Hold on to your follicles: Haircare MLM Monat crossing the ditch to NZ
Bronwyn Rideout (September 27, 2022)
In June, I wrote about controversial haircare MLM Monat. The MLM has long been dogged by accusations that its haircare products caused haircare and skin damage, and was the subject of multiple class-action lawsuits. Monat was able to escape serious fines by agreeing to stop making specific claims about their products and offer refunds to dissatisfied customers.
In October 2021 Monat launched in Australia, to much internal fanfare and not much else. Engagement on their facebook page is meagre, and their Instagram is only marginally better. One of the incentives offered to potential distributors (or market partners, in Monat parlance), if they registered early, was a chance to earn shares through the Asia Pacific Founders Pool. The company had been incorporated in NZ as a branch of Monat Australia, and I was curious if anything would come of it.
My questions have been answered, as Monat announced its imminent expansion into the New Zealand market two weeks ago, starting with a similar launch schedule as in Australia. It starts with a pre-launch period from October 1st to 31st, just to lure in people who want to take advantage of the financial gains one makes just by being in on the ground floor of a new MLM market. Then proper product sales start from November 1st. You can watch the launch video here. Kiwis can also avail of a similar offer to the one given to the Aussies to become part of the Asia Pacific Founders pool
The Founders pool represents 1% of the sales volume for a region, and is paid out on a quarterly basis. It is possible that the pay-out grows as the company does. At the 11:05 point in this video, Monat market partner Alina Reksha talks about how payouts in the American Market have grown from $50 to over five-figures.
Needless to say, this promotion has been misrepresented on social media.
However, there is a catch. In order to receive the Founders Pool payout, market partners need to reach the rank of Market Mentor, and then maintain it if they want the payments to continue. Those who enrolled during the pre-launch period of October 1st -31st, 2021 had the chance to earn 2 shares if they reached the rank of market mentor by November 30th, 2022. Market partners who enrolled at any other time during this first year, up to October 31st, 2022, had 12 months to do the same, but only earned 1 share. Anyone who reaches the rank of Senior Executive Director is automatically eligible for 1 share, regardless of enrollment date.
Reaching that rank is not based on personal sales alone. Baked into the Australia and New Zealand compensation plans (which are essentially the same) is the requirement to have multiple downlines and at least two market partners who rank climbing as well.
According to the NZ price list, Monat's flagship product is Rejuvenique oil. It retails for $171, and counts towards a personal volume of 100 units. Personal Volume (PV) is defined by Monat as the value assigned to products and, when determining rank and bonuses, PV is the sum of products purchased by the market partner as well as retail and VIP customers personally enrolled by the market partner, but not those in your downline; their purchases are counted towards your group volume.
So, as an example, between themselves and their enrolled customer, the Market Mentor has to sell 5 units of Rejuvenique ($855). Then, there is a group volume requirement that calculates the PV of anyone in the market partner's downline who is ranked between market partner up to market builder. This group will have to sell at least 70 units of Rejuvenique. If they sold at the highest retail price that is an additional $11,970 earned for the company.
To further complicate things, a Market Mentor needs to have at least 2 market partners in their downline who have at least two recruits each. These two recruits then must have at least two individuals in their downline. It's a pyramid of at least 20 people from which the Market mentor requires them to sell a minimum of 30,000 PV in downline volume to maintain rank. Subtracting what was already sold in group volume, the rest of the downline has to pull in $39,330 in Rejuvenique sales.
Rinse and repeat.
Every month.
Rank advancement can be rapid, as it is calculated on a monthly basis, but demotion can take between 6 to 12 months depending on rank. If someone doesn't regain their rank, then the group volume they were able to claim via the downline gets redistributed to the market partner's upline. This may sound like a sympathetic action, but it is also misleading advertising if someone is making a pitch for you to join Monat as one rank, when they themselves have not kept that rank.
This doesn't look all that flash.
Assuming each of the 11,000 VIPs fulfilled their commitment to three automated flexiship orders (to qualify as a flexiship order to meet this requirement, the order had to value $130 or more AUD at VIP pricing. FYI: Rejuvenique's VIP pricing is $145), that accounts for at least 33,000 orders already. Each market partner is required to purchase a starter kit or a product pack which includes a starter kit (in NZ, the most basic kit costs $135); that such an order is counted and that is the only one that is shipped to the market partner, then that already brings the total number of orders shipped to 8000. If each market partner made an additional personal order, then that leaves maybe 1000 for other retail or VIP sales.
I also reported back in June that only two founders had earned their shares by April 2022; Monat Australia has not done a good job in promoting the opportunity with somehow 11 others snuck through with little or no fanfare. However, October 2022 is the last month for new Australia market partners to enrol and still be eligible for a single share from the Asia Pacific Founders pool if they reach Market Mentor by November 2023. So we will have to wait until then to see if it was all it was meant to be.
Should Skeptics be wary?
I remain as concerned now as I did in June, if not more so given how stalwarts such as Tupperware and Mary Kay have ditched the NZ market with little notice. Monat is still losing market partners to other MLMs overseas, and their longevity cannot be guaranteed. Given the size of the NZ market, it remains to be seen if NZ can sustain anyone, let alone someone at the tippy-top of this crumbling pyramid. The lack of government action on MLMs is leaving New Zealanders vulnerable to financial harm. These companies are able to make income claims and misrepresent opportunities for advancement, while refusing to put their money where their mouth is, and demonstrate how the opportunity is really only accessible to a small few.
More Info
- Illuminaughti - Monat: The History of This Hair Raising MLM
- Hannah Alonzo - ANTI MLM MONAT DEEP DIVE
- CC Suarez - MONAT ‘Free Trips' Exposed
- CC Suarez- Proving MONAT is a PYRAMID Scheme: Leaking internal revenue reports
- Savannah Marie - Monat Series | I used Monat for 8 Months | Monat ‘Lifers' are dedicating their entire lives to their MLM