MyFunLife to squeeze more money from affiliates
One of the problems with running an MLM company that pays out commissions from affiliate membership fees, is the constant requirement of affiliate recruitment to ensure those who joined recently get paid.
On the value side of things, with the attached product or service having little to nothing to do with the compensation plan or how affiliates are paid, there’s little in the way a company can do to increase the commissions paid out to affiliates.
As demonstrated by MyFunLife, pretty much the only thing a company can do, short of scrapping their recruitment-driven compensation plan, is to start charging affiliates more money.
Announced as coming into effect on October 1st, MyFunLife recently sent out an email to affiliates, explaining that
with such tight margins on our $21 Membership product, it didn’t previously seem possible to increase the income in the Compensation Plan.
By simply raising the cost of the Membership from $21 to just $25, only a $4 dollar increase, it could make over an $800 per month difference in your first 6 levels!
MyFunLife claim the affiliate membership cost increase has been implemented ‘at the request of leaders’ and after several such leaders came ‘to us over the last couple of months with nearly the exact same requests‘.
MyFunLife don’t clarify what those requests were, but they appear to be requests to squeeze more money out of those recruited into the scheme.
Abolishing the 25 cent commission MyFunLife previously paid out over levels 3 to 6 of their matrix, the company now pays a minimum $1 per affiliate recruited:
- Levels 1 to 6 pay out $1 per affiliate per month
- Level 7 pays out $2 per affiliate per month and
- Levels 8 to 10 pay out $1 per affiliate per month
In announcing and implementing the change, MyFunLife confirm that it is the money affiliates pump into the scheme themselves that dictates the amount of money the company pays out in commissions.
Rather than focus on a retail offering and provide a product or service of value to non-participants of the MyFunLife income opportunity, the company has instead seemingly acted on advice of its “leaders” (those who have the largest amount of affiliates under them).
While MyFunLife’s compensation plan changes might be great for those who have recruited the largest amount of affiliates (either directly or indirectly), ultimately all it translates into is a larger amount of money shuffling its way up the company each moth.
Participants in the scheme now have to cough up more so those at the top can earn more.
Despite having no retailable product of their own and 100% of MyFunLife’s revenue being sourced from its affiliates, participants like Rick Weston are busy running around the internet and reassuring everyone that
MyFunLIFE has been reviewed by TOP MLM Attorneys and is 100% compliant with all laws and regs.
Meanwhile what happens when MyFunLife’s leaders start complaining that their downlines have begun to shrink because those at the bottom of the scheme have decided $25 a month is too much, remains to be seen.
OZ,
Hopefully we can have a debate this time without all of my comments being edited or deleted again.
The comp plan changes were brought to the company by field leaders, I’m in all the meetings and we bring a lot of items to the table for discussion all the time, always looking for ways to improve the experience of our reps.
Every rep I have spoken to, both with large or small organizations, LOVE the changes to the compensation plan for MyFunLIFE. The only question I got was will the monthly go up and the answer is no, it will not.
The change to the monthly was made to accommodate the changes to the comp plan payouts.
As for putting more money into the company’s pockets with this change, it actually costs MFL $0.50 more to pay out the new compensation with at the $25 price point.
Companies that are in pre-launch often will make changes to products, compensation, pricing, marketing etc., tweaking the company’s offerings to maximize the results.
While I can’t tell you what people are earning, it wouldn’t be legal for me to do so, I can tell you that
BTW, a customer can purchase our membership without being a representative of the company and get the same extreme savings as our representatives. When our reps retail the membership they earn a commission and a monthly residual on that membership.
Also, you have a typo, ‘MyFunPlaces’ has nothing to do with MyFunLIFE.
One rep told me today that their residual income will go up by over 5 times due to the compensation plan changes.
That hinges entirely on whether or not you can stay on topic.
Naturally, they have recruited the most (either directly or indirectly) and stand to gain the most.
“Hey I’ve recruited a bunch of people, now start charging them more each month so I can make more money!”
The only people who would “love” paying more money each month are those that stand to gain more from those they’ve recruited.
