Is Melaleuca a Pyramid Scheme?

Is Melaleuca a Pyramid Scheme? Ultimate Review

Hi, welcome to my Melaleuca Review. Do you ever hear of Melaleuca? Is Melaleuca a Pyramid Scheme? Let’s see…

Melaleuca is a multi-level marketing company that sells nutritional, cosmetic, and personal care items. It is not a pyramid scheme, and it is a legitimate MLM company.

You most likely learned about Melaleuca from someone – perhaps a friend or family member.

Many people nowadays are looking for extra money, and you are most likely one of them. There was then an opportunity to work from home by becoming an independent distributor for Melaleuca.

Before we begin this review, let me introduce myself…

Hello, my name is Dima, and I’m a successful online marketer who went from spending time to running a successful affiliate marketing business.

In addition, I analyzed and tested over 200 courses to determine the best way to make money online.

In other words, I enjoy making money online and assisting you legally!

However, as I’ll explain in this review, there are some reasons why Melaleuca’s success is unlikely. Only experienced salespeople and well-funded recruiters, in my opinion, will have real success with this MLM program.

I’ll also tell you the best alternative to the Melaleuca MLM program that has enabled me to make a full-time passive income online at the end of this review.

Table of Contents

Is Melaleuca a Pyramid Scheme?
Is Melaleuca a Pyramid Scheme?

Melaleuca Overview: Is Melaleuca a Pyramid Scheme?



Best Alternative
Is Melaleuca a Pyramid Scheme

Melaleuca provides a wide range of safe and toxic-free health and wellness products. Many people appear to be pleased with their 400+ products. However, in order to make any serious money as a member, you must recruit a large number of people into the company.

Features Rate 1
Can Make Money? 2
Recommended 1
  • Positive product reviews
  • Big selection of products
  • Long history
  • Low income potential
  • Expensive products
  • Not transparent
  • Cancellation issues
  • Executives are forced to keep purchasing
  • Not in the "early momentum" phase

What exactly is Melaleuca?

Melaleuca is a Multi-Level-Marketing (MLM) business that sells a variety of health and wellness products. They claim to be a “direct sales” company rather than an MLM company, but they are essentially the same thing…

There’s nothing wrong with being an MLM company, so I’m not sure why they’re so squeamish about the term!

The company was founded in 1985 by Frank L. Vandersloot, so it has been around for quite some time. It operates in nearly 20 countries and generates billions of dollars in revenue each year.

Furthermore, by promoting these products and recruiting more people into the MLM business, they provide ordinary people with the opportunity to work from home.

The 3-minute promotional video below explains the Melaleuca concept…

Is Melaleuca a Pyramid Scheme?

Melaleuca gets its name from the Melaleuca plant, which is an interesting fact. They claim that this plant is responsible for their high product quality, which makes sense. I’ve never tried it, so I can’t say if it’s everything they claim.

In any case, the majority of the company’s products are vitamins, supplements, beauty products, detergents, and cleaning supplies.

There are a few other things on the shelf, but this is the most important one. They claim that none of their products contain non-green ingredients like chlorine, formaldehyde, coated pills, and so on.

Melaleuca is appealing and potentially profitable because the “green” concept is already a well-established psychological draw. Melaleuca was thus innovative in this regard.

Who Founded Melaleuca?: Is Melaleuca a Pyramid Scheme?

Frank VanderSloot owns Melaleuca, which is based in the United States. In 2011, he was the 92nd largest landowner in the United States, according to The Land Report. VanderSloot was named the richest person in Idaho and the 302nd richest American in 2017 by Forbes, with a net worth of $2.7 billion.

His other businesses include Riverbend Ranch and Riverbend Communications. VanderSloot also serves on the board of directors and executive committee of the US Chamber of Commerce.

He contributes significantly to Republican presidential candidates and Idaho political campaigns. He has also spent money on ads opposing several Democratic candidates in Idaho. VanderSloot is a major supporter of Idaho Falls’ American Heritage Charter School.

What Kinds of Products Does Melaleuca Have?

Melaleuca sells dietary supplements, cosmetics, and personal care items. They sell a wide variety of goods, including:

  • cleaner for the shower
  • toothpaste
  • polishing furniture
  • stain remover for laundry
  • tea tree oil
  • shampoo
  • lip balm
  • vitamins
  • fiber
  • tub & tile cleaner
  • …and many more!

