Tuesday, January 26, 2010

Reader Feedback: Am I wrong about monavie?

I received an email from “Bruce” stating the following:

“I don't know where the blogger got their info but Dallin Larsen is still the president of the company. He didn't go anywhere. But the real question is, are you interested in making some extra money or not? If not, that's fine. If so, pay attention and I'll show you how to do it!"

I like this kind of feedback. I think I am decent at admitting my mistakes and adapting as more evidence comes out. Bruce is sort of right. In trying to simplify a long company history, I made a misstatement. I said that Dallin left the company. This is incorrect and unclear. What I should have said is that he sold ownership interest in the company he started (offloading the risk to other people). Unfortunately, Bruce is wrong about everything else. This is especially sad because Bruce works for monavie! Dallin Larsen is NOT the president. He is the CEO. Dell Brown is the president. It is very interesting that of all the concerns I raised about monavie, Bruce says the only question is whether or not I want to make money. “Who cares if the product is a sham, let's dishonestly market it and dupe people out of their money!” Bruce, I would bet just about anything that you have never made a dime from selling monavie.

I should also point out that Dallin Larsen also started the company Dynamic Essentials which was shut down by the FDA for… (you guessed it) making fraudulent medical claims regarding their products. (The company has since been re-formed under a slightly different name)

I found a video on youtube of a monavie distributor claiming that the not-so-super juice cures cancer. With any luck, the video has been taken down because they died of cancer (oh sweet ironic justice!). I suppose it’s more likely that the government got involved since they were making unsubstantiated (and stupid) medical claims. The FDA has warned monavie about saying idiotic things on the web, and it appears the company is being careful. However, I personally heard a neighbor telling falsehoods about the juice just a few weeks ago, so the message may not have gotten to the distributors.

Deceptions and sneakiness

I was told by another person that TONS of distributors make money. They pointed out that monavie posts something called an Income Disclosure Document that describes the average earnings of their distributors. www.monavie.com/ids In mid year 2009, the document shows that the average person gets $23-65k per check. 65k sounds pretty good! Was I wrong?

First of all, look at the % column and the annualized check column. Now recall that these people are buying about $2000 per year of product for themselves. That means that 85% of their distributors are losing money every year!

Secondly, if you read the fine print, in order to be counted in these averages you have to have recruited at least one person AND earned a bonus AND been active in the previous 8 weeks. So their “averages” don’t even include all their employees!

Thirdly, the government requires companies like this to file a report on distributor earnings. For monavie it shows that 90% of their “commissions” were people getting sales discounts on their own product. (In other words, they are counting products that people sell to themselves in their sales numbers).

Fourthly, since their impressive income numbers only count people getting commissions, and only 1% of distributors earn commissions (Newsweek), this means that only .85% of distributors make money! (So sorry Bruce)

What’s the Skinny?

The Income Disclosure Statement is for marketing purposes. They have left out the information that makes their numbers look bad. It exists to convince people who are bad at math that they should spend $2,000 per year for a juice which seems to have no effect other than to make people gullible.

Ridiculous claims of monavie saving people from outlandish diseases and situations are everywhere and they are FALSE. Maybe I’m crazy for thinking this, but not everything we hear is true.

The company is a house of cards. It will look sweet and tempting while being built, but eventually it WILL collapse. (That is unless they make some major changes)

Skeptical thinking means we follow the evidence wherever it leads (even if we don’t like it). It should not be confused with cynicism which is only following the contrary evidence . I would bet that most “magical” juice distributors are not dishonest. They may even think they are doing people a favor by selling to them. Do them a favor by helping them to stop drinking the kool-aid and think more skeptically.


Stephen said...

Take that, pushy sales people!

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