Xocai is a Scam

I had the interesting experience of attending a Xocai “Pre-Launch” seminar recently. The idea was that i’d meet up with two old friends we’d listen to some fast talk about a new investment opportunity and then have tea and lunch to catch up. The Presentation was very stereo type of an American time share presentation. The 45 Min Presentation took 3.5 hours! and somehow they danced around without mentioning the business model or the profitability ratios. Kinda like this:





I tried to pull them up on the fact that they hadn’t mentioned the numbers and they told me i was on a “different level to most” and they’d be happy to take all the time to answer the questions after the presentation. Everyone else was told they didnt need to understand the business or the numbers. The presentation talked about the benefits of the Xocai product (which i agree seem valid), how the lady bring the product to Ireland in front of us is an ex-retired millionaire who was one on the UK rich list (although she let it slip she worked six days a week in her shop 6 months ago – not exactly a millionare lifestyle?) and how great being rich is. They show’d incentive scheme’s without mentioning the numbers and said if you want to drive a AMG Merc and take cruises like the once on the slides they’d show you how – It’s all part of the bonuses built in.

AMG Merc

AMG Merc




They finished the presentation with a 20min clip of a successful entrepreneur humorously talking about his life and how great being rich is – was this somehow affilaited with Xocia? No – i would bet the guy has never even heard of the product, but people in the room licked their lips and signed up immediately – because if they didn’t things were moving so fast that they’d be further down the pyramid. It sounded too good to be true – i nearly put my name down but wanted to see the numbers first.

Xocai – The Product
Xocai is a dark chocolate which is very high in AntiOxidant’s, can be eaten by Diabetics and is marketed as Healthy Chocolate. Although none of the literature actually states it – there is a clear message amongst the group that this chocolate is a hunger suppressant and a catalyst for weight loss; i’m not an expert about this area but 7% fat and 3% sugar still isn’t something i’d call a diet food. In truth the product itself is very impressive, only catch is it costs about 150Euro RRP a box.


What is MLM
At 150Euro RRP a box finding distribution for such a product is extremely difficult. So they use a process called MLM to bring the product to market. MLM is not a scam, its can be a very practical marketing method. MLM (Multi-Level-Marketing) more commonly known as network marketing is a system of bring a product to marketing by referral marketing and appointing agents in a downline, similar to a franchise operation where the franchiser receives a commission. I would be a fan of the concept, as are Donal Trump and Robert Kiyosaki. The pretense of MLM that makes in not a pyramid scheme is that no money may be earned from recruiting alone (“sign-up fees”), though money earned from the sales of members recruited is one attraction of MLM arrangements.


Is Xocai a Pyramid Scheme?
Xocia just about avoid the official description of a Pyramid Scheme by insisting that each “distributor” buys at least one box of chocolate per month. However it was made very clear in the Xocia presentation that the way to make money in this business was to focus building a pyramid below you and the example given was that if you get 4,000 people in a pyramid below you and each buys their one box of chocolate…


So why is Xocia not a viable business opportunity?


After the “45min presentation” that took 3 and a half hours i sat down with the American Millionaire Lady so that someone could finally explain the business model and the financial’s of the project.


First question – how much does the product cost and how much does it sell for? Erm $110 per box to buy and, erm, we recommend a 50% mark up.
Gross or Nett Mark Up?
Erm, what do you mean?
Well for example i’m VAT registered and most people in the presentation would not be. Does the VAT then errode my Profit?
No you just add that to the price.
Well Doesn’t that mean i’m then 21.5% more expensive than the next person? What if i bought 100 boxes do i get a discount?
Erm, The guy who knows the numbers and accounts isn’t here today i’ll find out for you.
Why the 7 day wait to get the product, can i stock the product at my warehouses for next day distribution
No i don’t think so, they are distributed from the UK at the moment.


Then the conversation really turned down hill. It was explained that anyone can be a distributor so rather than selling the product to them what i needed to do was to sign them up to the for lack of a better term “pyramid”. The distributor then gets paid a finders fee for bringing them in. After all the new person then buys wholesale rather than retail and since you only need to buy one box why would anyone really buy retail? The minimum order is one box of product and with the Entry $40 fee its still cheaper than retail price for the same box!


We were interrupted just as i started to realise what was going on. “Your carrage awaits so i really must pull you away. Ronan i shall be in touch to invite you to the next level of Seminar” (she must have forgot to call / invite me though).


The trick is that once your a distributor you then must try to recruit two people in your down-line who will then buy a $110 box of product each and every month. If they don’t buy their box they cannot get commission and their up-line doesn’t get paid (so no pressure now).


Xocai – An uncomparable opportunity?


