Before you say doTERRA is not a pyramid scheme, you need to look at the company compensation plan and earning disclosure statement.
In our previous discussion, MLM vs Affiliate Marketing, we agree that not all mlm opportunities are pyramid schemes.
However, we also agree that an mlm becomes a pyramid scheme when its compensation plan encourages consultants to recruit, not selling products.
After reviewing the doTERRA compensation plan together with the company earning disclosure statement, I say to myself, ‘doTERRA is a pyramid scheme!’
You should at least read this doTERRA Review to fully understand why you will not make money promoting and selling doTERRA products.
OK, let us begin!
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doTERRA Review Summary
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What Is doTERRA?
doTERRA is an mlm health and wellness company manufacturing and distributing essential oils and essential oil products through its network of over five million Wellness Advocates and customers.
doTERRA was founded in 2008 by a group of former executives of Young Living, also an mlm company selling essential oils.
doTERRA annual sales revenue is $2 billion dollars.
According to the doTERRA, the company primarily sells its products through an mlm network of 5 million members worldwide with the largest group, approximately 3 million members, is from the United States.
However, doTERRA reported approximately 268,000 active Wellness Advocates within the United in 2017.
The company is facing intense criticism and warning from the FDA for allowing its consultant making misleading or unverifiable claims that the company products as a possible treatment or cure of terminal illnesses such as cancer or Ebola.
doTERRA announced the company information system was hacked on April 2014, which hacker obtained personal information, including name, dates of birth, social security number, address, telephone number, email address, debit and credit card numbers, username, and passwords…
Based on the information available to the public, we can conclude:
- doTERRA is an mlm company.
- doTERRA home-based business opportunity is operating as a pyramid scheme with a few consultants at the top earned the most.
- the doTERRA consultant failure rate is high, and
- The doTERRA business is very competitive.
The doTERRA home business opportunity doesn’t seem to be a good investment.
Before investing with doTERRA, it’s smart to compare with other home-based business opportunities…
You can use My Writing Business to make a comparison.
How to Join doTERRA?
You can join doTERRA in two ways:
- You can join as a wholesale customer for a cost of $35 and an annual renewal of $25. As a wholesale customer, you can retail doTERRA products for profit, but not allow to build an mlm business with doTERRA.
- To become a consultant for doTERRA, you must join as a Wellness Advocate, and you will need a sponsor to sign up.
Meeting with the doTERRA Consultant
You are required to have a face-to-face meeting with a local doTERRA consultant to discuss the cost and process of joining doTERRA as a Wellness Advocate.
You can find your own doTERRA consultant, or the company can assign you one to start the application process.
Completing the Paperwork and Fees
The meeting with a local doTERRA consultant is to start the application process and pay the required fees to join the doTERRA mlm business.
This consultant is your sponsor and your upline.
At this meeting, you are required to pay the initial investment to join doTERRA mlm business opportunity.
How Much Does It Cost to Join doTERRA?
I have told you the cost to become a wholesale customer for doTERRA above.
However, the cost to become a doTERRA consultant ranges from $200 to $2,666.67. It depends on the enrollment kit that you have selected.
All DoTERRA consultants are required to purchase one of the enrollment kits above.
Your doTERRA sponsor will likely encourage you to purchase the most expensive enrollment kit to boost your chance of success with doTERRA… But,
I honestly don’t believe it makes a difference.
Besides the startup cost, there are other additional costs which doTERRA will never disclose to you at the initial meeting.
These costs are known as business operating cost. The cost to operate your doTERRA consultant business.
I will only list the two biggest operating costs in this doTERRA Review:
1. Time Investment With doTERRA business
The times require to operate a successful doTERRA business vary.
But, to be successful as a doTERRA consultant, you need to invest over 80 hours per week into building this mlm business.
Let take the minimum wage of $7.25 per hours, this means a doTERRA consultant must invest at least $580 per week, or $2,320 per month, of time into operating doTERRA mlm business.
2. DoTERRA Hidden Operating Costs – “Monthly Sales Volume Requirement”
DoTERRA is an mlm. So, all consultants are required to meet the monthly minimum sales volume to remain active.
You must be an active consultant to receive commissions. This is what I refer to as, “Pay and Play!”
According to the doTERRA compensation plan, which I’ll discuss more detail in the next section, the minimum monthly Personal Volume for the Wellness Advocates is 50 PV, while Managers and upper ranks are 100 PV.
It is very difficult to know the exact dollars and cents for each individual consultant monthly PV requirements.
However, from doTERRA financial information, we can roughly estimate about $100 per month of personal purchase or 2 points for $1 spending.
I call this hidden cost because most mlm companies do not disclose this monthly sales volume requirement to new consultants. Consultants usually discover this requirement after making the first sale.
To meet the monthly sales volume requirements, most doTERRA consultants have to order their own products. This is how mlm companies sell their products.
