Is Melaleuca a Pyramid Scheme?

People will often use the terms ‘multi-level marketing scheme’ and ‘pyramid scheme’ to refer to the same thing. I get it. Even I do that a lot. There is just a minor difference between those two terms. But people probably wouldn’t stop doing it even if you forced them to. They probably will just be mad at you for it.

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Multi-level marketing, sometimes referred to as network marketing, schemes and pyramid schemes both are dependent on people joining the scheme. More often that not, they will be recruited by people who are already part of the scheme. You pay a fee in order to join in both of them. Some multi-level marketing companies will offer free memberships. But more often that not, they will require a membership fee upfront.

Both schemes employ a compensation structure that may or may not resemble a pyramid. That’s why they call a pyramid scheme a pyramid scheme. There’s a person at the top and below them are the people they recruited and so. The cash flow in pyramid schemes is highly dependent on new people joining the scheme. This is where multi-level marketing schemes differ from pyramid schemes. In MLM schemes, they don’t rely on just the cash that members pay to keep the scheme going. They also have products that they sell. People who join MLMs are required to sell those products in order to earn commissions from it. Pyramid schemes will sometimes have that, but the main source of money is the investments made by new recruits.

Multi-level marketing schemes are a bit more legitimized than pyramid schemes. Pyramid schemes fall faster than multi-level marketing schemes. Some pyramid schemes will last longer than you would expect, but they will eventually fall.

Melaleuca falls more towards the side of multi-level marketing scheme. There isn’t really much to the company that I could online. The company was founded in 1985 by Frank VanderSloot. And that’s it. There isn’t much of an origin story to this company compare to the ones that Noonday Collective or OneHope have on their respective websites. The most interesting thing I found about Melaleuca is that their name comes from the scientific name for tea tree. Unsurprisingly, tea tree oil is one of the ingredients that Melaleuca uses for some of its products.

Speaking of products, I was really surprised by the amount that they have on their catalogue. They have a lot of different products. They have nutritional supplements, a very common product that other health and wellness-related MLMs offer. They also have their own line of beauty products. There’s also personal care products like body wash ad deodorant. They even have different cleaning products like laundry detergent. There’s even meal replacement kits. But what really surprised me is that they also offer medicine. Like, actual medicine for headaches and stuff. You can basically stock up on a lot of essentials from this website.

Like a lot of other multi-level companies, you have to pay a fee in order to become an affiliate member at Melaleuca. It took a little bit of digging because, for some reason, they didn’t really put any of this information directly on the page regarding memberships. Somehow, the company assumed that people who got to the website were people who were referred to by an affiliate member. It is also sort of aware that people may have found this website through searching on the web. Still, it’s weird seeing a website not disclose certain information readily. It costs $29 to become an affiliate member.

Since the website doesn’t have that much readily available information about its compensation plan, it’s probably safe to assume that it’s pretty much similar to other multi-level marketing companies. You have to reach a certain quota in order to qualify for commissions. All retail items will have different values assigned to them. Not price per se. But a different value that they count towards your monthly quota. So the higher the value, the easier it is to reach the quota.

Even though multi-level marketing companies offer an opportunity to earn income. I don’t really recommend it to anyone. There’s always a disadvantage to the people who are new to these schemes. Not all of the people who join these schemes actually earn any money from it. Some even lose money from being part of it. It doesn’t worth all the trouble.

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About the author: If you want someone who will talk straight with you, respect your time, and show you a business that might actually work for you, you should watch this short video.