Melaleuca is a billion-dollar wellness company that has been confronted with this question for many years. In this article, I’ll share my expertise in the MLM industry and provide my Melaleuca Review. So, is Melaleuca an MLM?
Affiliate marketing is a flourishing industry and will hit $6.8B by the end of 2021. Thus every company tries to leverage affiliates to promote their products to save their marketing costs.
Melaleuca is doing the same by asking its customers to promote their products and then earn commissions just like other companies with affiliate programs.
When I dig into it further I found out that they have a tiered compensation plan for their affiliates that makes their partner program look like an MLM.
In this post, I have taken a deep dive into why Melaleuca is not a multilevel marketing company and how their ‘affiliate’ program is essentially different from the norm.
With a lot of experience with this company and others like it in the direct sales or networking marketing arena, I’ll share some of my insights on the industry in general.
What is Melaleuca? An MLM?
Established in 1985, Melaleuca (not Melalueca or Melaluca!) is a wellness company that claims to be the largest online wellness shopping club in North America.
It manufactures and sells a full line of over 400 world-class wellness products, supplements, nutrients, functional foods, that naturally and effectively reduce weight, increase nutrition, and advance health.
They have direct control over ingredients used in their products and the amount of time between manufacturing and you using the product is short.
Melaleuca gets over 1 million shoppers every month, has an over 96 percent month-to-month reorder rate, and has hit the 2 Billion dollar mark in annual sales in 2017.
Yes, the website looks like it’s trying to party like 1999, but the ordering experience via the app is really simplistic.
Sidenote: if you accidentally spelled it Melaluca, Melalueca, or any other variation, you’re definitely not alone.
It’s a toughie.
Let’s dive a bit more into their promo methods.
Related Reading: Is Zyia Active an MLM?
How Does Melaleuca Promote Its Products?
Rather than sell its products in retail stores like Wal-Mart, Walgreens, or Smiths, Melaleuca relies on word-of-mouth or referral marketing from its customers and ships products directly to their homes.
This alternative strategy enables Melaleuca to compete against the giant product manufacturers that spend billions in advertising each year.
It also allows Melaleuca to duck the expensive turf wars over shelf space in the retailers’ stores.
Instead, Melaleuca’s business model compensates so-called “marketing executives,” a term it uses for business builders who refer customers and help them set up shopping accounts.
To date, Melaleuca has paid $4.5 billion to marketing executives who have made referrals and helped others to do so.
The general idea of the model of this company and many other old ones in the industry.
Think Amway, Mary Kay, Herbalife, or even new-age companies like Zyia that sell activewear (my wife, a rep, just got me some killer stretchy business casual pants).
These are giants in the industry that operate on similar models — cut out middlemen, don’t fight for retail shelves, and pay reps to market your product instead of millions in advertising campaigns.
It’s that simple.
I find it humorous that reps of these companies (specifically Melaleuca here) have to defend themselves on being an MLM (multi-level-marketing) or not.
But let me give you a bit of additional thoughts on multilevel marketing based on my experience.
Here are some things you can ask to look closer at opportunities.
My Melaleuca Review
Give your MLM opportunity the ‘ole MLM Test!
“Is Melaleuca an MLM?” your friends ask when you tell them about it.
“No, and here’s why. See we only have a x-factor tier and you don’t get paid on multiple layers deep until the 5th tier. The sublevels have to level up with your subreddit and substack.”
Ok, I made that up.
It’s just funny that companies have to defend whether they are an MLM or not.
Unfortunately, there are plenty of bad apple companies that I’ve run across out there.
But who cares? I think you’re asking the wrong questions.
These are the rules I use to examine any sort of direct sales, networking marketing, or MLM opportunity (I think the three of these are interchangeable).
My MLM Test (Great For Melaleuca Reviews)
I have two simple tests for you if you happen to be looking at these opportunities and wondering if Melaleuca is an MLM.
Test 1: Is the company more focused on selling great products and promoting those or are they more concerned and focused on selling the idea of recruiting others and getting paid for that? This second part is where it can get sticky as a company begins getting built a bit more on a house of cards.
