Color Street sells nail strips. These colorful nail polish strips promise to be easier to apply than traditional nail polish. They come in hundreds of designs and are sold through a multi-level business model. We looked at the 2018 income disclosure statement to learn more about how much money consultants are making.
First, let’s take a look at the ranks of the color street stylists. Most stylists are in non-leadership positions and are the rank of “Stylist,” “BQ Stylist,” or “Senior Stylist.” These three ranks cover 94.4% of all stylists in 2018.
How much can you make selling Color Street?
Looking at the income disclosure statement for 2018 we can see that the median earnings for most stylists is extremely low. Nearly 95% of stylists are paid less than $500 a year, and many are paid absolutely nothing at all. Often, when people talk about getting paid they are thinking about profits. Profit is the amount of money brought in minus expenses.
What are expenses associated with Color Street?
In order to join Color Street, you must purchase a $125 starter kit. There are additional expenses as well. Many stylists host parties, travel for conventions and trainings, pay for marketing materials, purchase samples, and more. These expenses add up quickly. Color Street mentions these expenses in the income disclosure statement.
Commission and rebates distributed to Color Street Stylists in 2018 is2018 Color Street Income Disclosure Statement
exclusive of expenses incurred by Color Street Stylists in the operation or
promotion of their business, including, but not limited to advertising or
promotional expenses, product samples, training, rent, travel,
telecommunication and internet access fees.
How do you advance to the next level?
It’s clear that almost all of the money goes to the people at the top. How do you get to the top? First, to qualify for a ‘promotion’ and to maintain that level, a stylist must be ‘bonus qualified.’ This means that they have sold $300 of Color Street themselves (personal volume). Also, you must recruit enough stylists to reach the group volume requirements ($1000 or more monthly).
These requirements are to maintain the stylist’s rank. These stylists must meet the personal volume and group volume requirements each month. This can lead to bonus buying.
Is Color Street a good opportunity?
It’s pretty hard to tell if a multi-level marketing company is a fair business or a multi-level marketing scheme. The income disclosure statement shows that most people don’t make money selling Color Street.
The way that Color Street calculates the income disclosure is pretty misleading. For example, they use the monthly amounts x12 to mean the annual amounts. However, this means the earnings in the disclosure are higher than they actually are because some consultants did not earn for the entire year. Similarly, if a consultant changes rank, their earnings look as if it was for the whole year, but it was only for the part of the year they were at that rank. There are many other examples of how the disclosure is confusing or misleading.
Most people do not make money. In order to reach higher ranks stylists must recruit others and earn money through recruiting. These are red flags that this is not a good opportunity.