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Is Rodan and Fields a Scam?

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[Editor's Note: This article is long and I hope you find the information you need to make an informed decision. Towards the end, I have a special gift for you. (If you want to cheat, click here to get it now.)]

Is Rodan and Fields a Scam?

Is Rodan and Fields a Scam?

It's not often that a personal finance blogger says that they are getting involved in multi-level marketing scheme. However, earlier this week, I woke up to an email from a friend saying just that. Specifically it went like this, "I'm really sleepy but had a quick read of this and.... Isn't Rodan and Fields a pyramid/MLM scheme?" Then she posted the link to this Jenny Pincher article on multiple streams of income.

I consider The Jenny Pincher to be reputable, so this came as a surprise. Last I had heard from her was about a month or two ago. She was thinking about taking some off and finding someone to run to the blog. I was initially interested and reached out to her, but soon after I did, I realized that I couldn't keep the "voice" of the blog. She agreed and we moved on. Now I'm wondering if she found someone else.

I had never heard of Rodan and Fields. Fortunately, the Jenny Pincher article gives me a little background:

"The third source of income is from my newest venture which is as a Rodan + Fields consultant. If you are not familiar with Rodan + Fields, its the premier skincare line created by the doctors who created Proactiv. I chose this opportunity because I saw this company was at the ground floor level (preparing to go global). Rodan + Fields is the 4th largest and fastest growing premium skincare brand in the U.S., following Clinique, Estee Lauder and Lancome. I have only been working this business 1 month and I work this business in 15 minute pockets here and there. I received my first check this month, which was almost enough to cover a car payment, I was shocked! If you’d like an overview of the business opportunity, you can click here."

I'm not going to suggest that I am a skin care expert, but I had heard of the others. In consulting my wife, she too had never heard of this #4. Google Trends to the rescue. Here's a comparison of the four brands:

As you can see Rodan + Fields is barely a blip on the radar at the bottom. It's hard to find a definitive list top skincare brands in the United States, but I did find a top 10 global beauty brands, which referenced a list here. Here's the top five: Olay, Avon, L'Oreal, Neutrogena, Nivea. Three of the top 4 are from the United States. We haven't even gotten to any of the three big players we were looking for. They show up at 6 (Lancome) and 8 (Estee Lauder), sandwiching the well known Dove. Biore and Shiseido round out the top 10. Clinique didn't make it.

While this list is from 2012 and it is beauty brands, I call BS on Rodan and Fields being #4 in the United States. There's no evidence that such a shake-up happened to move the Lancomes and Lauders to top status and drop all the others down below the obscure Rodan and Fields.

And if such a shake-up did occur, I can promise you that you aren't getting in the ground floor, as stated in the Jenny Pincher article. If it's bigger than Neutrogena with all its shelf space in drug stores everywhere, you can simply move on... it's already saturated.

So already we've come some inconsistencies in the marketing. As is often the case in MLM, sources for the claims are missing. Some people ask why MLM has such a bad name. This is just one of the many reasons.

It's gets worse with the "preparing to go global" comment. In the normal business world, this is a good thing, seen as a sign of success of the business. In the MLM world, it is called pop and drop. In short, if a pyramid scheme starts to implode in one country, start it up in another country. The initial growth in that country (the "pop") will cover up the "drop" in the initial country and overall, the company can pitch a message of "we're growing!" Billionaire Bill Ackman has criticized Herbalife for bringing expensive diet products into countries that have hunger as one of their top problems.

It gets worse. The Jenny Pincher article continues on past the point I quoted. She says, "As I begin to share these products, I gain a customer base and I start building my team where I will get paid for sharing the opportunity."

This is greatest example of Orwell's Doublespeak that I can think of. What MLMers call a team, is what everyone else calls a pyramid. It certainly sounds better to "build a team" than "craft a pyramid scheme" doesn't it? Unfortunately the acts are one in the same. A rose by another name, right?

The distributors in Vemma's MLM talked about "building a team" too. In August the FTC got a court of law to shut them down for being a pyramid scheme. It's a long, complicated story, but the upside is that the FTC allowed Vemma to operate with a compensation plan that requires salesmen to be salesmen, not recruiters of a pyramid scheme. The result has been nothing less than disastrous for Vemma which looks to be losing money and almost out of business.

Rodan and Fields touts a great rate which coincides with their switch to MLM. Now that I've seen what taking away the pyramid scheme does to Vemma, it makes me look at Rodan and Fields' growth in a whole new light.

Rodan and Fields' Misleading Euromonitor Claim

Update: I need to thank some commenters who have added more insight into the claim on Jenny Pincher's website of "Rodan + Fields is the 4th largest and fastest growing premium skincare brand in the U.S."

Specifically they pointed me to this misleading Facebook post (archived here in case they delete it) about Rodan + Fields ranking.

It is important to note that Euromonitor, their source, did not include Rodan + Fields in their ranking. Rodan + Fields seems to admit this, but they are inserting themselves into the rankings based on their data. The image that they ask their distributors to share really promotes the title of "4th Largest...", but it misleads people to think that Euromonitor did include them. I don't think the FTC would appreciate the marketing of the image with the very small, unclear disclaimer.

Logically, Rodan and Fields can't assume the 4th position because they don’t know how many other competing companies were also not included that may have been ahead of them. In fact, we have to question the accuracy of the report in general if they were truly leaving off the 4th largest brand. A reputable report doesn't come out with a top 10 list and omit a big player at #4.

The other issue is that Rodan and Fields can't really qualify exactly what a sale is. Let me explain. In the world of MLM, distributors need to qualify (usually by having "personal volume") to earn commissions. This is easiest done by buying product each month (often called "autoship"). What we found with Vemma is that much of the sales were coming from people looking to qualify to make money. Without the pay-to-play "business opportunity" they didn't have many sales and are actually losing money based on the link I provided above.

I believe Rodan and Fields is counting sales as sales to distributors. This is apples and oranges compared to what Estee Lauder is reporting. Estee Lauder is reporting actual sales of products at a store to people interested sole in the products. This is commonly referred to as "sell-through." They aren't reporting sending a product to a store as a sale. To do an apples and apples comparison, we'd need to say that distributors are like stores and only reported sales from these distributors to other people count as "sell-through."

Vemma's tremendous collapse shines a bright spotlight that nearly everyone was interested in the "business opportunity" and buying the products as an admission fee for that. Otherwise, they'd have no problems selling the very same product without the pyramid scheme attached to it.

People in the comments have noted that Rodan and Fields products weren't successful in retail stores. The founders were able to buy the company back and make it an MLM. Once again, given what we've seen with Vemma, it's hard for me to believe that people suddenly became huge fans of the products and it has nothing to do with sales to people exploring a "business opportunity."

Aren't Rodan and Fields Products Reputable?

As they claim, they appear to be the dermatologists behind Proactiv. They both went to Stanford University Medical School, so they aren't dummies. Commenter Tom points out: "Katie Rodan attended medical school at USC and Kathy Fields graduated from University of Miami." Just to dig a little deeper on Fields, she is listed as an Adjunct Clinical Assistant Professor. Boston University points out that "adjunct" positions are "part-time" and "adjunct clinical" positions "are usually without salary." I presume that Fields with the title of assistant is an assistant to a part-time, unpaid professor. Katie Rodan did a residency at Stanford, but attended undergrad, medical school, and interned elsewhere.

However, it turns out that Proactiv isn't anything special. The active ingredient is benzoyl peroxide. Consumer Reports found that Proactiv didn't work better than other products that contain benzoyl peroxide... and the other products are much cheaper.

Their recommendation: "To treat acne on your own, start with a benzoyl peroxide-based treatment, and buy by price. Nearly all of our test participants were satisfied enough with the topical product they tried to say they would buy it. Remember, acne outbreaks are cyclical in nature, so yours might get worse before it gets better. Also keep in mind that benzoyl peroxide can irritate skin."

Of course you can pay more for Proactiv, but it looks like you are just paying for Justin Bieber and Katy Perry to make Proactiv commercials.

It seems like Proactiv's true contribution to skin care is marketing, not the product.

Oddly, Rodan and Fields eschews what works, marketing skin cream with celebrities, to go with MLM.

By the way, shouldn't Proactiv rank above Rodan and Fields if Rodan and Fields are using it for name recognition? Just another skin cream brand that would seemingly be in the large gap between Clinique/Estee Lauder/Lancome and Rodan and Fields.

Mini-FAQ on Products, Policies, and Pricing

(This section of the article is still in development.)

Q. Are the products safe?

A. I found this video on YouTube (it isn't mine) showing why they aren't:

The links on YouTube's website use information at EWG.org. The Environmental Working Group gives good, unbiased information and it seems like Rodan and Fields don't score particularly well.

The downside of the video is the beginning that says it isn't a scam, which is something we'll cover in more detail in the section on pyramid schemes.

Q. Is there anything interesting in the Rodan and Fields Product Policy?

A. Rodan and Fields policies states, "Sales of the R+F Products through any other website, including but not limited to Internet auction sites such as eBay or Amazon, or third party bulletin board websites such as Craigslist, are strictly prohibited."

It is the highest level of hypocrisy of Rodan and Fields to attempt to ban Ebay.com. Ebay is the epitome of "direct sales" in the United States. Rodan and Fields simply can't call themselves a "direct sales" company if they are against the biggest form of direct sales today and substitute it with "autoshipping" from a factory.

Q. What about Product Pricing?

A. Despite the attempted ban, products do make their way on Amazon and Ebay. Typically these products make their way there from distributors who realize they got scammed and want to make back some of their money. I still feel like these products are a waste of money, but if you are convinced they are great, that's up to you. I can't and won't tell you what to buy.

However, I would highly suggest you avoid involving yourself in any kind of pyramid scheme (see below) by helping someone on Ebay get some of their money back. You'll also save a lot of money!

For example, I found Redefine Regimen Mask for around $169 on Ebay.

Of course, you may not want to buy it if you read the Amazon Reviews. There are a lot of one-star reviews in there. There are definitely more 5 star reviews, but many of them give themselves away as Rodan and Fields consultants by saying, "Don't buy here, buy from a Rodan + Fields consultant." Take away those fake and obviously biased reviews and you'd be left with something earning a very mediocre 3 stars with a lot of 1 star horror stories.


Looking at MLM Skin Cream Products

I've stayed away from writing about MLM skin cream products. It seems straight-forward to explain how juice isn't going to heal your cancer, but it's less so about skin creams. One thing you can say about skin creams is that there are no shortage of products claiming to be really awesome... some of them even rock the 3AM infomercial circuit. And certainly the backs of the magazines wouldn't lie.

However, just like how MLM relies on psychological tricks to make it seem juices work, the same can be true of skin creams. In fact, the FTC used to warn of MLM lotions (creams) and potions (juices) (PDF). The FTC's advice applies to a broader range of products now, but there's no denying that most MLMs focus on unquantifiable consumable products like creams, juices, and weight loss shakes. Have you seen an MLM refrigerator company? Me neither.

Serendipitously, I received an interesting comment on my article about Nerium, which is another cream. The comment author's sister harassed her into buying the product. She never used it, but gave it to her husband. Her sister went on and on about how great her sister's skin looked... and doesn't appear to have ever mentioned the husband's skin. It cost her $700 over several months to "support her sister's business." Not only that, but the comment author makes it seem like there's some kind of Photoshop going on:

"The LOL moment though was I was with her on the day she posted a pic of herself. My sister has terrible acne scars on her face and the day I was with her she looked the same as I have always known her without makeup. That day a pic went up where she said look at me 3 weeks in and see the difference? ummm, where were the scars? I was just with her!"

I'm not suggesting that Nerium and Rodan and Fields cream is the same, just that people see what they want to see. And sometimes, it appears, purposely fake results. If it can happen with one cream, it can and probably will happen with others.

Reddit shows the Evils of Rodan and Fields (and MLM in general)

[Update: Well the person speaking out about Rodan + Fields seems to have been strong-armed by lawyers. She deleted the blog I mention below and went into Reddit and deleted all her posts and her username. She didn't post a correction which would expect if she changed her mind. Instead her useful information has been deleted so you can't read it.

