Is Paparazzi Jewelry A Scam? What They Don’t Tell

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

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

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’m going to look at Paparazzi’s products, history, income statements, and compensation plan to find out if Shaklee is legit or a scam.

I’ll also recommend an alternative at the end of my post for people who are interested in earning money in a different way.

What is Paparazzi Jewelry?

Paparazzi Accessories a.k.a. Paparazzi Jewelry is a company that sells affordable jewelry and fashion-related items. In 2011, Misty Kirby, Trent Kirby, Chani Reeve, and Ryan Reeve founded this company.

It started when Misty and Kirby who were sisters were sharing self-made jewelry with the world. 

They found that people were drawn to jewelry that was fashionable, but not intimidating, timeless, but never boring, and best affordable. This is when they started focusing on selling jewelry for $5 a piece. 

With the help of Trent and Ryan, they turned to the MLM model and started distributing their jewelry through network marketing with the help of parties where independent consultants can showcase the jewelry and earn a commission.

By teaching people how to accessorize, Misty and Chani grew the company by 900% in just six months.

The company has grown to a business with thousands of internal employees and is based in St. George, Utah.

While the jewelry is made in China Paparazzi is targeted to the US.

How does “Paparazzi Accessories” work?

Paparazzi Accessories is a company that distributes Jewelry, Accessories, Necklaces, Rings, Bracelets, and Earrings.

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 selling 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 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, so scammers often use MLM to disguise their pyramid schemes.

Is it absolutely necessary to recruit people? No.

You can also stick to just selling products you can order at wholesale price (35% – 45% discount) and re-sell to make a profit. This is easier said than done for multiple reasons which is why most members try to recruit others so they can earn more money.

Papparrazzi refers to their non-salaried force as consultants so I’ll be using that term throughout this post.

How to join Paparazzi Accessories and Become a Paparazzi Consultant

Most people get referred to Paparazzi Accessories but you can also sign-up through their website and will be assigned to a sponsor that’ll assist you with starting your “business”.

After that, you can become an independent Paparazzi Accessories consultant by following these 3 steps.

Step 1: Sign-up and find  a consultant
Step 2: Purchase a starter kit
Step 3: Share and Earn

Step 1: Sign-up and find a consultant

In case you weren’t referred to Paparazzi Accessories, you can fill in your zip code on the sign-up page and the system will find the nearest consultant. This person will become your sponsor.

Step 2: Purchase a starter kit

You can choose between 3 starter kits

• Preview pack ($99) with 35 Pieces of Jewelry
• Small Home Party Kit ($299) with 120 Pieces of Jewelry
• Large Home Party Kit ($499) with 200 Pieces of Jewelry

These are made specifically for new Paparazzi members.

As a result, they’re only available for initial purchases of new Consultants and provide them with the basic necessities to become a Paparazzi consultant. 

All kits come with more or less the same business resources and hand-selected jewelry. Here’s a list of resources new consultants will be provided with after buying a starter kit:

Style Snapshot
Stylist Tip Card
Necklace Bust
Pink Sales Bags
Paparazzi Party Planner
Display Hooks
Complete Jewelry Tool Kit
Party Invitations
Vinyl Window Decal
Receipts
Consultant Enrollment Forms
Thank You Cards
Frequent Buyer Loyalty Cards
Compensation Plan Brochures

Step 3: Share & Earn 

Get access to your virtual office which is your hub from where you manage sales, recruit, get training, and find online resources needed for marketing Paparazzi products.

You can give your first launch party and start sharing Paparazzi products.

Something you also have to take into account which isn’t mentioned on the opt-in page of Paparazzi is that you have to place an order worth at least 50 points every month after signing up.

Is Paparazzi Accessories 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 instead of selling products and services. 

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 or a monthly fee and in exchange for that, they get a percentage of the fee of everyone they recruit after.

The remaining money goes to the creators at the top of the pyramid.

The problem with this model 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.

At the point that people can’t be recruited anymore, the pyramid collapses because not enough money is coming in to pay members and sustain the pyramid.

Looking at the description of what a pyramid scheme is, Paparazzi Accessories can’t be classified as a pyramid scheme from a legal perspective. Paparazzi products have given people a method to make money without recruiting people.

That said, Pyramid schemes have evolved in recent years and the authorities haven’t fully adapted to their changes.

Simply arguing that a company isn’t a pyramid scheme purely because it’s been around for a long time isn’t a good enough justification.

There are pyramid schemes that disguise themselves as MLM companies because MLMs also use a pyramid structure but sell products and services. 

John M Taylor. a prominent figure in the research of MLM’s and Pyramid schemes calls these product-based pyramid schemes.

He came to the conclusion that this variant is a lot more dangerous than its predecessor.

