Safety and Dangers of Essential Oils

Dangers of Essential Oils

Essential Oils can be dangerous. People selling the essential oils for companies create articles and guides in order to sell more oils. This can make it difficult to find good truthful information about safe ways to use oils. Additionally, members selling dōTERRA and Young Living will often falsely claim that oils can treat conditions or cure diseases.

It can be difficult to find the truth about essential oils even if you do careful research. This is because of the way search engines and ranking algorithms work. They surface articles and websites based on how large numbers of people act — but in this case, large numbers of people are working to sell more oil. To learn more about this check out our post on how MLMs break the internet.

Here are some articles we’ve vetted to learn more about the dangers of essential oils and how to use them safely

WebMD articles talking about the safety of essential oils including tips on who should and should not use oils, what applications make sense, allergies, and more!
WebMD: Essential Oils; Natural Doesn’t Mean Risk Free

WebMD: Dos and Don’ts of Essential Oils

Women’s Day explains the dangers of some essential oils as well as their relationship to this type of company (DoTerra and Young Living). Also mentions how they can be used effectively.
Women’s Day: Dangers of Essential Oils

Refinery29 story about a diffuser with essential oils causing a woman chemical burns. “I was unaware that the vaporized ‘diluted’ oil from my diffuser could also be dangerous…”
The Terrifying Reason This Woman Was Burned By Essential Oils

Continue Reading

LuLaRoe Lawsuits – News Roundup

Pyramid Scheme Allegations

CBS News story with detailed information around the $1 billion lawsuit filed in October alleging LuLaRoe is a pyramid scheme. Also references LuLaRoe’s own legal action against critics.
https://www.cbsnews.com/news/lularoe-is-accused-of-being-pyramid-scheme/

Fortune.com article explaining LuLaRoe and referencing the lawsuit filed in October alleging LuLaRoe is a pyramid scheme.
http://fortune.com/2017/11/01/lularoe-lawsuit/ 

Teen Vogue’s includes the court documents here:
https://www.teenvogue.com/story/lularoe-leggings-lawsuit-alleged-pyramid-scheme

 

Other Lawsuits

Additionally, previous legal battles over product quality and payment processes were also reported on by CBS News.
https://www.cbsnews.com/news/lularoe-legal-woes-multi-level-marketer-product-defects/

https://www.cbsnews.com/news/lularoe-multi-level-marketing-women-clothing/

Today reported on product quality lawsuits
https://www.today.com/style/lularoe-leggings-under-fire-after-customers-say-it-easily-tears-t108835

LuLaRoe also sued for improperly collecting sales tax
https://www.cbsnews.com/news/fashion-marketer-lularoe-sued-over-sales-tax-charges/
https://www.forbes.com/sites/kellyphillipserb/2017/02/27/popular-fashion-line-lularoe-sued-for-overcharging-customers-sales-tax/

 

Local news outlets also reported on the LuLaRoe lawsuits. Please comment with additions to our roundup! Thanks.

Continue Reading

Making Money with dōTERRA – Compensation Plan

Making money with dōTERRA

According to the official dōTERRA compensation plan, advocates make profits on the dōTERRA items sold to retail customers or preferred members. Profits are the amount sold over wholesale costs. Additionally, advocates can make money on bonuses paid based on the wholesale purchase volume of the advocates and teams they sponsor.

The compensation plan is based on sponsor bonuses rank level achievements

To participate in the bonus program an advocate must at least:

  • A qualified LRP (Loyalty Rewards Program) order for $100
    • This means purchasing inventory even if you haven’t sold inventory that month.
  • Maintain some number of personally sponsored qualified advocates or customers (at least 3 per “leg”)
    • To be “qualified” each of these customers/advocates must also be purchasing $100 each month
    • Often, this leads to sponsors encouraging advocates and wholesale customers to purchase month after month
  • Total amounts of team or organization volume sales
    • If the team is under the necessary amount, sponsors will encourage advocates to purchase extra inventory that month even if they cannot sell it

 

At higher bonus levels, there are bigger and bigger requirements to get the bonuses. It becomes harder to continue getting the bonuses each month, and most of the bonuses are based on sponsorship and team building.

