Is Younique Going Out of Business? Not Yet, Despite Challenges
Younique has been hit by exits of top Black status sellers. However, it doesn’t seem everyone is leaving Younique.
Oct. 15 2021, Published 9:31 a.m. ET
Younique sells beauty products spanning from makeup to skincare products. The company sells its products directly to consumers. It uses an MLM (multi-level-marketing) strategy. Why is everyone leaving Younique? Is Younique going out of business?
Derek Maxfield and Melanie Huscroft started the company in 2012. The other prominent companies that use an MLM strategy like Younique are Neora, Herbalife, and AdvoCare. The use of social media and online sales channels has contributed to Younique’s quick growth.
Who owns Younique after Coty bailed out?
In 2017, global beauty company Coty acquired 60 percent of Younique for $600 million. The deal valued Younique at $1 billion. Coty went on to report strong earnings 2018 as Younique recorded a big increase in sales. Coty booked a gain of about $85 million from the sale of its Younique stake.
In 2019, Younique's sales and profit dropped sharply. A few months later, Coty changed its mind and sold its stake in Younique back to the founders led by Maxfield. It figured out that Younique was different from other businesses in its portfolio.
Why is everyone leaving Younique?
Younique has been accused of running a pyramid scheme-like business model and that its products don’t live up to the expectations. In addition to losing top investor Coty, Younique has also been hit by top sellers exiting.
Younique sellers are called presenters. They purchase products from the company to sell to their network—family and friends. They also earn commission on sales. Presenters have different ranks with various commissions. You rise through the ranks as you sell more.
The starting rank is “White” status and the commission at this level is 20 percent. The top rank is “Black” status and the commission on sales is 30 percent. Black status presenters also earn commission on the sales of the presenters they bring to the network.
Some of Younique’s top sellers switched over to the company’s rivals in apparent pursuit of better earnings opportunities. There have been reports that an average Younique seller earns less than $14 a month. Some sellers have left the network due to claims that the products don’t deliver what they promise or they’re losing money in their arrangement with Younique.
Is Younique going out of business?
Not everyone is leaving Younique, at least for now. The business has continued to run even after top investor Coty quit and some top-level sellers jumped ship to the company's rivals. Younique continues to recruit presenters to replace those leaving the network and drive its sales. The company has a charity program where it donates 10 percent of the profit from product sales to fight child sexual abuse.