BuzzFeed and Inc Magazine reported changes to LuLaRoe’s return policies which is bad for consultants. People must buy lots of inventory to get started selling with LuLaRoe (see: Getting Started with LuLaRoe). This seems okay because the company had a return policy which claimed to cover […]
It Works! sells the weight loss and cosmetic wrap products (“crazy wrap thing”). It Works! claims to be a ‘Multi Level Marketing’ company. MLMs share many qualities with Pyramid Schemes. Because they share so many qualities it can be incredibly difficult to tell if the company is a […]
Check out this great video from John Oliver about Multi Level Marketing
Who is getting paid and how? Details! Consultants (bottom level) pay up front costs to sell products and get initial inventory. They then try to sell that inventory (and more) to get back the initial money they spent, and make more. They make less money if the products […]
Probably, it’s hard to tell. LuLaRoe claims to be a ‘Multi Level Marketing’ company. MLMs share many qualities with Pyramid Schemes but are a bit different. Because they share so many qualities it can be incredibly difficult to tell if the company is a legitimate […]
Jamberry is a multi level marketing company which sells a nail ‘wrap’ product (kind of like a polish replacement).
It’s relatively easy to find information about Jamberry, their company, products, and compensation plan. You can sign up on their site to become a consultant and they will assign you a sponsor if you don’t already have one.
Products are sold on their website, directly through their consultants via inventory on hand, through orders, or through the consultant’s website. Also, Jamberry consultants are known for hosting parties to sell the nail wraps and give workshops.
What does it cost to get started?
To begin selling Jamberry nail wraps as a consultant you purchase a starter kit. A starter kit costs $99 and includes application tools, business materials, samples, etc.
Additional Expenses 
It’s against Jamberry’s policies to create marketing and business materials, they must be purchased directly from Jamberry. Catalogs cost $6.50 for 10 and must be purchased with each new release (every 6 months), another site reports the cost as 25 catalogs for $14.50 with free shipping. In addition to catalogs there are also host join pamphlets, sample cards, postcards, order forms, and more.
To sell Jamberry online you’ll pay $10 every month for a website.
There are also additional costs associated with collecting money and running a business: credit card fees, tax preparation, etc.
For purchases, marketing materials, and direct sales you’ll also likely need to pay shipping and handling (including for your starter kit).
Do you need inventory? Can you just sell online and take orders?
You can just sell online. However, there is a lot of pressure to carry inventory. Most of this pressure comes from sponsors who benefit from consultants purchasing additional product. Additionally, much of the trainings and success stories revolve around parties where customers learn to apply the nail wraps and buy products at the parties.
Inventory held on hand may also go out of style as new nail wrap styles are released. Returns by consultants have limitations outlined here. Mostly, consultants may return only $1000 in any 1 year period, and may only return marketing materials upon resignation.
Encourages personally purchasing to meet quotas and get bonuses
Because commission structure requires consultants sell a certain amount each month ($200+, host a party with a certain amount of sales, etc), consultants may be encouraged to purchase a significant amount each month regardless of whether customers have actually made purchases.
This seems like a good idea because otherwise the consultant will lose access to higher commissions or bonuses. Additionally, they may be pressured for letting down their team or sponsor who may miss out on opportunities well.
This cycle of personal purchases to meet quotas can lead to debt, stress, and problems. Personally purchasing to meet qualified volume requirements is never a solution, ask sponsors for other solutions — introduce you to new leads, co-host an online party, etc.
Who is getting paid and how? Details!
Unlike some of the other programs Jamberry’s compensation plan is right on their site here.
They also publish the number of active consultants at each rank in 2015 here.
More here: Full Jamberry Compensation Plan
Consultants make commissions based on their personal retail sales volumes (30%)
Once they maintain $200+ in PRV (personal retail sales volumes) they can get additional sales bonuses (up to 10% more).
Consultants recruit other consultants to add “legs” and “downlines.
Managers and executives make additional “generational overrides” or commissions based on the PRV of the generations in their downlines. The number of generations they can collect commissions on depends on their own rank and team’s total retail volume, personal retail volume ($700), number of active legs, and more. The overwhelming majority of consultants never reach these ranks.
Jamberry consultants can make additional bonuses for moving through ranks quickly (“Fast Start Rewards”), advancing to each level (“Rank Advancement Bonus”), and more.
Stella and Dot is a multi level marketing company which sells jewelry. They are known for their trunk shows and stylists who help customers with creating overall looks to go with the jewelry. You can find vague information about Stella and Dot’s compensation and initial costs […]
Lularoe is a multi level marketing company which sells clothes. They are known for their leggings which come in limited edition patterns. Consultants sell clothing at parties. What does it cost to get started? By looking at training documents created by independent consultants it appears […]
If you heard about something that seemed like it might be too good to be true, your first reaction would probably be to Google it. Maybe if you’re really suspicious, you might add “reviews” or “does it work?” to your search. We trust the internet to make available to us all of the best information–and most of the time, it does.
