Tag Archives: Nutrilite

Great video from Nutrilite and Kurt Warner!

You may know that Kurt Warner is two time winner of the NFL Most Valuable Player award, and also winner of a Superbowl MVP award. What you might not know is that in 2010 he won the Bart Starr Award for “outstanding character and leadership in the home, on the field and in the community”. While people like Howard Megdal may be clueless about Amway (see my post a couple of days ago!), people like Kurt Warner are not, which is why he’s a spokesperson for Amway’s Nutrilite brand.

He’s also got a great sense of theatre!


Debunking the critics. Claim: the one who does the work receives the smallest compensation

In recent weeks I’ve done a couple of posts where I’ve highlighted some of Amway’s online critics and their hypocrisy and sometimes downright fraudulent behaviour. But what about the claims they make about Amway? Do they make legitimate points? Occasionally they do. But not often. Here’s a recent example:

Over the weekend Joecool aka Steve Nakamura did a blog post that claimed -

One of the issues I have with the Amway plan is that the newest IBO, possibly the one who does the most “Work”, receives the smallest compensation. Amway pays about 32% of their income back in the form of bonuses. An IBO who does 100 PV receives a 3% bonus and somewhere, uplines and sponsors receive the rest.

Later he says -

Here’s a challenge for IBOs and/or prospects who are being recruited into the Amway business. 100 PV will cost around $300 a month and dedication to the tools system will cost you around $200 a month on average. Would you not be better off simply writing a check to your upline for $100 and not even joining?

Let’s examine these two claims. Joecool points out that Amway pays back around 32% of their income, and the IBO doing 100PV (points volume) will receive 3% volume rebate, or a little less than 10% of this. It sounds like the “upline” makes more, right?

No.

There are several ways to generate income in the Amway business. Joecool dishonestly only includes one of them, the volume rebate. The first income source for IBOs is retail margin, which on Amway products ranges from 20 to 30%.

Let’s take an example. Say an IBO sells 2 x Perfect Packs and a 1 x Farmers Market Vibrant Health Combo and 1 x Kid’s Chewable Multivitamin. IBO cost is $244.19.

Product PV BV Profit
Perfect Pack 41.95PV 121.66 52.73
Perfect Pack 41.95PV 121.66 52.73
Health Combo 15.75PV 45.67 19.78
Kids Chewable 4.97PV 14.40 6.22
Total 104.62 303.39 131.46

First of all you’ll note that the IBO cost for *more* than 100PV is only $244.19. Joecool, who was an IBO for less than a year in the mid 1990′s,  claims 100PV will cost the IBO $300. He is still stuck in the mid 1990′s and completely ignores the fact that Amway increased the PV/BV ratios for their major brands several years ago.

So, the IBO profits $131.46 in retail margin, then gets a 3% volume rebate (on 303.39 BV) which is an additional $9.10.

Total gross profit for the IBO “doing the work”= $140.56

What does the upline get? In the US the volume rebate scale goes up to 25%, then there’s an additional 4% leadership bonus, plus various other Emerald, Diamond, Depth etc etc bonuses. I believe it averages roughly 32%, so less the 3% given to the original IBO, that’s 29% of the BV (business volume) or $87.98.

  • The new IBO doing the work gets $140.56
  • The upline IBOs who helped share in $87.98.

So for the total profit available, the IBO gets 61.5% and the upline share in 38.5%.

Joecool’s claim is false.

Joecool gets to this point because he completely ignores retail profit and is most likely assuming an IBO is only “buying for themselves”. Of course, if that’s all they do, then they’re not even operating a business and they have done no work. They’ve merely shopped! If they bought the above for their family (say 2 adults, a teenager, and a younger child), then they’ve saved $131.46 by shopping at the wholesale price and got an additional $9.10 discount.

Not bad.

