Is It Works a pyramid scheme? No. But, It Works! has some of the characteristics of a pyramid scheme but does not meet all of the criteria.
This company’s business model does not fit all pyramid schemes’ definitions.
However, it is a multi-level marketing (MLM) company that provides you with numerous ways to earn money. Still, you may not make the amount you anticipated after signing up.
Yet, depending on your level of commitment, you may find success with such MLM.
In this guide, I’ve compiled information from reliable sources as well as my own It Works! experience. I hope this information will assist you in making an informed decision about participating in this income opportunity.
Our Editorial Team writes this article at Incomepedia with the help of a former It Works! employee.
Table of Contents
My Personal Experience
My experience with It Works! began in the summer of 2020. Over the spring, due to covid 19 ravaging all of our lives, I had gained a fair amount of weight. For the first time in my life, I was hesitant about my appearance and wanted to lose weight to feel better. I tried to lose weight.
Although I had heard about It Works! body wrap and other products a lot, it wasn’t until an old high school acquaintance engaged me on Instagram that I thought maybe this was the product for me.
At first, I was hesitant to trust whether anything would come off by investing in this product as I had seen way too many “seen on tv ads” to know better. But at a low point in my life, I decided what the worst could happen and ordered this body wrap from the acquaintance.
He was ecstatic, and that alone made me feel better. I felt like helping someone out through a dark period of all your lives. However, I hadn’t only ordered it to support someone I knew. I knew what I was ordering for myself.
I had looked up reviews for the It Works! crazy wrap things and found plenty of people praising them. Wanting to lose weight quickly, this point sold me. Without hesitation, I ordered It Works’ body wrap. The product arrived in the mail four days later, and I decided to try it immediately.
I was impressed by the crazy wrap thing. It seemed like a good departure from the various inferior products I had seen or heard about. This product worked as it was compressing my waist, and I felt the burn every second. I was delighted with my purchase.
I revisited It Works’s website to see what other products they offered. Then, I accidentally ended up navigating their “Become a Distributor” page.
Before this point, I assumed It Works! was just another health and wellness product company. You know, the kind with a large team of salespeople on staff. After reading their “Become a Distributor” page, my opinion changed.
People were openly invited to join the company as “Independent Distributors.” They described it as a chance to start your own business while benefiting from a “loyal customer program.”
This offer sounded appealing because I was between jobs at the time. I had also considered starting my own company at some point. I hoped that working as an It Works! distributor would allow me to hone my sales skills and eventually apply them to my business ventures.
After paying the entry fee, I signed up with the company. I also purchased my first shipment of products to sell. My time as an It Works! distributor was limited to four months.
I was initially unsuccessful in selling their products and was losing money. After all, I was new to sales and had no idea what I was doing. I looked through some of the company’s resources for new consultants and changed my sales strategy.
Throughout my scenario, I had the most success after showcasing their goods across various social media platforms. Nevertheless, I was still not making the money I had hoped for. After four months, I gave up and planned to retain the few It Works! products I had left.
According to my experience, I would not recommend It Works! to anyone who expects to earn a significant amount of money in a short period. After splurging numerous hours per day on advertising their products, I managed to make approximately $800 in four months.
My experience is detailed above.
Then, I will talk about this organization, its commodities, procedures, and lawsuits so you can make an informed decision about joining them.
So follow my experience as I deep-dive into It Works! and find out if it’s a viable source of earnings for you
What is It Works!
It Works! is a global health and beauty brand. It is a legacy brand. For decades, the business has been creating and distributing healthcare items. They have also included cosmetics and nutritional supplements in their product lineup.
It Works! is a Florida-based multi-level marketing organization. It was started in 2001 by Mark and Cindy Pentecost and distributes skin care and nutritional items to help you look good and feel better. It was valued at several hundred million dollars in 2022.
Protein powders, hair supplements, and other health and wellness items are available at It Works!
It Works! does not have physical storefronts. Instead, the items are marketed online through ‘Distributors,’ who promote on social media by utilizing the products and filming videos showing their achievements and discussing how the products have benefitted them.
It Works’s Products
It Works! MLM provides the following fundamental product categories:
- Beauty – With prices ranging from $5 to $232, there is something for everyone, from facial cleanser to toner, lip and eye cream, anti-aging cream, and amazing wraps.
