Unicity International Review: $125/month autoship

Unicity International officially launched as Unicity Network in 2001, following the merger of Rexall Showcase (launched in the late 1980s) and Enrich International (launched in 1972).

Prior to the merge, both companies were acquired by Royal Numico, a food-based (baby food and nutrition) subsidiary of Groupe Danone.

After unsuccessfully trying to sell off Unicity two years later in 2003 to Activated Holdings, the parent company of Shaklee, Numico eventually sold Unicity to two of the company’s executive management members. Following the sale, management renamed Unicity Network to Unicity International.

Heading up the company as CEO is Stewart Hughes (right), who was appointed the role after working Rexall Showcase as a distributor for a number of years before the company was bought out by Numico.

Prior to being acquired by Numico, Rexall Showcase had a few run ins with US regulators, which appear to have started back in 1994.

Piecing together exactly what happened has proved to be a challenge given the date range I’ve had to dig back over.

That said, here’s what I’ve managed to put together:

In 1994,

a racketeering (Racketeer Influenced and Corrupt Organizations, RICO) complaint was filed against Rexall/Sundown and RSI in the Federal Court, Southern District of Florida, Miami (case # 93-6534).

A Florida newspaper described this complaint as “…– a 180-page civil racketeering complaint that is replete with anti-Semitic, invective and even a death threat…” (Daily Business Review, March 3, 1995).

One of the top sales persons of RSI with almost $100 million in annual sales in his downline (sales organization within RSI), was censored and permanently barred from the New York Stock Exchange (NYSE Docket/Case # 91-101). He had previously been connected to a drug money laundering operation.

In 2006, Matthais Rath, who credits himself as the “developer” of Rexall Showcase’s products, filed a complaint with the US and Florida Attorney-Generals requesting an investigation into Rexall’s business practices.

Rexall weren’t too happy about all of this and tried to silence Rath by filing for an injunction that would prohibit him from stating why he left the company.

In response to Dr. Rath communicating his reasons to separate from RSI, this company now tries to silence the scientist by seeking a temporary injunction preventing him to communicate his reasons.

RSI already lost the first such attempt in the Superior Court of California, San Mateo County on August 23, 1996. Now RSI is undertaking another effort to silence Dr. Rath. This time in the Circuit Court of the 15th Judicial Circuit in Palm Beach County Florida.

The hearing will be in the Palm Beach Courthouse in West Palm Beach, Courtroom 11D, September 18, 1996 at 5 p.m.

Dr. Rath: “I believe the aim of RSI and Rexall is to put my company out of business while still continuing to make huge profits from selling the products we developed and continuing to use my name and reputation.

I am now calling on the Federal and State authorities to share this responsibility and to immediately start an investigation of the business practices of RSI.”

Nothing much seems to have happened then until 2000, when the Florida Attorney General’s Office opened up an investigation into Rexall.

The Florida state attorney general’s office is pursuing an investigation of vitamin and healthcare products manufacturer Rexall Sundown Inc., Boca Raton, FL, for what it alleges are questionable business practices in relation to the company’s direct marketing sales and distribution operations.

Heading up the investigation is David Aronberg, an assistant attorney general based in Fort Lauderdale, who says his office has subpoenaed documents from the company’s distributors, as well as from its Rexall Showcase International office.

According to Aronberg, the state of Florida is pursuing tips that some of the company’s operating units may have violated state laws by participating in pyramid scams that create revenue through fraud and deception rather than actual sales of products.

The Florida attorney general’s office has also requested that the Internal Revenue Service make available tax records for two of Rexall’s distributors, according to published reports.

Stewart Hughes attracted the attention of Florida’s AG investigators, who

(wanted) IRS 1099 tax forms for two big distributors, Stewart Hughes and Randy Schroeder. The company has said Schroeder, of Salt Lake City, is the top moneymaker, taking in $250,000 a month.

Two months later Rexall was sold to Numico and I haven’t been able to work out what exactly happened after that (other than Numico merging Rexall with Enrich International and rebranding the company as Unicity).

Meanwhile while all of the above was going on, in 1999 ‘several class action complaints alleging violations of the Federal securities laws were filed against’ Rexall and in 2000 the FTC filed suit, accusing Rexall of

engaging in deceptive acts or practices and false advertising in connection with the advertising, marketing and sale of a purported cellulite treatment product called “Cellasene,” in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a), 52.

How much of this rubs off on Stewart Hughes as a top earner of Rexall International has unfortunately been lost in time. That said, to the best of my knowledge neither Hughes or Unicity International has been subject to any regulatory action or further investigations since Unicity was formed.

I’ve included the above information as a matter of due diligence, with the aim of shedding light on the origins of Unicity International and how the company came about.

Read on for a full review of the Unicity International MLM business opportunity.

The Unicity International Product Line

Unicity International market a range of personal care, anti-aging, weight loss, health and wellness and energy drink products.

There’s too many products to list here individually (check out the Unicity website for a complete list), however a full catalog is available on Unicity’s website.

