Is Isagenix a Pyramid Scheme? The Truth About the Isagenix MLM

Chances are you’re here because you’re considering signing up as an Associate with the Isagenix MLM.

You’ve more than likely tried the discounted products as a Preferred Customer and figured you may as well take the next step and  register as an Associate so that you can make some extra cash by selling them to your nearest and dearest.

However, you’re hesitant.

You’ve heard whispers that Isagenix is a pyramid scheme and that it is impossible to make money with them, and you want to do your research before you dive in headfirst. 

Or maybe it isn’t you considering Isagenix as a career move.

Maybe a friend or family member has joined and you’re concerned. You’ve noticed some red flags about the company and you want to learn more about this new ‘business venture’ of theirs.

Whatever the case, I’ve created this article to help.

We are going to put Isagenix under the microscope and take a good look at just how good the Isagenix business opportunity really is, whether you can make money with Isagenix, and whether Isagenix is operating as an illegal pyramid scheme or not.

So, without further ado, let’s get into it.

Is Isagenix a Pyramid Scheme? The Truth About the Isagenix MLM

The Basics

What is MLM?

MLM stands for multi-level marketing, and MLM companies are also known as network marketing or direct sales companies.

You don’t receive a salary in an MLM. 

Instead, you earn money from selling products to people you know and recruiting others into the business. 

When you recruit a new person and that person begins earning money, you will earn commission from the sales and recruits generated from THAT person. 

This continues down in multiple levels (hence multi-level).

Imagine a triangle. If the person at the very top of the triangle recruits 10 people, and each of those 10 people recruit another 10 people, and each one of those people recruit another 10 people, you will be making commissions from EVERYBODY because they are all in your direct downline. 

All you had to do was recruit 10 people and you made money from 1100.

While you can always make money from selling products, most people in MLM companies prefer to recruit others because they stand to make a lifelong passive income from that person, whereas if they sell a product they will just receive a one-off commission.

As there is a lot of money trickling up to the top of the triangle, the people at the top are making a lot of money, while the people at the bottom are making the least.

The ultimate aim of somebody in an MLM company like Isagenix therefore, is to have as many people in their ‘downline’ as possible, enabling them to make large amounts of passive income for little work.

What is a Pyramid Scheme?

Pyramid schemes are very similar to MLMs, but the main difference is that MLM reps sell a product as well as recruiting others into the business. 

A pyramid scheme simply takes an initial investment from each member and promises to pay them for enrolling others into the scheme.

You are never buying a product; you are buying into an ‘opportunity’ to get rich.

However, as members increase, recruiting quickly becomes impossible and so most members are unable to profit or even make their initial investment back. 

The Wikipedia diagram below illustrates just how unsustainable this business model is – after just a few levels of recruitment, the scheme would have recruited everybody on the planet and there would be no-one left to recruit!

Because it is impossible for most people to make any money in a pyramid scheme, pyramid schemes are illegal.

MLM companies are not illegal because there is a possibility to make money from selling products and not just recruiting.

However, although a business may appear like a totally legit multi-level marketing company, it could still be exploiting loopholes in order to function as a pyramid scheme in disguise.

What is Isagenix?

The Isagenix MLM was founded in 2002 by John Anderson and Jim and Cathy Coover. It is a multi-level marketing company with a focus on wellness, which (to Isagenix) comes in the form of dietary supplements, shakes, ‘elixirs’ and more. 

Before founding Isagenix, John spent decades in the supplement formulating industry, while Cathy and Jim have spent a combined total of 50 years in direct sales – a match made in heaven if you want to create a wellness MLM!

Many of the Isagenix products are weight loss focused (think meal replacement shakes and low calorie snacks), but they also have products for energy, hydration and other general ‘wellness’ supplements.

Isagenix claim that their products ‘support the body’s natural detoxification process,’ despite there being no evidence that detox supplements actually work.

However, the point of this post really isn’t about Isagenix products. There are people far more qualified to talk about weight loss supplements than I am, and besides, what YOU really want to know is whether joining Isagenix is a good idea or the whole thing is just an Isagenix scam.

Isagenix Controversies

For a relatively new company, Isagenix has been embroiled in its fair share of controversies.

In 2010, the Environmental Research Center filed 3 complaints against Isagenix for violating California’s Proposition 65, which requires companies to put warning labels on their products when the products contain certain chemicals. 

These chemicals include those known to cause cancer, birth defects, or other reproductive harm.

At the time of the complaint, Isagenix had a tonne of products which ‘naturally’ contained lead. 

Isagenix claimed that they shouldn’t have to disclose the presence of lead in their products, and so this resulted in a lawsuit, which was settled privately in 2013. 

