Longrich Review: Whacky products Chinese pyramid scheme
Longrich’s presented corporate structure is confusing.
The company markets itself as “Longrich America Int’, Inc.”, but also claims to be a ‘leading company which dominates the cosmetic industry in southern China.’
In July 2009, the Ministry of Commerce of the direct selling industry management information systems announced that Jiangsu LONGRICH Bio-Science Co., Ltd has officially obtained the China’s direct selling license.
Within that year, Longrich was selected as the “Top Ten Profitable Enterprises in Cosmetics Manufacturing Industry”.
Longrich as a non-MLM company has been around since 1986.
Founded in 1986, our company has seen steady growth in its market share and expansion that makes us today one of the most successful private companies.
Our trademarks have been registered in 183 countries and our products are sold in more than 50 countries and regions around the world including Malaysia, Taiwan, Hong Kong, Singapore, Nigeria, Ghana, Gabon, South Africa, Cameroon, Russia, Ukraine, South Korea, Thailand, Philippines, United Arab Emirates as well as the United States.
On Longrich’s website a suite address in Cerritos, California is provided. Google Maps shows the address is a shared use office building.
Longrich’s marketing videos show a “town” in China. The company’s official YouTube channel sits abandoned for four years.
Corporate staff detailed on Longrich’s website include Zhiwei Xu and Sean Xu.
Zhiwei Xu (right) is credited as Chairman of Jiansu Longliqi Biosceince, which appears to be Longrich’s trading name in China.
As per Xu’s corporate bio, he has ties to the Chinese government and is dubbed ‘the most influential man in China’s cosmetic industry’.
No information with respect to Longrich is provided.
Sean Xu’s Longrich corporate bio is a marketing pitch for the company itself. No information about Xu or his business experience is provided.
According to his LinkedIn profile, Xu (right) is also “HRD” (Human Resources Director?) at Jiansu Longliqi Bioscience.
I did try searching out independent information on both Xus. Unfortunately their names are too generic and I suspect language-barriers didn’t help.
The only photos of the pair that seem to exist are two shots used in Longrich marketing.
In 2016 Longrich Botswana collapsed, resulting in “millions of Pula” in losses.
In April 2019 the Bank of Namibia outlawed Longrich, finding it to be an “illegal financial scheme”.
The Bank hereby declares Longrich as an illegal financial scheme exhibiting undesirable practices.
The sale of Longrich products is not mandatory. The marketing strategy focuses mainly on the recruitment of new members as the primary source of income, as opposed to the sale of Longrich products.
Read on for a full review of Longrich’s MLM opportunity.
Despite claiming to have “more than 1,000 products”, Longrich’s website only details a handful across home ware, personal care, nutrition and feminine care.
Product descriptions are provided by way of PDF brochures. There seems to be a bug with ordering though as when I click on the order button I’m redirected back to Longrich’s homepage.
Longrich fail to provide retail pricing for any products on their website.
Longrich’s Compensation Plan
Longrich do not provide a copy of their compensation plan on their website.
As such, the following analysis has been put together from various marketing presentations published in 2020.
There are twelve affiliate ranks within Longrich’s compensation plan:
- 1 Diamond – purchase Platinum tier affiliate membership or upgrade
- 2 Diamond – purchase Platinum VIP tier affiliate membership or upgrade
- 3 Diamond – have two unilevel team legs with a 2 Diamond or higher in each
- 4 Diamond – have two unilevel team legs with a 3 Diamond or higher in each
- 5 Diamond – have two unilevel team legs with a 4 Diamond or higher in each
- 6 Diamond – have two unilevel team legs with a 5 Diamond or higher in each and generate 250 GV in new downline volume each month
- 7 Diamond – have two unilevel team legs with a 6 Diamond or higher in each and generate 750 GV in new downline volume each month
- 1 Star Director – have three unilevel team legs with a 6 Diamond or higher in each and generate 1250 GV in new downline volume each month
- 2 Star Director – have three unilevel team legs with a 7 Diamond or higher in each and maintain 1250 GV in new downline volume each month
- 3 Star Director – have three unilevel team legs with a 1 Star Director or higher in each and generate 5000 GV in new downline volume each month
- 4 Star Director – have three unilevel team legs with a 2 Star Director or higher in each and generate 10,000 GV in new downline volume each month
- 5 Star Director – have three unilevel team legs with a 3 Star Director or higher in each and generate 20,000 GV in new downline volume each month
GV stands for “Group Volume” and is sales volume generated by an affiliate’s orders and that of their downline.
New volume is tied to recruitment of affiliates for that month who purchase Longrich products.
Longrich affiliates are paid to recruit new affiliates.
Commissions are paid as a percentage of funds spent by newly recruited affiliates when the sign up.
While the recruitment commission percentage itself isn’t disclosed, a 10% recruitment commission is paid when recruited affiliates purchase a higher-tier affiliate membership level.
