Shaklee is quite an old MLM company that has an interesting past. It was started in 1956, has been both publicly traded and privately held, and has seen some of its distributors arrested for operating an illegal Ponzi scheme. Shaklee sells many different products today, but it all started with nutrition supplements. Those items are still some of its most popular sellers. While the company still maintains decent revenues, most experts agree that Shaklee is not what it used to be. Let’s dive deeper into this MLM company and learn more in this Shaklee review.
Shaklee Company Overview
History Of Shaklee
Shaklee was founded in 1956 by Forrest Shaklee. He was a chiropractor and, interestingly enough, created the first vitamin in the United States back in 1915. Being a nutritionist, he continued to research nutrition and its positive effects on the body. This is what led him to starting the Shaklee Corporation in 1956 with his two sons to manufacture nutrition supplements.
The company’s supplement products quickly became popular, and they began manufacturing and selling organic cleaning products in 1960. In the late 1970’s, Shaklee became a publicly traded company and was listed on the New York Stock Exchange. The next ten years would bring a lot of change for the company.
First, they relocated their headquarters to downtown San Francisco in 1980. They also began to diversify their portfolio during the 80’s. Shaklee acquired Bear Creek Corporation, another MLM which was most well known for its fruit of the month club. In the late 1980’s, the company sold some of its Japan operations to a Japanese company. Shaklee then became the target of an unsolicited acquisition.
The Jacobs Group began buying large amounts of Shaklee stock in an effort to essentially complete a hostile takeover of the company. However, Shaklee was able to work out a deal with the Japanese company that had acquired their Japan operations for a full buyout to prevent the Jacobs takeover. When the deal closed, Shaklee once again became a privately held company.
In 2004 the company was sold once again. This time it was to American multi-millionaire Roger Barnett. Today, reported numbers about Shaklee’s annual revenue vary widely from roughly $200 million to over $800 million per year. Due to the company being privately held, it is difficult to determine their precise revenue numbers.
Company Investigations
During the 1970’s, Shaklee was the target of multiple Federal Trade Commission investigations and had some orders issues against it by the FTC. The first issue was due to its “Instant Protein” product. The company was not including any warnings about using the product for infants less than 1 year old, and it also misrepresented the amount of protein that was contained in the product.
A couple of years later, the company was in hot water the FTC once again. This time they were found to have coerced or threatened their distributors to maintain suggested retail prices. The FTC ordered that the company stop these practices and allow distributors to sell the products through whatever means the distributor deemed appropriate.
Lastly, nearly every MLM has been accused of operating a pyramid scheme at one time or another. But in the case of Shaklee, it went so far as to having distributors arrested. This was more recent as it occurred in 2012. Distributor Jack Cranney was arrested for defrauding 36 victims for approximately $10.4 million through an investment Ponzi scheme.
Current Company Structure
Today, the company’s last buyer Roger Barnett serves as the CEO. The company headquarters have been relocated from San Francisco to Pleasanton, CA. Annual revenues are somewhere between $200 and $800 million. It is difficult to get an exact figure as these records are no longer required to be public documents since the company is privately held. Although it appears that revenues peaked around $800 in 2014 and have been declining since then.
The company still operates using a direct selling model through approximately 1 million distributors worldwide. The company operates in several countries outside the United States including Canada, Japan, and others. Shaklee has expanded well beyond its original produce lineup of nutrition supplements, although they are still very committed to being a “green” company.
Shaklee Product Lines
The bulk of the company’s products are still part of the nutrition supplement market. They offer various vitamins, shakes, and meal replacement options that are intended to keep their customers healthy. Shaklee offers solutions for weight loss, aging, blood sugar, metabolism, and other potential health problems for both men and women.
In addition to their vitamins and supplements, Shaklee also sells products related to beauty. This lineup includes natural makeup, lotions, and creams to help prevent aging and help their customers have beautiful skin. Finally, the company’s product lines include natural home products too such as cleaning supplies and water filtration devices.
Company Marketing Practices
Shaklee’s marketing practices have evolved throughout the life of the company. Today, as with most MLMs, the company relies heavily on the Internet and social media to market its products. They even have a trademarked practice called Social Marketing. This process involves sharing Shaklee’s products and opportunity with people you meet, sponsoring them into the company as a preferred customer or distributor, and growing your business by teaching others how to duplicate the process.
Making Money With Shaklee
While the nutrition supplement market is extremely large across the globe, Shaklee sales seem to have been on the decline over the past few years. It also does not have the brand recognition that some of the newer, larger supplement companies have. Add that to the fact that there are roughly 1 million distributors within the company, and the opportunity for making money seems slim. So, how much are Shaklee distributors really making?
Since the company does not publish an Income Disclosure Statement for its distributors, it is difficult to determine exact payout numbers. However, this should be the first red flag. In 2016, there were some leaders in the company who were only making $4,155, so the average distributor likely makes much less than that. Overall, most experts guess that around 99% of Shaklee distributors fail to make a profit at all.
How To Enroll
Enrollment simply requires completing an application and paying the enrollment fee. That varies depending on which starter kit you purchase. You can get started for as little as $50 or go all in and purchase the “I Want it All Success Pack” for $1,130. You will need to enroll as part of another distributor’s team since hierarchy is very important in their compensation model.
Shaklee Compensation Plan
Shaklee’s compensation plan is actually called their “Dream Plan” because they want you to be able to make enough money to fulfill your dreams. At the basic level, you earn commissions on all of your personal retail sales. Shaklee’s compensation plan varies from some other MLM plans in the fact that recruitment and downline sales are extremely important to your overall compensation. Plus, minimum sales volumes are required to remain commission eligible. In fact, failing to meet the required minimums (roughly $150 per month at the lowest level) can result in losing all accumulated points in the commission system.
Sales And Marketing Techniques
As discussed above, social media plays a large role in the success of many distributors. Sharing Shaklee products with your audience can encourage customers to buy as well as sign up as new distributors. People want to learn about these products before purchasing in many cases, and they also like to see results from others who have used them. So, sharing informative posts and results from others is a great way to get your audience to try out Shaklee products.
Shaklee Comparison To Other MLMs
There are tons of MLM companies out there, such as Scentsy and doTERRA, so how does Shalee compare? In terms of brand recognition, Shaklee is not as much of a household name as some of the larger companies in the direct selling world. Shaklee puts much more emphasis on recruitment of additional distributors than most other MLMs as well, and their compensation plan definitely takes this into account. As for income potential, it is in line with what you can expect to earn from an MLM. Most distributors fail to make a profit while just a few make very good money selling the products.
Conclusions For Shaklee
Shaklee is a company that has been around for over 60 years and continues to see strong revenues, even though they have declined in very recent years. Even though they are not a household name, the company has around 1 million distributors around the world. The company does seem committed to providing high quality, natural products to improve the lives of their customers. While they do have a good mission, do not expect to see a large income from selling their products. Most distributors fail to make a profit, and there is a heavy emphasis on additional recruitment.
