I have an acquaintance who sells some nutrition crap, and the Facebook posts are ridiculous. I know she must be using some posting formula of 1/3 personal, 1/3 advertising, 1/3 general interest or some shit, but I just think what a fool she looks like. She really appears to drink the Koolaid. Maybe she’s desperate for cash, but you could not pay me enough to make me look like that in front of everyone I know.
I watched something similar go down with a FB acquaintance (somebody I grew up with but haven't seen in years). She seldom posted anything and if she did, it was all personal/family, then all of a sudden she had multiple daily posts about Plexus. And she would get 2-3 cheery-MLM-bot comments from people who had never commented on anything in her feed before and never commented on anything but the "pink drink" posts, who were obviously other Plexus sellers.
She would throw in the occasional post about church or her garden or whatever, but the abrupt change in posting frequency and content was so contrived and fake. I don't remember how long it lasted, maybe two months? And then it went back to her usual infrequent posts, so she must have come to her senses.
I don’t understand the psychology of the people who continue to buy into LLR (any MLM, really, but especially LLR)— denial? Hubris? Thinking that what has happened to thousands of others won’t happen to them? It’s not like it’s hard to find this sort of information these days. And for someone with another source of income, why would you want to stake your reputation on this nonsense? Even if — best case scenario — you make a profit, you’re doing it for a super shady company that has put countless people into financial trouble. And, not to mention, because it’s an MLM, the best way to profit is not to sell clothes but to continually find more victims.
Throwing good money after bad is a very common human phenomenon.
My former neighbor (we moved last summer) is still selling and her downstairs living and dining is wall to wall Lularoe. Her live sales typically have 3-5 viewers and I don’t see much moving. But she still orders a ton! It blows my mind and makes me sad to see. It’s like the race to the bottom.
Post by wanderingback on Feb 24, 2020 7:50:30 GMT -5
I actually only "know" 2 people who do MLM. They're both acquaintances from college and sold some diet stuff. I can't remember the name, but it was pretty popular and I think there was a netflix documentary about how they scammed so many people.
One of them actually seemed to be doing pretty well. In that both her and her H had quit their jobs and were doing that exclusively for a couple years. Then, they even sold their house, got a tiny house on wheels and were just traveling the country with their young kids. I had unfriended her on FB because she was annoying, but then I read an article about how the diet MLM changed their structure (I think they're going through a process of getting sued), so it was no longer viable as a MLM. So of course I had to creep on her page. She posted some vague message about "She's devastated, but God has a plan" but that they were moving back home until they figured out next steps. Next thing I know, literally 3 days later she's posting about some other MLM that every MUST TRY. Omg, what an idiot.
I haven't been on FB in probably about 6 months, but it's kind of tempting to sign back up to see what ridiculousness she's up to.
My friend is still going strong and making a decent profit. She said she is adding to her kids college fund every month. She isn't working crazy hours like these people in the article though. She probably does 1 wall drop a week. She maintains a FT job. She legot runs it as a small business and has separate FB page with over 1k followers and never pesters our friends(or me). The clothes seem to sell themselves.
But I think part of the article's point was that it's a facade. So I don't know how anyone would make money with out how much you have to put in. Just in the last few months they have released and/or added more denim, shirt styles, a cardigan, joggers, and a jacket. I know there are people making money but like the girl in the article, I bet a TON [don't] even realize they aren't making money
I think this article more than others kind of brought this point home for me. If you're being handed bonus checks of $8K, and moving a lot of clothes, it would be REALLY easy to just believe that you're making a fantastic profit unless you are also putting in the time and effort to keep a highly accurate eye on your costs.
I mean, I suck at tracking and turning in all of my expenses for work travel in my WFH job working for someone else. If I had to keep track of pieces of inventory (and how much I had invested in inventory) in a high-turnover venture like LLR, plus keeping track of shipping/packaging costs, juggling daily or weekly online and/or in-person events and billing/responding to individual customers, I would probably struggle. Not because I'm dumb, but because of my newbie-ness to operating that kind of business. There would be a big learning curve and when you join a brand that is "hot," the idea is not to ramp up slowly as you gain expertise, it's to get as much business as you can ASAP and then get even more.
