Color Street MLM Review (Legit or Pyramid Scheme?)

Color Street is a multi-level marketing (MLM) company that is best known for selling nail polish strips.

And since you’re on this page, you’re probably wondering if it’s legit or some kind of scam or pyramid scheme?

If so, here’s the short answer…

Color Street isn’t a pyramid scheme. It’s a legitimate MLM company that (unlike a pyramid scheme) sells real products, doesn’t require you to recruit anyone to make money, and pays commissions to Stylists based on the sale of products rather than joining fees.

With that being said, it wouldn’t be the first time a seemingly legit MLM company was later discovered to be a pyramid scheme.

So let’s take a closer look at what this company is all about, and then compare it to how a pyramid scheme operates, so you can compare the differences and decide for yourself.

About Color Street (Company Overview)

Color Street is a beauty based multi-level marketing company operating out of New Jersey, that was founded in 2017 by a man named Fa Park.

Fa immigrated to the United States from South Korea in the early 1980s. And soon after, in 1984, he came up with the idea for his 100% nail polish strip, which is what Color Street is best known for.

According to the Color Street website, Fa came up with idea after seeing a woman putting nail polish on while stuck in New York city traffic, and wanted to come up with a better way.

Eventually, his 100% nail polish strip was born. Which he says will give you a “brilliant, salon-quality manicure in just minutes. No dry time, smudges, or streaks. Lasts up to 10 days.”

I’ll let the man himself elaborate on the concept:

Like any product, not everyone is going to love it.

In fact, some people probably think it sucks. But I don’t think there’s any disputing the fact that it’s a legitimate product. And whether or not the company is selling legit products is one of the main ways to determine if it’s a pyramid scheme or not. But this is only part of it.

What about the MLM side of things?

Well, it’s kind of similar to other MLM companies I’ve reviewed like Avon, Mary Kay, Pink Zebra, and PartyLite for example, that use the “party plan” business model.

The idea is to signup, buy some products and show your friends, and their friends, how it works. Basically, the idea is to invite whoever you can to your home, so you can show them how the product works and hopefully sell them something.

And as an “Independent Stylist” you are also hoping to recruit people under you, so that when they sell stuff, you earn commissions on their sales too.

This is where the MLM aspect comes into play.

In and of itself, there’s nothing “scam” or “pyramid scheme” about this business model. There are many legitimate MLM companies that use this model and have been around for decades. Even well-known companies like Tupperware and Rodan + Fields use this model.

But sometimes even legit-looking MLM companies can be running a pyramid scheme in disguise. And the only real way to know if that’s what is going on, is to look a little deeper.

What Is a Pyramid Scheme?

Before we can answer whether or not Color Street is a pyramid scheme, let’s first define what a pyramid scheme actually is.

And since the foremost authority on this is the Federal Trade Commission (FTC), who’s job involves shutting them down, I think we should see what they have to say.

Here’s what the FTC says about pyramid schemes:

Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.
Source: FTC website

As you can see, one of the main things that define a pyramid scheme is that, instead of selling real products, it’s all about recruiting people.

How do pyramid schemes work?

The people running these schemes start by luring you in with promises of making big money. And if you do join (for a fee), your job is then to recruit others into the same scheme, so you can earn a commission on their joining fee. And this process continues until the scheme collapses.

Pyramid schemes are illegal in most countries, and they’re completely unsustainable because there needs to be a constant influx of new people joining the scheme, in order to make the people at the top of the pyramid money.

By default, there need to be lots of people making next to nothing at the bottom, to make the big recruiters at the top the bulk of the money.

Even though pyramid schemes are outlawed, many “modern-day” pyramid schemes are hard to identify and can exist in plain sight. Mostly because they include “real products” as part of the scam.

However, these products are often low quality, overpriced and overhyped. They claim their products are amazing but provide little proof to support this.

In any case, my point is that an MLM company needs more than just quality products to be considered legit. The bulk of their revenue should be derived from selling these products to genuine (non-affiliate) customers.

Otherwise, the whole thing is about chain recruiting.

Is Color Street a Pyramid Scheme?

After looking into Color Street in detail, I don’t believe it’s a pyramid scheme.

I say this because they don’t just sell real products, they also don’t require you to recruit anyone to make money, and pay commissions to Independent Stylists based on the sale of products rather than joining fees.

So to me, it looks like a legit MLM company.

