(Please note: this article contains corrections based on reader comments. Corrections are noted throughout. I welcome feedback if there are further discrepancies.)
I have a friend who has a friend who can NOT stop talking about Plexus on her Facebook page. It’s become a point of fascination to watch her post selfies from vacations and shopping sprees, all based off sales of a very sketchy-looking “pink drink” that we can’t believe anyone would ever buy.
The drink is the latest item on a conveyor-belt of weight loss products, with additional far-fetched claims that it can help ease symptoms of incredibly serious diseases like fibromyalgia, MS, and autism. A quick Google search will tell you that they’ve received a warning from the FDA for failing to register their products as drugs, which you kind of have to do if you’re going to go around telling people you can cure their jock itch. But there are still tons of people out there who will try anything, so their market is secure.
Additionally, Plexus is a multi-level marketing company (MLM), which rewards associates for selling stuff to their friends and then recruiting their friends to sell the stuff, too. Think Amway, but with more risking peoples’ lives.
Here’s the conundrum: friend’s friend (I’ll just call her Plexus Girl) posts photos all the time of fabulous Plexus-sponsored vacations, shopping sprees, and a free Lexus, all in addition to her amazing earnings as a Plexus Ambassador, which she claims (on Facebook) is around $400,000 year. The combined value of all of that is at least a half million. This means that even with a commission of 50% she’s pushing out $1,000,000 worth of product, just by selling toxic Kool-Aid to her friends and family, and her percentage from recruits who do the same. Something is fishy. I did some sleuthing. Here is what I learned.
Ambassadors get paid for…recruiting more ambassadors.
This very telling landing page says it all. It’s like if Comcast said their mission was to give rude people the opportunity to provide terrible customer service by creating crap that doesn’t work and losing things. (Is that not their Mission Statement?)
Plexus Girl has bragged about reaching something called Emerald Status, so you know she’s hot stuff. I tried to research how much Plexus product you actually have to sell in order to reach this status, and it turned out it wasn’t that simple. According to this, and this, and I think this, in order to reach Emerald Ambassador you need 6 Personally Sponsored Qualified Ambassadors; 375 Points Outside of Primary Leg; and 1500 Points In Your Organization. Then you earn Number of Levels Paid On 1 – 7 and a Share in the Emerald Pool (which I hope is at least heated).
Let’s break this down.
Annual Membership Current –That’s right, you, too, can sell Pink Drink for the low low price of $34.90. That’s per year. To sell Kool-Aid. Insert Jonestown joke, well, just about anywhere. This entitles you only to buy the products wholesale to keep in stock. If you buy wholesale (instead of customers ordering online) you keep the profit from sales. It was very difficult to confirm this—all of the materials for new “associates” use wording that strongly suggests you can’t earn a single dime unless you take the next step. From the Official Compensation Plan:
Associate – You have paid the Annual Membership but do not have a Backup Order (AutoQualification) order in place. You are entitled to purchase product at wholesale but you cannot participate in any earnings from the Plexus Compensation Plan.
To participate in the Compensation Plan, you must upgrade to Ambassador Status. Which I suppose happens through a rigorous internship and years of training… Nope! Just something called:
Backup Order (AutoQualification) In Place – You must sign up to automatically buy a certain amount of wholesale product per month in order to earn Ambassador status and start actually earning a commission on your sales, which is where “all qualified Ambassadors will earn the majority of their income.” The sign-up kit points out that it’s not “required,” but is helpful if they want to start earning compensation. Like breathing every so often isn’t “required” but is helpful if you want to keep living.
Personally Sponsored, Qualified Ambassadors – An Ambassador is someone who has given Plexus enough money and promises of future money to earn the right to sell their garbage. “Sponsor” is code-word for “recruit and then profit from by scraping off the top of their commissions.” Please do this at least six times.
Points Needed Outside of Primary Leg – My primary leg is my right because it’s my driving leg and also much shapelier. I don’t know how many points are inside.