LLR and other MLMs put all the pressure on to have people sell, sell, sell and recruit, recruit, recruit. If you are putting in hours and hours a day to do those things--holding all those events, answering DMs and texts at all hours, getting packages together and mailed and invoiced for; recording payments; posting on social media on your own and others' accounts, planning the next event, re-checking inventory to see what is likely to sell and what probably won't; watching LLR webinars and having text chains with your upline or downline--when you do have time to sit down and calculate the actual value that LLR is providing you vs. what you're putting in? Obviously, they hope that you don't. The whole framework is designed to keep you focused on immediate cash-flow in and getting more of it, not on staying on top of whether you are actually cash-flow positive/profitable given your costs. You have to have some level of understanding of finances and running a business to get to that point, and I think for most people, once they get there and take a hard look at the numbers, they realize that they actually AREN'T making a profit and they bail. Which a savvier person experienced in operating a consumer business would probably realize much faster than the people that MLMs target (those who have never run a business before).
But until they get to that point, they are cash cows for LLR and their upline. In the meantime, the system is designed to obfuscate any doubts. I've never sold MLM, but I compare it to social media platforms in that even more than a "like," sales are like dopamine hits. It feels really good when you get them, you get various positive feedback from cash in-hand to other sellers' social media comments to happy customers and even disappointed customers clamoring for more because they missed out on something. Then MLMs are designed to make you chase the next dopamine hit without thinking too hard about what you're putting in to get there.
And novices running a "home business" almost certainly don't factor in things that are fuzzier, like fully calculating how much time they're working and what their hourly wage equivalent is, especially when women notoriously undervalue and/or are used to having their time undervalued; or assigning a cost/value to the amount of space being taken up in their homes (but there are government rules by which you can do so, because it can play into tax deductions). This girl had LLR making parts of her house (dining room) unusable for actual family living, but it obviously took some time for that to sink in as a "cost of doing business"--whereas if you were a business owner who had a store-front, the amount of space your company takes up would be in your face in the form of a lease/monthly rent.
It really is a shitty, shitty system, from top to bottom. And the claim that it's not a pyramid scheme because they're selling something that people liked/thought was "valuable" is laughable.
Also I don’t know if I forgot or I didn’t know but I cannot BELIEVE the previous comp structure was for LLR uplines to be paid based on what their downlines bought rather than sold. And that the downlines actually listened when their uplines said the way to improve business was to keep buying more inventory. That is incredible. Off the wall and I cannot believe any sound-minded person would listen to that advice, not can I believe anyone with good character would give it.
Isn't this essentially the way all MLMs work in practice though? Like, you have to sell X amount to stay at your level or move up or get a bonus or help your upline move up or whatever, so if you haven't sold that much to real clients then you just buy it yourself because you believe it's worth spending that money on product to get the reward from the company? Aaaaand then eventually you find yourself surrounded by boxes of product and realize that you spent more than you earned? I don't know the details of LLR, so maybe I'm missing the difference.
Even if some of the products are good, I'm against the basic structure of MLMs, so I will continue to just be disappointed in the people I know who sell them instead of trying any for myself.
Also I don’t know if I forgot or I didn’t know but I cannot BELIEVE the previous comp structure was for LLR uplines to be paid based on what their downlines bought rather than sold. And that the downlines actually listened when their uplines said the way to improve business was to keep buying more inventory. That is incredible. Off the wall and I cannot believe any sound-minded person would listen to that advice, not can I believe anyone with good character would give it.
There’s a podcast called The Dream that does a pretty good job of examining this phenomena; they talk to people who have succeeded and failed at many different MLM’s and what compelled, or still compels them to buy into ‘the dream’ when they are otherwise intelligent and reasonable people.
My SIL has been successful with MLM’s, I’ve watched her do it for years- the leggings, the lips stuff, cleaning products, jewellery. The key to her success has been that she isn’t delusional lol; she has an MBA ffs and she understands how markets work- when to get in and when to get out. I still think she’s insane to whore herself out on social media do everyone she knows and I don’t buy from her lol. It’s absolutely absurd that the woman in that linked article thought that a legging trend would be more sustainable for her future than a nursing career. I don’t care how persuasive the seminars are, that just isn’t how economics and retail work lol.
