Is Monat a pyramid scheme? Here are my thoughts!

Unless you’ve been living under a rock, there’s a good chance you’ve come across Monat on social media. 

It is a multi-level marketing company that sells hair care and beauty products.

is monat a pyramid scheme

While some people swear by Monat’s products and business model, others have raised concerns about the company’s practices and whether it operates as a pyramid scheme.

With so much conflicting information out there, it can be difficult to know what to believe.

So, I’ve combed through tons of Monat reviews to understand its business model. 

And I’ll answer that very question in this post.

Let’s get started. 

What is Monat Anyway? 

Luis and Rayner Urdaneta created Monat in 2014 as a privately held corporation.

The business began by selling hair care products, which quickly acquired traction on social media. 

This is because Monat’s sales model is multi-level marketing.

As it’s mainly reliant on market partners promoting the brand and its products on various social media platforms.

So what are some of the popular products of Monat?

What Are The Monat Products? 

Monat sells a variety of hair, face, and wellness products, as well as supplements.

Its hair care line is by far it’s most extensive.

A bottle of shampoo costs $40 on average, and a bottle of conditioner appears to cost around $47.

When compared to other similar brands, it may appear to be a bit pricey.

Interesting part is that the company has been under scrutiny in recent years due to a number of legal challenges.

Why Is Monat Facing Multiple Lawsuits?

lawsuit on Monat

Monat has been facing a number of lawsuits in recent years over allegations that its products have caused hair loss, scalp irritation, and other adverse reactions.

These lawsuits allege that Monat’s products contain harsh chemicals and that the company has made false and misleading claims about their safety and effectiveness.

In addition to these product liability lawsuits, Monat has also faced legal action over its multi-level marketing (MLM) business model.

Despite these challenges, Monat continues to operate and has a loyal following of customers and distributors who swear by its products and business opportunities.

Let’s find out if it is really a pyramid scheme.

So Is Monat A Pyramid Scheme? 

Monat shares some features with pyramid schemes.

However, it is better classified as a “multi-level marketing” company.

That’s technically a legal business practice because it involves the selling of products through a network of independent distributors or representatives.

MLM companies often have a multi-level compensation structure, where distributors can earn commissions not only from their own sales but also from the sales of the distributors they recruit.

Distributors are typically encouraged to build their own sales teams and earn commissions based on the sales volume generated by their team.

The focus in MLM is on product sales, and legitimate MLM companies derive a significant portion of their revenue from these sales.

Melaleuca is another such company that has long faced similar allegations.

Here is my deep dive into how MLM companies (like Melaleuca) operate.

And if you’d prefer to read, here are my thoughts on Melaleuca and the MLM business model, in general.

With that said, lets find out how does Monat help people make money…

How Do People Make Money With Monat?

Monat allows you to generate money in two ways:

Selling their products and

Recruiting people to join the company.

Of course, as with almost all multi-level marketing organizations, recruiting team members is far more profitable.

How Much You Can Earn By Joining Monat? 

Since we’re on the subject of money, I’ll give you some hard figures.

The great majority of people who sign up for multi-level marketing companies make NO money.

The same is the case with Monat.

In case you get lucky and make sales with Monat, here is a breakdown for you.

Monat’s market partners get a 30% commission on each product they sell.

If they sell to a “VIP,” they get a 15% commission.

This makes sense considering that VIPs get a 15% discount on their purchases.

You have to pay a $19.99 registration fee, have two flex ship orders, and have an enrollment order to become a VIP.

To put it another way, you should be really into some Monat lines and believe in their products. 

Market partners receive a $60 bonus for signing up four VIPs in a calendar month.

It’s designed to compensate for the 15% decrease in commission.

Market partners, like many multi-level marketing organizations, can increase their commission rate by selling more products. 

To earn a 10% incentive and a 25% commission on your VIPs, you’ll need to hustle a lot.

You’ll need to make 3500 PV every month, to be exact.

If one PV equals one dollar, you’d need to sell $3500 in merchandise per month.

That’s a lot of convincing you have to do to become VIPs to make $875 per month.

Furthermore, it would help if you had at least 200PV every month to remain active as a market partner.

So if you want to sell Monat, you must either buy or sell at least 200 PV per month.

Affiliate marketing is another concept and is similar to muti-level marketing in the sense that both have the potential for individuals to earn commissions based on sales or referrals.

I am into affiliate marketing for a handful of years now, and here are some of their secrets that I want you to know.

Ranking Up By Recruiting People To Monat 

It’s more profitable to recruit individuals to join Monat as a market partner than sell the products.

