All of these businesses offer their representative contractors the opportunity to make a profit by selling jewelry directly to their friends, relatives, neighbors, etc.
The profits are made when reps purchase wholesale jewelry from the business and then sell it to others at a marked up price. In some cases, the business may already have a suggested selling price that all the reps adhere to; in other cases, reps have more personal discretion at marking up their merchandise.
Most jewelry MLMs require that their reps first purchase starter packages that enable them to enroll in the business and give them some product to sell. Starter package prices vary depending on what amount and type of merchandise is included, as well as add-ons such as software, website(s), order forms, business cards, etc.
With all these jewelry businesses to choose from, it pays to shop around and compare MLM businesses on their starter packages, profit margins, commissions, and terms.
One MLM jewelry business you may have heard of is Paparazzi Accessories.
What is Paparazzi Accessories?
Paparazzi Accessories is a direct sales jewelry business that was started by sisters Misty and Chani and prides itself on offering the majority of its jewelry items for the retail price of just $5. The jewelry items range from necklaces to bracelets to rings to earrings- and more. Here are a few example pieces available on the Paparazzi website:
Paparazzi consultants who join the business and sell their products earn an impressive 45% commission, which is hard to find in direct sales MLMs. The norm for most MLMs is 25%.
Furthermore, Paparazzi consultants earn even higher commissions if they recruit other consultants under them.
Consultants can earn percent commissions from recruits that are up to three levels below them. So, first level recruits would be those individuals that were personally recruited, second level recruits would be consultants that the first level recruits recruited, and third level recruits would be consultants that second level consultants recruited.
How do you start a Paparazzi business?
Anyone who is interested in becoming a consultant must purchase a start kit from the company. There are three starter kit sizes to choose from, including preview, small and large.
This all sounds good in theory…but is it?
High commissions- Paparazzi definitely offers a higher than average commission to its consultants. This enables them to take a more liberal approach to pricing and promotion strategies. On Facebook, you can find quite a few Paparazzi online parties, with consultants advertising all kinds of discounts and freebies (e.g., buy 4 get 1 free).
High bonuses- Other MLMs pay out 2-5% on recruit sales. With Paparazzi, you instantly earn 5% on the sales generated by your direct recruits. Once you surpass three recruits, your bonus is bumped up to 10%. This makes having a downline very profitable for the consultant.
Cheap products- Jewelry is, arguably, one of the most evergreen products out there. People buy jewelry regardless of need or personal financial situation. And because Paparazzi jewelry is priced at just $5, it becomes an easy impulse purchase for just about anyone.
Required bulk purchases– Paparazzi consultants must buy their jewelry packages in bulk, after which they sell their inventory at fairs, at home parties, or online. When a consultant orders a bulk jewelry package, this is what she might receive:
Because individual pieces cannot be purchased, this leads to some inventory not getting sold due to low popularity, inability to match/accessorize, etc. For example, if a consultant had a customer who wanted 10 sets of a certain earring, necklace and bracelet, she would be hard-pressed to have that much inventory on hand to make a sale.
Update: I have been corrected. As pointed out in the comments below, you no longer have to make bulk purchases.
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Levels are sales-driven– Paparazzi consultants who wish to ascend the ranks and earn bonuses from their recruits need to not only fulfill a given amount of personal sales (or PV for personal volume), they also must eventually have a set amount of sales from their team (or OV for organizational volume). This is a monthly requirement, by the way- in other words, if in a given month you do not meet your PV and/or OV requirements, you slide down the ranks and lose out on potential bonuses.
Minimum monthly cost– According to Paparazzi, each $5 in sales provides 2 PV. So, to even ascend to the Star Consultant level, you need to sell 25 pieces of jewelry in that month. Now, if the total amount of revenue for 50 PV is $125 ($5 x 25 pieces), and the basic commission is 45%, that means you’ll need to pay $56.25 each month for a jewelry package that you can mark up.
So, while the company bonus is a ‘nice’ thing to have, it will cost you a monthly fee to obtain and maintain.
Is Paparazzi a worthwhile business to start?
Many MLMs are operated by stay-at-home parents and spouses who have some extra time on their hands. The money that is earned via the MLM is side income that is not the primary income of the household.
At least, that’s the theory.
In many cases, MLM contractors and reps end up investing significantly more money into the business than they end up earning through their sales. Also, it takes a lot of work to keep hitting people up for purchases of non-essential items like jewelry. A good majority of MLM reps are burned out and done after putting in about two years into their business. Many of these reps have extra inventory they can’t sell, or that they sell at a loss. The only sure winner in all this is the MLM itself, which has managed to clear out its own inventory to its main buyers, the distributors (i.e., reps).
Have you had experiences with Paparazzi as either a buyer or a seller? Please let us know in the comments below!