Volishon Review v2.0: Revised commissions, retail focus?
Earlier today I was contacted by Volishon’s attorney, who advised that BehindMLM’s initial review of Volishon, dated December 17th, 2015, was inaccurate.
Upon receiving the email, I had a look into Volishon’s compensation plan and confirmed that it had indeed changed.
Today we go over Volishon’s current compensation plan, as per a June 22nd “The Compensation Plan” video uploaded to the official Volishon YouTube channel.
The Volishon Product Line
Volishon’s product is a travel discount subscription costing $50 and then $34.95 a month.
As per the Volishon website, the “travel group subscription” provides access to ‘some of the best travel deals in the industry.‘
The Volishon Compensation Plan
The Volishon compensation plan pays affiliates to make retail sales of travel group subscriptions.
Volishon affiliates are also paid direct and residual commissions on the recruitment of new affiliates.
Volishon Affiliate Ranks
There are three ranks within the Volishon compensation plan.
Along with their respective qualification criteria, they are as follows:
- 1 Star – pay an $84.95 affiliate fee
- 2 Star – pay a $249 fee or have a downline of at least ten active Volishon affiliates (no more than 4 may be counted from any one unilevel leg)
- 3 Star – pay $449 fee or have a downline of 100 active Volishon affiliates (no more than 40 may be counted from any one unilevel leg)
- 3 Star Elite – pay $1499.95 or have and maintain 500 affiliates active Volishon affiliates in your downline
Note that an “active” Volishon affiliate is one that continues to pay their $34.95 a month travel group subscription fee (affiliates who purchase 2 Star or 3 Star rank are exempt for 6 and 12 months respectively).
Volishon affiliates earn up to 60% of travel commissions generated by travel booked through their replicated travel booking engine.
Residual traffic commissions are paid out down two levels of recruitment, paying 20% on level 2 and 10% on level 3.
Direct Recruitment and Retail Commissions
Volishon affiliates are paid to recruit affiliates 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.
Volishon cap payable direct recruitment commissions at three levels of recruitment.
How much of a direct recruitment commission is paid out is determined by affiliate rank and what level of the unilevel team a newly recruited affiliate is placed on:
- 1 Star – $15 per affiliate personally recruited (level 1)
- 2 Star – $25 per affiliate personally recruited and $5 on level 2
- 3 Star – $30 per affiliate personally recruited, $5 on level 2 and $3 on level 3
Recruitment of a 3 Star Elite affiliate generates a $500 commission.
When a retail customer purchases a Volishon travel group subscription, the above commissions are paid out as a retail commission (across the same three levels).
Resdidual Recruitment Commissions
Residual recruitment commissions in Volishon are paid out via the same unilevel compensation structure as direct recruitment commissions.
How much of a recruitment commission is paid out is determined by affiliate rank and what level of the unilevel team a newly recruited affiliate is placed on:
- 1 Star – $3 per month per affiliate personally recruited (level 1)
- 2 Star – $4 per month per affiliate personally recruited and $2 a month on level 2
- 3 Star – $5 a month per affiliate personally recruited, $3 a month on level 2 and $1 a month on level 3
Note that the above commissions are monthly and tied to ongoing payment of monthly fees by recruited affiliates.
Also note that when a retail customer purchases a travel group subscription, the above commissions are paid out as a retail commission (for as long as the retail customer continues to pay $34.95 a month, across the same three levels)
Coded Infinity Fast Start Override
The Coded Infinity Fast Start Override allows 3 Star Elite ranked Volishon affiliates to earn a direct commission beyond three unilevel levels.
3 Star Elite affiliates earn $2 per recruited active affiliate or retail customer in their unilevel team each month.
Second and third generation 3 Star Elite affiliates in their team earn $1 per active affiliate or retail customer.
Volishon pay another residual recruitment and retail commission through a matrix-based compensation structure.
