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Is Melaleuca A Scam?

Today we’re going to discuss an oldie. Is it a goodie? I’ll let you decide. In this review we’re looking at Melaleuca because it’s a well known company that people either love or hate. So I’ll try my best to present both sides of the argument so that you can make an informed decision.

I suspect this review may bring out some strong feelings either way. But as always I expect that everyone stay professional and act like adults when expressing their two cents. We obviously welcome feedback from either end of the spectrum but let’s keep it civilized. 

With that said, let’s get into it. Melaleuca is an MLM/Home based business that has been around for many years which isn’t the norm for such companies. Furthermore it has a BBB A+ rating which may or may not mean a lot to you depending on what you feel about the BBB. So far so good. 

 

What is Melaleuca?

It is a part of home products/health and wellness industry that has been around since 1985. They concentrate on selling the “green” and “natural” kind of  health and household products.. Melaleuca gets its name from the Melaleuca plant, found in Australia where they use the natural ingredients as extracts in all of their products. They of course say this plant is what makes their stuff so wonderful. I’ve never personally tried it, but who knows maybe it is everything they claim it is. 

 

In any event, the company is basically selling vitamins, supplements, beauty care, detergents and cleaning supplies. There are other things but this is the main push.  The products have no additives, chlorine, formaldehyde, coated capsules, all of that sort of stuff that make them a “good green”product.    

 

Their liquid products are sold as concentrate, so once you buy it it lasts a long time. This would be cleaning products, laundry and dish washing detergents, shampoo etc.  Vitamins and supplements are generally in 3 month supplies, and make-up and beauty items are normal sizes. The big push is that if you buy what you normally buy, you won't spend any more money, but you will get natural and green healthier living.  

 

Once you join the company as a business partner will save 30-40% off retail on your household products. You can also try to make  money by building a business and get others involved.

 

What makes Melaleuca appealing and possibly profitable, is you are getting people on two effective emotional issues.  It is products you normally buy anyway, so technically it’s not adding to your monthly budget, and the whole environmentally friendly thing is NOW a proven emotional draw. It wasn’t back in the day. So Melaleuca was ahead of their time in that respect. 

 

The whole program centers on this.  

 

What are the start up costs?

You join the company for a one time fee of $35. Then you are required to buy a minimum amount of products each month either for your own use  or from your direct marketing attempts to others.  This works out to be about $55 each month.  They use a point system that I go into in more detail below under “Forced Purchases” It should be noted that a large number of good folks join only to get the products, they do it as a money saver and as a green alternative.  Most of them never consider the business side of things. 

 

So how do you earn money?

Apparently the popular way to earn is to get people to join the company so they can order themselves at wholesale prices. That lets you buy your products at wholesale prices. Then you will earn 7% commission on what ever any one of your referrals buys in terms of the products. From what I can tell, I honestly feel that the majority of your business will be this way. This is probably a turn off for most people because recruiting is always a hurdle for most work at home seekers when it comes to these type of work at home opportunities. Lord knows it use to be for me.  Oh by the way, you don’t earn any commission on the $35 sign up fee that your referrals must pay to join the company. I think that’s a crappy policy after all you made the introduction. You should earn commission on any fee the company charges. 

 

The folks that tend to succeed with this company are involved in a lot of face to face networking. You can try to market online but it seems the big players do a lot of their recruiting over the phone, home parties, etc. So it’s something to keep in mind if you consider this as an option.

 

The good thing is that people who go into this as a full-fledged business can rise up to different earning levels and bonus opportunities as they develop as leaders and continue to promote the products. So there is a lot of room for growth for the right people.

 

How & when are you paid?

Commission and Bonus checks are mailed on the 15th of  each month directly to the business partners/members. This will cover the previous months earnings. If the 15th is on a weekend or holiday, it will be the next business day. Why companies still need to send checks instead of direct deposit or Paypal is a mystery to me. After all it’s 2011 not 1911. But at the end of the day, the most important thing is that they pay like clockwork. You rarely find any complaints about late payments. So that’s great even though the way they pay is antiquated. Money is money so how it gets to you isn’t a big issue so long as you get paid for your work.

