Encore3 Review: Not the Zhunrize reboot you’d expect

Encore3 claim to operate out of the US state of Georgia.

Details on the Encore3 management are limited, with the company website only revealing that Todd Spencer is the Founder.

Our mission began with founder Todd Spencer’s search for natural solutions to pain relief and common health issues.

No further information about Spencer or any of Encore3’s other executives are provided.

The email address used to register the Encore3 website domain (“ncore3.com”) appears to belong to an individual named “Beto Paredes”.

The same email used to register the Encore3 website domain appears on a “help wanted” ad bearing Paredes’ name.

The ad was posted on April 23rd and seeks a “Mandarin Translator/Interpreter” who will be

responsible for understanding/interpreting and reproducing statements, predominantly for a reading audience, from English to Mandarin.

We are seeking powerful and highly motivated individuals aspiring to learn and apply new knowledge from an exquisite Multi-Level Marketing (MLM) network company known as Encore3.

Here’s where things get murky.

Todd Spencer (right) is the former Vice-President of Product Development for Zhunrize. On his LinkedIn profile, Spencer additionally credits himself as Zhunrize’s Chief Operating Officer.

Zhunrize was launched in 2013 and saw affiliates invest up to $3000. In exchange, Zhunrize paid investors recruitment commissions and daily and monthly “profit-sharing” ROIs.

The SEC shut down Zhunrize in September 2014, revealing it to be a $105 million dollar global Ponzi investment scheme.

In December 2014 Zhunrize CEO Jeff Pan settled with the SEC. He lost his house and car, and is currently assisting a court-appointed Receiver with recovering Zhunrize funds.

Whether any criminal charges will be filed against Pan remains to be seen.

Todd Spencer meanwhile worked directly with Jeff Pan in Zhunrize.

According to the Zhunrize Receiver, Spencer had direct input as to the flow of funds within the scheme:

Zhunrize outsourced its back office functions to Vodaware, an IT and business services company.

The Receiver and his team has interviewed the Vodaware contractor who entered information into Quickbooks and paid bills as
directed by Jeff Pan or Zhunrize employee Todd Spencer.

Like Spencer, Beto Paredes was also involved in Zhunrize. His exactly role within the company however is unclear.

On his website, Paredes claims he ‘has extensive experience in training sales representatives and structuring MLM companies for success‘.

Paredes makes no mention of his involvement in Zhunrize.

Getting back to Encore3, the search for a Mandarin translator is of particular relevance because Zhunrize primarily targeted Chinese and Korean investors.

Are Todd Spencer “and the Encore3 team” looking to reboot Zhunrize and target investors who lost money?

Read on for a full review of the Encore3 MLM business opportunity.

The Encore3 Product Line

According to the Encore3 website, the company markets products from third-party vendors Nature’s Synergy, Allure3, Homelife Products and Tech-Link.

Our product offerings within Nature’s Synergy focuses on achieving “a sound mind in a sound body” including Nutrition, Natural Remedies, Pain Management, Dietary Supplements, Weight Management, and Food & Beverage categories.

Encore3 then expanded our efforts for a more complete lifestyle of natural brands introducing Allure3 with beauty products such as the effective Just Be Beautiful line of skincare products.

As we expanded our product lines, we understood that the Encore3 product offerings would not be complete until we helped to reduce the stress from your busy daily lives.

In most cases, keeping up with our schedules causes the most important parts of our lives to suffer… our health and our quality family time.

To help reduce stress, and as a source to find what’s special for your home,we developed the Homelife and Tech-Link categories – offering convenient, fascinating and innovative products that include the unexpected to the downright everyday and practical necessities.

The specifics of the products offered under these brands (including retail pricing), was unavailable at the time of publications.

Attempts to click on product links on the Encore3 website were met with HTML “404 not found” errors:

Of note is that part of the inventory seized in the Zhunrize shut down was a “beauty product”:

There is a small amount of inventory of 2 products located in the Glenridge office: a powdered drink, and beauty product.

The Receiver anticipates filing a motion for Court approval to abandon or dispose of these products.

Whether or not Encore’s products are sourced from the same supplier(s) is unclear.

The Encore3 Compensation Plan

The Encore3 compensation plan is a combination of retail commissions, with residuals paid out via a unilevel, matrix and several performance based bonuses.

Retail Sales Points

A number of Encore3 commissions and bonuses are tied to the acquisition of retail sales points (RSP).

