Isagenix is an Arizona based supplement company which was founded in 2002. Using the network marketing model, Isagenix has grown into an international company. Isagenix has over 200,000 associates in 13 countries in their multi-level marketing system.
If you've heard of Isagenix, then it's very likely that you've been invited to look at 'the opportunity' of becoming a member of the Isagenix network marketing team. Here at Finance Guy, we believe that you can't make money with network marketing. In this full review of Isagenix, we’ll give them the chance to prove us wrong. We want to find out if this is a real money making opportunity, or just another MLM
What Does Isagenix Do
Isagenix manufactures a range of dietary supplements. They have divided their product range into four broad categories, which are, weight loss, energy, performance and healthy aging. They've even taken the extra step and created a collection of programs. We looked at one called the '30 day energy system', which is a prepacked combination of Isagenix products which are designed to work together to help improve energy.
Rather than sell their products on supermarket shelves or through advertising campaigns, Isagenix has employed a version of direct selling known as 'network marketing' This involves rewarding people for bringing in new customers. If you are successful in network marketing, you can get the products for free, or maybe even earn a very good full time income. Here at The Finance Guy, we think that you can’t make money with MLM, but we’ll give Isagenix a chance to prove us wrong.
How Do You Make Money With Isagenix
While all network marketing companies are similar, there are slight differences in how members qualify for commission payments. We found this short video explaining how 'anyone can make money with Isagenix'.
This video was obviously made as a prospecting tool by an existing Isagenix member. This is fairly typical of what you might see at any network marketing presentation attempting to sign up new recruits. The recurring theme of the video is that you need to recruit two new members in your first week, and have them do the same.
This is what is known in network marketing as 'duplication'. The idea being that you will become successful if you simply follow the steps taken by successful people. Isagenix calls this 'You + Two, Them + 2'. According to the video, if you 'instil the sense of urgency' for your recruits to also recruit 2 friends in their first week, then after 12 weeks, you'll have an Isagenix team with over 8,000 members
Even if things don't go according to plan, and after 12 weeks, you only have a team of 4,000, then don't despair, because you'll be earning around $4,500 per week. The video claims that with this 'life changing company'. You can build an annual income of over $250,000 in 12 weeks with Isagenix. All you have to do is share the opportunity with two people, and tell them to do the same. This overly simplified extremely positive approach sounds a little too good to be true!
How Much Are Isagenix Members Earning
To find out how much existing members are earning, we looked at the 2015 Isagenix Earnings Disclosure Statement. Our calculations found that only 0.04% of all Isagenix members earned more than $50,000 in 2015. This means that only 1 in 2,500 people made a full time income with Isagenix.
In 2015, 99.6% of global Isagenix members earned less than $10,000, does this look like a system which will build a residual income of $250,000 after you've 'shared the opportunity' with two friends? The numbers show that you can make money with Isagenix, but it's highly unlikely.
One very interesting point we found in the earnings disclaimer, was the statement that 'a large majority of those who join Isagenix don't join to make money at all' (that would be 83.3% who earned nothing). They then explain that the 11.5% of people who earned less than $500 are in a known as 'product sharers'. They are not considered active business builders because they only earned commission for 'referring a few friends'
It sounds like the people who earned less than $500 in 2015 did follow the urgent instructions in the video to 'find their two'. We're not saying the Isagenix promotional video was a lie, but their forecast income calculations appear to have over stated the income by a factor of 500:1.
Maybe 2015 was a bad year, so we also managed to find a copy of the 2016 Isagenix US Earnings. Unfortunately things did not improve for Isagenix members in 2016. Our calculations found that 99.79% of members earned less than a full time income.
It is important to remember that there is a difference between earnings and profit. The earnings shown in these disclosures do not include any expenses. Active Isagenix members have to buy purchase at least 100 Personal Volume points every 30 days to remain active. This means it's impossible to earn commission from Isagenix unless you are also spending money with them.
How much money you spend remaining active with Isagenix, depends on what products you decide to buy. Each product has a point value assigned, but it's directly related to the price. According to one Isagenix price list we looked at, remaining active with Isagenix can cost anywhere from $105 to $399 per month.
Members who remained active for a full year spent at least $1,250 on Isagenix products. This means that all Isagenix members who earned less than $1,250 in commission lost money.
Why is it Difficult to Make Money With Isagenix
To find out why so few members are earning a substantial income, we looked at the Isagenix Compensation Plan. This 13 page document explains the Isagenix opportunity in detail, including how commissions are earned. Isagenix uses what is known in MLM as a 'binary compensation plan'. It is quite similar to the Usana compensation plan, which we have previously looked at.
On the first page, Isagenix describes it as 'a competitive Compensation Plan - one of the best in the industry', and goes on to say that members who 'dedicate significant time and money, may not achieve any meaningful results' Strange as it seems, we believe both these statements could be true. Despite the fact that only 1 in 2,500 Isagenix members earned a substantive income in 2015, this result could be considered 'one of the best' MLM opportunities.
