After a brief survey on the antiMLM subreddit we decided it was time to review It Works! Founded in 2001 in Grand Rapids Michigan, the company has expanded rapidly. In 2012, It Works! reported that annual global sales were over US $100 Million. It Works! has decided to promote their wide range of products through network marketing.
At the Finance Guy, we believe that you can't make money with network marketing, but we decided to do a full review of It Works! We want to find out if this really is an original money making opportunity, or if it's just another MLM
What is the It Works! Opportunity
This question has been answered for us by the company. Here is a short video explaining the It Works! opportunity.
The first thing we notice from this video, is that the opportunity is very exciting. It even purports to have some sort of ‘secret’, which can make all your financial dreams come true.
The excitement doesn’t end there, we then here a bit about the products. The ‘reviews’, tell us that the products are also fantastic. We got the impression that, whatever you’re looking for It Works!
According to the video, this is a ‘rewarding opportunity’, which will ‘change your life’. It sounded pretty good, we wanted to know how if worked.
There’s a lot more in the video, including;
- People telling us how their lives changed
- People telling us about the greatness of the products
- Constant reminders that It Works!
- Other stuff, but who could pay attention?
The CEO describes this as a ‘vehicle to set you free’, and claims that It Works! will ‘teach you to invest in yourself’. This MLM can help you achieve ‘complete financial freedom’.
While the video managed to make a lot of claims about how wonderful life is once your join, it doesn’t really explain how It Works!
How Do You Make Money With It Works!
To find out how this mlm will set you financially free, we looked at the It Works! compensation plan. This document explains the different ways to earn and what you need to do to qualify for payment. It Works! describes this as ‘your guide to achieving your optimum earnings potential’. It certainly sounds good, but we’ve heard similar promises before!
It Works! describes their system as ‘relationship building’, but we think this is just code for ‘sales’. They have broken the system down into 3 key areas which are:
Retail Customers - Like any business, you need customers. It Works! describes these as the people who make random purchases. If you had a store, this would be like random customers walking off the street and making a purchase
Loyal Customers - This would be what an every day store would call ‘regulars’. The main difference with It Works!, is that these customers get ‘wholesale’ prices if they agree to sign up for at least 3 months worth of products on ‘autoship’.
Distributors - Unlike regular stores, these are customers who decide that they too would like to run a business just like yours. If you sponsor them to ‘duplicate’ the process, then you can profit from their activity.
If you’re new to It Works!, then you’re in luck! There’s a guide for ‘your first 30 days’. There’s only 2 things you need to do in your first month, which are:
1. Become Commission Qualified - This is easy, all you have to do accumulate 400 Personal Bonus Volume (BPV). Fortunately you don’t have to spend all the money yourself, as the activity of any customer (retail or loyal) is also included. There is also a requirement that at least 80 points of this in on autoship…
2. Earn Free Product - If you gather 4 ‘Qualified Active Loyal Customers’, in your first 30 days, then you can earn $120 in product credit. While it’s nice to be able to spend money with It Works!, we’d prefer cash, which could be spent on anything…
3. Get Wrap Rewards - If you continue to enroll customers, then you may be entitled earn points which can be used to purchase an It Works! Wrap, or an It Works! Facial Applicator. We don’t know what these products are, but we’d prefer cash over vouchers. If they products are good, then we might buy them, but it would be nice to have the choice.
4. Qualify for the Fast Start Bonus - If within your first 30 days, you sign up a new distributor, and they spend 80 PV and also sign up 2 Loyal Customers, you can earn $100.
If you enroll customers or new distributors, you can earn commission from any It Works! products they buy. If people you have enrolled also enroll others, you can earn from their spending too! You can earn 10% on 2 levels of distributors and customers. There is also a 5% bonus for any that you personally enroll. If you want to earn even more commission, then you need to get yourself promoted in the It Works! system
How Do You Climb the It Works! Ranks
Each new distributor you personally recruit to It Works! becomes a new ‘leg’ in your team. As they go on to also recruit new distributors, this will build layers in your ‘downline’. If a leg in your downline is generating at least 400 worth of Group Volume in a month, it becomes a ‘qualified leg’.
