MLMs – not book related, but oh well…

So, I want to clear up a couple things I hear All. The. Fricking. Time. Yes, this is a book blog. Normal service will resume shortly. But bear with me… I needed somewhere to put this so I could link to it on my Facebook…

If you’ve seen my posts recently, you’ve probably noticed that I’ve started “doing essential oils”. Honestly, I’m not exactly sure what I’m “doing” to these oils… Are the oils doing it to me? I don’t know. Anyway. I digress… The point is, I get my oils through a company called Young Living.

Since I started “doing” my oils, I’ve had lots of people say, “how great for you”, “you seem so happy nowadays”, “it’s really cool, all the things you can do with these oils”. Lots of supportive things. But I’ve also heard a hell of a lot of the following:

“Oils don’t work / are you an anti-vaccer now?”

I’m going to say upfront, I’m not sure what it is you assume I think oils “do”, but they work just fine for what I’m using them for… And I don’t understand what oils have to do with vaccinations. Who is going “oh, I’m just off to this random country… Malaria vaccinations? No, no, I have my Lemongrass!” No-one I know. That’s frickin’ stupid!

 If you don’t want to vaccinate your kids, I’m not judging you. You do do you. But, I can assure you, I vaccinated my puppy. And myself. While we’re at it: the earth is round, I don’t believe I’ve ever been abducted by aliens, and I don’t think the Queen is a lizard.

My personal favourite: “it’s a cult”.

That always makes me laugh… If it’s a cult, it’s the nicest one I’ve ever heard of! I kind of wish it was… Maybe I’d get to run off and live on a commune with all my lovely new friends, and we’d talk about the benefits of Frankincense oil and shit all day. That sounds awesome. Seriously, any of you guys up for that? Cos I’m in!

 But the one I find most difficult to answer, and which is usually accompanied by the person spitting with indignation:

“Young Living is an MLM, you know! They’re all dodgy pyramid schemes!”

So, let’s deal with that, shall we?

MLM stands for “multi-level marketing”. It means a non-salaried workforce sells the company’s products/services for commission (thanks Wikipedia). That sounds like a telesales company, right? You don’t necessarily get a salary, because you work on commission. In the UK you get minimum wage, I think, as well. But not in all countries, like the US. And Young Living is a US-based company. So, why is that so dodgy? Sounds like a lot of businesses!

Well, I can’t speak for other MLMs, so I’m just going to tell you how Young Living works.

When you sign up as a member, you get:

  • a starter kit (they have all different ones, oils, cleaning products or supplements, stuff like that
  • wholesale discount
  • store credit points when you place an order
  • the opportunity to sign up for a monthly wellness box which you customise each month

 

And, if you want, but you don’t have to (and most people don’t), you can earn commission on things other people buy when they do so with your membership number.

When I signed up for a Waterstones card, as a “member”, I got discounts, entered into competitions, and store credit points when I purchased new books. Just sayin’…

That’s it. And you don’t have to sign up “with” anyone, but, if you do, that person earns a set amount of commission on what you buy. So, if I did a super cool post, and you were all like “omg, I need to get that”, and you signed up with my number, I’d earn some commission on what you bought.

You could also just buy something the retail way, through the website. You don’t have to sign up for a membership. And, if you put my member number in when you did that, because you heard about it through me, and you love me, you want to help out a friend… Well, I’d also get some commission on that too.

A bit like a refer a friend scheme. If you cite me as the person who referred you to a mobile phone company when you buy a new phone, I get £25 or something, right? It’s like that. Only, if you order again in the future from Young Living, I still get some commission on what you buy. That comes out of Young Living’s profits. That’s their marketing budget. They don’t advertise, they rely on word of mouth.

And I’m not selling you Shit. All. I don’t hold stock. That stuff I’ve got, that you see in my posts? That’s mine. You can’t have it. I’m not selling it… Like, I bought it… It’s mine. I’m using it… If you ask me for it, I’m going to tell you to go get your own, you cheeky fuck. I mean, I’m nice, so I might let you try some. But it’s like the last Pringle. Who do you honestly like enough to give the last Pringle? That’s yours, right… You’ll fight me for it.

