Cabi MLM Review: Is Cabi A Pyramid Scheme?

Welcome to my Cabi Review.

You probably came to this page because you wonder if Cabi 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 Matilda Jane and after reading it you’ll know exactly if you should give it a chance.

What is Cabi clothes MLM?

Cabi stands for Carol Anderson by Invitation which is a company that distributes and sells clothing and jewelry for women in the United States, United Kingdom, and Canada. As the name states, the founder of Cabi is Carol Anderson.

She started the company in 2002 with her co-founders. Cabi distributes its clothing with help of the multi-level marketing model. Cabi headquarters is located at 21750 Arnold Center Rd Carson, CA 90810, United States.

The current president is Kimberly Inskeep.

Here’s an excerpt from the Cabi website about their mission.

Cabi’s mission is to encourage and empower women in need.

From distributing clothing in local communities affected by natural disasters to empowering women entrepreneurs in the developing world to work their way out of poverty, to contribute to the education and futures of Rwandan children, we are passionate about serving and investing in women and families across the globe.

How does Cabi work?

Cabi Clothing is a company that distributes apparel and accessories. 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 that you can order and re-sell to make a profit. This is easier said than done for multiple reasons (I’ll explain this later) which are why most members try to recruit others so they can earn more money.

How to join Cabi Clothing

You have to be introduced by a member or you can sign-up through the website. After that, you have to purchase their starter pack of $2570 (the deposit is non-refundable).

The enrollment package contains:

• An inventory assortment of women’s clothing and accessories.
• Promotional items and marketing materials
• Rack and hangers.

You’ll go through their virtual training after which you’re ready to start hosting parties and get orders.

Is Cabi 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, Cabi Clothing can’t be classified as a pyramid scheme from a legal perspective. Cabi sells products and has given people a method to make money without recruiting people.

That being said, there definitely is something a bit sketchy going on. Read below to find out what I mean.

Who can benefit from Cabi?

Who could benefit from joining Cabi MLM:

• Expert salesmen
• Expert recruiters

Who shouldn’t join Cabi MLM:

• People that hate sales jobs.
• People that hate recruiting
• People that don’t have the budget for it
• People that expect to earn passive income

Cabi products

A good MLM should have quality products that you can sell so I thought it was appropriate to look at what they offer. Cabi Clothing is a clothing and jewelry company geared towards women.

Cabi Clothing sells products such as dresses, tops, sweaters, accessories, bottoms, jewelry, jackets, gift cards.

When I compared the products they sell here with other companies, I noticed that Cabi Clothing products are pretty expensive. This is strange since most of the products are made in Taiwan and China.

An example of that is the busy tank which costs $65. You could easily find the same kind of tank top for half or maybe even a quarter of the price on other websites.

This seems to be a trend with most MLM companies. Their products aren’t adjusted to the rate of the market which makes them harder to sell as a distributor.

Pros and Cons

Pros

• Cabi products have tangible benefits
  Unlike MLM’s that sell essential oils you know exactly what you’re getting and how it works. This makes it easier to sell to people.
• Cabi has been around for a long time
  It has proven to be a stable company which even survived the last financial crisis.
• High Commission rates
  You start at a commission rate of 20-25% which is high compared to other companies.

Cons

• Expensive products
  The products are compared to what the market is offering. I can imagine this making it harder to sell the products.
• You have to pay to play
  You have to invest a minimum of $2570 just to become a member. After that, you’re also financially investing every season in the products you’re going to show at parties.
• Limited to the US, UK, and Canada
  The MLM program isn’t available for people outside of the United States, United Kingdom, and Canada.
• Cabi Clothing can still bill you for refunds after membership is terminated.
  Yes even after you quit there’s is the possibility to lose money.

Cabi Compensation Plan

Cabi is, for the most part, a traditional MLM. The only thing that separates Cabi Clothing from other MLM’s is that they don’t work with ranks. The only title that is available is the title team builder.

The compensation plan states that there are 2 methods for making money with Cabi Clothing.

• Selling products for a commission
• Creating a downline and earning residual income.

How much can you earn with Cabi?

The commission rate starts at 20% which is decent and can become higher when you start recruiting people for your downline.

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.

According to Cherryl Higgins vice president of sales and field development, the average show sells $1800. Your commission on a show would be $450.

Most stylists give 4 to 5 shows a month resulting in at least $1800.

Do this for 1 selling season (5 months) and you’d have $9000.

When you start recruiting you’ll receive residual income on your downline. Here’s is the commission rate once you start recruiting.

25% of the retail value on your personal sales
3% of the retail value on level 1 of your downline.
5% of the retail value on level 2 of your downline.
3% of the retail value on level 3 of your downline.
2% of the retail value on level 4 of your downline.

You’ll also get an 8% increase on your commissions if your level 1 reaches $24.000 a month. At that moment, you’ll receive the title team builder.

The earning potential of a stylist without recruiting is low which explains why most stylists focus more on recruiting to increase their income.
Source: Cabi Official YouTube channel

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

You have to buy the collection for $2570 every selling season.

There’s also a seasonal sales threshold that you have to reach as a Cabi stylist according to their FAQ page but they don’t mention how much that sales threshold is and the consequences of not reaching it.

My guess is that your membership will be deactivated or you’re not eligible anymore to earn commissions.

In the end, you start off in a financial deficit without any guarantee of earning money.

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

I have summed up the reasons why it’s hard to make money with Cabi 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 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 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

Cabi Reviews, Opinions, and Ratings

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

Most of the people reviewing Cabi are stylists but I did find 1 person that wasn’t. She raised some interesting points.

I also took a look at what the bloggers had to say about Cabbias an MLM company.

Most bloggers don’t consider Cabi Clothing a pyramid scheme but they don’t think it’s a great idea to join them.

Paying $2570 for an opportunity of which statistics has shown that +70% lose money doesn’t seem like a good decision from a logical standpoint.

My Personal Take

In my opinion, the financial risk you have to take with Cabi is huge for most people. You have to invest $2570 before even starting. The people at Cabi are claiming on average people can earn that back in 1 month and even earn a profit of $700 but what if you don’t?

I wouldn’t take that risk knowing the clothes I’m trying to sell are overpriced compared to the market. Unless you’re a very skilled salesman and recruiter, I don’t think you have a great chance of succeeding with Cabi.

I don’t feel comfortable recommending Cabi to people. I’d rather go with a method that gives me a higher chance of succeeding.

Verdict

Is Cabi A Pyramid scheme?

No. Cabi is not a pyramid scheme but it isn’t legit either.

The fact that you have to pay $2570 just to start and sell products that are way above the prices of the rest of the market doesn’t give you a great chance at succeeding in my opinion.

Cabi Alternative: No Crazy Start-Up Costs, No Recruiting, And High Earnings

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 of $1600 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 Matilda Jane leave a comment.

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

That’s all for today.

See you at my next post!