Company Name: CAbi
Costs: $2,570 (yes, really)
What Is It?
Despite what Google may tell you, CAbi is an MLM company that focuses heavily on fashion and style. As such, the main products on offer are clothing, although the company does also sell some jewelry and accessories.
CAbi also has the unfortunate luck of being sometimes confused with the UK’s Center for Biosciences and Agriculture International, which has the initials CABI. Needless to say, despite the similarities in names, there is no connection between the two organizations.
CAbi is one of the few MLMs that is doing fairly well in the market right now but that doesn’t necessarily make it a good choice for making money. The startup costs for distributors are considerable, which makes this a risky business to get involved in. While some people may be successful in it, most would find themselves left with an expensive stockpile of clothes and a lot of time wasted.
The first thing to note about the products on sale at CAbi is that the selection is relatively small. Their complete collection can be seen in the list below, and even within that list there are a number of duplicates. For example, all of the items in the collections (like Boho Femme) will also be in at least one other category.
The product selection seems especially small as we are considering clothing, because people vary so much in what clothing they like and what they are looking for.
However, the company does seem to be going for the concept of being somewhat exclusive, so the relatively limited selection does make sense when you look at it that way. The company does also release two different collections each year, which offers some variety.
That pattern is also likely to affect how easy it is to make sales.
In particular, it would probably be fairly easy to make sales when a new collection comes out, especially as current customers would be excited. In contrast, it would be harder to make sales in the months between collections, especially as some people would choose to save their money for the next collection.
Now, I don’t know a whole lot about women’s clothing but, in general, I’d say that most of their clothing looks okay but it isn’t exactly revolutionary. There are some more unusual products in the mix but many of the products seem to be something that you could easily get elsewhere.
It’s very hard to say whether the prices for the items are any good or not. Clothing varies considerably in price due to any number of factors. In some cases, the branding or the style plays a role, while in other cases the quality is the most significant aspect.
From simply looking at the products online, there is little way to get a sense of their quality. However, the pricing is in line with some of the more upmarket stores, so I imagine some people would be okay with the pricing (while others probably wouldn’t want to spend $70-something on a t-shirt).
The Products and Sales
Selling clothing is an ambitious goal for any MLM company, which is probably why you don’t see it done all that often. Perhaps the biggest challenge of this approach is that clothing tends to look different from one person to the next. Because of this, people tend to like trying on clothing. That approach simply isn’t realistic with the direct marketing structure.
I mean, how do the logistics work with buying the clothing? In a party structure, you can't all try on one piece of clothing. Online, there's a lot to deal with regarding returns.
However, the brand has been doing pretty well for itself with a decent amount of growth and sales.
Part of this seems to come from the fact that the company focuses on teaching its distributors (or stylists, as CAbi calls them) a lot about style and actually giving fashion advice. It’s easy to see how this would be appealing to customers, especially as that type of personal help and advice often isn’t given at clothing stores.
With CAbi, distributors earn anywhere from 20% to 33% in commission. Those are really good commissions in my opinion. Precisely how much commission you get depends on the amount of sales you make and the sales that your team makes.
For example, you get 25% commission if you sell $2,500 per month of product (this goes up to $3,500 in your second season and on). Likewise, you get an 8% bonus commission if you and the people you directly recruit sell $24,000 of product in a month. The full breakdown of bonuses can be seen in the table below.
Now, the monthly minimum it refers to is the $2,500/$3,500 per month level that I mentioned, and the minimum for the team builder bonus is the $24,000 per month. Honestly, that’s a huge amount of sales to try and make consistently. Yet, if you want to be successful in the company, that’s precisely what you have to do.
Based on the information that the company provides, it doesn’t look like there is a rank-based structure where your bonuses increase in ranks. Instead, the bonuses seem to simply be tied into your team. To me, this is a nice change. MLMs tend to have a complex commission plan that is hard to understand and follow.
Here, the commission plan is simpler and there seems to be just the two main sales requirements. That makes it easier for people to understand what they are supposed to be doing and to get ahead.
Nevertheless, even without the complex commission scheme that you often see, the company does still place a strong emphasis on recruiting others. Realistically, if you wanted to make a decent income, you really would have to recruit others and grow a team.
I always say this with MLMs – simply because it is true.
Convincing people to buy products is hard. In many cases, you’re trying to sell a brand that people haven’t even considered beforehand. In this case, you’re also selling fairly expensive pieces and not everyone will have the budget for it. If you are a woman interested in this biz op, think about how much clothing you DON'T buy vs how much you buy. How much shopping do you do before actually purchasing an item?
Yes, making sales is possible. But, do you really have enough connections to make the sales you need?
