Is Monat A Pyramid Scheme or Scam? Here’s What I Found After Review

You probably came to this page because you wonder if Monat is a scam, pyramid scheme or a legit MLM opportunity.

No need to worry you’re in the right place.

Over the last years, I’ve been busy creating reviews about all kinds of online products.

Some turned out to be fake other were legit ways to make money online but in the process I learned how to spot scams. 

In this post, I’ll show you absolutely everything you need to know about Monat Global and after reading it you’ll know exactly if you should give it a chance.

What is Monat Global?

Monat Global is an MLM company founded by Rayner Urdaneta and his son Luis Urdaneta in 2014.  According to its website, Monat Globals mission is:

“…to help people everywhere enjoy beautiful, healthy, fulfilling lives through our exceptional, naturally based products, a fun, and rewarding business opportunity, and a culture of family, service, and gratitude…”

They do this by selling hair and anti-aging products.

Monat has won multiple awards such as:

• Direct Sellers Associations 2019 Industry innovation award
• Direct Sellers Associations 2018 Making a difference award
• Gold Stevie Awards Startup of the year

It even landed in the Inc. 5000. 

Monat Controversy & Lawsuits

When you Google some of their achievements it looks really impressive but Monat Global also has another side to them.

Monat has had its fair share of controversy resulting in 11 class-action lawsuits. Also, hundreds of complaints were made to the FDA about Monat. 

Some of the accusations were: 

• Products being made in unsanitary conditions
• Misrepresenting product ingredients as naturally derived
• Monat advertised its products as promoting hair stability and growth, but instead, people experienced significant hair loss or thinning and other complications (such as itching, scalp irritation, sores, and cystic acne).
• Unauthorized deduction of their member's funds.Not upholding their refund policies

Here are some of the situations Monat has dealt with: 

Unsanitary manufacturing location

I’ve seen multiple reviews bring up the notion that Monat Globals products aren’t FDA-approved.

This is logical because the FDA website says the FDA isn’t in the business of approving cosmetic products.

However, the FDA does research the facilities where their products are made. In the past, the FDA has stated that some of the facilities were “unsanitary”.

This has caused a lot of problems in the past but seeing they’re still open for business I assume they’ve fixed those problems.

After doing my research about the products it’s hard to call their product line legit.

I wouldn’t be comfortable reselling products that I have doubts about.

Misrepresenting of ingredients in their products

Monat claimed that the ingredients of their products were safe and naturally derived but when taking a closer look at the list of ingredients you might notice this doesn’t add up. 

Many ingredients were found that are known to be contact allergens such as Cocamidopropyl betaine and Behentrimonium Chloride.

Other products also contained Stearamidopropyl dimethylamine which is known to be an environmental toxin. 

The obligatory refund of people who were possibly victims of Monat products and a $250.000 fine
In 2018, Florida’s State Attorney General started an investigation after 800 Monat consumer complaints were issued about false claims and bad business practices. 

This investigation was stopped after the company signed an Assurance of Voluntary Compliance. 

This agreement gives the State Attorney General’s office full access to Monat facilities and books. 

After finding out that false claims were made in the marketing and sales of the products and its ingredients a refund was granted to thousands of customers.

At the moment, Monat has fully refunded $ 83,000 to consumers while not admitting any wrongdoings. 

There was no civil penalty, but Monat had to pay $250,000 to the A.G. to cover attorney's fees, investigative costs, and future enforcement.

Statements Monat and its distributors officially can’t say anymore as a result of the controversy

As a result of the ruling, a close eye is being held on Monat and its independent distributors. They officially aren’t allowed to make unsubstantiated claims about the products. 

Here’s an example of a few of the claims they can’t make when marketing or selling Monat products. 