One of the things that struck me about the who experience was that they pushed the whole you can’t compare this opportunity to any opportunity. Personally i beg to differ so here is my personal comparisons of similar business models and products:


Xocai Vs the Insurance Sales Man


A very popular business model in the 80’s and 90’s was to find a keen person not very versed in business and give them amazing opportunities for wealth and magnificent bonuses. The insurance sales man starts his first month and feels great about himself, he starts prospecting his family and close friends in the first week and makes several sales. He’s gets told that if he keeps up at this rate he’ll be driving a Mercedes and enjoying Cruises in no time. But after the first month he’s prospected all his extended family and friends. In his second month he calls friends of friends, old school mates and people he remotely knows. Leaving several messages and soon gets a reputation for bring a person with an agenda at all social gatherings. After exhausting his pool of contacts he lets go his position for someone else to repeat his misfortune.


So how does this relate? You see after 3 months people will tire of having to pay $110 each month for expensive chocolate just to stay in a pyramid. In the economic climate the masses just can’t afford a 1,000 Euro a year chocolate indulgence.


What about the financials?


Yes in theory you can make money but the numbers, demand and economic climate don’t stack up to scrutiny in my opinion. At 10% of your down line commission you need to have at least 11 active users just to break even on your personal intake of chocolate for use to try an engage new down-line prospects to keep your head above water. And they have to have 11 active users to keep them NOT LOOSING MONEY, thats before factoring in your time and expenses. At some stage at all times someone is loosing money to be in the game. Eventually the pyramid collapses because $110 per month is just too expensive for chocolate for the masses to accept. Like gambling some will win, majority will loose and the one thing that is for sure is that the house takes the majority of the profit.



Xocai does have competing products


Xocai is unique! Its patented! Its a brand unlike any other. Thats what they tell you and want you to believe. But what exactly does this mean? Is Xocai the only high in AntiOxidant darK chocolate? NO ITS NOT! Here’s where the whole business model falls apart.

Xocai Subsitute

Xocia Subsitute


Photo By katnhwi


Choxi+ is a very comparable product to Xocai in that they are both Very high in Antioxdiants, both are cooked at a low heat to keep the goodness of the cocoa bean. So are they exactly the same then? Well no Choxi is Organic and Xocia is not.


But the biggest difference is that Xocai costs about £2.65 per 6g square and Choxi+ costs just £1.99 per 70g Bar
Choxi+ is available online and in Selected TESCO stores.


So in conclusion technically Xocai is not a scam, however i do believe it is recklessly deceptive sucking people who would not be as business minded or financially adepth as someone who has experience in business. Therefore i write this post not to aggravate the nice people who got involved in Xocai’s program but to protect the people who have already been hit with the rough end of the down turn and might loose it all on a pyramid scheme that is built on an unsustainable business model!


Sorry to burst the bubble but things that seem too good to be true usually are just that!

Related articles:
6-questions-with-a-former-xocia-distributor
Xocai Business Opportunity Watch

__________update 14-02-09___________

More articles:
About the CEO Jeanette Brooks
MLM WatchDog Xocai accusations about its senior staff
Accusations about Xocai Management from the Sydeny Morning herald include this quote:

“The Xocai operation has 75,000 distributors including 620 in Australia where further rapid expansion planned by its founders, Jeanette and Martin Brooks whose past companies have a history of bankruptcies and serial litigation…”



Also i should mention that people i attended the seminar with did not leave with a similar distaste for the chocolate or experience as i did and continue to investigate the possibility of becoming involved.

14 Responses to Xocai is a Scam

  1. Pingback: Another Prespective on Xocai | The Home Business Private Eye

  2. Maria Swayne says:

    Hello, I am thinking of joing as a distributor but your article has made me think twice, can you provide any evidence of the quote in your article “The Xocai operation has 75,000 distributors including 620 in Australia where further rapid expansion planned by its founders, Jeanette and Martin Brooks whose past companies have a history of bankruptcies and serial litigation…”

    Any forther information on this claim would help me make an informed decision, many thanks, Maria Spain.

  3. Ronan says:

    Hi Maria,

    That quote is from an Australian News Paper, i believe it is regarding her previous companies called Yurika Foods, Universal Health & Diet Products and Phoenix International Corporation.

    I found the names of these companies on this website:

    http://www.mlmnightmares.com/

    On that page a really scary quote stood out: “On February 13, 2002, Martin Brooks and Jeanette Brooks filed for Chapter 11 bankruptcy with the Nevada District court. The total amount claimed in the Bankruptcy Claims Register by outstanding creditors is $46,983,091.58. ”

    I’m absolutely amazed that no representive for Xocai has cared to leave a comment, explain or refute any of the above – Despite this article currently being the number 1 and 2 result for “Xocai” in pages from Ireland on Google!

    I’d be interested to hear how your decision goes and if you do decide to go with it i’d love to actually hear of someone who has made real money from this flawed business model.

