Company Name: Xocai
What Is It?
An MLM that promotes the health and antioxidant benefits of chocolate through a selection of overpriced products.
In general, Xocai is similar to most MLMs. It has the same complex model that you often find and has even got in some trouble for misleading consumers and implying that making money is easier than it actually is. In many ways, I think the company is actually worse than most other MLMs, as the products are overpriced and many aren’t unique. Those issues would make the process of actually selling the products extremely difficult.
There’s been quite a lot of research and rhetoric focusing on the idea of getting health benefits from chocolate. The idea is certainly appealing. After all, most of us already love the idea of eating chocolate – so healthy chocolate sounds perfect. That concept is what underlies Xocai and its entire product line.
The company breaks its products into four categories.
- Healthy Chocolate
- Weight Loss
Most of the products call into the healthy chocolate or the beauty categories, so we’re going to start with the other two. Of these, the energy category is probably the least exciting. In fact, the category contains only a single product, which is an energy drink. This has been done to death with companies like Verve and WakeUpNow, both of which are now DEFUNCT.
The biggest difference with this energy drink is that it contains cacao and acai, which are ingredients that you don’t typically find in energy drinks (kind of cool actually!). Realistically, those ingredients are mostly there because they are antioxidants, so they probably wouldn’t help with energy much at all. Now, the drink might be a good source of antioxidants but that’s really the only thing it has going for it.
Simply put, that’s not enough. I mean, there are a lot of different antioxidant products on the market already. So, if a person did want to maximize their antioxidants, this product probably isn’t the approach they would choose.
The weight loss category isn’t any more impressive. This time, there is just two products. One of these is a protein powder and the other is a drink, which basically acts as an antioxidant shot.
The first issue with these is the price. The company lists two prices for the products, a preferred price and a retail price. Although Xocai doesn’t explain the difference, it’s likely that the preferred price is what distributors pay, while the retail price is what they try to sell the product for.
Either way, those prices are excessive.
Take the shake, you are paying at least $74 for 14 servings, that’s a little under $5.30 per serving. That’s a lot to pay for a shake. If you’re really focused on weight loss, the cost might be worth it, but most people probably wouldn’t feel that way.
In fact, high prices like these make it pretty difficult to actually sell the products from the company. Do you know many people that would be prepared to pay these prices? I don’t.
On a side note, I want to note that an antioxidant shot isn’t really going to help with weight loss anyway. A meal replacement shake will, but that isn’t limited to the shake that this company offers. In fact, any high-protein, low sugar shake will work for weight loss if you consume it instead of a meal.
The beauty products from the company are what you might expect. Basically, they are skincare products that contain cacao and antioxidants. Again, they are fairly expensive for what you get.
At the same time, there is little evidence that this type of product would actually offer skin benefits. Realistically, research into antioxidants and cacao tends to focus on benefits inside the body, which does limit the amount of evidence available on this topic.
The final set of products is the chocolate itself.
Again, these are pretty expensive and the price is higher than most people would be willing to pay for chocolate.
In fact, one of the half boxes in the image above costs distributors $69 and contains 10.1oz (288g) of chocolate. That’s not a lot of chocolate at all.
Surprisingly, most of the information about the chocolates focuses on the fact that they are high in antioxidants.
To me, that’s a particularly concerning claim. Most of the research into chocolate and health benefits have focused on compounds like flavanols. While these do have an antioxidant function lots of other compounds do as well. So, I would expect the marketing to focus on the flavanol level of the chocolate, but this isn’t even mentioned. Indeed, some research suggests that chocolate might not be a particularly good way to get those flavanols.
That suggests that the health benefits of the chocolate aren’t as good as the authors claim. It's my personal belief that the benefits are exaggerated by many companies, and the media itself, simply because that's what people love to hear. Same deal with saying that wine and beer makes you live longer. As much as I like to believe it, there are studies that go both ways.
Most of the products from Xocai seem to focus on the idea that you want to be consuming large amounts of antioxidants a day. Now, there certainly is evidence suggesting that antioxidants can be good for health. However, there is still a long way to go in research.
In particular, we don’t know exactly how much antioxidants a person should be consuming.
Antioxidants are desirable because they fight oxidation in the body and in doing so they can potentially protect against disease and improve health. But, at the same time, oxidation is an important biological process that we need to survive. Because of this, consuming too many antioxidants may potentially be just as bad as not consuming enough.
