Chances are you’re here because you’ve been invited to a Pampered Chef party, where an enthusiastic representative of the company has told you how you too, can make money from hosting parties and cooking great food.
It sounds great – who wouldn’t want to make some extra cash by recommending products you love to your friends while having fun at the same time?
However, you’re hesitant.
Maybe you think that everything sounds too good to be true, or you’ve heard people saying things like ‘Pampered Chef is a pyramid scheme!’ and ‘Pampered Chef is a scam!’ and you want to figure out whether Pampered Chef is legit before diving in headfirst.
In this article, we are going to dive into the Pampered Chef MLM opportunity and find out what being a Pampered Chef Consultant is really like, and whether Pampered Chef is just another pyramid scheme in disguise.
Is Pampered Chef a Pyramid Scheme or a Legit Business Opportunity?
What is MLM?
In case you were wondering, Pampered Chef is an MLM company.
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 Nu Skin, doTERRA, Modere 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 Pampered Chef 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 Pampered Chef?
Pampered Chef was founded in 1980 in Chicago, Illinois, by Doris Christopher, a teacher-turned-stay-at-home-mom who decided to start doing ‘kitchen shows’ and selling kitchenware in her friends’ homes.
Pampered Chef sells every kind of cookware imaginable, and it specialises in gadgets, specifically things you never knew you needed, such as a salad chopper (scissors for cutting lettuce), an onion peeler (pretty self-explanatory), and a corn butterer (a plastic device that holds butter, so you can baste your corn on the cob).
There’s even a ‘Cut-N-Seal’ tool that will cut the crusts off your sandwiches in one fell swoop!
Pampered Chef is an MLM (or network marketing) company, with a worldwide presence that includes the UK, Germany and Mexico, but its primary headquarters is in Addison, Illinois.
It sells its products through the old-school ‘Party Plan’ model (because who doesn’t love being invited to a party where the host is going to try and sell you an apple wedger?), and in recent years, ‘virtual’ parties on social media have grown in popularity with their worldwide sales force of over 65,000 Consultants.
In 2002 Pampered Chef was purchased by Berkshire Hathaway (Warren Buffet’s company) and is now part of their family of companies.
Inside the Pampered Chef MLM Opportunity
How do Pampered Chef Consultants make money?
In order to find out how Pampered Chef Consultants make money, I took a look at their compensation plan (which they called a ‘Career Plan’).
Like most MLM compensation plans, the Pampered Chef compensation plan is pretty complicated, but to summarise, you make money in Pampered Chef by selling products and recruiting others into the company.
The Pampered Chef compensation plan has 5 commission rates based on monthly sales, but all consultants make between 20-25% commissions per sale, which is actually very low for multi-level marketing.
Pampered Chef also offers a few bonuses:
- Earn a 3% commission on every sale your downline makes
- Receive discounts on products
- Earn Points to exchange for free products
- The commissions can increase to 3% if you hit $15,000 in sales
Like most MLM companies, the only way to earn real money is by building a downline (recruiting people) and making money when they sell products and recruit more people.
It’s also worth nothing that in order to stay ‘active’ as a consultant and receive your commissions, you need to sell at least $150 worth of product every month.
How much do you make with Pampered Chef?
In order to see how much money Pampered Chef Consultants are making, it is necessary to see their Income Disclosure Statement.
An Income Disclosure Statement is a document that allows us to see exactly how many people are earning money with an MLM company, and how much of it they’re making.
However, unlike every other MLM I have analysed on this blog, Pampered Chef does not have an Income Disclosure Statement that is available to the public.
This is extremely telling.
If Pampered Chef was such a lucrative business opportunity, why wouldn’t they publish the earnings of their Consultants?
Why would they keep them a secret?
According to Jon M. Taylor, 99.6% of people in MLMs make no money or actually lose money, and one can only assume that Pampered Chef is one of the 99.6% of MLMs that fall into this category.
How much does it cost to join Pampered Chef and become a Pampered Chef Consultant?
To join Pampered Chef, you need to purchase a Start-Up kit ($25 at the time of writing), and you then have the option to add on a Launch Bundle, includes Pampered Chef products that you can use and recommend at your parties.
While these Launch Bundles aren’t mandatory, you will need to buy Pampered Chef products at some point (otherwise you won’t be able to host a party), and buying them as part of a Launch Bundle is significantly cheaper than getting them later down the line.
The Launch Bundles are as follows:
- Stoneware Launch Bundle – $25 ($260 value)
- Cast Iron Launch Bundle – $75 ($445 value)
- Air Fryer Launch Bundle – $175 ($725 value)
- Grill Launch Bundle – $225 ($900 value)
Let’s say you choose the cheapest bundle, bringing the total cost of joining Pampered Chef to $50.
You then have to maintain a monthly sales volume of $150 in order to receive any commissions.
