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Is Shaklee a Scam? Here’s Why Most People Fail

Chances are, you have been approached by someone you know to join a business opportunity called Shaklee.

It’s not unusual for Shaklee distributors to recruit family and friends into their network, after all.

You are doing the right thing by reading Shaklee reviews and investigating this opportunity thoroughly, because not everyone is suitable for this business model.

In today’s review, we will tackle a few important questions. Is Shaklee a scam? Or is Shaklee a pyramid scheme?

Most importantly, can you make money with it? Let’s find out.

shaklee logoName: Shaklee
Website: shaklee.com
Niche: Health and Wellness
Type: Network Marketing / MLM
Founder: Forrest C. Shaklee in 1956
Costs: $49.95 to join as distributor + 100PV/month (~$123/month)

Should you join Shaklee?
Only if you are comfortable with MLMs and recruiting members

 

Is Shaklee a Scam?

 

A common question when it comes to joining Shaklee as a distributor comes down to whether the company is a scam.

If you find yourself asking the same question, the simple answer is NO – Shaklee is not a scam. Nor is Shaklee a pyramid scheme, because it has actual products that make money for the company.

Shaklee sells a range of eco-friendly and health-related products via the network marketing/multi-level-marketing model, which is totally legitimate.

In fact, Shaklee is a decent company that has been around for more than 60 years.

However, if you are here for the money, it’s not as easy as they make it sound. Not to mention it can be costly to get started as a Shaklee distributor.

Even though there is real money to be made, the way some Shaklee distributors recruit and push for sales may turn people off, especially if they use false claims and promises.

This is a common problem for most network marketing companies, and it is not just Shaklee’s problem. You can find obnoxious MLM distributors everywhere.

It’s fine if you are not comfortable with the MLM model. Personally, I’m terrible at both recruiting and face-to-face selling. I would’ve failed miserably with the MLM model.

Not only that, I’m not a big fan of some cult-like members who glamorize everything about their MLM companies (no offense, this was simply my personal experience).

Fortunately, there are other ways to make decent money from home without joining a network marketing company. I make a comfortable side income online every month, and I’ve never met a single customer.

 

Don’t Like Recruiting People?

Recruiting and training new members is essential to your success with MLMs.

If you don’t like it, learn how to make a consistent monthly income from the internet instead – without recruiting anyone.

Here's How I Make My Side Income!

 

 

With that said, if you think you have what it takes to succeed with MLMs, let’s dive into the Shaklee review and understand it as a whole!

Table of Contents:

  1. What is Shaklee?
  2. Why It’s Not Easy to Sell Shaklee Products
  3. Make Money with Shaklee
    1. Start-up Costs
    2. How to Rank Up in Shaklee
    3. Compensation Plan
    4. Earning Potential (Without Recruitment)
    5. Earning Potential (With Recruitment)
    6. How Much Do Shaklee Distributors Make?
    7. Are You Cut Out to be a Shaklee Distributor?
  4. How I Make My Side Income

 

What is Shaklee?

 

Shaklee is a manufacturer and distributor of natural nutrition supplements, weight management, beauty and household products.

It’s an American company based in Pleasanton, California with global operations in multiple countries:

  • Canada
  • China
  • Indonesia
  • Japan
  • Malaysia
  • Mexico
  • Taiwan

To date, it has over 200 products in its line-up and continues to expand. As a distributor, there are a lot of products you can choose to promote.

The problem is, there are no lack of direct marketing or MLM companies out there selling very similar products.

Some other prominent health and wellness MLMs include Kyani, Juice Plus, Avon, Herbalife, and Melaleuca. All of them focus on the same niche – weight loss and healthy living.

This does not include the countless retail and online stores selling similar supplements, often at lower prices.

Does Shaklee offer anything unique that set it apart from the crowd?

 

Why It’s Not Easy to Sell Shaklee Products

 

shaklee product lines

Shaklee products revolve around healthy living

If you look around the product lines of Shaklee, you’ll realize that most of them are just proprietary versions of their generic counterparts.