But Joecool isn’t talking about a shopper, because in the next statement I cite from him he says this person is spending $200/mth on “tools” . If they’re building then they’re trying to recruit customers for the products, and other IBOs to market them. As such that IBO must have at least 50PV in customer sales in order to receive a bonus on downline sales. Where does he account for that? He doesn’t. What about increased volume from their work recruiting others? He ignores that too. As he does an increased bonus thanks to that extra volume.

Even more ridiculous, he seems to think that the money spent to obtain 100PV is 1) a business expense and 2) you receive nothing in exchange for the money!

Both are absurd. Firstly of course, you receive products in return. Products that are some of the best in their categories and have won awards around the world.

As for it being a business expense, have you run that past the IRS, Joecool? Can a business owner who withdraws stock for personal use, or accounts for it as a sale to themselves, claim that as a business expense?

It’s absurd, and sadly Joecool isn’t the only MLM critic who asserts this.

If anything, a $300 product purchase for personal use is an income for their Amway business, from a sale to a customer (themselves). There’s no profit since it matches the $300 expense for the IBOs business to purchase the stock from Amway.

Was this how Joecool ran his Amway business? Spending money not for products he wanted and thought were good value, but merely to try and qualify for a bonus? That’s not only stupid, it’s also potentially defrauding his upline of commissions they should have received.

Unfortunately, we already know Joecool has no problem committing fraud.

Does Amway or Nutrilite use GMO crops?

I’ve occasionally received questions about whether Amway uses genetically modified organism (GMO) crops in their products, in particular in Nutrilite products. I’m personally not overly concerned by GMO if it’s from a company I trust. In past years “gmo” had a simpler name – farming! We’ve been genetically modifying our food supply for thousands of years, through transplanting and interbreeding of different plants and animals. Now we can just do it faster and in a more controlled situation.

Still, I understand peoples concerns. On the weekend though, there was a surprising article posted in China’s People’s Daily Online –  Is Amway Nutrilite protein powder as addictive as heroin? The article is a bizarre, non-scientific hit piece, against both Amway and GMO. It cites some studies that found problems with some GMO animals. That’s kind of like saying you shouldn’t eat strawberries (a man-made hybrid fruit) because breading a donkey and a horse will give you an infertile mule. Just plain silly.

But it gets sillier. The article says, about Amway protein powder …

“people really feel better to take the Nutrilite protein powder but feel not as good  as before if stop taking it”

… and claim this is evidence the product is addictive and creates dependence like heroin! Right. So if I give a badly dehydrated person water … they’ll feel better. If I stop it and let them get badly dehydrated again, they’ll feel even worse.

Bad water! Bad bad water!

The article has obviously been written or sourced from an Amway competitor, and there’s a big clue to this when we go back to the discussion on GMO -

 “Industry insiders said that the Amway Nutrilite protein powder sold in China contains protein from GM soybeans grown in the United States.”

Industry insiders” huh? That’s code for “competitors”. Still, I was interested if Amway was using GMO so I started googling around, and I found several documents of interest. One was the All Plant Protein Powder FAQ, produced by ” TECHNICAL REGULATORY SERVICES, Access Business Group, South Africa”. Access Business Group (ABG),  a part of Alticor, is responsible for manufacturing Amway products. The FAQ says -

42. How do we verify that we use non-genetically modified soybeans? 

We follow the European Union standard for providing non-genetically modified ingredients. The supplier of our soy protein isolate has a
stringent quality control system in place to ensure they provide us with non-genetically soybeans. We also ensure this requirement is being
met by using a test known as polymerase chain reaction, or PCR testing. This advanced methodology can test for the presence of genetically
modified DNA.

