Youngevity Review: 500+ products, compensation red flags
Youngevity launched in 1991 and are based out of the US state of California.
The company operates in the health and wellness MLM niche, and is headed up by CEO Steve Wallach.
Wallach’s father, Joel D. Wallach is one of the co-founders of Youngevity.
A biomedical research pioneer, Dr. Joel D. Wallach spent more than 40 years in the field of Veterinary Medicine, observing and researching the effects of individual nutrients on animal health, before becoming a Naturopathic Physician in 1982.
Ma Lan is Youngevity’s other co-founder:
Dr. Lan received her medical degree from Beijing Medical University and her Master’s degree in Transplant Immunology from Zhon-Shan Medical University. She also has extensive training in Traditional Chinese Medicine.
As for Steve (right), his Youngevity corporate bio credits him with ‘nearly two decades of sales and network marketing experience‘.
In addition to his work over at Youngevity, Wallach was a co-founder of DrinkACT.
DrinkACT launched in late 2007 and marketed an energy drink under the “Vitalagy” brand.
In early 2013 DrinkACT was acquired by Youngevity. The two companies merged and the DrinkACT brand was dropped.
Acquisitions are a recurring theme over at Youngevity, with the company having acquired Javalution (2011), R-Garden (2011), Bellamora (2011), Financial Desitination Inc. (2011), Adaptogenix International (2011), Heritage Makers (2013), GOFoods Global (2013), Biometics (2013) and Good Herbs Inc. (2014).
In 2014 Youngevity also partially acquired Beyond Organic.
The company still operates as a stand-alone enterprise, however the affiliate-bases appear to have been merged:
Youngevity has entered into a definitive agreement to acquire certain assets and assume certain liabilities of Beyond Organic, Inc.
As a result of these business combinations, Youngevity distributors and customers will have access to Beyond Organic’s products and programs.
In turn, Beyond Organic distributors and customers will gain access to more than 500 high-quality, technologically advanced products offered by Youngevity.
Read on for a full review of the Youngevity MLM business opportunity.
The Youngevity Product Line
With all the acquisitions that have taken place over the years, combined with their own in-house product lines, Youngevity’s product line is an exhaustive catalog of health and wellness, personal care and personal finance themed products.
A press release from the company states that there are over 500 product lines available, which I’ve summarized below:
- health supplements
- weight management
- energy and sports drinks
- healthy chocolate
- general food
- makeup, hair care and spa and personal care
- art and craft
- home and garden
- pet products
The Youngevity website itself has a readily accessible catalog of their products, with full information about each line and retail pricing provided.
The Youngevity Compensation Plan
The Youngevity compensation plan pays out retail commissions, upfront and coded bonus commissions on affiliate purchases of CEO Packs and residuals via an infinity-deep unilevel compensation plan.
Stock options and additional performance-based bonuses are also available.
Youngevity Affiliate Membership Ranks
There are nine affiliate membership ranks in the Youngevity compensation plan.
Along with their respective qualification criteria, they are as follows:
- Junior Independent Marketing Director – maintain 50 PV a month
- Independent Marketing Director – maintain 100 PV a month
- Regional Marketing Director – maintain 150 PV a month and personally recruit at least three Junior Independent Marketing Directors
- Executive Marketing Director – maintain 200 PV a month, personally recruit at least three Independent Marketing Directors and have three levels of downline generating at least 1000 GV a month
- Senior Executive Marketing Director – maintain 250 PV a month, personally recruit at least three Regional Marketing Directors and have three levels of downline generating at least 5400 GV a month
- Vice-Presidential Marketing Director – maintain 300 PV a month, personally recruit at least three Senior Executive Marketing Directors and have three levels of downline generating at least 7500 GV a month
- Presidential Marketing Director – maintain 300 PV a month, personally recruit at least five Senior Executive Marketing Directors and have three levels of downline generating at least 10,500 GV a month
- Vice-Chairman Marketing Director – maintain 300 PV a month, personally recruit at least six Senior Executive Marketing Directors and have three levels of downline generating at least 27,000 GV a month
- Senior Vice-Chairman Marketing Director – maintain 300 PV a month, personally recruit at least nine Senior Executive Marketing Directors and have three levels of downline generating at least 43,200 GV a month
Note that PV stands for “Personal Volume”, and includes an affiliate’s own purchases and those of their retail customers.
GV stands for “Group Volume” and includes sales volume from an affiliate’s downline, capped at three levels of recruitment.
Retail commissions are offered on the sale of Youngevity products to non-affiliates.
Retail commissions are paid out as the difference between the wholesale and retail cost of a product. The Youngevity compensation plan states that this may be “up to 30%” of the retail price charged.
When a recruited Youngevity affiliate purchases a “CEO Pack” ($399 to $499), a recruitment commission of $100 is paid out to the affiliate who recruited them.
