Beauty Counter MLM Review: Pyramid Scheme, Scam or Legit?

Welcome to my Beauty Counter MLM review.

You probably came to this page because you wonder if Beauty Counter life is legit or a pyramid scheme?

No need to worry you’re in the right place for the answers to these questions.

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

Some turned out to be fake others 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 Beauty Counter and after reading it you’ll know exactly if you should give it a chance.

What is Beauty Counter?

Beauty Counter is an mlm company that distributes and manufactures make-up and skincare products. The name of the founder Gregg Renfrew. She founded the company in 2013 with the mission of providing people with safer make-up and skin care products.

She created the “Never” list. This is a list with +1500 ingredients that are dangerous for the human body but are being used in make-up and skin care products. Beauty Counter doesn’t use any of these ingredients in their products.

Beauty Counter Headquarters is located at 1733 Ocean Avenue, Suite 400, Santa Monica, CA 90401, USA

How does Beauty Counter work?

In short, Beauty Counter is a company that distributes make-up 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 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/or 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 person that recruited you which is called your upline is 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.

Source: Wikipedia

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.

Is it absolutely necessary to recruit people? No.

You can also stick to just selling products which you can order at wholesale price (25% discount) and re-sell to make a profit. This is easier said than done for multiple reasons which are why most members try to recruit others so they can earn more money.

How to join Beauty Counter

You can join Beauty Counter as a consultant 

Most people get introduced to Beauty Counter by a partner which will become their sponsor but you can also sign up for both by visiting the Beauty Counter join page.

Those that sign-up to become a partner by signing up will have a sponsor appointed to them by “The Beauty Counter”.

You’ll also be asked to purchase one of their starter kits. 

You’ll receive training after which you can start selling products and recruiting people to earn commissions and bonuses.

Is Beauty Counter a pyramid scheme?

To answer this question we need to know what a pyramid scheme is.

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.

Looking at the description of what a pyramid scheme is, Beauty Counter can’t be classified as a pyramid scheme from a legal perspective. Beauty Counter sells products and has given people a method to make money without recruiting people.

That being said, there definitely are definitely a few unanswered questions that make me worry. Read further to find out what I mean.

Who can benefit from Beauty Counter?

Who would benefit from joining Beauty Counter:

• Expert salesmen
• Expert recruiters
• People that believe in the cause.

Who shouldn’t join The Beauty Counter MLM Program:

• People that hate sales jobs.
• People that hate recruiting
• People that want to earn a full-time income
• People that expect to earn passive income

Beauty Counter products

A good MLM should have quality products that you can sell so I thought it was appropriate to look at what they offer. Beauty Counter is a company that creates make-up and skincare geared towards women and kits.

The price range on some of these products is insanely high compared to other companies. An example of that is one of their bestsellers which is an anti-aging cream called Countertime Tetrapeptide Supreme Cream which costs $98.

I can imagine people having a hard time selling these products.

Pros and Cons

Pros

• Products have tangible benefits
  Some of these MLM companies sell products of which you don’t know if they’ll benefit you until you use them. An example of this is essential oils. Its never been concluded from a scientific perspective that they work which limits you in promoting their benefits. The beauty Counter has the advantage with their products that what you see is what you get. People know exactly what they’re buying.
• 30-day money back guarantee
  All products of the Beauty Counter have a 30-day money back guarantee which makes products a bit easier to sell because it removes risks of not getting the value you pay for as a customer.
• You don’t have to keep an inventory of products
  As a Beauty Counter consultant you can order products directly from the website and have them shipped to your clients. 

Cons

• Expensive products
  The Beauty Counter products sold are insanely expensive making them hard to sell to others. I can imagine associates having a lot of trouble with getting rid of the products they purchased with the goal of reselling.
• Low earning potential
  The commission rate is high but when you look at the products you have to sell, you start to notice that you have to sell a unrealistic number of products to earn decent money or start recruiting.
• You have to pay to play
  You have to purchase a specific amount of products to stay eligible for getting commissions based on your downlines. The higher the rank, the more you have to purchase.

Beauty Counter Compensation Plan

The Beauty Counter MLM program can be considered a traditional MLM when you look at their compensation plan. You either re-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 8 ranks that all come with their benefits such as getting a higher commission percentage of all your sales starting at 25%.

Consultant
Senior Consultant
Manager
Senior Manager
Director
Senior Director
Executive Director
Managing Director

How much does it cost to start a Beauty Counter “business”?

