In this article, we are going to discuss the Melaleuca pyramid scheme allegations.

You are probably reading this because you were approached by a Melaleuca distributor about an exciting home business opportunity.

You were promised the moon.

Time freedom.

Unlimited income.

The opportunity to fire your boss.

But before jumping into something crazy, you figured you should probably do your due diligence and do some research on the Melaleuca MLM business.

Long story short, Melaleuca is a network marketing company, also referred to as multi level marketing or MLM.

But…

It is not a scam or pyramid scheme.

In this Melaleuca review, we are going to do a deep dive. We’re going to talk about the good, that bad, and the ugly in terms of the Melaleuca business opportunity.

Because there is certainly some ugly.

What Is Melaleuca Inc? | A History

Melaleuca is a health and wellness company that produces and distributes health supplements and cleaning supplies all over the world. 

In fact, 25% of their revenue comes from overseas countries such as the United Kingdom, Taiwan, Australia, and New Zealand.

The company’s products are best known for containing oils extracted from the well known melaleuca plant family, which is known for its antifungal and antibiotic properties. 

When people refer to tea tree oil, they are usually referring to melaleuca plants. 

Who Started Melaleuca?

The Melaleuca business, originally called Oil Of Melaleuca Inc, was originally founded by Roger Ball and his brother Allen Ball.

They were struggling with the business and the FDA (Food and Drug Administration) came knocking shortly after the business was founded.

Oil Of Melaleuca Inc was under scrutiny because the company’s salespeople were allegedly making exaggerated medical claims about their products.

The Melaleuca business as it exists today was founded in 1985 by Frank VanderSloot, a brother-in-law to the founders of Oil Of Melaleuca. 

The original Melaleuca MLM business model was based on luring their distributors to buy $5,000 worth of inventory in order to operate their independent businesses.

This offended VanderSloot since he didn’t see it as fair to the Melaleuca distributors.

He changed the business structure when he took over the business and re-branded it as Melaleuca Inc.

Who Owns Melaleuca Today?

The Melaleuca MLM is still owned by Frank VanderSloot to this day.

He was named the richest man in Idaho in 2017 and the 302nd richest person in America.

Where Is Melaleuca Located?

The Melaleuca business has locations in Idaho Falls, Idaho and Knoxville, Tennessee, employing over 2000 people.

How Long Has Melaleuca Been In Business?

As the wellness company exists today, they have been in business since 1985, over 37 years.

Melaleuca BBB Reviews

Melaleuca is a member of the Direct Selling Association and is also listed on the Better Business Bureau.

On average, the Melaleuca reviews left on the BBB website are about 3.5 stars.

However, you will find many 1 star reviews.

Most of these very negative reviews appear to be a result of poor customer service or lack of communication.

You will not find many bad reviews on the products themselves.

Melaleuca Products

Melaleuca, The Wellness Company has 4 main product lines that they produce and distribute. 

They sell over 400 different products and if we were to cover all of them, you’d be here all day. 

So we are not going to go deep into the products in this Melaleuca review.

There are many other websites where you can find in depth reviews about these products.

And you came here to get to the bottom of the Melaleuca pyramid scheme rumours…

So that’s what we are going to focus on.

But we will do just a brief overview of the 4 main product lines.

Because if you decide to move forward with this business opportunity, you would be selling these products, right?

Here’s a marketing video about the Melaleuca business… keep in mind that I have no affiliation with this business so the views in the video do not reflect my own.

So let’s briefly go over the product lines.

Home Cleaning And Laundry

Melaleuca cleaning products claim to be all natural and completely green. 

They come completely concentrated, meaning that the liquid products need to be mixed with water before using.

Considering this, you would actually save money using Melaleuca cleaning products versus any competitor that you find in your local grocery store.

Supplements And Foods

This product line consists of vitamin supplements, sports nutrition, and healthy snacks. 

Melaleuca supplement products are built around a technology called Oligo.