This means that if you only manage to sell $100 worth of product one month, you will not receive any of your commissions for those sales, unless you somehow make up that $50.
Most Consultants will therefore purchase $50 worth of product themselves in order to qualify for commission.
You also need to have enough products to show to your guests at parties (the garlic cutter and measuring spoons from your $25 Launch Bundle aren’t going to cut it if you want to really show off the products), as well as all the food you’ll have to buy for your ‘kitchen shows,’ where you will be feeding everyone at the party.
In other words, while the actual sign-up fee is low, you’re going to have to spend big money on Pampered Chef kitchen products if you want to be in with a chance of being in the 0.4% of people who earn money in MLM.
Is Pampered Chef a pyramid scheme?
In order to see whether Pampered Chef is a pyramid scheme in disguise, we must first outline what a pyramid scheme is.
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 enroling 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 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, which simply isn’t true.
In order to see whether Pampered Chef is a pyramid scheme, we must attempt to answer 3 questions.
1. Are most people unable to profit?
Because Pampered Chef does not release an Income Disclosure Statement, we can’t definitively say that most people don’t profit in this business.
However, with 99.6% of people in multi-level marketing companies making no money or actually losing money, it’s not a stretch to say that Pampered Chef probably falls into that 99.6%.
2. Do you have to ‘pay to play?’
While the official sign-up fee is only $25, it is impossible to host Pampered Chef parties without having a wide range of products to show off to your guests.
You can’t exactly use a regular chopping board and say ‘Hey, I’m not using a Pampered Chef chopping board but if you’d like to buy one, you can,’ can you?
Pampered Chef Consultants must also hit a monthly sales quota in order to qualify for commissions, which encourages those not hitting their quotes to game the system and place orders themselves.
Like all MLMs, Pampered Chef’s entire business model is designed to force distributors to spend as much as possible, essentially making them the biggest customers.
3. Is there a heavy focus on recruitment?
Just like most MLM companies, Pampered Chef has an aggressive approach to recruiting, with bonuses and higher commissions only being paid to those who build a large downline.
However, it is important to note that Pampered Chef does not pay their members directly to recruit people.
Instead, it give ‘bonuses’ in the form of higher commission grades in exchange for and enroling others into the ‘opportunity.’
This is one of the sneaky ways that Pampered Chef avoids being classified as a pyramid scheme by the FTC.
Of course, you can make a small amount of money selling Pampered Chef products, but earning a 20% commission from a $16 spatula is not going to make you rich (unless you have a lot of friends who buy a lot of spatulas).
The only real way to make real money with Pampered Chef is by recruiting a lot of people and earning residual income through their sales and the sales of people under them.
Is Pampered Chef a Pyramid Scheme? Final Thoughts
Most MLMs closely resemble pyramid schemes and Pampered Chef is no different.
With a huge emphasis on recruitment, a ‘pay to play’ model and huge likelihood that barely anyone in the company is making money, Pampered Chef definitely appears to be functioning like a pyramid scheme.
If it wasn’t already clear, Not Your Boss Babe does not recommend joining Pampered Chef, or any other MLM!
An alternative to Pampered Chef
So then, how the hell do you make passive income online?!
Well, a much more viable alternative to network marketing is affiliate marketing.
Affiliate marketing is very similar to network marketing, but unlike multi-level marketing, you actually stand a chance at making a substantial amount of money from the comfort of your own home!
Just like multi-level marketing, affiliate marketing involves promoting products you love and making a commission every time you make a sale.
However, unlike MLM, there are no monthly quotas, no sign-up fees, no recruitment involved, and most importantly, the money that YOU earn will be going straight into your pocket, NOT trickling up the pyramid.
Affordable affiliate marketing courses
Below are a few recommendations of courses and other tools that may be useful if you want to build a blog, grow your social media account and make money with affiliate marketing.
The best bit is that if you use our discount code to sign up, you can save as much as 70%, meaning that you getting all of the material at a fraction of the price!
Here are the best affiliate marketing courses:
Affiliate Marketing Diploma – This Centre of Excellence course will teach you all you need to know to get started with affiliate marketing and build your own successful affiliate marketing business. The usual price is £147, but if you use code TRAVELLINGJEZEBEL466 you will get 70% off! (The code is the name of NYBB’s travel blog!)
Blogging Business Diploma Course – This is another Centre of Excellence course that will help you turn your blog into a business. This course is usually £127 but you can get 70% off using the code TRAVELLINGJEZEBEL466.
Travel Blog Prosperity – This is a fantastic selection of blogging courses that you pay for monthly access to, with new material being added all the time. You can get your first month for only $9 (usual price $59.29) when you use code JEZEBEL.
Social Media Marketing Diploma Course – Want to create a successful affiliate marketing business using only the power of social media? Turn your socials into money with this course. It is usually priced at £127 but you can get 70% off with code TRAVELLINGJEZEBEL466.
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