Thinking about becoming a Melaleuca customer in order to make some money by marketing their products? Read this Melaleuca review first!
The Wellness Company, Melaleuca is a well-established company with a long track record and seemingly high-quality products. It uses a business model known as Consumer Direct Marketing (CDM for short).
The chances are that if you are reading this, someone has contacted you about their products or maybe you have been invited to one of their sales parties.
First of all congratulations on taking the time to do research on the company. I will do my best to answer your questions in this review.
If you are in a hurry, I'm not going to keep you in suspense. The company is not a scam, the products are legit but the CDM business model makes it something I can't really recommend as a business opportunity.
I want to be completely honest and tell you that I have not tried any of Melaleucas products or participated in any of their events. In short, I'm not affiliated with them in any way and I'm not here to sell you their products.
That, of course, means that I'm basing this review on third party information without trying their products or actually using their sales system.
This has its pros and cons. The pro is that you can rest assured my review is unbiased but the con is that I rely on third party experiences and opinions which might represent biased or false statements.
Finally, I want you to know that I will mostly focus on the company, sales system and business opportunity they offer. I'm not reviewing their products.
The reason I'm writing this review is that I love reviewing business opportunities. Especially home-based and online ones.
AppNana Review
Company: Melaleuca (Founded in 1985).
Product Type: Wellness & Health CDM (Customer Direct Marketing) company.
Profit Potential: Substantial
My Score: 3/5
Final Verdict: Melaleuca is a CDM business that focuses on selling high quality health and wellness products directly to customers.
The CDM business model offer the potential for customers to earn commissions from marketing the products. It also allows you to earn a commission from the sales the people in your downline make. So it's a type of network marketing.
Recommended?: Yes for high quality health products. As a business opportunity I would recommend SEO based affiliate marketing. It's simply more versatile and allows you to create potentially life transforming passive income with similar (time & money) investment. You can check my recommendation for getting started below.
Also check out my free 7-day course if you are serious about starting a home based business.
What Is Melaleuca
Melaleuca is an American Wellness company that specializes in wellness, health and environmentally friendly products.
They are the largest online wellness club in North America (according to their own words) and offer over 400 products in the health and wellness market space. More about the products later on.
The company started as a small startup in Idaho over 30 years ago and has since grown to a 2-billion dollar enterprise that operates in 19 different countries.
According to its website, Melaleuca manufactures all kinds of wellness products including:
- cosmetics
- pharmaceuticals
- eco-friendly cleaners
- personal care products
- nutritional supplements.
In their mission statement they disclose that:
"Everything we accomplish is done with an eye toward promoting the physical, environmental, financial, and personal wellness of those around us"
A pretty noble mission if you ask me.
Their business model is to deliver their products directly to the customer, cutting out all the middle-men of a typical distribution and marketing chain.
They are both the manufacturer and the retailer as well so I have no doubt they can produce high quality at low cost.
They reach their customers in two ways through a full-service catalog and an Internet shopping system. This allows them to spend more on research and ingredients while maintaining reasonable prices, in their own words.
They guarantee their wellness products are effective and unique, environmentally responsible, safer to use and of better value than store alternatives.
So yeah, everything looks pretty decent on the site and as far as I can tell, they hold up to the promise of high-quality products.
One thing that isn't obvious at first glance on their site is that you can't directly purchase anything. You can find information on their products, the history of the company, the source of ingredients, etc.
They talk about a catalog and an online shopping system but you can't access these directly from the website.
If you got to their website at Melaleuca.com you will find a button that says "sign-in" and also a button that says "become a member today".
If you click on the become member today button, you will find that you will have to contact the person who told you about Melaleuca and recommended it to you.
But If you click the sign-in button, you can click create an online account. This takes you to a page that asks your phone number with area code.
I can't confirm this but I bet they have regional representation on their marketers so based on your region, you would get a call from them and a way to sign in.
So if you want to become a Melaleuca member to either buy or market their products you need to be referred by another member.
How Can You Make Money With Melaleuca?
If you are thinking about using Melaleuca for the business opportunity, you are probably very interested in their compensation plan.
I did some digging around and I found their compensation plan.
In short, their business offers its customers the possibility of creating income without the need for huge investments like you require with regular business.
They have paid out over $4.5 Billion to their customers. Yes, you read that right. Billion. We are talking about some serious money here.