This may not seem relevant, but it’s something to keep in mind that if you plan on selling Isagenix products, a Google search of the company will bring up information like the above, which can’t be good for product sales.

Isagenix has also come under fire for their products being way more expensive than similar ones on the market, as well as allegations that Isagenix is promoting a toxic diet culture due to their products being extremely low in calories.

Inside the Isagenix Business Opportunity

How do you make money as an Isagenix Associate?

I took a look at the Isagenix compensation plan to see how Isagenix Associates are making money.

As with most MLM compensation plans, it was long (12 pages) and pretty difficult to understand. 

In fact, Isagenix acknowledge this themselves on page 8, when they say ‘If this seems overwhelming right now, that’s completely OK! We don’t expect you to become an expert overnight. That’s why we provide additional tools at IsagenixBusiness.com and further in-depth training at events!’

This is just a nice way of saying that Isagenix are well aware of how confusing their compensation plan is and they don’t expect you to understand it before you sign up.

Anyway, here are some ways that you can make money with Isagenix:

• Selling Isagenix products to people you know and receiving a commission
• Selling Isagenix products to other Isagenix Members. When they purchase something, you receive a bonus
• Team bonuses are bonuses received due to the combined product sales of everyone in your team. The compensation plan states that this is the ‘foundation of the compensation plan,’ signalling the importance of growing a team
• Other incentives and promotions which Isagenix may introduce

What we can see here is that Isagenix are really keen to push product sales on Isagenix Members rather than retail customers, and that there is a lot of money to be made from growing a big team.

Two defining characteristics of product-based pyramid schemes are the focus on endlessly recruiting others into the business, as well as the distributor actually being the main customer.

How much money can you make in Isagenix?

To see whether it is likely that you will ever make money as an Isagenix Associate, I took a look at their 2020 Income Disclosure Statement (IDS).

An Income Disclosure Statement is a document which outlines exactly how many people are registered as distributors (or ‘Associates’ in this case) within the company, how many of them are making money, and how much money they are making.

Now, before we get into the numbers, it is important to note that you can be an Isagenix Member in two ways: as a ‘Customer,’ where you will receive discounted products but do not sell products to others, or as an ‘Associate,’ where you still receive discounted products but also sell products to people.

Isagenix’s IDS states that approximately 85% of Isagenix Members opened Customer accounts only, and therefore earned no compensation from Isagenix. 

This shows that 85% of Isagenix Members never attempted to turn their love for the products into a business. 

Other MLMs claim that most of their distributors only sign up for the free products and that’s why they don’t make any money, but they don’t provide any evidence to back up these claims (sidenote: Monat is a notoriously toxic company to work for).

With Isagenix, at least we can rest assured that, of the 15% of Members who made any money with Isagenix, all of those people had, at one point, tried to turn their passion for Isagenix into a business. 

This means that if we STILL see very high failure rates, then it is likely because of the BUSINESS MODEL itself as opposed to a lack of desire on the part of the distributor.

So, let’s take a look at the numbers.

Unfortunately, the Isagenix Income Disclosure Statement lacks a lot of information when it comes to how much their Associates earn.

The only information we have is the following:

• The mean average earnings of all Isagenix Associates was $843
• The top 50% earned a median average of $1021
• The top 10% earned a median average of $7427
• The top 1% earned an average of $94,578

It is unfortunate that these percentages aren’t narrowed down even further, but que sera, sera. 

Now, while these numbers initially look great compared to other MLMs (49% of Color Street reps only earned $68 in 2020), we have to remember that every single one of the Isagenix Associates was actively trying to build a business, whereas some of the Color Street distributors may have signed up just to get some cheap nail strips.

When you consider that the top 50% of the company were only earning $1000 in an entire year, which is nowhere near enough to replace a regular job, the numbers seem a lot more bleak.

We should also remember that these figures do not take into account EXPENSES accrued by the Associates while building and promoting their ‘business. 

This means that the top 50% of Isagenix Associates didn’t actually walk away with $1000 at the end of 2020.

How much does it cost to be an Isagenix Associate?

How much does Isagenix cost?

The numbers on the Isagenix Income Disclosure Statement do not take into account the costs of being an Isagenix Associate.

In doing my research for this post, I discovered that Isagenix do not let you view sign-up costs unless you give them your contact information, which was a BIG red flag.

However, thanks to other Isagenix reviews, I found that to start with, you must pay a $29 registration fee.

You must then purchase one of their ‘Product Introduction Packs,’ which cost anywhere from $148 to a whopping $1098!

That’s not all though.

You must also sell $150 worth of product every month to remain ‘active’ and receive your commissions. If you don’t manage to reach this number by selling products, you can buy products yourself to make up this number.

