If it weren’t for Rodan+ Fields, there may never have been The Upside. The idea for The Upside first came to me when I started to notice my Facebook feed filling up with “before and after” pictures of women’s freckly faces, perky “join my team” posts and discount promos for a skincare line I had never heard of. It was late 2015 and Rodan + Fields was taking over my social media universe. What interested me the most was that the women who were selling these products were bright, capable former corporate professionals, many of whom I went to college with, studied hard with, interned each summer with and busted my hump in the corporate world with. I was shocked that they were selling (gasp!) skin cream on Facebook. I already knew that the corporate world was deplorable when it came to flexibility, especially for women. But was THIS what it’s really come down to?
Fed up with too many months of being solicited with way too many hyped-up multi-level marketing (MLM) Facebook posts, I wrote my own post, questioning the quality of the MLM movement. No more than 60 seconds later, I received a message from a summer camp friend letting me know that my comment may be perceived as hurtful, which was her nice way of telling me I was being insulting. So I called her. She shared a story about how Rodan + Fields was helping women, that significant income was attainable and that it even helped pull her friend out of depression after a divorce. I immediately removed the post and tucked my tail between my legs, feeling embarrassed that I had insulted even one woman trying to take ownership of her life. Shame on me.
A year or so passed and I noticed more and more MLM companies cropping up: Beautycounter, Stella & Dot, Lula Roe, Chloe + Isabel, and so on and so on. Many had been around for years, but somehow I was just noticing them. I have a marketing background and understand enough about business to know that there was no way our society had suddenly developed this huge additional demand for contour creams, printed leggings and cute costume jewelry. What I realized instead was just how much demand there was for business and career opportunities that allow for some level of flexibility, working on our own time in between shuttling kids to school and picking them up for afternoon activities, all while earning a respectable income and having intellectual and social fulfillment.
I realized, these companies weren’t just selling products, they were selling a dream. They were selling a relatively low-risk, low barrier-to-entry platform for hundreds of thousands of talented, accomplished and/or eager women, desperate for flexibility or independence and striving to achieve that elusive “having it all” lifestyle. Until the majority of corporate America catches on and begins to restructure the traditional 9 to 5 facetime model from the 1950s (when, by the way, women weren’t even part of the workforce and the push button telephone hadn’t even been invented…time for change much?), the MLM companies will continue to draw women away from the corporate economy and thrive on their ability to give women what they want and what corporations do not offer: flexibility and opportunity.
From this lightbulb moment, I developed the concept for The Upside, deciding I was going to create a sort of hybrid Rodan + Fields meets McKinsey, helping corporate professionals achieve that same level of flexibility that the MLM companies promote, but using a woman’s hard-earned career skills and corporate pedigree to achieve it, keeping them in their current or better career trajectory. Through The Upside, I developed a mission to change the way working works in America. As I developed my business model, I started asking my MLM friends more about their various companies, and began realizing, albeit slowly, that these companies just may deliver on their promise to provide their consultants with financial success and independence from the corporate world. Now that I’ve launched The Upside and understand just how far we have to go in achieving better work opportunities for women, any method of attaining real flexibility with real income opportunity receives an A+ in my book. Although I certainly don’t think this path is for everyone, I’m proud (and shocked) to say that I’m no longer a full on MLM skeptic, depending on the company of course.
The conversations that I had with my MLM friends were so interesting, I decided to continue the discussion, written below, so that others can understand more about why women are choosing this path. I sat down with Alaina Kelly from Rodan + Fields and Lori Tulloch from Beautycounter, two smart, wonderful women from two companies that I think are doing it right, to ask the questions that everyone is (secretly or not so secretly) curious about. You wanted the truth about MLM companies, well here it is:
The Upside: Give me a little background on your career prior to joining your current company. Alaina: My background is in HR Management. I worked for a global consulting firm in New York City for the majority of my corporate career. I was introduced to Rodan + Fields 3 years before I decided to start my business, and have now been in the business for 3 years.
Lori: After college, I became an Account Executive for Tiffany & Co business sales. I worked exclusively with business clients in Washington DC, Upstate New York and Manhattan. I sold and managed large employee recognition and corporate gift programs. I was with Tiffany for 15 years but decided to become a stay-at-home mom shortly after I had my second child. I joined Beautycounter late in 2016 so I’m relatively new to this industry.
