Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

Hey all, welcome to my Scentsy review. Yes, another MLM company, and just like any other MLM company out there, I’m here to answer the question “is Scentsy a pyramid scheme?”

I’m by no means associated with Scentsy so you’ll know that my personal take on Scentsy here today will be from a 3rd party view.

If you’re thinking of joining Scentsy, I’m here to show you what Scentsy is all about first and whether or not it’s actually possible for you to earn extra income with them.

So, without further ado, let’s get started!

Is Scentsy a pyramid scheme? Here’s the truth..

Scentsy Summary

Product: Scentsy
Founder: Kara Egan & Colette Gunnell but later bought by Orville & Heidi Thompson
Product Type: Fragrance, perfumes, wickless candles
Website: scentsy.com
Price: $99 to start  + $10/month for website + $200 a month out of 4 month period
Rating: 40/100
Recommended: No
Summary: Founded in 2003 by Kara Egan and Colette Gunnell, Scentsy had first started as a small business before being bought over by Orville and Heidi Thompson. After Scentsy had been bought over, the Thompson couple changed Scentsy’s business operation to become a multi-level marketing company and had successfully expanded the business to hundreds of millions in revenue year after year.

They did mention that the reason they opted for an MLM model is that the scents are better explained or experienced in person. While this is not wrong, I can think of multiple companies that had managed to attract millions of customers without being an MLM company, such as Bath and Body Works and Yankee Candles.

Therefore, is being an MLM company really necessary, and can you actually make money with them by becoming an agent? Let’s find out.

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Is Scentsy A Scam?

First off, just to get this out of the way, no Scentsy is not a scam.

It’s a real company selling real, tangible products to consumers. You and I as a consumer can buy their products through their website (although we do need to select a consultant in order to purchase) without signing up to become an agent.

Even though the company had first started selling wickless candles, they have now expanded their product range to diffusers, laundry detergents as well products that you can even use for your pets!

They do have a lot of different smells that you can choose on their website, catered to different preferences from bakery, citrus, floral, fresh and a few other more.

scentsy warmers - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

I’m not going to lie, their products do look cute.

Scentsy Club Subscription

If in any case, you like their products so much, Scentsy also has a subscription that you can choose to go for. Below is the video that they have made for their “Scentsy Club”.

You will basically just create a subscription by choosing the products that you want, create your own shipping schedule (bi-monthly, monthly or quarterly), pay them, and get the products delivered to your house.

As like any other MLM companies’ subscription program, you will get some perks while joining their club and for Scentsy, you will get:

scentsy club perks - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

I do recommend checking out their page and carefully read their FAQ because a lot of their fine prints are written there.

They didn’t write on their cancellation policy so you might want to write to them first before joining their subscription.

Now the reason I’m covering Scentsy’s products and membership first before we get into the nitty-gritty of their money-making plan is because I believe that you will need to be in love with their products first before signing up.

Though you don’t need to become their agent even if you love their products.

BUT if you’re thinking this is something that you want to try, it’s always best to be a fan of the company’s products first.

If you’ve been a fan and know the company’s products inside out, let’s get you to know how the company works and how you can make money by joining them.

That being said, I’ve watched a video from an ex-agent of Scentsy about how she had joined because she loved the products so much but later dropping out because she knew she couldn’t make any money. Just so you know.

Is Scentsy An MLM?

Yuppp, I don’t need to elaborate on this. If you go to their Wikipedia page, you can see this written very clearly. Everybody knows it…except for Scentsy, maybe.

I was digging around on their FAQ page and found this written when asked whether or not Scentsy is an MLM company:

scentsy mlm co - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

I have no idea why they won’t just own up to it.

Orville and his wife decided to make the normal small business into an MLM company and take pride into “changing people’s lives”, why can’t they just admit that they are running an in-fact MLM company.

It’s literally a yes/no question and the answer that we get is a party-plan company.

OKAY.

Is Scentsy A Pyramid Scheme?

Once upon a time ago, all MLMs are a pyramid scheme and pretty much illegal to operate.

scentsy mlm wiki - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

“An MLM strategy may be an illegal pyramid scheme”

So with that fact, we just need to do our due diligence before deciding to join an MLM company – because we CAN ended up signing up for a scam.

Let’s first find out what a pyramid scheme is all about.

You can see that pyramid scheme is focusing on recruiting people to make money, while they can actually have a product for agents to sell as a disguise.

Honestly, the line is very vague to many of us.

But I don’t think Scentsy is a pyramid scheme. The reason being that they do have a range of products that people love and use. The products are not bogus and low quality.

You can still make money with Scentsy just by selling their products without recruiting people to become your downlines, though you will make significantly less money than the ones who do build a team under them.

I am going to cover on just how much you can make with and without building a team and most importantly, whether it’s worth your money to join.

Cause…you do need to pay to start becoming an agent.

How Much Do You Need To Pay To Join Scentsy?

When you’re joining Scentsy by signing up on their website, you will be directed to purchase their Starter Kit worth $99 (in the US) plus shipping and taxes.

scentsy starter kit - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

With this Starter Kit, you will get:
– Body samples
– Fragrance testers
– Wax
– Wax warmer
– Consultant guide
– Product training guide
– Catalogs

If you don’t want to be paying $99 for the Starter Kit, here’s another way given by Scentsy:

scentsy starter price - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

After paying for your starter kit, there’s a minimum of sales that you have to make to remain active with Scentsy.

You need to sell $200 in a single month of 4 month period.

This can also include your own purchases. And unfortunately, with many MLMers out there, they opt to just pay this themselves to still remain active and be eligible for commissions.