  4. Dave Millard says:

    I appreciate the comments on the page thus far. I too was a skeptic when I was looking into Xocai, as I had been burned in previous MLM’s and just wanted to be sure. I decided to give Xocai a try and here is what I have found.

    1. The Brookes family did have some failures in the past. They seem to have learned from the mistakes and have done a couple things differently this time.

    a. First to overcome the efficacy of the product they have the chocolate tested AFTER processing by a third party firm (Brunswick labs) to give the buyer confidence. I looked up Brunswick labs and they seem to be very legit. Their site is devoted to antioxidant research and testing.

    b. Second, the pay structure is lucrative but fair. You must work with your downline, helping them to succeed or you do not get the full payout from the compensation plan. It rewards those that help people, not those that simply recruit, recruit, and recruit. The company is debt free, maybe due to past mistakes, I do not know. But for what is relevant today, the debt free part, which gives me assurance. I know that I have made errors in the past, and I think I have learned from them. From what I can tell this seems to be what happened to the Brookes family. They screwed up, it’s a fact, but they also seem to have learned and grown from the mistake. I give them Kudos for getting back up and trying again, it seems to be working.

    2. I have made money in the company. I see the value in having others sell a product that will in turn pay me a commission. The big difference here is that 1/3 of the people that have signed up are simply using the product. They have seen results and will continue to use it for quite some time based on their results. This gives me a long term cash flow from a single sale. I like this aspect. I think this is the reason I have made and will continue to make money in this company. I have been in since Dec of last year, my downline has over 180 people in it and more sign up every week. It is work, it does meet with resistance at times, and there is no magic bullet. I work with those that I sponsor, and try to teach them to do the same. Maybe that is why it has continued, I can only speak for what I have seen.

    If you are looking for a company that is perfect, this is not the one, but it is a pretty good one and the product really does help people. I have seen it myself, and at first I was surprised, but to be honest, now it is so common that I actually expect it. I think this will give us long term stability as people want to feel better and many love chocolate. So when you put the two together it just seems to work. I hope this has helped you, best of luck with your decision. Dave

  5. Ronan says:

    Hi Dave,

    Thanks for giving your balanced perspective and glad to hear that you’ve made some money.

    Would love to heard your thoughts on if you think the business model is flawed from a perspective that it is cheaper to become a user just buying one box a month and calling yourself a distributor than being a customer? Also i’d question you cost comparison in relation the the above mentioned like with like comparison, not apples v oranges, but then again i understand that is the information Xocai gave you.

    Also not meaning to Neg and i do understand that your site is brand new, but if your in Ireland / the EU, this site is in breach of several laws. I’d recommend have a legal adviser run through the distant selling act with you. For example you are legally required (if in the EU) to state an address on your website, a contact number and returns policy if you sell products online. This would also increase your sales as customers are less likely to buy from your site at the moment since you give no indication of what country you are in as is the case at the moment.

    Best of luck with the business, i really hope it works out for you.

  6. Dave Millard says:

    Ronan,
    Thanks for the response.
    To respond to your question about the difference in price for a consumer vs a distributor. Here is the logic that I use, bear in mind that this is me talking here, not Xocai.
    For a simple consumer, you are purchasing this product with no intent on reselling. For a distributor, you are purchasing at “wholesale” thus you have the ability to repackage and re-sell if you wish. So, I always suggest to anyone that wants to consume the product that they just come in as a distributor. This will give you the benefit of lower price, but it also gives you the ability at some point to sell it if you find yourself in need at some point. The way the compensation plan works, you may actually have some people placed under you in the Binary tree whose purchases will accumulate over time thus giving you the ability to earn money in the future on sales made today. You know, not everyone is looking for another way to make money today. But in the economic times that we are faced with, who knows what tomorrow may hold. I just don’t see a downside to suggesting that a person become a dist rather than just ordering the product. There are also certain tax advantages in the US for a “home based business like Xocai” that one can take advantage of as well.
    As for the cost comparison, I don’t have a lot of info on the other product mentioned, so it is hard for me to really give a “nuts and bolts” comparison. But I will say this about our chocolate. We have no fillers, no waxes and the Acai berry is not exactly cheap (try to buy some and you will see) so these three things jump off the page to me. We may ask a bit more for our chocolate, as it is not your “candy” that you will find in the store. The sweeteners are complex, not simple. Its diabetic friendly, unlike most And, they have to pay me! I mean let’s be serious; would a distributor go out and sell something that they will only make a 1.00 on? Probably not. There is a pay component that one must take into account. But, the product is unique, and it works, so I will gladly spend my hard earned bucks to keep enjoying it. And most important, it requires someone to go out and tell the story, to inform and help others learn etc. So, you are paying for a product and the knowledge to get the work out to the public about it. Both are equally important to the success of any new launch.
    As for my site, I do not advertise in the UK or EU so I think I am good for now. If someone happens upon it from a blog or something, I have a contact page and FAQ page that will answer most of their concerns. I will take it under advisement however and look at adding the location to the page. After all, I have nothing to hide and work pretty hard to stay transparent.
    By the way, I am located in Beaufort SC and run my Xocai business in Florida, GA, NY, Canada, Mass, CA, Il and NM. I spend most of my time in Florida and South Carolina.
    Thanks again, hope this helps.
    Dave