Unfortunately, with products distributed by multi-level-marketing companies, such as Plexus and Lularoe, your go-to Google search gives you bad information. That’s due to a clever trick that these companies use to exploit a common weakness of algorithms used by companies like Google, Facebook, and Twitter.
How MLMs Break Google
The internet is made up of millions of pages of content. In order to answer your every question, your favorite search engine has to know about all of that content.
There’s so much content out there that when you ask a question, your search engine can’t show you every possible answer. Instead, it has to examine all of that content to decide what it thinks are the best answers. “Good” content rises to the top of the search results, and “bad” content gets demoted to the end of the list, where you likely never see it (most people only look at the first few results). To decide what’s good and what isn’t, your search engine scans everything for clues, including how frequently different kinds of content appear. The internet relies on wisdom in numbers, just like we do.
This ranking system is how multi-level-marketing companies control their online presence. These companies encourage a lot of people to create a lot of positive content (videos, tweets, reviews, blogs, websites, and more) all over the internet to promote their products. The huge volume of unique results tricks website search engines, feeds, and trends into thinking that this positive content is the best content about these companies and products. Critical and unbiased stuff gets drowned out.
MLM companies know that If you search for a bad review of something online and you can’t find one, you will probably conclude that the product is great, not that you just can’t find the bad reviews. If you search for a product online and you can’t find it, you probably will conclude the product doesn’t exist at all.
The implications of this are a little bit mind-blowing. The algorithms behind Google’s search results, Facebook’s feed, Twitter’s trends, and are so powerful that they can change how we think about what’s important or even what exists.
But isn’t that spam?
Really, this is a system where companies blanket the internet with a huge amount of biased information about their products. If they were blanketing your inbox, your mailbox, or your windshield with that information, we would call it spam. Does that mean that all of these chirpy blog posts and motivational tweets are spam, too? And if so, why don’t search engines notice and banish it all to the “bad” category, never to be heard from again?
This is where the MCMs’ plan get even more sophisticated. Breaking the internet isn’t just a numbers game. It’s the kind of content that really counts. Search engines are diligently trying not to show you spam and other undesirables, like your classmate’s old Geocities site from 1999. On the other hand, sites are also sniffing out good content that’s important to you.
As far as Google, Facebook, Twitter, and their ilk are concerned, MCM content isn’t spam. Spam is generated by computers, sent out to huge lists of unsuspecting people, and is really obviously scammy to humans. Spam is not created by a bunch of individuals creating unique blog posts and videos talking about their experiences, and sharing with their personal friends and family. But since MCMs encourage individuals to do the company’s promotion for them, it’s individuals who are generating all of the blog posts, tweets, videos, testimonials, and motivational updates. Those are your friends or your family members posting, so all of that content must be “good” content. At least, that’s what the time-tested logic of the internet would say.
The problem is that the internet’s ideas about good and bad content haven’t caught up to the age of social media. These posts may seem important, but in reality, they are a brand-new kind of spam. Like the chain letters of your childhood, this spam is made by social networks, not computers. Multi-level-marketing leaders actually even train their teams to avoid detection (read: seem less like a computer, more like a human) by teaching things like “don’t copy and paste posts” and “get creative, be unique.” Part of the reason these companies have flourished is because their model is strongest where the internet is the weakest: algorithms are not as creative as people are. And unlike clicking “report spam” on an email, you’re not nearly as likely to block your friend or loved one.
So, posts by the people who are selling the products or recruiting for the company seem important because to the algorithms — they look important. This means these posts show up at the top whenever you search YouTube, Google, and Twitter. If you look for reviews–even if you search for bad reviews– all you’ll find is content that the company, or its representatives, has personally crafted. The company has total control over what shows up online.
The problem just gets worse
The people creating this content are good people, doing their best to sell products and recruit new team members, caught up in something larger. The problem snowballs out of control as new people rely on the flawed information online for protection, only to get entangled themselves.
Suppose Jamie is thinking about joining a team selling an MLM vitamin product. Even if she is smart, she knows how to research, and she cares about doing her due diligence, she can’t. The tool Jamie trusts to do that research–the Internet–is effectively presenting the company’s advertising materials as the factual truth. Extensive research leads Jamie to the very biased conclusions presented by the masses of people already involved with the company. So Jamie joins the company, and creates even more content. If Jamie joins a particularly bad MLM she might end up losing a lot of her money and time, and involving family and friends along the way.
Check out these links to learn more and leave questions in the comments!
Fun and Unique patterns LuLaRoe leggings come in a variety of fabrics (manufactured abroad). Rarer patterns are dubbed “unicorns.” Consultants may not have more than one of a given pattern. They are often described as comfortable, modest, and of good quality with a great fit. “Like […]