The Upside: What did you think about MLM companies before you considered joining one? Lori: Before I joined Beautycounter I had a negative opinion of MLM companies. Many of my friends who had left the corporate world when they had children asked me to try their product or join their teams. I simply wasn’t interested. I never went to a social or joined online parties. I was afraid I’d be talked into buying something I didn’t need or want out of obligation. I was afraid they would ask me to join their team and I’m not good at saying no. My Facebook feed was loaded with solicitation posts I didn’t want to see.
Alaina: I actually didn’t think about them much, period. I never thought they were “schemes” but also never really thought it would be something anyone with a career would do. Sad, but true! I was a good student, went to a good college, got a job in corporate America right out of school and climbed that corporate ladder. At the time I thought I was doing what made me happy but looking back, I was following the traditional path to what we view in our society as success.
The Upside: Why did you decide to take this career move? Alaina: I watched my friend for 3 years. I watched her leave her six figure corporate job. I watched her work this business around her family, and it looked like she was having fun on top of it all. I was at the point where I didn’t believe I could have it all at the same time: a successful career that I was proud of while also being there for all the important moments in my children’s lives. I was watching my mentor and others with R+F who looked like they had that balance, and truthfully, I was envious. I wanted “it all” and had no idea if this would work for me, or if I would be any good at it, but what I did know is I would definitely regret not trying it and look back one day saying “what if.” So I jumped in, terrified and still not 100% sold, but I did it.
Lori: I decided to take this career move for a lot of the same reasons Alaina mentioned. I’d been looking at going back to work very casually. Something was missing from my life. I was my kids’ mom and that was it. Yes, I was very lucky to be at home but I wanted more. A full-time career wasn’t in the cards with three small children. I needed a flexible part time job with great earning potential. I loved the idea of teaching Pilates and yoga but the certification was costly and time consuming. My friends in the direct sales industry made a lot of money, often replacing a full time corporate salary. They had the flexibility that I needed. Furthermore, I didn’t love being a one income family. What if something happened to my husband’s job? This opportunity had everything I was looking for.
The Upside: Why did you choose your particular company over another? Lori: Beautycounter’s founder and CEO, Gregg Renfrew, was one of the main reasons I chose this company. She started Beautycounter to advocate and educate for safer products and to provide a product that is as luxurious as it is safe. Having very sensitive skin myself, I was intrigued. As a business person, I knew this was a VERY untapped market. Only a handful of my network was aware of how toxic conventional products are and that there is little legislation in the personal care product industry. We aren’t asking anyone to buy anything new, but to replace what they already use with safer products. Additionally, personal care products are repeatable business. How many handbags can you sell to one person?
AND, shopping as we’ve known it has changed. The retail model is dying – malls are closing. I’d always been good at relationship selling and providing solutions for my clients. This was an opportunity to create a financially rewarding business while simultaneously having social impact. So, regardless of my opinion on traditional MLM’s I needed to be a part of Beautycounter and joined almost immediately.
Alaina: As I mentioned, I wasn’t looking for an MLM opportunity. So for me, it wasn’t about choosing this over another. It was about not missing out on the opportunity that this specific company provides. What first drew me in to this one in particular (once I finally did my research) were two things:
#1: The brand recognition. Everyone knows Proactiv - where would I be now if I had the opportunity to get a piece of the Proactiv pie before it was a global household name? And now these same two dermatologists are handing that opportunity out for their next company, looking for people who are hungry, smart and see the opportunity to help them open markets.
#2: I loved that we are a skincare company that chose MLM as its distribution channel, not an MLM that chose skincare as the product to sell. That is a HUGE difference in my opinion. We launched in high-end retail in 2002. They were successful, the #1 clinical brand in Nordstrom, and they still deliberately broke up with Estee Lauder and pulled out in 2007 to move into this distribution channel because they recognized that’s how they were selling their products already, the power of word of mouth. These doctors' vision is to make this the #1 skincare company not only in the U.S., but in the world. It’s not a fad, it’s not the hot product of the moment, it’s an industry that is only growing and these doctors are positioned to continue to create a legacy brand that will last for generations to come. That gave me goose bumps, so from that perspective my decision became a business decision, not an “I want a side gig” decision, if that makes any sense.
Adding to what Lori already touched upon, what also appealed to me is our products are consumable, which means our customers use them, wash them down the drain and need more. This creates a steady residual income even for consultants who don’t build a team and only have customers. R+F is not a party company and doesn’t stock inventory. This is more nitty gritty but I had no interest in throwing parties to build my business or packing and shipping orders, so for me, even with all of the above, this would have been a deal breaker.
