How much money can you make with MLM doTERRA?
What’s so special about the MLM doTERRA’s essential oils? And how much money can you make with them? We investigate their income disclosure statement to find out.
Over the past few months, we’ve been seeing more and more about two essential oil MLMs: Young Living and doTERRA. But what’s it really like working for them? And how much money can you earn? To find out, we investigated on of them: doTERRA.
Before we get into actual numbers, there’s something we need to address: the ‘pyramid’ word. MLMs go to great lengths to distance themselves from that term and ensure they do enough to be legal. But as the New Yorker points out, even their employees find it hard not to use the word:
“Everyone in the industry studiously avoids any comparison to pyramid schemes, which are illegal, but the structural similarities are hard to ignore. “You have the two legs of your pyramid,” a doTerra employee told me, as she explained the company’s compensation structure. “I mean, not a pyramid, but, you know, it has a triangular shape.””
Indeed, when you look at their income disclosures, it’s hard to see the earning potential of MLMs as anything but pyramid-shaped. (In doTERRA’s example, as we’ll discover, only 0.5% of their members make more than $9,000 a year before expenses.)
So how much can you earn with essential oils MLM doTERRA? Let’s find out. (We also, very worryingly, discover how some of the claims made by doTERRA have been described as “medically dangerous”.)
What’s the earning opportunity with doTERRA?
So, you’re curious about joining doTERRA, possibly as as a Wellness Advocate to earn money from home selling their essential oils. What are the membership opportunities available to you?
Firstly, you can simply join as a Wholesale Customer for $35 (renewable annually for $25) and pay their wholesale prices (you are not allowed to sell any products you purchase). If you wish, you can join their Loyalty Rewards Program and, if you order at least 50 PV each month you’ll earn Product Credits. doTERRA say that 67% of all new members initially join as a Wholesale Customer.
But if you want to earn money, you can’t stay as a Wholesale Customer; you must become a Wellness Advocate. To join at this level, you need to purchase an enrolment kit. There are several options ranging from $200/$150 (retail/wholesale) to $3,333.33/$$2,650.00. Here is a selection:
Once you’ve joined doTERRA, you start at the bottom of their compensation plan as a Wellness Advocate. This means you make 25% commission on any purchases your customers make. You can also earn bonuses based on your own and your downline’s (once you build it) performance.
Here’s a snapshot of their compensation plan for each level:
How much money can you make with doTERRA?
But how much money can you actually make with doTERRA? To find out, let’s look at their income disclosure statement, which says:
“Entry-level Wellness Advocates with the rank of Consultant, Manager, Director and Executive earn from $350 to $1,370 annually in commissions and account for 17 percent of all doTERRA members.”
So, the first four levels of their members who sell doTERRA products earn a maximum of $114 a month before expenses. What about the next levels up? Here’s what doTERRA says:
“At the mid-level ranks of Elite and Premier (4 percent of all doTERRA members), Wellness Advocates learn about participating in doTERRA as a business and are almost always building a business on a part time basis. Average annual earnings for these ranks range from $3,650 to $8,900 per year.”
Again, doTERRA omit the fact that this is just commission paid – and doesn’t take into account your expenses. These figures also don’t take into account the Wellness Advocates who didn’t meet their quotas in any given month, and therefore made nothing.
How much money do doTERRA leaders make?
Above these ranks you have the leadership ranks – doTERRA’s top earners. Here’s the amount they earned (before commission) in 2016, and the percent of all leaders at each rank:
Looks quite impressive doesn’t it? And, just like Leonie Dawson, you’ll often find that this is the table doTERRA reps are happy to share to demonstrate the earning potential of doTERRA.
But this is deceptive. Because, in the text doTERRA clarify that this table accounts for just 0.5% of all their members. Yes, just 0.5%. In fact, out of approximately 1,036,000 members, only 7,227 achieved these ranks at some point in the year.
It’s also worth noting that doTERRA says these numbers count people at the highest rank they achieved at any point during the year. It doesn’t mean that all these people remained at this rank or income level throughout the entire year (they’d only have to hit in one month to make this table).
Indeed, given the habit of MLMs like doTERRA (as we explore in a minute) to skew any data in their favour, we suspect that if they were only to include the rank or income level their reps maintained throughout the year, that 0.5% figure would be even lower.
The data appears to be presented to hide the truth
Just like most MLMs, everything in their income disclosure statement is intended to show doTERRA off in the best possible light. The charts and data all appeared to be skewed and presented to hide the fact that many people probably earn nothing – or even lose money – like most MLMs.
How? Here are some examples:
- They say that 67% of all members join as a Wholesale Customer. Even if none eventually decide to sell, it means that 33% are selling their products.
- And yet, they also admit that they paid commission to only around 25% of members who purchased from them.
- This means that at least 8% of their members who are selling earned zero commission in 2016.
- They only show leaders from Silver up in their earnings table graphic. Everyone else is conveniently left off.
