Once again we did some math and we could see that even at the Pro 5 level the average commissions paid in the 12 months were less than $30,000. In other words people who put in the time and effort required to reach Premier Pro 5 might have qualified for a new business center, but on average they could make more money if they worked a regular job.

According to the table, 75% of US distributors were paid less than a full time income in the 12 months to June 30 2017. An additional 23.02% earned nothing at all. This means that a total of 98.02% of Lifevantage distributors are not earning a full time income.

As a publicly traded company (NASD:LFVN) Lifevantage is required to release their financials to the public. To get an idea of how much Lifevantage distributors are earning globally, we looked at the Lifevantage 2017 4th quarter fiscal results.

We saw that for the year ending June 30 2017, Lifevantage say they paid a total in commission and incentives of $96.7 Milliion. They also tell us that globally they ended the year with 64,000 active consultants. We once more rely on our math skill and find that on average Lifevantage distributors earned $1,510.94 for the year.

The figures in the financial report include all Lifevantage distributors at all ranks. While the top 1.98% in the hierarchy might be earning more than $30,000 per year, most are not. What we can see is that the expected income from the Lifevantage business opportunity is less than $1,511 per year.

Why is it Difficult to Make Money With Lifevantage

We believe that the problem is not unique to Lifevantage. It is common to any opportunity which uses the MLM business model. The problem with network marketing is that it's designed to promote and sell products. It is not designed to help you make money. Companies use MLM because they can generate a profit for themselves, they do not use it to share the wealth.

The generous compensation plans offered by MLMs are part of the problem. Lifevantage pays ongoing commissions which add up to a total of 59.9%. The problem is that these are all included in the 'wholesale price' they charge their distributors. If you are a new Lifevantage distributor then 59.9% of what you pay will be paid as commission to people above you in the MLM

In their financial report, Lifevantage showed that commission and incentives represented 48.5% of their revenue for the 12 months to June 30 2017. While it's not the full 59.9% which would be possible if all sales qualified for all commissions, it's still a lot.

The remaining 51.5% is kept by Lifevantage. This covers the costs of production and includes their own profit. This would be the amount traditional companies earned from producing products and selling them to the wholesale market. The price paid by distributors is close to double the traditional wholesale price.

Is Lifevantage an Illegal Pyramid Scam

Multi-level marketing may look just like a pyramid scam, but it is not illegal as long as there is a product or service attached. This means that opportunities such as Lifevantage are legal, but this does not mean that they are ethical.

MLM creates an environment where there is a danger of over consumption. People start buying products because they think it's their path to financial freedom. They are not buying products which they otherwise would have spent money on.

The buying frenzy is intensified by the levels in the compensation plan. The system is designed so that people all the way up to the top of the pyramid will earn more money if you spend more. When they 'encourage' you to keep buying product is it because you are on the path to freedom, or is it because your ongoing purchases will make them money?