Company Name: Paparazzi (or Paparazzi Accessories)
What Is It?
An accessory and jewelry-based MLM with an unusual twist – the vast majority of products cost just $5.
Paparazzi takes the unusual stance of having low priced products, which could make it easier to sell the products. At the same time, the company offers 45% commission and a compensation plan with just three levels. Overall, that means the plan is more focused on selling product than most other MLMs. However, the plan does also rely on buying and reselling product, which is a major issue and makes the process much riskier for distributors.
When it comes to MLMs, one thing that never ceases to surprise me is how often the same concept is repeated, especially when it comes to products. Now, there are some fairly unique MLMs out there but they are the exception. In most cases, MLMs seem to promote the same types of products over and over again.
In this case, the emphasis is on jewelry and on accessories.
Perhaps that shouldn’t be a surprise. A lot of MLMs do tend to be targeted at women, especially women who have spare time. And, accessories are a popular topic among that audience. But, are the products good enough to stand up to all the competition out there?
My first impression of the product selection is that there’s nothing particularly special about it. Now, in fairness, jewelry and accessories isn’t my area of expertise. Nevertheless, the products on offer don’t seem all that amazing.
One advantage is that the site does offer a fairly decent selection, depending on the type of product that you’re after. Plus, most MLMs change their product offerings over time, so it’s likely that there will be new collections of products as the seasons change.
As products go, selling jewelry and accessories has advantages and disadvantages. One advantage is that people tend to buy these fairly regularly, regardless of how many they already own. In fact, these are sometimes called evergreen products (or an evergreen niche) because people continue to purchase even when the economy is doing poorly.
The catch is that there is also a huge amount of competition.
You just have to look at all of the stores physically and online to see that. There is a huge variety of jewelry and accessories out there and people are spoiled for choice. Selling this type of product through an MLM is also a bit challenging, as people aren’t always comfortable with how long they have to wait to actually get the product or they trust a physical store more.
But, Paparazzi does actually have an advantage in this field. Specifically, the company sells low proceed products. In fact, the vast majority of their products are set at $5.
That price tag doesn’t apply to every single product on the site. But, I’d estimate that at least 90% of them are $5, which is actually pretty cool. This might explain why the products don’t stand out as much as the ones from some other sites and stores. Likewise, the price also suggests that the quality isn’t great.
However, most customers would expect fairly low quality from the price tag, so this mightn’t be an issue for distributors.
That low price tag may make it easier to beat out competition and sell the products. After all, it’s relatively easy for post people to spare $5 here and there to get themselves a treat. This can even lead to increased sales, as it’s easier to get a person to spend $5 four times than $20 once. That pattern has something to do with the psychology of how we view money but it’s especially useful for this company.
The products and their price will influence what audience you can promote the products to. For example, the products would be great for people with limited money who don’t spend much on themselves. However, you probably couldn’t sell the products to people who are fond of luxury.
So, if you’re thinking about getting involved in this MLM, one of the first steps would be to look at your potential audience and think about whether they would be interested in the products.
There is one other thing to note. With most MLMs, you end up selling fairly expensive products and getting a commission on those sales. In contrast, Paparazzi’s cheaper products will mean that, on average, you will make less money per sale. However, the concept is that you will make more sales because the products are cheaper. In theory, that could lead to more profits.
The first part of the opportunity for Paparazzi is simple, you earn money by selling the products. In this case, distributors earn a 45% commission, which is pretty high for the type of business.
But, there is a catch.
Part of the reason that the commission is so high is that this is one company where you buy the products first, then resell them. This setup is a horrible one, especially for a company that offers such a wide range of products.
The company even claims that if you resell the products from your starter kit, you will make either a 76% or a 100% profit, depending on which kit you buy.
That claim is completely unrealistic though. I mean, if you got a set of 35 pieces of jewelry, there’s a good chance that some of those pieces won’t be interesting to other people. So, you’re likely to end up with at least some products that you can’t sell on.
Thankfully, it is also possible to have a website with the company and sell products that way. However, the emphasis of the company is on running parties and selling products there, which also creates a strong focus on you buying products first (as opposed to selling them on the website). There are ways around this, of course, such as distributors taking orders first and then making purchases.
