Melaleuca is based out of Idaho and operate in the nutritional supplements, cleaning supplies, and personal-care MLM niches.

Melaleuca was founded all the way back in 1985 by Frank VanderSloot, who today at 70 remains CEO of the company.

According to Forbes, VanderSloot (right) has an estimated net worth of $4.2 billion.

(VanderSloot) is a major landowner — with an estimated 117,500 acres across Idaho, Utah and Montana — and he runs a leading purebred angus cattle operation.

He is also an active political donor, giving millions to Republicans. He was a national finance co-chair for Mitt Romney’s two presidential bids.

Prior to Melaleuca VanderSloot’s relatives ran the MLM company Oil of Melaleuca.

In September 1985, amid FDA investigations into exaggerated medical claims and inventory loading, Melaleuca, VanderSloot’s relatives offered him the company.

By the end of the year Oil of Melaleuca had been shut down and rebooted as Melaleuca.

Since then Melaleuca has mostly had a clear-run with regulators, which is impressive considering the age of the company.

Echoing the 1985 Oil of Melaleuca situation, in 1991 Michigan issued Melaleuca a cease and desist over alleged violations of the state’s anti pyramid scheme laws.

 In 1992, Melaleuca signed a consent decree with the states of Michigan and Idaho agreeing to “not engage in the marketing and promotion of an illegal pyramid.”

The Idaho Attorney General took issue with the marketing practices of several of Melaleuca’s affiliates, as opposed to the company’s business model itself.

In 1997 Melaleuca received a warning letter for “false and misleading claims” regarding two of their supplements.

The matter was resolved and since then nothing further has come of it.

By my count it’s been over two decades since Melaleuca’s last regulatory run-in.

That’s not to say the company is in the clear though. Investigations by Truth in Advertising have documented ongoing instances of Melaleuca affiliates making illegal health claims and false and unsubstantiated income claims.

Read on for a full review of the Melaleuca MLM opportunity.

Melaleuca Products

Melaleuca describes itself as ‘the largest online wellness shopping club‘.

There might be something to that claim, with Melaleuca counting an impressive 400+ products in its range.

Every product has been developed and manufactured to stand out from the competition.

Each must be superior in a very clear and relevant way to the products you might otherwise use.

That means they are researched, refined, and scrutinized before they ever go to market.

Specific product categories featured on Melaleuca’s website include nutrition, medicine cabinet, beauty, household, bath & body and essential oils.

Unfortunately Melaleuca’s online catalog and shopping cart isn’t as useful as it could be.

For starters I had trouble finding it off the main Melaleuca website. Eventually I found a link the store buried in the website footer (second link down in the far right column).

Once you’re at the store, you’ll notice some of Melaleuca’s “best sellers” appear to provide retail pricing.

Look close though and you’ll see it’s actually quoted savings.

For whatever reason, Melaleuca fails to provide potential customers with retail pricing on their website.

Not sure why this is, seeing as the company encourages me to add any product I’m viewing to my cart.

Why as a potential retail customer would I commit to buying something when I have no idea what it costs?

The rest of the product information provided is what you’d expect and informative. It’s just let down by the complete lack of provided pricing.

I can only assume this is by design on Melaleuca’s behalf, as the company has certainly been around long enough to know better.

The Melaleuca Compensation Plan

Melaleuca’s compensation plan is primarily geared toward enrollment and retention of customers.

Note that Melaleuca classifies both retail customers and affiliates as customers.

Melaleuca’s expansive compensation plan rewards Melaleuca affiliates with direct and residual commissions. Several performance-based bonuses are also offered.

Melaleuca Affiliate Ranks

There are a whopping forty-nine affiliate ranks within Melaleuca’s compensation plan.