Longrich pays residual commissions 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 affiliate’s 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.
Note that Longrich caps unilevel team levels at three. Presumably this means that anyone recruited after three is placed left to right across the existing three unilevel team legs.
Residual commissions are paid as a percentage of sales volume generated across the two weaker unilevel team legs, that is the two legs with less volume against the third.
Sales volume is generated when recruited affiliates purchase Longrich products.
Residual commission percentages are calculated based on how much a Longrich affiliate spends when they sign up:
- sign up at the Q-Silver and Silver tiers and receive an 8% residual commission rate
- sign up at the Gold tier and receive a 10% residual commission rate
- sign up at the Platinum and Platinum VIP tiers and receive a 12% residual commission rate
Note that the marketing examples I’ve seen appear to suggest Longrich limits the unilevel team to three legs. This would mean residual commissions are paid on the two weaker legs.
If that’s the case, then what happens beyond three recruited affiliates, with respect to unilevel team placement, is unclear.
The Leadership Bonus is a matching bonus paid on residual commissions earned by downline affiliates.
The Leadership Bonus is paid out using the same unilevel compensation structure as residual commissions, however the number of legs is uncapped.
That is to say each personally recruited affiliate generates a new unilevel team leg.
The Leadership Bonus is tied to affiliate rank, capping out at 5 Star Director affiliates earning the bonus across twelve unilevel team levels.
- 1 Diamond ranked affiliates earn a 10% match on level 1 (personally recruited affiliates)
- 2 Diamond ranked affiliates earn a 10% match on level 1 and 5% on level 2
- 3 Diamond ranked affiliates earn a 10% match on level 1 and 5% on levels 2 and 3
- 4 Diamond ranked affiliates earn a 10% match on level 1 and 5% on levels 2 to 4
- 5 Diamond ranked affiliates earn a 10% match on level 1 and 5% on levels 2 to 5
- 6 Diamond ranked affiliates earn a 10% match on level 1 and 5% on levels 2 to 6
- 7 Diamond ranked affiliates earn a 10% match on level 1 and 5% on levels 2 to 7
- 1 Star Director ranked affiliates earn a 10% match on level 1, 5% on levels 2 to 7 and 1% on level 8
- 2 Star Director ranked affiliates earn a 10% match on level 1, 5% on levels 2 to 7 and 1% on levels 8 and 9
- 3 Star Director ranked affiliates earn a 10% match on level 1, 5% on levels 2 to 7 and 1% on levels 8 to 10
- 4 Star Director ranked affiliates earn a 10% match on level 1, 5% on levels 2 to 7 and 1% on levels 8 to 11
- 5 Star Director ranked affiliates earn a 10% match on level 1, 5% on levels 2 to 7 and 1% on levels 8 to 12
Repeat Order Bonus
The Repeat Order Bonus is an autoship commission, meaning Longrich affiliates must have a standing 30 PV or higher autoship order to qualify.
PV stands for “Personal Volume” and is sales volume generated by an affiliate’s product purchases.
The Repeat Order Bonus is paid out as 4.5% of autoship orders placed by affiliates across a “placement tree”.
The placement tree is described as a fifteen-level deep matrix structure, however the width of the matrix is not defined.
The Breakaway Bonus is an autoship commission, meaning Longrich affiliates must have a standing 30 PV or higher autoship order to qualify.
The Breakaway Bonus pays a percentage on autoship orders maintained by personally recruited affiliates.
The Breakaway Bonus percentage is calculated based on the sum total PV generated by an affiliate’s autoship order and that of their personally recruited affiliates.
- generate less then 100 PV a month in autoship orders and receive a 21% Breakaway Bonus rate
- generate 100 to 200 PV a month in autoship orders and receive a 25% Breakaway Bonus rate
- generate 200 to 400 PV a month in autoship orders and receive a 29% Breakaway Bonus rate
- generate 400 to 800 PV a month in autoship orders and receive a 33% Breakaway Bonus rate
- generate 800 to 1600 PV a month in autoship orders and receive a 37% Breakaway Bonus rate
- generate 1600 to 3500 PV a month in autoship orders and receive a 41% Breakaway Bonus rate
- generate 3500+ PV a month in autoship orders and receive a 45% Breakaway Bonus rate
Super Director Bonuses
To qualify as a Super Director, a Longrich affiliate must
- generate 3500 GV a month within their personally recruited affiliate group;
- have a personally recruited affiliate who has qualified for Super Director; or
- have two affiliates anywhere in your unilevel team who have qualified at Super Director.
Once qualified, Super Director affiliates earn a Vertical and Horizontal Bonus.
The Horizontal Bonus is based on sales volume generated by personally recruited affiliates:
- generate less than 3500 PV across your personally recruited affiliates and earn nothing
- generate 3500 PV across your personally recruited affiliates and earn 10% on up to 3500 GV
Both those bonus amounts are wonky, as presented by Longrich affiliates.
