Cosmetics and multi-level-marketing go together like pie and ice cream... although I prefer the latter. If you follow my blog you'll know I'm not big on MLM's, but that doesn't mean they're not right for you. This review is all about LipSense, and I'll answer the question... is it a scam... which is two questions really.
Are the product claims a scam? And... what about the business opportunity? Is it legit?
Please note, I am not a member or an affiliate for LipSense. This review has been researched with information and testimonials that are available online in the public domain. Any conclusions drawn by myself are opinions.
What is LipSense?
LipSense is the premier product belonging to the direct sales (MLM) cosmetics company, SeneGence International.
SeneGence International was founded in early 1999 by Joni Rogers – Kante, and today the Lipsense brand has become it’s most widely searched product online.
Why is that important? Because if you decide to become an LipSense distributor you can be confident it’s a product in high demand.
As the story goes, Joni traveled to the other side of the world with a team of scientists and botanists to find different ingredients than those found in the U.S.
While it may sound like the plot of an adventure movie, hiking through jungles and floating down rivers, searching the base of a volcano for a mythical flower that legend says will make you young again… my guess, is that it was more like walking in hallways and riding up elevators to attend negotiations with suppliers.
I’m not sure where the team of scientists fits into the story…
But, truth be told… the journey may have been more like the movie. The story certainly sets the stage for what has become a multi-billion dollar cosmetics empire, and even if you're not a fan of multi-level-marketing… there are reasons to admire Joni Rogers – Kante.
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Is LipSense A Scam?
As mentioned, there are two parts to the scam question. Are the product claims real? And, is the business opportunity a scam?
LipSense claims be a complete departure from conventional lipstick. Where have I heard that before?
It seems most (if not all) MLM’s make the same claim about their products. From cosmetics, to essential oils and health supplements… they are unlike anything else in the market.
It's a necessary claim... to justify prices which are often two or three times higher than competing products in stores.
Since several people (upline) are paid a commission on that single product, AND the company earns their profit as well… there is a reason MLM products are more expensive.
Having said that, LipSense has some great reviews (examples below).
Not all reviews are good. You can find complaints about price, and even some who get a burning sensation when using LipSense... but these negative reviews are far and few between. The vast majority really like it.
But, the question remains... are the product claims legit?
For context... you can buy a 4-pack of Burt’s Bees for under ten bucks, or EOS lip balm for less than three.
A tube of LipSense Lip Balm, however, goes for $20.00!
It claims to be anti-aging and restorative… but... (this is just my opinion) anti-aging and restorative are subjective claims at best.
We’re talking prices that are 6 or 7 times what you would pay in store for a similar product.
I’m certainly no judge on the quality of lip products, and I am definitely not saying LipSense claims are a scam. But, I do think you should make your own comparisons, be aware of how many people are collecting a commission, and look beyond the marketing hype.
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The LipSense Business Opportunity?
When it comes to the business side of LipSense being a scam, it's an easier question to answer.
LipSense… or SeneGence to be more accurate, has been in business for nearly 20 years. You don’t survive that long and become a multi-billion dollar company if you’re a scam.
LipSense has probably had it's fair share of bad distributors over the years. Ones that have made false claims, used deceptive tactics or just flat out lied. But, that doesn’t make LipSense a scam.
And, although many consider multi-level-marketing in general to be a scam, or a pyramid scheme, the top MLM’s (including LipSense) operate within the boundaries of the law. According to the legal definition, SeneGence International (LipSense) is not a pyramid scheme.
Can You Make Money Selling LipSense?
The quick answer is yes, you can make money selling LipSense. Will you make money selling it? That’s a different question.
We already talked about the prices being significantly higher than competing products. While lipstick from brands such as MAC or KYLIE can cost $40-$50… common brands are more reasonable at $10 or less.
If your friends, family, co-workers etc. are accustomed to the ten dollar brands, charging them double ($20 plus for LipSense) could be a hard sell.
