If you are considering joining the business opportunity that Nerium offers you may have run into some people calling it a pyramid scheme or even came to this conclusion yourself. But is Nerium a pyramid scheme or is this just a baseless rumor that came about from people that just have something against the company?
I have looked into Nerium’s business structure and I can tell you that this is not a baseless rumor. This company operates very similar to a pyramid scheme so it is understandable why people come to this conclusion. However… its just not a pyramid scheme although it is close. And in this post I’ll be going over how it works, how it resembles one, the downsides of it, and more.
Nerium is a direct sales mlm company that sells anti-aging skin products. They do not sell any products in retail stores and rely on independent distributors to market the products.
As an independent distributor there are 2 main ways in which you can make money. Of course you can sell Nerium products yourself directly to customers and earn commissions. When you are a distributor you can buy the products at wholesale prices and then when you sell them at markup prices you pocket the difference.
But this part of the Nerium business obviously isn’t what you are interested in. What you are interested in is the mlm side of it. MLM stands for multi-level marketing and what this means is that there are multiple levels within the company and you can also make money by recruiting others in beneath you. This is the side of it all that brings up the whole pyramid scheme thing.
How Nerium Could Be a Pyramid Scheme?
For Nerium to be a product based pyramid scheme the business would have to be overly dependent on making money off of new recruits rather than the selling of Nerium products to the general public.
So the question you have to ask here is are they overly dependent on recruitment like this? In order to answer this question you have to take a look at the compensation plan and see whether they push new recruits to recruit others too much or not.
The Comp Plan
Nerium’s compensation plan is a unilevel structure and it goes 10 levels deep. Because it is uni-level each level can be infinitely wide. And how it works is like this: When you recruit people into the Nerium business they go to your level 1; when your level 1 recruits people into Nerium they go to your level 2; when your level 2 recruits people into it they become your level 3… and so on.
You can make money off of these people 10 levels down if you are able to move up the ranks within Nerium. There are 10 ranks total and as you can see below, when you start out you only earn commissions from levels 1 & 2.
So how do you move up the ranks you might be wondering? Because after all… if you want any chance of making good money you need to move up the ranks and take advantage of this comp plan.
Well… you have to recruit more people in pretty much. I took a table from Nerium’s website and I its confusing but what I want you to look at is what I circles. The Personal Volume Requirments remain pretty much the same as you move up the ranks. They go from 200 PQV to 300PQV… not much difference. However, the Monthly Group Qualifying Volume (GQV) increase drastically.
This GQV number is the amount of product volume that you and your downline sell. So pretty much in order to increase that and move up the ranks you need to recruit like a madman.
So Is This a Pyramid Scheme?
Well there is no doubt that they put a lot of emphasis on recruitment. The only realistic way to move up the ranks and make good money is through tons of recruitment. They indirectly make you recruit pretty much.
However… according to a 2012 Income Report released by them they claim that over 70% of their revenue comes from retail and preferred customers… which are brand partners or distributors. I know this report is pretty old at this point but I would expect it to be around the same amount to day since the company hasn’t changed much.
If this is true then Nerium definitely is not a pyramid scheme although they do focus on recruitment to a great deal.
I don’t consider Nerium a pyramid scheme based on what I see. They are a legitimate mlm and people do make good money with them. However, its isn’t easy. The way mlm’s like this are set up usually only the top few percent of people make the majority of the money which the new recruits and those at the bottom make very little.
Usually mlm companies like this release an official income disclosure that I could use to prove this but Nerium has not. But anyway… I have looked into enough mlm’s like this to know that with a compensation plan like this not many people make good money.
Comments, questions, concerns??? Leave them below in the comment section and I’ll get back to you soon ?