is doterra a pyramid scheme

Is doTerra a Pyramid Scheme? Here’s Why Most People Lose Money

is doterra a pyramid scheme

Welcome to my doTerra review!

To start things on the right note – this is not a review of doTerra products. Today, we are taking a look at the business side of doTerra.

Chances are, one of your acquaintances introduced you to their products and an opportunity to make money with doTerra.

The sales pitch sounds good, but at the same time you are not too sure if it’s really as good as it sounds.

Well, you are in the right place. In this review, we’ll find out if this company will really make you money, or is doTerra a pyramid scheme?

doterra logo2Name: doTerra
Niche: Essential Oils
Type: Network Marketing / MLM
Founder: David Stirling and co.
Costs: $35 registration ($25/year in subsequent years) + $150 – $2,650 enrollment kit + ~$50 – $100/month to qualify for commissions

Best For: People who are good at recruiting members and face-to-face selling

 

doTerra Review Summary

 

For those of you who want a quick doTerra review, here you go.

Contrary to some rumors out there, doTerra is not a pyramid scheme. It is a legit MLM business opportunity that has been around for a decade now, and it’s possible to make real money if done right.

They provide a wide range of products, and have generated more than $1.2 billion revenue in 2016.

However, here’s the bad news – at least 99% of doTerra advocates lose money. This is not just doTerra’s problem, it’s common for all MLM companies.

The reason behind the high failure rate is that people join the company without having the right expectations and skill set.

To succeed, you need to first understand the products offered by doTerra inside-out.

After that, you need to talk to a lot of people, do face-to-face selling, follow up with prospects, recruit new distributors, and motivate them to do the same. This is how you expand sales team and make more commissions.

A lot of doTerra advocates rely on just selling to and recruiting family and close friends into their network, which is not sustainable and destroys relationships. Don’t do this – it’s just not worth it.

If you prefer to work alone without recruiting anyone, there are much better alternatives out there to make a decent second income.

Here's My Top Recommendation

 

What You Need to Know About MLMs

 

You are doing the right thing reading reviews about doTerra and making up your own mind, because this opportunity simply isn’t for everybody.

Just like any other opportunities out there, there’s no guarantee you’ll make money with doTerra. A lot of it comes down to your skill set, and what you are willing to do to sell products and recruit people.

Since doTerra employs a multi-level-marketing model, you are expected to do the following once you become a Wellness Advocate:

  • Buy initial enrollment kit and understand doTerra products
  • Make minimum purchases every month to qualify for commissions
    (~$50/month for 1st rank, ~$100/month for 2nd rank and above)
  • Sell doTerra products
  • Recruit new doTerra advocates (so you can advance in ranks)
  • Motivate and coach your advocates to do the above
  • Attend trainings and conventions at your own costs

These are the basic commitments expected from you once you join an MLM team.

Many companies out there use the same process to push their sales. This includes major MLM brands such as Amway and doTerra’s direct competitor, Young Living.

 

Popular MLM Practices

 

In many cases, when you first join a MLM team, you will be instructed to come up with a personal name list to contact and recruit.

MLM recruiters like to use this strategy because this name list is your “warm market” – you know them personally and they are more likely to “support your business”.

If you don’t feel comfortable with this, or if you don’t like to do face-to-face selling, you will do much better with a business model that doesn’t require direct human contact.

Yes, it’s possible to make money without meeting a single customer or recruiting anyone. It’s called affiliate marketing, and it’s how I make a 4-figure side income (after expenses) every month with just my laptop.

With that said, everyone has different dispositions. Maybe you are better with  recruiting and face-to-face selling than to sit in front of your computer.

To be honest, affiliate marketing can get boring after a while because you can essentially work on your own.

However, this is precisely what made me choose affiliate marketing over MLM.

No matter which one you choose, one truth remains – it takes hard work to make a meaningful side income.

If you think you have what it takes to beat the odds and really make money with MLM companies, let’s dive straight into the full doTerra review!

Table of Contents:

  1. doTerra Review Summary
  2. What You Should Know About MLMs
    1. Popular MLM Practices
  3. What is doTerra?
    1. doTerra Products
  4. How Consumers View doTerra?
    1. Primary Challenges as doTerra Advocates
    2. Other Challenges as doTerra Advocates
  5. doTerra as a Business Opportunity
    1. How Much Does It Cost to Get Started?
    2. How to Make Money with doTerra?
    3. doTerra Compensation Plan
  6. Reality Check: How Much Do doTerra Advocates Really Make?
    1. Are You Cut Out to be a doTerra Advocate?
  7. How I Make a Sustainable Income

 

What Is doTerra?

