LifeVantage Review: No retail focus & mandatory autoship
LifeVantage are based out of Utah in the US and commenced MLM operations in 2009.
Previously, under the names LifeLine Therapeutics, Lifeline Nutraceuticals and Yaak River Resources, Inc, LifeVantage had experienced ‘several consecutive years of multimillion dollar losses‘.
In 2012, LifeVantage’s then CEO Doug Robinson claimed the shift to an MLM business model “saved (the) company”.
Earlier this year in February Robinson resigned from his position. At the time Robinson stated that
after having discussions with the Board, I have concluded that it is in the best interests of the Company to step down from my position as President, CEO and Board Member.
Today LifeVantage is headed up by CEO and President, Darren Jensen (right).
As per Jensen’s LifeVantage corporate bio;
Mr. Jensen brings 25 years of global network marketing and direct selling experience to LifeVantage from companies selling a variety of product types including nutritional supplements and personal care products.
Mr. Jensen previously served in senior executive roles at some of the largest and most respected direct selling companies in the world, as well as co-founded two thriving multi-level marketing companies.
According to his LinkedIn profile, Jensen has held executive positions with
- NuSkin as International Marketing Specialist (1990-1995)
- Amway as Brand Marketer (1995-1997)
- Synergy Worldwide as Vice President of Marketing and Product Development (1997-2002)
- Usana as Director of International Business Development (2003-2005)
- Agel as Executive Vice President and Corporate General Manager (2005-2010)
- Ampegy as Chief Sales Officer (2011-2012) and
- Jeunesse as Chief Sales Officer and later President (2012-2015)
Of note is that it was during Darren Jensen’s tenure as President of Jeunesse that the whole Matthew Nestler saga blew up.
Jensen resigned from his position at Jeunesse a few months after Nestler filed his lawsuit.
Nestler’s lawsuit meanwhile is ongoing, with the latest update from Thompson Burton (representing Nestler) dated September 2nd:
Jeunesse filed a motion, attempting to pull the lawsuit into arbitration. We responded with our own arguments, attempting to keep the case in state court (public).
After hearing arguments and considering the issues for a few weeks, the Judge reached a decision. The part of the case that relates to the Business Development Agreement will remain in state court.
The part of the case that relates to the Jeunesse Policies and Procedures will go to arbitration.
LifeVantage themselves are no stranger to litigation;
In 2009, LifeVantage was sued by Utah-based Zrii LLC based on allegations that LifeVantage had conspired with former Zrii executives to “ruin the company” and take it over “on the cheap” following a “mass exodus”.
The case was closed in December 2009 following LifeVantage’s settlement payment of $400,000 to Zrii.
On October 14, 2011, Burke Hedges, a former LifeVantage distributor (hired for his background as a speaker and trainer) filed a lawsuit with the Utah District Court against LifeVantage and its executives, seeking $3 million in punitive damages over allegations of wrongful termination and tortious interference.
I was unable to find the Hedge vs. LifeVantage case on Pacer, nor was I able to find any public information on the outcome of the case (confidential settlement?).
Read on for a full review of the LifeVantage MLM business opportunity.
The LifeVantage Product Line
LifeVantage’s flagship product is Protandim, which the company claims
activates the body’s natural ability to reduce age-related symptoms on the cellular level.
Protandim reduces oxidative stress in humans by an average of 40 percent in 30 days. It activates Nrf2 to communicate with your DNA to deliver a biochemical wake-up call to your genes.
To date Protandim has been recalled twice by LifeVantage;
In December 2012, LifeVantage issued a voluntary recall of select lots (10 lots in total comprising 247,896 bottles) of Protandim due to potential health risks arising from the possible inclusion of small metal fragments in the final product.
In February 2013, the company announced that it was extending the recall to include additional lots of the product, estimating the total cost of the recall at $5.9 million.
Protandim comes as a pill and is sold retail at $50 for a bottle of 30 pills.
Other products LifeVantage market include:
- Axio Energy Vault – “fast energy and mental focus”, retails at $60 for a pack of 30 single-serve sachets
- Axio Endure Charged – “long-lasting power and mental clarity”, retails at $60 for a pack of 30 single-serve sachets
- TrueScience Micro Lift Serum, retails at $60 for a pack of 60 0.3ml applications
- TrueScience Ultra Gentle Facial Cleanser, retails at $30 for a 50ml bottle
- TrueScience Perfecting Lotion, retails at $48 for a 120ml bottle
- TrueScience Eye Correction Serum, retails at $48 for a 10ml bottle
- TrueScience Anti-Aging Cream, retails at $85 for a 50ml bottle
A TrueScience complete skincare regimen containing one bottle of the Ultra Gentle Facial Cleanser, Perfecting Lotion, Eye Correcting Serum and Anti-Aging Cream is also available for $175.
- Canine Health – “reduce oxidative stress in your dog”, retails at $30 for a bottle of 30 chewable tablets
The LifeVantage Compensation Plan
The LifeVantage compensation plan pays affiliates on volume generated by recruited affiliates and preferred customers.
