But isn’t Rodan+Fields a Pyramid Scheme?

Um, no.

I’ll be honest. I thought so, too, at first. Because we’ve all been taught for the warning bells to go off when there’s even a hint of asking someone to buy or join, right?

But then I thought about it some more and I realized how wrong I was. And Gary Vaynerchuck, my favorite Internet celebrity, showed me why.

We don’t pay attention to advertisements. If you have Tivo, you fast forward through commercials. And everyone is too busy texting while they’re driving to notice billboards.

As a small business owner, it’s the question I struggle with daily. How on earth do I get my services/product in front of people that will want to buy it? And even better, how do I get them to talk about it?

Gary Vaynerchuk says that in today’s world you have to start selling to people one-on-one. The mass platforms (television, newspapers, magazines) are dying a slow death.

What I love is that Dr. Rodan and Dr. Fields saw the same thing.

Their product was in all of the high end stores. Not only did it have shelf space it was also a top seller.  But after the success of Proactiv the doctors had to wonder why their anti-age and sun damage regimes weren’t household names yet. So they started asking questions and they found out that Estee Lauder (the company they partnered with to get into the department stores, read the 2003 press release here) wasn’t responsible for their sales. Women using their products and telling their girlfriends was responsible for their success.

Rodan+Fields tested the direct sales waters and discussed making the switch with Estee Lauder by its side. Unfortunately, Estee Lauder knew it wasn’t the right organization for the direct sales aspect and sold the rights back to R+F (while keeping a vested interest because they knew the money was coming). So they restructured the companies to pay the people who were really selling the products: you, the consumer.

Not only that, they pay tons better than trying to get your foot in the mommyblogger door, which is another post for another day.

Products aren’t sold with commercials or celebrity endorsements. Gary Vaynerchuk sees it. The doctors saw it. And I see it too.

Want to do coffee some time to learn if it’s a good fit for you? Email me (marie.mckinney@gmail.com) and we’ll make it happen!

 

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8 thoughts on “But isn’t Rodan+Fields a Pyramid Scheme?

  1. Katie says:

    It’s still the literal definition of a pyramid scheme. People above make money off of the folks they recruit.

  2. dcfoodblog says:

    Katie, with all due respect, the definition of a pyramid scheme is when money is made through people paying money to those above with no product exchanging hands. R+F is NOT a pyramid scheme. It is direct sales–taking out the middle man (that in R+F’s case was slowing down sales of an awesome product). In fact, if your definition were correct, all of corporate America would be a “pyramid scheme”!

  3. Dan Jones says:

    Multi Level Marketing = Pyramid Scheme = Annoying “Friends” Trying to Sell You Crap=Rodan + Fields

  4. Philip says:

    It is absolutely the same as other pyramid schemes. Any one of the MLM schemes can claim you make money by selling the product and not by recruiting. R+F still has “partners” recruiting and making a commission from the sales of recruits. It is the exact same as any other pyramid scheme. Maybe the product is good, I have no idea, but its still a pyramid scheme.

  5. Cheryl says:

    Why in the world would two incredibly successful doctors who have already made their fortune with Proactiv start a pyramid scheme? It’s just idiotic to suggest it. Were they sitting on the beach sipping Margaritas, after becoming absurdly wealthy from creating Proactiv, and one said to the other, “you know what would be awesome? Lets start a pyramid scheme”. Why are those of you leaving negative comments so cynical? A scam happens when people pay in and get nothing in return. People are getting skincare products.

  6. S Flynn says:

    Never argue with ignorance…………ignorance will always win. Ignorance makes statements of which it knows nothing about. Ignorance will always remain ignorant .
    To say that all Direct Sales companies are the same is Ignorant. To say that Stanford trained Dr. Katie Rodan and Dr. Kathy Fields would do something illegal is ignorant. To say that people in a “downline” can’t make more money than people in the “upline” shows ignorance about Direct Selling business models where the “sponsor” spends countless hours “mentoring” the “newbie” and deserves nothing in return is ignorant.
    To believe that corporations do not have a pyramid philosophy when the people at the top (boss, CEO) will ALWAYS make more money than the “employees” is ignorant.

    Ignorance may be bliss but it can cost you a fortune………………….

  7. Canda Olmi says:

    it is amazing to me that everyone is so eager to cry pyramid scheme, turn their nose up at recruiting people and frowning on people making a percentage on what their recruits sales/make. What company does not follow the same principals. Do you think the CEO of a company makes the same as the new employee hired out of college? Does the Division President make the same as the Managers in the division? Is it a pyramid scheme when I receive an override on the sales of my sales team? I recruit the sales people, I train them, I help them establish their territory. Am I not entitled to an override? Is my CEO not entitled to a bonus when the entire company performs well? Why is no one screaming pyramid scheme??? I am doing the very same thing with my Rodan and Fields business. I recruit them, I train them, I help them establish their territory. So why is one legimate and one illegal?

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