The company claims it is a medical breakthrough which allows your body to more effectively absorb the minerals that your body needs.

The above video comes directly from the Melaleuca marketing division, so you may want to take it with a grain of salt.

Personal Care And Beauty

Melaleuca has a vast product line of personal care and beauty products. 

One of the better known ones is the Hair, Skin, and Nails Supplement. 

They claim that the supplement contains the exact nutrients your body needs to slow the ageing process and promote healthy skin and hair.

I’m not sure about the scientific merit of the claims made in the video above. 

In this article from ConsumerReports, Julia Calderone explains that deficiencies causing problems with hair and skin are extremely rare.

She claims that supplements may be helpful only if you have a definite medical deficiency in which case you should be talking to your doctor.

Essential Oils

The Melaleuca Aromatic Diffuser is a device sold by the company that you can use to fill the atmosphere in your home with the aroma of whatever essential oil you use in it.

The process of using essential oils in a diffuser like this is called aromatherapy. 

There are many grand claims out there about the health benefits of essential oils, many of which are unsubstantiated…

As outlined in this Healthline article.

I personally like using essential oils as a replacement for those stinky Glade Plugin Air Fresheners…

But I should let you know that I do not buy anything from Melaleuca.

Melaleuca Products Reviews

If you want to find more in-depth Melaleuca products reviews, you can do so on the TrustPilot website.

Most customers gave the products very favourable reviews, although there were a few negative ones too.

Most of the very poor Melaleuca reviews left on the TrustPilot website however, were not due to the products…

They were complaints about the business model and/or customer service.

There appear to be many customer service complaints about the Melaleuca MLM all over the internet.

So hey Melaleuca team, if you’re reading this…

You should probably work on that!

Is Melaleuca FDA Approved?

Technically no.

The FDA does not specifically regulate vitamin supplements. They categorise them under “food”.

With that being said, Melaleuca was under some scrutiny from the FDA in the mid 1980s.

Since then however, the products have actually been very well received by customers and regulators.

How The Melaleuca Opportunity Works

How does Melaleuca work?

Is Melaleuca an MLM?

As we already discussed…

Yes.

The network marketing business model (MLM) can cause a lot of scepticism for people who don’t actually know how it works.

So let’s talk about how the Melaleuca business opportunity actually works.

Unlike a traditional corporate business, Melaleuca uses independent distributors to distribute their products into the marketplace.

In doing this, the company saves millions of dollars in advertising campaigns and retail fees. This allows them to pass profits on to their customers and sales reps.

It also gives them a much larger budget to spend on research and development of new technologies and products.

Melaleuca products are not available in any big box retailers and can only be purchased from an independent Melaleuca distributor.

So let’s say you become a Melaleuca distributor.

You would then start undergoing your Fast Start Training.

You will be asked to make a list of 100 people or more.

Family, friends, acquaintances etc…

Then you will need to introduce these people to your products. This is something that may push you waaay out of your comfort zone.

But hey, if it were easy, everyone would be a network marketing millionaire.

And it definitely ain’t easy!

Anyway…

When you make a sale, your new customer would purchase their new products on the website and you would earn a commission for every sale made.

Including if your customer buys more products in the future.

But you wouldn’t only earn from product sales.

In the Melaleuca direct sales business, you have the ability to build a team of distributors underneath you.

This process is known as recruiting.

So every time one of your distributors makes a sale, you would earn commissions from those sales as well, including your own.

Not only that…

But your distributors may start building their own teams in the future.

And you will also earn income from those sales…

Down to the seventh generation.

The Melaleuca MLM  business model, if built effectively, can offer a lot of leverage.

Especially when your team grows large enough that it starts to grow on its own, without you putting in any additional effort.

Your network marketing business could reach a point where your income grows month after month, without you putting in any extra work.

But this doesn’t happen by accident.

It takes a serious commitment and deliberate action in order for you to grow and train your team in such a way that they can function and grow without you.

We will talk more about how to succeed in the Melaleuca opportunity later.

