Chances are you’re here because you’re considering joining Monat and becoming a Monat Market Partner so that you can sell their products and earn additional income from doing so.
It sounds great – who wouldn’t want to have their own business, work from anywhere in the world and never need to worry about money?
Add the free Cadillac, trips to Vegas, and whole new friendship group of supportive women, and selling Monat seems like a no-brainer!
However, there’s a small part of you that thinks this may be too good to be true, and you’re wondering, is Monat a scam?
In this article, we are going to dive into the Monat business opportunity and find out the truth about Monat.
Is Monat a scam, or a legit business opportunity?
Let’s find out.
Is Monat a Scam or Legit Business Opportunity?
Before we begin
Before we dive in, I want to get really clear on exactly what I mean when I say the word ‘scam.’
The Oxford Dictionary defines a ‘scam’ as being ‘a dishonest scheme; a fraud,’ usually for the purposes of making money.
Now, I don’t want any lawsuits coming my way, so I will not be making any allegations that could result in that – in other words, I’m not going to just come right out and say that Monat is a scam.
What I will do is examine the multitude of Monat scandals that exist, look at whether you can realistically expect to make any money by selling Monat, and point out some ‘red flags’ that I find along the way.
You will then be able to draw your own conclusions about whether or not Monat is a scam 🙂
What is Monat?
MONAT Global is a multi-level marketing company that sells haircare and skincare products including shampoos, conditioners, serums and more. Its name stands for ‘Modern Nature,’
It was founded in 2014 by Luis Urdaneta. Rayner Urdaneta is the CEO and Stuart A. MacMillan is President of Monat.
Interestingly, MacMillan was the former CEO of the TelexFree 3 billion dollar Ponzi Scheme that was shut down in April 2014, 6 months before MacMillan was appointed President of Monat.
Monat do not sell their products in brick and mortar stores, but through their sales representatives, known as ‘Market Partners.’
In addition to selling products, Monat Market Partners make money by signing up other Market Partners. Not only do they get bonuses for building a team, but they also make commissions from every sale that people underneath them make.
The more people a Monat MP recruits then, the more money they make.
Monat’s business model is MLM, also known as ‘Network Marketing.‘
Later in the article, we will discover some of the issues with networking marketing, but for now, just know that Monat is a networking marketing company, and that network marketing is the same thing as MLM.
Is Monat a scam?
Is Monat a legitimate company?
Monat is a legitimate company in the sense that it is a real company that operates in various countries around the world.
In the UK, it is registered as a private limited company, and you can find its registered address and all of its financial statements on the UK Government website.
In a very literal sense then, Monat is a legitimate company. It exists. It is not just a bunch of cowboys hiding behind a fake website, waiting to steal your card details and sell them on the dark web.
Is the Monat business opportunity a scam?
As we discussed earlier, the way that Monat Market Partners make money is by selling Monat products to people they know, and recruiting other people into the company.
Unfortunately, it isn’t actually as easy as you might think to make a decent income selling Monat.
Monat’s Income Disclosure Statement from 2018 shows that, in the year 2018, 47% of Monat distributors earned nothing at all.
Of the people that did earn money with Monat, 94.03% of them earned an average of $183 in 2018.
In fact, when we look at the chart, we see that individuals in the first 7 ranks of the company all earned less than $40,000.
This means that 99.89% of Monat reps earn less than you could in a full time job.
In other words, only 1 in every 909 people make a real living from Monat.
This does NOT take into account the costs of signing up to Monat, which include a starter kit (£99), product pack (prices start at £199), and other expenses that you will rack up during your time spent selling Monat.
I dive deeper into Monat’s income disclosure statement and the reality of how much money people make in Monat in my article: How to Make Money With Monat.
What this means
If you only sign up to Monat to be eligible for discounted products, and you never want to make any money by selling them to other people, this doesn’t really matter.
However, if a Monat Market Partner has told you that you can make a decent income with Monat, and that selling Monat is a worthwhile side hustle, you’d be within your rights to feel scammed, given that only 0.1% of Monat MPs earn a real wage with Monat.
You will be Monat’s biggest customer
A major red flag that Monat is a scam is the fact that the people who spend the most money and buy the most products from Monat are Monat Market Partners!
When you join Monat, you get bonuses for the following:
- Convincing a new Market Partner to buy a product pack (£199+)
- You will receive a commission on any product purchases your recruits make, so if someone you signed up buys a Monat shampoo, you will earn commission from that sale
In other words, you make money not by selling Monat products to regular customers, but to other Monat Market Partners.
What this means
Because Monat actively encourages Market Partners to convince other Market Partners to buy products, the distributor actually becomes Monat’s biggest customer, which would be strange in LITERALLY ANY OTHER BUSINESS, but for some reason, it’s seen as normal within the network marketing industry.
