If you are thinking about joining Young Living you should first be aware of how their compensation plan works–which is how you are going to be able to make money with Young Living.
This is exaclty what I’ll be going over. It can get pretty confusing if this is your first encounter with a MLM business, but I’ll break it down for you in an easy to understand way.
In this article I’ll also be going over the shocking income statistics (shocking in a bad way) of distributors.
Overview of Young Living
Young Living was started in 1993 by D. Gary Young and Mary Young on a small farm. Since its humble beginnings it has grown into a massive international operation with farms and distilleries on every continent except Antarctica.
Much of this growth can be attributed to its business model, which allows anyone to easily join the business as a distributor and help further market products and expand. Sure, another big part of its tremendous growth can be said to come from the high demand for essential oils, but the business model no doubt has had a big effect.
Young Living is what is called a direct sales company, and has a network marketing (MLM) commission model built into it. What this means is that distributors make sales directly to the consumers–there is no selling in retail stores–and that distributors have incentive to recruit in other distributors to build at ‘network’ and earn money from their efforts.
So the 2 main categories of earning money here include direct sales and recruitment (both of which I’ll go over in detail).
The Process of Joining
In order to make money with Young Living of course you first have to join.
When joining you will have to buy a “starter kit”. You can buy the basic starter kit for only $45, although you are encouraged to purchase the Premium Starter Kit for $165…
Besides getting an array of different products with your starter kit, you will also get business materials to help get your Young Living distributor business up off the ground.
Not only will joining as a member give you access to the compensation plan so that you can make money, but you will also be able to save 24% off of your personal orders.
The Compensation Plan
As mentioned, the 2 main categories for making money here are 1) selling products, and 2) recruitment. Let’s get to it…
#1 – Selling Products
I’m guessing you are probably already well aware of what types of products YL sells. They are famous for their high quality essential oils, which as already mentioned, are harvested from all across the globe.
You have the basic pure essential oils, essential oil blends, etc.–and you also have products that are infused with essential oils, such as massage oils, shampoos, supplements, toothpaste, lotions and more.
Just as you can save 24% when buying Young Living products as a member, you will make 24% when selling products to other people–this is because 24% is the difference between wholesale price and retail price.
2 Ways to Sell: The Two Basic Ways to Sell are This…
- You can refer customers to purchase products on the Young Living website through you, in which you will earn a 24% commission from.
- You can purchase extra products yourself and then sell them directly to customers at a markup price.
The direct sales part of the compensation plan is pretty straightforward and easy to understand.
#2 – Recruitment
This is where the compensation plan starts to get really confusing and hectic. If you our new to the world of MLM’s, it can really be a headache to try to understand what is going on here. MLM’s are famous for their incredibly confusing compensation plans that seem better than they really are.
I’ll do my best to break this down for you in a simple and easy to follow way.
This is the MLM (multilevel marketing) part of it. The goal is to recruit in other distributors beneath you and build up a ‘team’, a.k.a. downline, that you will make money from as they go about recruiting in other members and selling products.
Lets start off talking about the different bonuses you can earn–which are all earned based on recruitment of other distributors into the business.
Bonuses:
Starter Kit Bonus – Each time you enroll a new member and they purchase a Premium Starter Kit, you earn a $25 bonus. These bonuses are ONLY if your recruits purchase the Premium kit, not the basic.
Fast Start Bonus – This bonus is designed to help earn you money quick. With every new distributor you get to enroll, you will also earn 25% commissions on their orders for the first 3 months.
You will also earn this bonus from the people that your recruits go out and recruit in–but you only earn 10% from these second-level distributors.
ER Enrollment Bonus – When one of the distributors you recruited in enrolls in the Essential Rewards program, in which they pay for products to be autoshipped to them on a monthly basis, you earn a $15 bonus.
Unilevel and Generational Commissions:
Ok now here’s where it starts to get really confusing.
Before I dive straight into this, you first need to know that there are different ranks within the Young Living business. You start off as a Member and then as you move up, you unlock more and more of the compensation plan, giving you access to more and more commissions.
The ranks are as follows:
- Member
- Star
- Senior Star
- Executive
- Silver
- Gold
- Platinum
- Diamond
- Crown Diamoned
- Royal Crown Diamond
When you start off at the rank of Member, you will want to have at least 100 PV per month.
PV = The personal volume of products that you order. This is equal to the wholesale price of products. So in a nutshell, you have to purchase $100 worth of products (wholesale price) a month.
