A reader asked if Paparazzi Accessories is a Pyramid Scheme. In this article, I clearly show how Paparazzi Accessories measures up to the three telltale signs of a pyramid scheme as defined by the FTC.
Is Paparazzi Accessories a Pyramid Scheme? Paparazzi Accessories is a legitimate multi-level marketing company that sells affordable jewelry and accessories through a network of Independent Consultants. Paparazzi Accessories also offers a work from home opportunity.
I am critical of the MLM industry for several very good reasons. However, I think Paparazzi Accessories gets it as right as MLM can be. They offer fun products at impulse prices, and affordable starter packs for their distributors.
Why Paparazzi Accessories is NOT a Pyramid Scheme.
To better understand why Paparazzi Accessories is not a pyramid scheme, it’s helpful to understand what a pyramid scheme is. Many pyramid schemes pretend to be MLMs and it can be difficult to see the difference. Paparazzi Accessories is a legitimate MLM.
The Federal Trade Commission has determined there are three warning signs of a possible pyramid scheme. These warning signs are;
- Money is only made by recruiting people into the scheme.
- You are forced to buy lots of expensive products.
- And, you must buy additional business tools, training and products to maintain an active “qualified” membership.
A pyramid scheme is all about recruiting and a pure pyramid scheme doesn’t have products. It only has a so-called business opportunity. With a pure pyramid scheme, you pay to join the scheme. Once you join, you make money by recruiting people into the scheme and they make money by recruiting people into the scheme and on it goes.
And, each time someone pays to join the scheme, money is paid out to the distributors in the upline, but most of the money goes to the top of the organization.
Pyramid schemes are usually expensive to join too. Such schemes could cost hundreds or thousands of dollars to join and hundreds or thousands of dollars each month to stay qualified.
Pyramid schemes are illegal because they produce nothing of value and because they destroy people’s lives.
There are product-based pyramid schemes that claim to be multi-level marketing companies. Sometimes they hide so well behind an MLM façade it takes a Federal investigation to determine if they are a genuine MLM or a scam.
A product-based pyramid scheme has such expensive products that no one wants to buy them. That leaves only one way to earn money, recruiting like a pure pyramid scheme.
One of the tests to determine if a company is a pyramid scheme or not is whether they have retail sales to the public. A company that earns most of its revenue from retail sales is not a pyramid scheme.
Paparazzi Accessories has strong retails sales and the products are affordable. These two facts assure me that Paparazzi Accessories is NOT a pyramid scheme.
Paparazzi Accessories is a Simple Business.
Paparazzi Accessories is a Simple Business where you buy product at wholesale and sell it for $5. You make a 45% commission on each sale.
Paparazzi Accessories Independent Consultants.
Paparazzi Accessories calls their distributors “Independent Consultants.” I feel this is a bit misleading because they are independent only with regards to the company’s liability. That’s typical MLM behavior.
And Independent Consultant is just a contractual commission salesperson.
Honestly, they are probably just putting a positive marketing spin on their business opportunity. Independent Consultant does sound better than commission salesperson.
Paparazzi Accessories Commissions.
There are three ways to make money with Paparazzi Accessories. You can make straight commissions by purchasing products at wholesale and selling them at retail. You earn 45% commission on each sale which is $2.75 for a $5 product.
As a Paparazzi Accessories Independent Consultant, you get an eCommerce website. So you can also sell Paparazzi Accessories jewelry on the internet and earn the same 45% commission on each sale.
Just having a website is not enough. You’ll need to drive traffic to your website before you can make sales. You’ll need to know basic affiliate marketing skills. I recommend the FREE starter level of The Online Entrepreneur Certification Course.
Finally, like any MLM, you can make money in Paparazzi Accessories by building a sales organization, aka, a downline. Building a sales organization is not as easy as just selling the Paparazzi Accessories opportunity to your friends and family. You’ll need to become a recruiting machine if you want to make substantial money. Recruiting requires a different skillset than marketing alone. You’ll need to be both persuasive and impeccably honest, because you will be building relationships. It is your relationship with the people in your downline that will give your business stability.
