Company Name: Velata
What Is It?
An ‘income opportunity’ that lets members earn money, discounts and products by making sales of food products and kitchenware.
Velata has a better product range than most MLMs in my opinion. This includes products that are reasonably priced and that people would actually want to buy. Still, I’m not convinced about the potential to make money through the company. After all, it still uses a complex commission scheme and also relies on “parties” as a way to make sales.
Velata’s products may be the company’s main advantage in the world of MLMs. For one thing, the company offers a decent range of products. These products are focused on cooking (and serving), edibles, kitchenware and gifts.
That selection can be quite appealing, simply because it is different than most other MLMs. For example, there are literally hundreds of different MLM companies that focus on cosmetics or on health and nutrition.
With those companies, you often find that the products are quite similar from one MLM to the next. Protein shake? Boring! Energy drink? Yawn. That makes the process of actually selling products so much more difficult.
In Velata’s case, the product range certainly helps the company to stand out, and their products are pretty appealing. Here’s one example:
There are lots of other products too, but the fondue range and warmers do seem to be the most popular. The company has even expanded their range to include cheese fondue, which is bound to appeal to quite a few people. There are also surprisingly few options for safe fondue at home, so it’s easy to see how Velata products can potentially be popular with this niche market.
The fondue makers seem to be popular because they don’t involve much risk or mess. I’ve seen a number of positive reviews for the fondue online.
The types of product that the company offers are a good thing for distributors. In particular, many of Velata’s products are things that people would buy repeatedly. For example, a customer might buy just one fondue warmer, but may buy many packets of the fondue itself over time. Repeat sales = passive income baby!
That’s also true for any consumable product that the company offers – and it does offer a lot of them.
I haven’t seen many complaints online about the company’s products, so they are probably of decent quality. That’s the thing with food products. If people don’t like the products, they do tend to be vocal to friends and online, and I simply haven’t seen that with this company.
The other thing to consider with this company is the price of the products. The company has a catalog on its website that spells these out nicely. That’s a big plus for me, as it means that the company isn’t being deceptive.
Most of Velata’s products are pretty reasonable. For example, these dip blends are $8, and many of the food products, including the fondues, are $10 or under.
Now, those prices are more than you would pay at a grocery store, but that’s to be expected. The prices are low enough that many people would be prepared to spend the money for something that seems a little bit different.
The company also has kitchenware products, and not surprisingly these are higher in price. Even then though, the prices aren’t absurd.
So as far as the product lineup goes, I could get behind these guys. Approved!
The site for Velata offers relatively little information about the opportunity, although there is still information there. One interesting this is that the company places a strong emphasis on free and discounted products. This means that as distributors sell items, they end up with products themselves. Much of this comes from the party structure.
So, distributors are encouraged to hold parties where they promote and sell the products. The amount of sales that they get in a given party influences the bonuses they get as well as how much they earn. The company’s breakdown for this concept looks like this:
The emphasis on free products and discounts is manipulative in my opinion.
By doing this, the company entices distributors that are passionate about the products. At face value, that’s a pretty good practice, but that approach means that many distributors will feel like they are gaining a lot, even when they aren’t getting all that much for their work.
After all, getting free or discount products isn’t the same as earning money – and you would find yourself still spending money on the products from the company. That can easily mean that the business ends up costing you more than you make from it. Are you selling Velata to fill your gut or to start a business?
The party structure has advantages and disadvantage. One disadvantage is that people tend to buy things when they can afford to, so you might not get many sales at a party simply because people don’t have the money at that time. Additionally, people tend to lead pretty hectic lives. That can make it pretty difficult to find a time and a place to get a decent number of people together.
I actually know people who have tried this type of MLM in the past. They typically found that the one or two parties were easy, but after that the process got much harder. In some cases, people were simply not interested in going to any more parties. In other cases, people went to the parties to be a good friend, but didn’t buy anything, meaning the distributor wasted time, effort and sometimes money for little outcome.
However, the nature of Velata’s products does suit the party structure well. Parties give distributors the chance to show off the products that the company offers, and to allow friends and family to taste test them. That can be effective, but even then, making consistent sales from parties is no easy task.
There is also one more issue with parties – the tiers.
The party structure means that the rewards distributors get depend on the sales they make. There are different levels to achieve, starting at $100 and going up to $1,000. Higher levels mean more free and discounted products.
That approach could encourage distributors to purchase their own products to try to push the sales over the threshold. I have even seen distributors for other companies do just that. Keep in mind though, even if you only do that occasionally, the costs can add up.
However, it is important to note that distributors don’t have to buy products to sell them. Instead, customers pay the distributor and the distributor makes the order. This lowers the risk for the distributor. This is also an advantage compared to other MLMs that require you to be on auto-ship to maintain “active” status.
The Commission Scheme
The company appears to have a standard commission scheme that focuses on recruitment- even though they don’t offer much detail about it. In general, this approach means that distributors are encouraged to recruit others into the company. It is still possible to make money just from sales, but the amount you can earn this way is typically much lower than what you can earn with recruitment.
The recruitment is the MLM aspect of the company. To make big money, you need to find new distributors and build a team under you. That team plays a large role in your income, and you get more bonuses as the size of the team increases. You also earn a percentage of the commissions that the team makes.
The site offers an illustration of the different ranks, which I’ve included below:
This structure is similar across different MLMs. As you move up the tiers, you start to be able to earn income from different levels in the team below you and higher ranks offer more bonuses. However, the requirements for the ranks also increase as you go up the levels, so it gets progressively harder.
Keep in mind that it sound amazing on paper, but actually starting a strong downline that wants to sell (and does sell) on a regular basis is extremely hard. That's not to say you shouldn't do it (anything worthwhile is going to be difficult), but the success rate in MLM is extremely poor because most people simply don't have the recruiting skills or a large enough network of friends and family.
How Realistic Is It?
Personally, I'm not so hot on MLMs. People can and do earn money, but, there’s a catch. Some people do make money, but most people fail. In my opinion, the MLM model is designed so that many people fail. It wouldn’t work otherwise. How can you grow your downline while your downline grows a downline? There aren't enough people in the world, and in the case of Velata, not enough people enjoy fondue, or selling fondue.
MLM VS Affiliate Marketing
The MLM model works best for people who are fantastic at networking, great at selling and who have a large social network.
A better way to make money for an independent person that doesn't like recruiting is affiliate marketing. You simply sell products online (you choose them). This is done through a website, which are simple to build these days. The power of affiliate marketing comes from the fact that it is online so you don't have to store or purchase any inventory, and you don’t have any downline to worry about.
Instead, your website becomes your tool for getting sales and making money.
A rarity on my blog, I think this is an OK network marketing company to join. They have decent products and a cool niche market. I don't personally like the MLM business structure though, and I'll discuss a better option for you fondue lovers below.
Whatever type of product you decide to promote, it's VITAL that you generate leads to grow your business.
But let's face it, "parties" are boring, and no one likes the annoying Facebook friend who's always promoting a biz-op.
That's why I use this lead generation system. Learn how to generate leads outside of your circle of friends and family and discover what it means to truly own your own business, rather than just be a cheerleader for one network marketing company.