doTerra Review: Essential oils & autoship incentives

doTerra was operate in the essential oils MLM niche and was launched back in 2008.

The company operates out of Utah in the US and is headed up by CEO and President, David Stirling.

Stirling and other founding executives of doTerra came over from Young Living, a rival essential oils MLM opportunity. Stirling himself was Young Living’s Chief Operating Officer at the time of his departure.

Stirling (right) however maintains that he didn’t intend to go on to launch a rival essential oils MLM opportunity:

I did not leave YL to start a competing essential oil company. In fact, the thought had never occurred to me.

My entire heart and soul were with YL and its distributors, and I had no other desire than for the success of the company and those distributors who were working so hard to help make that success happen.

Two months before I was fired, I went down to Ecuador to meet with the owners for a few days.

Certain views and ideology were shared with me, with the desire they be integrated as a part of the company’s mission, going forward.

Some of these were contrary to what I felt I could support or even be associated with, to which I expressed my concerns. I knew as I left that my time with YL would be short, and it was.

Not long after my departure from YL, a few former YL associates, including myself, Dr. David Hill, Emily Wright and Greg Cook, came together and discussed the need the world has for a better way of sharing essential oil healing.

I will only say that we all felt strongly that it was the right thing to do, and were compelled to move forward.

While we had many YL distributor friends who likely would have joined dōTERRA in our early days, we were very careful to not approach them.

Nor were we then, or are we now, in possession of any distributor lists. That would be illegal.

I am proud to say that almost all of our leaders who built dōTERRA in the first two years were new to essential oils, and did what they did because they discovered the power of the oils and that they work in an almost miraculous manner.

dōTERRA’s mission is not to compete with or try to destroy other essential oil companies. Our vision is to become a very large multinational company, partnering with hospitals and research universities all over the world.

Nonetheless, with both doTerra and Young Living operating in the essential oils niche, and Stirling joined by several other Young Living executives, employees and distributors in the launching of doTerra, a lawsuit was likely inevitable.

Young Living filed suit in mid 2013, accusing doTerra of

stealing Young Living’s trade secrets, violating their duties to Young Living and improperly recruiting Young Living’s employees and distributors to leave Young Living.

The case was dismissed in October 2014;

Fourth District Court Judge Christine Johnson has dismissed all of the claims made by Young Living Essential Oils LC of Lehi against competitor doTERRA Inc. of Orem.

“It’s unfortunate that so much time, energy, and money on both sides have been spent on something that never should have been taking up time in our courts,” doTERRA President and CEO David Stirling said in a statement.

Arthur Berger, attorney for Young Living, said the judge ruled that the company waited too long to sue and not on the allegations of wrongdoing by doTERRA founders who remain as defendants.

Johnson also ruled that Young Living had failed to show that it had suffered anything other than negligible damages from the solicitation of distributors who did not end up joining doTERRA.

Young Living provided only “pure conjecture” on possible damages, and its own expert had admitted it may be impossible to identity them, the judge wrote in a 47-page ruling.

“Given the extraordinary effort (in both time and money) which has been invested into these proceedings thus far, the notion that this particular claim should proceed forward so that Young Living can request one dollar in damages is troubling,” Johnson wrote.

But the judge also said it was undisputed that some of those who went over to doTERRA had retained Young Living property, including computers and documents that the company says contained confidential information.

An investigation by an outside law firm also revealed that some Young Living distributors had been contacted by doTERRA officials using information only available from its rival, Johnson wrote.

“Other claims are still moving forward, including breach of contract claims against certain founders of doTERRA that they improperly solicited Young Living’s distributors and used Young Living’s confidential information in violation of their contractual agreements,” Berger said in an email.

I wasn’t able to find an update on the status of those claims, so I assume what’s left of the case is ongoing.

A month prior to Young Living’s lawsuit being mostly dismissed, doTerra received a warning letter from the FDA.

Based on our review, FDA has determined that several of your dōTERRA Essential Oil products including, but not limited to, “Melaleuca,” “Oregano,” “On Guard,” “Clove,” “Eucalyptus,” “Frankincense,” “Geranium,” “Lavender,” “Lemongrass,” “Myrrh,” “Peppermint,” “Rosemary,” “Wintergreen,” “Clary Sage,” and “Vetiver” are promoted for conditions that cause them to be drugs under section 201(g)(1)(B) of the Federal Food, Drug, and Cosmetic Act (the Act) [21 U.S.C. § 321(g)(1)(B)].