The focus of this article is whether Paparazzi Accessories is a pyramid scheme. It isn’t. Remember the three warning signs of a pyramid scheme we covered earlier? The first one was that money can only be made through recruiting.
Paparazzi Accessories has two ways you can make money with retails sales. You can sell jewelry directly to people at home parties and you can sell jewelry online with an eCommerce site.
Paparazzi Accessories Compensation Plan.
Most pyramid schemes and MLMs I’ve researched hide a lot of wickedness in the compensation plan by making it complex. And many MLM compensation plans create the illusion that you can become wealthy with their opportunity. Paparazzi Accessories is different.
The Paparazzi Accessories Compensation Plan is beautiful in its simplicity. They do not make unrealistic claims about how much money you will make. The requirements are straight forward and easy to understand.
Paparazzi Accessories Starter Kits.
The Paparazzi Accessories starter kits give you
product and materials to have a profitable home party.
There are three starter kits available and priced at $99, $299 and $499.
The basic $99 kit is enough to get you started, but it is limited and only contains 35 pieces of jewelry. Veteran Independent Consultants claim they sell 50 to 100 pieces of jewelry at each party.
The larger starter kits have more products and marketing materials.
Starter kits are available only for the initial purchase by new Independent Consultants.
How Much Do Paparazzi Accessories Independent Consultants Earn?
Some Paparazzi Accessories Independent Consultants claim to earn $25 to $50 an hour. While this might be true, I do not believe they are earning that rate 40 hours a week.
The basic strategy of selling the jewelry is to have a home party which may last an hour or longer. That’s when you make the money. The more parties you organize, the more money you can potentially make.
Some forum comments complain that they cannot earn enough to pay the bills as a Paparazzi Accessories Independent Consultants.
Because the products are so affordable and fun, I think it would be easy to make money with Paparazzi Accessories. However, to make enough to earn a full-time income would require substantial people skills such as recruiting and management. Plus, it may take a few years to build a full-time income.
I could not find an income disclaimer on the Paparazzi Accessories website, so there is no way of knowing what the earning averages are for Paparazzi Accessories Independent Consultants.
Because of the affordable price and the impulse factor, I would think selling Paparazzi Accessories jewelry would not be difficult. Earning a direct commission should be readily achievable.
However, the MLM industry has a horrible reputation for making people lose money. Because the industry has such a dismal track record, I would caution against joining Paparazzi Accessories only to make money. Very few people are good at direct sales.
In my experience, when people focus on making money, particularly in sales, the customer feels it and shies away. However, if you like the products and enjoy helping women look their best, making money with Paparazzi Accessories might be a happy side effect.
Is Paparazzi Accessories Jewelry Junk? Paparazzi Accessories jewelry is not junk. Each piece offers a lot of value for a $5. It’s meant to be fun and fashionable and to help you look your best.
It holds up well and should last a long time. However, it is not heirloom quality, but you shouldn’t expect it to be for $5. Paparazzi Accessories jewelry is comparable to fashion jewelry available at large department stores. However, it is more affordable and does not contain lead or nickel.
Is Paparazzi Accessories a Scam? Paparazzi Accessories is a legitimate MLM with affordable products, robust retail sales, and a simple business opportunity. A scam requires dishonesty and deception. I see no evidence of either with Paparazzi Accessories.
Is Paparazzi Accessories Right for You? Paparazzi Accessories is a simple business model with impulse products available at an affordable price. If you like jewelry and fashion and enjoy getting together with women, you should be able to make money as an Independent Consultant.
I started this article to address the question of whether Paparazzi Accessories was a pyramid scheme. It’s not. It’s a legitimate MLM. And, while I detest MLMs, I find very little to criticize about this company.
Paparazzi Accessories has two avenues of retail sales, direct sales and eCommerce sales. Both pay a generous 45% commission.
The minimum starter kit is $99, a modest entry cost compared to most MLMs. Plus, it is possible to turn a profit with your first in-home party.
Do not expect to make a lot of money unless you are prepared to build a sales organization. Building a sales organization requires recruiting and management skills and may take several years to establish.
If you found this article helpful or have experience with Paparazzi Accessories, please leave your comment below. Your insight into the Paparazzi Accessories business opportunity may help someone decide if it is right for them. Thank you!