Melaleuca products are available for purchase on Amazon.

Their website claims to have over 400 products, but none of them are described.

Is Melaleuca a multi-level marketing company?

Melaleuca is a legitimate MLM (multi-level marketing) business. Melaleuca is a member of the United States Direct Selling Association, a trade association that promotes the multi-level marketing industry through public relations and political lobbying.

Melaleuca, as a multi-level marketing company, will not pay its sales representatives on a regular basis. You will run your own business as an independent distributor of Melaleuca products after joining Melaleuca’s MLM program and becoming a member.

Melaleuca distributors can earn commissions from Melaleuca for each purchase made by people they refer as well as people their customers refer, up to seven “referral generations” in total.

If you bring in a few or a lot of new members, the average commission rate is 7%, which can quickly add up. However, before you can start recruiting, you need to buy some products.

To keep your “non-active” status and continue receiving payments as a Melaleuca member, you must purchase a certain number of product points each month.

The item currently has a point level of 50, implying that it costs around $80. So, if you want to continue with the Melaleuca MLM program, you should order about $80 in products per month.

There are many “levels” of selling Melaleuca products, as is typical of multi-level marketing companies.

  • Product Advocates
  • Business Builder (Director 1-2)
  • 3-9 Director
  • Senior Director
  • Executive Director
  • National Director
  • Corporate Director

You simply sell products to people you know as product advocates. You still sell products as a business builder, but you take them more seriously.

Once you reach Director level 3+, the multi-level aspect becomes available. You will be expected to hire team leaders who will lead their own teams and report to you.

Surprisingly, Melaleuca never refers to its recruitment methods as “MLM,” instead emphasizing that they are “referral-based.”

This arrangement is referred to by the company as “Consumer Direct Marketing,” a term it has trademarked.

You can, of course, buy or sell products without recruiting new members. Melaleuca’s top salespeople and earners, on the other hand, manage teams of people who also sell memberships.

MLM isn’t about selling products; it’s about selling memberships and building the necessary downline to succeed.

If you’re prepared to take on the world, launching an online business is a good idea.

Perhaps you need a full-time income from home due to a health problem, having children to take care of, or even working a job you detest.

You might want to start an online business that makes passive income in which case you need to know how (and where) to start in order to achieve your goals.

Now, I’ll give you a free step-by-step beginner’s guide to making money online, which you can access by clicking below.

Are You Ready To Create Your Online Business?

What exactly is MLM?: Is Melaleuca a Pyramid Scheme?

Multilevel marketing firms are also known as direct sales firms or network marketing firms.

You are not paid a salary by an MLM company.

Rather than selling products, you make money by recruiting others to join your business. If you hire someone and they begin to generate revenue, you will be paid a commission on the sales and recruits they bring in.

This has several levels to it (hence multi-level).

Consider a triangle. If the person at the top of the triangle recruits ten people, and each of these ten recruits ten more, and these ten recruits ten more, you will receive commissions from all of the people in the triangle because they are all in your direct downline (in an MLM, the people beneath you are known as your ‘downline,’ and you are their ‘upline’).

By recruiting ten people, you can earn $1100.

Even if your MLM company offers a wide range of products, most people prefer to recruit others because they can earn a lifetime passive income from them, whereas they would only receive a one-time commission if they sold a product.

Because money trickles up to the top of the triangle, people at the top make a lot of money, while people at the bottom make the least.

Someone who works for a company like Melaleuca’s ultimate goal is to have as many people in their ‘downline’ as possible, allowing them to earn large amounts of passive income.

What is a pyramid scheme?

A pyramid scheme occurs when members can only earn money by recruiting more people into the company.

Technically, no products or services are available.

As shown in the diagram below, these are illegal in most countries because they are completely unsustainable…

Is Melaleuca a Pyramid Scheme
Is Melaleuca a Pyramid Scheme?

Most MLM companies, like Melaleuca, will sell products.

However, some MLM companies only offer products to “appear legitimate” on the outside. When, in reality, the only way for their ambassadors to earn good money ($1,000+ per month) is to recruit.