And that’s the easy part of the equation. Even if you incredibly effective at making sales, what about recruitment? Could you convince people to join the company, even on a part-time basis?
That process is one of the hardest things about an MLM and it’s why so many people don’t get far. After all, you don’t just have to recruit people, you also have to make sure that they are effective and that they make sales of their own.
Once again, this isn’t impossible but it is a lot harder than people assume. This is even more true for CAbi, because the costs of getting started in the business are extremely high – much higher than any other MLM that I’ve seen.
Costs and Requirements with CAbi
Most of the time, MLMs seem to place a huge amount of emphasis on the money-making side of their venture and much less on the actual products. CAbi is an exception to this rule and the company instead has a strong focus on the products. This is appealing, to some degree, but it also comes with its issues.
One of the biggest is that representatives have to buy inventory at the beginning of the season, which costs $2,570 (plus shipping and tax). Distributors make a profit if they sell that product but if they don’t, they can end up majorly out of pocket.
Personally, the idea of having to buy inventory is a major downfall and it’s one that some MLMs focus on and others don’t. Having inventory does mean that customers can get products when they buy them, rather than having to wait. But, it also means that you have to guess what people are going to want to buy. That’s difficult at the best of times and even more so in this case because clothing comes in a wide range of different sizes.
The company also has a minimum threshold in place. If distributors don’t sell enough in one season, they aren’t allowed to sell in other seasons. Another restriction is that stylists have to attend training meetings twice a year, which adds to the costs.
Beyond all this, distributors also have to agree that they won’t sell products on sites like eBay or Amazon – although the products do still turn up on there, like these:
The point of these various restrictions seems to be to get marketers who are passionate about CAbi and about fashion.
That sounds like a great concept in some senses but it also makes the process of making money that much more difficult. Realistically, making money with an MLM isn’t easy at the best of times. The model means that people have to focus on both sales and recruitment, and each of those tasks comes with its own considerable challenges.
One outcome of this is that CAbi has a higher retention rate than most other MLMs, simply because people don’t get involved unless they really are serious about the company. Likewise, the company is one of the few MLMs that is actually doing well in the current market (according to my research for this article).
The heavy restrictions that CAbi places on distributors also serve to keep distributor numbers down. This may mean there is less competition and more potential to make sales.
Even with this, the potential to make money with CAbi is lower than it might seem. After all, you have to pay a lot of money to get started and stay active in the company.
At the same time, you are selling clothing through a direct marketing structure. Your business is battling on three fronts: A new way to buy clothing, an unfamiliar brand, and the need to have a large network of friends to make sales.
Personally, I would recommend taking a step back and looking at whether you have the connections to start making sales. After all, this company involves a considerable investment and it’s certainly not a decision to rush into.
MLM VS Affiliate Marketing
Companies like CAbi appeal to people because they are promoted as a good way to make money. At face value, it even seems like this is true. Yet, in reality, you end up investing a large amount of time and money but probably won’t see much return.
In the past, I’ve had people tell me that I’m too hard on MLMs. After all, making money is going to be challenging however you go about it and MLM companies are pretty honest about what’s involved.
While that perspective is true, my problem with MLMs is that they are much harder than they need to be. I mean, you’re trying to talk people into buying products from one specific brand over any other, when the products themselves aren’t really that much better. If you’re passionate about the brand, that might not be an issue but the recruitment component is something else entirely.
Essentially, you end up having to manage a team and also sell products yourself. You also have to consistently hit sales figures month-to-month, even though the economy varies and your own personal situation varies as well. In many ways, this would be just as challenging and stressful as many jobs. Which begs the question, how is this any better than a conventional job? Certainly, it’s less reliable and you have fewer benefits and less stability.
Personally, I love the idea of working for myself. Which is good, because I do. But, I do it through an approach that gives me all of the power and doesn’t rely on recruitment or specific sales figures. In fact, I don’t have to directly sell to individuals at all and I get to pick topics and products that I’m passionate about.
What I’m referring to is a concept called affiliate marketing.
In some ways, affiliate marketing is like that first part of CAbi, where you are selling a product for a commission. But, the process is online, which gives you the potential to scale it much higher than you ever could with an MLM. I don't have to stick to one brand, and don't have to promote anything to my friends.
Whatever type of product you decide to promote, it's important to own your own website to grow your business.
Parties only work if you have a network of friends with money in their pockets. Network marketing only works if your friends are interested in joining business opportunities.
With a website you can reach the entire world, and only promote great products to people interested in what you have to say. Plus, you open up doors to multiple streams of revenue like affiliate sales, ad click revenue, paid advertising, and even selling your own digital products.