In May 2017, Hempworx merged with My Daily Choice (MDC). As a result you can now purchase Hempworx with all the other MDC products. Based on our research, MDC offers the option to focus all your energy on Hempworx. MDC just runs the system in the background.
What is Hempworx
Hempworx provides high quality CBD oils made on their hemp farms in Kentucky. It’s important to remember that Hemp, and CBD oils, come from a strain of the Cannabis plant that contains very little THC. This means that the products will not have ‘recreational’ side effects.
While you may not be able to write hip music with Hempworx, there are a lot of purported benefits of CBD Oils. According to the Hempworx website, they produce very high quality CBD oils. The oil is extracted through a combination of Carbon Dioxide and drying
Rather than using traditional avenues, MDC uses network marketing to sell Hempworx products. Here at The Finance Guy, we believe you can’t make money with MLM, but we’ll gladly be proven wrong! Our full review of Hempworx will find out if this is a real money making opportunity, or just another MLM
What is the Hempworx Opportunity
We found this video by Hempworx which explains their opportunity
The Hempworx business opportunity is simple enough. According to their page, it’s a chance to be part of the fast growing cannabis industry. Hempworx tells us that the Cannabis industry will expand by 700% by 2020 If you become a Hempworx Affiliate, then you can have your own piece of that pie.
My Daily Choice will help you promote your Hempworx products with their online tools. They’ve created a Hempworx ‘business in a box’. If you sign up, you’ll get a copy of their pre-made webpage, as well as an app for your phone and some tracking tools.
While this is all well and good, it’s nothing new. We’ve seen these tools offered by other MLMs too. We want to know what makes Hempworx a good business opportunity.
How do you Make Money With Hempworx
To find out how we can make money, we looked at the Hempworx compensation plan. This document explains all the commissions you can earn from Hempworx, as well as how to qualify for them.
To join Hempworx, you’ll have to pay a once off joining fee of $20, which they say is to set you up with all their systems, and their ‘success starter kit’. You will also need to buy some product. Depending on which starter pack you choose, you’ll spend anywhere from $69 - $599 on product.
The deal with the starter kits, is that the more you spend the more Business Volume (BV) points you’ll earn. We’ll learn more about BV points as we go along.
Jump Start Bonus
This bonus is paid on all orders made in the first month by new affiliates and ‘preferred customers’. MDC proudly tell us that this bonus adds up to 85% of BV and goes down to 10 levels. The Hempworx Jump Start payouts are shown below:
If a new recruit joins your Hempworx downine, then you can earn commission as shown above. Having said, that, if you are a new recruit, then for the first month, 85% of your BV spending will be paid to people in your upline. They may tell you that the Jump Start Bonus is an incentive to get new people on board, but for us it raises Red Flag 1 - Constant Recruitment of New Members
As a new affiliate, you’ll probably find that your sponsor, and several people in your upline are all encouraging you to purchase product and get yourself set up early. While it may sound like they are being helpful and taking an interest in your new venture. It’s important to remember that they are earning commission from your spending.
MDC uses a binary compensation plan to pay Hempworx Affiliates. In a binary downline, your business has 2 legs, as shown below:
When you recruit new Hempworx affiliates, you can place them either on your left leg or your right leg. In theory all you need to do is concentrate on the outer legs. If the people you recruit also go on to recruit new affiliates, then they will fill the inner parts of your legs for you.
Before you can earn any commission from MDC, you will need to buy at least 40 BV worth of Hempworx products per month. They may tell you that this is because being a ‘product of the product', makes you successful. For us this raises Red Flag 3 - Pay to Play
Once you’ve purchased your qualifying quota, you’ll be able to start earning commission from the people in your downline. To earn a binary commission, you need to have at least 300 BV on both your downline legs. If your legs have different BV values, then your ‘paid leg’ will be the one with the lower volume.
The amount of commission you can earn each month with Hempworx, will depend on your rank. The binary commission paid at each rank in the MDC system is shown below:
When you first join as an ‘Active Affiliate’, you can earn 8% binary commission. As you climb the ranks this will gradually increase. If you make it to the top ‘Super’ rank, you’ll be earning 20%. MDC tell us that this is ‘one of the most aggressive’ payouts in the industry, but we’ve heard similar claims from almost every MLM we look at. To us this raises Red Flag 4 - Most of the Rewards go to your upline
Leadership Check Matching
MDC offers you the ability to earn bonuses based on the Hempworx commissions paid to your downline. Depending on your rank, you can earn these bonuses on up to 10 levels. They proudly tell us that this ‘sets them apart’ from others in the industry. For us, this raises Red Flag 5 - More than 5 levels in the payout plan
If you continue to grow your Hempworx downline, you might qualify for some of the other incentives such as the Global Bonus Pool, a car lease or even an expense account. As always, your incentives will increase as you climb the MDC ranks. The only way to climb the ranks is to sponsor as many new Hempworx affiliates as possible, and encourage them to spend monthly BV. This raises Red Flag 2 - Promotion Through Recruitment
How Much are Hempworx Affiliates Earning
To answer this question, we found a copy of the MDC / Hempworx Income Disclosure Statement. This document shows the commissions paid by MDC to all affiliates between January 2017 and July 2018. This includes all Hempworx affiliates. Using the information in this disclosure, we created the table below:
The first thing we notice here, is that after a bit of addition, we find that 99.85% of Affiliates earned less than a full time annual income with MDC / Hempworx. This may well be one of the most aggressive compensation plans in the industry, but only 1/666 affiliates earns more than they would with a regular job.
The income disclosure statement only includes affiliates who remained part of Hempworx / MDC during the time the figures were measured. It does not factor in those who quit. If we were to include these, then things only get worse. MDC tell us that over 70% of affiliates quit Hempworx within their first 12 months. We can safely assume that they earned very little if any commission at all.
Another thing we notice, is that it’s lonely at the top. Of the 120,926 MDC affiliates included in this income disclosure, only 3 have reached the top ‘Super Affiliate’ rank. While the presentations may show you how much you can earn if you climb the ranks, very few ever achieve this. To us, this feels like Hempworx are dangling carrots.
Why is it Difficult to Make Money With Hempworx
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 Hempworx, and found that it raises all 5 flags. According to research this means that your chances of turning a profit with the MDC opportunity are less than 1%.
The market for cannabis and related products is one of the fastest growing in the world. This however is not a guarantee of success. We should not assume that just because Hempworx is involved with CBD oils, you can automatically be successful with this opportunity.
Even if Hempworx as a company is successful and turns vast profits, this does not mean you can make money with the MDC opportunity. At the end of the day MLM is designed to make you a customer, not a business partner. If you sign up to be a Hempworx affiliate and spend your monthly BV, then you’ll be buying their products, and sending them profits. You will not make any money unless you are very good at selling both the products and the opportunity to others.
Another problem is the high attrition rate. More than 70% of the new affiliates you recruit will quit within 12 months of joining Hempworx. This makes building downline more difficult because it’s not enough to just recruit. To grow your business you need to first replace all those who quit each month.
If you were offered a job where 7/10 people quit each year, would you accept it? Well that’s what you are doing if you join Hempworx
Is Hempworx an Illegal Pyramid Scam
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 Hempworx affiliates are trying to scam their new recruits. It's more likely that they themselves believe that 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. In reality you are more likely to lose money and quit within your first year.
As always we welcome your feedback in the comments section below. We'd love to hear what you think about Hempworx, especially if you can share your personal experiences with the company
For more posts like this, look at our list of mlm reviews.