• Monat products don’t contain polyethylene, glycol, petrochemicals, sulfates, harmful fragrances, or colors, or are 100% vegan or cruelty-free.
• Monat products are certified by the FDA
• Monat products are confirmed to be safe and effective by tests run by independent labs
• Monat products are “detoxing” the scalp and hair
• Monat products are “clinically proven to increase hair growth and decrease hair loss”.

Breaking these rules by making these statements results in an immediate termination of your agreement as an independent distributor and a fine for Monat.

The history of the current Monat president 

The current president of Monat Global named Stuart A. MacMillan. He used to be the CEO of TelexFree a ponzi scheme disguised as a telephone service.

More than 1 million people were affected by the scheme according to several news outlets.

Is Monat a chance at redemption or is it just another scam? After reading this post, youll know exactly what I think about Monat.

How does Monat Work? Is Monat A MLM?

Monat is a company that distributes beauty, haircare, and skincare products.

Instead of directly selling it to consumers they have chosen to use the MLM model which gives you the choice to earn money by:

• Selling the products for a commission
• Recruiting people to earn bonuses.

What is a MLM?

MLM (a.k.a network marketing or direct selling) stands for multi-level marketing.

According to Wikipedia, multi-level marketing is a marketing strategy for the sale of products or services where the revenue is derived from a non-salaried workforce.

As a part of this workforce, you sell the products from the company and you recruit people to do the same thing. This group of people you recruit will work under you and is referred to as your downline. 

The bigger your downline is the more money you can earn passively (technically speaking) because you’re getting paid a percentage based on the performance of your downline.

This also means the people above you which are called your upline are making money based on your performance.

The act of recruiting turns an MLM company into a pyramid-shaped organization where the first people to join make the most and are on the top of the pyramid and those last to join are at the bottom.

MLMs have been around for a long time. There are Multi-level marketing companies active today that were founded in the 1950s. MLM has a lot in common with pyramid schemes which is why scammers often use MLM to disguise their pyramid scheme.

How to join Monat Global

There are 3 Monat memberships. 

You can join Monat as a Retail customer, VIP customer, or Market Partner. 

Each membership comes with different perks. 

• Retail customers can buy personal products at retail prices. 
• VIP customers have these same perks and additional discounts, free shipping, exclusive sales, and promotions.
• Market Partners have all the perks of VIP partners but are also able to earn commissions, rewards, incentives and get personal sales and marketing training.

Retail customers are free to sign up on the website and enjoy their perks. Signing up as a VIP customer or Market Partner will require additional steps. 

Step 1: Pay the enrollment fee

As a VIP customer, you’ll have to pay an enrollment fee of $19,99. To become a Market Partner, you’ll have to pay a $99 enrollment fee. 

Step 2: Select or customize a starter pack

As a market partner, you’ll also have to select a starter pack. The price of the pack will include your enrollment costs.

You can choose between 7 packs.

• Starter Kit, $99 ( worth 0 PV)
• Hair Essentials Lite Product Pack, $149 ( worth 200 PV)
• Essentials Combo Product Pack, $199 ( worth 200 PV)
• Skin Essentials Product Pack, $249 (worth 250 PV)
• Hair Essentials Product Pack, $249( worth 250 PV)
• Success Product Pack, $400 ( worth 350 PV)
• Overachiever Product Pack, $650 ( worth 500 PV)

Source: Monat Premium Packs

Step 3: Receive training & start sharing

After signing up and paying your fee, you’ll get access to your personal back office and Monat training that you can follow. From this point, you can start sharing products and earning commissions and bonuses.

Monat Products

Monat’s biggest focus aside from recruiting lies in selling their anti-aging line and hair products.

Their products are in the $99 — $27 range.

Their biggest products are from the rejuvenique product line which are anti-aging products that help with rejuvenating your skin and your hair.

It was kind of hard to find honest product reviews about this line because most on the internet are made by Market Partners that seem a bit too “enthusiastic” which shows bias.

Are Monat Global products legit?

When I started to look at some more stories about Monat products ran into this:

Monat Global complaints made the news
There are a lot of stories of people that have been using their products and had no complaints the first few months but had their hair falling out after those initial months.

