Chances are you’re here because you’re considering joining Norwex and becoming a Norwex Independent Sales Consultant.
You’ve probably been to a Norwex Home Party, bought a couple of Norwex products and figured you may as well take the next step and register as an Independent Sales Consultant so that you can start hosting your own Norwex parties and making a bit of additional income.
And why wouldn’t you?
Who wouldn’t want to have their own business, work from anywhere and enjoy financial freedom?
However, you’re hesitant.
You’ve heard people saying that Norwex is a pyramid scheme and that it is impossible to make money with them, and you want to do your research before you dive in headfirst.
This article is here to help.
We are going to dive into the Norwex business opportunity and find out what it’s really like as a Norwex Consultant, whether Norwex is a scam, and lastly, whether Norwex is actually a pyramid scheme in disguise.
Is Norwex a Pyramid Scheme? Inside the Norwex Business Opportunity
What is MLM?
Before we get into Norwex specifically, you ought to know what an MLM company is, because this is the business model that Norwex use, and it is different to a regular business.
MLM stands for multi-level marketing, and MLM companies are also referred to as network marketing companies or social selling companies.
MLMs have been around for years, and popular MLMs include Arbonne, Monat, Color Street and even Avon!
You don’t receive a salary in a multi-level marketing company.
Instead, you earn money from selling products to people you know and recruiting others into the business.
When you recruit a new person and that person begins earning money, you will earn 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’re their ‘upline’).
All you had to do was recruit 10 people and you make money from 1100.
While MLM companies like Norwex also give you the chance to make money from selling their products, most of the people in MLM companies prefer to recruit others because they stand to make 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 somebody in an MLM then, is to have as many people in their ‘downline’ as possible, enabling them to form large amounts of passive income for little work.
What is a pyramid scheme?
Pyramid schemes are very similar to MLMs, but the main difference is that MLM distributors are supposed to make more of their money from product sales rather than recruitment.
A traditional pyramid scheme takes an initial investment from each member and promises to pay them for enrolling others into the scheme, meaning that people are buying into an ‘opportunity’ to get rich.
However, as members increase, recruiting quickly becomes impossible and so most members are unable to profit 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’s impossible for most people to make any money in a pyramid scheme, pyramid schemes are illegal.
However, most pyramid schemes these days have got wise to the fact that they have to offer a product in order to appear legit, but even though a business may have products, the focus will always be on recruitment rather than product sales.
Because there are so many of these ‘pyramid schemes with products,’ around, the FTC hasn’t quite caught up yet, and so many people believe that just because a company hasn’t been shut down yet, it can’t possibly be a pyramid scheme.
This simply isn’t true, and we’re about to dive into the Norwex opportunity to see if Norwex is a legit direct sales business or just another shady pyramid scheme in disguise.
What is Norwex?
Norwex was founded in Norway in 1994, by Bjørn Nicolaisen, after he came across a microfibre cloth that made his windscreen spotless using nothing but water.
This has since become Norwex’s flagship product, known as the EnviroCloth, and Norwex claim that this cloth can eliminate 99% of bacteria on surfaces using only water.
Nowadays, Norwex have an entire line of chemical-free cleaning products, as well as a personal care range, and Norwex products include towels, laundry detergent, bathroom cleaning products and more.
Norwex claim that ‘By using Norwex products and cleaning methods, you don’t breathe, touch or ingest harmful chemicals. Dirt and dust are removed instead of being spread on surfaces, resulting in a cleaner indoor climate, which helps reduce allergies and promote a healthy home environment.’
When it comes to their why, Norwex say that they exist to ‘improve quality of life by radically reducing chemicals in our homes, while offering people an outstanding business opportunity.’
Over the years, the company’s popularity continued to grow and it was eventually launched in Canada By Debbie Bolton in 1999.
It has since expanded to Australia, England, Estonia, Germany, Ireland, Latvia, Lithuania, New Zealand and the USA, making them active in 3 continents.
An important thing that we need to note before diving further into Norwex, is that although Norwex themselves describe the company as an ‘environmentally friendly direct sales company,’ what they actually are is an MLM company, which is something entirely different.
If a company is purely a direct selling company, the only money to be made is in selling products online and in person through your social network.
In an MLM, there are multiple ranks within the company, and the people at the top make the majority of their money from the sales made by the people at the bottom.
Inside the Norwex Business Opportunity
How do Norwex Independent Sales Consultants make money?
One of the ways that Norwex Consultants sell products is by purchasing Norwex products themselves at a discounted price and making social media posts and videos about how great they are, encouraging their followers to buy the products through their personalised links.
