MLM (multi-level marketing), pyramid schemes and the Sunrider International SCAM (Day 40)
Dawn of the Magical 40
My morning routine was the same as usual, with the exception of a booking I had with Nengi the lead personal trainer from BeFitToday.co.uk. The day I went to Speakers Corner at Marble Arch I met two very interesting people who were offering me two potential avenues to explore opportunities that could well upgrade my detox experience to the next level. The first person was Nengi who was offering one free 1 hour personal training session, and the other was the IBO who was singing the praises of the nutritional benefits of the products he was promoting and the opportunity to generate an income from getting involved with them too. Both follow up events happened to be taking place today – the fortieth day of my detox!
If you’ve read my previous post you will have come across my mother’s practice of repeating certain prayers to 40 days to get a result on the 40th or 41st day, a practice that has variations amongst many cultures including Zoroastrians and Jews. As my detox lasted an additional 2 days, I would say the days to look out for any siginificant changes would be the 40th day, 41st day, 42nd day and 43rd day. Days 40 and 41 (day after the fortieth) because of its prevelance in many mystical traditions. Days 42 (the day my detox actually ended) and 43 (because it was the day after the completion of the actual detox).
My weight, body fat, body water and body muscle readings during the 42 days of this detox and 12 days after completing the detox
When I realised that both appointments happened to be landing on the 40th day of the detox, you can imagine the wonder, curiosity and excitement I was feeling about what could potentially transpire as a result of both meetings. Could these two meetings be a mystical response to my 40 day detox? Could it be a “sign” that they were both doors opening to paths I should walk down to continue on this journey? Were these two synchronistic appointments the Universe responding to me via the Law of Attraction? Was this The Secret at work? Was it God, telling me “Ali, this is the way forward…” I had all these thoughts rushing around in my head. But at the same time I also knew that in the past when I have blindly followed the signals of synchronistic events they haven’t always gone according to the positive outcomes I had originally assumed they signified. Though, looking back at those experiences that seemed negative at first hand, I can say from hindsight, in the long term, they did lead to an awakening and an overall acceleration in the evolving of my perspective of reality. It has been my experience that sometimes synchronicity takes you by your hand, gives you a club and guides you in smashing to pieces your current idols of belief from which your present Weltanschauung has been constructed. How to respond to both potential opportunities was therefore a little confusing as I wasn’t really in the mood for anything too dramatic. I would prefer to understand from afar what to do, rather than go down a route that I could later regret (even if the regret was temporary)!
My hour or so session with Nengi was very interesting. He measured my body fat percentage on his scale. My reading was 1% less than the scales I use at home. Get in! He said that he found his scales quite accurate as when he’s had his body fat checked by a professional (callipers perhaps) both his scale and the other method showed similar results. But at the same time he agreed as long as you keep your method of measuring your body fat percentage consistent and regular you will notice when your body fat is going up or down in a useful way which you can then use to your fitness benefit by making adjustments in your diet and exercise regimen. We then headed to Valentines Park for an example of the kind of things he’d be getting me doing if I were to book him as a Personal Trainer.
After about half an hour I had a splitting headache. I also noticed my shoulders and neck were stiff and my nostrils were constricted making it harder for me to breath through my nose. The workout was challenging, but not enough to make me sweat, so I’m not sure if the symptoms were caused by the physical activity or as a result of the lack of Omega 3’s in my diet – no fish, and for some reason I hadn’t replaced my flaxseed oil during the detox either! It was a painful experience. At the end of the session Nengi agreed to look into vegan and meat eating diet plans for my fitness goals, plus send me further information in regards to twice weekly group fitness activity events starting the following week.
White dal, brown lentils and buckwheat
Post workout I ate white dal, brown lentils and buckwheat for lunch.
The Magic Corn stand at The Mall in Ilford
Magic Corn
A couple of hours later I snacked on some sweetcorn whilst out at the Shopping Mall.