- However, when counting numbers of leaders, they conveniently include the mid-ranks (without showing their actual earnings) to bump the figure up from an actual 7,227 to a more impressive sounding 49,140.
- And when they calculate their retention figure they only include leaders, to make it look far more impressive than it probably is, looking at the low earnings of lower ranks.
In the text they even admit that very few of their members make a profit, stating that of the 25% of US-based doTERRA members who received any commission in 2016, the majority “earned enough to pay for a significant portion, if not all, of their own purchases each month.”
So of the people who earned anything from doTERRA, all most of them could expect was to pay for some, of not all of the oils they themselves bought. And how many of those oils were samples to make sales, or purchases bought to maintain their ranks?
You need to sell a minimum amount each month to stay active
As with most MLMs, you need to sell a minimum amount of essential oils and related products every month to remain active as a doTERRA Wellness Advocate, and therefore be paid commission and receive bonuses.
This figure is 50 PV for Wellness Advocates and 100 PV for Managers and all ranks above. For ranks of Manager to Premier, you also need to meet a monthly OV of 500-5,000. And Premier and above need to meet their ‘leg’ requirements.
So what do you do if you want to remain with doTERRA or want to claim your commission or group commission, but are short of sales that month? The answer for most MLM reps that we have spoken to, is to buy the amount you need to reach your quota (or rise up a rank), in the hope you’ll sell it on later.
This is why the ‘earnings’ you see quoted in their income disclosure statement only tell part of the story. Because they don’t take into account their Wellness Advocates’ expenses, or personal purchases to remain active, or rise up a rank.
Their compensation plan seems unnecessarily complicated
As with most MLMs, their compensation plan seems to be deliberately complicated so the average person can’t work out exactly what needs to be earned to qualify. Here’s their leadership pools compensation table as an example:
They also make it hard to work out exactly what you need to sell to make your quotas by using a points system with terms like PV and OV, rather than a more direct cash value of sales.
We like to think we’re relatively intelligent, and we’ve spent many months investigating the earning potential of MLMs, but we still find the majority of MLM compensation plans, like doTERRA’s, complex and confusing.
So what chance does the average person, who has probably been told by a trusted friend or relative they should join, stand in deciphering it, and joining with a realistic idea of the odds of making an income?
doTERRA Wellness Advocates have been caught lying
Money aside, there’s one other important issue we need to address about doTERRA (again, this is not uncommon with MLMs): the lies they tell.
In 2o14, the Federal Trade Commission formally warned doTERRA about their reps making unverified claims about their products, including that they can cure or ease symptoms of (among MANY other diseases and conditions):
- Brain injury
- Crohn’s disease
- Bell’s Palsy
- Chicken pox
- Cold sores
- Viral infections
They were warned for ads like this one:
Why doTERRA reps’ advice is “medically dangerous”
doTERRA reps also enthusiastically recommend you ‘makeover’ your medicine cabinet and replace them with doTERRA oils. The problem with this is that, not only are Wellness Advocates not medically trained, but there are not even any requirements for the to read the educational materials doTERRA supplies them with.
This has led experts like Peter Holmes, author of the book Aromatica to tell the New Yorker that “The multilevels have the whole aromatherapy community worried.” doTERRA reps are even telling consumers to drink some oils, something that’s controversial even among alternative-health practitioners. As Holmes said:
“You hear about completely untrained housewives telling people to ingest up to fifty drops. That is sheer insanity. That is medically dangerous. It’s a crazy situation.”
Kayla Fioravanti is a Certified Aromatherapist with more than 20 years of experience, and she too is alarmed at the “dangerous practices of consuming essential oils and applying them undiluted on the skin [that] have gone viral on the internet, chat rooms and via sale representatives of many dōTERRA and Young Living MLM representatives.”
“Beware of anyone who tells you to ingest essential oils either by putting a few drops in your water or putting them into a capsule. The only cases of death, organ failure and hospitalization in the history of aromatherapy have been caused by ingesting essential oils. It is THAT dangerous.”
She’s also concerned about the number of reps recommending customers apply essential oils to their skin:
“Another dangerous practice many dōTERRA and Young Living representatives teach is to apply essential oils undiluted directly on your skin. Please don’t.”
This physics teacher from the University of Minnesota, Rochester, is equally concerned:
“The claims that really bother me the most are the ones for children. Like most essential oil proponents, they think because the word “natural” is involved it is OK to just apply this stuff to your kids.
For example, there is a post with instructions for homemade baby wipe solution that includes Melaleuca (tea tree oil). Much like lavender, when exposed to air and/or light, other products form that can be harmful to the skin. It can also be poisonous when ingested.
It is generally not advised to use tea tree oil on children or pregnant women. It may cause hormone disruptions in boys before puberty and lead to gynecomastia. Any of the claimed benefits such as treating nail fungus have had mixed results. Just don’t put this on your kids. Do not.”
