Hey there sea changers, and welcome back to my series of MLM reviews. Today we are going to take a needle to the fashion industry with my cabi MLM Review. The online sale of clothing is an extremely lucrative one with many making a good living selling new and used clothing via online stores and affiliate marketing. Added to this obviously is the array of clothing based multi level marketing programs that are available so without wasting any more time, is cabi a MLM worth checking out in 2020? Let's have a look and find out…
What is MLM?
Multi-level marketing (MLM) programs are the traditional mainstay of the ‘party plan' world of products such as Tupperware, Mary Kay and Amway etc. and, of course within the beauty/cosmetics, supplements and essential oils markets. It is not as prevalent within the clothing industry but as MLMs have become more popular in recent times – mainly due to the fact that much of the sales and marketing is now being managed online – companies in other niches are starting to get in on the action.
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The ‘multi level' aspects of MLM come from its hierarchical nature in which you make commissions based not only on those that you sell to, but also the sales of those whom you ‘sign' into membership arrangements as well.
In short, the process works as follows:
- You join the program, either via referral from another person (known as your up line) or directly through their website.
- You promote the products of the company via parties, workshops or online.
- As you make sales, you offer incentives to your customers to sign up as a member of the program (there are different names for this but they all mean the same thing).
- That new member is then placed ‘underneath' you in a hierarchical arrangement (known as your down line).
- You, and a number of levels of your up line, then gain extra commissions for everything they sell as well.
- If they manage to refer their customers into memberships, they also become a member of your down line allowing you to make up line commissions as well.
The number of levels of your up and down lines will vary depending on the program you have joined. Commission rates will also change as your down line grows or contracts and many will also offer other incentives such as total company sales percentages and/or access to membership prizes as your own business grows.
Who are cabi?
Originally called ‘Carol Anderson by Invitation', cabi describes itself as “a company for women by women” and was founded in 2001 when Carol Anderson and Kimberley Inskeep started to talk about how women needed both a better way to shop and a better way to work. From there, with the phrase, “…Affect lives through relationships” as their mantra, they asked 10 like-minded friends to brainstorm with them and cabi was born.
Based in the U.S, cabi has grown from those original 12 founders to generate over $250 million in revenue in 2016. It operates in the U.S, U.K and Canada.
What do they Sell?
Ok, so we can keep this simple – cabi sell women's fashion. Their product range can be purchased in three categories – Casual, Dressy and Work – and includes:
Item costs appear to fall into the low to medium price range of around $50 to $100 per piece.
MLM Program outline
The cabi clothing MLM program calls their members ‘Stylists' who are part of what appears to be an extremely simple program with a basic retail and downline commission structure. Here are the basics as I have found them…
Base Commission rate: 25% to 33%
Down line commission rates: 8 – 2% to four levels (level 1 down line is 8%)
Minimum monthly spend to qualify for commissions
Monthly sales bonus threshold are as follows:
- 800 in personal qualifying volume (PQV) during Launch, first and second seasons,
- 2,500 during third and fourth seasons
- 3,500 during fifth season and beyond.
Payment terms: Monthly.
Application required?: Yes, Application form on website.
Purchase requirements to join: Yes
New stylists are required to purchase a seasonal ‘collection' in order to become active. From what I can see there are two options:
- Introductory Collection: $USD 1000 (available for first two seasons only)
- Seasonal Collection: $USD 2500
Ongoing seasonal collection purchases are required (see below re sell off of last season collections).
Marketing materials provided: Free starter kit which includes a cabi curtain, garment dividers, rack, order forms, invitations and envelopes, and invitation inserts. Personalised website and training.
As with the most MLM programs, downline commissions are determined by the total personal qualifying volume (PQV) generated by the Stylist and their down line within a calendar month. Most MLM programs manage it this way in that commissions are paid on the points assigned to a product rather than the entire sales total. I have been unable to locate any information as to how cabi calculates its PQV allocations however as an example, if a product retails for $100 and it has an 80 PQV rating (these generally vary from product to product) then the commission is calculated on $80 only. So if a commission rate for a product is 8% then it will generate a $6.40 commission payment.
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How can I get paid?
The compensation plan promotes 3 ways in which Stylists can make money when they promote and sell products. These are fairly straight forward however there are none of the extra bonuses (fast start etc.) found in many other MLM arrangements. The 3 payment options for the cabi MLM program are outlined as follows:
Retail Profit
Retail Profit is the base profits earned by the general day to day retail sales that Stylists can generate. There are two main ways here:
- Earn a base commission of 25% of the purchase value if done so at retail prices via the Stylists personal website.
- Purchase products at discounted rates and on sell them at retail prices within a shop front, market stall, kiosk or via the cabi preferred traditional party plan (called styling sessions) method.
