Forever Living Products’ Leadership Bonus pays affiliates on sales volume generated down three Manager generations.
To qualify for the bonus affiliates must meet sales volume requirements, which can be met entirely with self-purchase (no retail).
The volume can of course be also generated via retail sales (or a combination of retail and personal purchase), and so Forever Living Products operates in the all too familiar grey regulatory area.
That an MLM company without significant retail activity is a pyramid scheme is clear-cut. But Forever Living Products, like most MLM companies, does not disclose how much of its company-wide volume is attributable to retail sales.
In a recent compensation plan change email, Forever Living Products shed some rare insight into the current situation.
The gist of the Leadership Bonus change is that affiliates who haven’t qualified for the bonus by qualifying at the Manger rank.
Manager rank qualification requires the generation of 120 cc worth of sales volume every two months.
For reference, one “cc” of volume in the Forever Living Compensation plan is the equivalent of $132 of wholesale personal volume generated by an affiliate and/or their downline.
One of the concerns I pointed out in BehindMLM’s Forever Living Products review was that affiliates could sign up, pay $132 a month and eventually max out the compensation plan solely by recruiting other affiliates who also did nothing more than pay $132 a month.
That qualifies you as a Manager and, provided you keep up rank qualification, you earn the Leadership Bonus.
Previously there were no time-restrictions on qualifying for the Leadership Bonus.
Now affiliates must hold the Manager rank for twelve months before any downline Managers (and their downlines) count towards their Leadership Bonus.
Any downline Manager affiliates generated within this twelve-month qualification period are permanently passed upline to the first Leadership Bonus qualified affiliate.
And yeah, this includes their downline, meaning the qualifying affiliate misses out on the Leadership Bonus for that unilevel leg entirely.
If that sounds like a strange change to make, it’s because Forever Living Products’ top affiliates are feeling gimped out commissions because of “skimming”.
Wondering what skimming is? I’ll let Forever Living Products explain:
Managers who have not qualified for Leadership Bonus for twelve months are not putting forth the effort to build a business worthy of Leadership Bonus.
Many times, when this occurs, the upline will step in to build and support the non-qualified Manager’s downline, only to find that, when that downline becomes significant, the Manager steps in and buys 12CC each month to “skim” the Leadership Bonuses.
Thus, the upline are not fairly compensated for their effort. This will help to curb the practice of “skimming” Leadership Bonuses.
Before we get into the real problem with the above, let me further break down the issue.
Manager and higher Forever Living Products affiliates recruit affiliates who themselves don’t qualify as Managers.
Nonetheless they work to build these affiliates’ downlines because, as Managers, they earn the Leadership Bonus on downline affiliates in the leg.
Once the downline gets big, the recruited affiliate realises earning potential and pays $132 a month to qualify as a Manager.
They then start earning the Leadership Bonus but the upline affiliate, who built the downline, has whatever generation that affiliate makes in that leg cut off.
If it’s the last generation they qualify for in that leg, that means they don’t earn any money on the downline they built (the Leadership Bonus stops at the affiliate who promoted themselves to Manager).
Still with me?
While this is definitely an issue higher ranked Forever Living Products’ affiliates, the bigger problem is that upline Forever Living Products affiliates are building downlines for other affiliates.
Personally recruited affiliates are supposed to be placed on level 1 of the affiliate who recruited them. If upline Forever Living Products affiliates are placing recruited affiliates further down the line, that’s downline manipulation for starters.
Second, where is the retail in any of this? It very much sounds like the “pay $132 and then recruit other affiliates who pay $132” compliance concern I pointed out in my review.
And remember, Forever Living Products themselves are stating affiliates self-qualifying for commissions happens “many times”.
Should a regulator investigate, I have little doubt they’ll find little to no retail sales taking place.
Back to the Leadership Bonus, let’s take a step back and look at the bigger picture.
Manager and higher ranked Forever Living Products affiliates are building downlines for those they’ve recruited who can’t or don’t want to recruit themselves.
By paying as little as $132 a month, their “lazy” downlines potentially cut them out earning a Leadership Bonus on volume generated by those they brought into the business.
Is severing non-Managers from their downlines the answer though?
The core issue, I believe, is not Manager and higher ranked affiliates getting screwed out of commissions on one bonus (cue violins), it’s how Forever Living Products are allowing affiliates to qualify for the Leadership Bonus to begin with.
By allowing affiliates to only pay $132 a month to qualify as Managers, Forever Living Products are basically condoning affiliate autoship recruitment.
“Skimming” upline affiliates out of the Leadership Bonus shouldn’t be so easy.
An actual solution to the problem would be to increase Manager rank qualification criteria, but by that I don’t mean simply jacking up the volume requirement.
The Manager rank is the fifth progression rank in the Forever Living Products compensation plan.
By that stage it should be expected affiliates are generating retail sales. So why not roll them into Manager qualification?
This way Manager affiliate’s wont feel “skimmed” if their downlines qualify as Managers, as it would require actually building a business and not just paying a $132 a month fee.
And if they still feel cheated, what are these people doing in an MLM company anyway? In an MLM company upline affiliates are supposed to be working with their downlines, not against them.
But to hell with that, Forever Living Products have issued a qualification deadline of September 1st, 2018.
Starting September 1st, 2017, affiliates must maintain the Manager or higher rank for twelve consecutive months, otherwise they lose their Manager lines to the first qualified upline Manager.
After September 1st, 2018, Manager and higher affiliates surrender any downline Manager affiliates (and their built downlines) until they’ve been Manager or higher ranked for twelve consecutive months.
Call me cynical, but now I see two things happening:
This is a classic case of not addressing the root problem and instead creating a solution to treat symptoms (the fact that Manager qualification doesn’t require the building of an actual business).
What’s worse is those at the Manager level who are deeply rooted in a $132 a month chain-recruitment downline, will just continue to pay $132 a month and earn off others who do the same.
And again, this is such a common scenario that Forever Living Products have gone out of their way to address it.
Better people losing downlines doesn’t prompt a flood of regulatory complaints.
But better still, why even let it come to that. Why not actually fix the problem and implement workable solutions to begin with?