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Is Tupperware a Pyramid Scheme?

Plastic garbage

Tupperware is a food storage brand that has garnered popularity since we know it. The effectiveness of preserving food as it is makes it very convenient for families to be able to store food as closed and as neat as it could be. Bringing mothers into the picture, Tupperware is one of the most important items in the household – and to admit it, moms could even be disappointed in you by forgetting your Tupperware somewhere you could never remember where.

As the brand has gained multi-billion worldwide, they have come to a point where they have established its brand from stores to households – while its products were mainly sold in malls and shops, they have come a long way with bringing the businesses for individuals who want to have another source of income by selling Tupperware’s products. Nevertheless, with the growing business opportunities the brand provides, many people and business critics have labelled it as a pyramid scheme. While Tupperware regards itself as a Multilevel Marketing strategy, one could not help but wonder if it is just another networking tactic, or if it is a profitable one without a shady side.

MLM and Pyramid Scheme

Tupperware uses a Multilevel Marketing strategy in ensuring individuals can have a passive source of income when they sell. This strategy encourages individuals, not business owners, to promote a certain brand, distribute them to others, and might even pool recruits to be able to broaden their networks and thus generate more and more income as their networks sell and recruit correspondingly. Hence, just another direct sales opportunity, without the need to be responsible for business permits and liability, and is considered a small enterprise that works single-handedly by those who want to sell. This, on the other hand, should include physical products, in a way that there is tangible material distributed to distributors and consumers- thus considered a legal business model around the world.

Nevertheless, the Pyramid Scheme has been considered a fraudulent business strategy in most countries. The system includes making money in the form of recruits and getting them to have an initial investment so they could be registered as a legal umbrella to the whole business. Still, it requires recruits to be able to recruit others as well, creating a network of “investors” where the uplines can gain more as they rise on top of the “pyramid”. Now, as more recruits recruit another, profit possibilities can also broaden and increase. But the only problem is you are not primarily gaining from selling a product, but actually at recruitment where new ones will provide you with costs that are often cloaked as investments.

The difference between both structures is not quantified in their systems. It is more than safe to say that both business structures are just alike but with one difference – MLM primarily focuses on distributing products and Pyramid Scheme often bases profits on recruits. Moreover, when the majority of the operation’s profits funnel up to the top and leave little for the rest of the recruits, then it’s a fraudulent tactic that may be under the Pyramid Scheme – this is done by giving commissions through cuts on their recruit’s sales, and at the same time sellers gain profits, but just a little.

Tupperware’s MLM Strategy

With the proven history of Tupperware since the 1940s, the brand has impacted the lives of some by selling its products. By creating business opportunities to sell and be an umbrella for the company to do direct sales, more households, especially mothers, have been drawn to doing business under Tupperware’s MLM.

However, along with the seemingly pleasant opportunity it provides, there’s still an underlying notion that Tupperware’s business opportunity is disguised as an MLM in a Pyramid Scheme. The MLM perhaps gives a career with recruits working from home, but it is certainly not easy to sell the product directly to consumers, and in most cases, most people rely on recruits rather than selling the products. This is also partnered with statistics showing that only 1 out of 833 reps earn over $32k a year. Success stories are also going down; only 1 out of 100 earns well from the business model.

More so, while it is possible that you can become successful in the merchandise of Tupperware’s products, it is still not the best lucrative method. First, you have to pay an initial fee to be part of the business, and you have to buy products at a “discounted” price to be able to provide to consumers and recruits. While the products are deemed great when it comes to performance, selling the products to your friends and family cannot be a long-term strategy. It is to note that the products cannot easily be worn, and thus lower the chance for you to replace them where you can sell or distribute them over again.

In line with this, selling your products directly outside of your family can become a handful. And with digital marketing growing fast-paced, most people can even find your products online before you even have a sales pitch for them. This goes to show that you will become reliant on recruiting distributors under you, where you take a cut of how many they have sold under your network. Hence, instead of directly selling the products, one cannot deny the fact that recruitment is the best possible option where you can just sit and relax and let your downlines do the selling and recruiting for you; more recruits, more commissions, and profit cuts, higher returns of investment.

Is it a Pyramid Scheme?

Ultimately, most Pyramid Schemes nowadays have become very evident as being disguised as an MLM. Sure, both strategies may be different when it comes to providing tangible products, but what lies underneath is how you will be successful and make bigger profits. As Tupperware’s products can survive the usual wear and tear, most distributors are left to console recruits rather than actually sell the products.

Tupperware’s MLM may be deemed legal technically, but when it comes to the works of the business itself, it may have become a fraudulent business scheme for most people. Therefore, it always lies with how you sell products, balanced with recruits rather than solely depending on your downlines to be able to skyrocket your profits with the distribution.

Therefore, it may be technically an MLM, but most people consider it as a Pyramid Scheme; with distributors doing or trying to make a business with you, has anyone become so successful after several years? We’ll leave you to be the judge of that.

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Written by Aiza Day

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