Update to the Update: A super smart reader pointed out that it is available on the Internet Wayback Machine so I archived a PDF version of it and a PNG version of it.]

I could go into much greater detail about Rodan and Fields. Maybe over time I will. However, I found that there's an outstanding Reddit thread filled with juicy information. (You can see bubbapink43's responses are deleted when you compare it to the archive above.) For example, they have the same car scam as ViSalus, where you can qualify for car payments. You have to first put the car in your name and if people in your team/pyramid stop buying products, you'll no longer qualify for the car payments and be forced to pay out of pocket... an expense of $750 that many didn't plan on.

There's a lot more in the thread, but that's just a taste.

The Reddit thread is started by the person who has created a very good blog on Rodan and Fields. (Blog deleted)

Rodan and Fields Consultants Mislead the Public?

In my research of Rodan and Fields, I came across Bonnie Cribbs asking "Is Rodan & Fields a Pyramid Scheme?". Unfortunately his article is useless because he confuses heirarchical organizations (which do not rely on endless chain recruiting, such as a school system) with pyramid schemes which do rely on endless chain recruiting. (Read more: Corporate America is Not a Pyramid Scheme). Bonnie even goes as far to say, "Why are people so afraid of a triangle?"

This is a common deception in the world of MLM. Unfortunately the MLMers spread it because it sounds reasonable and helps them recruit more into the scheme.

He also includes a video on his site that depicts Eric Nelson's dangerous MLM deception.

You shouldn't be afraid of a triangle, but you should be afraid of people spending false information to defraud people by recruiting them into an illegal pyramid scheme.

(By the way as made famous in the Jake from State Farm commercial, the cream doesn't seem to be helping Bonnie as she looks hideous. When "Bonnie" is writing about skin cream, I am thinking it is going to be a girl.)

Is Rodan and Fields a Pyramid Scheme?

Sounds like an easy question, but it's extremely difficult to answer.

The FTC officially guides:

"Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money."

However as NY Times' Joe Nocera points out:

"In one of those letters, he quoted from a 2010 F.T.C. staff report that said that identifying pyramid schemes entails a complex economic analysis.” The report added that 'there is no bright line disclosure that would help consumers identify a fraudulent pyramid from a legitimate [multilevel marketing company].' Really?
...
On Friday afternoon, I called the agency and asked what distinguished an illegal pyramid scheme from a legal direct-selling company. Even having talked to Craig, I found it hard to believe that it wouldn’t have some kind of definition.

A few hours later, I received an email from an F.T.C. public relations staffer. 'I’m sorry,' it began, 'but we won’t be able to offer you any on (or off) record assistance.'"

So as a consumer, there's no easy way to tell if you are getting in a legal or illegal business. The one thing we do know is that when money is rewarded from people you recruit and sales to them (commonly referred to as a downline) it appears to be a pyramid scheme according the official FTC website.

In this NY Post article on Rodan and Fields we find:

"'Unless a great deal of care is taken by the leadership of a multilevel marketing company, it is possible to allow even a well-intentioned structure to devolve into a pyramid scheme, where payment depends on recruitment,' says Bill Keep, dean of the School of Business at the College of New Jersey."

As Michelle Celarier of The NY Post Tweeted:

In case Rodan + Fields takes that link down, I've archived a copy of the PDF here.

When you open up the PDF, the monthly duplication pattern is built on a pyramid of recruiting and not selling product to people outside the pyramid. The example shows a 4-month plan where one person recruits a 1632 team/downline/pyramid that earns $40,590 a month.

Of course there's the disclaimer at the bottom about the above assumptions. The problem is that these assumptions can't mathematically carry through. If one person has a 1632 team/pyramid, it becomes very obvious that those people will have difficulty doing the same as the 1000+ people on the bottom all have to recruit 1632 team/pyramids for a total of over 1.5 million people who all have to recruit 1632 people into their team/pyramids. In just a few levels you can see how a billion people would have be recruited for just the first 1632 to reach the point in the example. You simply run out of people in the population of the world, and almost everyone is left at the bottom.

If that's not the embodiment of a pyramid scheme, I don't know what is. It clearly isn't an example of how much someone can make by selling a certain cream to friends and family.

The "False" "Value" of a "Stevie" Award

Rodan and Field's distributors have recently taken to talking about the "Stevie" Awards as if it adds credibility to the company. One commenter even pointed to Apple winning the one the year before.

Here's a little background of the Stevie Awards courtesy of Wikipedia which cites the Stevie's Awards FAQ as the source. (I checked, it's accurate.):

"As of 2014, entry fees range up to $505... According to the organization, awards are given in hundreds of categories, and 30-40% of entrants receive an award. There is an additional fee for attending the awards dinner."

Maybe next year, I should apply for Lazy Man and Money. Spending $505 for a 30-40% chance isn't bad. Better yet, maybe I should come up with my own "Lazies" where I undercut them and price it at $400 to collect a thousand entrance fees. Seems like a good way to raise $400,000. Oh and then I'll charge them to attend the dinner party too.

Reputable companies don't waste their time on such awards that no one has ever heard of and don't mean anything. Part of scam/confidence game is trying to use them to give the company some kind of legitimacy.

WZVN (ABC-7) News and Diana Haytko Join Scam the Public?

A commenter noticed this "special report" from WZVN (ABC-7) news. Here are some of the issues that I have with the segment:

The companies that are being referred to in the segment (Rodan+Fields, Nerium, Beachbody, Herbalife) are commonly known as Multi-level Marketing (or MLM) companies, not Direct Selling companies. They've adopted the Direct Selling Association (DSA) a lobbyist group for MLM companies, whose members make up more than 90% of the organization.

The "expert" that was used in the segment, Diana Haytko, has been employed by the Direct Selling Education Foundation (DSEF) as noted on this website. The DSEF prominently features a top Rodan + Fields executive on its Board of Directors.

Diana Haytko misinforms the public that pyramid schemes can not have products. If this were true, the FTC would not have been able to shut down Vemma last summer. Vemma had products such as energy drinks and juices in their MLM scheme. Vemma was also a prominent member of the Direct Selling Association, which obviously didn't police their member company very well.

The FTC has a posted guidelines on MLMs and pyramid schemes here. As you can see from this document there is no mention by the FTC that pyramid schemes can't have products. In fact, it is quite the opposite as they show companies with products can indeed be pyramid schemes.

It looks to me like this segment may been funded by the DSA as it seemed to specifically highlight DSA sources funded by MLM companies. It lacked any balance from the FTC or similar authoritative, unbiased, sources to correct the false information presented.

I contacted the director of ABC-7 programming, Deborah Abbott, via her listed email address and received no response after 10 days. A reader reports to have written Diana Haytko in the comments and says there was no response as well. Hopefully, they'll post a public apology that I can link to here.


My Gift to You

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For more visit my five minute financial fixes article. If neither of the above is helpful, I'm sorry. I appreciate you for just being here. The person recruiting you has a financial incentive to present only one side of the story. Kudos to you for searching for more information to make an informed decision.

Final Thoughts on Rodan and Fields

Like many of the MLMs that I've covered, there is more of the same here. More misinformation, more psychology tricks, more deception.

When there is doubt it is best to assume that it is a pyramid scheme and stay away. It's simply not worth losing a ton of money and going to jail over. If the company was truly reputable they wouldn't try to walk the line in the first place.

It would be very simple for them to simply pay a straight commission on products sold and eliminate the endless recruiting aspect that signifies it is a pyramid scheme. When a company consciously chooses to associate itself with pyramid schemes, what else do you really need to know?

Sample Reader Comment(s)

I want to thank so many people for leaving great comments. I'd like to highlight a few that I think are noteworthy. I think it's worth reading all the comments before buying products or becoming a distributor/consultant:

Ellie said: "But guess what? 95% of [Preferred Customers] don’t order every two months. So, more posting and commenting about the love of R+F on the posts of other consultants just so they’ll comment on mine... Again, I like the products but do I think they are worlds above other lines? Not really. Are they ridiculously expensive? You bet. Do I stress every month about not meeting the minimum qualifying volume of 600? Yes. Am I making any money? Nope. Do I feel like a complete idiot despite being a pharmacist and actually being pretty smart? Yes. Am I tired of spending $100 a month on a website and products that I give away? Yes."

Note to lawyers looking to send a frivolous lawsuit my way.

Most companies are smart enough to realize that such lawsuits trigger a Streisand effect that makes them look much, much worse. It invites media coverage. It's probably not a good look to threaten a consumer advocate, his military wife, and 1 and 2 year old that they are going to be homeless after a huge judgment. I maintain open communication channels via my contact form and the comments on this article, which is a far better way to resolve any differences in opinion your client may have.

Last updated on April 18, 2016.

This post deals with:

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682 Responses to “Is Rodan and Fields a Scam?”

  1. Patricia says:

    As for the buying from customers or consultants- I believe it is the minimums that consultants are required to have in order to receive commission (or a higher percentage of commission from the downline). In order to get a certain percentage commission, you or your team must sell $600 or 600 sales volume and apparently other consultants have admitted that many open up fake preferred customer accounts in order to meet their monthly minimum if they are low that month. If you are acting as your own customer in order to maintain receiving the commissions from those below you, that is sales to a consultant not a customer yet on paper there is no proof of that fact. From what I understand from my sister the consultant this is common practice and all the extra inventory they bought just gets held until they can sell to other person. Which makes sense there are a lot of R+F deemed illegal direct sales going on on eBay and Amazon for consultants trying to get rid of their extra stock. If R+F took away the 600sv minimum it would be a whole lot less fishy because people would not feel pressured to sell a certain amount each month and go to those extremes.

    However as LM stated maybe R+F does regulate more and does require addresses of new customers in order to prove the 70% sales to customers (not consultants) if that’s he case, can any consultant verify that? Maybe it’s in the policies but just not upheld?

  2. Geoff says:

    Jess said, “I don’t sell any product to any consultants. If you read the policies as consultants we are not to be purchasing bulk product ourselves and if we do we must have proof that over 70% is purchased by customers.”

    Um…that’s clearly a lie unless you have nobody in your team. However, in this line here you have said, “As a consultant, it is my job to set up my team members for success and I dedicate a decent amount of time to helping my team achieve their goals.” Therefore, we can naturally assume you either have no idea what you are talking about, or are talking out of both sides of your mouth. While you may not directly be handing the downline products and then taking their money, you are having them order through you with R+F so that you can receive a commission. I don’t see the point in arguing semantics on how the product is being given to the downline. Also, and this is the biggest point, if downline is purchasing the product for their own use (Which is the case most of the time), then the upline should not be receiving compensation because that is a pyramid structure. The only time commissions should be paid are when products are going to consumers outside of the organization. This is a concept you seem to be having a lot of trouble with.

    Jess said, “This is a very regulated business. I am fully aware that I am part of an MLM, RF is a respected member of the DSA. Direct sales is a legitimate business, just not for everyone. I believe most of the people here with issues are confusing Ponzi schemes for legit business models.”

    First of all, we have proven that the regulations are not strong enough in this business model. There have been many reputable sources commenting about the main forces for regulation needing new legislature, because the existing legislature is not stringent enough.

    The DSA is bought and sold by members of MLM, because it is run by current MLM members…that is literally like having a 5 year old monitor themselves in front of a candy store…

    Direct sales, network marketing, social commerce, relational marketing, or w/e other term you want to use to hide behind MLM is further proving that this is not a legitimate business model. There aren’t 30 different ways to call retail sales what they are…

    I don’t think you understand the difference between Ponzi schemes and Pyramid schemes…Which is probably the biggest reason for why you are continuing to misunderstand the concepts of legitimate and criminal enterprises. Please read this, http://www.investopedia.com/ask/answers/09/ponzi-vs-pyramid.asp, and maybe you will understand which type of criminal organization we are talking about.

    Jess said, “Do you also play in the lottery? Lol. You are part of one as well. Also the website owner can check our IP addresses and see that we are in fact all different consultants. Who has the time to pretend to be different people? Oh well happy Sunday all, go work in your normal jobs and move on with your life!!”

    Are you actually referring to R+F in relationship to the lottery? Is that your candid understanding that R+F has the same success rates as the lottery?