Source: ABC actionews article

Better Business Bureau stories
Better Business Bureau doesn’t take reviews anymore because they don’t know which are real. Too many Market Partners place fake reviews to earn money.

If you go to there website you’ll see that they don’t showcase any of the previous reviews either.

FDA problem
I’ve seen multiple reviews bring up the notion that Monat Globals products aren’t FDA approved.

This is logical because the FDA website says the FDA isn’t in the business of approving cosmetic products.

However, the FDA do research the facilities their products are made in. In the past, the FDA has stated that some of the facilities were “unsanitary”.

This has caused a lot of problems in the past but seeing they’re still open for business so it's saf to assume that they have fixed these problems.

Monat Compensation Plan

Monat can be considered a traditional MLM when looking at its compensation plan. 

You either sell their products for a commission or you can recruit people and receive residual income, climb up the ranks, and earn bonuses.

In total, there are 11 ranks that all come with their benefits such as getting a higher commission percentage of all your sales.

• Market Partner
•  Managing Maket Partner
•  Associate Market Builder
•  Market Builder
•  Managing Market Builder
•  Associate Market Mentor
•  Market Mentor
• Managing Market Mentor
• Associate Market Director
• Executive Director 

You start as what is called a Market Partner and rise through the ranks based on:

• Personal Volume (PV)
  the sum of your personal purchased products as well as products purchased by your personal sponsored Retail and VIP Customers.
• Active lines
  Any first level Market Partner and their entire downline, where at least one Market Partner in the line has at least 200PV.
• Group Volume(GV)
  The personal volume from you and your downline, down to, but not including,
  the next Managing Market Builder or above (by Career Title). When a Market Partner in your group promotes to Managing Market Builder for the first time their GV will be included in your GV for that month’s qualification purposes only.
• Downline Volume
  The sum of PV from you and your entire downline, regardless of their title.
  Also called organizational volume (OV).

The moment you don't fulfil the requirements for a specifc rank you lower in rank and earn less money.

Here's the complete compensation plan in it's entirety from 2023.

Interested in learning more about the compensation plan in video form? Click on the video below. 

It’s a bit biased and I’ll show you later in this review why but she does a great job explaining the structure of the plan and the fast start bonuses for people who want to earn money immediately. 

Pro Tip*  in case you don’t have a lot of time the video is still watchable at 1.5x normal speed.

How do market partners make money?

On the website and in Market Partner videos, they’ll tell you there’s no sales quota for staying a market partner but to be considered an “Active” MP you need to accumulate at least 200 PV a month.

For those not familiar with the term “accumulate” in the MLM context, it means either purchasing or reselling products. 

After you qualify for this level, you can earn money in the following ways. 

A 30% commission is awarded to MPs per retail sale. A 15% commission is awarded to MPs per VIP customer saleA VIP bonus of $60 is awarded to MPs for every 4 VIP customers they enroll.

The commission rate on sales also increases after reaching certain milestones in points such as: 

• 3% commission rate when selling 1,000 - 1,999 PV
• 5% commission rate when selling 2,000 - 3,499 PV
• 10% commission rate when selling 3,500 PV or more

How much does it cost to join Monat as a Market Partner?

Every market Partner starts off by paying the starter fee of $99. 

To stay eligible for commissions you have to accumulate 200PV every month. 

PV doesn’t have an exact dollar amount in Monat but there is confirmed to be a range when it comes to how much 1PV is in US dollars. 

For reference, I’ll use 1 of the cheapest starter kit which is worth 200PV to explain the costs. 

The Hair Essentials Lite Product Pack costs $149 and is worth 200PV. 

Yearly, this would result in investing $149x12= $1788 (excluding the startup fee of $99). 

The minimum yearly cost of joining Monat as a Market Partner at the lowest level is $1887.

