MLM & Elevacity

Part
01
of two
Part
01

MLM & Elevacity - Marketing Structure

Elevacity operates a 12-rank affiliate MLM scheme where Elepreneur affiliates can gain Check Match Bonus and other bonuses based on an unilevel compensation structure as they level up in rank. After a thorough research into Elevacity's MLM scheme and how it correlates with MLM and the pyramid scheme in general, its financial performance, testimonies, and possibilities, research has shown that Elevacity appears to walk a thin line between the a 'true' MLM scheme and the illegal pyramid scheme. Therefore, caution should be applied in dealing with them.

METHODOLOGY

To address this request, we searched through the official website of Elevacity. However, we found no information on its multi-level marketing scheme (MLM). We only discovered that one would have to be referred by an "Elepreneur" to gain access into its marketing scheme. Further search into Elepreneur showed that it is Elevacity's marketing outlet/platform. Research into Elepreneur's website revealed no information on its MLM unless one logs in or signs up; hence, we had to use other third-party industry and review sites to provide an overview of Elevacity's/Elepreneur's MLM scheme. Also, for the purposes of this research, Elevacity and Elepreneur as a brand are used interchangeably; however, they all refer to Elevacity.

To identify the problems of Elevacity's MLM, we searched through survey and review sites that focus on businesses and marketplaces such as Better Business Bureau. We also searched media reports to see what they are saying about Elevacity's MLM structure. However, we could not find much on this regard. Hence, we expanded to the general MLM space to identify some problems that may be peculiar to Elevacity's MLM structure since it is assumed that all MLM structure would always have a pyramidal basis. The difference would only be the reward size and benefits.

Lastly, based on the problems we have established on Elvacity's MLM scheme and the general problems with MLM, we drew inferences and addressed the notion if Elevacity is a sham or not. Note that we have used data beyond 24 months because of their relevance in addressing some parts of this request.

ELEVACITY/ELEPRENEUR: MLM OVERVIEW

Elevacity operates its MLM scheme through Elepreneur where it organizes and manages its salesforce and network of marketers. Just like every other MLMs, Elevacity's MLM scheme involves an Elepreneur and his/her affiliates or downline. Elepreneurs earn money by driving retail sales of Elevacity's range of health products and as usual, compensation/commission from the recruitment of affiliates into the network. On average, a retail customer can earn 25%-45% on sales from personal inventory.

  • Joining Elepreneur:
To join the network, new affiliates are required to pay a basic affiliate membership of $49 annually or they can opt for a one-time purchase with an 'enrollment pack,' which ranges from $249 to $999. There is also a $40 mandatory monthly autoship fee that Elepreneurs must pay to be eligible to get their benefits.

  • Elepreneurs Affiliate Ranks:
According to reports from BehindMLM, Elepreneur's MLM features 12 affiliate ranks and each rank has a specific sales volume its downline is required to generate monthly for an affiliate to level up. This is called 'group volume' (GV) which includes an affiliate's personal volume (PV) and his/her affiliate's/organizational volume (OV) in an affiliate's downline. These parameters mostly determine how much an Elepreneur is compensated. The ranks are as follows:

  • Star — sign up as an Elepreneur's affiliate
  • Bronze — generate 2,500 GV a month
  • Silver — generate 5,000 GV a month
  • Gold — generate 10,000 GV a month
  • Platinum — generate 20,000 GV a month
  • Diamond — generate 40,000 GV a month

  • Check Match Bonus:
When an Elepreneur recruits a new affiliate, they earn a 'Check Match Bonus' of 22% on the earnings of the recruit. On the second recruitment, the Check Match Bonus rises to 44%, to 66% on the third recruit, to 88% on the fourth, and so on.

  • Infinity Bonus:
In addition to the Check Match Bonus, Eleprenuers who recruit at least three affiliates automatically unlock an Infinity Bonus, "a 20% match on sales volume generated by the two highest performing affiliates (out of 3 affiliates per group level) of each recruited affiliate." This bonus also works on an unilevel compensation structure of 3s — an Elepreneur affiliate is placed at the top of an unilevel team. Then, each recruited affiliate is placed directly under him/her as level 1. If each level 1 affiliate recruits a new affiliate, the recruit is placed directly under the level 1 affiliate, and becomes the level 2 of the initial/top Elepreneur affiliate. This continues down the line in that order. Thus, each affiliate sub level can be grouped as three affiliates. This infographic describes these levels in detail. With this structure, "an Elepreneur's affiliate earns a 20% match on every unilevel team level (top two affiliates on each level) as their personally recruited affiliate’s downline grow deeper."