Legs are based on a binary system that isn’t very exciting. Here’s a decent explanation, if you care. All you need to know is that each Ambassador is allowed multiple legs, with a hierarchy in each one. In each leg you get paid based on specific sales volume, regardless of the level of the person who generated the sales. The reason Plexus Girl needs a certain percentage of sales outside her primary (read: biggest) leg is to prevent that one leg from getting too big and crushing us all. (Please note: this is a correction based on a helpful comment from a reader.)
Okay. What the hell is a Plexus Point and how do I get one?
You earn points based on how many people you recruit, and how many people they recruit, and so on. Each person in your leg has a level as it relates to you. Level one is a direct recruit. Level two is someone they recruit, level three was recruited by the level two person, and so on. Here’s how the points pan out.
Levels 1-3: 5 Points
Level 4: 4 Points
Level 5: 3 Points
Level 6: 2 Points
Level 7: 1 Point
So, in order to earn 1,500 Plexus points, Plexus Girl had to recruit approximately 300 people at a minimum within her network.
So the answer to the question: How many sales does Plexus Girl have to generate in order to earn Emerald Status?
The answer is: zero.
Then why in the world is the company paying for all of these trips and expensive cars? It doesn’t seem very cost-effective, does it?
Well, look at it this way: her 300 recruits each have to sign up for their Auto-Qualification, which is at minimum $100/month. Multiply it by 300 people (minimum), that’s $30,000 per month. Plexus doesn’t actually give a shit if anyone is actually reselling any of it. They only care that their Ambassadors are buying it. The rest is just the icing on the freaky-looking pink cake.
Then you add in the fact that paying people for recruiting in an MLM scheme is illegal, you get the incentives based on vacations and shopping sprees. You also get a percentage of the Emerald Commission Pool, which is worth 3% of the company’s gross product volume, which appears to be around $225,570,000. Three percent of that is $6,767,100, split between this many people:
Divided up, this means your Emerald Ambassador is earning (minimum) ~$67,671 per year. (Correction from previous because math is hard.)
It’s important to understand this: they’re not actually making commission kick-back on the $30,000/month (minimum) their Ambassadors buy, because Plexus wisely implemented a policy that the commission structure doesn’t kick in until after each Ambassador has over $100 in Personal Volume. So if Plexus Girl manages to recruit 300 people who don’t do a single thing after that, Plexus earns $360,000 per year and owes their sales team $67,671, a vacation for the top dog and his/her family ($10,000?), a lease on a Lexus (~$5,100/year), and a shopping spree at Bloomingdale’s ($5,000 is a high estimation). Total cost to Plexus: $87,771.
It’s true that this is only the base amount an Emerald Ambassador earns, and it would increase as Ambassadors start making actual sales and increasing their Personal Volume. Plexus’ earnings would also go up, so it’s an even win-win from there on out, if you consider massive profits by exploiting your Ambassadors a win-win.
Based on what I’ve learned, my guess is that the creators of Plexus don’t give a shit about product. They know they’re toeing the line legally with their claims and they know it will work for a very finite period of time. They also know that their money is in wholesales, because they can make a lot of money from it without having to pay salespeople. This is why they incentivize recruitment over product sales, and why many of the annoying Facebook posts are about how great it is to work for Plexus over how great their products are.
This company does not have long term plans. They’re designed to milk as much profit from their Ambassadors as they can get until someone shuts them down. They’re also banking on the likelihood that any fines related to outrageous and untrue claims won’t be higher than their overall earnings. A fine will be a slap on the wrist, and they’ll walk away with cash in the bank.
So this explains one thing I’ve always wondered: why a friend of mine was once successful enough to earn the pink Mary Kay car (another MLM and confession: I actually use their products) but still couldn’t support her family on her earnings.
In my follow-up article here I get more into how much money a Plexus Ambassador earns if they actually sell the product. It’s a pretty good hate-read.
Melissa Dylan is a writer and MBA who wants to earn a Lexus but doesn’t have any friends.