An extremely small number of people (almost no one) will get to the highest bonus levels (leadership). People at the highest bones levels make a lot of money. dōTERRA’s own disclosures show that these top earners make up less than 0.5% of the members.

As a matter of fact, dōTERRA only paid bonuses to 25% of members. Most advocates didn’t make any commissions at all.

https://www.doterra.com/US/en/policy-manual-compensation-plan

http://media.doterra.com/us/en/flyers/opportunity-and-earning-disclosure-summary.pdf

 

Consider the following questions:

  • Is your sponsor pressuring you to make purchases you can’t afford?
  • Have you reviewed the dōTERRA disclosures as well as the compensation plan?
  • Are you comfortable with the required investments, risks, and returns you’ve had with dōTERRA? (Ask this question weekly)
  • Are customers ready to buy the products that you’ve purchased wholesale? Can you afford it if no one purchases those products? (Ask these questions with each purchase)

 

Continue Reading

Is Du North Designs a pyramid scheme?

Du North Designs pyramid scheme

It’s hard to tell if Du North is a pyramid scheme… and that’s not a great sign.

Du North Designs sells leggings directly and through distributors. Most of their business and their stated business model is “Multi Level Marketing.” MLMs share many qualities with Pyramid Schemes but are a bit different. Because MLMs and pyramid schemes are so similar it can be hard to tell them apart.

The US Government’s Federal Trade Commision has more information about pyramid schemes to help us track this down.

How to spot a Pyramid Scheme:

  • Large profits are based primarily on recruiting others not on the real sale of goods.
  • Recruites are forced to buy more products than they could sell often at inflated prices.
  • People at the bottom (new recruits) make excessive payments for inventory that accumulates in their basements.
  • Many schemes will claim product sells like crazy — but actually sales are only occuring between people inside the structure or to new recruits. Check for inflated prices.
  • Commissions for recruiting new distributors, no legitimate product or service, OR separate up-front membership fee (having a product/service doesn’t remove all danger).pyramids (not a scheme)

How does Du North stack up?

  • If you look carefully at the policies for Du North distributors get bonuses, from recruiting others to purchase inventory.
  • Recruits are encouraged to buy thousands upon thousands of dollars of merchandise to join Du North and stay active.
  • It’s not possible to directly sell the merchandise without first purchasing an expensive ($99+) “starter pack.”
  • Du North says the clothes are worth more than they are. Check out ebay.com for Du North for current market pricing by checking sold listings.
  • There are direct commissions for new distributors. The amount of inventory purchased by recruited distributors determines the bonus. You can get more money if the new recruits buy more. None of the compensation bonuses listed depend on any sales only inventory purchases.
  • There are costs to join. Du North packages and sells initial inventory, website access, and materials for selling in a “starter kit.” You cannot become a distributor (get a website, do direct sales, etc) without purchasing one of the starter kits.
  • You cannot remain active to continue online sales or recruit without purchasing at least $300 in inventory each quarter (no matter how much is actually sold).
  • Du North does have policies to avoid too many distributors in one area, but there are many exceptions (previous direct sales/MLM experience, request waiver, etc).
Ebay versus Du North leggings pricing
Ebay (Left), Du North (Right)
Products on Ebay are selling for more than 30% less than the prices on the DuNorth pages

Yes, Du North probably is a Pyramid Scheme

Pyramid schemes will disguise themselves as MLM or direct sales companies. It appears that Du North Designs is doing that because of the red flags above. Whether it’s a pyramid scheme, a scam, or just an unhealthy business, Du North shares many bad qualities with Pyramid Schemes.

To recap, these qualities make it a dangerous opportunity and everyone should probably avoid Du North Designs.

What do you think?

More Resources

Investopedia: What Is A Pyramid Scheme

How Pyramid Schemes Work

Du North Designs Policies

Continue Reading

LuLaRoe Return Policy Updates and Hidden Costs

BuzzFeed and Inc Magazine reported changes to LuLaRoe’s  return policies which is bad for consultants.