I will tell you that I think Young Living is awesome. I’ll tell you that if you’re doing zero-waste, trying to consume less plastic, concerned about chemicals in your products, or just want to do more to help the environment… You’ll find you need essential oils. And I’ll tell you that Young Living’s products are the best for quality, value, and price. That’s why I chose them. So, if you want to get some, great… Get them with my membership number, I could use the extra cash!

I Googled MLMs and there’s loads of stories about how they’re scams…You should do your research!!”

Yep, Google MLMs and you’ll be bombarded with scary articles about how they’re all scams and people get ripped off. Many of them are.

But just a thought… Maybe the internet and tabloids are not a reliable source for all your information… I mean, I refuse to argue with stupid. So, if you really think The Sun or Wikipedia are what you should base your opinions on… I’m not going to argue with you.

But there are some great, much more balanced, articles out there. For example, Forbes did one which explained the difference between legit MLMs and pyramid schemes.

 I read one on a website called The Balance Small Business, which set out a series of questions to help you determine if it’s a legit direct selling business or an MLM operating as a pyramid scheme.

For thoroughness sake, let’s go through those questions…

Are you required to “invest” a huge amount of money up front to become a distributor?

No. You buy a starter kit, which gets you a membership and all the benefits therein. You don’t have to distribute / sell / promote anything if you don’t want to. Most people don’t. According to Young Living’s own figures, about 70% of members never distribute, sell, promote or otherwise have someone enrol with their membership number. They just get it for the perks and discounts.

If you have to pay for inventory, will the company buy back unsold inventory?

You don’t pay for inventory. In fact, you’re actively discouraged from doing so. You can have your membership revoked for selling as a third party without the company’s agreement.

Is there any mention of or attention paid to a market for the product or service?

Yes, if you decide to do this as a business, there’s lots and lots of resources about the market for the product. And lots of business support, including classes, training, groups and materials. The person who enrolled you will answer any questions you might have, as will the person who enrolled them, and the person who enrolled them… And so on. You get a series of great mentors.

Is there more emphasis on recruitment than on selling the product or service?

It’s about 50/50. Obviously, if more people sign up with your membership number and buy products, you’re going to get more commission. But if those people don’t keep buying those products… Well, that’s not sustainable as a business (if that’s what you’re doing it for). That’s talked about. A. Lot.

When you sign up with someone, they will enrol you in different groups and they’ll invite you to classes. It’s about helping you learn about the products, finding new ways to use them; as well as helping you figure out what else you might want to buy later.

 Is the plan designed so that you make more money by recruiting new members rather than through sales you make yourself?

No. You get a set percentage of commission for each sale made by people citing your membership number. You don’t get any extra money for recruiting a new member. You do get more percentage commission on sales made in someone’s first three months, and then the rate of commission goes down. But not massively.

Are you offered commissions for recruiting new members?

Nope.

 

>>> I’m going to add a couple of my own questions here.

 Does everyone who does this as a business make lots of money?” 

Not everyone who does this as a business makes a shit ton of money, no. Like any other business, some people do better than others. Some of them came into it with huge social media followings. Some have the right skills, some learn the right skills, and some don’t. Some of them work harder than others. Some give up and some don’t. But, since you don’t “invest” anything in order to be a distributor, you never lose any money. You continue to buy what you use for yourself, and that’s it.

Of the 33% of all members who became “distributors” in 2017, meaning someone signed up with their membership number, Young Living’s own stats say that 67% of those “distributors” make around $400 – $1,000 a month. So, 37% of all distributors make what amounts to a full-time wage: $2,000 – $100,000 a month. That’s roughly 488,000 people who make a decent living from promoting Young Living’s products. 

 The market will eventually saturate, that’s the problem with MLMs”

Sure, if the goal is to sign up as many people as possible, as fast as possible… I mean, there are only so many people, right? But that’s not the deal here. You want people to use and love the products. That’s how people build a sustainable business. You want some new people to sign up, but more importantly you need lots of people continuing to place orders – on which you get commission.

And the product is consumable, so, no, the market won’t saturate. Even if everyone in the whole world, all 7.53 billion of them, signed up as a Young Living member – they would still eventually run out of this or that and have to place an order. You’d still be making money.