Take away the income opportunity and who loves paying more for the same thing? A moot point I suppose seeing as everyone is just paying to participate in the income opportunity in the first place, but still.
Well duh. If you want to pay out more you have to charge participants more too.
You’re on your own there, I never mentioned that.
I’m sure they’re ecstatically happy about it. The people at the bottom of their recruitment pyramid who have n recruited affiliates under them probably aren’t too happy about it though.
Gloating about earning more by charging your affiliates more in membership fees? /facepalm.
What people are earning is neither here nor there, it’s how they are earning it that is the problem. If you researched the legalities of affiliate recruitment commissions you’ll likely find that’s not all too legal either.
Affiliate membership is $24, with everyone being given access to the comp plan. Choosing to not recruit is not a valid differentiation between affiliates and retail customers.
Furthermore, cut the crap – even if retail without access to the income opportunity was offered you and I both know MyFunLife would be operating at close to 100% affiliate-funded revenue.
The rep I was referring to has personally sponsored only one member and has about 270 reps in her organization now.
Actually, I personally spoke with over 50 of my team members about this change, some with hundreds and mostly those with only a few members in their organizations to about 25-30 members or so and they all have had the same positive reaction.
Well, as I have stated previously, MFL has been reviewed by one of the most competent firms for MLM available and found to be well within all applicable laws. Again, I am not at liberty to release MFL’s legal council, it isn’t my place, it is up to them to release that information publicly.
Could you site the research you are referencing, case law and how it applies to MFL? Perhaps you could even give me your legal counsel info so I can personally confer with them, on my dime of course.
Thanks!
Yes, yes. They recruited one affiliate who recruited a bunch of affiliates who recruited a bunch of affiliates blahblahblah, recruit recruit recruit.
Whether or not the recruitment is direct or indirect is irrelevant.
Who all stand to earn more from those they’ve recruited. Naturally their response will be positive.
Sure, by all means confer with the FTC:
http://www.business.ftc.gov/documents/inv08-bottom-line-about-multi-level-marketing-plans
Let us know how that goes…
Again, that is not a legal counsel opinion on MFL, it is based on your opinion and not on the guidance of legal council.
Commissions in MFL are paid out from affiliate membership fees, based on the number of affiliates recruited (directly or indirectly).
The FTC most certainly do have legal counsel, which you’re welcome to contact and discuss MFL’s compensation plan with. That is if you’re done making up childish excuses not to do so.
Note that they won’t validate the model (they don’t greenlight indivdual companies), but you should be able to get them to confirm what they have published on their website about recruitment commissions.
If I need to further explain to you just what it is the FTC do and why they trump MFL’s lawyers, then you’re probably a lost cause.
Childish excuses? I have made no excuses, childish or otherwise. Why are you always attacking me personally, why can’t you have a rational debate based on facts?
Persecution complex much?
You crap on about “legal counsel” when as per the FTC’s own definition My Fun Life is a blatant pyramid scheme, and then wonder why this isn’t a rational debate based on facts?
Good grief… do you even know what the FTC is?
Please educate yourself on why the FTC trump your silly legal counsel and then maybe we can begin a rational debate.
Again, your personal opinion, not based on legal counsel of your own, just your personal interpretation of what you have read.
Interpretation? You don’t need to interpret anything as the FTC have expressed themselves in simple English:
Game over son.
Don’t ask “random people” or “people by your own choice”. Identify the groups of people first, and analyse it hypothetically for “How will it affect those groups of people?”, and THEN ask neutral questions about it.
You can order the groups like this:
* Huge downline
* Big downline
* Medium sized downlines
* Small downlines
* No downline
“Huge”, Big”, “Medium sized” and “Small” will partly depend on the compensation plan and other factors (e.g. reps who have brought in existing downlines can affect the statistics).
“Medium sized” are supposed to have ONE directly recruited participant in downline, and a few indirectly recruited participants a few levels down.
I KNEW people wouldn’t be happy with small commissions on level 3-6 in the compensation plan, so the changes are correct from that viewpoint. But leaders should typically not reward themselves at the expense of followers, rewards will need to be “justified” in something.