Conditions listed in doTerra advertising included ebola, cancer, asthma, bronchitis, Alzheimer’s Disease, diabetes and arthritis among others.

In response to the FDA’s letter, McKay Brown, senior director of corporate marketing for doTERRA, told the Herald Extra:

Because doTERRA’s products are natural products and are not registered with the FDA as drugs, we are restricted on the health claims that can be made for marketing purposes.

We recognize essential oils have profound health benefits, but do not claim our products cure or treat diseases including the Ebola virus or any other disease.

We are pleased to share that in our normal course of compliance auditing practices, we were already working to correct distributors marketing materials referenced in the FDA letter.

Since receiving the letter, we have contacted all the distributors who own the sites in question. They have all corrected or are working to correct their marketing materials to ensure they are compliant with FDA and company regulations.

To date there has been no further action taken by the FDA.

Read on for a full review of the doTerra MLM business opportunity.

The doTerra Product Line

doTerra operate in the essential oils MLM niche with a range of oil products marking their flagship offering.

The dōTERRA collection of single essential oils represents the finest aromatic extracts available in the world today.

Each oil provides the living essence of its source, gently distilled from plants that are nurtured and carefully harvested throughout the world.

Each oil is subjected to strict standards of purity and potency as well as a battery of thorough testing.

A beautiful palate of botanical energies, they can be used individually or blended for personalized essential oil therapies.

There are currently forty-two essential oils listed on the doTerra website, ranging in price from $13.33 (Lemongrass and Lemon respectively) to $153 (Melissa).

And if you’re curious as to what Melissa is (I know I was), according to doTerra:

Our most expensive and rare oil, Melissa essential oil has a sweet, fresh, citrus-like fragrance and is steam distilled from the fresh flowering tops, leaves and stems of the Melissa officinalis plant.

With a wide range of therapeutic properties, Melissa can be used for calming the nerves, addressing stomach discomfort, mood support, and seasonal bugs.

Because the Melissa plant has an oil yield of less than 1/10 of 1%, it is one of the most commonly adulterated oils. For aromatic, topical, or internal use.

Other products marketed by doTerra include:

• essential oil proprietary blends – $12.67 for “TerraShield” to $92.67 for “Immortelle”
• Breathe respiratory drops (“proprietary blend includes: Lemon, Peppermint, Eucalyptus, Thyme, Melissa, and Cardamom”) – $19.33
• Breathe vapor stick – $11.33
• OnGuard essential oils (foam wash, throat drops and whitening toothpaste) – $4.66 (toothpaste samples) to $44.67 (foaming handwash twin pack)
• Deep Blue essential oils (roll on, deep rub and Polyphenol Complex to “ease achy joints and sore muscles”) – $6.67 for deep rub samples to $85.33 for the roll on

Essential oil accessories are also available.

The doTerra Compensation Plan

The doTerra compensation plan pays affiliates to sell doTerra’s essential oils to retail customers.

Residual commissions are paid out through a seven-level deep unilevel team, with additional performance-based bonuses also available.

doTerra Affiliate Ranks

There are twelve affiliate ranks in the doTerra compensation plan.

Along with their respective qualification criteria, they are as follows:

• Wellness Advocate – sign up as a doTerra affiliate and generate at least 50 PV a month
• Manager – generate at least 100 PV a month and have a total downline volume of at least 500 GV a month
• Director – maintain at least 100 PV a month and have a total downline volume of at least 1000 GV a month
• Executive – maintain at least 100 PV a month and have a total downline volume of at least 2000 GV a month
• Elite – maintain at least 100 PV a month and have a total downline volume of at least 3000 GV a month
• Premier – maintain at least 100 PV a month, maintain at least two Executive ranked personally recruited affiliates and a total downline volume of at least 5000 GV a month
• Silver – maintain at least 100 PV a month and at least three Elite ranked personally recruited affiliates
• Gold – maintain at least 100 PV a month and at least three Premier ranked personally recruited affiliates
• Platinum – maintain at least 100 PV a month and at least three Silver ranked personally recruited affiliates
• Diamond – maintain at least 100 PV a month and at least four Silver ranked personally recruited affiliates
• Blue Diamond – maintain at least 100 PV a month and at least five Gold ranked personally recruited affiliates
• Presidential Diamond – maintain at least 100 PV a month and at least six Platinum ranked personally recruited affiliates

Note that PV stands for “Personal Volume”, which is sales volume generated by a doTerra affiliate’s own purchases and retail orders.

