The Aftermath of the Beautycounter Shutdown

On May 6, 2024, Beautycounter shut down, leaving 40,000+ consultants without a job. Understandably, those connected to Beautycounter, including consultants and customers, experienced a range of emotions like shock, confusion, sadness, or even anger.

What has surprised and saddened me more than anything, however, is the reaction from some outside the Beautycounter community. There is almost a palpable sense of delight at the misfortune of those who have lost their job, as if it was “something they had coming to them” for earning a living from a direct sales company. 

The Aftermath of the Beautycounter Shutdown

Beautycounter, which is a direct sales company, provides consultants two ways to earn income. Consultants can earn commission on products that they sell directly to customers, both online or in person. They can also grow their business by recruiting new consultants to Beautycounter and providing them with support and guidance as they grow their own businesses. 

As their teams grow, the original consultants earn a percentage of their teams’ sales as well.  Building a large team can require a significant time and energy commitment and Beautycounter’s compensation plan incentivizes this by rewarding consultants who actively support their teams.

This isn’t unique to Beautycounter and this is, more or less, how all direct sales companies work (although I think Beautycounter may have structured the percentages differently than others? I’m not sure). I am very aware that many people believe this type of company structure and compensation are predatory. This belief seems to be the origin of the “they had it coming” narrative.  

But can we pause for a second and explore this? 

My husband works for a real estate firm. Anything that Tommy sells, his firm takes a percentage of the sale. When Tommy hires someone, he spends time helping them develop their business, providing leads and resources to help them grow. When someone he has hired makes a sale, he gets a percentage of that sale too. 

When I worked in corporate America, if our team did well, not only did we get a bonus, but our boss got a bonus as well. She was there providing support and strategy along the way. Our success was her success and vice versa. 

So why is this structure viewed so differently in direct sales (or MLMs?). If someone on my team makes a sale, and I earn a portion of it, why is that considered predatory? I support my team, I help them be successful, I help them grow. 

There seems to be an attitude that working in direct sales is somehow less valid than commission-based roles in other fields like real estate or financial services. Direct sales consultants are often judged and treated harshly, despite the similar pay structures of other industries. Would you ever ask your real estate agent if he was running a pyramid scheme? I doubt it. If Wells Fargo laid off 40,000+ people, wouldn’t that be ALL over the news?

So, it’s concerning that the loss of livelihood for Beautycounter consultants is seen as less significant or even deserved simply because they were in direct sales.

And I am here to tell you: your Beautycounter consultant was not okay. 

(Should we discuss the fact that most Beautycounter consultants are women and perhaps their work is dismissed more than men? That’s another topic for another day.)

The Day Beautycounter Shut Down

I was on the call when it was announced at 8:00 pm ET on May 6, 2024. Women were bawling. The announcement was sudden and swift, and our source of income was immediately cut off. No 30 days notice, no severance. Gone. For many women I know, we aren’t talking about small side hustles. I know women whose husbands had left their job to become the primary caregiver of their children because their wives had created a thriving business with Beautycounter. I know women who were making significant progress on paying down their or their spouses’ student loans with their income from Beautycounter. I know women who were paying for their aging parents to have live-in help rather than going to a nursing home while dealing with a severe cancer diagnosis.

If your friend was laid off from a more traditional job, how would you react? Most people would reach out and offer sympathy and support. You might offer to edit a resume, help them network or even just provide a supportive listening ear. For many consultants, I’ve heard that even some of their closest friends or family seem dismissive or even unaware of the impact that this closure has had on them. But instead, they just bemoaned that they couldn’t buy their favorite vitamin C serum.

Beautycounter wasn’t just a source of income for consultants; for many, it was also their community. Daily conversations with my team, connecting with women at annual conferences, and sharing strategies with other online based consultants created true friendships and connections. The recent closure isn’t just about lost income; for many women, it means losing a network of close friends built around the business. The grief and shock within this community are profound.

My Reaction

When I heard about Beautycounter’s closure, I sprang into action. For the next two days, I spent six or seven hours daily on the phone, updating my team, prioritizing issues, and formulating a plan. Once things calmed down and I had a preliminary strategy, the weight of the situation finally hit me and all the emotions that I had held back while in work mode rushed in. I felt fear, worry and disappointment about Beautycounter’s abrupt decision. I gave myself some time to fully feel these emotions and acknowledge my own shock and disappointment. And then it was back to work. 

I immediately began sourcing replacement recommendations for my audience. I knew the first question women who loved and used Beautycounter would have is “what now?” While I’m disappointed to no longer be able to recommend a product line I liked, at the end of the day my “why” was always about helping women look and feel their best. By pivoting and providing new recommendations, I maintained continuity in my work and commitment to my audience. 

And thankfully, I’ve always had multiple sources of income with my business since that’s hugely important to me and I just find that fun. I use LTK and ShopMy to share my outfits. I promote big sales like the Nordstrom Anniversary Sale and Prime Day since affiliate income is a big part of my business. I partner with various brands on sponsored content and use my blog, email, Instagram, Pinterest and Facebook for a well-rounded business. And even with all of that, I still felt the impact in a major way. So for women who only had Beautycounter as their sole source of income, it’s especially tough.

What This Means

The Beautycounter closure was a sudden and difficult experience for everyone involved. If you were a client or even a friend to a consultant, reach out and offer your support. Imagine they’d been laid off from any other type of traditional job and offer them the same kindness you would in that situation. Support them in their new venture.

Consultants, allow yourself to process your emotions about this unexpected change. But, also consider that you have built valuable skills and relationships in your business already, and you can apply those somewhere else. Your customers could have shopped with Beautycounter directly (without a consultant) but they shopped with you. They want your recommendations so give them! Don’t wait for Beautycounter to come back – provide value in the meantime and they’re more likely to support you when (if) it comes back vs. ghosting them for a few months. Your customers value your expertise, and I am certain they would love to support you as you move forward with your next steps. 

The bottom line is that we can’t always control what happens to us, but we can control how we respond. The shock and sadness that this abrupt closure brought about for many of us was legitimate. But continuing to lament over what we cannot change does not move us forward. If you got laid off at Wells Fargo, would you wait around hoping they’d change their mind and hire you back? Take charge. Move on. Find something you love just as much – or even more. You deserve it.