Is Young Living A Pyramid Scheme? Here Are The Facts!

You probably came to this page because you wonder if Young Living is a pyramid scheme or a legit opportunity.

No need to worry you’re in the right place.

Over the last years, I’ve been busy creating reviews about all kinds of online products.

Some turned out to be fake others were legit ways to make money online but in the process, I learned how to spot scams.

In this post, I’m going to look at Young Living's products, history, income statements, and compensation plan to find out if Young Living is a pyramid scheme or any other type of scam.

Young Living Review — Is Young Living A Pyramid Scheme?

Overview

Summary:
Young Living is an MLM company that sells Essential Oils and products that contain essential oils. After looking into Young Living I don't think it's a pyramid scheme. I'd consider it a bad business opportunty in which I only can see 3 groups succeeding if everything goes their way. 

It is possible to make money with Young Living but it isn’t worth the time and energy in my opinion. Read below why I came to this conclusion.
Similar to: It Works!, Monat Global, Amway Global
Rating: 5/10
Recommended: No

What is Young Living?

Young Living is an MLM company founded by Donald Gary Young. It sells essential oils and does that by having a large focus on recruiting independent sellers and paying them commissions based on the products they sell and the people they recruit.

“…We enhance and empower lives around the world by sharing the unique benefits of nature’s living energy–essential oils…”

Young living is active in and shipped products to over 200 countries.

In 2017, Young Living surpassed $1.5 Billion in sales and they haven’t shown any signs of slowing down. They are seen by most as the market leader in selling essential oils.

Their focus on recruiting often sparks up the question if Young Living is a pyramid scheme.

If this is true you’ll find out at the end of this post.

Is Young Living An MLM And How Does It Work?

Young Living is an MLM company that distributes essential oils. Instead of directly selling it to consumers they have chosen to use the MLM model which gives you the choice to earn money by:

• Selling the products for a commission
• Recruiting people to earn bonuses.
• Mentoring your downline to earn bonuses

This is exactly how you earn money when joining an MLM. Young Living can be considered an MLM when looking at these 3 ways to earn money and the business model as a whole.

What is MLM?

MLM (a.k.a network marketing) stands for multi-level marketing.

According to Wikipedia, multi-level marketing is a marketing strategy for selling products or services where the revenue is derived from a non-salaried workforce.

As a part of this workforce, you sell the products from the company and recruit people to do the same thing. This group of people you recruit will work under you and is called your downline.

The bigger your downline is the more money you can earn passively (technically speaking) because you’re getting paid a percentage based on the performance of your downline.

This also means the person that recruited you which is called your upline is making money based on your performance.

The act of recruiting turns an MLM company into a pyramid-shaped organization where the first people to join make the most and are on the top of the pyramid and those last to join are at the bottom.

Source: Wikipedia

MLMs have been around for a long time. There are Multi-level marketing companies active today that were founded in the 1900s.

MLM has a lot in common with pyramid schemes, so scammers often use MLM to disguise their pyramid schemes.

Is it absolutely necessary to recruit people as multi-level marketers? No. not in a legitimate MLM company.

You can also stick to just selling products you can order at wholesale price and re-sell to make a profit.

This is easier said than done for multiple reasons which is why most members try to recruit others so they can earn more money.

How to join Young Living

Most people get referred to Young Living but you can also sign-up through their website.

After that, you can become an Young Living Brand Partner by following these 3 steps.

• Step 1: Choose Your Business Essentials Kit
• Step 2: Sign Your Agreement
• Step 3: Start Sharing

Step 1: Choose Your Business Essentials Kit

The Starters kit includes:

• 90-day MyYL trial: a must-have for building your business website and sharing YL. 
• RISE 90-day planner: Planning Calendar for setting and tracking your business goals.
• RISE to Royal brochure: A guide through the perks that await you at every rank within YL.
• YL Insights card: a snapshot of how YL Insights can help you manage your business.
• Silver Bound flyer: a road map for structuring your team for success.

The kit doesn’t include products and doesn’t count as Personal Value.

Step 2: Sign Your Agreement

The agreement listing all your rights and the terms and conditions for working as a Young Living Brand Partner.

Source: US Brand Partner Agreement

Is Young Living a pyramid scheme?

To answer this question we need to know what a pyramid scheme is.

What is a pyramid scheme?