The first has a specific formula: (your personal group sales+total group sales of all first level that reaches 3500PV 3500PV)*10%.
The problem is if you’re generating less than 3500 GV from your personally recruited affiliates, essentially you’re subtracting 3500 from a number less than 3500, and then multiplying that by 10%.
The second option also has a formula: 10% from your first level that reaches 3500PV.
Again you need 3500 GV to qualify, so if the commission is capped at 3500 GV that’s all you’re ever going to earn on.
The Vertical Bonus is a bit more straight forward. It’s paid out on downline volume and based on how many Super Directors you’ve personally recruited:
- recruit three Super Directors and receive a 5% bonus on their generated sales volume
- recruit five Super Directors and receive a 3% bonus on their generated sales volume
- recruit seven Super Directors and receive a 2% bonus on their generated sales volume
- recruit nine Super Directors and receive a 1% bonus on their generated sales volume
Longrich affiliate membership is priced across six tiers (note that I was only able to find membership costs in Nigerian Naira):
- Q-Silver – N40,000
- Silver – N80,000
- Gold – N130,000
- Platinum – N350,000
- Platinum VIP – N750,000
How much a newly recruited Longrich spends on their membership directly impacts earning potential.
Presumably each affiliate membership tier is also bundled with an assortment of Longrich products.
Longrich is your classic product-based pyramid scheme.
Your first red flag is Longrich banging on about being a majorly successful Chinese company, yet not operating their MLM opportunity there.
Chinese regulators have a reputation for not caring unless their own citizenry are being scammed. That and I suspect there’s plenty of palm-greasing going on behind the scenes.
Pure speculation of course on my part.
Zhiwei Xu’s ties to the Chinese government aren’t speculative though, and that no doubt helps Longrich.
As identified by authorities in Botswana, the core of Longrich’s MLM opportunity is signing up, putting in a monthly autoship order, and then getting paid to recruit others who do the same.
This explains Longrich’s practically non-existent retail focus on their website, including the broken ordering system referenced in the introduction of this review.
How long the ordering system has been broken for, who knows. It doesn’t matter, because there’s no retail activity going inside the company.
This is also why compensation material isn’t openly presented, as you’re supposed to be conned into signing up by an existing Longrich affiliate.
With respect to Longrich’s products themselves, I note that Mmegi columnist, Richard Harriman stated
they claim that their “Nutri V Rich” product is “anti cancer, improve and prevent diabetic, high blood pressure, and other terminal diseases.
“They also say it’s ‘almost 100% effective in treating a range of conditions such as high blood pressure, fatty liver, diabetes mellitus (type 2 diabetes), obesity, gastritis, liver disease’.
I didn’t find anything as egregious at that from Longrich themselves, but the result of simple searches like “longrich diabetes” or “longrich cancer” are minefields of illegal medical claims.
Longrich themselves don’t seem to give a crap. Again neither will Chinese regulators, so long as nobody in China itself is scammed.
While I didn’t find Longrich making disease related claims about their products, at least not publicly, I did find their description of simple cooking pots utterly ridiculous.
This is a bit lengthy but it’s Longrich’s verbatim marketing for their “Classy Style Energy Pots”.
With Classy Style Energy Pot, without seasoning or flavorings once served mixed dishes of chicken, fish seafood, vegetables and or tofu.
Your food will not be oily. Soup always clear and vegetables retain the original color and taste.
The Classy Style Energy Spot [sic], making use of physical “field synergy” effect technology of China independent property rights, with core technology device “sixty four column array”, the energy product system of world leading, created initially by the Chinese.
It’s working principle is collecting and integrating disordered space energy by system resonance, one kind of new “energy field” is transferred and formed with effective method.
What a load of utter baloney. And if that’s how Longrich are officially marketing a simple cooking pot, god knows how other products are unofficially marketed.
Wonky products, a pyramid scheme compensation plan, executives with no verifiable background and lack of MLM business in their home country.
There’s literally nothing appealing about Longrich’s MLM opportunity, outside of earning a quick buck by recruiting people into this mess.
One thing I did note is Longrich claims to have a thriving whitelabel business.
Beside the traditional sales and direct sales, we also have a proven experience in OEM and ODM.
We help local and international firms manage their entire supply chain in China.
We have the capability to provide product research and development, packaging design, raw material procurement, production, warehousing, distribution and sales of all kinds of cosmetics, personal care, household, health and pet care products.
Again, this is purely speculation on my part, but I suspect this is the actual core of Longrich’s business operations. I’d certainly wager it’s behind the success touted by the company.
The MLM side of Longrich is low-effort and, without sounding crude, seems targeted at third world countries whose populace might not know any better.
Long story short; if someone approaches you about Longrich and they start babbling on about magical cooking pots, run.