This makes it pretty clear this product has no GMO. But is it perhaps different in different markets? I also found, from the same group at ABG, an FAQ on Nutrilite and Organic Farming -

22. Do Nutrilite farms utilize GMOs or GMMs?
Nutrilite has a long tradition of using organic farm practices on its farms. This policy includes using only traditional
farming methods and natural methods to control insects and prevent crop disease, and has been extended to preclude
the growing of GMO and GMM plants on any Nutrilite farming operation. It reflects Nutrilite’s commitment to providing
customers with products that address all of their concerns

So, Nutrilite farms don’t use GMO/GMM and in Europe/South Africa at least, they follow EU standards for suppliers. The final nail in the coffin for the People’s Daily claim is this, the Nutrilite Global GMO Policy, which states -

All ingredients for Amway core branded products (Nutrilite, Positrim) will be nonGMO or IP with a recombinant DNA threshold of 0.9% with the exception of
flavors, and subcomponents with no function or presence in the final formula.

So there you go. With some minor exceptions, Amway and Nutrilite don’t use GMO ingredients.

Amway and Euromonitor

Most IBOs would be aware of various “claims” about Amway’s products and sales that are backed up by research done by Euromonitor International. I’ve just discovered Euromonitor actually has a page on their website describing some of the claims and their methodology. Worth a look! The claims listed are -

  • Since 1959, Amway has paid out more bonuses and cash incentives to its distributors worldwide than any other direct sales company in history.
  • In 2010, Amway paid out more bonuses and cash incentives to its distributors worldwide than any other direct sales company.
  • In 2011, Amway paid out more bonuses and cash incentives to its distributors worldwide than any other direct sales company.
  • In 2011, more people renewed their Amway business than any other direct selling company in the world.
  • Amway is the first leading direct selling company in Brazil to empower its distributors with exclusive Facebook tools to manage their business.
  • Nutrilite is the only global vitamin and mineral brand to grow, harvest, and process plants on their own certified organic farms.
  • Artistry is among the world’s top five, largest selling, premium skincare brands.
  • Artistry is among the world’s top ten, largest selling, premium cosmetics brands.

 

Oh the confusion …. CSPI gets it (mostly) very wrong.

The Centre for Science in the Public Interest (CSPI) is a somewhat voracious “defender” of a healthy lifestyle. While I agree with many of their positions, I disagree with much of the way they go about it, with attacks on various foods and supplements that often go outside scientific support and verge on obsession. I think they need to remember that stressing too much about what you’re eating can be more damaging to the health than whatever it is you are actually eating!

Anyway, this week CSPI set it’s eyes on Amway and Nutrilite in a letter to Amway President Steve Van Andel and a widely circulated press release. At best their claims against Amway are confused. At worst they are outright deceptive. They are also incredibly ironic!

CSPI attacks Amway over Nutrilite twist tubes, mentioning in particular two products, Nutrilite Fruit & Vegetables 2GO twist tubes  and Strawberry Kiwi flavored Immunity Twist Tubes. CSPI’s letter and press release show a lack of due diligence on their part both with regards the products they attack and Amway itself, as well as, surprisingly, a lack of understanding of FDA regulations. I’ll start with their confusing, and misleading press release.

In the release they say -

“Fruits & Vegtables 2GO” has “the antioxidant equivalent of two of the 9–13 daily servings of fruits and vegetables your body needs,” according to Amway. But there’s far more to fruits and vegetables than just antioxidants, according to CSPI.

Oh the irony. CSPI is pretty much parroting Nutrilite’s greatest marketing differential back at Nutrilite to falsely criticise a Nutrilite product. Yes, CSPI, you are right. There is far more to fruits and vegetables than just antioxidants. It’s what Nutrilite has been saying for nearly 80 years. That’s why Fruits & vegetables 2GO has actual fruit and vegetables in it! A review of the ingredient label shows it includes “Acerola Cherry Concentrate … Pomegranate, Cranberry, Blueberry, Carrot, and Red Beet Juice Concentrates”. Real fruit and real vegetables, complete with all those phytochemicals CSPI correctly points out are important.