For example, imagine if you worked in Sephora, and not only did you and the other staff members spend most of your wages at Sephora, but you also never had any real customers walking through the door to buy makeup – wouldn’t that seem strange?
Or let’s say you work at KFC, but the only people ever buying chicken were you and your colleagues, and nobody ever walked in from the street to order a meal.
It wouldn’t strike you as being a legit or sustainable business, would it?
The ‘Free’ Monat Cadillac
Something that often convinces people to become a Monat Market Partner is the opportunity to receive a free Cadillac when they hit a certain rank within the company.
The famous Cadillac that Monat MPs receive when they join the ‘Monat Motor Club’ is a physical manifestation of the luxury lifestyle that all Monat reps aspire towards.
However, is the ‘free’ Cadillac really free, or just a scam?
First off, Monat do not just give you a Cadillac.
They give you payments towards a Cadillac.
If your rank within Monat drops, you will still be responsible for meeting the payments on your ‘free’ car, as it has to be purchased/leased in your name and connected to your bank account.
This is different to a regular company car, where you can just give the car back to the company if you decide to switch jobs. With the Monat Cadillac, you are locked into a fixed contract and must continue to make the payments no matter what.
Other important things to note about the ‘free’ Monat Cadillac:
- You have to pay tax on your new Cadillac.
- You have to pay tax on the car bonus money given to you by Monat.
- You have to pay any costs associated with your car such as including registration, licensing, insurance, etc.
- If you drop rank, Monat will pay up to 2 month’s grace (not consecutively) in a calendar year. This means that if you lose your rank for 1 month, Monat will make your car payment, but if you don’t qualify again after a month, the onus falls on you to make that payment. If drop below the rank of Market Mentor, you will not receive ANY grace from Monat.
- If you ever struggle to make payments on your car, your credit score will be affected.
- The car payments might not cover the full cost of the car. For example, Market Mentors receive $500 per month towards their car payment, but this is not usually enough to cover the cost of a luxury car.
- Monat reserve the right to change the terms and conditions of the plan at any time, or even terminate it without giving any notice. If this happens, you will be stuck with a brand new Cadillac and no financial assistance.
What this means
The ‘free’ Monat Cadillac is not technically a scam, because you are able to read the terms and conditions and find out all of this information for yourself.
However, usually when people qualify for the Monat Motor Club, they get swept up in the excitement and neglect to read the small print, trusting their upline when they tell them that they’re about to get a ‘free car.’
This can result in people getting stuck in a situation that they really can’t afford to be in.
You can find out more about the ‘free’ Monat Cadillac here.
VIP Membership Scam
During my research for this article, I decided to look at what people had to say about Monat on the Better Business Bureau (BBB) and Trustpilot.
Worryingly, many of the negative reviews mentioned unauthorised purchases being made on their cards, and being sent products that they didn’t order.
This seems to occur when people have enrolled onto the Monat VIP membership programme.
When somebody enrols in the Monat VIP programme, they are signed up for the Flexship Programme, which requires them to purchase a minimum of 3 orders of above a certain amount, which is automatically charged to their credit card.
This would be fine, if people knew what they were getting into – unfortunately, many people who signed up for the VIP membership were not informed by the person that signed them up that they would automatically be enrolled onto the Flexship Programme.
Market partners receive a hefty bonus if they sign up 4 VIP members within a month, and this is probably why they’re reluctant to tell people exactly what they’re getting into.
Below are some of the reviews I found on BBB talking about this issue:
‘They wrongly charged my account for a Flexship that was moved, they also charged me for processing charges for products that I haven’t received, which I haven’t given authorisation. I need my complete refund, cancellation of the account with no extra charge, and also the administrative charge as the products that I haven’t ordered and I haven’t received.’
‘I was charged $188 for an order I did not place. I called the company and they told me I had a monthly membership which I did not have or sign up for. I specifically declined the monthly membership.’
‘I continue to receive notifications for Flexship and deductions from my bank account event though I requested through the website, phone, and several times with the agent who signed me up to stop the automatic shipments. I had to change my card but still getting notifications. Additionally, my daughter. who was 15 at the time signed up with the rep without my approval. We stopped receiving notifications for her account but shipments continued to come to the house and charges continued. We have not opened the boxes and the company wont allow us to return them. I already cancelled my card to stop them from automatically charging but they are somehow still charging my daughter’s card. They’re telling us they wont refund us the money because it’s outside of the 30 day window and we were to pay to send the shipments back -even though we didn’t request them and made attempts to cancel.’
