Avoiding Monavie

Nov 30, 2009

Recently I had a friend try to recruit me into their Monavie distributor network. I don’t think they were trying to abuse our relationship as much as they honestly believed that it was a great opportunity. They seemed somewhat hurt when I said no, so I have been producing the reasons why I not getting involved.

Here is what I have produced, it’s not perfect, but it’s good enough for me to say no, thought I would post it so that there is can be no misconceptions about why I don’t like this endeavor.

Initial Impressions

My initial impressions of MLM (Multi Level Marketing) businesses have never been positive. Based on the recommendation from a close friend, I decided to reserve judgement. A Google.com search produces the following as its top 5 results:

Not all of these articles are anti Monavie, but it should be noted that 4/5 contain very negative words in the title (Scam, Scheme, Horror). Everywhere I search for Monavie I see the term Pyramid Scheme. A simple search by a prospective customer will not yield positive search results.

Legality

There is a reason that the Team aspect is packaged with Monavie. It needs a retail product to maintain legality.

As with other MLMs, the company’s focus appears to be on recruiting, rather than retailing the product. Of course, the product is integral to the scheme. Without it, MonaVie could easily be called a pyramid scheme. With the product, we’re not supposed to identify the company as an endless chain recruiting scheme or pyramid scheme. And until the FTC decides to enforce the laws against pyramiding, many will believe that a company like MonaVie is perfectly legal and legitimate.

– http://www.sequence-inc.com/fraudfiles/2008/06/30/monavie-scam-or-not/

Woodward founded Team in 2001 and built it into one of the fastest-growing tool vendors associated with Amway. Senior management at Amway had long feared that tool vendors risked being tabbed illegal pyramids and dragging the company into a legal morass. Still, the company tolerates them because tool vendors generate sales for Amway. Woodward claims Team’s tools generated Amway sales of $200 million and net profits of $60 million last year.

The relationship between Amway and Woodward began to deteriorate a few years ago when Team began promoting its tools as a money-making opportunity in themselves. That message has the potential to get both Team and Amway in legal hot water. Amway, meanwhile, already had legal headaches. The law firm of courtroom tiger David Boies is now maintaining a California class action against Amway in which former distributors have accused it of being an illegal pyramid. The company faces similar claims in India.

– http://www.forbes.com/forbes/2008/0811/050.html

The Product

In any sales opportunity the product is an important one, and at $40 a bottle, I don’t believe in this product. I simply won’t get involved in a product that I won’t purchase for myself. Most of the research I have done on the juice has produced positive reviews. Having said that, the very structure of the organization leads me to question these reviews, as the people who are reviewing as frequent users are also distributers.

Even baseball players like JD Drew are selling the juice, and thus his reviews are biased:

And Drew is looking for Red Sox Nation recruits to help him sell cases of the fruit drink that purports to give users increased energy, a boost to the immune system and a reduction in joint pain.

–http://www.bostonherald.com/track/inside_track/view.bg?articleid=1087939&srvc=rss
On the other side I found a review that seemed very negative, but that was primarily because the doctor writing the review strongly dislikes MLMs.

For the record, I also object to MonaVie because it is sold via a mix of multi-level marketing and direct-from-distributor sales. I’m sorry, but I am prejudiced against multi-level marketing of any kind.

–http://www.drweil.com/drw/u/QAA400351/Thumbs-Down-on-MonaVie.html

One genuine review I did find had this to say:

Packaged in a high-end-looking wine bottle, MonaVie tested extremely low in anthocyanins and phenolics. Even apple juice (which also tested poorly) has more phenolics than this Utah-based company’s juice. Plus, MonaVie’s vitamin C level was five times lower than that of Welch’s Grape Juice. That’s not many nutrients, especially at $1.20 a serving.

–http://www.mensjournal.com/superjuices-on-trial

While another outlined the suspect ORAC numbers that all these juice companies cite:

Problem number one in the pseudo-comparison sweepstakes is that you can base an ORAC value on one fluid ounce, 100 grams, one liter, “per serving” or “per cup”, resulting in ridiculous comparisons of apples to wheelbarrows. The companies rarely if ever tell you what quantity they used to get their measurement. One guy even hawks a home shopping network product claiming “A million ORAC Value!” without saying how much is needed to produce that value (by some estimates a warehouse the size of Waco Texas).

–http://www.huffingtonpost.com/dr-jonny-bowden/new-rules-no-more-claimin_b_106562.html

Chief Operating Officer

Perhaps the most disturbing part of Monavie is the executive team. The executive team is a big part of an investment, as I like to invest in companies with strong leadership. As for the CEO (Dallin Larsen) of Monavie, he was Vice President of Sales for another MLM juice company; Royal Tongan Limu, which was shut down by the FDA.
–http://www.casewatch.org/ftc/news/2005/nbty.shtml

Larsen, for his part, realizes that his sales team can get him in hot water with the Feds. A 20-year-veteran of the multi-level marketing industry, he left a senior post at another juice company in 2002, a year before the FDA destroyed the company’s “bogus products” that were being falsely promoted to treat “cancer, arthritis and attention deficit disorder.” Last summer, the FDA warned MonaVie about medicinal claims on its Web site…

–http://www.newsweek.com/id/150499/page/2

Distributor Revenue

Finally it does not appear that people are making money with Monavie, at least there are a great many more people who are not making any money. As with any MLM, the system degrades the closer you are to market saturation (the later you get in), so the later you get in the less chance you make money. The numbers from 2007 are showing that people are not making money and this can only get worse 2 years later as there are more distributors upstream.

Meanwhile, most of the million-strong sales team is really just drinking the juice, according to MonaVie’s 2007 income disclosure statement, a federally required printout of their distributor earnings. More than 90 percent were considered “wholesale customers,” whose earnings are mostly discounts on sales to themselves. Fewer than 1 percent qualified for commissions and of those, only 10 percent made more than $100 a week. And the dropout rate, while not disclosed by MonaVie, is around 70 percent, according to a top recruiter.

–http://www.newsweek.com/id/150499/page/1

Team is one step ahead of all these juice selling schemes. It is a pyramid atop a pyramid. It is selling motivational aids to help MonaVie vendors move the juice. But wait. If you can’t earn back the $258 you’ve spent on the motivational lectures by selling $39 juice bottles, you could earn it back in another way–getting people to buy $258 motivational lectures. If you’re good, you flog the lectures to other people, who sell them to yet others. Everybody gets rich. Everybody, that is, except the last round of buyers. That’s the theory, anyway. The reality is that a mere 1% of Team members make any money from involvement with the firm.

–http://www.forbes.com/forbes/2008/0811/050.html