A pyramid scheme is a type of scam where people are promised money for joining the scheme and recruiting other people instead of selling products and services. 

No selling of a product or service is involved whatsoever.

So you might be wondering where the money comes from in a pyramid scheme.

The people that join are expected to pay a one-time or a monthly fee and in exchange for that, they get a percentage of the fee of everyone they recruit after.

The remaining money goes to the creators at the top of the pyramid.

The problem with this model is from a mathematical standpoint it’s impossible for everyone to make money because you simply run out of people.

Take a look at this picture below showing how it’s impossible for everyone to earn money.

Source: Wikipedia

As you can see, in this pyramid model it’s required to recruit 6 people to earn money. You’ll notice from the 12th level and further, it’s not possible anymore for everyone to earn money.

The 2.2 Billion people on the 12th level need 13.1 billion recruits in total for them all to make money which is more people than there are currently on Earth.

When people can’t be recruited anymore, the pyramid collapses because not enough money is coming in to pay members and sustain the pyramid.

Looking at the description of what a pyramid scheme is, Young Living can’t be classified as a pyramid scheme from a legal perspective. Young Living products have given people a method to make money without recruiting people.

That being said, there are pyramid schemes that disguise themselves as MLM companies because MLMs also use a pyramid structure but sell products and services. 

John M Taylor. a prominent figure in the research of MLM’s and Pyramid schemes calls these product-based pyramid schemes.

He came to the conclusion that this variant is a lot more dangerous than its predecessor.

A few examples of these can be found on the FTC website,  such as Vemma an  “MLM/Direct-selling company” that supposedly was selling liquid nutrition products but turned out to be a pyramid scheme.

Ultimately they settled and had to pay a fine of $238 million and were suspended from partaking in recruiting practices to distribute their products.

These pyramid schemes offer products that are almost impossible to sell with the goal of pushing you to recruit people because you supposedly can get higher commissions.

These pyramid schemes bring in money by the members paying for a membership and them purchasing products thinking they'll earn money in the long run.

In an investigation by the FTC regarding Amway, a precedent was set called the 70 percent rule.

They were accused of being a pyramid scheme. 

The 70 percent rule states that every distributor must sell at wholesale and/or retail at least 70% of the total amount of products he bought during a given month in order to receive the Performance Bonus due on all products bought. 

This was set in order to prevent distributors from purchasing their way to the top and the company from earning money at the expense of the distributor.  

This is ofcourse hard to prove so most of the time to spot a pyramid scheme people look for signs in which the company encourages recruiting while discouraging selling products.

From that point on it’s the same as a traditional pyramid scheme but is this the case with Young Living? Let's take a look at their product, income numbers, earning potential, costs, and more to find out.

Young Living Products

Young Living is known for its essential oils.

According to their website, Young Living has more than 500 kinds of essential oils which is insane if you ask me but Young Living seems to make it work.

Aside from the oils, they also sell products that contain their essential oils.

These are mostly household products for facial care, soaps, bath gels, lotions, hair care, diffusers, animal treats, perfumes, and more.

The majority of the products I have seen on the website seem affordable but what about the quality?

Are Young Living Products Legit?

A lot of people try to make money selling Young Living products which makes it hard to find honest reviews on the standard websites I look for reviews such as YouTube or simply Googling reviews.

In the past, Young Living essential oils have had problems with the FDA because some of their distributors promoted their oils as drugs that could help against Alzheimer’s, Ebola, Diabetes, and a few other diseases.

This is why I think there’s value in looking at user rating websites since it prevents people from selling the product after they have rated it.

That being said, It’s a hard thing to prove if essential oils are legit because they don’t really cure anything. According to the FDA website it considers most of Young Living’s essential oil-related products cosmetics.

The only products that might be the exception would be the CBD oil products but even these are carefully promoted as energy boosters.

On Trustpilot, most people seem to be satisfied with the quality of the products but not the service Young Living provides. The only big thing that has been brought up that people seem to be frustrated with regarding the quality of the products is the price.

Young Living Compensation Plan

Young Living is very similar to a traditional MLM when looking at its compensation plan. 

How much money you’ll earn is heavily based on your ranks which you receive by meeting Young Living's compensation plan qualifications. 

There are three factors to meeting qualifications:

• Personally purchase (or resell) enough product volume to qualify
•  Recruiting enough customers (who become your downline) to qualify at your desired level.
• Your downline purchasing (or reselling) enough products.

