I was sitting in Starbucks the other day reading a book and drinking my coffee when I chanced to overhear two people at the next table.  One of them was working on getting the other one enrolled in a distributorship for MonaVie.  This is a fruit drink which contains, as it's main ingredient, the Acai berry.  I'm not going to speak to the medical claims and supposed curative properties of this berry, but lets say it sounds like it can cure everything from the common cold to chronic fatigue to cancer.  In fact it was so good at what it did apparently the FDA forbids the company from making any claims about it's curative properties.  Very curious indeed.

In any case, my main interest is how a person who enrolls in this 'distributorship' can earn money.

In order to explain how this all works, I'm going to reference a publicly available document from the corporate MonaVie site.  It can be found here:

MonaVie Compensation Plan

The document I'm referencing is dated March 3, 2008.  I have seen several different versions of this document.

Before I get in to explaining each of the various methods of earning income, I first need to explain how MLM (multiLevel marketing) works.

The basic concept is that you need to recruit people to buy product from you.  They essentially buy product from you and you make a percentage off the gross sales of the product.  This sounds just like a regular store doesn't it?  Well, that's really only half of how MonaVie's scheme works.  The second part of this is recruiting more and more distributors.  These people then work under you and try to sell more product and/or recruit more people to sell the product.  The more people under you buying product, the more money you make.  Seems simple doesn't it?

Now that we understand the basics of MLM, Lets examine the different methods of earning an income from selling this product.  Throughout the following discussion, I'm going to only refer to the 'Original' MonaVie formula.  It appears to me that this sells for $40 per bottle retail on the web.  First you have to become a distributor.  This means that you pay $39 for a marketing kit and also sign up for 'auto-ship.'  Auto-Ship sends you MonaVie every 28 days and charges your credit card.

In order to access any income other than that earned from direct sales, you need to be signed up to buy a case of MonaVie every 28 days.  If you want FULL access to all of the potential income sources, you buy two cases every 28 days.  This means that you're buying 104 bottles per year.  Lets assume that you are getting a 50% discount on these bottles.  If that's true, then you are spending $2080 per year on berry juice.

(Note: Some MonaVie sites talk about monthly sales and monthly auto-ship.  That's not quite right.  If you read their literature, you are on a 28 day auto-ship program.  This equates to 13 months in a year, so I'm going to go by the yearly numbers, not monthly.  Also, through out this discussion, I'm going to ignore shipping charges and taxes.)

Direct Website Sales

Essentially this works like a store.  You buy the product and the person running the website makes a percentage of the sales price. When you sign up as a distributor, you can also add a website to help your marketing.  Customers can become 'preferred' customers by signing up for auto-ship.  This gives the customer a 15% discount on the cases.  You are paid the difference between the wholsale price of MonaVie and the price the customer pays.

Lets examine this a bit more closely. The retail price of the juice is about $40 per bottle.  I looked through the various websites and some say $39, others say $40.  Lets use $40.  Auto-ship customers pay $34 per bottle.  Therefore, a distributor who's just selling MonaVie through direct sales, would make about $14 per bottle.  If you're buying 104 bottles per year, then you need to sell approximately 149 bottles per year to break even.  Remember it's probably going to be a few more to cover shipping charges and taxes on your personal bottles.

The average person in America makes about $26,000 per year as of 2006.  Sell 1857 bottles of MonaVie through your website per year, and you'll make $26,000.

Every MonaVie distributer and all of their marketing is NOT geared to this methond of earning money. You need to sign up more distributors to make real money.

Team Commission - Getting more Distributors

Now here's where this all gets interesting.  The big sales pitch whenever you hear a MonaVie distributor give his talk is going to be about signing up distributors.  Essentially, the more distributors who are under you, the more money you can make.  This gets a bit complicated, but simply put, you have to sign up two people to be distributors.  These people each go on a seperate 'leg' under you.  In order for YOU to qualify for commissions the following has to happen:

• You must buy 52 bottles of MonaVie per year. (104 for full participation in all bonuses)
• Each of your Personally sponsored distributors must buy 52 bottles per year.
• Each 'leg' of the tree under you must be generating a minimum of 500 GV per week.

What is GV?  It stands for Group Volume.  Each case of sales represents 100GV.  Therefore you MUST sell 10 cases of MonaVie at a minimum and these must be divided properly.  Sell 6 cases on one 'leg' and 4 cases on the other and you don't qualify for commission.  How much commission? Well, you get paid 10% of the GV of your lesser 'leg'

Huh?

Let me try to explain.  Lets assume that you recruit two people and the left 'leg' does REALLY good and sells 2000GV, but the other one sells only 500GV.  You are going to get paid 10% of the LESSER leg.  In this case you'll be paid 10% of 500GV.  This equates to a $50 commission.

