Xseed Health Review: Marketability & recruitment concerns

BehindMLM first reviewed Xseed Health during its pre-launch infancy late last year.

Despite signing up affiliates, at the time the company had practically no information up on what affiliates could expect come their January 2014 launch. I was highly critical of this, as I believe if you’re going to sign people up, you at least need to be providing them the basic cost structure and compensation plan (how they will get paid).

If neither of those details haven’t been fleshed out yet, then to put it bluntly you shouldn’t enter prelaunch until they are.

Now, six months after Xseed’s launch we revisit the opportunity to see where they’re at. Read on for a full review of the Xseed MLM business opportunity.

The Company

Absent during their prelaunch period, Xseed Health now provide full corporate disclosure on their website.

Heading up the company is CEO John de Vries (right).

Mr. John de Vries has over thirty (30) years of experience in developing and building brands from the ground floor. Mr. de Vries experience has given him the ability and knowledge to develop the systems for any business model.

His ability to develop a direct sales program, create all financial and proforma models, develop and execute a marketing plan, and implement a research and development program for all product and market analysis, are just a few of his talents in the business industry.

For reasons unknown, de Vries’ Xseed corporate bio focuses on his experience as a consultant and work in the food industry. That he was a master distributor for MLM company Nutrie or a top-distributor with Monavie is not disclosed.

I’d have thought that information would take precedence over mentioning de Vries was a Subway franchisee back in 1987 (in an MLM bio), but I digress.

The Xseed Health Product Line

Back in prelaunch, all we knew about Xseed Health’s product line was that it would include ‘a meal replacement shake, super greens, aox antioxidant & multivitamin, slender weight management, nutritional bars & an energy supplement.‘

With the launch of Xseed, that list can now be expanded on:

• AOX Complete – an antioxidant and multivitamin ($49.99 for a months supply)
• Fresh – “supergreens” ($49.99 for a 28 day supply)
• Infuse – “complete nutritional meal” ($89.99 for a one months supply)
• Slender – weight management ($99.99 for a 28 day supply)
• Xbites – “nutritional snack” ($54.99 for six 5oz bags)
• Xtreme – energy drink supplement ($89.99 for 24 cans)

The Xseed Health Compensation Plan

The Xseed compensation plan is a binary/unilevel hybrid, paying out binary commissions weekly and unilevel commissions monthly.

Additional bonuses are also offered, including retail and affiliate recruitment.

Retail Commissions

Retail commissions are offered on the sale of Xseed Health products as follows:

• AOX Complete – $12.50
• Fresh – $12.50
• Infuse – $22.50
• Slender – $25
• Xbites – $13.75
• Xtreme – $22.50

An additional bonus is paid out for every three retail customers that place an order in any given month. How much of a bonus is paid out is determined by how much Product Volume (PV) is purchased by the customers:

• 20 PV = $10
• 50 PV = $25
• 100 PV or more = $50

Note that this bonus is payable only once a month, and is paid out on either the first three retail customers or recruited affiliates who qualify (see recruitment commissions below).

Recruitment Commissions

Recruitment commissions are paid when a new Xseed Health affiliate purchases a “Jump Start Pack”.

There are three Jump Start Packs in total, with the amount of commission paid out determined by how much an affiliate spends when they join:

• Little League – $35 to the recruiting affiliate, $21 to their upline and $14 to their upline
• Minor League – $50 to the recruiting affiliate, $30 to their upline and $20 to their upline
• Major League – $65 to the recruiting affiliate, $39 to their upline and $26 to their upline

An additional bonus is available if an affiliate recruits three or more affiliates in a month. How much of a bonus is paid out depends on how much newly recruited affiliates spend on Jump Start Packs:

• Little League – $50
• Minor League – $75
• Major League – $100

Recruited affiliates can purchase different packs and count towards the three, however the bonus is paid out on the lowest level pack purchased (one-time payment).

Note that this bonus is payable only once a month, and is paid out on either the first three retail customers or recruited affiliates who match the qualification criteria (see retail commissions above).

