Is dōTERRA a pyramid scheme? On paper, the company isn’t. However, it is a multi-level marketing company that comes quite close to being one.
This essential oils company refers to its recruitment-centric direct sales model as “Wellness Advocate.” It has successfully attracted millions of members by offering discounts and a path to becoming an agent for change.
The firm sells a lot of “Award-Winning Products.” This may lead you to feel they are a trustworthy firm with a decent business plan that lives up to the promise.
However, you may be dissatisfied with the modest commission payouts and the emphasis on recruitment. I’d even argue you won’t be able to make a minimum living wage as a dōTERRA Wellness Advocate.
I hope to break down dōTERRA’s business model and show you how much you can truly make with this guide. Based on my own experience with the firm, I will also address the main benefits and drawbacks of working as a dōTERRA Representative.
I aim to provide a realistic picture of what to anticipate when you join dōTERRA. This contains crucial information I was unaware of when I signed up with them a couple of years ago.
This article is written by our Editorial Team at Incomepedia with the help of a former dōTERRA Wellness Advocate.
Table of Contents
My Personal Experience
My journey with dōTERRA began two years ago. Before discovering who they were and what they sold, I had seen the company’s name mentioned in the news a few times. My first direct contact with the brand happened in March 2020, at the onset of the Covid 19 epidemic.
Like millions of others, I was suddenly out of a job, and to make ends meet, I asked my friend, who was already a Wellness Advocate, to help me start my journey with the company. I had high hopes as my friend raved about how dōTERRA essential oils were the best in business out of all essential oil companies.
She discussed how dōTERRA’s Essential Oils and other skincare products were created utilizing “cruelty-free” methods. She also said that as a dōTERRA representative, she receives a special discount on items.
I was intrigued by this information and asked her what a dōTERRA Wellness Advocate was. She explained the company’s direct-sales model and commission schemes. She also felt the brand was assisting her in becoming a well-known ambassador.
I was amazed that someone could earn income while working at home and selling a product you could not only be proud of, but it will also help people to become the best version of themselves.
She informed me that dōTERRA had given her the freedom to sell things at her own pace. This adaptability enabled her to work when she wanted during the week. Navigating covid was hard for my mental health, and this flexibility was comforting and reassuring to me that this was the right move to make.
The dōTERRA sales model sounded appealing to me because if I worked for them, it meant I could work from the safety of my home. I was given hope that I would be able to sell their product within days as dōTERRA oils were considered the best in the business.
Navigating a pandemic when you don’t know if life will ever return to normal is stressful. If you have to cover rent and other living expenses, finding a solution that gives you the best of both worlds was too good of an opportunity to pass up. Hence, I decided to sign up as a dōTERRA Wellness Advocate.
The sign-up procedure was reasonably simple and quick. I went to the website, filled out some information, contacted a representative, and paid a sign-up fee. I then acquired a product beginning kit and attended a couple of complimentary corporate training classes.
I spent the next three months buying dōTERRA products and began trying to sell them to individuals. I started with close friends and family members and marketed them as products that could potentially help them battle covid.
I then moved on to contacting strangers. I did that for almost eight months before giving up.
The reality was that I had long been dissatisfied with the company’s strategic planning process. I was generating close to nothing in commissions and wasn’t trained by the company to be good at recruiting new Wellness Advocates.
I worked countless hours each week pushing items for the brand but wasn’t making minimum wage. I persisted initially because I expected business to ramp up at some time during my time at dōTERRA.
I could have stayed with the organization even longer if I hadn’t received a job offer. I felt a great weight lifted off my shoulders the day I resigned as a dōTERRA Wellness Advocate.
dōTERRA was a bad experience for me. The commissions were pitiful, and I didn’t make any progress in recruiting new members due to a lack of training. If I had understood what the reality was like, I would never have joined up with the company in the first place.
Therefore, to assist you in becoming more educated, I’d want to go through the firm’s business plan, how much you can truly earn as a dōTERRA representative and the different benefits and drawbacks of picking this organization.
What is dōTERRA
dōTERRA is an American multi-level marketing company based in Pleasant Grove, Utah, that sells essential oils and other related products. They have expanded to numerous countries and offer skin, hair, and life care products for women and men.
dōTERRA currently stands as the second-biggest essential oils company in the world. It is also one of the largest network marketing companies after Young Living, their direct competition, whose ex-employees founded dōTERRA.
Being the second biggest and most respected essential oil quality company. This multi-level marketing company has over three million representatives worldwide. dōTERRA reported annual revenue of $2 billion-plus in 2021.
History
dōTERRA was founded in 2008 by a group of executives who used to work for the biggest essential oil company in the world, “Young Living.” After learning the traits of the trade, these executives decided that now was the correct time for them to work and launch a brand on their own.
