Is Scentsy a Pyramid Scheme?

There is often a struggle whenever I use the terms “multi-level marketing scheme” and “pyramid scheme.” A lot of people will probably say that both are the same thing. I would sometimes have to agree with them. Words are weird. I always second guess myself whenever I write any of these reviews. But I almost always use multi-level marketing scheme a lot more than pyramid scheme.

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What I’ve kind of internalized after researching a bit about both terms is that there are very small differences between the two. Both types of schemes require people to join into them by paying a fee. Sometimes it’s a one-time fee, sometimes it’s a monthly fee. Both have a compensation structure that resembles a pyramid. That’s why they call the scheme as such. The difference, really, is how you earn money from it. In a MLM scheme, you earn money mainly through sales of the product that the company sells. In a pyramid scheme, you earn money from the people who join the scheme after you. Like I said, you have to pay a fee to join in. When nobody else joins a pyramid scheme, the revenue stream stops. Nobody in any level of the structure gets paid.

Scentsy falls on the multi-level marketing side. I am always to find out of any multi-level marketing company that exist in other industry. Having written a lot of reviews about companies that often sell nutritional supplements, it’s a breath of fresh air when I get to review something that I don’t see quite that often with these types of schemes.

Scentsy was founded in 2004 by Heidi and Orville Thompson. In their corporate bio on the Scentsy website, it’s mentioned that the couple bought Scentsy from a couple of moms in Utah. Like a lot of businesses, they started off small in a shipping container on a sheep farm. Throughout the years, their business has been steadily growing. So much so that they have their own space called the Scentsy Commons, which has been the company’s headquarters since 2013. Apparently, the couple has taken a bit of a step back in order to serve on a mission for the Church of Latter-Day Saints for about three years. Currently, Scentsy president Dan Orchard serves as the company’s interim CEO.

Scentsy started out mainly as a company that made wickless candles. You know, candles that use heat from lamps in order to melt. Of course, having the name Scentsy meant that their candles are fragrant. Since then, the company expanded towards becoming a fragrance company. They still have their wickless candles and warmers. But they now have scented oils, laundry detergent, and body care products. You know, products that make sense to have scents in them. Like a lot of companies, Scentsy also has philanthropy arm where sales of a product go to different causes.

The way you earn money from multi-level marketing schemes is by becoming an affiliate member. Sometimes, you will be called a special term like hac.er or a cause entrepreneur. But it means the same thing. You’re just called a Scentsy consultant. Consultant is a very commonly used term for affiliate members in MLMs. A lot of these affiliate programs will have different costs. Sometimes you have to pay for a membership then purchase a separate product kit so you can actually sell something. In the case of Scentsy, you just have to pay a $49 starter kit that contains all the necessary marketing materials and orders and a selection of that season’s products. You do need to have input the name of a sponsor if they invited you or you could just input your postal code and choose one that’s nearby.

Once you’ve become a Scentsy consultant, you can now start selling their products. Like a lot multi-level marketing companies, you have to sell those products in order to earn a commission. You get the commission every month. Certain rankings in the structure require you to recruit others to become consultants and sell a certain amount of products individual and as a group. Certain items have their own denominations that count towards your retail volume. Commissions start at 20% and go up as you climb through the ranks.

I have said this in a lot of my other reviews of multi-level marketing companies. But I don’t really recommend anyone to join any kind of MLM. Regardless of how great the product may be, it’s not really worth all the hassle. Some people may find success in it, some don’t. But MLMs often put new people at a disadvantage. There are better ways of earning money. I just don’t think MLMs are one of those ways.

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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.