Front loading or inventory loading is the practice of buying a lot of stock so that customers can buy from you right away. Basically, sure, it's a good idea to have stuff in stock, and customers do love being able to get what they want immediately.

However. Front loading sails very close to the “Pyramid Scheme” wind in Direct Marketing (DM) and Multi-Level Marketing (MLM) businesses, especially as distributor orders are usually linked to bonuses, rewards, progression to higher levels, and earning commissions. Distributors often place orders for stock just to qualify for something, not because there's a demand for their products, or that they've sold a lot.

This is what we're told to do, in the private Crown Princess and other royal groups for distributors ...

And this is what the official SeneGence Distributor Policies and Procedures Guide (2017) states (covering their legal butts by stating that progression within SeneGence doesn't depend on stockpiling, even though it does):

Front loading is, of course, of great benefit to the company, and uplines. It means THEY earn big commissions and get big sales. Not so great for the downlines, though. So it's a win-win-lose sort of deal, where the distributors lose out, purchasing too much stock, getting into debt, and often ending up selling stock at a heavy discount just to get it out of their house.

The Federal Trade Commission (USA) rules that front loading is inappropriate activity:

Front-loading or inventorying of product in which excessive product purchases are viewed as prohibited consideration for the requirement that individuals make an initial investment of product purchased to engage in the opportunity.

Kevin Thomson, an MLM attorney, writes:

The courts add another layer to this definition that muck it up a little: inventory loading can occur when distributors are purchasing a minimum amount of product in an effort to qualify for bonuses. FTC vs. Omnitrition

Here are just a few articles you can read about front loading in MLM:

• MLM Basics: What is Inventory Loading?

I particularly love this quote from the above article (my emphasis added):

Modern MLM sales people don't really stock products in their garage or storage, but instead, just take orders and the items are drop-shipped straight from the company's fulfillment center.

SeneGence, still stuck in the dark ages ...

• MLM Basics: Inventory Loading and Front Loading

• Where Have All the Products Gone?

• What is Front Loading or Inventory loading?

SeneGence founder, Joni Rogers, used to work for Mary Kay, and seems to have copied a great deal of the Mary Kay business model (their annual conventions are also called Seminar, just for starters!)

• The Mary Kay New Year, New Recruit Frontloading Wipeout

• Front loading: How Mary Kay Predators Rope their Prey into Large Inventories and Bigger Debt

#frontloading #inventory #SeneGence #LipSense #MLM #debunked

I signed up in January 2017. My upline (she lives in Texas, I'm in NY and we've never met) showed me an album with tons of beautiful colors that I was super excited to order. I started a Facebook group, she told me to use her albums to show my customers the lovely colors I could offer. I went to order my stock, and there were about 5 colors available. I had 2 that I had purchased from her, but I didn't want to demo them because my friends couldn't buy them. I placed an order with what I could and once they came in I did live videos enthusiastically trying on what I had, even the colors I didn't love. People purchased a little, but I ended up breaking even bc in NY our tax is super high, plus I had to ship everything & pay for packaging. So I scrounged up some money & placed another order. But most people don't need 20 colors, just one or two. Sales dried up. People watched my videos & we had fun, but nothing moved. Then for months there was literally 1 color available everyday. I have a full time job & cant spend 24-7 staring at the website, so 99% of the time I missed out on anything that came back in stock. I never heard from my upline, but one of my customers did when my upline asked her to join her team 😞. Then my team got a new CP, and while I couldn't get a gloss to move, she's making 10s of thousands off of us.

Several straws broke this camel's back. I truly think the encouragement of front loading isn't because uplines think stock sells, it's because stock makes them huge commission checks.

This was a heart breaking experience for me. I work 2 jobs & saw what these other girls were doing, and thought I could quit one of my jobs & do something I loved. It seems that if you didn't get in early so that you're one of those girls at the top of the “non-pyramid”, it's very difficult to not only get ahead but get anywhere. Since June, I've sold everything I had at a discounted rate, including my personal stash, and still haven't broken even. But no SeneGence product will ever touch my face again. It's just not a product or company I can stand behind.

— TAF

#SeneGence #LipSense #MLM #distributor #debunked #truestory

I'm 61 with health issues and my husband is totally disabled. I was going to purchase a collection for myself but was also duped into thinking this DS company was “different” and I'd finally be able to supplement our income.