1 Star affiliates are paid through a 2×10 matrix, 2 Star affiliates are paid through a 2×12 and 3 Star affiliates are paid through a 2×14.
A 2×10 matrix places an affiliate at the top of a 2×10 matrix, with two positions directly under them:
These initial two positions form the first level of the matrix, with the second level of the matrix generated by splitting each of the first two levels into another two positions each (4 positions).
Subsequent levels of the matrix are generated in the same manner as required, with each new level housing twice as many positions as the previous level.
A 2×10 matrix is capped at ten levels, with a complete matrix housing 2046 positions.
A 2×12 matrix adds an additional two levels to the matrix, for a total of 8190 positions.
A 2×14 matrix adds another two levels, for a total of 32,766 positions.
Positions in each matrix are filled via recruitment of Volishon affiliates and acquisition of retail customers.
Commissions through each matrix are paid out as a percentage of monthly fees both recruited affiliates and retail customers pay as follows:
- 1 Star affiliate – 2% on levels 1 to 4, 2.5% on levels 5 to 8 and 3% on levels 9 and 10
- 2 Star affiliate – 2% on levels 1 to 4, 2.5% on levels 5 to 8 and 3% on levels 9 to 12
- 3 Star affiliate – 2% on levels 1 to 4, 2.5% on levels 5 to 8, 3% on levels 9 to 12 and 2% on levels 13 and 14
Matrix Matching Bonus
The Matrix Matching Bonus sees Volishon affiliates earn a matching percentage of matrix commissions earned by affiliates in their downline.
Based on a Volishon affiliate’s rank, the Matrix Matching Bonus is paid out on up to six levels of recruitment (unilevel):
- 1 Star – 15% on level 1 (personally recruited affiliates)
- 2 Star – 25% on level 1, 10% on level 2 and 5% on level 3
- 3 Star – 30% on level 1, 15% on level 2, 5% on level 3, 3% on level 4 and 2% on level 5
- 3 Star Elite – 50% on level 1, 15% on level 2, 5% on level 3 and 2% on levels 5 and 6
Monthly Vacation voucher
Each month Volishon affiliates who pay their monthly fee receive a “3 Day 2 Night Getaway Vacation” voucher purportedly worth $300 to $500.
Affiliates must pay an additional $15 to redeem the voucher, plus up to $12 in “taxes and fees”.
Volishon affiliate membership is tied to the purchase of a Volishon affiliate rank:
- 1 Star – $84.95 plus $34.95 a month
- 2 Star – $249 (includes $34.95 monthly membership for 6 months)
- 3 Star – $449 (includes $34.95 monthly membership for 12 months)
- 3 Star Elite – $1499.95 (includes $34.95 monthly membership for 12 months)
Note that the 2 Star and 3 Star ranks have alternative qualification criteria (see Volishon compensation plan analysis above).
The primary difference between Volishon’s three affiliate ranks is income potential through the Volishon compensation plan.
A free Volishon affiliate membership exists, however it limited to travel engine commissions and has nothing to do with the MLM opportunity.
Volishon’s Achilles’ heel is the fact that, from a retail perspective, the appeal of their travel group subscription is pretty limited.
Our collection of over 300,000 discount providers offers unparalleled value of up to 50% off at the places consumers’ shop every day, and we have not just kept it with travel, but added a couple more exciting providers.
- Dining & Food
- Hotel & Travel
- Car Rental
- Movie Tickets
- Theme Parks
- Sporting Events
- Auto Care
Access to travel discounts appears to be free, which from all accounts is Volishon’s primary draw card.
Is $50 and then $34.95 a month attractive for mere access to discounts?
From a compliance perspective there’s also the fact that Volishon themselves aren’t the provider of any of the discounts. As acknowledged by the company, Volishon charge for access to “discount providers”.
Access to third-party discounts in and of itself is not a tangible product or service within the context of an MLM opportunity.
One smart move by Volishon since launch is the abolishment of profit-sharing. This had potential to operate as a Ponzi scheme so it’s great to see it gone.
