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Is Scentsy a Pyramid Scheme

Is Scentsy A Pyramid Scheme? What You Should Know About Scentsy Investment

Scentsy is a multi-level marketing platform where consultants can join the program and earn commission from selling Scentsy products. There have been many controversies surrounding the legitimacy of the program, but those benefitting from it believe it is 100% legit. All products promoted by Scentsy are sold via third-party members or consultants, and these consultants also earn commission from sales generated by other consultants they recruited under them. It is, therefore, possible to make from Scentsy without doing anything as long as those in your downlines are selling.

So, Is Scentsy a Pyramid Scheme?

No, Scentsy is not a pyramid scheme but a multi-level marketing program where consultants or members earn commission from sales of Scentsy products.

History Of Scentsy

Scentsy was founded in 2003 by Kieran Egan and her sister-in-law Colette Gunnel in Salt Lake, state of Utah, USA. The group eventually incorporated the business at a small event in 2004. The ladies finally met Orville Thompson, an entrepreneur who had managed several small companies unsuccessfully over decades. A few months later, the partners started making and selling wick-less candles.

Thompson eventually purchased Scentsy from Kieran and Colette, and in July 2004, Scentsy was re-launched as a multi-level marketing company. He also moved the headquarters of the company to the state of Idaho in the same month.

All marketing materials for Scentsy were created by Layton, a Utah-based graphics design company. In 2009, Scentsy expanded its operations into neighboring Canada, and in 2011, the company had expanded its operations to the United Kingdom and Germany.

As of 2012, the company had registered more than 170,000 active consultants or private partners in countries where it operated. By the end of 2015, the number of consultants on Scentsy dropped below 96,000.

In 2017, Scentsy recorded a turnover of about $450 million, putting it in the top 45 direct-selling companies in the country. In 2011, Scentsy was listed on Forbes Magazine’s America’s 100 most promising companies in the country. In 2018, the company became one of the best mid-size employers in the country.

What is Scentsy’s Business Model?

Under Scentsy’s multi-level marketing system, products are sold only by the company’s consultants, those signups under the multi-level marketing plan.

Consultants also get a portion of the sales generated by other consultants they refer to the company. According to the company’s CEO, they had chosen the direct sales of their wickless candles in 2011 because such products were experimental.

The Criticism

Scentsy has been criticized heavily for its recruitment of particular people, including spouses of American military personnel, whose spouses are constantly moving. In contrast, they had difficulties in finding permanent employment. These products were quite popular on military bases at the beginning.

According to the company’s 2015 income disclosure statement, about 65% of Scentsy’s consultants received an average income of less than $464 a year before expenses. Critics believe that deducting monthly expenses from this meager income will leave consultants with little.

In addition to this, only the top 200 consultants, representing about 0.2%, earn approximately $113,363.98 yearly. The highest-paid consultant earned almost a million dollars a year.

According to experts, a consultant on Scentsy will have to sell about 638 company products to earn the same as a minimum wage worker. This is a huge task for anyone trying to make a living through multi-level marketing. It was also estimated that more than 99% of Scentsy’s consultants could not earn total time income.

What You Should Know About Scentsy

The following are essential things you should know about Scentsy;

  • Products Offered
  • The products offered and sold through consultants are;
  • Scented candles or wax
  • Diffusers and oil
  • Pods and fans diffusers
  • Laundry products
  • Personal care products, and
  • Pet care products.

How To Join And Make Money As Scentsy Consultant

There are two ways of making money on Scentsy: selling products and recruiting people under you. If you opt to sell products as a consultant, Scentsy will sell them to you at discounted prices, and you can resell them at retail prices for profit. Recruiting new people under you is straightforward, to it may take time to convince them to join the program.

Just before you join the company as a consultant, They will direct you to watch a video from its official website. This video will explain how the registration works and how the company operates.

For a smoother application process, you will have to find a sponsor. You can find a sponsor by providing your local area zip code on the website. The website will give you the contact details of consultants already in your local area.

Alternatively, you can pick a starter pack from the company directly if you want to join through a sponsor. With few clicks, you can complete Scentsy’s registration process under few clicks.

Things You May Like About Scentsy

If you are a natural lover of fragrances, you will indeed like selling Scentsy products. If you are allergic or sensitive to certain smells, you will probably dislike working as a consultant for Scentsy.

One thing you may like about Scentsy is that it brings out your sales ability. The ability to convince people to buy these products can be your driving force towards becoming successful.

Since its inception, more than 65% of consultants made substantial income monthly, though it is still not enough compared to those on minimum wage.

You will also like the fact that Scentsy consultancy work will not affect your regular day job; hence you have the flexibility to manage your time well.

From all indications, Scentsy is not a pyramid scheme but multi-level marketing that requires different input to make money.

Things You May Dislike About Scentsy

The recruitment process seems to be the major challenge of this multi-level marketing system. Without recruiting other consultants under you, making significant money with the system cannot be easy. The top 200 consultants representing 0.2% can make lots of money from the system because of their long downlines.

You may think that relying on sales only can fetch you good money on Scentsy until you realize how difficult it gets. Experts suggest that if you want to be financially successful on Scentsy, forget about sales and marketing and recruit more in your downlines.

Another challenge here is that many people are not really interested in their homes smelling unnatural all the time; they would rather go and buy cologne or perfume at the mall instead of scented candles.

The Scentsy Compensation Plan

The Scentsy compensation plan, just like any other multi-level marketing system, comprises a ranking of consultants. There are eight ranks in total, and each consultant moves from the bottom to the top depending on their progress. There are eight consultant levels you will reach in Scentsy, these are;

  • Essential Consultant
  • Certified Consultant
  • Lead consultant
  • Star consultant
  • Superstar consultant
  • Director
  • Star director
  • Superstar director

1. Personal Retail Volume (PRV)

The primary income of a consultant begins with the personal retail volume, and you become certified for life once you sell the first 1000 products. Only the essential and certified consultants are required to sell a minimum of 1000 units; in the beginning, the rest are expected to sell up to 500 units.

2. Group Wholesale Volume (GVW)

To become a lead consultant, you or other consultants on your downline should have sold another 1000 units of products. To become star consultants, you or your downline consultants must have sold 2,500 products minimum. Minimum sales to become a superstar consultant is 6000, and 10,000 for the director, 30,000 units minimum for the star director, and 80,000 for the superstar director.

Responsibilities also include; the team wholesale volume (TWV), Active front line sales responsibilities, and First-generation directors responsibilities.

The Compensation Packages

The following are the total amount of money you can make from being a consultant with Scentsy;

1. Commission from PRV

Essential consultants get 20% income from sales generated from PRV; other categories of consultants will get 25% commission from PRV sales.

2. Commission from Personal Wholesale Volume

Essential and certified consultants don’t earn a bonus from this, but lead consultants earn a 2% bonus, while star consultants get 4%. The superstar consultants earn 7%, while the rest on the top rank earn 9%.

3. The Frontline Essential or Certified Consultant TWV Bonus

Bonuses here are the same as the ones for Personal Wholesale Volume. Essential and certified consultants don’t qualify for this.

4. Frontline Lead Consultant TWV Bonus

The lowest three consultants don’t qualify for this bonus; however, the star consultants and superstar consultants will get 2% and 5%, respectively, while the director, star director, and superstar directors will earn 7% each.

5. The Frontline Star Consultant or TWV Bonus

The first four lower-ranked consultants don’t qualify for this bonus, but the superstar consultant earns up to 3% while the director, star director, and superstar directors get a 5% bonus each.

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