Chances are you’re here because you’re considering signing up as an Associate with Isagenix.
You’ve probably tried the discounted products as a Preferred Customer and figured you may as well take the next step and register as an Associate so that you can make some extra cash by selling the products to your family and friends.
However, you’re a little bit hesitant.
You’ve heard people saying that Isagenix is a pyramid scheme and that it is impossible to make money with them, and you want to do your research before you dive in headfirst.
Maybe it isn’t you who is considering becoming an Isagenix Associate. Perhaps a friend or family member has joined and you’re concerned. You’ve noticed some red flags about the company and you would like to find out more about this new business venture of theirs.
Whatever the case, this article is here to help.
We are going to discover just how good the Isagenix business opportunity really is, whether you’ll be able to make money with Isagenix, and whether Isagenix could be a pyramid scheme in disguise.
Is Isagenix a Pyramid Scheme? A Closer Look Into the Isagenix Opportunity
What is MLM and is Isagenix an MLM?
Before we get into Isagenix itself, you should know what an MLM company is, because Isagenix is an MLM.
MLM stands for multi-level marketing, and MLM companies are also referred to as network marketing companies.
MLMs have been around for years, and popular MLMs include Color Street, Beachbody, It Works! and even Avon!
You don’t receive a salary in an MLM.
Instead, you earn money from selling products to people you know and recruiting others into the business. When you recruit a new person and that person begins earning money, you will earn commission from the sales and recruits generated by THAT person.
This continues down in multiple levels (hence multi-level).
Imagine a triangle. If the person at the very top of the triangle recruits 10 people, and every one of those 10 people recruit another 10 people, and each one of those people recruit another 10 people, you’ll be making commissions from EVERYBODY within the triangle because they’re all in your direct downline (the people underneath you in an MLM are referred to as your ‘downline’ and you are their ‘upline’).
All you had to do was recruit 10 people and you make money from 1100.
While you can always make money from selling whichever product your MLM company offers, most of the people in MLM companies prefer to recruit others because they stand to create a lifelong passive income from that person, whereas if they sell a product they’re just going to receive a one-off commission.
The ultimate aim of someone in an MLM company like Isagenix then, is to gather as many folks in their ‘downline’ as possible, enabling them to form large amounts of passive income for little work.
What is a pyramid scheme?
Pyramid schemes are very similar to MLMs, but the main difference is that MLM reps can make money from selling products as well as recruiting others into the business.
A pyramid scheme simply takes an initial investment from each member and promises to pay them for enrolling others into the scheme.
You are never buying a product; you’re buying into an ‘opportunity’ to get rich.
However, as members increase, recruiting quickly becomes impossible and so most members are unable to profit or even make their initial investment back.
The Wikipedia diagram below illustrates just how unsustainable this business model is – after just a few levels of recruitment, the scheme would have recruited everybody in the world and there would be no-one left to recruit!
Because it is impossible for most people to make any money in a pyramid scheme, pyramid schemes are illegal.
MLM companies aren’t illegal because there’s an opportunity to make money from selling products and not just recruiting. With that said, many pyramid schemes produce products in order to look like a legitimate MLM company, but the people in those schemes aren’t actually making much money from product sales.
Companies like this are known as ‘pyramid schemes with products’ or ‘pyramid schemes in disguise,’ and while they remain legal for the time being, if the FTC investigates one of these companies and discovers that they’re operating as a pyramid scheme, they can be shut down.
What is Isagenix?
Isagenix is a multi-level marketing company with a focus on wellness in the form of dietary supplements, shakes, ‘elixirs’ and more. It was founded in 2002 by John Anderson and Jim and Cathy Coover
Before founding Isagenix, John spent decades within the supplement formulating industry, while Cathy and Jim have spent a combined total of 50 years in direct sales.
Many of the Isagenix products are weight loss focused such as meal replacement shakes, but they also have products for energy, hydration and other general ‘wellness’ products.
However, the purpose of this post isn’t to go into detail about the Isagenix products. If you’re considering joining Isagenix, you probably already know about the products!
What you actually really need to understand is whether or not joining Isagenix is a good business idea!
Inside the Isagenix Business Opportunity
How do you make money as an Isagenix Associate?
I took a look at the Isagenix compensation plan to see how Isagenix Associates are making money.