This probably isn’t an issue with a person’s normal diet – but if you’re having products like the ones from Xocai, you may well be consuming an excessive amount of antioxidants.
Xocai has actually been getting into a bit of trouble for its opportunity. Like most MLMs, the company has two ways to pay distributors. The first of these is to offer them a commission for sales. The second is to promote recruitment. So, the idea is for people to recruit others into the company. Ideally, a distributor is supposed to build a team under them.
Every MLM balances these two aspects of the company differently.
For the company to be considered legitimate it has to be possible for distributors to make money solely by selling the products. After all, if distributors have to recruit others to make money then the whole approach is little more than a pyramid scheme.
In the case of Xocai, the company has been accused of essentially running a pyramid scheme and tricking distributors. In many cases, distributors have lost a significant amount of money trying to be successful in the company.
Regardless of the outcome of the case, the controversy raises major red flags about the commission scheme at Xocai. It suggests that the company has a strong emphasis on recruitment, to the extent that it is difficult for distributors to earn money.
You can actually see some of this by looking at the compensation plan that the company offers.
For one thing, the plan works like other MLM plans, where the more people you recruit, the better the bonuses are that you can earn. Likewise, your potential for bonuses is strongly dependent on the success of your team. Xocai also has another aspect, where a distributor gets more bonuses if the person they recruit buys more product to begin with.
All of these aspects of the plan mean that there is a strong emphasis on recruiting as many people as possible and growing your team. All of this might sound fine, but the focus was meant to be on selling products, not recruiting.
The thing is, recruiting a person into a company is a lot more difficult than it seems. For example, people might be willing to buy products from you from time-to-time (out of loyalty if nothing else), but getting them to join the company means that they have to commit to it. Most people aren’t willing to do that, especially if they already have a job.
To make matters even more complex, your success depends on the success of people in your team. So, you need to recruit people and make sure they are successful. For example, there is a focus on going up the ranks yourself and getting team members up the ranks in the company.
Personally, I hate the idea of having to rely on other people being successful. It’s a bad approach for business, especially as you have very little control over what they actually do. In fact, you’re likely to find that some of the people that you recruit quit, especially as making money through this type of company takes more time and money than most people are prepared for.
It gets more complicated too.
Xocai uses a binary system, which means that the team under you is basically split into two ‘legs’. The bonuses that you can earn depend on how those legs perform in relation to one another as well as on how you and your team perform overall.
Chocolate is an extremely popular treat and theoretically, you could make money selling it, especially if the chocolate was healthy. But honestly, I doubt anyone could make money selling Xocai. After all, there are a lot of different options for chocolate out there already and people are pretty particular about what chocolate they like and what chocolate they don’t.
Besides that, the prices for Xocai chocolate are pretty extreme, especially when the products are mostly just high sources of antioxidants. I imagine that most of us would know few people willing to regularly pay that much for chocolate. That issue alone pretty much kills your chances of effectively making money through the company.
It’s also worth noting that there are other brands of high antioxidant and/or high flavanol chocolate out there. So, the products from Xocai aren’t even unique, which makes them that much more difficult to sell.
MLM VS Affiliate Marketing
One of the hallmarks of the MLM model is that it is complicated. You have to pay attention to selling the products and recruiting others, while also trying to make sure your team succeeds. At the same time, the money you earn comes in the form of commissions and a range of bonuses. That can make it difficult to keep track of how much you are supposed to be earning and how to optimize your income.
Why all this complexity?
I think this is one of the reasons I like affiliate marketing so much.
Affiliate marketing is an alternative approach to making money that many network marketers are unfamiliar with. Affiliate marketing just focuses on selling products, so there isn’t any recruitment to worry about. At the same time, you are selling through a website, so you don’t have to physically buy anything yourself and you don’t have to directly interact with customers.
This makes it much easier to control your income and to scale up the business. Additionally, there is a huge range of companies that offer affiliate programs, so you can choose what types of products you promote. You could even promote chocolate if you wanted to!
Affiliate marketing does involve building a website so it can sound a little complicated but it actually isn’t. Building the website is the simple part these days. The tough part is getting traffic to your site!
Personally, I think selling specialty chocolate could be an interesting business to get into. However, I would not recommend Xocai to friends and family, so I can't recommend it to my readers that are looking to start an online business.
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