But the truth is, nobody knows for sure how much of the company’s revenue is derived from distributors buying products just to “stay active” versus retail customer sales.

Which matters, a lot.

Because if most of the people buying the products are distributors, it could be a pyramid scheme, which the FTC detailed in this letter to the Direct Selling Association:

…a multi-level compensation system funded primarily by payments made for the right to participate in the venture is an illegal pyramid scheme.
Source: FTC letter to Direct Selling Association

So, if most people buying the products are just distributors looking to qualify for commissions, then it could still be a pyramid scheme. Even if all the other aspects of it are legit.

And Color Street does have Personal Volume (PV) sales quotas within the compensation plan that a distributor must meet in order to qualify for commissions. And from what I can tell, this PV quota can be met by either selling OR purchasing the products for personal consumption.

This doesn’t make it a pyramid scheme, but it does lead to the question of what percentage of the company’s revenue is coming from genuine retail sales, versus distributor consumption?

Ultimately, the only way to know this is by seeing the company’s books, which obviously nobody, other than a select few, can do.

However, we can look at the details such as startup costs, the different ways you can earn, and how much you can earn, to help determine how legit the company is overall.

So let’s do that now.

Can You Make Money Selling Color Street?

It is possible to make money selling Color Street, but if you want to earn more than just discounts and free products, you need to become an Independent Stylist which costs $129. And, according to the company’s income disclosure, most consultants don’t earn very much.

With that being said, this is the case with most MLM companies I review, the failure rate is just typically very high. And some people DO make good money this way.

So let’s take a closer look at the startup costs, the different ways you can earn and how much money you can expect to make selling Color Street.

What Are the Startup Costs?

There are two main ways to get started with this company – either as a “Host” or as a “Color Street Independent Stylist.”

Page on Color Street site to a Host or Stylist

There is no startup cost to become a Host. It’s kind of a transition between being a customer and being part of the business side of things. So this is where most people get started.

However, it costs $129 for a Starter Kit to become an Independent Stylist (AKA consultant). This is an essential cost if you want to actually make money with Color Street.

Here’s an overview of what you get with a $129 starter kit:

Over a dozen sets of nail strips
Some prep and remover pads
Nail files, buffers and cuticle sticks
Tote bag
Some catalogs and opportunity brochures

The Starter Kit basically includes everything you need to get started, including products you can demonstrate at a home party. So that when you invite your friends over, you can show them how the nail strips work.

One point worth mentioning is that, in order to maintain an “active Stylist” status, you must sell $300 (AKA 300 PV) worth of products in a single month, every 6 months, just to stay active.

So if you’re not selling this much, you’d need to buy it yourself to stay active.

Oh.. and you need to pay the company $9.95 per month for your replicated website, which is the site you send people to so that they can buy products from you and you can earn a commission.

How Do You Actually Earn Money?

As a Host, you can only earn discounts and free products (as laid out in this Host Benefits document) when you host a “Nail Bar” party.

A Nail Bar is just a “party” where you invite people over to your house, in the hopes they buy stuff from you. They don’t actually buy products from you directly though, they just order them through your replicated website, and Color Street handles everything from there.

Here’s a quick overview of the host benefits:

Sales	Free product credit	Half priced items
$150–$299	10%	1 half-price item
$300–$599	15%	3 half-price items, free shipping
$600–$999	20%	6 half-price items, free shipping
$1000+	25%	9 half-price items, free shipping

Host Benefits overview

As you can see, Hosts can only earn free products.

In order to actually earn money, you need to become an Independent Stylist, which gives you access to an entirely different method of earning, which is laid out in the Color Street compensation plan.

As an Independent Stylist (distributor), there are 10 individual methods of earning money available to you, but they all really fit into one of these categories:

Make money selling products
Make money by recruiting people who sell products

Compensation plans can be confusing, but when you boil it down, they all fit into one of the above categories. You’re either earning commissions for selling products, or you’re earning based on the efforts of your team.

