Zinzino Review: Overpriced espresso coffee pods?

Zinzino launched in 2007 and are based out of Gothenburg in Sweden.

Exclusively targeting the European market (Norway is Zinzino’s primary revenue source, accounting for 35% of company-wide sales revenue), Zinzino operate using a parent company / subsidy structure.

The company Zinzino AB is the parent and in each country Zinzino operate in a separate child subsidiary company is formed.

Provided in the Zinzino 2012 Annual Report is a “brief history of the company”:

Business activities commenced in autumn 2007. The principal activity of the business is to own and develop companies in direct marketing and related businesses.

In 2009, Zinzino Nordic AB was acquired through both a directed issue in kind to shareholders in Zinzino Nordic AB and through the rights issue Zinzino Nordic conducted in December 2009. This gave Zinzino AB control over 97% of votes and 92% of capital in Zinzino Nordic AB.

By December 31, 2012, participating interest had increased to 93% of capital.

Since September 20, 2010, Zinzino AB has been listed on the Aktietorget stock exchange. Stock performance has been very positive, particularly over the past year.

In 2011, the Group expanded with companies in Estonia and Lithuania. In 2012, companies were also launched in Latvia and Iceland. Unlike previous group structures, the new subsidiaries are directly owned by Zinzino AB.

Heading up Zinzino is CEO Dag Bergheim Pettersen (right), who wrote in the aforementioned 2012 Annual Report:

All Zinzino employees and distributors are well aware that our real boss is the customer, and everyone is familiar with our goal of 1 million customers by 2020.

I wasn’t able to find a history on Pettersen MLM industry wise, indicating that Zinzino is his first venture on the executive management side of things.

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

The Zinzino Product Line

Zinzino primarily market coffee, manufactured by Rombouts, ‘that was founded in Antwerpen, Belgium, in 1896′.

Market wise Zinzino claim to be “No. 1 in Scandinavia”, and market their coffee in three ranges; Luxury, Exclusive and Premium.

Zinzino coffee is sold in boxes of pods, ranging in price from 6.75 EUR (12 pods of Rombouts Columbia, Grande Reserve, Ristretto, Deca, Brasilia or Ethiopia coffee), to 8.50 EUR for some of the Premium blends (Malongo and Rombouts).

Zinzino also market a range of teas (6-6.75 EUR for a box of 12 pods), along with beverage syrups (coffee flavours and others, 7.50 EUR a bottle), confectionary (chocolate based) and Espresso machines (269-1020 EUR), coffee cups and carry-bags.

The Zinzino Compensation Plan

The Zinzino compensation plan primarily revolves around the purchase of products from the company, with volume tracked via a series of credits and points and paid out to affiliates via a binary compensation structure.

Commission Qualification

All Zinzino affiliates are subject to ongoing monthly commission qualification.

Regular affiliates must have at least four active customers and an autoship order that generates at least 10 credits.

Executive affiliates must have at least ten active customers and an autoship order that generates at least 20 credits.

Note that an “active customer” is defined in Zinzino as a customer who has purchased at least 3 credits worth of product over the last 90 days.

Affiliate Membership Ranks

There are sixteen affiliate membership ranks within the Zinzino (more if you include the star ranks) and, along with their respective qualification criteria, they are as follows:

• Partner – starting affiliate membership rank, qualified to earn on up to 450 points in their first 90 days and only retail sales thereafter
• Bronze – 4 active customers, able to earn on a maximum of 450 points in binary commissions each week
• Silver – generate 750 credits in a month, able to earn on a maximum of 450 points in binary commissions each week
• Gold – generate 1500 credits in a month, able to earn on a maximum of 450 points in binary commissions each week
• Executive – 10 active customers, generate 3000 credits in a month, able to earn on a maximum of 750 points in binary commissions each week
• Platinum – generate 6000 credits in a month, able to earn on a maximum of 750 points in binary commissions each week
• Diamond – generate 12,000 credits in a month, able to earn on a maximum of 1050 points in binary commissions each week
• Director – generate 24,000 credits in a month, able to earn on a maximum of 1350 points in binary commissions each week
• Crown – generate 48,000 credits in a month, able to earn on a maximum of 1500 points in binary commissions each week
• Royal Crown – generate 80,000 credits in a month, able to earn on a maximum of 1350 points in binary commissions each week
• Ambassador – must have two income centers with each producing 20,000 in credit volume each month and have 100,000 credits in balance
• Royal Ambassador – must have two income centers with each producing 30,000 in credit volume each month and have 150,000 credits in balance
• President – must have three income centers with each producing 40,000 in credit volume each month and have 200,000 credits in balance
• Elite President – must have three income centers with each producing 80,000 in credit volume each month and have 500,000 credits in balance
• Global President – must have three income centers with each producing 160,000 in credit volume each month and have 1,000,000 credits in balance
• 4 Star Global President – must have four income centers with each producing 200,000 in credit volume each month

Additional stars can be earned to an affiliates membership rank per new income center added that independently generates 200,000 credit points each month.

