What Is Shaklee About? A Pyramid Scheme Scam – Or Legit Business Opportunity?
The Shakelee brand is an American based multi-level-marketing company that offers a large selection of natural supplements and products in the health, beauty and weight loss niche – founded way back in 1956 by Dr Forest Shaklee.
Shaklee products have plenty of positive feedback online, (for the most part) and many loyal, long-withstanding customers.
If you’re interested in the business opportunity though, this is a multi-level-marketing/network marketing business and you may want to learn a little more about that before you dive in.
Partly because, people are growing ever more suspicious about opportunities that can involve recruiting others into the business, with a multi-level-structure.
As such, many people believe it will get gradually harder to get people to join these types of business.
However, I do know of a way that you can promote an MLM business and still create your own independent business at the same time.
Stick with me until the end and I will explain one way that you could do this. Let’s dig in!
Shaklee Review In Brief:
Started: 1956 by Dr.Forest Shaklee
Cost: You can start at entry level from $349 at the time of writing, (sometimes $299).
Type: Multi-level-marketing/network marketing business.
Overall Rating: At the time of writing, Shaklee is classed as a legitimate multi-level-marketing business. One that sells some high quality products, at a premium. These products have gone through rigorous testing to ensure they’re safe and also many trials to measure effectiveness. If you have any direct experience with Shaklee, I’d love to hear from you in the comments.
Shaklee has survived a long time for this type of business and yet, they’ve managed to escape the criticism that many of their newer competitors have faced and continue to face.
When I visited the Shaklee website, some of the videos on the Shaklee website seem a bit outdated, but do have some interesting information.
For example; they said that Shaklee distributors in the Entry level rank in 2013, made an average of $10,000 per year.
At the time of writing, we’re in 2018, so I’m unsure why they wouldn’t have updated this figure at this point.
You have to also consider that, many people will have made less than $10,000 a year at the entry level.
You may take this with a pinch of salt though, as many people seem to say this number does not paint a realistic picture.
Are you a Shaklee distributor? I’d love to hear from you! Leave me a comment below!
Shaklee On YouTube:
The Shaklee video below shows how shaklee products go through rigorous testing to ensure they are safe and actually works.
This meticulous testing is distinct from many MLM related companies, whose products are often not sufficiently backed up by scientific testing.
While Shaklee products are deemed to be safe though, there is still a lot of speculation about whether many health & wellness type supplements really do work.
It’s not an easy thing to measure and rely a lot on anecdotal evidence.
There are thousands of supplements on the market today deemed “safe,” but how much they really work, is really matter of debate.
Shaklee – Has Stood The Test Of Time!
This company has decades of experience and the business has created many loyal fans along the way.
However, there there have been questions raised about their products and marketing ploys being used over the years.
Shaklee depends on distributors to make their products and services available to the public – but some of their business practices have come under scrutiny.
It’s been noted that some of their distributors have used questionable tactics to lure people into the Shaklee business and build a team.
Unfortunately, this can portray the company in a negative light, even if they do not approve of the tactics themselves.
This is one reason that some people have claimed that Shaklee is a Pyramid Scheme – as some distributors made it very obvious that they were solely interested in recruiting, not selling products.
The fact that Shaklee claims to focus more on the quality of their PRODUCTS; rather than the recruitment aspect, has meant they have avoided the Pyramid Scheme label and have remained in business since the 1950’s.
The problem is, it doesn’t seem that their distributors always follow suit and that is how MLMs can end up in deep water.
Shaklee In The Past:
The distribution methods of Shaklee have been criticized by the federal government at times over the years.
In 1974, Shaklee was ordered by the Federal Trade Commission (FTC) to change their marketing strategy.
The company once claimed that their “Instant Protein” product could be tried by infants. But the FTC did not agree and asked them to cease the marketing for this particular product.
In 1976, the FTC added another stipulation that Shaklee would have to change their marketing plan. They were accused of coercing and exerting pressure on their distributors.
The goal was to maintain advertised prices and that caused quite a stir for a lot of reasons. Shaklee was yet again pressurized to change their tactics.
Shaklee & Their Distributors:
Shaklee has worked hard to maintain a good public image over the years. From 1988 to 2000, Shaklee sent out a cycling team to compete in events.
That contributed to public awareness over the Shaklee brand name and the work that they do. In 1993, Shaklee introduced their own drink to be consumed by astronauts.
They’ve even had their products endorsed by celebrities in the past – for example; Shaklee products were reviewed on the Oprah show.
Nevertheless, some people have been concerned about Shaklee’s relationship with their distributors.
Distributors are on the front line when it comes to customer interactions and recruiting more people into the business. This network of distributors is what keeps Shaklee afloat and is vital for the Shaklee growth and success.
So, it goes without saying that their distributors need to be treated well – as they’re the backbone to the company.
However, some critics have claimed that distributors are not fairly treated. Obviously, Shaklee need to avoid such criticisms if they’re to uphold a good reputation and remain an attractive option to distributors.
By contract though, they need to ensure their distributors are not using underhand tactics to get people to join Shaklee and that can be incredibly difficult, (if not impossible) to keep track of.
The company naturally wants to avoid any association with the term, “pyramid scheme”. They would view that label as a significant setback and it could put the business in jeopardy.
