Is Scentsy a MLM? Or perhaps you are looking for answers to the question, “Is Scentsy a pyramid scheme?
Lets find out, shall we?
Scentsy was founded in 2003 as a wickless candle company by Kara Egan and Collette Gunnell. A year after its foundation, it was bought by Orville Thompson who turned into a Multi-Level Marketing company that involves throwing parties that involve selling and recruitment.
Scentsy is an MLM. It is built around the community paradigm. They take pride in saying that ‘At Scentsy we're a family’ and many such phrases.
Scentsy over recent years has supported charitable causes. Actually on first glance, you may easily be attracted into joining Scentsy. But a fact still stands, Scentsy is built on an MLM model.
What is a Pyramid Scheme?
Before we make any inferences, let's first understand what a pyramid scheme is. A pyramid scheme is a type of fraud whereby a pioneer starts the business, recruits people into the business as independent associates of the business, who further recruit more people individually, and the chain continues.
The word “pyramid” stems from the resemblance of the business to a pyramid. When we imagine placing people in arbitrary positions according to the time when they joined the business, this plot will form the shape of a pyramid.
A point to note here is that in pyramid scheme, the recruits do not join as employees but associate with the business independently.
Joining a pyramid scheme requires you to pay an initial joining fee. You are then required to convince other people to join, and for each person you convince and successfully joins, the business gives you a commission.
The more referrals you make to the business, the more you earn. Pyramid schemes are illegal in most countries.
In recent times, the original Pyramid Scheme model has been diversified to morph into the Multi-Level Marketing model. Multi-Level Marketing, unlike pyramid schemes involves a product.
The recruits that join the business gain the status of “Independent sales persons”. They work by marketing the business product, while earning commission from the sales they make.
What brings in the pyramid scheme aspect in this model is the fact that these salespersons have to recruit others and by this recruitment earn commission.
Same as in a pyramid scheme, joining a Multi-level Marketing company, too requires paying a joining fee.
Anyone can join to work and recruit for these businesses regardless of whether or not they are academically qualified for the positions; for example to join as a sales representative, you don't need to have a degree in a sales-related course.
All you need to fulfil is the minimum age requirement and above all, have the joining fee with you. They you're set to take the plunge into the Bermuda Triangle, or rather pyramid scheme.
You can join Scentsy as a consultant. By this, you are not a legal employee but you are working independently from the business.
One of the core characteristics of MLM pyramid schemes is that you partner with it independently.
This is a liability cover for the company in that it cannot be held accountable in case an independent sales representative does something that attracts legal action. MLMs are the pyramid schemes of the 21st Century.
They prey on the hopes of vulnerable people. By according the inaccurate status of ‘Independent business owner' to recruits, they are able to attract more sign-ups.
Because, who doesn't want to be independent? Who doesn't want to be called a Consultant? Making it in life the easier way, just by joining with a few dollars? I'm in. Kidding.
You can heck out this one minute video to learn more about what the Scentsy MLM is all about.
Scentsy Meanings Decoded.
From Scentsy’s website: Being a Scentsy Consultant means being part of a bigger community — one with plenty of friendship, fun and support. Your Sponsor can help you set up your business and understands Scentsy products, training and business tools. They are ready to encourage and inspire you along the way — and show you all the possibilities of a new Scentsy business.
The ‘larger community’ here is the ever-expanding network of recruited sales representatives typical of pyramid schemes.
The ‘Sponsor' referred to here is not the person who has sponsored you in monetary terms as the literal meaning implies, but it's actually your direct up line. The person who has convinced you to join the business.
They will earn a commission for referring you to Scentsy, that's why on signing up you are required to fill in the details of your ‘sponsor' (obviously for follow-up and compensation)
You can check out the Scentsy MLM compensation plan below.
To get a better understanding of the Scentsy compensation plan check out the video below by Kimberly.
Join the Party!
In the scentsy setting, the Host connects their Scentsy Consultant with friends and family so they can shop Scentsy products.
Below is a screenshot of some of the scentsy products.
Sometimes the Host also provides a party location (often at home), but the only real requirement to be a Host is to provide the guest list!
All you need to do is invite your friends to join this ‘party'. From this gathering, the Scentsy consultant purposes to get recruits and also sell products.
The main purpose of this party is recruitment, disguised under product sales, although product sales are also important.
As a host, you are rewarded a credits that you can use to get free products or you can use them to get a host-exclusive starter kit to enrol as a Scentsy consultant.
Another alternative way to become a Scentsy consultant is to purchase a starter kit at 99 dollars. You can ask yourself, “Why would someone need to pay in order to work for the business?”
The emphasis on providing a guest list reveals the pyramid scheme aspect of Scentsy. Pyramid schemes put emphasis on recruitment. It may or may not be explicit, but that's how they work.
Every MLM has its way of reaching out to get more recruits. Scentsy uses parties for this. It is such a devastating feeling to believe you're going out for an all-night girls’ party, only to realise it's a Scentsy MLM outreach as you listen to a guest speaker Scentsy Consultant in the middle of the party.
Even on Facebook?
The scope of MLMs does not end around physical encounters. Independent Consultants create Facebook groups to which they add their downlines, who further add more downlines. In these groups, members message people in each other's friend lists in search for prospective recruits and buyers.
These groups have names in formats like ‘Scentsy with Clara', and ‘Scentsy Independent Consultants.’
Climb the Hierarchy, But Keep Hopeful Regardless.
Just like in other pyramid schemes, Scentsy Independent Consultancy has ranks or levels. You start out as an Essential Consultant, then you become a Certified Consultant, then Lead Consultant, then Star Consultant, then SuperStar Consultant, then Director, then Star Director and ultimately, SuperStar Director.
To advance from one level to the next requires a particular amount of time and hitting certain sales and recruitment targets.
Hierarchy is a typical feature of MLMs. It serves to keep you hopeful as you work hard to hit those targets.
Not to mention that those targets are really hard. The amount of energy you waste to earn something small in an MLM would earn you a fortune in a more legit venture. These ranks are an MLM tactic to offer false prestige to make you feel like you're making it in life and to keep you devoted to the business in hopes of achieving that rank.
The Collapse of the Pyramid
A pyramid scheme cannot be sustained indefinitely. Why is this? Let's reason it this way. If the way to gain in the business requires a recruit to recruit more people in a world with a finite population, assuming all people in the world join, where will the last recruit get recruits? You guessed right.
They lose their money and since the money from newer recruits is funnelled to the upper phases of the pyramid, when the pyramid stops getting recruits, the business is no longer sustainable. The pioneer may run out of the company and the multitude of recruits obviously loses their money.
Pyramid schemes, or their variants, MLM companies make it overly impossible for members to earn money through the business.
They set high targets whereby if you fail to deliver, you blame it on yourself. “Maybe I'm not hardworking enough.
How come other people are making millions and buying cars out of this business?”
There's a number of words and phrases you won't miss out when you have a pyramid scheme encounter.
Words and phrases like ‘a life changing business', ‘become your own boss', ‘make a thousand dollars a month while sitting on your couch', ‘I used to be like you..(Insert touching story)’, ‘quit your job and gain financial freedom', ‘it's not even a pyramid (draws triangle around the business structure), ‘it can't be a pyramid scheme because pyramid schemes are illegal. But we're here in legal operation.’
Some recruiters are outright direct and will tell you things like ‘how would you like to get in at the top of the pyramid?’
When you get a text from a high school friend you've not heard from for years inviting you for a passive income opportunity, just advise them to take it up.