Later in the evening I, Naadira and Zar had agreed to attend a Sunrider event at their headquarters in London, thanks to an invite from the IBO. The IBO said we were lucky to be invited as Wendy Teng (formerly Wendy Chen) the VP of Marketing and daughter of Dr. Tei-Fu Chen and Dr. Oi Lin Chen the founders, Chairman and President of Sunrider International, a multi-million (maybe even billion) dollar company. I couldn’t have organised an event like that on the 40th day of my detox if I had tried! So when I went, I went with an open mind, open to the possibility of purchasing their products and maybe even recommending them (after trying them myself first), or joining their business opportunity if it sounded like it was a fair deal (again only after trying their products myself first and getting my personal approval).
When we arrived the IBO was there demonstrating how good their Fortune Delight herbal beverage was at cleansing out oil from inside one’s digestive system by getting us to rub vegetable oil on our hands then busting open the Fortune Delight sachet and rubbing our hands with the contents, then rinsing with water. See photos of the Sunrider Product Fair here. Did the process get rid of the grease? Not that well. And I did wonder if it would have had the same effect if I had simply rinsed my hands with water? There were a few things that attracted me to check out the Sunrider product fair. There was the fact that I personally like doing things that have a positive impact in the world. I have more social entrepreneurial tendencies rather than just entrepreneurial tendencies, and if there was the possibility of generating a living while doing that why not? Another thing that attracted me was how healthy the IBO looked when we first met him. He had a glow from within. I got the impression that the wonderful health-conscious products of this company, based on old Chinese herbal secrets, was at least, partly responsible. Not only that, he also seemed like a really genuine and nice guy. I like these attributes in a person. But then I noticed his colleague who was also working on the same table. She was quite overweight. If you’re going to be promoting the excellence of your health products – it helps if you’re in shape. Just an observation on my part. Then I looked around at the other people who worked for or distributed Sunrider products. I wanted to see evidence of people glowing from within and in shape just like the IBO. To me this is the biggest evidence you can give in support of the health claims of the products you’re promoting. If people are overweight, pale and generally look ill then the chances are this is a reflection of an unbalanced diet and/or lifestyle. So did I see people glowing from within? No. The IBO was one exception, and I now believe this is due to his overall “fitness fanatic” attitude to nutrition and exercise in general and not specifically due to the “wonders” of Sunrider products.
At the time, these doubts were not so well pronounced. I continued to explore the product fair and hear Wendy Teng speak with an open and positive mind towards the possibility of trying their products or working with Sunrider. At one table they were demonstrating SunSmile® Fruit & Vegetable Rinse. This was perhaps the most interesting demonstration. They had two bowls of water: one ordinary tap water, the other, tap water with the Vegetable Rinse mixed in it. They then had a tray with broccoli on it. They put a piece of broccoli in each bowl for a few seconds and then pulled them out. The visual difference was staggering. The broccoli that had been rinsed in just tap water looked dull and clearly had a white residue on it (I was later told this was wax used to increase the shelf life of non-organic fresh produce) while the broccoli that was rinsed in the vegetable rinse came out vibrant with colour with the wax washed off. That demonstration did look pretty good. And had me tempted for a bit. Then the gentleman who was doing the demonstration said that the vegetable rinse would get rid of all kinds of things including pesticides. Wait a minute… Pesticides? How will the cosmetic cleaning of the surface of a vegetable that’s been sprayed with pesticides remove the pesticides? Sure it might remove it from the surface, but wouldn’t the pesticides have been absorbed into the fruit or vegetable in question? So even if you clean it from the outside you’re still likely to consume the pesticide by eating it regardless aren’t you? I mean isn’t the effect of pesticides so far and wide that we are told to limit our consumption of fish to twice-a-week thanks to pesticides running into the water supply which then gets absorbed by the fish which can then be absorbed by us?! So surely it would be far better to eat organic rather than use fancy and expensive cleaning methods (a 475ml bottle will set you back £26.66!) to avoid consuming pesticides if it is a concern for you. If I could afford it I would definitely opt for organic. I’ve just discovered that a similar far more prudent way to wash the wax of vegetables is to scrub them with dish washing liquid then rinse!
