Thread by @ExposingNV

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1. Promises of great wealth, being your own boss, financial freedom, $60k monthly commissions, retiring at 30 whilst helping people cure their health problems by drinking alkaline water!

Inside the world of multi level marketing scheme Kangen Water

2. What is Kangen Water?
Kangen Water is the brand name for alkaline water owned by Enagic Corporation, a Japanese company which operates as a multi level marketing (MLM) company. It sells overpriced water ionising machines through a network of “distributors”

3. What is an MLM?
For those that don’t know, multi level marketing (MLM) is a sales method that focuses on both direct sales & recruiting others under you (your “down line”). You receive a commission for your direct sales plus the sales your downline makes (your indirect sales)

4. MLMs are not the same as pyramid schemes, which are illegal in Australia. The Consumer Law defines a pyramid scheme as one where:
1) you need to pay to participate
2) your commissions are derived primarily from recruitment

5. A common misconception of MLMs & pyramid schemes is that MLMs sell products whereas pyramid schemes don't. The existence of a product doesn’t mean an MLM is not a pyramid scheme. If commissions are derived mainly from recruitment, the business is more likely a pyramid scheme

6. Whilst MLMs might be legal, they can still be just as harmful as pyramid schemes. Consumer groups such as the Consumer Action Law Centre say the defn of pyramid scheme is too narrow & needs to broadened to include similarly harmful MLM schemes

7. I mentioned before that the Kagen Water machines were overpriced

I wasn’t kidding

The “best selling” machine is the K8. Price? USD$4980

8. If you want to drink alkaline water, there are plenty of water ionizers available for significantly less money

The Kangan machines are overpriced only because of the MLM commission system (I will get to this later)

9.The Enagic Australia website has limited info about the business, it’s products & zero info about becoming a distributor. It leaves this to distributors, some of who make completely irresponsible & dangerous health claims about Kangen water

10. Examples of common health claims Enagic distributors make:
-More hydrating
-Slows aging
-Improves digestion
-Prevents illness

11. None of these are true

12. On the more extreme end, some Enagic distributors have claimed that the water cures cancer and other serious illnesses 🙀

13. During COVID, many Enagic distributors were claiming that Kangen water cured COVID! The US Federal Trade Commission issued a Cease & Desist Notice to Enagic US, ordering Enagic to immediately direct its distributors to cease making any such claims

14. Now to the MLM aspects of Enagic...

15. To buy a Kangen Water machine you need to go through a distributor

To become a Kangen Water distributor, you need to go through a distributor

16. You also can’t become a Kangen Water distributor w/o buying a Kangen Water machine!

From another distributor.

17. So if you want to become a Kangen Water distributor, you need to fork out USD $5k
Can’t afford this?
Don’t worry, you can FINANCE the machine via Enagic

At 10% interest on a 24 month loan 😱

18. Anyone who buys a Kangen water machine AUTOMATICALLY becomes a distributor. Upon making a purchase, the purchaser is issued with a ‘Distributor ID’, meaning EVERY SALE is technically a RECRUITMENT

19. Unlike many other MLMs, you don’t hold any product. Your “customers” (i.e your downline) makes their purchase via Enagic (using your distributor referral code so that you’re credited for the sale)

20. So, WHY should you need buy a machine to become a distributor? You should be able to become a distributor w/o buying the product!

21. Enagic’s commission structure:

As with all MLMs, commissions are based on different levels/ranks. The higher the rank, the more commissions a distributor will earn. Your starting rank is 1A, you advance to higher ranks (2A, 3A etc) based the number of “sales” you make

22. Your own direct sales + your downline’s combined sales count towards your total sales. Therefore, the fastest way to make money is by recruiting.

23. Note: these commission amounts reflect how much you’ll receive if your “customer” pays in full up front. Most ppl finance their machine through Enagic, which means you don’t receive full commission till your “customer” has paid off their machine

24. Level 6A (100+ sales) gives you the highest commissions. But once you reach 6A, the only way to “level up” is by having 2 direct recruits reach level 6A. So your direct recruits need to keep recruiting if they ever want to reach 6A.

25. This video provides a good overview of the commission structure

Bottom line: the only way to make money, is to recruit!

26. When spruiking the commission plan, distributors often mention that you can’t de-rank (once you hit a certain rank, you’re there for life)

But if you don’t make a direct sale for 6 months, you forfeit 50% of your commissions

This drops to zero after 2 yrs

27. It reportedly takes at least 7-10 months to make a “sale"

That is, if you even make one at all..