Well, was I WRONG! I started in January and wasn't told about the OOS issue. I, like an idiot, purchased the most expensive distributor collection (unaware that it didn't count towards PV)!

Then as other colors came in, I purchased a few at a time (if I could log on before they were hoarded and OOS). Most times I only got 20-30% discounts because I wasn't buying 20 of one color 😡.

I'm in NY, and aside from online competition, there are so many boutiques and department stores (offering discounts and/or specials) it's really been difficult for me to sell the products.

I'm in debt because of this, on a fixed income — I can't invest another dollar. I was enthusiastic early on (about recruiting) ... but when I saw that the OOS problem was not going away, I stopped trying to recruit.

In addition, since I joined in January, I'm furious that I have outdated books and unicorn 🦄 colors! The company had to have known they were eliminating these colors, thereby making the books obsolete as well.

I'm one of those distributors trying to recoup most of my investment back by offering discounts or free shipping. What I thought was going to give us a cushion, turned into a nightmare.

— VW

#SeneGence #LipSense #MLM #distributor #debunked #truestory

I became a distributor because I liked the products. I'm a born saleswoman — I love sales, and have been a recruiter for 8 years. This business was perfect for me, I have never done an MLM before (I also own my own business), and I evaluated all the numbers my upline told me, as far as earning potential to sell the product alone (I did have girls sign up under me), I was repeatedly told there were two ways to make money — selling the product and building a team ... ok I'm good with that ... except that was not the case AT ALL.

There was zero stock available, so I had to fight to buy 10 of 3 different colors when colors came out to get to $750 PV. Crunching the numbers buying under $750 PV just didn't make any sense. Anyway now I'm $1,000 in the hole and I have learned sooooo much about SeneGence's business practices that I frankly feel disgusted.

The things that bother me the most ... the fact that the Fast Start program was taken away — why? This makes it SO difficult to get started, spending $750 (which comes out to be closer to $900 after shipping and handling and prepaying taxes) ... it's such a huge risk.

Putting girls I love (my downline) in this situation makes me feel very uncomfortable. I know their financial situation and they want to make an honest buck — but I do not feel SeneGence is honest at all.

The other thing that REALLY bothered me was on my upline pages they would promote posts on how to “make money on sales alone” they say — buy $750 and sell for $1,500 make $750 profit (which you re-invest right back into SeneGence of course). THERE IS NO WAY IT IS POSSIBLE AT ALL TO MAKE $750 PROFIT OFF OF A $750 INVESTMENT. Simply — the exorbitant shipping and handling charged FROM SeneGence negates that profit margin entirely — it's impossible even if you happen to have sold exactly everything you bought (like that's going to happen), and what about testers?

We forgot to mention that a large part of our inventory is dedicated to testers. I recognize it takes money to make money, but the way SeneGence promotes making money is TOTALLY DISHONEST. I absolutely can not compromise my integrity just to get someone to take the bait and become a distributor and front load a bunch of product. I would rather eat my $1,000 loss then to propel the lie posed by SeneGence and their successful distributors. There is no legit income opportunity to sell the products alone. I can ask on my upline's page “Who is making a profit on sales alone” and out of over 1,000 — it's crickets — maybe one person claims to make a profit months down the line ... My time is waaaay more valuable than that.

Let's talk about the Shipping and Handling and TAX from SeneGence. You are charging way too much — just skimming every which way you can to make money off your distributors. WHY ON EARTH DO YOU CHARGE TAX ON SHIPPING???? HOW IS THIS EVEN LEGAL???? Just further proves that you are skimming in anyway possible.

Let's talk returns, you are supposed to send us the colors that were returned — but now you just give a credit — you don't return the tax paid on it and we have to pay S&H AND TAX again on these returned products! Come on give us a break ... also why are there WAY more colors available — almost all of them — on the Australia's distributor site, when the colors are shippped from the USA? We all know you are trying to create a fake supply and demand to create this buying frenzy ....

– Distributor 2

#SeneGence #LipSense #MLM #distributor #debunked #frontloading #inventory #truestory

I personally signed up for the LipSense. Having sold other MLM companies I wasn't new to this so I hopped on board.

Wow, was I wrong, I had never logged into a site to order products and there was nothing to order. My upline didn't tell me this little bit of important info. I just made a game out of it, called it the Hunger Games and went to trading sites where that is a whole new blog post.

I have a great team, meaning, myself and my recruit and her recruits I had a great team when I sold another MLM, so I felt that I could do this, with that being said with “front loading” that is pure bull shit!

