Pampered Chef is the king of the kitchen.
This multilevel marketing company sells just about everything you need for cooking and meal preparation using a direct sales model.
Founded in 1980, Pampered Chef is a party-based sales network with a long history.
So have I been involved? This explains everything:
The company had been experiencing declining revenue for several years up until 2014, when Pampered Chef’s parent company Berkshire Hathaway (owned by billionaire Warren Buffett) intervened and appointed a new CEO to turn things around, as reported by Chicago Business. How is it going so far?
In terms of company popularity, the changeup at the top does not seem to have reversed the long, slow slide. Search traffic from the last few years shows that public interest in the company has dropped by about a third, as measured by search volume.
Examining long-term trends doesn’t make the picture any rosier; Pampered Chef is definitely on the decline.
Trends analysis also shows that the company experience moderate seasonal variation in its popularity, which is to be expected for a multilevel marketing company that sells relatively inexpensive home ware and uses a party based model.
MLMs that fit this profile almost always do much better in the months leading up to Christmas, then experience a substantial decline thereafter. Pampered Chef’s popularity seems to surge by about 33% every holiday season, so you can use this as a rough gauge for how your sales might change.
Products
As you’d guess from the name, Pampered Chef sells a wide range of kitchenware, tools, and accessories. The products range from super-cheap measuring cups and spatulas to knife sets the run in the $460 range. If you need to outfit a kitchen, you’ll find almost everything you need.
One area where their products are somewhat lacking is in the appliance department. Pampered Chef doesn’t offer much in the way of toaster ovens, baking mixers, or blenders, which is a shame: these higher-priced options would go well with their low-cost utensils and tools, and could boost your sales and income.
The most likely reason for why the company does not forge into this product category is that they couldn’t compete in terms of price and quality with what’s already on the consumer market.
On cooking websites, reviewers note that most of Pampered Chef’s products are decent quality, though they may be a bit more expensive than what you’d find elsewhere.
Remember that part of the pitch with Pampered Chef is the convenience of getting all of your kitchen products from the same place, which saves you the time of shopping around online or going out to stores in person.
One category of Pampered Chef product that gets rave reviews is their stoneware. Their grill stones, baking pans, and dishes are reputed to be thick, well-constructed, and able to distribute heat evenly when cooking in the oven or on a grill. These products are also more expensive, which helps you hit your sales goals as a distributor.
Compensation plan
As is the case with most party-based MLMs, Pampered Chef’s compensation plan heavily emphasizes earning money from selling at retail prices and de-emphasises building a sales team, though it is still possible.
For starters, you’ll need a starter kit. There are three options, at $109, $159, and $249. Even the most basic kit is pretty expensive, but this is typical for low cost party-based MLMs. It does mean it will take longer to recoup your investment.
Your retail commissions (the amount of money you make from your direct customers) starts out at 20%. From here, the commission increases by two percentage points at $750 of monthly sales, and another percentage point at $1250, $2500, and $4000.
You also need to maintain your status as an active distributor in order to be eligible to earn any money. The minimum monthly sales volume to remain active is $150 in sales.
Since the sales are commission-based, not retail discount-based, this means you don’t get paid at all if you only submit, for example, $100 in sales. Because of this, you should make sure you have enough sales events set up to hit your monthly sales goals before you embark on an “active” month.
Though there are bonuses, there aren’t too many “levels” in the network to speak of. Your sales team earns you a 3% commission on all of their sales too, but given that the price of the products is generally low, this is going to be a very small part of your income unless you generate a huge sales team on multiple levels that has a lot of transactions every month.
Recap
The products for Pampered Chef are average to good, but with the relatively weak compensation plan that is heavily oriented towards direct customers, instead of building a sales team, joining the company is a hard sell.
The problem with selling durable goods, like kitchen utensils, is that the market for them in your direct social contacts is finite. People don’t really go through stoneware oven dishes the way they go through moisturizer or protein powder.
Additionally, because the sales model is focused on what you can sell as a sales representative, not how your team can build in size and increase its customer base, you will rapidly reach a point at which you’ve saturated your own market.
From here on out, it will be hard to hit your monthly minimum in sales, and as a result, make it hard to earn any money.
If you do try this MLM, it will probably be a “get in and get out” operation, not a long-lasting passive income stream.
But if you’re just doing it for the money, there are better ways to kill your day job. You might like our coaching because it shows you the good life without selling kitchen products to your family and friends.
http://bodynutrition.org/pampered-chef-review/
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