Getting back to the travel group subscription though, I have to say that it doesn’t come across as a core focus, and this is evident in Volishon’s own marketing material.
A video titled “The Compensation Plan” was uploaded to the official Volishon YouTube channel on June 22nd, 2016.
The video is narrated by Marlon Hurd, who credits himself as Vice-President and Director of Training at Volishon.
Hurd mentions the $50 travel group membership once in the fifteen minute video, when he’s introducing Volishon affiliate fees.
From that point on every commission is presented within the context of recruiting new Volishon affiliates.
Here’s an example of how Hurd stresses Volishon’s matrix commissions are paid out:
1 Star you can earn up to $2053 dollars, at 2 Star $8505 dollars and at 3 Star $25,000 dollars… you can earn but the entire matrix has to be filled with active paid distributors.
I want to make sure that you understand that, active paid distributors.
Distributors aren’t retail customers, begging the question of whether retail travel group subscriptions are even paid out at all.
Retail travel group subscriptions have the same monthly $34.95 fee Volishon affiliate’s pay, so I’ve given the company the benefit of the doubt and included them where commissions are paid on the monthly fee.
The presentation of Volishon’s MLM opportunity however seems very much focused on affiliate recruitment.
According to Hurd, he “alway(s) recommend(s)” people “come in at” the 3 Star rank.
Hurd represents 3 Star Volishon affiliate membership as a $449 “investment”.
In a Volishon marketing video titled “Volishon New Commissions update $500 Fast Start Bonuses”, uploaded to the official Volishon YouTube channel on July 23rd, 2016, CEO Joel Santiago markets the $1499 3 Star Elite affiliate membership by showing
[7:43] how quickly they’re gunna be able to get their money back, get their return on their investment of the fifteen hundred dollars.
To the best of my knowledge Volishon are not registered with the SEC. Any solicitation of investment from existing or prospective affiliates by Volishon would thus constitute an unregistered securities offering.
Another example of Volishon’s affiliate recruitment focus is Hurd’s presentation of the Matrix Matching Bonus.
As a result of the potential payout through the bonus, Hurd ‘recommend(s) that you sponsor actively all the time‘.
Sponsor is a reference to recruiting new Volishon affiliates.
The fact that Volishon affiliates can pay to qualify as 2 Star and 3 Star affiliates is another issue.
These ranks directly impact earning potential through the Volishon compensation plan. The attachment of a price to the ranks is clearly pay to play.
In MLM income potential should only be tied to sales performance, not how much an affiliate spends when they sign up.
Looking at the broader picture, the crux of Volishon’s compliance legitimacy lies in the sale of retail travel group subscriptions. That is, retail customers who have paid $50 a month for the subscription and continue to pay $34.95 a month thereafter.
The good news is this is easy to verify as a prospective Volishon affiliate. Just ask your potential upline how many retail travel group memberships they’ve sold (that are still active), and compare this to the number of still-active affiliates they’ve recruited.
What you want to see is a healthy balance of both, which would suggest retail viability with the travel group subscription.
If the ratio is heavily weighed towards affiliate’s being the only one’s paying $34.95 a month, you’re looking at recruitment and the attached income opportunity as the primary driver for $34.95 a month fee payments.
This would suggest Volishon is operating as a pyramid scheme, subject to collapse once recruitment of new affiliates dried up.
For their part Volishon’s lawyer assures me that ‘75% of the company’s revenue has been generated by travel booking commissions‘.
Considering the low margin on travel commissions is going up against membership fees ranging from $50 to $1499.95 and a flat $34.95 a month fee per active affiliate and retail customer, personally I find the claim hard to believe.
Being able to PAY your way to a higher tier (i.e. better commission level) is pay-to-play. Volishon didn’t even bother to disguise this as “sales” or kit.
Merely making recruitment “possible” won’t satisfy the regulators.