Is SeneGence a pyramid scheme? Technically it’s not because the FTC hasn’t deemed it to be one. Yet. But once you go through this article, you are going to be shown similarities between SeneGence and a pyramid scheme. A lot of similarities.
I’m also going to show you some people who quit SeneGence (and they usually end up at another multi-level marketing company thinking the next one will be better…) and other horror stories from distributors and corporate employees alike.
It’s going to be fun, so let’s get into it!
What is SeneGence?
SeneGence is a makeup, skincare, and beauty multi-level marketing (MLM) company started in 1995 by Joni Rogers-Kante. Joni had some experience in the direct selling business prior to starting SeneGence.
According to this article from Direct Selling News:
“An early positive experience in the direct sales channel laid the groundwork for her vision that would become SeneGence. She joined Mary Kay years ago, and although she says she did “OK” as a consultant and earned the famous pink Cadillac, it was the business model itself and company founder Mary Kay Ash that impressed her.”
SeneGence has a wide range of products available, including skincare, body scrubs, shampoos and conditioners, and their famous LipSense, which is a long-lasting lip product.
According to the website, they don’t test on animals or use animal bi-products, most of their products are GMO and gluten-free, and all the products are made in the USA.
Here are a few of the products available along with their prices to compare with non-MLM products.
- Daytime moisturizer (1.66 oz) = $50
- Dark circle under eye treatment (0.51 oz) = $50
- Shaving cream for men (5 oz) = $29
- Makeup remover wipes (pack of 30) = $20
- LipSense (0.25 oz) = $25
- Hairspray (6 oz) = $30
Maybe I’m just frugal (I’m not), but $30 for hair spray?! These prices seem a little outrageous, but that’s how it goes with MLMs. That compensation plan has to be paid somehow.
How Much Does it Cost to Join SeneGence?
In order to have the privilege of selling SenGence products, you need to pay $55. In addition, you can also add on a Starter Pack.
Adding a Starter Pack is optional, but you probably would want to do this so you can see what the products are like for yourself and also have inventory to show others.
The Starter Pack options include:
- Lips Pack = $75
- Glamour Demo Pack = $295
- Qualified Distributor Pack = $345
- Significant SeneSeller Pack = $795
- Fast Start Pack = $1195
None of these prices includes tax and shipping. You also may have other expenses that pop up such as:
- Travel
- Home party expenses like food and drinks
- Brochures and other marketing materials
- Business cards
- Payment to get a table at events such as craft fairs
In order to be qualified to earn full commissions and bonuses you need two things:
- A 300 PV (personal volume) or more order (that’s why there’s a pack called “Qualified Distributor”, which is the image shown above)
- A100 PV monthly order (in SeneGence, 100 PV would be $200)
Besides that, you also qualify for more earnings the more you spend. But let’s talk about that in the next section.
SeneGence Compensation Plan
The SeneGence compensation plan is confusing just like they all are. You can see it on the SeneGence website here. I am going to link you to BehindMLM who does a great job of breaking down compensation plans. That’s here.
Here’s an interesting image from the plan:
Not only is this image strangely pyramid-shaped, but it straight up says the more you sponsor (recruit), the more you earn. Which is basically describing a pyramid scheme.
But, OK.
There are two paths for earning when you build a team:
- Downline Bonus
- Group Sales Volume Bonus
To qualify for the downline bonus, you need to have a monthly PV order of 100. To qualify for Group Sales Volume bonus, you have to order 300 PV for the month and you need to have 5 people in a line who also order 300 PV in a month.
From BehindMLM, this is the max that you can earn in Group Sales Volume Bonus commissions (if I understand it correctly):
“purchase 300 PV or more and have a downline who have each recruited five affiliates who have purchased 300 PV or more each down five levels of recruitment, and earn 10% on level 1, 6% on level 2, 4% on level 3, 3% on level 4 and 2% on level 5”
Here’s an image to show this. It’s clear as mud:
Here’s someone who does a great job of breaking this all down for us:
You can also earn retail commissions if you don’t want to build a team, but we all know there’s no money in that.
SeneGence Income Disclosure
SeneGence doesn’t have an income disclosure that I could find. Not every MLM provides that data, and it isn’t legally necessary in the United States. Some companies do provide them, and if you look at the ones provided, you would notice a pattern.
