Maybe a friend invited you to a Pampered Chef party and you want to know if Pampered Chef is an MLM. Does the compensation work? Or is Pampered Chef a pyramid scheme?
I went ahead and did the research for you, so you can make up your own mind about the Pampered Chef business model. In this review, I'll take a close look at the income opportunity, expenses, potential income, and compare it to other online business models.
Pampered Chef Review:
Min $99 Kit
Industry & Products:
What is Pampered Chef?
Founded by Doris Christopher in 1980, Pampered Chef has been around for quite awhile now. Pampered Chef is an MLM company in the cooking industry, such as; kitchenware, kitchen tools, appliances, recipes, and other products. The idea is to encourage stay at home moms to start making money from home by promoting cooking products.
Based on customer reviews, the Pampered Chef products seem good-enough, but some people have complained they're a bit pricey. The problem is almost everyone who hears about Pampered Chef are interested in the income opportunity, which claims you can be your own boss and find your purpose in life.
We'll cover the compensation plan later on in this Pampered Chef review.
Is Pampered Chef an MLM?
Pampered Chef is clearly an MLM (multi-level marketing company) which are often compared to pyramid schemes. The fact is pyramid schemes are illegal and based entirely on money going up to the person above you.
Multi-level marketing companies like Pampered Chef use compensation plans with multiple ways to earn, such as product commissions, new sign-ups, bonuses on downlines, and more.
However, I do not recommend multi level marketing companies for their business opportunities. Why? For reasons I outlined in this article regarding the difference between network marketing & affiliate marketing. Generally, it's very difficult to earn a profit with a multi-level marketing scheme, in fact, 99% of people fail to make any profit at all. Is Pampered Chef's opportunity the special case? I'll lay out the facts, and you can decide.
As of January, 2016 Pampered Chef has discontinued its business in the United Kingdom. It is unclear why they shut down.
Pampered Chef Compensation Plan:
If you're familiar with multi-level marketing companies, than the Pampered Chef compensation plan (also called Career Plan) won't surprise you.
To start, to become a Pampered Chef consultant, you'll need to buy one of three Starter Kits, which are listed below:
- Starter Kit - $99
- Deluxe Kit - $159
- Ultimate Kit - $259
After that, you can start working your way up their Career Plan, which is very similar to other multi-level marketing companies. There are many titles, requirements to maintain titles, bonuses, samples, commissions, and whatnot.
If you choose, you can promote Pampered Chef products for a commission. The commission rate varies depending on your monthly sales total, starting at 20% with a maximum of 25%.
Note: They advertise a maximum of 30% commissions, but that extra 5% is only available if you build a team and qualify for the extra rate. Generally, as a beginner, you'll probably stay in the 20 - 23% range.
Here's the monthly sales to commission rate structure:
- $1 - $849 - 20%
- $850 - $1,499 - 22%
- $1,500 - $3,499 - 23%
- $3,500 - $4,999 - 24%
- $5,000 and more - 25%
Overall, the commission rates aren't too bad, but there are better affiliate programs that offer higher rates.
Pampered Chef Bonuses:
The bonuses are what you would expect from an multi-level marketing company. As you progress with the Career Plan, you unlock more bonuses, but your monthly requirements increase too.
Bear in mind, the only bonus that you unlock on the first level is the Recruit Bonus. The second one is Team Overrides, but that requires a Senior Consultant account.
- Recruit Bonus ($30 flat-fee)
- Monthly Active Bonus (Bonus for every active member under you)
- Team Overrides (Personal Sales, Direct Recruits, Indirect Recruits, Team Bonus)
- Leadership Overrides (Commissions on generations under you)
Let's take a moment to talk about the titles (also known as Ranks or Levels) in the Career Plan.
There are over 11 titles in the Pampered Chef compensation plan, each with certain monthly requirements, and the majority of members occupy the first handful of positions.
- Consultant - (Requirement: Purchase of a Kit and $150 Personal Sales)
- Senior Consultant - (Requirement: 1 Active Team Line and $150 in Personal Sales)
- Team Leader - (Requirement: 2 Active-Lines, $740 in Personal Sales, and $2,500 in Team Sales)
- Director Promotion (5 Active-Lines, $750 Personal Sales, and $5,000 in Team Sales)
- And it goes on like that.
Most people are in the first three positions, it's not easy keeping a downline active. Now let's talk about the part your most interested in, making money from home.
Making Money with Pampered Chef:
Even if you don't fully understand the compensation plan, making money with Pampered Chef is rather straightforward, they provide most of the training material, and all you have to do is follow it.
Promoting the Opportunity:
The marketing method they recommend is hosting parties and using your samples to invite people to buy products or join the opportunity. You can earn commissions on sales as well as a flat-fee on new recruits.
The problem? Hosting parties is a really outdated marketing method, and there's a limit to the amount of people you can physically meet in person. What happens when you run out of people to invite? The truth is promoting Pampered Chef is not easy and the rewards for the work are not worth it.
Pampered Chef is trying to make the model more approachable, so they're now recommending Virtual Pampered Chef parties, which take place via online video chat rooms. The goal is the same; show off the products, the opportunity, and try to get people to join under you, but all virtual.
How Much Can You Earn with Pampered Chef?
Earning with Pampered Chef can be a little tricky because your income is tied to your performance, and you have to keep up with the monthly requirements too.
Income Disclosure Statement:
According to their income disclosure statement, not many people are succeeding with the Career Plan. For example, most of the members (61.3%) earn an average of $325 annually.
The next highest-bracket (28.9%) earns $2,342 annually. From there, the population of members drops to single digits, with 5.9% earning $6,919 and 2.9% earning $14,705.
2.9% of Members Earn Close to Minimum wage!
Remember, that's annual income! Interestingly enough, the annual income for a full-time minimum wage worker is $25,080 in the United States. So that's something to think about.
Overall, based on my research and ex-member discussions, it seems like most people are not making money with Pampered Chef, and are actually losing money in the compensation plan.
What About Sales Requirements?
The requirements are pretty steep, for example $150 monthly personal sales for the first level of the plan. That means you have to buy $150 worth of products for yourself, not for sale.
Who needs that much kitchenware every month? On top of that you also need to invest in marketing tools, hosting parties, buying samples and kits, and many other expenses.
Do I recommend Pampered Chef's opportunity? No. It's designed against you.
What Do I Recommend?
If you want to make money from home, then you can do it without actually having to host parties and use the marketing methods recommended by MLM companies.I recommend learning about affiliate marketing because you can promote almost anything and you don't need to spend much.
Want to learn more about how to build an affiliate marketing business? I recommend my number one affiliate training center, Wealthy Affiliate, it has everything that you need to start.
The best part is you can try a week completely free of charge. No need to buy a starter kit, host parties, or anything like that. In fact you don't have to talk to anyone!
Thanks for take the time to read this Pampered Chef review. Remember, Pampered Chef is an MLM, so it's best to avoid their compensation plan. If you like the products, you're free to buy them, but be careful about the business offer.