Is Monat An MLM?

Monat bills itself as a company that sells "premium haircare and skincare products" (via Monat), and chances are, you either know someone who sells it or you've been approached by a hair stylist who also happens to sell it. You might have heard the claims that it does wonders for hair, and you might also have heard that the company has been accused of selling products that cause serious hair damage, hair loss, and dangerous irritation to the scalp (via Healthline). 

Further, you might have a friend who insists selling Monat products has allowed her financial freedom, while on the other hand you've also heard that it's a pyramid scheme-like business model and most people who sell the products actually lose money. So how do you comb through all these stories? What's the truth?  

While Monat is not an illegal pyramid scheme, it is a multilevel marketing company, often called an MLM, and while MLMs are legal business models, there are some legitimate reasons they get a bad rap.  

How Monat's business model works

According to Investopedia, an MLM business model is one that "encourages existing members to promote and sell their offerings to other individuals and bring on new recruits into the business. Distributors are paid a percentage of their recruits' sales. New recruits become the distributor's network or downline and are, in turn, encouraged to make sales to earn money." So while it's true that Monat is a direct sales company, meaning consultants sell Monat products directly to customers rather than those customers buying from a store or website, it's not the only way consultants earn money. In fact, in order to really succeed at selling for a MLM, you have to recruit people to sell underneath you, and get them to recruit people under them, and so on. This is where the business model starts to look like a pyramid. 

The reason this isn't considered a pyramid scheme is because of that direct sales component; Monat really is selling an actual product. But the tricky part is that a whopping 75% of people who sell for MLMs never make a profit. Ever (via Fundera). This means the vast majority of people who become convinced to sell Monat products thanks to promises of huge financial success never see such results. In fact, they are more likely to lose money than make any.