CSPI seems to have assumed that Amway’s products are like most other competitors in the nutritional supplements category – composed of synthetic isolates. In general, they’re not. That’s the Nutrilite difference. In their letter to Steve Van Andel, CSPI goes further -

Amway claims that “60mg of vitamin C from NUTRILITE Acerola Cherry Concentrate [provides] the natural vitamin C equivalent of about one mango or 1/2 cup of cooked broccoli” and “5 mg of Beta carotene from the algae plant [provides] the natural beta carotene equivalent of about one medium carrot or one cupe of cataloupe.” These claims suggest that the ingestion of isolate vitamins or antioxidants have the same benefit as the ingestion of whole foods such as mango, broccoli, carrots, or cataloupe that countain those vitamins and antioxidants. This is not the case, and suggesting as much is deceptive to consumers.

CSPI has somehow come to the conclusion that “Nutrilite Acerola Cherry Concentrate” is somehow an “isolated vitamin”. It’s not. It’s exactly what it says, Acerola Cherry Concentrate. Amway also clearly states that it’s natural beta carotene, from algae, provides the equivalent beta carotene as a carrot or some cantaloupe. “equivalent” is not “the same“. A cup of cantaloupe is not the same as a medium carrot is not the same as some algae. Contrary to CSPI’s claims, Amway nowhere suggests they are, and I can’t see how this is at all “deceptive to consumers”

Now, the Strawberry/Kiwi flavored immunity twist tube is one of those exceptions from “the Nutrilite difference”. It doesn’t contain fruit and vegetables as nutritional sources, it’s primarily Vitamin C as ascorbic acid (almost certainly synthetic). Personally I, and others who contribute to this blog and Amway Talk, were a little bit disappointed in the twist tube products when they came out, because they didn’t uphold the Nutrilite difference. The Fruit & Vegetables 2GO product, released fairly recently, begins to address that. Still, CSPI’s criticisms of this product verge on the childish. Despite the very name of the product saying it’s “Strawberry and Kiwi flavored dietary supplement”, CSPI apparently believes the pictures of a kiwi and a strawberry on the front misleads consumers in to thinking it has actual fruit in it. That might be true if you were already aware of the normal Nutrilite approach, but for the vast majority of consumers – really? A can of fanta has a picture of an orange on the front. Do people really believe it contains oranges? Pictures of fruit on packaging are an extremely common approach for depicting the flavor of a product. Is CSPI going to threaten to sue them all?

CSPI also criticises this product for the claim that  it is a an “immune system booster” that will “protect your cells.”  CSPI believes this claim is deceptive as it implies it prevents or cures disease – a no no under FDA rules. They’re wrong. This is what are categorised by the FDA as “structure/function” claim, not a disease claim. The idea that antioxidants are import in protecting cells and the immune system is well established, I believe Amway is on safe ground on this issue.

There is one area where I think CSPI is correct in their criticism. They state - “Also, both product lines contain the artificial sweetener sucralose, despite a print advertisement for “fruits & vegetables 2GO” that claims the product has no artificial ingredients.”

Both products state on their packages and on the Amway website that they contain “no artificial colors or flavors”. This is correct. Personally I think this kind of marketing line does verge on deceptive as many people would interpret it as “nothing artificial” rather than just limited to colors or flavorsSucralose is neither a color or flavor so Amway is technically and legally correct. However, CSPI also refers to a print advertisement  (pictured right) for Fruit & Vegetables 2GO which states the product “contains no artifical colors, flavors, preservatives or ingredients“. This is clearly wrong, it contains sucralose, which is an artificial ingredient.

So CSPI gets one claim right out of the many they make against Amway. Their letter to Steve Van Andel though, I find extremely ironic, with several pages devoted to educating him about the benefits of phytochemicals, a consumer field Amway and Nutrilite virtually pioneered!

A little more due diligence next time, CSPI.

Amway to be presenting sponsor of the Detroit Red Wings

Amway and the 11 time Stanley Cup winning Detroit Red Wings have announced that Amway is to be the team’s first ever presenting sponsor, and Nutrilite the team’s official nutritional supplement. Nutrilite is also going to work with the team on optimising supplements for each player.

