Is Young Living a Scam or Pyramid Scheme?

Welcome to my review. If you area reading this, you are probably doing your research and asking yourself, is Young Living A Scam or Pyramid Scheme?

If you are looking into Young Living, it is for one of two reasons. The first reason is if you are interested in the products that they sell, and want to know whether they are good for your own use. The second reason would be that you are looking into the business opportunity that they have and want to know if you can make money from it.

In this review, I will be looking into and assessing the business model. I will also explain to you if it is a legit opportunity that you can make money from.

Young Living Review Summary

Young Living is a multilevel marketing company that specializes in essential oil-based products. The key aspect of their business model revolves around training members to recruit other members under them and increased the size of their network which generates sales of the essential oil products.

While there is a potential of making money through sales, this is unlikely for most people.

Young Living is not a scam or pyramid scheme (in the technical sense) because it sells tangible products with some value that you can either consume for yourself or sell outside of the company itself.

If you understand how multi-level marketing works and are willing to do the recruiting that is required to make money, Young Living is an option worth considering.

If you aren’t outgoing and willing to recruit people you are better off trying other ways of making money that allow you to be more passive.

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What Is Young Living

Youg Living is a multilevel marketing company that sells essentially oils and related products. The company was founded in 1992 by Donald Gary Young.

Young Living has is based in Lehl, Utah in the United states, but it sells products across the world and has operations across the globe including farms in South Africa, Asia, Europe and South America.

It’s similar in model to Forever Living. Whereas Forever Living focus on Aloe-based products, Young Living is all about essential oils.

Young Living has farms in various countries from which they harvest the essential oils to create the final products that they sell.

Young Living produces a range of diet powders and other nutrition products that are not sold in stores and can only be bought from an independent distributor (another person signed up as a member).


Young Living Line of Products

Young Living produces a range of products across 12 brands that specialise in different categories of goods, from cosmetics to household items like cleaners and toothpastes, to wellness oriented products like slimming teas, and even merchandise.

Young Living Products

The products are not sold in any conventional stores, and can only be bought from Young Living directly or from independent distributors.

Young Living is popular developing countries, especially in Latin America, Asia and in South Africa, particularly being bought and sold by the distributors.


How Young Living Works

The way that Young Living works is rather complex, so this part of the article will be longer than I usually like to right. If you want to have a proper understanding of how it works, go ahead and read. If not, I will try to give you the “Too Long, Didn’t Read” version as well.

The short (TL;DR) version is that if you want to make a lot of money on Young Living, you will have to recruit a lot of people into Young Living. All of you will then buy the products and sell it to whoever you have recruited that is below you. The closer you are to the top of the pyramid, the higher your chances of making more money.

The Compensation Plan has 4 basic ranks to start out with. If you have tried to read the compensation plan, you were likely left very confused. It is the common operating procedure for MLMs to have exceedingly complicated earning structures and it took me a few hours to get a decent understanding of the Young Living Compensation Plan.

I have put together an explanation that simplifies things while giving you a fundamental understanding of what’s going on.


Young Living Compensation Plan

Rank 1 (Member) – Earn commission up from recruits up to Level 2 (100 PV to qualify)
Rank 2 (Star) – Earn commission up from recruits up to Level 3 (100 PV + 500 OGV to qualify)
Rank 3 (Senior Star) – Earn commission up from recruits up to Level 4 (100 PV + 2000 OGV to qualify)
Rank 4 (Executive) – Earn commission up from recruits up to Level 5 (100 PV + 4000 OGV to qualify)

The level refers to your down line. People that you recruit personally are your Level 1 recruits. Those recruited by your recruits are your Level 2, and so on up to Level 5.

Level 1 commission is 8%, Level 2 commission is 5% and Level 3 to 5 commissions are 4%

There are 4 factors you need to understand if you plan to ascend the ranks at Young Living.

  1. PV – Personal Volume is the amount of your total orders that you buy personally
  2. OGV – Organizational Volume is the monthly volume of you and everybody in your down line
  3. PGV – All of your of the volume in your organization excluding Silver or Higher Rank Volume
  4. LV at OGV – The number of personally sponsored members and the amount of monthly OGV required for each member to qualify at each rank.

*The amount of money that equated to PV is different from country to country. But in the US it is about $1 for essential oil based products and less for others.