Price wise Unicity’s products range from $2.95 for a “professional booklet” on how their slim product works, to $399.95 for a “Bios Life Slim Pack” that contains ‘the complete package for overall optimal health and advanced fat loss‘.

The Unicity International Compensation Plan

The Unicity International compensation plan offers affiliates monthly residual commissions via a unilevel compensation structure, along with a Fast Start Bonus on new sales volume and ongoing membership rank bonuses.

Unicity International Affiliate Membership Ranks

There are sixteen affiliate membership ranks within the Unicity International compensation plan.

Note that whilst not explicitly defined in Unicity’s compensation plan material, I believe the abbreviations “OV” and “TV” stand for “organisation volume” and “team volume” respectively.

TV I’m taking it counts sales volume by an affiliate and those they’ve personally recruited, whilst OV counts volume generated by an affiliate’s entire downline. All OV, TV and Personal Volume (PV) requirements below are monthly.

With that in mind, along with their respective qualification criteria, the Unicity International affiliate membership ranks are as follows:

• Junior Manager – 125 PV autoship order, one-time 500 TV a month qualification
• Manager – 125 PV autoship order, one-time 1000 TV a month qualification
• Senior Manager – 125 PV autoship order, 500 TV, 2000 total OV and at least one unilevel leg generating 1000 OV
• Director – 125 PV autoship order, 500 TV, 5000 total OV (no more than 2000 OV counted from any individual leg) and at least three unilevel legs generating at least 1000 OV each
• Senior Director – 125 PV autoship order, 500 TV, 10,000 total OV (no more than 4000 OV counted from any individual leg) and at least three unilevel legs generating at least 1000 OV each
• Executive Director – 125 PV autoship order, 500 TV, 25,000 total OV (no more than 10,000 OV counted from any individual leg) and at least three unilevel legs generating at least 1000 OV each
• Presidential Director – 125 PV autoship order, 500 TV, 50,000 total OV (no more than 20,000 OV counted from any individual leg) and at least three unilevel legs generating at least 3000 OV each
• Presidential Sapphire – 125 PV autoship order, 500 TV, 100,000 total OV (no more than 40,000 OV counted from any individual leg) and at  three unilevel legs generating at least 5000 OV each
• Presidential Ruby – 125 PV autoship order, 500 TV, 150,000 total OV (no more than 60,000 OV counted from any individual leg) and at least three unilevel legs generating at least 5000 OV each
• Presidential Diamond – 125 PV autoship order, 500 TV, 250,000 total OV (no more than 100,000 OV counted from any individual leg) and at least three unilevel legs generating at least 5000 OV each
• Double Diamond – two unilevel legs generating at least 5000 OV each, one AFP generating at least 100,000 OV and 500,000 total OV
• Triple Diamond – two unilevel legs generating at least 5000 OV each, two AFPs generating at least 100,000 OV and 1,000,000 total OV
• Crown Diamond – two unilevel legs generating at least 5000 OV each, three AFPs generating at least 100,000 OV and 2,000,000 total OV

Note that at the Double Diamond and above affiliate membership ranks, AFP stands for “Additional Franchise Position”. An AFP is the creation of an additional position within an affiliate’s downline, which essentially allows an affiliate to double (or triple) up on their unilevel commissions earnt.

Fast Start Bonus

Unicity International’s Fast Start Bonus is a percentage bonus paid out on volume generated by a newly recruited affiliate in their first month.

The percentage paid out is either 41% for a Junior Manager or 66% for a Manager, split between the affiliate who recruited the new affiliate and their upline.

• Direct upline (affiliate who recruited the new affiliate) – 15% for a Junior Manager affiliate and 30% for a Manager affiliate
• Direct upline’s upline (the affiliate who recruited the recruiter) – 3%
• Director – 3%
• Senior Director – 3%
• Executive Director – 3%
• Presidential Director – 3%
• Presidential Sapphire – 3%
• Presidential Ruby – 3%
• Presidential Diamond – 5%

Payments are made according to rank, with an affiliate in the upline paid up to their rank and any additional payments being paid to the next ranked affiliate in the upline.

Eg. If an affiliate recruits a new Junior Manager affiliate, they will receive a 15% volume bonus, their direct upline will receive a 3% volume bonus and then the first ranked Director or above will receive their percentage share.

If the next ranked affiliate is a Presidential Director for example, they will receive 12% (the percentages between Director and Presidential Director), with the system searching further up the upline for a ranked Presidential Sapphire or above to pay out the remaining three percentage levels (Presidential Sapphire, Presidential Ruby and Presidential Diamond).

Note that if a newly recruited Junior Manager or Manager affiliate generates over 1000 PV in their first month, they are paid the recruiting affiliate bonus (15%/30%) with the affiliate who recruited them only being eligible for the direct upline’s upline 3% bonus. The rest of the bonuses then are paid out to the greater upline as per normal, determined by affiliate membership rank.

Unilevel Commissions

Monthly residual commissions are paid by Unicity International via a unilevel compensation structure. A unilevel compensation structure places an affiliate at the top of the structure, with every personally recruited affiliate placed directly under them (level 1).

