Essential Oils are a Marketing Scam
Doterra Essential Oils Germany experience - serious or fraudulent?
If you are considering DoTerra Essential Oils as an opportunity to earn money on the side, you have come to the right place, because in this Doterra Essential Oils experience article you will find out whether it is worthwhile, whether it is perhaps a pyramid scheme, i.e. whether DoTerra is a scam.
First of all, I am neither a sales partner nor a customer of Deterra Essential Oils, I have researched for you what DoTerra Essential Oils is all about from the perspective of a curious prospect.
I will explain the products from the point of view of earning potential, the marketing plan (compensation plan) and the disclosure of earnings in the USA, because there companies are obliged to disclose via income disclosure what percentage earn what. If you are interested in DoTerra and want to know whether DoTerra Essential Oils is a scam or not, please read on.
The history of DoTerra Essential Oils
DoTerra became 2008 based in Please Grove, Utah (USA). David Stirling co-founded DoTerra Essential Oils with several other former Young Living executives to compete with their former employer. They founded the company with 25 individual oils and 10 blends.
These oils are very similar to their former employer's top brands, so there seems to be bad blood between the two companies.
DoTerra has been running its product range since 2014 150 products expanded and now offers not only essential oils but also dietary supplements and body care products. However, it is not surprising that a new network marketing company that also sells essential oils has similar products. This company was founded by executives who recently left Young Living, so a certain resemblance is not surprising.
In its very short existence, DoTerra has grown very quickly, so the website states that the company has over 5 million customers.
The products: what are essential oils?
Essential oils have been around for centuries. They are extracted from a wide variety of plants and are believed to have a wide variety of psychological, physical, and spiritual effects on humans. Many cultures used essential oils over time, the popularity of which has increased significantly in recent decades.
There are currently 55 individual oils, 45 blends and 33 other products listed under essential oils on the main website. Also, there is now an additional section for other products they are now offering.
DoTerra claims that their products are exceptionally high quality essential oils with certified purity and therapeutic quality. A.
However, there are a few problems with this statement. The essential oils industry is not regulated, so there is no certification body.
There is no official definition of what grade an essential oil can possess. In addition, this "Certified Pure Therapeutic Grade" is a brand name that comes from DoTerra and therefore only DoTerra essential oils can identify with these words.
Therefore, this information has no actual scientific or certifiable value, but is only a trademark.
Just why did DoTerra choose these words as their trademarks if they have no bearing on the actual quality of the product? Are you trying to say something about the product quality?
When checking the actual product ratings, the products receive 4 to 5 stars on Amazon, which is a good rating, although you don't know how many of the customers may be sales partners who are naturally interested in “their” company doing well. Nevertheless, this is very positive, because at Amazon people are usually more likely to describe their experiences when they have negative ones than when they are satisfied, yes people are like that ...
The DoTerra Essential Oils company
DoTerra is a Multi-Level Marketing (MLM) company, also known as Direct Selling. Your products are therefore not sold through large retailers, but through independent contractors who are known as wellness advocates. These wellness advocates make money from commissions they receive from products sold and products sold by recruits. How the money is made and how much you can make at DoTerra is discussed in more detail in the next two sections: Compensation Plan and Disclosure Statement.
When you join an MLM company like DoTerra, the first thing they want to do is impress you with how much money you can make in a variety of ways at that company. Usually, you will be shown a compensation plan with all levels and bonuses, which you can also view on the DoTerra website. Since this is protected by copyright, I will not include it ...
DoTerra's Compensation Plan is 2 pages. There are 3 columns on the first page. The first column shows the retail profit. This is how you can tell how much you make when you sell a product. With DoTerra, according to this information, you earn a commission of 25% on every product sold. That is really good.
If you've never had anything to do with MLM, here's a tip: It makes an MLM company legal if every member can make money by selling a product, as it is then really direct sales and not an illegal Ponzi or pyramid scheme.
This end customer sale is the only point in the compensation plan that can be used to make money by selling products. The rest of the revenue comes from recruiting new distributors, as pretty much all MLMs do.
The next item on the first page is the Fast Start Bonus. This helps with faster recruitment. If you can build a team within the first 60 days of registration, you will receive an additional bonus.
The third item on the first page is the Power Of Three Bonus. This is also a recruiting bonus that should motivate you to build a network on all levels. In addition, there should be at least 3 people at each location on your network.
Organizational unilevel bonus
On the second page, things get a little more complicated with the organizational unilevel bonus and your upline is set up so that it sounds good to you. In the upper area there are 12 columns that start on the left at the lowest level and work up to the highest level on the right. You need to understand this information when we look at the income information in the next section.
On the left side you can see levels 1 to 7 in a column, and in the rows to the right of that you can see percentages from 2% for level 1 to 7% for level 7. This indicates the amount you earn in commission from the sales of your hired people. So if one of your recruits sells products worth $ 100, you will earn a 2% commission worth $ 2. Now your recruit is recruiting another person. That person is now your level 2, so you will earn 3% commission on your sales. This person then recruits someone and is therefore your level 3, so you earn 5% commission on your sales. This goes up to the seventh level, where you earn 7% commission on your sales.
(All information without guarantee)
Advantageous or not?
DoTerra's process is a little different from that of most MLMs. I saw a video where an editor from DoTerra explained how this system is better than that of other MLMs. When you expand your downline it will look like a pyramid and many will be at level 7. The advantage of this plan is that you will make a lot more money because there are a lot more people at this level. Sounds good and makes sense right! Incidentally, a pyramid is not bad, every company has a pyramid structure. Above is the shareholder, below the managing director, the manager, the sales manager, the employees ... and the lower the level goes, the less the employees earn. It is no different in MLM.