I also found something odd that suggests the $29 registration fee involves a monthly autoship of something but I couldn’t figure out what?!

An Isagenix Associate will rack up other expenses such as:

• Phone/internet bills
• Buying products for personal use
• Buying products to sell on to customers (inventory loading)
• Food, gas, travel and accommodation when travelling to Isagenix events and conferences
• Costs of running your own blog or promotional channel such as YouTube
• Social media promotion

You then have to take into account the time spent working on Isagenix and whether the money you made justifies the hours spent.

All in all, it seems like working as an Isagenix Associate is a pretty expensive thing to do.

Is Isagenix a Pyramid Scheme?

I am not the FTC. 

I cannot say, without a shadow of a doubt, whether or not Isagenix is a pyramid scheme.

I’m also not trying to get sued over here!

So, it is important that I make clear that everything which follows is alleged and my own personal opinions.

HOWEVER.

What I will say is that from the compensation plan alone, Isagenix is the most pyramid-schemey MLM company that I’ve ever seen and I’m very surprised it hasn’t been closed down yet. 

In order to determine whether Isagenix is a scam or functioning as a pyramid scheme, we must try and answer 3 questions.

1. Are most people unable to profit?

When we looked at the Isagenix Income Disclosure Statement, we saw that the vast majority of Associates were not making anything close to a full-time wage, and it is likely that many of them are actually losing money.

The Income Disclosure Statement is also very vague and doesn’t contain nearly enough information to establish what exactly people in the company are earning.

All in all, we can see that the people at the very top are making a significant amount of money, most people are unable to make a profit with Isagenix, and the idea that it is a legitimate ‘business opportunity’ seems laughable.

2. Do you have to ‘pay to play?’

Not only do you have to spend hundreds of dollars when you sign up to Isagenix, but there are hidden costs within the compensation plan.

Remember when I said earlier that you can make money by selling products to people you know?

Well, you can do this in 2 ways:

1. You can buy the product first, at a discounted price, and then sell it at a marked-up price to a customer, keeping the difference.

2. You can direct your customer to your personal website and they can purchase the product from there. However, this comes with an ‘admin’ fee, meaning you earn less commission from these sales.

This is important as it incentivises Isagenix Associates to purchase and resell the products, which could be interpreted as inventory loading, which is a popular characteristic of a product-based pyramid scheme.

By making it financially more beneficial to buy products rather than directing customers to the website, Isagenix are trying to ensure that Associates continue to purchase products from them, regardless of whether they can sell those products afterwards or not.

This is sneaky, you guys.

Really sneaky.

There is also something called a Product Introduction Bonus, which means that if you convince an Isagenix Member to buy a product, you will receive a commission.

This is another dead giveaway that Isagenix is operating like a pyramid scheme – by incentivising their distributors to sell to other distributors, they are ensuring that the distributor is the customer, meaning that the ‘pay to play’ concept is even more pronounced.

Oh, and let’s not forget that you have to meet your $150 monthly sales target.

Like with most MLMs, if a distributor is struggling to hit their $150 target, it makes sense that they would buy some Isagenix products for themselves in order to hit that target and stay ‘active’ as an Associate.

So, to answer our question – do you have to pay to play with Isagenix?

The answer is a resounding yes.

3. Is there a heavy focus on recruitment?

As with most MLM companies, the only real way to make money with Isagenix is by having a team underneath you.

Isagenix themselves say that the Team Bonus is ‘the foundation of the compensation plan,’ meaning that the entire compensation plan is built on the premise of recruiting others into the business (or ‘building a team’ as they like to say).

Of course, you don’t get paid directly for recruiting people. 

You get paid when those people make sales.

This is a fine line, but an important one because it allows Isagenix to skirt around the lines of being an illegal pyramid scheme.

So, is there a big focus on recruitment?

Yes, there is.

Is Isagenix a Pyramid Scheme? | Final Thoughts

Of all the MLM companies that I have analysed on this blog, Isagenix is the one that most closely resembles a pyramid scheme (albeit with products).

Not only is there a huge focus on recruitment (as with most MLMs), but due to the very nature of the compensation plan, the biggest customers of Isagenix products ARE ISAGENIX ASSOCIATES THEMSELVES.

While all MLM companies encourage their distributors to ‘live the product’ and hit their monthly targets by making purchases, Isagenix is the only company I have seen that gives out specific bonuses for getting current Isagenix members to buy products.

If that doesn’t say it all, I don’t know what does.

Even if you don’t care too much about whether Isagenix is a pyramid scheme or not, you still stand little to no chance of making money with Isagenix, and so I definitely do not recommend becoming an Isagenix Associate.

That’s all for now folks, don’t forget to let me know your thoughts in the comments section below.

Until next time!

XOXO

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