This was originally a breakdown created by an insider with Manatech. I have had many discussions via email about this information, so I am very interested to get some feedback after posting it here. We don't have many views now, but the email blast goes out tomorrow so I am expecting that to change. Keep the information coming!
What do the major direct sales companies actually pay out to their own distributors?
What do the major direct sales companies actually pay out to their own distributors?
Agel
Agel’s payout is likely in the 35-37% range. One could argue that it has reached 42.5%. This would be the theoretical high but it is unlikely that they have never paid out at this level.
Agel does pay a maximum of 50% on commissionable Volume but not on money spent on commissionable volume products. That is why it is not likely that they have ever hit the 50% payout. In addition, they offer a disclaimer about reducing their distributor’s commission checks in order to comply with the 50% cap. How and especially when that kicks in would be instructive. Also included in the max 50% payout is the 3% that is set aside for Luxury Car Program, Travel Expense Allowance and Leadership Retreat.
Agel products already have a split. You get an average of .85 volume on $1.00 spent. If they pay a max of 50% on commissionable Volume then you must take ½ of the .85 which is 42.5% payout. The 42.5% is the maximum payout percentage. It is much more likely that the real percentage is under 40% and probably in the 35% 5o 37% range.
Here is an Agel Training Slide which offers and explanation of their methods. Sept. 2008: http://www.slideshare.net/garyhasson/agel-pay-plan- september-2008
Agel’s payout is likely in the 35-37% range. One could argue that it has reached 42.5%. This would be the theoretical high but it is unlikely that they have never paid out at this level.
Agel does pay a maximum of 50% on commissionable Volume but not on money spent on commissionable volume products. That is why it is not likely that they have ever hit the 50% payout. In addition, they offer a disclaimer about reducing their distributor’s commission checks in order to comply with the 50% cap. How and especially when that kicks in would be instructive. Also included in the max 50% payout is the 3% that is set aside for Luxury Car Program, Travel Expense Allowance and Leadership Retreat.
Agel products already have a split. You get an average of .85 volume on $1.00 spent. If they pay a max of 50% on commissionable Volume then you must take ½ of the .85 which is 42.5% payout. The 42.5% is the maximum payout percentage. It is much more likely that the real percentage is under 40% and probably in the 35% 5o 37% range.
Here is an Agel Training Slide which offers and explanation of their methods. Sept. 2008: http://www.slideshare.net/
Amway
Amway pays out 30%.
Here is a link to a recent interview with Doug DeVos:
http://www.mlive.com/business/west-michigan/index.ssf/2009/02/qa_steve_van_andel_doug_devos.html
For a time Amway was publicly traded in Japan and thus figures could be reverse engineered. The payout percentage was the same. Amway Japan 1998 @ 30.0%
The great question for Amway is if it counts payouts to unoccupied positions in its tree as part of the payout to the field? This is relevant because the Amway Company allows breakage. A leading distributor can be removed or dismissed. But his position then usually reverts to the company. Thus the company receives this money as well. If this is counted as “pay out to the field” then the actual payout to working distributors may be substantially less than the 30% claimed. Even as it is, Amway has the lowest payout of any major MLM company.
Furthermore, it is widely believed that Amway aggressively seeks to limit by law the payout of other companies. In Korea, Amway alledgedly helped write a law that limits all MLM companies from paying out more than 35% of its sales income to its own distributors.
Amway pays out 30%.
Here is a link to a recent interview with Doug DeVos:
http://www.mlive.com/business/west-michigan/index.ssf/2009/02/qa_steve_van_andel_doug_devos.html
For a time Amway was publicly traded in Japan and thus figures could be reverse engineered. The payout percentage was the same. Amway Japan 1998 @ 30.0%
The great question for Amway is if it counts payouts to unoccupied positions in its tree as part of the payout to the field? This is relevant because the Amway Company allows breakage. A leading distributor can be removed or dismissed. But his position then usually reverts to the company. Thus the company receives this money as well. If this is counted as “pay out to the field” then the actual payout to working distributors may be substantially less than the 30% claimed. Even as it is, Amway has the lowest payout of any major MLM company.
Furthermore, it is widely believed that Amway aggressively seeks to limit by law the payout of other companies. In Korea, Amway alledgedly helped write a law that limits all MLM companies from paying out more than 35% of its sales income to its own distributors.