Personally though, the focus on having distributors buy products first is a concerning one. This practice makes it very easy for distributors to end up spending much more money than they earn.
Paparazzi is one of a large number of companies that is considered an MLMs. MLMs tend to follow the same general type of model. Part of that involves selling the products for a commission, which is frequently somewhere around 30%. However, in most cases, it isn’t really possible to make a substantial income from the company this way.
Instead, effectively earning money is connected to the second part of the model. That part involves recruitment.
With Paparazzi, you can potentially earn commissions from people up to three levels under you. So, the first level would be people that you personally recruit into the company. The second level would be people that they first level recruits and the third level are people that the second level recruits.
The general concept is that the levels you can earn from and the percentage you earn increases as you go up in the ranks of the company. At the same time, other bonuses also increase. This means that the further you go in ranks, the more potential there is to earn money.
But, there’s a catch.
Going up the ranks involves meeting various criteria and these increase as you go along. For example, here are the criteria for the first six ranks in the company:
In these criteria, the PV refers to the amount that you personally have to buy while OV refers to the amount you have to sell within your team. According to the company’s compensation plan, each $5 product gives 2 PV. So, you have to purchase 25 accessories to meet the basic requirement.
Now, 25 accessories would retail for $125 and that is supposed to include a 45% profit for the distributor. So, in theory, this means that you need to be spending somewhere around $60 or so on products to meet that PV. It’s also important to note that the volume requirement is monthly, so you have to spend around $60 every month on products (and more in the higher ranks).
It’s easy to see how you could end up putting a lot of money into the company before you see any type of return. For one thing, the monthly requirements means that you need to be selling at least $60 worth of product to simply break even.
This also means that you’re trying to run a business with a fairly high and consistent monthly cost right from the very beginning. That makes it so much more difficult to get started with the business. In many cases, you’d end up with some months where you spend more than you sell.
In fact, this pattern is why many ex-MLM members end up with stockpiles of product that they can’t sell. Likewise, many will end up investing more in the company and its products than they earn.
MLMs do sound like an amazing opportunity when you first look at it, so it’s not surprising that so many people get involved. Yet, the entire model means that you need to recruit and manage a team to actually get anywhere.
That recruitment process is probably my biggest issue with MLMs. The company makes it sound easy to get friends or family members into the company – but is it really? How many people do you know that have $60 a month to invest in buying product for an opportunity that might, or might not, earn them money?
Chances are that most of the people you know either don’t have the time or don’t have the money. This means that it would be extremely difficult to actually grow a team to the point where it can make you a lot of money.
That recruitment pattern is also why MLMs are sometimes referred to as pyramid schemes. They’re not – but they use the same structure. As with a pyramid scheme, the pattern means that people who get into the company early may have a decent chance of making money. But, the further down the pyramid you are, the less likely it is that you will earn money. Plus, as more people join the company, the pool of people who are likely to join decreases.
The end result is that you are fighting a losing battle against a model that simply isn’t sustainable.
MLM VS Affiliate Marketing
The underlying concept of an MLM is that you have an ‘opportunity’ to make money. People often end up getting involved because that sounds so great. They present it like you can just make some extra cash in your spare time by selling stuff to your friends.
Well, I don't have that many friends, and I don't like to bug them with promoting things.
That's why I created an online business, independent of my friends buying my stuff, and promoting products to people that are searching for them online.
In modern society, people are turning to the internet more and more. We’re already heavily relying on it to research products that we’re interested in and many of us also make regular purchases online. After all, this is much more convenient than physically going down to the store.
So, why not take advantage of that behavior?
Many people out there do just that and they use websites as an effective way to reach out to people. Websites are a powerful tool because you can use techniques to get them ranking in search engines and drive traffic to them. Plus, you can make money by promoting the products from other companies, through a process called affiliate marketing.
Affiliate marketing has a range of advantages, especially as it has a pretty simple model. At the same time, you don’t have to worry about high monthly investments. All you need is a domain and hosting. You can learn how to start your own affiliate business online, in the same way I started my own. Pick your own topic, build a website about it, and help others find the best products in your niche!
Selling cheap jewelry to my friends just isn't something I'd enjoy or recommend. Plus the fact that it's a network marketing business, this is not a biz op I recommend.
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.
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