phyto-science-logoPhyto Science was founded in 2012 and are based out of Kuala Lumpur in Malaysia.

In just a short span of 18 months after its inception, PhytoScience’s monthly sales have surged to RM40 million, making it one of the TOP MLM companies in Malaysia.

Lai-Teck-Peng-ceo-founder-phyto-scienceCredited as Founder and CEO of Phyto Science on its website is Lai Teck Peng (right).

Dato’ Sri Lai brings in more than 26 years of significant network marketing experience and track record as a successful network marketing entrepreneur as well as extensive leadership and operational management skills in global consumer-oriented businesses.

Possibly due to language barriers, I was unable to find anything further on Lai’s MLM history. Phyto Science themselves provide no additional information on their website.

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

The Phyto Science Product Line

phyto-science-product-linePhyto Science operate in the health and wellness MLM niche, with the following products listed on their website:

  • Double Stemcell – a “proprietary blend of signature stem cell extracts”
  • 2 Sllim – weight loss via “a proprietary blend of patented and clinical proven all-natural ingredients”
  • Snowphyll – haemoglobin supplement based on a “combination of Snow Algae Pure & Mulberry Leaf Extract”
  • H2o Moisturizer – “a potent source of skin food to nourish cells and hydrate the skin”
  • Miracle Intense Essence – “helps the skin maintain perfect cellular balance transforming the skin to a remarkably ageless state”
  • Shine Stem – a “multi-function anti-aging formulation enriched with Sun Actin”
  • Parfum Elixir – imitation perfume oils based on well-known designer brands
  • Double Snow Chocolate – chocolate drink with vitamins, proteins and calcium
  • Anylock – airtight bag sealers
  • Water Tumbler – BPA-free water bottle (650ml)

Note that Phyto Science do not provide retail pricing on their website.

I’ll also note that while I did see various regulatory warnings about Phyto Science’s products, supposedly issued by Malaysia’s National Pharmaceutical Control Bureau, I was unable to independently verify any of them on the NBCB website.

As such I’m treating any and all warnings about Phyto Science’s products currently floating around as suspect.

Phyto Science’s products themselves, either in part or in full, appear to be manufactured by Mibelle Biochemistry Group.

Mibelle Biochemistry Switzerland designs and develops unique, high-quality actives for the beauty industry which are based on naturally derived compounds and extensive scientific expertise.

A photo of Lai Teck Peng with a certificate acknowledging Phyto Science as “the largest users of PhytoCellTec Stem Cells in Asia” (issued by Mibelle), was published on Lai’s Facebook page on April 11th, 2015.

The Phyto Science Compensation Plan

The Phyto Science compensation plan is not provided on he company website. As such the following analysis has been put together from a Phyto Science affiliate marketing presentation, published on May 12th, 2015.

Note that affiliates are only paid 80% of all commissions earned, with 20% withheld into a “redemption points” balance.

Redemption points are an internal currency used within Phyto Science, and can only be used by affiliates to purchase products (required to qualify for certain commissions).

Recruitment Commissions

Phyto Science affiliates are paid to recruit new affiliates.

How much of a commission is paid is determined by how much a newly recruited affiliate spends when they join, as well as how much the affiliate doing the recruiting paid for their own membership.

Silver and Silver Mix Affiliates ($116-$128)

  • recruit a Silver or Silver Mix affiliate = $30 commission
  • recruit a Gold or Gold Mix affiliate = $88
  • recruit a Mobile or Mobile Mix affiliate = $176

Gold and Gold Mix Affiliates ($688-$755)

  • recruit a Silver or Silver Mix affiliate = $30 commission
  • recruit a Gold or Gold Mix affiliate = $176
  • recruit a Mobile or Mobile Mix affiliate = $294

Mobile and Mobile Mix Affiliates ($2290-$2512)

  • recruit a Silver or Silver Mix affiliate = $30 commission
  • recruit a Gold or Gold Mix affiliate = $176
  • recruit a Mobile or Mobile Mix affiliate = $588

Note that these commissions are overrides, meaning the amounts paid out to Mobile And Mobile Mix affiliates are the maximum paid out.

Leftover amounts not paid out when Gold or Mobile affiliates are recruited, are paid out to Gold and Mobile ranked affiliates in the upline.