    I will enjoy working my normal job, continuing to save for my retirement, and better my future. Thank you for the strong encouragement.

  3. Jess says:

    The people here seem to really twist words this is pointless. I did not equate RF to the lottery. and no we don’t sell products to consultants. Consultants buy their own products and we don’t profit from that like how we would when a real customer purchases. There are many negative comments here and that’s fine everyone is entitled to their opinion but not everything that’s being stated is true. Most of us work full time jobs, are very wise with our investments and money, and use RF as a vehicle to use the products we already fell in love with at great discounts and benefit from sharing them with our networks. I fell in love with some Peter Thomas Roth stuff many years ago and told all my friends- it did nothing for me when they went out and bought it but they made some big company richer! Now us little guys have a chance and it’s actually working for most of us and all there is it hate here from people who do not know the business on the inside, your just looking at it from the outside. And that’s fine. But I wanted my comments to shed some light on the positive of RF but it truly changed my life and confidence level. I’ve used many acne products and nothing cleared up my skin like Unblemish did and it’s very liberating to go to the grocery store without makeup on! If I can help others experience that too then that’s awesome! So what I make a profit selling the products. Someone’s profiting somewhere in any company, id rather help a mom make school payments than a CEO buy another boat.

  4. Patricia says:

    Nice diatribe Jess, but you never answered the question I put out there- Does R+F actually uphold the 70% sales to outside customers rule? Do they actually audit those receipts that they require you to keep and show that 70% that you buy is actually going to a real customer and not just product that you use or store for greater than 30 days? It’s a legitimate question that would in fact give me a little more comfort that R+F does in fact regulate their consultants in order to keep from appearing like a pyramid scheme. Would any consultant be able to verify that they were audited by R+F? I did see the rule for the 70% sales to customers in the policies manual, but from real life testimony consultants or previous consultants have admitted that it is common to end up with inventory in order to meet the monthly minimums for commission or else within time they lose their downline to the person above them.

    I believe this is a relevant question and not out of emotion… If there is legitimacy to R+F please prove it without just using opinion and personal testimony. The products are extremely expensive (e.g. 50% pricier for sunscreen of equal size and ingredients from a competing premium brand) so you wonder why they marked it up so much except to pay everyone all the way to the tip of the pyramid/recruiting line.

  5. Lazy Man says:

    Jess, I’ve written more than a few articles on the lottery, so why ask the question? It’s unrelated to R+F and you already have the answer available to you, by simply searching the website. You brought the lottery up in a discussion of R+F, so one has to presume that you were equating the two in some way. Or are you going to bring up kangaroos next to try to throw the conversation in another unrelated direction?

    I’m not sure were you see negative comments. I guess negative is in the eye of the beholder. You may see criminals refer to police officers as “pigs” which is makes them seem negative, but let’s recognize that the police (in general) are a positive influence in society.

    I’ve always been a fan of sharing products that you love and even receive a profit on it. I believe that Bill Keep as quoted in the article best expressed the problems with some implementations. Please go back and review it. There are implementations, such as a straight commission, that does not have those problems. No one has been able to explain why R+F wouldn’t choose something that has all the same advantages of word of mouth without the questions of pyramid schemes as identified in in this NY Times article.

    I don’t see what’s wrong with people just saying they like something without getting paid for it. I do it all the time. Another way to look at it is whether the recommendations are genuine or a way to make money? I believe it creates a conflict of interest. I’ve seen many people in MLMs jump from MLM to MLM. For example, this this Washington Post article mentions one guy who has been in 16 different MLMs over 30 decades and doesn’t even like the chocolate he’s selling. It doesn’t seem like he’s just spreading the word of products he loves.

    If you were to look at the “RFx EC” who appear to have average $700,000 a year (according to this this income disclosure statement), do you think they are compensated that much by simply telling all their friends that they like the products? Keep in mind that Dunbar’s number suggests that people can only maintain around 150 social connections.

    There is a great article explaining how the little guys end up getting screwed by MLM. I’d need access to Rodan and Fields accounting to determine whether it’s the same specifically for them, but you can at least follow the general concept.

    Jess, if you are going to say that R+F changed your life, why are you afraid to give your full name. For all we know, you could be the President of the company simply acting as a shill.

    Do you think that Rodan and Fields executives make less money than executives at other companies? Can you give us data on their salaries? I suspect that you may be contributing to the CEO earning enough to buy a boat (or other such things).

  6. Michael says:

    Jess – better post than your prior posts. You admit the products have helped your skin and given you more confidence and you are making a little money. The facts as provided for R&F are that 90+% make little to no profit. That’s ok if the intent is to get overpriced product at a discount. Smart even. But, then don’t turn around and say everything is AMAZING and AWESOME. If it is/was you wouldn’t gave an attrition rate of more than 50% a year.

  7. Geoff says:

    Jess said, “The people here seem to really twist words this is pointless. I did not equate RF to the lottery. and no we don’t sell products to consultants.”

    If you are confusing twisting words with misinterpreting what you are stating, then I would suggest proof reading your work before submission. I am an analytical person when it comes to this, but far from perfect, please tell me where I am making stuff out of nothing and I will fix it.

    You absolutely equated R+F to the lottery as previously stated here “Do you also play in the lottery? Lol. You are part of one as well.” Sorry but there is no confusing that one…

    Jess said, “Consultants buy their own products and we don’t profit from that like how we would when a real customer purchases.”

    Huh? Do you mean you don’t make as big of a commission percentage? The point is that you shouldn’t be making any commission percentage off of them because it promotes recruitment over sales. This is wildly different from being a manager of a sales team that gets overrides based on team’s sales…The managers have limits on how many team members they can have, and how much they can make. With MLM they reverse that and say recruit as many as you want and get MORE commissions for MORE recruiting…hence pyramid comes to mind.

    Jess said, “There are many negative comments here and that’s fine everyone is entitled to their opinion but not everything that’s being stated is true. Most of us work full time jobs, are very wise with our investments and money, and use RF as a vehicle to use the products we already fell in love with at great discounts and benefit from sharing them with our networks.”

    I’m glad I’m entitled to my opinion, but what is being stated that is not true? You can’t start off a thought like that and not finish it with a concrete point. This is just making you look more foolish…

    I’m willing to argue that you are not wise with your investments or time if you are chasing this pipe dream. I don’t have to be inside this particular version to see the issues in the income/disclosure statements and business model. We have also proven that R+F discounts are imaginary at best, and that the product is wildly overpriced for the market place. If I get a 25% discount on something marked up 400%…should I really be bragging about that discount?

    Jess said, “I fell in love with some Peter Thomas Roth stuff many years ago and told all my friends- it did nothing for me when they went out and bought it but they made some big company richer!”

    Are you suggesting that the company which created the product should have to pay everyone who encourages others to use it? This is complete bovine excrement…They came out with the product, took the risks in the market place, did the hard work, and now they should have to pay you because you helped suggest it to friends? What planet are you from? If I suggest using a swiffer to 3 friends, should I be entitled to a paycheck? The entitlement here is ridiculous…

    Jess said, “Now us little guys have a chance and it’s actually working for most of us and all there is it hate here from people who do not know the business on the inside, your just looking at it from the outside. And that’s fine.”

    Again, it doesn’t matter if I am on the inside or outside to notice there are significant issues here. For one, the structure of the business is bad. Two, it is priced out of the market and has nothing proprietary or different compared to the competitors. Three, it has no oversight on distribution and recruitment. Four, the pay scale is backwards rewarding more for recruitment of consultants and their sales rather than sales of your own. Plus more!

    Jess said, “And that’s fine. But I wanted my comments to shed some light on the positive of RF but it truly changed my life and confidence level. I’ve used many acne products and nothing cleared up my skin like Unblemish did and it’s very liberating to go to the grocery store without makeup on!”

    This is literally what every consultant resorts back to…the anecdotal stuff that proves nothing. Even if it is true that this particular product works, who cares? Everything else surrounding the company is absolutely terrible…If I told you that baby’s tears were the best for clearing up my psoriasis, would you go out kicking babies to help your psoriasis? Or would you go towards a more reasonable method?

    Jess said, “If I can help others experience that too then that’s awesome! So what I make a profit selling the products. Someone’s profiting somewhere in any company, id rather help a mom make school payments than a CEO buy another boat.”

    The reality of the situation, 95% don’t turn a profit and 99% turn profits in slave labor wage range…so you can’t be making much. Also, you are giving up your credibility by openly admitting you have a monetary incentive…finally the CEO’s at R+F are still making plenty of money just like the other big skin care companies…I don’t think you have to worry about that one.

    Jess I would really suggest thinking about the crap that you are saying before you put it down on the page…It might help to play devil’s advocate for yourself, and hopefully anticipate what our responses will be so that we do not confuse any of your ideas.

  8. Lazy Man says:

    I want to emphasize something that Geoff said.

    Jess (or anyone else), if there is something here that I’ve written that’s untrue, please point out specifically what it is and I’ll be happy to fix it. I’m trying to provide the most accurate possible. Please recognize that we might have different opinions, but that doesn’t mean that someone’s opinion is wrong or the information is “untrue.”

  9. Jess says:

    As for the 70% thing it is in our policies. I’ve seen many areas of our policies upheld, but haven’t personally been audited. I do however keep detailed transaction records. If they ever ask me for receipts to prove it I will let you all know. But I have no doubt that they would uphold that rule. We are reminded by corporate of wording and image use all The time. It is very important that consultants abide by the policies and approved messaging. So I do not see why hey wouldn’t follow the same for the 70% rule. We would not be experienced growth of we recycled internally.

  10. Lazy Man says:

    It is my experience that nearly every MLM has the 70% number in its policies. The number stems from the 70 percent rule in the Amway case. There was also a 10 customer rule that was part of that, but oddly the 10 customer rule doesn’t make it many policies in my experience.

    I’ve written about a number of MLMs and spent a lot of time reading and I have never come across one company that has asked for receipts from a distributor once. That’s not to say that it hasn’t happened, but that it looks like words in policies designed for an MLM to cover its butt if the FTC shows up. I believe to be nothing more than window dressing. For it to have any teeth, I believe they should have an additional policy of something like, “25% of our distributorship will be randomly selected to be audited every quarter” and then follow through with it.

    So beyond what it is written in R+F policies, approved policies, and messaging, what can you tell me about how R+F has policed and enforced violations of those? I believe that regulation is more than posting a sign on the wall.

  11. Geoff says:

    Jess said, “As for the 70% thing it is in our policies. I’ve seen many areas of our policies upheld, but haven’t personally been audited.”

    I think by the tone in which she addresses this regulation answers all questions. It is not a thing…it is a court mandated decision. Clearly this is probably treated much like the rest of R+F regulations…no consequences. It is in the company’s best interests to have the money keep rolling in and not ask questions.

    Jess said, “If they ever ask me for receipts to prove it I will let you all know. But I have no doubt that they would uphold that rule. We are reminded by corporate of wording and image use all The time.”

    I wouldn’t worry about being audited Jess, because you are their life blood to keep the game alive. As for the reminders about the corporate image…I think you are confusing that with the facade of this being a wholesome company. That doesn’t really have anything to do with making sure you are abiding by the regulations that have been instituted based on previous court decisions.

    Jess said, “So I do not see why hey wouldn’t follow the same for the 70% rule. We would not be experienced growth of we recycled internally.”

    Please clarify what the heck you are talking about…it sounds like you are saying that you are growing because of the 70% rule, otherwise all of the income would be generated from distributors? This is a logical fallacy…the 70% rule does not reflect the income generated for MLM’s, but rather how it is generated. You are not growing because of this rule, but rather growing because more and more distributors sign up for the dream.

  12. Ann says:

    During the short time that I was a consultant, I had a brief training session where my sponsor and another team mate of hers “trained” me. Mostly going over the website, phone app, trying to explain the compensation system which I never did really understand despite a math degree. Anyway, more to the point, I was plainly told that I should set my husband up as a preferred customer and order any products I wanted to use for myself under his account. As for the minimum consultant order–that would just be the minimum amount needed to keep commissions coming. So the 70% rule could be covered that way.

  13. Lazy Man says:

    Why would they suggest you pay the preferred customer price instead of the consultant price for product?

