Is Shaklee a pyramid scam? Many MLM companies are often accused of being pyramid systems, but it that tag really warranted when it comes to this health and wellness business?
Let’s take a closer look and find out…
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Company Name: Shaklee
Owner: Roger Barnett
Price To Join: $49.95/Month Minimum
My Rating: 5.5/10
~ Shaklee Reviews ~
What Is Shaklee?
Shaklee is a global corporation but has its headquarters based in Pleasanton, California. If you dig into the history of the origins of this company, it dates way back to 1915, when Forrest C. Shaklee created “Shaklee’s Vitalized Minerals”. So technically the origin of the products of this company are over 100 years old.
The Shaklee Corporation was founded in 1956 and the company utilised the multi level marketing method to promote and sell its products from that point on. From 1960 the focus was on “organic” and providing products that are “environmentally friendly”. So Forrest Shaklee was way ahead of his time on that score.
The company has changed ownership multiple times over the years and these days its owned by American billionaire Roger Barnett.
Throughout its long history the company, its products and distributors have been embroiled in controversy, but yet the business has managed to weather everything thrown at it and it still thrives today.
While their official website makes a big deal about green energy and goes on and on about it, the real focus is on health and nutrition supplements, made from natural ingredients and produced in a way that is kind to the environment.If you want to make the most of a MLM opportunity, then having your own website will really help with sales and recruiting. It's way easier than you might think to make one. Just check out the free training at Wealthy Affiliate.
Shaklee Product Range
These days, with such an emphasis on health and fitness, so many companies in the MLM world have decided to jump on board the health and wellness bandwagon. It’s a very saturated niche. While Shaklee is yet another MLM involved in this niche, at least they were doing it a long time before all the others and are one of the true originators of health and wellness combined with the MLM method of distribution.
Like all MLM companies the prices of the products are exceptionally expensive. There’s no real choice when you adopt this sort of distribution setup because of the way the compensation is paid out to the members. It really jacks the prices up.
There are quite a few products, so I won’t list them all here. I’ll just give an overview of the categories available:
- Nutrition – Vitamins, energy shakes and fitness packs
- Healthy Solutions – Supplements to fight aging, reduce blood pressure and sharpen the mind
- Weight Loss – Diet shakes, energy shakes and variety packs
- Beauty – A variety of creams and anti-aging lotions
- Healthy Home – Water filters and organic home cleaning products
Those are the main categories available in the Shaklee range and there are a variety of products available within each category.
As mentioned, the prices are sky high. As an example, a tube of BB cream costs more than $41. The MindWorks brain supplement will set you back $58.75 for only 30 pills.
The Shaklee Business Opportunity
The real thrust of this company and the way it moves its products is by recruiting a vast team of distributors to essentially do all the work. This saves Shaklee huge money on advertising and maintaining a payroll. Distributors don’t get paid wages and actually have to pay monthly for the privilege of working for Shaklee.
It’s for reasons like this that I really don’t like the way MLM is set up. All the advantages go to the company and all the disadvantages to the distributors, although MLM businesses make out like they’re doing you a huge favour by allowing you to become part of their team. The reality is, you are doing them a monumental favour by paying to distribute their products and building their mostly-free workforce for them.
Shaklee don’t even have to recruit. The unpaid workers do it for them.
Sure, you get paid as in earning commissions, but you are doing loads of work for the company, mostly for their benefit and not yours.
When you pay your membership fee and purchase a starter kit, you get the best products Shaklee has to offer, some business materials, as well as your own website to use to make retail sales and recruit other members. Your best chance of making money is to focus on recruitment and not retail sales.
The Compensation Plan
I always find MLM compensation plans rather complex and confusing, so I won’t get right into it here. What I’ll do instead is provide a link to the official Shaklee compensation plan. They actually refer to it as the “Dream Plan”.
There are a number of ways you can make money with the Shaklee Dream Plan and they include:
- Retail sales
- Gold Bonus
- Power Bonus
- Personal Group Bonuses
- Fast Track Bonus
- Car Bonus
- Leadership Bonus
- Infinity Bonus
You also earn more the higher your rank is in the Shaklee business structure. There are a total of 11 ranks in this MLM structure and they are:
- Senior Director
- Senior Coordinator
- Executive Coordinator
- Senior Executive Coordinator
- Key Coordinator
- Senior Key Coordinator
- Master Coordinator
- Senior Master Coordinator
- Presidential Master Coordinator
A Pyramid Scheme Defined
All MLM businesses operate on some sort of pyramid structure with the downlines and extra legs. Whoever creates the business is always at the top, usually followed by those who joined up first. The rest is comprised of the masses, each vying to move up the ranks and get off the bottom where all the Directors are.
Illegal pyramid systems are known as a “naked pyramid”. What this means is the business or pyramid structure has no products or services of any tangible value. They rely solely on recruiting to get new money into the system to pay the profits of those already established within the pyramid. It’s very much the same as a Ponzi scheme.
All MLM businesses tend to get around the illegal pyramid label by offering products or services that do have a value and can be sold at a retail level. Shaklee is one such multi level marketing company that has products of value that can be sold at retail as well as to new recruits, therefore it’s not a naked pyramid system.
So many people are into eating healthier, exercising, taking vitamins and other supplements these days that joining a MLM opportunity that specialises in these products kind of makes sense. Add to that the ability to join the business and make some extra money in the process, and something like Shaklee has quite wide appeal.
What I Like
- In one form or another, Shaklee has been around for over 100 years
- The MLM side of the business has been operating since 1960, making it one of the oldest MLM businesses on the planet
- The products are quite well received and are all organic and environmentally friendly
- Quite possibly Shaklee is the original health and wellness MLM company
- They provide you with a website
What I Don’t Like
- The health and wellness niche is super saturated already, both with MLM businesses and retail products
- This opportunity has been around officially since 1960, so you will be way behind in the overall scheme of things if you desire to climb the ranks at Shaklee
- The products are way too expensive for what they are
- Anything MLM related is a very tough sell and a hard way to make money
How Much Does Shaklee Cost?
This can get a little complicated as well. Just joining as a Director (distributor) will cost you $49.95 every single month. You then need to buy one of the business kits to get going. If you buy the Gold Pack it will cost you $349.00. You really need to buy at least this membership kit level to qualify for all the bonuses on offer. So it’s a pretty expensive venture. Instead of Shaklee paying you to work for them, you are basically paying them for the right to sell their products for them.
Is Shaklee a Scam?
No, it’s not a scam, but it is highly priced and even more highly competitive in a niche that is already way over-saturated. Over the years Shaklee has been accused of being nothing but a pyramid scheme, but just about all MLM businesses go through this. Some of its distributors have been in hot water over the years as well for unethical sales tactics.
I never advise to get involved in any MLM venture, no matter who it is with or whatever the niche. It’s just an extremely tough way to make money and you are really getting shafted by the company in the process, making you pay a membership as well as forcing you to buy X amount of product every month. Basically you do all the work and the company collects most of the money. You’re nothing more than a sales rep, yet you have to pay them money to be one.
Forget MLM and Try An Online Business Instead
I prefer doing affiliate marketing online. In a way it’s kind of similar to MLM, as you promote products for a commission. There are some major differences, though. For starters, I don’t have to pay anyone for the right to be an affiliate. I also don’t have to buy any products. I promote online and make commissions when sales are made.
Anyone can do this and it costs virtually nothing to get started. If you have a computer and access to the internet, you are almost good to go.
I say almost because without the right training to guide you on your road to success, the journey will take that much longer and be a lot harder. To check out the training I did that has led to me making over 5 figures online every month, just click on the banner below to read my review.
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