Four Things To Know Before Starting A Melaleuca Business!
Frist off I want to make it clear that I am not a representative for Melaleuca. Although I have been approached several times about the Melaleuca Business opportunity from friends and acquaintances, I didn’t feel this would be a good business fit for me and you will see why below.
Not to say this wouldn’t be a perfect fit for you… Melaleuca is a great company with some very good products but in my opinion, offers a mediocre compensation plan and requires a lot of product to be sold each month.
This article was updated on 9/18/2015 to reflect the changes in the Company Compensation Plan.
Here are four main points to consider before joining the Melaleuca Business Opportunity.
1. Products Must Be Sold – A Lot Of Them!
2. You Must Be A Product of The Product!
3. You Must Convince People Melaleuca’s Products are Better! (even though they are)
4. Confusing Compensation Plan
The Melaleuca Business Model and Brief History
Melaleuca was founded in 1985 by Frank VanderSloot and his vision of bringing healthy, natural, environmentally safe products to consumers via word of mouth as opposed to conventional radio and television advertising has paid off quite well.
Melaleuca stresses to their Reps and on their business website the idea of Transfer Spending. Convincing people that your product is better is paramount if you are going to be successful with the Transfer Spending idea.
Consumers are going to buy certain products the traditional way and the Melaleuca business model is to convince people to purchase the same type of product at a savings. Have it shipped to the home and make a percentage by referring other customers to Melaleuca. Pretty typical of the Network Market Industry.
But why is someone going to quit using a product or products they have used for decades? First you have to convince them your product is superior. Saving 10% to 25% on a inferior product alone will not make for a long term customer. I am not saying that Melaleuca products are inferior by any stretch, it just goes back to #3 – Having to convince people first that your product is better in order for the transfer spending idea to work.
Melaleuca has a vast array of products and most are quite good! With over 300 products to choose from, ranging from household cleaners, personal care items, nutritional and pharmaceuticals, to cosmetics, wellness products and more.
The Melaleuca Business & Compensation Plan!
Here are some basics of earning money with the Melaleuca business model and from what I have been able to gather, it goes like this. Keep in mind, this is not a full breakdown on the Melaleuca compensation plan but an overview of some of the ways you are paid.
First off as stated on Melaleuca’s website: ” You Do Not Earn commissions or bonuses paid for recruiting reps or signing up customers”. Each commission and bonus is earned on the end sale to a consumer.
[It later states: “The Quality Customer Bonus” Once you quality enroll your first new customer for the month, you trigger your qualification to receive the QCB on all future enrollments for the month” After quality enrolling one Preferred Customer for the month, you will earn $25 for every additional Preferred Customer you quality enroll”.] But this is calculated over again each and every month.
When you refer Melaleuca to a customer, once they purchase you are paid 20% on the first 150 Product Points when they shop their first month. It’ not clear what happens the second month and less clear when you read the next paragraph below.
“Personal Enrolled Customer Commission”: As an active Director your commissions paid on your personal customers’ Product Point purchases increased to 14% (with 8-19 personal customers) Once you have 20 customers purchasing every month you earn 20% on all Product Points generated.”
Here’s What Has Changed
(Click images to enlarge)
Nowhere on Melaleuca’s website could I find any detailed information on the pie chart breakdown below. Notice that commissions are only paid down 7 generations.
Statistically they say the average network marketer only has 7 to 10 customers purchasing their product or products at any one given time. The key to earning 20% commissions on all Product Points is to have 20 active customers personally enrolled and buying every month. This is difficult to achieve on a consistent basis.
It seems this will require a huge customer base spending $100.00 or more every month in order to make any real money with Melaleuca, but keep in mind…
For each customer you sign up, when and if they refer a friend, you will be paid 7% on everything they purchase as well. BUT… Your downline is limited to 7 generations deep. You can grow your business horizontally with no restrictions so that is a plus!
*NOTE – This referral percentage appears to be part of the old Melaleuca compensation plan as I cannot find mention of it anywhere. It is possible the “blue” part of the pie chart now pays a commission on all customers 7 levels deep. Again, details are not spelled out.
They also have Leadership Development bonuses as well for Senior, Executive, and Corporate directors which can be found on the link below.
There are all kinds of other restrictions and requirements included with what seems like a confusing compensation plan. For a complete review on the Melaleuca Business Compensation Plan here is the company website link for your review.
The Melaleuca business model does have a lot to offer someone who’s looking to have a home based business, with one BIG BUT…
The compensation plan is very confusing, requires far too many customers shopping monthly in order to get paid a small percentage of the product sales. In order to gain customers, they must be convinced Melaleuca products are better than what they have been using for decades, which the company calls Transfer Spending.
So, if you are considering the Melaleuca company or any other product based MLM, you might want to do some comparison shopping before you make Melaleuca your home.
Consider This Alternative:
If a compensation plan that pays everyone within your organization the same 100% of the product points accumulated, allows for retail profits of up to 30% to 50% which can be realized on all product sales, along with product points that pay you, the smallest commission check paid is $300, with the ability to generate $3600.00 per week, per business center, and you can have unlimited business centers…
A company that offers a true Transfer Spending program; whereas you can purchase the same items you’ve purchased for decades, have grown to love, and get paid CashBack for doing so. (these are just a few differences) Which would you rather have?
You can read all the details and make the comparison for yourself by CLICKING HERE!
In closing, I would like to make it understood that Melaleuca and the Melaleuca business plan offer great products, a solid long term business history, and top company leaders. Just know, you won’t build a huge residual income overnight. Stick with it and don’t let anyone take away your dream!
I wish you the very best in your endeavors!
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