Young Living Compensation Plan


Qualifying For Higher Ranks

The next level of ranks at Young Living require your recruits to qualify for certain ranks for you to be promoted further. So beyond your own volume, you must coach your recruits to rank up so that you can rank up to the next levels.

From here on it gets complicated so don’t worry yourself trying to understand it and can skip to the next section, unless you are genuinely curious or are a member who is close to Silver and want to know what you need to qualify and what you get out of it.

Silver Rank – Earn a Personal Commission Generation of 2.5% and Generation Commission of 3% for Generation 1 to 3 (100 PV + (10,000 OGV) + (1000 PGV) + (2 Legs at 4,000 OGV) to qualify)

Gold Rank Earn a Personal Commission Generation of 2.5% and Generation Commission of 3% for Generation 1 to 4 (100 PV + (35,000 OGV) + (1000 PGV) + (3 Legs at 6,000 OGV) to qualify)

Platinum Rank – Earn a Personal Commission Generation of 2.5% and Generation Commission of 3% for Generation 1 to 5 (100 PV + (100,000 OGV) + (1000 PGV) + (4 Legs at 8,000 OGV) to qualify)

Diamond Rank – Earn a Personal Commission Generation of 2.5% and Generation Commission of 3% for Generation 1 to 6 (100 PV + (250,000 OGV) + (1000 PGV) + (5 Legs at 15,000 OGV) to qualify)

Crown Diamond Rank – Earn a Personal Commission Generation of 2.5% and Generation Commission of 3% for Generation 1 to 7 (100 PV + (750,000 OGV) + (1000 PGV) + (6 Legs at 20,000 OGV) to qualify)

Royal Crown Diamond- Earn a Personal Commission Generation of 2.5% and Generation Commission of 3% for Generation 1 to 7, 1% Commission for Generation 8 (100 PV + (1,500,000 OGV) + (1000 PGV) + (6 Legs at 35,000 OGV) to qualify)


Membership Bonuses

Members who are silver and higher also qualify for what is called the Generation Leadership Bonus. 6.25% of Young Living’s monthly revenue gets paid out towards this bonus and you get paid according your rank, which qualifies you for a share. Silver members acquire 1 share, Gold Members acquire 2 shares and so on up to the highest rank for which you get 6 shares.

There is also a further 0.5% of monthly sales that is paid out towards a bonus called the Diamong Leadership Bonus, which is for members at the 3 highest levels. Diamond members acquire 1 share, Crown Diamond members acquire 2 shares, and Royal Crown Diamond members get 3 shares.

Notes*

Personal Generation Commissions: Additional commissions are paid to members who achieve the rank of Silver or higher on all volume within each leg of the organization, down to but excluding the next Silver or higher ranked member within the leg.

Generation Commissions: Based on a member’s monthly rank of Silver or higher, an additional 3% commission is paid on the OGV of each Silver or higher in the member’s organization. This commission is paid down to the next Silver or higher ranked member and down to eight generations deep in each leg.

**There are other bonuses and components to the compensation plan but including them all would make this article way too long and is more information that you need from the start.


For Personal Consumption?

Essential oils are not a widely known group of products so there is not as much information available for comparing between brands as compared to products that are more mainstream.

From the reviews that are available, the users of essential oils products report good experiences with them after using them.

The point of comparison that we do have available is the pricing. The pricing of Young Living products is significantly higher than comparable products that you can buy elsewhere.

Young Living Essential Oils

For example, their cheapest toothpaste is $12, which is as much as 6 times the price of what you would pay for normal toothpaste and even more than the most expensive options you will find in a conventional store.

So you pay more than multiple times the value of some of the best products for a product that is not demonstrated to be of a higher quality. This doesn’t make a lot of sense when spending. And if you are trying to sell the stuff and someone asks for a comparison, it would be difficult to justify the price difference.

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Pros

Promotes a healthy lifestyle and well-being – The products that Young Living sells are a good selling point. From buying the products alone, and using them, you will see benefits and your customers will see benefits if they use the products.

You get a tangible product – As a Young Living distributor, you will get product for the money that you spend. This means that if the business company were to stop tomorrow, you would have a something that you can sell or even use yourself if you can’t sell it. Some MLMs don’t give you anything tangible so this offers at least a bit of assurance.