Post by ouiserboudreaux on Feb 24, 2020 12:09:30 GMT -5
emilyinchile - I don't know about other MLMs or how it might be now, but many years ago I was a Pampered Chef consultant and any product that I as a consultant purchased (or was purchased by your downline) did NOT count towards your monthly sales goals.
Post by icedcoffee on Feb 24, 2020 12:33:26 GMT -5
I still have a LLR seller on my FB. I often wonder how she's doing. On the one hand, I looked a while ago and she was one of very few sellers in my area (which surprised me because I'm outside DC) so it doesn't seem too competitive, but she has under 1,000 people in her group. She posted something that said she generally sells 175 pieces a month. It just doesn't seem like you can make that much money off 175 pieces a month.
But really..no one knows just how much money is tied up in inventory so even if she's bringing money in when she goes to get out of the business and realizes she's literally holding a bag of worthless shit she won't have much of a profit then so....
emilyinchile - I don't know about other MLMs or how it might be now, but many years ago I was a Pampered Chef consultant and any product that I as a consultant purchased (or was purchased by your downline) did NOT count towards your monthly sales goals.
Good to know! I only see Arbonne and BeautyCounter, and people from both give me the impression that the products that they purchase do count for them (because they say stuff like "if it's easier for you to have me order it and you pay me back then that's still helping me toward my goal"), but I could totally be wrong on that.
emilyinchile - I don't know about other MLMs or how it might be now, but many years ago I was a Pampered Chef consultant and any product that I as a consultant purchased (or was purchased by your downline) did NOT count towards your monthly sales goals.
Good to know! I only see Arbonne and BeautyCounter, and people from both give me the impression that the products that they purchase do count for them (because they say stuff like "if it's easier for you to have me order it and you pay me back then that's still helping me toward my goal"), but I could totally be wrong on that.
I can confirm that's what it is like in Arbonne. Because the company isn't tracking if you're ordering for customers and delivering it to them, ordering it and using it yourself, or using it for demos. They just care how much gets ordered under your number.
From my understanding, most MLMs are the same way. It's why so many push for inventory packages.
If you want the psychological profile of someone who would join an mlm or cult, look in the mirror. Seriously. Every single person in the world is susceptible to influence. Once you join there’s the good money after bad effect in addition to all of the gaslighting that says, “If you just try harder, message more people, host more parties, you’ll make money. It’s not our impossible structure, it’s your lack of effort!”
Arbonne is currently enemy #1. I can’t even look a mom from my kids’ preschool in the face. I’m raiding savings accounts to pay for tuition and she’s thinking I should buy $$$ snake oil? I could be the 1% who doesn’t lose money or go into debt? Or since she doesn’t deserve to know how IRL poor I am I should buy $12 hand lotion for her to donate to the homeless? How about giving the $12 to a shelter and not shilling your product and calling it philanthropy.
I actually only "know" 2 people who do MLM. They're both acquaintances from college and sold some diet stuff. I can't remember the name, but it was pretty popular and I think there was a netflix documentary about how they scammed so many people.
Was it Herbalife? There was a good documentary on that on Netflix. After watching it, I realized that there are 2 Herbalife stores in my neighborhood. They don’t advertise that’s what they are but call themselves “—- nutrition” and have curtains obscuring the insides. I looked online and the description was consistent with what was described in the doc. My neighborhood has a large immigrant/1st generation population that Herbalife generally preys upon.
She's not allowed to mention SH by name I don’t think. She and her friend were two women and got obliterated by SH’s $$$. Patent defense only works if you can defend it forever in court from what I know of this situation. They couldn’t.
Her patent expired last year because she failed to pay her maintenance fees. The only lawsuits I've seen are against Jamberry (they have their own patent issued by the USPTO for their product) and a defunct business entity known as SheeKee, LLC.
For a small business that is based less than 20 minutes from my house, I have never heard of them nor seen their products in any local salons. Nail products are my thing and if I had known about a local company with a nail product, I would've checked them out.
