last weekend I sat down with a guy from Austria who was building the Lyoness business in America. This is just my personal opinion based on what I heard and later researched about the company and it’s compensation plan so for those participating in Lyoness that don’t agree sound off in the comments section below.
The system is overly complicated or what I would call “very German”. The basic concept is earn a % back on the purchases you and your “members” do. Sound’s like a cash back card doesn’t it? There are other ways to earn money which I will list in a bit. We found several major red flags that caught our attention with the Lyoness MLM.
1. (Phase III is coming soon) – Every company I have known to tout some big great thing is coming in a couple of years has gone out of business or was flat out illegal. This gentleman kept saying “when phase III begins” That was the first read flag. Maybe I’m misinformed but isn’t this illegal?
2. ( The person holding the meeting didn’t have access to the full compensation plan because he didn’t hold a particular rank ) – Anytime things are not transparent as public information it raises another red flag. I understand new bonuses specifically for higher ranks not being explained but parts of the actual compensation plan were missing.
3. ( The confusing plan) – It’s foreign, actually alien. There is absolutely no reason to have such a complicated compensation plan, It makes me begin to ask WHY? The funniest part is when the person showing me this plan say’s Lyoness makes very little from it’s people.
4. (Lot’s of Hypothetical’s) – All of the examples of success were from Austria. I’ve been there three times for vacation and lived nearby it’s nothing like the U.S. The average american consumer has access to thousands of tools to find product at discounted prices.
So in a nutshell here’s an example:
Basic of settlement system:
For example sake (Brand X) is giving Lyoness customers a 9% discount so if I bought a product on line for $300.00 heres what happeneds next:
1%- $3.00 to my personal bank account
0.5%- $1.50 to my recommender bank account
0.5% – $1.50 to his recommender bank account
7% – $21.00 to my internal Lyoness account to create a position ( will explain next) ** You have to make deposits to chase bank and Lyoness will hold this profit as leverage with store negotiations**
1 Position in USA is worth $75.00 and is being created as the rest of the discounts from all other shopping reaches $75.00- what is this for ??
To give you back $675.00. When do you get your $675.00 in your bank account?
When 70 more positions will be behind a first position in a binary system (35 up/35 down) created from my own shopping.
I did a bit more research, the actual discounts are small in comparison to what’s found online and in the USA the product can only be purchased online by following a link from Lyoness US ah ha! another way they create revenue! Affiliate links…
I compared discounts with retailmenot.com and my wife’s crazed addiction to coupon’ing and Lyoness just donesnt compare. One thing to consider is American shoppers are pretty savvy. There’s places like ebay and amazon that totally smash any discounts offered by Lyoness. When I brought this up with the Gentleman showing me this plan he acknowledged it’s for people who don’t know about these types of things. Ahh so the idea is to look for uneducated shoppers and those with no access to the internet?
Let’s face it Google will lead anyone with half a brain directly to the lowest priced places to obtain their needs right? He responded yes in short. That brings a new question, if they have no internet how the hell will they purchase product through the Lyoness USA website which is the only way to get it??? uhhh….
The gentleman showing me the presentation had 302 members in his organization yet his check was about $1000.00 per month. Now the presentation they show is based on people doing $100.00 worth of shopping each with Lyoness member stores online. But in his scenario the 302 people created only $7000.00 in purchases to these stores. After the math his average sales per person was less than $24.00.
I’d like people from Lyoness to chime in with any inaccuracies here and I would ask they do not use Hypotheticals or examples from people in Austria as its a totally different consumer and market there.