Senegence was founded in 1999 by Joni Rogers-Kante. After becoming a top level consultant with Mary Kay, she decided to use a similar business plan. Lipsense cosmetics are sold through a network of independent distributors.
Since inception the company has grown into a multinational system. It is often referred to as LIpsense (their most popular product). In the UK, it is known as Sheersence. Here at The Finance Guy, we believe you can’t make money with MLM. In this full review of Lipsense we’ll find out if Senegence is a real money making opportunity, or just another MLM money hole.
What Is The Senegence Opportunity
According to the official Senegence Opportunity page, becoming an independent distributor will come with ‘boundless opportunities’, with professional support. They then tell us that you can earn commission from selling Senegence cosmetics. However you can also make money by sponsoring others to become Senegence Distributors, and then earn a commission from any Lipsense they sell.
The fun doesn’t end there, along with commission, you can also earn holidays and a new car… According to the Senegence opportunity, you can earn yourself a new car in just a few months. If that’s not enough, you can also see the world by earning yourself ‘Lips trips’.
While this vague hype may sound interesting, to us, it lacked details. We want to know how Senegence is going to put us on the path to financial freedom. It’s not enough to just tell us that Lipsense will make our mouths look pretty. So we kept going with our research.
How Do You Make Money With Senegence
We wanted to know how selling Lipsense (and other Senegence cosmetics), would make us rich. To learn more, we looked at this video:
This 14 minute video is all about the the Senegence Compensation Plan. This explains all the ways you can make money selling Senegence products, as well as what you need to do to qualify. If you’re in a hurry, we also found a 2 page version of the Lipsense Compensation plan.
The first thing they tell us about is customer sales. In our opinion, retail sales is the best way to make money with Senegence The commission you can earn from selling Lipsense to customers depends on your monthly volume. The amount you can earn and the volume required is shown below:
As we can see, the key to earning retail commission, is volume. The more you spend on Senegence products, the more PV points you’ll acquire. Once you’ve hit 750 PV points for the month, you can earn the maximum 50% retail commission.
If you are having a very quiet month, ( or a personal usage month), you might only qualify for 20%. The important thing to remember is that no matter what you are paid, the full 50% mark up is included in the Senegence SRP. Half of what you charge to your customers is sales commission!
Selling Lipsense to customers isn’t the only way to make money with Senegence. You can also earn money from building a ‘downline’. This is MLM speak for sponsoring other Senegence distributors. You can earn commission from the sales of any Senegence distributors you sponsor
Your dowline commissions don’t end with the people you sponsor, you can also earn commission from the people they sponsor. All you have to do is spend enough PV per month and you can qualify for up to 5 lines of Senegence downline commission, as shown below:
You can earn downline commission on up to 5 levels in your Senegencence org. All you have to do is spend is generate 300 PV worth of Lipsense products per month..
Building a downline is as simple as sharing the opportunity with a few friends, then having them do the same thing. This is what MLM people call ‘duplication’. It is the theory that all you have to do is repeat the process and you’ll be successful. If duplication works out, then your Lipsense business will look something like this:
The diagram above shows how you can build a downline with Senegence. As we see, you can earn commission on up to 5 generations in your downline. In theory if everyone just shares the opportunity with a few friends, then by the time you reach 5 levels, you’ll have a very substantial downline.
To qualify for the 5th line commission, you need to generate enough group volume. You also need to personally spend at least 200 PV on Senegence per month. For us this is a problem because it’s an incentive to hyper-consume.
One you are earn on 5 levels, you can earn a total of 70% commission from your Senegence downline. Unlike personal sales, downline commission is included in the Senegence distributor price. That means when you buy Lipsense or any other products, 70% of what you pay to Senegence goes to your upline as commission.
Group Sales Volume
This is quite similar to downline commission, in that it’s paid on the activity of your downline. One notable difference is that in order to qualify for this, you need to spend more than 100 PV per month. To qualify for more than one line of GSV, you need to spend at least 300 PV per month.
Senegence GSV is only paid on volume over 100 PV per month. We don’t like this because it can lead to distributors buying Senegence products just to qualify for commission. Even worse, it can lead to uplines encouraging hyper-consumption of Senegence products so that they can earn GSV
Like downline commission, it is paid on up to 5 levels, as shown below.
As we can see here, if your downline meets the qualifying volume, you can earn up to 25% in total Group Sales Volume Bonuses. All you need to do is convince them to spend over 100 PV per month. You will also need to convince 5 distributors at each level to spend 300 PV per month. We are not sure if that’s 300 each or between them as Senegence did not clarify this well in their compensation plan.
They have been vague, but they are giving the impression that Senegence pay a total of 95% in commissions. It’s important to remember that these commissions are all included in the price paid by distributors. The only way this system can be profitable for Senegence, is if Lipsense products are severely overpriced, or if very few distributors qualify for full compensation.
Are Senegence Distributors Making Money
While there are plenty of claims online that you can make money selling LIpsense, most of them appear to be trying to recruit us. We also found some reviews which suggest that it’s very difficult to make money with Senegence.
One Senegence review by a British distributor explains why she will not review. After a year with Sheersense, even with 80 customers she is losing money with Lipsense. We agree with her assessment that to turn a profit, you need to spend a lot of time and effort into selling product, and recruiting a downline.
She also gives us some interesting insights about how Senegence works. To us, it sounds like Senegence is just like every other MLM. Especially worrying to us, is the way they encourage people to keep buying product every month. If you attend one of their meetings, you might hear them say ‘you can’t sell from an empty cart’.
The review suggests, and we agree that most sales are being made to Senegence distributors, and not to customers. The problem with this is that there isn’t enough retail spending, so the only way to make money is if people in your downline are losing money.