Ok, but let's examine this a bit more closely.  In the most optimal case, you're really only making a 5% commission on sales.  This means that optimally if your distributors sell 10 cases optimally distributed, you are going to make $50 on 40 bottles sold (remember a 1 case = 100GV = 4 bottles) or $1.25 per bottle.  This seems reasonable, but wait.  I lured you into the first 'trick' they pulled on you. You're thinking that all you do is sign up 10 distributors to get auto ship, but remember, they're getting their shipment every 28 days.  This is a PER WEEK requirement. Lets work this out per year, so we're all on the same page.  10 cases per week times 52 weeks in a year equals 520 cases sold under you.  Those 520 cases equate to 2080 bottles of MonaVie sold under you.  If your distributors do this, you will earn a whopping $2600 for the year.

Now remember, I'm assuming PERFECT distribution of distributors on your legs.  If you get lopsided, remember you're only paid based on the LESSER of the two legs.  Also remember that we've hooked you with the thought of 100PV per case per week.  You and all of your distributors are buying two cases every FOUR weeks.

By the way, there is an upper limit on these commissions of $10,000 per week.  I wonder how many bottles that is in a week?  It's 8000 bottles per week, or 2000 cases per week!

How many people is that?  Well, MonaVie says that the proper 'dosage' of their product works out to approximately 1 bottle per person per week, so for you to make $10000 per week, 8000 people have to be buying from you and your distributors per week.

What about my friends who I recruited?

Wait, wait, what about my friends who I got into this business.  I want them to earn $10000 per week too!!  It shouldn't be just me!  Lets figure out how they can do it too!

We're going to again assume that your friends are PERFECT in their distribution such that both legs are equal under each of them.  (notice how this has become exponentially more difficult to keep the optimal distribution, not only do you have to get it exactly right, but each person under you has to do it exactly right) So we're going to assume that they did this exactly right and each are selling 8000 bottles per week under each of them.  If we assume they are personally buying the bare minimum number of cases (2 bottles per week) that's 16006 bottles sold per week.  This will net 3 people a total of $30,000 per week.

Ahh, I can hear it now.  How many bottles per YEAR is that?  Simple, 832,312 bottles per year.  For 3 people to make $1,560,000 per year, MonaVie is selling $16,646,240 worth of product per year.

If we're doing PERFECT distribution (i.e. each person in this ladder has the distributors divided PERFECTLY) How many levels of people do I have to get before I earn my $10,000?  This is a simple doubling progression:

• Level 1 = 1 person (you)
• Level 2 = 2 people
• Level 3 = 4 people
• Level 4 = 8 people
• Level 5 = 16 people
• Level 6 = 32 people
• Level 7 = 64 people
• Level 8 = 128 people
• ...
• Level 17 = 65536 people

This actually gives us another way of looking at the problem.  Assuming each person on the tree is purchasing the bare minimum, who on this tree is getting paid $10,000?

The first thing you notice when you start to figure this out is that it 'breaks' at the 256 level.  They're not getting the full $10,000 because they do not have nearly enough people under each of these 256 people.  They're making $640 per person.  (After a few more levels, you actually start to run out of people on the planet)

Obviously, the distribution is never going to be perfect, but this does show you the higher up the chain you go, the better off your chances are.  If you weren't there when it started, you're in trouble.

Distributor Rankings:

Lets look at a very interesting document that MonaVie has on their website.  I suspect, but I could be wrong, that almost NONE of their distributors look at this.

Income Disclosure Statement

I've heard that less than 5% of the people involved in MLM make any significant money. Based on this chart, I'd say that is true. Of 35,471 people only 1508 or 4.3% of them made more than the poverty line.  Fully 90% of them made $83 or less per week. 78% made $42 or less per week.

How much per hour did these people make?  Interestingly enough this chart shows average hours worked per week.  I do not know for sure how they determine this information, but lets go with it!

90% of the people in the system earn an average of $4.59 per hour worked.

95% of the people in the system earn an average of $5.26 per hour worked.

Conclusions:

I didn't go in to all of the executive levels and such because that would be pointless.  Based on the final chart alone, only the top 3% get any of these bonuses.

Remember the guy trying to get a new distributer under him at the Starbucks?  One thing he said that stuck with me was: 'You know, the government won't let us claim that MonaVie can prevent cancer or help cure your cold.  They won't let us claim that MonaVie can help cure all the various diseases caused by our modern processed foods.'

So, is MonaVie a scam?  I'll answer that question this way:  Liability laws probably prevent me from claiming that MonaVie is a scam.