Is Shaklee A Pyramid Scheme Or A Scam? [2020 Review]

The chances are someone you know has recommended Shaklee products or it's incredible business opportunity to you. But that little voice at the back of your head told you to take a step back, could this be a pyramid scheme?

Before we continue I want you to know that I'm not affiliated with Shaklee in any way or form, so I'm not trying to get you to join the program.

My site is about finding the best opportunities out there to make money online for regular people just like you. So I review different "earn at home" and make money online products and recommend the one's I find useful.

Difference Between MLM And Pyramid Scheme

Before we continue this review, It's important to understand the difference between multi-level marketing (MLM), aka network marketing and pyramid schemes.

People often get these mixed up, so much so that many network marketing companies have started to shy away from the whole MLM term because so many people automatically think of a pyramid scheme.

A network marketing company or an MLM is a company that uses individual reps as it's distribution chain. To make it multi-level, the individual reps can recruit people under them. And those recruits can recruit more people. The people below you, your recruits, are called a downline and the people above you an upline.

The aim of this is to grow the distribution and sales force of the company. The reps earn a share of the sales from their downline usually for several tiers or generation, which are levels of recruitment.

This creates an incentive for the sales reps to recruit people into the system. The upline also offers training to the downline, passing on knowledge to improve their sales as this is a win-win situation.

In a legit MLM this whole recruiting charade is a secondary function. The main function for all recruits is selling products or services of the company.

It usually costs something to get in to an MLM, but it shouldn't break the bank. This is because the main income source within the system can't be the participation fees of the members.

When this happens, an MLM becomes a pyramid scheme. A pyramid scheme is usually disguised as a network marketing company or an investment opportunity.

In a pyramid scheme the money comes in mainly from the recruitment fees of the new recruits. So a pyramid scheme uses the same multi-levels model as legit MLMs but the difference is that they are usually expensive to join and there are no real products to sell or selling them is not the main attraction, recruiting is.

It's important to know this difference because there are legit MLMs, even though many people seem to categorize them all as pyramid schemes.

It is true that the system is very enticing for recruiting even in a legit mlm. This is because of simple math. If you can recruit even few active recruiters, your downline can grow at an incredible rate.

If the MLM pays out commissions for several generations (levels of recruitment), you can have thousands of individual sales reps making sales for you that you earn passive commissions from.

But still the fact remains that if most of the revenue comes from actual sales and not recruitment, a company is generally though of as a legit (and legal) MLM company. At least in the US by the FTC.

There are benefits in MLMs to the consumer as well. Many large MLMs manufacture their own products and because of the direct distribution chain they can often offer quality products at a lower price point than companies with regular distribution chains.

Now that we understand the small but very important difference between MLMs and pyramid schemes, let's look at Shaklee.

Shaklee: The Company

Shaklee is an American multi-level marketing company and a manufacturer that specializes in nutrition supplements, weight loss, beauty and household products.

Shaklee is actually one of the oldest MLM companies in the US. It was founded by Forrest C. Shaklee in 1956 with his two sons to manufacture supplements.

Originally originating from Iowa and Oakland, Shaklee has it's current headquarters in Pleasenton, California.

They also have subsidiaries in Canada, China, Indonesia, Japan, Malaysia and Taiwan. 

Shaklee promotes itself as a green company with environmentally friendly products and manufacturing facilities.

Leadership

The Shaklee Corporation has been public ally traded since 1970s and it's had several changes in ownership in it's past.

The current ownership formed in 2004 when Shaklee corporation was sold to Roger Barnett by Yamanouchi Pharmaceuticals.

Barnett is currently the CEO and Chairman of the company. The president is Heather Chastain and other key figures include CFO Shobhna Asthana, CIO Franci Kursh, Chairman in medical affairs Dr. Jamie MaManus and James

Shaklee Products

Shaklees main products seem to be different kinds of supplements and especially vitamins. Shaklee manufactures all it's products and they don't do animal testing. The products are also produced sustainable, organically and Non-GMO.

Apparently Shaklee was the first company in the world to be certified Climate Neutral. That's pretty neat actually. They have 5 main categories of products:

Nutrition

Multivitamins, nutrition regimens and different kind of targeted regiments.

Healthy Weight

Weight loss kits, shakes, meals & snacks, Energizing Tea and metabolism boosters.

Beauty

Make-up, beauty products and anti-aging products.

Sports

Sports supplements like energy and protein drinks and recovery aids.

Green Home

Cleaning products and water filtration.

Business Opportunity

So how about the business opportunity, maybe someone offered you Shaklee as a way to make money after all.

Well since it's an MLM they have a multi-level compensation plan. Compensation plans are often very confusing but the main thing you need to understand that your commissions increase the more people you have under you and the more sales you have made.

Shaklee compensation plan isn't really different from many other MLMs like Avon or Primerica for example. They are complicated and full of information, like they were designed to

Shaklee calls their compensation plan the Dream Plan. You can see here how the Dream Plan Works.

So how can you actually earn with Shaklee? Well there are two main ways like with all MLMs. By selling the products directly to consumers or by recruiting more people to become sales reps. You can also earn different kinds of bonuses if you make enough sales.

They have 4 different levels of memberships:

1. The Customer: A free membership. You cannot promote Shaklee products and pay the retail price when buying.
2. The Premium Customer $19.95: You get a 15 to 25% discount on your purchases. You are still not allowed to sell products.
3. The Official Distributor $49.95: You can promote the products but you are also required to order products each month to be qualified for a commission.
4. The Gold Ambassador $49.95 + Gold Pak $299/$599: Just like official distributor but with a chance to get higher commissions.

