this, for “active affiliates”, don’t help:

Active —renewed their annual status and purchased the appropriate amount of sales volume in the current business period.

Pay an annual fee and purchase product is all that’s required to remain active, with there being no retail qualifiers whatsoever.

Another worthwhile check with a potential upline is how many retail sales they and their personally recruited affiliates are generating each month.

Weigh this against commissions earned on autoship volume and you’ll get an idea of how little or how important retail sales are being focused on.

Little to no retail focus is a red flag, with the opposite what you want to see.

Like I’ve said previously though, retail focus is of course possible but unlikely.

There’s a lot of room for grey area within Mannatech’s compensation plan, leaving the overall MLM opportunity best approached with caution.

 

Update 23rd July 2017 – Mannatech introduced a new compensation plan on July 1st, 2017. BehindMLM reviewed Mannatech’s latest compensation plan in our Mannatech Review 3.0, published July 12th.