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What’s the deal with Norwex?

What’s the deal with Norwex?

Norwex is a direct sales company selling home products via consultants at parties. The company’s products include things like microfiber towels, household cleansing products, and some personal care products. Norwex focuses on being eco-conscious and cleaning your home with fewer harmful chemicals. Is Norwex a […]

Is Trades of Hope a Scam?

Is Trades of Hope a Scam?

Not a Charity/Non-Profit The company is very upfront about this. However, they explain it as a motivation — women don’t want charity. Then, the company goes on to downplay profits. For all the language about helping and empowering women out of poverty, it is important […]

Book Review: Rock Your Network Marketing Business

Book Review: Rock Your Network Marketing Business

Succeeding in Network Marketing is super challenging (99% of new members lose money*). We’re excited about any book that might have insight on how to actually make it work. We checked out this book that promises to help. We highly recommend using your local library for this kind of research!

Summary:
This book lacks specific sales and recruitment instruction and mostly focuses on
attitude. We recommend skipping this title. If attitude and motivation are something that you’re looking for help with, there are much better books.

This book by Sarah Robbins focuses mostly on attitude and perseverance as being the keys to success and common reasons for failure in Network Marketing. For those who are already motivated and who are looking for a concrete steps to improve, this book may leave you wanting more. This book mainly focuses on recruitment (not sales).

Also, this book is very high level. It suggests the same reasons for failure and strategies for success for all folks involved in all businesses that are labeled “network marketing.” It doesn’t discuss different kinds of network marketing companies or different kinds of strategies.

Finally, though this book will often quote statistics and refer to other materials as supporting evidence. We couldn’t find the sources to back up the information presented. We aren’t sure all of the claims in the book are true. Normally, we’d see an appendix with citations or footnotes but this book doesn’t have this. We reached out about some figures cited in the book but never heard back.

Not affiliated with any network marketing company or this book. We shared this review to help inform our readers. Please use your local library as a resource!
*FTC Report showing 99% of new recruits lose money

Comparing Essential Oils

Comparing Essential Oils

When evaluating a potential business opportunity it is important to consider whether the products are competitive in the market. There are many measures of value for consumers including quality, price, brand, convenience, etc. When choosing a product it’s important to choose one that is competitive. […]

Is Stella & Dot a Multi-level Marketing Company?

Is Stella & Dot a Multi-level Marketing Company?

Yes! Stella and Dot is a multi-level marketing company. We first researched Stella & Dot back in 2016. They hadn’t yet launched the sister brands Keep and Ever. Back then, their compensation plan was more easily accessible and all around the company was a lot more transparent. Today, it’s a little tricky to […]

How much can you earn with Stella & Dot?

How much can you earn with Stella & Dot?

Analysis of the 2017 Income Disclosure Statement

“The earnings represented herein are not necessarily representative of the income, if any, that an Independent Stylist can or will earn. There is no guarantee that any Independent Stylist will earn any income.”

Stella & Dot 2017 Income Disclosure Statement

This is a little weird to see after scoping out their website and seeing a tool on “see how much you can earn,” reading the FAQ, and learning about the “jobs” that Stella & Dot has created. There are actually little disclaimers all over the website pointing to the income disclosure. The FTC has provided guidance to help companies ensure they aren’t being misleading to folks.

However, digging into this disclosure we find that lots of Stylists aren’t receiving any income at all from Stella & Dot. 62% of Stylists didn’t receive a check in 2017. The company doesn’t pay by the hour, this isn’t a job or source of income in the way most people might think. Stylists pay for a starter kit and then are paid based on commissions for the sales they make (or the sales of the Stylists they recruit). Most people get paid a modest amount (if they get paid). Career level pay is super duper rare.

In order to start selling with Stella & Dot you must purchase a starter kit.
This is one of many costs and expenses to consider in order to evaluate profit.