  7. I have been living with the Xocai scam for a year now, my mother has bought into the religion and is of course going to be making big money, its always about the opportunity that will occur, but never what is occurring, she is constantly trying to reach levels, buys herself into those levels, this is not a sound model for business, she is a customer, Dave you are a customer, MLM is not a scam in the sense of it really makes money for the founders, it is an elaborate way for the founders to have sustainable sales. How much money have you made Dave? How much have you spent? Nobody ever explains those numbers. Who cares how healthy it is, money is the only thing that matters in a business, if you buy into the belief that they are supplying this product because they want to heal the world they would sell it to the world and share this wonderful product and save lives, wake up. It borders on a religion, you are the pawns they are your idols.

    Have fun making Jeanette rich.

  8. Meduka says:

    Could Dave provide us with some of his costs and profits etc.

  9. Ronan says:

    Apparently not, would have been great if he could have. But frankly i wouldn’t believe them anyway.

    One has to question the logic of someone that creates a website as a brochure but with no intent to sell or ability to contact them.

    If the product or scheme was so great we’d have heard more about it after this much time.

    So it’s safe to say now, it’s a time wasting scam that offers no actual opportunity to get rich at all. Not a single person in Ireland that i’ve heard of has made any profits near enough to cover their costs.

  10. Michelle R says:

    I’ve been a distributor with xocai for 2 months now and made over $2000 (70% from new recruits commission, 30% team sales commission)- I don’t even have a background in sales and never been in a network marketing! I am a walking billboard of the product as I lost 10 lbs in 3 weeks! Everyone wants to know my secret. Walk the Talk first before you waste all your time formulating your opinion here. P.S. One of my downline made $3000 in 6 weeks!

  11. Ronan says:

    Michelle, Congrats on making some money and loosing weight. However if we assume you make yourself contactable 40 hours per week. The two months income you made is equivalent to $2.5 per hour, probably before expenses such as phone, transport to meetings, taxes etc.

    Business fundamentals simply make this in impracticable venture. It’s selling a dream to others (100% of your examples income) and no physical sales of the core product (0% in your example). Its the classic 90s pyramid scheme scam with a product loosely tied in. I’m not saying people shouldn’t use the product or network with others for a social life, but dont call it a business.

    Also in terms of walking the talk, I’ve made my reputation and money by solid investments and fundamentals. I’m not some anonymous poster.

  12. lily says:

    My sister friend is into Xocai and of course she is talked to join and she did. Business like this is always a red flag on me. I bought one replacement meal kind and it taste awful! My sister has to sell her boxes of chocolate to anyone she knew and it’s just awful thing to do. Who on earth can afford buying a box of a very expensive altered cacao and add it with berry whatever that does not dissolve in either hot, cold or iced added water? I told my sister to earn profit you have to generate and sell a lot of Xocai hello..good luck.I tried buying one just to make her happy. it’s apyramid period. I’d rather eat a commercial chocolate from godiva, taste more better.

  13. Dan P. says:

    Michelle R. is a shill at best!!!!!!!!!!! Don’t believe this nonsense. The owners make the money, period. Her whole email is crap and she knows it. She’s a shill people. She did not make that much money or she’d be back bragging about how much more she has made since her original message. It’s a joke and good luck joining up and selling chocolate to family and friends because that’s all that’s going to happen. Cheers!

  14. GRACE D. says:

    i GOT INTO XOCAI EARLY ON….THE LINES MUST REMAIN EVEN…MY EXPERIENCE WAS…ONE SIDE OF MY SALES TOOK OFF ( I BROUGHT HER IN SHE OWNED A COMPANY WHERE SHE COULD SELL THEM AND SOLD THEM TO OTHER OWNERS OF THE SAME COMPANY)…GREAT FOR HER SHE MADE BIG MONEY AND ADVANCED TO THE TOP…i ON THE OTHERHAND COULD NOT GROW THE OTHER LINE AND ENDED UP RECIEVING NO PROFITS AFTER 2 YEARS OF HARD WORK AND ABOUT 6,OOO DOLLARS OF TIME AND ENERGY. i WOULD NEVER DO A MARKETING SCHEME LIKE THIS AGAIN. i LOVED THE PRODUCT…IT BECAME A WHO YOU KNOW KIND OF INVESTMENT.

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