Is American Dream Nutrition a pyramid scheme? In my opinion (and my opinion only), I believe that it is. Or, it’s at least on the very edge of being one. I’m going to explain why in the article below.
If you’re thinking of joining because you want to live out the “American Dream” and be able to make loads of money with their business opportunity, let me show you why that’s not likely to happen.
Let’s get right into it.
What is American Dream Nutrition?
American Dream Nutrition LLC is a multi-level marketing (MLM) company located in Beloit, Kansas. The CEO of the company is Greg Gunderson. It’s really hard to find much more information on this company. They do not have a true About page on their website.
Here’s a video of Greg Gunderson on YouTube:
There isn’t much more on Greg or how American Dream Nutrition got started, except I found this piece about Greg and some of his other businesses. It looks like he is (or was) the CEO of another MLM called TriUnity International.
But back to American Dream Nutrition…
They have nine products available on their site. They are:
- PhytoZon – $49.95 for distributors, $59 for retail customers
- Stem Cell Release Factor – $$59.95 for distributors, $69.45 for retail customers
- Get Juiced – $39 for distributors, $45 for retail customers
- Wild Shiaga – $49.95 for distributors, $49 for retail customers
- Clear Heart – $49.45 for distributors, $55 for retail customers
- Super Omega 3+6+9 – $45 for distributors, $55 for retail customers
- PureAquaMins – $39.95 for distributors, $49 for retail customers
- Nu-Derma Gold – $69.90 for distributors, $74.50 for retail customers
- ChagaPlus – $40.45 for distributors, $59 for retail customers
I don’t know about you, but I’m already skeptical of supplements because I don’t think our body can utilize man-made pills and potions very well. This company seems to make a lot of claims, and they got into some trouble specifically with PhytoZon.
But, this article is mostly about the business opportunity, so we’ll move on for now.
How Much Does it Cost to Join American Dream Nutrition?
You have a few different package options with American Dream Nutrition:
- Pro Pack – $349 + free S&H
- Platinum Pack – $164 + free S&H
- Gold Pack – $$89.90 + free S&H
- Silver Pack – $$49.95 + $5.50 S&H
There are also Platinum, Gold & Silver mixed product packages with varying costs.
On their join page, they also seem to push signing up for autoship right away. From this page, it almost seems as if it’s a necessity.
When you go to their enrollment page, there’s a disclaimer that says (italic underlining by me for emphasis):
“Enrollment: – By JOINING Today with this INVITATION offer, I understand I will be charged $19 (one time set up) today, along with my first order and I will be placed in the Highest Possible Position in our 2 X 15 Level Matrix following my sponsor. I also understand and agree that I am joining American Dream Nutrition, LLC. as an Independent Distributor on the monthly autoship program.“
This mandatory autoship is concerning, but we’ll get back to that a little later.
You also pay a one-time $19 fee, and for that you get 2 websites, a PhytoZon marketing website and a corporate website.
American Dream Nutrition Compensation Plan
The American Dream Nutrition compensation plan is, of course, confusing and convoluted. Here is a video that goes over some ways that you can get paid on this plan:
According to this video, there are 10 ways you can make money with American Dream Nutrition:
- Retail Profits
- Fast Start
- Coded Bonuses
- Mega 90 Day Builder Bonus
- Monthly Residual Income
- Infinity Bonuses
- Matching Bonuses
- Lifestyle Bonuses
- Revenue Sharing Pools
- One Time Achievement Bonuses up to $510,000
There are 9 ranks you can achieve in American Dream Nutrition:
- Silver
- Gold
- Platinum
- Sapphire
- Ruby
- Diamond
- Double Diamond
- Triple Diamond
- Presidential Diamond
Since I have a hard time decoding these plans, I’m going to point you to BehindMLM who does a great job of breaking this down.
American Dream Nutrition Income Disclosure
American Dream Nutrition doesn’t have an income disclosure that’s publicly available. Why is that? Are they hiding something? Would their income disclosure be worse than others that we’ve seen?
(Which would be hard to do since all the others are pretty terrible.)
We really don’t even need to see the income disclosure. We already know that over 99% of distributors in an MLM lose money, according to this report on the FTC’s website.
