Rodan and Fields Compensation Plan
If you’re thinking of joining Rodan + Fields you should review their compensation plan and income disclosure statements. This article will specifically cover Rodan + Fields compensation plan!
As a reminder, I have an MBA, I am a Certified Public Accountant (CPA), and have almost 15 years working in finance and accounting. These are my opinions based on researched facts and my understanding of those facts. However, this is not legal, financial, or tax advice. If you need legal, financial, or tax advice, you should reach out to a professional for a 1:1 chat! All opinions are my own.
Use the table of contents below to skip to the sections that most interest you, or find the full PDF of the compensation plan below by clicking here.
What is Rodan + Fields?
Rodan + Fields or R+F is a company that sells skincare and haircare products. It has been a multi-level marketing company since 2008. The company was founded in 2000 by Dr. Katie Rodan and Dr. Kathy Fields. It was sold to Estee Lauder in 2003 and the products were sold in department stores. Dr. Katie Rodan and Dr. Kathy Fields purchased the company back in 2008 and launched it as a multi-level marketing company. They describe it as a Consumer Connected Commerce business model, but it is an MLM/Network Marketing company.
How Do Multi-Level Marketing (MLM) Companies Work?
Multi-Level Marketing (MLM) companies go by a few names. Multi-Level Marketing is also known as called direct sales, network marketing, social selling, consumer-direct marketing, consumer-connected commerce, pyramid selling, referral marketing, and more. I will be referring to it as an MLM in this article.
An MLM doesn’t use traditional methods to market their product, meaning, they don’t sell their products in stores. However, some MLMs do have their products in stores. For example, Tupperware has started selling at Target for example. Although when they sell their products in stores they are not doing it via multi-level marketing.
MLMs sell their products through independent sales consultants directly to consumers. Therefore, instead of using stores, they use salespeople to advertise and distribute their products. In multi-level marketing, they encourage you to build a downline having to make different levels below you.
How to Rank Up In Multi-Level Marketing
When reviewing any compensation plan or income disclosure statement for an MLM, you will see the top ranks are the only ones that earn any money. So how do you rank up and reach those ranks that make all the money?
In order to rank up within an MLM, you must recruit others to join your team. Then, you must encourage those that joined you to recruit more. That is why in MLMs there is more of a focus on recruiting than actually selling the product. Generally, in MLMs, selling products alone will never allow you to rank up to earn large commissions.
Why Would a Company Choose to be an MLM?
Why would a company structure itself as an MLM instead of a traditional business in stores? Here are a few of my thoughts on this:
- Logistically, it can be easier to get the product to market. There can be competition within stores for shelf space. Needing to warehouse and truck products to stores is also another challenge of a traditional business. With an MLM, they can promote it through these independent salespeople and ship all products from a single warehouse using an established shipping company (UPS, FedEx, USPS, etc.)
- Bigger customer market. When a company is set up as an MLM, you can sell both the idea of being a business owner and the product you are selling. Therefore, one product can be sold to two different sets of consumers. Most MLMs have compensation plans set up that you need to have so much personal volume or product volume (PV) to stay active, which can often be achieved through just purchasing the product yourself. That means, as long as they can convince you to stay in the MLM, they have a guaranteed sale.
Ranks with Rodan + Fields Compensation Plan?
Within the R + F Compensation plan – there are 8 Ranks. Below is a summary of my understanding of all the ranks. Compensation plans are complicated by design, so if I have something wrong here, please reach out to let me know!
Key Definitions of Rodan + Fields Compensation Plan
- Sales Volume (SV) – purchases made directly by Retail Customers and/or personal purchases
- Personally Sponsored Qualifying Volume (PSQV) – sales to preferred customers whom you personally enrolled and consultants you personally sponsor. This also includes Qualifying Volume (QV) from retail customers. This is the product a consultant buys, then resells to another customer at a higher price.
- From everything I’ve read, this includes any product purchased by the consultant themselves.
- Commission Period – Calendar Month
Consultant
- This is someone who has purchased the Starter Pack from R+F but hasn’t qualified by achieving 100 SV.