If you want an extremely in depth explanation of what network marketing is and how it works, you can read this deep dive MLM article here.

If you want to check out the Melaleuca business presentation, feel free to watch the video below.

Again, I am not affiliated with the Melaleuca network marketing company. The views and opinions do not reflect my own. I’m putting it here for informational purposes only.

Melaleuca vs Amway

If you are looking into the Melaleuca opportunity, then chances are that you’ve probably heard of Amway.

You’re probably wondering if Melaleuca and Amway are the same type of business.

The answer is yes.

They are both network marketing companies who focus mainly on health and wellness products, although the compensation plans have significant differences.

Amway is the “big daddy” of MLM.

They’ve been around a lot longer than Melaleuca and their product line is considerably larger. This is both good and bad…

While Amway is a well established company having been around since 1959, they’ve also been mired in a lot more controversy and lawsuits than Melaleuca.

This can make it somewhat difficult to sell Amway products or recruit reps into your organisation.

Think about what happens…

You try to recruit someone into Amway.

After you’re done giving your pitch, what’s the first thing your potential new team member will do?

The same thing you would do.

Go to Google!

And they would find one website after another talking about all the negativity and controversy associated with the Amway business.

To a certain degree, this is going to happen with any network marketing business…

But Melaleuca has received a lot less bad press than Amway.

If it were a choice between these 2 companies, I would personally go with Melaleuca.

I’m not saying this to disparage Amway. In fact, I think Amway is a decent company with quality products.

You can read more about Amway here if you want.

But no matter what I think about Amway, it doesn’t change the fact that there is a ton of negativity associated with the company.

Melaleuca Lawsuit

While Amway has faced many lawsuits, Melaleuca has had its share of problems as well.

• In 1991, Michigan regulators sent a cease-and-desist order to Melaleuca, claiming that the company violated the state’s anti-pyramid scheme laws. The following year, Melaleuca signed a consent decree with the states of Michigan and Idaho, agreeing “to not engage in the marketing and promotion of an illegal pyramid”.
• In 1997, the FDA sent a warning letter to Melaleuca for “misleading” statements about some of its supplements.
• Then in June 2020, the FTC (Federal Trade Commission) sent Melaleuca a warning letter during the COVID-19 pandemic regarding some Melaleuca distributors making exaggerated income claims.

All things considered, there are a lot less Melaleuca lawsuits than I was expecting prior to doing my research for this article.

Compared to many other MLM companies such as Herbalife, Melaleuca seems to have a rather clean reputation.

I was starting to wonder whether other Melaleuca company reviews were deliberately leaving out negative information…

But there really wasn’t that much dirt to dig up.

Melaleuca – Scam Or Legit?

I know what you’re thinking.

How is Melaleuca not a pyramid scheme?

I mean come on.

Listen…

The hierarchical nature of this type of organisation exists everywhere.

Have a look at this diagram of how a traditional corporation is structured.

Looks suspiciously like a pyramid scheme, doesn’t it?

As humans, we will always organise ourselves into hierarchies. You will see it in:

• small and large businesses
• sports teams
• churches
• families
• even groups of close friends

It simply can not be avoided.

So think about this:

If you are a production worker at a large corporation, will you ever out earn the President of the company?

The answer is no.

But in network marketing, you could most certainly out earn the person who recruited you. 

If you perform better, make more sales and recruit more reps, you WILL earn more money.

And if the people above you in the organisation don’t perform, they will make less.

The multi level marketing business model is really brutally fair.

If you don’t perform, you don’t make money.

Period.

Before we go into the actual differences between network marketing and pyramid schemes, let’s briefly go over the Melaleuca compensation plan.

Melaleuca Compensation Plan

The Melaleuca compensation plan is based on a 5×7 Forced Matrix Plan. You can learn about all the different types of compensation plans in this MLM deep-dive article.

The Melaleuca pay plan allows you to have up to 5 people directly below you in the organisation.