Also, numbers in this disclosure statement are all ‘payments’ or ‘income.’ None of the numbers indicate profit. Always look at profit (or profit potential) when evaluating business opportunities. Profit is revenue minus expenses: the money coming in minus the money spent. This disclosure only shows money paid by Stella & Dot, it doesn’t show what Stylists must spend on their business in order to earn these figures. Costs can be pretty high. Most direct sales participants report costs being hundreds or even thousands annually.

Percentiles, Highs, Bottom, and Top

The “Bottom 25%” of participants is explain to mean the lowest 25% of folks at that rank. This means that the average annual estimated income reported is the most that anyone in that quartile brings in.

Specifically, at the Stylist rank, the bottom quarter of folks make between $0-200. The top quarter all make more than $1,800. We can clarify this a bit to be:

Rank% of Paid Stylists2017 Income Range
Stylist (Bottom 25%)18.48%$0 – $200
Stylist (Middle 50%)36.95%$200 – $1,800
Stylist (Top 25%)18.48%$1,800 – $43,800

The average over this rank is $1,400 which means that there aren’t very many people making those higher pay-outs. It’s probably very rare and just a few people. It’s much more common in this group for the estimated annual average to be hundreds of dollars.

What about higher ranks?

Like most multi-level marketing companies, the big money is paid at the higher ranks. This means, to earn the most money you need to recruit others to sell the product. Very few people advance to these higher levels. A little over 89% of participants are in the first three ranks.

Rank% of Paid Stylists2017 Income RangeAverage for rank
Stylist (Bottom 25%)18.48%$0 – $200$1,400
Stylist (Middle 50%)36.95%$200 – $1,800$1,400
Stylist (Top 25%)18.48%$1,800 – $43,800$1,400
Lead Styist (Bottom 25%)1.28%$0 – $400$1,600
Lead Stylist (Middle 50%)2.55%$400 – $2,100$1,600
Lead Stylist (Top 25%) 1.28%$2,100 – $15,100$1,600
Associate Stylist (Bottom 25%)2.53%$0 – $900$3,600
Associate Stylist (Middle 50%)5.05%$900 – $4,800$3,600
Associate Stylist (Top 25%)2.53%$4,800 – $28,300$3,600

All of the others make up just 11% of the folks who are paid (or about 4% of all Stylists, paid or unpaid) Stylists in 2017. Even though they make up most of the disclosure they represent a very small number of people and their earnings are certainly not typical. It’s really rare for people to be paid an amount that would be similar to a job even before considering expenses.

Annual calculations

The notes remind us that stylists don’t necessarily make commissions every month. However, the estimates in the table take monthly averages of many stylists and then estimate what income would be annually assuming a check every month.

If Stella & Dot were to take actual average annual income of stylists they would be lower. This is because any analysis that did include months where stylists recieved $0 would be lower. We can’t figure out how much lower without knowing more about how many stylists each month recieve $0. We can only conclude that the averge income from actual stylists is definitely lower than those reported in this disclosure.

Stella & Dot does report that around 62% of Stylists in the United States didn’t recieve a comission check at all during 2017. Because they didn’t receive income, none of those thousands and thousands of participants are taken into account when describing the average income disclosed here.

Finally, the Stylists at many ranks have likely worked for more than just one year to reach their rank. They have invested a lot of time, energy, and money to reach their level. This isn’t captured, and there is no disclosure about the time to reach each of the ranks.

Conclusion

It is best to view the amounts in this Income Disclosure statement as over-estimations. There are known costs and under estimates that will lower the actual averages. It’s likely that many of the folks at the ranks described actually lost money selling Stella & Dot jewelry once they factor in costs and expenses: driving, tax preparation, their time, childcare, party prep, etc.

According to their own income disclosure, annual earnings of $43,000 (or monthly of $3,600) is at best very rare and there is no evidence for the claim of 5-10 hours per week.
The income disclosure estimations do not take into account costs and expenses.

Here are some suggestions about topics for more questions when doing more due dilligence on the Stella and Dot opportunity:

  • Costs and expenses
  • Requirements and time to reach various ranks
  • Time investment

For all questions about the opportunity, be sure to ask for data about most participants, typical participants (medians, averages) rather than anecdotes and information about the most successful participants.