If you want to make money with Melaleuca, your role is simply to refer customers to Melaleuca. You will earn commissions when those customers buy something.
Since many of their customers are what they call Preferred Customers, meaning customers who buy every month, you can be looking at substantial amounts of money over time.
I like how the emphasize that you can make supplemental income through their business opportunity and that you shouldn't quit your job for it.
OK. Honestly so far this looks just like affiliate marketing. A customer you referred buys something, you earn a commission.
Aaand this is where the network marketing comes in. It turns out that you get commissions from customers enrolled by you, and from customers enrolled by others. Others meaning people in your Marketing Organizations (i.e. down line).
Melaleuca is adamant they are not an MLM but if you look at the compensation plan, starting from page 5 it becomes clear there is a very complicated, tier-based commission structure. Just like in any other network marketing company.
The compensation structure is complicated enough that I'm not going to try and summarize it any further. Check it out for yourself from the link.
I Melaleuca a MLM company
Melaleuca isn't an MLM (multi level-marketing) company or a pyramid scheme. At least not in the typical definition when compared to companies like Primerica or Prosperity of Life.
Their business model is something they call Customer Direct Marketing, or CDM for short. It's a form of network marketing but Melaleuca dislikes MLMs strongly.
They have actually publicly voiced their negative opinion about MLMs and their CEO Frank VanderSloot created the CDM business model in an effort to address the problems with most MLM systems.
So how does this actually differ from an MLM? Well, the key difference seems to be the compensation structure.
The key difference to most typical MLMs is that in CDM your compensation is based on your referred customers billed total. You don't receive recruiting commissions or entry fees, so the emphasis is clearly on the products instead of recruiting.
In all honesty, I think CDM is just another word for network marketing even though they want to make a clear distinction from MLM companies for understandable reasons.
In my opinion CDMs, MLMs and Pyramid Schemes are essentially variations of the same business model and phenomena. But they go from legit/legal to scam/illegal in that order.
In CDMs the focus is on selling products. The products are usually high quality and with competitive price in the market space. You are also not required to buy them yourself.
In MLM, depending on the company, it's a variable scale ranging from an emphasis on selling products to recruiting. Many MLMs are designed so that you can't really make money at the bottom. Products range from high quality to over priced.
Pyramid Schemes depend solely on recruiting. The usually have very expensive products or membership fees that give you nothing in return. The system makes money almost solely to the creators. This is why pyramid schemes are illegal in many countries.
To be honest I really don't see too much of a difference between a legit MLM and a CDM. They both use word of mouth (i.e. network) marketing, both utilize presentations and gatherings and pay out commissions based on multiple level referrals.
The naming based on how much the focus is on sales vs recruitment is just semantics in my opinion. Of course, there is the case to be made for Melaleuca that it truly seems to be a direct sales platform first. You just have the option to market the products to other people.
The only difference compared to affiliate marketing is that you can also earn commissions from several generations in your down line. In affiliate marketing, there is no down line.
But I'm not going to claim Melaleuca is an MLM. They want to make a clear distinction and they have the right to do so as a legit company.
Feel free to correct me in the comments section below if my understanding of the business model is somehow flawed. I love to learn about the intricacies of network marketing!
The Good
The things I like about Melaleuca:
1. It's a well-established and trusted company.
With a BBB rating of A+ and over 30-year track record, they must be doing something right. This likely means they have satisfied customers and they have kept their finances clean.
2. They produce their own products
Many MLM companies and wellness companies just re brand the same stock items and add a hefty price tag on them. From what I can tell, Melaleuca actually produces its own products and invest in research and development.
3. They are environmentally conscious
I love the fact that they produce eco-friendly cleaning products and other environmentally conscious products. They avoid using harmful chemicals in their products and manufacturing lines.
4. The products seem really high quality and good value
I've done a lot of research on health supplements and from what I can tell their supplement live up to the companies products. They are of high quality and offer better value than store-bought counterparts.
5. You can make money with Melaleuca with minimal investment
One of the great things about the company is that you can earn a supplemental income with minimal investment as you are not required to buy their products to market them.
Since the company does all the actual selling, shipping, and other labor-intensive stuff, all you have to do is get new customers.
There's another business model with very similar benefits without any of the cons of network marketing. I'll talk more about it at the end of this post, so definitely check that out.