And this is the case with the bulk of multi-level marketing organizations.

The Monat recruitment pay details, like those of most MLMs, are unclear. 

Monat has 11 different ranks to climb through, each with its bonus scheme.

There are six different forms of bonuses:

  1. Uni-level 
  2. Group Volume 
  3. Rank Advancement 
  4. Rank Advancement Matching 
  5. Motor Club 
  6. Generation 

There are several levels or generations within two of these bonuses, the “uni-level bonus” and the “generation bonus.”

While the pay structure is confusing, it’s clear that the more individuals you attract, the more money you’ll make.

The question is: are you comfortable approaching friends, family members, coworkers, acquaintances, and complete strangers to recruit them?

Do you have the power of persuasion?

If so, then Monat would be worth considering. 

Does Monat Give Its Members Cadillacs? 

There’s a mythical Cadillac that Monat’s Instagram “influencers” like to flaunt.

So is it true that Monat provides you with a Cadillac?

Nope, Monat does not “present” you with a Cadillac.

Monat features a motor club program that is similar to those offered by many multi-level marketing firms.

In essence, once you reach a particular company position – in Monat’s instance, “Market Mentor” – you are eligible to receive payment toward the purchase or leasing of a white Cadillac. 

You will get a one-time $1500 USD payment in addition to the monthly payment for your down payment.

Monthly payments depend on your rank.

Here’s what you can expect to receive: 

  • Market Mentor and Managing Market Mentor: $500
  • Associate Executive Director and Executive Director: $750
  • Senior Executive Director: $1,000 

There are a few things to keep in mind about Monat’s “Motor Club Rewards” program.

First and foremost, it is ultimately your responsibility to make your auto payments, not Monat’s.

Maintaining the rank of Market Mentor is required to continue getting payouts.

If you fall below the status of Market Mentor, you are offered two months of “grace” per calendar year.

During this grace period, Monat will continue to pay you.

It is important to note, however, that these two months cannot be consecutive.

As you can see, it’s not really that realistic unless you’re a superstar seller. 

What happens if you miss Market Mentor for the second month in a row?

It implies you’re responsible for your automobile payment and won’t receive any compensation from Monat.

The next point to keep in mind is that Monat does not cover all of the costs associated with the vehicle.

You’re on your own when it comes to registration, insurance, and gas.

In general, the more expensive a car is, the more it will cost to operate.

In case you want to learn more, here are some other companies who operate on similar business models.

Is eXp Realty a pyramid scheme

How To Join eXp Realty

Zyia Active and how to join

Melalueca – Is it an MLM?

Time for FAQsss…

Is Monat A Pyramid Scheme – FAQs

What are direct sales companies?

Direct sales companies are businesses that market and sell products or services directly to consumers through independent sales representatives or consultants rather than through traditional retail channels.

What is a network marketing company?

A network marketing company, also known as a multi-level marketing (MLM) company, is a business model that relies on a network of independent distributors to sell its products or services.

In network marketing, sales representatives are typically referred to as “distributors” or “consultants,” and they earn commissions based on their sales volume, as well as the sales volume of the distributors they recruit into the business.

Is Monat a Ponzi Scheme?

Monat is not a Ponzi scheme, at least according to the available information and legal rulings.

While Monat has faced criticism and legal challenges over its business practices, including allegations that it operates as a pyramid scheme, it has not been found to be a Ponzi scheme.

Is Monat an MLM?


Is Monat still in business?


Summing It Up

So while Monat has faced criticism and legal challenges over its business practices, including allegations that it operates as a pyramid scheme, it has not been found to be a pyramid scheme by the courts.

However, it’s important to note that Monat has faced lawsuits and complaints over its products and business practices, and these issues should be taken into account when evaluating the company.

Ultimately, the decision of whether or not to get involved with Monat or any other multi-level marketing (MLM) company is a personal one that requires careful research and consideration of the risks and rewards involved.

So if you are planning to join Monat, do your due diligence and make an informed decision based on your own goals and circumstances.

Disclosure: This article might contain affiliate links to the resources I refer to. It's at no cost to you, and it's how we pay the bills. Get more info here.

Brooks Conkle Banner Image
Brooks Conkle

Brooks is an entrepreneur, father, husband, & follower of the golden rule. He has over 15 years of experience as an entrepreneur after graduating with a Finance degree from Auburn University. Addicted to starting new business projects, he believes in creating multiple income streams and a life of flexibility. Business should work around your life, not the other way around. He creates content on his website, sharing his projects to help other hustlers in marketing, personal finance, and online business.