Just about no one makes money in an MLM. Any MLM. I don’t care how good or different one says they are.
This article posted on the FTC website shows that over 99% of people in an MLM lose money.
They don’t even make $1 – they LOSE money.
That report says that gambling is a better bet!
So honestly, it’s OK that SeneGence doesn’t have an income disclosure. I guarantee it would show us the same things. And I think this company may even be worse due to the high costs of qualifying. (Not that the income disclosure would show that. They don’t take any expenses into consideration.)
While Instagram posts try to convince you that you’ll retire early with SeneGence (or any MLM), the reality is that this is only true for the very tippy-top of the pyramid.
SeneGence Complaints and Positive Reviews
Let’s take a look at some places where people talk about SeneGence online and see if we can get more information from distributors and customers to find out if SeneGence is worth joining.
SeneGence BBB Rating
SeneGence has an A+ rating with the BBB and gets pretty good reviews.
The positive reviews said things like:
- I love the products and they really do work.
- I am a customer (not a distributor) and I have been using LipSense for a year. Excellent quality.
- Excellent customer service.
- I love this company so much. My skin looks years younger.
Here’s a very positive review from a distributor of the company:
Some of the SeneGence complaints said things like:
- I had a bad reaction to LipSense but couldn’t get a refund.
- I ordered the mascara and it was completely empty, but the company wants me to pay a 10% restocking fee and shipping to send it back.
- Horrible product and it burned.
- The only thing going for this company is the lipstick. Every other product I tried was horrible.
I read a few complaints about the return policy and how it’s not great at all. Here’s someone who (understandably) has a complaint about it:
I also wanted to capture some frustration from a distributor, and I think Tiffany has some valid concerns:
Truth in Advertising
I love taking a look at Truth in Advertising to see what kind of violations these MLMs have had and SeneGence has had quite a few unsubstantiated income claims.
To be fair, a lot of them have been removed, and you can see the entire list here at the TIN.org website.
Here is a Facebook post that TIN found, and it shows a woman talking about how SeneGence has changed her life and now she’s earned a cruise and a trip to Disney World. She says it’s the best $55 she’s ever spent.
For any type of posts like this, you need to have an income disclosure or some way to back it up. But remember, SeneGence doesn’t have an income disclosure.
I’d also like to point out once again that $55 is how much it is just to have the privilege of selling SeneGence. Then you need to buy all that inventory to be qualified. So she has spent much more than $55. Did she make it back by selling her stock to customers? Maybe.
Maybe not. We don’t know.
Why I Quit SeneGence…
There a lot of stories online about distributors who have decided to quit SeneGence. I’m going to compile some of those stories here from blogs, the anti-MLM subreddit, and YouTube.
Here’s a YouTuber who left SeneGence to join Farmasi. (This happens a lot. I think people think that this next company will be the ONE But they’re really all the same.)
Here’s a YouTuber with a lot of influence (this video has over 180k views and she has tons of comments, which I recommend reading through for more experiences.)
She talks about:
- How lots of people wanted to return their products
- Customer service was extremely hard to get a hold of
- Products weren’t easy to exchange because the right color wasn’t always available and then she had to hold that inventory herself
- You had to order $1400 worth of product to get a 50% discount
- SeneGence was charging extra tax on top of the shipping and handling and regular tax
- There were terrible out of stock issues (I saw tons of complaints about this)
Here’s a couple of sad comments:
Here’s another commenter from this video with the same story of money lost:
Here’s a story of someone on Reddit who was in SeneGence and she mentions that she:
- lost a lot of money
- spent too much time away from her kids working the business just trying to break even
- was told she had to work harder
- was alienating people by messaging them about her “business opportunity”
Here’s another story from Reddit from someone who started in Younique (oh no!) and then moved to SeneGence. She mentions this interesting tidbit:
“Long story short I maxed out my credit card because SeneGence pushes “front-loading” which really means buying TONS of stock upfront to get the maximum discount (Keep in mind this means buying over $600 worth of makeup every month to get a 50% discount, so you spend $600 and get $1200 worth of product you can sell). If you just bought one or two things you were ridiculed by your uplines because at that point you were only getting a 20% discount… ‘why not place a bigger order for a bigger discount?! You’re just wasting money!'”