Forever Living
Like many companies Forever Living has split pv and split pricing. So their payout depends on what products you sell. The sales generally run 60% Juice Sales and 40% other products and our sources say that “this might be a little conservative.”
Here is the calculation on a 60/40 ratio of Juice to other products and a calculation of 50/50 Juice to other products. Also, they changed the 66/33 to be 42% instead of 41% (rounding error.)
60% Juice and 40% other products = 40% payout (Theoretical Max – doesn’t take into account any breakage that goes back to the company - if they have breakage)
50% Juice and 50% other products = 37% payout
75% Juice and 25% other product = 44%
66.6% Juice and 33.4 other products = 42%
Product Sales Breakdown
Scenario 1: 75% Juice and 25% other products = 44% payout ratio
Scenario 2: 66.6% juice and 33.3% other products = 42% payout ratio (changed based on rounding)
Must take the volume per product multiplied by 53% payout on commissionable volume to determine the payout percentages:
- Juice volume is .94 multiply 53% = 49.82% payout on juice
- All other product average volume is .49 multiply 53% = 25.97% payout on combination of all non-juice products
- Hiro volume is .27 per $1 = 14.31% payout on Hiro products
- Nutrition volume is .37 per $1 = 19.61% payout on Nutrition products
- Supplement volume is .80 per $1 = 42.4% payout on Supplements
- Trim volume is .44 per $1 = 23.32% payout on Weight Loss
- Foods & Teas volume is .28 per $1 = 14.84% payout on Foods & Teas
- Facial Care volume is .85 per $1 = 45.05% payout on Facial Care
- Body Care volume is .40 per $1 = 21.2% payout on Body Care
Herbalife
In 2008 Herbalife paid out 33.8%
In 2008 Herbalife paid out 33.8%
Manatech
In Q2 ’09 Mannatech’s payout was 59%, the highest for any Direct Sales organization.
While its payout varies for each quarter the annual average is between 44 and 46%.
(Quarterly report info is based on our websites that show quarterly filings)
Details on Mannatech payout.
2008 Annual payout @ 44.9%
Net Sales of 332,708,000
Distributor Commissions & Incentives of 149,595,000
Q2 2009 @ 59.7%
Net Sales of $77,644,000
Distributor Commissions & Incentives of $46,419,000
Q2 2008 @ 47.6%
Net Sales of $86,781,000
Distributor Commissions & Incentives of $41,368,000
Six Months ending June 30, 2009 @ 54%
Net Sales of $148,345,000
Distributor Commissions & Incentives of 80,145,000
Six Months ending June 30, 2008 @ 47%
Net Sales of $178,232,000
Distributor Commissions & Incentives of 83,860,000
In Q2 ’09 Mannatech’s payout was 59%, the highest for any Direct Sales organization.
While its payout varies for each quarter the annual average is between 44 and 46%.
(Quarterly report info is based on our websites that show quarterly filings)
Details on Mannatech payout.
2008 Annual payout @ 44.9%
Net Sales of 332,708,000
Distributor Commissions & Incentives of 149,595,000
Q2 2009 @ 59.7%
Net Sales of $77,644,000
Distributor Commissions & Incentives of $46,419,000
Q2 2008 @ 47.6%
Net Sales of $86,781,000
Distributor Commissions & Incentives of $41,368,000
Six Months ending June 30, 2009 @ 54%
Net Sales of $148,345,000
Distributor Commissions & Incentives of 80,145,000
Six Months ending June 30, 2008 @ 47%
Net Sales of $178,232,000
Distributor Commissions & Incentives of 83,860,000
MonaVie
MonaVie’s payout is reportedly between 32% and 36% of Sales. With the new sales of EMV payout % are probably closer to 32%.