People must buy lots of inventory to get started selling with LuLaRoe (see: Getting Started with LuLaRoe). This seems okay because the company had a return policy which claimed to cover 100% of returns. However, it was already full of fine print and it was pretty easy to get into a situation where sellers were losing thousands. The return policy is now even more strict, covers less, and isn’t a 100% refund.

Check out the original articles for more information

BuzzFeed.com: LuLaRoe Just Changed Its Return Policy and People are Pissed 

Inc.com: LuLaRoe Changes Return Policy, Costing Consultants Thousands

LuLaRoe is not a great option to join if you’re looking to start a business. Be sure to do a lot of research about LuLaRoe. Many people have lost a lot of money with LuLaRoe. Also check out: Is LuLaRoe a Pyramid Scheme?

Continue Reading

Is “It Works!” A Pyramid Scheme?

Is that crazy wrap thing a pyramid scheme?

It Works! sells the weight loss and cosmetic wrap products (“crazy wrap thing”). It Works! claims to be a ‘Multi Level Marketing’ company. MLMs share many qualities with Pyramid Schemes. Because they share so many qualities it can be incredibly difficult to tell if the company is a good company to join.

The US Government’s Federal Trade Commission has more information about pyramid schemes to help.

How to spot a Pyramid Scheme:

  • Large profits are based primarily on recruiting others not on the real sale of goods.
  • Recruits are forced to buy more products than they could sell often at inflated prices.
  • People at the bottom (new recruits) make excessive payments for inventory that accumulates in their basements.
  • Many schemes will claim product sells like crazy — but actually sales are only occurring between people inside the structure or to new recruits. Check to see if price is inflated.
  • Commissions for recruiting new distributors, no legitimate product or service, OR separate up-front membership fee (having a product/service doesn’t remove all danger).

How does It Works! stack up?

  • If you look carefully at the compensation plan for It Works! much of the big profits come both directly and indirectly, from recruiting others to sell the wrap products.
  • Recruits are encouraged to order inventory for auto-shipment; which could lead to extra wraps that maybe difficult to sell.
  • Returns and refusals of merchandise delivery have penalties.
  • Though there are not direct commissions for new distributors, compensation is based on the number of distributors on your team, and bonuses are paid for reaching the next the next levels sooner, each require recruitment. In this way, there are indirect commissions for recruiting new distributors.
  • There are costs to join. Inventory, and materials for selling It Works!  body wraps (“starter kit”) are rolled up and you cannot become a consultant without purchasing a starter kit.
  • The wraps offer unbelievable results, explaining all of the benefits on their site. However, their site also states: These statements have not been evaluated by the Food and Drug Administration.

It Works! seems like a Pyramid Scheme

Pyramid schemes will disguise themselves as MLM or direct sales companies, and it appears that It Works! is doing that because of the red flags above. Whether it’s a pyramid scheme, a scam, or just an unhealthy business, It Works! shares many bad qualities with Pyramid Schemes. These qualities make it a dangerous opportunity and everyone should probably avoid It Works! and all of their products.

What do you think?

More Resources

Investopedia: What Is A Pyramid Scheme

How Pyramid Schemes Work

Continue Reading

Who’s Making Money With LuLaRoe?

Who is getting paid and how? Details!

Consultants (bottom level) pay up front costs to sell products and get initial inventory. They then try to sell that inventory (and more) to get back the initial money they spent, and make more. They make less money if the products sell for less money.

Sponsors (next level) are eligible to make up to 5% of the orders by the consultants they sponsor (the consultants they recruited to sell Lularoe), BUT in order to receive the bonus sponsors must purchase 175 pieces during the month for which that bonus is calculated.

Most people are at these two levels

LuLaRoe provides an income disclosure statement[1] which shows the percentage of consultants at the different levels in the company (see pie chart). Using this we can start to get a handle on the number of people rising to higher ranks. Reportedly LuLaRoe added around 33,000 consultants in a year[2]. This would mean we could estimate around 6 would be mentors, and less than 200 would be trainers.