Note: The website outlines ‘Generous discounts' for hostesses – I have been unable to locate discount rates however.
Team Sales Commissions
Team sales commissions are the basic unilevel commissions that are prevalent within most MLM programs. Within the cabi MLM program, commissions are paid to 4 levels based on the number of downline sales and PQV reached. Commission payments are as follows:
As part of the team sales commissions, extra payments can be generated:
- When Stylists and their first level team members reach 24,000 or more in group qualifying volume (GQV) in a month, their commissions are boosted an additional 8% (totaling 33%) commission on that month's CV.
- If the Stylist is a Team Leader of a Stylist who begins in Fall '19 and beyond, they will earn 8% on that Stylist's monthly CV in their first four seasons, 5% in their fifth season, and 3% in their sixth season and beyond.
Qualification
Commissions are earned when the Stylist and their team members each reach their respective monthly sales bonus thresholds. These are 800 in personal qualifying volume (PQV) during Launch, first and second seasons, building to 2,500 during the third and fourth seasons and 3,500 during the fifth season and beyond.
Inventory Sales
I mentioned above in the MLM outline that Stylists are required to purchase an inventory kit to begin their MLM journey and then seasonally moving forward. The purpose of these kits is to use during the ‘party plan' styling sessions where commissions are made on retail sales.
As each season changes and a new inventory kit is required @$2500 ($1000 kit only available for first two season) then cabi promote the option to sell your old inventory off. Their theory is that if you sell 70% of your inventory for 50% off then you will make enough to purchase your next kit as follows:
Obviously, if a Stylist is able to sell their inventory at higher than 50%, then they can make a little extra as well.
Ranking structure
Usually, MLM programs use ranking structures on which to base commission payments and other bonuses upon. The cabi MLM program does not use rankings for its Stylists as such. They do however implement higher commission qualifying levels dependent upon the number of seasons that a Stylist has been active.
What is good about it?
So, after a good look around the site and looking at all the options I could find, I do like the following:
- Commission/discount rates for entry level sales are good.
- Program is simple and easy to follow.
What is no so good about it?
There are also some things to be aware of including:
- There are not the full array of bonuses that are evident in other programs within this niche.
- Joining and ongoing costs are extremely high.
- Commission qualifying PQV levels are quite high.
- There is a strong onus placed on recruitment rather than ongoing sales as such.
How much can you make?
I was unable to locate projected income figures on the cabi website however as with most MLM programs, the percentage of members making the upper rank levels – and hence earning a living – is usually very low.
My final thoughts
Look, MLM is not an easy platform to make money in and there is not much that I have seen here to put this program above the many others I have seen.
There are no real red flags with this one in terms of the actual program however, to be honest, the high entry level and ongoing costs to me make this one out of the scope of most. Ongoing PQV requirements appear high (I have not seen calculations) but with most products selling at the $50 to $150 mark, I am going to make the call that quite a few sales will be required each month to earn any sort of decent cash. The program does also appear to be heavily focused on recruitment meaning that new members are going to need to be sourced each and every month.
That said, if you are an absolute fashion nut with a large customer list at your disposal and willing to run a lot of old-fashioned MLM party plan style fitting sessions, then the commissions rates on base sales might just appeal here.
I was unable to locate any negative reviews in terms of non-payment etc. however there was some negative comments about the quality of customer service and the MLM program itself – although it was not really anything that is uncommon in regards to MLM programs or products within this niche. There was however a larger than usual number of complaint online in regards to aggressive Stylists as they look to recruit new members.
Conclusion
So there you have it, my honest review and appraisal of the cabi MLM program. I hope it has been of assistance but as usual, if you have any questions or experience with this program please do not hesitate to reach out by commenting below – especially if any of my information is inaccurate.
Are there any other programs you have been looking at but want to know more about? If so, please comment below and I will do my best to get some details for you.
Do you want further assistance with any of the above or need help to build your own fashion based website?
Are you looking for a comprehensive training platform that can give you step by step training, 24/7 support, tools to develop and host your very own website, ongoing assistance with SEO and social media and access to some of the best affiliate marketing minds on the planet, then click on the following link to read more about Wealthy Affiliate.
Until next time
Have fun
Paul
Note: If you make a purchase from this page, there is a very good chance that I make a commission from it – these commissions do not increase your sale price.
cabi MLM
$1000
Pros
- Commission/discount rates for entry level sales are good.
- Program is simple and easy to follow.
Cons
- There are not the full array of bonuses that are evident in other programs within this niche.
- Joining and ongoing costs are extremely high.
- Commission qualifying PQV levels are quite high.
- There is a strong onus placed on recruitment rather than ongoing sales as such.
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See you there
Paul