Test 2: Is the product or service one that you would be happy to pay for at the price? Is it even a product or service that you could learn to get excited about? Maybe even share it with your friends like you already do with countless other products that you use and love?
If a company can pass those 2 tests, then it’s probably a great opportunity for you to seriously look at further.
Melaleuca Reviews: You will have to test the opportunity for yourself with the above questions. I would argue that they are definitely passionate about the products that are offered. And Melaleuca makes some incredible products. The second question is going to be for you to decide. If you buy all of your products from Dollar Tree and you have no concern for how products you use are made, then you won’t find great deals with Melaleuca. But if you already purchase products with carefully picked ingredients then you may find some new favorites with Melaleuca (wait until you smell the laundry detergent!)
How Much Does It Cost To Join Melaleuca?
To join Melaleuca as a customer, you need to contact the person who referred you to their site.
They will enroll you as their customer and then you will be able to shop.
If you enroll as a Direct Melaleuca Customer, by submitting a Customer Membership Agreement, there is no cost. If you enroll as a Preferred Member, by submitting a Customer Membership Agreement, the cost is $19.00 plus GST.
A Preferred Member commits to ordering a minimum of 35 Product Points (equal to $80) each calendar month and receives a 30-50% discount off regular prices.
I will admit, that one of the things that I dislike is when companies require minimum orders in order for you to stay activated.
But every company is different and has different requirements.
Ok, let me show you the money.
The Commission Plan Of Melaleuca
With Melaleuca you earn commissions from customers who were
1- Enrolled by you and
2- Enrolled by others
You’re paid commissions when customers in your marketing organization purchase products from Melaleuca. The commissions are calculated based on how many products points each customer purchases in a given month.
1- Customers Enrolled By You:
Product Introduction Commission:
When you enroll a customer, you’ll receive 50% of product points on purchases in the customer’s first month.
2- Customers Enrolled By Others:
You receive 7% of product points on purchases by customers who were enrolled by customers in your marketing organization.
The marketing organization has many levels of selling.
1- Product Advocates
2- Marketing Executives
3- Senior Director
4- Executive Director
5- National Director
6- Corporate Director
You are paid bonuses:
1- When you advance in status
2- When those in your marketing organization advance
3- As you increase the number of your customers in your marketing organization
4- When you qualify for a monthly car bonus.
You can also earn bonuses for enrolling Quality Customers. Quality customers are people who enroll, become Preferred Customers, and make the necessary minimum purchases within their first month.
Weekly Melaleuca bonuses are paid to anyone who has kept their Preferred Customers enrolled through the past 5 months. If you’ve managed to retain 75% or more of your Preferred Customers, you can qualify.
Finally, Melaleuca gives out some pretty good Leadership Development Bonuses for those who are building up a solid team of distributors who sell a lot and move up in rank. Each time one of the distributors in your downline gets a rank bonus or sales bonus, you get a bonus that’s equal to 50% of their bonus.
Conclusion – So is Melaleuca an MLM?
Ok, let me first ask you this – “Does the term scare you or are you just looking for an answer?”
With the basic definition of a multi-level marketing company, yes it is.
Because you’re getting paid on multiple levels.
If the MLM (or multi-level marketing) phrase is negative to you and you tie it to the term pyramid scheme, then no it’s not.
I understand why companies want to detach themselves from the term.
Because the term means different things to different people.
But I honestly think it’s the wrong question.
Really, who cares?
Today, companies like activewear company Zyia (my wife recently became a rep after trading in 95% of her closet for athleisure) are modern-day affiliate programs where you become a customer and use the product.
They then reward you for promoting the products to people in your network when you make sales.
This is affiliate marketing at its core.
Just revert back to my 2 test questions above when looking at any opportunity.
1: Is the company more focused on creating a great product or recruiting people?
2: Would you be happy to use the product or service yourself and purchase at the price points?
Does it pass both tests?
Good, then it’s probably worth looking at whether you call it direct sales, MLM, or networking marketing.
Typically, it’s all very similar.
If you’re looking for Melaleuca Reviews, you’re going to find different opinions based on personal experience. So be sure to take these with a grain of salt.
So is Melaleuca an MLM?
I’ll let you be the judge.