This Melaleuca MLM review will delve deeper into the company later. For the time being, however, you can learn what to look out for in “pyramid schemes disguised” in the video below…

Is Melaleuca a Pyramid Scheme

Is Melaleuca A Pyramid Scheme?

Melaleuca does not operate as a pyramid scheme. It is a legitimate MLM company that enables members to earn money by selling health products. You don’t have to make money solely through recruitment as a Melaleuca distributor.

Melaleuca, on the other hand, received a cease-and-desist order in 1991 for violating Michigan’s anti-pyramid scheme laws. Melaleuca signed a consent decree with Michigan and Idaho in 1992, agreeing not to “engage in the marketing and promotion of an illegal pyramid.”

Melaleuca has not yet been classified as a pyramid scheme.

So, what exactly is a pyramid scheme? Members of a pyramid scheme are recruited by promising them money or services in exchange for recruiting others. It is unsustainable and frequently a scam because the lowest-income members are doomed to lose money.

Those interested in participating must pay a membership fee to the company that runs the pyramid scheme. As a reward, the company would split a portion of the funds raised from each additional member recruited.

Melaleuca distributors, on the other hand, are not compensated for recruiting new members. There is no direct monetary incentive.

A pyramid scheme is profitable only for the company’s directors, or those at the top of the pyramid because they receive a portion of the payments from each newly recruited member. The scheme will continue as long as members continue to recruit and funnel funds to the top of the pyramid.

These businesses almost never sell valuable goods or services. The scam’s only source of income is from recruiting new members and soliciting additional funds from existing members.

To make money for everyone who participates, a pyramid scheme would have to grow indefinitely. This is impossible due to the planet’s finite population.

If there are no new recruits or other sources of income, the scam will fail. Because the majority of members are at the bottom of the pyramid, the majority of them will lose money.

Vemma, a manufacturer of energy and weight loss drinks, is a good example of a pyramid scheme. In August 2015, the FTC charged Vemma with operating a pyramid scheme that paid more to recruit new members than to sell products.

New members, typically college students and other young people who were promised high pay, were required to pay $600 for starter packages and hundreds more for monthly products. The majority of participants, according to the FTC, lost money.

How does Melaleuca Work? : Is Melaleuca a Pyramid Scheme?

The truth is as follows:

  • Melaleuca manufactures health and wellness items.
  • These products are marketed by “executives” for the company (and get a commission for what they sell or their “downline” sells)
  • Melaleuca generates revenue.

It is intended to be a “win-win” situation.

Melaleuca spends less on advertising. And ordinary people can work from home without dedicating their lives to creating products or starting a business from the ground up.

How to make money with Melaleuca? : Is Melaleuca a Pyramid Scheme?

Ok, this is probably the part you’ve been looking forward to!

So let’s not waste any time and get right to it…

As an executive, you can earn money from Melaleuca in two ways:

  • Sell products
  • Recruit more “executives” and make a commission from the products they sell

You are not compensated for recruiting people, but you do receive a commission on any sales made by these recruits. Melaleuca appears to believe that this does not qualify them as an MLM company… However, this is fairly standard practice for any half-decent MLM company! (Remember, not all MLMs are bad or scams!)

The short video below explains why some people became Melaleuca executives…

Is Melaleuca a Pyramid Scheme?

How much does it cost to join Melaleuca?: Is Melaleuca a Pyramid Scheme?

To get started, it only costs $19 + tax.

This is an annual fee, but you can begin earning money as soon as you pay it and join the company.

So you’re probably beginning to wonder… Oh my goodness, this is incredible, and it’s so inexpensive, to begin with!

It doesn’t stop there, amigo…

If you’re prepared to take on the world, launching an online business is a good idea.

Perhaps you need a full-time income from home due to a health problem, having children to take care of, or even working a job you detest.

You might want to start an online business that makes passive income in which case you need to know how (and where) to start in order to achieve your goals.

Now, I’ll give you a free step-by-step beginner’s guide to making money online, which you can access by clicking below.

Are You Ready To Create Your Online Business?

Compensation plan for Melaleuca

For some reason, MLM companies make compensation plans more difficult to understand than astrophysics in Latin!