Wendy Teng VP Marketing and daughter of Dr Chen, CEO of Sunrider International
After the product fair came the presentation by Wendy Teng. She spoke about many things and as most of the people present were “IBOs” (Independent Business Owners = Sunrider speak for distributors) from the UK, the Netherlands, Sweden, and Switzerland most of the audience seemed at awe at how lucky they were to be in the presence of Wendy the daughter of Dr Chen the man who had given them the gift of health and wealth out of the goodness of his heart. I however, was curious, and had some questions I wanted answered that popped up in my head while she gave her presentation. I was polite and waited until she finished before firing away with my questions.
Beverly Hills Formula Total Enamel Sensitive Toothpaste 125ml / 170g
At one point Wendy spoke about how conventional toothpaste has many poisons in it and that their toothpaste was superior as it didn’t contain any of these toxins. She specifically mentioned fluoride, which I myself have written about in this blog. I pointed out that most researchers agree that digesting fluoride is a bad idea, however topically applying it to the teeth is good for the teeth (even most opponents of fluoride will agree with this). However even if I agreed with their perspective and wanted to buy Sunrider’s “superior” toxin free toothpaste I asked “How competitively was it priced?” The response was that the SunSmile® Herbal Toothpaste including VAT was £10.66 (and that’s before the rise in VAT this week!). “How much?!” That’s right! I almost literally fell off my seat and really needed someone to repeat the price to me. The IBO was quick to qualify that its size was bigger (135g) than a standard toothpaste bottle and that it was a lot more concentrated than ordinary toothpaste so you only need to use a tiny bit each time you brushed your teeth. At the time I didn’t know what a standard size was (its not exactly the kind of figure I keep in my head). It’s hard to compare as toothpastes usually come measured in ml rather than grams. My herbal toothpaste is 100ml and was already quite expensive at nearly £4. I also have Beverly Hills Formula, a high-end tootpaste that is 125ml and 170g (bigger than Sunrider’s toothpaste) which can be bought for around £2-£3. There is no justification for charging over £10 for a standard-sized toothpaste!
I have a full price list of Sunrider products in front of me and can tell you that the prices are what I can only say seem to me as being extortionate – unless you believe their claim that they are so highly superior and concentrated that the prices are worth every penny. In September 2010: their range of Calli teas range from £5.60-£7.56 for 10×2.5g sachets (that’s 56-76p per tea sachet!). Their 60g deodorant stick is £9.25. Compare that to the price and size of deodorants on the open market.
MLM Pyramid Structure
I asked Wendy if when you become an IBO are you tied into their products i.e. if I opened up a health store or an online shop would I have to only promote Sunrider products or could I sell the products of other brands alongside them? She responded quite diplomatically that Sunrider IBOs do not sell the products of other brands simultaneously. I then said to her, “But could they if they wanted to?” Again she avoided answering me directly. The IBO then helped rephrase my question and said I think what Ali is asking: “Are there any rules in the contract that forbid IBOs from selling the products of other brands?” She said that she wasn’t sure and someone else said that they didn’t think there was any such clause. One of the IBOs in the audience who was sat a few rows in front me then turned around and said to me: “Why would you want to promote other brands? Have you tried Sunrider products? They are the best nutritional products on the market and once you’ve tried them you wouldn’t go back to anything else let alone want to promote anything else.” Either she was speaking the truth or this company had a cult-like following where Mr Chen was the Pharoah sat on a throne at the top of the pyramid while these guys were his loyal pyramid builders. But no! It’s not a pyramid scheme, such things are illegal in the UK… I was assured that it was a “Direct Marketing Company”. Despite the pyramid looking structure to their business model they insist it is not a pyramid scheme. See the scan I’ve done of a copy of a slide that Wendy presented that day and now compare it to what it says here about the legality of multi-level marketing companies.