And many more complicated levels At each level higher the compensation gets more complicated. Each higher level is even more difficult to reach, requires even more inventory purchase by consultants in the downlines, and as we know from the disclosures very few consultants reach those levels. However, it’s at these highest levels where the biggest bonuses are paid.

trainer pyramid

Digging into the Income Disclosure Statement

The income disclosure statement from LuLaRoe’s website tells us a bit more about bonuses. However it only tells part of the story. This statement does not include any information about earnings or losses based on selling the products. It also doesn’t account for any expenses. Therefore, while these are called bonuses, really consultants could earn a bonus but still end up losing money in the end because of expenses or unsold inventory.

Most people earn no bonuses

This means they most rely on the sale of the product to earn back the money they have spent to purchase inventory, cover expenses, etc. This can be difficult because of a variety of factors and can result in consultants ultimately losing money.

Bonus structure encourages buying and stockpiling

In order for everyone involved at the various levels to make more money, everyone — consultants, trainers, and coaches need to buy more wholesale inventory and encourage others to buy more inventory even when the inventory they already have is not selling

Consultants (bottom level) are required to purchase a substantial amount of inventory to get started. Sponsors (next level) must purchase additional inventory to get their bonuses. In order for trainers (higher levels) to earn bonuses on their downline — both trainers AND their downline must buy more wholesale inventory. 

This can lead to people feeling like they should buy more one month in order to get their bonus, thinking they will be able to sell it later. This can lead to a really bad cycle. Too much inventory and a lack of sales leads to debt, a feeling that you must buy to get bonuses and maintain status with the company to get out of debt, only to have it start again next month.

LuLaRoe doesn’t publish it’s compensation plan on it’s website, but it is available from LuLaRoe consultants who will share it as part of recruitment. Here are two examples:
lulashoppe.com/lularoe-compensation-plan
llrteamuplift.com/lularoe-compensation-plan

See Also: Is LuLaRoe a Pyramid Scheme? 

Continue Reading

Is LuLaRoe a Pyramid Scheme?

Probably, it’s hard to tell. LuLaRoe claims to be a ‘Multi Level Marketing’ company. MLMs share many qualities with Pyramid Schemes but are a bit different. Because they share so many qualities it can be incredibly difficult to tell if the company is a legitimate marketing company or a pyramid scheme.

The US Government’s Federal Trade Commision has more information about pyramid schemes to help.

How to spot a Pyramid Scheme:

  • Large profits are based primarily on recruiting others not on the real sale of goods.
  • Recruites are forced to buy more products than they could sell often at inflated prices.
  • People at the bottom (new recruits) make excessive payments for inventory that accumulates in their basements.
  • Many schemes will claim product sells like crazy — but actually sales are only occuring between people inside the structure or to new recruits. Check to see if price is inflated.
  • Commissions for recruiting new distributors, no legitimate product or service, OR separate up-front membership fee (having a product/service doesn’t remove all danger).

    Pyra

How does LuLaRoe stack up?

  • If you look carefully at the compensation plan for LuLaRoe much of the big profits come both directly and indirectly, from recruiting others to sell LuLaRoe.
  • In order to join those recruits have to buy thousands upon thousands of dollars of merchandise. See: LuLaRoe: Cost to Get Started
  • The inventory is encouraged to be passed inside members of the structure because inventory purchased from LuLaRo is random (you cannot choose the patterns, sizes, etc). Or recruits are encouraged to purchase more in order to get more chances to get the more rare items.
  • The leggings, dresses, and more aren’t valued at what the company says they are (check out ebay.com for LuLaRoe for current market pricing by checking sold listings).
  • Though there are not direct commissions for new distributors, compensation is based on the number of distributors on your team, and bonuses are paid for reaching the next the next levels sooner, each require recruitment. In this way, there are indirect commissions for recruiting new distributors.
  • There are costs to join. Inventory, and materials for selling LuLaRoe (“starter kit”) are rolled up and you cannot become a consultant without purchasing a starter kit.