Her patent expired last year because she failed to pay her maintenance fees. The only lawsuits I've seen are against Jamberry (they have their own patent issued by the USPTO for their product) and a defunct business entity known as SheeKee, LLC.
For a small business that is based less than 20 minutes from my house, I have never heard of them nor seen their products in any local salons. Nail products are my thing and if I had known about a local company with a nail product, I would've checked them out.
She stopped paying her fees because there was no point anymore I assume. I haven't asked her. They were huge when they started because Beyonce, Lady Gaga, and Katy Perry were wearing them. At one point they were doing extremely well and after the patent attacks, everything went downhill.
You having heard of them or not doesn't make any of the patent thievery less true. I know both the owners, and I worked for the main one at her shop when she invented the product.
Thing is, maybe if the original thieves hadn't had their case dropped due to bad press, and Jamberry hadn't done what all MLMs do and steal from women, and SH not have completely taken over the market, maybe you would have heard of them. She used to own a shop right on Coast Highway in Oceanside.
Also, I would prefer you tag me rather than quote me and I'd appreciate you deleting the quoted. This stuff is very identifying of me. I shouldn't even post about it, but I get so damn angry every time.
I don't know why I am defending a MLM, lol, because I hate them and how they take advantage of women as sellers.
But I actually think the Color Street product is different than Minx or Jamberry. They may have built off the idea (placing color on nails instead of using bottles of polish) but they are made of a different material (actual nail polish). Press on nails existed before any of these, and I am not sure i agree that it is stealing to make new and improved versions of things that already exist. Otherwise you could argue that everyone who makes any nail product is ripping off the inventor of nail polish, kwim?
What I wish is that they would just sell their full product line at Ulta instead of a handful of wild colors. If they are already in stores, why involve a sketchy and morally concerning MLM practice? They have to know most MLMs eventually fall apart anyway. Apparently Jamberry no longer even exists!
I’m certainly not going to defend a MLM or dig my heels in bc I am not educated enough in patents etc but I don’t understand how the ColorStreet et al brand hurt her? She said herself there were other alternatives being marketed when she was experimenting. CS is just nail polish. It’s not like Jamberry where you need special application instructions (heat, a nail technician) or removal outside of regular polish. Hers seems innovative in the formulation. Jamberry, yes I can see the issue. I am unfamiliar with the SH product. But can you really infringe upon something that has existed? And she didn’t invent the sticker concept, that was already around.
Again, not digging my heels in. I’m genuinely interested. It should be noted that I’m on the side of the designer in this Phillie Phanatic mess 😛
If they are already in stores, why involve a sketchy and morally concerning MLM practice? They have to know most MLMs eventually fall apart anyway.
This is what I don't understand about all MLMs. There are some good products out there. Cutco knives cut really well and last forever. Pampered chef and tupperware products have stood the test of time as well. Why not just sell through moral business practices? It makes no sense.
If they are already in stores, why involve a sketchy and morally concerning MLM practice? They have to know most MLMs eventually fall apart anyway.
This is what I don't understand about all MLMs. There are some good products out there. Cutco knives cut really well and last forever. Pampered chef and tupperware products have stood the test of time as well. Why not just sell through moral business practices? It makes no sense.
I guess they make more money with the inventory building and selling rep to rep to keep numbers up. Plus they can make money on the reward trips etc. and conventions? I think that the concept of at-home parties was rooted in good - lonely SAHM and bored housewives, specifically in more rural areas who have less access to convenient and diverse shopping options, can kill several birds with one stone - socializing, shopping, money making etc. Social media changed it and ruined it.
ETA: This is also why, for the most part, MLM flourishes amongst the group that it does. Less educated, more rural, younger moms outside of urban and immediate urban areas.
This is what I don't understand about all MLMs. There are some good products out there. Cutco knives cut really well and last forever. Pampered chef and tupperware products have stood the test of time as well. Why not just sell through moral business practices? It makes no sense.
