Can You Make Money With Reliv
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Founded in 1988 in Chesterfield, Missouri, Reliv produces a large range of dietary supplements. They say that they are ‘backed by science’, and use all natural ingredients to promote ‘optimal nutrition’.
Rather than using traditional marketing through stores, Reliv uses a network of ‘independent distributors’ to promote their products in a MLM system. Here at The Finance Guy, we think you can’t make money with network marketing, but we’re willing to be proven wrong. In this full review of Reliv, we’ll find out if their business opportunity can make you money, or if it’s just another MLM.
What Is The Reliv Opportunity
To find out what it’s all about, we looked at the official Reliv opportunity page. Here we learn that you can ‘be the best boss you’ve ever had’. Then there’s some stuff about how consumable products are great for repeat customers. There’s even the standard claim that this is the best compensation plan in the industry.
So far Rliv hasn’t shown us anything we haven’t seen before. We’ve heard about the ‘benefits of consumable products’ and almost every MLM claims to have ‘the best compensation plan’. To find out what make Reliv different, we looked at this video:
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The video starts off by telling us that there is a health crisis. They claim that only 14% of us eat the proper amount of fruit and vegetables, furthermore we could spend 75% less on healthcare if we all ate properly. It then moves on to tell us about our financial distress. They tell us that 75% of us live pay check to pay check. To make things wore, most of us have credit card debt, loans, and will have to work past retirement age.
Are you where you want to be with your health, your finances, and your life? If not then relax, because Reliv has the answers. They tell us, you can ‘live your dream lifestyle through the Reliv vision’. They tell us a bit more about their wonderful health boosting products, then get back to the business opportunity.
It doesn’t take long, for us to hear a familiar mantra… ‘you’re in business for yourself, not by yourself’. MLM companies enjoy this slogan because it makes them feel like they are offering the opportunity to be your own boss, but also have the support of a major corporation.
What they are really saying is that you can sell their products, and use their systems. They’ll handle things like production and shipping. They’ll even give you access to their online tools so you can promote and sell their products. To us, this is similar to a regular sales for commission job.
It took over 8 minutes, but the video finally gets to the points we want to hear:
How Do You Make Money With Reliv
The video explains that there are 5 ways to make money with Reliv, as shown below:
The video goes into each in detail, but to help us understand them even better, we also found a copy of the Reliv compensation plan. This document explains all the ways you can earn money with Reliv, as well as what you need to do to qualify to earn.
The first thing we notice is that before you can earn any commission from Reliv, you need to make sure that you are ‘active’. To remain active, you need to buy at least 50 Personal Volume (PV) points worth of Reliv products every month. While this may not sound like a big deal, it can be a problem. In many MLMs we’ve found that people spend more on staying active, than they earn in commission. This can lead to stockpiling product and losing money.
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There are 5 ways to make money with Reliv, we’ll go through them below:
1. Retail Profits The amount of retail margin you can earn selling Reliv products, depends on your rank with Reliv. Your rank depends on how much personal and group volume PGPV points you generate each month. This is a combination of the points for products purchased by you, your customers, and any distributors in your downline.
The amount of retail commission you can earn at each rank, and the PGPV required, are shown below:
As we can see, you can start earning 20% retail commission right away. As your business grows (and your monthly volume increases), this will increase. Once you reach the ‘Master Affiliate’ rank, you will be earning the maximum 40% retail commission. We think that retail sales is the best way to make money in any MLM. After all without retail customers, all the money is coming from existing distributors.
2. Wholesale Profits This commission is the difference between your retail profit level, and that of those in your downline. For example, if you are a Master Affiliate, you will be entitled to 40%. If you sponsor a brand new retail distributor, their retail commission will be 20%. You will earn a 20% wholesale profit on any volume ordered by the retail distributor.
3. Override Commissions Reliv describe this as the ‘most lucrative’ commission. It can only be earned by those distributors who reach the ‘Master Affiliate’ rank. If someone in your downline also reaches the rank of Master Affiliate, then you will not be eligible for any wholesale profit commission from them. You can however earn an override commission on any volume their group generates. This is paid on up to 5 levels of Master Affiliates, as shown below:
As we can see, it is possible to earn a total of 23% in override commissions from up to 5 generations of Master Affiliates in your downline. While this all looks very generous, to us it is a concern because it’s included in the price Reliv charges their distributors.
If you are a new distributor, then 20% of what you pay goes to your upline as ‘wholesale commission’ then another 23% goes to other Master Affiliates as override commission. That means that a total of 43% of what Reliv distributors spend on products, goes to their upline as commission.
If you manage to sponsor more than 2 Master Affiliates, then you could qualify for the Star Director bonus. This is paid in addition to your override commission, and is paid on unlimited generations of master affiliate in your downline. The more master affiliates you personally sponsor, the more you earn, as shown below:
Once again these bonuses would be great if you are able to grow your downline. Having said that we should remember that the only way for Reliv to pay all these commissions if if they are included in the prices charged to distributors.