Xseed Affiliate Membership Ranks

There are sixteen affiliate membership ranks within the Xseed compensation plan. Along with their respective qualification criteria, they are as follows:

• Executive – sign up as an Xseed affiliate
• Active Executive – generate 75 PV in a month
• Regional Executive – generate 75 PV a month, recruit three affiliates and have a total downline volume of 300 GV
• National Executive – generate 75 PV a month, recruit three affiliates and have a total downline volume of 1000 GV
• Presidential Executive – generate 75 PV a month, recruit three affiliates and have a total downline volume of 2500 GV
• Ambassador – generate 75 PV a month, recruit three affiliates and have a total downline volume of 4000 GV
• Bronze Ambassador – generate 75 PV a month, recruit three affiliates and have a total downline volume of 7500 GV
• Silver Ambassador – generate 75 PV a month, recruit three affiliates and have a total downline volume of 12,500 GV
• Gold Ambassador – generate 115 PV a month, recruit three affiliates and have a total downline volume of 20,000 GV
• Platinum Ambassador -generate 115 PV a month, recruit three affiliates and have a total downline volume of 40,000 GV
• Diamond Ambassador – generate 115 PV a month, recruit three affiliates and have a total downline volume of 80,000 GV
• Royal Ambassador – generate 115 PV a month, recruit three affiliates and have a total downline volume of 150,000 GV
• Crown Ambassador –  generate 115 PV a month, recruit three affiliates and have a total downline volume of 300,000 GV
• Double Crown Ambassador – generate 115 PV a month, recruit three affiliates and have a total downline volume of 500,000 GV
• Triple Crown Ambassador – generate 115 PV a month, recruit three affiliates and have a total downline volume of 750,000 GV
• Global Ambassador – generate 115 PV a month, recruit three affiliates and have a total downline volume of 1,000,000 GV

Note that the following GV percentage restrictions apply to GV counted from any individual unilevel leg:

• 0-19,999 GV – up to 45% may be counted from any one leg
• 20,000 to 299,999 GV – up to 40% may be counted from any one leg
• 300,000 GV or more – up to 35% may be counted from any one leg

Binary Commissions

Residual commissions in Xseed are paid out using a binary compensation structure.

A binary compensation structure places an affiliate at the top of two binary teams, left and right.

Sales volume is tracked between both teams, with a commission generated if both teams generate over 100 points in sales volume for the week.

80% of the sales volume from Jump Start Packages and 20% of the sales volume from all other product sales is counted towards binary volume.

Xseed calculate binary commissions by paying out a percentage of the sales volume generated by the weaker team. How much of a percentage is paid out is determined by an affiliates membership rank:

• Active Executive to Silver Ambassador = 10%
• Gold Ambassador to Royal Ambassador = 15%
• Crown Ambassador or higher = 20%

Whatever volume is paid out on (the amount in the weaker team) is then flushed from both sides, with leftover volume on the stronger team carrying over the next week.

Note that irrespective of an affiliate’s membership rank, Xseed cap binary commissions at $20,000 a week.

Unilevel Commissions

Secondary residual commissions in Xseed are paid out using a unilevel compensation structure.

A unilevel compensation structure places an affiliate at the top of a unilevel team, with any personally recruited affiliates placed on level 1:

Commissions are paid out as a percentage of the sales volume generated by affiliates in the unilevel team, payable down a total of seven levels.

20% of the sales volume from Jump Start Packages and 80% of the sales volume from other product sales are counted towards unilevel volume.

How many levels an Xseed affiliate is paid out on is determined by their affiliate membership rank:

• Executive – 5% on level 1
• Regional Executive – 5% on levels 1 and 2
• National Executive – 5% on levels 1 to 3
• Presidential Executive – 5% on levels 1 to 3 and 4% on level 4
• Ambassador or higher – 5% on levels 1 to 3, 4% on level 4, 3% on levels 5 and 6 and 2% on level 7

A matching bonus is also available on unilevel commissions earnt by an affiliate’s recruited downline, payable down five generations:

• Presidential Executive – 5% on the first generation
• Ambassador – 5% on the first generation and 4% on the second
• Bronze Ambassador – 5% on the first generation and 4% on generations two and three
• Silver Ambassador – 5% on the first generation and 4% on generations two to four
• Gold Ambassador – 5% on the first generation and 4% on generations two to five

Note that a the first generation is defined as all the affiliates in any given unilevel leg between the affiliate at the top and the first Presidential Executive or above ranked affiliate.

The second generation is defined as all the affiliates after this first Presidential or above ranked affiliate, until an Ambassador or higher ranked affiliate is found. The third generation starts after that affiliate until a Bronze Ambassador or higher affiliate is found, the fourth generation runs until a Silver Ambassador or higher affiliate is found and the fifth until a Gold Ambassador or higher is found.