However, the main focus of a Norwex Consultant is the ‘Home Party.’
This is a pretty old-school way of doing business (especially post-pandemic!), and some of the most well-known companies that use this model are Tupperware and Scentsy.
The way that a Home Party works is that the Consultant will host a party where guests can learn about the products (and hopefully buy some) and learn about how to become Norwex Consultants themselves.
While it may seem like great fun – who wouldn’t want to get paid to host parties?! – it’s actually not so easy to make money this way.
The Problems With Norwex Home Parties
Would you want to go to a party if you knew the entire thing was just a sales pitch for some cleaning products?
It isn’t exactly a wild Friday night, is it?
Not only that, but you’re swiftly going to run out of people if you choose the party plan model for your business.
You can invite everybody you know, but chances are, they’re not going to want to show up every week.
You may also find yourself becoming resentful if your friends don’t want to attend, which can cause tension in your relationships and result in you seeing everybody in your circle as a big fat dollar sign.
Even if people do end up buying something, Norwex products are designed to last for a long time, meaning that your customers will not be coming back after a couple of weeks or months to buy more.
This is different to other MLM companies such as Isagenix and Monat, who sell consumable products that often need replacing.
Yet another risk of hosting Norwex parties is that you might end up losing money.
If you host a party for 15 people complete with drinks and snacks, and nobody decides to buy anything, you’ll end up at a loss.
It isn’t hard to see why this way of doing business is not ideal.
The 7 Ways of Earning With Norwex
According to the Norwex Success Builder (the name they give their compensation plan), there are 7 ways that Consultants can be compensated by Norwex.
- 4-Star Free Host Programme – Consultants receive free products based on how many sales are made during a house party.
- Personal Retail Sales Discount – Consultants get a discount of up to 35% on any product they purchase, as well as a 35% commission on anything they sell.
- FreshSTART Rewards Sales Plan – Consultants receive free products when you make a certain amount of sales.
- FreshSTART Rewards Team Building Plan – Consultants receive freebies for bringing in new recruits.
- Qualified Recruit Bonus – For every new Qualified Personal Recruit, Consultants get to choose $300 worth of free products.
- Uni-Level Commissions – Uni-level commissions are earned via the sales made up to five levels deep in a Consultant’s downline. The higher your rank, the more Consultants in your downline and the more commissions you earn.
- Monthly Car Bonus – You can apply for a car bonus worth $500 on a monthly basis if you hit the level of Vice President Sales Leader or higher, similar to the Arbonne Mercedes or Monat Cadillac
One thing to note is that a couple of these forms of compensation are not even cash – the Consultants literally get paid in cleaning products.
Now, this is problematic for 2 reasons.
First, cleaning products don’t pay the bills, and second, the fact that Norwex Consultants aren’t given financial rewards for recruiting people is a huge red flag that Norwex is trying to avoid being classified as a pyramid scheme.
Giving out cleaning products as bonuses allows them to incentivise recruitment without actually paying their Consultants to recruit.
Another red flag that Norwex might be operating as a pyramid scheme in disguise is the fact that it is impossible to rank up in the company without recruiting, and without the people you recruit going on to recruit their own people.
For example, in order to progress from Sales Consultant to the next rank up, which is Team Coordinator, you must have 3 ‘engaged’ personal recruits.
To rank up AGAIN to Sales Leader, you must have at least 5 engaged personal recruits, as well as 10 active Consultants in your downline (in other words, Consultants who have been recruited by your recruits).
This continues all the way up to the Senior Vice President Sales Leader, who must boast a whopping 85 personal recruits and 600 engaged Consultants.
It is at these higher levels within the company that people will begin earning the megabucks, because they have passive income streaming in from at least 600 people.
Unfortunately, such exponential growth quickly becomes unsustainable – remember that Wikipedia diagram we looked at earlier?
Here it is again, just as a reminder.
One major red flag of a product-based pyramid scheme is a focus on growing a ‘team’ rather than selling products to the general public.
As we can see with Norwex, the only real money to be earned is when you have recruited a tonne of people, meaning that most people will likely prioritise growing a team rather than selling cleaning products.
How much do you make selling Norwex?
Most MLM companies like Norwex publish a yearly Income Disclosure Statement that details how much money people in the company are earning.
However, in over 25 years of business, Norwex have never released an Income Disclosure Statement, which suggests that they want to keep this information to themselves.
This is no real surprise, considering that when Jon M. Taylor studied 350 MLMs, he found that 99.6% of people in MLM companies make no money or actually lose money.