While you are in the early stages of your network building, you are at most level 2. In this phase you need the most money, but you don't make very much. In addition, the number of people in the first stage determines how much control you have. The seventh level people, on the other hand, are the furthest from your control. This plan exaggerates the benefits of the people at the top of the pyramid and makes it even more difficult for new people to climb the pyramid.
One of the most important aspects in MLM is the declaration of disclosure, which is necessary at least in the US. DoTerra has one on their website, but was slightly renamed, on purpose?
Click here for a summary of the DoTerra Disclosure Statement 2016, as I said it relates to the US market, but it shows how the merits could be in Europe ...
This summary is a 2-page document, the first page of which is more or less just a selling point for how great DoTerra is.
The important thing is the graph on the right that shows that 67% of their members have only joined at wholesale prices to obtain. This information is very important if you want to get involved as a company and build a network in order to receive the large commissions on the seventh level mentioned above. This tells you that 2 out of 3 recruited people do not recruit other people because they are only interested in wholesale prices are. But again, the low level 1 commission is a problem. To build a downline, you need to recruit 3 people who in turn will recruit other people. Of course, they don't say it that way directly, but with a more positive twist. Cleverly threaded.
Merit in the first stage
On the second page, you should take the time to read the first paragraph carefully. This is about the first 4 levels, which are 17% of the members. Remember this does not include the 67%mentioned on the previous page. That's 17% of the remaining 33%, yes that's how you can elegantly make numbers, well done from a business point of view, but it's a little sneaky ...
Those 17% are people trying to start a business with Doterra. These people earn on average between $ 350 and $ 1,370 per year at Level 4, which is still well under $ 2,000 a year on average, so less than 2000 € per year! I wouldn't want to do that. You?
The same paragraph is about two intermediate levels averaging between $ 3,650 and $ 8,900. Now you are on the 5th and 6th level of the network - not an easy task. Only 4% of DoTerra members are at this level, yet an average of less than $ 10,000 a year is made. From the first four levels up to these 5th and 6th levels you can see a significant increase in income. This is where the reverse commission plan begins. Now you earn 5% and 6% commissions on the lowest levels of the network.
Merit from executives
Ready to move on to the chart that says people make decent incomes of up to a million dollars a year? Well, that's what DoTerra and most of the others are hoping for.
Please stop for a moment and read the first sentence of the second paragraph. The highest paid commissions are obtained from leadership positions, which only make up 0.5% of all members. So this pretty chart with its attractive numbers only represents 0.5% of the members. That said, of the more than 3 million DoTerra members, 99.5% earn less than $ 26,370 on average.
You should also note that the majority of this 0.5% is in the first two rows, mediocre earnings. If you dream of traveling the world, living on the beach, or having other grandiose plans, then your percentage is much less than 0.5%.
But that's not all, because DoTerra doesn't just trick with numbers. If you look at the graphic on the right, you can see that there are more steps here than on the left. If we recall now, we saw that the Elite and Premier only made an average of between $ 3,650 and $ 8,900. The problem here is that both have been merged, so you can't say exactly what you earn as an elite. It is safe to assume, however, that it is at the lower end of this range. If you now look at this diagram, you can see that the elite consists of 33,881 people, which is the vast majority in this diagram.
Why should DoTerra just present these two tables like that?
Because they know that most people won't read the text and that most people will spend a few seconds at most just looking at the tables. The graphic on the left is really terrifying because you should be interested in joining a program that only makes you less than $ 26,000 a year. If one does not read the text one might assume that this is the lowest income bracket. And the graphic on the right looks like a lot of people are making this money. But if you take it exactly, it is only about 7,000 People. A number like 49,000 would be a lot more encouraging, wouldn't it?
The crazy thing about this disclosure is that it is completely factual, but it can still give the wrong impression. If you really read the attached text and don't just skim it, you will only get the facts about the actual earning potential.
In 2013, Young Living sued for trade secret theft, which is unsurprising given the move of several Young Living executives to found DoTerra and the great similarity between the products. The products were tested and found to be different and the case was discontinued.
In 2014, the US Food and Drug Administration (FDA) issued a letter advising that DoTerra could no longer offer its products as cures for Ebola, cancer and other diseases.
A DoTerra representative responded that they were working on correcting all of the marketing material.
Is DoTerra Essential Oils a Scam Company?
An illegal pyramid system is also called a naked pyramid. It defines a company in the structure of a pyramid that exclusively relies on the recruitment of new money to survive and does not offer real products.
However, DoTerra does offer products so this is not a bare pyramid.
What I do not like
- Only about 10% of doTERRA members earn a full-time salary
- More than 97% of people fail at MLM
- If you can't recruit like crazy, there is little money to be made from doTERRA
- MLM is for the company, not the distributor, the company makes the rules. You are just a cheap worker who does not cost the company any social security contributions or salaries, you only earn money if you are successful.
- The average annual profit of an MLM company is less than $ 500 before expenses
- This method is one of the most difficult on the entire planet to make decent money for the time it takes, that is a fact. Yes, if you pull it up professionally and give it gas for 3-4 years, it's a very good business model, but who wants that, very few can hold out that long.
- The prices of the products are extremely expensive
What I like:
- According to Amazon reviews, the products are of good to very good quality.
- The web design is successful.
- Essential oils are good for wellbeing
Better variants than DoTerra Essential Oils
These are of course also available for people in the beauty and healing sector and housewives should actually be interesting for DoTerra as an additional income. However, if you want to build a flexible income to live with, you are more likely to achieve this goal in an online business in the long term.
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