Have you heard about LifeVantage and its products and wondering if it’s another multi-level marketing pyramid scheme, or if it’s a legit business opportunity?
Well, to be honest:
There’s good news and bad news.
The good news is that people do seem to like the products that LifeVantage sells.
The bad news is that their business model is a little iffy. There are quite a few similarities between it and a pyramid scheme, honestly.
Let’s dive right in so I can show you what I mean.
What is LifeVantage?
LifeVantage is a multi-level marketing company based out of Utah that was started in 2009. (To be clear, the company was around before 2009, but they created the MLM side of the company in 2009.) Before making the shift to MLM, the company was suffering million-dollar losses.
Darren Jansen is the current CEO of LifeVantage and has had some experience with other MLMs:
LifeVantage’s products are in the health and wellness niche, with their most popular product being Protandim. They also products in beauty, fitness, and pets.
Here are some examples of product prices:
- Hand cream = $12.99
- Shampoo = $30.99
- Protandim NRF1 Synergizer = $49.99
- AXIO Decaf = $50.99
- Petandim for Dogs = $25.99
Now let’s talk about the business opportunity.
How Much Does it Cost to Join LifeVantage?
I personally had a hard time watching this video, there are just so many things wrong with it. But, she does a quick summary of the products and how much it costs to join LifeVantage, so it could be interesting for you to watch:
https://youtu.be/vFutq2mqidc
For her example, she uses the most expensive product pack at $1250. (There’s a reason for this, which we’ll talk about later.) However, there are less expensive options.
You can join with an affiliate membership for $50 + shipping.
You can choose to add on a pack, and these include:
- Silver Pack = $300
- Gold Pack = $600
- Platinum Pack = $1200
You can see what each of these packs include here.
To start making money with LifeVantage, you need to be a preferred customer with an autoship of at least 40PV (personal volume) every month. 1PV is approximately $1. To qualify for MLM commissions, you will also need to have a minimum of 100PV every month. (This includes your 40PV autoship, so you’ll need an additional 60PV minimum on top of that.)
LifeVantage Compensation Plan
I seriously don’t like going through compensation plans for MLMs because they are confusing, and I’m pretty sure that’s on purpose. When I was with Young Living, I never fully understood the compensation plan. It doesn’t really matter though since almost no one will get the opportunity to take full advantage of it. (See the next section.)
In any case, here’s another video from top earner Sheri Hollenback that gives an overhead view of the compensation plan and how you get paid:
https://youtu.be/4ZgeQvlc0bs
You can also read this post by BehindMLM to get a really good breakdown.
LifeVantage Income Disclosure
LifeVantage does have an income disclosure on its website, which you can view in full here. For the 2018 income report, there are a few key things they point out:
- The total commissions earned for all distributors was $70,388,516
- There were 58,105 total US distributors
- There were 44,577 paid US distributors
This means all distributors made an average of $1,211.40 for the entire year. Of those that qualified and were actually paid, their average pay was a whopping $1,579.03. For the entire year. Before expenses.
Now let’s take a look at the chart:
This income report is no different from the other ones I’ve seen. 75% of distributors who qualified for payments made less than $35,000 a year on average. And less than 1% make that $35k a year cut. (yes, I see someone made $20k in a month. That’s likely 1 person.) Again, this is before expenses so this isn’t even profit.
Of course, not everyone has the drive and the ability to make it to the top of a company. I understand that. My problem with MLMs is that they overstate how easy it is to make money when clearly every income disclosure shows a different story. 99% of people lose money in an MLM, according to this report posted on the FTC website.
Please note this quote from that 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.”
And 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, no product 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.”