You'll receive different types of points (personal volume, customer volume, team volume, etc.) for doing these actions. What type of points you get can differ. Here's a video explaining points and the rest of the compensation plan.  

In total there are 10 ranks divided into 3 phases called: 

The Foundation
There are 3 ranks in the foundation phase called associate, star, senior star, and executive. Distributors with these ranks solely focus on reselling products they’ve accumulated for a commission. 

A minimum of 100 points of any type of volume is required to stay eligible for commissions at these ranks.

Building your business
There are 3 ranks in the BYB phase called Silver, Gold, and Platinum. In this phase, you start getting into building teams (aka your downline) and get the capability to earn based on the performance of your downline.

• A minimum of 100 points of personal volume is required to stay eligible for commissions at these ranks.
• Between 10.000 and 100.000 points of volume from your entire “organization”.
• Multiple legs.

Developing leaders
There are 3 ranks in the Developing Leaders phase called Diamond, Crown Diamond, and Royal Crowne Diamond. In this phase, you are experienced in building teams (aka your downline), earn based on the performance of your downline, and also get a share of global revenue.

• A minimum of 100 points of personal volume is required to stay eligible for commissions at these ranks.
• Between 250.000 and 1.500.000 points of volume from your entire “organization”.
• Multiple legs.

How much does it cost to join Young Living?

Like most MLM companies, you’ll have to make a financial investment to join as a brand partner.

How much you’ll have to pay differs per country.

For this post, I mostly focused on what it’d be like if you joined Young Living in the United States of America but most countries seem to be around the same price range aside from 4 exceptions.

When you sign-up you’ll have to buy the Business Essentials kit ($14,95) that contains documents to keep up to date with what is going on with Young Living.

To kick start your journey you also have to purchase 100 points worth of products. Young living has a few recommendations of kits you can purchase to get the 100 points. Some of these you can see below in the picture.

You have multiple kits that you can choose from starting with the “basic” starters kit which is the cheapest at $135 and the most expensive bundle is $165. All of them grant you 100 points.

At the lowest level, you’ve to at least purchased 100 points for products every month. Looking at the point value of the products on the website this is at least $135. 

So that’s 135x12= 1620 + 14,95 = $1635,95 a year you have to invest as a brand ambassador. 

According to the income disclaimer they’ve published you also have additional costs such as: 

• advertising or promotional expenses
• product samples
• training
• rent (for conferences)
• travel (for conferences)
•  telephone and internet costs
• other miscellaneous expenses.

So the absolute minimum you'll be spending as a Brand Partner is $1635,95 per year.

Young Living Earning Potential

How much can you make with Young Living? In theory, you could make an average of more than a million-dollar per year according to their income disclosure statements but what is the chance of you getting to this point?

Let's take a look at the most recent income disclosure.

This disclaimer only show the revenue numbers not the actual profit.

According to their disclaimer, 98,7% of Young Living on average earns less than $1635,95 in 2022. Since these are the minimum expenses that means except for the people at the top most people lost money.

It's normal to not break even in your first year with most businesses but these numbers are a bit extreme in my opinion.

The people (1,3% in 2022) that succeeded in breaking even and earning a profit did that after an average of 22 months.

That's $135 x 22 =  2970 (+ 14,95) = $2.984,95 that they've invested in those 22 months.

I’m not saying it’s impossible to make money as a member of Young Living but the chances of you losing money are that much higher than earning money.

Why aren’t people earning decent money with MLM companies like Young Living?

I have summed up the reasons why it’s hard to make money with Young Living and MLM companies in general into 3 points. As an Young Living Brand Ambassador, you’ll have to deal with the 3 points mentioned below.

1. MLM companies are often associated with pyramid schemes
MLMs have a pyramid recruiting structure that you often have to join to be able to make decent money or at the very least not lose money. The problem is a lot of pyramid schemes disguise themselves as MLM programs making it difficult to differentiate the two.

This is the biggest problem why most distributors have a difficult time recruiting people. The moment people hear about how you can make money by recruiting people red flags appear in most people’s minds.

This isn’t good for your sales.

2. You have to invest your money to earn commissions consistently
You’re only eligible for bonuses and commissions if you resell their products. The bigger the bonuses, the more product you have to buy and resell.