 

What about company support?

For people who want to make a full-fledged business, one good thing about a company like Melaleuca, is they have all the product information, descriptions, sales and promotional materials available to help make this work. So whether is is printed leaflets (you would have to buy them of course) or articles and copy to use on websites and email marketing lists, they have everything you need.

 

On the support side of things they are also a well oiled machine. They have training materials that include videos and webinars, and there is always someone a phone call away to help and advise you.  Part of the bonus structure of the upper leadership levels requires you to work with the people who are in your down line. So that means there will be someone who will come to your house and meet with you on a regular basis.  Local distributors also get together and meet and share advice and motivational and business strategies. This can be good or bad depending on your nature. I’m anti-social by nature and prefer to keep everything at the convenience of the web. So I would hate the idea of regular face to face meetings. But many of you do appreciate being able to talk to a real person for questions and support. So I think this is probably a big plus for many people.  

 

What are the cons?

Like all companies I review, there will be cons. A company that has cons DOESN’T make it a scam. Companies are like human beings, you’re always going to have flaws. But it’s important to know what these weaknesses are so you can determine if you can work around them or just avoid this company all together. Too often I see reps getting their feathers all ruffled when you mention anything negative about their beloved company. But I think it’s worst to present a company as perfect to a prospect because they will eventually learn this stuff when they sign up. Then you end up with disgruntle customers and reps that are going to blast your company to their peers and the web because you failed to be totally real with them about the pros and cons of your company. So keep that in mind as you read through the cons I have identified. It’s not an indictment. It’s just things people have complained about for better or worst.

 

Commissions

I think it is unacceptable for a company this old and successful not to give the referrer a cut of the $35 sign up fee they make from the new person you recruited. That’s like marketing 101. I’m sure the argument is that you’ll make more on the lifetime of the customer’s everyday purchases, but honestly they’re making enough money to do both. 

 

Another place they drop the ball in terms of commission is that they do not give you credit for your own purchases! Only the person you signed up under you gets that! Maybe their margins would be too low if they did this or it’s the fact you’re already getting a discount on your purchases? Either way I think it’s a missed opportunity. 

 

Difficult cancellation policy.

Canceling must be done in writing, no exceptions and must be done by a certain date in the month to stop one more automatic shipment. Not surprisingly this has been the cause of many complaints. A big part of these complaints have to be taken with a grain of salt because we all know people fail to read the fine print on the sites they sign up for. But with that said, I think it’s still unacceptable that in this modern day and age you can’t just push a button to cancel at ANY TIME. After all they made it pretty easy to join. Shouldn’t it be that easy to cancel as well? Making you do it in writing at the right time the stars align with the moon is the type of stuff shady businesses practice. A company with a A+ BBB rating shouldn’t employ such a tactic. 

 

Administrative issues.

There has also been issues with order mistakes, accidental double billing etc. Honestly that’s normal administrative headaches that happen with any big company. So take that with a grain of salt. If it were a pervasive problem that wasn’t resolved then they probably wouldn’t have the high BBB rating.

 

Jumping through hoops for no good reason. 

In order to discover the ins and outs of their business, you either have to know someone or have to sign up and get a personal home presentation, phone call and/or webinar where they give their spiel about how great they are, and how much money people make. It reminds me of those annoying time share presentations.  You cannot just go to the website and read about it. If you’re opportunity is that great just present most of the ins and outs on the site. Why make someone go through a presentation and phone call. That should be purely optional for people that want more details. Fortunately for me, my research assistant knows a member, so I was able to get the inside scoop. But the fact I couldn’t get the details directly from the site has always been a turn off for me with any opportunity. It makes me think you have something to hide or want to pressure me into joining. 

 

Over saturated market. 

One of my major concerns about this business is over saturation. But that can be argued for any business. That being said when Melaleuca first started green products were fairly new. Now Target, Walmart and many other big name players have their own green lines which are pretty affordable, accessible and without forced minimum purchases per month or regular meetings. So when you consider that, what’s the benefit of buying from Melaleuca? Well if you got paid for your own purchases and received the products at wholesale, then it might be worth it. But unfortunately that’s not the case. That’s the type of resistance you’re going to get from people you’re trying to convince to join. So how do you address it? I’m sure a rep will be able to fill that in and I’ll welcome it.