- Nutrition – From $33 to $119, you can obtain a variety of super greens, probiotics, immunity pills, and other supplements.
- Keto – From $30 to $195, the keto diet product range includes keto coffee, keto creamer, and keto energy.
- Weight loss – $25-$195 There are various carb control pills, cleanses, fat fighters, and coffees, among other things.
- Energy & Endurance Products – $25-$142 for Energy & Endurance Coffee, hydration sachets, ketones, and other goods are available.
- Vegan – $30-$65 selection of coffee, energy sachets, and immunity packets, among other things.
- Apparel and Accessories – $8-$46 assortment of goods include pens, t-shirts, and caps.
Mark and Cindy Pentecost established It Works! in 2001. Mark Pentecost worked as a public school teacher in Michigan before starting It Works! He worked for a few different multi-level marketing organizations.
Before recognizing that he wanted to earn big bucks, he needed to create his own MLM business. Mark started It Worked in 2001, and after a long journey, the company is now worth hundreds of millions of dollars.
Mark’s goal was to design health and wellness products that would hurt their consumers and the environment. While developing these products, he learned about direct selling to earn profit.
He was drawn to the company concept for a variety of reasons. He appreciated how it allowed salespeople to flourish and exercise economic independence.
Although It Works! is an MLM company, something that sets It Works! Apart from other MLM firms, it includes a philanthropic branch called It Works! Gives Back Foundation.
This non-profit organization contributes to topics such as cancer research and homeless outreach projects. Although I don’t feel that the MLM business model is ethical in general, I will give them credit for spending part of their earnings for good, which is more than others can claim.
It Works! presently operates on a global scale. This MLM company aims to inspire individuals and help them thrive via “sustainable healthy living.” It Works! collaborates with specialists to design products that are rigorously tested scientifically.
You can learn more about It Works’s origin in the following video:
CEO and Staff
Mark Pentecost is currently It Works’s CEO. Mark has been the CEO since the business was established in 2001. Mark was previously a high school math teacher and basketball coach. Mark, along with his wife Cindy, established It Works! in 2001. It Works! is a health and wellness brand.
Under Mark’s inspirational leadership, It Works! has evolved leaps and bounds. Just after seven years, the company became an international business. In 2012 under Mark’s leadership, It Works! crossed $100 million in revenue, making it one of the world’s most significant health and wellness brands.
It Works! has over 10,000 full-time employees globally. It does not include the millions of part-time distributors It Works! has built its business on.
Is It Works! a Pyramid Scheme?
So is It Works! a pyramid scheme? To answer this question, let’s consult the legal definition of a pyramid scheme.
The Securities and Exchange Commission defines a pyramid scheme as “an investment fraud in which new participants’ fees are typically used to pay money to existing participants for recruiting new consultants.”
They describe pyramid schemes as having the following traits:
- No genuine products or services are sold;
- Members are promised high returns in a short period
- Members are told the business model allows them to make easy money or passive income
- There is no verifiable revenue generated from retail sales
- Members must purchase sign-up
- The business has a complex commission structure
- The business model places a high emphasis on recruiting
Why It Works! Isn’t a Pyramid Scheme?
It Works! is not a pyramid scheme since it lacks some of the abovementioned characteristics. It includes the following:
#1. They Sell Genuine Products
It Works! sells a variety of nutrition, skincare, and grooming products. These products have been purchased, used, and sold by me. Hundreds of thousands of It Works! consumers have bought and utilized the company’s products worldwide.
#2. Distributors are Promised Flexible Online Income, Not High Returns in a Short Period
It Works! claims to provide flexible online business opportunities. However, they never claim that if you work for them, you will earn a lot of money in a short period.
#3. Distributors Can’t Make Easy Money
It Works! explains the various methods distributors can generate income. On their “become a distributor” page, they do, however, state that “It Works! offers no assurances regarding profits.”
According to the page, a distributor’s income will vary depending on their time, effort, abilities, and resources. It Works! does not offer “easy money” or “passive income” based on this information.
#4. Revenue Is Generated from Retail Business
It Works! publishes its annual income. The corporation’s financial statement generated $200 million in 2021.
It Works! has explicitly indicated that this income was produced through various means. However, the corporation is unlikely to have made $200 million through recruitment. They have less than a million consultants worldwide and demand a $99 registration fee.