I personally don't have credit cards and pay cash for everything, so I don't understand why a person can't just give me their credit card info and plug it into YOUR system and have the product shipped to me or THEM! Ohhhh, that may make sense ...

And let's talk about the personal website, can we get in the same century? If I logged into that I would get out and drive to Walmart to buy something. Geesh. Even the website needs updating. Maybe I don't know what I'm doing, but some of the product knowledge, why do we have to listen to it?! Can't we read it?? I'll get off my soapbox now.

— Holly Harris

#SeneGence #LipSense #MLM #distributor #debunked #frontloading #inventory #truestory

Dear Joni,

We are writing you in the hopes that you will take some time to understand what we are saying, and where we are coming from. We love and believe in your products. We are distributors because of that love and belief.

It saddens us to see the rapidly growing negativity all over the internet regarding the company. There are literally hundreds of groups on Facebook where distributors are going out of business and/or selling stock at crazy low prices. They are terrified, because during the OOS months, they hoarded colors and products because they didn’t know when those products would become available again. Now, everyone is panicking and trying to get out of the debt that this has caused.

The products simply cannot sell fast enough. We are each, only one person. We cannot spend 23 hours a day promoting, selling, packaging, marketing, shipping, invoicing, taking orders, and so on, to try to earn a profit. We have families and children, careers and lives. We signed on because we believed we could have fun, sell a product we loved, and earn some extra income on the side.

We have all been distributors for several months, if not longer, and even with steady sales that have kept many of us busier than both our day jobs and our families do, we can say that most of us still have not made any profit. Most of us are in debt, some of it running into thousands of dollars.

There are a few reasons why it’s not profitable to sell your product, and we believe that with a few changes, it could be the amazing and life-changing company you claim it to be. Not just for a select few Crown Princesses, but for all of us.

The key to a company’s success is to hold on to integrity, and not get swallowed up in the greed. We see the women pushing their downlines to order 300pv and “front load”, so they can earn their commissions. That is pure greed. Many of us have downlines, but we refuse to climb to the top on their backs. There has to be a better, more humane way.

If things continue with no changes, SeneGence will end up like LuLaRoe. A passing fad that is in its death throes now, with their $25 leggings going for $5 all over the internet. We don’t want to see this happen to SeneGence, and if you think it can’t happen, you’re wrong. As fast as it exploded is how fast it can implode. Life on the web moves fast.

Here are a few ideas we have collectively put together, with the hopes of saving the company, and our business investment in it.

1. Lower shipping costs or provide free shipping for orders of 300PV and higher.

2. 50% discount for distributors who purchase 300pv. 750 pv is really high and it's partly to blame for causing the OOS issues and the overstock issue that current distributors have. This is causing tons of going out of business sales all over the internet, where the product is being sold to customers for up to 50% off. We've seen LipSense as low as $11!

3. Low cost personal website — we need modern, well-designed and user friendly sites, where our customers can place their own orders, and we receive commission on the orders.

4. $40K a month is just greed. At 150 Crown Princesses, if they each earn $40K a month, that is costing the company $72 million a year. That is insane. How about capping that monthly commission income for the Princesses, and using some of that to make real changes to help the majority of your distributors, who are the majority of your workers, and making pennies.

5. Training — ones we don't have to pay $2,500 for. $500 for a weekly call? Why?

6. Branding. Please do something current and attractive ASAP. To be selling your products for the amount they’re priced at, they need to look like luxury items. They don’t at the moment, because of the amateurish logo, packaging and marketing materials.

7. End the monthly PV for commission earnings, stop “pay to play” (which is sailing very close to the wind with illegal pyramid scheme definitions) and give us credit where credit is due, we shouldn't have to purchase to earn commissions!

8. Bring back incentives for new distributors to sign up. Right now, there is ZERO reason for anyone new to sign up.

9. Release the new colors and products at the same time, so everyone has equal chance to get it if they need it.

10. STOP NEW DISTRIBUTOR SIGN UPS when there is no inventory to sell them!

11. Retroactive “Fast track” for those who were ineligible when they signed up.

12. Employ a UX / information design specialist to redesign Back Office so we can find things, and documents are arranged in a logical, systematic way.

13. Cap the “hoarding” of stock during times of OOS, putting limits on how many of each item a distributor can order at any one time. This is the reason for the going out of business sales all over the place. All that does is hurt those of us who are trying to sell the product at full retail.