If you continue to recruit more people beyond your 5, you will now need to add these people underneath one of your 5.

This process is called spillover and it allows you to help your team members grow faster by adding people to their own organisation (aka downline).

This can generate a lot of excitement and can help to increase motivation for a team member that may be off to a slow start.

If this doesn’t quite make sense to you, have a look at this Melaleuca comp plan diagram:

While your network marketing organisation will never grow in the super neat way that the diagram above shows…

I hope it does let you see the potential leverage that the Melaleuca opportunity could give you.

There are many nuances to the Melaleuca compensation plan such as tiered commission structures and car bonuses. 

But this should give you a general understanding of how it works.

If you would like to learn about all the details in the compensation plan, feel free to read more about this on the official Melaleuca website.

If you are seriously considering the Melaleuca opportunity, you should also read the official Melaleuca income disclosure.

How Do You Get Paid With Melaleuca?

I was unable to find out how often Melaleuca pays out commissions.

But typically, network marketing companies pay out weekly or bi-weekly.

You could choose to have your commission checks mailed to you or sign up for direct deposit into your checking account.

How Much Does It Cost To Sell Melaleuca?

In order to qualify for commissions, you will need to pay a monthly fee of $19.95 plus tax. 

This fee goes towards accounting expenses and other miscellaneous expenses associated with paying distributors.

But…

In order to maintain an active distributor membership with Melaleuca, you need to accumulate 35PV (product volume) per month.

So really, your total expenses come out to about $80 per month.

Which really isn’t bad.

Considering you should be using the products anyway, right?

Obviously you should be buying products from your own business. 

You wouldn’t open a pizza place and then go to the Pizza Hut across town for lunch, would you?

Besides…

You would simply be replacing products that you would normally buy from the grocery with products from your own “store”.

Is Melaleuca A Pyramid Scheme?

We’ve talked about how the Melaleuca business is structured, but you might still be thinking that it really resembles a pyramid scheme.

As we talked about earlier, humans will always organise themselves into hierarchies. So this pyramid shaped organisation cannot be avoided.

So what the heck is a pyramid scheme, then??

Here’s how the FTC defines a pyramid scheme:

Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.

So in a Ponzi or pyramid scheme, you would simply be paying for a spot in a pyramid shaped organisation.

That’s it.

You wouldn’t receive any product or service in exchange for your money.

Your money would simply be paying the people at the top of the pyramid who got in earlier.

Because there’s no product or service being sold in a pyramid scheme, the “business” is not providing any value to the real economy, and is doomed for collapse.

And that’s really the major distinction:

Our economy functions on the premise that we can all exchange value for value. 

This allows us to provide value to the economy and get money (value) in return. 

We can then use that money (value) to go out and exchange it for goods and services that we need or want.

A pyramid scheme doesn’t do that.

Why Melaleuca Is Not A Pyramid Scheme

Melaleuca generates all of its revenue from the sale of products. That’s the reason it does not fall under the pyramid scheme definition.

It’s really not that different from any other type of traditional business.

Products are exchanged for money.

Value for value exchange.

The only difference is the way in which those products are marketed and distributed into the real economy.

No big box retailers, no million dollar advertising campaigns, way simpler supply chains.

Just independent distributors (regular Joes and Janes like you and me) earning some money, building a real business, and providing value to our communities.

So Why The Melaleuca Pyramid Scheme Rumors?

In the past, there have been many illegal Ponzi and pyramid schemes masquerading as legitimate network marketing companies.

This really has done a lot of damage to the network marketing profession.

If somebody was roped into what they were told was network marketing…

And then got royally screwed over…

They are going to tell everyone they know that network marketing is a scam.

And for good reason!

I don’t blame them.

The blame lies with these illegal schemes that lied and claimed to be network marketing.

Because of this, network marketing companies are watched very closely by government regulators around the world.

So you can rest assured that a company which has been around as long as Melaleuca, has been very closely examined by regulators.