This is the most important paragraph from this report:
“Failure and loss rates for MLMs are not comparable with legitimate small businesses, which have been found to be profitable for 39% over the lifetime of the business; whereas less than 1% of MLM participants profit. MLM makes even gambling look like a safe bet in comparison.”
Followed by this one:
“MLM as a business model is the epitome of an ‘unfair or deceptive acts or practice’ that the FTC is pledged to protect against. It is even worse than classic, noproduct pyramid schemes (for which the loss rate is only about 90%) and ‘pay to play’ chain letters. For promoters to present MLM as a ‘business opportunity’ or ‘income opportunity’ is a misrepresentation.”
A little later in the report, we get this word of caution:
“Caution: If the MLM won’t provide statistics of average earnings, you should consider that a red flag, as it would for anything promoted as a ‘business opportunity’ or ‘income opportunity.'”
Positive Reviews and Complaints
It doesn’t seem that American Dream Nutrition is the most popular MLM out there because I couldn’t really find anyone who talked about them – good or bad, except for the FTC when they made claims about their PhytoZon product, as we mentioned above.
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Is American Dream Nutrition a Pyramid Scheme?
Since American Dream Nutrition is still up and running, at this point we can’t technically say that they’re a pyramid scheme. However, because they require affiliates to be on autoship, this makes me think that the majority of their sales are coming from affiliates. This WOULD qualify them to be a pyramid scheme.
Let’s talk about what a pyramid scheme is below.
Pros
- Fairly inexpensive startup costs
- Could potentially make a good amount of money if you can recruit enough people
Cons
- You’re very likely to lose money with this
- You are required to be on autoship, which means you’ll spend money every month
- You’ll have to be extremely careful with product claims
- The products are very expensive, which will be hard to sell retail
- Most people lose money in MLMs
What is a Pyramid Scheme?
I really like this article posted on the FTC’s website about pyramid schemes. When you run into someone who’s in an MLM and they try to convince you that their company is not a pyramid scheme, they will say it’s because they sell a physical product.
But, according to that article,
“Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. “
And…
“Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.”
Bingo.
Later in the article, there are a couple of things they tell you to look out for when presented a “business opportunity”:
“Beware of any plan that offers commissions for recruiting new distributors, particularly when there is no product involved or when there is a separate, up-front membership fee. At the same time, do not assume that the presence of a purported product or service removes all danger. The Commission has seen pyramids operating behind the apparent offer of investment opportunities, charity benefits, off-shore credit cards, jewelry, women’s underwear, cosmetics, cleaning supplies, and even electricity.”
And…
“If a plan purports to sell a product or service, check to see whether its price is inflated, whether new members must buy costly inventory, or whether members make most “sales” to other members rather than the general public. If any of these conditions exist, the purported “sale” of the product or service may just mask a pyramid scheme that promotes an endless chain of recruiting and inventory loading.”
These quotes basically describe most MLMs that have a product. They are really just product-based pyramid schemes.
An Alternative to American Dream Nutrition
You can still have the American Dream of earning an income on your own time. In fact, the way that I recommend is much easier than joining an MLM.
It’s called affiliate marketing, and you can get more information about it here.
With affiliate marketing, you are promoting other people’s and businesses’ products for a commission. It sounds similar to an MLM, but it’s vastly different.
With affiliate marketing, there’s no:
- Recruiting
- Downlines
- Uplines
- Team meetings
- Training recruits
- Hard sales
- Cold calling or messaging
- Begging your friends and family to join
Affiliate marketing is simply creating content for people on a specific topic and promoting products within that topic. When someone buys from you, you earn a commission. (And the prices are no different for the customer, so the sales aren’t inflated.)
If this is something you’re interested in, this training will teach you how to create an affiliate website that pays you over and over again, step-by-step. (And it’s free to join – no credit card required.)
Conclusion
Is American Dream Nutrition a pyramid scheme? I’m not the FTC, but in my opinion, I believe it’s a product-based pyramid scheme. And I believe that because 1. There’s no income disclosure, 2. Distributors are required to be on a monthly autoship.
To me, this tells us that almost all the sales are happening within the company. In other words, the distributors are the customers. And while many people will say it can’t be a pyramid scheme because there’s a product, you can have a product and still be a pyramid scheme if your sales are almost all coming from within the organization.
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