NuChoice overhauled its compensation plan in early 2013, nearly two years after its initial launch sparked internal pricing wars among affiliates. The company saw defections as sellers competed directly on product prices.
In October 2011, NuChoice offered a product, but its business model had flaws. Affiliates consistently undercut one another's prices. This practice squeezed out new recruits. The company's structure also pushed people to focus on recruitment rather than direct product sales.
NuChoice now relies on a matrix component to address the issues its simple unilevel structure failed to resolve.
The company introduced new membership tiers. An Associate pays a one-time fee of $15 for 15% off products. Silver membership costs $39 monthly, Gold $49, and Platinum $59. Each higher tier offers escalating discounts, reaching up to 50% for Platinum members. All tiers, except Associate, require autoship enrollment.
Retail commissions offer 15% on standard orders. This increases to 20% for Associate-level preferred customers and 30% for higher tiers enrolled in autoship.
Recruitment commissions vary by membership level. Silver members and above earn $20 for signing Silver, Gold, or Platinum recruits; $5 of this flows to their upline. Gold members receive $20 for Silver recruits and $25 for Gold or Platinum recruits. Platinum members earn tiered amounts: $20 for Silver, $25 for Gold, and $30 for Platinum recruits. The upline split in these cases ranges from $5 to $7.50.
The company's new 2x15 matrix forms a central part of the compensation structure. This matrix features two slots on the first level, four on the second, and eight on the third, extending 15 levels deep. Each filled position, representing a recruited Silver affiliate or higher, pays $2. Affiliates can fill these positions with their own recruits or through recruitment activity within their organization.
Payout depth within the matrix depends on an affiliate's membership rank. Specific details on this mechanism were not fully outlined in the available plan document.
Matrix bonuses incentivize recruitment without direct regard for retail demand. The $2 per-position payout appears small, but these amounts compound across 15 levels. An affiliate with a full matrix, totaling 32,767 positions, could theoretically earn $65,534 from matrix commissions alone. This calculation holds only if positions continue to fill.
Many matrix plans encounter this issue. NuChoice relies on sufficient product demand to sustain continuous recruitment. If demand slows, the entire structure could stall. New affiliates might then face the same challenge seen in 2011: income depends more on building a downline than on selling products.
The revised compensation plan indicates NuChoice recognized its initial problem. But whether a matrix structure truly solves it, or simply masks the issue, depends on actual retail sales volume. Without strong retail fundamentals, the restructure may not address the core business model concerns.