This commission is paid out whether an affiliate purchases a pack when they join the company or at a later date.
Quick Start Bonus
Orders made by newly recruited Youngevity affiliates in their first thirty days generate a 30% Quick Start Bonus for the affiliate who recruited them.
The Quick Start Bonus is capped to 750 BV per order made.
In order to qualify for the Quick Start Bonus, a Youngevity affiliate must have an autoship order of at least 100 PV or more.
Residual commissions in Youngevity are paid out using 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 of these level 1 affiliates go on to recruit new affiliates of their own, 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.
Commissions are paid out as a percentage of the sales volume generated by affiliates in the unilevel team.
How many levels a Youngevity affiliate is paid down is determined by their affiliate membership rank:
- Junior Independent Marketing Director – 5% on levels 1 and 2
- Independent Marketing Director – 8% on levels 1 and 2 and 7% on level 3
- Regional Marketing Director – 8% on levels 1 and 2, 7% on level 3 and 6% on level 4
- Executive Marketing Director – 8% on levels 1 and 2, 7% on level 3 and 6% on levels 4 and 5
- Senior Executive and Vice-Presidential Marketing Director – 8% on levels 1 and 2, 7% on level 3, 6% on levels 4 and 5, 8% on level 6, 4% on levels 7 and 8 and and 2% on all remaining levels
- Presidential Marketing Director – 8% on levels 1 and 2, 7% on level 3, 6% on levels 4 and 5, 8% on level 6, 8% on level 7, 4% on level 8 and 2% on all remaining levels
- Vice-Chairman and Chairman Marketing Director – 8% on levels 1 and 2, 7% on level 3, 6% on levels 4 and 5, 8% on levels 6 to 8 and 2% on all remaining levels
Youngevity’s Coding Bonus is tied into affiliate purchases of CEO packs ($399 to $499).
Up to $190 is paid out, with how much of a payout is received determined by an affiliate’s membership rank:
- Regional Marketing Director – $15
- Executive Marketing Director – $35
- Senior Executive Marketing Director – $100
- Vice-Presidential Marketing Director – $140
- Presidential Marketing Director – $170
- Vice-Chairman Marketing Director – $180
- Senior Vice-Chairman Marketing Director – $190
Up to $190 is paid out on each CEO Pack purchase, with the system searching the immediate upline to pay out the remaining balance to if the affiliate who first receives the Coding Bonus is not a Senior Vice-Chairman Marketing Director.
Eg. A Youngevity affiliate recruits a new affiliate who purchases a CEO Pack. Their immediate upline is an Executive Marketing Director so they are paid $35. $35 from $190 is $155, which remains to be paid out.
The system then continues to search up the upline for a Senior Executive Marketing Director or higher ranked affiliate. Any Regional or Executive Marketing Directors are skipped, as their portion of the coding bonus has already been paid out.
If a Presidential Marketing Director is the next qualified affiliate found, they are paid $170 minus $35 = $135. The system then continues to search upwards till it finds either a Vice-Chairman Marketing Director ($10 would be paid out) or a Senior Vice-Chairman Marketing Director (the last remaining $20 would be paid out).
Using the above example if the immediate upline was a Senior Vice-Chairman Marketing Director, the full $190 Coding Bonus would have been paid out.
Note that in order to qualify for the Coding Bonus, an affiliate must have purchased a CEO Pack themselves.
Youngevity’s Car Bonus is a monthly bonus put towards the lease of a car.
Note that qualification for the Car Bonus requires the recruitment of affiliates beyond what is required at the applicable membership ranks.
The Youngevity compensation plan does not make it clear if the maintenance of these recruited affiliates is an ongoing requirement after an affiliate promoted.
- Senior Executive Marketing Director – $300 (must have recruited at least 12 International Marketing Directors)
- Vice-Presidential Marketing Director – $600
- Presidential Marketing Director – $800
- Vice-Chariman Marketing Director – $1000
Senior Vice-Chairman affiliates can be awarded an actual car, subject to the following qualification criteria:
- 3,000,000 GV a month for three consecutive months with no more than 50% coming from any one unilevel leg – Corvette C6
- 6,000,000 GV a month for three consecutive months with no more than 50% coming from any one unilevel leg – Ferrari 458 Italia
Global Revenue Sharing Pool
Youngevity place 0.5% of global sales volume into a Global Revenue Sharing Pool.
Affiliates can qualify for a share in the pool by achieving the Senior Vice-Chairman Marketing Director affiliate rank. All affiliates at this rank receive an equal share in the pool.
As a publicly traded company, Youngevity extends this incredible unique opportunity to become a shareholder at a discount!
What is a stock option? Simply put, it is the right, but not the obligation to purchase shares of stock at a pre-established price – at a time in the future, when the value may be much higher.
