The Company: Market America
Founder/ CEO: JR Ridinger
Startup Cost: $399+
This company sells a broad range of products online and allows distributors to make money promoting these products or by building their downline. There is potential to make a solid income with this but there are drawbacks to consider before signing up as I explain.
The company was founded by JR Ridinger in 1992 as a "product brokerage and Internet marketing company designed to shift the economic paradigm". Apparently, the company helps everyday people create an income from home in way a lucrative and achievable way. Sounds good.
It turns out JR has been in the network marketing game for many years and before this he was a top recruiter in Amway. He definitely knows what he is doing when it comes to network marketing.
What Is Market America?
They sell a range of their own products and products from other companies on their online store. They also provide distributors with an opportunity to promote these products, along with the ability to build a sales team under them.
There seems to be some confusion about the underlying business model floating around so I wanted to clear this up. Is this really a multi level marketing company? Yes. It most certainly is. Why the confusion?
You don't get paid on 'levels' in your downline since they use a different downline structure to a lot of mlm companies and perhaps they are trying to distance themselves from being an mlm since it's a somewhat controversial model. Whatever, this IS an mlm company. Plain and simple.
There is also nothing wrong with this, since mlm itself is not a scam.
The Product Range
The products are sold through a website the company owns called Shop.com which houses a large range of products. Anything from cloths, electronics and groceries, it's all there. Why would anyone want to shop at this store though compared with others?
On one hand they have their own branded products, one of these brands is called Isotonix which is health and wellness product. Like most products in the market, some love them and some hate them. I'm no expert in health and nutrition but I did some research to help you figure out what these are all about.
One article I found was published by a popular supplement review site called DietSpotlight.com who had this to say:
Some of the Isotonix products are well-researched and proven to help with weight-loss. Unfortunately these same ingredients are in the supplements that you can find at a fraction of the cost on the shelves in any grocery or drug store. These do have the benefit of taking effect faster, but that benefit isn’t worth paying double for.
I haven't used them myself but from what I can see the products are good, but on the high priced side of the spectrum. As mentioned, they sell popular brands as well including Colgate, Nike, Apple and pretty much every brand within their categories you could think of. This is the first time I have seen an mlm that allows distributors to sell such well known brands so I was interested to see how this actually worked.
Turns out they are affiliates for other online stores such as Overstock and have various deals with other stores to some extent. From what I could see, there are 3 key advantages to using their website to buy these products:
- They have a 'deals' page which does contain a lot of deals, how good varies
- The bring prices from other websites together for you to compare which makes it easier
- You get a certain amount of cash back on each product
I guess if the deals are good for whatever you are looking to buy then it's worth using the store, the comparison element is also kind of cool. But what about this 'cash back' thing. Is it legit?
Cash Back On Purchases Explained
According to the terms and conditions page, a first time customer will receive $5 cash back on their next order if they spend $25 or more. You must register yourself into the cash back program for this to take effect which also gives you up to 2% cash back on subsequent purchases and 0.5% on whatever your friends buy.
When you register for this program you are actually registering yourself as a 'preferred customer' which is free and the only thing to maintain this is to make one qualify8ing purchase every 365 days. Seems fair. In order to receive any of these cash back offers however, they must be 'qualifying' purchases. I'm not sure what this actually means since it wasn't very clear in the terms . This may just mean purchases over $25 or something of that nature but I can't say for sure so this is probably worth investigating.
I think as long as you are not paying more for products than other online stores, who doesn't want 2% cash back? You will be 'presented' with the opportunity from your sponsor though which will turn some customers off understandably, but this is one of the ways the company brings in new recruits so there's no getting around it.
The 'UnFranchise' Business Opportunity
The idea behind this model is to sign up, get yourself qualified and start sending people to the Store through your affiliate link. When they buy, you get a commission. The main way you'll be earning is through referring people you know to join your team so they can do the same. Make no mistake here.
The Compensation Plan
The basic way you can earn with this company is with retail sales of between 30-50% on anything you sell thorough your replicated store. The other way is by building your downline team as I explain below.
This company uses a binary based downline system to determine who goes where in your downline. Basically, you can only ever have 2 people under you (left and right team) and the same goes for everyone you refer and who they refer, infinitely deep.