28. The average distributor joins through a “funnel company”. Founded by Enagic distributors, these companies are independent of Enagic

29. These funnel companies promote themselves as “online business trainers” or “coaches”, saying they’ll help you “be your own boss” & start your own online business so you can achieve financial freedom

30. In reality, they’re designed to convince ppl to become Enagic distributors under the guise of "entrepreneurship"

31.There are loads of these funnel companies all over the world, the most popular in Australia is the “Fr33dom Era”

32. TFE claim to be a “global community of conscious entrepreneurs who are committed to bringing forth a paradigm shift in how we do business and life”

33. TFE’s Vision is to “create a new way of doing life & business. To bring forth the new Earth in how we live, lead, serve & receive”.

34.TFE provides a “holistic approach in its delivery of world class training”, teaching the “fundamentals of doing from employee to entrepreneur”.

35. Some TFE training content is free, such as training on how to “Up Level Your Vibration Awareness to Create Success & Abundance”, & “Magnetising New Business Partners”

Okay...

36. To be part of the TFE, members pay $987 per year This covers access to their training platform which includes videos on how to “build an online brand” & social media tips.

37. TFE, like all these funnel companies, will not explicitly mention the Kangen water machine.

This comes after you join

38. Once you’ve joined, you are taken on a “discovery process” where you’ll be “guided through the journey of uncovering what it is you want to create”

(hint: it’s an online "business" selling Kangan water machines)

39 You’re then encouraged to buy a Kangen water machine & become a distributor.

You too can then convince others to join the TFE and become a Kangen distributor!

40. Once you’ve paid the subscription fee, the expenses don’t stop there. To run a successful “business” (i.e to sell water machines) you need to set up your “automations”

41. “Automations” = paid social media posts, email autoresponders, bots, tracking software, funnel builders.

42. There are also (optional) conferences throughout the year where you can learn how to take your “business” to the “next level” & hear from like-minded “thought leaders”

43. Recruitment tactics:

On their FB pages, TFE reps all describe themselves as “creators”, who show other “like minded ppl” how to “thrive” by creating “a thriving online business” & achieve “financial freedom”

44. As mentioned, TFE reps don’t explicitly advertise the Kangen machine. They use “attraction marketing” to sell a “lifestyle”.

“DM me to learn how you can get rich working one day a week!”

45. “I LOVE being my own boss. Who wants to work for someone else? My life could be yours. DM me to learn how!”

46. Income claims are frequent.

47. Very frequent

48. Distributors know they shouldn’t make income claims, but they still do it

49. As this video explains, it’s mathematically impossible, no matter how you structure it, for an entire MLM downline to be profitable.

To make money as an individual, you need to have significant losses below you.

50. If you’re making money, it means ppl below you are losing money

51. Look at Enagic’s US 2022 Income Disclosure Statement

In 2022, over 50% of distributors made US$285 or less. This doesn’t include the $5k spent to buy the machine

So over 50% lost money

52. If you reach level 6A (the holy grail), the median earnings are USD $6,617 (excluding expenses).

In 2022, only 7.46% of distributors reached level 6A.

53. There are 3 different “investments” TFE reps promote to prospective recruits

The 1st is buying the K8 water machine for USD$4980

54. The 2nd is the “Trifecta”, which consists of purchasing the K8 ($4,980) plus a water spa system ($2,890) & a 4 month supply of turmeric supplements ($760)
Total: USD$8,630.

55. The 3rd is the “Quad” which is a trifecta + an extra K8 water machine. Total: USD$13,610

JFC

56. As the only requirement to become a distributor is to purchase one water machine, why would anyone buy all these extra products?!!?

57. To make more $$ of course! Sales you make to yourself earn $$ & count towards your total sales! As this distributor explains, if you start w/ a quad, you will “level up” immediately & will earn higher $$$ on your very 1st sale!

My god

58. As another distributor explains, you just need to convince 164 people to also buy a Quad and then you will make $1 MILLION DOLLARS

"It's so easy" 😬😱

59. Enagic “only” lets you finance 1 machine at a time, so the Trifecta & Quad are only obtained by loans & credit cards

60. Worried about getting into so much debt? Don’t worry, as Engagic distributors will teach you, not all debt is “bad”.

There’s “good” debt & bad “debt”. “Investing” in your online “business” is “good” debt

61. Plus, you’re not the only one getting into debt! Everyone is doing it! 🤢

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