 

doterra founders

doTerra founders

doTerra is a multi-level-marketing company based in Utah. At the time of writing, it reportedly has over 3 million consultants in more than 100 countries making sales for the company.

Just like its closest competitor Young Living, doTerra puts a heavy emphasis on essential oil products.

Even though doTerra was late to the party for 15 years (Young Living was founded in 1993 and doTerra in 2008), it has quickly rose in sales and became the fiercest competitor of Young Living.

In 2017, both companies achieved a gross revenue of $1.5 billion respectively. From business model to sales figures, doTerra is in many ways very similar to Young Living.

Now, we know that the company is making good revenue and profits. However, our main question in this review remains – just how much are the individual consultants making for their effort?

As a potential doTerra advocate, this should be the question closest to your heart.

We’ll go over the details in the later sections, for now let’s take a look at what doTerra has to offer.

 

doTerra Products

 

doterra products

doTerra offers other lifestyle products apart from essential oil

Apart from essential oils, doTerra has expanded their product lines to include various lifestyle products over the years.

Here’s a list of products offered by doTerra at the time of writing:

  • Essential Oil Products
    doTerra offers single oils and proprietary blends, including a few subsidiary brands such as Deep Blue and DigestZen.
    .
  • Diffusers and Accessories
    These products complement the essential oils, and doTerra advocates often promote them as package deals.
    .
  • Personal Care Products
    These are predominantly skin care products, but there are also hair products and body deodorants.
    .
  • Weight Management Products
    doTerra has a proprietary sub-brand called Slim & Sassy, which offers products such as shakes, metabolic gum and soft-gel capsules.
    .

Since I’m not an expert on the products, I won’t go into the details. You can find a lot of well-written, product-oriented reviews on the internet.

Feel free to check out sites like Essential Oil Haven for the price comparison table between doTerra and its closest competitors.

While doTerra essential oils are significantly (30% – 40%) cheaper than its direact MLM competitor Young Living, it’s still overpriced compared to non-MLM competitors such as Edens Garden.

doTerra’s essential oils are consistently 2 – 3 times more expensive than equivalent oils from non-MLM competitors.

Of course, we understand that the prices may vary significantly due to resources, processes and production across brands.

However, this is not a good sign for doTerra advocates. Not only are they competing with so many fellow advocates out there selling the same products, the huge price gap makes it difficult to sell to the average consumers.

Will the average consumers pay extra to buy from you? How much do they really value doTerra products over the other brands?

Apart from your skill set and personal connections, what really determines your success with doTerra is the general population’s impression on the company.

 

How Do Consumers View doTerra?

 

As a potential doTerra Wellness Advocate, it’s very helpful to know not just the company’s product, but also where the company stands in the mind of the consumers.

After all, your success hinges on:

  • Your personality and skill set. Are you comfortable with selling and recruiting?
  • Product quality. Are people going to keep buy from you?
  • Company’s reputation. Do people shun away the moment you mention doTerra?

One of the best ways to gather information is to look at existing customer comments and feedback about the company. What do the consumers say about doTerra?

I’ve compiled some of the most typical comments about the company here. You can visit the sources if you like (1, 2, 3).

doterra positive comments

Generally, consumers are loyal to doTerra because they have experienced benefits by using the products.

Looking through the comments, you’ll seldom find complaints about doTerra product quality.

Even though they have to pay a premium over non-MLM brands, many consumers still purchase doTerra essential oils year after year.

With that said, there’s no way for us to separate genuine customer comments from fake reviews made by doTerra advocates to make more sales.

Exercise caution if you see overly positive comments that describe effects that shouldn’t be there.

Among the genuine reviews, there are bound to be a couple of made-up reviews written by desperate advocates.

 

Primary Challenges as doTerra Advocates

 

Even though there are many positive reviews, it appears that quite a large number of customers are not satisfied with the company.

doterra negative comment

If you become a doTerra advocate and intend to build a business around it, you’ll have to buy a minimum of 50 – 100PV/month products depending on your rank.

This translates to expenses of ~$50 – $100/month just to qualify for commissions.

doTerra essentially turns their own advocates into customers, which is honestly not uncommon in MLMs.

The company makes a sizeable revenue from this alone, and it’s also the primary reason why the vast majority of advocates are losing money.

