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.
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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.
A Disappointed Consultant.
A new Paparazzi Accessories Independent Consultant, who did not give their name, expressed disappointment with the business.
“As a new Paparazzi “independent consultant”, I have been disappointed in how difficult it is to obtain their “new releases” or the hottest selling items. Many of the upper level consultants buy up to 100 of the same pieces and really limit the access to those items for the lower level consultants. I feel like it’s an unfair company that caters to those who have downline consultants.”
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.
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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.
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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.
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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!
Hello,
As a new Paparazzi “independent consultant”, I have been disappointed in how difficult it is to obtain their “new releases” or the hottest selling items. Many of the upper level consultants buy up to 100 of the same pieces and really limit the access to those items for the lower level consultants. I feel like it’s an unfair company that caters to those who have downline consultants.
Hi!
Thanks for sharing your experience with Paparazzi. Your insight will help people who may be considering becoming a distributor.
I’ll post your comment in the top half of my article so readers will be sure to see it.
Thanks again,
Gary
I have checked the website of Paparazzi Accessories and also read your post here, and I conclude that it is not a pyramid scheme.
To earn money you will need to get more people to buy the accessories and it is more effective if you hold a party and invites all your friends, family, colleagues, others to come and promote those accessories. Since the price of those accessories are not that expensive and they are fun to wear, there will be a demand for those accessories.
It could also be an avenue for all your invited guests to have a fun time together. When they have fun, they tends to spend willingly and that is where the money come in.
If you are a party animal and like to hold party often, this business may suit you well. For me, I am not party type and therefore I will opt for Affiliate Marketing and promote products/services online instead. Online Entrepreneur Certification
Gary
PS the jewelry is $2.75 each not 2.25 each
Thanks for the correction.
Yeah 45% of $5 equals $2.25 per piece. So… if you purchase a kit for $299 (120 pieces) you can make in commission $270. Not a great deal. So you’ll actually lose Money with each kit you buy even if you sell it all. Math is math.
Actually you sell each piece at $5 so you will get $600 from selling 120 pieces. then you subtract the amount you paid for the jewelry which is $299 but more like $330 with taxes (I’m rounding ?) and you make a profit of $270 or so, you do actually make money off of the starter kit. Not trying to be rude ? I just want people to understand. I am a consultant and I just wanted to add that another cool thing about paparazzi is that you aren’t required to buy “kits” each time you actually get to pick out each individual piece you want and how many of each you would like.
Thank you for the review on Paparazzi Accessories. It’s a good eye-opener for those who like to join Paparazzi Accessories. It’s very interesting to know how Paparazzi Accessories work. This is my first I got a clear understanding about Pyramid Scheme. I will share your article to my friends who interested in MLM.
Hi Gary, thanks for this article. I am glad to finally see points why a scheme is a pyramid. I have been duped a number of times, yet at the onset they all looked promising. I am also glad you pointed out the operation of paparazzi accessories as an example, showing how simple and understandable it works. Like they always say “If it looks too good to be true, it probably is!” Best wishes
Pyramid schemes are really sucking and i hate them because they drain people their hardly earned money, as for Paparazzi accessories i am inspired by that you have to create traffic which is something i know is really happening when you want to create sales, traffic is really important, so i am convinced that it is not a pyramid scheme but since it feels like you are not sure of the commissions.
The other problem with an MLM program like this is lack of brand recognition. At least with something like Amway, people have heard of the product (for good or ill). Here, you have to educate people about your brand AND try to coax them into signing up to sell. Secondly, you’ve got market saturation problems. To really make money, you have to recruit more salespeople. And when you do, they’re probably going to be selling to YOUR potential buyers. I mean, seriously, think of how many friends you actually have who will come to your jewelry parties, month after month. Do the math . . . $2.50 per piece, and your rent is $1000. Hmmm . . . And, of course, *they’ll* be recruiting more salespeople too. And if they are better at it than YOU are, you get left in the dust! So it’s in your best interest to only recruit rubes who will never become recruiters. Ugh.
It may not technically be a scam, but the promises they make are just flat-out lies. Thanks for the good info.
hi, thanks for the great and valuable info about paparazzi accessories, its well described and very brief and clear, i enjoy the content and its make me more trust on paparazzi business and there was a lot of things even i did not knew about that scheme which also you clear with your brief content which is good for reader to understand more, thanks again and best regards, shaz
Hi Gary
Anthoer great review and although it is a reasonable price to join and get started I do feel it is just another mlm on the list. No real benefits to people really- just a bit of bling to wear to feel better about what you are wearing lol
I prefer something with more depth and as for party plan- Are people still doing this as a way to make money- Wow
I thought everything was, buy online these days so I have learned something today
Thanks, Gary and great review
Hello Gary,
I think this is one of the easiest MLM scheme I’ve read of. I didn’t have to scratch my head to understand it. However, what worries me is the quality of the jewelry, you know ladies can be quite picky when it comes to quality. If I do sell online, would there be any need for me to possess the jewelry is physically?
The jewelry falls apart.