In other words, they don’t have a lot of unique products that set them apart from the fierce competition in this industry.

To make matters worse, many of these products are overpriced, and you can simply get a cheaper alternative elsewhere.

Let’s look at a simple example – the vitamin C tablets.

 

shaklee vitamin c

Shaklee Vitamin C 500mg

At the time of writing, Shaklee is selling its vitamin C (180 tablets) at a retail price of $25.50 per bottle. Members can purchase the same product at $21.70.

A simple search on Amazon will find you a better alternative – a best-seller vitamin C 1000mg (250 tablets) selling at just $15.58.

BrandPricesPrice/tablet
Shaklee Sustained Release Vitamin C (180 tabs)$25.50 (Retail)
$21.70 (Member)
$0.14 (Retail)
$0.12 (Member)
NOW Sustained Release Vitamin C (250 tabs)$15.58$0.06

 

A deeper look into their ingredients reveal nothing extraordinary about the Shaklee alternative, yet it commands more than double the price per tablet.

The trend continues with other Shaklee products. You can almost always find a cheaper alternative elsewhere with relative ease.

If you are looking to become a distributor and make money with Shaklee, this is going to be a big problem.

How do you convince people to buy your products when there are cheaper variants out there? What is your unique selling point?

No matter how easy Shaklee representatives make it sound, it’s definitely not easy to make money selling overpriced products.

Do you think you can convince someone to buy a bottle of supplements that cost double the usual price?

Try asking someone who earns a commission when they make sales at a store (e.g. the cosmetics industry). Chances are, they’ll tell you it’s more difficult than it seems to close a deal.

In these cases, the promoters sell products that people are already interested in.

How much harder do you think it will be to convince people to want your product in the first place?

 

Make Money as Shaklee Distributor

 

For those of you who are looking to make money selling Shaklee products, the sections below are important for you.

We will go over the Shaklee compensation plan, start-up costs involved, as well as your earning potential as a distributor.

Unfortunately, the compensation plans for most network marketing companies are almost always convoluted. There are just too many facets and bonuses involved.

Shaklee is no exception. In any case, I’ll try my best to explain it so you can follow along.

 

Start-up Costs of Shaklee Distributors

 

If you decide to become a distributor, you will need to sign up for a distributor membership.

There are 4 levels of memberships available, but not every level will allow you to sell their products.

The Shaklee membership levels are as follow:

Level 1: Customer (FREE)

This is for normal customers who simply want to purchase Shaklee products.

  • No membership fees required.
  • Buy Shaklee products at retail prices.
  • Cannot promote Shaklee products to make money.

 

Level 2: Normal Member ($19.95 one-time fee)

Also known as “Premium Customer”, this membership allows you to buy Shaklee products at a cheaper price.

  • One-time membership fees of $19.95.
  • Entitled to member prices, which are usually 15% off the retail prices.
  • No auto-ship or minimum purchase requirements.
  • Cannot promote Shaklee products to make money.

 

Level 3: Distributor ($49.95 one-time fee)

You must have the distributor membership to promote and make commissions selling Shaklee products. It comes with below requirements:

  • One-time membership fees of $49.95.
  • Entitled to “director prices”, which is around 15% lower than member prices.
  • Minimum monthly purchases worth 100PV to qualify for commissions. From my calculations, this is equivalent to around $123/month.

 

Level 4: Gold Ambassador ($299.00 – $599.00 one-time fees)

Most MLMs stop at distributor levels, but Shaklee takes it one step further. As a distributor, you have the option to buy (and promote) one of the 2 Gold PAKs:

  1. Gold PAK ($349 one-time fee)
  2. Gold Plus PAK ($699 one-time fee)

PAK here stands for Product Action Kit. It includes various Shaklee products and additional bonuses when you do group purchases.

If you are a Shaklee distributor, you are entitled to additional bonuses as you accumulate PV (more details below).

