A Review of FM World

 

A Review of FM World

Is Joining Worth It?

 

 

What is FM World?

FM World is Multi-Level Marketing Company which boasts products in vast array of industries which include:

• ·       Fragrances
• ·       Cosmetics
• ·       Body care
• ·       Household Goods
• ·       Weight Loss and Management

The company was launched in 2004 by Polish Artur Trawiński. In 2007 the company began expanding internationally and now has offices in 50+ countries. FM world operates on these five values:

• ·       Trust
• ·       Excitement
• ·       Independence
• ·       Caring
• ·       Boldness

You can find out a more detailed history of FM World and the FM Group on the company’s official website.

 

How to join FM World?

To become a business Partner with FM World you should first find a sponsor (often referred to as your upline).  This person will be able to guide you throughout your time with FM World.  If you do not know anyone who is a business partner with FM World, the company will assign a sponsor to you. Once assigned you cannot change your sponsor.

After selecting a sponsor, a person will register online.  No card information or national insurance number is required to sign up to be a Business Partner, just a name, date of birth and an address.

 

 

How Much Does It Cost to Join FM World?

FM World is free to join. Well in theory.  The initial registration to become and FM World business partner is free, however evidence from the company website leads you to believe otherwise.

When discussing the business opportunity on the company website, there are three steps to becoming a Business Partner.

·       Step 1 – Find a sponsor

·       Step 2 – Register

·       Step 3 - Buy a Starter Kit

The website states that that these Starter Kits have “samples of FM by Federico Mahora fragrances” and “FM WORLD catalogues and other necessary materials”. This would lead anyone reading that these starter kits and their contents are essential to be a successful business partner. Currently there are two available Starter Kits on the FM World Website for purchase

• ·       Mini Starter Kit (£15) containing 20 samples
• ·       Starter Kit 150 (£55) containing 150 samples

 

Additionally, in the Marketing Plan Booklet found on the official FM World UK website, it is stated that the first step to success is to be your first customer. By doing this, you are told this will “consolidate your skills and knowledge” because “experience-based learning is the best”.

There is also an example provided for this.

·        The catalogue price for a perfume is £22.50
·        The business partner price is £15.00
·        So you are saving £7.50

This example shows that you will save £7.50 when buying this perfume at business partner price, instead of the catalogue price, however it does not state that the business partner is still spending £15 on the perfume to help promote their ‘free’ business opportunity.

In conclusion, although FM World is an initial free opportunity, the company website and training materials fail to back this claim, as they attempt to convince these extra expenses are essential to becoming a successful Business Partner.

Compensation Plan: How do you make money?

The FM World Compensation Plan is hard to understand on first inspection.  There are three ways which FM World Compensates its Business Partners:

• ·       Retail Commissions
• ·       Marketing Plan Compensations
• ·       Incentives

Retail Commissions

FM World Business Partners are able to purchase all of the company’s products at a wholesale price and then resell them for a retail price.  When Advertising Business Partners claim this to be a mark up of 30%, however this will be discussed later.

Marketing Plan Compensation

The FM World Compensation plan (referred to as Marketing Plan) is split into three different parts which follow on from one another:

• ·       Marketing Plan 1-The Magnolia Club
• ·       Marketing Plan 2- The Orchid Club
• ·       Marketing Plan 3-The Star Club

The commissions earned through the three Marketing Plans add up.

 

Marketing Plan One

As a business partner, your compensation level (known as your Effectiveness Level) is dependent on the volume of points yourself and downline have accumulated throughout the month (each product purchased have a points value associated). These points are known as your group points. This is what Marketing Plan One compensation is based on. In theory, a business partner could reach the top of Marketing Plan One alone, however this is highly unlikely given the number of points required, and so a business partner must recruit other to join their team (referred to as downline or leg) and contribute points to the total group points.

To be eligible to receive any commissions you must achieve a minimum of 50 personal points.

 

Marketing Plan Two

Business Partners who reach Marketing Plan Two reach the Effectiveness Level of ‘Orchid’ . The calculation of commission here is different from Marketing Plan One and is dependent on a huge range of factors, and so it is impossible to explain fully.  However, the main factors are as follows.

Business Partners who reach any Orchid Level share a percentage of FM Worlds Worldwide Point Turnover; 8.5% across the 4 Orchid Levels.

The qualifications to reach the Orchid Level are as follows:

Pearl Orchid:

• have at least 1 leg with a 21% Effectiveness Level Business Partner
• have at least 20.000 Points (Group &Personal combined)

Amaranth Orchid:

• have at least 3 legs with at least one 21% Effectiveness Level Business Partner each

Golden Orchid:

• have at least 3 legs with at least one Orchid Level Business Partner each

Diamond Orchid:

• have at least 5 legs with at least one Orchid Level Business Partner each

 

Marketing Plan Three

Business partners who reach the effectiveness level of ‘Star’ can participate in Marketing Plan Three. Again, the calculations of the compensation for this Marketing Plan have many factors and make determining commission impossible. Those who qualify for Marketing Plan Three share 3.5% of the worldwide Point Turnover between the five ranks.

