Is AdvoCare a Pyramid Scheme? My Take On It
AdvoCare is endorsed by all sorts of professional athletes which makes it seem legit and all. But can you really trust this place? Is it possible that these athletes are endorsing it for the money they will make off of it?
There is a lot of controversy surrounding AdvoCare and many believe its all a scam and even wonder is AdvoCare a pyramid scheme. If you are one of these people then stick around because I’m going to be going over how this company operates and whether or not it really is a pyramid scheme.
This review is as unbiased as it gets. I am in no way affiliated with AdvoCare and am going to be giving this to you straight.
Overview Of The Company
AdvoCare is a mlm company in the sports nutrition industry (similar to It Works!). They sell products that you would see in stores like GNC and vitamin world. What makes this company different is that it uses a direct sales business model. This means that anyone can join in and start their own home-based business selling AdvoCare products.
In addition to the direct sales model, this company also has a mlm compensation plan. Of course I will get more into this. But basically this means you can earn money from recruiting other members into the program and earn off of what they do.
AdvoCare doesn’t exactly have all that good of a past as far as I see it. If you look into the man behind this company things start to seem a little shady and you really start to question the legitimacy of this company right off the bat.
AdvoCare was founded in 1993 by a man named Charles Ragus. Ragus has a history in mlm’s. He was involved in the mlm Herbalife and even started another mlm company called Omnitrition in 1989. Omnitrition when on to be sued in 1996 when a class action lawsuit was filed alleging that it was a pyramid scheme.
So anyway…. there is some shady history here and it makes you wonder if Ragus is in this just for the money.
There is no doubt that they sell good quality products. But this doesn’t necessarily mean that they aren’t a pyramid scheme.
One thing to look for in mlm’s like this is the price of the products. Often they will be severely overpriced. In AdvoCares’ case I would definitely say that they are overprice. You can find better deals at stores like GNC. However… they aren’t all that overpriced.
How They Could Be a Pyramid Scheme
In order for AdvoCare to be considered a product based pyramid scheme their revenues would have to be overly dependent upon recruitment of new members rather than retail sales of their products. That is the difference between legitimate mlm’s and pyramid schemes.
So do they cross this line? Do they rely too much on recruitment of new members? To answer this question you have to take a look at the mlm structure of their compensation plan.
The Comp Plan
As a distributor you can make up to 40% commissions on selling their products. You will start out at 20%, but as you move up the ranks you can make 40%.
So how do you move up the ranks? How do you make more money? Its all about recruitment of new distributors and that is where the mlm structure of this business comes into play.
There are several different ways you can earn money from the people you recruit in.
You can earn 5-20% commissions from the products that your recruits sell. Again, this is based on your rank.
This is going to be one of the biggest money makers. Here you will earn commissions from your direct recruits, their recruits, their recruits, and so on.
You can earn bonuses of up to 19.75% on your entire organization.
Does AdvoCare Cross The Line?
There is no doubt that they are focused on recruitment. In order to move up in the company its all about increasing your Personal Group Volume (PGV), which is the volume of products that your group sells. And your group includes you, your recruits, their recruits, and so on.
So pretty much you can just go out and recruit new members to get your PGV up and to advance up the ranks. There isn’t all that much incentive to sell products yourself. Most of the incentive here in the comp plan is to get you to go out and recruit.
So does this mean that AdvoCare crosses the line? Is it all a pyramid scheme?
Although there is plenty of incentive to recruit above all else, they still do put a lot of focus on the actual products. So for this reason I cannot say that they are a pyramid scheme. But what I will say is that they are a very shady mlm.
The Cold Hard Truth
In mlm businesses like this it is very difficult to make good money. In order to really profit you need to take full advantage of the mlm comp structure. You need to recruit, recruit, and recruit some more. Build up your team and make money off of them.
The official income statements from AdvoCare prove how difficult this really is. Below I took a screenshot of the official 2015 income report. I know this is old but its the most recent official one I could find.
As you can see, 96% of all distributors that are active make MUCH less than a livable income. These income figures are from the entire year!
Final Thoughts & What I Recommend
While there might not be enough to call AdvoCare a pyramid scheme, there is enough to call it a bad opportunity. Well… at least for most people.
The problem is that only the tippy top of the mlm pyramid make good money. And the only way you can get up there is by recruiting like a madman. So if you have that salesperson type personality and think you will be good at recruiting, then this might be something to consider. But if not it is going to be extremely difficult to make good money here.
Personally, I don’t have anything even close to a salesperson type personality and there is no way I would make it in this mlm business. I just wouldn’t be any good at recruiting. If you are like me then I would recommend you take a peek at how I make money online.
I make a living working for myself online, which I think is a pretty awesome job. You can learn more about it by clicking the link below that will take you to a post I wrote.
In the post I wrote I explain what it is that I do, how it all works, and how others can do the same.
Comments, questions, concerns??? Leave them below in the comment section and I’ll get back to you soon 🙂