Do you know anybody who sells Color Street?
Maybe you’re considering signing up as an Independent Color Street Stylist yourself as a way to make money from home and promote products you enjoy to your family and friends.
Whether you’re considering joining Color Street as a side hustle or as a replacement for your current job, you’d like to know a bit more about them before you make a decision, and that’s admirable.
Color Street Stylists will always be more than happy to talk to you about the ‘opportunity,’ but it’s always wise to do some independent research as well, and that’s why you’re here!
You want to know if Color Street is legit, if you’ll be able to make money selling Color Street, and you also want to make sure that Color Street isn’t a pyramid scheme masquerading as a regular direct sales business.
So then, let’s dive into the Color Street MLM opportunity and see if we can answer some of those burning questions.
Diving Into the Color Street MLM Opportunity
What is MLM?
Many of you are here because you’re wondering ‘Is Color Street an MLM?‘
The answer to that is YES, Color Street is an MLM company.
MLM stands for multi-level marketing, also known as network marketing.
Multi-level marketing has been around for years, and popular MLM companies include Beautycounter, Beachbody, It Works! and even Avon!
People in MLMs don’t receive a salary.
Instead, they earn money from selling products to their friends and family and recruiting others into the business.
For every individual that they recruit, they’ll make a commission from the sales and recruits generated by that person.
This continues down in multiple levels (hence multi-level).
Imagine a triangle. If the person at the very top of the triangle recruits 10 people, and every one of those 10 people recruit another 10 people, and each one of those people recruit another 10 people, you’ll be making commissions from EVERYBODY within the triangle because they’re all in your direct downline (the people underneath you in an MLM are referred to as your ‘downline’ and you are their ‘upline’).
All you had to do was recruit 10 people and you make money from 1100.
While you can always make money from selling whichever product your MLM company offers, most of the people in MLM companies prefer to recruit others because they stand to create a lifelong passive income from that person, whereas if they sell a product they’re just going to receive a one-off commission.
The ultimate aim of someone in an MLM like Color Street therefore, is to have as many people in their ‘downline’ as possible, enabling them to form large amounts of passive income.
What is Color Street?
Color Street is an MLM company that was founded in 2017 in New Jersey by Fa Park. Unlike other MLM companies, Color Street has one 1 product – nail polish strips.
It all started back in 1988 when Fa Park was taking the bus and he noticed a lady struggling to paint her nails. He thought that there must be an easier way, and so he bought some nail polish products and began experimenting with them on paper.
Eventually, he developed a formula which meant that the top was dry but the base remained moist, meaning that it would stick to the nail.
These days, Color Street has nail strips in a very wide selection of styles, and every set comes with a nail file/applicator, a nail prep pad and in-depth instructions.
The selling point of Color Street nail strips is that they’re easy to use and last for up to 2 weeks, with a set costing 11-13 USD.
Considering the strips are supposed to stay on for 2 weeks, $11 seems like a reasonable price, but an interesting thing to note is that Color Street’s parent company, Innovative Cosmetics’ Concepts, sells the exact same strips for 4-6 USD in places like Walmart and Amazon.
If you’re a fan of Color Street nail strips then this is great news because you can snap them up for as little as $4 on your weekly grocery shop, but on the other hand, this is bad news for Color Street Stylists, who must sell the marked up version.
This isn’t a huge deal, but it’s something to bear in mind if you wish to become a Color Street Stylist.
How do you make money as a Color Street Stylist?
To find out how to make money as a Color Street Stylist, I took a look at the Color Street compensation plan.
Like with most MLM companies, it was incredibly long and difficult to grasp, but there appear to be 10 main ways in which you can make money with the Color Street MLM:
- Jump Start Bonus – Hit some goals when you sign up and you’ll receive a bonus.
- Base retail commission – Earn 25% on every product sale you make. These can be sales to the public, sales to members of your ‘team’ or even ‘sales’ to yourself.
- Enhanced retail commission – If you sell more than 600 USD worth of products in a month, you make up to 10% extra commission.
- Enroller matching Jump Start bonuses – For everyone you recruit who gets a Jump Start bonus, you will also receive a bonus.
- Enroller bonuses – You will earn a 3% commission on the Personal Volume (sales) that your recruits make.