Along with their respective qualification criteria (where provided), they are as follows:

  • Product Advocate – enroll and maintain at least one active customer
  • Product Advocate II – enroll and maintain at least two active customers
  • Product Advocate III – enroll and maintain at least four active customers
  • Director – enroll and maintain eight active customers
  • Director 2 – enroll and maintain ten active customers and 1000 monthly GV
  • Director 3 – enroll and maintain eleven active customers, recruit and maintain at least one Director and generate and maintain at least 2500 monthly GV and 1000 PEG
  • Director 4 – enroll and maintain twelve active customers, recruit and maintain at least two Directors and generate and maintain at least 5000 monthly GV and 2500 PEG
  • Director 5 – enroll and maintain thirteen active customers, maintain at least two Directors and generate and maintain at least 7500 monthly GV and 5000 PEG
  • Director 6 – enroll and maintain fourteen active customers, recruit and maintain at least three Directors and generate and maintain at least 10,000 monthly GV and 7500 PEG
  • Director 7 – enroll and maintain fifteen active customers, maintain at least three Directors and generate and maintain at least 12,500 monthly GV and 10,000 PEG
  • Director 8 – enroll and maintain sixteen active customers, recruit and maintain at least four Directors and generate and maintain at least 15,000 monthly GV and 12,500 PEG
  • Director 9 – enroll and maintain eighteen active customers, maintain at least four Directors and generate and maintain at least 17,500 monthly GV and 15,000 PEG
  • Senior Director – enroll and maintain twenty active customers, recruit and maintain at least five Directors and generate and maintain at least 20,000 monthly GV and 17,500 PEG
  • Senior Director 2 – maintain twenty active customers, maintain at least five Directors and generate and maintain at least 22,500 monthly GV and 20,000 PEG
  • Senior Director 3 – maintain twenty active customers, recruit and maintain at least six Directors and generate and maintain at least 25,000 monthly GV and 22,500 PEG
  • Senior Director 4 – maintain twenty active customers, maintain at least six Directors and generate and maintain at least 27,500 monthly GV and 25,000 PEG
  • Senior Director 5 – maintain twenty active customers, recruit and maintain at least seven Directors and generate and maintain at least 30,000 monthly GV and 27,500 PEG
  • Senior Director 6 – maintain twenty active customers, maintain at least seven Directors and generate and maintain at least 32,500 monthly GV and 30,000 PEG
  • Senior Director 7 – maintain twenty active customers, recruit and maintain at least eight Directors and generate and maintain at least 35,000 monthly GV and 32,500 PEG
  • Senior Director 8 – maintain twenty active customers, maintain at least eight Directors and generate and maintain at least 40,000 monthly GV and 35,000 PEG
  • Senior Director 9 – maintain twenty active customers, recruit and maintain at least nine Directors and generate and maintain at least 45,000 monthly GV and 40,000 PEG
  • Executive Director – maintain twenty active customers, recruit and maintain at least ten Directors and generate and maintain at least 50,000 monthly GV and PEG
  • Executive Director 2 – maintain twenty active customers, maintain at least ten Directors and generate and maintain at least 60,000 monthly GV and PEG
  • Executive Director 3 – maintain twenty active customers, maintain at least ten Directors, recruit and maintain at least one Senior Director and generate and maintain at least 70,000 monthly GV and PEG
  • Executive Director 4 – maintain twenty active customers, maintain at least ten Directors and one Senior Director and generate and maintain at least 80,000 monthly GV and PEG
  • Executive Director 5- maintain twenty active customers, maintain at least ten Directors, recruit and maintain at least two Senior Directors and generate and maintain at least 90,000 monthly GV and PEG
  • Executive Director 6 – maintain twenty active customers, maintain at least ten Directors and two Senior Directors and generate and maintain at least 100,000 monthly GV and PEG
  • Executive Director 7 – maintain twenty active customers, maintain at least ten Directors, recruit and maintain at least three Senior Directors and generate and maintain at least 110,000 monthly GV and PEG