Is Shaklee A Scam

No, Shaklee is definitely not a scam. It's one of the oldest MLM companies with a continued track record of over 60 years.

It is clear that it is a multi-level marketing company, which means that the individual sales reps will face the typical challenges of being an MLM rep.

To succeed as an MLM rep you will need to have a tough skin and your really need to learn how to sell to people. By far the toughest part is getting your initial sales and finding people to recruit into your downline.

But some people find MLMs as a huge opportunity because it is true that you can make more money with them than in most regular careers if you can recruit enough people below you.

But that's the thing, most people who try MLMs end up failing according to FTC research. It's not really the companies fault, it's just the way the system functions.

I don't personally recommend MLMs because of the research done on them but then again I actually haven't been an MLM rep ever. It's a matter of personal preference to an extent but I want you to beware of the statistics.

Keep in mind that Shaklee might have better statistics than the whole industry since they've been around so long. They have to keep their sales force motivated after all. Otherwise they would run out of business.

There really isn't much controversy about Shaklee online, just the odd claim of it being a pyramid scheme on Reddit or Quora, which is pretty standard for all MLMs as some people categorize them all as pyramid schemes.

The fact that there isn't any real dirt online means that the company has managed to keep a solid reputation and is definitely earned the legit MLM badge.

Is Shaklee A Pyramid Scheme

There isn't anything that would point that Shaklee is a pyramid scheme. On the contrary actually.

Most pyramid schemes are very short-lived and they don't have real physical products or services to sale or they are just a cover-up for the recruiting.

Pyramid schemes are also very short-lived typically. This is because both people in the system and authorities will realize sooner or later what's going on. Pyramid schemes typically build huge hype and when the authorities start investigations, the top of the pyramid disappear with all the money.

Shaklee actually manufactures it's own products, which is. They are simply using the MLM model to cut down distribution costs and to grow the sales force.

Shaklee has been around for over 60 years, so they would have been caught if they were running a pyramid scheme. The only FTC investigations I could find actually involve a formed distributor that was running a fraud, but the company was not in it and fired the distributor immediately.

So as far as MLMs go, I can recommend Shaklee if you think you have what it takes to become an MLM rep.

But I can't really recommend the business model, because I think the

If you focus on selling products it's not really different from being a door to door sales person. If you focus on recruiting, you might actually make some decent money if you can recruit enough people.

But the sad truth is that recruiting people in the old fashion way into MLMs is actually really hard work. You need to be outgoing, social and active and you have to have a tough skin because many people will tell you no and be rude.

But I want to broaden your horizons. Maybe you haven't realized it but you can actually leverage the online world to recruit people into your downline, or to make money in a completely different way. Let me show you how!

How To Make Money Online (Or Recruit People)

So how can you leverage the online world to get endless streams of potential recruitment leads or to simply make money in other ways?

It's pretty simple. I'm sure you have a vague idea how bloggers and YouTubers make money right? If you can get your offer in front of people, you are bound to make sales or recruit people.

There are two ways to get traffic, organic and paid. Organic traffic refers to the traffic you can receive through search engines like Google or YouTubes search algorithm.

Organic traffic is naturally superior, because it's free and targeted, so it converts into sales well. But the problem is that it takes time and effort to actually get it.

Paid traffic can also be very well converting if you know how to target the right audience. But the learning curve is steep.

So how can you leverage this information to earn money online or to recruit people into your MLM business?

I recommend you start by creating your own niche website. If you have no idea what a niche website is, you are looking at one right now.

The idea is to create content you know people are looking for, you research it with tools. You then aim to rank that content in the search engine results. This is called SEO or search engine optimization.

Then it's up to you to do the selling or pre-selling. My number one recommendation is to combine SEO with affiliate marketing and advertising, because the system can be fully automated.

You just include affiliate links in your content and if your visitors end up buying through them, you will earn a commission. If you want to recruit people into your downline, you could for example create a landing page with a marketing video where you convince people of the opportunity and leave a contact number if they want to join.

If I've managed to broaden your horizons, I recommend you check you my Wealthy Affiliate review. It's my number one recommendation for learning this stuff as they have top-notch training and all the tools you need. It's the service I use myself.

I also created a free 7-day course that can fast track your progress. I will show you in very simple steps how to build the foundation of your own online business in a week. You can join the course through the form below.

I will also share exactly how I find keywords, products to review, how I structure my content etc. to my list so definitely consider joining.

Conclusion

I hope you found my Shaklee review useful. If you have any questions, you can leave them in the comments section below and I will get back to you.

Shaklee is definitely not a pyramid scheme or a scam as the company is one of the oldest MLM companies.

Pyramid schemes and scams are short-lived and definitely don't have their own manufacturing facilities like Shaklee does.

But you have to keep in mind that it's an MLM and it a tough road to make a living as a new MLM sales rep. You need to be very active and not afraid to contact people directly about products and recruitment. You also have to be able to take a no for an answer.

Even if you are a perfect match for the MLM model, keep in mind that the FTCs research suggests that only 1% of all MLM reps make a profit.

I personally can't really recommend the MLM business model because you will likely need to focus mainly on recruitment to get significant income from it. Especially passive income. But it's a matter of personal preference.

My recommendation is to find a regular day job that pays the bills and start working on an online business of your own.

It takes several months or even years (this depends on you) to build a successful online business that relies on organic traffic. But if you are willing to think ahead a bit, you will be rewarded with an exceptional asset that has huge income potential.

You can also master paid traffic if you have the money to invest and want faster results. Wealthy Affiliate can help you with both but I honestly think their training is top-notch especially for the organic traffic.

Thanks for reading and feel free to share this post in social media if you found it useful and inspiring!