Monat: Pyramid Scheme Or Legit? [Comp Plan & Review]

MONAT Global Corp is a privately held multi-level marketing company (MLM) that sells skincare products, hair care products, and hygiene products for pets.

You probably heard about Monat from a friend or family member who introduced you to its products. Or perhaps you attended an online workshop or an in-person information meeting.

Whichever the case, if you have encountered its product or one of its salespeople, you were probably left wondering whether it is a pyramid scheme.

In this Monat review, we take a closer look at the company to find out what it is all about and whether it is a pyramid scheme as some people have said it is. We will also be determining whether it is a legitimate business opportunity that you can join to make money online.

Before I start…

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What Is Monat?

Monat Global Corp. is a privately held American company based in Doral, Florida that sells hair products. It is a subsidiary of a company called Alcora Corporation that sells hair products for hair loss, hair damage and scalp irritation along with many other beauty products.

Many people have been questioning whether Monat Company is a legit business or a direct sales pyramid scheme.

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 31Needless to say, Monat has been courting controversy with its products and it has been the subject of many lawsuits.

Many people have filed complaints with the FDA and the Better Business Bureau over products that have allegedly caused hair damage, scalp sores, and balding.

Others have complained that the company is set up in a way that it is incredibly difficult to stop product purchases. Monat has defended itself against those complaints and in some cases, it has retaliated with defamation lawsuits.

That being said, in actual sense, Monat Global is a typical making money online program that is based on the idea of either selling its products or recruiting other people to join the company as market partners.

These market partners are required to sell products and they get to buy the products at a discount.

Examples of MLMs I have reviewed include Inbound Closer and Affiliate Institute.

On paper, this sounds a bit like what a normal wholesaler and retailer relationship would work, but it is a text-book case of a multi-level marketing scheme as we’ll find out.

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Who Owns Monat?

Monat is a subsidiary of the Alcora Corporation, which is headquartered in Doral, FL. Alcora Corporation is owned by the Urdaneta Family, led by the family patriarch, Luis Urdaneta.

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 32

Luis Urdaneta, who grew up poor, entered the world of direct selling thirty years ago. He started his first company that sold beauty products called L’eudine Global.

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 33

Luis Urdaneta runs the company together with his wife and children (Rayner Urdaneta, Javier Urdaneta, and Luisaylen Urdaneta). Rayner is the CEO, Javier the Operations manager, and Luisaylen the culture and communications manager.

Luis started Alcora Corporation in 2008. Monat came later in 2014 and since they launched it, they have recruited thousands of market partners and expanded the business significantly.

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How does Monat Global Work?

Monat Global is a Multi-Level Marketing (MLM) business. You may decide to call it network marketing (NWM) or direct sales but it operates in textbook MLM fashion:

When you are recruited as a market partner, you pay some money upfront so that you can start to sell products.

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 34The products are supplied by the company and they come with high price tags. The company is pretty good at branding as it uses fancy labels and packaging.

As a marketing partner, you are urged to build your own successful business by selling the products to friends and family, and if you can, rope them in with a subscription that will earn you a “monthly recurring revenue”.

Note that they do not pay you a salary as a market partner. You get paid purely on commission for the products you sell and the new market partners you recruit.

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What Products Does Monat Global Sell?

As I mentioned at the beginning of this review, Monat Global sells hair and skincare products that are supposed to help people make their hair cleaner and skin healthier.

The goal is to sell these products to people who can potentially join your sales team as a distributor and, in turn, sell more products.

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 35Monat products often come in sleek packages to give the impression that they are top-of-the-range and can justify their high price tags.

We won’t dive into the topic of product quality in this review because it is up to the customer to decide whether these products are effective for their beauty routines.

Making Money From Sales

When you become a market partner, you serve as a type of middleman. The customers are free to buy the products they want from your stock.

The concept sounds good on paper but in practice, it may limit your earning ability. If you think about it, the more people there are in a supply chain, the lower the profit margin people get if they are in the lower tiers.

Monat’s income structure is such that they divide commissions in a way that distributors make 30% of the sale.

As a market partner, you earn just a portion of Monat’s profit, which means that the company gets the bulk of the profit.

Another problem with this model is that Monat market partners only get paid if they sell products to others. This means that if they have some customers but they fail to hit a certain volume where they will be eligible for a bonus, they don’t receive credit if they buy the products themselves.

A market partner gets an average commission of about 30%. However, it is important to note that very few people that work for multi level marketing companies ever get to make money because selling the products is quite tough.

The Federal Trade Commission has found that 99% of people in this system only break even. The sad reality is that a majority of the people who join such a program lose money in the long run.

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Earning Money Building A Team

Monat Global pays out a small percentage of the revenue for every sale your recruits make. This applies to even the cheapest products — they pay you a small percentage of the sale.