  14. M says:

    Why won’t it let me type!!?!

  15. Lazy Man says:

    M, what won’t let you type? Everyone seems to be able to type.

  16. M says:

    FIANLLY! I have been trying for months to respond to this site and it kept giving me errors. The reason you should set up your spouse as a preferred customer is because you would automatically have 100 in your bucket. You always need to have 100 in one bucket (That can come from retail sales or your auto payment of 80.00 in products a month and your 20.00 website fee which equates to about 115.00 a month) and then you need 600 in the other bucket. That is why R+F is A L L about the recruiting. You can get to the 600 from preferred customers or you can just sign 6 consultants and their $80.00 in products and their $20.00 website fee goes into that 600 bucket. That is why splines always say, get those 6 recruits and make sure they keep on their CRP! Once you have 6 recruits, you never have to worry about hitting your monthly minimum and you also make a commission off of the products they have to purchase every month! Not only that, everything the consultant buys also going into your organizational volume and you get a percentage of that as well. I’ll say it again, R+F is ALL about the recruiting and unless you go hard and fast with R+F, you will lose money. Expensive kit + monthly CRP + little to no sales + discouragement = leave

  17. Ann says:

    What M said is right. By purchasing through a preferred customer account, you pay about the same amount as the consultant discount–because you would receive a commission on the “sale.” So you get part of that $600 bucket filled, use your CRP to fulfill the $100 bucket–thereby helping your sponsor. So the company has part of their 70% covered, and buckets get filled.

  18. Lazy Man says:

    I’m starting to follow this. What is the CRP that fulfills the $100 bucket? I’m not sure what CRP stands for.

    It feels to me like enrolling a spouse as a PC in order to get product for yourself is an attempt to game the compensation plan. This is why I suggest that R+F move to simple commission sales plan.

    Why not simply give everyone 10% (or whatever they want to pay out) and be done with it? If they want to attract more distributor/consultants, simply raise the commission percentage.

    I’m a huge fan of Occam’s Razor, so I have to ask, “Why all the complication?”

  19. Geoff says:

    Hey LM,

    I found this video on YouTube https://www.youtube.com/watch?v=G63yhQaRPYw, and it seems to go through this bucket analogy stuff. I too was not exactly sure what the last two were talking about, but this video is a kindergarten explanation. She basically goes through how people earn commissions, and how they have to pay a monthly auto ship…She inadvertently described how it is a pyramid. It is disturbing to see all of the people liking and commenting positively on this junk.

  20. Ann says:

    Sorry. CRP is Consultant Replenishment Program. You need $80 of that, plus $25 for the website in order to get commissions on your downline. You further need $600 in preferred customer orders so you can earn a higher rate of commission on your sales, plus earn on your downline sales. I think that’s more or less correct. I never sold any products or recruited anyone before returning my kit for refund, so the whole bucket thing and all the downline percentages are still confusing to me. I never did figure out why the sponsors told me you earn more on preferred customers (who get a discount) than you do on retail customers (who don’t). I personally think the systems are intentionally confusing so that the company and upline consultants can keep you in the dark when you ask why you aren’t earning as much as you expected.

  21. Patricia says:

    Thank you to M and to Ann-

    In an effort to really understand the details, I had a few questions. Does that mean that on a given month in that you choose to receive commissions, you will have to pay $115 for CRP ($20 for website, $80 for retail products to give as samples, $15 I’m guessing for shipping/handling) and then to fulfill the $600 minimum, it is common to use a preferred customer account (not yourself) and pay for products to use for yourself which would count towards the $600. Or were you saying it is not necessary to pay for products if you are doing the CRP? Are the two buckets mandatory to fulfill in order to receive commissions off your downline? If you don’t hit the monthly minimums for a specific period of time, will you lose your downline?

    Thanks for clarification…

  22. Lazy Man says:

    I’ve seen that M. I still believe a straight [x]% commission would be a better plan. As I asked before, “Why all the complication?”

  23. M says:

    No idea why they don’t do a straight commission. Isn’t this how most if not all MLM’s work though? A person gets paid for both selling and having a team but most if not all of the big earners don’t earn it by selling products but from their team selling products and recruiting. I know for a fact that one of the top earners had only a handful of Preferred Customers but made over $10,000 a month because of the large team.

  24. Ann says:

    Patricia, I think you may have tripped into the area that never fully understood. I’ll give you my best understanding. In order to remain fully commissionable, you have to maintain both buckets. The $100 is usually filled by consultant purchases for either their own use or to give away–the minifacials. And $20 of it can be for the website maintenance fee. But it can also be filled with retail priced orders from paying customers.

    The $600 bucket is filled by preferred customers (with the 10% discount and autoship program). So yes, if you were to reorder an expensive regimen for yourself, you would probably want to place it here and help fill this bucket. If you sponsor a new consultant, their kit goes here as well. Also, personal purchases from your recruits go here (them filling their own $100 buckets).

    As for losing your downline. Yes, you can. As I read the P&P’s, if you do not maintain the $100, $600 buckets, with 1 grace period per 12 months, you will be demoted to the first level of Consultant and your downline will roll up to the person above you.

    I hope I got all that right.

  25. Jess says:

    There is no 600 minimum. 600 should just be your goal bc that’s when you earn higher commission.

  26. Lazy Man says:

    Jess, I’m reading this in this official document:

    “EXECUTIVE CONSULTANT (EC): The first promotion title an Active Consultant may achieve. Requires a monthly minimum of 100 in Sales Volume (SV) and a minimum of 600
    in Personally Sponsored Qualifying Volume (PSQV).”

    If I’m reading that correctly there’s a 600 PSQV minimum. Am I misreading that?

  27. Patricia says:

    LM- What I get is that they use the verbiage that you don’t have to earn commission off the people that you recruited (for the purpose of getting more commission) but if you choose to get that extra commission (for the purpose that you recruited those consultants under you) you have to meet the $600 minimum.

    The confusing thing is that of course you want to make the most money you can, so the $600 is obviously going to be a driving factor. All those hard work of recruiting consultants is so that you can make money off their sales but they are saying, unless you make $600 each month off them or yourself, you can’t make that “extra” commission.

    The part I have a problem with (a lot of it) but mostly is that the pressure is constantly there or whatever work you previously put into it, could be taken away after just a few months of lagging sales. If I were in it, I could absolutely see why some would try to buy more product to make up the difference of $600 if that was needed to avoid negating all the previous hard work.

  28. Michael says:

    Jess – please help me understand why any consultant would charge their close relatives & friends more than their cost. Why would anyone want/need to make a profit off of their close relatives & friends? Would any consultant be willing to provide their avg hourly rate calculated by dividing their income by their hours worked? I think it is a personal decision what hourly rate anyone is willing to work for. But it is a very good reference point for prospective consultants to help decide whether they want to get involved or not. They then have to decide whether the the hourly rate is worth it for this type of work. Thanks.

  29. Em says:

    Not sure if you or anyone else has posted this, but I found an archive of the insightful blog created by a former R+F consultant who was likely strong-armed into removing it. Here is the link. Just too bad the comments weren’t archived as well…

    http://archive.is/OIjRE

  30. Jess says:

    Yes that’s right, when you hit 600 PSQV you become and executive consultant which entitles you to a different income level. You still earn on PSQV under 600 though as long as you meet $100 in retail sales. And as for why we would charge our friends or family anything other than the consultant cost- think about it. Do you get the same employee discount and benefits of your friend who works in retail when you go on a shopping spree? Sure I hook people up all the time, I give freebies to my loyal customers, and many free samples, many discounts, and I run sales. But we can not change the price of anything on our website. You’d give cash back to someone if you wanted to offer it cheaper, but also who goes into business to not make money? If I did that for everyone my commission check would be negated by the “discounts” I gave. Hourly rate I am not sure if that’s the best way to evaluate it because you can do the same amount of work but sell different products. I could spend less time working than my friend but if I am placing larger more profitable orders I could be making more. My personal results from last month is roughly $33 an hour though and I work this minimally bc I have a full time job and family obligations.

  31. Geoff says:

    Jess said, “And as for why we would charge our friends or family anything other than the consultant cost- think about it. Do you get the same employee discount and benefits of your friend who works in retail when you go on a shopping spree?”

    Actually, yes a lot of the time friends and family do get the same discounts. A weak personal example is Ralph’s. A member of the Ralph’s team gets an extra 10% off of everything they buy, AND they get to give that discount to friends and family via a special shopper card. Worst case scenario, the employee can buy the product for a friend/family member in need, and then get reimbursed when the friend/family member picks it up. Either way, this is far different from me selling $45 eye cream to my family member for $54 because they are not a consultant…It doesn’t make sense and pocketing $9 off of them should make you feel like a heel.

    Jess said, “Sure I hook people up all the time, I give freebies to my loyal customers, and many free samples, many discounts, and I run sales. But we can not change the price of anything on our website.”

    Interesting…the beginning of this statement seems to go against your previous statement. Also, you are a business owner…why can’t you fix the prices on your website??? Are you suggesting you are not in full control of your business?

    Jess said, “You’d give cash back to someone if you wanted to offer it cheaper, but also who goes into business to not make money? If I did that for everyone my commission check would be negated by the “discounts” I gave.”

    I think you are having a moment of clarity…you are noticing it isn’t right to take advantage of your personal relationships for monetary gains, and that is not the way to run a successful business.

    Jess said, “Hourly rate I am not sure if that’s the best way to evaluate it because you can do the same amount of work but sell different products. I could spend less time working than my friend but if I am placing larger more profitable orders I could be making more. My personal results from last month is roughly $33 an hour though and I work this minimally bc I have a full time job and family obligations.”

    I’m going to be very forthright with this…I am calling BS on you NETTING or GROSSING $33.00 an hour…unless you are only counting the time that you are handing a product to a family member/friend that bought this stuff. If you made a real chart that factored in the time you spent ordering products, marketing your products, driving to parties, hosting those parties etc…you are probably putting in a lot more time than you are ultimately recognizing.

    Secondly, If you are counting that $33.00 an hour solely based on the checks you are receiving and not including the amount of money spent on the products (which I believe is a very likely scenario), then that is neither your gross or net profit…those are your net SALES…(assuming taxes have already been taken out, otherwise it would be gross sales). You have to subtract that number from the money you have invested to understand your actual net profits…i.e. products purchased, gas, food, lodging for out of town meetings, seminar ticket costs. I’m guessing your actual net profit is probably closer to a number with a minus sign in front.

  32. Jess says:

    I did not account for income tax or my expenses such as mailing out a product, though most are shipped directly by corporate and never touch my hands. I don’t know why you say to subtract cost of product. I am not buying product and then reselling it. And in the rare occasion that I do, they are still paying for the product. That number was based off my actually pay check and if I account for the expenses than roughly $25 an hour. I am very satisfied and only growing. If you want to work for free and give products away at your cost then go ahead. I have no problem giving cost prices occasionally but that’s not sustainable.

  33. Michael says:

    Jess – you can’t compare my question about giving your products to “close” friends & relatives at cost to buying in a retail store. You just can’t. I know many legit business owners who elect to not make a profit when dealing with “close” friends & relatives. I just can’t imagine a family electrician or plumber charging his family for anything other than parts or possibly a worker that he brings along to help on the job. Heck, you claim to have a full time job and do this for some extra money. I can’t imagine stooping so low to make a profit off of a “close” friend or relative. Just sayin

  34. Lazy Man says:

    Jess, can you share what percentage of your money comes from what is commonly referred to as your “downline”?

  35. Jess says:

    I have one executive consultant on my team, which accounted for approx 15%.

  36. Vogel says:

    Em said: “Not sure if you or anyone else has posted this, but I found an archive of the insightful blog created by a former R+F consultant who was likely strong-armed into removing it. Here is the link. Just too bad the comments weren’t archived as well…”

    I’ll do you one better. Here’s an archived version complete with 120 comments.
    http://web.archive.org/web/20141202221440/http://istoppedsellingrodanandfields.wordpress.com/2014/03/04/rodan-fields-my-story-bad-experience-and-lets-create-a-dialogue-about-rf-and-mlm/#comments

    Save it as a PDF or HTML file because even these archived sites have a tendency to disappear once the company finds out about them and takes steps to defeat the archiving autobots.

