#Thisis(not)aPyramidScheme: A Multi-Level Explanation

November 9, 2016 — So, have you heard of John Oliver? Until a few days ago, when a video he made went viral, I had not. But he did recently grab my attention when he hopped onto his TV show to share his unsolicited thoughts on “pyramid schemes” using the hashtag #thisisapyramidscheme.

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Being a representative of a company that is often mistaken for a pyramid scheme, John Oliver’s extremely drawn out segment held my attention- until it didn’t. Blah. Same old arguments and unoriginal regurgitation of misinformation. However, his video went viral for a reason and, as I encounter this type of willful ignorance and, frankly, bias on a frequent basis, I decided to do more than roll my eyes and go back to reading a good book- this time.

This post addresses some very important things that many, many people simply don’t understand about what I do, what many people do- successfully- and  it bears mention, definition and explanation. While this article is not nearly as lengthy as John Oliver’s windy hubris, please, I humbly ask that you take a few minutes to learn something new today from the thoughts written here. (By the way, you can watch John Oliver’s grandstanding here, but it has a lot of profanity, so…you’ve been warned.)

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Specifically, John, in that sort of venomous-funny-guy-in-high-school-that-you-didn’t-want-to-make-mad-at-you kind of way, called out direct sales companies: Mary Kay, Rodan + Fields, NuSkin, Amway, Vemma, USANA and Herbalife, among others, for being “pyramid schemes”. Now, I will be the first to admit that I don’t actually know if these companies are the sort of smarmy, get-rich-quick companies that gave direct sales a bad reputation, but I can speak about doTERRA, and I will.

From this article, you will either know, at last, what a pyramid scheme is, and is not, or you will continue on as you have, assuming you know, and never realizing you don’t, existing in a suspended state of drowsy content and intentional ignorance. (I have a 5 year old, so I’m well aware of this lamentable condition.)

But let’s start here, first:

The dreaded PYRAMID

Ok, so first, as John Oliver so astutely pointed out, a pyramid is shaped like a triangle. Narrower at the top, and wider at the bottom. While I applaud him for his luminous math calculations being on par with my 5-year old’s, I was concerned for dear John, over this one glaring oversight in his understanding:

Does he think he is the CEO of the company he works for?

Being just a stay-at-home mother, it’s possible I have missed out on the shape that a massive media conglomerate takes when honing only from construction paper, which is pretty much the essence of my day as a homeschooling mom (in between staging breastfeeding sit-ins and biting pieces of Cheerios in half for my toddler). But, hmm -if you’re not the CEO, nor are you in the line directly under the CEO (CFO, COO, etc), nor are you one of any number of an even wider, and lower line of vice presidents, nor are you an even wider and lower line of mid-level managers, nor are you one of the faceless schlubs in the mail room/front desk/cafeteria/janitorial department- wait… did that just make a triangle? Or… a… pyramid shape?! pyramid2 I find myself inexplicably compelled to defer to Steve from Blues Clues for the correct answer…

Based on my clearly stated and highly thought out shape model of pretty much every, single company anywhere, ever, I think its safe to note that the shape of a triangle, as the structure of a company isn’t really the crux of John Oliver’s deeply heartfelt rant on pyramid schemes.

So, the shape that all companies anywhere take, that being a pyramid, doesn’t seem to be the issue. Yes, John? Let’s move on, then, and make our way toward the “scheme”, shall we?

#HatersGonnaHate

John Oliver, in spite of his saucy British accent and clearly unappreciated celebrity status, seems to have a real problem with direct sales companies who have a celebrity endorsement, or who elevate their founders and highest earners as celebrities. Irony aside, I can appreciate his apprehension at allowing one person to walk too tall, or encourage others to work hard, or letting their example of success shine, because, after all, we can’t all be celebrities. Someone has to be at the top and others, greater in number, must be at the wider, bottom level of humanity…. in a… triangle shape of life… Hmmm.

So, issues at the top. Yes, I noticed that. But then, there’s more. I scratched my head when it dawned on me that maybe John Oliver was like those 6 Wolfpack brothers in NYC who lived their whole lives in a tiny apartment, never leaving, and only watching and reenacting cost-per-drop4movies to learn about the outside world. Maybe John, in the same manner, was only ever given newspapers, books and movies about the sort of network marketing industry from the 1980’s, which has encumbered his understanding of how network marketing companies and direct sales work today. TODAY, John. Its like hating day traders on Wall Street whom you’ve never met because your only experience with them is via Gordon Gekko, or fearing dogs because you’ve only read “Cujo”.

