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.
|Head Office||Idaho Falls, Idaho, USA|
|Products||Nutritional Supplements, Cleaning, Personal Care and Cosmetics.|
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What is Melaleuca?
Melaleuca was founded in Idaho by Frank VanderSloot in 1985.
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, the 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.
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There are two options at the time of joining Melaleuca.
A fee of $19 is needed to become a customer. Melaleuca has two types of customers.
- Active Customers: They are ordinary customers with no purchase requirement. These are considered non-members.
- 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 a 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.
Melaleuca 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 mainly deals in nutritional supplements, cleaning products, personal care products, essential oils and cosmetics.
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 prices 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:
- Product Advocates: Includes Product Advocates, Product Advocates 1, and Product Advocates 2.
- Director: Includes Director followed by Director 2 to Director 9.
- Senior Director: Includes Senior Director followed by Senior Director 2 to Senior Director 9.
- Executive Director: Includes Executive Director followed by Executive Director 2 to 9.
- National Director: Includes National Director followed by National Director 2 to 9.
- Corporate Director: Includes Corporate Director followed by Corporate Director 2 to 9.
- 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.
Members can earn Commissions in either of the two ways:
From Personally Enrolled Customers
- Product Introduction Commission: Receive 50% of the Product Points on the first month purchases made by enrolled customers.
- 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|
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.
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.
Advancing to a new status makes the Members eligible to earn Advancement Bonus. However, the amount or percentage is nowhere stated.
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.
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:
|Status||Core Organization Generations|
|Senior Directors||4 Generations|
|Executive Directors||5 Generations|
|National Directors||6 Generations|
|Corporate Directors||6 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:
|Senior Director- Senior Director 9||30||$500|
|Executive Director- Executive Director 9 *Non-masters||30||$2000|
|Executive Director- Executive Director 9 *Masters||30||$3000|
|National Director and above||30||$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.
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 neither Ponzi nor pyramid scheme. It is a product-based direct selling company. It has distributors and customers to buy products. Distributors get commissions on personal and downline product 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.
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.
In 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 and hence you need to learn essential MLM skills to sell such products.
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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Company Profile - 50%
Compensation Plan - 50%
Products - 40%
4 thoughts on “Melaleuca Honest Review: Legit or Another MLM Scam?”
This company looks like a gigantic scam with their pricing and outrageous multilevels and getting people to join to earn points. The amount of mandatory points would have a customer spending hundreds of dollars each month, plus a membership fee – if you don’t they force you to purchase their “backup basket”. On average, I’m seeing less than half a point for every dollar spent. This reminds me a bit of Amway MLM many years ago.
I have ben a Melaleuca customer for 15 months. Just about everything you stated is easily proven to be incorrect..
Mandatory points per month to maintain preferred status are 35. Typically 1 point is $2.00 worth of product.
Annual membership is $19. Sometimes there are $1.00 annual fee specials.
Backup orders aren’t forced because any and every customer can leave at any time. Backup orders ship at the beginning of a previous month when a customer forgot or failed to place the minimum order. This protects preferred member status.
No points or commissions are earned for enrolling new customers. Commissions and bonuses are earned based on volume when preferred customers shop.
Sorry! Do you you get Fact Checked? This explanation of Melaleuca is way off on some basic Facts! Where did you get the $29 Enrollment fee form? It’s normally $19 Bucks for an Annual Membership–pleas compare to Coscos that charges much much more and may pay you a small rebate after 6 months. The company has evolved and now has USDA approved beef products and offers discounts form over 2000 established Retailers who have vetted Melaleuca extensively–why would you project such negativity, when their are so many positive aspects to this BBB Certified Debt FREE Company! See: mealeucaawards.com and try to find an MLM with these kind of credentials!
If reading for full context, the $29 is for signing on as a Marketing Executive. That is a different level than member customer. To have an A+ rating for BBB, you only have to “resolve complaints” and if you look into the word salad, “resolve”, according to the BBB simply means “respond”. Why yes, they hire people simply to respond to all complaints, so their track record will show “resolved” and fulfill that main parameter for an A+ grade. Companies use BBB as a pay to play- its not a mediator of integrity these days. Debt free?? Yes, if you made 3.2 billion, your overhead was much higher than your company payout (funds to run it and pay distributors)…of course you would be debt free. With everyone involved needing to meet an order quota every single month, cutting corners in your products with PEGs, Titanium dioxide, ethyl (not sugar dirived- and yes you can find that out), synthetic polymers, etc (while claiming to be healthier- which is a lie known as Greenwashing)…sure, that’s a good way to be “debt free”. If you didn’t know, when a company is making *profit, that is an other way of saying debt free. Word salad…they are really good at that. Those of us who are discerning, dig a little and understand marketing and chemistry, we can see why not many people have heard of this pyramid company even though they’ve been lurking since the 80s. It’s a quiet little profit circle that sells crap with a smile and virtue signaling. Hope the guy doesn’t break his arm patting himself on the back 😉