Have you heard of doTerra? This Utah-based company, which has been around since 2008, offers essential oils for a variety of applications, including personal use, therapy, cooking, and ingestion.
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It is easy to see why doTerra has created several different applications for its essential oils: if the company stuck to only offering oils for massage and fragrance, it would quickly overwhelm the customer with its plethora of fragrance. However, by entering the areas of cuisine, natural supplements, and even traditional OTC items (e.g., vapor sticks), doTerra manages to create more need for its items.
doTerra advertises that its products are all natural and 100% pure. You can find these products online, at the doTerra website. However, once you try to purchase the products, you are directed to a DoTerra ‘Wellness Advocate.”
Why can’t you just purchase doTerra products directly?
Because doTerra is a direct sales and multi-level marketing (MLM) company. What this means is that doTerra doesn’t sell its products through area retailers or grocery stores. Instead, this business sells its wares directly to private individuals like you and me.
Why would doTerra do this? Because it offers its buyers the opportunity to then resell those products to others for a profit. And in so doing, the company gains a sales force that works only on commission.
How does an individual like you or me get started with doTerra?
How to become a Wellness Advocate for doTerra
Anyone can sign up and work for doTerra as a Wellness Advocate. The actual cost of sign-up is $35, which gives the new member a website, business materials (e.g., order forms, catalogs), and wholesale pricing of products. After the first year, membership is renewed at $25/year.
A Wellness Advocate can get 25% off the retail value of doTerra products, then sell them at full retail costs to others. The difference in price is pocketed as profit.
doTerra states that, once you’ve purchased at least $100 worth of oils, the 25% discount on products matches what you pay each year to renew your membership.
Other doTerra benefits: Bonuses and commissions
doTerra Wellness Advocates earn different bonuses and commissions for member recruitment, which are paid up to seven levels down. Specifically, they are the called out as the following:
Unilevel: To achieve this commission, a personal volume (PV) must be met, along with a combined volume for the advocate and her team (Organizational Volume, or OV). Leg requirements must also be met. Incidentally, a leg is personally enrolled doTerra member.
Power of 3: This $50 bonus is earned if three people personally enrolled by the Wellness Advocate place 100 PV loyalty rewards program (LRP) orders and the team’s OV is at least 600 PV. The Power of 3 bonus increases as PV orders increase in size.
The full scope of doTerra’s compensation plan is rather lengthy, as this Unilevel table alone shows:
Keep in mind that PV and OV do not convert to dollars on a 1:1 ratio. It’s a bit unclear as to which items carry a given PV or OV quantity, but the doTerra sales compensation tables state that some items will carry different or even no PV/OV depending on the items, associated promotions, etc.
As with all business opportunities, doTerra has its pros and cons:
Good quality products– doTerra offers several lines of essential oils for different applications. The company advertises that its products are all natural and 100% pure. The company also works with small farmers in countries like Bulgaria, Kenya, Madagascar, and Nepal in fair trade agreements to purchase their products.
Expensive items- doTerra is by no means a company that offers cheap products. Even a single bottle of shampoo, when purchased at wholesale discount, is still going to cost $45.
In light of this, it’s going to be quite the challenge to convince customers to purchase such items at retail price.
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PVs and OVs– doTerra Wellness Advocates are required to make set PVs and OVs if they are to receive their downline commissions and bonuses. Because the PV/OV to dollar value doesn’t necessarily go by a 1:1 ratio, that means Wellness Advocates may need to spend up to $100/month just to stay active in doTerra and receive their commissions and bonuses. This can easily lead to an advocate having a lot of extra stock that he has no use for. Plus, having to pay what is, in essence, a membership fee of roughly $1,200/year, quickly chips away at one’s profit margin.
Membership fee– Adding insult to injury is the doTerra annual membership fee. Exactly why a member must pay $25 for the privilege of working with this company is never explained by doTerra. Where that collected money goes is also never explained.
Emphasis on recruitment– doTerra spends much time and effort discussing member recruitment and downline rewards. It spends far less time discussing how a busy Wellness Advocate might sell the products online or at events. This means that Wellness Advocates are almost certainly going to fail at maintaining the needed sales volume for their bonuses and commissions.
doTerra is a so-so business opportunity
doTerra might offer good quality products that are ethically sourced, but its emphasis on PV and OV over actually selling to outside consumers should be cause for concern. Likewise, the products themselves aren’t cheap, so they will not immediately sell to an outside market. This will eventually result in the Wellness Advocate making up her losses by purchasing more and more product- and paying a membership fee in order to do so. Such a tactic easily leads to negative revenue- in other words, a gradual loss of profits.
With so many other business opportunities out there, you are better off passing on doTerra.
If you’ve sold or currently sell doTerra products, we’d love to hear from you! Please leave a note about your experiences in the comments below.