Note that until these ranked affiliates are found, the generations described above cannot be created and paid out on.

The Unilevel Doubler

The Unilevel Doubler commission, presented “as is” in the Xseed compensation plan, is confusing and makes little sense to me.

The Unilevel Commission Doubler Simply takes all of the Commissions paid in the Unilevel Commissions and groups them by what level they were.

Each level’s commissions are added up and the Unilevel Commissions Doubler, doubles the payment of the highest paying level.

The example provided is for 125 PV, which the compensation plan pays out

• $100 in Active Executive level Commissions
• $250 in Regional Executive level Commissions
• $80 in National Executive level Commissions or
• $120 in Presidential Executive level Commissions

The Regional Executive level is the highest paying level, therefore the Doubler would pay you an additional $250.

The levels grouped would appear to be the unilevels an affiliate is paid out on (levels 1 to 7). How that corresponds to the affiliate rank level though is not explained.

Crunching the numbers provided in the example above would suggest the highest level is paid out at

• 80% for Executives
• 200% for Regional Executives
• 64% for National Executives or
• 96% for Presidential Executives

Whether these are static percentage or whether they float from month to month however is unclear.

Unilevel Check Match Doubler

Like the Unilevel Doubler above, the Unilevel Check Match Doubler is difficult to get one’s head around.

From what I gather it works in the same manner as the Unilevel Doubler, but doubles an entire matching bonus generation (see “matching bonus” section of unilevel commissions), rather than any given unilevel level.

The generation matches is the highest paying one, but again the percentages paid out are a mystery.

You have 220 RPV.

• You were paid $1000 in 1st Generation Check Match Commissions
• You were paid $250 in 2nd Generation Check Match Commissions
• You were paid $800 in 3rd Generation Check Match Commissions (or)
• You were paid $1200 in 4th Generation Check Match Commissions

Crunching the numbers from the example provided, the first generation pays out 454%, the second 113%, the third 363% and the fourth 545%.

Rank Achievement Bonus

The Rank Achievement Bonus rewards Xseed affiliates for qualifying at certain affiliate membership ranks:

• National Executive (maintain for 1 month) – $50
• Presidential Executive (maintain for 1 month) – $150
• Ambassador (maintain for 1 month) – $250
• Bronze Ambassador (maintain for 2 months) – $1000
• Silver Ambassador (maintain for 2 months) – $1500
• Gold Ambassador (maintain for 2 months) – $2500
• Platinum Ambassador (maintain for 3 months) – $5000
• Diamond Ambassador (maintain for 3 months) – $10,000
• Royal Ambassador (maintain for 3 months) – participation in a “Fiat car program” (no further details provided)
• Crown Ambassador (maintain for 4 months) – $40,000
• Double Crown Ambassador (maintain for 4 months) – $100,000
• Triple Crown Ambassador (maintain for 4 months) – $50,000 plus participation in “$100K Luxury Car Program”
• Global Ambassador (maintain for 4 months) – $250,000

Note that these are one-time payments, and are only paid if the affiliate maintains the rank over the applicable qualification period.

Lifestyle Bonus

The Lifestyle Bonus is paid out the following month an affiliate receives their Rank Achievement Bonus in full:

• Ambassador – $150
• Bronze Ambassador – $250
• Silver Ambassador – $500
• Gold Ambassador – $1000
• Platinum Ambassador – $1500
• Diamond Ambassador – $2000
• Royal Ambassador – $2500
• Crown Ambassador – $4000
• Double Crown Ambassador – $6000
• Triple Crown Ambassador – $8000
• Global Ambassador – $10,000

Note that the Lifestyle Bonus is a once-off payment.

Commissions Guarantee

Between the Bronze Ambassador and Platinum Ambassador affiliate ranks, if an Xseed affiliate’s commissions dip below a pre-specified amount, the company will make up the difference.

Commissions used to determine whether or not an affiliate requires a commission guarantee payment are the Jump Start Commissions (recruitment commissions above), Unilevel Commissions, Unilevel Doubler Commissions, Check Match Bonuses, and Check Match Doubler.