Why Do People Think It Works! is a Pyramid Scheme?
Many individuals consider It Works! to be a pyramid scheme. They believe this for the following reasons:
Reason #1. It Works! Has a Registration Fee
Typically, pyramid scams work by encouraging recruits to pay the person who recruited them or the firm directly. Because they don’t offer any actual items, these companies use the payments to support the entire corporate structure.
While It Works! does charge a $99 sign-up fee, a $35 yearly renewal cost, and a $20 website renewal fee. Hence making it look like a Pyramid scheme.
Reason #2. It Works! Has a Complex Commission Structure
For novices, It Works’ commission structure can appear perplexing. It is because its compensation plan is challenging to understand for new distributors.
The commission structure grows more intricate when you get to a higher level. People at higher levels will thus need to follow a sophisticated procedure if they wish to meet a specific earnings objective.
Reason #3. It Works! Emphasis on Recruiting
It Works’ business approach places a great value on recruiting. The firm provides you with a share of the sales commissions generated by your recruits. They also demand that the persons enrolled below you accomplish a minimum sales volume for you to advance to the next level.
These considerations motivate consultants to hire additional employees while simultaneously selling their goods.
How Much Money Can You Earn from It Works?
Fact: 96% of It Works! Distributors make less than $1k a month.
Also, the fine print in the note says these figures are REVENUE, not PROFIT. So, the take-home money for 96% is less than $1,000 a month. That’s less than the minimum wage of $1,256.7 a month.
It Works! Distributors typically start as “Independent Distributors.” They can work up to higher levels if they meet specific sales volume targets.
Independent Distributors can get promoted to the Diamond level after meeting a sales quota. Approximately 2% of It Works! Distributors are at the Diamond level. These Distributors earn between $554 and $1,848 per year. The average earnings for this level are $1,100.
The next level is Double Diamond. These Distributors make between $1,118 and $4073 per year. The average earnings from this level are $2,600, which is close to what you would earn if you worked a minimum wage job in the United States.
Given the above information, only 4% of It Works! Distributors ever reach a level where they earn minimum wage or higher.
How to Earn Income Through It Works?
Like most MLM firms, It Works!, has two options for you to generate income:
- Earn a commission by selling their stuff.
- Recruit others to join the MLM company and earn commissions on their sales.
Method #1. Commission Earnings
All It Works! Distributors receive a 10% commission on items sold to customers. When they sell items to “Preferred” customers, they get a further 10% commission.
Customers that have joined up for It Works’ premium membership are considered preferred clients. This membership provides members with unique goods discounts.
Method #2. Recruiting Others To Earn Commission from their Earnings
It Works! Distributors get a modest portion of sales from persons they have recruited. These commission revenues are referred to as “overrides” by It Works.
If you are at the Independent Distributor level, you will receive 5% of the sales made by your recruited members. If you advance in rank, you will be able to earn overrides from the sales made by the individuals they have recruited.
At higher levels, these overrides might be challenging to compute. However, they provide distributors with an incentive to acquire as many new members as possible.
3 Key Advantages of Becoming an It Works! Consultant.
Pro #1. Earning Income from Both Recruiting and Selling Products
It Works! allows you to make money in a variety of ways. If you’re strong at selling, you might be able to make a decent living selling their items. If you’re good at recruiting, you can earn a percentage of the individuals you bring in.
If you wish to move to the next level, you must be proficient at both of these jobs. According to It Works’ revenue earnings statement, this is feasible. According to the earnings statement, roughly 10% of Distributors advance past the first level.
Pro #2. Selling a Wide Range of Products
It Works! sells nutrition, skin care, and health care products. Distributors are not required to offer items from every category. It means you have complete control over which things you order and sell.
It might be beneficial if you are an influencer specializing in a specific area. For example, if you’re a health and fitness blogger, you might focus on selling It Works’ health care and nutrition products.
Similarly, if you are a lifestyle influencer, you may promote It Works’ skincare and health care products using your current social media channels.
Pro #3. Access to Training Resources
It Works! offers a variety of online training options for distributors of all levels. You may use your smartphone to access these training resources. It implies you may pick up new sales techniques on the fly.
I used It Works’ training materials to learn about social media promotion. After putting what I learned into practice, I could considerably increase my sales. I believe these training tools benefit anyone new to the sales game.
