Is Avon a Pyramid Scheme?

Have you decided to check the oldest direct selling company in the world?
Do you want to know whether this would be a good opportunity for you?

I get it; being independent is a great thing for a lot of people.
And MLM could be a good start for a person who just quit the 9-5, or also for a student or an aspiring entrepreneur.

But many MLMs are also called scams, or pyramid schemes.
Is it true?

Is Avon a Pyramid Scheme?

In this review, we are going to take a look at Avon as a business opportunity. How much can you earn as an Avon distributor and whether this lifestyle will satisfy your entrepreneurial spirit?

Disclaimer
Please note, I am not a member or an affiliate for Avon. This review is based on research and information available online in the public domain.
Any recommendations and conclusions are only opinions and may not apply to all persons or situations.

Avon Overview

Name: Avon
Website: www.avon.com or www.avonworldwide.com
Price to Join:
$25
Recommended:
Not as a primary source of income

Avon Summary

Avon is a well-established Multi-Level Marketing Company. In fact, it is the oldest network marketing company in the world. 

The good thing about Avon is they don’t use aggressive marketing methods. Their products are good and they offer a wide selection of different items, for both women and men. 

From the business point of view, this is not as good an opportunity as it may look like. The earning potential is low so it is not good as a primary source of income. 

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What is Avon?

Avon is a direct selling company dealing with personal care products, beauty, and household products.Is Avon a Pyramid Scheme

The company was founded in 1886 which makes it the oldest network marketing company in the world. To be precise it was not a multi-level marketing company when it started.
Only in 2005, Avon switched from direct selling to the MLM.

Today it is the 5th largest beauty company and 2nd largest MLM company in the world.
Guess who is the 1st?  Yes, it is the Amway.

Avon has almost 6.5 million representatives all over the world, so it seems that they are doing pretty good. The annual sales in 2018 were $5.5 billion.

It sounds like a lot, but let’s compare it with 2013:
“Avon reported nearly $10 billion in worldwide revenue…”

Or let’s take a look at the screenshot that shows the Avon annual revenue from 2011 to 2019:

Is Avon a Pyramid Scheme

Is this a result of implementing the MLM tactics?
I believe we can only speculate, why there has been a decrease in the revenue.
We can also guess that the internet with the introduction of the smartphone is taking over and people can buy what they want just using their fingers and cell phone.

One more thing about Avon – Only recently (in January 2020) the Brazilian global personal care cosmetic group (based in Sao Paulo) acquired Avon.

Avon – Is it really an MLM?

Many people don’t even realize that Avon is an MLM. And a few years ago when my colleague Patricia used to bring the Avalon Catalog to the office I had no idea Is doTERRA a Scameither. To this day I don’t know whether she was a distributor or just a person showing us the latest catalog.

She left it there, other colleagues (mostly women) marked what they wanted. About 5 days later, Patricia came for the catalog and order the marked items. About a week later she brought the ordered items to our office.
Not a clue that this was an MLM.

This is the reason why so many people don’t realize that Avon is an MLM.
And I admit, this is a very laid-back way of how to promote and sell new products.

The reason is (probably), that Avon switched to the MLM only in 2005. The long history of just direct selling still plays a small role.

But the way Avon operates since 2005 starts to resemble the shady MLM tactics.

Founder and a little bit of History (really just a few lines I promise)Is Avon a Pyramid Scheme

Unlike the other MLM beauty giant, Mary Kay, Avon was founded by a man named David McConnell (and it was 77 years before the foundation of Mary Kay).
Mr. McConnell was a book salesman.
As he was selling the books door-to-door he realized that a lot of women preferred to smell good rather than reading a book.

So he switched the niche and in 1886  started a new business in Manhattan New York. The company was named California Perfume Co., as per his partner’s suggestion who lived in California.

Side Note:
1886 was the first year of Benz Patent-Motorwagen production – to give you a perspective on how long ago this was.

Mr. McConnell is not the only person who after switching the niche, became a wealthy person.
We know the story of Ray Kroc or William Wrigely Jr. Both guys were initially selling different products.

Back to the Avon.
Within 15 years (after the foundation) the company had about 10,000 representatives. These were still representing the company under the name California Perfume Co and this was until 1939.
In 1939 (just when WWII started) the company was renamed to Avon Products and Corporated.

A year after WWII ended, in 1946, Avon introduced the classic Ding Dong Campaign.
It looked like this:

And that brings us to the present time.

(Legal) Issues with the Avon

You may have heard that Avon Products. Inc. used to test products (and/or ingredients) on animals.

