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Welcome to our Shaklee MLM business opportunity Coffee Talk.
This coffee talk is a review of Shaklee…
In this Shaklee Review, we will discuss the opportunity of making money as a Shaklee distributor, and we are going to address the most popular question,
“Is Shaklee a pyramid?”
When people ask the pyramid scheme question, they are actually asking, “Is Shaklee a scam?”
All pyramid schemes are scams! If Shaklee is a pyramid scheme, then Shaklee is a scam.
In our previous Mlm Coffee Talk, MLM vs Affiliate Marketing, we have discussed the FTC guideline in determining a legit mlm vs a pyramid scheme, under the laws.
Truth… the FTC guideline offers a legal procedure to define a legit mlm operation.
But… this legal guideline doesn’t tell us anything about Shaklee mlm home-based business opportunity, becoming a Shaklee distributor.
Is Shaklee business profitable? Or Can you make money with Shaklee?
Let revisit, why we want to start a business?
Yes, we start a business to make money and gain financial freedom.
There are many home-based business opportunities, which are more lucrative and profitable than Shaklee, available for us to invest.
Before starting a Shaklee mlm business, we need to know more than a simple answer to, “Is Shaklee a pyramid scheme?”
We need to know,
- How to become a Shaklee distributor?
- How much does it cost to become a Shaklee distributor?
- Can you make money with Shaklee? And
- Whether Shaklee mlm business opportunity is profitable?
“Profit” is the reason we join Shaklee… This is how we make money and recover our investments.
Before investing with Shaklee mlm home-based business, you should at least read this Shaklee Review to fully understand the risks and rewards as a Shaklee distributor.
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Shaklee Review Summary
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What Is Shaklee?
Shaklee is an American mlm company manufacturing and distributing over 200 products line including, natural nutrition supplements, weight-management products, beauty products, sports, and organic & biodegradable household products.
Shaklee founded in 1956 by Forrest C. Shaklee. The corporation was established to manufacture nutritional supplements.
In 1960, the company began expanding its product lines to market organic, biodegradable household products.
Today, Shaklee Corporation continues to emphasize the “natural” and “environmentally friendly” in its product marketing messages.
Shaklee became a publicly traded company in the late 70s with the shares listed on the New York Stock Exchange.
However, Shaklee Corporation was sold to a multi-millionaire Roger Barnett on April 2004 for $310 million.
The company has become a privately held company since.
At the time of conducting this Shaklee Review, the company annual sales revenue is $900 million dollars.
Shaklee offers its products through an mlm network in the United States, Japan, Malaysia, Canada, Taiwan, and China, as well as online.
After 26 years, on November 30, 2018, Shaklee suspended its mlm operations in Mexico.
Shaklee only reported earnings on the Business Leader level, starting with Director, which an average earning $4,274 per year, roughly, $357 per month.
Shaklee does not provide income information on Distributors.
However, according to a few Shaklee current Directors,
As a Distributor, which they refer to as “Business Builder”, “… you can start to earn money back to pay for your products…” This means Shaklee Distributors earn no commissions operating this mlm business.
This explains why we don’t have earnings data for Shaklee distributors.
During the 70s, the Federal Trade Commission (FTC) issued two orders against Shaklee:
- The first order was to stop misrepresenting and marketing the company “Instant Protein” as suitable for infants.
- The second order came in 1976 which the FTC sanctioned Shaklee for “requiring, coercing, threatening, or otherwise exerting pressure” on its distributors to maintain or advertise suggested retail prices.
Based on the information available to the public, we can conclude:
- Shaklee is an mlm company.
- It’s super difficult to make money with this home-based business opportunity, with a few at the top earned the highest income.
- Shaklee distributors do not make money, and
- Shaklee investment is very risky.
The Shaklee home business opportunity doesn’t seem to be a good investment.
Before investing with Shaklee, it’s smart to compare with other home-based business opportunities…
You can use My Writing Business to make a comparison.
How To Become a Shaklee Distributor?
Shaklee offers four membership levels:
- Retail customers can join for free but receive no benefit. Retail members get exclusive access to Shaklee products.
- Preferred Shaklee Member enjoys a 15-25% discount off the Retail Price. The costs for this membership $19.95, a one time fee.
- Distributor – This membership allows you to test out Shaklee mlm business opportunity before becoming a Qualified Distributor. You enjoy a 15%-25% retail discount, but also the opportunity to earn money based on product points (PV) which you accumulate by introducing people to Shaklee products.
- Qualified Distributor – This membership offers you the opportunity to build a home-based business with Shaklee. You receive up to 30% discount on the retail prices, and the opportunity to participate in all Shaklee compensations and bonus.