3 Key Disadvantages of Becoming an It Works! consultant.
Con #1. Sales and Recruitment Quotas
To keep your status, You Must Meet Specific Distribution and Recruitment Quotas of It Works. If you continually fail to achieve these standards, you will be demoted to a lesser level. It may affect your capacity to earn overrides from individuals you’ve recruited.
Con #2. Dubious Product Claims
If you want to seem thinner for a specific event, the Skinny Wrap may assist, but since it costs more than twice as much as everything else on the sale, the ultimate effect is disappointing.
Con #3. Making Money Isn’t as Easy as It Claims.
Remember that 4% of It Works’ distributors earn less than the minimum wage. Only around 1% of its employees have the potential to make six figures (not earning). This oddity bothers me.
To create a good living, you must sell items and recruit people. These are demanding jobs, and you are more likely to fail than to sell enough things to progress.
However, those who do not have access to other choices may believe that a few hundred dollars are a significant reward for their efforts.
Major It Works! Controversy
It Works! has been involved with many controversies over the years. The following are its significant controversies.
Dubious Product controversy
It Works! has been involved in various controversies surrounding the underperformance of its product. In 2017 they were targeted by the WJHL website, where they published accounts of previous customers and employees dissatisfied with the product.
However, given that in 2021 they still have an annual revenue north of $200 million, we can safely assume that the hit piece did not have the consequences the organization/writer initially intended.
Being Named One of the most hated MLM Company
The second major controversy It Works! was involved in was when it was named one of the most hated MLM companies by Walt. Watchdog.com
Like most MLM companies, It also thrives on the market reputation. It was severely damaged when it was exposed for unethical practices and the constant pressure of earning more than product sales on recruitments.
The data I gathered above should provide helpful insight into whether or not It Works! is a pyramid scam. I do not feel the business is a pyramid scam. It is, nonetheless, one of the most successful multi-level marketing firms in the United States.
It Works! has had decades to fine-tune its approaches and remodel its recruiting procedures to attract fresh employees. These recruits can decide to become distributors to make a lot of money. However, only 4% of It Works! distributors ever reach a level where they may make minimum wage or more.
If earning quick money is your primary goal, we suggest you avoid It Works! in favor of other MLM organizations with higher reputations. It Works’ distributors rarely make minimum wage and carry a negative reputation with themselves.
For example, they have a reputation for deceiving consumers and new hires. It is seen by the significant controversies in which they have been involved, as stated above.
So who would It Works! be a good fit for?
If you are an influencer covering a particular area, I believe It Works! might be a good fit. I appreciate how you can offer nutrition goods, skincare products, beauty products, or a mix of all three when working with them.
So, if you are a YouTube cosmetic guru or a makeup influencer, you can focus on advertising It Works! products. You can also utilize your influence to promote and recruit members for these items.
Similarly, if you have a fitness blog, you can promote It Works’ nutrition items on your site.
It Works! might also be a good fit if you want to learn about sales and social media marketing. The organization provides several training tools to assist you in this area. I’ve profited personally from implementing some of these talents in my other business ventures.
In the end, It Works! is just another multi-level marketing company. You can make good money if you are ready to invest time and effort. However, there are more straightforward ways to earn the same amount selling things as a company’s professional salesperson.
Frequently Asked Questions
Are It Works’ products harmful?
It Works’ goods aren’t as healthy as they claim. Some of them also contain substances declared unsafe by various health organizations.
Does It Works! allow you to return unsold products?
It Works! enables distributors to return unsold items if they fulfill specific criteria. I haven’t tested this return procedure, so I can’t say whether it’s that simple.
Can You Lose Money from Being an It Works! Consultant?
As previously stated, you can return unsold items to It Works! for a full refund. However, you may still lose money because of the registration and renewal fees.
You must pay $99 to become an It Works! distributor and $35 to renew your membership yearly.
- Products: Product Inventory
- History: Our History
- CEO: Mark Pentecost
- Employees Number: It Works! Employees
- Security and Exchange Commission’s Pyramid Scheme Definition: Pyramid Schemes
- Compensation Plan: Independent Distributor Compensation Plan
- Controversy 1: Dubious Products Complaint
- Controversy 2: Most Hated MLM Company
- Return Policy: Return Policy