Is Melaleuca A Scam? Health and Wellness Based Pyramid Scheme?
Are you looking to make money with Melaleuca and wondering if it's a scam or pyramid scheme?
If so, this post should clear up everything for you. You'll find company information, price to join, compensation plan, pros, cons and more.
By the time you're done reading you'll be an expert on Melaleuca.
Let's get into it!
Summary of melaleuca
Price to join: An initial $29 and an additional $19.90 per year
Do I recommend? No!
Summary: Melaleuca is not necessarily a scam or pyramid scheme. Although, there are some aspects in Melaleuca that is similar to those of pyramid schemes. But I definitely DON'T recommend you joining.
This company offers overpriced goods which will cost you a lot since you need to buy a certain amount of these goods to keep your membership. You might end up losing more money than you gain.
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What is Melaleuca?
Melaleuca is a health and wellness-based company that makes use of the multi-level marketing business model.
It was founded by Frank Vandersloot in Idaho. Melaleuca evolved from being a little start-up company to a multi-billion-dollar enterprise that can rival Unilever, Colgate and etc.
The only difference between these companies is that Melaleuca has chosen to distribute their products in a different approach.
Melaleuca is a membership-based online catalog company that encourages their consumers to be a member.
Once you become a member, you are required to pay a membership fee as well as buying a certain amount of their products.
Also, lawsuits in multi-level marketing business are not something to be surprised about. Often times, these types of companies always end up with one or more lawsuits. Aside from lawsuits due to loyalty issues, Melaleuca also has lawsuits from different Individual Marketing Executives for unreasonable dismissals.
Is Melaleuca A Pyramid Scheme?
People often relate MLM-modeled businesses as pyramid schemes but that isn't necessarily the case.
Although there are some MLM's that ultimately end up as pyramid schemes, this is not the case for all.
Melaleuca is not really an outright pyramid scheme. Although it may have some elements in its income-generating method that is similar to pyramid schemes, the business is 100% legit.
Let me explain how both Melaleuca and pyramid schemes work - take a look at the picture below:
This is how part of the commission structure of Melaleuca looks like. The more people you recruit, the more money you gain from the commissions from their sales.
Whenever your downline recruits someone under them, you will still be able to get a percentage from the sales made by their downline and it goes on to their donwline's downline as well.
This is the similar aspect between the Melaleuca and pyramid schemes. The amount of income is affected by the amount of people you recruit in your circle.
The only difference between the two is that your income generation does not solely depend on the recruitment of downlines. Because you can always choose to not recruit people and just sell the products manually on your own.
But the easiest way to make money through commissions is to have other people help you in the selling process. Which is why recruiting people will help you make money faster than selling the products on your own.
Success Is Rare At Melaleuca
In Melaleuca, you mostly rely on recruitment to make money. So, the ones on top usually have a higher success rate than the ones at the bottom of the pyramid.
This is a common occurrence in MLM's where the individuals of the higher tier earn as much as $2.6 million while the ones at the bottom just lose money due to the buying of products to sell.
If you are interested in seeing Melaleuca's income statistics that shows how much people of different tiers earn, click here.
So, to explain who earns the most and the least at Melaleuca, take a look at the table below.
Usually, when someone is recruited in a downline, they initially start as a customer. A total of 66% of Melaleuca members end up losing money or not gaining any profits annually.
For someone who is looking for a good way to earn more income, this is not really a good scenario for them.
In order to meet the demands for daily needs, the median income of an American household must reach at least $61,891.
This is not an easy feat since only a small percentage of Americans earn slightly above the average salary.
To be able to reach the median income, you must reach the level of senior director which might take you a month at the very least and 267 months at most.
Thus, you would have to work more and waste a lot of time in trying to boost your level to reach a higher tier.
It will definitely take you years before you are able to make a stable income in MLM's.
There are better and easier ways where you can make a stable income.
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How Much To Join Melaleuca?