- Leadership Level Bonuses – You will earn a 3% commission from the sales of the person that your recruit recruited (the person 2 levels below you).
- Leadership Depth Bonus – You will earn a 1.5% commission from the sales of people 4 levels or more below you in the scheme.
- Team Bonus – An extra 1.5% commission from the total sales of your downline.
- Generation Bonuses – You receive higher commissions from your downline as you rank up in the company.
- Car/Lifestyle Bonuses – Like many MLMs, Color Street has a ‘car bonus’ incentive. You can read my article about the Arbonne Mercedes to see that this is not all it seems.
The really interesting thing about the Color Street compensation plan is that 8 out of 10 ways of making money with Color Street involve recruiting people, and there appears to be no limit to how large you can grow your downline.
It really seems as if the main focus is on growing a team of people who are also growing their own teams, instead of actually selling nail polish strips.
We will get into why this is problematic later in the article.
How much money can you make with Color Street?
I decided to take a look at the Color Street Income Disclosure Statement (IDS) to find out how much money Color Street reps are making.
Now, before we take a look at the numbers, I want to point out that the Color Street Income Disclosure Statement is two statements.
One shows the average earnings without subtracting the money spent by Stylists on sign-up fees and website fees, and one shows the average earnings after subtracting the money spent by Stylists on these things.
In this breakdown, we are going to be looking at the typical earnings after the sign-up fee and website fees are subtracted, because these numbers will be closer to the actual amount of profit made.
However, it is very important to know that Stylists will certainly incur more expenses than simply the sign-up fee and website fees, and so we can’t take these numbers as final profit, but they do give us a slightly more accurate representation of the facts.
So, let’s see how much money people are earning with Color Street (figures from 2020).
The Color Street Income Disclosure Statement shows that:
- 49.31% of Stylists earned an average of $67 in 2020
- 36.95% of Stylists earned an average of $1933 in 2020
- 1.3% of Stylists earned an average of $17,198 in 2020
- 0.51% of Stylists earned an average of $35,278 in 2020
- 0.08% of Stylists earned an average of $260,443
- 0.04% of Stylists earned an average of $781,322 in 2020
As you can see, these numbers vary massively, with the top 0.04% of individuals earning nearly a million dollars, while 93.91% of all Color Street Stylists earned between $5.69 and $358.86 per month, on average.
Taking the top 0.08% of the Color Street Stylists out of the equation, we see that the majority of Color Street reps aren’t earning enough to replace a regular job.
We should also remember that, apart from the Starter Kits and website fees, none of the other expenses have been accounted for.
This means that the bottom 49.31% of Stylists, who earned $67 in 2020 likely lost money.
How much does it cost to be a Color Street Independent Stylist?
While the Color Street Income Disclosure Statement takes into consideration the Starter Kit ($129) and the cost of your Color Street website ($9.95 per month), it doesn’t take into account the other costs of being a Color Street Stylist.
Other costs that you will need to cover if you join Color Street include:
- Phone/internet bills
- Hosting ‘Nail Bar’ parties
- Buying products to use as samples, for personal use, giveaways and competitions etc.
- Costs of running your own blog or promotional channel like YouTube
- Gas used driving to Nail Bar parties, meeting potential recruits/customers etc.
You must also take into account the time spent working on Color Street and whether the money you made justifies the hours spent.
Are you making minimum wage if you only earn $67 in a whole year, minus expenses?
No, not even close.
Is Color Street a pyramid scheme?
In order to see whether or not the Color Street MLM is a pyramid scheme in disguise, we must first outline what exactly a pyramid scheme actually is.
What is a pyramid scheme?
Pyramid schemes are very similar to MLMs, but the main difference is that MLM reps can make money from selling products as well as recruiting others into the business.
A pyramid scheme simply takes an initial investment from each member and promises to pay them for enrolling others into the scheme.
You are never buying a product; you are buying into an ‘opportunity’ to get rich.
However, as members of the scheme increase, recruiting becomes impossible and most members are unable to profit from the scheme or even make their initial investment back.
The Wikipedia diagram below illustrates just how unsustainable this business model is – after just a few levels of recruitment, the scheme would have recruited everybody in the world and there would be no-one left to recruit!
