As far as health and wellness go, I believe our financial success CAN BE directly linked to our overall physical (medical) condition. Notice how I emphasized the pronoun and verb earlier? This is to point out that investing in better health may not always be the ideal path to financial success. I have Mr. James Quincy (CEO of Coca Cola USA) as an easier example of ‘I told you so.’
Most people who are looking for a business venture with a relatively easy start-up cost couldn’t help but choose health as an ideal avenue. After all; in a country where nearly two-thirds of the population is classified as obese, who wouldn’t want to be fit?
But with most Americans ending up ghosting their own gym memberships, perhaps it’s preferable for them to get their hands on a product that offers faster favorable results with slightly less effort required. While I tend to have a habit of swinging the ‘honesty bat’ too hard on health companies that stray from normal expectations, this famous company called Shaklee somehow compels me to pull some punches (like a keyboard warrior, that is).
Shaklee: Nature’s Champion
As vaguely mentioned earlier, I tend to pay a certain degree of respect for this health brand. But I don’t just base this admiration on a mere whim. Obviously, it requires a strong sense of personal distaste not to acknowledge this health company’s good reputation. Staying operational since 1956 is just plain legendary considering how cutthroat American business playing field is.
Shaklee Corporation is the undying namesake legacy of a brilliant man named Dr. Forrest Shaklee – a distinguished chiropractor and nutritionist. But being a physician in the early 1900s wasn’t the most impressive part yet. What made him worth mentioning in the history books is that he is among the earliest (if not exactly the first) of the modern doctors to actually promote the idea of nature as a principal therapeutic source.
“I never belittle the medical profession but we are in two separate fields of endeavor. They are trained to treat disease and I am interested in building health.” – Dr. Forrest Shaklee
The quote “prevention is better than cure” has just sounded too lazy and inept compared to Dr. Shaklee’s display of literal depth and substance (yeah! run Forrest, run!). More importantly, his heritage more than matches his vision of building health.
Shaklee Corporation was able to maintain a seemingly unparalleled standard in terms of ‘product purity.’ For the past 60 or so years, everything being sold for consumption undergoes an extremely rigid set of scientific trials before being released for distribution. They put a very strong emphasis on producing the most natural and eco-friendly nutrition supplements, weight-management products, beauty products, and household items.
With nature as the core of the Shaklee Corporation’s strategic move, it was not surprising for them to become the very first Climate Neutral business company. From manufacturing to selling, they were able to pull off industrial-scale operations that have zero environmental impact.
The Better Business Bureau (BBB) gave them an A+ rating and they generate up to $844 million worth of revenue as of the reports dated back to 2014. As of that same year, this company had a total of 1.25 million distributors. Aside from the United States, they also operate in these following countries overseas:
Shaklee: The Pyramid Scheme?
If you were paying attention earlier (I know you do, right?), then it is painfully obvious that Shaklee’s business reputation is a force to be reckoned with. Well, so are the Italian mafias. But here’s the thing with using the seemingly far-fetched comparative analogy – not all good business is something that lawmakers, law enforcers, and law-abiders can conveniently go along.
But take note: there is a fine line between a company that peddles dangerous illegal stuff and one that markets something that is beneficial for all. Think about it, Shaklee vitamins hardly fit into the same category as contraband AK-47 or plutonium. Imagine a hard gangster or terrorist selling vitamins and try not cracking a smirk at the thought. So yes… Shaklee is not a crooked enterprise.
In the eyes of the people outside the legal profession, it is easy to picture them as shady given the number of lawsuits they have faced in the past. This company had its own share of hard times dealing with serious business malpractices from their rogue direct sellers. In fact, a case in 2012 to 2014 got so bad it required the intervention of America’s very own FBI.