Melaleuca is no exception!

They claim there are nine ways to get paid:

  1. Commissions (20% for referrals and 7% for the seven “tiers below”)
  2. Bonus points for advancing to one of the 49 “status” levels (see diagram below as a small sample)
  3. Pacesetter bonus- Rank up in a certain amount of time.
  4. When your enrollees advance through the ranks, you will receive a mentoring bonus.
  5. When your enrollees advance through the ranks, you will receive a core mentoring bonus.
  6. When your enrollees advance in the ranks, you will receive a double-core mentoring bonus.
  7. Leadership advancement bonus- more bonuses as you advance in rank!
  8. Monthly car bonus- a monthly bonus for a car of a specific rank.
  9. 20/20 bonus- 20 new customers in your first five months

So this may appear to be very exciting to you.

That’s fantastic; there are numerous ways to receive bonuses and rewards.

But here’s the harsh reality:

  • When you sell something, you only get paid in one way.
  • To make money in the other eight ways, you must recruit people.

So I hope you are prepared to hire new employees!

Here’s an old video that explains the principle behind the compensation plan (be aware that it’s a little out of date, but it may help you understand what’s going on)…

Is Melaleuca a Pyramid Scheme?

The most recent Melaleuca compensation plan is available here.

Reasons I Do Not Recommend the Melaleuca MLM

1. False Advertising on Their Supplements

Melaleuca has created a wide range of nutritional products, including vitamin and mineral supplements that promote heart health, cardiovascular and blood pressure supplements, and a glucosamine product for healthy joints.

The health claims, on the other hand, are deceptive. In 1997, the United States Melaleuca received a warning letter from the Food and Drug Administration for making “false and misleading” claims about two of its supplements.

Dietary supplements are classified as foods and are governed by less stringent Food and Drug Administration (FDA) regulations.

Some doctors and pharmacies warn that some natural supplements may interact with prescription medications; therefore, anyone taking strong prescription medication should consult their doctor before taking any supplements.

You’re trying to put customers’ health at risk when you sell Melaleuca supplements.

2. Only a few people can profit from Melaleuca.

With an MLM company like Melaleuca, success is difficult to achieve.

According to statistics, 72.5 percent to 99.9 percent of MLM members lose money.

This is because MLMs have sales quotas that require members to keep selling products in order to stay active and eligible for commissions.

If they do not meet the quota, they will not be paid.

As a result, many MLM members lose money before they even recruit one person into the company.

3. Melaleuca MLM Losses Are Reframed As Investments

Melaleuca MLM uplines frequently reframe their financial losses as “investments” in their business in order to retain their reps in an MLM scheme by dangling the carrot of future financial freedom.

But, in reality, these are not investments. You are unlikely to receive your money back. In most cases, the return on “investment” is negative. So calling it an investment is deceptive.

4. Melaleuca is a Cult

Why do people keep working for Melaleuca if the company appears to be so bad? Our research into MLMs revealed that they all have cult-like corporate cultures.

MLM representatives actively discourage critical thinking. When they ask questions that deviate from the ‘this company is an amazing mindset, they are chastised and even isolated.

Like abusive partners, MLMs encourage you to isolate yourself from anyone who questions your participation.

Those who leave an MLM are labeled as failures or negative people/influences, and reps are forbidden from contacting them.

One of the most devastating losses experienced by former MLM representatives is rejection from people they once considered practically family.

MLMs frequently expect their representatives to prioritize events and business over personal lives in order to further embed them in the business while separating them from family and friends.

5. You Might Need to Buy Melaleuca Products Yourself

If you do not have a large network of friends, family, neighbors, and so on, you may have to purchase products on your own each month. Overall, it’s a losing proposition.

I think it’s absurd that you have to buy the products you’re trying to sell. However, this is very common among people who join MLMs such as Melaleuca. That is why, in the long run, you will lose a lot of money while also making money.

6. Melaleuca Products are Expensive

Melaleuca, like other MLMs, sells overpriced products. There are numerous other brands that provide comparable products at lower prices.

As a result, you may find it difficult to sell Melaleuca products because your prospects can get the same product for a much lower price elsewhere. This explains why most people who join MLMs are only interested in recruiting rather than selling actual products.