Of course, it’s not just lipstick. You can sell all products from the SeneGence cosmetic line.
So, in theory… you can make money selling LipSense, and on paper, pyramid type compensation plans make sense.
Statistically, however, once expenses are accounted for, only about one percent of those involved in multi-level-marketing actually make money.
LipSense Compensation Plan
Most MLM’s have a complicated payment structure for no other reason (I think) than to add drama and excitement to the recruitment presentation. The more circles you can draw on a whiteboard the better. 😀
LipSense has one of the most confusing compensation plans I’ve seen.
There are mulitple ways you can earn.
- Profit margin on sales
- Downline commissions
- Group sales volume
- Rewards such as trips, and a new car allowance
The first one...profit margin is pretty straight forward. The rest of the compensation plan, though... is about as clear as mud.
Everything is based on Point Value (PV). One PV is ½ of a suggested retail dollar. Put another way… one retail dollar is equal to ½ PV.
Your profit margin is determined by your distributor discount... which is based on your PV.
0 – 99.5 PV = 20% discount
100 – 299.5 PV = 30% discount
300 – 749.5 PV = 40% discount
750 PV and up = 50% discount
Now... 50% discount sounds great… until you realize the reason you’re charging your customers twice as much (as what they might pay in store), is not because the product is that much better… but because you, you’re upline, and the company, are keeping a massive percentage as profit.
I’m not saying there’s anything wrong with that. We all get into business to make money, and for your hard work, you should make money.
What I am saying, however, is that a business is difficult to sustain over a long period when you’re not competitive in the market.
And, for that mark-up, your customer service should be exceptional.
As far as selling your cosmetics, you can sell “on-the-spot” with inventory you have on hand, or you can order direct from SeneGence and they will ship it direct to your customer.
The rest of the compensation plan get’s murky. The following video explains it better than I can. Plus... I'm not sure I fully understand it myself. 😀
Note: I don’t endorse this video, it’s for informational purposes only.
Getting Started - The Cost?
You can get started by purchasing a New Distributor Kit which sells for $55.00 (annual fee).
The kit includes printed materials, training DVD and CD, as well as a distributor handbook.
There is also an additional Lips Kit available for $75.00 which includes tester products and sample sizes of popular colors.
And, for $550 you can purchase the Distributor Training Package which includes,
- Weekly Online Training
- SeneGence Website ($300/year renewal)
- Seminar General Seating
- SeneU Event Registration
- PIT Stop Registration
- SeneMedia Collection
- SeneLibrary Training Materials
- MSF Donation
- Launch Demo
There is also a product replacement insurance plan (if your car was broken into for example).
Speaking of cars… your car is an additional expense you must consider. Fuel is not cheap, and wear-and-tear on your vehicle can add up. In addition, there are seminars you’ll want to attend, accommodations to pay for, product samples, testers, and so on…
How Do You Sell LipSense?
Your two main strategies for selling LipSense will be offline, and online.
Offline (or relationship) selling usually starts with your family, friends and co-workers. Most people don’t move beyond this point, and for good reason.
Most people are not comfortable selling.
If you are (comfortable selling that is), you can look beyond to friends you may have lost contact with, past colleagues, members of your church, gym or community groups.
If you have children in school, soccer, dance, martial arts etc. you can approach other parents.
Another great strategy is to partner with local businesses… a yoga studio for example.
And it goes without saying, exceptional service and going the extra mile is key to developing those repeat sales.
Selling LipSense Online
The internet has given us many things, one of them being the ability to make money online. The problem, however, is that it can also be extremely competitive (depending on your strategy and niche).
A quick search on a popular social media platform brings up countless sellers.
There multiple ways you can go about selling LipSense online. The most common (above) is social media. However, aside from being the most competitive strategy, another issue comes up.
You're building your business on someone else's platform.
In the past, people have lost their entire businesses when Facebook, or YouTube for example decided to “re-priortize” what they were showing in their subscriber's newsfeeds.