  • Executive Director 8 – maintain twenty active customers, maintain at least ten Directors and three Senior Directors and generate and maintain at least 120,000 monthly GV and PEG
  • Executive Director 9 – maintain twenty active customers, maintain at least ten Directors and three Senior Directors and generate and maintain at least 130,000 monthly GV and PEG
  • National Director – maintain twenty active customers, maintain at least ten Directors, recruit and maintain at least four Senior Directors and generate and maintain at least 140,000 monthly GV and PEG
  • National Director 2 – maintain twenty active customers, maintain at least ten Directors and four Senior Directors, recruit and maintain at least one Executive Director and generate and maintain at least 150,000 monthly GV and PEG
  • National Director 3 – maintain twenty active customers, maintain at least ten Directors, four Senior Directors and one Executive Director and generate and maintain at least 162,500 monthly GV and PEG
  • National Director 4 – maintain twenty active customers, maintain at least ten Directors and three Senior Directors, recruit and maintain at least two Executive Directors and generate and maintain at least 175,000 monthly GV and PEG
  • National Director 5 – maintain twenty active customers, maintain at least ten Directors, three Senior Directors and two Executive Directors and generate and maintain at least 187,500 monthly GV and PEG
  • National Director 6 – maintain twenty active customers, maintain at least ten Directors and two Senior Directors, recruit and maintain at least three Executive Directors and generate and maintain at least 200,000 monthly GV and PEG
  • National Director 7 – maintain twenty active customers, maintain at least ten Directors, two Senior Directors and three Executive Directors and generate and maintain at least 212,500 monthly GV and PEG
  • National Director 8 – maintain twenty active customers, maintain at least ten Directors and one Senior Director, recruit and maintain at least four Executive Directors and generate and maintain at least 225,000 monthly GV and PEG
  • National Director 9 – maintain twenty active customers, maintain at least ten Directors, one Senior Director and four Executive Directors and generate and maintain at least 237,500 monthly GV and PEG
  • Corporate Director – maintain twenty active customers, maintain at least ten Directors, recruit and maintain at least five Executive Directors and maintain at least 250,000 monthly GV and PEG
  • Corporate Director 2 – maintain twenty active customers, maintain at least ten Directors and five Executive Directors, generate 12 Leadership Credits and maintain at least 300,000 monthly GV and PEG
  • Corporate Director 3 – maintain twenty active customers, maintain at least ten Directors and five Executive Directors, generate 15 Leadership Credits and maintain at least 350,000 monthly GV and PEG
  • Corporate Director 4 – maintain twenty active customers, maintain at least ten Directors and five Executive Directors, generate 18 Leadership Credits and maintain at least 400,000 monthly GV and PEG
  • Corporate Director 5 – maintain twenty active customers, maintain at least ten Directors and five Executive Directors, generate 21 Leadership Credits and maintain at least 450,000 monthly GV and PEG
  • Corporate Director 6 – maintain twenty active customers, maintain at least ten Directors and five Executive Directors, generate 24 Leadership Credits and maintain at least 525,000 monthly GV and PEG
  • Corporate Director 7 – maintain twenty active customers, maintain at least ten Directors and five Executive Directors, generate 27 Leadership Credits and maintain at least 600,000 monthly GV and PEG
  • Corporate Director 8 – maintain twenty active customers, maintain at least ten Directors and five Executive Directors, generate 30 Leadership Credits and maintain at least 700,000 monthly GV and PEG
  • Corporate Director 9 – maintain twenty active customers, maintain at least ten Directors and five Executive Directors, generate 33 Leadership Credits and maintain at least 800,000 monthly GV and PEG
  • Presidential Director – maintain twenty active customers, maintain at least ten Directors and five Executive Directors, generate 35 Leadership Credits and maintain at least 1,000,000 monthly GV and PEG