They are a bit more open with information – A lot of the information on Young Living is freely available online and from their website. You can look up the documents at your leisure and study them before deciding whether to join. Some other MLMs are cagey with information and you can only get it directly from consumers, who might present things in a way that is not clear just to get you to sign up.

Technically not a pyramid scheme – A pyramid scheme is a business model with no real products. With Young Living you are receiving a product that you can consume or sell. There is a potential to make money if you put the requires amount of effort into recruiting and managing your network.

It’s an option – For those who are starting out in business, MLM is an option that you can explore. Unlike looking for a job where you have to apply and hope to get to the shop, with MLMs like this you can sign up, buy the stock and then sell it to customers at a market up. There are no entry requirements other than being willing to sell.


Cons

You have to recruit people – The Young Living business model is MLM so you will have to recruit people onboard if you hope to make money. You might think that you make money from selling products but that alone will not get you anywhere. So if you are not an outgoing people and have an issue with constantly looking for new customers and recruits, this might night not work for you as business model.

Not scalable – With any business, the medium to long term strategy should be to expand the business so that you can do less of the lower level work. With this model, you have to interact with each customer directly, which limits the number of people you can reach. The internet allows scaling of sales-focused businesses though integrated online tools like ads and affiliate links. These are lacking from Young Living.

Complex Compensation Plan – As with a lot of MLMs, the compensation tends to be complicated, with different types of earning and various points and positions and ranks. The not easy to understand, so you will have to sit down for quite some time with the compensation documents to understand what exactly you are getting into.

You are competing with the Young Living company itself – Young Living is a MLM but also sells the products through their website online. This means that they are competing with their own distributors. So over time, if your customer wants to buy products, they can simply buy from the website instead of going through extra step of buying through you. So in the long term, you can lose customers to the company. This is different to other MLMs like Herbalife, which can only be bought through distributors, which is more sustainable for you as a seller and means once you acquire a customer, you have a better chance of keeping them.


In 2017, the New Yorker reported that distributors are required by Young Living to make $100 of purchases per month to qualify for a commission. According to a public income statement, in 2016 approximately 94% of Young Living’s active

members made less than a dollar, while less than one tenth of one percent (about one thousand Royal Crown Diamond distributors) made over a million dollars.


Controversies

There have been a few controversies surrounding Young Living and its founder in the earlier years. The founder of the company, Donald Gary Young, was convicted for unlicensed practice of medicine and for making claims that he could detect cancer with a blood test and treat the disease.

In 2014, Young Living was warned by the Food and Drug Administration (FDA) for illegally marketing its essential oil products as possible treatments for the Ebola virus and other serious diseases such as “Parkinson’s disease, autism, diabetes, hypertension, cancer, insomnia, heart disease, post-traumatic stress disorder (PTSD), dementia, and multiple sclerosis”

In April 2019, a class action lawsuit was launched against Young Living, and its executives, with complainants seeking damages of $5 million and accusing the company of being a pyramid scheme that is disguised as selling essential oils for medicinal purposes.


When it comes to essential oils, there is a lot of debate on the effectiveness or safety of the products. In some countries that are even primarily bought for children, with some parents being concerned about using alternatives therapeutic products for their kids. There is no definitive answer in either direction and the only way a person will know for themselves is by using the product.

So if you sell the product to your own customers, you need to take all of these concerns into account be sure to give them accurate information. Do not claim any unproven medical benefits so that you don’t run the risk of similar accusations related to unlicensed practice medicine.


Is Young Living a Scam

The Young Living business model is multilevel marketing model which is quite common and sometimes associated with shady companies.

But is Young Living a Scam? No, Young Living is not a scam. They have a suite of products that have inherent value to the customer. Some people might be quick to label it a pyramid scheme, but there are distinct differences between a pyramid scheme and a legal MLM.

The definition of a pyramid scheme from Wikipedia is a “business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products.”

Young Living sells tangible products that you can use or sell so by that virtue, it’s not a pyramid scheme.

However, it is important to understand that while there is potential to make a profit by selling the products, the likelier way for you to make money with Young Living is by recruiting more people who will then buy the products themselves and then recruit more people to increase your down line


Verdict

If you are interested in using the products for yourself, then there is good value there. But when it comes to the business side of it, I would say it depends on you understanding how a MLM business work and if you believe you can do the selling that is required. If not, you should look at other business opportunities that don’t need you to sell or recruit agressively and have a more passive business model.


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