It works Income Disclosure

Following on from our review of the It Works Opportunity, we decided it was time to take a closer look at their income disclosure. We want to find out how much It Works distributors are really earning.

We had a look at the official It Works Income Disclosure page. For some reason it is showing outdated data, but we’ll go ahead with it. It could be that it takes a long time to prepare current data, or it could be that the information has only gotten worse. We thought we’d take the opportunity to publish our own write up of this before it mysteriously vanishes like so many MLM documents tend to do.

It kicks off with the following table:

The table would have us believe that 85.13% remained at the bottom ‘Distributor’ rank. Here the average earnings are $87 per month or $1044 for the year. Applying a bit of math we find that 85.13% of It Works Distributors earned less than $21 per week in commission for the year.

As we move down the table, the income rises, and the number of distributors at each level falls, sounds just like an ancient Egyptian business structure doesn’t it.

By the time we get to the ‘Double Diamond’ rank, we see that these distrubutors are earning an average of $5,367 per month, which is enough to replace a regular job. If we look at all distributors in It Works who are at this level or above it adds up to 2.43%. A little deduction shows us that 97.57% of It Works Distributors earn less than a full time income from this opportunity.

While these numbers are hardly worth getting excited about, they do seem pretty impressive for a MLM hunportunity. As is required by the MLM code of conduct, they have presented the data in a way which obfuscates the true information.

For example their definition of an ‘inactive distributor’, was anyone who earned at least one commission in the past, but did not earn one in 2018, but did renewed their distributorship for the year.

What we’ve found while research for our other MLM reviews, is that it’s not uncommon for up to 80% of participants to never earn any commission at all. By excluding those who have never earned anything, It works is improving the figures.

Another group which is never included in the income disclosures, is those who drop out. It’s common for more than half the participants to quit in any given year. Once again if these figures were included, we’d have a much clearer interpretation of just how bad this ‘income generating’ business opportunity is.

Something else to consider is that there is a difference between income and profit. Even if it were true that over 80% of distributors earned a commission at some point, it doesn’t mean that they made money. There are lots of expenses involved with being an active distributor. You have to buy product to remain active, then there’s all the hun meetings and the time and money you spend trying to ‘grow your downline’. If we had access to all this information, we’d expect to find that most It Works Distributors are losing money from this hunportunity.

It would be interesting if to see whether skewing data like this is a breach of the FTC MLM Guidance.

For posts like this check out our list of MLM Income Disclosure Statements. If you notice one that you think should be added to the list, let us know and we’ll do our best.