You do get discounts but if you can’t sell the products I can see you easily fall into a financial deficit (which happens to the majority of distributors of MLM companies).

3. The price of the product often isn’t aligned with the market
It’s hard for a multi-level marketer to sell products because most MLM products are much more expensive than similar products sold by non-MLM companies.

This means even if you’re really good at recruiting your downline still needs to sell those same expensive products for you to make decent money.

You can see that translated in these statistics I found about Multi-level Marketing.

• Nearly half (47%) of MLM participants reported that they lost money.
• One in four (27%) MLM participants reported that they broke even (made no money).
• MLM participants are 7% more likely to declare bankruptcy during their lifetime.
• Direct sales have risen 79% in the last decade, but MLM participants continue to lose money.
• 90 – 99% of distributors in multilevel marketing only receive a couple of hundred dollars in commission per year.
• Out of the 33,000 interviewed, 90 people made enough money to cover the costs of building their businesses.
• 50% of the people who start a network marketing enterprise abandoned it in the first year.

Sources:
FTC
AARP
Jobsinmarketing.io

Risks of Becoming an MLM Distributor

As I said it’s not impossible to earn money as a Young Living Brand Partner but there are some risks that come with the gig. 

High Likelihood of losing money

The number shows that at least last year Young Living was comparable to the statistics of most MLM companies which states that less than 1 percent makes a profit as a member. 

You might be the exception but it’s important to know this before you financially commit to Young Living.

Strain on relationships

Network marketing requires you to pitch not only the product but the “opportunity” to others starting with your family and personal network.

There are many stories online about people who have ruined valuable personal and work relationships by pitching MLM products and attempting to recruit people.

Pressure from your upline

Just like you’d have your downline, you’ll also have an upline. 

In the best-case scenario, they’ll coach you in a non-aggressive way to improve your chances of success but it’s not uncommon for an upline to pressure you into purchasing products.

This might not be the case with Young Living but if this happens I suggest reporting it immediately to the higher-ups or finding other methods to earn money.

My Personal Take

Young Living doesn’t use over-the-top bonuses to steer people toward recruiting but the number of levels that you can get residual income from worries me a bit.

John M Taylor (Pyramid scheme research expert) does mention that having more than 5 generations that you can profit from is often a red flag. 

The income disclaimer also indicates that most people lost money in 2022. This isn’t unusual for new businesses but numbers are a bit extreme.

That in itself isn’t enough to call it a pyramid scheme but it’s enough information for me not to recommend joining it.

The only 3 groups I could see succeeding with this business model are expert recruiters, salesmen, and influencers with a big audience.

Conclusion: Young Living 

Is Young Living a (Product based) Pyramid Scheme? 

Young Living isn't a pyramid scheme based on the information I have gathered. It's a legitimate essential oils MLM but that doesn't mean it's a great business opportunity. I wouldn't be comfortable recommending this MLM program to people looking for a side or full-time income.

Is Young Living A Scam?

Young Living seems thruthful (but vague) in their marketing. An example is their ongoing suit because they use the term “therapeutic-grade”. This can mean so many things.

That being said, it does take some deep research and some calculations to uncover the true earning potential of Young Living.

The thing I'd be careful with are Young Living brand partners that make false statements trying to earn a quick buck. That's where the real danger lies with Young Living.

Final Thoughts

Unfortunately, Young Living isn’t for everyone. 

It comes with significant financial risk and it’s hard to scale because most of the marketing is done face-to-face and you can’t be at multiple places at once.

This is why I suggest to those that don’t want to deal with these 2 factors an alternative.

It is called affiliate marketing. 

It’s the method I use to earn most of the money I earn online.

How do you earn money with affiliate marketing?

You don’t have to sell products or services and you don’t have to recruit people.

The only thing you’ll be doing is referring people (that already are interested) to merchant websites such as Amazon, Walmart, and eBay. 

When people buy something based on your recommendation you’ll get a percentage of the purchase.

My #1 recommendation is an affiliate marketing training platform with more than 1.5 million members. 

Memberships are basically an all-in-1 package that comes with expert-level training, resources, and support from a community of people doing the same thing. 

Want to learn more? Take a look at my comprehensive review of the affiliate marketing platform.

Do you have any experience with MLM or Modere let me know in the comments!

That’s all for today. 

See you in my next post!

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