I guess they make more money with the inventory building and selling rep to rep to keep numbers up. Plus they can make money on the reward trips etc. and conventions? I think that the concept of ath-home parties was rooted in good - lonely SAHM and bored housewives, specifically in more rural areas who have less access to convenient and diverse shopping options, can kill several birds with one stone - socializing, shopping, money making etc. Social media changed it and ruined it.
That's true. I remember my mom attending at home parties when I was a kid and they definitely weren't as hated. They were a good chance to socialize, snack and buy a few things. Social media and the follow up harassing is all new.
If they are already in stores, why involve a sketchy and morally concerning MLM practice? They have to know most MLMs eventually fall apart anyway.
This is what I don't understand about all MLMs. There are some good products out there. Cutco knives cut really well and last forever. Pampered chef and tupperware products have stood the test of time as well. Why not just sell through moral business practices? It makes no sense.
It's the best way to have almost no oversight into your business practices, to keep overhead costs low, and to "feel out" the market on a new product without having to get venture capital, spend much on branding, etc etc.
Those pesky overhead costs include things like actually paying your employees, providing training (that they don't have to pay to participate in), benefits such as health/401k, store fronts so that your product is out in the open or connections with major retailers so they carry your product (and of course get a cut), and if it's widely available in at least one place there's not as much mystique/being "special" that people like (see LipSense and LLR group sheep when "limited edition" patterns come out).
I guess they make more money with the inventory building and selling rep to rep to keep numbers up. Plus they can make money on the reward trips etc. and conventions? I think that the concept of ath-home parties was rooted in good - lonely SAHM and bored housewives, specifically in more rural areas who have less access to convenient and diverse shopping options, can kill several birds with one stone - socializing, shopping, money making etc. Social media changed it and ruined it.
That's true. I remember my mom attending at home parties when I was a kid and they definitely weren't as hated. They were a good chance to socialize, snack and buy a few things. Social media and the follow up harassing is all new.
It happened fast. I remember enjoying Tastefully Simple parties a lot when I was a new SAHM 10 years ago. We had som much fun. I actually was thisclose to becoming a rep - in hindsight I see how I was ripe for the picking. Newly unemployed, lonely and overwhelmed, and not bringing in my own money for the first time in nearly 20 years. Lucky for me, it was different back then. They weren't as pushy with the recruiting.
That's true. I remember my mom attending at home parties when I was a kid and they definitely weren't as hated. They were a good chance to socialize, snack and buy a few things. Social media and the follow up harassing is all new.
It happened fast. I remember enjoying Tastefully Simple parties a lot when I was a new SAHM 10 years ago. We had som much fun. I actually was thisclose to becoming a rep - in hindsight I see how I was ripe for the picking. Newly unemployed, lonely and overwhelmed, and not bringing in my own money for the first time in nearly 20 years. Lucky for me, it was different back then. They weren't as pushy with the recruiting.
Same same. I loved Tastefully Simple too! I had no idea about MLMs even like 7 years ago. But I think it's the rise of social media and the really pushy sales models that have brought this out into the open. I went to many TS parties (and loved their mixes and dips) but was never recruited. Their beer bread is still my fave mix but I just buy it at Trader Joe's instead because I won't support the model anymore.
I am in no way defending MLMs, and avoid them as much as possible. But remember (And this is also briefly covered in the Dream) that there are some companies that are considered direct sales and don’t profit off of the people they recruit under them to make money. MLMs require that hierarchy to profit. I don’t know for sure, but I believe Tupperware, Avon and pampered chef are not MLM but instead direct sales, but I haven’t been into the weeds on their business organization structures. They of course still require a huge up front purchase of goods, which is of course also part of the problem.
I know LLR just "retired" a ton of styles, so the consultants are all, "last chance!" on things they've have sitting around for like 2 years. It's like when movies go into the "Disney vault" forever, only to be brought back in 3 years, I think.
gummybear , so, I'm not familiar with all of the different nail products at issue, but I can speak to the patent aspect.
