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Having a flexible work schedule is a dream for many of us. If you can manage to find products that you connect with and respect, you might even consider joining an organization where you can make some money selling products. Melaleuca is a company that might provide that option for you. In this Melaleuca MLM review, I’ll explore whether this is indeed an MLM model and if this particular flexible work schedule can work for you.
What is Melaleuca?
Melaleuca is a company that was founded in Idaho by Frank VanderSloot in 1985 that focuses on wellness products such as vitamins, home cleaners, bath and body products, essential oils, cosmetics and more. Melaleuca claims that the products are safe, eco-friendly, effective and affordable. Products can be purchased in a number of countries: Canada, Mexico, Australia, across Asia and the European Union.
Are Melaleuca Products Worth Their Price?
It’s hard to tell if these products are worth their price or not since the prices are cloaked in secrecy. There are no product prices on the website. In order to purchase the products you have to become a member. You can also buy a monthly membership which buys you 35 points worth of products and it will cost a customer $19. Unless you become a member, there’s no way of telling what the product costs are.
Melaleuca’s flagship product is the Melaleuca oil which is tea tree oil. The name Melaleuca comes from a native Austrailian plant called Melaleuca alternifolia. Tea tree oil can be added to facial cleansers, moisturizers, and more. It has powerful anti-bacterial properties.
The Melaleuca MLM Opportunity
Before we dive into the Melaleuca opportunity, we should probably define what an MLM actually is. Melaleuca insist that they are not an MLM but they have been compared to Amway and other MLMs. So I found this explanation by the FTC’s case against BurnLounge:
Any marketing program in which participants pay money to the program promoter in return for which the participants obtain the right to: (a) recruit additional participants, or have additional participants placed by the promoter or any other person into the program participant’s downline, tree, cooperative, income center, or other similar program grouping; (b) sell goods or services; and (c) receive compensation, in whole or in part, based upon the sales of those in the participants downline, tree, cooperative, income center or similar program grouping.
As you can see from the definition above, this is what an MLM looks like and this is how Melaleuca make their money–in recruiting others to buy products and recruit others. In fact, on their FAQ page, there’s a section under Business Development about enrolling customers. There’s no mention in the description above about buying kits which is what a lot of MLMs require. That is how Melaleuca distinguish themselves because they do not require that you buy a kit to get started.
So What Exactly Is The Opportunity Here?
Everyone who signs up to buy products on a monthly basis goes in at the same level–as customers. If you start to enroll customers, that’s where you can start to build a business and a downline. If you enroll enough people you move up the ladder and eventually earn “Director” status and there are nine levels to a Director.
The image above came directly from the website. So yes, there’s an opportunity here but it’s a little vague. No mention of commission rates.
How Much Does It Cost To Join Melaleuca?
There are two options to joining Melaleuca. The highest option is the one that allows you to build a business with their products.
Regular Member: no monthly commitment; pays regular price for all products and has limited access to the Marketplace.
Preferred Member: This is the minimum membership. Customers pay $19 per month and must purchase 35 points worth of products each month plus pay any shipping and handling. Preferred Members are eligible to earn Loyalty Shopping Dollars and has access to other membership perks. These are earned by educating yourself about the products by watching videos and answering questions about the products.
So there’s no upfront cost if you want to start a business here. You don’t have to buy a kit. And you don’t have to ask people to host parties and push products.
Can You Make Money With Melaleuca?
While it took some digging, I did manage to find a little information on how people make money with Melaleuca products. According to their website, 80% of people who buy the products are customers and will remain customers. They have no interest in building a business. But they must buy their products from a Melaleuca representative. You cannot buy the products in a retail store.
Product Advocates: A representative who refers at least one customer but fewer than eight. Advocates will receive a “small commission” from these referrals.
Directors: these people spend an average of 50+ hours developing at least eight customers and have maintained them.
Initial Leadership Status: these people have referred several customers and helped some of those customers build a business to becoming Marketing Executives.
Preferred Shopping Dollars: this membership plan allows you to earn Loyalty Shopping Dollars by watching videos and learning about the company and its products. To keep this membership active, you have to continue to earn and spend your Loyalty Shopping Dollars.
Regular Members Don’t Have To Buy a Membership
If you can find people who really like the product but don’t want to buy a membership, at least you can offer them that. You won’t receive any points for that but at least you’ll have happy customers who only want to buy on occasion.
Good Quality Products
Customers do seem to really like these products and the products tap into the health and wellness and environmentally conscious customer.
Customer Satisfaction Guarantee
Melaleuca provide their customers with a 100% customer satisfaction guarantee. This is not to be confused with a MONEY BACK guarantee. If your customers are not happy with their products, they can return the products within 90 days for an exchange or credit. They will not get their money back.
Crappy Product Introduction Commission
So if you get someone to sign up to Metaleuca as a new customer, you can receive up to 150 Product Points provided that customer buys products in their first month. 150 points? That’s not cash commissions. Those points can only be used to buy more Metaleuca products.
According to my research, Melaleuca has promoted their products as made in the U.S.A. but that’s not necessarily the case. Some of the products are made in Canada and elsewhere.
Many, if not all, of the products contain some sort of fragrance or perfume but Metaleuca does not completely disclose the breakdown of what makes up these fragrances and perfumes. In fact, when a customer questioned a representative about this, the representative didn’t know and cited that it was a “proprietary blend.” According to their website:
In looking at products on the website, there are no prices listed. Some of the products have a savings of a certain amount but if you don’t know how much it costs to begin with, how do you really know if you are saving money?
According to the BBB (Better Business Bureau) there are over 120 complaints made against Melaleuca from customers who have tried to cancel their monthly subscription.
Crappy Cancellation Policy
In order for your customers to cancel their subscription, they have to submit the request in writing by filling out a cancellation form and submitting it by sending through the mail or by faxing it in. Mail by post and faxing? Who does that anymore? I don’t know about you, but I don’t think I know any business that uses faxing anymore. This cancellation policy seems to be a stalling tactic.
Is Melaleuca Scam?
There’s a lot of secrecy around the company and the products they market. So you have to ask yourself, if this opportunity was legitimate, why all the secrecy? The lack of information here should be enough warning for you. And one thing you should be aware of is that Melaleuca insists that they are not an MLM. But if you are still scratching your head, check out this Forbes article where Frank VanderSloot admits that it’s tough to earn money. Yes, it’s from 2004 but still quite revealing. The only difference between Melaleuca and a more traditional MLM is that you don’t have to buy a kit to get started.
Selling products, whether part time or full time, can be impossible unless you really love the products and are outgoing enough to sell them. Lots of people seem to love these products but you will never make money here unless you can convince people to buy that $19 a month membership. Not to mention there’s no information on what your commissions really are.
It’s a big leap of faith to jump into this particular opportunity when there’s so little information about what your earning potential really is. The fact that Frank VanderSloot admits how tough it is would steer most people away. But if having your own home business is really something you want to pursue, check out my #1 recommendation on how to start your own home business. You’ll get all the tools you need along with great training.