If you are approached to join Shaklee, the distributor will most likely encourage you to take up one of these gold PAKs.

They stand to earn a commission if they sell this to you, and you are not required to buy it. Don’t get be pressured to buy any of these if you don’t feel like it.

Ask the distributor to give you a full list of the products contained within the Gold PAKs, and buy only if they are really useful to you.

To become a member or a distributor, all you need to buy is either the membership ($19.95) or distributor license ($49.95).

Minimum Start-up Costs:
$49.95 Distributor Membership + ~$123 Monthly Purchase Requirement

All-in Start-up Costs:
$49.95 Distributor Membership + $699 Gold Plus Pak + ~$123 Monthly Purchase Requirement (100PV)

 

In any case, be prepared to shell out more than $100 per month to stay as an active Shaklee distributor.

You can either achieve the monthly purchase requirement through your own consumption or by selling the products to others.

 

 

How to Rank Up in Shaklee

 

shaklee ranks

There are 13 ranks in Shaklee organization, with the lowest rank being Distributor and Associate (not shown in chart), all the way up to Presidential Master Coordinator.

When you buy the $49.95 distributor membership and become a Shaklee distributor, you will start at the distributor rank.

Most Shaklee teams encourage you to reach the 3rd rank (Director) as soon as possible.

To earn (and maintain) this rank, you will need to sell at least 2,000 Point Value (your purchases + your team purchases) every month.

Each product comes with a Point Value (PV). For example, the Gold PAK (costs $349) is worth 250PV. Gold Plus PAK (costs $699) is worth 500PV. Vitalizer Men supplement (member price costs $79.25) is worth 55.56PV.

By calculation, each dollar spent is worth around 0.7PV.

This means that you and your team will have to sell around $2,800/month worth of Shaklee products every month in order for you to maintain the rank of Director.

To climb beyond the Director rank, you will need to start recruiting new Shaklee distributors under your name.

The number in each of the rank above represent the number of 1st Generation distributors (direct recruits) that you need to have in order to achieve that rank.

For example, to achieve the rank of Senior Director, you need to personally recruit 1 distributor and maintain at least 2,000PV per month. Coordinator rank will require 2 direct recruits and at least 2,000PV per month.

 

MLMs Are Too Complicated? Here's an Easier Way to Make Money

 

Shaklee Compensation Plan (aka Dream Plan) Explained

 

There are 9 ways to make money with Shaklee. While it sounds like a lot, the main activities boils down to:

  1. Sharing and selling Shaklee products to others
  2. Recruiting new Shaklee distributors into your team

This process is universal for all network marketing / MLM companies. You will always have to sell and recruit to rank up and to qualify for bonuses.

While recruiting members is essential to grow your income, Shaklee still puts a decent emphasis on product sale compared to some other MLMs.

Let’s look at the bonuses that you can get just by selling Shaklee products alone.

 

1. Gold Bonuses

 

shaklee gold bonuses

 

The Gold Bonuses come from selling Gold PAK and Gold Plus PAK to others.

This is one of the first ways you can make money as a Shaklee distributor. Even though it costs a lot, it is usually easier to justify when you sell to others.

If you add everything up, the total value of products included in these Gold PAKs exceeds their respective prices.

For each Gold PAK that you personally sell, you make $50 Gold Bonus.

For each Gold Plus PAK that you personally sell, you make $100 Gold Bonus.

This bonus is paid for your sale of the products included in the selected Gold PAK.

Earning potential:
$50 – $100 per sale

 

2. Price Differential

 

shaklee product differential

 

This is the profit you earn from the sale of products. You buy at one price and sell at another.

Each Shaklee product comes with 3 prices and 1 PV:

  • Suggested retail price is for customers (non-members)
  • Member price is for members (with $19.95 membership)
  • Director price is for distributors (with $49.95 membership)
  • Point value (PV) is used to calculate bonuses for Shaklee distributors

In the example above, Shaklee distributors buy the product at $68.40 (Director price) and resell it to others at either retail or member prices.