Hence dōTERRA was born. Its founders, Corey Lindley, Emily Wright, Dr. David K. Hill, David Stirling, Greg Cook, Mark Wolfert, and Rob J. Young, all had previously worked for Young Living. Still, they weren’t satisfied with the quality on offer; hence to create the best product, they founded dōTERRA.
These executives quickly realized that although there was a massive market for essential oils, the ones available in the market were of inferior quality. They were frustrated with companies making a huge profit while serving inferior products. Hence they decided to change the landscape forever with dōTERRA.
For the first couple of years they worked on a shoestring budget, and their only focus was to create the finest quality of product possible. Once they could produce that, they onboarded a group of wellness advocates to market and sell their product.
They found success with this sales model and grew their team quickly. Because most of their wellness advocates were women and, more specifically stay at home moms. They believed it would empower women and give them more economic freedom.
The company entered the American market in 2008 and started expanding quickly. dōTERRA expanded to Taiwan in 2009, marking its entry into Asia.
In 2010, the company expanded to the European market, and by 2012 they had successfully onboarded over 100,000 recruits. They hit annual revenue of $100 million the same year. dōTERRA launched its first line of skincare products in 2012 before adding literature to its lineup in 2018.
In 2021, dōTERRA hit its annual revenue of 2 billion for the very first time. The company has over three million representatives worldwide and sells products in over eighty-six countries; their latest expansion is India.
You can learn more about dōTERRA’s history in the following Youtube video:
CEO and Staff
dōTERRA’s current CEO is Corey Lindley. He was appointed to this top position in June 2022. However, he has been with the company as a founding executive since its inception in 2008.
Before onboarding dōTERRA, Corey had been enthusiastically engaged in the global world of direct selling as a Chief Financial Officer (CFO) and in other Senior Executive positions.
As CEO of dōTERRA, Corey guides the company’s global operations, implementing the board-approved vision, mission, and strategic direction while ensuring the company remains stable and secure.
He has lived in China (twice), Japan, Australia, and the United States handling challenging obstacles. Prior to commencing his direct selling career.
Corey’s ability to establish loyal teams has been one of his career’s defining characteristics. Corey has a bachelor’s degree in accounting and a master’s degree in business administration.
dōTERRA officially has approximately 8,412 full-time employees, according to its LinkedIn. This excludes the over three million dōTERRA Wellness Advocate representatives worldwide.
dōTERRA claims to take great care of their employees, and from the testimonies I found on the internet, this claim seems legit. dōTERRA also plans a yearly annual trip to an exotic location for their best-selling Wellness Advocates; hence their numbers are always on the rise.
The company hit its annual revenue of $2 billion for the first time in 2021. And have recently expanded to growing markets like India, Thailand, and Israel, which believes and invests a lot in Oils.
Hence it is safe to assume that the upcoming years for dōTERRA will be extremely fruitful for them. They can expect their revenue to double, and they might be able to beat Young Living in the essential oil category.
Young Living essential oils sales have been downward since 2011, whereas dōTERRA is rising every year.
Is dōTERRA a Pyramid Scheme?
So is dōTERRA a pyramid scheme? I no longer like the company’s business model, but it isn’t a pyramid scheme. To see why not, I have to examine the Securities and Exchange Commission’s definition of a pyramid scheme.
SEC states that a pyramid scheme is “an investment fraud in which new participants’ fees are typically used to pay money to existing participants for recruiting new members.”
The SEC also mentions that pyramid schemes typically have each of the following qualities:
- No genuine products or services are sold;
- Members are promised high returns in a short period of time
- Members are told the business model allows them to make easy money or passive income
- There is no demonstrable revenue generated from retail sales
- Members must make a purchase to sign-up
- The business has a complex commission structure
- The business model places a high emphasis on recruiting
Why dōTERRA Isn’t a Pyramid Scheme
dōTERRA doesn’t count as a pyramid scheme because it doesn’t meet each of the criteria mentioned above. This includes
#1. dōTERRA Sells Genuine Products.
dōTERRA started selling Essential Oils products and has expanded to sell skincare, literature, and general health care supplements in recent years. I have used and sold many of these items.
This means the multi-level company’s products are genuine.
#2. Members Aren’t Promised A Get Rich Quick Scheme.
dōTERRA does not claim that you will generate a lot of money in a short period. Their recruitment page includes the tagline “Gift of the Earth.” This implies that dōTERRA’s purpose has always been to share the highest-quality essential oils with the globe. This is not the same as “promising” high profits immediately.
#3. dōTERRA Sells Itself As A Flexible Business Not A Get Rich Quick Business
dōTERRA never claims directly that their business approach allows you to generate quick money. Instead, the company emphasizes the business model’s flexibility.
They also try to enhance sales by providing discounts, training courses, and remote access.