There’s a chance you’ll also have to deal with additional costs. According to the income statement on the Monat website, additional costs could be for:

• payment of renewal fees
• purchases of product samples or inventory
• shipping costs
• transportation costs
• training and educational expenses
• travel expenses.

Can you make money as a Monat Market Partner?

I have talked about the compensation plan and how Monat pays their Market Partners but what does that mean for you? How much can you earn personally?

It’s impossible to look into the future to look at how much you’d earn but we can look at the past and learn from that.

Below is the latest income disclosure statement Monat has brought out. This document showcases what Market Partners have earned in the previous year.

Key takeaways from this earnings disclaimer: 

Most people lost money after joining Monat
91,33% made $34 in the last year. The enrollment fee alone is $99. This means most market partners at least lost $65 (excluding costs for minimal PV quotas and additional expenses).

Earning a full-time income isn’t likely as a Monat Market Partner
The average annual salary according to the Bureau Of Labor Statistics is $53,861 in the United States. 0,11% of all Monat Market Partners earn this on an annual basis.

The costs to maintain eligibility as a Market Partner exceeded the revenue made by most members.
91,33% of market partners earned a median annual earnings of $34. Per month you’re obligated to acquire 200 points in PV.

The cheapest starter pack that is worth 200PV requires an investment of $149. I suspect this is why the dropout rate seems to be very high.

It’s natural to have a small number of people that make it to the highest ranks in anything because it takes a lot of work.

That being said, according to these statistics making money seems extremely difficult.

Roughly 0,11% of Monat members are making a full-time income (excluding expenses). 

This tells you a lot about your chances of succeeding with this compensation plan.

Why aren’t people earning decent money with MLM companies like Monat?

You might be wondering why there’s such a big discrepancy between how much people can earn and how much most market partners earn in reality.

Technically, the sky is the limit but in reality, we know because of factors such as your ability to recruit, your competition, and the performance of your downlines there’s is often a limit.

Modere also shares the same “handicaps” most MLM companies have which prevents members from earning decent money.

1. MLMs are often associated with pyramid schemes

MLMs have a pyramid recruiting structure that you often have to join to be able to make decent money or at the very least not lose money. The problem is a lot of pyramid schemes disguise themselves as MLM programs making it difficult to differentiate the two.

This is the biggest problem why most distributors have a difficult time recruiting people. The moment people hear about how you can make money by recruiting people red flags appear in most people’s minds.

2. You have to consistently invest money to earn decent commissions
The bigger the bonuses the more product you have to buy. and the more you have to recruit. You do get discounts but if you can’t sell the products I can see you easily fall into a financial deficit (which happens to the majority of MLMs).

3. The price of the product often isn’t aligned with the market

It’s hard for a multi-level marketer to sell products because most MLM products tend to be a lot more expensive than similar products sold by non-MLM companies.

This means even if you’re really good at recruiting your downline still needs to sell those same expensive products for you to make decent money.

You can see that translated in these statistics I found about Multi-level Marketing in general.

• Nearly half (47%) of MLM participants reported that they lost money.
• One in four (27%) MLM participants reported that they broke even (made no money).
• MLM participants are 7% more likely to declare bankruptcy during their lifetime.
• Direct sales have risen 79% in the last decade, but MLM participants continue to lose money.
• 90 – 99% of distributors in multilevel marketing only receive a couple of hundred dollars commission per year.
• Out of 33,000 interviewed, 90 people made enough money to cover the costs of building their business.
• 50% of the people who start a network marketing enterprise abandoned it in the first year.

Sources:
FTC
AARP
Jobsinmarketing.io

Monat Global Revenue

Monat was named one of the fastest-growing companies between 2016 and 2018. According to multiple sources and news outlets, they grew 785,86% from $42,58 million to $365,7 million in revenue.

In 2018, they took another jump and even landed in Inc. 5000 after they expanded to Ireland and Poland, and launched a skincare collection.