Preferred customers are retail customers who sign up for a minimum monthly autoship order. Much of the rest of the LifeVantage compensation plan has a heavy focus on affiliate autoship recruitment.
All LifeVantage affiliates must have a minimum monthly autoship order of 100 PV to qualify for commissions.
From the Premier Pro 4 rank, this monthly autoship requirement is increased to 200 PV.
PV stands for “Personal Volume” and is a point-based volume metric assigned to all LifeVantage products.
LifeVantage Affiliate Ranks
There are eleven affiliate ranks in the LifeVantage compensation plan.
Along with their respective qualification criteria, they are as follows:
- Distributor – sign up as a LifeVantage affiliate and maintain a minimum 100 PV a month autoship order
- Pro 1 – maintain a 100 PV a month autoship order, recruit at least one affiliate and have a total monthly downline sales volume of 1000 GV
- Pro 2 – maintain a 100 PV a month autoship order, recruit at least one affiliate and have a total monthly downline sales volume of 2500 GV
- Pro 3 – maintain a 100 PV a month autoship order, recruit at least two affiliates and have a total monthly downline sales volume of 5000 GV (max 80% from any given unilevel leg)
- Pro 4 – maintain a 200 PV a month autoship order, maintain at least two recruited affiliates and have a total monthly downline sales volume of 10,000 GV (max 80% from any given unilevel leg)
- Pro 5 – maintain a 200 PV a month autoship order, maintain at least two recruited affiliates and have a total monthly downline sales volume of 20,000 GV (max 70% from any given unilevel leg)
- Pro 6 – maintain a 200 PV a month autoship order, maintain at least two recruited affiliates and have a total monthly downline sales volume of 50,000 GV (max 70% from any given unilevel leg)
- Pro 7 – maintain a 200 PV a month autoship order, recruit and maintain at least three affiliates and have a total monthly downline sales volume of 100,000 GV (max 60% from one unilevel leg and 30% from another)
- Pro 8 – maintain a 200 PV a month autoship order, maintain at least three recruited affiliates and have a total monthly downline sales volume of 200,000 GV (max 60% from one unilevel leg and 30% from another)
- Pro 9 – maintain a 200 PV a month autoship order, maintain at least three recruited affiliates and have a total monthly downline sales volume of 500,000 GV (max 60% from one unilevel leg and 30% from another)
- Pro 10 – maintain a 200 PV a month autoship order, maintain at least three recruited affiliates and have a total monthly downline sales volume of 1,000,000 GV (max 40% from any given unilevel leg)
A LifeVantage affiliate can qualify for recruitment commissions if they purchase a Freedom ($300), Vantage ($600) or Platinum ($1200) affiliate pack.
Personally enroll a new distributor that purchases a PLATINUM PACK and earn $500.
Personally enroll a new distributor that purchases a VANTAGE PACK and earn $250.
Personally enroll a new distributor that purchases a FREEDOM PACK and earn $125.
These recruitment commissions pay two levels deep, with affiliate recruitment by personally recruited affiliates generating the following commissions:
- Freedom Pack – $12.50
- Vantage Pack – $25
- Platinum Pack – $50
Note that in order to qualify for full recruitment commissions, a LifeVantage affiliate must generate a minimum 200 PV a month.
Affiliates who generate between 100 and 199 PV a month are paid 50% of the above commission rates.
Which pack a LifeVantage affiliate buys themselves also affects their commission rate:
Any distributors who purchase a FREEDOM PACK will only receive 1/2 of the bonus eligible on VANTAGE PACKS and PLATINUM PACKS that they sell to any newly enrolled distributors.
Additionally, any distributors that purchase a FREEDOM PACK will only receive 1/2 of the bonus on any FREEDOM PACK, VANTAGE PACK or PLATINUM PACK that are sold by any distributors they enroll.
Effectively, if an affiliate purchases a Freedom Pack they are only paid 50% in both direct and residual recruitment commissions (25% if they fail to meet the 200 PV a month qualification criteria).
Fast Start Bonus
The Fast Start Bonus is paid out on all orders made by a newly recruited affiliate in their first 30 days with the company.
LifeVantage affiliates who generate 100 to 199 PV a month are paid a 30% commission on product orders made by newly recruited affiliates.
This percentage is increased to 40% if the recruiting affiliate purchased a Freedom, Vantage or Platinum affiliate pack and has a 200 PV a month minimum autoship order.
Fast Start Bonus Pool
The Fast Start Bonus Pool is made up of 5% of LifeVantage’s company-wide sales volume.
Affiliates can earn a share in the Fast Start Bonus pool by selling 1200 PV worth of product to newly recruited affiliates and preferred customers in any given month.
Note that at least 400 PV of the total 1200 PV qualifying volume must come from recruited affiliate purchases.
Residual commissions in LifeVantage are paid out via a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, 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 2 and so on and so forth down a theoretical infinite number of levels.