The current situation is about squeezing more money out of their own downlines. It may or may not be fair. “Fair” is about “exchange of values” rather than about compensation, e.g. 25 cent commission per member won’t allow for much value either (leaders will be demotivated by a compensation like that, and will not provide much value either).
As a leader, I wouldn’t have joined any compensation plan like that (the old one) in the first place. I KNOW people will feel unhappy about a system like that.
But if I had suggested any changes, I would also have suggested changes to level 7 (“give some and get some”). That would have REDUCED payouts to SOME leaders closer to the top, but they would probably have accepted it.
The problem wasn’t about LOW compensation, but about UNBALANCED ones. That problem does still exist in level 7. You can’t justify fixing level 3-6 without fixing level 7.
@Oz
That typo comes immediately after this section:
Ack I forgot to edit that when Weston first mentioned that (been a busy day).
My thanks to both of you.
I can accept that, “the legal sources will need to be INTERPRETED rather than be read literally”. But before that idea can make any sense, it has to be accepted in both directions = you can’t solely use it as a defense argument without accepting others to use it in an opposite way. But the idea itself is correct.
1. Regulators and courts will first need to establish their own JURISDICTION, their own rights and competence, “the correctness of handling the case”.
2. Then they will need to establish the FACTS in a case, using proper sources and interpreting the material in a neutral way, representing facts rather than their own opinions about it.
Facts are about realities, not about constructed theories (whether it’s about law theories or other theories isn’t really important).
3. Then they will need to identify legal sources.
Legal sources are about different types:
* Statutory laws (what the law says)
* Common Law (how it has been interpreted earlier)
* Law theory
* The underlying material from the legislature
I’m not a lawyer, so I can’t list all types of legal sources or rank them correctly in a list. I have only had a quick look at it to be able to communicate it relatively correctly, not to “teach” anyone about it.
4. Then they will need to interpret the RELEVANCE of the legal sources, and use a “weight system” to give them different “weight” (“importance”).
* In that system, “fair compensation for work” will have some weight, “fair exchange of values” (trade) will have some weight. It can be used as a defense against other laws with similar weight. But in the same system, the OPPOSITE arguments will also have the same weight, clearly contradicting any constructed defense system people have made up.
5. Regulators and courts have a set of legal doctrines they can use to identify the weight of different legal sources, e.g. “Lex Superior” (law with a higher rank), “Lex Specialis” (a specialized rule rather than a general one).
6. Courts will typically use some sets of “higher ranked doctrines and theories” than regulators. I can accept some of them too (I don’t need to know them exactly, I will most likely be able to identify them as valid anyway).
Then again, I’m not a lawyer and I have no intentions of becoming one, or pretending to be qualified to act like one. I have checked it for “communication purposes” only, so I can follow other people’s ideas and arguments.
I can clearly accept valid arguments if I’m able to identify them as valid. You can’t expect more than that from an internet audience. If you want to bring in legal arguments you will meet the right type of audience here, so “bring’em in” (your legal arguments).
FTC is one legal source, one of many. People can bring in other legal sources with higher rank (“weight”) than FTC, either because of higher relevance or because of higher rank in the hierarchy of legal sources.
“Fair compensation for work” is a generally accepted legal principle. It’s nothing illegal about it in itself. Compensation will need to be weighted agains that principle too, not only against the lower ranked pyramid scheme rules.
The specialized anti pyramid scheme rules can typically be found near the bottom of the food chain (the hierarchy of laws and other legal sources). They can’t over rule other legal sources (e.g. legal principles) with a higher rank than themselves.
Using only ONE legal source as a “bible” will be an incorrect and misleading method. People CAN have valid arguments outside that “bible”, arguments they successfully can use to defend something in court. A prosecutor will need to have a solid case based on correct facts and methods to be able to prosecute a case in court.
My post #15 is a relatively correct description, but without each and every detail. I communicated the IDEA rather than the EXACT METHODS, focusing on an overview rather than on the details. It was done from memory, but the IDEA should be relatively correct.
I only provided the source because it was requested. Common sense should be enough for someone to determine that pyramid schemes are unsustainable schemes that offer little chance of success to later participants.
