The American skincare brand Rodan + Fields discontinue its multi-level marketing (MLM) business model to streamline operations and reach new customers. Starting September 1, the brand will support its consultants through marketing and advertising via traditional channels and social media.
Introduction of a New Affiliate Program
According to the company, consultants will participate in a new affiliate program, receiving increased commissions and product discounts based on sales. Under this new affiliate program, existing R+F consultants who continue to sell R+F products will benefit from increased commissions on customer sales and product discounts, resulting in over 90% of current consultants having higher earning potential based on their current sales performance.
The MLM commission system, where consultants earn commissions from the sales made by their recruits, will be eliminated. This change aims to provide a simpler consultant experience. Customers will find it easier to browse, discover, and engage with the R+F brand through digital channels while continuing to benefit from the passion and expertise of R+F consultants.
Dimitri Haloulos, CEO of Rodan + Fields, stated, “We are confident these changes will enable us to meaningfully expand the lives we can impact and—importantly—allow us to continue to provide our passionate Consultants with a modern and meaningful earning opportunity.”
Rodan + Fields was founded in 2008 by Stanford-trained dermatologists Katie Rodan and Kathy Fields. Three years after its launch, the brand was acquired by the major beauty company Estée Lauder Companies. The founders bought back the company in 2007 and relaunched it in 2008 with a direct sales model using independent consultants. In 2018, the private equity firm TPG Capital acquired a minority stake in the brand.
Rodan + Fields is committed to providing skincare and haircare products developed by dermatologists and backed by science. In 2022, it was named the No. 1 dermatologist-founded premium skincare brand in North America. Additionally, the brand was recognized as the No. 1 premium skincare regimen brand in the U.S. for five consecutive years (2018-2022).
Background of Issues and Model Transition
The company has faced various issues related to its MLM model. Recently, it encountered a class-action lawsuit in California over the classification of consultants. The lawsuit alleges that the company misclassified its sales force in California as independent contractors instead of employees. It also came to light that one-third of consultants did not receive commission checks throughout 2022.
Currently, Rodan + Fields employs over 500 people and, according to its official website, has more than 300,000 independent consultants.