  37. Lazy Man says:

    So your “team” consists of one person? Seems like an odd classification. When I look up the definition of “team” the definition usually starts off as… “a group of people.”

  38. Jess says:

    I have two others who just started and they are not executive consultants yet. I used the last month as an example before the others joined. Like I said, I earn much more from selling product than from growing a downline currently. I’ve been doing this for just a few months as well.

  39. Lazy Man says:

    That’s good for you as you have just been doing this “a few months” as you say. Are all the RFx Circle Achievers making their money from selling products.

    Does anyone else think it’s odd to consider referring a product to people as “selling”? Sometimes as bloggers we refer people a financial product, but I don’t think anyone considers it “selling.” It seems much more clear that if I’m at a Pampered Chef party and someone buy a product that I’m demonstrating that it counts as “sale.” When someone says that product they sell has never touched their hands, it’s a little weird to me. There might be other examples of this (dropshipping comes to mind), but you don’t see identical dropshipping websites or a controversial selling plan/scheme such as MLM.

  40. Jess says:

    Selling, sharing, referring, ordering… Whatever you want to call it. I just said selling. Yeah those other people who’ve made rfx have probably been building this over a few years. It takes time to build up and certainly have many team members under them. This is a 2-5 year plan for me not something that happens over night.

  41. Lazy Man says:

    I believe that “selling” is important in as I read these FTC guidelines. Referring to me is a different activity.

    Also I think a sale or referral would be a one-time activity, not something that occurs repeatedly

  42. Patricia says:

    Thank you Jess for answering the questions thus far and although I appreciate it I’m also looking for consultants who have been at it for several years that would say the same thing. Honestly my sister is fresh into it about half a year and because of her network of knowing so many on FB (she’s one of those people that deemed it important to friend EVERYONE she ever knew) she did well initially but even that has died down despite continued efforts (she started with a bang- got two recruits within a few months and claimed to have made her investment back). You just run out of people you know or people who know those you know who are interested- it’s inevitable. She admits she hardly makes much now off of primarily sales and that her recruits fizzled in their enthusiasm as well.

    For those consultants who would be as honest as Jess to lay out what you make monthly after a few years, it would be appreciated.

    Thanks Em for that post it was an interesting read.

  43. M says:

    LazyMan said- “Are all the RFx Circle Achievers making their money from selling products.” -no way is this true. I wish I still had my breakdown of how I got paid. RFX people have huge teams. One person has around 6000 consultants in her downline. Like I said before, I know someone who only had a handful of preferred customers and was making over $10,000 a month.

  44. Kim says:

    I want to preface this by saying that I have only tried one product off of the R&F line so I cannot speak much or at all to their effectiveness. Also, I am not or have ever been a consultant at any level for this company. I just happen to be close to a consultant who is currently at Level 2 and have found out or heard of many of their secrets. I have also done A LOT of research on my own about their company because I was admittedly interested in actually joining the business. Fortunately, my research paid off and I decided against investing. Here are my reasons why:

    1.) The pitch that consultants give out is that there are no parties. LIES. Instead of parties, they just call it “events”. Any new consultant who buys a business kit is encouraged to host an opening party for their business. You are also encouraged to have events every month. What does that entail? Teaming up with other consultants to book a private room at a restaurant and entice interested buyers with freebies (free wine tasting, free facials, free whatever). Who pays for this? The consultants! Each event could cost anywhere between $100-300 for one night. My close friend even admits that most people go just for the free stuff and never actually buys anything.
    2.) They say that you don’t need ANY experience with skin care. You actually really don’t…but a lot of times that can play against the consultant. My consultant friend, bless her heart, really tries to explain the products but is never able to provide me with any real explanations of how the products work. When people come to her with complains of how the products irritate their skin, she just chalks it off to the fact that they have sensitive skin or that they ordered the wrong one. There was no real effort to rectify the issue, she just egged them on to order more products that were supposed to fix the issues that other products from the same line caused!
    3.) The 60 day return guarantee, a shady promise if I have ever seen one. The 60 day starts the SECOND you place your order, not when you actually get to lay your hands on it and use the products. When my boyfriend ordered a whole regimen from his own sister, it took almost 2 weeks to arrive. If you’re counting, that’s 14 days give or take so he had only 46 days left to actually use the products. The issue? The regimen was supposed to take 60 days to work. So how was he supposed to use the products, intended for 60 days, in 46 days and then make an informed decision about whether or not he liked the product? He ended up with worse skin and tried to return the product. Can you guess what he was told? He had already surpassed his 60 days and could no longer return the product for the full refund. Thank god he didn’t give up and pressed the customer service that since he did not know and was never told from the consultant that sold it to him of when the 60 days started, he ended up getting the refund back. All the fuss about the product being no risk because of their return policy is BS.
    4.) Consultants are just a bunch of drones regurgitating information that the company gives them. My consultant friend admitted one day, while trying to persuade her mom into joining the business, that “you don’t have to even try, they tell you exactly what to say”. This is completely true. I would see on her other consultant friends’ social media messages identical posts. I guess I don’t see the fundamental issue with this, but it just bothers me on a personal level that you are supposed to be running your “own business”, yet you’re just reposting the same information with the same images that everyone else is doing. Isn’t that what any franchise, like Subway or McDonalds, does?
    5.) Consultants are always saying that anyone can do this business. I honestly believe that this is not true. The success stories, even personal ones that I know of, are from people who were once managers at a hospital, a registered nurse, or a pharmacist. For me, those backgrounds don’t guarantee success, but it does give that consultant much more credibility than someone with no formal education. As a customer, I would buy from these people rather than my own friend who is a stay at home mom.
    6.) R&F does not go giving away free cars to their consultants who qualify. Do a simple google search and you can find that it takes big, consistent, sales numbers in order to reach this level. Once you have passed their qualification requirements, YOU go out and get yourself a Lexus in their specified color and they will send you $750 a month to spend towards your payment or lease. If you achieve more “milestones” as they call it, you can get an additional $250. Just like how the previous posts talk about losing your downline if you don’t meet your sales number, you can lose the Lexus payments the same way. Except this time, you’re in way more of a hole.
    7.) I have seen my consultant friend spend HOURS, yes, HOURS, on trying to take the “right” picture of her mom so that she can post a before and after photo on her social media accounts. The difference? Literally just a different shadow because the sun had set while she was trying to do this. I know for a fact her mom bought the regimen because of her and uses it very inconsistently. No disrespect to her mom, but this just shows how much manipulation goes into those photos that’s not just photoshop.
    8.) Someone had asked for an honest income disclosure from someone who has been in the business for a few years. Yes, I know it was not me personally who has been involved, but I have seen with my own eyes the paychecks that my friend gets. She has been in the business for almost 1.5 years, is a Level 2 (she has 2 active consultants under her) and has barely just last month broke the $10,000 mark. When her business was slow, she was making about $700-$800 a month. Now that it has been picking up (she sold 3 business kits), her last paycheck was around $1,100. She spends anywhere between 3-6 hours on her phone or computer every day, and more hours when she has events or is going to another person’s event. If you break that down, on her best month, she makes about $13.10-$6.55 an hour. [ I took the number of hours spent per day and multiplied that by 28 days (in case she took a day or two off, which she did) to get the total number of hours worked. I then divided her best paycheck of $1,100 by that total number of hours worked to get the hourly wage. I used the range of hours worked as stated above. ] Please feel free to correct my math if I am wrong.
    9.) If you think about those numbers, it took her almost 1.5 years to make $10,000 on a business she INITITALLY put $1000 in. Every month, she spends about $100 ($80 in products she buys and $20 for the website) towards the minimum that she is required to pay out of her own very small pay check – that’s $1,200 a year. So for 18 months, she spent about $1,800 of the $10,000 she made JUST to stay in the business. This puts her back down at $8,200 net income in 1.5 years. If you include the $275 registration she paid for last’s years company convention and the $650 for this year’s (she’s bringing her husband and tickets are $325 per person), that puts her back down at $7,275. Now, let’s say she spends about $50 a month to put on an “event” by herself or with a group, that’s about $600 a year, or $900 for 1.5 years. She is now at $6,375. If you account for the flight expense it took for her to get to last year’s convention in Texas and the gas money she will spend to get herself to Vegas for this year’s convention, it will be about $450 (I looked up flights from airports she traveled from for September and actually rounded the price down in case she got a discount, and figured that she will spend minimum $100 on gas). Now she is back down to $5,925. I will stop there because she also hosts coffee days and goes to numerous seminars put on by the company where the registration is anywhere between $25-50 per event. As you can see, hopefully very clearly, a huge percentage of her income from almost 1.5 years have been eaten away by just trying to stay in the business. Now consultants are always saying, ignorantly, that “these are the best tax write offs you can ask for”. My consultant friends literally tries to write-off all of these expenses and is always surprised that she never gets any money back for her return.
    I apologize if this was extremely long but I had to share my reasons for not joining the business. It is incredibly hard for anyone starting this business, at this point in time, to make as much money as the company and its consultants claim you can make. In the magazine articles that consultants always publish or even in R&F’s own account, their top earners make 95% of their money from their “downline”….which basically means the pyramid beneath them that they have built. Just because they call it a “downline” or “upline” does not change the fact that the shape is a pyramid. You can see it when a consultant inadvertently draws out the pyramid when trying to explain how the compensation plan works…yes, this happened to me when I went to one of their events, I mean party. You can also see the pyramid in the company’s published materials online. The only people who can’t see it are the consultants who are trying to defend their decision. I don’t know enough about legalities or nuances of pyramid schemes to even try to call it one, but I can tell what a shape is when I see one. I do think that you can make real money from this business, it’s just not as easy as they want you to believe. I hate that they never really tell you the truth, they just say things close enough to it without lying.

  45. Jess says:

    Kim that was a thoughtful response. All consultants work this differently. ive never had a “launch party” nor have I been to or held any other events. We are not a party company but if one chooses to have parties that’s up to them. Also no requirement to go to the convention. Your friend chose that. I am not attending the convention for several reasons. Your friend certainly spent too much time taking her moms before and after photo, I would not be happy to find out that my consultants were doing that. When the lighting is different it’s obvious and that’s not cool for our businesses. Not everyone gets the $995 start up kit. I have a consultant on my team that started with the $45 kit bc she
    Wanted to try without making a large investment. I made nothing off of that “sale”! I personally started at a much lower kit too. So everyone please keep in mind that all results and income will vary. I certainly don’t spend hours a day working this biz, more like a few hours a week. Not everyone is as effective in their marketing, or efficient with their time. If your friend keeps up at her current level though, her income will outpace her expenses. If you research about other more traditional brick and mortar type businesses it is not uncommon for it to
    Sometime take them years to turn a profit too.

  46. Lazy Man says:

    Given the confusion/uncertainty that the NY Times reports about MLM/pyramid schemes, it seems odd to allow distributors in an MLM to “work it differently.”