The qualifications to reach the Star Level are as follows:

Jasper Star:

• Have 7 Legs with 1 Orchid Level Business Partner in each Leg
• Have 1 Amaranth Orchid Business Partner in 3 of the 7 Legs
• Have 1 Pearl Orchid Business Partner in 4 of the 7 Legs
• 2 of the 7 Legs must qualify as New Legs
• Reach 21% Effectiveness with 1 of your additional business spots

Amethyst Star:

• Have 9 Legs with 1 Orchid Level Business Partner in each Leg
• Have 1 Golden Orchid Business Partner in 2 of the 9 Legs
• Have 1 Amaranth Orchid Business Partner in 5 of the 9 Legs
• Have 1 Pearl Orchid Business Partner in 2 of the 9 Legs
• 3 of the 9 Legs must qualify as New Legs
• Reach Pearl Orchid with 1 of your additional business spots

Malachite Star:

• Have 11 Legs with 1 Orchid  Level Business Partner in each Leg
• Have 1 Golden Orchid Business Partner in 7 of the 11 Legs
• Have 1 Amaranth Orchid Business Partner in 2 of the 11 Legs
• Have 1 Pearl Orchid Business Partner in 2 of the 11 Legs
• 4 of the 11 Legs must qualify as New Legs
• Reach Amaranth Orchid with 1 of your additional business spots

Nephrite Star:

• Have 13 Legs with 1 Orchid Level Business Partner in each Leg
• Have 1 Diamond Orchid Business Partner in 2 of the 13 Legs
• Have 1 Golden Orchid Business Partner in 5 of the 13 Legs
• Have 1 Amaranth Orchid Business Partner in 4 of the 13 Legs
• Have 1 Pearl Orchid Business Partner in 2 of the 13 Legs
• 5 of the 13 Legs must qualify as New Legs
• Reach Golden Orchid with 1 of your additional business spots

Onyx Star:

• Have 15 Legs with 1 Orchid Level Business Partner in each Leg
• Have 1 Diamond Orchid Business Partner in 3 of the 15 Legs
• Have 1 Golden Orchid Business Partner in 5 of the 15 Legs
• Have 1 Amaranth Orchid Business Partner in 7 of the 15 Legs
• 6 of the 15 Legs must qualify as New Legs
• Reach Diamond Orchid with 1 of your additional business spots

 

Incentives

In addition to the Retail Commissions and Marketing Plans, FM World also offers their business partners several incentives which include:

• ·       Fast Start and Smart Start Bonuses
• ·       Product Vouchers
• ·       Car Payments
• ·       Paid Vacations

Some of these incentives will be further discussed later.

How much do can you earn with FM World?

It is impossible to say. However, after running scenarios using their compensation plan and calculations, your main source of income will be retail commissions to begin with.

For example- Claire joins FM World and buys one perfume. She then recruits three others to her team who between them recruit eight others.  Claire now has a team of 11 below her and has 4200 group points, which mean she reaches her 9% effectiveness level, and earns £8.40 in commission.

Claire keeps recruiting for her team and has lots more people join. She also has a few in her team which are selling very well.  She now has a team of 30 people, a group points total of 7350, and earns £63 in commission. Claire only must earn 50 personal points to earn this commission ie. Sell one perfume.

This makes it clear that in the early stages of FM World your only real income is your retail profit, and until you build a team you will not be making a lot of commission.

The Pros and Cons of FM World

PROS	CONS
Established Company	MLM Business Model
Free to Join	Complicated Compensation Plan
	Focus on Recruiting
	No Available Income Disclosure Agreement

 

Established Company

FM World has been in business for over 15 years so is much more established than other MLM companies. FM World also claims to have more than 2 million international business partners.

Free to Join

There is no initial fees to become a Business Partner with FM World unlike other MLM companies, some which charge over £100.  However as mentioned earlier, although there is no mandatory investment, training provided by FM World leans towards a new business partner having to buy a starter kit and products. 

MLM Business Model

The chances of making a profit as an MLM rep are minimal.  A report by the FTC found that more than 99% of MLM reps will either not make any money or lose money, partly because of start up costs, purchasing products to reach targets, and for recruiting and advertisement. This model has also been found to effect relationships with friends and families by pestering these people to buy to earn a commission.

Complicated Compensation Plan

The FM World compensation plan is extremely complicated as previously mentioned.  The plan is over 40 pages long and includes long formulas on how to calculate commissions.

Focus on Recruiting

The FM World compensation plan is heavily recruit orientated. As mentioned, the amount of commission you receive as a business partner only becomes a sizable after building a large downline. In the 40+ page compensation plan there is only a very short mention of selling;

          When you are a Business Partner you receive discounts for the purchase of FM GROUP products.