Finally, I thought this Reddit post would be fun to include as it’s someone who worked for SeneGence corporate. This is certainly eye-opening!
Related Articles:
- Selling Essential Oils Online [MLM vs Affiliate Marketing]
- MLM vs Affiliate Marketing – Why Affiliate Marketing is 100x Better
- Why I Quit Young Living [Any Why I’m Now Anti-MLM]
Is SeneGence a Scam or a Pyramid Scheme?
Technically, SeneGence is not a scam or a pyramid scheme. That’s really up to the FTC to determine. They have quite a few things in common with product-based pyramid schemes though. We’ll get to that in a minute.
Pros
- You can get started for just $55 (this is a yearly fee from what I’ve read)
- People do like the products, for the most part, especially LipSense
Cons
- You are very, very likely to lose money in SeneGence
- You have to buy about $1400 in products in order to get a 50% discount, which would give you the highest margin on sales
- You have to have a 300 PV order to qualify for commissions
- You have to have a 100 PV monthly order in order to stay qualified
- In order to qualify for more levels of sales, you have to have higher monthly PV amounts
- There have been numerous issues with products being out of stock
- The prices of the products are very high
- You have to build a team in order to get “real” income (see the video below), which basically puts this right on the border of being a pyramid scheme
This YouTuber is honest and says about SeneGence,
“If you have big goals in this business, you can’t just be selling product and making commission off that. You can do that, but where the real income comes is in building your team.”
Here’s an article from the FTC website about the difference between MLM companies and pyramid schemes. The key points in this article are:
- Pyramid schemes can look like legit business opportunities
- Promoters often pitch you on how much money you can earn
- You’ll be encouraged or required to buy a certain amount of product at regular intervals
“Eventually, most distributors find that no matter how hard they work, they can’t sell enough inventory or recruit enough people to make money. They also can’t keep up with the required fees or the inventory purchases they need to make to qualify for rewards, and they can’t earn enough money to cover their expenses. In the end, most people run out of money, have to quit, and lose everything they invested.”
I think SeneGence (as well as most MLMs) get away with not being called a pyramid scheme for a few reasons:
- The FTC hasn’t had time to get to them yet
- They are technically selling products to customers because distributors are customers
- They have a checkbox on their site where you have to say you’ve sold or used 70% of your inventory in order to buy more (but does anyone really check that?)
One of the “best” arguments I often hear with people in MLMs is that “my company isn’t a pyramid scheme because those are illegal.” I’m sure that’s also what distributors of AdvoCare, Neora and Success By Health said too.
An Alternative to SeneGence
I always love to recommend affiliate marketing as an alternative to joining an MLM. It’s similar to an MLM in the fact that you can promote products that you recommend for a commission. But it’s different because:
- You don’t need to buy a starter kit
- You don’t need to buy inventory
- You don’t need to build a downline
- You don’t have monthly purchase requirements
- You don’t have to pay to sell products
- You can promote any products you like, you’re not forced into one company or one product
- You don’t need to be recruited
- You can make a great income and you can make passive income
The only thing you need to invest in with affiliate marketing is hosting and a domain name. I also recommend training because it’ll make your life easier, but it’s not a necessity. It still takes consistent work to build up an affiliate income, but your much more likely to succeed.
(You’re almost guaranteed to fail in an MLM. More than 99% of people end up losing money. Source.)
If you’re interested in learning more about it, I have a free guide for beginners here.
Conclusion
Is SeneGence a pyramid scheme? As mentioned, it’s not technically a pyramid scheme and that’s only because the FTC hasn’t said that it’s one. There are actually quite a few similarities between SeneGence and a pyramid scheme, and that’s information I pulled directly from the FTC’s website.
To me, just about all MLM companies are the same. In order to make a decent income, you have to recruit (making it similar to a pyramid scheme). But even then, only a tiny percent of people end up making a decent living. And they only make it because most people below them are losing money.
If you think about it, it’s pretty sad. And that’s why I don’t ever recommend joining one.
Other related content:
- Best Programs to Make Money Online
- Learn How to Make a Site That Pays You Over and Over Again
- How To: Affiliate Marketing for Beginners (FREE Guide)
- Ultimate Wealthy Affiliate Review