Since your minimum monthly purchase as a distributor is 100PV, let’s assume that you manage to sell all of them.

Earning potential (by selling minimum 100PV worth of products):
~$20/month selling at member prices (for every 100PV)
~$44/month selling at retail prices (for every 100PV)

Net costs:
Since your monthly purchase requirement is 100PV, you will be incurring around $123/month net cost if you fail to sell any product.

 

3. Personal Group Bonuses

 

shaklee personal group volume

PGV Bonuses are based on your PV and ranks

These are the monthly bonuses you earn based on the PV generated by your personal group (include your own purchases + customer purchases) for the month.

Assuming that you sell 100PV worth of products for a particular month, you will be ranked as Distributor (lowest rank) and make up to 4% of your personal group PVs.

Earning potential (by selling 100PV worth of products):
~$4/month (4% of 100PV)

Earning potential (by selling 2,000PV worth of products):
~$400/month (20% of 2,000PV)

 

4. Power Bonuses

 

shaklee power bonuses

 

The Power Bonuses are not a reliable way to make long-term income with Shaklee, as they are only available to new distributors for the first 3 months.

They are there to encourage new distributors to make sales in their early months.

Once a distributor accumulates 15 Power Bonus Points, he/she will be eligible for a one-time $150 payout.

There are no limit to the number of Power Bonuses a new distributor can earn during the first 3 months.

Do note the points awarded for Gold PAK (5 points) and Gold Plus PAK (10 points) are higher than the rest.

This is why so many new Shaklee distributors pester their families and friends into buying one of the Gold PAKs.

 

Earning Potential (Without Recruitment)

 

shaklee earning without recruitment

Earning potential based on 2,000PV monthly sale volume

In this scenario, we’ll look at your earning potential if you choose to focus on just selling products.

We assume that you don’t recruit anyone into Shaklee, since recruiting and motivating down-lines is always a big headache for most distributors.

We further assume that you are very good at selling, managing 2,000PV sale volume within the first month (which is very rare).

In this case, you have bought a Gold PAK yourself (250PV), sold 3 GOLD PAKs to other customers (3 x 250PV), and managed to find 10 customer members buying 100PV worth of products each (10 x 100PV).

In total, you have generated about $2,800 worth of sales for Shaklee. Now, how much do you get in return?

Type of BonusEarning
3 GOLD Bonuses
- 3 x $50
$150
1 Power Bonus
- 3 x 5 points = 15 points
Note: Only available for first 3 months
$150
Personal Group Bonus
1. Your own 250PV x 20% = $50
2. 1,000PV x 20% = $200
3. 3 x 250PV x 16% = $120
$370
Price Differential
- 1,000PV (~$20 for every $100PV)
$200
Total$870

 

Your rewards for selling $2,800 worth of products in the first month gives you a reward of $870, which is about 30% return. That’s not bad at all in the MLM industry.

However, keep in mind that the Power Bonus is only available for the first 3 months.

Another caveat is that you need to maintain at least 2,000PV every single month to enjoy 20% Personal Group Bonus.

You have to either bring in new customers consistently to replace lost customers or make sure that your existing customers stay with you long-term.

 

5. Leadership Bonuses and Infinity Bonuses

 

shaklee leadership bonuses

Shaklee Leadership Bonuses

The bonuses from here on out are only available if you have recruited at least 1 distributor under your name.

The Leadership Bonuses are the monthly bonuses you earn on the Personal Group Volume (PGV) of each distributor you have in your down-lines.

You can unlock this bonus when you reach the rank of Senior Director.

At this rank, you qualify for 6% of the PGV from your 1st generation distributors (direct recruits), and 3% from the 2nd generation.

Shaklee infinity bonuses

Shaklee Infinity Bonuses

The Infinity Bonuses are paid at the rank of Senior Coordinator and above, in addition to the Leadership Bonus described above.