How much does it cost to be a Norwex Independent Sales Consultant?
To be able to sell Norwex, there are some things that you will need to pay for.
First there’s the Starter Kit.
On Norwex’s website, they market this kit as ‘free,’ saying you only have to pay $9.99 in shipping and handling fees.
However, there is a caveat.
If you do not manage to generate $2000 from sales in your first 90 days, you will have to pay Norwex $200 plus tax for the Starter Kit.
$2000 is a crazy amount to generate considering Norwex’s main product is less than $20,
There are also ‘optional’ expenses such as the following:
- Silver Kit Builder Package: $150.63
- Gold Kit Builder Package: $260.71
- Platinum Kit Builder Package: $428.84
- Office Suite: $9.99 per month
- Office Suite Plus: $11.99 per month
- A $9.99 extra cost is applied to the Starter Kit and to the Builder packages for the handling and shipping. You may also have to pay customs duty and taxes.
Although these ‘Builder Packages’ are marketed as being ‘optional,’ the reality is that there isn’t much choice involved when it comes to purchasing one.
First, the products in the Builder Packages cost twice as much if purchased separately and chances are that you will purchase most of them anyway at some point.
Also, Builder Packages are only available for purchase during your enrolment, so it makes sense to buy them when they are at the lowest price.
Even if you don’t choose to pay for the replica website ($9.99 – $11.99 per month), you’re still looking at up to $700 just for a Starter Kit and Builder Package.
You also have to maintain a minimum of $250 in personal sales every 3 months in order to remain ‘active’ in the company and receive the commissions earned through your downline’s sales.
If you don’t hit this target through your sales, you will have to actually buy Norwex product yourself in order to achieve that target
This is what people in MLM companies like Norwex often end up doing, meaning that they are spending money just to remain ‘active’ in the company.
A Norway Consultant will rack up other expenses such as:
- Refreshments & other supplies for Home Parties
- Phone/internet bills
- Products for personal use (MLM distributors are encouraged to ‘be a product of the product’)
- Food, gas, travel and accommodation when travelling to Norwex events and conferences
- Costs of running your own blog or promotional channel such as YouTube
You then have to take into account the time spent working on your Norwex business and think about whether the money made justifies the hours spent.
Is Norwex a pyramid scheme?
As of right now, the FTC has not ruled Norwex to be a pyramid scheme, so technically speaking, it is a perfectly legal multi-level marketing company.
In order to see whether Norwex is a pyramid scheme in disguise, we must attempt to answer 3 questions.
1. Are most people unable to profit?
Norwex do not release an Income Disclosure Statement, which is very concerning.
Considering that 99.6% of people in MLM companies lose money, it is pretty safe to assume that most people within Norwex are not making a profit.
2. Do you have to ‘pay to play?’
Not only do you have to pay over $200 to join Norwex, but you will also end up spending hundreds of dollars on Builder Packages, products for personal use, website fees, products to hit your targets, party supplies and so on.
Most people in MLM companies end up spending a lot more money than they make in the company.
3. Is there a heavy focus on recruitment?
As we have seen, your revenue potential increases dramatically in Norwex the more you recruit.
Bonuses are awarded, commissions increase and you begin receiving passive income from your downline’s sales.
This shows that there is an incredibly heavy focus on recruitment, and not too much emphasis on selling dishcloths to people on social media.
While you can earn money by selling Norwex products, you would have to sell a LOT of $20 cloths to make a full time income (keeping 35% of each sale), and the only realistic way of making a living is by growing a large team underneath you.
It is also very interesting to note that there are 8 ranks within Norwex, and according to Jon Taylor, once there are more than 5 levels in a compensation plan, it becomes extremely difficult for new members to make a profit.
He states that when a compensation plan becomes more than 5 levels deep, it becomes ‘an exploitative money transfer scheme, or product-based pyramid scheme.’
Is Norwex a Pyramid Scheme? Final Thoughts
Most MLMs closely resemble pyramid schemes and Norwex is no different.
With a huge emphasis on recruitment, fees to join and pressure to constantly buy products (making the distributors the biggest customers), Norwex appears to be functioning very much like a pyramid scheme.
Although we don’t have access to the average earnings of Norwex Consultants, it is highly likely that most of them are not making a profit, and so the idea that this is a legitimate business opportunity is just not true.
If it wasn’t already clear, Not Your Boss Babe does not recommend joining Norwex!
That’s about it for now, but if you have any questions or comments, don’t forget to leave them in the comments section below.