Can we guarantee that? Certainly not – but wouldn’t it be nice to have the option?
Youngevity Stock Options are begin at the Executive Marketing Director rank as follows:
- Executive Marketing Director – 250 options
- Senior Executive Marketing Director – 1000 options
- Vice-Presidential Marketing Director – 4750 options
- Presidential Marketing Director – 15,000 options
- Vice-Chairman Marketing Director – 29,000 options
- Senior Vice-Chairman Marketing Director – 50,000 options
Note that in order to qualify for Stock Options at any given rank, said rank must be maintained for a minimum of 90 days.
Basic affiliate membership to Youngevity is $99.
In order to become CEO qualified (required for various commission qualifications), the purchase of a “CEO Pack” is required ($399 to $499).
The difference in price between the various CEO Packs available is attributable to the various Youngevity products bundled in them.
With such a large product range it’s obvious that there are plenty of retailable products within Youngevity.
The question is whether or not these products are only being bought by affiliates, or whether there’s significant retail activity taking place.
Analysis of Youngevity’s compensation plan doesn’t leave me convinced it’s the latter.
The most obvious red flag in Youngevity’s compensation plan is the $100 commission paid out on CEO Packs. Affiliates are the only people buying these packs, so effectively if bought by a newly recruited affiliate, you’re looking at $100 a pop paid out on the recruitment of a new affiliate.
Given that “CEO qualified” is the only way to qualify for various commissions and bonuses, there’s a big question mark over whether affiliates who purchase the pack are doing so out of a genuine perception of value in the pack, or whether they just want to pre-qualify themselves for various commissions later on.
The coding bonus in particular sticks out like a sore thumb, paying a coded bonus on the purchase of a CEO Pack and also requiring the purchase of a CEO Pack in order to qualify.
Due to the relatively high monthly PV requirements, should an affiliate not sell product to retail customers and just autoship the required amount, there’s a definite potential for large affiliate downlines to be generating commissions on nothing but affiliate purchases.
And on the topic of autoship, I felt the monthly PV requirements only led themselves to autoship abuse.
Take for example the first two Youngevity affiliate ranks. The only difference between the two of them is 50 PV.
What are the odds a newly recruited affiliate is just going to pay an extra $50 for autoship and make up the 50 PV themselves?
One level higher, and another 50 PV is required (again likely to be an increase in an autoship order) and the recruitment of three affiliates.
The Quick Start Bonus wholly encourages an affiliate to sign up for autoship, and from a very early level then sets a precedent of retail sales taking a backseat to affiliate-purchase PV qualification.
In order to fend off possible autoship/recruitment abuse, Youngevity would do well to implement a cap on how much PV is counted from autoship. 50 PV I believe is reasonable, with the remainder required to be retail sales volume.
I don’t believe we’re going to be seeing something like that anytime soon though. Take for example this description of a successful Youngevity affiliate (from the compensation plan):
If you personally enrolled only three Distributors on level one who, in turn, did the same through 8 levels… You would have 9,840 IMD’s in your pay structure.
This truly separates you from the norm in Corporate America – where people are just trading their time for money.
Think about this: In this example, you only did the work to develop three Distributors – if they duplicate your efforts, and those efforts compound, you can get paid on 9,840 people’s efforts!
You recruit three affiliates, who recruit three affiliates, who recruit three affiliates and so on.
Retail isn’t mentioned at all, with it being implied that everyone is on a monthly standing autoship order. The only duplication is the recruitment of three affiliates down eight levels of recruitment.
If one were to engage in this, you’d be part of a chain-recruitment pyramid scheme.
And remember, this suggestion is coming from Youngevity corporate in an official compensation document.
That’s why I have little to no confidence that retail is a significant portion of Youngevity’s total revenue.
That said, I did find the restriction of GV on an affiliate’s first three levels to be a good incentive to focus on building their immediate downline.
That said, if it’s just everyone recruiting three affiliates and paying autoship fees each month – we still have a problem.
The stock options offering was an interesting twist. As per Youngevity’s definition of a stock option, a snapshot of their stock price reveals there might be something to it:
That said I’d definitely treat the options as an additional bonus over something to strive for. Stock prices of MLM companies are notoriously volatile.
Given the nature of Youngevity’s compensation plan and the nature of the inherent “recruit three, who recruit three etc.” culture within the company, I’d strongly advise prospective Youngevity affiliates to enquire with their upline as to how much retail volume versus affiliate downline volume (within their first three unilevel levels) they are making each month.
Anything other than a reasonably close to 50/50 split might indicate they’ve adopted Youngevity’s “recruit three, who recruit three etc.” strategy.
If that’s the case, one can reasonable expect to have to do the same (recruit three etc.) in order to get anywhere in the company.
Approach with caution.