As the name suggests, it pays an additional percentage based on the PGV of distributors under your team.

The more distributors you have under your name and your team, the more bonuses you can get.

 

Earning Potential (With Recruitment)

 

As you recruit new distributors into the company, you stand to make commissions from their sales.

In fact, recruiting more distributors under your name is the only way to make sustainable and passive income from Shaklee, or any network marketing company for that matter.

Even so, your earning potential is highly dependent on the sales volume of your recruits.

If most of your recruits are highly motivated and make profits month after month, you will enjoy a nice stream of passive income.

On the other hand, if they lose money and quit within a few months, you will have to recruit new members to replace them over and over again.

This is why recruiting and training new recruits is a constant effort in MLMs.

It’s not good enough to just recruit a distributor – you have to train them and make sure they sell products.

If they don’t, you won’t receive any commissions either, since your payout depends on their monthly sales volume.

 

Reality Check: How Much Do Shaklee Distributors Make?

 

shaklee income disclosure

Shaklee Annual Income Disclosure in 2014

The most recent Shaklee income disclosure that I can find was way back in 2014.

On first glance, their distributors seem to be doing pretty well. However, looking at the figures alone doesn’t tell the full story. Let me explain.

Firstly, the chart above only shows the average earnings of Directors and above. The most basic ranks – Distributor and Associates have been conveniently left out.

No one knows why, but I speculate that most of these distributors simply do not make any money with Shaklee.

According to Dr. Jon Taylor’s book “The Case (For And) Against MLMs”, 99.7% of all MLM distributors lose money after accounting for expenses.

These distributors may as well make up the 99.7% of all of Shaklee distributors.

Secondly, the chart above only reported the average earnings for each rank, but it doesn’t report how many percentages of Shaklee distributors fall into these ranks.

This is very important, because it is possible that the chart above only consists of 0.3% of all Shaklee distributors.

We simply can’t tell if the income disclosure is representative of the majority of Shaklee distributors. It is probably not, judging by the success rate of MLM distributors in general.

Thirdly, the chart above only reported the gross annual income of these distributors. It doesn’t include the expenses incurred.

Be very careful if your sponsor uses the income disclosure above to recruit you into their team.

You need to ask the right questions – is the chart representative of the majority of Shaklee distributors? How many distributors actually make money for any given month?

 

Are You Cut Out to be a Shaklee Distributor?

 

Let’s face it, nobody joins an MLM opportunity to make money for the company.

Everyone joined at some point with just a single goal – to make more money for themselves and to provide a better financial life for the family.

However, the odds are heavily stacked against you if you charge in without the correct expectations and mindset.

It’s not enough to just sell the products. As we’ve discussed above, you need to consistently make 4-figure monthly sales to earn a passable 3-figure monthly income.

The money lies in recruiting members, and to recruit a lot of members at that. It’s the reality of 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 MLM opportunities 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 most probably have what it takes to thrive in MLM companies.

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 Side 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, there is no need to recruit members, join sales teams, or even do face-to-face selling.

I’ve been doing affiliate marketing in the past 2 years and I have never had to answer to anyone, or meet any customer for that matter.

If you want to know how I got started, read about my story and failures, as well as how I made my first income from the internet.

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

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 (training to make money from affiliate marketing).

I hope this in-depth Shaklee 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!

 

 

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9 Comments

  1. mark kabakov

    The author of a large and interesting article made a topic title in the form of a question: Is Shaklee a Scam? The second part of the headline is also interesting: Here’s Why Most People Failed. Let’s take it separately in our comments.

    Shaklee Corporation is an American manufacturer and distributor of natural nutrition supplements, weight-management products, beauty products, and household products. The company is based in Pleasanton, California with global operations in Canada, Japan, Malaysia, Mexico, Taiwan, China and Indonesia. Shaklee Corporation was Founded1915, Founder Forrest C. Shaklee with Revenue  US$ 844 million (2017) ISN’T SCAM.