Cash Bonus

Zinzino state in their compensation plan material that when a customer (affiliate or retail) purchases a product off the “partner price list” with an attached “customer offer” that generates cash.

I had a look at the partner price list and the only products I could see with an attached “cash bonus” was the espresso machines (either by themselves or together with a monthly autoship order).

The cash bonus ranged from 15 EUR (customer spends 205 EUR) to 110 EUR (customer spends over 1000 EUR).

Team Bonuses

Team Bonuses are paid out to affiliates who have a specified number of active customers who also generate a specified number of credits via product orders each month.

There are three tiers of Team Bonuses in Zinzino and they are as follows:

• A-Team Bonus – if a Zinzino affiliate has at least 25 active customers (non-affiliates) who generate a minimum of 125 credits a month in product orders, the affiliate qualifies for a 10 EUR bonus for each new additional “cash bonus” customer they bring into the business
• Pro-Team Bonus – if a Zinzino affiliate has at least 50 active customers (non-affiliates) who generate a minimum of 250 credits a month in product orders, the affiliate qualifies for a 20 EUR bonus for each new additional “cash bonus” customer they bring into the business
• Top-Team Bonus – if a Zinzino affiliate has at least 100 active customers (non-affiliates) who generate a minimum of 500 credits a month in product orders, the affiliate qualifies for a 30 EUR bonus for each new additional “cash bonus” customer they bring into the business

As per the Zinzino partner price list, effectively this means any customer who purchases an espresso machine.

Fast Silver Bonus

The Fast Silver Bonus pays out a 300 point bonus to new Zinzino affiliates who recruit at least two new affiliates and have at least four active customers in their downline, all of which generate a minimum of 750 credit balance in the affiliate’s first 30 days with the company.

Binary Commissions

Monthly residual commissions in Zinzino are paid out using a binary compensation structure.

A binary compensation structure places an affiliate at the top of the structure with two positions branching out directly under them.

These two positions form the start of two teams in the binary, a left and right team. Each position branches out into two more additional legs and so on and so forth down a theoretically infinite number of levels.

Each position in the binary represents a recruited affiliate, with the credit volume generated within the binary used to calculate an affiliate’s monthly residual team commission.

This is done by squaring off the volume generate between the two teams (left and right) against eachother. Volume is taken from each team at the end of the month, with no more than 2/3rds of the total credit volume counted is able to be sourced from the stronger of the two teams.

How many credit points an affiliate is able to earn on is also determined by their affiliate membership rank.

• Bronze, Silver and Gold affiliates – up to 3000 credit points
• Executive and Platinum affiliates – up to 5000 credit points
• Diamond affiliates – up to 7000 credit points
• Director affiliates – up to 9000 credit points
• Crown and higher affiliates – up to 10,000 credit points

Additionally the commission percentage of said points is also determined by how many credit points an affiliate’s downline generates each month.

• up to 300 countable credit points – 7.5%
• up to 2000 countable credit points – 10%
• 2001 or more countable credit points – 15%

Enrolment Credit Bonus

Affiliates who qualify for the Fast Silver Bonus (Silver rank must be maintained), or have a 20 credit autoship order, 150 customer points in balance and at least 10 active customers, A-Team Bonus qualification or who are ranked Platinum or higher, qualify for double credit points on all new affiliate and customer autoship orders.

Residual Credits Bonus

The Residual Credits Bonus pays out double credit points on all orders, excluding Enrolment Credit Bonus orders.

In order to qualify for the Residual Credit Bonus, an affiliate must qualify for the A-Team Bonus, or have a 20 credit autoship order, 500 customer points in balance and at least 10 active customers or be ranked at Director or higher.

Rank Achievement Bonus

The Rank Achievement Bonus is paid out to Zinzino affiliates who achieve the qualifications required for the Director and above affiliate membership ranks.

• Diamond – 2500 EUR (paid out over 5 months)
• Director – 5000 EUR (paid out over 5 months)
• Crown – 10,000 EUR (paid out over 10 months)
• Royal Crown – 15,000 EUR (paid out over 10 months)
• Ambassador – 25,000 EUR (paid out over 10 months)
• Royal Ambassador – 50,000 EUR (paid out over 20 months)
• President – 100,000 EUR (paid out over 20 months)

Note that if an affiliate loses their rank, they lose their monthly payments.

Customer Acquisition Bonus

Zinzino’s Customer Acquisition bonus revolves around credit points generated by customer orders and affiliate’s purchasing starter kits when they join the company.

Points are tracked on each side of the binary weekly, with specified quotas equating to an increase in the points awarded.