 

Forced Purchases

Each month you must order a certain amount of products based on a point system. A $20 product might be 15 points, and a $35 might be 25 points for example. Don’t quote me on the exact points but you get the picture. Each month you must order 35 points worth which works out to be $55 /month. You all know what I think about thresholds. In this case it is just an excuse to bring more money into the pockets of the people in your up-line, and you do not get credit for your own purchases! Granted, this is not that high and if you spread things out, you could easily figure out $55 worth of household products to buy each month, but still….

 

If you do not choose your own 35 points worth of products, each month they will automatically send you an order anyway. This is like the forced continuity nonsense I’ve written about with other companies. It sucks. They’re kind enough to allow you to pick things they will automatically ship to you if you fail to meet the points requirement. But you don’t necessarily find out about that option right away. If you have not done that, they send stuff they choose, which trust me will include things they are trying to get rid of.  

 

Something smells funny..

Another minor complaint is that there is a definite odor to the cleaning products from the Melaleuca plant extract used in most of the products.  It is not horrible, just different, and it sticks around for awhile. Some people are turned off by it.  Not a biggie. 

 

So what do I think?

Well, first of all I have to tell you there are other companies in this natural, organic green home products line to investigate if you are of the frame of mind to be a “go getter” that thinks they can make this work.  So before signing up with Melaleuca, I would investigate all of your options. This is whether you are interested in only buying the products wholesale, or if you want to build a home business.  The killer cons of the monthly threshold and forced purchases are the reasons I suggest this step. You might find a company that does not have that particular feature in their business plan.

 

With that being said, I have no problem with this business, as long as you are fully aware of and agree to deal with some of the little quirks I mentioned above.  I would think it would be easier to meet your monthly threshold if you had a large family that takes vitamins every day, and uses lots of detergents, and shampoo. I do know it is possible to bring money in with this opportunity. I also know it takes a lot of work but that’s a given for any business. With that in mind you can be sure people will be dropping out of your down-line regularly, so you will always need to replace that income. 

 

As for building a businesses, this it’s totally feasible for the right people. If you’re prepared to work hard at a home business, you can make money. It’s that simple. But most people aren’t built for a home business. Folks just want to put in their hours and get a set salary. If that’s you, there is nothing wrong with that. But don’t join Melaleuca because that mentality won’t cut it. Focus on a traditional work at home job

 

However if you are considering this just be prepared for the long haul. Because there will be ups and downs. But for the chosen few, the rewards are great. If you do decide to join Melaleuca I would also encourage you to try the products first before promoting this business. It’s definitely not a good look to push something you are not passionate about or have tried. I preach this constantly with my preferred way to make money which is affiliate marketing.

 

Trust me I see people slapping up websites all the time and just throwing affiliate links on them that pay them the most. But they never end up making any money because they aren’t really adding value via their own personal experiences. Believe me it’s much easier to convince people to take action on anything when you’re speaking from experience. Why do you think I spend so much time actually trying some of the opportunities I recommend? Not surprisingly it’s also the reason why I consistently tend to be top affiliate marketer for most of the companies I work with. So definitely walk the walk so you’re better prepared to present the business and products. You’ll make way more money that way!

 

All and all considering the years this company has been around and the success stories, I think its worth a shot for the right person. Like most home based businesses this is based on sales. When you have the proper training (as I constantly remind folks who want to get into affiliate marketing) sales isn’t as bad as you make it seem in your mind. It’s just a matter of putting yourself in front of people that have problems that you can solve with the products you’re promoting. It’s not forcing people to buy crap they don’t want or need. My only concern with this company is that green products are very common place now and can be purchased damn near anywhere. So it may be a tough sell. But I guess that’s why they also have other products.

In any event, I would love to hear from people that have had success with this company or haven’t. Feel free to chime in on anything I may have missed or been wrong about. Your respectful comments and views are always appreciated. So chime in below.

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