Straight Up Truth: Rodan + Fields Transforms from MLM to Affiliate Program
MLM shake-up: Analyzing Rodan and Fields' possible bankruptcy
📌 Rodan + Fields goes affiliate, not bankrupt.
The buzz surrounding the skincare giant, Rodan and Fields, being on the brink of closure is all haywire. Here's the real scoop.
Launched by skincare innovators Katie Rodan and Kathy A. Fields (creators of Proactiv), Rodan + Fields skyrocketed to fame in 2002. Originally positioning itself in the marketplace, the brand switched to a multi-level marketing (MLM) scheme in 2007. Critics often question if this move leaned towards a pyramid scheme.
💣 Is Rodan and Fields Going Under?
A major shake-up within Rodan + Fields has ignited speculation about its collapse. But rest assured, the brand is not headed for closure. Instead, it has chosen to exit the MLM game and establish an affiliate program.
MLM businesses thrive on recruiting people, earning profits through the line of recruitment. In contrast, affiliate marketing focuses on salespeople promoting products they love and earning a commission for each sale, without relying on recruiting others for the majority of their income.
This revolution at Rodan + Fields also coincided with slashing 100 jobs within the company. The brand has been grappling with hardships for some time, leading to this makeover, as confirmed by Women's Wear Daily. This move follows a $75 million cash injection injected earlier this year, alongside 76 layoffs at their San Francisco headquarters in September 2023.
💡 The Struggles of Rodan and Fields
Rodan + Fields used to be a billion-dollar empire in the MLM world. However, recent years have been tough, with fierce competition from platforms like TikTok Shop, indie brands, and Amazon.
According to a 2016 Income-Disclosure agreement, over 90% of its members made less than $200 a month, and only 96% earned more than $500 a month. The popularity of MLM giants, including Rodan + Fields, has waned, as revealed by a 2023 study from Seeking Alpha, which showed that MLM brands lost half their market share in the UK between 2018 and 2022.
This shift comes as regulatory bodies clamp down on the MLM sector, with the FTC fining industry leaders like Herbalife and Advocare over $350 million for their operations. Rodan + Fields might have faced the same issues, which led to the decision to abandon the MLM model altogether.
The brand's affiliate program is set to launch on September 1.
🔑 Insight: By switching to an affiliate model, Rodan + Fields hopes to simplify operations, focus on sales, and deliver better customer experiences. This trend is not unique, as other MLM companies are moving towards affiliate marketing to streamline processes and increase customer engagement.
In the wake of Rodan + Fields' transformation, the brand is moving away from traditional multi-level marketing (MLM) and adopting an affiliate marketing approach, with the goal of streamlining operations, focusing on sales, and enhancing customer experiences. This shift in the finance sector of the business follows a trend observed in other companies, as they shift towards affiliate marketing to improve efficiency and engage customers more effectively.
