Market America’s CEO is getting rich, but are their consultants? (review)

Market America does a great job of combing two of the worst MLM types for double spammy, scammy goodness: product brokerage and internet marketing.

Meanwhile, their CEO is living lavishly at yacht parties in Miami and penthouses in NYC. Have I been involved?

This video explains everything:

Make sense? Either way, here’s the full review on Market America.

Overview

Market America was founded in 1992 by JR and Loren Ridinger in Greensboro, NC. JR Ridinger was a former top Amway distributor, and Loren Ridinger is his wife.

They got off to a rocky start. Market America didn’t start taking off for nearly a decade, perhaps due to charges from the SEC in 1999 regarding violations of federal securities laws.

Like so many MLMs that go public and then run into problems with the SEC for sketchy behavior, Market America then decided to go private in 2001. By 2002, they were expanding internationally into Australia. Soon after they moved into Hong Kong, the Philippines, Mexico, and the UK.

As of 2011, they had 650 full-time employees, and they had really started to pick up some buzz.

In 2010, they acquired Shop.com, an online comparison shopping engine that touts some of the biggest former investors in the world, including Amazon, Yahoo, and Bill Gates himself. [1]

The same year, they reported $393 million in revenue, and they unveiled two new celebrity spokespeople: Scottie Pippen would rep their Prime Joint Support Formula by Isotonix, and Kim Kardashian, the physical definition of celebrity, made a guest appearance at their Annual International Convention to tout their Cashback program (lol at the idea that Kim K has any need for a Cashback program). [2]

By 2013, they were ranked 27^th on the DSN’s Global 100. [3]

If JR and Loren Ridinger are any indicator of the company’s success, then it’s doing well. The couple is loaded – their laundry list of assets reads like a rap song by Rick Ross. They are multimillionaires with a 35,000 square foot mansion in Miami’s Biscayne Bay, a 150-square foot yacht on their dock, celebrity friends, and a $25 million condo in Manhattan. They’re 93% owners of what is now one of the top MLMs in the world. [4]

But you know as well as I do – a rich CEO does not a rich distributor make.

How much does Market America cost?

It costs $399 for an UnFranchise Business Owner Startup Kit, and that’s not including monthly fees.

You also have to meet a monthly minimum of $200 in personal sales to qualify for commissions.

Products

The Market America store is bigger than a Wal-Mart…literally. I’m not going to sit here and list out everything they sell, because they’ve got over 3,000 proprietary products.

Their products include…everything. Health tonics, household cleaners, makeup, weight-loss and nutritional supplements, fitness programs, gardening products…seriously, everything.

In addition to having their own proprietary products, Ridinger made the decision to purchase Shop.com, a website that sells all kinds of well-known name brands at cheaper prices, in order to turn the company into the next Amazon.com.

The most popular product is the one they got Scottie Pippen to rep back in 2010 – Isotonix, a line of nutritional supplements. They go for $70 a bottle. You could find supplements with the same ingredients at your local drugstore for about $20 a bottle, but those don’t have an NBA star’s face on them.

Opportunity

Commission in the Market America compensation plan is built around a binary system, and you have to build out the two sides of your downline evenly. Actually, JR Ridinger claims that Market America is the inventor of the binary compensation plan, and that hundreds of MLMs have tried to copy them but simply can’t beat their compensation.

There are a few ways to earn with this company.

Gross Retail Profit

Distributors earn retail profit off their personal sales, and exact amounts vary by product item.

There are two ways to earn this commission. Distributors can either carry inventory purchased at wholesale and sell it themselves at retail, or they can build up a network of preferred customers who continually order from them online each month on a monthly auto-ship program. Distributors can make up to 50% on retail profit.

Cashback Commission

This is cashback that a distributor makes on both their own personal purchases as well as their customers’s purchases. Cashback only comes from eligible products on Shop.com, and they have to be Market America-branded products, but it’s possible to earn up to 35% cashback on your own purchases and .5% cashback on the purchases of every customer you refer.

Team Earnings

If a distributor has developed a team of representatives that is equally distributed between right and left legs, they qualify for team commissions. Team commissions are paid out weekly based on a distributor’s weaker leg.

Distributors are capped at $3,600 in team commissions per week.

The company has generated over $2 billion in commissions and retail profits since opening up shop in 1992.

Recap

This company is booming, and I don’t think it’s going anywhere. The Ridingers have certainly made a name for themselves.

But despite all their claims of wanting to “help people achieve their dreams”, they don’t seem to be making a name, or a paycheck, for most of their distributors. According to their career manual, the average Market America distributor makes under $1,000…per year.

That’s wayyy below poverty level income…in a third-world country.

If you like automated ways to build passive income, there are certainly better ways.

(and you can trash those old MLM habits, too)

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