The distinguishing difference between Melaleuca is that with Melaleuca there are not multiple levels of distribution. As all state and federal legal definitions make clear, MLM consists of the buying and selling of products by distributors. Melaleuca Marketing Executives do not resell any product. In fact, Melaleuca’s policies strictly forbid it.
In Melaleuca’s model, a Marketing Executive simply refers customers to Melaleuca, helps them set up shopping accounts and then trains others to do so. Melaleuca’s Marketing Executive don’t sell products like MLM distributors. Commissions are not based on sale to other distributors, but on purchases made by actual customers.
These differences are significant, which is the Idaho State Tax Commission has stated, “Melaleuca, Inc. does not fall within the legal definition for a Multi Level Marketer.”
With Melaleuca there is only a single transaction between Melaleuca and the end consumer. Melaleuca has no distributors since Melaleuca handles the entire transaction, thus no multiple levels.
Don’t Confuse Melaleuca With MLM
Traditional MLM companies often use a strategy of “setting people up in business” by having distributors purchase significant amounts of inventory with the hope of getting rich quickly, only to learn the difficulty of getting rid of the inventory. In many cases, that inventory ends up in their garage and becomes a drain on a family’s finances. Distributors, consultants, or “independent business owners” purchase steeply priced products such as specially filtered water, skin creams, exotic berry juices, or body enhancing magnets and then they attempt to sell those items to their friends and neighbors. If they are unable to move through that inventory, they are left “holding the bag.”
Whereas MLMs often incentivize people to buy an inventory of products, Melaleuca encourages customer to purchase only the products they need and intent to use in their home on a monthly basis. At Melaleuca, there is no incentive to build a product inventory and, therefore, no financial risk.
MLMs often have a very difficult time determining how much of their products are ultimately sold to end consumers.
Contrast that with Melaleuca’s strategy of providing natural products that consumers use on a daily basis. Of those who enroll with Melaleuca, 88 percent have never referred another customer or have not done so for several years. These customers continue to purchase products every month because they genuinely want them in their home, and not because they want to qualify for a bonus. The company consistently maintains a 96 percent month to month reorder rate, meaning that 96 percent of all customers who ordered last month will order again next month. These customers do not expect a financial reward. They just love the products.
Another distinguishing feature of MLMs is that they usually charge several times what their product is worth in the marketplace (e.g. $40 for a bottle of juice that would sell for less than $5 at a grocery store). Melaleuca’s products are competitively priced against retail, grocery, and drugstore brands on a per use basis, even though they contain higher quality ingredients than those brands. Our pricing structure allows Melaleuca to go head to head with the major product manufacturers and aggressively compete against the most popular brands in the world. That is simply not an MLM practice.
In MLMs, those who “get in on the ground floor” win, while those who get in last, as the company is collapsing, lose. Melaleuca’s compensation plan has rewarded those who have referred customers for the last 30 years and it has become more rewarding over that same period. Today, new enrollees can look forward to building lasting businesses that will compensate them for decades to come. Melaleuca discloses annual income statistics for prospective Marketing Executives to review so they can have a realistic expectation about potential income for their work.
When one compares the history and current state of most MLM companies, it’s not hard to see why Melaleuca created a different kind of business model. The experience you’ll have as a Melaleuca customer will be nothing like the experience you would have in an MLM company. You can purchase Melaleuca products directly from the company knowing that they’re substantially better than the products you’ll find on the grocery store shelves, which is where most of our competitors’ products are sold. You can build a business knowing that you’ll be fairly compensated for the customers you refer and this company will be there for you in the long run. You can trust that Melaleuca is and always will be structured for the best interests of its customers and Marketing Executives … today, tomorrow and for generations to come.