It does get a fair bit more involved than this but this is the basic premise of your downline.
Important Concepts To Understand
Before I get knee deep trying to explain this, it is important you understand some basic concepts first, it will make a lot more sense this way.
Business Volume (BV) & Internet Business Volume (IBV)
Every product comes with an attached amount of volume which is what your commissions are going to be based on. There are 2 main types of volume you can earn.
Business Volume (BV): sales volume related to selling the companies own products.
Internet Business Volume (IBV): sales volume related to partner products.
You would need to refer to their current price list to figure out how many points are allocated for each product, but you don't need to know the individual values to understand the concept.
The Business Development Centre
All of the BV and IBV you earn is attributed to your 'Business Development Centre' or BDC for short. This is just your downline organisation, capped at a set amount of income potential.
Each time you get 1200 BV in BOTH your left and your right teams, you will earn 1 'commission cycle' which pays out $300. Each BDC is capable of earning 3 standard cycles (3x $300) and 1 last cycle paying out double (1 x $600). This gives you a total of $1500 for BV related sales volume which is the max it can make. The exact same rule applies to IBV which means the total earning capacity of your BDC is $3000 per week.
However, you will earn a bonus of $600 if you max out your BDC and two BDC's somewhere in your downline organisation. This brings the total earning capacity of each BDC to $3,600 per week.
Needless to say, this is pretty elaborate and confusing. It may be worth watching the video the company provides below as I did find this helpful in understanding the concept. It's also a sales pitch so take it with a grain of salt.
But Wait, There's More
If you thought you were done with these confusing little BDC's, think again. The way I've explained above is actually the simplified version. For real? Yep.
I have only showed you what it looks like with 1 BDC, but when you sign up you actually get 3 of these.
I'm not even sure I understand this fully, but from what I can gather you can earn a maximum of $10,800 from these 3 BDC's combined.
All of the volume earned within you downline (BV and IBV) travels upwards until all of your BDC's get credited. So whatever volume BDC2 and BDC3 earns, your 1st BDC will also earn. Again, I could be wrong here but this is my understanding.
Once you max out all 3 BDC's you are eligible to open up as many additional BDC's as you want within the very same downline. So the company does not limit your income potential which is cool.
The initial cost to get yourself started is $399 plus tax and shipping. In order to get yourself qualified however, you must accumulate 200 BV worth of volume. I don't have a price list so I can't say for sure, but from what I can gather this is about $100-$200 worth of product purchases yourself or direct sales.
In order to keep your business running, you must have a total of $200 or more worth of personal sales to your customers with no more than $60 coming from products you've purchased for personal use. You must also pay the $99.99 annual renewal fee to stay active. This is pretty reasonable for a network marketing company all things considered.
What I Liked
- Large product range means many different angles/ opportunities to promote this
- Decent income potential for the top recruiters
- Cash back program seems pretty good and may allow reps to promote products effectively
- Pretty good comp plan video on their site
- You can see all of their product retail prices before joining
- BV and IBV carries over each week indefinitely
What I Didn't Like
- Try to distance themselves from being an mlm
- You'll need to build a large team to make this profitable and warm market won't cut it
- Many addittional costs to begin your UnFranchise business properly that are not explained upfront
I think how great this opportunity is comes down to how marketable the products are on the store and your ability to get people to the store. I haven't spent a huge amount of time researching prices but from what I could see, they allow you to promote products that people want and for prices people are happy to pay.
That said, to make this business products means accumulating both BV and IBV, meaning you must sell the partner products which is easy enough, but it also requires promoting their branded products which are more expensive and will be more difficult to sell.
The other thing I want to point out is how you really shouldn't rely on friends and family to build your organisation. Although possible, it is highly unlikely you will build a significant income this way and there really are better ways to go about building your business. I think they provide social media training but I can't say to what extent and the emphasis does appear to be placed on warm market techniques.
Whatever the case, the company has been going strong for almost 25 years so they must be doing something right! It's not my top recommendation, but it's definitely not a scam either, there's no doubt you could make a good income with this if you know how to get people to your store. Whatever you decide, I hope this review was helpful and feel free to chime in below if you have something to share.
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