I don’t normally quote the FTC (or any other legal source) otherwise, as legalities are secondary to practical analysis of comp plans for me.
Gotta love the idiots who try to defend the schemes their in with “we are 100% legal” though.
Thus far when confronted with “as evidenced by their compensation plan and business model, MyFunLife is a recruitment-driven pyramid scheme”, Weston has only been able to come up with “but MLF’s random lawyers said it wasn’t!”.
Not good enough.
You will need to get HIS arguments before you can present your own. You will need to check whether or not his arguments are valid, and you can generally NOT attack valid arguments.
“Lawyers say” is not a valid argument, if he doesn’t identify WHAT they say and their logics.
The old compensation plan was clearly a BUSINESS PROBLEM.
A compensation plan can be …
* “front loaded” (rewarding the lower levels where the work actually is done),
* “middle loaded” (rewarding not the lowest level, but starting to reward them when they already have produced some results),
* or “back loaded” (pushing money upwards in the system, at the expense of all the lower levels).
The old compensation plan was heavily “back loaded”, “stealing rewards” from the middle levels 3-6 in order to pay out higher rewards to people near the top. People have also correctly complained about it (the complaint itself is relatively correct).
The plan was misleading in itself and needed to be corrected. That’s a BUSINESS PROBLEM, i.e. it will affect people’s motivation for doing some work if they don’t get compensated for it in the form of “fair compensation for work”.
Changes like that aren’t illegal in themselves, but the underlying model may still be illegal.
JUSTICE is about “cases of some importance”, about the realities rather than about the rules themselves. Unimportant cases should not be brought in before a court or a regulator, e.g. with the purpose of proving one’s own theories about something.
You will need to respect that principle too. A case can be “unresolvable in court” simply because of its own unimportance, it belongs more in typical debate forums than in court. You can use that idea later as a defense against something, e.g. if people starts to focus on unimportant details that only have importance in hypothetical discussions.
As an example for where you can have some use of that logic is in libel / defamation complaints, where people are using their own “hurt feelings” as a primary legal source, backed up by something they have found on the internet. That type of problem is something they will need some type of therapist to resolve.
Yo the comp plan is the same B. They’re charging affiliates more to play and using that money to pay out more.
My Fun Life is still an affiliate recruitment scheme it launched as.
It clearly is, as far as I can see it. I haven’t analysed the details there, only the parts people complained about. I pointed out a misinterpretation of the real problem, it wasn’t about LOW compensations but about UNBALANCED ones.
Anti pyramid scheme rules can typically be found near the bottom of the food chain, and you can’t give them higher importance than they really have. MLM analysts will typically look at them as some sort of “Bible”, “God’s gift to the World in how to interpret the realities”. That idea doesn’t make much sense in itself. 🙂
for an MLM analyst, WHAT aspect of an MLM can be higher up on the food chain than anti pyramid scheme rules? as an analyst oz is living in the black and white world of strict interpretation of a pyramid scheme rules.
as a realist , i live in the gray area where i believe that there is no international legal definition of pyramid schemes and believe that EVERY MLM out there , is pyramidal ,but this should not scare a us away ,if we can put in sufficient checks and balances to protect consumers .
what exactly is YOUR stand norway ? i am unable to identify your exact stance.
hey rick weston , why don’t you clarify WHY your lawyer says your plan is legal instead of shadow boxing .i am really interested to know, and i’m not a cult follower of some 50 % retail rules.
The same as before. 🙂
I’m a former sales person, and I will typically try to identify a wider range of “products” that can be offered into a market, with slightly different “products” designed for different parts of the market from the low levels right up to the top.
“Products” was used as a replacement for any type of argument that has any relevance, e.g. legal arguments, business arguments, ethical arguments.
I’m simply looking for the types of arguments that can be “sold” to an audience, where we reasonably can expect them to be accepted by other parts of the market than the initial one (e.g. be accepted by judges, even if they were presented at a much lower level initially).
So I have relatively uncomplicated ideas. 🙂
I have also added something about legal procedure, but I’m actually trying to identify the realities rather than legal ideas.