He also goes on to warn:
“The anti-science bend to these essential oil pushers is disturbing. The claims made are bogus at best, and can be dangerous in many ways. The sad part is the oils do have some legitimate uses. They smell nice – so as a scent for a relaxing bath or just to provide a pleasing scent in the home is a nice treat. In concentrated forms, they can kill bacteria on surfaces and even repel bugs…
But none of that justifies the misapplication of science to the point of being dangerous. Of course, they might not sell well enough to support the MLM structure if they stuck to just the legitimate uses. And as we know, pseudoscience sells.”
Essential oils are not toys or the latest fad – they’re powerful substances. If you genuinely want to explore their many benefits then we recommend finding a qualified and experienced aromatherapist, and not trusting your health to a MLM rep who has read few marketing pamphlets and just wants to make money from you.
doTERRA oils seem very overpriced
Like most MLM products, doTERRA’s essential oils are very expensive. As we discovered when researching this article on doTERRA, their AromaTouch Diffused Kit comes in at a pricy $200 ($150 wholesale):
Here’s what it includes:
- 8 x 5ml bottles of essential oils.
- 4ml of fractionated coconut oil.
- A diffuser.
Compare this to the TOP 8 ESSENTIAL OILS & OIL DIFFUSER SET from artnaturals. For just $36.95 you get:
- 8 x 10ml bottles (DOUBLE the volume of doTERRA).
- A diffuser.
You can also buy fractionated coconut oil separately from Amazon for as little as $6.99. Even if we rounded the total cost up to $50, it’s still a third of the wholesale cost of the doTERRA kit, for twice the amount of essential oils.
There’s no such thing as ‘therapeutic grade oils’
So how do doTERRA justify their apparently extortionately high prices? Like most MLMs they find a ‘magic thing’ that they can claim makes them special. And in doTERRA’s case, it’s that their oils are ‘therapeutic grade’.
“Without an accepted standard for essential oil quality, doTERRA created its own testing process, calling it CPTG Certified Pure Therapeutic Grade®”
So, with no external body grading oils, they decide to make up their own and, surprise, surprise, they all pass. But an internal grading is worthless out in the wider world. As naturopath, nutritionist and author Katherine Maslen points out:
“The term ‘therapeutic grade” essential oils is both false and misleading. The term ‘certified therapeutic grade’ was actually created by um… doTERRA, who then registered the name and then told the world that all other essential oils were not as ‘pure’.
They even go so far as to call them ‘better than organic’. And just to point out, their oils are NOT organic, which would make them free from pesticide residues, genetic modification or irradiation. There are many oils on the Australian market that are just as good if not better quality than those sold by doTERRA…”
(Katherine is also damning of untrained doTERRA Wellness Advocates encouraging customers to ingest oils, probably in the hope of increasing consumption and enabling them to meet their monthly targets.)
So there’s no evidence that doTERRA’s oils are any different from other essential oils you can buy from reputed retailers for a LOT less.
Why we recommend not joining doTERRA (or any MLM)
We’ve been investigating MLMs for almost a year now, and we have yet to find one that we’d recommend joining.
Not only do they all appear to offer the same poor odds – thorough research reveals that an average of 99.6% of people who join an MLM will lose money – but MLMs often brainwash participants and destroy relationships.
It’s easy to buy into the enthusiastic hype of an MLM, especially when their reps are told to always be positive, and even to lie to recruit and make sales. People are also often recruited into MLM schemes by people they know, like and trust.
And don’t we all want to believe the lie they often tell us? That they have the easy answer to working from home, having fun, and earning money?
But the truth behind MLMs, including doTERRA is usually much darker. As you can see from the figures above, only a tiny percentage of doTERRA Wellness Advocates make money.
As doTERRA themselves admit, of the 25% of their US members who earned any money from them in 2016, the majority only “earned enough to pay for a significant portion, if not all, of their own purchases each month.”
So if you’re looking for a way to make money, we recommend avoiding doTERRA (and any MLM). And if you just want to purchase essential oils for home use, save your money and buy equally-good oils elsewhere.
Want to read more about the income opportunity (or lack of) with doTERRA? We recommend reading this research by The Finance Guy.
Read more about MLMs
What are other MLM companies like? You can read more income disclosure investigations here:
- How much money can you earn with Isagenix?
- How can you make money with MLM LuLaRoe? Why the sums don’t add up
- How much money can you really make working for MLM Arbonne?
- How much money can you really make working for MLM Stella&Dot?
And more income investigations:
- How much money can you really make working for MLM Herbalife?
- How much can you earn with MLM Younique? (Why it’s probably less than $14 a month)
- How much money can you earn with MONAT, the new MLM coming to the UK?
And finally, some articles looking at the business model:
- The 10 ugly truths MLMs don’t want you to know
- Thinking of joining an MLM? Read the truth behind the ‘income opportunity’
- Are MLMs the modern day snake oil?
Photo by Christin Hume