    I did some research on more traditional small business and the failure rates of them of vs. MLM. You’ll be amazed if you think starting a small business is risky: Failure Rate of MLMs vs. Small Businesses

  47. Patricia says:

    What I understand from my relatives’ experience is very similar to Kim’s:

    1) I don’t know about other events, but yes the BBL involves buying party supplies (alcohol, food, etc) in order to gain interest for others to join in. They had a top RFxer several levels up come to the BBL in order to tell everyone how she was just like them (mom of four, small business owner in several ventures, and then R+F became so lucrative she quit everything else and was able to retire her husband– that is a common testimony you will hear from top earners). They must have spent at least $100 each on supplies and lots of time with advertisement and getting the word out.
    2) When other relatives ordered and had sensitive reaction, the consultant would refer to the company nurse who would say you should try another line of product that the company sells (Soothe) to calm down the irritation and if that didn’t work, to try yet another line, until you get the right one. They also initially just say it is your skin “purging” and you should wait it out for awhile (that’s just weird they don’t assume you should go see your doctor in case you really have an allergic reaction). Also, I’ve said this before, how long does one expect an adult who is likely working in a professional setting to go around with an embarrassing teenage-skinned face?
    3) I did not know that the clock starts on the day of order for the 60 day guarantee… interesting.
    4) The repetitive word-for-word posts are quite annoying. They don’t even think about what they are posting. Did anyone at all question where their new ranking of #2 premium skincare brand came from? Can they cite their sources besides corporate telling them to post it?
    5) I do believe the healthcare field professionals get more credibility just because of their background (but not in skincare). Since I am in healthcare myself, knowing what it took to get my degree, it would annoy me to no end if “anyone” could just start doing my job, I could only imagine what dermatologists, estheticians and other real skincare experts feel.
    6) The car thing is interesting, I did not know that either.
    7) Although I don’t know exactly how much time was devoted to the before/after pictures, I do know that as soon as I mentioned the lighting was different, the defensiveness that I encountered could have leveled our relationship. But really, how much change could really one see in a 30-day period. OF COURSE there was a lighting change that helped. There really is not much that can defend their horrendously altered before/after pics.
    8) I believe when they are asked what they make from this business, almost all of them will tell you their paycheck on their best month and possibly round up without disclosing unless you ask directly, what that is when you take away the expenses you put into the company. And they will make a big show to say they already recuperated their investment (meaning their initial business kit) and omit all the following monthlies and purchases they made themselves.
    9) Thank you so much for the breakdown. I have been researching this company since my relatives joined. When I told them I was not interested, they really shut me out in this area and I was surprised at how strong of a reaction that caused me to find out more. I honestly felt they were somewhat “brainwashed” and when speaking to people I was so close to before when they would say “they didn’t have the luxury to think negatively towards this business” and they couldn’t discuss the negative research that I brought up, I knew there was definitely something not right about this.

    LM and all the commenters who helped shed light on the realities of MLM has helped me understand why and I hope Lazyman and Money and other sites like it can continue to help combat the mind tricks that MLMs put out to take money from other people’s pockets. It is absolutely not like any other business out there and it should be stopped.

  48. Jess says:

    Corporate does not require parties. If a consultant is being pushed to do parties it is because their upline decided it was a good idea and they are listening to them. It’s not a bad idea actually, get a bunch of girls together for snacks and wine and skincare talk. I have not done one though and no one is making me do one. No one is forcing anyone to purchase liquor or anything for a party or business launch event.

  49. Lazy Man says:

    Jess, I think we should stop talking in absolutes. No one suggested that corporate requires parties. It was simply brought up that this is one of the strategy that seems to be used by more than one R+F distributor.

    It’s not that parties are bad. In fact, they seem to facilitate actually selling product. And of course you’d actually get to make the sale of the product rather than a referral where the actual sale seems to be fulfilled by a separate corporate factory.

    However, as Patricia explained it, it seems like distributors wouldn’t actually make much money from parties. Obviously people run parties how they want, but if an upline is convincing them to outlay $100s, they might have some difficulty in being profitable on the margins.

  50. Geoff says:

    Jess said, “Corporate does not require parties. If a consultant is being pushed to do parties it is because their upline decided it was a good idea and they are listening to them.”

    What is the point of this comment? The upline is employed as a contractor through the company, and are a representative of the company. If the upline says throw parties, then by extension corporate has to be held accountable for that person’s actions…(Granted they spend so much time covering their asses from liabilities created by their distributors that it is extremely difficult to fight them).

    MLM has literally created this gigantic annoying grey area where distributors are legitimately convinced corporate is not responsible for the actions of negligent distributors…NOT TRUE. You are an employee of the company and therefore they are responsible for what you do on the streets…(If they are recruiting too many people too quickly because this business is designed to grow like a virus, then they have to institute ways to keep people in line). Distributors need to stop standing up for these companies that do not have their backs, and realize it isn’t upline’s fault, because they too are just doing what they have been taught which initially started with someone that the company allowed to keep on board.

    Jess said, “It’s not a bad idea actually, get a bunch of girls together for snacks and wine and skincare talk. I have not done one though and no one is making me do one.”

    It is also not a bad idea to stop pretending like you know the field, and try to profit on the trust of your friends. This is a manipulation technique, and is not a service to your friends. Getting them liquored up so they make poor business/personal decisions is one of the least friendly things you can do. I really don’t understand how people think this is a valid form of being a human being…

    Jess said, “No one is forcing anyone to purchase liquor or anything for a party or business launch event.”

    Again Jess, you said it isn’t corporate’s fault…it’s upline, and now you are saying it is nobody…this is the same crap every distributor says to minimize the severity of the situation. Granted this isn’t as bad as some people covering a company’s ass when their distributors claim the products produce miracle cures with no science. The principle is still the same, and every distributor is trained to respond this way.

    LM,

    You might want to look into doing a piece on how repetitious distributors can be, as Patricia has pointed out. The nonsense about corporate not being responsible for distributors, and because it is not in the bi-laws it isn’t the distributors problem…I’m going to call it the OPTIONAL argument which seems to be riddled with fallacies.

  51. Lazy Man says:

    Geoff, that is a tremendous response.

    Nearly 7 years I wrote about MonaVie was likely the next Napster: http://www.juicescam.com/monavie-is-the-next-napster/. The point being that the actions by the users are reflective of the company and the company needs to show they are indeed acting legally. In Napster’s case, the users weren’t financially motivated as they are in MLM companies. I think my logic is strong, but I failed to recognize that the music companies had a lot of money to sue one Napster and the FTC doesn’t have the money to sue a lot of pyramid schemes as noted in this Bloomberg article.

    I’m not sure that the distributors count as employees, which is part of the difficulty in applying the actions to corporate. For example, Uber doesn’t classify its drivers as employees, but this appears to be controversial.

    As for how repetitious distributors can be, I’ve put together a summary of common MLM Myths. This can obviously be expanded, but I don’t have the time or energy while attempting to help readers on this site.

    There’s a great Bad Argument MLM Generator that is a parody of helping MLM distributors to create a template to bash consumer advocates. It’s pretty comprehensive. I’ve been thinking of posting a copy of it with subsections, so I can use shorthand of “See section 2.6” when responding to comments. I wish I had the time to write this in FAQ form so I’d have the response to all the template points and simply direct people to previously addressed points on MLM in general.

    What do you think?

  52. Geoff says:

    LM,

    The article on Vander Nat is very enlightening, and while the HerbaLife case is of paramount importance it is not enough, and he clearly demonstrates that without new legislation the processes to shut these monsters down is doomed to be insufficient.

    This is a weird comparison, however it is directly relevant to the model problems of attacking an entire industry (MLM, Tobacco, Organized Crime, etc.). When I was in college we were studying international law pertaining to the prosecution of mass rape. Rape is an extremely difficult thing to stop, because you have to have an exorbitant amount of proof, as seen here http://www.law.virginia.edu/html/news/2001_02/zug.htm (This is only for Virginia…it gets worse for more expansive/global cases). With mass rapes in Sudan, it is literally impossible to convict hundreds of cases because the evidence needed along with the lack of people coming forward makes the situation impossible. Sadly, the same parallels are showing with these MLM businesses…there are too few people engaging in the situation and there is not a form of legislation similar to RICO to take these companies down.

    The other reason for why I chose this comparison is the intensity. A lot of people will not look at MLM as intensely as they would rape. I feel that needs to change drastically, because they do a vast amount of damage and are eerily similar.

    I believe a bad argument generator is perfect, because of two reasons. 1. It shows that the defendant is being programmed, and has not critically engaged their minds into what they are saying. 2. It shows that this has been done many times before, and reveals a new level of deceit they probably didn’t realize they were committing.

  53. Julie G says:

    LM –

    I love the generator. When I have a minute I want to share the “truths”, “facts”, “science” and “training” I received when involved with two different (although eerily similar) skin care “companies”.

    Also, two other MLMs use similar mind games and mumbo jumbo.

    Keep up the excellent work. I love reading every link and comment.

  54. Patricia says:

    I agree with Geoff that it is the “everything is optional” argument that really stops up all accountability. Just like Jess, I noticed many consultants here will just blame the “bad consultant” who did something that is pointed out as being shady and is not something that all consultants (insinuating- the good ones) abide by. For a band of “sisterhood” they sure are quick to leave someone hanging out to dry when real issues are brought up exposing some major fallacies in the company.

    If everyone, including corporate, can just play the blame game, and no one follows up on P&P that is written in order to keep FTC at bay, then therein lies the primary stench surrounding MLMs like R+F. If, however, consultants can show me more proof of their compliance department doing more than policing those that hinder the company from making good money (i.e. finding those who are going against the rules to sell direct on Amazon and Ebay and finding those who are talking bad about the company on blogs to shut them down). But instead give examples that show that R+F will distance themselves from the even shadier pyramid schemes (i.e. upholding the 70% customer sales rules), that would be a very enlightening post to read.

    I, however, have not read one consultant’s post as of yet to convince me that R+F is not just like any other crooked MLM out there.

  55. kim says:

    I agree with Patricia, consultants are quick to put the blame on other consultants despite the whole sisterhood act. Their pitch is that ANYONE can succeed in this business, but when you point out the many examples of those who don’t, their response is that their business isn’t for everyone. What? I would also like to see the actual study, or any legitimate sources, they use to make their claims on their standing of their company.

    Jess – I am aware that brick and mortar business takes years to turn a profit. My parents own two businesses and has to work, in addition to their full time job, nights and weekends. R&F consultants claim that the business is a 2-5 year plan and that you can retire with a 4-6 figure monthly income. Certainly this has happened to many people in R&F, but it is not because they sell more and more products. It is because they build their PYRAMID to be as expansive as possible. My parents own an honest business where they make a profit off of the services or goods that they directly sell or provide – not by ripping off their friends and families or through the work of someone else. They have managed to turn a profit after 3 years by building their customer base – not by getting other people to start selling their stuff. My consultant is certainly seeing an increase in her business, but it is not because she is selling more skin care. It is purely because the three people she recruited into her “business” is selling to their friends and family and she gets a 5% cut of that. For her to promote to the next level and earn more money, the people she recruits must also promote by recruiting more people.

    If R&F announced tomorrow that they are switching to a purely commission-based business model for their consultants, can you just imagine the uproar? How many consultants would continue with their “business” if the money they make are only based on the products they sell? My friend’s entire team’s sales number was $5 million dollars one month, and the team leader, aka the person sitting on top of the pyramid, gets 5% of that. Now how do I know this fact and what is the point of consultants publicizing it? It’s not to sell more products – this literally tells you nothing about the skin care. All this does is to entice you into joining the “business”.

    Another example of recruitment tactics by corporate itself: A tool that R&F sells is “retiring” so consultants were pushing this product pretty hard on their social media accounts. Retiring just basically means this product doesn’t sell and they need to get rid of it. Today, I saw a post that said they were supposed to have a 2-3 month supply but are already “sold out” after a few days. BUUUUUT, you can still ONLY purchase it by buying a bundle or buying the consultant kit. So, it’s not really sold out is it? Instead of spending about $250 on just the tool itself, I now need to spend $400-1000 on the bundle or business kit? If I spend that kind of money, I would NEED to start selling products or recruiting more people if I want to make my money back wouldn’t I?

    Like I said before, the company and its consultants try to gloss over many of the ugly facts about their company. Jess decided to hone in on only a few small facts in my post, but did not, or could not, address any of the other issues I pointed out. I would have more respect for this company if consultants were just more upfront with facts.

  56. Lazy Man says:

    I hope there’s no pitch of retirement in MLM. The churn in MLM from the companies that have been good enough (or mistaken enough) to report it are 50-70%. That means downlines are constantly shrinking unless they are being replaced.

    In my interpretation of the FTC guidelines (cited in the article), a very large amount of retail sales to the outside public still need to be made (more than the income from the downline) and it’s not clear to me how a “retired” person would be actively making these retail sales.

    It’s interesting that you bring up the uproar around an MLM switching compensation plans to something more commission-based. One company that I’ve written about, Yevo, has done that. I’ve been told by an insider, but I can’t verify this, that the FTC warned them, so take it for what it’s worth. The same source said that many of the top distributors have left. I’ve also written about how similar changes have impacted Vemma: Vemma to Bring MLM Scams to an End?.