The Bad
A few things I don't like about the company
1. They are a bit shady about their business model
It's hard to find out how exactly you can buy their products at first glance. It's also hard to understand how exactly the buying system works.
I had to do a bit of digging to find out how the compensation plan works, what it costs to join the program etc.
Then again I guess I'm supposed to learn about the company through one of their Marketing Organization reps instead of their website.
2. They have their own term for Network Marketing
I don't know why they are so adamant that they are not an MLM company. There are legit MLM businesses. All MLM businesses are not pyramid schemes.
It seems they don't want to understand the difference between an MLM company and a Pyramid Scheme, so they invented a whole new name of their own to describe their marketing system.
That said it's not exactly the most common type of network marketing and if there weren't different generations in the compensation plan, I would be happy to call it just affiliate marketing or revenue sharing.
Is Melaleuca A Scam
Now that we know how what Melaleuca is about and what kind of business opportunity it offers comes the real question. Is it a scam?
I don't think Melaleuca is a scam. Actually from what I've seen, it's one of the more honest direct marketing companies. They are upfront to the recruits about their position in the system and income potential.
They also hold an A+ BBB rating and have been an accredited business since 1987. Just considering that, it's impossible for the company to be a scam.
If you plan on using Melaleuca to buy health and wellness products, it might actually be a great place for that.
If you are planning to earn a little side income and don't mind recommending health products to your networks, it might be good for that as well.
That said you have to keep in mind that the compensation plan is similar to many other network marketing businesses and in this business model, it's unfortunately not very good to start at the bottom.
Fortunately, Melaleuca seems to be relatively honest about income potential. You can find their compensation model here and their income statistics here.
I especially like that they don't recommend you quit your job in an effort to make a full-time income through their marketing system. They strongly recommend you do it is a side business on your spare time.
The problem is with the whole network business model. Even if the parent company is honest, there are thousands and thousands of sales reps in the network.
Many network marketers lure people into whatever network they are a part of by telling how much their top sellers/recruiters are making and that you could be making that in no time if you work hard and are a real go-getter and all that.
Many people fall for this, buy a large stock of products or otherwise invest large amounts of money just to find it takes way more work than they expected.
Fortunately, this is not something you have to really worry about if you want to market Melaleucas products as you are not required to buy them yourself.
To make things worse the only way to mage significant money with most network marketing programs is through recruiting people. This means convincing people to join the program in hopes of making income.
Most people these days are aware of MLMs and pyramid schemes, so it is hard to convince people to join (which is a good thing in my opinion).
This leaves two options for the sales reps to get people to join. Both as unethical. The first is diversion or deception. They might mask the system as a job opportunity, including interviews and everything.
The second is pressuring. Many people who have suspicions will join the program out of social obligation when pressured by a friend or a colleague. Some people are simply too nice to say no. Network marketers often take advantage of this.
Then there's the downright scamming. Lying about the income potential and work involved.
That's why I always advise people to be extremely careful about not getting sucked in if someone they know is trying to convince them.
So if you are interested in joining Melaleuca to buy their products I'm not going to try to stop you. The company seems legit. Just don't go in thinking that you can turn it into a full-time business easily.
If you are looking for a way to earn an income from home, here's my suggestion:
How I make Money Online
While there direct sales companies are mostly legit, my biggest problem with the business model is how it encourages intrusive sales tactics.
I don't like being sold to and most people are like this. Of course, there are people who actually enjoy the social events of network marketers, like product parties, but most people hate being sold to.
I don't think there's nothing wrong with regular marketing, IF it's passive. I.e. ads and commercials are fine but when you get in my face (or my phone) I'm annoyed.
I believe in letting people decide in their own privacy if they need something. There is just too much crap being sold in the world today that I would actually prefer if every single person would think twice before buying something.
Better yet, I prefer to help out people who are are looking for a solution to a problem they have. This way you don't have to actually market anything. Just present the solution.
That's why the business model I recommend for people looking to work on their own terms is affiliate marketing.
With affiliate marketing it's possible to earn a commission from presenting this solution. This creates a win-win-win situation.
The people are looking for a solution that receives one, the company that offers the solution receives a sale and the affiliate earns a commission of this sale. Simple as that.
I make money online using this simple business model. The best part is that it can be automated to an extent, so that the work you put in once, produces income for years to come. The so-called "passive income".