And they obviously deemed it to be legitimate network marketing.

Watch the video below to hear Eric Worre describe why network marketing is so misunderstood.

Another Reason For Melaleuca Scam Allegations

One of the things I really hate about network marketing is the cult-like atmosphere that many of these companies have.

Especially people who are inexperienced and brand new to the business.

Often, they can be very overzealous and frankly, quite annoying about their opportunity or products.

Look, I get it.

They’re excited about their business opportunity and they wanna shout it from the rooftops.

But the overzealous, immature representation of the network marketing business can be extremely off-putting to people.

It makes red flags go up in people’s minds.

They think to themselves, “If it sounds too good to be true, it usually is”.

And they dismiss it as a scam or pyramid scheme.

It’s simply because they weren’t given an honest representation of the business because they heard about it from an overly excited new distributor.

Training is extremely important if you want to be effective at building your Melaleuca business.

Don’t be weird.

Just be normal.

When you tell someone about your business and they tell you, “no thanks”…

Then that’s OK!

No need to be pushy, because it will only hurt the reputation of your company and even worse, could put a serious strain on your personal relationships.

If you’ve been told that this business is extremely easy to build and that you will be able to retire in less than a year…

Then you know what I’m talking about.

Hey, you can potentially get filthy rich in network marketing, including the Melaleuca opportunity. That’s absolutely true.

But if you’ve been told that it will be easy, then you’ve been lied to.

It’s gonna take:

• Serious commitment
• Effort
• Dedication
• Time
• Personal growth

But it’s real, and it can be done.

Can You Make Money With Melaleuca, Actually?

Of course you can.

There are countless people all over the world who have quit their jobs thanks to the Melaleuca opportunity.

But…

That’s unfortunately not the case for most people.

How Much Can You Make With Melaleuca?

The US Federal Trade Commission did a study on how much money people were earning in network marketing.

The results of the study were not great.

They found that less than 0.29% of Melaleuca reps made any profit at all.

And more than 99% of reps lost money.

The truth is, these numbers are skewed a bit.

Many people are technically signed up as distributors for the business but are not actively building the Melaleuca opportunity.

They are simply enjoying the products along with the discount they get for being signed up as a distributor.

So this messes with the statistics a bit and makes it appear worse than it is.

Regardless…

The fact still remains that the vast majority of people will not succeed in this business.

How Do I Become A Melaleuca Rep?

Just because most people don’t make it in the Melaleuca opportunity, doesn’t mean you won’t.

If you absolutely have a passion for health and wellness and enjoy networking with others, then perhaps this could be a good opportunity for you.

The only way for you to get started with the business is through an existing rep.

And since you’re researching the business, I’m guessing somebody has already reached out to you about it.

As I’ve said…

I have no affiliation with this company so there is no way to get started with the Melaleuca opportunity through this website.

So let’s talk about how to be successful in this business.

Selling Melaleuca Products

After getting started with the Melaleuca opportunity, you will be provided training by the person who recruited you, or maybe someone else in your upline.

It’s crucial that you take the training seriously.

The leaders in your organisation will have put together a system in a very specific way because it’s exactly how many other people succeeded in the business.

If you’re lucky that is.

I was actually a distributor for Melaleuca over 10 years ago.

It was the very first exposure I ever had to network marketing.

It didn’t go great.

I was recruited by somebody online.

I never met her or spoke to her.

My training consisted of her sending me a PDF with some tips about posting Melaleuca stuff on Facebook and messaging my social media contacts.

This is not an effective way to build a business!!

I had no clue how to sell Melaleuca products and felt completely lost and alone.

Needless to say, I didn’t make a dime and quit the business within weeks.

So let’s hope you will have good leadership if you decide to move forward with Melaleuca!

How To Make Money In Melaleuca

Your first year will determine your future in network marketing.

Most people spend too much time “getting ready” to build the business. 

It shouldn’t take you that long to “get ready” in this business.

