What Is Scentsy?
Scentsy is yet another direct selling company that has burst onto the scene and taken advantage of the huge selling opportunity through social media. As the name implies, they sell a myriad of items related to scent, with one of their biggest sellers being their flameless candles. The company has a trusted reputation, although most distributors find it difficult to break even selling the products. Let’s take a closer look at Scentsy in this review.
Scentsy Company Overview
History Of Scentsy
Scentsy got its start in 2003 when co-founder Kara Egan was inspired by watching Oprah’s “Millionaire Moms” show. Kara decided that people needed a safe way to scent the areas around them and thought that there must be a better way than the open flame candles that were on the market. She began working on the idea with her sister-in-law Colette Gunnell.
Hence, Scentsy was born and the pair began operating the business out of their basement. They quickly discovered that people loved the idea, and their products started to become quite popular. Originally, Scentsy was not using a multi-level marketing sales model. Kara and Colette were selling the products themselves, and their operating costs were starting to create debt for the company.
In 2004, the founders met Orville Thompson at a trade show in Utah. They happened to have booths across from each other, and Kara agreed to trade Orville several Scentsy products for a video game controller that she wanted for her kids. Orville took the Scentsy products home, and his wife Heidi loved them.
As his wife began telling her friends about the products and having people over to smell the different scents, Thompson soon realized that the company could benefit from the “party” selling model. The Thompsons purchased Scentsy from the founders in May 2004 and immediately utilized a direct selling approach. The company grew very quickly and has made its way to the Top 50 largest direct selling companies in the world.
Today Scentsy has over 1,000 full-time employees and a distributor network of around 100,000. It should be noted that this number is down from their peak distributor size in 2012 of nearly 170,000. The company’s annual revenues are in the range of $450 million. It has also been named to Forbes 2018 list of America’s Best Midsize Employers.
From a product perspective, Scentsy has had relatively few complaints. Customers do seem to love the products and are happy with them. There are hardly any documented issues with Scentsy products. However, their promises of earning potential and distributor marketing tactics have come under fire.
Scentsy has been accused of targeting military spouses with their sales model since those families often move around and have trouble finding traditional employment due to their frequent moves. According to one calculation, you need to work an average of four years in order to make the same amount as someone working three and one half hours per week at minimum wage. In Scentsy’s defense, many MLM companies have been accused of targeting military spouses.
The income promised to new consultants is the other big complaint from Scentsy opponents. As with most MLM’s, the majority of distributors operate at a net loss while very few achieve a full-time income. Typically, less than 1% of distributors within Scentsy make an income that would be considered full-time at a traditional job.
Current Company Structure
Orville and Heidi Thompson still serve as co-owners and co-CEOs of the company. The company is headquartered in Meridian, Idaho, which is where the Thompsons moved the company soon after the purchase. The Thompsons have established a strong leadership team within the company to handle everything from new products to consultant management and opportunities.
In 2017, the company achieved $450 million in revenue. Scentsy operates in 11 countries around the world, and they have a “contribute more than you take” philosophy to their work. They aim to provide a family friendly business opportunity to their consultants and enliven the senses with their unique products.
Scentsy Product Lines
As the name implies, all Scentsy products are about one thing – scent. However, they have expanded their product lines significantly from their original wickless candles. Their wax warmers, or wickless candles, are still some of their best-selling products. Customers can purchase a warmer and then select from any of their hundreds of scents to place into the warmer.
Scentsy also offers many types of diffusers and oils to fill your space with aroma. In addition, they offer car bars, room sprays, and other items that are easily transported to carry wherever you go. Scentsy even offers stuffed animals for kids with scent packs inside like bubble gum or sugar cookie.
Lastly, Scentsy now offers products like laundry detergents or bath products. Their bath products include items like soaps and lotions in many of their traditional scents. They even have items for your pets such as detangling sprays and deodorizing mists.
Company Marketing Practices
One of the company’s favorite marketing practices is utilizing the “party” selling method. Consultants are encouraged to host parties where potential customers can smell the different scents, see the warmers in action, and talk to their friends about the products. This model has worked very well for them, and it was the idea of owners Orville and Heidi Thompson.
In marketing the business opportunity, the company must tread carefully. After being accused of making false promises of high income potential, Scentsy must balance being honest and transparent while still enticing people to sign up as a new consultant. This has proven somewhat difficult in recent years of their number of consultants has been declining.
Making Money With Scentsy
With the number of consultants on the decline, does this signal a good time for opportunity or a dying business? Perhaps it is neither. Scentsy’s sales are remaining somewhat flat; however, most of their consultants are not earning much money. This seems to be a common theme in the MLM world.
A quick glance at Scentsy’s 2019 Income Disclosure Statement quickly proves this point. Even for consultants who were with the company more than 12 months, half of them earned less than $700 for the year. This does not factor in business expenses either, so many of those likely operated at a net loss for the year. One can easily see why the promises of a large income are mostly unfounded.
How To Enroll
It is easy to get started selling Scentsy. Simply register through their website and order your starter kit. The base kit can be purchased for only $20 or you can opt for the larger kit for $99. After three months, you will need to pay $10 per month for your personal website so that customers can order from you online. The starter kits include scent samples, quick start guides, and even a warmer in the larger kit.
Scentsy’s compensation plan is more straightforward than some MLM’s out there. Consultants earn a 20% base commission on sales up to 1,000 points and then 25% on sales after that. Scentsy has also included several bonus types based on sales volume and how quickly the consultant can achieve that sales level.
As consultants recruit other consultants, the potential for bonuses increases. Consultants begin to earn bonuses on the sales from their downline. They can earn bonuses from their group as well as their entire team. However, these bonuses are based on total sales volume from the whole group or team.
Sales And Marketing Techniques
Successful Scentsy consultants have a large network of people to whom they can sell. Social media is one way that people can utilize their following to sell the products. While virtual “parties” are good to showcase the products, in-person parties are typically better because customers get a chance to smell the scents. The more parties a consultant can hold, the more likely they are to be successful.
Scentsy Compared To Other MLM’s
There are many MLM companies out there, such as Young Living and Mary Kay, so how does Scentsy measure up? Compared to other MLM’s, Scentsy is a trusted and reputable company. Their products are well-liked by customers, and the company has been free from any major scandals or investigations. The market for Scentsy products is not as large as some other MLM markets such as health and wellness, but the products do sell well, and revenues are strong. Scentsy’s compensation plan is more straightforward than some, and their earning potential is on par with most other MLM companies.
Conclusions For Scentsy
While Scentsy is somewhat of a young company, it has grown quickly and is trusted by consumers. The company offers unique products that appeal to a wide market. While some consultants earn nearly $1 million per year, the odds of earning even a full-time income are incredibly low. Scentsy is a good option for anyone looking to join the MLM world, but not a great option for someone looking for a way to earn a lot of money.