You don't need to be good with computers or know anything about building websites, programming etc. The tools these days are very intuitive and straightforward.
But it takes work and dedication to see real results so it's definitely not get-rich-quick type of deal, don't let anyone tell you otherwise.
If you are interested in learning affiliate marketing I created a free 7-day course you can join by submitting you email in the form below.
Conclusion
I hope you found this post about Melaleuca useful and I hope it answered most of your questions. If you have any questions, please leave them in the comments section below and I will get back to you.
Melaleuca is definitely a well-established and legit company build over the Wellness business. They handle everything from manufacturing to shipping themselves so it's no wonder they've been so successful.
Their core values seem to be ethical and the product quality is high as witnessed by thousands of satisfied customers.
The CDM model is a bit like a cross between network marketing and affiliate marketing. But before anything else, Melaleuca is a direct sales company. A bit like online Costco for wellness products.
Melaleuca definitely doesn't seem to be a typical MLM company which is notorious for luring you in with promises of high income with selling high-quality products to your friends, family, and other networks. The truth is that most network marketers don't make any significant income.
There are definitely people making tons of money with MLMs (and pyramid schemes) but they are not the majority.
It takes a lot of work and existing networks to succeed with network marketing and then there's the question about ethics. The fact is that network marketers often pester people with aggressive sales tactics, trying to pressure them to buy or join the program.
I just don't like this type of marketing. There are much better and ethical ways to earn an income if you want to sell products.
If you are looking to make money with the Melaleuca compensation plan they offer to their customers it might be a good way to supplement your other income sources.
That said I can't really recommend it because I don't truly believe in their marketing model. While it's not an MLM it's still a form of network marketing. I honestly believe online affiliate marketing offers a better bang for the buck on the long run.
You might of course be different as every program is not for everyone.
If you want to learn more about affiliate marketing definitely check out my 7-day course. It's completely free, my compliment to you. I want to see you succeed!
That's it for today. If you liked this post don't forget to bookmark my site and hit the social share buttons on your way out!
See you next time.
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8 replies on “Is Melaleuca A Scam [2020 Review]”
I really found your website interesting and informational, I don’t think I will give this company a try despite they sound to be a legitimate company.
You provided a great review of this company and its products, but I never promote a company that promotes products and services in more than one niche
JEff
Glad you liked it Jess! I understand your principle quite well. Then again I guess Melaleucas niche is wellness but that’s definitely a broad and unspecific niche.
Hi,
Firstly I really appreciate just how long this article would have taken considering the depth of this review. I normally read business reviews or product reviews and find them as you say…bias. However, throughout reading your review it was obvious that the information provided here is based around genuine sources and opinions.
I would highly recommend this as a go-to review of Melaleuca for anyone interested in joining their business.
I look forward to reading further reviews in the future
Best wishes
Justin
Glad you liked it Justin! I try to stay as unbiased as possible. Of course, I have my own incentives for creating this post and I always encourage people to be skeptical about everything they read online. That said, I like giving credit where credit is due. It seems some people are bashing legit companies just to make a buck themselves. There needs to be some pretty aggravating evidence against a company or a product before I would call it out as a scam.
Thank you so much for sharing. Just out of interest. You say they make their own environmentally friendly cleaning products – where are they based?
The company was created in Idaho but I couldn’t find confirmation where their headquarters are physically located currently. Keep in mind they operate globally, so there are likely several manufacturing facilities and regional offices. This is just my speculation though.
Well, I don’t like MLM business model because of my previous experience. I had really hard time getting any money in one famous company and the problem is – you always have to pay for monthly membership even if you are not making any money.
Not only me, but my friends as well had really difficult time making money with MLM business model. That is why I prefer affiliate marketing.
You did a nice review and this company is clearly a legitimate company but as many others, you have to be on the top level in order to make real money, and you have to recruit as much as you can.
That is the sad part about all MLMs.
You are right about MLMs Strahinja. While I don’t think Melaleuca is a pure MLM in the typical meaning of the word, I do wonder if you need to build a substantial “Marketing Organization” to earn any significant income with Melaleuca. If you can make some decent cash simply by endorsing the high-quality products, I don’t see it any different from affiliate marketing really. This would make the network marketing side of the business just an interesting option to scale your business.