For a corporation that literally serves as one of the earliest pioneers of genuine multi-level marketing (MLM), the term ‘Shaklee pyramid scheme’ almost sounds laughable. But wait, Bob? Isn’t MLM and pyramid scheme the same? Now here’s one of the occasional moments where people (and by that, I mean unkind strangers) can’t help but describe me as a know-it-all.
While I have an odd craving for reading boring stuff, I don’t appreciate the same inclination for throwing thesaurus-trigger words and calculus-worthy logic as academic textbooks do. Hence, I’m going to make this as blunt, concise, and non-homicidal as possible. Brace yourself! Here goes the 154-word key trivia!
Pyramid scheme can simply be understood as ‘bad multi-level marketing.’ But what exactly is MLM? This business opportunity allows a prospective entrepreneur to avail for membership and earn a percentage from the products or services he/she helped sell. Aside from directly promoting the brand, the qualified member/distributor can ALSO receive a percentage of the earnings gained by the new members he/she has recruited.
Did you notice the term I caps-locked earlier? This is because the recruitment of ‘down-line’ members merely supplements the main objective – to sell the brand. With that in mind, here are some of the strong points defining a pyramid scheme:
- The product/service is almost (if not completely) unknown or irrelevant, taking a back seat to recruitment as the main objective.
- Members are required to shell out a huge amount of investment money on the first day.
- The company does not offer sufficient or complete explanation of how exactly members earn some profit.
So is Shaklee legit? Absolutely! The three aforementioned conditions never apply to this company. As one of the top distributor of health products worldwide for roughly 63 years, it’s just unthinkable for NASA to promote something that is insubstantial (and no, Karen, I’m not getting into the Moon Landing Hoax debate either). Voila! That wraps up the 154 words of now-you-know.
With Shaklee Corporation being a gold standard health product and also a valid business opportunity for all, you might be thinking that I am hands-down supporting your interest in joining the MLM business. But from the immortal words of the National Geographic channel, ‘think again.’
I certainly wouldn’t go that far yet considering my reservations about MLM enterprises in general. This type of business has a tendency to give its prospective members unrealistic expectations. While Shaklee has successfully elevated its brand into a proverbial superstar trademark, the people behind that accomplishment did not have it easy (far from it!).
Being your own boss is a truly attractive proposition. Unfortunately, you really need to think twice when it comes to treading the MLM path (even with Shaklee as the main vehicle for success). Here are the reasons why…..
Business Con 1: Flexibility
Many people are easily led into joining MLM groups believing that this business opportunity is a better alternative to the standard 8- to 10-hour rat-race. One of the key selling points of ‘being their own boss’ is your free rein in terms of the number of hours spent on your actual labor.
Every MLM organization promises that you can “work wherever and whenever you want.” Shaklee’s MLM dynamics seem to be no different in this regard and they also have their fair share of unintentionally dashing the newbies high hopes. However, the pressure usually zeros in on individuals who struggle to manage multiple tasks within a restricted timeframe.
Shaklee prescribes its own formula for success to those who aim to make a serious killing in the overall sales effort. Every prospective distributor must be aware of the fact that they will have to divide their time according to these proportions:
- 75% spent on an actual conversation with new people
- 10% spent on attending or hosting training
- 10% spent on running events
- 5% spent on personal development
Frankly, I have no idea how they accurately describe ‘personal development.’ But it should be enough to take note that a huge portion of your time will be funneled towards chatting strangers (and by that, I don’t mean via online text messages). Under the 75% partition alone, you might be spending an average of 2 to 3 hours a day for a single face-to-face appointment.
This duration may include the actual time you need to spend traveling to a prescribed meeting place (if you haven’t set up your own ad-hoc office yet). You also need to take note of the actual time spent waiting for the potential client/recruit to arrive at the agreed venue.
After finishing the pep talk, you will also have to consider the timeframe for the previous audience to spend in retrospect before they decide to purchase Shaklee products or join the company as one of your newest down-line distributors. Some of the previews interviewees take days or weeks (or even months) after a ‘follow up’ to make up their minds.