There are 2 main pieces of advice I’d like to share with you which will be key to building your business and succeeding for the long term.

I. Build Momentum Fast

As soon as you get started, you should immediately:

• Go through your Melaleuca business starter kit
• Schedule a call with your Melaleuca business leader 
• Put together your Melaleuca business plan
• Schedule your trip to the annual Melaleuca Conference
• Start taking action as soon as possible while you’re still excited about your new opportunity.

If you spend 2 weeks just watching videos, learning, and getting ready to get ready, you will lose momentum right out of the gate…

And your business will grind to a halt before it even starts.

II. Duplication

The big secret of success in network marketing is not actually recruiting or sales skills.

It’s duplication.

This is why it’s so important to do exactly what your Melaleuca business leader teaches you.

You want everyone in your organisation to follow the same proven system so that they can teach their own business builders the proven system.

This is how deep, profitable network marketing organisations are built.

The top earners in network marketing don’t actually recruit that many people.

They simply teach a system, and teach their business builders to teach the system to their business builders.

If you overcomplicate things, you will not see success in your own downline and your team will never grow without your own efforts.

This is a teaching business more than anything else.

You can read this in-depth guide about what it takes to build a long term, massively profitable network marketing business.

Making Money With Melaleuca ONLINE

You will eventually run out of people in your personal life to talk to about your business.

At this point, it might be a good idea to turn to the internet to expand your business and find more business builders. 

Just be careful when using the internet…

The internet is full of rabbit holes and distractions. If you’re not careful, you can find yourself in a sales funnel being sold cheap training programs that may not actually help you.

And it’s important to be aware of this risk.

This is why I believe that you should initially just focus on doing what you’re being taught by your Melaleuca business leader before turning to the internet.

But once you’re ready, there are 3 main things to focus on when putting together your online Melaleuca marketing plan.

I. Create Content

Do you want to attract interested prospects to you? 

People who are specifically looking for a network marketing business?

Then you need to focus on becoming a thought leader in this niche.

When somebody is asking themselves a question about their business or whatever topic you’re covering, YOU want to be the first person that comes to this person’s mind.

So your focus should be on creating content that provides value and answers common questions that people are asking.

You want to become an authority figure on whatever topic you’re creating content on.

II. Collect Leads

I would recommend building an email list, but you could also build a list via social media. 

You should have some type of free gift to entice people to get on your list.

Once people are on your list, you should continue to provide value. 

Don’t bombard them with sales pitches about your products or opportunity again and again.

III. Sell Products + Recruit Reps

You have to make money, right?

After all, you’re running a real business. 

So every now and then you need to have a call to action. 

I would recommend keeping your messages to your list around 80% pure value and 20% sales pitches.

This is a major oversimplification of internet marketing, but you can learn the ins and outs of online marketing here.

Melaleuca FAQ

Let’s go over a few of the more common questions people ask that we may have missed in this Melaleuca review.

Melaleuca Review | Summary

There are good and bad things about this business and unlike other Melaleuca reviews, I wanted to make sure I talked about both sides of the coin.

So let’s summarise.

One of the most important keys to your success in this and any other business will lie in your passion.

If you don’t care at all about health and wellness…

If you don’t enjoy networking with other people…

You are going to have a very hard time making the Melaleuca opportunity work for you.

About a year after I quit the Melaleuca business, I was recruited into another health and wellness MLM.

I had very good leadership in this business.

They provided more than adequate training and support to me, but I was still unable to succeed in the business.

I did make some money…

But eventually I quit because I simply did not have a deep passion for health and wellness.

Maybe you do though.

If you have a love for health and wellness and you can see yourself enjoying this type of home based business, this could be a very lucrative opportunity for you.

Overall, I feel quite comfortable recommending this business for you.

Melaleuca is a well established company.

They’ve been able to stand the test of time and their products appear to be very high quality.

So if this is something that you’re interested in trying, simply reach out to the person who introduced you to the business…

And I wish you all the best!