It seems they reached their peak in 2020 but from their till now they faced a 17% decrease in revenue earning roughly $104 million less than previous years.

Will revenue keep decreasing in the following years is something I can’t say with certainty but there is 1 key indicator that this could happen if changes aren’t made. 

That indicator is relevancy.

Monat Global Relevancy and Google Trends

Relevancy and demand are closely linked to each other. After all, you won’t proactively look for things if you don’t need them.

This is why Google Trends is a great way to see if there’s a demand for something.

In the case of Monat Global, you clearly see a link between revenue numbers published and their relevancy in Google Trends. 

The first spike as you can see was between 2016 and 2018 after which it drastically died down. 

Around 2020, when Monat started expanding to other countries and launched their skincare collection it started to spike again but now again it started to lose relevancy. 

I’m predicting Monat Global will either start expanding again to other countries or partially pivot to another niche to create demand. 

I can imagine as a long-term distributor this could be frustrating because the lower the demand, the harder it becomes to make sales and there doesn’t seem to be any consistency.

What are people saying about Monat MLM?

I have seen a lot of videos of people that show proof of making money but its hard to know who to trust because people are trying to recruit people for their downline.

This is why I started to look at reviews of people that quit Monat and their experience with it.

Here’s an example that kind of summarizes what a lot of people are saying about Monat Global.

It's a video of an ex-member explaining her experiences with Monat Global and how much she earned durng her time as an member.

It is possible to make money with Monat Global but there are things you have to think about before joining.

• You’ll start in a minus because of the costs for joining
• Most of the people that make money already have a huge audience
• Products are expensive and hard to sell
• Monat its reputation makes it hard to recruit people
• You can’t use their name when promoting the products on social media ( Very sketchy!)
• You aren’t allowed to tell people about the hidden fees until they’re in the payment process (Again Very Sketchy!)

Is Monat A Scam?

Monat has had its fair share of controversy dealing with accusations of false marketing and sales claims as you can read in this post. 

That being said, they have signed an agreement with Florida’s State Attorney General that gives them full access to their business operations. 

So it’s not likely they’ll do anything sketchy in the future. 

I think the biggest problem at the moment lies with the independent distributors.

There’s been an official ruling that they can’t make any more false statements. 

That being said, I wouldn’t be surprised as we speak that some “rotten apples” are making false claims since complaints about it still keep coming in.

I don’t think Monat itself can be considered a scam anymore but it also can’t be considered a great opportunity, to be honest.

Is Monat A Pyramid Scheme?

What is a Pyramid Scheme?

A pyramid scheme is a type of scam where people are promised money for joining the scheme and recruiting other people.

No selling of a product or service is involved whatsoever.

So you might be wondering where the money comes from?

The people that join are expected to pay a one-time fee and in exchange for that, they get a percentage of the fee of everyone they recruit after that.

The problem is from a mathematical standpoint it’s impossible for everyone to make money because you simply run out of people.

Take a look at this picture below showing how it’s impossible for everyone to earn money.

Source: Wikipedia

As you can see, in this pyramid model it’s required to recruit 6 people. You’ll notice from the 12th level and further, it’s not possible anymore for everyone to earn money.

The 2.2 Billion people on the 12th level need 13.1 billion recruits in total for them all to make money which is more people than there are currently on Earth.

From a legal perspective as long as you sell a product you aren't a pyramid scheme. This is why over the years scammers started disguising pyramid schemes.

How do pyramid schemes disguise themselves?

MLM and Pyramid schemes are very similar which makes it easy for scammers to disguise their schemes.

There are just a few things they have to do:

• Add a product and pretend the focus is on selling it.
• Create a compensation plan that’s set up for failure.
• Pretend to offer bonuses instead of directly paying people in the pyramid.
• Subtlely push people towards recruiting.

By making the product hard to sell and profit from everyone will start recruiting.

This will eventually result in the majority of the revenue comes from members joining and trying to stay active.