Other Bonuses:
Other bonuses include the E-Infinity Team Commissions, Lifestyle Bonus, Global Bonus Pool, and SHRV Stock Rewards. The E-Infinity Team Commissions is a 22% bonus paid out to via the unilevel team when earnings are not paid either through the Check Match Bonus or Infinity Bonus. The lifestyle Bonus is meant for Gold and other highly ranked Elepreneurs. While these Elepreneurs can earn between $500 to $100,000 in bonuses, they must meet an additional personal volume (PV) of 80. The Global Bonus Pool is generated from 4% of the company-wide sales volume. This share is split into five groups and distributed among affiliates with Royal Black Diamond ranks and above. The SHRV Stock Rewards rewards Elepreneurs with stocks with the parent company, Sharing Services, Inc., based on affiliates' rank.

PROBLEMS OF ELEVACITY: A GENERAL PERSPECTIVE

According to complaints filed on BBB by Elepreneurs, a good number of them were on the mandatory monthly autoship fee that affiliates must pay to be eligible to receive benefits. To corroborate this information, BehindMLM revealed that during sign up, Affiliates are required to pay $40 or more for a monthly autoship order or they cannot progress. This is a 'pay-to-play' red flag that points towards affiliate recruitment, which is the only way Elepreneur affiliates can improve on "their effective commission rate." These commissions from are then paid to each Elepreneur affiliate with viable downlines.

Furthermore, as revealed by Behind MLM, a careful analysis of Elepreneur's compensation plan shows that compensations are pivoted around volume requirements; there are no retail requirements tied to the compensation plan. This also shows an inclination towards affiliate recruitment. In plain description, "customers sign up as an Elepreneur's affiliate, establish a monthly autoship order and then get paid to recruit others who do the same." To better understand how these two issues raised above 'could' be considered problems, we take a high-level look at the similarities and differences between multi-level marketing and the much-considered illegal pyramid scheme and its problems.

Essentially, the only difference between the MLM and pyramid scheme is that the pyramid scheme is illegal. However, both leverage a limitless system of networks to drive earning opportunities; "they depend on recruiting people to become distributors of a product or service." A pyramid scheme has all the features of an MLM; however, the key difference is in the way they operate. While the core aim of MLM is to leverage the vast network of distributors to move product, it is not so for the pyramid scheme. It's usually only to pay in a compulsory fee, start the recruiting round, and then earn money from downline payments. According to the US Federal Trade Commission (FTC), an MLM scheme has a real product to market and if a distributor earns primarily from their sales to the public, it is legitimate. However, if a distributor earns primarily based on the number recruits and sales to them, it is probably a pyramid scheme.

Another aspect of the MLM and pyramid scheme analysis is that even pyramid schemes now pretend that they are product-focused, but this a smokescreen to cover the very scheme they operate. This is revealed by various articles from authoritative sources like the US FTC. This way, we find that there is a thin line between MLM and the pyramid scheme, with almost little or no differentiating factor. However, there are some checklists provided by reputable experts in the MLM/pyramid scheme industry, such as Robert Fitzpatrick, to help identify pyramid schemes. Of these checklist items, the most important questions include:

  • "Do you have to pay for your sales job?"
  • "Is it really about selling?"
  • "Is it actually about recruiting?"

Similarly, another checklist published by The Balance Small Business puts these questions forward succinctly:


An attempt to answer these questions for Elevacity based on the two issues already highlighted above (a mandatory monthly autoship order and the seaming emphasis on affiliate recruitment), we can infer that the idea of a mandatory monthly autoship order and major focus on affiliate recruitment are problems in Elevacity's MLM structure because they make the company appear to be operating a pyramid scheme rather than a 'true' MLM scheme. This issue is probably what led to an FBI investigation of Herbalife and its MLM operations. More so, experts like Robert Fitzpatrick and Bill Ackman maintained that Herbalife operated on a pyramidal scheme, and as such, was considered fraudulent.

