Melaleuca Honest Review: Legit or Another MLM Scam?

Melaleuca MLM Review

In this post, we are going to explore Melaleuca, The Wellness Company – a Direct Selling company dealing in nutritional supplements, cleaning products, personal care products and cosmetics.  

The company claims to stay committed to providing the best to its members as they deserve the best. As of now, the company has more than 400 products included in different categories.

So let us plunge into the company details to understand Melaleuca Products, Compensation Plan lastly followed by our personal analysis regarding the company being a Pyramid Scheme or not.

About Melaleuca

Melaleuca was founded in Idaho by Frank VanderSloot in 1985.

frank vandersloot melaleuca

Till now Frank VanderSloot still remains the CEO of Melaleuca.

Frank VanderSloot is supposed to be a major landowner having a huge area under ownership across Idaho, Utah and Montana.

Before Melaleuca, Frank’s relative ran an MLM Company named Oil of Melaleuca which somehow faced investigations and medical claims that resulted in the company being offered to Frank.

By the end of 1985, Oil of Melaleuca was shut and a new company came out Melaleuca – The Wellness Company.  

The company claims to combine “what’s needed, with what’s possible” to have more effective results.

As per the official site, Melaleuca focuses on providing opportunities to everyday families to make $250, $500 or $2500 every month.

According to the Similarweb stats, the majority of the traffic to the Melaleuca site (melaleuca.com) is from the United States (65.66%), Canada (9.17%), Malaysia (5.19%), Mexico (5.17%) and Taiwan (4.19%).

The company has had a clear run since 1985 but still, there is a lot to know about, let us move further and understand the company’s strategies.

Company Profile

Company NameMelaleuca
FounderFrank Vandersloot
When Started1985
Head OfficeIdaho Falls, Idaho, USA
Websitewww.melaleuca.com
ProductsNutritional Supplements, Cleaning, Personal Care and Cosmetics. 
Email ID[email protected]

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Joining Melaleuca

There are two options at the time of joining Melaleuca.

Customer

A fee of $25 is needed to become a customer. Melalecua has two types of customers.

  1. Active Customers: They are ordinary customers with no purchase requirement. These are considered non-members.
  2. Preferred Customers: These customers need to purchase 35 or 75 points (own choice) products every month. Preferred customers have the benefit to get products at 30 to 50% of discount. Preferred customers are members of the company.

Every product is assigned a Point Value which is used to calculate the commissions paid to members.

Marketing Executive

Melalecua calls its distributors Marketing Executive and $29 is charged to become one.

Marketing Executives are company members as preferred customers. Both the members automatically renew annually for $19.

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Melaleuca Products

Melaleuca mainly deals in nutritional supplements, cleaning products, personal care products, essential oils and cosmetics.

melaleuca products

As per the company details, there are around more than 400 products with a claim of each being natural.

Also, every product is displayed along with the Member and Non-member price on the official site.

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Melaleuca Affiliate Ranks

There are 49 affiliate ranks as specified by the Melaleuca Compensation Plan. Ranks are known as Status as per the plan. There are mainly 7 categories divided into multiple categories as follows:

  1. Product Advocates: Includes Product Advocates, Product Advocates 1, and Product Advocates 2.
  2. Director: Includes Director followed by Director 2 to Director 9.
  3. Senior Director: Includes Senior Director followed by Senior Director 2 to Senior Director 9.
  4. Executive Director: Includes Executive Director followed by Executive Director 2 to 9.
  5. National Director: Includes National Director followed by National Director 2 to 9.
  6. Corporate Director: Includes Corporate Director followed by Corporate Director 2 to 9.
  7. Presidential Director

The ranks and their rewards are decided on the basis of PV and PEG.

PV means Personal Volume i.e. volume generated through the purchases made by the Members.

PEG is Personal Enrollee Group which is calculated as the total PV generated only by the personally recruited affiliates.

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Melaleuca Compensation Plan

There are mainly two types of incomes as per the Melaleuca Compensation Plan: Commissions and Bonuses.

Commissions

Members can earn Commissions in either of the two ways:

From Personally Enrolled Customers
  1. Product Introduction Commission: Receive 50% of the Product Points on the first month purchases made by enrolled customers.
  2. Personal Customer Commission: Depending on the total active customers, Members receive some % of commission from product purchases made by customers from second month as follows:
Personally Enrolled Active Customers% of Product Purchase Paid
1-77%
8-1914%
20+20%
From Customers Enrolled by Downline
  • Organization Commission: Members receive 7% of the Product Points purchased by the customers who are enrolled by other Members in their downline.