  57. Kim says:

    I’ve seen countless posts of pictures of consultants and the first word used is “RETIRED”. There are usually two claims – the R&F income they’ve earned has replaced their previous income or their spouse’s income to such an extent that now one or neither person has to work. Of course this is not like the retirement that most people think of – money in a 401k, IRA, or mutual fund that has accumulated over the past however many years.

    This is why R&F consultants spend so much time recruiting other consultants instead of interacting with people purely on a consumer-supplier standpoint. Besides the initial commission a consultant stands to make from an expensive business kit, it is entirely possible that they make little to nothing from that downline in the future. However, if that downline sells a lot of product AND recruits other people to become future consultants, the streams of revenue multiply for the initial consultant. So yes, the commission, regardless of however many levels it comes from, is still generated from sales of actual products. However, like it has been pointed many times on this thread, those sales of products include business kits and sales to their own consultants. If you build a big enough “team”, and they build their own teams, you can stand to “retire” from the business because your team is generating income FOR you.

  58. L says:

    Thanks for writing this.
    I get contacted by so many people on facebook and it always starts the same – false caring about your life and then soon after false enthusiasm about whatever product. Beachbody, weight loss shakes, life coaches and Rodan and Fields being the most recent.
    I politely say it’s nice to hear from you but I’m not interested in being a consultant or in the products so please don’t ask me again. I promise if I’m interested I’ll contact you now that I know you’re a consultant.
    Each reaction was similar – persistent false enthusiasm, then when I don’t respond (because the conversation is over) anger and then final stage was usually a vague facebook status of negativity to their new and fantastic business opportunity and how they’ve funded their mortgage/vacation.
    I can’t stand people trying to sell me on something (religion, products, etc) without my inquiring.
    I like facts not to know that I’m funding your life.

    Also, what the R&F consultant – she was pushing much harder on getting consultants than selling the product so I think that’s enough to show you it’s a pyramid scheme.

  59. camfan54 says:

    So the current claim, or the one in the last week is that they are the #2 premium skincare line. Do you know or can you find where this is from? Jess, maybe you could enlighten me. I’ve searched for the basis and am really curious where this claim has come from. I’ve seen it on a number of R+F consultants posts so it’s not just one or limited.

    Thanks!

  60. Lazy Man says:

    I’m guessing it is from Euromonitor, but if you “have seen [the claim] on a number of R+F consultants posts” without a referring source that seems like a big problem to me.

  61. Shopgirl says:

    LM , on my Facebook post are now saying they are the only #1anti ageing company and you can also get reimbursed for unblemished and sunscreen through your health savings account since they are clinically proven dermatologist ingredients. I have family getting involved wanting to be come a consultant. I don’t want to see them get hurt by all this. How soon before the FTC gets involved? I sure wish they would hurry!

  62. Geoff says:

    LM said, “I’m guessing it is from Euromonitor, but if you “have seen [the claim] on a number of R+F consultants posts” without a referring source that seems like a big problem to me.”

    I found this official video on a facebook page, and I can confirm they got their results from Euromonitor. https://m.youtube.com/watch?v=7Pe7NxbxXxs&feature=youtu.be.

    It would seem they have no low point, and will do what they can to fabricate the nonsense.

  63. Julie G says:

    The last time they cited Euromonitor when they were #4 that was “if they had been included”. Total BS. I don’t want to pay $995 for the report but until I see it piblished I call bull!

  64. Vogel says:

    That self-adulating R+F video peeves me on many levels. What I found most idiotic were the claims that they (a) they have more than 150,000 distributors, and (b) they generated revenue of $626.9 M in 2015. To put that in perspective, Pfizer, the second largest Pharma company in the world has a total of 78,300 employees (I repeat, total employees, not salespeople) and generates roughly $50 B a year in revenue. In ballpark terms, Pfizer generates about 80 times R+F’s revenue with probably less than a tenth of the sales force. What really makes this point significant is that R+F makes its money by selling to its own distributors – classic pyramid scheme BS!

    The other claim that irked me was that R+F is the fastest growing premium skin care brand over the last 5 years. Monavie pulled that same stunt (and they eventually imploded even faster than they initially grew). It’s easy (and very misleading) to say that a company grew quickly when it started from a low baseline; e.g., if it had revenue of $1 M in year 1 and $626.9 M in year 5, then the 5-year growth rate would be astronomically high (62,690%) but the figure would be completely meaningless. It’s also stupid to compare the growth rate of a new company, which begins with very low revenue, with the growth rate of well established companies that already have high revenue and would be thrilled with annual revenue growth of 10%.

    Notice also, that while the company brags about its fortunes, it makes no mention of the abysmally high failure rates. It’s no wonder that the company is making money when more than 90% of their distributors don’t even poverty level wages.

    It also bears pointing out that R+F is not a publically-traded company, and their revenue claims are unaudited and unverifiable. That being the case, any claims they make should be regarded as BS.

    A more telling detail than R+Fs questionable growth statistics is brand recognition. I would imagine that R+F would fare very poorly (near the bottom) in a brand recognition survey. A few people might respond with something like “oh yeah, that’s the stupid annoying pyramid scheme company that my idiot deadbeat niece-in-law just joined and keeps spamming about on Facebook”.

  65. scotia says:

    when I was opening my spa, I had some grants and was looking for products to use. I wanted something that new and fresh and that no one else had in the city I live.
    I found R+F and thought great they have 4 kits for skin types, but had a super hard time finding what was even in each kit and couldn’t ever find the ingridents list. it was also so new that ewg.org hadn’t had anything of them listed on there yet.

    I contacted a sales person and asked if it was esthetician friendly.. meaning all products can be combined and there were proper products for each skin type. obviously she said yes, sent me a decent sized text book about skin care and dermatology.. looking through it… it never explained their own products just average information you would get from any generic skin care/dermatology text or medical book but with more “proof of” graphs and stats.

    when I got my very expensive starter kit… their mask… which there was only 1 of… wasn’t even a mask it was a cleanser. they had included this little plastic skin roller that doesn’t come with disposable rollers (if it touches blood by law its single use and needs to be thrown away). their exfoliator was too harsh for any skin type past normal well hydrated skin.
    so I complained and asked to send it back. she tried soooo hard to get me to keep using it saying “because its soo formulated you don’t need masks or serums.” BS clients who come to spas who are paying 70$+ want the extras especially a mask!
    I had asked for what estheticians she sells to and how educated they are. turns out they were nail technicians and hair dressers who were buying it to sell in their salons and use for themselves.
    i called her on her bs and she sent me the return address which was a giant hassle, though it came from canada it went to texas and then they lost it and wouldn’t refund me until i did all the work of tracking it down. as from once it was delivered and the tracking code was done and used, they moved it twice to other warehouses and such.

  66. Angie says:

    This video was posted on a consultants FB page and it’s got me perplexed. Why is this guy who claims to be from euromonitor talking up r+f about how they were once the 4th largest blahblahblah and now they’re the 2nd largest yadayada when the r+f themselves admit that they were never even considered in the analysis? What’s to make of this?

  67. camfan54 says:

    I found this article from Forbes that states it is ranked 2nd by Euromonitor but when I go to Euromonitor’s site, it looks more like a misdirected page when I search for any type list or anything like that. Is Euromonitor a legitimate research tool? I never heard of it unitl R+F. When I search google, R+F is never in the top lists of magazines and applicable websites.

    http://www.forbes.com/sites/nicoleleinbachreyhle/2016/04/25/rodan-fields-rising-success/#7c854e2f4854

  68. Gur says:

    Found this when I looked up the guy in the video – this stinks of ‘synergy’ and some paid consulting and cross-promotion.

    “R+F Growth Explained (Featuring R+F President and CEO Lori Bush and Euromonitor’s David Margulies)”

    He does work for Euromonitor International. But I know for a fact that anytime a ratings or marketing company does this type of work or promotion they are paid to.

    I work in Sales – any growth or ranking numbers are completely subjective and can seem impressive until you see the comparison in the size of the companies and the overall numbers compared to your competitors (ie “We grew from 20 to 100 customer accounts!” when your competitors have thousands of accounts and gain a few hundred).

  69. Lazy Man says:

    Gur,

    Seeing how they say that they’ve been working with Euromonitor in that video and Euromonitor seems to disclose that it engages in consulting with companies they seem to be quite biased to me. That’s not to say that the data is necessarily wrong, but it seems to me that they would be presenting data in a way that would look most favorable to R+F.

  70. Vogel says:

    Wow that David Margulies/Euromonitor video was so worthless and misleading that it eliminates any hint of a doubt that R+F is trying to deceive people. First of all, it should be assumed that Euromonitor doesn’t do this sort of thing for free; so this is essentially paid advertising.

    Second — and this is the really deceptive part (which I alluded to previously (http://www.lazymanandmoney.com/rodan-and-fields-scam/comment-page-7/#comment-1316181) — Marguiles presents a chart showing alleged data for annual yearly growth rates from 2010 to 2015 for Shisedo (4.3%), Estee Lauder (2.7%), Clinique (2.5%), and Lancombe (5.2%) and he compares these rates with R+F (91%), claiming that “no one truly competes with R+F in terms of average yearly growth.” But as I pointed out in my last post, growth rates alone are misleading and useless in the absence of actual revenue data in dollars. Marguiles failure to include actual revenue data betrays a willful attempt at deception.

    All of the companies that R+F hopes to compete with (but really doesn’t since R+F is not retail) are large, well established, and well respected retail companies with high revenue and valuations, whereas in 2010, R+F was a nobody in the marketplace. If a company starts with $100,000 in revenue and grows that to $1 M in 5 years, it represents a seemingly impressive 5-year growth rate of a staggering 1000% (virtually impossible to achieve for an established company that does billions in revenue), but $1 M in revenue is still extremely trivial compared with what other companies rake in each year.

    In fact, Estee Lauder reported annual sales of $10 B in 2013, dwarfing R+F’s sales, and has a market cap of more than $28 B (R+F’s market cap is probably about 1/50th of that at best).
    http://www.wsj.com/articles/estee-lauders-growing-beauty-empire-1423753606
    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjA0Mzg1fENoaWxkSUQ9LTF8VHlwZT0z&t=1
    But the worst part of Margulies shameless BS pitch follows his presentation of the growth rate data, when he says: “As the R+F brand continues to expand, the opportunities in North America and globally continue to grow, which means statistically, the possibilities are tremendous. So go get it R+F”.

    Good grief this is so wrong and vapid on so many level it makes me want to knock that conniving idiot’s face off. First, there’s the issue about his misleading data and his failure to include actual revenue figures as opposed to focusing exclusively on percentage growth. Second, while R+F may (or may not) have had 91% revenue growth over the last 5 years, there is no reason to believe that the trend will continue; in fact, statistically, there is every reason to suspect that it will not, or more likely, because it is an MLM, that it will implode within the next 3 years. Third, R+F is not a publicly traded company so there is no reason to trust the accuracy of their revenue claims (rather there is strong reason to mistrust them). Lastly, as every business analyst and investment expert knows full well, and warns the public, past performance is not a predictor of future success. In R+Fs case, the fact that they may have experienced 91% revenue growth in the past 5 years is reason to strongly suspect that they will not be able to achieve or sustain anywhere near 91% growth in the future. Now that they are achieving substantial revenue (i.e., no longer starting from a very low baseline), they will be lucky to see so much as a 10% gain.

    The people responsible for putting out this claptrap have proven unequivocally that R+F is not trustworthy. They should be ashamed of themselves. A-holes!

  71. Vogel says:

    Wow that Lori Bush video is atrociously misleading. She speaks of valuations, revenue and profits but presents no data whatsoever on any of those parameters. Case in point:

    “While R+Fs financial performance should easily qualify for unicorn valuation levels…our valuation would not be based on those putting money in; rather it’s based on real marketplace value that together we’ve created; real sales of real products…and real profits”.

    You would think that since she was talking about valuation, sales, and profits, that she would be showing data for valuation, sales revenue, and profits, but she doesn’t. What she shows instead are 3 red herring graphs with percentage growth rates and preferred customer/consultant growth rates – and laughably none of the graphs even have an y-axis so they are all the more worthless. She then continues…

    “…and real profits that have been shared with our impressive and growing network of consultants across the country.”