So, the real investment fund to launch a doTERRA business is more than the fee to join doTERRA is minimal… This is minimal.
But the major expenses of mlm business, like doTERRA, is the monthly personal sales volume, which can cost a doTERRA consultant thousands of dollars.
The monthly personal sales volume requirement is the reason why many investors do not make money with mlm business opportunities.
This monthly expense destroys your chance of making a profit, because you don’t earn commissions unless you purchase products from the company, even in the month you make no sale.
With affiliate marketing, you get paid commissions on every sale.
The reason that mlm businesses have a monthly sales quota is to maintain their legal status. Without product sales, doTERRA is considered a pyramid scheme under the FTC guideline.
This to show you that the FTC guideline was not written to protect investors, but rather to protect the mlm businesses.
I personally view all mlm businesses including doTERRA as a pyramid scheme based on the compensation plan, where only a small number at the top of the pyramid make money.
OK, I have discussed with you the costs of joining doTERRA.
Don’t you want to know how you can recover your investment?
To do this, we have to look at,
doTERRA Compensation Plan
Too often, many people decided to invest in an mlm opportunity without fully understand the compensation plan.
All mlm compensation plans are designed with a high level of confusion and difficulty to hide the fact that a few owners can make money operating an mlm business.
The doTERRA compensation plan is the key factor in determining your profitability as a consultant.
I’ll provide you a quick overview of the doTERRA compensation plan. If you want to see it in detail, just download a copy by clicking on the link.
According to the doTERRA compensation plan, consultants have 3 options to make money with doTERRA.
- Earnings from retail product sales.
- Earnings on recruiting new consultants, and
- Earnings override on team sales, downline performance.
However, to earn the commissions above, doTERRA consultants must recruit others to join the company and meet the minimum personal sales volume.
No commission is paid for failure to meet both conditions above.
doTERRA offers a flat 25% on retail sales.
So, if you sell $100, you make $25. It’s easy to determine your retail earnings.
But, it’s hard for us to determine the exact earnings when looking at the other two options to make money with doTERRA.
For commissions on personal recruits, earnings are not calculated based on sell dollars, but rather on personal sales volume of each recruit in the first 2 months (60 days).
Looking at the doTERRA compensation plan, recruiting commissions is not earned unless a recruit purchased 100 PV ($200) within 60 days.
This means a doTERRA consultant could potentially earn nothing recruiting.
If the 100 PV is met, you earn 20% on level 1, 10% on level 2, and 5% on level 3.
If a doTERRA sponsor telling you that you earn 20% to 5% recruiting others, this is a lie.
You earn nothing by recruiting others.
To earn this commission, your recruit must purchase at least $200 of doTERRA products.
This minimum purchase requirement is a lot harder to achieve than you might think.
Earnings From Downline Sales – Override Commissions
The commissions under this option are determined using a totally different method.
A doTERRA consultant could earn $50, $250, and $1,500 upon meeting the power of 3 team bonus requirements.
A doTERRA consultant earns $50 override commission upon satisfying these three conditions:
- 50 PV monthly sales volume,
- Recruiting 3 people, and
- 600 Team Volume (OV), or about $1,2000 total team sales for the month.
$250 override commission is earned when a consultant meets the following requirements:
- The consultant must qualify for the $50 bonus, and
- Three personal recruits by the consultant must also qualify for $50.
A doTERRA consultant reaches the $1,500 bonus, only when:
- The consultant qualifies for a $250 bonus, and
- Three personal recruits must also qualify for $250 bonus level.
The doTERRA compensation plan is very difficult to understand. It’s designed this way.
There are many ways to explain the doTERRA compensation plan, and I can assure you, none of them is 100% right.
However, we don’t need to fully understand the doTERRA compensation plan, Because…
The DoTERRA compensation plan only tells us how DoTERRA sales representatives can make money.
The compensation doesn’t give us the actual earnings of a doTERRA consultant business.
Actual earning is the information that helps us determine the profitability of owning a doTERRA business.
Then, why we discuss the doTERRA compensation plan?
Simple, to prepare us for the following discussing,
Can You Make Money With doTERRA?
Every time this question is asked, the first document they will receive from doTERRA is the compensation plan.
Do you know why doTERRA do this?
Here’s the answer, they are selling you a dream, not a real business.
By giving people the compensation plan, they’ll forget to ask for the truth.
Then, where can you find the answer to this question, “Can you make money with doTERRA?”
The answer to this question is in the doTERRA earnings disclosure statement.
Let me show you what I mean,
- The compensation plan tells the POTENTIAL EARNING with doTERRA mlm business opportunity.
- The earnings disclosure statement gives the ACTUAL EARNINGS a doTERRA consultant made the prior year.
As a business review writer, I look to the actual earnings when advising clients on an investment. Potential earning is just a guess, an estimate.