They have to spend ~$50 – $100/month just to stay as an active advocate who qualifies for commissions, whether they are actually making money with doTerra or not.

It’s entirely possible that advocates spend $100/month just to make a $10 paycheck.

In fact, it is estimated that 99% of all advocates lose money after expenses.

I’m using an estimation here because doTerra makes their income disclosure extremely opaque, which I’ll go into more details later.

This estimation is in line with the investigations of Dr. Jon Taylor, the founder of Consumer Awareness Institute.

He found that approximately 99.6% of all MLM distributors lose money after expenses, and his data set included doTerra.

The loss rates for MLM participants (averaging at least 99.6%) is far greater than for participants in classic pyramid schemes, which is approximately 90%.

Dr. Jon Taylor in “The Case (for and) against Multi-Level Marketing”

Having said that, there is still a very small percentage of advocates who are actually making money with doTerra.

For every 1000 advocates that sign up, 1 or 2 may actually make it big enough to generate a full time income.

How did they make it? It all comes down to your compatibility with the MLM business model.

A lot of people sign up without knowing what is required from them and end up leaving when they find out the truth. This is why the turnover rate is extremely high.

So ask yourself these questions:

  1. Do you believe in doTerra products? Are willing to share them to people around you?
  2. Are you ready to sell these products to family and friends?
  3. Do you feel comfortable recruiting them into your network? Recruiting is absolutely essential to make a meaningful income with doTerra.
  4. Once you exhausted this pool, will you talk to new people and repeat the steps above? You need to constantly expand your circle or you will run out of prospects.

 

Don’t like MLMs?

Learn how to build your second income with just a laptop.

Get Started with No Money Down

 

Other Challenges as doTerra Advocates

 

Once you have identified your affinity with the MLM model, it’s time to tackle the rest of the obstacles.

Firstly, when you introduce the products to your prospects, you will most likely hear complaints about inflated product prices.

Indeed, when I sifted through the customer complaints, one of the biggest gripes that customers have seems to be the overpriced products.

As discussed earlier, doTerra is charging a premium for their essential oils compared to most of the non-MLM competitors out there.

This is inevitable when it comes to MLM model, because the company needs to make more profits per sale to pay for advocates commissions.

When a doTerra advocate makes a sale, not only does the seller gets a commission, the commissions also get passed upstream to 7 generations deep.

More than 50% of the product prices go to the commissions of various advocates.

Such is the nature of unilevel compensation plan in MLMs. Unfortunately, it makes the products more expensive and harder to sell for everyone.

Another prominent challenge that you need to overcome is the potential negative public perception towards the company.

doterra fda warning

In September 2014, FDA warned doTerra against marketing its products as potential cure for Ebola virus and multiple other health conditions.

doterra ebola advertisementdoterra ebola advertisementdoterra ebola advertisementdoterra ebola advertisementdoterra ebola advertisementdoterra ebola advertisementThis was the result of certain doTerra advocates who actively spread false information just to make more sales.

Here’s a screenshot of such advertisements that the company into trouble.

You will find dishonest distributors in every MLM, but the claims of these doTerra advocates were widespread enough to warrant an FDA warning.

Do note that this is not necessarily doTerra’s fault. These ads were made by individual advocates, but it hurts the company’s reputation, and also the chances of honest advocates to make sales nonetheless.

Scouring through customer feedback, it appears that most customers also complain about auto-ships and refund issues.

Quite a few customers were signed up to auto-ships and recurring payments without their knowledge, and it’s difficult to get refunds even when it’s cancelled.

These incidents, along with the high-pressure tactics of some doTerra advocates can leave an overall negative impression on the company.

This means that you will potentially face more backlash and rejections when you reach out to your clients.

In summary, here are the major obstacles that you will need to brace as a doTerra advocate:

  1. Extremely high failure rate
    Studies of independent consumer watchdog agencies have shown that approximately 99.6% of all MLM distributors lose money. This data set includes doTerra.
    .
  2. Inflated product prices
    doTerra essential oils are generally more expensive than non-MLM competitors because they need to account for advocate commissions.
    .
  3. Potentially negative public perception
    doTerra’s incident with FDA, along with shipping and refund issues can potentially leave a bad taste in customers’ mouth.

 

doTerra as a Business Opportunity

 

To become the top few advocates who actually make money with doTerra, you need to know how to play the MLM game.

You should be excellent at making sales, recruiting new members, as well as training and retaining your members.

These are arguably the top 3 skills required to rank up and make real money with any MLM company.