Sunrider MLM pyramid structure: note the need to "buy" products each month and an emphasis on finding more recruits who will do the same
And note the words from America’s Federal Trade Commission Alert (I recommend clicking on the link and reading through the whole alert as it seems to me to describe Sunrider International to a Tee):
Watch Out For Pyramids
“Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. They’re actually illegal pyramid schemes.
Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people-except perhaps those at the very top of the pyramid-end up empty-handed.”
I can’t comment on the quality of their products as I haven’t tried them over an extended period of time. It’s possible that Sunrider’s products are very good, but it’s also very possible the IBOs convince themselves that the products and the company is THAT GOOD as it suits their business interests. I would be happy to do a 40 day trial of their products and blog about my experience (if the products are supplied courtesy of Sunrider). If they are amazing, I will state that to be so. If they are crap I will say so too. I also have no ethical hang ups about people earning commission from products sold to consumers who are sold something at a competitive price or even earning commission on sales generated by customers that are introduced from the customers you introduced (multi-level). What I have issue with is:
- the extortionate pricing;
- the fact that you don’t have enough faith in your products (or pricing) to have them sold side by side with other brands on the same shelf or online store;
- the requirement for each distributor to “purchase” €100 to €200 worth of extortionately priced products each month in order to be eligible for commission;
- and an emphasis on finding other distributors who also pay in €100 to €200 per month into the pyramid scheme!
I also wonder if schemes like this have an exit strategy? If you spend 20 years building a business as a distributor it would be nice to be able to sell your business onto someone else if you no longer wanted to be a part of it or simply want to retire. That’s what you can do with a normal business. If you can’t do that with an MLM “business” then it’s not a real business is it? Instead you’re more like a sales contractor who only earns a commission, but with the additional catch that you must contribute to the pot of gold with monthly purchases.
Not even being employed as a salesperson on a 100% commission basis do you get such a raw deal. You’re not expected to purchase the company’s products on a monthly basis in order to be eligible to continue to earn a commission on sales that you have generated for the company. What if you don’t want the products for a particular month? Lets take the lowest monthly purchase required: €100. That’s £84 per month for food. To put that figure into perspective: I currently buy a whole bowl of fresh fruit or veg for £1. For £20 I can buy 20 bowls of fresh fruit and vegetables which is easily more than enough for two of us for the whole month. For £84 I could buy 84 bowls of fresh fruit and veg! It really is ridiculous!
So the question is how do companies like this continue to operate and make their founders incredibly wealthy for quite an extended period of time despite their questionable business model? Well if the photos of Dr Chen at the London Sunrider HQ are anything to go by (there are photos of him with almost every US President in recent years that I can think of and even one with Arnold Schwarzenegger the Governor of California); the large amounts of money they make; the fact that the majority of human beings are good decent people who are truthful and have faith in others; and the human tendency to seek someone wiser and more knowledgeable (particularly someone who allegedly has exclusive secret information or an exclusive ”higher link”) who will tell them what to do with their life: the factors that leads to their continued success can easily be seen. It is a formula for success that selfish yet charismatic people have used for thousands of years to build their monarchies, empires, organised religions and monopolies. It’s not that difficult to do. You just need to be a lying, two-faced C%$T to do it. It’s something that has gone on since humans have walked the Earth. This manipulation of people is something that even Plato alludes to in The Republic when he quotes Socrates’ simile of the cave over two thousand years ago.
If I had any doubts about the “social entrepreneur” nature of Dr Chen I just had to Google Sunrider and Dr Chen and the kinds of things he’s been convicted of in the past to realise he is not the opportunity-giving angel he promotes himself to be. And it seems the health and wellness industry is filled with many characters like this. So please be wary. Of course there are good people involved in the health industry too. There are people and organisations who not only genuinely would like the world to be a healthier place, but also deal in complete honesty and fairness when it comes to generating a revenue from this industry.
I would like to say to the IBO, if you’re reading this, I want you to know that I do genuinely like you very much. For that reason I was in two minds about writing this piece. But once I start writing, how I see things just flows out. I think you’re great, but Sunrider’s business model seems to me highly questionable.
Having said all that, it seems I appear on the Sunrider blog.