THE BIGGEST MLM PROBLEM

Elevacity's MLM structure, just like every other MLM structure, has one big problem — the problem of market saturation leading to an unsustainable business. In the real world, it's a common practice not to overhire or oversupply a market. Demand and supply must always be kept in check. However, the MLM space is highly unregulated with no control. Even Fitzpatrick argued that the last thing a marketer wants is to find his/her next door neighbor marketing the same product. As such, the "MLM is set up by design to blindly go past the saturation point and keep on going." "It will grow till it collapses under its own weight." Supply keeps on rising until the market is saturated and when this happens, inevitable losses set in and companies fold.

IS ELEVACITY A SHAM?

The fact remains that Elevacity is gaining traction financially. After all, it is leveraging an almost limitless network of affiliate system to drive sales. Therefore, it is easy to infer that its MLM scheme is functioning optimally. To back this up, there are testimonies of Elepreneurs who are leveling up the affiliate ranking system. A typical example was found in a report published by on February 2019, by Business For Home, the report showed that top leader Tommy Wyatt leveled up to the Black Diamond rank at Elepreneur. Nevertheless, caution must be applied with Elevacity just like with all MLM schemes. Its scheme, while prosperous at the moment, may not always remain the same due to the following reasons:

  • Because research has shown that Elevacity's MLM structure has inherent problems that suggest that it is operating a pyramid scheme, it may only take a while for critics set in or even involve law enforcement agencies. "Since 1996, the Federal Trade Commission has filed 26 pyramid scheme cases against MLM companies, each time emphasizing false earnings representations and other deceptive marketing." In all these cases, MLM companies lost.
  • Because research has shown an inherent problem with the MLM scheme, there's a chance the business may not be sustainable in the near future due to possible saturation. More so, if it truly operates a pyramid scheme (one that encourages customer recruitment to gain benefits), then it is going to drive the market saturation process even faster than normal, as more and more affiliates troop into the program.

In conclusion, based on financial reports, analysis of its MLM scheme (compensation plan) with respect to the general idea of the scheme and testimonials, the capacity to make money through Elevacity's MLM scheme is real, though it is dependent on factors such as affiliate rank and general downline position. However, there are potential issues surrounding the whole scheme, and as such, one should approach them with caution.
Part
02
of two
Part
02

MLM & Elevacity - Consumer Perceptions

Consumer perceptions and opinions about Elevacity’s Smart Coffee are mostly positive and many consumers report benefits such as weight loss, increased energy and focus. However, there is a significant number of negative comments. Below, you will find more details about this.

Methodology

To analyze consumer perceptions and opinions about Elevacity Coffee, we looked through dozens of consumer reviews on Amazon, eBay, YouTube, and Facebook. We focused only on reviews from customers and avoided reviews by affiliates or people that seem to be marketing the product to avoid bias. We have reported our findings based on the consumer reviews we came across about the product below.

Consumer Perception of Elevacity Smart Coffee

Consumer opinions and perceptions of Smart Coffee are diverse, so we have attempted to categorize them into various headings to help highlight what most of the perceptions are.

Positive Only

Dozens of consumers love Elevacity Smart Coffee and are happy about the effects. There are no "buts" or negatives in such comments and consumers are thankful. Those who were full of praise were happy because of the weight loss effect or/and because of the energy it gives them. A few samples of such comments are as follows:
"It actually works I lost 19 pounds so far !!!"

"I love this coffee and it gives me so much energy, keeps me full and it does give you a happy feeling! I give this over five stars!"

"My wife loves this coffee! It gives her a boost of energy and curbs her appetite which was just what she was looking for."

"I love Elevate Smart Coffee. I lost weight and it curves my appetite. Soooo much energy, happiness and mental clarity. I'm hooked"

"I drink too much coffee. I had one of these today. I only had one 12 ounce coffee after drinking this. I typically drink coffee most of the day. I'm sold. This is the real deal. After drinking one packet, I've been alert and on task all day. Not to mention my appetite has been suppressed!"