14. Don’t use Crown Princesses and Queens as your communication channels. It becomes one big game of Chinese Whispers, with rumors running rife. One way of making sure distributors get clear information directly from you is to send out emails of updates and action plans.

We truly appreciate you taking the time to read this, and hope that you and your team will sit down and carefully consider the points we have made.

Sincerely, Your Distributors

#SeneGence #LipSense #MLM #distributor #debunked #frontloading #inventory #truestory #openletter

I started SeneGence with high hopes, believing in all the talk of “momentum phase” and getting in early. I am a business woman, have been for a decade and do very well with my full time business. With that said, I am always looking for an opportunity!

I read once that every millionaire has 7 streams of income coming in. Once I signed up however, I quickly realized that in order to be successful and earn the real money, I'd have to trick ladies a little in order to get them to sign under me and push them to spend $460 (give or take depending on your shipping costs) in products monthly.

The OOS issues, as you all know, caused me to panic-buy. I have customers, waiting for colors, and had no idea when the color was going to come back. Early on, I asked the uplines if this was “the game”. Creating urgency to buy. They assured me NO, it was not, it was the company exploding in popularity and blah blah blah.

Now, after several months, I have 45 color tubes and 15 glosses that have not sold. That is over $1,000 in product. It happened so fast.

Groups are popping up all over Facebook where girls are selling at half price, making selling at full retail close to impossible.

I'm really disappointed in this company and the way they are treating their distributors, and that is why I hope they will hear us and make some changes.

— Distributor 1

#SeneGence #LipSense #MLM #distributor #debunked #frontloading #inventory #truestory

Luxurious packaging design and branding are important to cosmetic brands. It helps their products look desirable and valuable, worthy of their prices. It also helps to people who sell it, whether in shops or by direct marketing, to feel proud of the product they're representing.

All of SeneGence’s branding and graphics are outdated, amateurish, and widely disliked. The logo is laughable. A freshman graphic design student could do better, like, much better. Even our customers don't like the branding. Customers like to show off the products they use, and the current branding means often they don't want to. Especially the skin care range. It looks like it's from the bargain basement.

It is hard to feel proud of the products we're promoting. We feel embarrassed by the logo, graphics, and packaging. We love LipSense despite the packaging. It would be nice to be able to feel proud for a change.

Even a professional packaging designer has an opinion on this too:

“I do packaging design and if I had to hazard a guess as to why LipSense wouldn’t make it in the main market, it would be that they lack quality design and branding. Cosmetics is an insanely competitive market and LipSense packaging and branding are ugly and old-fashioned looking. Getting new branding, marketing, and advertising is very expensive, so that could be one reason the company’s sticking with the MLM model.” — (in the comments section)

Some of us remove the labels from our LipSense testers, because they look so much better with nothing on them at all. The colors can be viewed much more easily, and we can see how much is left in the tubes. All our customers are interested in is the color and the color name.

We also want recyclable packaging. We don't know if any of the empty packages can be recycled, and have not received answers to our questions to you about this. This is an important issue to us and our customers.

Here are a collection of lipsticks and lip glosses from all kinds of companies. From the cheapest to the most expensive, they all look better than LipSense. Everyone else has understood the importance of attractive and modern packaging design.

Surely y'all can do better, SeneGence? You might not think this is an urgent issue BUT IT IS. Can you at least keep up with with everyone else is doing? Look over the articles on the Beauty Packaging website to get some more understanding of this long-neglected part of your business. Get professionals in. It's not a job you can do yourselves.

#SeneGence #LipSense #MLM #design #debunked #packaging #branding

This is an anonymous blog where some real SeneGence distributors will share their experiences and thoughts with you. These blog posts are the personal opinions and experiences of people who have been or are still distributors. Your experience of SeneGence may differ, you might be one of the lip bosses who actually got this business to work, and good luck to you.

We all got in this to make some extra money selling a product we love, or to gain the financial freedom that is dangled out there.

But is that really attainable?

Let's talk about that! No-one should get into financial ruin here, and we see so many on that road. We’d like to be a part of helping. We hope we can all figure this out together, and help each other make good business decisions.

We also have suggestions for SeneGence on how to improve their operations, based on our experiences. We would like anyone thinking of signing up as a distributor to know the full story of what’s going on with the company. By all means sign up, but be informed of the issues as well.

We want to help you make good decisions!

#SeneGence #LipSense #MLM #distributor #debunked #truestory