Eg. If a Silver affiliate recruits a Mobile affiliate, they are paid $176 with $412 remaining (588-176).

The system then searches the upline for either a Gold or Mobile affiliate to pay the remaining balance out to.

If a Gold affiliate is found, $118 is paid out with the remaining $294 being paid to the first Mobile affiliate found further upline.

If a Mobile affiliate is found before a Gold affiliate, they are paid the full $412 and the system stops searching.

Key-In Recruitment Bonus

Not sure why this has a separate section in the Phyto Science compensation plan, but the Key-In bonus is an additional recruitment-based commission paid to Mobile and Mobile Mix affiliates only.

  • recruit a Silver affiliate = $3.65
  • recruit a Gold affiliate = $22
  • recruit a Mobile affiliate = 73.50

Note that this commission is not an override and stacks onto the regular recruitment commissions outlined above.

Residual Commissions (binary)

Primary residual commissions in Phyto Science are paid out via a binary compensation structure.

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

binary-MLM-compensation-plan

Positions in the binary are created via recruitment of affiliates, with positions in the binary splitting into two additional positions each to make up subsequent levels.

Commissions in the binary teams are tracked via points, with each affiliate package generating a specific amount of points for the binary team that affiliate is placed into:

  • Silver – 73 points
  • Gold – 440 points (6 x 73)
  • Mobile – 1470 points (20 x 73)

Commissions are paid out using a pairing calculation, with each 73 points paired on both sides of the binary paying out a $14.60 commission.

Binary commissions are capped daily, depending on how much a Phyto Science affiliate spent when they joined the company:

  • Silver affiliates can earn $58.40 (4 pairs), additional pairs up to 24 are paid out at a rate of $3.67 per pair ($88)
  • Gold affiliates can earn $116.80 (8 pairs), additional pairs up to 200 are paid out at a rate of $4.41 per pair ($882)
  • Mobile affiliates can earn $233.60 (16 pair), additional pairs are paid out at a rate of $6.52 per pair (no limit)

Note that Phyto Science affiliates are forced to purchase products in order to qualify for binary commissions.

These products must be purchased in “packs”, which start at $58 each.

This is tracked via a timer, which is initially set to 60 days. If this timer reaches 0, all points accumulated between both binary teams are flushed.

Affiliates can add up to 6 months worth of time to the binary timer via the purchase of Phyto Science products.

Residual Commissions (unilevel)

In order to qualify for residual binary commissions, Phyto Science affiliates are required to purchase products.

Commissions on the sales volume generated by affiliates purchasing these products are paid out via a unilevel compensation structure.

Commissionable volume on the purchase of poduct packs by affiliates appears to be roughly half of the cost of the pack (minimum $58).

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):

unilevel-commission-structure

If any of these level 1 affiliates go on to 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.

Phyto Science cap payable unilevel levels at ten, with commissions paid out as a percentage of the sales volume generated by affiliates within the unilevel team (when they purchase products to qualify for binary commissions):

  • level 1 (personally recruited affiliates) – 6%
  • levels 2 and 3 – 5%
  • levels 4 to 6 – 4%
  • levels 7 to 10 – 3%

Note that Phyto Science affiliates must qualify to earn on unilevel levels, with how many levels they can earn on determined by how many affiliate’s they’ve personally recruited:

  • recruit at least two affiliates (one on both sides of the binary) = qualified to earn on two unilevel levels
  • recruit at least four affiliates (two on both sides of the binary) = qualified to earn on four unilevel levels
  • recruit at least six affiliates (three on both sides of the binary) = qualified to earn on six unilevel levels
  • recruit at least eight affiliates (four on both sides of the binary) = qualified to earn on eight unilevel levels
  • recruit at least ten affiliates (five on both sides of the binary) = qualified to earn on all ten unilevel levels

Matching Bonus (unilevel)

Phyto Science affiliates can earn a Matching Bonus on unilevel commissions earned by their downline.

The Matching Bonus is paid out as a percentage of unilevel commissions earned, payable down ten levels of recruitment.