If any of these level 1 affiliates recruit new affiliates of their own they are placed on level 2 of the original affiliates unilevel team. If any level 2 affiliates recruit new affiliates they are placed on level 3 and so on and so forth down a theoretically infinite number of levels.

Using the above structure, Unicity International pay out commissions down a maximum of nine levels of recruitment:

• Manager – 5% on level 1
• Senior Manager – 5% on levels 1 to 2
• Director – 5% on levels 1 to 3
• Senior Director – 5% on levels 1 to 4
• Executive Director – 5% on levels 1 to 5
• Presidential Director – 5% on levels 1 to 6
• Presidential Sapphire – 5% on levels 1 to 7
• Presidential Ruby – 5% on levels 1 to 8
• Presidential Diamond and above – 5% on all nine unilevel levels

Rank Achievement Bonus

Unicity International affiliates who achieve the Director or above ranks are paid out a cash lump-sum bonus as follows:

• Director – $2000 lump-sum plus $2400 over 12 months ($200 a month)
• Senior Director – $3500
• Executive Director – $5000
• Presidential Director – $10,000
• Presidential Sapphire – $20,000
• Presidential Ruby – $30,000
• Presidential Diamond – $50,000
• Double Diamond – $150,000
• Triple Diamond – $500,000
• Crown Diamond – $1,000,000

In order to qualify for the Rank Achievement Bonus, an affiliate must qualify at the new rank for two consecutive months.

Note that in their compensation plan material Unicity International mention some additional qualification requirements for the Double, Triple and Crown Diamond bonuses (Chairman’s Club):

There are some additional requirements that are necessary in order to receive the Chairman’s Club Bonus.

For more details about the Chairman’s Club bonuses, including these requirements, please check with your respective Country Manager.

No further information is provided.

Lifestyle Bonus

UniCity International pay out a monthly Lifestyle Bonus to affiliates who qualify at the Director, Senior Director and Executive Director membership ranks.

• Director – $200 a month for 12 months ($2400)
• Senior Director – $300 a month for 12 months ($3600)
• Executive Director – $400 a month for 12 months ($4800)

Joining Unicity International

Basic affiliate membership to Unicity International is $40. New affiliate can also buy a series of packs when joining the company, ranging in price from $217 for a “Get Slim Now Core Pack” to $6900 for a “Health Care Professional Options” pack.

Each of these packs attributes sales volume to the new affiliate purchasing them, which in turn is used to qualify them for commissions and generate commissions for their upline.

Conclusion

The structure of Unicity International is such that when conducting my research and due diligence into the company, I found retail focus to be virtually non-existent.

From the affiliate joining pack options and the mandatory 150 PV a month commission qualification spend, Unicity International is definitely set up with a focus on building a downline who purchase product each month.

A preferred customer class is available for those wishing to regularly purchase Unicity International products at a discount, however this isn’t mentioned anywhere until you opt-in to join the company.

Neither retail commissions or preferred customer commissions are addressed or explained anywhere within the Unicity International compensation plan material.

I’m also not to keen on the mandatory autoship affiliates must buy each month in order to qualify for commissions.

Referred to as “automatic refill”, the Unicity International distributor agreement states

This program allows me to automatically receive my product order each month and guarantees that, as a Distributor in good standing, I will meet the PV qualification requirement to be eligible for Awards under the Award Plan in that month, if my Automatic Refill order total at least the minimum qualifying amount required by the Award Plan.

This is clearly defined as a monthly autoship, with the Unicity International compensation plan then going on to state that

Auto-Refill of 125 PV is required to receive Awards and Bonuses.

An alternative PV requirement is provided for rank achievement purposes but with it not qualifying an affiliate for commissions, its inclusion makes little sense.

In the US mandatory affiliate purchase of products is generally frowned upon, as it blurs the true motive behind the purchase of products. That being for the purpose of commission generation or actual use (value in the product).

With Unicity International product purchases are mandatory for commission qualification which is problematic. That said the company appears to be heavily targeting and primarily operating in Asian countries, so I don’t suspect they’re too concerned.

If the Unicity International compensation plan is remotely similar to that used by Rexall International though, I can definitely see where the issues of it being an effective pyramid scheme arose.

As a distributor though, regardless of where Unicity International are primarily targeting their opportunity, ideally you want to be selling products to retail customers and have this make up the bulk of your sales commissions.

Long-term it’s not really going to be feasible recruiting an army of affiliates at $125 a month and then encouraging them to do the same.

Naturally the standard upline revenue check applies here, with prospective affiliates strongly encourages to enquire as to how many retail (including preferred customers) a potential upline has vs. recruited affiliates sitting on monthly autoship orders.

All in all the lack of retail focus and generally speaking rather generic product offering (what I feel is an inevitable result of company mergers), leaves me feeling rather unimpressed with what Unicity International are offering  as an MLM business opportunity.

That’s not to say that it can’t be worked as a genuine retail focused business with tangible products, just that in going through what the company had to offer I found it a rather underwhelming opportunity in comparison to what else is out there.