With 11 titles the Red Wings are the most successful ice hockey club in the US, bested in the overall NHL rankings only by two Canadian teams. Along with the AC Milan sponsorship this means Amway and Nutrilite are partnered with two of the most successful teams in world sport. This sponsorship has benefits outside of the US though, with the team currently including not only 6 American players, but 7 Canadians, 6 Swedes, 2 Czechs, a Russian, a Finn, and a Slovenian. Indeed the captain, Niklas Lindström, is a Swede, so this sponsorship might be a fillip for Amway Sweden as well as North America.

The increased effort in marketing and branding seems to be working, with Amway North America Vice-President of Sales, Sandy Spielmaker revealing in a video to IBOs this week that Amway North America has been experiencing double digit growth over the past year.

Can a positive review be a bad thing?

Today on my Facebook feed a post came up from Nutrilite US about Nutrilite Energy Bars getting a positive review in Triathlete Magazine -

“That’s great!” I thought. I’ve competed in triathlons and have a few friends who continue to do so. So I eagerly clicked on the link through to Amway’s News website and looked at the PDF of the Triathlete Magazine Review.

The magazine highlights four energy bars for “when you need an extra shot of energy to keep going on a long ride or run”. The four are Honey Stinger Waffles, Iron Girl Energy Bar, Nutrilite Energy Bar, and Clif Bar. All four are given glowing reviews, which is great for Nutrilite. So where’s the problem? There’s two. First is this -

Honey Stinger Waffles – $1.39
Iron Girl Energy Bar – $0.99
Nutrilite Energy Bar – $20.97 for box of 9 bars
Clif bar (coconut chocolate chip) – $1.39

You have to do the math, but that puts the Nutrilite Energy Bar at  $2.33/bar – nearly 70% more expensive than the next most expensive bar, and 135% more expensive than the cheapest!

If you were a triathlete, would you check out the Nutrilite bar first or last? Now, I’ve learned a lot over the year about The Nutrilite Difference, and often even though a Nutrilite product may be more expensive, it may be a significantly better product and better value. We don’t have Nutrilite Energy Bars where I live and so I’ve never tried them and don’t know much about them. So I went to Amway.com to learn more. And that’s where the second problem came up -

Hopefully it will change soon, but right now two of the three flavours, indeed the two that were mentioned by Triathlete Magazine, aren’t even available! Hello? Even if you can’t help when Triathlete magazine promotes something, why on earth would you be promoting a product on Facebook that people can’t even order? Wouldn’t it have made more sense to wait until the products were in stock?

In any case, I went to amway.com to see if I could learn more about these bars and if there was any information to help a consumer make the decision to purchase these over the other three bars, or indeed for an IBO to market these products against competitors. Unfortunately, under “competitive info” I found only some nutritional comparisons with Power Bar. Reading through the rest of the info the only thing that stood out was “Exclusive NUTRILITE® C-Lenium Blend provides antioxidant protection from harmful free radicals generated by intense exercise”.

Was that the Nutrilite Difference? I don’t know. It sounds good – but is it worth paying more than double the price compared to an Iron Girl energy bar? I don’t know that either. If anyone from Nutrilite or Amway, or an IBO, can help explain it, I’d love more information. What I do know is that it’s unlikely that many triathletes are going to be turned on to Nutrilite by this review. All the information they get is from the magazine, and then the Nutrilite Health and Amway websites. That tells them these products are expensive, and out of stock.

Is that what you want from being highlighted in a magazine?

UPDATE: Even worse, anyone checking out this product after September 2 (two days from now), will see another price – $22.65 for a box of 9, or $2.52/bar. So a potential customer checking out the product is going to get yet another “sticker shock”. Unless there’s something incredibly special about this product – and if there is, both IBOs and customers need to be educated about it, the only way I can see this being successfully marketed to customers is by IBOs putting big discounts on the suggested retail price. Even at base IBO price the bars are still significantly more expensive than the competitors. At least though they’d be marketable. Is Amway US slipping back to the old habit of targeting product pricing at IBOs instead of customers?