Positive Reviews and Complaints
LifeVantage does get an A- from the BBB website and seems to have a mix of positive and negative reviews on there:
The positive reviewers said things like:
- I am a huge believer in the line of products LifeVantage offers
- This business has been a true life-changer for me
- I’m blown away by the results I’m receiving from the products
Now, let’s take a look at some LifeVantage complaints:
- I needed to pause my order by customer service was hard to get a hold of
- Customer service representative was extremely rude
- The product made my heart race and my hands tremble
- The company tries to confuse customers to make it hard to cancel an order
Here’s a complaint from a former distributor who’s not happy about the change in the compensation plan:
Sorry, buddy. LifeVantage can change the rules at any time and they don’t need your permission to do it. That’s why being in an MLM is NOT OWNING YOUR OWN BUSINESS.
I had to get that out. 🙂
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Is LifeVantage a Pyramid Scheme?
Now we finally get to the main question. Is LifeVantage a pyramid scheme? Well, technically it’s not at this moment. Although, it doesn’t mean it won’t be. I don’t see much of a difference between LifeVantage and AdvoCare.
In fact, after taking a look at this article about MLMs on the FTC website, it’s LifeVantage is looking suspiciously like a pyramid scheme. The article says:
“Here are some warning signs of a pyramid scheme:
- Promoters make extravagant promises about your earning potential. Stop. Such promises are false.
- Promoters emphasize recruiting new distributors for your sales network as the real way to make money. Walk away. In a legitimate MLM program, you should be able to make money just by selling the product.
- Promoters play on your emotions or use high-pressure sales tactics, maybe saying you’ll lose the opportunity if you don’t act now and discouraging you from taking time to study the company. Leave by the nearest exit. Any company that tries to pressure you to join is one to avoid.
- Distributors buy more products than they want to use or can resell, just to stay active in the company or to qualify for bonuses or other rewards. If you see this happening, keep your money.”
In a legitimate MLM, you should be able to make money just by selling the product. Meanwhile, in this video on Instagram, CEO Darren Jensen starts off by saying, “So a better future depends on better recruiting.” He didn’t say “a better future depends on better retail sales”, now did he?
In any case, LifeVantage has been sued for being a pyramid scheme in 2018. I don’t see any updated posts about this lawsuit, so we’ll have to wait and see how it turns out. For now, it’s business as usual for this MLM.
Pros
- People do seem to be happy with the products overall
- Fairly inexpensive startup costs
Cons
- Startup costs can be expensive if you go for the higher packages
- You have to be on autoship and sped at least $40 per month on products
- Focus is on recruiting and not retail sales
- Very few people earn a good income
- You become the customer, and you’re likely to spend much more money than you earn
If you like the idea of selling something and earning an income on your own time without having to spend an arm and a leg on products, I would encourage you to check out affiliate marketing instead. You can read my post MLMs vs Affiliate Marketing – Why Affiliate Marketing is 100x Better to see how it’s different from an MLM.
Is It Worth It to Sell LifeVantage?
Remember above when I showed the video of the top earner in LifeVantage where she says it’s a good idea to get the package worth $1250? The reason she’ll tell you that is to “experience more of the products” and “show them to your friends and family to get them on board.”
Maybe. That’s somewhat true.
But the real reason she wants you to get that high package is because in an MLM, you are the customer. You’re the one making sales for the company and lining her pockets. The more you spend, the more she makes.
Of course, that’s true in traditional companies too. The more you spend, the more the company earns. But there’s a key difference. Traditional companies aren’t telling you that their products are going to earn you an income…
You can see the problem here and why 99% of people lose money in an MLM, especially in one where you have to have an autoship set up. You are going to spend more money than you make by buying these products.
Here’s someone on Reddit talking about some relatives that were members of LifeVantage:
I hope this helps answer your questions if it’s worth it to sell LifeVantage.
Conclusion
Is LifeVantage a pyramid scheme? In case it wasn’t clear, they technically aren’t at this point, but they are being sued for being one. On top of that, they do seem to promote recruiting over retail sales. And finally, to make matters even worse, they require you to be on autoship to qualify for commissions.
Hmmm, seems a little pyramid-scheme-y to me. But that’s just my opinion. We’ll let the FTC decide officially.
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