Another Lipsense review by The Outline, has trouble telling the difference between MLMs and pyramid schemes. They share some more real life experiences from a Sengence distributor going by the alias ‘Michelle’.
Michelle explains that when she joined, she was told to focus heavily on recruiting a downline. Her upline claimed recruiting was the key to success. As a result she did not put much time or effort into building a retail customer base. After 8 months, Michelle had recruited an impressive 26 new distributors into her downline. Her Senegence business was $6,000 in debt, even though she had been very successful in recruiting a downline.
.The Outline offers the opinion that Michelle was buying more Senegence products than she needed so that she could qualify for monthly downline commissions. This is a common problem in most MLMs, and it is one of the reasons why The Outline believes that MLMs such as Lipsense are Pyramids
We kept going with another Senegence Distributor experience we found on MLM Truth. They interviewed a former Lipsense distributor they called ‘Madison’, who gave a very detailed account of her 5 years with Senegence.
Madison tells a similar story to Michelle, in that no matter how much time and effort she put in, she could not make money with Senegence. Even though Madison genuinely liked the products, she didn’t feel they were being sold ethically. She was not willing to to pressure her customers into joining the opportunity. She also didn’t want to force her downline to buy more product than they needed each month.
Madison shares a very interesting story about the moment that made her finally decide to quit Lipsense. She was at a meeting and overheard 2 high ranking Senegence ladies tell each other that ‘80% of the distributors in the room would never earn any money at all’. They agreed it only mattered that they all spent money. This could have been an isolated case of two bad distributors, or it could be that MLM is a predatory system.
Madison also brought light to an unusual practice which we think might be happening at a few MLMs. She explained that Senegence often made certain products ‘unavailable’, for short periods of time. The reason was to create the illusion that they were very popular, and created hype. That way when they were ‘made available’ again, the distributors would urgently place orders. Not only that, they probably ordered more stock than they needed because they thought it might be unavailable again soon.
Why Is It Difficult To Make Money With Senegence
We believe that the problem is not unique to Lipsense. The problem is with the business model. In his book, Multi-level Marketing Unmasked, Jon Taylor found that 99.7% of people who join direct selling companies end up losing money. Despite what you hear in the sales pitches, it is highly unlikely that you will make money from any network marketing company.
Network marketing is a way for companies to sell products without employing a sales force and without having to spend money on traditional advertising and promotions. Instead they build a network of loyal ‘Distributors’, who are willing to pay unusually high prices for the added hopes and dreams of financial freedom.
Dr. Taylor has also provided a 5 Step MLM evaluation, which is designed to show you if you have a chance of turning a profit with any MLM opportunity. We looked at each of the 5 flags for Senegence, as shown below:
Red Flag 1 - Constant Recruitment of New Members
As we saw in the stories we looked at, Senegence focuses strongly on constant recruitment. Distributors are even told to build their downline rather than their customer base. We also saw that they are told to try and turn every customer into a Senegence Distributor.
Red Flag 2 - Promotion Through Recruitment
Like all MLMs you can earn more with Senegence as you climb the ranks. We had a look at the Senegence ranks, and how distributors qualify. As expected, there is a requirement to personally recruit new distributors to reach each rank. If you don’t recruit, you can’t reach the full earnings potential.
Red Flag 3 - Pay to Play
While there are no compulsory ongoing fees, you can only earn commission if you spend at least 100 US Dollars on Senegence every month. If you don’t place personal orders, you won’t be able to earn commission from your downline.
Dr. Taylor found that this can lead to hyper-consumption. Distributors are buying product because they want to be part of the compensation plan, not because they actually want the products. This is why several MLM participants admit to having collected stockpiles of product. If they were buying for personal use, or to sell to retail customers, stockpiling would not happen.
Red Flag 4 - Most of the Rewards go to your upline
As we noted earlier, you can earn downline commissions and group sales volume bonuses adding up to a total of 95%. While this is great if you have a substantial downline, these commissions are included in the price you pay. Most of what you pay for Senegence products goes to your upline as commission.
Red Flag 5 - More than 5 levels in the payout plan
Dr Taylor says 'Excessive levels in a downline is another sign participants are expected to sell primarily to their downline, rather than to the general public. This makes it an exploitative money transfer scheme, or product-based pyramid scheme'.
Is Senegence An Illegal Pyramid Scheme
Even though MLMs closely resemble pyramid schemes, they are not illegal. The reason dates back to the 1979 case of Amway vs the FTC. After 4 years in court Amway was found to be offering a business opportunity, rather than a pyramid scam. The technicalities came down to wording in their paperwork. One example requires consultants to make retail sales.
The Amway ruling effectively opened the doors for all other MLMs to operate within the law. However we should remember that being legal doesn’t make it ethical. If you knew that less than 1% of people had a chance of generating a real income, would you feel comfortable recruiting new distributors?
In the story we read about ‘Michelle’, she shed some light on this. She explained that when distributors place an order, they have to check a box stating that they have sold (or are personally using) 70% of your Lipsense products.
The check box is for compliance. If distributors complain about being pressured into buying too much product, then Senegence can say ‘well you checked the box, so it’s your own fault’. Features like this mean that it is legal. Having said that, based on the stories we found, it’s easy to see how some could think Senegence is a pyramid scheme.
Should You Join Lipsense
We think that the only reason to join any MLM, is if you are already using their products, and are happy enough to recommend them to others. At the end of the day, you can’t make money in MLM unless you make a lot of sales.
If you are a good salesperson, and you have the ability to be part of the 1% who turn a profit in Lipsense, then we suggest that you look at all your options before becoming an Ambassador. It’s quite likely that you can make more money in a regular sales job than you would in the Reliv opportunity.
As always, we’d love to hear what you think in the comments section below, especially if you an share your experiences with Senegence
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