LifeVantage cap payable unilevel levels at nine, with commissions paid out as a percentage of sales volume generated within the unilevel team
How much of a percentage is paid out is determined by a LifeVantage affiliate’s rank and what level of the unilevel team sales volume is generated:
- Distributor – 2% on level 1 and 5% on level 2
- Pro 1 – 2% on level 1 and 5% on level 2
- Pro 2 – 2% on level 1, 5% on level 2, 9% on level 3 and 5% on level 4
- Pro 3 – 2% on level 1, 5% on level 2, 9% on level 3 and 5% on levels 4 and 5
- Pro 4 – 2% on level 1, 5% on level 2, 9% on level 3 and 5% on levels 4 to 6
- Pro 5 – 2% on level 1, 5% on level 2, 9% on level 3 and 5% on levels 4 to 7
- Pro 6 – 2% on level 1, 5% on level 2, 9% on level 3 and 5% on levels 4 to 8
- Pro 7 and above – 2% on level 1, 5% on level 2, 9% on level 3, 5% on levels 4 to 8 and 2% on level 9
Residual Matching Bonus
A matching bonus is payable on unilevel commissions paid out to a recruited downline.
The Matching Bonus is payable down five levels of recruitment as follows:
- level 1 – 10%
- levels 2 to 5 – 5%
Note that till the Pro 6 rank, a LifeVantage affiliate must recruit one new affiliate or preferred customer a month who has a standing minimum 100 PV monthly order.
A minimum 200 PV a month must be generated to earn the full Residual Matching Bonus, with 100 to 199 PV a month affiliates only earning 50%.
The Elite Pool is made up of 4% of LifeVantage’s company-wide sales volume.
The Elite Pool is split up into four 1% smaller pools, with affiliates able to qualify for a share in each pool based on their affiliate rank:
- Pro 7 to 10 – one share in a 1% pool
- Pro 8 to 10 – one share in a 1% pool
- Pro 9 and 10 – one share in a 1% pool
- Pro 10 – one share in a 1% pool
Note that shares are accumulative, with Pro 10 affiliates retaining shares in all four bonus pools.
The Platinum Pool is made up of 5% of LifeVantage’s company-wide sales volume.
Affiliates can earn one share in the Platinum Pool by purchasing a Platinum Pack ($1200).
Additional shares are earned per 5000 GV generated in any given month.
Basic affiliate membership with LifeVantage is $50.
An affiliate can also sign up with a pack purchase as follows:
- Freedom Pack – $300
- Vantage Pack – $600
- Platinum Pack – $1200
The primary difference between the packs is bundled product and income potential through the LifeVantage compensation plan.
Distributors need an Autoship of 100 PV or higher to be eligible for commissions. When you reach the rank of a Premier Pro 4, you’ll need to have an Autoship of 200 PV or higher.
The above, taken from the LifeVantage website, illustrates the core problem of LifeVantage’s MLM opportunity.
Affiliates are forced to purchase product each month just to qualify for commissions, with this overriding any arguments about affiliates purchasing the product for any other reason.
The compensation plan itself then lends itself to affiliate autoship recruitment, with this guaranteed because every affiliate must have a standing autoship order to qualify for commissions.
Additional incentives pushing autoship recruitment include the bumping of the Fast Start Bonus to 40% with a 200 PV a month autoship order and the Matching Residual Bonus.
Given the autoship focus, it’s likely that most LifeVantage affiliates will qualify for the full bonus by having a 200 PV a month autoship order.
The bonus itself meanwhile is also likely to be mostly paid out volume-wise on autoship orders by recruited affiliates.
The affiliate packs also delve into pay-to-play territory, with the more an affiliate spending on the pack equating to higher commission rates.
These commissions are paid out when recruited affiliates purchase the packs, with them essentially serving as high-priced recruitment aids.
Again the products bundled with the packs are designated irrelevant, because there’s a direct financial incentive attached to each pack purchase.
Worse still, those who order the cheaper packs are punished with the halving of commissions when recruited affiliates purchase the more expensive packs.
Perhaps the most alarming aspect of LifeVantage’s compensation plan documentation however was the complete absence of retail commission information.
As it stands it is unclear whether LifeVantage pay commissions on retail orders (preferred customers orders are paid out residually through the unilevel).
One possibility is that retail orders pay out through the unilevel, which would equate to a 2% commission per order.
This is in line with LifeVantage’s otherwise complete lack of focus on retail sales, but I can’t say whether it’s the case for sure.
Either way, the fact that LifeVantage’s compensation plan doesn’t mention retail sales speaks volumes.
On the product side of things I’d definitely recommend trying them out before committing to marketing them. Although I’m not sure how an average consumer is going to measure whether Protandim “reduces oxidative stress in humans by an average of 40 percent in 30 days” as advertised.
Unfortunately LifeVantage’s MLM opportunity as a whole is let down by a compensation plan obviously geared to affiliate autoship recruitment.
I suspect there is little to no retail activity going on inside the opportunity, with commissions mostly paid out on affiliate autoship volume.
This can be verified with a potential upline by asking what their unilevel monthly volume ratio is between preferred customers and recruited affiliates.
Even on the off-chance you find an upline who is committed to retail sales, the mandatory autoships and recruitment incentives through the affiliate packs still leave much to be desired.
Approach with caution.