The Process To Join Shaklee
You don’t need a sponsor to become a Shaklee Distributor.
You can join by visiting the company website and completing the signup process yourself.
Once completed, the application and paid the Distributor fee, you’re now a Shaklee Distributor.
But, before you can earn commissions, you must sell or recruit others.
The Cost To Become A Shaklee Distributor
As stated above, Shaklee offers two different Distributor levels.
The costs to become a Shaklee Distributor depend on the type of distributor membership that you selected.
To become a Distributor, the cost is a one-time fee of $49.95.
However, to become a Qualified Distributor there are two prices:
- The price for a Welcome Kit is $150, or
- Purchase one of the Success Packs
between $298 – $1,000, and the $150 is waived.
So, the costs to become a Shaklee Distributor, lowest is $49.95 and the highest is $1,000.
Shaklee is likely encouraging you to purchase the most expensive Success Pack to boost your chance of success with Shaklee… But,
I honestly don’t believe it makes a difference.
Besides the initial investment to become a distributor, there are additional costs associated with operating a Shaklee distributor business.
These costs are known as business operating costs.
I will discuss the two biggest operating costs for you in this Shaklee Review:
1. Time Investment To Build Shaklee business
The amount of time investment is on each individual distributor. But, to build a successful Shaklee mlm business, you need to invest over 80 hours per week into the business.
If we use the minimum wage of $8 per hours, this means a Shaklee distributor must invest at least $640 per week, $2,560 per month, of times in operating a Shaklee distribution.
2. Shaklee Hidden Operating Costs – “Monthly Minimum Products Purchase Requirement”
As a Shaklee distributor, you are required to reach 250 Personal Point Value (PV) to earn a 4% commission. If in a month you can only generate 150 PV, you must purchase another 100 PV to earn 4% commissions.
When you become a Shaklee Director, you are required to acquire 100 PV to earn commissions.
(I’ll explain the dollar amount of PV in the Shaklee compensation plan section.)
I refer to the monthly minimum PV requirement above as, “Hidden Operating Cost” because most mlm companies do not explain this requirement to new distributors.
Distributors usually discover this after making the first sale, when the transaction doesn’t generate enough PV to earn commissions.
So, the real investments to launch a Shaklee home-based business is more than the initial distributor fee… This is minimal.
The major investment is the monthly PV. This can cost a Shaklee distributor thousands of dollars over the years.
The monthly PV requirement is the reason why many investors do not make money with mlm business opportunities.
This monthly expense destroys your chance of making profits, because no commission is earned unless you meet the PV requirements every month.
Other businesses, like affiliate marketing, you earn commissions on every sale.
Why MLM companies have a monthly PV requirement?
- First to sell products, and
- Second to meet the FTC guideline as a legit mlm business.
Without product sales, Shaklee is a scam or a pyramid scheme.
This shows Shaklee mlm using the FTC guideline to hide the pyramid scheme.
I personally view mlm businesses as a pyramid scheme based on their compensation plan, only people at the top of the pyramid make money.
Don’t you want to know how you can make money with Shaklee?
If you do, then let discuss
Shaklee Compensation Plan
Shaklee compensation is very confusing because this mlm compensation plan using both cash and Point Value (PV) to determine commissions.
The Shaklee compensation plan was designed with a high level of confusion and difficulty to hide the fact that it is impossible to make money as a Shaklee distributor.
The Shaklee compensation plan is the key factor in determining profitability as a distributor.
I’ll provide you a quick overview of the Shaklee compensation plan. If you want to see it in detail, just download a copy by clicking on the link.
Shaklee offers distributors 4 real ways to earn.
However, to earn the commissions, Shaklee distributors must meet several requirements, or NO commission is paid.
This earning is straight forward, buy low – sell high.
But to get the lowest price, you must reach the Director Level.
So, as a low-level distributor, this earning option is not good for you.
The difference between Director price and retail is your earnings.
So, if you purchase a product as a Shaklee Director for $68.40 and retail for $93.25, you make $24.81.
Recruiting Bonuses – Success Bonuses
The recruiting bonuses are available to all Shaklee distributors.
But, they must meet several conditions.
- A $25 Success Bonus is paid when you recruit 3 preferred customers, all with a $150 purchase order AND signup for the $150 per month AutoShip program.
- You earn $50 Success Bonus every time recruiting a new Qualified Distributor who purchases Success Packs in their first month.
- A $150 bonus is paid when you recruit 3 new Qualified Distributors which qualified you for the $50 in a calendar month.