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4. Cash Bonuses and Trips At any time Reliv may run special promotions where distributors are able to qualify for special cash bonuses or trips. Unfortunately we couldn’t find any information about current promotions. It could be that the information is only available to active distributors or it could be that there aren’t any running at the time or researching.
5. Ambassador Program If you reach the ‘Managing Director’ rank with Reliv, you might qualify for the Ambassador program. This is an invitation only bonus which pays out 4.5% of total sales volume as bonuses to the top Reliv distributors. Your share of the Ambassador commission depends on how much volume your downline generates, and how many distributors you have sponsored (and who then got themselves promoted).
It should be no surprise but what we see is another 4.5% loaded onto the price distributors pay for Reliv products. All in all, we are seeing a sytem where it looks possible to earn a lot of money, but we think it’s unlikely.
How Much Are Reliv Distributors Earning
To find out how much distributors are earning, we looked at the 2017 Reliv Income Disclosure Statement. They start of, as most MLMs do, with a story about how most distributors join just for product and use the opportunity to share Reliv with a few friends and make a few dollars. Only very few join it with the goal of making a career of Reliv.
They then give us a table showing the breakdown of earnings for all distributors who earned commission in 2017. We used their data to create the table below:
The first thing we notice is that there is a severe disparity in the earnings. It seems that the only ones who are earning a full time income are the 0.47% who reach the PDR rank. This also tells us that 99.53% of Reliv distributors earned less than a full time income in 2017.
Remember that these figures only represent the distributors who earned a commission. The income disclosure suggests that only 16.35% earned a commission. In other words, 83.65% of Reliv distributors earned no commission at all in 2017.
If we were to include these all distributors in the income table, we’d find that only 0.07% of Reliv distributors earned a full time income. Or 99.3% of Reliv Distributors earned less than a full time income from this business opportunity
Why Is It Hard To Make Money With Reliv
We believe that the problem is not unique to Reliv. 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.
Dr. Taylor has also provided a 5 Step MLM evaluation, which is designed to show you if you have a chance of turning a profit with any MLM opportunity. We looked at each of the 5 flags for Reliv, as shown below:
Red Flag 1 - Constant Recruitment of New Members and Red Flag 2 - Promotion Through Recruitment If you want to earn anything more than 20% for retail sales, you need to recruit. The only way to climb the ranks with Reliv, is to grow your downline. To maintain your income and rank you will need to replace all the distributors who quit each year. This means you will need to constantly recruit to maintain your Reliv downline.
Red Flag 3 - Pay to Play If you don’t purchase your PV worth of Reliv products each month, you won’t qualify for any commission. This is known as pay to play. Dr. Taylor found that this can lead to hyper-consumption. Distributors are buying product because they want to be part of the compensation plan, not because they actually want the products. This is why several MLM participants admit to having collected stockpiles of product. If they were buying for personal use, or to sell to retail customers, stockpiling would not happen.
Red Flag 4 - Most of the Rewards go to your upline If you are a new distributor with Reliv, you can only earn 20% retail commission. However more than 43% of what you spend goes to your upline as commission. This means that people above you in the system earn more double what you do from your sales. When people in your upline encourage you to keep spending money, it’s important to realise that they are earning commission from your spending.
Red Flag 5 - More than 5 levels in the payout plan The compensation plan pays overrides and Ambassador commissions to unlimited levels in your downline. Dr Taylor says 'Excessive levels in a downline is another sign participants are expected to sell primarily to their downline, rather than to the general public. This makes it an exploitative money transfer scheme, or product-based pyramid scheme'.
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Is Reliv An Illegal Pyramid Scheme
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.
The Amway ruling effectively opened the doors for all other MLMs to operate within the law. However we should remember that being legal doesn’t make it ethical. If you knew that less than 1% of people had a chance of generating a real income, would you feel comfortable recruiting new consultants?
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.
Remember that there is a difference between being legal and being ethical. Would you feel comfortable recruiting people to an opportunity if you knew that 99.7% of them would make more money with a regular job?
Should You Join Reliv
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We think that the only reason to join any MLM, is if you are already using their products, and are happy enough to recommend them to others. At the end of the day, you can’t make money in MLM unless you make a lot of sales.
If you are a good salesperson, and you have the ability to be part of the 1% who turn a profit in Reliv, then we suggest that you look at all your options before becoming an Ambassador. It’s quite likely that you can make more money in a regular sales job than you would in the Reliv opportunity.
As always, we’d love to hear what you think in the comments section below, especially if you an share your experiences with Reliv
Are you wondering if you can make money in an MLM? Check our our list of mlm reviews before you join. If you find one that’s not on the list, let us know and we’ll do our best to write a review