AS long as you remain commission qualified, you can earn commission on any qualified legs in your downline. As you accumulate more qualified legs, you can climb the It Works! ranks. This is shown in the table below:
As we see in the table above, you can reach the rank of ‘Emerald’ if you develop 4 qualified legs in your downline. Once you are promoted to Emerald, you can earn commission from 6 levels in your downline.
It’s worth noting that due to ‘compression’ commission is paid down to 6 levels of commission qualified distributors. Any distributors who are not commission qualified will be counted as part of the level above them. In this way, your downline is ‘compressed’ into 6 qualified levels
The ability to earn commission doesn’t end at Diamond! As distributors in your downline start reaching the rank of Diamond, you may qualify for ‘Diamond Generation Bonuses’. Each new Diamond distributor is the beginning of their own generation. As with distributor commissions, can earn Diamond payouts on several levels, as shown below:
If you work hard, and recruit distributors who do the same, you can climb the It Works Ranks! As we’ve shown, it is possible to earn commission from several levels and generations in your downline. Having said that, it also means that if you are a new It Works! distributor,, then 47% of what you spend on your It Works! products, goes to your upline as commission
How Much Are It Works! Distributors Earning
To find out how much distributors are earning, we looked at the It Works! Income Disclosure. The version we found shows us how much commission was paid to It Works! distributors in Australia in 2016.
We were only able to find the Australian version. This could be because we are located in Australia, or it could be a coincidence that this is the only copy available. We will assume that the global income for It Works! distributors is similar. The data is shown below:
After a bit of math, we made some disturbing discoveries which are:
98.89% of It Works! Distributors earned less than a full time income - The minimum full time annual wage in Australia is $40,000. In 201, less than 2% of It Works! Distributors earned above minimum wage from this opportunity
Average annual income for all It Works! distributors was $2,976 - Even though some distributors are earning Diamond bonuses, on Average Distributors made less than $60 per week from It Works!
Expenses are not included - It’s important to remember that there’s a difference between income and profit. In order to earn these commissions, distributors had to spend money on product. They also would have to spend time and money promoting and growing their business. We believe that after expenses most distributors lost money with It Works!
Why is it Difficult to Make Money With It Works!
We believe that the problem is with the network marketing business model. It's not designed to help people make money or gain financial freedom. The system is designed to promote and sell products. MLM is profitable for the companies which produce the products, but not for the members who join the business opportunity.
MLM is a way for companies to sell products without employing a sales force and without having to spend money on traditional advertising and promotions. Instead they build a network of loyal believers who are willing to pay unusually high prices for the added hopes and dreams of financial freedom.
We applied Jon Tayolors 5 Step MLM evaluation to It Works! We found that all 5 red flags were raised. Dr Taylors research suggests that because at least 4 flags are raised, there is less than 1% chance of turning profit with It Works!
The company might be turning a profit, but that doesn’t mean that you will be profitable from the opportunity. Just because a small amount of distributors are making a lot of money, doesn’t mean that the system works for everyone.
Is It Works! an Illegal Pyramid Scheme
Even though MLMs resemble illegal pyramid schemes, they are legal as long as there is a product or service attached to them. We don't think that It Works! distributors are trying to scam their new recruits. It's more likely that they themselves believe that ‘It Works!’, and this opportunity will one day make them wealthy.
Being legal does not make MLM ethical. All companies are in business with the goal of selling goods and services for a profit. Network marketing companies are able to charge a higher price because they create a customer base of loyal members who believe that by consuming these products and recruiting others to do the same, they will become financially free.
Should You Join It Works!
The only reason to join any MLM, is if you are already buying their products, and are happy enough to recommend them to others. The only way to make Money with It Works!, is to sell a lot of product. If you’re not looking for a sales job, then this isn’t for you
If you are considering It Works! as a business opporutnity, then we suggest that you also look at other options. Before you join, perhaps spend some time getting familiar with the It Works! products, and make sure that you’d feel comfortable promoting them.
As always we welcome your feedback in the comments section below. We'd love to hear what you think about Arbonne, especially if you can share your personal experiences with the company
For more posts like this, look at our list of mlm reviews.