Some basics on patents:
The idea of a patent is that you're exchanging a complete and full public disclosure of how to make and use your invention for a limited time monopoly on practicing the invention. When you file your patent application, it's a lengthy, formal legal document that necessarily includes a set of claims laying out exactly what you claim as your invention, and a detailed description of the invention and how to make/use it. It typically also includes a background section, which places your invention into context in a particular field, and a summary of the invention, and a brief description of any figures included. Most people/companies with any kind of budget at all use a patent attorney for this because getting all the legal requirements right would be a hot mess for a lay person. Patent attorneys, in order to be qualified, not only go to law school and take the regular state bar exam, but also pass a separate patent bar exam to practice before the USPTO.
After you file, it is examined by an examiner at the USPTO, a/k/a the prosecution phase. This usually takes years, and involves a back and forth in writing with the examiner. The examiners work in technology groups or centers so that your application is being examined by someone who has substantive knowledge relevant to the content of the application. They come up with reasons why your invention is not patentable, you argue (usually through a patent attorney) why it is patentable. You usually end up amending your claim set, typically narrowing it so that what you're claiming as the invention you own, is more specific and limited. In order for the subject matter to be patentable, it needs to be novel (never done before) and non-obvious (meaning a person of ordinary skill in the art wouldn't be able to easily come up with it by combining 2+ existing technologies/devices/etc. to result in what you've come up with). You also have to have satisfied the requirement to disclose the best mode of practicing the invention, you need to have done so sufficiently thoroughly to enable a person of ordinary skill to practice the invention, and a bunch of other formal requirements need to be met.
Ideally, at the end of the process, your application is allowed, you pay the issue fee, and you are issued a patent. In order to keep your patent in force, there are maintenance fees due at 3.5, 7.5, and 11.5 years from issue. If all those maintenance fees are timely paid, it expires on the 20th anniversary of the filing date, subject to any adjustments/extensions.
There's also a separate type of "patent" called a design patent. It's a little different in that it protects ornamental designs rather than utilitarian methods/devices/etc. Design patents are much, much narrower. Some people who try to DIY patent protection accidentally do this instead of a utility patent (which is the "regular" kind of patent, described above), and it ends up not being worth much. Deisgn patents don't have maintenance fees and are only good for 14 years. In the application stage they are examined for novelty/non-obviousness of the protected ornamental designs though, similar to utility patent applications.
The whole purpose of the examination process is to prevent people from patenting things that are already available in the prior art, whether in other patent documents, non-patent publications, or a product that's just available for sale. A patent relating to a nail color technology would likely be quite specific in order to get to issuance. In order to be patentable (remember, novel and non-obvious) over prior nail technologies, it would need to have something specific and new, and the patented protection (defined by the claims) would be limited accordingly.
So then you have a patent, and you're maintaining it. Yay. What now? Well, enforcement, which sucks for a lot of small businesses. Sometimes it's hard to know for sure whether a competitor is infringing your claims (i.e. your claims read on their device/method/etc.), especially if there's a specific formulation or ratio or something as part of your claim. If someone is infringing your patent - meaning they are practicing the invention that you claimed in your issued patent - you can send them nastygrams (C&D letters), try to work out some kind of licensing agreement, or... you can sue them in federal district court for patent infringement. Patent infringement litigation is notoriously expensive, because there tend to be a lot of expert witnesses. It's outside the reach of many small businesses in the US.
Without knowing the specifics of what kind of patent was involved, the various formulations and methods of application of the different products, etc., I can't comment on this situation, but I can imagine a couple ways this could've gone sideways for the patentee.
Post by basilosaurus on Feb 25, 2020 10:33:37 GMT -5
10-12 years ago in an isolated snowed in military community overseas, people regularly had pampered chef parties. I never bought anything, was never even tempted as I have a well stocked kitchen, but it provided us a chance to snack, drink, and socialize. They were usually co-ed, too, as we really had limited group social options outside of bars. Yeah, we listened to a pitch, but there was no pressure to buy and definitely no pressure to become a consultant. Minor pressure to host the next party. I think that's what tupperware and avon fulfilled back when they started. I see so many mil spouses get on the merry go round of products now, and I understand mentally how they get there.
I agree with the sentiment that social media changed all that. I still have throughout the years gotten soft pitches the old fashioned way, like a neighbor asking me to model her avon products or someone saying I looked like I was into "health" and would I be interested in x product, etc.