People have also spent years creating content and growing their audience on platforms such as Friendster and MySpace. In hindsight, that clearly wasn’t a good idea.
Although it doesn’t seem like Facebook, Twitter or Instagram could go anywhere… we shouldn’t underestimate how quickly things can change.
Social media is fine for building awareness, but it should not be your “home-base” so to speak.
What you're aiming for is a business that YOU control.
For $300 a year you can build a SeneGence approved website, which begs the question… what do they mean by “approved”?
I’m not a member or an affiliate for LipSense… but if I was, I’d start my own website (simple to build, and cheap… you can learn more HERE) about related products and topics.
Or, you could start a lifestyle or relationship blog… and use your own platform (and audience) to sell LipSense… along with hundreds of other products that don’t compete directly with SeneGence Cosmetics.
The reason for doing this is so you're NOT completely dependent on LipSense (or SeneGence).
If you’re considering a home-based-business, I’d guess one of your reasons is to have more control and independence. Putting all your money and effort into a single company or brand who dictates what you can and can’t do is NOT building your own business.
Build your own online business first… and then leverage that to sell LipSense.
That’s the strategy I've used online (not for LipSense but other products). Create something your passionate about, and earn a living from it.
What I Like About LipSense
- Although it’s a little pricey, I like that LipSense generally gets great reviews online and has a high profit margin.
- There are many reasons I don’t like MLM’s or pyramid type businesses. But, one thing they do have going for them is a system that provides support and training. Your upline want you to succeed.
- It’s not the cheapest home-business to start, but it’s relatively inexpensive. In addition to the $55 New Distributor Kit, however, you may want to consider the $75 Lips Kit which will provide you with testers and samples.
- LipSense has been around a long time and you can be confident you're not putting your time and effort into a company that might disappear tomorrow.
What I Don’t Like
- MLM’s (not only LipSense) are not really your business. You’re still bound by their rules and restrictions. Even though they claim “you are building a business on YOUR terms”, the fine print is actually in THEIR Terms (and Conditions).
You have no control of the product, the price, whether or not they have sufficient stock, customer service at a corporate level… but if you quit for any reason, you’re leaving your organization behind and starting over from scratch.
In my opinion, it’s better to build a business that you own.
- Selling false promises. They say on their website, “we believe you can reach your goals”. Really? They don’t even know me.
The website goes on to say, “even if those goals include travel to exotic locations…” I might be nit-picking here, but the truth is, it’s a very rare person that succeeds at multi-level-marketing.
I’m not a big fan of the “lifestyle sale”, without ALSO explaining how difficult it can be.. and letting people know up front that this might not be for them.
- Minimum monthly purchases and restocking fees.
- Recruiting. If you’ve ever been around a friend or family member involved in multi-level-marketing, you know how potentially awkward it can be.
People don’t like to recruit and they don’t like being recruited.
Also, something that’s not often talked about in pyramid style businesses, is that every person you recruit becomes your competitor.
If you bring in half-a-dozen of your friends and family, you may find your circle of influence becomes saturated, making it difficult to reach your own minimum sales (and purchase) requirements.
Aside from the typical challenges with MLM’s, LipSense checks off a lot of boxes.
The product is popular, profitable, and well-established. The business is relatively inexpensive to get started, and in addition to LipSense, you have a diverse line of cosmetics and anti-aging products you can sell.
For most people, the biggest challenge will be selling and recruiting. If you're a little more introverted (like I am), or prefer your social relationships to remain that way… you might be better suited to an online business.
Building a business online isn't for everyone either, but it is another solution towards that independence and passive income you’re looking for… if you know where to look.
I hope this LipSense review was informative and helps you decide if it’s the right opportunity for you.
If you have any questions, comments or a review of your own, please don’t hesitate to share in the comments section below.
Also, if you found the review helpful, or think it might useful for others… please share 😀
PS - Whether or not you choose to sell LipSense online, or build an online business of your own… the strategies taught in my book The Indie Start-Up can help you get started the right way. You can download it for free HERE.