Red Flag 5 - More than 5 levels in the payout plan

Dr Taylor says 'Excessive levels in a downline is another sign participants are expected to sell primarily to their downline, rather than to the general public. This makes it an exploitative money transfer scheme, or product-based pyramid scheme'.

The doTERRA Uni-level bonus is paid to 7 levels (for those who qualify). The Infinity Bonus and Diamond Pool are paid... to infinity. This system is not sustainable! The only way for the people at the top to make money, is if people below them in the system are spending it.

How Good are doTERRA Products

We have not purchased or consumed an doTERRA products, so we looked at some online doTERRA product reviews. One by the supplement police found that doTERRA oils were pure and high quality. It's good to know that the products are high quality.

Another review we found by essential oil haven, confirmed that doTERRA is producing quality oils. They did go on to mention that doTERRA products are no different from the high quality pure essential oils made by their competitors. The main difference is that doTERRA is more expensive than most competitors.

This raises an interesting question about the people who 'join to get doTERRA at a discount'. If all they wanted was pure essential oils at a better price, then they would not buy from doTERRA. Even at the wholesale price, you can get the same quality essential oils at a lower price from competitors.

We see this as a common problem with network marketing. As we saw with doTERRA, at least 64% of the wholesale price is needed to fund the compensation plan. This means that only 36% is for doTERRA corporate profit and to pay all production costs. The prices need to be high because the MLM business model is more expensive than traditional marketing

What Are the Benefits of Essential Oils

Essential oils get their name because they are an extract of essence. They are so concentrated that even a few drops is enough to create a noticeable fragrance. According to thrive primal, essential oils can be used for a multitude of benefits including:

ADD

Depression and Anxiety

Pain relief

Parkinson's Disease

Brain Regeneration

Spirituality

On further reading we noticed that this website was run by a doTERRA advocate who was trying to sell doTERRA products. We decided to do some more research. We also looked at Live Science, who acknowledged that essential oils are used in some alternate forms of medicine. They then explain that there is limited scientific evidence that they provide any real benefit.

We also looked at science based medicine, who wrote an exclusive review on doTERRA products. They also note that the evidence that essential oils work is 'sparse to nonexistent'. They also note that most of the beneficial claims are made by members of the MLM seeking to recruit new members and sell product.

While we couldn’t find any evidence that there are any medical benefits to essential oils, several doTerra Advocates have made false claims about the benefits of their oils. Because of the way advocates are promoting the oils, there is an FDA issued warning to doTerra

Below is an extract from the FDA warning:

’Your consultants promote your above mentioned dōTERRA Essential Oil products for conditions including, but not limited to, viral infections (including ebola), bacterial infections, cancer, brain injury, autism, endometriosis, Grave’s Disease, Alzheimer’s Disease, tumor reduction, ADD/ADHD, and other conditions that are not amenable to self-diagnosis and treatment by individuals who are not medical practitioners’

We also looked at this warning about doTerra and Young Living from a qualified aromatherapist. She explains that ingesting essential oils, or applying them undiluted to the skin, can be very harmful. She is very worried about the ‘advice’ she is seeing given. She urges everyone to never ingest essential oils, and if you are applying them to the skin, they should be diluted all the way down to no more than 3%.

What are Others Saying about doTerra

We looked at a review by qualified naturopath Katherine Maslin. She confirmed that ‘therapeutic grade’ is just something invented by doTerra. She also explains why essential oils should never be ingested. They are simply unsafe

Over on Influenster, the reviews are mostly positive. Apart from a few complaints about the price, people seem happy with their oils. Then again most of these reviews seem to be written by existing doTerra Advocates. They have a vested interest in promoting the doTerra name.

The people at Lazy man have the opinion that doTerra is a scam. They agree that the products are overpriced. They also note that the ‘health benefits’, are unproven. In short they think doTerra is a pyramid scheme.

MLM best company gave doTerra a very good rating. It’s not surprising given that most people who vote on their site are from inside the MLM industry. Even with the rating of 8.1/10, they still raised some interesting points. One is that the doTerra therapeutic grade claims are meaningless. This review confirms that this ‘certification’, is something which doTerra themselves invented and has no value outside their own company.

Another issue we noticed is that in 2014 doTerra had problems with the FDA. It turns out that the claims about the health benefits of doTerra oils, aren’t proven. Therefore advocates who make such claims are in breach of FDA rules. They were forced to take corrective action including this doTerra FDA compliance video.

Is doTERRA a Pyramid Scam

Even though MLMs closely resemble pyramid schemes, they are not illegal. The reason dates back to the 1979 case of Amway vs the FTC. After 4 years in court Amway was found to be offering a business opportunity, rather than a pyramid scam. The technicalities came down to wording in their paperwork. One example requires consultants to make retail sales.

The Amway ruling effectively opened the doors for all other MLMs to operate within the law. However we should remember that being legal doesn’t make it ethical. If you knew that less than 1% of people had a chance of generating a real income, would you feel comfortable recruiting new consultants?

We also looked at the 2018 FTC Business Guidance for MLMS. The FTC explains that several activities used by MLMs to promote their business opportunities, may be misleading and unlawful.

Another issue, is that even though these rules may be in the paperwork, they are difficult to enforce. For example, several people in MLMs have said that they have cupboards full of product. This is because of the minimum monthly purchases they need to make to remain active in the system. Even though stockpiling is against the rules, there is no way for the company to monitor it.

Being legal does not make MLM ethical. All companies are in business with the goal of selling goods and services for a profit. Network marketing companies are able to charge a higher price because they create a customer base of loyal members who believe that by consuming these products and recruiting others to do so, they will become financially free. Keep in mind that making such promises is in breach of the FTC guidance.

Should You Join doTERRA

The only reason you should join doTERRA, is if you are already spending over $100 per month on their products and want to recommend them to others. Even if this is the case, you might want to look at what other brands are charging for the same essential oils. You might find that you can save money by switching brands.

If your only motivation for joining doTERRA is to make extra money, then we think you should consider other options before proceeding. Our calculations found that less than 0.5% of all doTERRA advocates are generating enough commission to replace a full time income

As with most MLM companies, it is possible to make money with doTERRA, but it is very unlikely. If you have the skills to make money with doTERRA, then we believe you'd make more money applying those skills to start your own business.

As always we welcome your feedback in the comments section below. We'd love to hear what you think about doTERRA, especially if you can share your personal experiences with the company

For more posts like this, look at our list of mlm reviews.