With MLMs now being closed down for not adhering to strict guidelines regarding the percentage of sales they make from real customers, (not just recruiting) this is more important than ever for multi-level-marketing businesses.
A really positive statistic to note about Shaklee is that 90% of the Shaklee compensation is based on SALES, not on recruiting others into the business.
Are Shaklee Products Really So Special? What Do You Think?
There are so many MLMs that are all fighting for attention within the health and wellness niche. Nowadays, healthy, environmentally friendly and organic products are BIG business.
But they also seem to automatically be a lot more expensive. This works out well for MLMs though, because they need their products to be priced at a premium to cover the costs of running a multi-level-marketing business.
The important thing is that, if you’re a distributor of Shaklee products – you’re going to need to convince people that these products really are superior to similar products that are vastly cheaper.
There are plenty of people out there willing to pay a premium for quality, but you need to convince people that’s what this is if you want to be successful selling the products.
The ideal scenario of course is that you have already tried and are a fan of many of their products; then the selling aspect would come naturally.
How Do You Make Money With Shaklee?
If you’re interested in exactly how you make money with Shaklee, you may want to check out the video below.
The video is obviously a promotional video, but gives you an idea of exactly what this business entails and how you could potentially make money from it.
Also, worth mentioning that the video below was created in 2013. You can access the full current compensation plan here.
You may notice during the video below, that this guy is really almost entirely focused on recruiting though? Where does he talk about the products you’re selling to people?
Why Is This NOT A Scam? – Should Be Explained!
While I wouldn’t label Shaklee a pyramid scheme, or a scam – I have noticed some videos from distributors online that don’t explain WHY it’s not a scam.
One lady I saw, claimed that typically people only label MLM’s a scam if they have failed at network marketing, or failed at Shaklee.
This is an unfair presumption. She also doesn’t explain WHY Shaklee is not a pyramid scheme. She just says it isn’t, (are you just meant to take her word for it?!).
Many people are wrongly told by MLM distributors that pyramid schemes do not have any legitimate products. This is false.
How do you think that some MLMs, (that have apparent tangible products) are closed down for being illegal pyramid schemes?
The answer is; many times MLMs start off as legitimate businesses, (according to legal parameters) but fall into recruitment schemes over time.
This usually happens when MLMs are very focused on recruiting and give very large rewards to distributors for recruiting people into the business.
Distributors then figure that recruiting people into the business is more profitable than actually selling products to anyone and focus all their efforts on this.
What happens to the next recruits…?
Well, they are encouraged to do the same thing. They then also focus on recruitment… and so on and so on and so on.
This is when products only start being distributed among the distributors themselves and aren’t actually being bought or consumed by customers outside of the business.
This is how even an MLM with what appear to be legitimate, tangible products; can eventually be described as a pyramid scheme.
As long as an MLM is selling a majority of their products to real people OUTSIDE of the business, (not just to distributors) then they should be able to stay trouble.
Is Shaklee A Pyramid Scheme?
The federal government will be watching to see what kind of developments take place with all MLM companies and it’s certainly a time of change within the industry as a whole.
The FTC have warned Shaklee about their business practices along the way and they have certainly become hot on the heels of many MLMs these days.
However, I can only speak for right now and at this moment in time, Shaklee is not a pyramid scheme.
Shaklee does have loyal customers that continue to buy their products for many years and are not part of the business opportunity.
There are real people out there buying these products and they are not simply being purchased by distributors.
However, that doesn’t mean that other people aren’t going to call this a scam.
Many people automatically presume that businesses with a multi-level structure, that reward you for recruiting, are really pyramid schemes, or scams and there isn’t much you can do about that.
However, there are still people interested in this sort of opportunity all over the world. It’s just that finding them isn’t always easy.
A Big Problem With Multi-Level-Marketing Is….. Generating leads!
Companies like Shaklee generally tell you initially to expose the people you know to the Shaklee business and start building a team.
This could be anyone from a friend, acquaintance, work colleague, or even someone like your hairdresser or the person you know at the local store.
But once you’ve exhausted this list of potential contacts, (and at times alienated a lot of people that you know) you are then stuck.
This may take some time if you have a giant social circle, but if you’re not a particularly social person, this “warm list,” of contacts could dry up very quickly.
This is partially why a lot of companies like this have gone online these days.
The problem with that is, people are often told to share the opportunity on places like social media and forums – which can quickly end up like spamming if you’re not careful.
One way you could generate leads in the long term is to have your own personal blog or website that talks about and reviews relevant products in your niche – this could be shaklee products, but it could be any number of related products too.
You can then earn a commission for recommending products and services through affiliate marketing, as well as via recommending your shaklee business, (or any other multi-level-marketing business you choose).
By doing this, you’re creating more a business for yourself and not entirely relying on the Shaklee business.
Because, if Shaklee was to suddenly disappear tomorrow, you would still be able to promote something else on your site instead.
You will be able to develop various income streams from your blog/website in the long run – from doing things like sponsored posts, advertising and affiliate marketing.
If you’re reading this and just are not sure how to create a website, or don’t know what affiliate marketing is; you can learn all about that here
There is a FREE 10-part starter course that you can join that here.
Do you have any expeirence with Shaklee, or MLM businesses in general? Why not leave a comment below!?
All the best,