Qualification criteria does apply to the commissions guarantee, focusing on the recruitment of affiliates and their promotion to specific ranks as follows:

• Bronze Ambassador (must have one Ambassador ranked affiliate leg and two Presidential Executive legs) – $500 for three months (affiliate and qualifying affiliates must maintain their ranks for three months)
• Silver Ambassador (must have one Bronze Ambassador ranked affiliate leg and two Ambassador legs) – $1000 (affiliate and qualifying affiliates must maintain their ranks for four months)
• Gold Ambassador (must have one Silver Ambassador ranked affiliate leg and two Bronze Ambassador legs) – $1500 (affiliate and qualifying affiliates must maintain their ranks for five months)
• Platinum Ambassador (must have one Gold Ambassador ranked affiliate leg and two Silver Ambassador legs – $2500 (affiliate and qualifying affiliates must maintain their ranks for six months)

Note that “leg” refers to any given unilevel leg. The affiliate who must maintain the rank is the level 1 affiliate (personal recruit).

Joining Xseed Health

Basic Xseed affiliate membership (referred to as “T-ball membership”) is $99 annually.

Additionally, Xseed affiliates also have the option of purchasing one of three Jump Start Pack when they join:

• Little League – $279
• Minor League – $379
• Major League – $479

These packs come with an assortment of Xseed product, and provide the affiliate with personal volume (PV), which can go towards their own rank qualification for their first month.

Conclusion

Priced at a premium, I found Xseed’s product line to be somewhat generic in nature.

Here’s the marketing spiel for their Xtreme energy drink:

Extreme Times Call for Xtreme Measures

We’ve all been there. It’s two o’clock in the afternoon and you’re fading fast. You can’t focus or concentrate, your head keeps bobbing up and down, and you actually dosed-off twice during that last conversation with your coworker or friend. You have to salvage this day. You need an Xtreme solution.

Well yeah, but am I going to shell out $3.74 a can?

Probably not.

In that sense I think marketing Xseed’s product line is going to be an affiliate’s biggest challenge. Specifically, convincing people that Xseed’s products are something you can’t get elsewhere (cheaper?).

That said if an affiliate can find a market, retail commissions are available and the transparency Xseed exhibits (in contrast to their pre-launch) is well-received.

On the compensation plan side of things, the biggest red-flag I identified was the Jump Start Packs and the commissions paid out on them.

Identified with a “retail price” in the Xseed compensation plan, Jump Start Packs are quite obviously aimed at affiliates, so I’m not sure what that’s about.

Ignoring retail altogether, an affiliate is able to concentrate of recruiting other affiliates, and gets paid when they spend money on one of the packs. The packs are bundled with affiliate membership, and thus constitute commissions on the recruitment of new affiliates.

This, unfortunately, drags Xseed into pyramid scheme territory.

An additional red flag is present in Xseed’s binary commissions, with 80% of the sales volume points of Jump Start Packs being pumped into the binary – there’s a question of whether or not the 20% of product sales volume can offset affiliate revenue being paid out.

Not withstanding that of that 20% in product sales volume, some of it is going to be affiliate autoship orders and product purchases.

Unless there’s huge amount of retail sales going through, the numbers would suggest that the majority of commissions being paid out through Xseed’s binary is sourced from affiliates. Considering that Jump Start Packs are tied into affiliate recruitment and that an affiliate’s binary team is literally a representation of their recruited downline, this is of particular concern.

At the time of publication I haven’t seen any retail revenue figures published by Xseed. As a prospective affiliate though, one way to ascertain whether or not the binary is paying out affiliate money or not would be to ask your potential upline how much retail activity they have going on within their own business.

Note that the only sales activity of interest here are product orders placed by non-affiliates. Anything else is affiliate-sourced revenue and does not count.

Other than that, the only other red-flag I identified was the commission guarantee. Billed as a “commissions stabilizer” in the Xseed compensation plan, there’s no getting around that, subject to affiliate recruitment criteria, Xseed are offering an earnings guarantee.

Recruit enough affiliates, get them to recruit enough affiliates (to qualify at the required ranks) and we’ll guarantee you a minimum income.

Probably a bonus that could be done away with sooner rather than later. After all, if you need to guarantee your affiliates a minimum payment, you’re probably better off examining why you’re not paying them enough at any given rank in the first place.

The “unilevel doubler” and “unilevel check match doubler” components of the compensation plan, could also definitely do with a re-write. As is they make little to no sense.

All in all, if one combines the recruitment commissions concerns with the income guarantee and generic’ish sounding product lineup, the Xseed MLM opportunity as a whole feels a bit underwhelming – and likely to face compliance issues upon closer inspection (either by an MLM lawyer or a regulatory body).

Approach with caution.