If you are still seriously considering to become a doTerra wellness advocate, this section is for you.

We’ll talk about the costs to get started, doTerra’s compensation plan, and the different ways you can make money with the company.

 

How Much Does It Cost to Get Started?

 

The starting costs of doTerra advocates are as follow (accurate at the time of writing):

Membership Fees: $35 + $25/year in subsequent years
Enrollment Kit: $150 – $2,750 (link)
Personal Volume: 50PV (~$50/month) for 1st rank
Personal Volume: 100PV (~$100/month) for subsequent ranks

With the purchase of an enrollment kit, you will be getting some products and samples that you can use to demonstrate to your first clients.

Even though the monthly purchases are not compulsory, you will need to achieve a certain amount of personal volume (PV) in order to qualify for the unilevel commissions.

In other words, the minimum purchases are necessary for you to earn a paycheck.

 

How to Make Money with doTerra

 

MLM structureAs with most other MLM companies, there are 2 main ways to make money with doTerra:

  1. Sell products and earn the difference in price (retail – wholesale). doTerra products offer 25% retail commissions.
  2. Recruit new advocates into doTerra and encourage them to do the same. You receive extra commissions from their sales, and earn bonuses as you rise in ranks.

While you can make some modest income from retail commissions, the primary income potential with doTerra lies in method 2.

As you get more advocates under your name, you will need to coach them to make sales and in turn, recruit even more advocates.

If you focus solely on selling products, you will not advance in ranks – which locks you out from the fast start bonus, power of three bonus, and unilevel commissions.

The unilevel commissions are where the real money is (more details below).

This is why recruiting is absolutely essential if you want to make a meaningful income from doTerra.

 

doTerra Compensation Plan

 

This quick video should give you a basic idea on how doTerra’s compensation plan works.

If you want to go into more details, check out their full compensation plan in writing.

doterra unilevel

To put it simply, there are 15 titles that you can unlock in doTerra’s ranking structure – from “Consultant” all the way up to “Double Presidential Diamond”.

  • Consultant / Wellness Advocate
  • Manager
  • Director
  • Executive
  • Elite
  • Premier
  • Silver
  • Gold
  • Platinum
  • Diamond
  • Blue Diamond
  • Presidential Diamond
  • Double Diamond (not shown above)
  • Double Blue Diamond (not shown above)
  • Double Presidential Diamond (not shown above)

At “Consultant” level, you will need to buy a personal volume of 50 PV/month to qualify for commissions.

doterra unilevel commissions

doTerra unilevel commissions increases as the generations go deeper

Once you recruit enough members to generate organizational volume of 500 OV/month (plus a separate personal purchase of 100 PV/month), you will be promoted to “Manager” level.

The OV is based on the sales of your “organization”, which consists of the members in orange color.

Using the OV requirement, doTerra makes sure that their advocates do their best to recruit and encourage new recruits to sell.

The percentages in the diagram refers to the unilevel commissions that you will make from your organization’s sales.

A unilevel commissions of 2% means that you will make 2% from your down-line’s total monthly sales.

As a “Manager”, you are entitled to only 2 generations deep (2% and 3%) of unilevel commissions.

Once you unlock higher ranks, you will unlock commissions from additional generations (up to 7 levels), which gets progressive higher.

The unilevel commissions will be your main source of income once you have built out your network.

If you operate on your own and only sell products (without recruiting anyone), your earning potential is going to become severely limited.

 

Reality Check: How Much Do doTerra Advocates Make?

 

In this section, we are looking at the latest income disclosure of doTerra from 2017.

doterra income disclosure 2017

On first glance, the majority of doTerra advocates seem to be doing extremely well.

In the table above, it appears that the vast majority are making more than $25k per year, which is unheard of in the MLM world.

When we drilled down further, we realized that the income disclosure doesn’t tell the full story. I’d even go as far as to say it’s downright misleading.

You see, the screenshot above only represents the “leaders” in the ranks of doTerra (“Silver” and above). This chart only represents the top 1% of all doTerra advocates.

In other words, 99% of the advocates did not do well enough to be included in this disclosure. See here for a detailed breakdown of the statistics.

Also, keep in mind that the income quoted above do not include the expenses (membership fees, PV requirement, costs to promote doTerra, etc.).

Once again, no matter how doTerra tries to manipulate the statistics and sugarcoat the disclosure, the percentage of advocates who are losing money is probably closer to 99.6% as revealed by independent consumer watchdog agencies.

 

No Capital to Start a Business?

Learn how to build your second income with just a laptop.