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 36This is separate from the 30% commission you get paid when you sell the products yourself.

Note that the money you make as a percentage of your direct recruits’ sales is dependent on their earnings. It can be tough to keep track of these figures because they vary from one sale to the next.

Then there is “Leveraged Revenue Sharing.” It enables you to earn up to six levels inside your marketing team. The company typically follows a uni-level team structure.

Although the percentages look decent, you have to recruit a lot of people to advance in the business. It is also quite difficult to recruit new consultants, not to mention how tough it is to sell expensive wellness products.

How to the Monat Compensation Plan works

The Monat Compensation plan looked like this in 2019 for clients in the U.S.

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 37

Smart Start

The SMART Start program is for people who just joined the program. It rewards beginners who are just getting into the business.

The SMART Start period is defined as the new market partner’s enrollment month and the two calendar months that follow.

This bonus bonus program is only made available to new Market Partners within this pre-determined period which gives them at least two months to “earn while they learn”.

Smart Start bonuses include:

VIP Acquisition Bonus: If you enroll four VIP Customers, you are paid $60 USD. There’s no limit to what you can earn, so you can enroll 4, 8, 12… or more, and earn more money.

Block Bonus: If you build a BLOCK, you get paid $150 USD. A block comprises four VIP Customers and one personally sponsored Market Partner with a Product Pack. You have to collectively enroll them during your SMART Start Period. There is no limit to the number of Block Bonuses you can earn while in SMART Start.

Monatborhood Bonus: If you “build a MONATborhood,” you are paid $500 USD. Building a Monatborhood means successfully building three Blocks within your SMART Start Period. To qualify, you will have to enroll 12 VIP Customers and 3 Market Partners with a Product Pack.

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Matching smart start bonus

If your personally sponsored Market Partner earns a Block Bonus while in SMART Start, you are entitled to a matching bonus of $75 USD.

The condition you must meet to earn the bonus is that you, as the sponsor, must be paid-as the same rank or higher, as the MP earning the Block Bonus.

Product Pack Bonuses

You’ll get a bonus for every new Market Partner you sponsor who enrolls with a Product Pack. There’s NO LIMIT to the number of Product Pack bonuses you can earn.

Emerging Founders Pool

On the document spelling out the terms of the emerging founders pool, it reads:

“Effective April 1, 2019, all Market Partners in the U.S. and Canada have a limited-time opportunity to qualify for the Emerging Founders Pool and become eligible for a new quarterly payout on top of their current earnings!”

You should check whether they have updated the terms of joining the founders pool.

Here was how it worked:

“MONAT will pool 1% of the quarterly U.S. and Canada Commissionable revenue on sales above $75M USD.

The Pool will pay quarterly during the first month of the following quarter.

All Market Partners have the ability to earn up to 3 shares of the Pool.

Market Partners must be paid-as a Market Mentor in the last month of each quarter to be eligible to receive their payout.

If a Market Partner is not paid-as a Market Mentor at least once within 12 consecutive periods, they will permanently lose their Emerging Founders Pool status”

To avoid losing money, you have to be proactive in claiming your bonuses.

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Monat runs a VIP program whereby members get a wide range of perks.

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 38If you become a VIP, you get exclusive access to promotions, flash sales, and the Purchase + discount where you save more money if you buy more products.

Is Monat A Network Marketing Company?

Monat calls itself a direct selling company.

In direct selling, a business sells to its customers through salespeople who market the products in front of customers in non-traditional settings.

This way, the business avoids online and physical stores while still getting to sell products directly to consumers. This sounds a lot like what Monat is doing.

One way of direct selling a product is through multi-level marketing.

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What is Multi-Level Marketing?

The best way to define a multilevel marketing is to call it a sales structure where members of the company are encouraged to recruit new members. It is a form of network marketing.

Once they’ve recruited new members, they receive a portion of the new member’s sales. Meanwhile, they also earn commissions when they sell the company’s products to other people as well as friends and family (you sure have encountered one of these).

The new recruits are the distributor’s network or downline. They are also urged to make sales and recruit other people to earn money.

MLM-based businesses are legal but controversial. There are some controversial ones that are borderline pyramid schemes and they are generally frowned upon.

Every member of the sales structure receives some commission and the more layers there are, the more money market partners can potentially earn if they are high up the hierarchy.

The downside of the business model is that there will be many people who join the program that will not earn significant returns.

Multi Level marketing is often used by direct sales companies that sell products and services.

Multilevel marketing is legitimate and it is often favored by some businesses that are heavily reliant on sales to generate revenue.

Is Monat a Multi-Level Marketing scheme?

Yes, Monat is an MLM company.

Monat fits the description perfectly because it has salespeople (market partners) selling its products in what’s technically a network marketing operations.