7. Melaleuca’s multi-level marketing business model has a bad reputation.

Joining a network marketing/MLM company has benefited some people financially. Unfortunately, the majority of people who join MLMs are left with nothing but regret and a plethora of useless products that they are unable to sell.

Melaleuca is a fundamentally flawed MLM. The commission distribution is skewed toward the top.

Those at the top and pioneers make the most money, while those at the bottom will not even break even after a few months.

As a result, many people do not regard Melaleuca as a viable business opportunity.

8. Exaggerated Income Claims

Melaleuca, like any other MLM company, makes exaggerated income claims, but in reality, only a small percentage of Melaleuca promoters make a good living.

Melaleuca’s low retention rate, with less than 41% of its distributors active, can also be discouraging.

According to Melaleuca’s distributor payouts, more than 99 percent of Melaleuca distributors never make a profit.

9. Melaleuca is a cloaked pyramid scheme.

MLM will actually encourage you to recruit people if you want to avoid losing money every month.

Every system that requires you to recruit people in order to make money looks like this at some point.

Melaleuca is not a traditional pyramid scheme because you can earn money by selling their products.

In reality, however, you will need to hire others in order to make a living.

10. Recruiting is Required to Succeed

Because of this, I do not recommend MLMs to people. Melaleuca, for example, invests heavily in recruiting. Recruiting is required in eight of the ten ways to make money with Melaleuca. If you do not recruit, you will lose money at the end of the day.

My top-recommended platform is unique. By promoting and selling products that you truly enjoy, you can earn a four-figure, five-figure, or even six-figure passive income. You do not need to recruit people, but you should recommend useful and excellent products. More information will be provided at the end of this Melaleuca review.

Melaleuca MLM Program Customer Reviews

Positive Feedbacks

  • The products are fantastic, and there are plenty of them. Because of its extensive product line, Melaleuca is one of the world’s largest multi-level marketing brands.
  • The company has been in business since 1985, making it one of the oldest MLM companies that have never changed its name.

Negative Feedbacks

  • Membership costs $19 plus tax per year, according to the brand. However, the harsh reality is that you must pay $739 to remain in the program.
  • Expensive items: A red flag is the requirement to purchase products and then resell them at a higher price every month. To get an idea, compare the prices of similar items in different stores.
  • Lack of a consistent source of income: If you are fortunate, Melaleuca may be able to assist you in making money. However, you can be certain that you will not earn six figures per year, especially given how difficult it is to find “executives.”

Is Melaleuca Legit?

Yes. Melaleuca is a reputable company. Melaleuca has been outspoken about the abuses of multi-level marketing and the harm it can cause. Melaleuca, on the other hand, prohibits inventory loading (a practice used by many multi-level marketing companies to encourage customers to purchase thousands of dollars worth of inventory), limits the marketing chain to seven generations, and prohibits “breakaways” (another practice common in multi-level marketing).

Melaleuca also differs from MLMs in that its Marketing Executives are not required to keep an inventory, according to the company. To remain an active Marketing Executive and receive client commissions, Marketing Executives must produce at least 35 product points per month (approximately $45-55 per month). The customer is then entitled to a 30-40% discount.

Furthermore, the company allows you to earn up to 15% of your monthly order back in the form of “Advantage Awards” dollars. After receiving $20 in Advantage dollars, the customer can redeem them for products.

The items purchased are commonplace items such as shampoo, hairspray, and cleaning supplies. According to merchants, the minimum quantity required is for typical household or personal use.

Is Melaleuca a Scam?

Melaleuca is not a scam. It is a legitimate multi-level marketing company. The Oxford Living Dictionary defines a scam as “a dishonest scheme; a fraud.”

Having said that, Melaleuca openly makes deceptive and irresponsible marketing claims in order to attract members.

According to the company’s founder, VanderSloot, it has a “business model for those who want to supplement their income,” but a study of multi-level marketing companies conducted by the U.S. According to the Federal Trade Commission, less than 0.29% of Melaleuca distributors make a profit, while more than 99% lose money.

According to the FTC, “Melaleuca fails to disclose that approximately 99% of all participants lose money and thus fall further behind financially as a result of their participation.”