“Time is money,” as they say. With these unavoidable delays, it’s easy to overlook how costly it can be just to close a deal. The odds are simply not that peachy. The number of hours you have spent trying to convince one audience does not always equate to the actual cash you will earn (more on ‘financial independence’ later).
Granted, your luckiest break would be to converse with a single group (comprising of as many eager and attentive sucke— ahem— persons as possible) for each appointment. This could increase the odds of success in your sales and recruitment effort. So just imagine… How is this any better than spending an average of 8 hours in the workplace (e.g. assembly line, office, hospital, and service booth)?
In terms of time, you as an employee in a standard 8-hour job will only need to be concerned about punctuality. In fact, workers can afford the luxury of not worrying about the nuances of their jobs during their off-duty hours. Regardless of how the day goes, you get paid for simply being present and functional (and the pay gets bigger in time if you impress your boss).
Many people who joined MLM organizations mistook ‘time flexibility’ as an advantage being guaranteed to them. In reality, flexibility is a virtue that is imposed upon prospective distributors. Instead of “we offer you adaptable working hours,” their pledge will soon sound exactly like “we require you to be adaptable with how you manage your time with us.”
Remember, at this point, I am only talking about 75% of your time ‘bending over backward’ (if you are an introvert who thinks ‘artificial conversations’ are painfully pointless). The other 10% that requires you to run events can be a whole new ball game.
This means spending hours setting up a venue (indoors or outdoors) that exude a welcoming atmosphere for guests. Days prior to that, you have to spend another set of hours planning your event’s program. Again, it’s spending a precious amount of time for a lottery’s chance of success.
Granted, selling your goods during the event could yield token returns. However, there is no guarantee that even half of the attendees in that so-called event would pledge to be your down-line.
If you belong to a group of people who are deathly scared of ‘public speaking,’ this part of the article is the best time for you to decide NOT to be a member of Shaklee (or any socially-oriented MLM group for that matter). If my knowledge serves me right, the enormity of the aforementioned 11 activities is simply too tedious and daring (unless you have spent years organizing special events).
Business Flaw 2: Independence
Some people are lured by the promise of having greater control over your time. If not, it is definitely easier to be tempted by the illusion of financial independence. One of MLM’s promises of helping you become your own boss entails the idea of being able to eliminate your need for a day job.
After all, what can be more attractive than the illusion of removing the hierarchy? You are your own boss, so you only answer to yourself. Isn’t that right, Johnny? WRONG! Or else which part of ‘multi-level’ in MLM still doesn’t ring any bell? As an excruciatingly obvious fact, every mid-level Shaklee distributor has an up-line and down-line (like, duh!).
Being able to pay yourself is a fascinating idea until it is put into practice. The irrevocable fact about being a part of an MLM business is that you need to be able to sell huge and recruit (and retain) down-lines that make a killing with their own selling strategies.
Shaklee’s system is watertight enough to survive several decades, even if a number of prospective distributors would complain about the expensive startup cost (from $50 to $600). Basically: higher investment cost = higher profit. While there’s nothing practically amiss or fishy about this scheme, there are still a number of reasons why it is specifically difficult for members of Shaklee.
One of the things that pose a challenge in attaining a favorable profit is that Shaklee simply has so many products to sell – and that’s just under the scope of health and beauty category. With more than 200 types of merchandise available, it can be both overwhelming for customers and distributors alike.
If that’s not hard enough, Shaklee has a policy of keeping their prices confidential. In fact, you have to acquire a free customer membership in order to access their price list online. This obviously slows down the rate of attracting prospective buyers (and even slower for down-line distributors). “No brochures? No way!” so says the shrewd buyer.
Lastly, Shaklee’s products are just downright difficult to sell. But why, Bill? Well, the MLM business is already too swamped with health trademarks. Majority of big-time MLM names are already into this type of market. Not only is Shaklee Corporation comparatively costly, but it is also too tight-lipped for its own good. It is easier for customers to choose the cheaper and more transparent rival.