"I drink the choclevate because I am not a coffee drinker. I mix it with my keurig got chocolate every morning. I am stunned with the energy, focus and curbed appetite results! There is no way I could start my mornings without it anymore. My husband uses the smart coffee, he mixes it in with his regular coffee each morning. The energy he gets is amazing for the work he does. We will be lifelong customers!"

Positive but with a Complaint

There are also dozens of comment that are positive overall, but with some complaint or a negative that they didn't like. Most of such complaints were about the price of the coffee, while a few stated that they don't like the after-taste even though they like the coffee. A few also complained of headache, tremors, or stomach upsets after taking the product even though they love the product. We have provided some samples of such comments below:

"I just started taking it 4 days. I do feel more energetic and have better focus. They only thing I have noticed I wake up with a headache. I don’t know if that has anything to do with it. I will stop it for a few days and see if my morning headache stops. Because I do like it."

"This product works very well for the first month or so as an appetite suppressant. The effects do wear off though so it may require taking breaks to retain effectiveness. It also gives me extreme tremors but I am the only one I know that has had that side effect."

"I absolutely love the product but it is very expensive. Arrived in a timely manner."

"This product did keep me awake and energized but the weight loss was not experienced. Didn’t meet expectations"

"I just really like this product. I just wish it wasn't so expensive because I would put more of it in my coffee."

"Its expensive and taste very biter but it is the best pick me up and it helps me get through my day, it makes my skin more clear too."

"It does suppress my appetite, but it makes me super jittery and I have yet to lose any weight."

Our research team found an interesting conversation around the price of the product. A consumer complained that the product was pricey but when another consumer explained that the price is actually cheaper than buying regular coffee daily and broke down the maths, the consumer that initially complained about the price agreed it was cheaper. This suggests that more consumers would feel more satisfied with their purchase and complain less about the price if it's compared to purchasing regular coffee daily. The conversation has been highlighted below:

First Consumer (Mona): "I think it's absolutely ridiculous that the bag of individual coffees is only 24 days worth. Why didn't they at least make it 30 (a month worth)?? They want you to auto ship monthly but they don't even send you a months worth of product. And $60 for 24 packets is a bit much (and they pretty much say you "should" take the pills too for "best results"..so altogether it's like $100 for less than a month of product if you buy the pills and coffee together (even more of you buy separately)"
Second Consumer (Jonson): "Good question about the 24 pack vs. 30 although it could be a production cost factor??? But as for the pricing, IF, and that is a big if, you drink specialty coffee daily i.e. any at Starbucks or the like, the per cup price is around $4 if not more and $4 x 24 (days) = $96...and that would be without the suggested accompanying pills. I am not a distributor so I'm not pushing it one way or other...just tried it the last couple of days...just commenting on the investment aspect. The best to you Mona."
First Consumer (Mona) "@Celeste Jonson oh ya, that's a great point, about the coffee pricing. I never even considered that. The coffee I drink every day is about $3 so if I drank this instead it would cost less still:) ty"

The majority of the comments are either completely positive or mostly positive. On Amazon, 68% of the comments are positive with five (61%) and four (7%) stars ratings. This means that the majority of consumers perceive the product to be effective and useful.

Negative perception

Some consumers do not feel Elevacity's Smart Coffee is worth it. On Amazon, 24% of consumers that reviewed the product rated it one (16%) or two stars (8%). Consumers who rated the product low complained mostly that the product didn't deliver on its promise, while others reported a negative physiological effect such as headache, tremor, stomach upset, after taking the product. The negative perceptions of the company also stems from complaints from consumers about difficulty canceling subscriptions for the product and poor customer service. We have provided some examples of such negative comments below:

"Tastes disgusting. Have used almost the entire bag and haven’t lost a pound. Leaves you feeling good but then in a few hours I have found myself crashing and getting extremely irritable. I would not recommend."

"A lot of coworkers tried it and loved, so I bought 2 sample packs. Glad that is all I bought. Tried the 1st on at work and it made me dizzy. Nauseous, sick to stomach all day. Thought it was a fluke. But tried the 2nd pack a few days later at home and it made me feel the same way. I can't live this way. It takes your appetite away because it makes you feel sick. I felt like I wanted to puke for hours, all evening. I do not usually have a problem with taking anything, so this was a surprise. I drink coffee every day. This also tastes horrible."