PV stands for “Personal Volume” and is sales volume generated by sales to retail customers and an affiliate’s own orders.

Each Melaleuca product has a corresponding PV value. PV is used to calculate commissions and bonuses, as opposed to the dollar amount paid for products.

PEG stands for “Personal Enrollee Group” and is PV generated by personally recruited affiliates only.

An active customer is a retail customer or recruited affiliate who has ordered 29 PV or more worth of product that month.

One additional qualification criteria I’ve left off due to uncertainty are Leadership Points.

Leadership Points are awarded when Melaleuca affiliates help their downline source retail customers or recruited affiliates through presentations.

For each retail customer or recruited affiliate acquired through a product presentation, Melaleuca awards

  • 3 points to the affiliate who enrolled the retail customer or recruited affiliate and
  • 2 points to the affiliate who did the presentation

An additional point is awarded to the presenting affiliate if the customer purchases a Value or Home Conversion Pack.

Leadership Points are cited in the Melaleuca compensation plan as monthly averages as opposed to hard monthly requirements.

How many months the Leadership Point average is calculated over is not provided.

Finally, while Leadership Credits are cited requirements for Corporate Director 2 and higher, no explanation for what Leadership Credits actually are is provided in Melaleuca’s compensation plan.

Direct Customer Commissions

Melaleuca affiliates receive a 50% commission on any orders placed by retail customers and recruited affiliates within a month of the customer’s first order date.

From the second month onward, retail customer and recruited affiliate orders are paid based on how many active customers a Melaleuca affiliate has:

  • 1 to 7 active customers = 7% retail commission rate
  • 8 to 19 active customers = 14% retail commission rate
  • 20 or more active customers = 20% retail commission rate

Again, Melaleuca classify both retail customers and recruited affiliates as “customers”.

Residual Retail Commissions

Melaleuca pays residual retail commissions 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 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.

Melaleuca caps payable residual retail commissions at seven unilevel team levels.

How many levels residual retail commissions are earned on is determined by rank:

  • Product Advocates receive 7% on two levels
  • Product Advocate IIs receive 7% on three levels
  • Product Advocate IIIs receive 7% on four levels
  • Directors and higher receive 7% on seven levels

Rank also determines how much residual retail commissions a Melaleuca affiliate can earn each month:

  • Director – $500
  • Director 2 – $375
  • Director 3 – 500
  • Director 4 – $750
  • Director 5 – $1000
  • Director 6 – $1250
  • Director 7 – $1500
  • Director 8 – $1750
  • Director 9 – $2000
  • Senior Director – $3000
  • Senior Director 2 – $3500
  • Senior Director 3 – $4000
  • Senior Director 4 – $4500
  • Senior Director 5 – $5000
  • Senior Director 6 – $5500
  • Senior Director 7 – $6000
  • Senior Director 8 – $6500
  • Senior Director 9 – $7000
  • Executive Director and higher – no limit

Leadership Bonus

The Leadership Bonus pays out $5 per Leadership Point acquired after the first ten points each month (i.e. from the eleventh Leadership Point onward).

Leadership Growth Bonus

The Leadership Growth Bonus is tied to the generation of at least a 30 Leadership Point average over a rolling three-month average for Senior Director and higher ranked affiliates.

If a 30 Leadership Point average over three months is maintained, the following Leadership Growth Bonuses are paid out:

  • Senior Director to Senior Director 9 ranked affiliates receive $500
  • Executive Director to Executive Director 9 ranked affiliates receive $2000
  • Executive Director to Executive Director 9 ranked for at least five years receive $3000
  • National Director and higher ranked affiliates receive $4000

Rank Achievement Bonus

Melaleuca split the Rank Achievement Bonus into a straight Advancement Bonus or Pacesetter Bonus.

Advancement Bonus

The Advancement Bonus option pays a fixed bonus through each of Melaleuca’s forty-nine affiliate ranks.

  • Product Advocate to Product Advocate III – not disclosed
  • Director – $100
  • Director 2 – $200
  • Director 3 to 5 – $500
  • Director 6 – $600
  • Director 7 – $700
  • Director 8 – $800
  • Director 9 – $1000
  • Senior Director – $2000
  • Senior Director 2 to Corporate Director 9 – 10% of generated PEG
  • Presidential Director – $1,000,000

Note that an additional $100,000 is paid out at the Corporate Director rank.

Pacesetter Bonus

The Pacesetter Bonus pays double the Advancement Bonus, however rank advancement is tied to a specific time-frame.

  • Director (within 2 months of signing up) – $200
  • Director 2 (within 3 months of signing up) – $400
  • Director 3 (within 4 months of signing up) – $1000
  • Director 4 (within 5 months of signing up) – $1000
  • Director 5 (within 6 months of signing up) – $1000
  • Director 6 (within 7 months of signing up) – $1200
  • Director 7 (within 8 months of signing up) – $1400
  • Director 8 (within 9 months of signing up) – $1600
  • Director 9 (within 10 months of signing up) – $2000
  • Senior Director (within 12 months of signing up) – $4000
  • Senior Director 2 (within 1 month of achieving Senior Director) – 20% of generated PEG
  • Senior Director 3 (within 2 months of achieving Senior Director) – 20% of generated PEG
  • Senior Director 4 (within 3 months of achieving Senior Director) – 20% of generated PEG
  • Senior Director 5 (within 4 months of achieving Senior Director) – 20% of generated PEG
  • Senior Director 6 (within 5 months of achieving Senior Director) – 20% of generated PEG
  • Senior Director 7 (within 6 months of achieving Senior Director) – 20% of generated PEG
  • Senior Director 8 (within 8 months of achieving Senior Director) – 20% of generated PEG
  • Senior Director 9 (within 10 months of achieving Senior Director) – 20% of generated PEG