If you somehow ended up in this hole, you basically are forking out $600 a year just to stay active.

Now, it’s not the end yet. You have to pay for the monthly fees too!

You will get an approved and replicated website from Scentsy when you join – if you want to get another website on your own, you will still need Scentsy’s approval on this.

So by getting your own website and other training and tools I believe, you will be paying $10 a month. So that’s another $120 a year.

Let’s calculate just how much you’ll need to spend in your first year with Scentsy: $99 + $120 + $600 = $819.

This won’t include other expenses that you will incur like restocking your products, food that you’ll likely to make or order for “parties”, gas, etc. This won’t be like a direct expense and you’ll probably won’t feel it as much when you’re first starting out.

But, if you take a step back and really track these little miscellaneous expenses, you’ll see just how much exactly you’ve been spending for your “business” 😊

I’m speaking from experience. And this lady below speaking from her experience.

scentsy fee - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

Now that you know how much you will need to spend, let’s figure out how much can you make your money back with Scentsy.

How To Make Money With Scentsy?

There are only two ways of making money with MLM companies:

1) Selling the products
2) Recruiting people to be your downline

If you want to make a lot of money, you will need to build your team or downline. If you don’t like the thought of approaching and convincing people to join you, MLM is not for you. And it’s okay if MLM is not the one for you.

There’s other better opportunity for you to make money.

Let’s see the simple compensation plan that they have shared with the public.

Below is how much you’ll need to sell before you get to move up your rank. Once you move up your rank, you will get higher commission percentage – thus earning more.

scentsy compensation plan 1 - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

The first level, which is the Escential Consultant, you don’t really need to achieve a certain monthly sales volume to be eligible for commission – which is great. Because some MLM companies don’t actually give you any commission if you fall short on your sales target in a month period.

As you can see in the chart, out of 8 levels, there are only 2 levels where you can earn money without building a team.

scentsy compensation plan 2 - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

And the highest commission percentage that you can get without building a team would be 25%.

Looking at their product price point, 25% is not a lot guys.

But this is their compensation plan. Let’s look at their income disclosure and see how much have their other agents been making.

scentsy income disclosure - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

There are 2 groups. Basically group 1 is agents that been with them throughout 2019 and group 2 is for agents who haven’t been with Scentsy throughout 2019 – either they quit or they newly joined.

Either way, let’s look at whatever numbers they have given us.

For agents who’ve been with them throughout 2019, most of them make $588 in annual income. That’s basically $49/month. I don’t know about you, but that’s not even enough to cover my internet bill at home.

I usually take the median number because that will give us a more realistic number. But even if I take the average annual commission, it’s only $147.20/month.

Is it worth it?

Not to me.

And that’s when you’re with the company for more than a year. If you’re just starting out and haven’t passed your first year yet, you’re more likely to make around $6/month. You won’t even be able to cover your monthly fee.

The whole thing just doesn’t make sense to me. Not only you’re not making money, you’re more likely to lose money. And I’m not bluffing, you can check the FTC study here saying 99% of people who join MLM don’t actually make money.

What I Like About Scentsy?

1) Charitable Cause

If you’ve gone to their websites, you can see that they regularly give support to multiple charities. You can check it out here.

You can also suggest which charity you would like them to contribute to. I’m not sure whether they are going to go with your suggestion but it’s nice if they do give back to your local community.

I know this also gives them a very good advantage when it comes to taxes.

But I know that not many MLM companies actually do this – many just either do recycling campaign of sort, but not full blown giving back to charities.

2) Good BBB Rating

scentsy bbb - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

Scentsy is one of the MLM companies out there that is accredited by BBB and also has a good rating.

They do have multiple complaints lodged against them, however; they actually took the time to solve those complaints. I could see there were back and forth between them and the customers but hey, comparing to MLMs that don’t even give a dang about their customers, Scentsy deserves some respect.

What I DON’T Like About Scentsy

1) They Have Reached Their Peak

Scentsy is not new in the game. They have been around since 2003 and it’s pretty saturated already.

When thinking of joining MLM, the best time for you to join and be making the most money would be in their very early stage.

When there are very little people who actually know the product or company so you’ll have bigger pool of customers to promote as well as to recruit.

2) Deteriorating Product Quality

Scentsy’s smell is actually pretty nice.

But, apparently recently I saw many complaints against their products – even when the customers have been buying from Scentsy for years.

I know that Scentsy’s revenue in recent years have actually went down and I’m thinking that this might nudge them to lower the cost in producing the products…

That might lead to the lower quality products produced. But that’s just my opinion. I have no legit explanation on why the quality had gone down, but it HAD gone down.

scentsy bad review - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!
scentsy bad review 2 - Is Scentsy A Pyramid Scheme? Truths You Need To Know Before Joining!

3) Recruiting People

Another thing I don’t like with Scentsy or any other MLM for that matter is the fact that you have to recruit people.

If you’ve seen the review above on the different expenses that you will incur while running this “business”, you will also see how she said that it’s UNLIKELY for you to make money solely from selling the products without recruiting more people under you.

The thing is, this is the MAIN way of making money in MLM – recruiting people.

If you know you just don’t like trying to push people to join your team, you are NOT going to enjoy working in an MLM business.

I’ve done MLM when I was a lot more active with a lot of connections. Even though I was making appointments every day and I like presenting to people, the whole process and business just drain my energy.

I just knew from there on out, MLM is NOT for me.

And thankfully, I found something else that I can do, that’s a lot more sustainable to promote the products that you love to others while making money – but the best part is that, you DON’T need to ever recruit people.

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