No affiliation with Stella & Dot. Please contact us with corrections or questions.
Source: https://www.stelladot.com/stylist/IDS

Costs of Selling DoTerra

Costs of Selling DoTerra

Product Costs DoTerra has a monthly personal volume requirement of either 50 units or 100 units. This means to receive bonuses and to remain active.This amount often corresponds to the wholesale cost of products but sometimes is less (like with special kits). Shipping costs ($3.99-$24.99) […]

Holiday Pyramid Schemes

Holiday Pyramid Schemes

Sometimes it’s our best friends who get us into the most trouble. Just in time for the holidays, gift scams are back! If you hear about a game or project that seems too good to be true it probably is. These chain letters and mail […]

Thirty One Gifts Income Disclosure Statement

Thirty One Gifts Income Disclosure Statement

The most recent income disclosure we could find on the Thirty-One Gifts website was from 2015. However, an internet search leads various copies of a 2017 disclosure. It is difficult to find or cannot be found on the Thirty One Gifts official website. Below is what we found.

Thirty-One Gifts 2017 disclosure

This disclosure can be a bit complicated to understand because of the fine print. The fine print lets us know that the table only includes consultants that were active in 2017. Thirty-one defines an active consultant as someone who submits $200 in personal sales volume in a rolling three-month period.

This fine print is pretty misleading because the table is labeled all consultants. The consultants in this table are actually more than active – they are pretty successful, all of them have $200 in personal volume sales in just a 3 month span (this can correspond to more than $200 in retail sales depending on the products sold).

Thirty-one did not report the percentage of total consultants are active. This makes it impossible to get a good idea of how many participants get paid. However, even the successful participants – 18% of those got paid less than $1 over an entire year.

Profits and Expenses

An important thing to note is that none of the data takes into account expenses. When evaluating business opportunities, most people are interested in profit. Profit is the amount of money brought in (revenue) minus any costs and expenses. A ThirtyOne participant would need to earn more money than these expenses in order to have a profit.

Expenses for Consultants can be several thousand dollars annually. You should factor in estimated expenses when projecting potential profits. Such operating expenses could include advertising and promotional expenses, product samples, training, travel, telephone and internet costs, and miscellaneous expenses.

Thirty-One Gifts 2015 disclosure

Is it worth your time?

A recent survey found that most multi-level marketing participants earned less than 70 cents per hour. The 2015 Thirty-One Gifts income disclosure statement disclosed the average hours worked and average annual income by consultants at different ranks.

Right around 80% of consultants in 2015 made on average $548 and worked an average of 7 hours per week. This amounts to about $1.50 per hour before considering expenses. If the expenses do reach even one thousand dollars as the disclosure indicated (“several thousand dollars annually”), consultants at this rank are losing quite a bit. 

At the director level average income divided by average hours reached $10. Only 2% of participants are at director or higher levels. And again, that’s before expenses. It’s likely the case that minimum wage jobs, temporary work, or gigs are more lucrative. 

Turning to the 2017 disclosure. We see that the top 1% of earners made more than $10,000. The disclosure lets us know that these consultants had an average tenure with Thirty-One Gifts of over six years. That’s a very long time. Looking only at these participant’s earnings in their most successful years is a form of survivorship bias.

Conclusion

The 2017 income disclosure statement does not break income down by rank, does not include information about average hours per week worked, or time to reach that rank. It’s likely that the difference in presentation accounts for the differences in the data rather than a significant change in the income for distributors. The numbers still stay in the same ballpark.

Most consultants are not earning much money from Thirty-One gifts. After considering expenses that most consultants are spending more than they are earning. The average earnings and corresponding average hours mean that consultants work very hard for the income. We recommend exploring other business opportunities and looking for profits per hour that exceed the minimum wage in your area.

Book Review: False Profits

Book Review: False Profits

False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes, by Robert L. Fitzpatrick and Joyce Reynolds, explores the history and cultural context of MLMs and pyramid schemes. It isn’t a great book for understanding the intricacies of today’s multi-level marketing companies. It explains why […]