Besides, you can also generate direct profit from selling the Products (the difference between the prices for which you buy and sell FM GROUP products stays in your pocket).

Everything else mentioned is recruit focused, how to stay qualified for commissions and about having a downline.  This leads to the impression of having to recruit to earn a sizable ‘wage’ instead of from only selling products.

No Income Disclosure Statement

Because FM World has been operating for more than 15 years, it would be expected that there would be an Income Disclosure Statement. FM World has never published an Income Disclosure Statement. Normally this is because they either do not have the statistical data to be accurate as they are newly launched, or their Reps earn so little it may discourage others from joining.

FM World Incentives to join.

FM World Has many different incentives; to many to explain here. However, we will investigate the most popular and/or the most widely advertised.

Smart Start

The Smart Start Program allows all new UK Business Partners to purchase selected products at a further 20% discount within the first 30 days.  The products available in the Smart Start Program include fragrances, make up, body care and weight loss/management. The amount of each product type available for purchase through Smart Start is limited.

Fast Start

Fast Start is an Incentive Program which runs through your first three months as a Business Partner. It is based on earning extra commission by achieving high Effectiveness Levels quickly.  If you miss out on the Fast Start you are also offered the Second Chance Target, which runs on the same ideas but spread over five months.

There are extra conditions however to reach these targets.  You must achieve a minimum of 100 Personal Points in each qualifying month. Qualifying months exclude the first month for each target and the second month for the Second Chance Target. Additionally, you must build a team to qualify. For each qualifying month no more than 60% of Tea
m Points may come from the main team leg. The reward total is accumulative however a Business Partner may only qualify in one of the Fast Start paths.

 

Drive for Success

There are many different factors which attribute to this incentive, and so we will only be covering the most important.  To be eligible for this incentive you must have hit a minimum 21% Effectiveness Level for two months consecutively. There are different rules for each Effectiveness Level to qualify, including the spread of Group Points, a minimum group point volume, a minimum Personal Point Volume (only 150 points for every level) etc.  Below is the Cash Payment Value provided by FM World to each Effectiveness Level.

There are many terms and conditions for this incentive plan, including the following:

·       A business partner can upgrade their car payment value if the qualify for a higher payment value, but they can not downgrade again.

·       The car is leased in the Business Partners name and so they are responsible for all payments. If the loose the eligibility for the incentive, FM World have no responsibility to pay.  All debt accrued are of the Business Partner only.

·       The business partner must pay all additional costs including car insurance, road tax, repairs etc.

·       If you require any upgrades to suit individual requirements, all cost are on the Business Partner

·       The car can be any brand but must be under 5 years old.

·       The reward cannot be exchanged for the cash value

 

Claims made by FM World Business Partners.

Below are three examples of Facebook posts where FM Business Partners are trying to recruit.

In this post, the Business Partner references a company car.  From researching the Drive for Success Incentive, we know that this is not true. Firstly, this post implies that if you join the team you automatically qualify for a car. If a business partner does qualify for this incentive the car belongs to them, and not FM World. An accurate claim would be ‘Earn payment for a new car’.

 

In this second post, the Business Partner firstly says that there are ten positions available. In fact, the number of positions are unlimited. Secondly their ‘target marker’ for new recruits are those who often struggle for money ‘students, stay at home parents’. This could be manipulative and taking advantage of others financial circumstances. Additionally, they say that there are part time and full-time work positions but contradicts themselves by stating you ‘chose your own hours’. A final point about this post is that there are ‘Incentives to be won’. By referencing the Incentives discussed before, you will know that you do not win these.  There is a huge amount of work done to earn these rewards.

Finally, we look at this third post. In this post the recruiter says there is ‘no leaving fee’. Firstly, if this was any other job, I do not pay to quit. Secondly, if the products and opportunity are as ‘life changing’ as they say why would anyone consider leaving. Further to this, the recruiter says there is no monthly expectation and you earn monthly commission. As we know from looking into the compensation plan, you must earn 50 Personal Points to earn your commission. So, if you want to earn this commission you must meet the 50-point target.

With these posts, the information provided can be seen as misleading, and some what manipulative.  Essentially, these Business Partners are wanting to promote themselves, but require more Business Partners to supplement the Group Points.

 

Other Things to Note

Anyone can join FM World, in fact many business partners actively encourage others to join for their own personal discount. By doing this, the ‘recruit’ is actively adding to the Business Partners Group Points.

FM World Business Partners are classed as self-employed and are responsible for all taxes etc. this implies. After looking through the FM World Business Partner Website there is no advice on completing any form of tax information.

If an individual does not want to join FM World, they can still purchase the products online without an FM World Business Partner, and still pay the same price. This rules out the need for Business Partners, as the consumer can access all the same sales and products without them.

I hope you will have found some useful information in this post about FM World, whether you are looking to become a Business Partner, already involved in FM World, or just  wanting some information.