By
James
Updated on
Earning money has become easier than before thanks to the thousands of companies that offer employment opportunities through online services.
Many of them provide you with their products which you can sell and get a commission. Such brands usually deal in personal care products like skin and hair products. But what happens when such a brand comes under the scanner, with claims about it being a non-legitimate business?
This is what has happened with Monat, a well-known MLM (multi-level marketing) company that sells skin and hair care products. Being an MLM company, Monat relies on its customers and clients to promote the company and earn commissions. But there are several claims stating that the earning opportunity it provides is a scam or a pyramid scheme.
We’ll be discussing those claims and will try to clarify the doubts surrounding the business in this guide, so you can know whether it is a worthwhile opportunity.
About Monat
Monat Global Corp is an MLM company based in Florida that specializes in the manufacture and sale of hair products, such as shampoos, oils, and conditioners. It has recently expanded its portfolio to offer wellness and skincare products as well.
Started by Rayner and Luis Urdaneta in 2014, the company now has an international presence and caters to customers in the US, Canada, and various European countries. Like other well-known brands in the industry, Monat claims to sell products that are free from sulfates, animal-derived ingredients, and parabens.
While the company sells a wide range of products, it is best known for its hair masks, conditioners, and shampoos. According to most customers, the products are effective and provide quick results, but this is not always the case.
Some customers have found the products to be completely ineffective and have even experienced problems like skin irritation, hair breakage, and loss.
Monat first became famous on social media platforms due to its MLM model, which attracted a lot of customers. But due to the adverse effects of some of its products and confusion regarding this business model, the brand has come under scrutiny.
Monat Products
Originally Monat was engaged in only selling hair products but it now offers body, face products, and supplements. Their hair product line is the largest and includes some of the most popular products from the brand, such as:
1. Renew Shampoo And Conditioner
The Renew Shampoo and conditioner is usually the first product people purchase from Monat. It has been developed to make your hair denser and stronger with most users experiencing positive results after using it.
2. Revitalize Conditioner
This conditioner should ideally be used after shampooing and can even be mixed with the shampoo.
3. Rejuvenique Oil Intensive
The Rejuvenique hair oil is another popular product that users have found effective in improving hair luster and strength.
Prices
Even if some users find Monat hair and skin products worthwhile, they are unlikely to purchase them again due to the high prices. Products are generally sold through market partners, who strive to make a profit and sell them at increased costs.
When some Monat products are available on websites like eBay and Amazon, they are generally cheaper than the price at which the market partners sell them. This means that as a market partner, you will find it very hard to convince buyers to purchase them.
Since you have to purchase the products from the company, the chances of making money are extremely low, and in the end, you are likely to suffer a loss.
The Monat MLM Model
To understand how Monat operates using the MLM model, it is crucial to know what an MLM company is.
How Does An MLM Company Operate?
Multi-level marketing, or MLM, is not a new marketing strategy, and companies like Avon, Tupperware, Amway, and many more have been functioning successfully using this model for many years. In MLM companies like these, you purchase products from the brand and then resell them to others.
Thus, you can recover the investment and earn some profit, or you can earn money by referring others to the company. They, in turn, recruit other people, and the process continues. For MLM companies like Monat, this is the main way of earning revenue, and such individuals are known as market partners.
In such a method, the person positioned at the top tends to earn the most while those at the bottom earn the least. That is why it is often confused with a pyramid scheme, though the MLM method and the pyramid scheme are not exactly the same.
Differences Between An MLM And A Pyramid Scheme
When people hear of an MLM company, the first thing that comes to their mind is a pyramid scheme, but there are certain differences between the two.
For instance, an MLM company like Monat relies on direct marketing by attracting distributors who, in turn, persuade other people to become a part of the distribution network. In most cases, such companies rank their distributors based on a certain system.
The reason is that besides their own commissions, members earn a percentage on the sales made by the people they recruited, who are placed at a lower rank. These people, in turn, earn a percentage on the sales made by others they brought into the network, and so on. That is why the person who is at the top will earn the most.
While this is a legal way of doing business, companies often turn this into a pyramid scheme, which is illegal. This involves getting money from members and promising to pay them back when they bring in new members. However, in this case, there is no actual product to be sold.
Since Monat makes most of its money by recruiting new members, many people are confused about whether it is legit or a scam. Selling costly products that may cause reactions, following unethical business practices, or facing a large number of lawsuits further compounds the confusion.
