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These days mlm has become synonymous with the words pyramid scheme. So you might be asking yourself, is Scentsy a pyramid scheme?
Well, if you’re looking for the skinny on Scentsy, you’ve come to the right place. And before I get into it I’ll just say it’s not a pyramid scheme. Let me tell you why.
What is Scentsy
Scentsy is a direct-selling multi level marketing company based in Idaho. The company sells products in the home and fragrance industries. It was founded in 2004 by Heidi and Orville Thompson and is very popular because of their Scentsy warmers, wax bars and other scent-based products.
There are more than 100,000 consultants working in the Scentsy network and the company generates more than $450 million in revenue per year. In 2018, Scentsy made the Forbes list at #35 for America’s best mid-size employers.
Is Scentsy a Pyramid Scheme?
I’ll share a lot of reasons below on why Scentsy is a solid company. Just the fact that it is an mlm company alone is enough for the anti-mlm crowd to label it a scam. Are there pyramid schemes that pretend to be an mlm? Yes.
A pyramid scheme is a business model that recruits members through promising to pay or perform a service for enrolling others into the scheme and there is no real product or service. The major purpose is to separate you from your money. Scentsy has a real product line.
The company’s mission is to help people achieve their dreams through financial freedom. Scentsy’s BBB rating wasn’t available. But the reviews were mostly positive.
As far as revenue goes, in 2017 the company posted revenues of $468 million and in 2016 – $456 million, which put Scentsy in the 42nd spot on the Global 100 list.
How to Become a Scentsy Consultant
As an mlm company, Scentsy offers the opportunity to sell their products and also earn commissions promoting the business opportunity. To get started, you first need to sign up.
In order to sign up you’ll need to find the person who referred you. If you don’t have a sponsor you can visit the Scentsy website to join. They will get you a sponsor.
Sign up includes purchasing a starter kit, which costs $99. The kit consists of all the basic fragrances and tools such as:
- Scent testers
- Business cards
- Order forms
- Scent bars
After sign up, they give you a free website for up to three months and then you will have to pay a monthly maintenance fee of $10. The website allows you to keep track of all of your business information in one spot. And gives you access to various products.
Scentsy Compensation Plan
The Scentsy’s compensation plan offers you an opportunity to earn 20-25% commisions on your personal retail volume and is paid out monthly. If you make more than 2000 PRV points in a month, you get rewarded a 5% bonus.
Scentsy Consultant Levels
Scentsy has 8 ranks in total. Each rank has its own requirements and commission eligibility. To move from a lower level to a higher rank, you have to recruit more people.
The escential consultant is the lowest level and pays 20% PRV commission on 1000 PVR. This is the level you start at when you sign up.
The 1000 PVR is cumulative and it doesn’t matter how long it takes you to reach 1000 PVR points whether it takes months or years.
From Escential consultant, you advance to a certified consultant position, which earns you 25% of PRV. You graduate to the next level once you hit 500 PRV points in sales per month.
The other upper levels are lead consultant, star, superstar, Director, Star Director and SuperStar Director.
Aside from retail sales, as I mentioned Scentsy allows you to recruit people to join the program. This gives you a downline (team) under you. When people you sponsor make purchases, you get paid commissions on those purchases.
Scentsy’s wholesale commissions start from the Lead consultant level. If anyone you’ve sponsored reaches the lead consultant level, they qualify for a wholesale commission of 2%.
When this happens you will be earning a differential commission of up to 4% on their wholesale volume. From the Director level upwards, you earn a wholesale commission of 9%.
As a Director, you earn a Director’s Bonus. With this bonus is a commission is paid to you on wholesale volumes of those in your downline.
You can earn bonuses on up to 3 director generations in your downline. Director bonuses start from 3% for the first-generation, 4% for the second-generation and 5% for third-generation directors.
Let’s recap the compensation plan. First, the maximum amount you can earn from Scentsy is 30% commission on all of your retail sales. For all consultants that you recruit there’s a 9% wholesale commission. And when you make Director there’s a 5% Director Bonus for achieving the Director level.
Scentsy sells fragrance-based products and the company claims that they are all-natural and scent-filled. These include essential oils, wax, warmers, and laundry care products.
Their fragrance families include bakery products, floral, bakery, fruity, woods, spicy and fresh.
Their wickless candles are great alternatives to traditional candles. Rather than burning, you simply warm them to release fragrance into the air.
The Fragrance Industry
One of the big advantages of working with Scentsy is that they are in a growing industry. The global fragrance market is huge and growing. And products like deodorants and perfumes are everyday essential products that people use regularly that play a big role in personal grooming.
I’m sharing a graph below on the estimated size and growth of the global fragrance market from 2012 to 2024. By 2024, the global fragrance market is estimated to be worth about $92 billion U.S. dollars.
North America was the largest market for the fragrance with a market share of 33.9% in 2018. It is projected to reach USD $30.27 billion by 2025.
The US (North America) has a big chunk of market share in the global fragrance market. But as you can see from the graph below, this is a global opportunity to make money.
Here are some of the major players/manufacturers in this space that compete with Scentsy:
- L’Oréal Group
- The Procter & Gamble Company
- CHANEL International
- LVMH Group
- Revlon Inc.
- Firmenich International SA
- Estee Lauder Companies Inc.
- Coty Inc.
- Giorgio Armani
One big question most people ask when joining a business like this is how do I sell? With Scentsy you buy the products from the company and then sell them to customers through online and home-based parties, trade shows, fairs, and even fundraiser events.
To buy the products, you have to contact a consultant and for someone who doesn’t have one they can find through the website. The site has a quick search option that helps you locate a consultant nearest you.
Most consultants rely on events where they can present products in front of people and share their personal experiences. If you are good at selling and persuading people in person, then this is one way to grow your business.
Here’s a business opportunity presentation for Scentsy.
Pros and Cons of Scentsy
- They have good customer support. As a consultant, you get free training once you sign up and you continue ongoing training as you use the system.
- The company is a Direct Selling Association member. It means they’ve met the strict guidelines needed to join DSA.
- There is a 30-day money back guarantee. If you’re unhappy with their products, you can get a refund. This shows that they stand behind their products.
- Their products are safe to use on different occasions. They’re also available in various scents and can be customized to suit different occasions.
- There have been claims that not all their products are natural. For some this might be an issue.
- It requires you make an investment to get started because you have to buy the products they sell.
- The failure rate in multi-level marketing makes it hard to get people you sponsor to stick. This impacts your earning potential. You’ll need an advanced skillset to succeed.
If you like scents or have once tried one of the Scentsy products, then you might see the value in the Scentsy program. You can supplement your income with this money making opportunity and tap into the huge global fragrance industry. With a solid product line and a solid company this might be a good fit.
As you can see their compensation plan can be lucrative when you move up the ranks. Making money with an mlm company isn’t a piece of cake. You have to grind and you need a solid product. Scentsy seems to have the product part handled. The rest is up to you.