#4. Membership Fee Makes Less Than 5% of Total Revenue
dōTERRA announced it had earned $2 billion-plus in revenue at the end of 2021. While soliciting new members may have contributed to part of this cash, it is doubtful that this was the exclusive source.
For example, it costs $35 to become a dōTERRA Wellness Advocate. Let’s assume all 3 million dōTERRA Wellness Advocates signed up for $35 in 2021. That would generate a revenue of only $105 million, which is far less than the $2 billion they reported.
As a result, we can presume dōTERRA generates money through product sales.
#5. There is No Minimum Purchase Obligation
dōTERRA offers the opportunity to sign up for $35. You are under no obligation to purchase items once you have completed this step.
Why Do People Think dōTERRA is a Pyramid Scheme?
People believe dōTERRA is a pyramid scheme for a few reasons.
dōTERRA Has a Complex Commission Structure
Depending on your rank, dōTERRA features a very complex commission structure. Depending on the people you onboard, you get a varied percentage of the commission. For example, a Wellness Advocate who joins the power of three programs receives a $50 commission.
If they can onboard their three advocates, you get a $250 commission, and this cycle keeps growing until you can reach a personal and organizational level rank. Then the structure becomes even more complex for further bonuses.
You can then earn a commission on the earnings of your recruits. When these elements are combined, determining commissions becomes extremely difficult.
dōTERRA Places a High Emphasis on Recruitment
dōTERRA representatives are not required to attract new members. They do, however, state unequivocally that recruiting is one of the easiest methods to generate expedited income.
You can earn incentives by recruiting new members. You can also make money if one of your recruits puts an order that exceeds a particular threshold
How Much Money Can You Really Earn from dōTERRA?
dōTERRA has not stated how much their Wellness Advocate is paid. This is a frequent tactic used by multi-level marketing businesses to conceal the facts about how little they will truly make. Salary posts on Glassdoor have helped us understand these wages better.
As you can see, the average salary for a dōTERRA Wellness Advocate is $48,537. The salary range specified is $26,000 to $77,000 per year. This implies that new or part-time members likely pull in less than $48,537 per year with dōTERRA.
Therefore, if you’re new to dōTERRA, you’re not making a livable salary. You’ll still earn less than a normal sales rep even if you’ve been with the organization long and worked through the ranks.
How to Earn Income Through dōTERRA?
dōTERRA lets you make money in two ways. These are:
- Earnings from personal sales
- Bonuses from recruitment and recruits’ sales
Method #1. Earnings from Personal Sales.
Selling items directly to clients is the most simple method to generate income with dōTERRA. This can be accomplished in a variety of ways. This includes the following:
- Buying dōTERRA products at a discount and reselling them at a higher price.
- Customers are being directed to your dōTERRA website to purchase items.
- Obtaining and sending a client purchase request to dōTERRA.
The first option could be appropriate if you are experienced at selling things to individuals in person. You can receive up to a 25% discount on your purchase. This indicates that if you sell the goods at their standard retail price, you can make a 25% profit.
The second and third options allow you to earn sales commissions. dōTERRA sends things directly to the client using this manner. As a result, you are not required to acquire or maintain inventory.
Method #2. Bonuses from Recruitment and Recruits’ Sales
dōTERRA rewards you for recruiting new Wellness Advocates with perks. This includes a 2 % to 7 % commission cut on sales earned by your recruits. You also benefit when your recruits submit orders exceeding a particular threshold.
These benefits differ based on your leadership position. It is important to understand that this “leading designation” is distinct from your representative ranking.
dōTERRA Wellness Advocate representatives with higher leader levels receive a bigger commission share from those they recruit. They could also earn commissions on the people these recruiters go on to recruit.
If you get a high-level leadership title, you will also begin earning additional income for retaining your group intact.
You can learn more about dōTERRA Wellness Advocate earnings in the following Youtube video:
3 Key Advantages of Becoming a dōTERRA Representative.
Pro #1. Business Model Flexibility
dōTERRA has a versatile sales model. As previously stated, you can purchase products, collect client orders, or earn direct commissions from website transactions.
You can also specialize in personal sales or recruitment. You will most likely perform a combination of both to optimize your revenue.
Pro #2. Free Training and Resources
dōTERRA provides free training and tools to assist you in getting started and growing your team. This contains videos as well as a mentorship program. However, unlike other MLM companies, they also have a much more advanced but paid course structure for higher-tier professionals.
I’ve utilized some of these training opportunities and feel they’d be beneficial to the majority of individuals just starting.
Pro #3. Wide Product Range
dōTERRA offers a much wider range of products than most other direct-selling companies. They sell Essential oils, skincare products, literature, and personal care supplements.
One of the benefits of working with them is that you are not required to sell each type. As a result, you can concentrate on goods you are familiar with.