If the idea itself doesn’t make any sense, people shouldn’t defend it either. I’m talking about the idea of using ONE specific legal source sa some type of “Bible”, and interpreting it as some type of “God’s Gift to the World in how to interpret the realities”.
People can have valid arguments not covered by the “Bible”, arguments that will be respected in all the other parts of that market right up to the top of the food chain. Amway’s 1979 “per se” arguments were respected, “Internal purchases for self consumption isn’t illegal in itself”.
They are the same as before, I’m trying to identify the realities rather than constructed theories.
MLM and network marketing have real problems, in that they gradually have become more recruitment oriented and less sales oriented. It will eventually be reflected in legal problems they will be unable to handle (if anyone is able to bring up the right type of “resistance”, in the right place).
Recruitment doesn’t need to be a problem in itself, i.e. we can’t logially identify 100% recruitment to be the most major problem in itself. Believing so will probably be about beliefs rather than realities.
I have added some new points about realities, e.g. I added “importance” as a factor of significance. Some cases will simply be too unimportant to decide in court or by a regulatory body, so you can’t clearly identify them either for whether they’re legal or illegal. Discussions will be hypothetical and theoretical, but JUSTICE is about realities.
I pointed out that as an easily identifiable example for where and why some specific logic can be useful. I’m pretty sure you have had SOME experiences where people have reacted negatively to some types of descriptions (e.g. “pyramid scheme”, “Ponzi scheme”, “recruitment scam” and others).
To be able to use an idea, you must first be able to identify it and “make it become your own”. If people are using a very limited range of legal sources as a strategy (e.g. their own “hurt feelings”, plus some information found on the internet), an effective counter strategy can be about bringing in some realities (in the facts, or in other legal sources).
Libel / defamation / slander have relatively specific definitions for what they are, and what they aren’t.
en.wikipedia.org/wiki/Defamation
People using their own “hurt feelings” as a primary guideline will potentially find something supporting their own viewpoints, and believe they have a solid case against you. Most lawyers will bring them back to reality, but not all.
People who believe they have acted correctly will make similar mistakes, believing they have a solid defense against lawsuits. That idea may be proven wrong. Some experienced people can even MAKE the idea become wrong, e.g. by attracting specific types of counter arguments.
“It’s the truth”, “it’s documented” and similar arguments will not always hold in court. Some defamation cases are not about whether or not something is true, but about the intentions for publishing it.
I have pointed out ONE case where personal information wasn’t justified for why to publish it, and I advised you to remove that specific part of a comment (it contained a TYPE of information that simply would ATTRACT defamation lawyers).
Some defamation cases are about RIGHTS rather than about truth. You must offer people a fair chance to defend themselves. I have pointed out ONE of those cases too, about a deleted comment from T LeMont Silver.
I have “balanced” a couple of other cases, e.g. an Herbalife thread where I pointed out that it wouldn’t make much sense speculating about WHY someone has committed suicide, since the main reason typically will not be very rational in itself.
We have ONE occasion where I “disarmed” a SpeakAsia lawyer reading and posting here on behalf of his client. I asked him about WHO he represented in his comments.
The fact that you have readers handling situations is a defense argument in itself, e.g. if a case is about intentions or rights. It will show that intentions and rights generally are handled correctly, people will not easily get a solid case against you on those parts.
The type of analysis I’m doing, along with a lot of other factors, will tell a professional lawyer that he will not meet an easy target for lawsuits here. I operate within a much wider range than they do themselves, and a potential case can easily result in unexpected outcomes.
Testing different types of legal arguments is simply a part of the legal defense system you already have in place. Sometimes it will be an extension of the existing system, sometimes I will add something completely new. And that idea is a defense system in itself.
The ‘Judicial Method’ described in post #15 was from memory and not 100% correct.
One of my original sources was this one:
paragraf1.cappelendamm.no/c165513/sammendrag/vis.html
Translated source
1. Facts
2. Law rule(s)
3. Law rule(s) applied to the facts
I actually used many different sources, but ended up focusing on the easiest to understand, the overview type rather than more detailed types of sources.