My good friend Ty Tribble posted the following on his blog recently. Unfortunate fact of life in the MLM world. I hope you all read very closely … and take the message to heart.
I get the sense that the $250 autoship and the "binary creep" is catching up to the once high flying MonaVie. Binary creep has to do with the company getting in a position that they are paying out too much money so they must do a couple of things to stop the bleeding. According to MLM compensation plan expert Rod Cook, companies like MonaVie sometimes have the following issues:
Everybody in the Binary has to be penalized by "Pooling." That means that the total allowable % of payout is put into a pool and the number of distributors generating matching commission pay points are divided into it. That drops the amount of everybody's checks and usually starts the decline of the company.
The products or services sold in the Binary have to have a CV (commissionable volume) reduction put on them. Other wise if a product sold for $20 in a new Binary that amount would be put into the Binary for payouts. After CV (sometimes called BV or Bonus Volume) the product still sells for $20 put only $15 goes into the Binary for pay purposes.
I think the MonaVie Energy Drink pays out about 50% CV on the dollar....that is approaching Amway numbers.
When these things start to take place, some leaders get restless. There teams are shrinking and no matter how hard they work, the team can't be replaced as fast as they are quitting.
Let's look at some of the evidence suggesting that MonaVie is sliding...
1. Black Diamonds are leaving. I'm not going to go into who is leaving and where they went, (perhaps another post), but they are leaving.
2. The number of new rank advancements in November was tiny when you consider the sheer numbers of MonaVie reps.
3. MonaVie never hit $1 Billion in sales in 2008 like they talked about. The sales were big, over $800 million but I haven't heard a whisper about 2009 sales. I suspect that those will not be announced.
I will be posting an article about the Binary compensation plan soon and one of the biggest points in the article is the fact that you can't cash 100 people at the bank. What I mean by that is the binary plan can lead to early growth because Network Marketers get excited about people being placed on "their team". However, those people very rarely lead to income and over time the luster of having a team will fade when the $8 a month income gets compared with the $250 autoship and another $100 in tools.
