DoTERRA is a multi-level marketing (MLM) company that burst onto the scene just over 10 years ago. It specializes in essential oils and accessories. In its short time in operation, it has experienced tremendous growth, both in sales and its number of distributors. During this time, it has also been subject to lawsuits by other companies and warnings from the FDA. Even today, doTerra is one of the top essential oil providers in the world.
doTERRA Company Overview
History of doTERRA
doTERRA was founded in 2008 by a group of people whose mission was to share therapeutic-grade essential oils with the world. In fact, several of the founders of the company were former executives at Young Living, another company offering essential oils. The name doTERRA is even derived from the Latin word meaning “Gift of the Earth.”
When the company was founded back in 2008, there was no industry standard for essential oil quality. Since doTERRA wanted to provide only the highest quality oils to their customers, they developed an industry-standard called Certified Pure Therapeutic Grade (CPTG). In order to achieve this certification, oils must go through very rigorous testing, both internal and by third-parties, to ensure that they are of the purest quality.
In just a short six years after its founding, doTERRA reached 1 million Wellness Advocates (distributors) and customers. Just two years later in 2016, it reached the 3 million mark. It has also been named by Forbes magazine as one of “America’s Best Midsize Employers” on several occasions.
It seems as though no MLM is immune to scandals and investigations, and doTERRA is no exception. One of the first major hiccups for doTERRA was a lawsuit by essential oil competitor Young Living. Since several founders of doTERRA were former executives at Young Living, the lawsuit alleged that they had stolen trade secrets and had illegally re-created Young Living’s manufacturing process.
In an interesting twist to the lawsuit, doTERRA counter-claimed that Young Living had falsified lab tests by spiking doTERRA’s peppermint oil sample with a chemical additive. doTERRA went on to claim that Young Living posted the results of these falsified tests on the Internet the day before doTERRA’s distributor convention. The claims against doTERRA were ultimately dismissed, and Young Living was found by the court to have acted in bad faith and was forced to pay doTERRA’s attorney fees.
In addition to the lawsuit, the Food and Drug Administration issued a warning letter to doTERRA in 2014 because its Wellness Advocates were marketing the oils as cures for diseases such as cancer and autism. The company responded by creating a large compliance team to ensure that this did not happen in the future. However, many distributors skirted this rule by telling customers personal stories of how the oils had treated their own personal health issues.
Current Company Structure
Today, doTERRA operates globally across more than 100 countries. They have approximately 1,650 full-time employees, and they utilize a network of more than 3 million distributors. The company is headquartered in Pleasant Grove, Utah, and they are extremely involved in local communities.
doTERRA operates a 501(c)(3) non-profit called the Healing Hands Foundation to provide resources to local communities around self-reliance, healthcare, and education. The company has also recently opened several healthcare clinics across the United States that look at incorporating more holistic approaches to healthcare.
By far, doTERRA’s main products are their essential oils. They sell single doTERRA oils, oil blends, and proprietary blends that contain many different oils mixed into a single application. For example, they’re On Guard, Breath, Deep Blue, and Digest products are highly popular options aimed at immune system defense, digestion, sleep aids, and other things.
Expanding beyond the oils themselves, doTERRA also sells many types of essential oil accessories. This includes manual and automatic diffusers, cases, travel pouches, and other types of accessories. The company states that some oils work best when applied in certain ways. For example, small roller ball applicators are another type of accessory sold by the company.
Recently doTERRA has also expended into dietary supplements with its product line. They offer supplements for weight management, daily vitality, digestive health, and other issues. While a small part of their business, they also make available literature and other materials that explain the benefits of essential oils.
doTERRA Company Marketing Practices
Like many new MLM’s, social media has played a huge role in doTERRA’s success. Essential oils, and holistic health in general, have a very large following on social media. There are many groups and pages solely dedicated to essential oils and their benefits. This is the biggest way that most Wellness Advocates market their products.
doTERRA products are also available through many traditional retail channels now, and many Wellness Advocates travel to events to sell their products. This allows potential customers to sample products and try them before they buy in many cases. A Wellness Advocate is tasked with not only selling the products but also educating their customers about which product may best suit their needs.
Making Money with doTERRA
While doTERRA has a huge number of distributors, currently around 3 million, not many of them are making much money. According to the company’s Earnings Disclosure Summary, 62% of their Wellness Advocates remain at the bottom entry-level. Only 53% of those entry-level advocates earned any commission at all, and those who did averaged only $380 per year.
At the top end, doTERRA does have distributors who make more than $1.2 million per year. However, this represents less than 1% of their leaders. Once a distributor makes it to that level, more than 95% of them remain with the company year after year.
How To Enroll As A doTERRA Wellness Advocate
Enrolling as a Wellness Advocate is quite simple. You can simply to the doTERRA website and enroll for a fee of $35. Another option is to purchase an enrollment kit instead of paying the $35 fee. The lowest-price enrollment kit is $140, but it does include products that you can then use or resell.
Upon enrollment, you can purchase products at a wholesale price. In order to continue your enrollment as a distributor, you must pay an on-going yearly fee of $25. You must have an upline to enroll, but if you do not personally know a distributor, one can be assigned to you. doTERRA also offers several tools and tips to assist you in building your business as part of the membership.
The compensation plan through doTERRA is fairly straightforward. A Wellness Advocate can earn money through retail markups and bonuses paid based on the volume of sales by the distributor and his or her team. Since Wellness Advocates purchase products at wholesale prices, they simply get to keep the difference between the purchase prices and selling price for all their products sold.
In addition, they can earn bonuses based on volume up to seven levels deep in their downline, depending on their own rank at the time. Bonuses are earned and paid weekly, and the bonuses play a large role in the total compensation of individuals who achieve high ranks within the organization.
Sales and Marketing Techniques
As previously discussed, social media is one of the largest marketing channels for Wellness Advocates. Another marketing technique that is highly encouraged is the teaching of classes about essential oils. Wellness Advocates are encouraged to teach classes in order to educate their customers and potential customers about the uses and benefits of the products. They should also have products there for testing and purchase. This can lead to many sales as well.
doTERRA Compared to Other MLMs
Overall, doTERRA is regarded as a highly trusted company. While some people do not believe in the healing benefits of the oils themselves, the company is trusted by most people. From an earnings perspective, the average and potential earnings of a distributor are quite low. Many people join the company simply to receive the wholesale discount on their own purchases, and this is likely the best way to go. It would take a huge amount of effort, and maybe even a little luck, to be successful in selling these products.
Conclusions For doTERRA
doTERRA is one of the leading suppliers of essential oils in the world. The company is very trustworthy, and their products are highly regarded. However, if you are planning to make a lot of money as a Wellness Advocate, it’s not likely to happen. The market is quite saturated with around 3 million distributors and many other essential oil companies other than doTERRA. Consider joining to receive the wholesale discount, but you should probably look at other places if your goal is to get rich.