Why Rodan + Fields is killing the direct sales game

Rodan + Fields is a billion dollar skincare brand based in San Francisco and founded by two dermatologists and rockstar entrepreneurs that call themselves “wrinkle warriors”.

Dr. Kathy Fields and Dr. Katie Rodan are hardly strangers to the money-making game when it comes to skincare.

In fact, they’re basically dermatology celebrities, heroes to every awkward, acne-ridden pre-teen who was ever called “pizza face”.

So am I involved?

This video explains everything:

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Make sense? Either way, here’s the full review on Rodan + Fields.

Overview

Before they started the wildly successful skincare MLM Rodan + Fields back in 2002, they created Proactiv. Yep, that Proactiv…the acne-busting product you saw on television all the time, but also the product that actually worked. It became one of the best-selling informercial products of all time. [1]

But that was only their first billion dollar company. Their latest venture into MLM has been arguably just as successful – and it’s well on its way to hitting the big bill in revenue. [2]

Their net revenue in 2015 was $626.9 million, and their year-over-year growth was an astounding 90%. Most companies are happy just to hit double digits. They’re now considered the #2 skincare brand in the U.S., and the #1 fastest growing skincare brand in the U.S. Over 150,000 consultants are now repping their products. [3]

2015 was also the start of their global expansion plans, with their first international launch into Canada. It may seem a little late in the game to finally start opening up international operations after they’ve been in business for over a decade, but I like that they’re moving slowly and thoughtfully. They created a sustainable empire in the U.S. before branching out. Too many MLMs jump the gun and expand into 20 different countries in their first 5 years before they’ve even achieved any revenue to support their growth. [4]

A big reason for their success is their expertise. Lots of MLMs claim to be backed or started by “doctors”, but a little research into their history shows that these “doctors” aren’t fully licensed. These women are no quacks – not only are they legitimate dermatologists who trained at Stanford, but they still maintain their practice, spending two days a week treating patients. They are so good at what they do that they’ve got a waitlist that’s two years long. [5]

Products

Unlike so many successful MLMs that rely on distributor membership fees and autoship orders to create their revenue, Rodan + Fields clearly has a product that does well and supports most of their income.

These dermatologist-created skincare products come in a variety of different formats, ranging from products that help with wrinkles to sun damage to acne to irritation. A lot of their products are fragrance-free, and none include toxic chemicals. Much like their Proactiv products, the Rodan + Fields product lines tend to come in three-step processes, so you buy a package kit with all three steps.

Redefine

Redefine is their line of preventative anti-aging skincare products formulated to reduce the appearance of lines, pores, and loss of firmness.

Reverse

Reverse is their line of age reversal skincare products formulated to reduce brown spots, dullness, and discoloration.

Unblemish

Unblemish is their skincare regimen for acne treatment. It includes 4 steps – the wash, the toner, the treatment, and the lotion.

Soothe

Soothe is their skincare line designed for sensitive skin. It helps you cleanse your skin and maintain an even complexion, but it uses ingredients that are specifically developed for people with sensitive and irritated skin.

Overall, their three-step kits range from $190 to around $350, depending on how many products you want to include. That’s not cheap, especially since these kits tend to last around 60-days if you use them as directed.

The price may be a little steep for someone just looking to develop a skincare routine, but if it actually cures serious acne, I know a lot of people with very bad skin would be willing to pay that much.

Opportunity

It’s pretty cheap to join up as a consultant, and there are no inventory requirements, so it’s a pretty low-risk investment if joining Rodan + Fields is something that interests you.

You’ll need to purchase a business portfolio, which costs $45. You get your own consultant website, business tools, trainings, marketing materials, and product information. You can also purchase a business kit complete with lots of product and samples, but it’s not required. The lower tier kit costs $695, and the higher tier kit costs $995.

Rodan + Fields has a hybrid compensation plan that offers 25% commission on personal sales. That’s not a great commission rate, but you can also earn up to 15% on the sales of your personal recruits, as well as 5% commission on sales of your downline, up to five generations deep.

While it’s not the best compensation plan in the game, it’s decent, and you are selling a product from a trusted and established company. They’ve also got various fast start bonuses, car bonuses, and exotic trips.

Recap

Rodan + Fields have definitely made a name for themselves, and it doesn’t sound like they’re stopping anytime soon. If you want stability in MLM, this is about as close as you’ll get outside of direct sales legends like Mary Kay.

That being said, their compensation plan is nothing impressive. The earning power just isn’t there for most people, even if the products are great.

In 2015, the average consultant made only $3,182 in annual income according to their company disclosure statement. For newer consultants, that figure was as low as $790. In an entire year. A babysitter can make more money than that in a few weeks. [6]

It may be a respectable company, and the founders may be some of the hottest in the direct sales game right now, but that doesn’t mean you’re going to be hitting it big.

While I’m not saying it would be impossible to make any money with R+F, they’re still MLM and those have a nasty history of dropping off just a few years after their opportunity isn’t hot anymore.

It’s the sad truth that almost all MLM companies have to face.

But if you like automated ways to build passive income, there are better ways.

(and you can trash those old MLM habits, too)

via http://mlmcompanies.org/rodan-fields/

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