Now let’s break down each earning method in more detail:

Jump Start Bonus: When who meet set PV (personal volume) sales requirements in your first 35-95 days of joining you get some free products.
Base Retail Commission: This is a set 25% commission for all retail sales you personally make.
Enhanced Retail Commission: This pays you a 3-10% commission on top of the Base Retail Commission when you meet certain sales quotas (see chart below).
Enroller Matching Jump Start Bonuses: When you recruit someone who earns the Jump Start Bonus and meet certain criteria, you earn a matching bonus (free products).
Enroller Bonuses: This pays you a flat 3% commission on the personal sales of those you recruit, 1-2 levels deep depending on your rank.
Leadership Level Bonuses: This pays out a 3% commission on the sales volume that occurs in your unilevel downline, 1-4 levels deep depending on your rank.
Leadership Depth Bonus: Senior Director ranks and above receive a 1.5% commission on sales volume from level 5 onwards, up to the next person in your downline with the same rank.
Team Bonus: Executive Director ranks earn an additional 1.5% commissions on the sales volume of their entire downline.
Generation Bonuses: Pays out 3% commissions on 1-3 “generations” in your downline. A generation starts when you become an Executive Director and ends with the next Executive Director in your downline.
Car/Lifestyle Bonuses: Executive Director ranks and above receive a $500 to $1,000 per month bonus.

Note: In order to earn anything from #4 onwards, you must be “Bonus Qualified” (BQ), which means selling $300 or more of product for the month. And there are other requirements that you can learn about in the comp plan I linked to earlier.

If you’re just getting started, the most important aspect to understand is that you can earn between 25% to 35% commissions on retail sales.

Here’s a table I created to break this down:

Personal Retail Sales (AKA Personal Volume/PV)	Commission Rate
All personal retail sales you make	Standard 25% commission
$600 to $1,199	Extra 3% commission
$1,200 to $1,799	Extra 5% commission
$1,800 to $2,399	Extra 7% commission
$2,400+	Extra 10% commission

Independent Stylist retail commissions

This retail commission rate is pretty good for selling a physical product, and it’s something you typically only see with an MLM company.

But it comes with disadvantages. For instance, the cost of these products are higher than more well-known (non-MLM) companies. And people trust MLM companies less which makes them harder to sell online.

This is typically why these types of companies leverage the direct selling/home party model, because it allows them to demand a higher price and pass that profit on to you.

In any case, as far as the recruiting aspects of the compensation plan go, this is pretty standard. And it’s legit because you’re not earning by recruiting alone, you’re only earning when those you refer make sales.

How Much Money Can You Make?

The short answer to how much money you can make with Color Street is – it depends. Some people earn 6 figures per year with this company, others earn nothing.

But to give you an idea, according to their income disclosure statement most people (around 95%) earn between $11.76 and $315.18 per month on average. And that same disclosure states that “”the average annual income for all Color Street Stylists in 2018 was $178.06.”

Here’s a screenshot of their income disclosure chart:

Color Street income disclosure chart — Color Street income disclosure

On one hand, this chart doesn’t paint a very pretty picture because clearly most people who try to make money as a distributor for Color Street, end up making very little. On the other hand, some people are obviously making great money. So it does depend on the individual.

Ultimately, your success depends on how much effort you put into your business and how persistent you are. Which is the same for virtually every type of business out there.

But it is true that, for whatever reason, multilevel marketing distributors generally don’t have very high success rates. And those who are successful, typically build large teams.

Which I discuss in more detail in this article I wrote about the differences between network marketing and affiliate marketing.

Is Color Street a Good MLM or Scam?

Color Street is not a scam or pyramid scheme, it’s a legitimate MLM company that sells real beauty products. But as with any company or “business opportunity”, there are some good and bad bits.

The Good

The product is unique and is manufactured in the United States which not only ensures higher quality standards but is a selling point.
The business opportunity is legitimate and some aspects of it are quite attractive. It is also well suited to the home party model they embrace.
The startup costs are relatively low in comparison to many other types of businesses and multilevel marketing companies.

The Bad

The products are expensive in comparison to more well known and trusted brands, which will make them difficult to sell online.
Relying on friends and family to make sales is not a good way to grow a business, yet that’s the main method they teach you.
The income potential is quite low overall when you consider the income disclosure, which shows that most people make very little.

Bottom Line

Overall I think Color Street could be a cool way to make money if you’re into these products and like the idea of starting a home-based business selling these.

If you learn the ropes and put enough effort in, it could become a decent business for you over time. Especially if you’re someone who enjoys talking to people and selling face to face.

With that being said, I do personally believe there are better ways to earn money selling products online. Like affiliate marketing for example, which costs even less to start, doesn’t have any sales quotas, and you never have to sell to people you know.

Check out my free guide to affiliate marketing here to learn more.