• 500 credits from each binary team – 200 point bonus
• 1500 credits from each binary team – 400 points bonus
• 3500 credits from each binary team – 600 points bonus
• 7500 credits from each binary team – 1000 point bonus

Crown Volume Bonus

The Crown Volume Bonus is paid out to all Crown or higher ranked affiliates who have generated at least 10,000 credits in team volume.

The bonus is paid out as a percentage of the total credit team volume as follows:

• Crown – 1%
• Royal Crown – 1.5%
• Ambassador – 2%
• Royal Ambassador – 2%
• President – 3%
• Elite President – 4%
• Global President – 5%
• 1 Star Global President – 5%

zPhone Bonus

Despite the name and Zinzino compensation plan material displaying a phone, the zPhone bonus is just a 200 EUR a month bonus paid out to all Executive or higher ranked affiliates.

Car Bonus

A 1000 EUR a month car bonus is available to all Diamond or higher ranked affiliates.

Director Trip

Zinzino state that their Director Trip is an annual “educational trip” where ‘partners get the opportunity to listen to fantastic speakers and get coaching from the best‘.

There are three ways to qualify for the Directors Trip:

• An affiliate qualifies as a Director within the qualification period (annually)
• If an affiliate reaches “400 points” and generates “1000 points” in their team or
• If an affiliate is ranked Crown

Joining Zinzino

Affiliate membership to Zinzino starts at 30 EUR, with affiliates able to purchase starter packs ranging in price from 499 EUR (Sales Partner – Oh Espresso) to 1795 EUR (Business Partner Coffee and Food).

Conclusion

I’m no mathematical genius but I do go over hundreds of MLM compensation plans each year. Most of them take me a few hours to get my head around, maybe three if it’s something I haven’t seen before…

…and then there’s plans like Zinzino’s.

Zinzino start off with your basic binary based compensation plan and then heap layer after layer of unnecessary complication on top of it.

At its core the plan is volume based but how this volume is calculated is a nightmare. Customer and affiliate purchases generate credit points, which are then shuffled through the binary which is then converted into europoints, which an affiliate finally earns a percentage of as cash.

Things get even more confusing when you consider that europoints do not have a fixed dollar value, but rather fluctuate between 0.90 EUR and 1.1 EUR per europoint.

Qualification wise the Zinzino plan is just as messy. Take for example the signing up of a new customer and them making a purchase. By my count this triggers at least four separate components of the compensation plan, each with an individual methodology of commission tracking and qualification criteria.

And that’s just one possible way to generate points!

Unless you’re dealing with someone freakishly adept at understanding ridiculously complicated compensation plans right off the bat (or Swedish?), you can forget about being able to clearly explain the compensation to them in any measurable capacity.

They’re just not going to get it. Hell I’ve gone over my break down of it and I’m still not even 100% sure I completely get it.

Between the cash bonus points, credit points, balanced customers, customer points, customer acquisition points, euro points and 16 affiliate membership ranks there’s just too much clutter. This might have passed a decade ago but simplicity has come along way in the MLM industry and today plans like Zinzino’s simply just don’t cut it.

I’d strongly recommend on the corporate side of things either a complete re-write of the compensation plan in line with today’s standards, or an overhaul of the distributed compensation plan material (which co-incidentally is not provided to prospective affiliates on the Zinzino website).

Having a terrible compensation plan is one thing but the material Zinzino provides to explain it is just as bad. In breaking it down I constantly found myself flying all over the place backwards and forwards trying to make heads or tails of what I was looking at.

It is volume based but there’s no need to heap so much additional point conversions and “bank balances” etc on top of it. Keep it simple guys!

On the other hand, if you are able to completely understand the plan as is or are content with the notion of “do stuff, get paid” being the extent of your understanding of the Zinzino business, I’d only then recommend analysis of the company’s products.

Rombouts have their own independent website up at “rombouts.co.uk” and in comparing their prices with what Zinzino offer, I’m at a complete loss as to how these guys are still in business.

Here’s some comparisons for you:

• Rombouts Brasilia coffee (12 pods) – 3.47 EUR at Rombouts vs. 6.75 EUR through Zinzino (94% dearer)
• OH Espresso Machine – 232.15 EUR at Rombouts vs. 269 EUR at Zinzino (16% dearer)

Throw in the bulk discounts Rombouts are offering and the price difference grows even larger.

Outside of those participating in the Zinzino business opportunity, I have no idea who is paying more for coffee from Zinzino than the manufacturer themselves are selling it for retail.

Couple that with the outdated and complicated compensation plan Zinzino use and this is probably an opportunity best steered well clear of.

 

Update October 25th – Following a change in direction of the company and new compensation plan, BehindMLM published an updated Zinzino review on October 25th, 2018.