Retail sales points can be acquired by Encore3 affiliates as follows:

• $15 spent in the online store = 1 RSP
• $30 spent in the online store =2 RSP
• $45 spent in the online store = 3 RSP
• $75 spent in the online store = 5 RSP
• $120 spent in the online store = 8 RSP
• purchase of a nutrition line product  = 5 RSP
• purchase of Just Be Beautiful product = 5 RSP
• purchase of a commercial energy service = 5 RSP
• purchase of a residential energy service = 2 RSP
• purchase of “Protect America” product = 5 RSP
• purchase of a travel product = 2 RSP

According to the Encore3 compensation plan document, in order for RSP to generated a purchase must be for a minimum of $15.

Encore3 Affiliate Ranks

There are eight ranks within the Encore3 compensation plan.

Along with their respective qualification criteria, they are as follows:

• Consultant (affiliate) – sign up as an affiliate ($95) and generate 5 RSP a month
• Consultant affiliate (qualified) – sign up as a consultant affiliate ($495) or upgrade from a regular affiliate membership ($400) and generate at least 10 RSP a month
• Marketing Director – attend “leadership training” and generate at least 750 RSP a month
• Senior Marketing Director – “conduct & lead regional events and more”, have a Marketing Director in three separate unilevel legs and generate 3000 RSP a month
• National Marketing Director – “conduct & lead national events and more”, have a Senior Marketing Director in three separate unilevel legs and generate 7000 RSP a month
• Senior Vice-President – “conduct & lead national and international events”, have a National Marketing Director in three separate unilevel legs and generate 30,000 RSP a month
• Executive Vice-President – “conduct & lead national and international events”, have a Senior Vice-President in three separate unilevel legs and generate 150,000 RSP a month
• CEO – “conduct & lead national and international events”, have a Senior Vice-President in five separate unilevel legs and generate at least 150,000 RSP a month

Presumably the RSP totals required are that generated by an Encore3 affiliate’s entire downline, however this is not explicitly clarified in the official compensation plan material.

Retail Commissions

Despite limited product information currently available on the Encore3 website, the company advertises retail commissions on the sale of products to retail customers.

A 50% retail commissions is written in the Encore3 compensation plan, but what that’s 50% of is unclear.

Being third-party products and services, there’s also a rather lengthy delay on the sale of some items:

The commission payout from selling offline products (travel, energy, satellite TV, home security, etc.) will only happen after Encore 3 gets paid from those product vendors, which could range from 60-90 days depending on the vendors.

Residual Retail Commissions

Encore3 pay residual retail commissions via a unilevel style compensation structure.

A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate directly under them (level 1):

If any of these level 1 affiliates go on to 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 theoretical infinite number of levels.

Encore3 cap payable unilevel levels at ten, paying out a percentage of the retail commissions earned by recruited affiliates down ten levels of recruitment as follows:

• level 1 – 15%
• level 2 – 8%
• level 3 (must generate at least 5 RSP a month) – 5%
• levels 4 and 5 – 2%
• level 6 (must generate at least 5 RSP a month and recruit and maintain at least three consultant affiliates) – 2%
• levels 7 and 8 – 2%
• level 9 – 6%
• level 10 (must generate at least 15 RSP a month and recruit and maintain at least five consultant affiliates) – 7%

Residual Recruitment Commissions

Every Encore3 affiliate pays a monthly fee (regular affiliates pay $30 a month, consultant affiliates pay $50), which Encore pay a commission via a 2×20 matrix.

A 2×20 matrix places an affiliate at the top of a matrix, with two positions directly under them (level 1):

These two initial positions make up the first level of the matrix, branching out into two additional positions to make up the second.

These second levels positions again branch out into another two positions to make up the third level, and so on and so forth down a total of twenty levels.

Note that in order to earn commissions beyond the fifth matrix level, the following qualification criteria applies:

• 5th level qualification = recruit at least 2 affiliates and generate at least 5 RSP a month
• 10th level qualification = recruit at least 3 affiliates and generate at least 5 RSP a month
• 14th level qualification = recruit at least 4 affiliates and generate at least 5 RSP a month
• 20th level qualification = recruit at least 5 affiliates and generate at least 15 RSP a month

Positions in the matrix are filled via direct recruitment, and the recruiting efforts of an affiliate’s upline and downline.