Are you investing based on a guess?
If your answer is NO, then let discuss doTERRA consultant actual earnings.
Based on the doTERRA earnings disclosure statement, here’s what we know about making money with doTERRA:
- Of the 268,000 people sign up to become doTERRA Wellness Advocates, only 76% are qualified to earn commissions, or 203,680 people met the monthly 50 PV requirements.
- BUT, only 16% of the active consultants earn a commission, about 32,589 people.
- However, the average earnings for doTERRA active consultants were only $375 for the year.
Here’s what this earnings information tells us. When you become a doTERRA consultant, your chance of making $375 a year ($32 a month) is less than 13%. But remember, this is not profit.
If you want to know the profit, you must take out operating expenses.
Remember the $100 (50 PV) monthly product purchase to earn commissions. This is about $1,000 annual expense when operating a doTERRA business.
So, you earn $375… But have to pay $1,000… Is this a good investment?
What about the breakeven point? This is where earnings equal expenses.
- According to the doTERRA earnings disclosure, a consultant must reach the mid-level ranks, Elite and Premier, to earn an average annual income of $4,370.
But your chance of reaching this mid-level rank is less than 1%.
Now, you see how difficult to make money with doTERRA?
So, to make money with doTERRA, you have to reach the leadership position. But according to doTERRA earnings disclosure, approximately 1% of all doTERRA consultants can reach this level.
Do you understand now, why DoTERRA hides the earning disclosure?
Do you know why I use the doTERRA consultant’s average earnings to evaluate this mlm business?
As a startup, it is unlikely that your doTERRA business earns the highest level of commissions.
Using average earnings to predict future income and profitability is more realistic.
Most people evaluate mlm business opportunities using the highest commission numbers… But that is a mistake.
Every startup business begins with ZERO earning, I don’t know why people think that they can make thousands in the first month… It doesn’t make sense.
If you believe achieving the top 1% doTERRA consultant earnings is easy, then doTERRA mlm business opportunity is for you.
After reviewing the doTERRA earnings disclosure, this business opportunity is not a good investment. You will lose all investments with this doTERRA home-based business.
Is doTERRA a pyramid scheme?
I think doTERRA is a pyramid scheme.
Why do I say doTERRA a pyramid scheme?
Looks at their earnings disclosure statement,
Do you notice anything unusual?
Yes, the largest commissions were earned by a few at the top.
Less than 1% earned millions while over 90% lost money as a doTERRA consultant.
Tell me what you see from the picture below, taking from the doTERRA compensation plan.
Doesn’t doTERRA incentivizes recruiting over selling products?
Yes, the more people you recruit into your team, the more money you earn.
The Personal Volume (PV) is the fee to join the pyramid scheme.
PV was introduced to meet the FTC requirement and nothing else.
If you look carefully at the doTERRA compensation plan, you notice that the PV for leader ranks are the same as the low-level managers, 100 PV.
Under this mlm compensation plan, doTERRA is rewarding consultants that recruit the most people into the organization, not selling products.
Recruiting is how you get promotions and make money with doTERRA!
Isn’t this a pyramid scheme?
I know doTERRA will tell you the company is a legit mlm under the law, meeting all the FTC requirements.
However, based on the financial documents, I have to say, “doTERRA looks like a pyramid scheme.”
You don’t have to agree with me if DoTERRA is a pyramid scheme or not. It’s not important
What is important?
The doTERRA earnings disclosure statement.
This financial document has shown us that your chance of making money with doTERRA is less than 4%, OR
Should I say, “the chance of losing your investment with doTERRA mlm business opportunity is greater than 90%.”
So, Is DoTERRA Worth It?
Who invests in a business where the opportunity of making money is near zero?
I’ll never invest in a business opportunity unless is profitable.
As I have shared with you in this doTERRA Review, the easiest way to determine profitability is by carefully analyzing the mlm financial information, especially the earnings disclosure, not the compensation plan.
DoTERRA is a bad investment.
Do you know why you want to start a home-based business?
To earn extra money from home, to be your own boss, or to achieve financial freedom?
And to make money, we invest in a PROFITABLE business!
As an affiliate marketer, there’s NO traveling around town to attend late-night meetings and NO face-to-face sales or recruits.
The best part, you are working on the computer in your own home or anywhere you like.
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Another major business risk associated with mlm businesses that people rarely talk about is the risk of the mlm parent company going out of business.
If doTERRA going out of business, every doTERRA consultant is out of business on the same day.
This means, when operating a doTERRA mlm business, you are not the owner of the business.
Don’t you want to own your own business?
If you want to be an owner of a lucrative and profitable business that generates six-figure passive income, then…
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Can you see?
Based on our doTERRA Review, your chance of achieving financial success as a consultant is low, less than 1%.
Even if doTERRA is not a pyramid scheme!
Do you agree?