Is Modere a Pyramid Scheme or A Scam? [2020 Review]

Welcome to my Modere review! If you are wondering is Modere is a pyramid scheme or a scam, or a legit business opportunity, I'm here to help you out!

I'm glad to see you are doing your research. The world is full of scams and it can be hard to find the legit opportunities out there. 

Modere is not a pyramid scheme but it is a multi-level marketing business so there are some similarities. The key difference is that MLMs are legal in most parts of the world while pyramid schemes are not. FTC has been going after MLMs in recent years and seems to be tightening its guidelines concerning pyramid schemes, so this might change in the US in the future. But for the time being, MLMs are a legal form of business and thus aren't considered scams.

What Is An MLM Business

Modere is an MLM business, so it's important to understand the difference between MLMs and pyramid schemes. MLM stands for multi-level marketing aka network marketing.

In the MLM business model, the company doesn't have a regular distribution chain of retail stores. It utilizes individual sales representatives instead that sell directly to the customers.

What makes this "multi-level" is the fact that the sales reps can recruit additional sales reps into their downline or "sales organization" like many MLMs like to brand them.

So, just like in a pyramid scheme, you can earn money by recruiting people into the system, and typically in MLMs, you will also earn income over several generations of recruits in your downline.

But here's the key difference. In an MLM the sales reps earn a share of the revenue of SALES their downline makes. They don't make money from recruitment. At least not most of it.

In a legit MLM, the main source of revenue will always come from the sales of products or services to the consumers. The participation fees are for training, inventory, and administration.

To make things more complicated, the line between legit MLMs and pyramid schemes isn't set in stone. An MLM that sells actual products but gets most of its revenue from recruitment, can be considered a pyramid scheme by the authorities.

Where the line is exactly, seems to be a matter of case-by-case interpretation as the court rulings haven't always been in line with each other.

It seems that the FTC has recently been tightening its leash as many major MLMs haven been investigated for pyramid allegations.

But the question in your mind is, where does Modere stand? Is it a pyramid scheme?

Modere Overview

Modere is an MLM company that focuses on the personal care, health, and wellness and home care niche.

Modere has been around in its current form since 2012. Before that, it was called Neways since 1992 and originally the company behind Modere was called Images and Attitudes.

The original company was founded by Thomas and Leslie D. Mower and it had manufacturing facilities in Salem, Utah. In 2006 Neways acquired by a private equity firm that used to own Herbalife.

The company was restructured in 2011 and rebranded as Modere and the ownership has changed since as well and the main shareholder now is Z Capital.

The CEO of the company is currently Ashma Ishaq, Chief Financial Officer Shane Ware and Chairman of the board Robert S Conlee.

Modere Products

Moderes concept is to sell products that look as good as they perform. "Stylish. Safer. Smart.". They claim their products are made with safe and environmentally safe chemicals and are scientifically designed.

They offer a portfolio of products in the following categories:

• Clean lifestyle
• Beauty
• Personal care
• Health and Wellness
• Household Care

Modere Business Opportunity

Modere is an MLM business so it naturally offers a business opportunity as an associate. You can essentially make money in two ways, selling products or by recruiting people and earning commissions of their sales.

The startup cost of Modere is $29.95 which earns you the right to become their Social Marketer. This is where Modere is a bit more modern than many other MLMs. They are big on leveraging social media and I would guess these types of products sell themselves well through social media.

The $29.95 doesn't include any products, so to sell products you will need to get a $399 Build Collection Package. This is apparently not mandatory and you can refer people to the online store, but this will apparently jump start your business.

But if you plan on actually demonstrating the products and maybe hold parties, you are pretty much going to have to either buy the package or the products independently with higher price tags.

The compensation plan is complicated and multi-leveled, so this confirms it's an MLM business.

Is Modere A Pyramid Scheme

Now that we know what a pyramid scheme is and the background behind Modere, it's time to look for any evidence pointing if Modere might be a pyramid scheme.

In case you didn't notice, the company has changed its name three times. While sometimes rebranding can be for strategic reasons, often there is a need for a fresh start.

So I did check out what the older business names brought up as well. More about that in a minute. But first!

There are three questions I like to ask when finding out if a business is a pyramid scheme:

1. How long has it been around? Pyramid schemes are short-lived.
2. Are there real physical products or services being sold? Pyramid schemes rely on recruitment fees
3. Are there any lawsuits or court rulings? If a company has been sued for being a pyramid scheme a court ruling will tell you what the authorities think.

1. How Long Has It Been Around?

Like we established already, the company was originally formed in 1987 and it has been rebranded a couple of times. Modere has been around 2012.

Generally speaking, pyramid schemes are short-lived as they are dependent on the constant recruitment of new members. A company that has been around in some way or form for over 30 years isn't likely to be running a pyramid scheme.