The compensation plan is very confusing at first sight but these are the most important things to know when it comes to the cost of staying a member.

To maintain your rank you have to pay an annual fee of $50.

You also have to “accumulate” 1200QV every 6 months. 

1QV equals $1 at beauty counter which means every 6 months you’ll be spending at least $1200.

Overall, the minimum costs for starting your Beauty Counter business are $1250. 

This doesn’t take into account the 1 of 5 starter kits that people often purchase (even though this is not required) after becoming an consultant. 

• Flawless In Five – $135
• Counter+ Booster – $158
• Skin Care Basics – $290
• Skin Care Best Sellers – $545
• Deluxe Skin Care – $730

How much can you earn with Beauty Counter?

At first, I couldn’t find any document showing actual numbers of how much people are making as consultants for Beauty Counter on their website but luckily after some digging, I found an income disclosure.

The truth is if you want to join Beauty Counter to earn a full-time income passively you might want to look for other make money opportunities. The average US income is somewhere around $51,916.27.

Only 0,6% of all consultants are earning that much money according to this earning disclaimer. What you also have to keep in mind is that this income disclaimer is based on income, not profit.

It doesn’t take into account $1200 you have to pay, the starter kit, and the enrollment costs.

The higher you’re up the ranks, the more you have to invest financially to stay eligible to earn money.

source: https://www.ssa.gov/oact/cola/central.html

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

I have summed up the reasons why it’s hard to make money with Beauty Counter and MLM companies in general into 3 points.

1. MLM’s are often associated with pyramid schemes
MLM’s 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 your money to earn commissions
You’re only eligible for bonuses and commissions if you buy their products. The bigger the bonuses the more product you have to buy. 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 as 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 translate in these statistics I found about Multi-level Marketing.

• 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 costs in building their business.
• 50% of the people who start a network marketing enterprise abandoned it in the first year.

Sources:
FTC
AARP
Jobsinmarketing.io

Beauty Counter Reviews, Opinions, and Ratings

To keep this as objective as possible I wanted to look at what others had to say about Beauty Counter. Here are the opinions of a few YouTube Reviewers.

I also took a look at what the bloggers had to say about Beauty Counter.

The bloggers that have reviewed Beauty Counter and are ranked on Googled all pretty much came to the same conclusion. This can be summarized in these 3 points:

• It’s not a pyramid scheme from a legal perspective
• The chances of succeeding are extremely low
• You earn almost nothing as a member of this MLM

Overall both the bloggers and YouTubers had the same opinion of Beauty Counter as an MLM.

My Personal Take

I don’t think that the Beauty Counter is a scam or pyramid scheme but that doesn’t mean it’s a great opportunity. The price range makes it very hard to sell the products. 

While the commission is high for retail sales the products don’t cot enough to make a decent commission without getting residual income from recruiting. I’m not saying this is done on purpose but it makes it very hard to succeed for those that don’t want recruit people.

You’re also taking a big financial risk in my opinion just by signing up because every consultant has to order $1200 worth of products every 6 months just to stay "active"(eligible for commissions). 

Since you have no guarantee that you can sell these products especially at their price range I can imagine people losing a lot of money. If you can make it work you can earn a lot of money but the deck is definitely stacked against you.

The only people that I could see succeed with this MLM program are expert salesmen, recruiters or people that have an audience online.

Verdict

Is Beauty Counter A scam? No but it isn’t legit either. 

The product prices are insanely high making them hard to sell and the $1200 dollar you have to spend every 6 months makes it hard to earn a profit.

Beauty Counter Alternative: Commissions without expensive start-up fees, recruiting, or overpriced products.

Let’s be honest unless you’re very skilled at selling and recruiting, MLM’s seem like a bad deal.

What if I said to you there’s a method to make money online that doesn’t require you to recruit people or resell products?

Sound like a better option for most right?!

If you want to make money online from anywhere including your own home I recommend looking into affiliate marketing.

I think this method is a better option for most people because you can earn just as much as with multi-level marketing but you don’t have to bother people to join your downline.

There is no need to dig yourself into a financial hole without knowing if you can succeed and you aren’t required to sell a minimum of products to stay eligible for commissions.

I learned how to do affiliate marketing with the help of a step-by-step beginners course on an affiliate marketing training platform called Wealthy Affiliate.

Interested in doing the same? Learn more about the training platform and try out their FREE starters course.

If you have experience with MLM companies like Thrive Life leave a comment.

I’d love to hear what you think about it.

That’s all for today.

See you at my next post!