Is Tropic a ‘different’ type of MLM? Watch our interview with Susie Ma to find out
Is it ever possible for an MLM to be ‘good’? To genuinely offer participants a valid business opportunity, and empower the people who join it?
If you’d asked me that a year ago I would have said an emphatic, “No.” Even now I am certain it’s impossible for the vast majority of the industry, as I explain here. But there’s one company who I have come to believe do stand out as very different, and that is Tropic Skincare.
I first looked at Tropic 18 months ago when someone shared a worrying looking Instagram post with me appearing to show a Tropic Ambassador with hundreds of pounds of stock.
This was a big red flag, as one of the key issues with MLMs is that reps are forced to personally sell a set amount of products every month to remain ‘active’ or make or keep a rank or bonus level. This leads to something known as ‘garage qualifying’, so called because MLM reps often have piles of products sat in their garages or homes.
This Instagram post seemed to be an example of this practice, and inspired me to look more closely at Tropic, and how it operated. As a result, I wrote and published this article.
I always invite MLM companies that I research to get in touch at the end of my articles, in case I have made any errors in my article. And despite being made aware that they read them, no company has ever contacted me.
So I was surprised when Susie Ma emailed me and asked if we could have a chat. I agreed and we set up an initial Zoom call. Since then we’ve spoken at length several times. Susie has sent me an Ambassador pack so I can sample the products, and I have had full access to the Tropic Lounge, their online training portal.
She’s also put me in touch with several Ambassadors to find out what their experience of the company has been like. (This includes the Ambassador whose Instagram post appeared to show her holding stock, and she was able to explain the reason behind it, and convince me that she wasn’t garage qualifying.)
This article has been written based on my experiences with Tropic, interviews with people within the company and information Susie has shared with me.
Why am I writing about Tropic now?
Before I get further into this article, I need to explain why I am writing it. I believe that to be an honest critic of any industry, you need to genuinely investigate both sides. Simply to claim an industry is inherently bad and refuse to properly look into claims otherwise would make me a poor and biased critic.
To date, no MLM company has reached out to me. I have however met the former Director General of the DSA, and communicated with the organisation many times. You can read what I think of the DSA as a result of my dealings with them here.
Unlike my experience of other MLMs (and that of the BBC when they tried to speak to them for their documentary on the industry), Susie was happy to listen to what I believed was wrong with the industry, and continues to make genuine efforts to make any improvements.
Five key problems with the MLM industry – and how Tropic is different
There are many issues with the MLM business model. And, as much as Susie is clearly passionate about running an ethical business than genuinely empowers women and helps them earn an income, there will always be inherent issues that arise from the model itself.
But here are five BIG problems with the business model, and why I believe that Tropic is very different from other MLMs.
1) MLM reps are the real customers
In every MLM we have investigated so far, it is our opinion that the real customers are the reps. Why? Thanks to the high price of their products, and the encouragement to recruit your customers into your team, it’s hard to sell the products to people outside the business.
With most MLMs there’s also little unique about their products – despite their claims otherwise. You can easily find comparable products on the high street for much less. Many MLM products are produced in factories and white-labeled for MLM companies. Some Revital U and Valentus products are made the same factory, for example.
However, this does not appear to be the case with Tropic. To begin with, the products existed before the MLM business model was adopted (Susie was famously a competitor on The Apprentice). The products are developed and produced uniquely by Tropic themselves, which also sets the company apart.
The quality of their products means that Tropic sells to genuine retail customers. Tropic don’t have data on exactly what percentage of all orders are for end customers (rather than reps), but they have looked at their data to get an idea.
The data shows that 47% of all orders in March 2021 were paid directly by customer payment cards – either through the customer checking out on an Ambassador’s webshop, e-pamper link or by Ambassadors entering their customer’s card details over the phone on the Tropic website.
This doesn’t account for all customer orders. In the April 2021 Business Survey, conducted by 4,043 Ambassadors, 80% of Ambassadors answered that they receive payment from customers via bank transfer. The Ambassador then pays for the order using their own payment card. 54% of Ambassadors answered that this occurs with more than half of their customer base.
60% of all orders in March were delivered to directly to Ambassadors’ customers, and 93% of deliveries for Tropic’s limited eye cream promotion on 18th of Feb went directly to customers.
In the April 2021 Business Survey, 73% of Ambassadors also answered they have customer orders delivered to them to provide a more personal service and/or gift wrap products for their customers. 65% of Ambassadors answered that this occurs with more than half of their customers.
It’s clear from the data that, unlike most MLMs, the majority of Tropic’s sales are to genuine retail customers, and not their own Ambassadors, which sets it apart from other MLMs in our experience.
2) MLM reps end up with spare rooms filled with unsold stock
Every MLM we have investigated to date appears to have a monthly sales requirement, often referred to as a PV, or personal volume. Reps for these companies need to meet this requirement if they wish to remain a member of the company, or to receive commission on their sales. MLMs will also require you to hit sales targets for promotions and bonuses.
