Monat started out of Florida in 2014. They sell their collection of hair products through a network of ‘Market Partners’. Monat market partners use both direct sales and social marketing to promote the products.
Here at The Finance Guy, we believe you can’t make money with MLM, but we’ll give Monat a chance to prove us wrong! In this full review of Monat, we’ll find out if this is a money making opportunity, or just another MLM.
What is the Monat Opportunity
To find out what all the excitement is about, we watched this video:
From this video, we learned that the name Monat, stands for ‘Modern Nature’. So I guess we’ve been saying the name wrong… They also tell us that they sell ‘naturally based haircare products’.
The video tells us that this is a ‘different kind of opportunity’, it’s a chance to become part of the ‘social selling movement’. After all Facebook and Instagram have ‘changed the industry’.
The video claims that with Monat, you decide how much you earn. By selling these ‘product that work’, you can ‘fulfill your dreams’. In our opinion, this was just another MLM hype video, so we decided to keep looking.
We looked at the official Monat opportunity page. We learn that through ‘Social Marketing,’ Monat will open the doors to our dreams. It also tells us that as a Monat market partner, we’ll benefit from ‘one of the most competitive compensation plans in the industry.’
So far the Monat opportunity is looking like every other MLM we’ve reviewed. There is a lot of talk about dreams coming true, and claims about being the best in the industry. What we don’t see is any information about how it’s going to make us wealthy.
How do You Make Money With Monat
To find out how we actually make money, we looked at a copy of the Canadian Monat Compensation Plan. This document explains the ways we can earn commission from Monat, as well as what we need to do to qualify for it. We see that there are 5 ways to earn with Monat, as shown in the image below:
VIP and Retail Sales
You can make a 15% margin on sales to VIP customers, or 30% to retail customers. We believe that selling to customers is the best way to make money with any MLM. Regardless of what they tell you Monat is a sales job.
Any salesperson will tell you that the best way to make money, is with a good product. It’s a good idea to use Monat yourself before you join their opportunity. Make sure you believe in Monat products as a customer before you try to sell them to others.
If you sponsor others to become Monat Market partners, then you can benefit from their purchasing activity. They might tell you that being a successful market partner is as easy as sharing with your friends. To us this raises Red Flag 1 - Constant Recruitment of New Members
The amount of unilevel commission you can earn from Monat depends on your rank in the system. As you climb the ranks, you will qualify for higher rates of commission. You will also start earning on more levels in your downlline. In other words you can also earn commission from the new partners brought in by those who you sponsored.
The amount of Unilevel commission paid at each rank is shown in the diagram below:
The way you climb the ranks with Monat, is by growing your downline, and making sure that everyone is purchasing enough product. We see this as Red Flag 2 - Promotion Through Recruitment.
If you make it to the top rank, you can earn commissions totaling 29%. This is nice for those at the top, but if you are a brand new market partner, then 29% of what you spend on Monat products goes to your upline as commission. This raises Red Flag 4 - Most of the Rewards go to your upline
Group Volume Bonus
Once you reach the rank of ‘managing market builder, you can qualify for group volume bonuses. This a 2% override on all levels in your downline. It only cuts out when someone below you also qualifies as a MMB.
If you reach the rank of MMB, and so does someone in your downline, then they become, what’s known as a ‘Monat generation’. Like the Unilevel commission, you can earn more generation bonuses as you climb the Monat ranks. The Generation bonuses possible are shown below:
The Monat compensation plan certainly looks generous. But we see another 20% in generation bonuses, which are included in the wholesale price members pay for Monat prices. This raises Red Flag 5 - More than 5 levels in the payout plan
To qualify for any payments at all from Monat, you need to remain active. To do this you need to personally buy 200 PV worth of Monat products per month. This is an example of Red Flag 3 - Pay to Play
As we’ve seen Monat raises all 5 flags in Dr Jon Tayolors 5 Step MLM evaluation. According to his research, if any mlm raises more than 3 flags, then the chances of members making a profit are less than 1%
How Much are Monat Market Partners Earning
The last page of the Monat compensation plan shows their ‘Statement of Typical Participant Earnings’. Monat appear to have gone out of their way to give us a little information as possible.
They tell us that if you reach the rank of MMB with Monat, then you can expect annual earnings of between $22, and $1,188. Even at the top of that range, Managing Market Builders earn less than $100 per month.
Keep in mind that there is a difference between income and profit. If we were to include expenses, we expect we’d find that most Monat market partners are losing money.
Why is it Difficult to Make Money with Monat
In our opinion the problem is not unique to Monat, , it is with network marketing. MLM is a system which is designed to help the company make sales. It is not designed to offer franchises or create business owners. If you join any MLM, you are a customer not a business partner.
Monat might have one of the best compensation plans in the MLM industry, but that doesn’t mean you can turn a profit with them. Social selling, might sound like a fun new way to operate, but we see some major flaws.
A major problem with all MLMs, is the focus is on recruitment instead of selling. Most of the spending in MLMs, is by members. This means very little money is coming from customers. The result is that we think the only way to make money in Monat, is if people in your downline are losing money.
Another problem with their model of ‘social selling’. It’s true, Facebook and Instagram are a great way to reach a lot of people. Having said that, it also means a lot of other Monat partners are trying to reach the same people. If you hear about Monat from social media, then you can bet that a lot of your contacts are also hearing about it. If you become a market partner, you’ll be in competition with everyone else who is trying to promote Monat to your contacts.
Is Monat an Illegal Pyramid Scheme
Even though MLMs closely resemble pyramids, they are not illegal. The technicalities date back to a 1979 Amway ruling. To the best of our understanding, Amway managed to word their documentation in a way that bypassed the pyramid scheme laws. This opened the doors for other MLMs to do the same.
While the paperwork may make them legal, that doesn’t mean that Monat or any other MLM is ethical. If you join, you have to realize that the only way to make money is if people below you are losing money.
It’s also important to remember that the people above you earn commission when you spend money on MLM products. When they encourage you to keep spending, it could be that they want to keep earning!
Should You Join Monat
We think that you should only join Monat, or any MLM, if you are already a customer. If you’re not happy using the products as a retail customer, then how are you going to sell it to others? It’s possible that you can make money with Monat, but if you have the skills to turn a profit with MLM, then you can probably do a lot better with a regular sales job.
As always, we’d love to hear what you think in the comments section below, especially if you an share your experiences with Monat.
Are you wondering if you can make money in an MLM? Check our our list of mlm reviews before you join. If you find one that’s not on the list, let us know and we’ll do our best to write a review