Unless you are able to sell a huge amount of product for a retail profit, then you will probably start at the ‘associate’ rank with Isagenix. At this rank, you will not qualify to earn any commission. To qualify for commission, you have to achieve the Isagenix status of 'Consultant' or higher. This can be done by employing what they call the 'You Share, They Share, Repeat system'. In other words you start making money when your two friends each tell two friends. Your binary MLM business will look like this:
Theoretically, with duplication, the above diagram would grow exponentially and your Isagenix team would go into autopilot. You'd advance through the Isagenix rankings and will be earning commission from all the product purchased by your entire network. In reality earning commission with Isagenix is a not so simple.
With the binary compensation system, you will have two teams, one on the left, and one on the right. When anyone in either team buys product, they will generate points which are assigned to their respective team. You only get paid commission if at least 33% of your points come from each team. This means that your commission is determined by how well your weaker team performs. It is possible to have a very strong Isagenix team, and still earn no commission.
How Good Are Isagenix Products
Regardless of what you might hear at recruitment sessions, to make money with Isagenix, you have to make sales. Any salesperson will tell you that the easiest way to make sales, is to work with high quality, in demand products. We have not tried any Isagenix products, so to find out how good they are we looked at what others had to say.
Diet spotlight clearly wasn't impressed with Isagenix Products. Given they were trying to sell their own products, it's no surprise that they focused on the negative side of Isagenix, describing them as:
- Overpriced, costing up to three times as much as similar competitor products
- Not liked by consumers, with several complaining about the bad taste
- Unproven quality, as no proven research has been made public
For a less one sided perspective we went to Ancestral Nutrion, to find out more about Isagenix from a certified nutrition consultant. Once again the findings were less than positive. They researched the ingredients used in Isagenix, their findings included:
- Unhealthy sweetners
- Known to carry toxic nitrates
- May contribute to cholesterol problems
- Bad for your liver
Ancestral Nutrition also found that some ingredients used by Isagenix may cause side effects including:
- Reduction of blood pressure
- Extreme stomach pain
- Trouble breathing
- Painful skin reactions
We understand that the findings of one nutrition consultant, shared on a blog, should not be considered conclusive. To make sure we weren't being unfair, we researched a little more. We looked at a review of Isagenix by Choice, who are a leading Australian consumer advocacy group.
Choice conducted research on Isagenix products using both a professor in Nutrition, and a scientist from the Gylcemic foundation. We think that their study has some credibility, after all their goal is to inform consumers, not to discredit or promote specific products. The most interesting point we learned was that Isagenix products are no different from cheaper alternatives, and they'll give you the same results
Anyone trying to 'share the opportunity' would argue that the high price of Isagenix is irrelevant because of the financial freedom which comes 12 weeks later. Choice advise consumers not to believe the hype driven by 'self proclaimed wellness experts', who are trying to profit from pushing Isagenix. They also mention that most Isagenix members will never make much money, and this is a common theme with all MLMs.
What's Wrong With Network Marketing
Here at The Finance Guy, we believe that network marketing simply does not work. There's no such thing as a secret to financial success. In his free e-book 'Multi-Level Marketing Unmasked', Jon Taylor offers 466 pages worth of research showing why he believes the MLM business model is deceptive and unfair. This extensive study found that 99.7% of people lose money with network marketing
Looking at what we know about Isagenix, more than 0.3% of members earned over $10,000 in commission during 2015. If they only had to buy $1,250 worth of product, to qualify for this then it is quite likely that that they turned a profit, which means Isagenix is an above average MLM!
We can't say for sure how many Isagenix members are turning a profit because we can't see all their expenses. For example we don't know how many people took unpaid leave from their jobs (costing themselves days of pay), to attend work on building their team. Building a team with any MLM takes more than just telling a couple of friends. It takes time and effort, and you will need to spend money building your team.
Is Isagenix an Illegal Pyramid Scam
Even though MLMs closely resemble pyramid schemes, they are not illegal. The reason dates back to the 1979 case of Amway vs the FTC. After 4 years in court Amway was found to be offering a business opportunity, rather than a pyramid scam. The technicalities came down to wording in their paperwork. One example requires consultants to make retail sales.
Another issue, is that even though these rules may be in the paperwork, they are difficult to enforce. For example, several people in MLMs have said that they have cupboards full of product. This is because of the minimum monthly purchases they need to make to remain active in the system. Even though stockpiling is against the rules, there is no way for the company to monitor it.
The Amway ruling opened the door for all MLMs to operate. The Isagenix business model is not illegal, but that does not mean that it's ethical. Like all businesses, network marketing companies turn a profit by selling goods and services. Unlike other businesses, MLMs charge a higher price for the added hopes and dreams of passive income and endless wealth.
Should You Join Isagenix
If you are considering joining Isagenix, then our advice is to use the product first, and compare it to other products (including those available at normal stores). If you are convinced that the products are well priced and of high quality, then you might have a chance of making money with Isagenix.
If you don't like the products when you're paying full price with no financial incentive, then how will you convince others to buy them? If you want to make money from Isagenix, you have to sell the products. It doesn't matter how anyone else describes it, MLM is a sales job.
If you have any thoughts about Isagenix, we'd love to hear about it in the comments section below, especially if you can share any experiences you've had with them.
For more posts like this, look at our list of mlm reviews.