It was 12 pages long and pretty difficult to grasp, here are some ways that you can make money with Isagenix:
- Selling Isagenix products to people you know and receiving a commission
- Selling Isagenix products to other Isagenix Members. When they purchase something, you receive a bonus
- Team bonuses are bonuses received due to the combined product sales of everyone in your team. The compensation plan states that this is the ‘foundation of the compensation plan,’ signalling the importance of growing a team
- Other incentives and promotions which Isagenix may introduce
What this tells us is that Isagenix are really keen to push product sales on Isagenix Members instead of retail customers, and that there is a lot of cash to be made from growing a giant team.
Two defining characteristics of product-based pyramid schemes are the focus on endlessly recruiting others into the business, as well as the distributor actually being the main customer.
How much money can you make as an Isagenix Associate?
To see how much money people are making with Isagenix, I took a look at their 2020 Income Disclosure Statement (IDS).
An Income Disclosure Statement is a document which outlines exactly how many people are registered as Associates within the company, how many of them are making money, and how much money they’re making.
Before we get into the numbers, it is important to note that you can be an Isagenix Member in two ways: as a ‘Customer,’ where you will receive discounted products but do not sell products to others, or as an ‘Associate,’ where you continue receive discounts on products but also sell products to people.
Isagenix’s IDS states that approximately 85% of Isagenix Members opened Customer accounts only, and thus earned no compensation from Isagenix.
This shows that 85% of Isagenix Members never attempted to turn their love for the products into a business, and that of the 15% of Members who made any money with Isagenix, all of those people had, at one point, tried to turn their passion for Isagenix into a business.
What this suggests is that if we STILL see very high failure rates, then it’s likely due to the BUSINESS MODEL itself as opposed to the distributor just not making any effort.
When it comes to the actual numbers, unfortunately, the Isagenix Income Disclosure Statement lacks a lot of data.
The only information we have is the following:
- The mean average earnings of all Isagenix Associates was $843
- The top 50% earned a median average of $1021
- The top 10% earned a median average of $7427
- The top 1% earned an average of $94,578
While these numbers may not look too bad compared to other MLMs (49% of Color Street reps only earned $68 in 2020), what we need to remember that every single one of the Isagenix Associates was actively trying to create a business, whereas some of the Color Street distributors may have signed up just to get some cheap nail strips.
When you take into account that the top 50% of the company only earnt $1000 in an entire year, we can see that most people in Isagenix are not earning anywhere near enough to replace a regular job.
We should also remember that these figures don’t take into consideration any EXPENSES that the Isagenix Associate racked up while building their business.
This means that the top 50% of Isagenix Associates didn’t actually walk away with $1000 at the end of 2020.
How much does it cost to be an Isagenix Associate?
The numbers on the Isagenix Income Disclosure Statement do not take into account expenses associated with being an Isagenix Associate.
What is very interesting to note is that Isagenix don’t allow you to view sign-up costs unless you give them your contact information, which is a BIG red flag.
However, thanks to some online reviews, I found that to start with, you need to pay a $29 registration fee.
You must then purchase one of their ‘Product Introduction Packs,’ which cost anywhere from $148 to a whopping $1098!
And that’s not all.
Isagenix Associates must also sell $150 worth of product each month to receive their commissions. What tends to happen if they don’t manage this, is that they’re going to buy products themselves so as to make it seem like they’re selling more than they really are.
Other expenses that an Isagenix distributor can expect to accrue include:
- Phone/internet bills
- Buying products for personal use
- Buying products to sell on to customers (inventory loading)
- Food, gas, travel and accommodation when travelling to Isagenix events and conferences
- Costs of running your own blog or promotional channel such as YouTube
You then need to take into consideration how much time you’ve spent working on Isagenix and whether the money you made justifies the hours spent. From the Income Disclosure Statement, it doesn’t seem like many people in Isagenix are earning a minimum wage.
Is Isagenix a pyramid scheme?
So far, the FTC has not ruled Isagenix to be a pyramid scheme, so technically speaking, it is a perfectly legal multi-level marketing company.
With that being said, the compensation plan reeeeally makes Isagenix look like a pyramid scheme, and I wouldn’t be surprised if it gets closed down or ordered to change its business structure in the very near future.
In order to see whether Isagenix is functioning as a pyramid scheme, we must attempt to answer 3 questions.
1. Are most people unable to profit?
When we checked out the Isagenix IDS, we saw that most Isagenix Associates weren’t making anything close to a full-time wage, and that many of them are probably spending more money than they’re making.
We can also see that although the people at the top of the company are making a significant amount of money, the vast majority of people are not making a profit.
