I have seen the boom of essential oils and people joining Young Living to see if they can make money with all this hype but is Young Living a pyramid scheme really?
You need to be careful as many who join this kind of business that has the MLM (multi-level marketing) business model usually don’t get very far.
But just because they are a MLM, it doesn’t automatically make them a pyramid scheme. There is a difference between the two and sometimes the line can be blurred.
In my Young Living review below, I will take you through the following:
- What is Young Living?
- How Young Living Works
- Is Young Living A Pyramid Scheme?
- Conclusion: Be Your Own Essential Oil Authority
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WHAT IS YOUNG LIVING?
Program Name: Young Living
Price: $45 and up
Founder: D. Gary Young
Young Living is a MLM company that produces a line of products that has to do with essential oils.
These are oils from plants that have high aroma concentration in them and the process to extract them is the key to high quality essential oils which Young Living provides.
I had found lots of women selling these oils on social media and they have become very popular.
The company also offers many other products that are either essential oil infused, accessories like diffusers, and different uses of essential oils like cleaning products for your home.
Pricing wise, it seems their products are a bit higher than other essential oil brands so it’ll be harder to sell if you don’t know the difference to explain to your customers why you are charging a premium.
Though, the Young Living brand is known for higher quality essential oils. However, when it comes down to it, it’s still a hard sell when I see a bottle going for $60 while another brand is selling at $9.
Young Living sure has a large product line to offer anyone who wants to become a distributor but they need to be sellable in order for you to thrive in your business.
Therefore, one of the things you’ll need to do when joining this program is make sure you know what makes these essential oils so much better than other brands.
The Young Living business model is a MLM because they sell their products only through their distributors only and distributors can make money from the sale of these products and/or by recruiting people into the program underneath them to make commissions from their sales and activities.
In this review, I will be talking more about their business opportunity and will determine if this is a pyramid scheme or not.
HOW YOUNG LIVING WORKS
It’s easy to join and become a Young Living distributor, you can sign up under someone you know or just through their website if you don’t know anyone who’s already in it.
You will have to buy a starter kit which they have one Basic and several Premium options to choose from.
For a MLM, these starter kits are actually priced reasonable starting at $45 for the Basic and $165 for one of the Premium kits.
You’ll be making money in this system in two ways:
- Direct sales you make
- Commission on sales and activities of your referrals
Let’s take a closer look at their compensation plan and see how you’ll be making your money.
You only make 24% commission of the price difference between retail and wholesale prices, and a bit more than that if you sell to wholesale customers.
With such a small percentage you’ll be earning through their product sales, you will need to recruit others to be distributors too if you’re going to make more money.
As with most MLMs, you will make most of your money with recruiting people to also be distributors and you can make money from your downline in many ways:
- Fast Start Bonus – 25% bonus for the first 3 months of your newly enrolled members’ orders.
- Starter Kit Bonus – $25 per kit sold to members you enroll, must be purchased in the same month they have enrolled.
As you start this business, you will be at a certain rank which is the “Member” when you first start, then you can move up to Star, Senior Star, and Executive.
Here’s a screenshot of what you can earn at these levels from your downlines:
As a Member, you must have 100 Personal Volume (PV) in order to earn 8% from your direct recruits (Level 1) and 5% from the people Level 1 have recruited, called Level 2.
As you move up the ranks to Star, Senior Star, and Executive, you’ll have to gain more and more volume for your whole team and you’ll keep earning more and more deep into your team, up to 5 tiers down, making you 4% for the last 3 levels.
It doesn’t stop there, you can make even more money as you grow your team even more and your ranks can move to Silver, Gold, Platinum, Diamond, Crown Diamond, and Royal Crown Diamond.
There are “Generation” commissions you can make as well when you reach Silver and higher, and to explain it properly, here’s their definition of the additional “Generation” commissions you can earn:
Personal Generation Commissions: Additional commissions are paid to members who achieve the rank of Silver or higher on all volume within each leg of the organization, down to but excluding the next Silver or higher ranked member within the leg.
Generation: A Silver or higher ranked member and his or her entire organization.
Generation Commissions: Based on a member’s monthly rank of Silver or higher, an additional 3% commission is paid on the OGV of each Silver or higher in the member’s organization. This commission is paid down to the next Silver or higher ranked member and down to eight generations deep in each leg.
So really, you make a lot of money when you reach even high ranks as you can make an additional 1-3% from 8 of your generations.
Clearly, there is money to be made with this system, but is it a pyramid scheme and is this business all that’s cracked up to be?
IS YOUNG LIVING A PYRAMID SCHEME?
To determine whether or not Young Living is a pyramid scheme, you have to look at whether there are sufficient amount of sales to retail customers or if the business is just concentrated on recruiting only.
It would seem that Young Living is not a pyramid scheme since it has a large line of products to sell but I feel the line is blurred here since you cannot make that much from the sale of their products at only 24% of the difference between the retail price and wholesale price and majority of the money will be made via recruiting.
At the same time, all members have to sell a certain volume on a monthly basis (so products are moving) and they have a heavy marketing plan in place to promote their products in the market place.
Therefore, Young Living is not a pyramid scheme because their products are widely sold to retail consumers through their distributors and the government hasn’t shut them down yet.
The Truth About MLMs
Although not a pyramid scheme, Young Living’s MLM structure, like most MLM, doesn’t live up to the financial freedom they portray you can create for yourself if you go into this business.
Here is a look at their 2016 Income Disclosure on how much their distributors make at different rank levels:
In 2016, 94% of their members remain at the first level “Distributor” (aka “Member” as mentioned earlier) making only an average of $1 per month.
In order to step it up to the next Star level, it takes an average of 15 months to get there and of course this depends on how aggressive you are in recruiting.
You will need to build this business for almost 9 years to make it to the highest Royal Crown Diamond level which by that point, you can make six figures a month but only less than 0.1% make it that far.
Even at the Executive level, which takes an average of 29 months (over 2 years) to get there, you will only make an average of $500/month.
This income disclosure is very similar to all MLMs, there are very little people who can make it to the top of the structure while majority of the people are stuck at the bottom.
This just shows how it’s way harder than it seems to recruit and most people don’t know how to recruit a lot of people to make this work.
Massive recruitment is needed to make it to the top and most people can’t do that so they eventually drop out when they run out of people to recruit.
This is why I never recommend MLMs as a business to start because there are much better business models these days to use which won’t require all this recruiting.
CONCLUSION: BE YOUR OWN ESSENTIAL OIL AUTHORITY
With the internet these days, there are many other options to make money with and my favorite is by far one that doesn’t require me to buy any products or bug anyone I know.
I really don’t like sales and I don’t know a lot of people so MLMs will not work for me, so in Sep ’16, I found the perfect business model for me that doesn’t require neither of those.
In this business model, all you have to do is talk about what you love, so if you love essential oils, then you do that and at the same time, you’ll be helping others find the perfect essential oil for them.
By doing so, this business model allows you to recommend products to others instead of directly selling them. There is a difference here as I don’t have to close any sales.
Even more, instead of working with just one company like Young Living, you can work with as many as you wish so you’re not limited to their range of products.
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I haven’t looked back since I’ve started this in Sep ’16 and now making a living online doing it.
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If you have any questions or thoughts regarding whether Young Living is a pyramid scheme or anything else, please do not hesitate to leave me a comment below. I always reply to my readers! 🙂
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