    Another thing is Shaklee distributors who find it very difficult to reach the level of earnings. And the author of this article explains this problem in detail and clearly. And here, of course, laid the bombs of fraud. I will illustrate this with a well-known fact.

    Controversy about Shaklee Distributors

    In 2012, New England distributor John “Jack” William Cranney was charged with leveraging the reputation of his 45-year affiliation with Shaklee to solicit financial investments from other Shaklee distributors, his family and his friends, beginning in 2002. 

    In July 2012, the Massachusetts Securities Division charged Cranney of implementing a financial investment Ponzi scheme to defraud 36 victims in multiple states of about $10.4 million and for using the funds for personal gain. Shaklee immediately suspended distributor payments to Cranney estimated at $45,000 per month. 

    Several victims sued Cranney to recover damages and he sought federal bankruptcy protection for his home, valued at $3 million. Cranney lost the battle for his home and the proceeds from the sale were used to satisfy the claims of some of his alleged victims. In September 2014, the FBI arrested Cranney in El Paso, Texas and charged him with four counts of wire fraud, 16 counts of mail fraud, and three counts of money laundering.

    The author has done a great, informative and convincing work, stating everything in a useful article. Thanks to him. Mark

  2. Lady Esther

    Good day,

    Your review is very well written and detail with necessary information to make a decision if you want to invest in MLM.  Most review that I read lately are some what vague and make very little sense.  Thank you for such a detail review.  

    I agree with you MLM can be complicated and I want my fund to work for me.  I agree with you, I would not be good for Multi-level Marketing, when I was going to college I try selling Avon and also Mary Kay Cosmetic, it did not work for me.

    Very best,

    Lady Esther

    • Edward

      Hey Esther, thanks for dropping by!

      MLM takes a very particular skill set to succeed, and sadly too many distributors stick to harassing and pestering the people around them when it comes to selling and recruiting.

  3. Israel

    I’ve been on the lookout for a honest review about Shaklee and am glad that I found one today. I really wanted to join this network as a distributor but wasn’t sure about the initial capital and the exact level to start with. I’m also impressed that the network has been in operation for more than 60 years which gave me some confidence that it’s capable of running a multi-level marketing business successfully.

    My question now is: Since 99.7% of all distributors lose money after accounting for expenses as revealed by Dr. Jon Taylor in his  book, and the same happens to the distributors of Shaklee, what can the existing distributors to reduce losses due to running expenses?

    • Edward

      The most sensible way is only to become a MLM distributor only if:

      1) You absolutely love the products of the MLM. There’s no point promoting something you don’t even believe in

      2) You have the network (not just friends and families) and a strategy to sell the products.

      The running expenses are inevitable, since you have to buy a minimum of 100PV/month worth of products to stay as an active distributor.

      If you find yourself losing money, give yourself a deadline. If you still can’t turn it around in X number of months, it’s better to cut your losses and call it quits.

  4. Nicolaas

    Hi Edward

    This is a very good and indepth review about Shaklee. I’m an affiliate marketer and you know we are always looking for ways to make extra money. Although this company is not a scam and do legitimate business, it is definitely not for me. 

    I answered “no’ to all your questions at the end of the review, because I’m not in MLM marketing and I can’t sell face to face.

    Thank you.

    • Edward

      Hey Nicolaas, that’s completely normal. Not everyone is born a salesperson, and I’m glad you have found a way that works for you!

  5. Emmanuel Buysse

    Great post and good info.

    It isn’t a scam but Shaklee isn’t for me.

    Why? It is MLM Marketing, it is a bit like Herbalife.

    I tried it once, and already after a while I quitted it since I felt it wasn’t what I was looking for.

    Anyway, you describe perfectly what it is and it can really help people.

    So thanks for sharing it!

  6. Chris

    Well the niche sounds alright, and the products look decent enough (although they could well be expensive)…but the monthly payments for being a member are a killer for me – how many people earn this much a month to cover their memberships? 

    Not many I’m guessing!

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