MLM investments are definitely one of the cheapest ways to earn money compared to starting a regular type of business which requires you to shell out a lot of money for capital, venue, equipment and etc.
Melaleuca is a bit more on the expensive side of MLM businesses. There are two types of memberships in Melaleuca:
Direct Customer Membership
This type of membership is totally free of charge. There are no monthly fees that need to be paid nor is there a need for the customers to buy a certain number of products to reach the required quota.
The downside with direct customer membership is that all products are sold at a regular price. Which means, customers who choose to join in this membership don't get the discounts no matter how much products they buy.
This is the least popular choice in terms of membership at Melaleuca.
Preferred Customer Membership
The preferred customer membership type is what customers at Melaleuca choose when they join the company.
In this membership type, you will be required to pay a one-time membership fee of $29 plus an annual fee of $19.90.
Members in this type of membership get to enjoy at least 30% to 0% discounts when they purchase products.
The downside of this is that there is an auto-shipment of 35 products every month which a member cannot avoid. The auto-shipment which is worth $55 is a requirement in order for members to remain active in the preferred customer membership.
Another perk of being a preferred customer is that you have a choice on what products you want them to ship to you every month.
There is also the back-up shipment option if ever you fail to reach the 35-product quota for a certain month.
But if you really want to make a lot of money in Melaleuca, you would have to become one of their official product distributors. This means that you would have to sign an agreement to become an Independent Marketing Executive (IME) together with your application as a preferred customer.
What Is Melaleuca's Compensation Plan?
It is already well-known that MLM's often have confusing compensation plans.
And, not unless you actually ask for a clarification, you might not really be able to understand any of the figures and charts they've provided.
Here is the compensation plan for Melaleuca, you can read it here.
Below is a video that will explain to you everything you need to know about Melaleuca's compensation plan:
There are a few key points you need to know about the compensation plan.
One is that you can't wait until someone does the work for you. You have to take control and make your move in a way that you can gain more. Top earners at Melaleuca do not wait for results to come, they make it happen.
But selling the products directly to customers on your own is difficult. It will mostly take years before you are able to earn a lot of money.
Another is that, you have to have a mindset that is in line with business management. You will be able to draw more people into your network if you are able to convince them to join your business venture.
The bonuses you get depends on three factors: (1) the number of customers that you have; (2) the number of products each of your customers buy; (3) and lastly, how effective you are in managing your own downline.
And, even though you have a lot of downlines under you, just remember that Melaleuca will only pay you commissions from the sales you've made not by the number of people you recruit.
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What Products Does Melaleuca Offer?
If you are really interested in joining Melaleuca, it is important for you to know what type of products they have for you to sell.
Here are some of the different types of products available at Melaleuca:
Vitamins & Supplements
This section provides a wide array of vitamins and supplements including anti-aging, beauty supplements, sleep- and mood-improving supplements and etc.
These are their best-selling products:
The Peak Performance Total Health Longevity +50 and Peak Performance Nutrition Pack for Women are both sold at $105 per box.
From what you see here, the packs are relatively expensive.
Food & Weight Loss
This section has a couple of popular products that sell quite well to their customers.
Here are a few of the products available:
Simply fit products come in different flavors and variations of protein content. Depending on the flavor you choose to buy, the prices may range from $6 to $9 per pack.
Splash H2O products of different flavors are sold at $6 per box.
All Sustain Sport products of different flavors are sold at $16 per box while, the Access Exercise Bars 2-Pack are sold at $41.
Melaleuca also offers a variety of organic coffees and herbal teas. Here are some of their products:
Mountain Cabin at Melaleuca offers their customers 10 different flavors to choose from. There is also an option of having regular coffee or decaf. Also, they offer choices of ground coffee or coffee beans.
Melaleuca teas on the other hand, offer a wide array of tea type and flavors to choose from. You can choose from either regular herbal teas to premium teas (either black tea, green tea or herbal tea).
Prices of their tea products range from $8 to $15 per box.
This section offers you different types of medicines for various ailments