    Here she demonstrates unfathomable dishonesty. The payouts to distributors do not represent dispersal of “profits” – these are considered operating expenses and what’s left over after the payouts is considered profit, which in R+Fs case is probably negligible. This is an unforgivable misrepresentation. She continues:

    “We were setting ourselves up to define a new way of doing business; that we were creating a totally modern platform for modern day entrepreneurs. And in the process we were defining the future of social commerce…disruptive approach to personal enterprise.”

    Lady, I’ve got news for you – selling snakeoil and pyramid schemes is primordial, not new; not modern; not disruptive; a worn out approach that’s been used by travelling medicine show hucksters for centuries and by pyramid scheme con men for decades.

    Now let’s turn to Margulies asinine presentation in the video. He presents a graph with data for the overall skincare market in the U.S. from 2009 to 2014. The graph shows that R+F sales account for about maybe $100 M to $200 M of the annual $4.2 B market in 2014, which translates to about 2% to 4% at best. So while R+F is misleading people by touting Euromonitor’s BS puffery that lumps in R+F with the world’s 5 or so leading skincare brands, the fact is that R+F accounts for an insignificant sliver of the market. And again, throughout Margulies entire presentation, he never once stated what the company’s actual revenue is/has been in dollar amounts (because he’s an ass-hat and a second-rate conman).

    If Margulies gave this presentation to educated investors and business analysts, instead of to an audience of ignorant naifs who distribute R+F products, he would have been laughed out of the room.

  72. David says:

    Five minutes of research showed me that Euromonitor has ranked Rodan and Fields as the #2 Premium Skin Care Brand in the US and the #1 Anti Aging Brand in the US.
    Another 3 mins and I was able to establish that both Dr. Rodan and Dr. Fields were Stanford trained in that they did their residencies there.
    I don’t even like MLMs. But I’m going to stop wasting time fact checking this article that is so full of poor research.

  73. Lazy Man says:

    Good try David, but I wrote the article a long time ago. At the time, the information available on my searches was very different. As I stated, I was responding to claims on The Jenny Pincher website, which did not state its source.

    If I were you, I would base my opinion on moving goal posts.

  74. Vogel says:

    David said: “Five minutes of research showed me that Euromonitor has ranked Rodan and Fields as the #2 Premium Skin Care Brand in the US and the #1 Anti Aging Brand in the US.”

    It appears that these rankings are not based on total sales but rather revenue growth, and as I explained previously, it is easy to grow revenue when starting from a low baseline but difficult when a brand is well established and already generates high revenue. The data that Marguiles presented in the R+F video indicates that R+F accounts for a very small share (a few percent at best) of the overall market.

    David said: “I don’t even like MLMs. But I’m going to stop wasting time fact checking this article that is so full of poor research.”

    How generous of you to refer to what you posted as “fact checking”. It was superficial and worthless.

  75. Cindy says:

    I appreciate all the information I have read here. I am sharing my experience with R+F and don’t expect anyone on that bandwagon to understand my viewpoint, but here goes:

    I have 2 friends who are consultants and have been truly trying to convince me this is a “legacy” they can leave to their children, and even one said she sees this as a solution to leave her permanent position and retire. I was talked into going to an event at the mother of one of my friends home. I was initially hooked, but still had some serious reservations. I’ve been digging now for about 3 weeks for information about the negative side of this business and feel too many people are touting the positive spin instead of the financial negative side.

    I respect these 2 ladies tremendously, but after reading all here, I will NOT be buying into this system. One of them gave me her Reverse regime to try, to help convince me about the products so I could truly promote the product. I have been using it just for a week and notice a very subtle improvement, but unless this performs a miracle on my face, I won’t spend the outrageous money to wash my face!

    I am 51 years old and don’t wear makeup much at all, and get compliments ALL THE TIME from friends who say how young my skin looks and they never would have known my age. I am also a Rosacea sufferer and have been for over 20 years. I keep it at bay with a daily antibiotic and wash my face with water only, so I can’t imagine a product that would replace medicine that has consistently helped my skin remain clear for this long.

    Again, thanks to everyone here for their opinions; that is what makes us individuals. MY opinion is that I will continue to search for my niche in the entrepreneurial system and hope that one day I can have a product that people can’t live without – – but I can live without R+F.

  76. Geoff says:

    Cindy said, “I have 2 friends who are consultants and have been truly trying to convince me this is a “legacy” they can leave to their children, and even one said she sees this as a solution to leave her permanent position and retire.”

    How do they think they are going to leave this to their children? As far as I have seen, this is not a transferable business unlike every other. In fact, you can’t even hire them on while you are running your business, and train them to take over your downline.

    Did they describe how they are going to retire, and maintain a steady flow of residual income without any involvement? I have never seen anyone able to accomplish this feat, even though it is preached as achievable at every meeting. I’m still waiting to here from the IBO/Consultant/Distributor/W/E that has successfully retired from their business and is still generating revenue. In actuality, many people who have risen to the top fall out of qualification before they can retire, and see a massive decrease in money earned.

    Cindy said, “I respect these 2 ladies tremendously, but after reading all here, I will NOT be buying into this system.”

    I’m not trying to pick on you here, but this sentence doesn’t make sense. You are seeing these two ladies utilizing your friendship to recruit you into a financial nightmare. Yet you still have a lot of respect for them? Make sure you draw clear boundaries between business and friendship, and also respect versus sympathy. My guess is you are more sympathetic to the fact they don’t understand the situation they are in rather than respecting their choice of business venture.

    Cindy said, “MY opinion is that I will continue to search for my niche in the entrepreneurial system and hope that one day I can have a product that people can’t live without – – but I can live without R+F.”

    I would go with the Shark Tank test when offered future business opportunities. Play devil’s advocate and ask yourself, why have you never seen this business idea put in front of savvy businessmen/women, and if it was…would they laugh in your face? If you went on to Shark Tank with R+F for example, and they asked what is your strategy of getting a portion of the market share? If your response is, I’m going to teach a bunch of people who will teach a bunch of people who will teach a bunch of people to use the products, they will probably laugh and say that isn’t sustainable.

    If they then ask you, what is proprietary about this business model (because that is one of the most important parts of growing your business in the market)? If your response is nothing, and it’s great because it is so easily duplicated…they again will probably laugh you out of the room.

    The final question is, can they make the same product for considerably cheaper and take your market share away? Your answer has to be yes, because there isn’t anything proprietary, and there are many competitors already with considerably cheaper products…that seems like 3 massive strikes and your out.

    I’m sure there are many other questions you can make up, but I didn’t want this to turn into a dissertation.

  77. Maja says:

    I have to rant.
    My facebook feed is inundated with R&F posts. Two of my Facebook-Friends are new consultants.
    At first I was just wondering why apparently hardly anybody manages before and after photos that are taken under the same lighting, distance etc. Now it is obvious to me that the vast majority of the after photos are either taken in more flattering light or are downright altered. (I have a free phone app that does a great job beautifying not-so-flattering pics, no experience or photography knowledge required)
    To me that’s dishonest at best and fraudulent at worst.
    One of my acquaintances posted photos of her husband titled “before” and “after 1 month”. In the lighter, slightly blurred after-photo he has the exact same small skin blemish near his cheek and his hair is the exact same length and some individual hairs are laying the exact same way.
    It’s clear that both photos were taken at the same time.

    There is so much R&F BS such as the consultant who is in her 20s raving about the Acute Care(?) strips that eliminated her wrinkles overnight. Why does a women in her 20s, who has used the miraculous R&F products for a long time, even have wrinkles?

    Today’s outrageous statement:

    “97%. NINETY-SEVEN PERCENT.
    Did you know that in 2015 just ONE company was responsible for NINETY-SEVEN PERCENT of ALL growth in the Premium Skin Care industry? These statistics are reported and validated by Euromonitor International.
    GUESS WHICH ONE?
    ???? Rodan+Fields!!! ????
    Are you ready to join my team?”

    Rant over :-)

  78. Vogel says:

    Maja said: Today’s outrageous statement: “97%. NINETY-SEVEN PERCENT. Did you know that in 2015 just ONE company was responsible for NINETY-SEVEN PERCENT of ALL growth in the Premium Skin Care industry? These statistics are reported and validated by Euromonitor International. GUESS WHICH ONE? ???? Rodan+Fields!!! ???? Are you ready to join my team?”

    Outrageous indeed. An idiotic lie to be exact. It also is completely lacking in context; i.e., growth from when to when? You can’t refer to growth in 2015 without specifying the starting period from when the growth is being measured. The statement also fails to explain whether it refers to global or US sales. That aside, the data that the company has presented so far deals with growth in the US market from 2009-2015, as in this video with that ridiculous conniving hack David Marguiles.

    At about the 4 minute mark, the video shows data claiming that the entire skincare US market grew by about $2.4 B from 2009-2015 and the premium skincare market accounted for about $1.4 B of that growth. Marguiles then explains that R+F accounted for 12.3% of the growth in the US premium skincare market from 2009-2015 – not 97% as claimed above in the outrageous statement to which Maja was reacting – which amounts to about $120 M. So once again we can see as clear as day that the R+F distributors are full of it.

    It’s inane to even refer to R+F as contributing to the US premium skincare market; it doesn’t compete in the US skincare market; it competes in the US MLM pyramid scheme market. They certainly aren’t stealing market share from established retail mega-brands like Estee Lauder and Shisedo.

  79. Adam says:

    Euromonitor is the same company that Amway people talk about in regards to their artistry cosmetics line;

    http://marriedtoanambot.blogspot.com/2011/01/artistry-cosmetics-google-searches.html

    It seems to me that euromonitor simply uses waffle words (“prestige” etc.) to bump competitors off the list that they are being payed to make. They are in no way a reliable source of information about, well, anything. Just like every other player in the MLM “industry”.

  80. Kim says:

    When I saw that statistic, I wanted some kind of proof – literally any kind of proof that went beyond “because corporate told us so it must be true”. I think I might have tracked down the article from Euromonitor themselves, but the price was $995 just to download it. What? No thanks.

    I’ve said it before, I would have more respect for this company and their sales representatives if they were just honest and upfront. The company is doing a great job finding deluded people dumb enough to give them their money. I just saw a post from a sales rep (I decided to stop calling them consultants because that is plainly what they are, sales people) in regard to R&F income disclosure. I’ve seen the PDF version from their official site and it clearly says that those numbers are ANNUALIZED INCOME. The sales rep said on her facebook that it is the MONTHLY PAYCHECK value of people who went into the business. I don’t know if she’s just dumb and can’t read or just thinks that everyone else is dumb and can’t google.

    Finally, the Forbes article that sales reps are blowing up about is not all that impressive…or at all. It was never printed in their actual magazine – it was just a short online article posted by a contributor. Following a short bio on the author, it clearly states that the content does not represent Forbes’ opinion but only that of the contributor. But regardless, sales reps are misrepresenting the context of the article to give themselves more credit than was given.

  81. Kim says:

    **Updated version on my Forbes article comment**
    The original Forbes article can be found here:
    http://www.forbes.com/sites/nicoleleinbachreyhle/2016/04/25/rodan-fields-rising-success/#5adf16dc4854
    An altered version by a sales rep can be found here:
    https://www.linkedin.com/pulse/forbes-rodan-fields-increasingly-rising-become-one-most-manning
    The original posting states this:
    “…hardly a combo that lines up with the pyramid-scheme stigma that many customers have when it comes to multi-level marketing companies.”
    The altered version states this:
    “…hardly a combo that would line up with the pyramid-scheme stigma that too many customers still have nowadays. Fortunately for the thousands of reps working with Rodan + Fields, this stigma is quickly being dismissed and instead, Rodan + Fields is increasingly rising to become one of the most well respected skincare companies in the world.”
    The altered version is insultingly obvious. Not only have they added words that the author NEVER WROTE OR PUBLISHED, they completely omitted her description of the company as “classic pyramid model of multi-level marketing” and how low (I mean, poverty level low) the average annualized income is for the vast majority of sales reps.
    This far exceeds their practice of stretching the truth – it is 100% lying about information that the company themselves falsified.

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