I am a Wellness Advocate for doTERRA. A network marketing company that produces world-class essential oils under a specific and proprietary designation called “Certified Pure Therapeutic Grade” which makes them safe to take aromatically (like most others), topically (like a few others), and internally (like NO others).

My husband and I teach classes about essential oils and when people, inevitably, grow curious about them, we help them create their own accounts to get oils into their homes to they can improve their health and wellness. We do not sell oils (you CAN buy them from our page at retail cost, so technically we do, but we don’t recommend it), and we DO make money when people sign up for an account, and place orders. Like a referral bonus.

By the way, at his day job as a corporate director of sales training for a branch of a massive Fortune 500 company, my husband gets referral bonuses anytime he refers someone to his company who is ultimately hired as an employee. Whose lining the pockets of WHOM, eh? How come those CEOs at the top of the pyramid keep getting richer while they toss him a measly $150? Talk about a racket.

The scheme…

A pyramid SCHEME, as opposed to direct sales/network marketing (which is a legitimate, alternative, non-traditional form of business), is truly a scheme. You give your money away, with only a promise in return. The quickest way to identify one is to ask this: what they are offering in return for your money? If they are offering a legitimate product that you enjoy and legitimately use, then it is not a pyramid scheme, no matter the shape of its compensation plan. And if, after a time you’d like to earn money by sharing those products you personally enjoy with others, then doTERRA has a real, and viable business model you can follow. Companies, like doTERRA, allow people from all walks of life to earn income from simply sharing oils and working hard.

amazon2Does it a require an investment? OF. COURSE. What other business on the planet can you start on your own without some sort of financial investment?! To criticize a direct sales company for requiring a financial investment from you to participate in their business model, and then demand that they give you money for being part of their business is stupid and…. well, millennial.

Investopedia noted this:

“[A pyramid scheme] typically starts with one person – the initial recruiter – who is on top at the apex of the pyramid. This person recruits a second who is required to “invest” a certain amount, which is paid to the initial recruiter. In order to make his or her money back, the new recruit must recruit more people under him or her, each of whom will also have to invest. If the recruit gets 10 more people to invest, he or she will make a profit with just a small investment. Further, the new people become recruiters and each one is in turn required to enlist an additional 10 people, resulting in a total of 100 more people. Each of those new recruits is also obligated to pay their investment to the person who recruited him or her. Recruiters get a profit of all of the money received, minus their initial investment paid to the person who recruited them. The process continues until the base of the pyramid is no longer strong enough to support the upper structure, and there are no more recruits.”

The problem? Most pyramid schemes sell nothing more than an idea, ala Bernie Madoff. Now, as I said, I am speaking about no other company but doTERRA because I, unlike John Oliver, will not speak of things of which I do not know.

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DoTERRA caps its compensation structure at seven levels, encouraging you to build WIDER, not deeper. It’s a significantly more stable way to sustain income in the long term. And as for earnings, you start earning at 2% of a person’s order. On the next level, it goes to 3% and ultimately down to 7% at the bottom of your ….pyramid. #itiseverywhere

DoTERRA doesn’t recruit people. DoTERRA sells a product, a truly useful, beautiful, powerful and life-changing product in their essential oils.

A LEGAL multi-level marketing company is a legitimate business, where people like me represent a product or service with actual value and get paid for it. You don’t have to recruit people to participate. You can simply purchase products you love and go live your life. You only participate in the business aspect if you want, well, a business. No one is pushing you. No one cares. Go, live your life.

The trappings of legitimacy

As a clearly benevolent humanitarian, John Oliver, whose deep concern for silly, American sheeple has driven him to protest the 1980’s style pyramid scheme without really understanding what one is, and what one is not, seems to feel he is doing a good thing. However, I can think of a number of dictators, kings, crusaders, bank robbers and clergy who thought they were doing God’s work too.

Oliver pointed to Herbalife, a company hauled before a Senate subcommitte (in the 80’s, ahem) for overstating the benefits of its company’s products, and, as recently as 2014, they were found to, again, (following an ABC News undercover investigation) be overstating their benefits and making false claims. I can’t speak to that.

