Candles are HOT right now. Scentsy’s wickless scents and warmers may only be warm, but they’re gaining some serious heat.
People love home scents and are willing to spend ridiculous amounts of money on them (Yankee Candle anyone?) Scentsy in particular has grown significantly in the last few years.
Does this mean I’m involved?
This video explains everything:
Make sense? Either way, here’s the full review on Scentsy.
Overview
Scented candles have been around forever, what’s the big deal? It’s hard to corner the candle market as an MLM, because you can buy candles at just about any store in the world. So Scentsy came up with something new – flameless home scents, made popular through their scented wax and electric warmers.
It was a smart idea – they’re able to convince people their beloved candles aren’t safe (they release carcinogens, they’re a fire hazard, etc), and then, when the customer is adequately freaked out, they present a product that’s safer and smells even better than burning that pumpkin spice mason jar candle.
This method is definitely bringing them hype, but is it bringing them enough money?
Overview
Founded by husband and wife team Orville and Heidi Thompson and in 2004, Scentsy is one of the trendiest MLMs in the candle scene.
They started out operating from Orville’s ranch in Idaho, but upgraded to a 603,000 square foot campus in a matter of years. Orville had always been an entrepreneur at heart, forgoing a corporate career and an academic future in exchange for developing and selling a unique car wax formula that supported his family for years. [1]
He then started a company, Event Sales, that become one of the largest fairs, shows, and mall kiosk companies in the U.S. But then, in 2003, he invested in a car wax informercial that failed, and he and his family found themselves $700,000 in debt. At once of his shows, he ran into two women selling wickless candles, and was intrigued. Both him and his wife loved the products, bought the company, and the rest is history. [2]
These kinds of extreme failure to success stories are rampant in MLM. They come off as very genuine and honest, but there’s definitely a hidden motive, which is why I’m not a big fan of them.
These MLMs are trying to appeal to people who feel like they’ve hit rock bottom or don’t have many financial options and are willing to take an entrepreneurial risk. The truth about MLM though is that it’s very, very risky, and most of these people will never see a decent paycheck.
But either way, the company is doing well for themselves. In 2010, Inc. named Scentsy “America’s fastest-growing consumer products company” and ranked them 19th on the Inc. 500 list. [3]
By 2012, they were a multi-million dollar business. They’ve opened up a new company since then, Velata, which is a fondue MLM, and they’ve got over 200,000 distributors worldwide. They’re huge. [4]
That being said, Velata has since then announced that they’re going out of business, and they’ve also closed the doors on their other subsidiary, Grace Adele. [5]
Really makes me question the staying power of Scentsy.
Products
Scentsy sells wickless candles – scented wax with warmers that diffuse the scent without you having to light a candle. They also sell room sprays, clothing conditioners, counter cleaners, and even hand creams. Basically, every kind of scented product you can imagine other than candles, all based around their signature scents.
Their scents include everything from floral to woody to fruity to seasonal scents, and they do smell pretty delicious. There’s a huge variety.
They’ve also got over a hundred different warmers to choose from, and the designs are lovely. They’re all around $30-60, with some smaller plug-ins as low as $20.
Essential aroma diffusers are another option, although they’re a little spendier. Those are anywhere from $50-130.
Overall, their products are great, and they’re pretty decently priced as well.
Opportunity
The startup kit for Scentsy isn’t cheap at $99, but that is starting to become standard in these kinds of MLMs.
After three months, you have to start paying for your distributor website too, which is $10 per month.
Compensation:
- Retail profit is 20%, which is a little below average, but it bumps up to 25% once you’ve sold $1,000 PRSV
- Group wholesale volume commission is 2% on each Active Frontline Consultants you recruit and another 2% in bonuses
- Increasing ranks get you higher team commission rates
While it’s not the sexiest compensation plans in MLM, it’s clear that the company is very product-driven. You’re not being forced to make all your money off recruiting, which means there’s probably no threat of them coming under legal fire or getting shut down by the SEC.
Now you’re ready to go invite all your friends to a candle sniffing party!
While that doesn’t sound like great fun, the owner claims that the joy he witnessed in his wife and her friends when they were sitting around a table at home smelling candles and chatting about scent memory was what inspired him to start Scentsy in the first place.
Still, you know how I feel about in-home parties. They’re just not effective, and they alienate your friends.
What’s more is that independent distributors rely almost completely on Facebook to sell their product, as you’ve probably noticed if you have any Scentsy reps on your friends list (chances are, you deleted them a while ago).
Recap
The product is super popular. Who doesn’t love candles?
And apparently, people love flameless scented candles even more than your run-of-the-mill Yankee Candle. Scentsy is definitely cashing in on the hype.
That being said, the compensation plan is underwhelming. And it’s troubling that they’ve had to close both of their subsidiary companies recently.
But the real kicker here is the in-home parties. It’s just not a sustainable model for hitting it big. You can’t get rich off of begging your Facebook friends to come over to your house and buy your candles.
—
If you are a firm believer in the products and you have a large warm market of people to hustle candles, this wouldn’t be a bad way to go. That is, if you were set on MLM.
But if it’s the income opportunity that you are seeking, your time could be better spent with other opportunities.
If you like automated ways to build passive income, there are better ways.
(and you can trash those old MLM habits, too)
via http://mlmcompanies.org/scentsy/
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