GV stands for “Group Volume” and is PV generated by an affiliate’s entire downline.

Retail Commissions

All doTerra retail orders attract a 25% commission.

Preferred customer orders (retail customers who sign up for a monthly autoship order in exchange for a discount), generate a 9% commission.

Residual Commisions

Residual commissions in doTerra are paid out via a unilevel compensation structure.

A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):

If any level 1 affiliates go on to recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.

If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.

doTerra cap payable unilevel levels at seven, with commissions paid out as a percentage of generated sales volume as follows:

• Wellness Advocate – 2% on level 1
• Manager – 2% on level 1 and 3% on level 2
• Director – 2% on level 1, 3% on level 2 and 5% on level 3
• Executive – 2% on level 1, 3% on level 2 and 5% on levels 3 and 4
• Elite – % on level 1, 3% on level 2, 5% on levels 3 and 4 and 6% on level 5
• Premier – 2% on level 1, 3% on level 2, 5% on levels 3 and 4 and 6% on levels 5 and 6
• Silver or higher – 2% on level 1, 3% on level 2, 5% on levels 3 and 4, 6% on levels 5 and 6 and 7% on level 7

Fast Start Bonus

The Fast Start Bonus is paid out on any product purchases made by a newly recruited affiliate, within their first 60 days with the company.

The Fast Start Bonus is paid up through three levels of recruitment, with the recruiting affiliate earning a 20% commission, the affiliate who recruited them (2nd level upline) 10% and their upline (3rd level upline) 5%.

Note that in order to qualify for the Fast Start Bonus, a standing 100 PV a month autoship order must be maintained.

Power of 3 Team Bonus

The Power of 3 Team Bonus requires a doTerra affiliate to have a monthly autoship order, with a bonus paid out when they recruit others who do the same.

In order to qualify for the Power of 3 Team Bonus, a standing 100 PV a month autoship order must be maintained.

Three affiliates must then be personally recruited, each who also sign up for a 100 PV a month autoship order. A total downline volume of at least 600 PV a month must also be generated.

For each month the above qualification criteria is met, a doTerra affiliate is paid a $50 bonus commission.

This monthly bonus commission is increased to $250 if three recruited affiliates in turn qualify for their own $50 bonus commission.

If three personally recruited affiliates then qualify for a $250 Power of 3 Team Bonus, the payout is again increased to $1500 a month.

This $1500 monthly bonus is paid out as long as the structure of three generations of affiliate autoship recruitment is maintained.

Infinity Performance Pool

The Infinite Performance Pool is made up of 3% of doTerra’s company-wide sales volume.

The pool is split into two smaller pools, with 2% going into a Leadership Performance Pool and 1% into a Diamond Performance Pool.

doTerra affiliates ranked between Silver and Platinum can earn shares in the Leadership Performance Pool, and affiliates ranked Diamond or higher in the Diamond Performance Pool.

Based on company-wide sales volume, shares in the Infinity Performance Pool are paid out monthly.

Acquisition of shares in both pools is as follows:

• Silver rank = 1 share in the Leadership Performance Pool, plus 1 additional share per personally recruited affiliate who qualifies at the Elite rank
• Gold rank = 5 shares in the Leadership Performance Pool, plus 1 additional share per personally recruited affiliate who qualifies at the Elite rank
• Platinum = 10 shares in the Leadership Performance Pool, plus 1 additional share per personally recruited affiliate who qualifies at the Elite rank
• Diamond = 1 share in the Diamond Performance Pool, plus 1 additional share per personally recruited affiliate who qualifies at the Premier rank
• Blue Diamond = 2 shares in the Diamond Performance Pool, plus 1 additional share per personally recruited affiliate who qualifies at the Premier rank
• Presidential Diamond = 3 shares in the Diamond Performance Pool, plus 1 additional share per personally recruited affiliate who qualifies at the Premier rank

Diamond Pools

There are three Diamond Pools in doTerra’s compensation plan, each made up of 1% of doTerra’s company-wide sales volume.