Good news:
Avon stopped all tests on animals in the world and that includes China.

Is Avon a Pyramid Scheme

Let’s stay in China for a second:
Avon apparently violated China’s law about the anti-pyramid scheme.

And there is more:
In the last 15 years (that is just around the time when Avon switched to a Multi-marketing model) Avon has been under investigation. The company is accused of corrupting officials of foreign governments with bribes.

Is the Avon Pyramid Scheme?

As much as people want to put all MLM and pyramid schemes in one group, I must raise a hand here and say, that Avon is not a pyramid scheme.

I know many MLM have been accused of being a pyramid scheme. A quite recent case is with a Young Living.
People need to be forced to recruit new members or just motivated with relatively high incentives to recruit.

Not having a consistent income from selling the products and having one thing in mind – to recruit, is already beyond the borderline of a pyramid scheme.

Here is a typical sign of a pyramid scheme:

Is Now Lifestyle a Scam

Avon does not have that (at least not at that large scale)

Who is Avon for?

Is Avon a Pyramid Scheme

I think it is safe to say that Avon is mostly a company for women who are interested in personal care, beauty, and this kind of stuff.

But are you thinking about becoming an Avon distributor?

You have to ask yourself – what is your plan. What is it that you want to achieve?

Is it just sharing the products with your friends?
Or do you plan to make a career?

In my opinion, the former will work way better than the latter.

I am sure these guys would disagree with me:

IMHO
…cheesy.

What is the Price to Join?

The start-up cost for most of the MLM is low, therefore so many people sign up for these companies. In other words, people signing up or buying a dream, since the vast majority of MLM distributors hardly make a living.
Nobody realizes that at the beginning (before signing up), though.Is Avon a Pyramid Scheme

Since Avon is available in more than 100 countries the start-up fee may differ, that is why check the office in your area.

In the US, the fee to start up is $25 and you pay for the starter kit.

There are also Kits available that are more expensive.

  • you can choose a $50 Advanced Starter Kit
  • or also $100 Premium Starter Kit

You get also free training and a free website, which is good.

Regarding the Kits, the more expensive you choose, the more samples (products) you get.

What Kind Of Products Avon Sells? (Very Briefly)

We are not gonna go through the list of the products here. The list is huge.

What is it they sell?
At least let’s check the categories:

  • Men
  • Wellness
  • Fashion
  • Fragrance
  • Jewelry
  • Bath and Body
  • Skincare
  • Makeup
  • etc.

The question is what is the price?
Many MLMs sell products that are expensive and one could get a comparable item in your local store or Amazon for lower prices.

But Avon is not an ordinary MLM and that applies to the price of the products as well.

They also have the “on-sale” section where you can purchase some items for a couple of bucks.

So having such a price policy, you as a potential distributor might have a higher chance to sell Avon products. Not mentioning the vast amount of different items (deodorants, toothpaste, shampoos, footwear, bug guards, glimmer sticks… ), so you can distribute a large spectrum of items.

You have probably seen already a physical Avon catalog. There is a new one every 2 weeks (I believe).

Oh and here – Avon just recently introduced a new catalog;
You can take a look:

What do People say About the Products?

Most people using Avon are satisfied with the products.

Is Avon a Pyramid Scheme

The company has been around for more than 130 years, so they must have the majority of product optimized. Sure for some people, these won’t work, but we are all different and have allergies to different kinds of chemicals.

Obviously, Avon products won’t satisfy 100% of the customers.

The truth is that there are no reported side effects.

Compensation Plan or Financial Rewards Plan

When it comes to the compensation plant, Avon is a company that allows the distributor to make some money just from selling the products.

You can earn 20% to 40% of a product you sell. The range is based on your position (your ranking within the company).

There are 4 positions (or titles) within the Avon raking system.

  • Promoter
  • Ambassador
  • Leader
  • Executive Leader

Within each position you have 3 or 4 sub positions as per the table:

Is Avon a Pyramid Scheme

It is obvious as you climb the structure you will earn more.
You can earn more, only if you start “creating your team”, in other words, start recruiting.

Pretty much MLM business as usual.

How Much Can You Make with Avon? – Income Disclosure

Usually, large companies including the MLM have to have the income disclosure available. Unfortunately, Avon does not have one and one can only wonder why is it so.

After a bit more digging I was able to found two disclosures from 2008 and from 2009.
Pretty old, right?

Well, it is – but remember that these were times when Avon still had about $10 billion in revenues?
So what I am about to show is an “ideal case” and it is safe to say that current numbers will be lower.

