Is Pampered Chef An MLM?
Established in 1980, Pampered Chef is a manufacturer and supplier of kitchen accessories designed to make cooking easier without breaking the bank. Customers can shop for baking pans, skillets, blenders, slow cookers, seasonings, or dinnerware on the company's website or reach out to local consultants. You can even become a consultant yourself and host catalog parties, fundraisers, or other events.
Independent consultants, or hosts, earn a 20-33% commission per sale, says Pampered Chef. Depending on their performance, they may also qualify for rewards, freebies, and trips. After registration, you must purchase a starter kit and meet a minimum sales quota. The cheapest starter kit is $79 and contains basic kitchen tools, including a pan, garlic press, salad chopper, and spices. Unlike Avon, Herbalife, and other similar companies, Pampered Chef has no inventory requirements. This means you don't need to order all sorts of kitchen gadgets and store them at home while waiting for customers to roll in. When someone decides to buy from you, their order is shipped directly from the company's warehouse.
The company had more than 40,000 consultants in 2018, according to Bon Appétit. But is Pampered Chef an MLM? Should you jump on the bandwagon and become a host? Let's find out.
What is the business model behind Pampered Chef?
Herbalife, Rodan + Fields, Younique, and other multilevel marketing (MLM) companies generate revenue by selling directly to customers. Most of them don't have physical stores — instead, they market their products and services through independent consultants. "MLM distributors earn money from selling products to people they know, commissions from each person they recruit to the company and commissions from the sales and recruits generated from their own recruits, continuing down multiple levels," explains Christine Alemany, the CEO at Trailblaze Growth Advisors (via Forbes).
Pampered Chef pays sales commissions and bonuses based on recruiting volume, so it fits the definition of an MLM. But that's not necessarily a bad thing. The Federal Trade Commission explains that MLM distributors can earn more or less, depending on sales volume and the number of people on their downline. Unfortunately, most consultants make little money or end up losing their investment. Only 25% make a profit, reports AARP.
As a Pampered Chef consultant, you'll get your own website where you can list and sell your products. This service is free for 90 days — after that, you have to pay $12 per month. The company also provides training resources and support, but it's up to you to identify potential buyers and close the deal. If you have business acumen and passion for cooking, then it might be worth joining Pampered Chef — although it's an MLM. Just make sure you have realistic expectations.