As with the Infinity Performance Pools, shares in the Diamond Pools are paid out monthly as follows:

• Diamond Pool (must be Diamond rank) – 3 shares in the Diamond Pool plus 1 additional share per personally recruited affiliate who qualifies at the Premier rank
• Blue Diamond Pool (must be Blue Diamond rank) – 3 shares in the Blue Diamond Pool plus 1 additional share per personally recruited affiliate who qualifies at the Premier rank
• Presidential Diamond Pool (must be Presidential Diamond rank) – 3 shares in the Presidential Diamond Pool plus 1 additional share per personally recruited affiliate who qualifies at the Silver rank

Joining doTerra

Affiliate membership with doTerra is tied to the purchase of one of the following affiliate kits:

• Family Physician Kit and Beadlets – $150
• Cleanse & Restore Kit – $195
• Athlete+ Kit – $195
• Emotional Aromatherapy Diffused Kit – $195
• Home Essentials Kit – $275
• Natural Solutions Kit – $550
• Every Oil Kit – $1775
• Diamond Kit – $2500

The primary difference between these kits are the products included with them (pay more, get more).

Conclusion

To suggest that doTerra’s launching was not inspired by David Stirling’s time at Young Living is disingenuous.

Quite obviously doTerra was launched from the ashes of Stirling’s career at Young Living, with him and the other founders working with what they knew.

That said, some seven years later and I think doTerra has well and truly stepped out from under Young Living’s shadow. Lawsuits pending of course.

On the compensation plan side of things doTerra does have strong elements of autoship chain-recruitment, but there are efforts to balance this out.

Retail is possible and somewhat attractive, as a sub 10% commission on monthly $100 or so affiliate autoship orders isn’t much.

That however doesn’t mean that compliance wise doTerra’s focus on affiliate recruitment isn’t an issue.

Perhaps the clearest example of this focus is the Power of 3 Team Bonus.

You sign up as doTerra affiliate on a minimum 100 PV a month autoship order ($100?).

You’re then paid to recruit three others who do the same, with your bonus increasing five-fold if they recruit three autoship affiliates.

If those three recruit three autoship affiliates each, the Power of 3 Team Bonus increases to six-fold to $1500 a month. And stays there provided everyone pays their monthly autoship fee.

No retail takes place in this model, with affiliates able to earn a minimum $18,000 annually on autoship recruitment alone.

This is a problem for obvious reasons, as I suspect the lure of $18,000 through the Power of 3 Team Bonus massively detracts from the retailing of doTerra products.

To that end doTerra themselves market affiliate autoship as being a ‘convenient way to meet monthly PV and bonus qualification requirements‘.

In MLM, an affiliate’s sales performance, not how much they spend on products each month should qualify them for commissions and bonuses.

Otherwise you’re encouraging autoship chain-recruiment, which is unfortunately how I suspect the bulk of doTerra’s sales volume is generated.

Again, retail is possible but unlikely given there are no retail volume qualifiers anywhere in the doTerra compensation plan.

Further evidence of doTerra’s affiliate recruitment focus is evident in the Fast Start Bonus:

The Fast Start bonus is designed to provide you, as an enrolling sponsor, immediate rewards for enrolling new IPC’s into your business organization.

Autoship is of course required to qualify for the bonus, which as above directly incentivizes the recruitment of new doTerra affiliates (who go on autoship to qualify for the same bonus).

As a prospective doTerra affiliate, I’d be asking your potential upline for their monthly retail customer revenue and that of their affiliate autoship revenue.

I’d be willing to bet overall the ratio would weigh heavily towards affiliate autoship revenue, but the specific numbers are up to you to ask for and obtain.

Personally I think doTerra’s focus on autoship recruitment is a shame, as there’s obviously a readily identifiable market for essential oils. They are widely available and no doubt a market for premium essential oils exists.

Tapping into that could be a challenge due to aforementioned widespread availability – which brings us back to giving up and focusing on affiliate autoship recruitment, which doTerra more wholly encourage in their compensation plan.

Approach with caution.