- Eligible for:
- Retail Profit
Qualified Consultant aka Active Consultant
- A Consultant who has earned 100 SV in a calendar month to become eligible for commissions
- Earn 10% Commissions on sales generated by retail customers, preferred customers, and sales generated by any consultants you’ve recruited to your team (downline)
- Eligible for:
Executive Consultant (EC)
- To reach this rank you need 600 PSQV in a calendar month
- Eligible for:
Level I Executive Consultant (LV EC)
- Maintain 600 PSQV in a calendar month
- 1 person in your downline has reached the rank EC
- Eligible for:
Level II Executive Consultant
- Maintain 600 PSQV in a calendar month
- 2 people in your downline have reached the rank of EC (in different legs)
- Eligible for:
- Retail Profit
- Consultant Commissions
- Personal Team Commissions
- Generation Commissions (Generation I-II)
Level III Executive Consultant
- Maintain 600 PSQV in a calendar month
- 4 people in your downline have reached the rank of EC (in different legs)
- Eligible for:
- Retail Profit
- Consultant Commissions
- Personal Team Commissions
- Generation Commissions (Generation I-III)
Level IV Executive Consultant
- Maintain 600 PSQV in a calendar month
- 6 people in your downline have reached the rank of EC (in different legs)
- Eligible for:
- Retail Profit
- Consultant Commissions
- Personal Team Commissions
- Generation Commissions (Generation I-IV)
Level V Executive Consultant
- Maintain 600 PSQV in a calendar month
- 8 people in your downline have reached the rank of EC (in different legs)
- Eligible for:
- Retail Profit
- Consultant Commissions
- Personal Team Commissions
- Generation Commissions (Generation I-V)
Premier Executive Consultant
- Maintain 600 PSQV in a calendar month
- 11 people in your downline have reached the rank of EC (in different legs)
- 1 EC has reached LV EC – Level 1 EC
- Eligible for:
- Retail Profit
- Consultant Commissions
- Personal Team Commissions
- Generation Commissions (Generation I-VI)
Elite Executive Consultant
- Maintain 600 PSQV in a calendar month
- 13 people in your downline have reached the rank of EC (in different legs)
- 3 EC has reached LV EC – Level 1 EC
- Eligible for:
- Retail Profit
- Consultant Commissions
- Personal Team Commissions
- Generation Commissions (Generation I-VI)
RFx Executive
- Maintain 600 PSQV in a calendar month
- 15 people in your downline have reached the rank of EC (in different legs)
- 5 EC has reached LV EC – Level 1 EC
- Eligible for:
- Retail Profit
- Consultant Commissions
- Personal Team Commissions
- Generation Commissions (Generation I-VI)
Here is a visual representation of what it takes to reach the top rank. Think of how many people need to be recruited to achieve this! So many when you factor in turnover, people who don’t rank up, etc. Then think about how volatile it will be if someone loses a rank, or one of your main LV EC quits!
Bonuses within Rodan + Fields Compensation Plan
Based on the compensation plan, there are several different ways to get paid based on your rank. I listed what each rank is eligible for above, and now I’ll define these commissions.
Retail Profit
The consultant purchases a product at a discounted price (Consultant Price) and sells it to their customers at a higher price. The difference in price is what the consultant makes in profit.
Consultant Commissions
Once you reach the rank of Active Consultant (EC) in R+F you are eligible for Consultant Commissions. This is a 10% Commission on all Level 1 Commissionable Value (CV). Level 1 (L1) are consultants you personally recruited and customers you personally sell to.
Personal Team Commissions
After reaching the rank of Executive Consultant (EC) you are eligible for Personal Team Commissions. This is a 5% commission on the CV generated by all the Consultants and Customers in your Personal Team. This means you earn these commissions of sales of those in your first level, and in all the levels below on your team.
Generation Commissions (Generation I-VI)
This is an additional bonus that Level 1 Executive Consultants and beyond are eligible for. They earn an additional 5% commission on specific generations as defined by their level. I have noted these above.
Can You Make Money with Rodan + Fields
Like with all MLMs, there is only a small percentage of people make any real money. In fact, many people potentially lose money when joining an MLM. According to Rodan + Fields income disclosure statement, the average consultant earned $462 in 2020. This is before any fees or purchases of products. In fact, 50% of all consultants earned $0. Therefore, on average, you cannot expect to earn large commissions for selling Rodan + Fields.
Check out all of the Income Disclosure Statements I’ve reviewed here: MLM Reviews & Info
Is Joining Rodan + Fields Starting Your Own Business?
If you join R+F, are you starting your own business? No. You don’t have control over pricing, products, etc. You can also be fired. What you’re doing is becoming an independent salesperson, and you’ll receive a form 1099 for tax purposes.
My Opinion on Network Marketing / Multi-Level Marketing Companies
I am very firmly against anyone joining an MLM. I do acknowledge that some people (less than 1%) get very rich in MLMs. The majority of people will lose time and money by getting involved in an MLM. I have reviewed many income disclosure statements and all of them show it is at max 3% can earn a living wage and less than 1% are getting rich in MLMs.
The business model is set up to motivate the uplines to have their downlines buy more products and recruit more people. It is the only way to achieve the bonuses and earn the most commissions. This business model is set up so that only a few at the top make the most money off those that are losing money at the bottom.
Final Thoughts on Rodan + Fields Compensation Plan
This compensation plan is no different than the other compensation plans in the MLM/Network Marketing space. Only those that have huge downlines will make a lot of money, and the money will be made off those in their downlines.
I’d love to hear from you if you have questions, comments, or differing opinions. Find me on Instagram, Facebook, or email me by going to my contact page.
Full PDF of the Rodan + Fields Compensation Plan
Taken from their website here.