Is Lyoness a scam cash back MLM company or a pretty clever way to make some money back and some cash on the side? It looks interesting, but is it worth joining? People were asking this question, so I wrote a review.
Let’s take a closer look and find out how it pans out…
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Company Name: Lyoness
Founder: Hubert Freidl
Price To Join: Free to start
My Rating: 1/10
~ Lyoness Review ~
What Is Lyoness?
This company has been around since 2003 so it has stood the test of time so far. Lyoness operates with a multi level marketing business model and it’s actually refreshing to see a MLM business that’s NOT operating in the health and wellness niche. These days everyone seems to be on the health, wellness, fitness and weight loss bandwagon.
Essentially this is a shopping platform where you can earn cash back on your purchases from selected retailers. Not only that, the company also has an affiliate program that works on the MLM format, making it possible to earn money from your recruits as well as bonuses.
To get the most out of promoting any MLM scheme it’s good to have your own website. You look more legit and professional, and it makes it easier to get those sales and recruit new members. Building a website is really fast and simple when you follow the training at Wealthy Affiliate. You can even get started for free.
The Products
The main product here is what’s called the Cashback Royalty Card. The card can only be used at Lyoness associated retailers and when you do make a purchase at an approved store, you present your card to be scanned and receive a cash back. The amount you get back isn’t much, around about 1% of the purchase amount and maybe only as high as 4%. Nothing too exciting.
The Lyoness Business Opportunity
Lyoness is really all about the business opportunity, recruiting others into Lyoness and making money from your recruits as they bring in new recruits. MLM is set up in such a way that most of the advantages go to the company running the show while those doing the bulk of the work – such as selling and recruiting – earn the least amount of money.
Multi level marketing of any kind is really not a good business or income deal for the average distributor. By its very nature it is designed to favour those at the top while the majority make very little to no money at all.
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The Compensation Plan
Everything works on the cash back system at Lyoness. You join, shop at the selected retailer and get some cash back via your Lyoness card. You recruit new people into your downline and you receive some small percentages on their cash back deals and so on.
You can also earn various bonuses in the Lyoness compensation system as well, and we’ll briefly touch on those here.
Friendship Bonus – With this one you make 0.5% commissions on every purchase your referrals make.
Premium Membership Package – The premium membership entitles you to future benefits and discounts. This costs $2000 and in order to sell this package as an affiliate, you must first purchase it yourself.
There’s not really a lot on offer with this deal and all the percentages are very small. Kind of looks like a waste of time to me.
Below is a video that explains the compensation plan in more detail.
Is Lyoness An Illegal Pyramid Scheme?
Well, this one is borderline in my opinion.
The definition of an illegal pyramid scheme is one that relies totally on recruitment for survival and has no tangible products of any real value.
Lyoness relies totally on recruitment, and the only product is the card to get cash back from retailers. I don’t know if that really counts as a product. This almost seems like a Ponzi scheme to me, where new money is constantly required to pay the profits of older investors.
Target Audience
Targeted at shoppers first and foremost, as well as those willing to do some recruiting and try and earn some extra cash in the process.
What I Like
- The idea, in theory, of cash back on your shopping sounds good
What I Don’t Like
- The retailers are often very obscure ones, and you can only get cash back at selected retailers
- In most cases the cash back percentage is pitiful
- The percentage you make on your recruits is even more pitiful
- The $2000 spend for premium membership doesn’t actually give you any extra benefits that I can see. It’s just an excuse to have something extra to sell to make money on
- You have to purchase premium yourself to be eligible to sell it as an affiliate
- This whole scheme kind of looks like a waste of time
- There are a lot of complaints about Lyoness online
- 24% of Lyoness members claim they make no money
How Much Does Lyoness Cost?
Technically it’s free to join, but to make any decent money you would have to sell the premium membership, which you must first buy yourself for $2000. That’s a pretty high price to pay for something that doesn’t seem to really give you any benefits other than the capacity to earn commissions from its sale as an affiliate.
Is Lyoness a Scam?
I seriously would put this one in the borderline category. The only reason I won’t say it’s an outright scam is because some people do actually make money with it. To me the cash back card and the premium membership are just token “products” to try and avoid the tag of Ponzi scheme, which is what I believe Lyoness to be.
I can’t recommend it because I really can’t see any value in this system. Even other Ponzi schemes I’ve seen have more money making potential than this one. As Lyoness relies entirely on constant recruitment to survive, this will no doubt die out eventually.
If You Want To Make Serious Money, Affiliate Marketing Is Way Better Than MLM
Affiliate marketing is a way better option the multi level marketing, and I don’t know why so many people decide to go the MLM route over the affiliate one. Affiliate marketing is so much simpler and far more profitable.
No recruiting- Bigger commissions
- Residual and passive income
- Work for yourself and actually own your business
- No buying and selling products
- Promote to a global audience
- Make money while you travel
- Live a lifestyle of time and money freedom
The list of advantages goes on and on. If you would like to learn more about affiliate marketing and how to get started, just click on the banner below.
Darren Burton
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