They call their sales people using different terms, including Monat Market Partners or independent business owners.

This means that you will not find Monat products next to other beauty products on the shelves at the supermarket.

You won’t find Monat products on online stores either because the market partners sell directly to customers.

In this day and age, Market partners have had to be innovative as they sell Monat products. You’ll find them selling via social media and various marketing channels that are available to us today.

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Is Monat A Pyramid Scheme?

This question gets asked a lot by people who encounter the Monat business model.

And the answer to it is: No, Monat is not a pyramid scheme.

As I mentioned before, it is a textbook network marketing company.

I think the confusion that often leads to people regarding Monat a pyramid scheme has to do with the fact that some people cannot distinguish between a pyramid scheme and an MLM.

Monat is a legit multi-level marketing/network marketing company that sells essential oils, skincare products, and hair care products to its costumers.

What is a Pyramid Scheme?

A pyramid scheme is an illegal (in most countries) and unsustainable business model in which a few unscrupulous top-level members recruit new members.

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 39The recruits pay a fee that goes to those higher up the ranks. As the new members recruit others, a portion of the money paid by third level new recruits goes to the second-tier members (who recruited them) and the top-tier members.

A vast majority of pyramid schemes are built on the premise of profiting from recruitment fees and rarely involve the sale of goods or services with real value. In fact, this is the main factor to look for when trying to discern whether a business is a pyramid scheme (illegal) or a multi-level marketing business (legal).

Why? Although multi-level marketing programs have a hierarchical structure similar to pyramid schemes, they actually involve the sale of goods with intrinsic value.

Answering the Question: Is Monat a Pyramid Scheme?

No, it is not a pyramid scheme.

While some people have had negative things to say about Monat hair products and other products in their catalog, the only thing that remains undisputed is that Monat is a legitimate company.

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Can You Make Money With Monat?

You can make money working for Monat.

Is it a sustainable way to earn a living? Well, that depends on how you go about it (we cannot specify how much money you will make)

Monat: Pyramid Scheme Or Legit? [Comp Plan & Review] 40I should point out that although you can earn by selling Monat products, the real money is in recruiting and building a sales team.

When you build a team, the people you bring in as market partners can build their own downline to make more money.

Recruiting new people below you is where the money is at.

Unfortunately, this can be uncomfortable for some people and for them, they can only make money by being the seller. But they are going to have to put in a lot of work to become a network marketer.

This is why I mentioned at the beginning there that the amount of money you make depends on how you approach it.

Another thing to consider when talking about your chances of making money is the kind of products you will be selling.

Admittedly, Monat products can be a bit expensive. This means that making sales is tougher because if you think about it, it is tougher to sell skincare products or hair products that are expensive to people in such a saturated market.

The downline is another consideration.

In an MLM structure, the money you make relies on your downline. This means that your earnings depend on how other people do. You are never in full control of your income even when you build a team.

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Is Monat A Scam?

I don’t think Monat is a scam. It is legit even though there have been complaints about its products from some customers.

The FDA and Health Canada have termed their products as “safe for their intended cosmetic purpose.” But that does not mean that they won’t cause reactions in people who are allergic to some of the ingredients.

As far as their business model goes, it is legitimate and legal.

Having said that, I don’t think it is easy making money as a salesperson for Monat products.

You have to work hard to convince people to buy the products and even build a team. As a result, you may get frustrated if you are not good at it and may earn very little in commissions.

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Monat is a company known for selling haircare and skincare products among other products through a network marketing model.

If you enroll as a salesperson (Monat market partner), you will be selling products directly to clients.

As you will find out, joining the company does not guarantee that you will make good money. You will quickly discover that selling their products is tougher than you had imagined.

You can go the route of building a team to make more money, but that isn’t easy too. The company claims that you can grow your network but that cannot be further from the truth.

You may think that getting five people to buy in will be easy, but it is NOT. Convincing people to invest money in something is never that easy.

You should be careful not to be too aggressive as you sell to your friends or family because they may start distancing themselves from you and make you a social pariah.

To avoid putting a strain on your relationships even when you start selling for mlm companies, you have to be tactful about how you handle sales.

There are also some crucial elements you’ll want to take into consideration with this business opportunity – your potential income, what people are saying about their products, how other companies in the niche operate, among other important consideration.

On top of that you’ll also realize that you need pretty good marketing skills to make money with this as your “own business”.

Before you leave

If you’re tired of scams and want a real solution for making money online, check out my no.1 recommendation.

This is the best business to start in 2023 and made me over 27k last month alone:

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David Fortune has been the editor since 2019. He is an expert at writing content on stock advisory services, side hustles, reviewing online business opportunities and many more topics. You can learn more about David on our about us page.

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