Because it is impossible for most people to make any money in a pyramid scheme, pyramid schemes are illegal.
MLM companies aren’t illegal because there is a possibility to make money from selling products and not just recruiting. However, if most of the revenue within the company is generated by the recruitment aspect instead of product sales to the general public, it could be that the MLM is actually a pyramid scheme in disguise.
In order to work out whether Color Street is a pyramid scheme, we must try and answer 3 questions.
1. Are most people unable to profit?
In the Color Street Income Disclosure Statement, we saw that the overwhelming majority of Stylists weren’t making anything close to a full-time wage, and that many of them are likely losing money.
Although the people at the very top of the company are making hundreds of thousands of dollars per year, most people are unable to make a profit with Color Street, and so Color Street cannot be considered a legitimate ‘business opportunity.’
2. Do you have to ‘pay to play?’
The absolute minimum that you can spend to remain in Color Street for 1 year is $248.88 ($9.95 x 12 = $119.88 + $129 starter kit = $248.88).
This is assuming that the Stylist never purchases a single Color Street product after buying the Starter Kit, but as we’re about to discover, it is likely that many of them do.
You see, while Color Street Stylists don’t need to hit a monthly target, they do have to sell $300 worth of product for at least 1 month in every 6.
This doesn’t mean selling $50 a month for 6 months. It means selling $300 worth of product during a single month, which is a crazy high target when you’re selling $11 nail strips.
However, like with most MLMs, this target can be met by the distributor EITHER selling products to the public OR purchasing products for themselves.
If a distributor is struggling to hit her $300 target, it makes sense that she would buy Color Street products herself in order to hit that target and stay ‘active’ as a Stylist.
It is also common for distributors in MLM companies to purchase from one another in order to cheat the system and help one another appear as though they are making more sales than they actually are.
This shows that even though you don’t have to continue purchasing Color Street products, there is definitely an incentive to do so.
Targets aside, network marketing is all about showing how awesome the product is 24/7.
You have to use the product so that you can post about it on social media and garner interest from your followers.
It’s just how it works.
So, do you have to pay to play with Color Street?
3. Is there a heavy focus on recruitment?
Out of 10 ways to make money within the company, 8 of them involve recruiting others.
Need we go on?
However, a vital detail, and one that allows Color Street to avoid getting classified as a pyramid scheme, is that you don’t get paid directly for recruiting people. You get paid when those people make sales.
This is a fine line, but an important one.
Does the compensation plan place an enormous emphasis on recruitment?
Does it directly reward the act of signing somebody up to the company?
No, you earn your rewards later.
Yes, you’ll make money selling Color Street products, but like most MLMs, the real money is made by signing other people up to the company and growing your ‘team.’
You would find it extremely difficult to earn a full-time wage selling $11 nail strips and receiving a 25% commission per sale. Unless you are a celebrity or you have a million IG followers, you are never going to get rich selling Color Street nail strips – recruitment is everything.
Quick FAQ Recap
Color Street is a multi-level marketing company that sells nail strips. It’s MLM business model means that participants earn more money by recruiting more people into the business.
Most people do not make a liveable wage with Color Street. Their Income Disclosure Statement shows that in 2020, 93.91% of all Color Street Stylists earned between $5.69 and $358.86 per month, not including expenses.
Yes, in order to be a Color Street Independent Stylist, you must pay for a starter kit and recurring website fees, as well as any other expenses such as buying products to promote to your social media followers, nail bar parties and more.
Yes, Color Street is a multi-level marketing company, also known as network marketing. Some compare MLM companies like Color Street to pyramid schemes because there is a very low chance of making money and a focus on recruitment rather than selling products.
While Color Street shares many similarities with an illegal pyramid scheme structure, it has not officially been classified as a pyramid scheme by the the FTC.
Final Thoughts on the Color Street MLM
They might make pretty nail strips, but the Color Street MLM is not a good business opportunity.
Not only will most Color Street Stylists never make a significant amount of money with Color Street, but Color Street also screams ‘pyramid scheme in disguise!’ meaning that it could get shut down by the FTC at any second.
There are so many ways to make money online that don’t involve joining a dodgy company like Color Street, so do yourself a favour and don’t become a Color Street Stylist!
An Alternative to Color Street
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