Is Tupperware a Pyramid Scheme?
Your mother and grandmother’s Tupperware… a pyramid scheme??? It cannot be true can it? I got the question recently is Tupperware a pyramid scheme and was pretty surprised by it. I had never associated this company with anything even relatively close to a pyramid scheme. But low and behold, I did a little research, looked into this company and found that they do have many resemblances of such.
So what I’m going to be doing in this short post is reviewing the business opportunity that Tupperware offers. I’ll be going over the compensation plan and be discussing the “pyramid scheme” part of it all. I am in no way associated with this company so this review is as unbiased as you will find. I’ll be telling you what they don’t want you to hear.
Tupperware has been around for ages, since 1946 to be exact. It all started when chemist Earl Tupper created lightweight plastic containers that were break-resistant.
At first Tupper tried selling the Tupperware in stores but it didn’t do well. People didn’t know what was so great about it. Tupper realized that people needed demonstrations that show why Tupperware was better and why they need to buy it.
With that in mind, the direct sales business model came into place. What this means is that anyone can sign up as a Tupperware consultant and go around selling their products and earning commissions. Sales are made online, from hosting home “parties”, and a variety of ways. All the sales come from the independent sales force that literally anyone can sign up to become a part of.
In addition to selling Tupperware and making commissions from the products consultants sell directly, they can also make money by recruiting in other consultants beneath them. This is the “pyramid scheme” part of it all.
So Is This a Pyramid Scheme?
Just because consultants can make money off of recruitment doesn’t necessarily mean this is a pyramid scheme. Legitimate multi-level marketing business models also use this practice as a way to grow business.
The problem is that there is a blurry line between what is actually an illegal pyramid scheme and what is a legitimate mlm business.
Illegal pyramid schemes focus more on recruitment. They still might have products to sell and much of their revenue might come from product sales, but often you will find that the product sales come from new recruits being forced to purchase products. Legitimate mlm’s will put an adequate amount of focus on product sales to the general public.
So what you have to look at here is the compensation plan that Tupperware has in place. Where is the money coming from? Is it coming from recruitment or is it coming from product sales to the general public? Of course there is going to be a mix of both, but by looking at the compensation plan you can see what the focus is.
For more info on what to look for in a mlm opportunity you can read this article by the FTC that is pretty good.
The Compensation Plan
There are 2 ways that you can make money as a Tupperware consultant. You can sell the products yourself and make retail commissions and you can recruit other consultants in beneath you and earn money off of them.
These are the sales you directly make. They could come from people buying from you at a party you are hosting or they could come from people buying from your personalized Tupperware website.
You will earn 25% commissions on all direct sales when you start out but you have the potential to make up to 35% as you move up the ranks within the business.
You will also get a 5% bonus on personal sales if you sell over $1,500 worth of products for that month and a 10% bonus if you sell over $4,000 worth of products that month.
This is where the mlm structure comes into play. You can earn commissions from the products that recruits beneath you sell. This is where the real money is at. You need to build up your downline and make money off of others in order to really make good money here.
There really isn’t much information at all on the mlm structure of Tupperware, but after doing a lot of digging around I was able to find out this…
The amount of commissions you will make from your downline depends on your rank. Consultants at the Management levels will earn from 4-8% and consultants at the Director Levels will earn from 6-12%. And these commissions are all based on the product sales of those recruited in beneath you.
I wasn’t able to find out how many levels down you are able to earn commissions from, but from the sounds of it there are at least several levels beneath you that the money will trickle up.
Although there definitely is a lot of incentive given to consultants to go out and recruit more consultants and make money off of them, I still wouldn’t consider this a pyramid scheme.
Tupperware does push consultants to make product sales to the general public without recruiting people. They offer the commission bonuses if you sell a certain value of products per month and this pushes consultants to make product sales.
So although consultants can make money by recruiting other consultants and this often does lead to deceptive recruitment tactics, this just isn’t a pyramid scheme. Just because you can make money this way doesn’t add up to it being one.
And I guess the FTC agrees with this opinion because this company has been around forever and they are still in business.
One thing I would like to know however is if consultants make money from the initial recruitment. Because when you join in you have to purchase a business kit (ranging from $79.99-$119.99). And I would like to know if consultants make money from these kits that are sold. Because if they do this would increase the incentive to recruit and make this whole thing lean a little more toward the pyramid side of things.
Final Thoughts & What I Recommend
Tupperware is definitely a legitimate company. Its not a scam and there isn’t enough evidence to say it is a pyramid scheme. But that doesn’t mean its a good opportunity. I would actually not recommend this business opportunity to many people.
Its just too difficult for the average person to make good money as a consultant and the statistics prove this.
The official income disclosure for 2015 proves this exactly and I have a screenshot of it below. This is the income disclosure for Canadian consultants by the way, but that doesn’t matter much because the business structure is the same everywhere and its just as hard no matter where you live.
As you can see below over 97% of ALL active consultants averaged way less than what is “livable”. The dollar amount on the right is the average income for August + September.
Only the tippy top of all consultants make good money. That is just the way it is with mlm’s like this. Those that are at the top of the people that have recruited like crazy and have massive downlines that they are making money off of.
Most people just aren’t going to make it. It seems that the only people that do really good in mlm’s are those that have that natural salesperson type of personality and can sell anyone on anything.
This is a quality that most people just don’t have and the statistics prove it. Personally, I don’t have anything even close to the personality it takes to make it here. I just wouldn’t be any good at recruiting. If you are like me then I would recommend you take a peek at how I make money online.
I make a living working for myself online, which I think is a pretty awesome job. You can learn more about it by clicking the link below that will take you to a post I wrote.
In the post I wrote I explain what it is that I do, how it all works, and how others can do the same.
Comments, questions, concerns??? Leave them below in the comment section and I’ll get back to you soon 🙂