Is Melaleuca A Pyramid Scheme – 2022 MLM Review
In this post, you will learn more about Melaleuca, the wellness company. Is it a pyramid scheme? Can you make money from it? What do customers think about it? All of this will be answered in this MLM Review.
Is Melaleuca a Pyramid Scheme?
Melaleuca is not a pyramid scheme because you can make money without recruiting resellers. Since Melaleuca offers user subscriptions, you can generate recurring revenue from introducing genuine product users to the brand.
This is different from what I call “grift MLMs.”
MLM grifters are technically not pyramid schemes. They, too, allow you to make money from direct sales. However, the money you make from recruiting resellers is higher than what you make from direct sales, which incentivizes recruitment over sales.
In other words, many MLMs are not pyramid schemes technically but might as well be from a practical perspective because they disproportionately incentivize recruitment. Sellers buy products to sell at increasingly higher prices which they sell to other sellers who further mark them up.
Most MLMs are unsustainable.
In contrast, Melaleuca allows you to recruit customers who can make recurring purchases to resell and use personally.
The following table will help you tell the difference between multilevel marketing (which Melaleuca does) and pyramid schemes (which this company is technically not).
|Pyramid Scheme||Multilevel Marketing (MLM)|
|Is short-lived.||MLMs can have longevity. Melaleuca has been in business since 1985, and Forever Living has been operating since 1978.|
|Recruitment is its only (or main) income source.||Recruitment can be an element, but sales are its main income source.|
|Doesn’t offer value to the end consumers.||Offers tangible products and services to the end consumers.|
A pyramid scheme requires one to invite others into the scheme to make money. That’s the main way to make money, and each individual’s subscription bankrolls the upper tiers of recruiters. In contrast, a multilevel marketing opportunity allows you to recruit others to amplify your cash flow, but you can sell products or services to make money.
Melaleuca is in the latter category. But most people who make significant money are ones who have recruited a large volume of dedicated workers.
Let’s take a deeper look at Melaleuca, the wellness company, so we can unpack the pros and cons of working for it.
Melaleuca, Sales, and Executives
Melaleuca has branded itself as a wellness company and primarily sells products and services to a market of resellers. The end consumer almost always gets his products through a Melaleuca executive.
Earners in this opportunity get money from selling to users of the products or to other sellers. Either type of customer is referred to as a “customer” by Melaleuca. The official term used for a seller in this MLM is “executive,” but the end duty is the same. It seems like a derivative of “sales executive.”
Melaleuca Compensation Plan
One of the best things about Melaleuca is that it can help you earn recurring revenue even if you don’t recruit other sellers.
Most MLMs help you make money off one-off purchases but keep most of their compensation tied to reseller recruitment. (And that’s why they might as well be pyramid schemes.)
Melaleuca offers up to 50% product points for the products bought by the customers you enroll. If these customers turn into subscribers who buy products in the second month, you can start making an actual commission.
Here is how Melaleuca rewards are distributed:
- Those who enroll 1 to 7 active customers start earning a 7% commission on each purchase made by said customers from the second month onward.
- Those who enroll 8 to 19 active customers earn a 14% commission on each purchase from the second month onward.
- Those who enroll 20+ customers actively purchasing products each month can earn a 20% commission from the second month onward.
A bulk of the money you make is reliant on customer dedication. Given that this is a multilevel marketing company, it is easy to see why recruiting resellers could be an easy way to maximize commissions. But people generally like to buy wellness products from the same brands over and over. And you can technically make money selling to genuine users.
Melaleuca: The Pros and Cons
Now that you know how Melaleuca compensates its customers and the two paths to making money with its commission-based opportunities, let’s look at the pros and cons of this opportunity in the context of MLMs.
The Pros of Melaleuca
- Offers product variety – Melaleuca has a decent inventory of products that fits online demography. This means you have a higher potential for closing the sale.
- Incentivizes subscriptions – Discounts are given to regular customers, which allows you to make recurring revenue. You don’t have to close sales repeatedly to keep earning commissions.
- It is a reliable company – MLMs that focus on recruitment without offering value to an actual consumer base eventually need to rebrand or go out of business. Melaleuca has been in business since 1985. And it won’t risk its reputation to scam you out of a few hundred dollars.
- Has positive reviews – Melaleuca products and services are genuinely good. Many MLMs try to maximize their margins by cutting costs on the production side. Melaleuca offers premium products that have earned it thousands of positive reviews across multiple forums and platforms.
The Cons of Melaleuca
- Costs up to $739 – If you can’t recruit enough customers to 50 product points every month (customers buying at least $100 worth of items), you will need to purchase $60 worth of products yourself to stay in the program. That can add up to $739 if you factor in the annual $19 program fee. I believe they have enough products to choose from so it really isn’t a “cost” but just replacing alot of what you buy from the grocery store already.
- Products are comparatively overpriced – While Melaleuca products are premium by market standards, they are also seriously overpriced. This makes selling to genuine buyers quite difficult.
- Initial earnings are quite low – Melaleuca offers opportunities to earn tens of thousands of dollars, but very few people go that far up the ladder. Most customers end up making a few sales and never get to see anything beyond product points.
Reviews for Melaleuca
Let’s look at the pros and cons of Melaleuca from the reviews it has received across multiple forums. From each review, we will try to glean a tangible takeaway.
“Strange company. A friend referred me, but this company could not get it together. Insisted on referral paperwork, but it was unclear what to send. Worst customer service because they would rather lose a customer instead of taking the steps to land a new customer.”
The onboarding process isn’t customer-friendly. If you refer someone, make sure they have all the materials.
“I cancelled my membership within a week after signing up in January 2022. I did not like the product. I had to pay $10 to return which was fine I guess. Just 2 months later in March the company charged me for product I didn’t order and now they want me to pay $10 to ship it back when I was told my account was cancelled.”
If you refer a friend instead of a stranger, make sure you help them with the cancellation process if they need to cancel.
“I really like the Melaleuca products. The vitamins are amazing, and I can’t keep the healthy snack foods in my cabinets because my kids eat them so fast. The customer service has always been fantastic. I have never had a problem with any of their products or services. I now recommend Melaleuca to others.”
When you introduce the right people to the company, they love it. Don’t introduce customers who don’t match the user demography.
“I signed up a year ago for the Melaleuca service and have had no problems with the products or customer service. In fact, their customer service is beyond good. I decided to cancel my membership in March simply because we had a surplus of products and won’t need any for a while.”
More tech-savvy customers are likely to be satisfied with this company. Customers who do not look at the fine print might feel scammed.
Melaleuca is a company that has been in business since the 80s. It is impossible to sustain a pyramid scheme that long.
The company offers straightforward MLM combined with premium products and optional subscriptions.
Some people make a lot of money with Melaleuca. Others don’t.