The multilevel marketing company Xango focuses the bulk of its sales efforts on one product: mangosteen juice.
Mangosteen is an Indonesian food that’s rocketed to popularity after several alternative health authorities, including Dr. Oz, have trumpeted its health benefits.
Did I get on board? This explains everything:
The Utah-based company, which was founded in 2002, has had more than its fair share of legal troubles and internal strife. On a number of occasions, the company has found itself in the crosshairs of the United States Food and Drug Administration for making unsubstantiated claims about health benefits.
These range from claims regarding mangosteen’s anti-cancer properties to its cardioprotective benefits to its antibacterial activity.
As a result, Xango now uses less specific terminology on its marketing literature, though its products are still promoted as healthy lifestyle choices.
There have also been various lawsuits alleging rampant internal mismanagement in the company, with feuds between the higher-ups and the CEO. The suits alleged misuse of company funds for personal enrichment, and were eventually settled. The details are messy to say the least, but despite that, the company continues to plug along.
Xango suffered serious setbacks financially in the aftermath of these lawsuits, and had to lay off a substantial portion of its employees in 2013 and dropped a prestigious sports sponsorship. Nevertheless, it still claims over a million distributors worldwide.
The company’s rise and fall is reflected in search engine traffic, too. Xango had a swift rise to popularity in 2005, but has suffered a slow but uninterrupted decline in traffic since then.
Though there have never been any precipitous dropoffs in traffic, overall search interest in the company has dropped to one-quarter of what it was at its peak.
Though the company’s core focus is its Xango juice, you should not overlook the rest of the company’s stock. In addition to their flagship product, they sell vitamins for children and adults, skin care products, anti-aging serums, and aromatherapy preparations.
Again, many of these products attempt to utilize the antioxidant properties of mangosteen fruit extract for their intended purpose.
In all likelihood, though, your main sales product is going to be Xango juice. It comes in two varieties, the original formulation and Xango Reserve, which is a more powerful, more concentrated, and more expensive version.
When it comes to the scientific merit of Xango juice, the evidence is scattershot.
Some research has found that it is beneficial. A small pilot study published in 2009 in Nutrition Journal had 44 obese test subjects take Xango juice or a placebo for eight weeks, then split them into four groups.
One received a placebo, while the other three received varying doses of the mangosteen juice preparation. After eight weeks the researchers tested a variety of markers of health and wellness.
The results showed no significant weight loss in any of the mangosteen groups, meaning that it is not effective as a weight loss supplement.
On the other hand, there was a significant result for a decrease in C-reactive protein, which is a marker of bodily inflammation. So, lower C-reactive protein levels would indicate that the Xango juice did indeed reduce inflammation.
On the other hand, a review by public health specialist Ano L. Loeb criticized other claims of efficacy, pointing out that they relied on unpublished, non-peer-reviewed, and industry-funded experiments. Overstating the benefits of liquid dietary supplements, Loeb concludes, could lead to a public health threat.
Health authorities like the Mayo Clinic have also warned that it is far too early to tout the benefits of mangosteen juice.
The clinic also terminated a proposed clinical study on the cardioprotective benefits of the extract, deciding its resources were better spent elsewhere.
The startup kit for Xango, which is required to become a distributor, is $35. To be eligible for getting paid commissions, you have to maintain 100 product volume per month. The retail discount for Xango is pretty good; a 4-pack of the juice bottles retails for $150 but can be had wholesale for $100.
As a unilevel network marketing company, Xango allows you to have distributors up to two levels below you at the first rank. The first and second line distributors earn you 2% and 5% commission, respectively.
On the whole, this is better than average for MLMs of a similar ilk. Generally, MLM networks focused on a single product, or a single product category, have to provide better incentive structures because it is harder to move a lot of product volume.
One thing that is difficult with Xango is moving up the ladder. Above the basic “representative” rank (which is the lowest active one), the next two ranks are named 1K and 5K precisely because they require 1,000 and 5,000 product volume to achieve. And remember, this needs to be consistent month-to-month to reap all the bonuses.
Still, the income disclosure statement for Xango is about what’s typical for this type of MLM. Among active distributors, preferred representatives (who are 61% of all active distributors) averaged $116 per month.
The serious money doesn’t start rolling in until the 20K rank, meaning you’d have to move 20,000 product volume per month consistently to get enough cash to live on.
As for now, be hesitant when it comes to Xango. The company is already well-established, meaning the potential for exploiting untapped markets is pretty much dried up.
Additionally, the legal troubles in the past five years have destabilized the company, so it might be wise to wait a while to see how things shake out.
However, if you can devise a business plan to move a lot of product and establish a strong distributor structure below you, the cash potential is there. Only a small fraction of distributors are able to reach such heights, though, so you need to have laid out your plan before jumping in.
So if you’re set on MLM, it’s not terrible, but it’s probably not the best, either.
If you’re doing it for the money, there are better ways to kill your day job. You might like our coaching because it shows you the good life without peddling overpriced juice to your family and friends.