The Upside: Can you discuss the economics of your company? How is it structured and what are the commission breakdowns? Lori: Beautycounter consultants make between 25-35% commissions on their own personal sales. Building a team is key as well, and the fastest way to grow your business. Consultants make an extra percentage on what their recruits sell up to four levels down. Bonuses are paid on level achievement and maintenance both for yourself and your downline. Commission is paid monthly.
Alaina: With R+F you can make money two ways:
A. By selling our products. We make an average of 32% commission on our product sales to customers. B. By building a team. We make 5% on our teams’ product sales, up to 5 generations out. And an additional 2.5% on our 6th generation once we hit the top title in the company.
The Upside: What does that mean?
Alaina: Ok, Let’s use multiples of 10 for simplicity. I introduce this business to 10 people. I make 5% on their product sales, and this does not dip into their paycheck, of course. Over time, they each introduce this business to 10 people… 10X10 = 100 people in my second generation that I’m earning 5% on. Over time, these 100 people each introduce to 10... 100X10 = 1,000 people in my third generation that I’m earning 5% on. And so on. Let me be the first to say that this TAKES TIME. It takes work, it takes commitment and it is the furthest thing from a get rich quick. However, the absolute beauty of it is that instead of the environment being every man for himself or cut-throat, we genuinely all want the same things. The earning potential isn’t capped - it’s limitless. That said, I have the ability to out-earn the person who introduced this business to me - there are checks and balances in place so we can’t free-load off our team without working our own businesses. It’s truly a genius business model, in my opinion.
The Upside: Is there anything about this journey that has surprised you? Alaina: Yup, LOTS. The quality and caliber of the individuals in my business were really impressive to me. Doctors, lawyers, high powered corporate professionals who want more for themselves and their families and who understand the value in having a diversified portfolio of income streams, and the power of being a part of this legacy brand. Even though these are the things that drew me in as well, it’s a whole different feeling to be amongst so many other accomplished individuals who see the same thing.
I also love the empowering and uplifting culture we have. Here’s a perfect example: When I first started, I saw that someone else in my town had also just started her business. I didn’t know her at all but I knew her sister, so I reached out to her to see if she wanted to meet up. We met, we clicked, and she is now one of my best friends. We could have easily looked at each other as competitors - we aren’t on the same team and don’t financially benefit from one another. We have kids similar ages and our social circles overlap. But I literally wouldn’t be where I am in my business if it weren’t for her. We collaborate, we share ideas, our teams have worked together. This culture has permeated from the top down by our amazing doctors who are the most giving, amazing women. To have so many people cheering for your success, even when it doesn’t benefit them? There is something special about that.
And lastly, the personal growth. I am a stronger, more confident version of myself than I was at the beginning. This business is VERY simple. But it’s not easy. The struggle comes from believing in yourself and what you’re doing when others may not believe in you, or may simply not see the opportunity in this same way you do. I’ve come across my fair share of roadblocks but it’s what I’ve done with them that has helped shape who I am today. SO much of this business mirrors life, and honestly if you had said that to me when I first started I would have laughed. So I get it if you are laughing, but I also know that it’s 100% true.
Lori: I’m very surprised at how much happier I am. Joining Beautycounter was like a rebirth for me both personally and professionally. I am out of my comfort zone doing something I love, meeting amazing people. I’m contributing to the family again financially. The most unanticipated byproduct of this venture, however, is that I have helped other women start their own businesses and become successful. This has had a profound effect on me.
The Upside: What direction do you see this industry going in 5 - 10 years? What trends are you observing? Lori: From what I can tell, this industry is growing – and quickly. When you go to the mall it’s hard to find sales people. Our business model allows a consultant to build relationships with clients. Relationship selling is more successful than transactional selling and you develop repeatable business. At Beautycounter, we are setting a trend because we aren’t just selling a product, we are educating consumers on safer products. We are advocating for better laws for our safety. People want to buy from companies with a social mission and these companies are doing very well.
Alaina: I agree with Lori. Retail is hurting, brick and mortar is beginning to fade and social commerce is where we are going. People get recommendations online now, from real people, not from commercials or advertisements. And they want to buy from people they trust. You want a mascara recommendation? You go online and ask or search on the reviews that consumers have placed. Once you find the right mascara, you point, click, purchase, done. This business model fits very nicely into this social commerce movement and for all the reasons above, I only see that continuing.