However, as we’ve already explained, it’s not easy to sell MLM products. So many reps end up personally buying products themselves, often telling themselves that they’ll use or sell them eventually. Shockingly, in some companies reps will also demand that their downline (the people recruited ‘under’ them) help them reach bonuses and promotions by buying products!
This is known as ‘garage qualifying’ or ‘inventory loading’ and can lead to scenarios like this:
(That is apparently a photo from a former Pampered Chef rep who is selling her accumulated inventory at a loss after leaving the company.)
Sadly it’s this kind of pressure to keep buying stock that leads to so many MLM reps we have interviewed getting into significant debt.
So how is Tropic different? Not only do they have no active requirement to meet each month (you simply need to make one purchase in a 12 month period to remain an Ambassador), but Tropic actively discourages Ambassadors from holding stock.
Their T&Cs state that Ambassadors can hold a maximum of 20 pieces of stock:
“Where the Ambassador would benefit from holding some items of stock for their business (for example, when doing events) then the Ambassador may hold up to twenty (20) items of an individual TSC product and/or TSC product collection SKUs as stock for sale at any one time. Stock of TSC products needs to be passed onto customers or used within 1 month of purchase.”
And if an Ambassador does end up with stock they can’t sell, Tropic buys it back at the full price.
So yes, it appears that in this respect Tropic is different from other MLMs. Rather than actively encourage/force reps to buy products, Tropic DIScourage their Ambassadors from buying products they don’t need.
3) MLM reps aren’t encouraged to keep proper accounts
According to research published by the FTC, an average of 99.6% of MLM reps will lose money once business expenses are taken into account, and this is confirmed in the income disclosure statements published by companies.
So, understandably, one question we often get asked about MLMs is why reps don’t leave when they realise they’re not earning money.
The answer to this question is two-fold. Firstly, most MLMs appear to operate very much like cults in that recruits are subjected to tactics like love bombing, gaslighting and isolation which psychologically binds them to the business and discourages critical thinking. They’re also given messages like “Only losers quit” and are told that success is just around the corner for them.
The second reason why MLM reps stay despite losing money is because they often don’t realise they are! They’re not taught or encouraged to keep monthly accounts, as any legitimate business owner would, so have no idea what the true financial picture is. So you’ll see social media posts from MLM reps celebrating a £1.97 bonus that cost them £19.70 to earn.
Again, Tropic is very different. Inside their Ambassador platform The Lounge, there is a wealth of product and business training resources, and Ambassadors are required to complete it. Every Ambassador I have spoken to keeps monthly books, and some have separate business bank accounts for Tropic.
So if a Tropic Ambassador is losing money, it will be quickly apparent to them. This is not the case in other MLMs. Many MLM reps I have interviewed, like this former It Works rep, only added up how much money they lost when speaking to me – and were shocked when they realised the extent of their loss.
Tropic have also surveyed their Ambassadors to find out what their experience of the company is, and 71% said they were earning what they expected or more than what they expected.
4) Most MLMs prioritise recruitment over retail
We’ve already established that most MLMs seem to sell the vast majority of their products to their own reps, rather than the general public. And a consequence of this is that the focus of these companies – and their reps – is on recruitment.
Even reps at the very top of companies, like this Black Presenter from Younique make their money from their downline rather than their own sales. And the Forever Living First Steps to Manager brochure focuses far more on recruiting than it does on sales.
And it’s no surprise when, as we discovered here, it’s pretty much impossible to make money from selling products in an MLM.
Again, Tropic bucks this trend. Tropic is far more focused on retail – selling products to real customers outside the business – than it is on recruitment. In their three minute welcome video the word ‘recruitment’ isn’t mentioned once, nor is ‘building a team’. And the training materials on The Lounge is very much geared towards learning about the products and selling them.
Tropic also say on this matter:
“Our Ambassadors are actually not allowed to promote the opportunity publicly. They are not allowed to share their earnings publicly nor imply how much they are earning. We put this rule in place a couple of months ago to ensure Ambassadors always sell products and not opportunities.
“So you will not see a Tropic Ambassador posting about ‘earn your dream income’/ ‘be your own boss’ etc. It also takes an average of 14 months for an Ambassador to onboard a newbie, further showing a focus on sales and not recruitment.”
5) MLMs don’t seem to care if the business doesn’t work for their reps
Given how little MLM reps make, it’s no surprise that companies are reluctant to share information about their businesses. Some, like Amway, are legally bound to produce income disclosure statements, but these have become increasingly vague as the anti-MLM movement puts them under an increasingly strong microscope.
And no wonder as their income disclosure statements reveal how little money most participants earn, and simply seem to back up the idea that 99.6% will lose money after deducting business expenses.
These income disclosure statements go back many years (in some cases decades) without change. This demonstrates to us that the business model clearly works for the companies, and they seemingly don’t care if their reps don’t have a positive experience.