A few examples of these can be found on the FTC website,  such as Vemma an  “MLM/Direct-selling company” that supposedly was selling liquid nutrition products but turned out to be a pyramid scheme.

They were active from 2004 until 2015. 

That’s 11 years of operating as a pyramid scheme…

Ultimately they settled and had to pay a fine of $238 million and were suspended from partaking in recruiting practices to distribute their products.

These pyramid schemes offer products that are almost impossible to sell with the goal of pushing you to recruit people because you supposedly can get higher commissions.

These pyramid schemes bring in money by the members paying for a membership and them purchasing products thinking they’ll earn money in the long run.

In an investigation by the FTC regarding Amway, a precedent was set called the 70 percent rule.

They were accused of being a pyramid scheme. 

The 70 percent rule states that every distributor must sell at wholesale and/or retail at least 70% of the total amount of products he bought during a given month in order to receive the Performance Bonus due on all products bought. 

This was set in order to prevent distributors from purchasing their way to the top and the company from earning money at the expense of the distributor.  

This is of course hard to prove so most of the time to spot a pyramid scheme people look for signs in which the company encourages recruiting while discouraging selling products.

From that point on it’s the same as a traditional pyramid scheme but is this the case with Paparazzi Accessories?

Let’s see if we can find some red flags by looking at the income statements, costs, compensation plan, and more to draw a conclusion.

There are 5 most occurring red flags present in pyramid schemes.

Here are the 5 red flags to look for when trying to spot a pyramid scheme.

1. Recruiting of participants is unlimited in an endless chain of empowered and motivated
recruiters recruiting recruiters. 
2. Advancement in a hierarchy of multiple levels of “distributors” is achieved by recruitment,
rather than by selling products and services. 
3. Ongoing purchases (products, sales “tools,” etc.) by “distributors” are encouraged in order
for them to be eligible for commissions and to advance in the business (“pay to play”). 
4. The company pays commissions and/or bonuses to more than five levels of “distributors.” 
5. For each sale, the company payout for each upline participant equals or exceeds that for the
person actually selling the product.

 Let’s review their compensation plan, income numbers, earning potential, costs, and more to see if we can uncover some red flags.

Paparazzi Accessories Compensation Plan

Paparazzi Accessories is very similar to a traditional MLM when looking at its compensation plan.

How much money you’ll earn is heavily based on your ranks which you receive by meeting Paparazzi’s compensation plan qualifications.

There are three factors to meeting qualifications:

• Personally purchase (or resell) enough product volume to qualify
• Recruiting enough customers (who become your downline) to qualify at your desired level.
• Your downline purchasing (or reselling) enough products.

You’ll receive different types of points (personal volume, organizational volume, etc.) for doing these actions. What type of points you get can differ.

In Paparazzi 2PV is equal to 1 product worth $5 with the exception of the Zi collection products which are worth 10PV per piece.

Here you can see the qualifications for each rank and the residual income they get for every level. 

Paparazzi Accessories does offer the ability to solely resell products to earn money but to your maximum earning potential, you’ll have to start recruiting.

How much does it cost to become a Paparazzi Consultant and start a Paparazzi “business”?

Like most MLM companies, you’ll have to invest financially to join as a Paparazzi consultant.

When you sign-up you’ll have to buy an enrollment kit.

There are multiple enrollment kits available but the cheapest and basic pack is the preview kit ($99).

This kit contains documents to keep up to date with what is going on with Paparazzi, 5 Consultant Enrollment Forms, 10 “Thank You” Cards, 10 Frequent Buyer Loyalty Cards, 5 Compensation Plan Brochures, and other resources.

To kick start your journey you also have to purchase 50 points (PV) worth of products.

At the lowest level, you’ve to at least purchase 50 points for products every month.

So that’s 50×12= 600 Personal Volume a year you have to invest as a Paparazzi consultant at the lowest level.

50 PV doesn’t say much on its own because most MLMs decide for themselves how much 1PV is worth. 

Luckily, Paparazzi Accessories shared how much PV all products are worth. 

Every piece from the general collection is worth 2PV at $5.

This means every month you need to invest at least 25x $5 = $125

This means in a year you’ll spend 12 x $125 = $1500 + $99 => $1599 as a consultant.

To become a Paparazzi Accessories consultant you’ll have to spend a minimum of $1599 in your first year and $1500 every year following that.

Can you earn money with Paparazzi Accessories?

In theory, you could make an average of more than a million-dollar per year according to their compensation plan but what is the chance of you getting to this point?

Let’s take a look at the most recent income disclosure statement.

Before we get into it you need to know exactly what an income disclosure is.

"...An income disclosure statement is a document that MLM companies publish that showcases how much their (active) members earn. ideally, it should help with estimating what potential a distributor would make if they enroll..."