Details for MonaVie: The company will not disclose any actual numbers. They do state that they payout 50% on commissionable volume but according to Newsweek that is only 1% of its sales force. If you take into account that they have split PV then the payout is significantly less than 50% of sales. Below is a payout for each product based on product sales:
22% payout on 1 case of EMV (Cost of $68 for 30 in volume: Payout is based on 50% of 30 volume (15/68 = 22%)
25% payout on 3 cases of EMV (Cost of $198 for 100 volume: Payout is based on 50% of 100 volume (50/198 = 25%)
27% payout on 6 cases of EMV (Cost of $375 for 200 volume: payout is based on 50% of 200 volume (100/375 = 26.6%)
38% payout on 1 case of MonaVie Pulse (Cost $131 for 100 volume: payout is based on 50% of 100 (50/131 = 38%)
38% payout on 1 case of MonaVie Active (Costs $130 for 100 volume: payout is based on 50% of 100 (50/130 = 38%)
41.6% payout on 1 case of MonaVie Original (Cost $120 for 100 volume: payout is based on 50% of 100 (50/120 = 41.6%)
An important question for Mona Vie would be if they count their large “headhunter” fees as payout. Mona Vie reportedly pays between $1 million to $5 million as personal bonuses to networking leaders as enticements to leave their own MLM companies and work with them. These kinds of bonuses are not available to the average person and if they are counted as payout by the company then the amount will shrink even more for the average distributor.
This from Newsweek, “… 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.” - By Tony Dokoupil, Newsweek, Aug 11, 2008,
http://www.newsweek.com/id/150499
MonaVie’s payout is reportedly between 32% and 36% of Sales. With the new sales of EMV payout % are probably closer to 32%.
Details for MonaVie: The company will not disclose any actual numbers. They do state that they payout 50% on commissionable volume but according to Newsweek that is only 1% of its sales force. If you take into account that they have split PV then the payout is significantly less than 50% of sales. Below is a payout for each product based on product sales:
22% payout on 1 case of EMV (Cost of $68 for 30 in volume: Payout is based on 50% of 30 volume (15/68 = 22%)
25% payout on 3 cases of EMV (Cost of $198 for 100 volume: Payout is based on 50% of 100 volume (50/198 = 25%)
27% payout on 6 cases of EMV (Cost of $375 for 200 volume: payout is based on 50% of 200 volume (100/375 = 26.6%)
38% payout on 1 case of MonaVie Pulse (Cost $131 for 100 volume: payout is based on 50% of 100 (50/131 = 38%)
38% payout on 1 case of MonaVie Active (Costs $130 for 100 volume: payout is based on 50% of 100 (50/130 = 38%)
41.6% payout on 1 case of MonaVie Original (Cost $120 for 100 volume: payout is based on 50% of 100 (50/120 = 41.6%)
An important question for Mona Vie would be if they count their large “headhunter” fees as payout. Mona Vie reportedly pays between $1 million to $5 million as personal bonuses to networking leaders as enticements to leave their own MLM companies and work with them. These kinds of bonuses are not available to the average person and if they are counted as payout by the company then the amount will shrink even more for the average distributor.
This from Newsweek, “… 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.” - By Tony Dokoupil, Newsweek, Aug 11, 2008,
http://www.newsweek.com/id/150499
Nu Skin
In 2008 Nu Skin paid out 42.4%
In 2008 Nu Skin paid out 42.4%
Tahitian Noni
They have a stated 53% payout on Commissionable volume but it is loaded with split pricing which guts it dramatically. Best estimate? The payout is between 41% and 44%.
Here are the details. TNI has over 100 products each product has a different split ratio with the Juice being the highest at .94 per $1 spent and Hiro having the lowest of .27 per $1 spent. I have broken out by two possible sales scenarios:
Product Sales Breakdown
Scenario 1: 75% Juice and 25% other products = 44% payout ratio
Scenario 2: 66.6% juice and 33.3% other products = 41% payout ratio
One must take the volume per product multiplied by 53% payout on commissionable volume to determine the payout percentages:
Juice volume is .94 multiply 53% = 49.82% payout on juice
All other product average volume is .49 multiply 53% = 25.97% payout on combination of all non-juice products
Hiro volume is .27 per $1 = 14.31% payout on Hiro products
Nutrition volume is .37 per $1 = 19.61% payout on Nutrition products
Supplement volume is .80 per $1 = 42.4% payout on Supplements
Trim volume is .44 per $1 = 23.32% payout on Weight Loss
Foods & Teas volume is .28 per $1 = 14.84% payout on Foods & Teas
Facial Care volume is .85 per $1 = 45.05% payout on Facial Care
Body Care volume is .40 per $1 = 21.2% payout on Body Care
USANA
In 2008 USANA paid out 41.6%
Xango
In 2008 Xango paid out 50%
In 2008 Xango paid out 50%
Conclusion: Manatech’s 59.7% payout, reached in the Second Quarter of 2009, is the highest payout of any major MLM.
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