So let me share with you a screenshot from 2008:

Is Avon a Pyramid Scheme

And here only a summary from 2009.

Is Avon a Pyramid Scheme

Now, these numbers represent higher levels and not the distributors at the bottom of the (pyramid) structure.
Did I use the term “pyramid” on purpose?

Maybe the more accurate term would be a triangle.

Regardless of what you call it, we must admit that people within Avon make more than representatives of other MLM (or at least they did 10 years ago).

Like with any other MLM the chance that you will be making a couple of thousands within a few months is low.
And that applies to people who are with Avon for a number of years.

You are obliged to purchase a certain amount of products each and every month if you want to stay in the game.
If you struggle with sales, then it is obvious that you may even lose money.

And there are other reasons why people lose money.

Why People Lose Money?

Direct selling is hard and not many people deal well with rejection. And we all know that this is already an obsolete way of selling stuff. Besides, there are only so many persons you can visit per day.

Throwing parties and leaving catalogs on places where people know who you are is not necessarily a guaranteed way to succeed.
How many people do you know? How many people do you deal with, per day?Is Avon a Pyramid Scheme

That is why Avon provided you with a website so you can reach a bigger audience, right?

Sure you have the website, which is good. You are also trained on how to promote Avon products.

There are a few ways.

  1. Create a YouTube channel and have people subscribe and fill the form
  2. Promote your website on social media.
    a) organic – takes time and skills
    b) paid – needs money
  3. Organic traffic – you want to have your website SEO optimized and that requires the application of proper knowledge.

How many distributors are there? More than 6 mil right?

Every one of them has a similar website “talking” about the same thing. What are the odds that your website will outrank the rest?

I dare to say pretty small.

Where do I go with this?
No matter what we do with the Avon website, it turns out, this is not a sustainable business that creates a consistent income

The only thing that left  – is to start recruiting.
Are you OK with that?

You know you jeopardize the relationship with your friend and family.
Most people would not do that.

Solution?

Choose a niche that is not so saturated (something like, gaming monitors, best coffee machines, how to lose weight after pregnancy, the best mattress for heavy people…- although I would rephrase the “heavy”)
Build your own website around this niche.

We have touched the internet thing already – so if that is done right and you know what to do, it possible to make 4 digits per month within 12-14 months.

I am not saying it is easy. But Affiliate marketing is a much more sustainable business model than any MLM.
And here is a comparison of both models, MLM vs. Affiliate Marketing.

A Better Way to Generate the Revenue

Making money as an MLM distributor is not that lucrative (and for many it never was).

Some MLMs are switching more in the online world, and you can also be provided with a website, as Avon distributors are.
Having a website is just the beginning.

How do you want to get people to your website?
In other words, do you know how to get traffic?

There are basically 2 ways:

  1. Free or Organic Traffic – requires some time and certain knowledge (you would have to acquire)
  2. Paid Traffic – It can be expensive and it is not recommended for beginners (Ads are not set properly which results in irrelevant traffic and losing money)

Besides, to have a website similar (or almost the same) as other  6 million distributors have, mean you will have a hard time ranking Google and other search engines.
(You do realize that people barely go to the 2nd page of Google).

Is Avon a Pyramid Scheme

I am not saying that Avon is a bad company, but it does not have training on how to rank well in search engines.
Such training is usually expensive and even if you do everything SEO-wise, you still have 6 million other distributors in the same niche.

My concern is that Avon is probably not the best business opportunity for you.

So what is my suggestion?

I have already touched that and here is what you can do:

  • Learn how to create a website (which is unique)
  • Learn how to get free traffic (as I mentioned earlier)
  • Finally, learn how to monetize the traffic

It can be difficult to find proper information on YouTube. I mean there is certainly valuable information out there, but the disadvantage is that they are only partial.

Or, You can pay for a course of $997 and learn something.
But such a course alone won’t give you a specific strategy.

You want something more:

  • Powerful Hosting Service
  • Website builder where you can create a website within seconds, as per the video below:

  • Training that will teach you step-by-step how to create content so it will be visible in search results
  • Helpful community and technical support (something will always go wrong, especially when you start)
  • Video training (hundreds of them) to watch professional marketers over the shoulder.

Would you be interested to check such a platform that has everything above?

It is possible to earn 4 figures per month within a year – but it depends on the effort and also on the niche you choose. It can take from 8 to 14 months.
But Once you learn what it takes to make money online, the sky is the limit.
People easily make 10K+ a month.

Is Avon a Pyramid Scheme

You can check the review of the platform I talk about and I am sure your question is how much does it cost?