"I drink coffee daily, have had energy drinks......NEVER have I EVER felt so horrible. I was told to only take a half does in my coffee to start. BIG MISTAKE. I am feeling so bad I started looking up reviews and side effects. Found out it is unadvised to add this product to any other caffeine product. It is somewhat scary how uncomfortable this makes you feel. It is beyond being jittery....and I only took a half dose. I would hate to think if I took a whole dose in my coffee what my side effects would be. I can not believe how stupid I was not to look this product up before I ingested it. I understand certain ingredients affect individuals differently, but this product is just scary....Talk to your doctor before taking it. Wow! Never again."

"Tastes terrible, left me feeling jittery and nauseous most of the day. I thought maybe it was a fluke, so tried just half a packet the next day & felt exactly same. The "energy" is just from added caffeine, which I definitely don't want. Sorry to report that, for me, it's not a magical miracle weight loss and energy potion. If your friends are raving about this stuff on social media, its only because they're trying to make a buck selling MLM product. Anyone wants to buy the rest of this bag?"

"I ordered directly from Elevacity 2 months worth with the pills and did the "dose" combination as they call it. The 1st day I felt good with lots of energy. But it did nothing for as far as boosting my mood, suppressing appetite and all the other claims this stuff has. I took a few days off from taking and started taking it again and again the 1st day I did have more energy but 2nd day and so on nothing to brag about like it stopped working. I also gained about 5 pounds while taking this. Many days by early afternoon I struggled to stay awake at work...like major struggle. Several times when I got home from work at 5:30pm I would crash in the recliner zapped of all energy. I drink lots of water normally like I was advised. I just tried the energy patches from the company too and didn't notice a thing as far as extra energy. Congrats to those who have had life changing experiences with this product but for me it is not worth the $$$$. I really had high hopes about this stuff."

"They will not cancel my account and issue refunds. It is impossible to reach them by phone or chat although an email stated they canceled my acct. I have made 5 or 6 attempts to cancel my account! Including receiving an email from customer support stating that my account has been canceled, the rep attempting to help me cancel the account, etc., etc. It is impossible to get through to them by phone! The chat doesn't work! I have spent over $40 in shipping fees returning their product that I canceled!!!!!!!!!!! I want reimbursement for all orders and shipping fees!!!!"
Sources
Sources

From Part 01
Quotes
  • "Elepreneur, LLC provides marketing and sales services for Elevacity’s products. The company was founded in 2017 and is based in Plano, Texas. Elepreneur, LLC operates as a subsidiary of Sharing Services, Inc."
Quotes
  • "Granted it’s possible to generate commissionable sales volume via retail sales, the Elepreneurs compensation plan primarily focuses on affiliate recruitment."
Quotes
  • "The company affords partners three ways to earn money; by acquiring customers, becoming a team leader and developing team leaders in turn. Your hard work and success will be directly proportional to your earnings. What this means is that each partner level will earn points in accordance with their personal volume (PV) sales and Organisational sales (OV)."
  • "You also make income through a 12 point customer program. When you are a preferred customer (PC), you monthly earn $700 bonus. When you refer 3 PCs within your first 60 days with a minimum order of 32 monthly, you will be paid $50 and also be given an Elevate stick bag. When you refer 5 PCs who each have a volume of 32 on EasyShip, you will get $150 and 2 Elevate bags. When 5 PCs are brought in with at least 32 points on EasyShip, you earn $500 and 5 Elevate stick bags."
Quotes
  • "The big difference between MLM and a pyramid scheme is in the way the business operates. The entire purpose of a pyramid scheme is to get your money and then use you to recruit other suckers (ahem - distributors)."
Quotes
  • "Critics say that the multilevel marketing model is unsustainable. If you recruit all of your friends and neighbors to sell the same product, they ask, won't you eventually run out of customers? "If I wanted to sell a product, the last thing I want is my next door neighbor to sell the same product," said FitzPatrick. Turnover rates are high. But as salespeople fail, more are recruited to take their place."
Quotes
  • "Herbalife distributors can make money just by selling the company’s products, but they must purchase and sell thousands of dollars' worth of the products before they realize a profit. Critics allege that the company's top recruiters receive the vast majority of profits."
Quotes
  • "Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s probably not. It could be a pyramid scheme."