Let’s take Beko as an example. Beko make washing machines and fridges. I wouldn’t say Beko was a consumable product – you’d be pretty pissed if your washing machine only lasted you a couple of months or a year! But, when it does eventually break, you’re likely to replace it with another machine from Beko – you got used to your old washing machine, you like their customer service, whatever. But that doesn’t seem like enough custom to generate a good profit… So, they also use advertising to attract new customers.

 Young Living’s business model is no different – it’s just that the people who use and love their products do their advertising for them, and are rewarded for doing so, rather than the company placing ads on the TV or on bus stops.

“But I heard it’s a “pyramid scheme”, is it shaped like a pyramid or not?”

The definition of a pyramid scheme, according to the dictionary, is “a form of investment (illegal in the UK and elsewhere) in which each paying participant recruits two further participants, with returns being given to early participants using money contributed by later ones”.

Does that sound like what I’ve just described? Cos it doesn’t to me… I don’t get a return for signing up a new member. That money doesn’t come from money contributed by people who signed up before me. I could sign up 20 people, who signed up 20 people, but if none of them did more than place one order… I wouldn’t make any fricking money!

 And a lot of things, all businesses, in fact, are shaped like a pyramid. I work for a company that creates promotional websites for other, bigger, companies. Its structure looks something like this:

Business Shapes

Now, what shape does that look like to you?

Would you like me to explain capitalism to you at this point? Because I can assure you, also pyramid shaped… Let’s not get political though, right.

Do they make loads of evangelistic claims about what their products can do? Do their distributors?

No. Short answer. I’m not saying it never happens… I’m sure people out there are claiming essential oils cure all kinds of crazy things and are farted out by unicorn fairies with fluffy toes. Yeah, probably. But if you do that, Young Living drops you as a member. The people in the groups will tell you it’s not on. And they make it very, very clear when you start your membership: that is not ok.

You’ll hear more crackpot claims reading The Sun or turning on Fox News.  

“Why are you doing this? Don’t you already have a job?”

Yes, I already have a job. A pretty good one. I’ve spent 10 years building a career as an information law specialist. And I don’t hate it… But I could always use the extra money. And, if you have any sense, you’ll also be finding ways to build residual income for yourself. Seriously, Google “Tony Robbins residual income”. Shit, just Google residual income… Work out how much will actually be in your pension fund when you retire, and then compare that to inflation rates and work out how much you’ll have per month in real terms. Then get back to me.

Also, have I mentioned, I actually really like Young Living… I like essential oils, I use them for making cleaning products and beauty products and bathroom products and perfume… And they smell really, really good. I like Young Living’s emphasis on sustainability and quality. I like their commitment to going plastic-free. I like that I get a lot of free stuff every month. I like that I can choose what’s in my subscription box. I like the wholesale discounts. I like the groups I’m part of and being part of a community of like-minded people.

I like that when they decided to put the price up for starter kits of oils in 2019, and then changed their mind, they didn’t just change the price for the next person who bought one – they refunded everyone the difference who had purchased a kit at the higher price. What other company does that, ffs?


 

If anyone would like to ask me any questions about Young Living’s business model, or anything else they might have heard about the company. Or about essential oils, and what I actually use them for. If you’d like to hear my idea about starting a commune… Totally here for you! PM me. I’ll chat all day…

4 Comments

  1. But just in case it does turn out to be a cult, you defo need to write a book about it! I’d totes read it 😀 I imagine a high octane thriller, fast paced, action packed, and everyone’s into lemongrass 😀 😀

    Liked by 1 person

  2. Having had someone close to me be scammed by a pyramid scheme, I’m really adverse to them. But, from what you describe of this brand, it doesn’t sound like a scam. It’s something so many companies do nowadays to get more revenue. You tell your friends about it (or audience), give them a link or discount, and you get some commission. That doesn’t sound like a pyramid scheme to me. However, I do know a lot of people are sensitive about anything that smells like it might be a scam, so people tend to freak out easily. I myself love oils, so I don’t begrudge any consumer using any company they want to get them. So you do you and let the haters hate!

    Liked by 1 person

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