Commissions are paid out according to an Encore3 affiliate’s rank and that of recruited affiliates in their matrix:

• Consultant – 40 cents for every filled position in the matrix
• Marketing Director – 40 cents for every Consultant and 60 cents for any other rank
• Senior Marketing Director – 40 cents for every Consultant, 60 cents for a Marketing Director and $1 for any other rank
• National Marketing Director – 40 cents for every Consultant, 60 cents for a Marketing Director, $1 for a Senior Marketing Director and $1.50 for any other rank
• Senior Vice-President  or higher – 40 cents for every Consultant, 60 cents for a Marketing Director, $1 for a Senior Marketing Director, $1.50 for a National Marketing Director and $2.50 for any other rank

RSP Bonus

The RSP Bonus pays a bonus commission based on RSP acquisition within an Encore3 affiliate’s first 30 days with the company:

• 5 RSP = $50
• 10 RSP = $100
• 15 RSP = $200
• 20 RSP = $300

An affiliate can also receive a bonus for helping their downline acquire RSP during their first 30 days as an Encore3 consultant affiliates too:

• have two recruited consultant affiliates generate 5 RSP within 30 days of joining the company = $400 bonus
• have a third recruited consultant affiliate generate 5 RSP within 30 days of joining the company = $1000 bonus
• achieve the above three times over a rolling 60 day period = $2000 bonus

Monthly Sales Bonus Pool

The Monthly Sales Bonus Pool is made up of product sales made by Encore3 affiliates.

How the bonus pool is split is a mystery and not disclosed.

Note that in order to qualify for a share in the Monthly Sales Bonus Pool, an Encore3 affiliate must acquire 5 RSP a month.

Monthly Presidential Sales Bonus Pool

The Monthly Presidential Sales Bonus Pool is made up of 15% of Encore3’s “worldwide sales revenue from the previous month” (including affiliate purchases).

In order to qualify for a share in the Presidential Sales Bonus Pool, an Encore3 affiliate must

• generate 15 RSP within 30 days of joining Encore3 as an affiliate
• generate 25 RSP within 30 days of joining Encore3 as a consultant affiliate

OR

• generate 5 RSP within a rolling four-month period (I believe this qualification period kicks in after an affiliate’s first 30 days)

Coded Bonuses (optional)

The Encore3 compensation plan material mentions “coded bonuses”, which appear to be an option versus the compensation plan broken down above.

You may want to consider using the coded plan system to help with qualifications.

The advantage of using the “codes” in qualification is that it promotes fresh recruitment over a span of time and through the latter stages of promotion as opposed to a big spell of new recruitment at the beginning and tapering off at the end.

This alternative is poorly explained and doesn’t make much sense to me.

From what I gather though it’s more tied into affiliate ranks than raw sales volume, paying out a 1-3% commission percentage. Bonuses are also paid as recruited affiliates rank up.

Joining Encore3

Basic affiliate membership with Encore3 is $99 plus $30 a month.

Consultant affiliate membership is $495 plus $50 a month.

Conclusion

With Todd Spencer being the VP of Product Development in Zhunrize, if I didn’t know any better I’d say Encore3 was an attempt to salvage vendor relationships fostered towards the end of Zhunrize.

This is evidenced by the related products seized by the Zhunrize Receiver, which realistically are probably from one of Encore3 suppliers.

That in itself isn’t a bad thing, as Encore3 is a far cry from the Ponzi scam Zhunrize was.

That said, Encore3 should not exist in its current state. The website is mostly non-operational, specifically in areas where it counts (such as product information).

Then there’s the products themselves, which for the most part appear to be sourced from third-parties.

Again not in itself a problem but leaves you wondering what exactly it is Encore3 themselves sell.

What exactly are consultant affiliates paying $495 and then $50 a month for?!

That part of Encore3 made no sense to me, other than to pay out matrix commissions… which drags Encore3 into chain-recruitment territory. Albeit with retail sales points qualifiers, but still.

RSPs are all very well, but if you have terrible product data on your site and nobody knows what exactly your selling, then you’re not going to be making any retail sales.

This means you’re looking at only affiliates purchasing products, which is problematic.

As to the Encore3 compensation plan in general, it suffers from being overly complex. This is a symptom common in MLM opportunities that rely on marketing a mish-mash of third-party products and services.

Parts of the Encore3 compensation plan made little to no sense, and then parts that did only did so after reading and re-reading what was written multiple times (hello headaches!).

All in all while Encore3 is a welcome departure from its Zhunrize roots, I think it still needs a considerable amount of polish. And these are details probably best fleshed out with the opportunity not open to the public (and one would certainly hope they aren’t currently charging affiliates $30 or $50 a month).

One final concern I’ll raise is that, obviously due to Spencer’s involvement in Zhunrize, I did see a number of Zhunrize investors marketing Encore3.

The two target demographics couldn’t be further apart, leaving me wondering just what it is former Zhunrize investors who are now marketing Encore3 have been sold on.

Zhunrize wasn’t in the slightest about marketing products to retail customers, it was all straight-up investment. Anyone who was attracted to that isn’t going to sign up for Encore3 with the same gusto.

Not that people don’t change, but here I think you’re looking at too large a difference.

Encore3, with some further work done on the opportunity, is marketable… just not to former Zhunrize Ponzi investors.

Who that leaves I’m not sure.