The Upside: Avon is one of the oldest names in the MLM businesses. That company is struggling while yours are booming. What do you think went wrong there? And what are your companies doing differently to give them so much success?
Alaina: I’m going to be honest - I don’t know much about where Avon is now or what it’s doing. The fact that I don’t hear about them speaks volumes. But the first question that comes to mind is, what about their products is innovative or unique? How have they evolved over time to make the company relatable and make it something that consumers want to be a part of? With any company, MLM or not, that is essential to staying relevant.
Lori: I also can’t speak much to Avon and its business model but I have a few theories about why it’s not doing well. First, their offering is too diverse and they don’t focus on core product. Avon sells fashion, jewelry, makeup and skincare. Second, as Alaina mentioned, I don’t think they’ve done a good job of keeping current with today’s consumer.
The Upside: What myths about MLM companies would you like to dispel?
Lori: For all those skeptics who say it’s a scheme, it is far from it. You can make real money on your own time. You can do this on the side of a full-time job or as your full-time job.
Alaina: I’d like to dispel two things:
1. Only the ones who get in first can make any money.
If you review my compensation outline above, you’ll see that we only get paid out to a certain generation. As our teams grow, the largest levels are deeper down, which means a bigger paycheck the deeper you go. I can introduce the business to someone who has a HUGE 7th generation that I don’t get paid on and they do. That’s a GOOD thing. I also have to keep a certain level to even get paid on them, which means I can’t recruit someone and then sit back and let them work for me. I have to be working my business. In short, a lot of people surpass and out-earn the person who brought them in to the business. There is no ceiling.
2. It’s saturated.
I can’t speak for all MLMs but I will say saturation is a way over-used term. For skincare, R+F currently only accounts for 3% of the skincare market in the U.S. We currently sell product in the U.S. and Canada, and will be expanding globally (first stop, Australia in the next few months). There is a tremendous, long term, global opportunity. The skincare market is currently $127 billion globally, and expected to reach $154 billion by 2021. This all equates to big business and big opportunity.
The Upside: What advice would you give to those considering joining an MLM business?
Lori: If someone asks you to join an MLM it’s a compliment. You’ve got NOTHING to lose so just take a chance. Shift your mindset from an employee to a business owner. To start most businesses, you need to put up a LOT of capital. In most cases with MLM’s, your business model is already created for you and there is minimal investment. You will hear no. A LOT. Don’t take it personally. Your friends will unsubscribe from your mailing lists. People you thought would be your biggest clients may not be interested. Despite all of that you will find some of the most unlikely people to be your biggest supporters.
Alaina: I second everything Lori said. This is not an immediate gratification business model, which is why so many people quit before they make much of it. A lot of people start and want to make full time incomes pretty quickly, and in part-time hours. That’s not how it works - and if it did, everyone would do it! Almost everyone starts their businesses in very part time hours, and that’s how it is meant to work, but it also takes time to build, like any business would. You are generally underpaid in your first year based on how many hours you are putting in, but know that you are building a foundation to a business that, if you work it consistently and treat it as such, will overpay you per hour once you’ve built it up. I work my business about 20 hours a week at this point, I am 3 years in, and I am on track this year to surpass my previous corporate salary. I do this all around my family - that “having it all” mission I was on has paid off, but it took time. I had the big picture in mind when I started and that is incredibly important for anyone looking into an opportunity in this field.
The Upside: What do you see yourself doing in 10 years?
Lori: My vision for myself in 10 years is to continue to be self-employed. I’ll have kids about to enter college and I want to provide for them like my parents did for me. I will have more flexibility so perhaps I’ll get that Pilates certification or start a wellness business.
Alaina: I see myself still doing this, with even more time, freedom and a retired husband.
Thank you to Lori and Alaina for their openness and honesty. It’s important that we support one another and build each other up, no matter the career choices we make. What works for one person doesn’t always work for another. Full time job, part time job, job share, MLM, stay-at-home mom, consultant, entrepreneur…there is no wrong choice. I just wish there were MORE quality choices for more women.
Although both Lori and Alaina know I won’t be “joining their team” anytime soon, I am so glad I learned more about their career paths and how fulfilling the MLM model has been for them. I’ll never look at MLM consultants the same way again. Will you?
Have more questions for Alaina or Lori? Feel free to reach out to them.
Alaina Kelly, Rodan + Fields
https://alainakelly.myrandf.com (for products)
https://alainakelly.myrandf.biz (for business)
Lori Tulloch, Beautycounter