I don't care how good a product is, though, I will never purchase anything MLM. I might have 15 years ago before I knew much about them, but hell no now.
gummybear , so, I'm not familiar with all of the different nail products at issue, but I can speak to the patent aspect.
Some basics on patents:
The idea of a patent is that you're exchanging a complete and full public disclosure of how to make and use your invention for a limited time monopoly on practicing the invention. When you file your patent application, it's a lengthy, formal legal document that necessarily includes a set of claims laying out exactly what you claim as your invention, and a detailed description of the invention and how to make/use it. It typically also includes a background section, which places your invention into context in a particular field, and a summary of the invention, and a brief description of any figures included. Most people/companies with any kind of budget at all use a patent attorney for this because getting all the legal requirements right would be a hot mess for a lay person. Patent attorneys, in order to be qualified, not only go to law school and take the regular state bar exam, but also pass a separate patent bar exam to practice before the USPTO.
After you file, it is examined by an examiner at the USPTO, a/k/a the prosecution phase. This usually takes years, and involves a back and forth in writing with the examiner. The examiners work in technology groups or centers so that your application is being examined by someone who has substantive knowledge relevant to the content of the application. They come up with reasons why your invention is not patentable, you argue (usually through a patent attorney) why it is patentable. You usually end up amending your claim set, typically narrowing it so that what you're claiming as the invention you own, is more specific and limited. In order for the subject matter to be patentable, it needs to be novel (never done before) and non-obvious (meaning a person of ordinary skill in the art wouldn't be able to easily come up with it by combining 2+ existing technologies/devices/etc. to result in what you've come up with). You also have to have satisfied the requirement to disclose the best mode of practicing the invention, you need to have done so sufficiently thoroughly to enable a person of ordinary skill to practice the invention, and a bunch of other formal requirements need to be met.
Ideally, at the end of the process, your application is allowed, you pay the issue fee, and you are issued a patent. In order to keep your patent in force, there are maintenance fees due at 3.5, 7.5, and 11.5 years from issue. If all those maintenance fees are timely paid, it expires on the 20th anniversary of the filing date, subject to any adjustments/extensions.
There's also a separate type of "patent" called a design patent. It's a little different in that it protects ornamental designs rather than utilitarian methods/devices/etc. Design patents are much, much narrower. Some people who try to DIY patent protection accidentally do this instead of a utility patent (which is the "regular" kind of patent, described above), and it ends up not being worth much. Deisgn patents don't have maintenance fees and are only good for 14 years. In the application stage they are examined for novelty/non-obviousness of the protected ornamental designs though, similar to utility patent applications.
The whole purpose of the examination process is to prevent people from patenting things that are already available in the prior art, whether in other patent documents, non-patent publications, or a product that's just available for sale. A patent relating to a nail color technology would likely be quite specific in order to get to issuance. In order to be patentable (remember, novel and non-obvious) over prior nail technologies, it would need to have something specific and new, and the patented protection (defined by the claims) would be limited accordingly.
So then you have a patent, and you're maintaining it. Yay. What now? Well, enforcement, which sucks for a lot of small businesses. Sometimes it's hard to know for sure whether a competitor is infringing your claims (i.e. your claims read on their device/method/etc.), especially if there's a specific formulation or ratio or something as part of your claim. If someone is infringing your patent - meaning they are practicing the invention that you claimed in your issued patent - you can send them nastygrams (C&D letters), try to work out some kind of licensing agreement, or... you can sue them in federal district court for patent infringement. Patent infringement litigation is notoriously expensive, because there tend to be a lot of expert witnesses. It's outside the reach of many small businesses in the US.
Without knowing the specifics of what kind of patent was involved, the various formulations and methods of application of the different products, etc., I can't comment on this situation, but I can imagine a couple ways this could've gone sideways for the patentee.
Thank you! This was incredibly helpful. I would love to know more about what exactly went wrong for Minx. With all the minute details and what appears to be existing nail products/materials and techniques I wonder if what happened was just a combination of bad luck for the little guy and getting overtaken by bigger companies, rather than something illegal.