Photo by María Victoria Heredia Reyes on Unsplash
Hello Anti-MLM world! For purposes of the blog, you can call me MaidenDisenchanted.
A little bit about myself. I am currently a SeneGence Distributor, disenchanted and maneuvering my way out. I signed up in early 2017 just before everything went out of stock. I tried LipSense in 2016, and immediately fell in love with it (I had used long-wear lipsticks for years and this was the best I had ever experienced). I still love LipSense! But over the course of the last year, I have come to realize that the business opportunity is just bad.
See, I had originally signed up just to get a discount on my own products. I honestly wanted almost every color, and thought signing up was the way to do it. Yet, I still had a “launch party” and invited some friends to try it. And I even sold product at cost to them, because I wasn't going to be doing this as a business (yes ... I know that's against the rules). Well I was honestly floored at how many people wanted LipSense! So, I decided to give the business thing a go (and sell at retail, or only discount up to 15%). And then everything went out of stock.
Photo by Anete Lūsiņa on Unsplash
I had been a demonstrator for another MLM (rubber stamping), about 10 years ago. Their commission was only 20%, so I was thinking I could run my LipSense business the same way (have parties and place orders). And with SeneGence, the commission would be a lot bigger, right? Well … not quite. First, there wasn't enough product to take orders, compile into a party, and order. And wait, if I actually did a party, I was stuck having to give away product for the hostess rewards! My old MLM had a smaller commission, but at least they provided the hostess benefits and everything was generally in stock!
But, I wasn't smart enough at the time I was realizing all of this. I thought that because so many people I knew loved LipSense that it would actually be profitable for me to just buy product and sell it. So I started buying colors, one at a time, as they came in stock. I spent HUNDREDS on shipping costs alone in 2017! But at the same time, I really was selling, and I was selling a LOT! And I ranked up just three months after signing up!
At times I had more Facebook parties than I could keep up with. (My husband came to dread times when I was doing a Facebook party because I would literally disappear. I would be “home” but not really “home.”) So I justified how many orders I was placing because I was genuinely selling at least enough to offset what I was ordering. But then I was also justifying a lot of expenses in materials, mirrors, shelves, brochures, etc. I thought this business would work in the long run. I did vendor events (but I barely broke even on them, and I spent hundreds of dollars in supplies to get ready), only to decide I didn't really like spending all day on a weekend away from my family. Vendor events were way outside my comfort zone.
I had an active Facebook group (and I spent WAY too much time on it!), and I was introduced to people I would have never met otherwise. Some of these women have become close friends, and I am grateful that I didn't run my business in a way that people felt “sold” every time they talked to me. I really kept my personal life and “SeneLife” separate for the most part.
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However, it was not until I started compiling my records to do my taxes that I realized what the real damage was. See, first I was getting things like my 1099 from SeneGence and my credit card processors. I realized that I had moved over $12K last year and I thought that was amazing! Until I saw that I had spent closer to $20K in product orders, supplies, and shipping etc. And SeneGence doesn't make it easy for you to track how much you ordered. Yes, it's all there, but if you want to total it out … you've got to do that yourself. I had about $3K in inventory left at the end of 2017. It was eye opening to realize I had given away so much product in giveaways and incentives. I had often done free shipping and no tax, so I was eating a lot of costs. There was literally NO PROFIT, even though I moved THOUSANDS of dollars in product.
Prior to seeing the exact numbers in my tax documents, I had already begun seeing large numbers of distributors going out of business. In many cases, these distributors had bought more than I had, and for the same reasons. When nothing was in stock, you bought what you could, when you could. And many of these distributors were realizing that inventory left over at the end of the year is taxed as an ASSET and isn't deducted from your income. So they were having to pay taxes on the product they overbought! I was seeing GOOB (going out of business) posts in groups on Facebook selling product cheaper than I could buy it directly from SeneGence. I was really concerned that so many had overextended themselves, and then I started feeling like a jerk keeping these deals from my own customers and expecting them to pay more from me.
And then I started seeing the posts in my team group pages that were encouraging FRONT LOADING* every month.
I ran across a two-part video of a leadership training by none other than Joni Rogers, the Founder and CEO of SeneGence:
Inventory Build Part 1
Inventory Build Part 2
It was EYE OPENING. For one, Joni mentions in the first part that not building inventory (front loading) is “Hold[ing] back [your] opportunity to sell.” Seriously!?? Taking on more inventory than you can sell is just putting yourself in debt, or spending money that could go ANYWHERE else. If product had been in stock, I want to say I would have not stocked up as I did. But then again, this is where the SeneGence compensation plan manipulates you to buy more. Remember, in order to get 50% off, you have to order $1,500 in retail product! To get 40% off you have to order $600. And pay sales tax on the retail value!
In the end of Part 2, she refers to a woman with a $100K budget of her husband's money as “Ms. Rocks-a-lot.” (I guess this was me.) It really showed me what SeneGence really thinks of its distributors. They are dollar signs, plain and simple. The entire premise of Joni's method of encouraging inventory and budgeting it is an assumption that EVERY booking will net $500 in sales. This has been proven to be false. (Yes, I had some parties get way over $500, but I had others that barely qualified at $150.) Plus, with market overflow as we currently are experiencing (and so many going out of business—understandably), I feel it is absolutely dishonest that Joni is encouraging Crown Princesses to use this dishonest method of accounting to their new recruits.
And then I saw these types of graphics flowing down from the Amethyst Queen (or Ruby Queen? I can't keep track) way above me.
I mean, really?! There is so much in this post that is misleading. The assumptions in the numbers here are that every person who signs up will spend 300PV every month ($600 retail at 40% off). This is simply not true, especially for those of us who got wise as to how much we were ordering.
Additionally, when I was doing two Facebook parties in a week, I was spending multiple hours every night in that week to prepare and engage in those parties! And I sponsored only ONE person EVER as a result of a party. Granted, I have never been a fan of MLM pyramid style compensation, so recruitment was never a priority for me. The only people who signed up with me were people who came to me asking about it and wanting to do it. And I have never encouraged any of my team to keep inventory or recruit. And, I was mistaken to believe an income could be had by selling LipSense alone.
What I have referenced above is only a drop in the big fat bucket of misleading information flowing down the ranks of SeneGence distributors. And there is absolutely no forum to question any of the Kool-Aid in team Facebook groups. I have been called out for being negative, just because I questioned the numbers in posts like the one above. I thought by openly questioning them, perhaps other distributors could avoid making the same mistakes as so many of us.
So, I am leaving SeneGence. I am lucky to be one of the few that didn't take on tons of debt, but I spent money that could have taken my entire family on a cruise! It makes me sick to think about that. I am trying to figure out how to get rid of my inventory. I love the products … guess I could have a 10 year supply … if it actually is any good after that long.
And if this post helps someone avoid making the same mistakes I did, then it has been worth it. Even if you want to stay with SeneGence, please read the above, get all the information, keep detailed and accurate records, and DON'T DRINK THE KOOL-AID!!
*Front loading or inventory loading is the practice of buying a large amount stock up front, generally more than you can sell easily.
#SeneGence #LipSense #frontloading #inventory #MLM #antiMLMmovement #antiMLM #pyramidscheme