Notes on Rank Advancement Bonuses

Although not explicitly clarified in the Melaleuca compensation plan, I believe the Pacesetter Bonus is offered as an alternative.

After the Senior Director 9 rank only the Advancement Bonus is available.

PEG time-frames aren’t provided, however I believe they correspond to the month a new rank is being qualified for.

For both the Advancement Bonus and Pacesetter Bonus, customer retention rates over a five month period are taken into consideration.

  • less than 40% customer retention over the past five months = 50% bonus rate
  • 40% to 44.9% customer retention rate over the past five months = 70% bonus rate
  • 45% to 49.9% customer retention rate over the past five months = 80% bonus rate
  • 50% or higher customer retention rate over the past five months = 100% bonus rate

Retention is calculated based on customer reorders from month to month.

An affiliate has a 12 month grace-period from each rank qualified for in which to earn any lost rank achievement bonus.

Lost bonus amounts can be claimed by

  1. increasing customer retention to 50% or more in the preceding 12 months a rank is qualified for; and
  2. having one more active customer over when the rank was first qualified for.

Finally, Director 3 and higher ranks require qualification criteria to be met two months prior to bonus payment.

Mentoring Bonus

The Mentoring Bonus is paid to affiliates who’s personally recruited downline qualify at the Director to Executive Director ranks.

Qualification for the Mentoring Bonus is based on generated Leadership Points (see “Melaleuca Affiliate Ranks” for explanation):

  • Director and Director 2 ranked affiliates require a 1 Leadership Point rolling three-month average
  • Director 3 to Director 5 ranked affiliates require a 5 Leadership Point rolling three-month average
  • Director 6 and higher ranked affiliates require a 10 Leadership Point rolling three-month average

For the Director to Senior Director ranks the Mentoring Bonus paid out is equal to that of the Advancement Bonus.

Senior Director 2 and higher Mentoring Bonuses paid out are as follows:

  • Senior Director 2 – $2200
  • Senior Director 3 – $2500
  • Senior Director 4 – $2700
  • Senior Director 5 – $3000
  • Senior Director 6 – $3200
  • Senior Director 7 – $3500
  • Senior Director 8 – $4000
  • Senior Director 9 – $4500
  • Executive Director – $5000

Core Mentoring Bonus

The Core Mentoring Bonus allows Director and higher ranked affiliates to earn a Mentoring Bonus on affiliates they didn’t recruit.

  • Director through Director 9 qualifies for the Core Mentoring Bonus down three levels of recruitment
  • Senior Director through Senior Director 9 qualifies for the Core Mentoring Bonus down four levels of recruitment
  • Executive Director through Executive Director 9 qualifies for the Core Mentoring Bonus down five levels of recruitment
  • National Director through Presidential Director qualifies for the Core Mentoring Bonus down six levels of recruitment

In addition to the above qualification criteria, the following personal recruitment criteria also applies:

  • personally recruited affiliate qualifies at Director 2 through Senior Director (excludes Director 3) = Core Mentoring Bonus qualification for two months
  • personally recruited Director 3 = Core Mentoring Bonus qualification for five months

The Core Mentoring Bonus begins when downline affiliates achieve the Director rank as follows:

  • downline Director rank advancement = $50 Core Mentoring Bonus
  • downline Director 2 rank advancement = $100 Core Mentoring Bonus
  • downline Director 3 to Director 5 rank advancement = $250 Core Mentoring Bonus
  • downline Director 6 rank advancement = $300 Core Mentoring Bonus
  • downline Director 7 rank advancement = $350 Core Mentoring Bonus
  • downline Director 8 rank advancement = $400 Core Mentoring Bonus
  • downline Director 9 rank advancement = $500 Core Mentoring Bonus
  • downline Senior Director rank advancement = $1000 Core Mentoring Bonus
  • downline Senior Director 2 rank advancement = $1100 Core Mentoring Bonus
  • downline Senior Director 3 rank advancement = $1250 Core Mentoring Bonus
  • downline Senior Director 4 rank advancement = $1350 Core Mentoring Bonus
  • downline Senior Director 5 rank advancement = $1500 Core Mentoring Bonus
  • downline Senior Director 6 rank advancement = $1600 Core Mentoring Bonus
  • downline Senior Director 7 rank advancement = $1750 Core Mentoring Bonus
  • downline Senior Director 8 rank advancement = $2000 Core Mentoring Bonus
  • downline Senior Director 9 rank advancement = $2250 Core Mentoring Bonus
  • downline Executive Director rank advancement = $2500 Core Mentoring Bonus

If a Director 3 or higher ranked affiliate recruits and maintains a second Director 3 through Senior Director personally recruited affiliate, the above Core Mentoring Bonus amounts are doubled for two months.

Car Bonus

Senior Director and higher ranked Melaleuca affiliates qualify for a monthly Car Bonus:

  • Senior Director through Senior Director 9 – $500
  • Executive Director through Executive Director 9 – $1000
  • National Director through National Director 9 – $1200
  • Corporate Director through Presidential Director – $1500

Note that from Executive Director and higher the monthly Car Bonus can be put towards two new cars.

20/20 Bonus

If a Melaleuca affiliate enrolls 20 active customers over their first five months, they qualify for a one-time $500 20/20 Bonus.

Joining Melaleuca

Melaleuca affiliate membership is $29.

Melaleuca’s Independent Marketing Executive Application states there is an additional $30 fee if the affiliate is “also enrolling as a customer”.

The FAQ on the Melaleuca website states that affiliate membership is only $19 if applied for along with preferred customer membership.

Note that the above dollar amounts are annual recurring.

Conclusion

Testament to the length of this review, Melaleuca’s compensation plan is about where you’d expect a thirty-four year old MLM company’s to be.

The plan is long but, to their credit, Melaleuca manage to avoid the confusion pitfall older MLM companies fall into.

That is a compensation plan that has been tacked onto so many times that it resembles an unintelligible mess.

It did take me a while to get through Melaleuca’s compensation plan, but at no point did I feel overwhelmed or confused.

Refreshingly, Melaleuca’s business model is rooted in the acquisition and retention of retail customers, although this can also tilt toward affiliate recruitment too.

The single most pressing issue in Melaleuca’s compensation plan is the lack of differentiation between retail customers and recruited affiliates.

As far as MLM regulation goes there’s an important difference between retail customers and recruited affiliates, and this needs to be better reflected in Melaleuca’s compensation plan.

I couldn’t find anything more recent, but as of 2013 Melaleuca claimed that 62.2 percent of sales were attributable to actual retail customers.

Note that’s sales revenue, which is what we want to see as opposed to raw retail customer affiliate numbers.

Another 23 percent of sales volume is attributed to former distributors, but it isn’t stated whether these distributors can still qualify for commissions.

In any event, with 62.2% of sales revenue being derived from actual retail customers Melaleuca safely avoids pyramid scheme territory.

Again I don’t know what Melaleuca’s current retail sales volume figure is but if it was at 62.2% after thirty-two years of business, I don’t imagine it’s changed too much since.

Melaleuca’s Annual Income Statistics document for 2017 does state 79% of

those who buy Melaleuca products each month are strictly customers.

They’re not interested in pursuing the Melaleuca financial opportunity. They just love Melaleuca products.

But doesn’t categorically state whether any of the quoted 79% are affiliates who haven’t earned commissions.

What you as a prospective Melaleuca affiliate want to do is ask how many customers your potential upline has. Then ask how many of them have signed Melaleuca Independent Marketing Executive applications.

Melaleuca Independent Marketing Executives (affiliates) are customers but under no circumstances are they retail customers. As soon as they have access to the compensation plan they’re business opportunity participants.

This is an important distinction to make. If a Melaleuca affiliate is meeting their required customers for rank qualification primarily on recruited affiliates, as far as MLM regulation goes they’re running their business as a product-based pyramid scheme.