Well, it is about $50 per month (or $495 per year).
Good thing is that you can test out for free – and you don’t even need a credit card.

Use this link below to sign up, and test it out.

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I will see you on other sites – and I can guide you through the platform.

What I like about Avon

  • Well established company – the oldest direct-selling company in the world
  • Operates in more than 100 countries
  • Easy to join ($25 sign up fee)

What I don’t like about Avon

  • Low Income Potential (unless you recruit others and “build” your team)
  • Selling Online requires additional SEO knowledge and a unique website (due to the SEO optimization) Imagine having the same website as another million “colleagues”
  • Controversies (Bribery, PETA…)

Some Thoughts at the End

Avon is not an aggressive MLM company and that is what I like about it. That is why millions of people thorough the world sell Avon cosmetics and other products.

Most people are not in the recruiting thing and that is why Avon is good if you want to make some pocket money. It does not require a lot of time either.
You must bear in mind that being the Avon distributor does not make you rich and as a newbie, you will have a hard time making a living.

If you like the idea of “sell without selling” I can recommend you affiliate marketing.
You provide your readers with value and some of them will click on the link on your website and you get a commission.

If you have a lot of traffic, you will get a lot of commissions.
Some people make 4 digits within 8 months, for others, it takes longer but eventually, if you are persistent you can’t fail in the long run.

Avon, being an MLM has become more and more similar to any other MLM and it loses the spirit it used to have in the last century. You would be just one out of millions of representatives working hard and trying to establish your position within the army of other Avon soldiers.

Is that what you wanna do?

If you love the product and you like meeting new people, and you are not relying on the income from Avon, I think it may be a good hobby for you.
As a business model, I don’t recommend going on this path.

Let me know if you have any questions or concerns.
Please the comment section below and I will be happy to give you feedback.

How to Get Started with Affiliate Marketing Business?

I have been a member of Wealthy Affiliate since late 2017 without prior marketing experience.
Beginning of 2018 I have learned how to build a website that drives traffic and makes sales.

Since the summer of 2019, I am a full-time internet marketer and I work from anywhere I want, whenever I want.
Training within Wealthy Affiliate teaches how to generate a consistent income in the long run. 

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7 thoughts on “Is Avon a Pyramid Scheme?”

  1. Yes of course, it is a pyramid scheme and the whole answer is here in the content of this post. I love to call MLM businesses a kind of pyramid scheme that has a product to sell, that’s the only difference between pyramid scheme and an actual networking business. I’m happy you gave this valuable information. It’s really good stuff.

    Reply
    • Thanks a lot for your thoughts. 

      The structure is definitely a pyramid structure but what I like about Avon is that they don’t use aggressive marketing as the majority of MLM companies do. 

      Despite that, Avon is not a business model that I would recommend. 
      Cheers 🙂
      Mike 

      Reply
  2. Thank you Mike, for this information on Avon as a business. I have been using Avon products for almost 20 years. My daughters joined the business,  but like you mentioned, they got the magazines, had to buy them then went round distributing them. Got few orders and at the end of the day my daughter said she was running at a lose. Not a good way to make money.         

    Reply
    • Thanks, Juliet for sharing your experience with Avon. 

      Yes, sometimes this could be a good way on how to make some bucks on the side, especially for students, but unfortunately, it does not work all the time. 

      Hopefully, your daughter will find some better ways, and if she is passionate about the Avon products, I am sure she will find something in that niche, but for other companies, or maybe online for her self as an affiliate marketer. 
      (Sorry for the shameless plug:) )

      Have a good one
      Mike 

      Reply
    • Juliet, I am incredibly impressed by your daughter’s prompt realization that she was operating at a loss. If only more people involved in MLMs could swallow their pride and recognize they aren’t getting what they bargained for! I have no doubt your daughters will discover they can be remarkably successful outside of the MLM world, and probably in ways they haven’t even imagined.

      Reply
  3. 1886 is a long time. I knew Avon for many but I didnt know that it is the oldest of the MLM’s. Avon is far from a pyramid scheme or a scam, it has a credible track record .It sells good quality products. and yes I have been one of those who on several occasions had to order products by marking them from the Avon catalogue 

    Reply
    • Yes, Avon is the oldest MLM company i the world. 

      The way they do marketing is not aggressive at all which makes it (in my opinion) one of the best Multi-level-marketing companies in the world. 

      Would I join it as an independent business owner? 
      I guess not – but for those who love the products, this can really be a good source of secondary income.

      Thank you for your comment
      Mike 

      Reply

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