2. Do you have to ‘pay to play?’
Not only does it cost hundreds of dollars to sign up as an Isagenix Associate, but there are also hidden costs within the compensation plan.
Remember earlier, when we discovered that you can make money in Isagenix by selling products to people you know?
Well, this can be done in 2 ways:
- An Isagenix rep can buy the product and then sell it onto a customer at a marked-up price, keeping the difference
- They can direct their customers to their personal website and instruct them to purchase the product from there. However, this comes with an ‘admin’ fee, meaning that there is less commission earned from these sales.
What this does is incentivises Isagenix Associates to buy and resell the products, which many people would view as inventory loading.
By ensuring that it is more beneficial to buy products instead of sending customers to the website, Isagenix are guaranteeing that Associates will still purchase products, irrespective of whether they can sell them or not.
This is super shady, and if, for whatever reason you do decide to join Isagenix, I would always advise to stay away from inventory loading at all costs. It is better to pay the online admin fee and receive a lower commission on the products you do sell instead of buying a tonne of stuff and not being able to sell any of it.
Isagenix also offer something called a Product Introduction Bonus, where Associates will receive a commission if they convince an Isagenix Member to buy a product.
This is another red flag that Isagenix is a pyramid scheme in disguise – by having their distributors sell to other distributors, they’re ensuring that the distributor is the customer, meaning that the whole ‘pay to play’ idea is even more pronounced.
Isagenix Associates also have to meet a monthly $150 sales target.
However, if a distributor is struggling to hit their $150 target one month, they’ll usually purchase some products for themselves so as to hit their target and receive their commissions.
So, do you have to pay to play with Isagenix?
3. Is there a heavy focus on recruitment?
As we have seen so far, the only way to make real money with Isagenix is by growing a large team underneath you.
In fact, Isagenix themselves say that the Team Bonus is ‘the foundation of the compensation plan,’ meaning that the whole compensation plan is built on the premise of recruiting others into the business.
Of course, Isagenix Associates don’t get paid directly for recruiting people.
That would be too obvious.
Instead, they get paid when the people they’ve recruited make sales.
This is a fine line, but an awfully one because it allows Isagenix to skirt around the lines of being classified as an illegal pyramid scheme.
So, is there a big focus on recruitment with Isagenix?
Quick Recap FAQ
Isagenix is a multi-level marketing company in the health and wellness sphere. It sells dietary supplements, meal replacement shakes and more.
Yes, Isagenix is a multi-level marketing company, also known as network marketing. Some compare MLM companies like Isagenix to pyramid schemes because there is a very low chance of making money and a focus on recruitment rather than selling products.
Most people do not make a liveable income with Isagenix. In 2020, the mean average earnings of all Isagenix Associates was $843, but this number is skewed because the top 1% of the company earned an average of $94,578 in the year 2020
To sign up as an Isagenix Associate, you need to pay a $29 registration fee, as well as one of their ‘Product Introduction Packs,’ which cost anywhere from $148 to $1098!
Isagenix has not officially been classified as a pyramid scheme by the the FTC, but it does share many similarities to an illegal pyramid scheme.
Is Isagenix a Pyramid Scheme? | Final Thoughts
While most MLMs closely resemble pyramid schemes, Isagenix really takes it a step further.
Not only is there an enormous emphasis on recruitment, but thanks to the very nature of the compensation plan, the biggest customers of Isagenix products are Isagenix reps themselves!
While every MLM company encourages their distributors to ‘live the product,’ Isagenix is the only company I have seen that awards specific bonuses for convincing current Isagenix members to buy products.
Does that not say it all?
Ultimately, Isagenix very closely resembles a pyramid scheme, and it is almost impossible to make money as an Isagenix Associate. For this reason, Not Your Boss Babe definitely does not recommend becoming an Isagenix Associate!
An Alternative to Isagenix
So then, how the hell do you make passive income online?!
Well, a much more viable alternative to network marketing is affiliate marketing.
Affiliate marketing is very similar to network marketing, but unlike multi-level marketing, you actually stand a chance at making a substantial amount of money from the comfort of your own home!
Just like multi-level marketing, affiliate marketing involves promoting products you love and making a commission every time you make a sale.
However, unlike MLM, there are no monthly quotas, no sign-up fees, no recruitment involved, and most importantly, the money that YOU earn will be going straight into your pocket, NOT trickling up the pyramid.
Affordable Affiliate Marketing Courses
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