Company-wide Melaleuca might be in the clear with 50%+ retail customer sales revenue, but last thing you want to do is get caught in a Melaleuca downline that is focused on recruitment over retail.

A simple fix for this would be to define a specific number of required retail customers for each rank. I.e. if 20 customers are required, at least twelve of them have to be actual retail customers.

12/20 is 60%, so that ballpark figure should fit within Melaleuca’s stated 62.2% of our sales revenue is from retail customers claim. To be honest I don’t know why Melaleuca hasn’t implemented this already.

On the product side of things Melaleuca operates as a shopping alternative for mostly consumables.

This ties in to the emphasis of repeat orders, which likely make up the majority of month to month sales volume.

Note that most of these customers are probably preferred customers, who pay $19 a year in exchange for a purchase commitment and 30% to 50% discount.

Unfortunately there’s no provided retail pricing on Melaleuca’s website, which means there’s no direct indication of competitive retail pricing.

Melaleuca’s retail customer size does suggest the company is retail competitive, but it’d still be nice to be able to compare.

With Melaleuca’s product-range appearing to exclusive, there doesn’t appear to be any legitimate reason to not provide retail pricing.

With respect to Melaleuca’s compensation plan, it’s been stretched out I imagine due to the length of time some affiliates have been with the company.

I initially balked at forty-nine Melaleuca affiliate ranks, but having gone through them they’re not unreasonably spaced out.

At least one bonus is tied to every rank, so progression throughout the ranks is kept meaningful as far as compensation goes (no “you get a pin!” unnecessary ranks).

One aspect of Melaleuca’s compensation plan that might be challenging is the whole Leadership Points thing.

Leadership Points are acquired through hosting Melaleuca presentations that convert into retail customers.

Average Leadership Points production is tied to rank, so it seems giving presentations is a solid component of building a Melaleuca business.

If you’re not into giving presentations, Melaleuca probably isn’t the company for you.

One thing I’m not entirely sure on is whether Leadership Points awarded any time a retail customer is enrolled (i.e. outside of a presentation).

The Melaleuca compensation plan specifically mentions presentations but I don’t see how the company would police that if it is restricted.

Echoing back to retail customer acquisition and retention, it’s worth noting that retail customers have to place an order to count toward commission qualification. Ditto recruited affiliates.

For the first three months “backup orders” don’t generate commissions. The customer has to manually order products (can be a monthly order).

After three months of ordering a retail customer likely has a sense of what they’re going to continue ordering, after which autoship can kick in. But again, that’s assuming the affiliate is acquiring retail customers and not just recruiting affiliates.

From a business perspective, presentations are a great opportunity for interaction between Melaleuca affiliates and their retail customers – which is key to ongoing retention.

And with retail customer retention an affiliate rank requirement, that’s something all Melaleuca affiliates are going to have to focus on.

At the Senior Director rank for example, twenty customers are required – with the rank maxing out at $36,000 a year in commissions.

Pretty reasonable if you ask me, assuming “customers” is a healthy mix of both retail customers and recruited affiliates.

How much a retail customer or recruited affiliate orders comes into play too, as sales volume over 150 PV isn’t counted:

Commissions are paid on the first 150 PV that a customer purchases each month.

No commissions are paid on amounts exceeding 150 PV.

I can’t say for sure but this appears to be enforced to tackle potential inventory loading.

I believe Melaleuca might actually be one of the first MLM companies I’ve seen actively discourage excessive purchase pressure in the field.

All in all Melaleuca as an MLM opportunity caters to those wanting to earn a bit on a few customers. The compensation plan is also expansive enough to offer depth to anyone wanting to go at it full-time or anywhere in between.

The big question mark is retail pricing but I did see periodic catalogs mentioned in Melaleuca’s marketing material.

It might be worth asking the affiliate you’re in contact with for a catalog so you can compare pricing against what you’re already buying.

They might not be 1:1 comparisons but should be close enough for you to get an idea of what you’ll be paying should you switch.

Oh and obviously be wary of any unsubstantiated health claims made. For the most part Melaleuca’s products appear to be marketed honestly, but Truth in Advertising’s findings shouldn’t be taken lightly.

Good luck!