Depending on the ranks, Members are paid commissions to different generations.

  • Presentation Point Commission: When marketing executive of status Director 5 or higher earn more than 10 Presentation Points they earn $5 on each Presentation Point after first 10 points of every month.

Whenever a new customer is enrolled, 3 points are awarded to the enroller and 2 points to the person who made the presentation. These are termed Leadership Points.

Bonuses

There are 8 types of bonuses in the compensation plan. Members earn a bonus as they advance in Status, one of their downline Member advances, increase their customers or qualify for the monthly car bonus.

Advancement Bonus

Advancing to a new status makes the Members eligible to earn Advancement Bonus. However, the amount or percentage is nowhere stated.

Pacesetter Bonus

Pacesetter Bonus is paid as double Advancement Bonus as and when the Members advance within the Director and Senior Director status.

There is a predefined time period within which the Members need to advance to a new status.

Once again, the values or percentages are not provided in the marketing material.

Mentoring Bonus

When the personal enrollees advance to a new status, the Members are paid Mentoring Bonus equal to the Advancement or Pacesetter Bonus of the enrollee when they advance from Director to Senior Director.

An amount ranging from $2200 to $5000 is also paid for the personal Senior Directors advancing to the Executive Directors.

Core Mentoring Bonus

Directors 3 and above qualify to receive Core Mentoring Bonus when any Member from their Core Organization advance from one status to another.

It is paid as 50% of Advancement Bonus or 50% of Mentor Bonus.

The Cores can be defined as follows:

StatusCore Organization Generations
Directors3 Generations
Senior Directors4 Generations
Executive Directors5 Generations
National Directors6 Generations
Corporate Directors6 Generations
Double Core Mentoring Bonus

When any Director 3 or above succeeds to retain new personal Director 3 through Director, such Members earn double Core Mentoring Bonus for that month and upcoming month.

Leadership Growth Bonus

For the status of Senior Director or above, when the Members generate 30 or more Leadership Points, they become eligible to earn Leadership Growth Bonus. It is paid as follows:

StatusLeadership PointsBonus
Senior Director- Senior Director 930$500
Executive Director- Executive Director 9 *Non-masters30$2000
Executive Director- Executive Director 9 *Masters30$3000
National Director and above30$4000
Monthly Car Bonus

Members are paid for a new car when they reach Senior Director Status. They are paid for two new cars when they reach Executive, National and Corporate Director Status.

20/20 Bonus

When the Member achieves 20 personally enrolled Members within the first 5 months, he receives a $500 one-time bonus.  

As long as the Member can maintain 20 Members or more, he receives 20% commission on the personally enrolled Members.  

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To Be Concluded

We hope the above explanation helped you to understand Melaleuca’s compensation plan. Now it’s time to share some facts regarding Melaleuca.

Is Melaleuca a Scam?

No, Melaleuca is not a scam. It is a product-based direct selling company. It has distributors and customers to buy products. Distributors get commissions on personal and downline products sales.

But be aware of false products and earning claims made by Melaleuca and its representatives, below controversies will help you to know more about it.

Controversies

Actually, before Frank VanderSloot, his relatives were operating this company with the name Oil of Melaleuca. But in 1985 FDA caught this company for infeasible medical claims and inventory loading. Altogether company shifted to Frank VanderSloot and he rebuild it as Melaleuca.

In 1991, Melaleuca was alleged for violating the state’s pyramid scheme law by Michigan Court.

Again 1997, the year when Melaleuca was blamed for false claims for its 2 supplements.

June 2020, FTC issued a warning letter against Melaleuca for deceptive earning claims in the Covid-19 pandemic.

You can check TruthAdvertising.org to know some exaggerated Melaleuca health and income claims here.

Overpriced Products & Complicated Incomes

Like most MLM companies, customers need to pay a higher cost to Melaleuca for every product compared to the retail market.

Melaleuca health products can be used as nutritional supplements but not to treat or cure any disease.

The compensation plan of Melaleuca is highly complicated to understand. It is highly misspelled and poorly explained.

Melaleuca’s compensation plan does not include exact figures or percentages by which actual earning figures can be known.

There is useless inclusion of 49 status. The same compensation plan could be achieved with fewer ranks too.

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