Again, how many levels a Phyto Science affiliate can earn the Matching Bonus on, is determined by how many affiliates they’ve personally recruited:

  • recruit at least two affiliates (one on both sides of the binary) = 20% matching bonus on level 1 and 10% on level 2
  • recruit at least four affiliates (two on both sides of the binary) = 20% matching bonus on level 1, 10% on level 2 and 5% on levels 3 and 4
  • recruit at least six affiliates (three on both sides of the binary) = 20% matching bonus on level 1, 10% on level 2, 5% on levels 3 and 4 and 4% on levels 5 and 6
  • recruit at least eight affiliates (four on both sides of the binary) = 20% matching bonus on level 1, 10% on level 2, 5% on levels 3 and 4, 4% on levels 5 and 6 and 3% on levels 7 and 8
  • recruit at least ten affiliates (five on both sides of the binary) = 20% matching bonus on level 1, 10% on level 2, 5% on levels 3 and 4, 4% on levels 5 and 6 and 3% on levels 7 to 10

Joining Phyto Science

Affiliate membership with Phyto Science is tied to the purchase of an affiliate package:

  • Silver – $116
  • Silver Mix – $128
  • Gold – $688
  • Gold Mix – $755
  • Mobile – $2290
  • Mobile Mix – $2512

The primary difference between these affiliate memberships is products bundled with the packages and income potential through the Phyto Science compensation plan.

Conclusion

Listed as “vision” bulletpoints on the Phyto Science website are the following goals:

  • to be the No. 1 ranking MLM company in Malaysia by year 2015
  • to have a membership base of 1 million by year 2015
  • to be the No. 1 ranking MLM company globally by year 2015

Those are some pretty lofty goals for an MLM company to publicly set and, with the possible exception of the first, I’m pretty sure none of which worked out.

That aside, let’s get into some analysis of the Phyto Science MLM opportunity.

Despite having a sizeable product catalogue, retail appears to be non-existent in Phyto Science.

There’s no pricing provided for any of their products on the Phyto Science website, nor is there any mention of retail sales in any of the compensation plan material I reviewed.

Affiliates themselves appear to be the only purchasers of Phyto Science products, dragging the opportunity into product-based pyramid scheme territory.

Phyto Science’s compensation plan only re-enforces this, as it primarily revolves around affiliates signing up and then recruiting others who do the same.

The requirement that affiliates purchase products to qualify for residual commissions is of particular concern, as affiliates in MLM companies should never have to purchase products to qualify for commissions.

Infact this is one of the hallmarks of a product-based pyramid scheme.

Also not helping is the fact that Phyto Science affiliates are directly compensated to recruit new affiliates, with chain-recruitment being entirely possible and nothing marketed or sold to retail customers during the process.

Finally there are also strong “pay to play” elements present in Phyto Science’s compensation plan, with how much an affiliate spends on their membership directly impacting their recruitment and binary residual commissions.

Combine all three, and Phyto Science are sporting some very serious regulatory compliance issues.

Broken down, the gist of the business is to sign up (preferably at the more expensive Gold or Mobile levels) and then get paid to recruit others who do the same.

The binary timer serves as mandatory autoship (the timer is extended 30 days at the $58 product pack purchase level), with affiliates only purchasing products to qualify for commissions.

As with all recruitment-driven schemes, once recruitment slows down so too will the commissions Phyto Science pay out.

The unilevel autoship commissions aren’t enough to provide a viable income opportunity (you get paid a tiny percentage of 50% of the value of the products purchased), except for perhaps affiliates who have unbelievable huge downlines (those who joined back in 2012).

The bulk of funds would appear to be paid out through the binary, which is a daily zero sum game (new affiliates are recruited and commissions are paid out).

Phyto Science appear to be primarily active in both Malaysia and India, with Alexa estimating that both countries currently make up 82.8% of traffic to the Phyto Science website.

Unfortunately neither country are particularly known for regulatory intervention (Malaysia in particular, where Phyto Science is headquartered), meaning Phyto Science is likely to collapse before it is shut down.

And that means that in order for a select few at the top of the company-wide affiliate genealogy to make their fortunes, the majority of Phyto Science affiliates are going to lose money.

With neither the Malaysian or Indian government likely to step in and investigate anytime soon, you’re going to have proactively conduct your own due diligence on this one.