Red Flags of a pyramid scheme in disguise

Often an argument to counter pyramid scheme claims is sustainability.

Unfortunately, this isn’t a good argument because there are a lot of companies that have been running pyramid schemes for over a decade and have been closed down just recently.

These pyramid schemes get an influx of new money by expanding to new countries or introducing new products that are geared to different audiences and turning them into distributors. 

The influx of new money makes it possible for the pyramid scheme to sustain itself much longer.

The only thing that really indicates that a business is running an illegal pyramid scheme is if the majority of the customers are the business its representatives.

This is why it’s better to look at the following red flags.

1. There is an endless chain in which recruiters are encouraged to recruit other recruiters.
2. Advancement in ranks is based on recruiting rather than sales
3. The compensation plan pays out on 6 levels or more
4. Upline earns more than the person makes the sale
5. You have to pay-to-play

Do the pyramid scheme red flags apply to Monat Global?

1. There is an endless chain in which recruiters are encouraged to recruit other recruiters
The bonuses that require having a team do come with a lot of money but it revolves mostly around their retail sales rather than rank advancement. There isn’t an endless chain of recruiting taking place at Monat.

2. Advancement in ranks is based on recruiting rather than sales
No. The majority of the bonuses seem to be based on sales rather than recruitment. 

3. The compensation plan pays out on 6 levels or more
There are 5 uni levels which is right around the border of a long-term sustainable MLM model that has the capability to pay out all their members.

4. Upline earns more than the person makes the sale
The upline per sale only receives a portion of what the person making the sale gets.

5. You have to pay-to-play
Yes. You do have to pay to play even at the lowest level by “accumulating” 200 points in personal volume through personal sales.

So you’re basically purchasing a Hair Essentials Lite Product Pack, $149 ( worth 200 PV) every month.

Conclusion
Monat does possess multiple red flags but it does seem to be focused more on sales than recruiting which isn’t the case with a pyramid scheme. 

This is a sign that their main customers aren’t their representatives. I don’t think Monat is a pyramid scheme but it isn’t exactly “clean” either.

Do I recommend joining the Monat Global MLM Program? 

No. I don’t recommend joining Monat Global at the moment. 

It seems to be in decline when it comes to relevancy and sales which makes selling any product harder. 

Its history might also be a factor when it comes to selling products. I can imagine it being difficult to sell products when online complaints keep coming in. 

The income disclaimer also makes clear that only a very small percentage is earning a decent income.

This of course doesn't say anything about your chances personally but it can give you an idea of what to expect.

Monat Global Alternative

Are you interested in earning money without monthly quotas, recruiting, or selling products?

If yes, then I might have something for you. It’s the method I have been using since 2018 to earn money right from my laptop.

It’s called affiliate marketing.

I’ve tried a lot of different methods in the past, and I spent most of my days reviewing all types of “make money/Business” opportunities.

I can say without a doubt this is the best way to earn money without huge financial risk.

Affiliate marketing is similar to the method used in the business opportunity above but there are a few significant differences.

Unlike Multi-Level Marketing:

• There’s no need to recruit people (and possibly lose valuable relationships)
• You don’t have to sell products (and sound like sleazy salesmen to earn money)
• You don’t have quotas that require you to purchase products every month
• You don’t have an upline (that next to the company also takes a piece of the pie)

No previous experience in online marketing, no problem.

It’s by far the simplest method to earn meaningful money online and even turn it into a full-time income.

Thanks to this method acquired simple affiliate websites that can bring in +$100/day without me selling products or networking with possible recruits.

If you’re interested in learning how I did it take a look at this 100% Free Step-by-step Affiliate Marketing training that’ll teach you everything you need to know.

It’s a Free A to Z course that you can use to set up your affiliate business and start earning money online.

That’s all for today.

I hope this course was of value to you.

If you have had experience with Monat or MLM companies in general, I’d love to hear from you in the comments.