Former model / entrepreneur Tyra Banks accused of running a pyramid scheme with her latest beauty venture…
According to Broadly Magazine Trya Banks new sell-from-home beauty line 'Tyra Beauty' is glorified pyramid scheme in which her 'beautytainers' will face an uphill climb to success.
Broadly explains,
Once you sign up to be a Beautytainer, however, the language quickly becomes more business-like. Beautytainers pay a $59 initial fee and then can purchase a $80 basic starter kit or a $139 "beyond basic" starter package, so they can begin demonstrating their products to clients. Before they start work, Beautytainers must sign a six-page contract, agreeing to the 64-page Policies and Procedures manual. The booklet includes a non-disparagement clause forbidding former Beautytainers from speaking openly for a year, effectively barring any public criticism for the one-year-old business. Tyra Beauty also supplies them with a copy of the brands compensation plan. The company's policies are open to anyone who is considering signing up to be a Beautytainer, but I had to track the compensation plan down by visiting actual Beautytainer's personal marketing pages. Beautytainers receive 25 percent of the retail selling price of items they sell either through their personalized Beautytainer websites or through in-person consultations, with a 5 percent bonus for selling $500 to $999 in a month (a whopping $27.50) and a 10 percent bonus for selling $1,000 in a month.
The real money to be made comes through recruiting new Beautytainers to your "crew." Beautytainers move up levels (called Bronzer, Silver, Gold, Platinum, Diamond, all the way up to a sixth level called Yellow Diamond) based on their sales, the amount of Beautytainers they recruit below them, and the combined sales of their team. Each level promises larger bonuses and a larger portion of the sales of those below you. A Yellow Diamond Beautytainer, the highest level, will have a team with a number of Platinum and Bronzer level members enrolled below them and bring in a total of $200,000 in combined sales from their team members. Tyra Beauty also gives high-performing Beautytainers "the Hook Up"—25 percent of the company's online retail volume not sold through Beautytainers. If a Beautytainer doesn't make her sales goals for the month, or her team doesn't bring in enough cash, she risks losing her spot in the hierarchy and having her account deactivated.
If this selling structure sounds familiar, it's probably because you've had a cousin try to sell you Herbalife. It's hard not to have had contact with one of the millions of Americans involved in a multi-level marketing scheme, also known as an MLM. These businesses bring in representatives through the promise of financial freedom and the opportunity to be their own bosses. Members focus on recruiting new members to a multi-tier selling system more than selling actual products, seeing very few actual sales or cash.
