Wow! What controversy there is surrounding this question! Melaleuca Marketing Executives (and its CEO) say it’s absolutely not MLM.
However, according to the compensation plan, you are paid commission on the monthly spend of customers enrolled by you and by the customers enrolled by others in your organization. Is Melaleuca An MLM Company? Yes. (Don’t shoot me!)
If you are paid at multiple levels for customer purchases, it is Multi-Level Marketing (or Network Marketing – it is the same thing). I’m sure they have their reasons for not wanting to be known as an MLM company, but in any case, this post sets out to clarify the opportunity available so you can decide if it might be for you.
What is Melaleuca?
U.S. based Melaleuca is a wellness company that started in 1985, It was ahead of its time in terms of the type of products created. They were working on personal care, home cleaning, cosmetic and health products that use non-toxic, environmentally-friendly ingredients long before there was a great demand.
Nowadays, people are keen to protect their families and the planet and are actively seeking out safe products. Melaleuca manufactures a toilet cleaner that doesn’t need a child-safe cap as it contains no chemicals! They also make a disinfectant that kills 99.9% of germs but the key ingredients are Thyme oil land and citric acid.
The whole ethos is around a healthy environment and healthy living, using ingredients that are safe, effective, eco-friendly and affordable. (Read more about the Melaleuca ‘Smarter Choice’ philosophy here.) It has certainly paid off, as Melaleuca is now the largest wellness online shopping club with more than $2bn in annual sales.
With Peak Performance apparently, you can ‘Add Years to Your Life and Life to Your Years TM’
What is on offer for the customer?
Customers can sign up to be members of Melaleuca and have access to the product range online. There is no cost associated with becoming a regular member.
However, there is a Premium Membership on offer for a cost of $19 per year that offers the opportunity to earn money back to spend on products with ‘Loyalty Shopping Dollars’ and get a discount of 30% – 50% off the regular product price. The discount is subject to placing a minimum order value each month.
How do you get started?
First of all, you sign up for $19 then buy some products to get started. You can spend as little as $60 or opt for a ‘Lifestyle Pack’ which is a range of products costing $99, $199, or $299. I don’t have a problem with this at all as you will need to know the products to be able to talk about them.
Also, people who sign up under you are likely to copy what you do and you will absolutely want them to be able to recommend products too. Going forward, there is a requirement to spend 35 PV (about $60) per month. To check out whether these are the sort of products you would use, you can view the catalog here.
The model varies from the regular direct selling model in that you are responsible for selling membership into the program and recruiting (or sponsoring) other Marketing Executives into the business. Once a customer has signed up, you don’t have to be in contact with them again unless you want to check if they may be interested in the business side.
How does the compensation plan work?
Personal Customer Commissions: When you start, you earn 50% of the product points value for the members’ first 3 months. From your customers’ 4th month your percentage commission depends on how many active customers you enroll in that particular month.
- 1 – 7 active new customers – 7%
- 8 – 19 active new customers – 14%
- 20+ active new customers – 20%
Organization Commissions: You will receive 7% commission on customers enrolled in your Marketing Organization from their second month. This can go down to 7 levels deep depending on your rank. For example:
- Product Advocates are paid on 2 generations
- Product Advocates 2 are paid on 3 generations
- Product Advocates 3 are paid on 4 generations
- Directors and above are paid on 7 generations
Advancement Bonuses: There are bonuses issued when:
- You advance in status
- When others in your Marketing Organization advance in status
- When you qualify for a monthly Car Bonus
There are 49 levels in Melaleuca so lots of opportunities to earn bonuses
Pacesetter Bonus: This program is to encourage new people to advance to the next status within a certain time frame to earn double the bonus.
Right Start Bonus: When you advance to the status of Director in your month of enrollment or the following month, you receive an extra $100 on top of the pacesetter bonus.
Bonuses for helping others:
One of the things I especially like about Melaleuca is the focus on supporting your team to achieve. These include a Mentoring Bonus, Expended Mentoring Bonus, and a Leadership Growth Bonus where significant bonuses can be attained (up to $5,000).
In the interest of keeping this post easy to read, I will let you check out the entire Compensation Plan for yourself. Also, you can have a look at the income disclosure here which shows what people are earning at each level.
Pros of Melaleuca
- They manufacture ethical, desirable products
- The products are consumable so members buy again and again
- The membership model encourages members to place an order every month
- Marketing Executives do not have to place or deliver customer orders so have time to focus on finding new customers and business builders
Cons of Melaleuca
- As with any MLM business, you will need to be a leader or learn to become a leader to earn the life-changing money
- You need to spend $60 per month just to participate – not a problem if it’s something you would buy anyway (or if you are making decent money).
- Green products are now much more widely available cheaply at the supermarket these days so consumers would have to be really sold on the brand
Should I join Melaleuca?
If you are excited at the prospect of using these products and sharing them with an American and/or Canadian audience then I don’t see why not. Just beware that old-school methods – i.e. approaching anyone and everyone with a pulse about the products and opportunity – are unlikely to work.
By all means, make everyone you know aware of what you are doing and offer to share the information if they are interested. Leave the door open, but don’t expect them to beat a path to your door.
There is a better way to get new customers and recruit new team members. Check out my post How To Succeed With Network Marketing When Your Friends Don’t Support You for a sustainable way of getting new leads and having people search for you.
I was in network marketing for 10 years and learned lots of valuable lessons. I loved the people and the positivity, but I couldn’t keep up the rate of sponsoring new people to compensate for the people who left! I did make money from the retail sales, but not enough to be life-changing.
This was partly down to my lack of leadership skills but I also found that most people are not massively motivated to take enough action to make it work. (I wonder if that was down to me too – food for thought.) I moved on to Affiliate Marketing so that whether I succeed or fail, it is 100% down to me – I am not relying on anyone else for my success.
Just as an aside, in one of the companies I was involved with (a cosmetic and wellness business) there was a father a daughter distributorship that earned 6 figures per month. This was MILES ahead of what anyone else was earning! What on earth were they doing that the rest of us weren’t doing?
There was a product range that we all perhaps dabbled in – a Wellness shake and some food supplement pills – but were too distracted with lipstick special offers and the like to focus on Wellness. This pair were focussing on the subscription opportunity and on duplicating it with everyone they brought into their team with sensational results.
There could be an opportunity with Melaleuca to focus on one product range only, become an expert in that area and knock it out of the park. If you are thinking of adopting this approach, check out my post How To Sell MLM Without Being Annoying.
In my opinion, the MLM business model is great for people who are natural leaders or who would like to learn to be leaders. Or indeed, those who just want to make a couple of hundred dollars to make life a bit easier.
I have seen enigmatic people lead massive teams and earn all the trips and the cars, I saw a supermarket worker leave her job in 3 months and go onto build a massive organization, and I saw hundreds sign-up, not take action (or enough action) and leave.
At the end of the day, everyone has the same opportunity. Everyone starts from ground zero. It must be the fairest business model of all time, but it’s not for everyone. Not everyone is meant to lead teams or even be business owners.
Are you in MLM or have you been in the past? If so, I would love to hear about your experiences in the comments below.