3 Key Disadvantages of Becoming a dōTERRA Wellness Advocate.
Con #1. You Won’t Get Rich
Your dōTERRA commission earnings will be lesser than you think. Furthermore, commission earnings for persons at lower positions are pitiful.
The company offers more commissions as you go up the ladder. However, for those who want to earn money right now, this might make the process difficult.
Con #2. There’s A Lot of Competition.
Depending on where you live, you may face stiff competition from other dōTERRA Wellness Advocate representatives. This is especially prevalent in major cities where Essential Oils have become valued commodities.
You may face competition in smaller towns and cities if a current Wellness Advocate has already “claimed” their region.
Con #3. There Will be A Lot of Rejections.
Many individuals will tell you “no” when you start working as a Wellness Advocate. That unfavorable reaction will remain constant. The ordinary person starting this job will have a conversion rate of 1%.
This indicates that out of every 100 persons approached for sale, 99 will decline. This profession is not for individuals who are easily disheartened by such negativity. You must have guts, conviction, heart, and determination to accomplish it.
Major dōTERRA Controversy.
dōTERRA’s lengthy legal history is littered with controversies. Among the most significant controversies surrounding this MLM organization are:
#1. Dubious Marketing Campaign Again Covid 19 Prevention
In 2020, dōTERRA was warned by the FTC for false advertisement. dōTERRA, on the brink of coronavirus, was falsely promoting its product as a cure for the disease. And when 3 million advocates claim something to be true, its believability becomes very easy to comprehend.
dōTERRA tried to profit from this tragedy but was immediately held accountable by the FTC. In the aftermath, dōTERRA apologized for the wrongful claim and removed this claim from their product packaging and marketing tactic.
#2. Theft Allegations by Young Living
dōTERRA was hit with a lawsuit in 2014 from Young Living for alleging theft of trade secrets, faked lab tests, false advertising, and “pure” products contaminated with unnatural substances.
However, a Utah judge ordered Young Living Essential Oils LC to pay dōTERRA Inc. around $1.8 million after a lengthy four-year court battle. In attorney fees and other costs related to a long-running lawsuit over executives who left the former company to start the latter.
Final Thoughts
As you can see, becoming a dōTERRA Wellness Advocate representative isn’t always what you expect. You won’t make much money, and you could have problems selling things to younger generations.
As I previously stated, your starting income as a dōTERRA Wellness Advocate will be less than minimum wage when you initially join the organization. Even if you advance through the company’s levels, you will not earn more than $77,000 a year.
At this rate, you’re much better off working as a salesperson for legit medical brands where your hard work and commission can earn you up to $100,000 a year.
Who Would dōTERRA Be a Good Fit For?
You might achieve success as a dōTERRA Wellness Advocate in two ways.
The first is whether you are skilled at recruiting Wellness Advocates. dōTERRA compensates those who are effective at bringing in new members in various ways. If your team becomes large enough, you may sit back and earn money from the organization without having to worry about personal sales.
The second possibility is that you are already an influencer. More particularly, a specialized influencer. dōTERRA has many items, and you might specialize in selling the ones you are familiar with.
Thus, if you’re a social media influencer who recommends essential oils products, you could find success advertising dōTERRA essential oils to your audience.
Personally, I did not like working as a dōTERRA Wellness Advocate. My income was inadequate, and I spent too much time pushing things rather than recruiting new members, where most of the money in this business is.
To conclude, dōTERRA is not a pyramid scheme, but it is also not an MLM company (multi-level marketing) that I would suggest to everyone. I hope this dōTERRA tutorial helped you understand more about the organization and whether it is good for you.
Frequently Asked Questions
Is dōTERRA the most successful Multi-Level Marketing company?
No, dōTERRA is nowhere near the most successful Multi-Level Marketing company as many goliaths of this industry exist. However, you can claim it as one of the most successful essential oils Multi-Level Marketing companies.
Does dōTERRA offer refunds for Wellness Advocates?
dōTERRA offers their wellness advocates and if the order is large enough then their wholesale customers a full refund on unsold products. Pending if you make the return request within 30 days.
Are dōTERRA’s products actually cruelty-free?
Yes, dōTERRA’s products have been cruelty-free since the company’s inception in 2008. Quality was the primary reason why the founding executives founded dōTERRA.
Sources
- dōTERRA Products: Our Brands
- dōTERRA Annual Revenue: Annual Impact Report
- dōTERRA Founding: Our Story
- dōTERRA CEO: Corey Lindley, CEO
- dōTERRA Number of Employees: dōTERRA LinkedIn Profile
- dōTERRA Recruitment Page: Become a Wellness Advocate
- dōTERRA Wellness Advocate Salaries: Glassdoor dōTERRA Wellness Advocate Salaries
- dōTERRA Earning Methods: 2022 Compensation Guide
- dōTERRA’s Controversy: Fake Covid Healing Claims, Young Living Lawsuit