That said, it seems there is some controversy in the background of Neways, the predecessor brand of Modere that we will talk more about in a second.

2. Are there real physical products or services?

This is an obvious yes. Modere manufactures and sells physical health and personal care products through it's direct selling network of associates.

The fact that they have manufacturing facilities and that you can buy their products directly on their website goes a long way in proving that they actually sell products. Some pyramid schemes have had physical products as a front but the actual revenue has come from recruitment fees.

Modere is one of the few network marketing companies that doesn't disclose its annual revenue and turnover. According to Business For Home's estimate, their annual revenue in 2018 was about 300 million dollars.

The company has established themselves as a trusted brand and numbers like those don't come just from recruitment fees so they are definitely moving merchandise in large volumes. Nothing that indicates a pyramid scheme here.

3. Are there any lawsuits?

Well, this is where things get interesting. There doesn't seem to be any lawsuits accusing Modere, Neways or Images And Attitudes of running a pyramid scheme.

There are however lawsuits and court rulings concerning Neways and Modere:

• Most recently in 2020, the MLM company Isagenix has sued Modere, accusing them of illegally recruiting Isagenix associates. There isn't a ruling of this case yet apparently but you can find Modere's response here.
• In 2008 Neways and Sisel settled three lawsuits against each other in federal and state courts.
• In 2006 the original founders of Neways were sentenced to federal prison time for tax evasion.
• In 2003 Neways pleaded guilty for selling products with illegal HGH.

In my opinion, there is no evidence that would point out that Modere is a pyramid scheme. They definitely have had some controversy in the past and at least one ongoing lawsuit. But none of the issues have been about running a pyramid scheme.

The company has been around for a relatively long time and they sell a lot of physical products, both facts imply strongly that they are a legit MLM and not a pyramid scheme.

Is Modere A Scam?

No. Modere doesn't seem to be a scam. It's a well-established company with some controversy in it's past that offers high-quality products and uses the MLM business model for distribution.

Now, one could argue that the products they sell seem to be a bit pricey and have some fairly. But asking a premium for quality is not scamming, consumers seem to be willing to pay after all.

The same goes for the MLM business opportunity. The fact is that most people who became MLM distributors/associates fail. But that doesn't make it a scam unless they have been recruited with false pretenses.

Modere doesn't condone marketing their business opportunity or products on false pretenses. No legit MLM does. But the problem with MLMs is that the individual sales reps that recruit people sometimes use strategies that aren't in line with company guidelines.

Now if they get caught, they will usually get terminated. But the problem is that in a huge MLM there are thousands upon thousands of sales reps. They simply can't monitor them very tightly.

So sometimes people feel pressured or scammed when a dishonest rep gets them to join and pay for the initial product pack. They then feel obligated to try to make their money back.

But all the above doesn't make the company or the business opportunity a scam. It's just an issue with the MLM business model as it's unavoidable to have some dishonest people as sales reps.

This is one of the reasons I'm not a huge fan of the business model. It creates a financial incentive to recruit in any way necessary for some people.

An Alternative Business Model

If you are looking at Modere because you want to start a home-based business of your own, I might have something interesting to offer to you.

While MLMs can offer an opportunity to work and earn at your own pace and from home, they are generally hard work. Harder work than most regular jobs.

You need to constantly look for new prospects, hold sales parties, arrange customer meetings, etc. In short, you need to hustle day and night if you want to succeed with MLMs.

I recommend you look at the potential the online world has to offer instead. The stuff I'm about to show can be used to grow your MLM business as well, so you might want to hear me out regardless.

Me and thousands of people all around the world are using a business model that involves a lot of writing but offers some very intriguing benefits over "regular" business models:

• Work from anywhere in the world
• No need to sell directly
• Passive income
• Minimal starting investment
• Help people to solve their problems

I'm talking about SEO based affiliate marketing. If you have no idea what either is, it's basically about creating websites that people find on Google and recommend useful products on them.

The products are recommended through affiliate links and if a visitor clicks on it and ends up buying, you earn a commission.

The beauty of the system lies in the fact that once the system is set up, it functions automatically. Just think about, a website is accessible 24/7 and since sales are made through links, there is no need for manual steps.

This means that a website becomes an asset that produces passive income, just like real estate you rent. But with a website, you can grow that passive income by working on them.

You can also invest money in advertising to increase your income but you really need to know what you are doing.

This is definitely not a get-rich-quick type of deal. It involves a lot of work in the form of writing. You will also not get paid anything in the beginning.

It takes time and effort to build the authority of your site and once you start getting traffic, it usually grows exponentially, as does your income.

If you want to learn more about this business model, check out my Wealthy Affiliate review. It's the place where I learned all this and used the training to create two income-producing websites.