Get Started with No Money Down

 

Are You Cut Out To Be A doTerra Advocate?

 

Here’s the fact – when it comes to doTerra, the money lies in recruiting members, and to recruit a lot of members at that.

It’s the reality of every MLM – the big money resides in recruiting a large following of members and keep motivating them to make sales.

Let’s do a bit of self-reflection on whether you are cut out for the network marketing business model:

  1. Do you enjoy talking to people and introducing doTerra to others? Can you take rejections with a smile and keep on pushing forward?
  2. Apart from your family and friends, do you have other ways of approaching new prospects? Don’t make the classic mistake of losing family and friends over an MLM company.
  3. Are you ready to attend weekly or monthly meetings with your team and sponsor? Joining an MLM team is a commitment. You are expected to recruit new members and make sales, or you are a liability.

If your answers to all three questions above is a unanimous “YES!”, then you might just have what it takes to thrive in doTerra and make it to the top few that really makes money.

I have been involved in MLMs before, and unfortunately, these were the top 3 reasons why I quit and looked elsewhere.

 

How I Make A Sustainable Income

 

If your answer to any of the questions above is a definite NO, you are probably not cut out to be a network marketer.

Fortunately, there are other avenues to make sustainable side income at home. One such methods is called affiliate marketing.

In affiliate marketing, you make a commission when you introduce relevant products and services to people who need it.

Most importantly, you don’t have to target the people around you. I’ve never recruited anyone or sold anything to people I personally know.

In fact, I’ve never met any customer or answer to anyone. This is the benefit of going online and leveraging on a website that works 24/7.

If you want to know how I got started, read about my story and learn from my failures. I also document how I made my first profit online, and how I made it into a consistent income stream.

If you are interested to get your hands on the same opportunities, I have a great recommendation to get you started.

Check Out My Top Recommendation and My Results Here

 

Do note that the article above contains affiliate links, and I’ll make a commission (at no extra costs to you) if you find any of the products useful and buy them.

This is how I make money with affiliate marketing, after all – by introducing people in need (such as you) to relevant and value-adding services (e.g. training to make money from affiliate marketing).

I hope this in-depth doTerra review has been useful to you. Do leave a comment if you have any questions or MLM experience to share, I’d love to hear about it!

Previous

Is Young Living a Scam? Here’s Why Most People Lose Money

5 Comments

  1. Seun Afotanju

    Thanks for such informative article, I wanted to show my friend an objective review of doTerra and I found it in yours.

    I was also introduced to a MLM program some years ago where I fully dedicated my time and money in making it work but it wasn’t exactly what I expected it requires one one one selling though it’s a good business if you know what you’re doing but based on the descriptions I’d much prefer affiliate marketing because it can be done without selling products one on one.

  2. Renton

    This is a great post! I have burnt my fingers with MLM companies on the past so I am weary of them. That is also in addition to me not being good with people face to face. That is probably why I also prefer affiliate marketing. doTerra does sound like they have a good quality product that many customers love but the business side doesent seem to get the same amount of love.

    I think affiliate marketing has many draw especially if I compare the pros and cons of MLM with the pros and cons of Affiliate marketing. I think that some people can make MLM work but for someone like me I am better off sticking to the internet.

    Is it possible to set up an affiliate website in the three big niches or it it better to focus on one at a time?

    Thanks for sharing this great information.

    • Edward

      Hey Renton, if you are just getting started with affiliate marketing I’d advise you only stick to one single niche.

      If you do 3 niches at the same time you’re bound to lose focus and not do as well.

      Stick to 1 primary niche and learn the ropes. Once you master the process you can do much better on your subsequent niches.

  3. Shellykh

    Your review just gave me a reminder why I shouldn’t plunge into MLM again.

    I use to join a company that use MLM style marketing which I soon didn’t like right after the training. All that work just to hire someone or sell to a person, family or friend, and then they may not do anything, is just really tiring. I also learned that I’m not very good as convincing people to buy or join into something, I just don’t have that “salesmen” personality in me.

    That’s why I too try affiliate marketing, and I love it. At least I’m really learning a lot about marketing online and I can see so much potential in the business. Plus, it is fun to build something around what I’m interested in.

    Thank you for making this article which reminds me that there are many kinds of marketing business, and not all are the same and not all you may like or dislike

    • Edward

      Great to see a fellow affiliate marketer here. Hope you are doing well with your niche!

Leave a Reply

© 2018 MasterMyFinance & All Rights Reserved