LuLaRoe probably is a Pyramid Scheme

Pyramid schemes will disguise themselves as MLM or direct sales companies, and it appears that LuLaRoe is doing that because of the red flags above. Whether it’s a pyramid scheme, a scam, or just an unhealthy business, LuLaRoe shares many bad qualities with Pyramid Schemes. These qualities make it a dangerous opportunity and everyone should probably avoid LuLaRoe.

What do you think?

More Resources

Investopedia: What Is A Pyramid Scheme

How Pyramid Schemes Work

Continue Reading

Joining Jamberry

Jamberry is a multi level marketing company which sells a nail ‘wrap’ product (kind of like a polish replacement).

It’s relatively easy to find information about Jamberry, their company, products, and compensation plan. You can sign up on their site to become a consultant and they will assign you a sponsor if you don’t already have one.

Products are sold on their website, directly through their consultants via inventory on hand, through orders, or through the consultant’s website. Also, Jamberry consultants are known for hosting parties to sell the nail wraps and give workshops.

What does it cost to get started?

To begin selling Jamberry nail wraps as a consultant you purchase a starter kit. A starter kit costs $99 and includes application tools, business materials, samples, etc.

Additional Expenses [1]

It’s against Jamberry’s policies to create marketing and business materials, they must be purchased directly from Jamberry. Catalogs cost $6.50 for 10 and must be purchased with each new release (every 6 months), another site reports the cost as 25 catalogs for $14.50 with free shipping. In addition to catalogs there are also host join pamphlets, sample cards, postcards, order forms, and more.

To sell Jamberry online you’ll pay $10 every month for a website.

There are also additional costs associated with collecting money and running a business: credit card fees, tax preparation, etc.

costs add up
For purchases, marketing materials, and direct sales you’ll also likely need to pay shipping and handling (including for your starter kit).

Do you need inventory? Can you just sell online and take orders?

You can just sell online. However, there is a lot of pressure to carry inventory. Most of this pressure comes from sponsors who benefit from consultants purchasing additional product. Additionally, much of the trainings and success stories revolve around parties where customers learn to apply the nail wraps and buy products at the parties.

Inventory held on hand may also go out of style as new nail wrap styles are released. Returns by consultants have limitations outlined here. Mostly, consultants may return only $1000 in any 1 year period, and may only return marketing materials upon resignation.

Encourages personally purchasing to meet quotas and get bonuses

Because commission structure requires consultants sell a certain amount each month ($200+, host a party with a certain amount of sales, etc), consultants may be encouraged to purchase a significant amount each month regardless of whether customers have actually made purchases.

This seems like a good idea because otherwise the consultant will lose access to higher commissions or bonuses. Additionally, they may be pressured for letting down their team or sponsor who may miss out on opportunities well.

This cycle of personal purchases to meet quotas can lead to debt, stress, and problems. Personally purchasing to meet qualified volume requirements is never a solution, ask sponsors for other solutions — introduce you to new leads, co-host an online party, etc.

Who is getting paid and how? Details!

Unlike some of the other programs Jamberry’s compensation plan is right on their site here.

They also publish the number of active consultants at each rank in 2015 here.

Jamberry Compensation

More here: Full Jamberry Compensation Plan

Commissions

Consultants make commissions based on their personal retail sales volumes (30%)

Once they maintain $200+ in PRV (personal retail sales volumes) they can get additional sales bonuses (up to 10% more).

Consultants recruit other consultants to add “legs” and “downlines.

Managers and executives make additional “generational overrides” or commissions based on the PRV of the generations in their downlines. The number of generations they can collect commissions on depends on their own rank and team’s total retail volume, personal retail volume ($700), number of active legs, and more. The overwhelming majority of consultants never reach these ranks.

Jamberry consultants can make additional bonuses for moving through ranks quickly (“Fast Start Rewards”), advancing to each level (“Rank Advancement Bonus”), and more.

Resources

[1]  This blogger does a good job breaking down the additional costs of becoming a Jamberry consultant and has some other posts skeptical of Jamberry.

Compensation plan

Consultants at each rank and earning ranges (2015)

Continue Reading