Based in Scottsdale Arizona, Plexus describe themselves as a ‘health and happiness company’. Rather than using traditional marketing, they have decided to use MLM to promote their products. Here at The Finance Guy, we believe that you can’t make money with network marketing, but we’re happy to be proven wrong.
Plexus produces weight loss, nutrition and skin care products which they purport will help you toward both health and happiness. If that’s not enough, then there’s also a business opportunity which can set you financially free!
What is the Plexus Opportunity
We thought we’d let Plexus explain the opportunity themselves in the video below:
The video is an interesting mix of hype and product promotion. We hear from a few people whose lives have been changed. We learn how becoming a Plexus Ambassador put them on the path to financial freedom. Then we hear all about how these products can make us happier, thinner, healthier etc. What we don’t learn, is how the opportunity will make us money.
How Do You Make Money With Plexus
To find out how Ambassadors earn an income, we looked at the Plexus Compensation Plan. This document explains how much you can earn with Plexus, and what you have to do to qualify for payments.
The first thing we notice is that this system is ‘predictable and profitable’. They’re off to a good start! Predictable profits sounds pretty much like sure money! What could go wrong? Are we imagining things or is this already looking too good to be true?
The next thing we see, is that 50% of the ‘commissionable’ volume is paid out every month. This might sound good, but we don’t like it. It tells us that the price paid by ambassadors is loaded to include these generous payouts. This concerns us because it raises Red Flag 4 - Most of the Rewards go to your upline
Plexus proudly tells us that they pay up to 7 levels down. This may sound appealing as you can get rewards for friends of friends friends who you’ll never meet, but for us, this raises Red Flag 5 - More than 5 levels in the payout plan
Moving on through the compensation plan, we see that you have to qualify to earn commission with Plexus. First there is a nominal annual fee, then you need to purchase at 100 PV worth of product per month. Active Plexus Ambassadors will argue that you need to be a ‘product of the product’, but for us this raises Red Flag 3 - Pay to Play
Once you are qualified to earn commission, you can earn even more, if you grow your downline. Once you have personally sponsored at least 7 new Plexus Ambassadors and have met the points criteria, you could become a Diamond Ambassador. At this level you will qualify for the maximum downlilne commissions. Once again, this may sound good, but to us, it raises Red Flag 2 - Promotion Through Recruitment
While it seems to possible to make money from Plexus, it requires a lot of work. In particular, you would need to have a very substantial downline. Building a downline isn’t enough, you also need to maintain it. Every time someone in your ‘organization’ quits, you need to replace them. Building an income with Plexus raises Red Flag 1 - Constant Recruitment of New Members
The compensation plan goes on to tell us more about what you could earn with Plexus, but to us it just seems that they are making Plexus products overpriced. After all, all the benefits of the compensation plan, are included in the ‘wholesale’ price paid by ambassadors.
We found that Plexus raised all 5 flags of Dr Jon Tayolors 5 Step MLM evaluation. According to Dr Taylor’s research, because 4 or more flags were raised, your chances of making money with Plexus are less than 1%. Having said that, we’ll keep going with our research
How Much Money Are Plexus Ambassadors Making
To find out how much Plexus Ambassadors are earning, we looked at the US 2016 Plexus Income Disclosure Statement. This document tell us how much U.S Plexus ambassadors were paid in 2016. The results are shown in the image below:
A bit of addition shows us that 99.5% of Plexus Ambassadors earned less than $31,000 in 2016. If the system is supposed to be predictable and profitable, then why do so few earn a full time living from the Plexus opportunity?
While is is possible that you could make it to the 0.06% who earned closed to $500,000 in 2016, it is unlikely. In fact you would be better off with a regular job. After all only 1 in 200 Plexus Ambassadors earned a full time income in 2016
Why Is It Difficult To Make Money With Plexus
We believe that the problem is not unique to Plexus. The problem is with the business model. In his book, Multi-level Marketing Unmasked, Jon Taylor found that 99.7% of people who join direct selling companies end up losing money. Despite what you hear in the sales pitches, it is highly unlikely that you will make money from any network marketing company.
Network marketing 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 ‘Ambassadors’, who are willing to pay unusually high prices for the added hopes and dreams of financial freedom.
At the end of the day to be a successful Plexus Ambassador, you will need to make sales. Any salesperson will tell you that the best way to make money, is to start with a well priced good quality product or service. It doesn’t need to ‘sell itself’, but it does need to at least be competitive in the market.
How Good Are Plexus Proucts
We did not try any Plexus products ourselves and are not qualified to assess the ingredients. Therefore we relied on the others for information about the quality of the products. We did our best to find what we believe to be trustworthy sources of information.
The first page we found was a review of Plexus slim. The first thing they mention is that there have been no independent studies on Plexus Slim. This is a bit of a concern because if the product is so great, why wouldn’t they have studies supporting it?
This review also told us there is no evidence that the ingredients in Plexus Slim help weight loss in humans. It’s possible that when combined, 4 ingredients are more effective, but there is no study proving that.
A study of Plexus products done by University Health News, had similar findings. They even remind us that while Plexus claim their products are ‘clinically proven’, but there is no evidence that any studies have been done. Further more they tell us that the supplement industry is prone to contamination and adulteration. Because there is no proof of any quality control, they can’t tell whether or not Plexus products could cause harmful side effects.
Is Plexus a Pyramid Scam
Even though MLMs resemble illegal pyramid schemes, they are legal. 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.
We don't think that Plexus Ambassadors are trying to scam their new recruits. It's more likely that they themselves believe that the system 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 so, they will become financially free
It is our opinion, that if you join Plexus, or any other MLM, their goal, is to make you a customer. They want to sell you products, they aren’t interested in making you a business partner
Should You Join Plexus
The only reason you should join Plexus, is if you are already spending over $100 per month on their products and want to recommend them to others. Even if this is the case, you might want to look at what other brands are charging for similar products. You might find that Plexus is not price competitive
If your only motivation for joining Plexus is to make extra money, then we think you should consider other options before proceeding. Our calculations found that less than 0.5% of all Plexus Ambassadors are generating enough commission to replace a full time income. We could be wrong, but we think it’s possible that you’d have a better chance of success with a normal job
As with most MLM companies, it is possible to make money with Plexus, but it is very unlikely. If you have the skills to make money with the Plexus opportunity, then we believe you'd make more money applying those skills to start your own business.
As always we welcome your feedback in the comments section below. We'd love to hear what you think about Plexus, especially if you can share your personal experiences with the company
For more posts like this, look at our list of mlm reviews.