Remember, you don’t earn a bonus unless all the conditions are met.
This means a Shaklee distributor could potentially earn nothing from recruiting.
If your recruits join Shaklee purchasing only the welcome kit, $49.95 or $150, you earn NOTHING!
These conditions are a lot harder to achieve than you might think.
The next two earning options are very difficult to determine the exact dollar value and requirement because commissions are determined using product point value (PV).
I’ll provide you a general concept of determining these commissions.
According to Shaklee compensation plan (see picture below), a product retail price of $93.25 has a 55.56 PV.
We can say that 1 PV is about $1.68.
I will use this to explain the rest of the Shaklee compensation plan.
Personal Group Commissions
Personal group commissions are determined based on the total sales volume of your personal team.
Your personal team is members of your organization that does not reach the Business Leader position.
Commissions in this group range from 4% to 20%.
However, to earn the 4% commission, the minimum team volume must be 250 PV. This means you have to generate a retail sale of $420 (250x$1.68).
You must be a Director and team volume must be over 2000 PV to earn a 20% commission. This mean total team retail dollars must be $3,360.
But, here’s the trick…
You do not earn 20% on the $3,360… You earn 20% on the 2000 PV, which is only $400.
If your 20% commission is based on the $3,360, you would have made $672.
Big difference, right?
Are you confused?
All I want you to understand is this, Shaklee claims their compensation plan is generous, but as we know it is not.
Why did they use PV?
To inflate the commission rates. When they say 20% commission, they mean only 11.90%.
The next earning from Shaklee is from
Earnings From Downline Performance – Infinity Bonuses
This commission is only available to Senior Director.
I am not going to explain this one because ZERO distributors will earn this commission.
You can look at the Shaklee compensation plan and fantasize.
Because the 8%, 7%, or 14% commissions are far less than what you might think. They are calculated based on PV.
Under this PV compensation plan, it is very difficult to earn commissions. The Shaklee compensation plan is designed for this purpose.
I understand there are many ways to explain the Shaklee compensation plan, and I can assure you, none of them is a 100% right.
However, we don’t need to fully understand the Shaklee compensation plan, Because…
The Shaklee compensation plan only tells us how Shaklee distributors can make money.
This compensation doesn’t give us the actual earnings of a Shaklee distributor.
Actual earning is the information that helps us determine the profitability of owning a Shaklee mlm business.
Then, why we discuss the Shaklee compensation plan?
Simple, to prepare us for the following discussing,
Can You Make Money With Shaklee?
Whenever you ask Shaklee this question, they will give you a copy of the compensation plan.
Do you know why they do this?
Well, using the compensation plan, Shaklee is selling you a dream, not a real business.
Do you want to invest in a dream or a real business?
Then, where can you find the answer to, “Can you make money with Shaklee?”
The answer is in the Shaklee earnings disclosure statement.
This is what I mean,
- The Shaklee compensation plan offers the POTENTIAL EARNING, a guess or an estimate.
- The Shaklee earnings disclosure statement contains ACTUAL COMMISSIONS distributors earned in the prior year.
As a business review writer, I look to the actual commission/earnings to advise clients on an investment.
Are you investing based on a guess?
If your answer is NO, then let discuss Shaklee earnings statement.
Here’s what we know from the Shaklee earning disclosure statement:
As I have discussed above, Shaklee does not offer earnings on the distributor.
Do you remember why?
Because Shaklee distributors don’t earn real cash, they earn Points Value (PV).
You want to make real money with Shaklee, you have to become a Director… And
According to Shaklee earning disclosure, you have to generate over 2000 PV to become a Director.
This is 2000 PV, that over $3,360 in retail sales to have a chance of earning real money!
Yes, as a Shaklee distributor, you earn virtual money (PV), not real cash.
If I want to invest in virtual money, I buy Bitcoin!
This is a terrible business?
However, Shaklee does disclose earnings for the Business Leaders.
But I am not impressed!
Shaklee Business Leader Average Income
What do we see from this earnings information?
Well, the first Business Leader position is Director.
The Director average annual income is between $4,442 to $19,607.
Shaklee Directors are broke, living below the 2019 Federal Poverty Guideline, which calls for a family of 3 at $21,330.
Why do we use the Director average income?
Because before you can become a top earner with Shaklee, you must first become a Director. And…
We cannot evaluate Shaklee using the distributor level, because distributors earn PV, not real money. Even Shaklee didn’t report them in its earning statement.
Therefore, using the Director annual average income to evaluate Shaklee mlm business opportunity is the best option available to us.