How Do You Earn By Becoming A Member At Monat?
To become a Monat marketing partner, you need to pay a certain amount of money since membership is not free. But such partners can earn various bonuses and get huge discounts on products from the brand. There are multiple membership plans to choose from, each priced differently and offering varying benefits.
But all plans include automatic shipping of products once you become a member and sign up for future shipments. To earn money, you need to convince more people to join the selling network.
As in the case of any MLM company, earnings depend on how many members you can recruit. So, there is no control over how much you can make when signing up with a company like Monat.
While you do not need to hold inventory, which is an advantage, it can be challenging to find customers since Monat products can be quite pricey. That is why it is crucial to look for qualified leads that are serious about purchasing products from the company. And the main way to do that is to promote the products online on various platforms and channels.
1. Recruiting Members
Monat provides a percentage of the sales for each member you recruit, which is, in most cases, a very small amount. Since the sales can vary widely, there is no fixed amount you can earn.
There is also leveraged revenue sharing, which allows you to earn from 11 levels within the marketing team, with 6 different bonuses. But for that, you need to recruit a huge number of members, which can be very difficult.
2. Selling Products
Selling products is supposed to be the main way by which you can make money, though, in reality, the company earns more revenue by recruiting new members.
How Much Can You Make From Monat?
According to the company, selling Monat products and recruiting members for that purpose provides an excellent opportunity to earn well. In fact, it is one of the key things that distributors mention to others when trying to convince them to join the network.
The earnings are the lowest for partners who have just joined the network and are placed in the bottom tier. But climbing the ladder and earning the rank of a managing market mentor opens up more opportunities. Similarly, senior executive directors can earn over $800,000 annually, as per the company.
However, in reality, most members are unable to achieve a rank higher than that of a market partner and quit quite early. Since becoming a member is a costly affair, the result is that most members end up losing money. This is similar to what happens in the case of most MLM companies.
Very few people earn money in such scenarios, and those who do are generally positioned at the top. So, is Monat a scam or a pyramid scheme? Let’s take a look at the lawsuits filed against the company before answering that question.
Lawsuits Against Monat
Several class action lawsuits have been filed against Monat Global. The most significant one among these was filed after an FDA investigation into one of the production facilities of the brand. This inspection revealed that the products were manufactured or packaged in unsanitary conditions.
Other lawsuits have been filed by consumers who have experienced adverse reactions after using products from the brand. Some common problems users have experienced include hair loss, irritation, hair thinning, chemical burns, etc.
There have also been cases where the credit cards of customers who signed up as VIP members were charged despite there being no purchases made. All these incidents may lead you to believe that the earning opportunity offered by Monat Global is a scam.
Is Monat A Scam Or A Pyramid Scheme?
Despite a large number of negative reviews, class action lawsuits, and investigations into its products and business practices, Monat is a legitimate business. The reason is that it is possible to make money by becoming a member of its distribution network, though, in reality, only some people are able to manage this.
Most people signing up for the program are unable to make money and end up losing it, just like in most other MLM companies.
However, while Monat Global earns most of its revenue by acquiring members, it does manufacture and sell physical products, which is not the case with pyramid schemes. People often associate it with such schemes due to a large number of complaints regarding its products.
Most of these products are not available on the market, like products from other hair and skincare brands. Instead, they are sold on the Monat website or through distributors at high prices, so recruiting more members is the main way of earning money.
This involves a lot of hard work, and even after that, there is no guarantee of success.
Since convincing people to purchase costly Monat products is difficult, most people do not progress beyond the rank of a market partner. Thus, the earning opportunities are highly limited and the majority of distributors quit before being able to move on to the next rank. This is another reason why many people believe that it is a pyramid scheme.
Final Verdict
Monat Global operates similarly to most other MLM companies and earns revenue by recruiting members to sell its products. Due to the existence of physical products, its marketing strategy cannot be classified as a pyramid scheme or a scam.
That being said, most individuals who have become a member intending to make money have, in fact, lost it. Also, the commissions and bonuses that the company pays to its members are not adequate compensation for the hard work involved in selling the pricey products and recruiting members.
So, if you’re looking to make money online, it is best to avoid Monat Global.
About The Author
Reviewed by
James
James is a writer who is a self-confessed kitchenware and coffee nerd and a strong advocate of Sundays, good butter, and warm sourdough.
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