Arbonne, for example know that most reps invest between 10-15 hours a week in the business when they first join. They also know that between 83-88% will earn nothing in a year. Which means they, in effect, will work between 520-780 hours a year for free.
This is another area in which Tropic seem to be different. Susie has surveyed her Ambassadors at least twice since we’ve been in contact and shared the results with us.
The data doesn’t just show how much time Ambassadors invest in the business and what they earn, but how happy they are and whether their expectations of the business are being met. Tropic scores highly on satisfaction (53.55% said they are happy, and 41.38% said they are extremely happy as a Tropic Ambassador, and 96.86% would recommend being an Ambassador to friends, family or colleagues).
Tropic have also – voluntarily – produced an income disclosure statement showing how much Ambassadors earn and are happy for us to publish it:
Please note that:
- Ambassador average monthly sales and earnings based on 15,417 new joiners in 2020 who had at least one month where sales £>0. On average, 70.5% of these new joiners achieved £>0 per month.
- Average monthly sales and earnings for remaining titles based on 2020.
- Average time to promote based on title promotions in 2020.
- % of Ambassadors based on titles held in Dec 2020.
- All stats excluding time spent taken from an external survey independently conducted in Nov 2020 with 4,551 Ambassador joiners’ responses.
- Time spent stats taken from a survey conducted in March 21 with 4,463 responses.
- Full information and Terms and Conditions on title promotion, maintenance, commission and bonuses can be found in Tropic’s Success Plan.
How else is Tropic different?
There are a number of other important ways Tropic does things differently from many MLMs.
Providing software to their Ambassadors for free
Tropic noticed that Ambassadors were paying for software to help them run their businesses. So, to give all Ambassadors access to useful resources, Tropic pays for every Ambassador to use their e-learning platform (The Lounge), social media management platform from Multibrain (Tropic Social) and customer relationship management app from Sell with AMI (Tropic AMI App) – all at no cost to the Ambassador.
Susie says that Ambassadors who actively use the Tropic AMI App have 71% higher sales than those who don’t.
Flattening compensation structure
Tropic have removed their fourth generation payment and adjusted the bonuses paid on the third generation in their compensation plan – meaning the maximum they pay on is three generations (levels). This addresses the issue of huge earnings disparity you see in MLMs and makes it fairer for all their Ambassadors. It also allows Tropic to invest further in tools and resources that will help all Ambassadors to earn more money.
Investing in training
Tropic invest in high quality business and product training for their Ambassadors, which they provide for free on their Lounge. This is to prevent Ambassadors from getting sucked into the expensive (but often useless) get-rich-quick/be a social media influencer/success mindset training that so many MLM reps lose money to.
No monthly fees
While some MLMs charge their reps for their website and other tools and training, Tropic are committed to charging their reps no monthly fees. Tropic also don’t charge any kind of ‘renewal fees’ and only require an order of £1 or more to be placed on the system in a rolling 6 month period to remain as an Ambassador.
Tropic noticed that Ambassadors were paying for branded merchandise to promote their business. So they created a dedicated website, Tropic Market, where Ambassadors can order pre-designed branded items should they wish to.
They work with suppliers to ensure products are sustainable, fairly priced and of the best quality for their Ambassadors. Tropic make no profit on the sales of any merchandise or business tools such as catalogues and order forms, so to give Ambassadors the very best prices.
As part of their commitment that Ambassadors genuinely earn money from the business, Tropic recommend they open a separate bank account for their Tropic orders and business expenses. They recommend a free account that automatically provides business spreadsheets.
What’s it like being a Tropic Ambassador?
We spoke to two Tropic Ambassadors at length about their experience with the company, and they confirmed everything we were told by Susie and the impression we formed of Tropic from The Lounge.
Here’s what Ayshea said:
“I’ve never felt any pressure to build a team or sell products. I create my own targets every week and decide what I want to earn. And if I don’t hit them then I don’t hit them. No one’s going to be disappointed. I just want to grow my business really naturally.
In The Lounge you get financial sheets you can use. One you can use for orders. It was three sections: the sale, what commission you’ll learn and how much your expenses are. At the bottom of the sheet it tells you what your profit was.
From the start with Tropic I set up a bank account and started to keep record books, as I think that is the best way to do business. I think it’s good to keep track of what’s coming in and going out, and I have a friend who does my accounts.“
We spoke to Jo and here’s what she says about being a Tropic Ambassador:
“Recruitment has never been pushed on me. I have a good customer base that recommend me to people, and they remain with me. My customers are very important to me and I look after them. I try to exceed their expectations and go the extra mile. I spend a lot of time with them and listening to their needs, and I’m confident that whatever I recommend will work for them.”
Watch our interview with Susie Ma
Want to learn more about Tropic and find out how Susie is taking steps to ensure it’s very different from other MLM companies? You can watch our video interview with her here:
Photo by engin akyurt