‘I was not told this would be an ongoing Flexship and if I tried to cancel I would be charged a $25 fee for cancellation. I emailed the business to tell them wanted to cancel this membership but they advised me I would have to have 2 more shipments to cancel without a charge. This company is scamming people and their product makes your hair fall out. I will not pay the cancellation fee since I was not told I would be enrolled in a programme that I had to have 3 Flexships before I can cancel with Monat.’
‘I have cancelled the service over a year ago and out of the blue, I just received a charge for $222.22. There is no record of it in my email, I have cancelled my account, so why would anything be sent to me? […] I have reached out with no response. I sent an email iMessage to the girl that used to take care of the shampoo. I have proof that I have cancelled my account, so why am I being charged for a crazy amount of $222 for something that I did not order? I even try to log in under an old email and it does not work because the account is cancelled. No response from anyone.‘
The reviews go on, but you get the gist.
What does this mean?
Of course, this is not the fault of Monat as a company.
It is the fault of individual sales reps, who are not being transparent with their customers.
However, considering how frequently this issue seems to be occurring, the compliance team should really be paying closer attention to the sales tactics that their Market Partners are using.
Pyramid scheme allegations
I went into this issue in more depth in my article about whether Monat is a pyramid scheme, so I won’t regurgitate the whole thing here.
However, the way that Monat functions as a business is very much like a pyramid scheme, in my opinion.
Some of the ways that Monat functions like a pyramid scheme are:
– Most people in the company are unable to make money
– You have to ‘pay to play’
– There is a heavy focus on recruitment, and the only way you can become successful with Monat is if you have a large downline working underneath you
What does this mean?
The people behind Monat are very clever, and know how to avoid being classified as a pyramid scheme.
Because of this, it is unlikely that they will ever be closed down (but not impossible).
However, the issue with businesses that function like pyramid schemes isn’t that they could be closed down at any moment, but that the business model makes it mathematically impossible for most people to profit!
Pyramid schemes are illegal because it is impossible for most people to profit within them, and we also see this reflected in Monat’s abysmal numbers.
Are the products a scam?
Monat’s products are FDA approved, but they are not without their controversies.
Monat has been the subject of 10 lawsuits and hundreds of complaints to the BBB and FDA, with allegations that Monat’s hair products actually cause hair loss.
You can also find scores of unhappy customers talking about Monat hair loss on Reddit.
As a result of the Class Action Lawsuit, Monat came to an agreement with the attorney general that it will no longer advertise that their products can decrease hair loss, and it will no longer use false before-and-after images in their advertisements.
What does this mean?
People react differently to different things, and you won’t find a shampoo out there that hasn’t caused an adverse reaction for someone.
However, usually such reactions are few and far between, whereas they seem relatively common for people using Monat products.
Of course, there are thousands of people who love Monat’s products, and so they aren’t a scam, but with so many people experiencing balding, hair loss, and severe scalp irritation, I would urge anyone to be extremely cautious when using Monat’s hair products.
Red flags that Monat is a scam
- The President of Monat was the former CEO of the TelexFree 3 billion dollar Ponzi Scheme that was shut down in April 2014.
- Monat is an MLM company, and studies have shown that 99.6% of people do not make money in MLM companies.
- 0.1% of people selling Monat are earning enough money to replace a full-time job, yet Monat is often marketed as being a great way to earn money and achieve ‘financial freedom.’
- You have to spend a lot of money to be able to sell Monat products, and most people will never earn this initial investment back.
- Monat’s biggest customers are Monat sales reps.
- The ‘free’ Monat Cadillac isn’t actually free (and can end up costing you a lot of money)
- Hundreds of people report fraudulent charges on their credit cards and claim to have been signed up to a Flexship membership programme without being told.
- Monat shares many similarities with illegal pyramid schemes.
- Hundreds of people allege that Monat products cause hair loss.
- People who stopped selling Monat compare Monat to a cult.
Is Monat a Scam? | Final Thoughts
I hope that I’ve managed to show that although Monat is not technically a scam, it certainly feels like one.
Here at Not Your Boss Babe, we do not recommend joining an MLM company, especially if you really want to make money.
You’d be much better off taking up another side hustle, one with a higher than 0.4% success rate!
Alternatives to selling Monat
If you’re looking for a side hustle or a work from home job, you may find these articles helpful:
Advantages and Disadvantages of Blogging
Easy Freelance Jobs for Beginners
Best Side Hustles for Single Moms
How to Sell Feet Pics Online
Secrets to Selling on Poshmark
Profitable Digital Products to Sell on Etsy
How to Become a Micro Influencer
That’s about it for today, but as always, if you have any questions then don’t hesitate to leave them in the comments section below and I will get back to you!
Until next time,