In June 2020, the FTC issued a warning to Melaleuca for making unsubstantiated profit claims during the COVID -19 pandemic, which contradicted previous FTC findings that less than 1% of Melaleuca distributors profit and the vast majority lose money.

You must put in a lot of effort if you want to be one of the few Melaleuca distributors who make money. And they usually make a lot of money from Melaleuca by aggressively recruiting.

If you’re prepared to take on the world, launching an online business is a good idea.

Perhaps you need a full-time income from home due to a health problem, having children to take care of, or even working a job you detest.

You might want to start an online business that makes passive income in which case you need to know how (and where) to start in order to achieve your goals.

Now, I’ll give you a free step-by-step beginner’s guide to making money online, which you can access by clicking below.

Are You Ready To Create Your Online Business?

What I like about Melaleuca

  • A lengthy history
  • Melaleuca product reviews that are favorable
  • a wide range of products

What I don’t like about Melaleuca

  • Expensive goods
  • Low earning potential
  • Problems with cancellations
  • Melaleuca is not clear… Is it just a ruse for a pyramid scheme?
  • Executives are compelled to continue purchasing.
  • Not in the early stages of momentum

Melaleuca Review Final Verdict: Is Melaleuca a Pyramid Scheme?

My Melaleuca review comes to an end here. Overall, I would not recommend working as a distributor for Melaleuca.

You will have a difficult time at first prospecting and finding recruiters to add to your Melaleuca commission.

Worst of all, you’ll have to practically beg your family and friends to join your Melaleuca business opportunity. It’s not enjoyable.

Even as you struggle to get people to join your downline, your upline is constantly following up with you to encourage you to purchase more Business Support Materials.

The reality is that you will most likely lose more money. Statistics back this up as well. According to a case study on the FTC’s website, 99% of people who join an MLM break even or lose money.

People who join MLM-type businesses frequently feel pressured to succeed, which is one of the main reasons they leave.

If you want to earn money while having a flexible schedule, why not consider starting your own online business?

As a result, rather than having someone tell you what you must promote, you can choose what you want to promote.

In the following section, I will explain how to build a legitimate online business to earn passive income online. This has enabled me to earn a full-time salary in a year. Most importantly, unlike MLM models, it is completely legitimate and sustainable.

The Best Melaleuca Alternative for Making Passive Income Online

If you’re just starting out in an online business, you deserve a better program than Melaleuca.

Wealthy Affiliate is my # 1 recommended platform.

Wealthy Affiliate is an all-in-one platform for starting your own affiliate marketing business.

When you join Wealthy Affiliate, you will have access to first-rate web hosting, keyword research tools, community support, extensive training, writing tools, and other products that will assist you in building an online business step by step.

You can sign up for a free account with Wealthy Affiliate to get started with affiliate marketing right away without spending a dime.

If you enjoy the site, you can subscribe to a premium subscription to have access to all of its features. There are no further upsells.

However, how much money can you make with Wealthy Affiliate?

A 21-year-old Wealthy Affiliate student earned $7,395 in only one week, which equates to more than $1,000 a day…all while using what he learned within Wealthy Affiliate.

Wealthy Affiliate.

Wealthy Affiliate has a far longer history than Authority Hacker, having been around for 15 years and having many success stories over the last decade. Actually, Wealthy Affiliate has over a million members, showing how popular this network is.

Here are some more inspiring success stories from Wealthy Affiliate members to offer you some ideas.

Where Can I Sign Up for WA?

Wealthy Affiliate features a straightforward price structure. It provides both free and paid membership. The premium membership is simply $49 per month or $395 per year.

If you want to get a feel for Wealthy Affiliate, join up for a free starting membership here (no credit card required). You have the option of becoming a free member with no time limit.

Furthermore, as a starting member, you will get immediate access to the community, live chat, over 500 training courses, 2 classrooms, networking, comments, 1 free website, and access to the keyword tool.

You may enjoy all of these benefits for free.

So I strongly advise you to create a free account and check it out for yourself.


Please contact me if you require assistance or have any questions.

And don’t forget to tell your friends and family about my Melaleuca Review.

What do you think?

Written by mr.success

On this site. You can get make-money tips,(extra cash tips & passive income), Digital Marketing, and program reviews.

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