Is Scentsy a Pyramid Scheme or Legit Money Making Opportunity?

is scentsy a pyramid scheme

Scentsy is a multi-level marketing company established in 2004. Multi-level marketing companies are usually labeled as scams due to the fact that there is a low success rate and the best chance to earn an income stems from the recruitment of others to join. Some of these companies are worth looking into, but the strategies taught by network marketers are outdated and is a reason many people fail within multi-level marketing.

If you have been approached regarding their business opportunity, this review will provide details on the company so you can make an informed decision of whether or not it is worth becoming a member. This review will also detail the best way about how to market, recruit, and sell products if you were to join and in general.

Scentsy Review

Based in Meridian, Idaho, Scentsy’s agenda is to provide scented products to keep your home smelling good. These include essential oils, wax, warmers, and laundry care products.

Their fragrance families include bakery products, floral, bakery, fruity, woody, spicy, and fresh.

There are more than 100,000 consultants working in the Scentsy network and the company accumulates more than $450 million in revenue per year.

Founder

Kara Egan and her sister-in-law Colette Gunnell were the two to jumpstart the business in Salt Lake City, Utah in 2003. At a small business event in 2004, they met Orville Thompson, a struggling entrepreneur who had previously established several failing business ventures. Thompson saw potential in the pair’s wick-less candle company which lead him and his wife, Heidi Thompson, to purchase the company from Egan and Gunnel a few months later.

History of Growth

  • In 2009, the company expanded into Canada
  • In 2011, the company expanded into the United Kingdom and Germany. Scentsy also made it on Forbes magazine 2011 list of America’s 100 Most Promising Companies.
  • Scentsy had over 170,000 active independent consultants by 2012
  • In 2017 the company reported over $450 million in annual sales, making it number 44 on the Direct Selling News’ list of the top direct selling companies in the world.
  • In 2018, Scensty was on the list of America’s Best Midsize Employers.

Membership

It costs $99 to become a member of Scentsy. You also need to pay $10 a month for a website that gives you access to various products and keeps track of all of your business information.

Although it does not cost much to join, you will have to sell $150 in product every three months otherwise your membership will be cancelled.

Compensation Plan

Like most MLM’s I’ve reviewed, it is difficult to have a clear understanding of how you will be compensated. Network Marketing Companies do not usually provide a direct approach for you having access to their products at wholesale prices and simply selling them at retail value to earn a profit.

In researching how you will be compensated for selling their products, I’ve found that Scentsy offers you a 20-25% commisions on your personal retail volume and is paid out monthly. If you make more than 2000 PRV points in a month, you get rewarded a 5% bonus.

Unlike most MLMs that pay members directly from recruiting others to join, Scentsy compensates members for sales their downline make.

Best Way to Sell Their Products

Network Marketing companies will usually teach consultants to throw home parties for associates, friends, and family in order to promote their products. That strategy is outdated and will make you feel like someone that nags everybody about some amazing business opportunity which will be contradictory if you have not made much money off the business yourself.

In order to grow leads and make sales when it comes to marketing, it is best to have knowledge when it comes to marketing online. I use to be a part of a Multi-Level Marketing company called World Ventures and the simple fact of the matter is that most people involved in MLM companies will not succeed. Failing has nothing to do with effort in Network Marketing but has everything to do with your marketing skills and the ability to reach a wider audience than the people you know.

Is Scentsy a Pyramid Scheme

I would not label Scentsy a pyramid scheme since it is possible for consultants to sell their products and earn a commission for doing so. A pyramid scheme promises to pay members an income for recruiting more people into the program instead of offering any quality products or services. 

The thing is, like most if not all MLM companies, the best way to earn would be from recruitment of others to join their business opportunity. In observing the company and all it has to offer, it can be perceived as a pyramid scheme in disguise.

Conclusion

Scentsy promotes their products as being organic which is a great selling point if it is true, but they use a secret combination of ingredients to form a melted wax for their essential oils. Their products are also more expensive than other similar quality products on the market.

Although this is a rather better opportunity than most MLMs, their compensation plan details how you can earn commissions selling their products and 9 different ways you will be compensated from recruiting others to join.

In looking through their income disclosure statement, you can see that out of close to a 100,000 distributors, only 530 are making a decent income over $16,000 a year. When doing the exact math I found that this attributes to 0.005 percent of distributors earning an income that is actually sustainable.

If all of this wasn’t enough, you don’t even have your own business and risk your account being closed if you do not meet a sales quota.

From the content, you can tell I am not leaning towards recommending this in any way, but if you like their products and may have some friends that would be interested then you could earn a bit of pocket money. 

The thing is that relying on friends and family will not enable you to become a star director or better. 

I hope this review provided clarity on the company called Scentsy and if you have any experience or opinion regarding the company feel free to leave a comment in the section below.

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