Then, what can we learn from analyzing the Shaklee earnings disclosure statement?
- Most Shaklee distributors only earn enough income to pay for their product purchases.
- The first group to earn an income is Director, but even then, their earnings are below the Federal Poverty Guideline.
- To reach the Director level, a distributor has to generate a total of $3,528 (2100 PV) in retail sales to receive an 11.90% commission.
- The only way to make money with Shaklee is to recruit and build a large team, Downline.
But remember, all the income we discussed above are not profits.
If you want to know the profits, you must take out operating expenses.
Here’s what I am talking about:
Let use the distributor highest annual average income of $19,607, which is approximately $1,633 per month income.
First deducts the Director monthly 100 PV expenses, spending $168 on the Shaklee products.
The Director has $1465
Then deduct the time the Director invests into building the business which is $2,560.
The Director net loss is $1,095 per month, $13,140 annually.
Yes, Shaklee reported its Directors earning income for the year, but when factoring in the expenses, Shaklee Directors losing money operating this mlm business.
So, Is this a good investment?
Now, can you see how difficult to make money with Shaklee?
Do you understand, why Shaklee provides people a compensation plan when asked, “Can you make money with Shaklee?”
Who’s going to invest if they find out the business is not generating a profit?
Is Shaklee A Scam?
Yes, it is difficult to make money with Shaklee, but this doesn’t make Shaklee a scam.
Shaklee mlm business is an investment opportunity.
Every investment has a certain level of risk, which means there a possibility of losing your investment.
Shaklee is a very risky investment. When you invest in Shaklee, you are willing to take a chance at starting a business.
When the business fails, you cannot call Shaklee a scam, because this would mean every business investment is a scam…
Risk is a part of every startup business.
Before you start a business, like becoming a Shaklee distributor, you need to do research on the business opportunity.
Reading this Shaklee Review is a good way to learn the investment risk before investing.
Many entrepreneurs hire professional financial analysis to evaluate the risk of every business deal before they invest.
As a Business Review Writer, I have evaluated hundreds of businesses to help investors managing the investment risks…
That’s all we can do, managing risks.
To me, Shaklee is not a scam.
It’s just not a profitable business to invest.
But, when it comes to pyramid scheme… here’s
My View Regarding ‘Is Shaklee a pyramid scheme?’
I personally think Shaklee is a pyramid scheme.
But, Shaklee will deny they are a pyramid scheme.
Why do I think Shaklee a pyramid scheme?
Looks at their earnings disclosure statement,
Do you notice a pyramid shape Shaklee compensation plan and earnings disclosure statement?
Here… what do you see below? This picture is taken from the Shaklee compensation plan.
Doesn’t this look like a pyramid scheme?
Yes, the more people you recruit into your team, the more money you earn.
The 100 PV is the monthly fee to become a member of this pyramid scheme.
Do you know why mlm companies use PV?
It was introduced to meet the FTC mlm guideline requirement and nothing else.
If you look carefully at the Shaklee compensation plan, you notice that the PV for top Business Leaders are the same as the low-level Director 100 PV.
Under this mlm compensation plan, Shaklee is rewarding distributors that recruit the most people into the organization, not selling products.
Recruiting is how you get promoted and make money with Shaklee!
Isn’t this a pyramid scheme?
I know Shaklee will tell you the company is a legit mlm under the FTC guideline.
However, based on the financial documents, I have to say, “Shaklee looks like a pyramid scheme.”
Well, you don’t have to agree with me. It’s not important
What is important?
The Shaklee earnings disclosure statement.
This financial document has shown us that Shaklee mlm business opportunity is not profitable. OR
Should I say, “the chance of losing your entire investment with Shaklee mlm business opportunity is very high.”
So, Is Shaklee Worth The Money?
Would you invest, if Shaklee discloses that Distributor earns PV, not money?
Well, Shaklee did disclose this information in the earnings statement, but no one care to look at it.
I’ll never invest in a business opportunity unless is profitable.
And profitability is determined by carefully analyzing the financial information, especially the earnings disclosure, not the compensation plan.
Shaklee is a risky 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!
There are much better and less risky home-based business opportunities.
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Let me ask you this,
What if Shaklee goes out of business?
Every Shaklee distributor is out of business.
This is a business risk associated with Shaklee which people rarely discuss.
Because of this, when you become a Shaklee distributor, you have no control over your own business.
Don’t you want to own your own business?
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Can you write?
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Can you see?
Based on our Shaklee Review, your chance of achieving financial success as a distributor is low. Even if Shaklee mlm business opportunity is not profitable!
So, what do you say?