But this brings up a MAJOR reason why I love and fully endorse doTERRA’s business model- their ethics. The FDA doesn’t regulate the essential oil industry and there are rampant false claims being made, adulteration of oils, and outright lies about how oils work and what oils can do for your health. doTERRA has set itself apart by requiring *strict* adherence to FDA guidelines and proudly sits as the largest and most successful essential oil company in the world, for the past two years.

an-oil-for-thatIf a doTERRA Wellness Advocate makes false claims, and you tried to use an essential oil to manage a life-threatening or serious health need, I am sorry. Truly. It horrifies me when I hear of this, but it does happen. And no, it is not exclusive to the Multi-Level Marketing industry. I mean, take a minute, please, and remind yourself of the news stories you’ve heard about other companies overstating claims, having products recalled and being in it “only for the money”. You have heard of them. Ever heard that cocaine was once an ingredient in sody-pop? Remember how cigarettes were marketed as a way to stay thin? Remember the low fat potato chips in the 90’s that gave you anal seepage? Not everyone is completely up front about their product claims, even when the FDA regulates them- GASP.

Granted, John Oliver’s colorful hubris did not extend to opinions about doTERRA, but I suspect that is more because they weren’t around in the 80’s than it is because of his personal bad experience with them.

Bad experiences

So, I got to thinking- maybe John Oliver did have a bad experience or two with a network marketing company. Maybe that is where the snark and vitriol comes from. He did actually mention Herbalife’s “disgusting creamy powder” that tastes like “the wood shavings inside a gerbil cage”. Now, I am not going to judge his experiences tasting a gerbil’s wood shavings, although I myself don’t find the act to be a temptation. However, a habit of eating gerbil shavings might explain his inability to grasp the difference between legitimate network marketing companies and pyramid schemes.

I, myself, was quite turned off by the network marketing model based on past experiences. I grew up in an MLM house. Phone cards, Melaleuca, Vemma, Sea Silver, Noni Juice, energy drinks, jewelry, Pampered Chef- you name it. We even had a time share! What those experiences did do was show me that there are loser ideas that will fail and there are dang amazing products to be had outside of your local store. Seriously, a.m.a.z.i.n.g. Truly unique and high quality. And also that money CAN be lost in them, through various means, which are not all necessarily scammy.

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In fact, sometimes the financial loss comes at the hand of incapable people, lack of motivation, and the expectation of untold riches for doing absolutely nothing, a common blight on the modern man. Many direct sales companies are truly worth paying attention to, but many are not- and you do need to accept a level of personal responsibility to educate yourself and build a business. BUILD. As in work.

But you know what? If you love it, if it’s working for you and your family, where you spend your money is no one’s business. How you make your money isn’t either.

Let’s talk money

People often ask me how much we make with doTERRA. My response? I’ll show you my pay stubs as soon as I can see your medical records. Like, how RUDE. Join or don’t join. Walk your path. But what good is showing you my paycheck going to accomplish? Excuse me. Would you like to come over and wash my unmentionables too? Not going to happen.

If you want to build a business of your own, from home, with a direct sales or network marketing company, you must educate yourself. YOURSELF. Know thy business. If you want to build a pizza business, why on earth could you expect to be successful if you don’t know everything there is to know about pizza, sauce, cheese, health codes, building codes, food handling, management, ovens and so. much. more? Why would you expect to be successful? It’s no different with a legitimate network marketing company.

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Some expect you to keep inventory (doTERRA doesn’t). Some expect you to buy-in at super high rates to get kits (doTERRA doesn’t). Some have a product that simply isn’t needed or has a limited use (doTERRA doesn’t). With doTERRA, your level of involvement is up to you. Everything is opt-in, no requirements to simply purchase essential oils and other products. If you decide to build a business with this amazing company, you then must invest. Yes, invest. Money. Just like owning any other business, ever. And you have a wonderful, powerful product that truly makes a difference in people lives, in their health, in their emotional lives, in their families.

Now, if you’re a doubter, you’ll remain a doubter and nothing I say is going to convince you. I mean, take John Oliver as your cautionary tale. The cynicism and disbelief (there are oils for that!). The posturing and largess. The purveyance of misinformation. Raking in his millions, positioned nicely in the middle of a mega-machine, non-scheme, pyramid structure company, and mocking your attempts to earn yours. No, he’s not selling bottles of essential oils or makeup or jewelry or weight loss products or energy drinks. He’s selling himself, and if he fails via a ratings nose dive, he’s fired.

I’ll bet he’d appreciate some residual income then.

#Thisis(not)aPyramidScheme

Thank you for your time.