All these difficulties point to the painful reality that ‘financial independence’ is simply too far from one’s grasp yet. You will have to climb up the ranks (more on ‘rank advancement’ later) to even begin entertaining the idea of leaving your stable day job and singlehandedly live off your income as a full-fledged member of Shaklee Corporation.
Bottom line: You’re not yet rich by the time you have just joined an MLM business. Hence, the very notion of ‘financial independence’ can be a subject of very fierce debate. See the ranking system below to know what I’m talking about.
Business Flaw 3: Advancement
Easy money and lax lifestyle never fail to attract a huge number of people into the MLM domain. But it is not surprising for some to join an MLM company to simply ‘elevate themselves.’ What makes this fulfillment extra glamorous is the fact that MLM organizations evoke a sense of exclusivity.
“I belong in a group apart from the rest,” says the dreamy rookie. In any part of the reality-based civilized world, wealth and convenience easily follows after the promotion. Hence, it is crucial for members to establish themselves as top players in a supposedly ‘elite group.’ Behold the dreaded corporate ladder… Sounds familiar?
If this kind of playing field is already commonplace in a traditional work setting, why still choose MLM? Those who value professional prestige does not always experience rank advancement for the simple reason that the demands of the usual work environment are often perceived to be more stressful and competitive.
What most people fail to realize is that there is little to no difference in terms of conquering the rank advancement between day jobs and some MLM businesses. Take note: Shaklee has more than 1 million distributors and the numbers may still continue to grow. Based on its population alone, this company gives the impression that chasing the hierarchy can be a lost cause.
As it turns out, Shaklee’s corporate ladder could scare the ‘faint-hearted ambitious’ (and I still wonder how some people can be both at the same time). This MLM enterprise has a total of 13 levels beginning with the ‘distributor.’ The lowest leadership position starts with the ‘director.’
It’s not just enough for the director to purchase at least $50 per month in terms of monthly inventory. Those who aspire for this basic leadership rank needs to at least earn 2,000 worth of ‘personal group volume’ (PGV) in a single month. Jeez, Tom, what on earth is that? This PGV or PV serves as the rough basis for their profit and prestige system.
Any distributor who yearns for the lowest boss rank (yes, think of it as a challenging video game) needs to keep a close eye on these numbers, on top of everything else mentioned in the earlier part of the article. This means expanding their points of consideration as well as their source of anxiety. Simply put; the more things you need to watch out, the more things you need to worry about.
So is climbing through the ranks of Shaklee Corporation difficult? Yes, especially if you’re in a hurry to reach the top. In fact, merely a handful of individuals among the million members ever became a senior director. The headcount only gets exponentially smaller after each higher level thereon.
The difference between both ends of the ranking spectrum is just mind-blowing, considering the number or levels you have to surpass. Distributors will no doubt feel slight pangs of jealousy over the lavish perks enjoyed by the coveted ‘presidential master coordinator’ rank.
As illustrated earlier, it takes at least three months for the fastest route possible to reach the rank of director. A lot of things can happen within that timeframe. Some people would look forward to better things (like saving for a week-long vacation in Singapore) than toiling for a title that grants them a median yearly income equivalent to the three months’ pay of all average American workers.
There is no question that I have great respect for Shaklee Corporation for its superior health products. In fact, it is rare to find a Shaklee review that is peppered with harsh criticisms. Unfortunately, some of the nuances of their overall business dynamics only reinforce my generally negative view about MLM.
Knowing what I know about business and my own personal finances, I could be contented with merely applying for the premium customer membership for a 25 percent discount on their weight control products. I could use an extra hand with keeping in shape knowing that my gym attendance is just as fair-weather as my fair-weather friends (I’m not going to drop any names….. Bob, Karen, Johnny, Bill, and Tom).