Key takeaways from their income disclosure

Most consultants lose money

72,84% of all Paparazzi Accessories consultants have lost money 

The Paparazzi Accessories MLM program isn’t fit for earning a full-time income

According to Forbes, the average full-time income is at least $36504.

This is $36504 /12 = Monthly $3.042

98,61% are making less than $3,=$3042 per month. So it’s safe to assume that the chance at earning a full-time income with Paparazzi isn’t likely

The majority of the money goes to the top of the pyramid

0,44% is making more than $10,170.12 a month. This means the top of the pyramid gets all the money while those down the pyramid are likely to lose money. That sounds a lot like a pyramid scheme in all honesty.

It already looks like a bad business opportunity and I’m willing to bet the numbers would be even worse if we looked at the median income of the consultants.

The earnings of a small percentage are now pulling up the average. It’s not giving an accurate presentation of what consultants are earning.

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

I have summed up the reasons why it’s hard to make money with Paparazzi Accessories and MLM companies in general into 3 points. As a Paparazzi Accessories consultant, you’ll have to deal with at least 2 points mentioned below.

1. MLM companies 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.

This isn’t good for your sales.

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 distributors of MLM companies).

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.

• 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 in commission per year.
• Out of the 33,000 interviewed, 90 people made enough money to cover the costs of building their businesses.
• 50% of the people who start a network marketing enterprise abandoned it in the first year.

Sources:
FTC
AARP
Jobsinmarketing.io

Is Paparazzi Jewelry A Pyramid Scheme?

Well… let’s look at the red flags

1. Is there an endless chain of recruiters being encouraged to recruit other recruiters?
People are being encouraged to keep recruiting to increase their earnings. The majority of bonuses are geared towards sponsoring independent consultants and supporting them to do the same. 

An example is their business builder bonus. It’s not based on the sales of your downline but simply enrolling them. This worries me a bit. Most of the bonuses seem to be geared towards going deeper with the “legs” of your downline.
2. Does rising up the ranks require recruitment rather than sales?
Recruitment is necessary but the number of people in your team doesn’t influence your rank. It’s more dependent on the performance of the team you have after a certain point.
3. Do you have to pay to play?
You have to invest financially before you’re eligible to earn commissions. Dependent on the products you “accumulate” to reach the minimum quota of 50PV per month you’ll have to invest roughly a minimum of $1600 on a yearly basis.
4. Does Paparazzi Accessories pay commissions and/or bonuses to more than five levels of “ambassadors.”
No. There are multiple bonuses based on the same 3 levels below you.
5. Does the upline receive more money for every individual sale from his downline than the person making the actual sale?
After doing a deep dive into the compensation plan, I don’t see any signs of the upline earning on an individual sale made by ambassadors in their downline.

It checks the boxes for 2 out of the 5 most occurring red flags pointing at a pyramid scheme. 

That being said, it seems a bit shady to encourage people to join an MLM program knowing more than 70% of consultants lose money that goes straight to the founders of Paparazzi Jewelry and the top of the pyramid. 

I wouldn’t be surprised if this turns out to be a pyramid scheme.

Is Paparazzi Jewelry A Scam?

According to the Cambridge Dictionary, a scam is:

“…A dishonest plan for making money or getting an advantage, especially one that involves tricking people…”

Paparazzi Jewelry isn’t making any untruthful statements about changing your lifestyle by becoming a Paparazzi accessories consultant. It also doesn’t guarantee you any earnings.

That’s why it can’t be considered a scam.  

The only thing that rubs me the wrong way is that they present the numbers in such a way as to make it seem better than it actually is. 

It isn’t illegal but a bit sketchy, especially when you’re encouraged to recruit people in what I’d call a failing business model (for its members).

Showcasing the median income instead of the average would give a more accurate look at how much most people are earning. These 2 can differ a lot but at quick glance, it’s likely a reader won’t think about that and join without having proper knowledge.

Paparazzi Alternative

Unfortunately, Shaklee might not be the ideal method for earning money.

It comes with significant financial risk and you’re fighting against the reputation of the business model every sale.

This is why I suggest an alternative to those who don’t want to deal with these 2 factors.

It is called affiliate marketing. 

It’s the method I use to earn most of the money I earn online.

How do you earn money with affiliate marketing?

You don’t have to sell products or services and you don’t have to recruit people.

The only thing you’ll be doing is referring people (that already are interested) to merchant websites such as Amazon, Walmart, and eBay. 

When people buy something based on your recommendation you’ll get a percentage of the purchase.

My #1 recommendation is an affiliate marketing training platform with more than 1.5 million members. 

Memberships are basically an all-in-1 package that comes with expert-level training, resources, and support from a community of people doing the same thing. 

Want to learn more? Take a look at my comprehensive review of the affiliate marketing platform.

Do you have any experience with MLM or Modere let me know in the comments!

That’s all for today. 

See you in my next post!

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