Having 100 PV gives you access to Uni-level Commission. As you can see from the chart below, as a Member with 100 PV, you will be able to earn uni-level commissions of 8% on level 1 and 5% on level 2.
As you move up the ranks you will be able to earn commissions down further levels, down to 5 levels deep…
How The Uni-level Structure Works:
I know this can be confusing so let me explain it better.
When you recruit a new distributor into the business, these personal recruits make up your level 1. When those people then go and recruit in other distributors, they then make up your level 2. When the level 2 distributors recruit in more distributors, those people become your level 3.
In the diagram below you are the person in blue at the top. The green level beneath you is your level 1, which you personally recruited in. The red level beneath them is your level 2, which level 1 recruited in.
So with a unilevel commission structure, you earn commissions from people you recruited in as well as others that were recruited in beneath those people.
When you reached the ranks of Silver, Gold, and Platinum, you begin to earn what are called “generational commissions” on top of the uni-level commissions you are already earning.
What the heck is a generational commission?
It is a commission you are paid from a generation.
A generation is formed when a distributor reaches the rank of Silver–their generation is their little ‘team’ of recruits within your organization.
I know–this is really confusing.
Moving up the ranks is all about recruitment and growing your organization, downline, whatever you want to call it. If you reach the rank of Silver, then you already have quite a large organization beneath you–which is then big enough to be called a “generation”.
There aren’t any new moving parts added to the compensation plan when you reach the ranks of Diamond, but you do unlock more and more levels of the Generational Commissions–with the ability to earn down 8 levels of generations if you make it to the top rank of Royal Crown Diamond…
It’s All About Moving Up The Ranks
As you can see, if you want to maximize your earning potential it is all about moving up the ranks.
How is this achieved?
Simple: recruitment
As you move up the ranks the same 100 PV requirement is in place–you don’t have to increase this at all–meaning that your personal sales do not have to increase in order to move up the ranks.
What does need to increase is your Group Volume, which includes OGV (organizational group volume) and PGV (personal group volume).
The way you increase these group volume numbers is by recruiting in more distributors.
Sounds simple enough, but of course it is always easier said than done. You will see this for yourself as I go over some statistics here…
How Much are Distributors Actually Making?
This is the big question. How much are Distributors really making?
The business opportunity is always promoted as some incredible way to achieve financial freedom and live a life with the ultimate flexibility and freedom. This is how MLM opportunities are usually portrayed–better then they really are.
Fortunately for us, Young Living is required to provide an income disclosure for their distributors.
Unfortunately for us, this income disclosure does not paint a very pretty picture.
I took a screenshot of Young Living’s income disclosure that you can see below and I also circled a few things I want you to take a look at. First off, about 96% of all of their distributors are ranked Executive or lower and earned not even close to enough to be able to live off of. About 74% of their distributors are of the Distributor (aka Member) or Star ranks and earned less than $1000 for the year.
A very small percentage of distributors make it to the elite ranks and actually earn good money. Distributors of the ranks Gold, Platinum, Diamond, Crown Diamond and Royal Crown Diamond make up LESS THAN 1% combined!
This is just the way it is–and unfortunately the way it will always be, as I will explain.
So don’t let that distributor recruit you in thinking that this is the greatest business opportunity on planet Earth. Unfortunately there are lots of people out there just looking to make money off of you by recruiting you in. Now you know the stats.
Why Such Bad Statistics?
The reason Young Living, and pretty much every other MLM ever, including Tupperware and Ambit Energy, have such horrible income statistics is because of the very business model they use.
A MLM compensation plan has a pyramid structure. There are different types of MLM compensation plans, different structures and such, but they all have the basic pyramid structure…
In this pyramid commission structure commissions flow up from the bottom to the top. This is great if you are at the top, but sucks if you are at the bottom.
There are always more people at the bottom–and always will be–who are having potential commissions sucked away from them and given to those above them. This is what makes it difficult for those at the bottom to earn good money, and is the reason MLM’s have extremely high turnover rates.
A lot of people think that MLM businesses should be illegal because of this. What do you think?
Is Young Living Worth Joining?
The purpose of me writing this article is not to bash Young Living, but rather to give you and others a realistic look at what you are getting yourself into.
Yes, there is potential to make a heck of a lot of money, but a very small percentage of people actually make good money… Due to the very structure that is in place.
You are more than welcome to join if you want to, after all it is your choice, but just don’t get your hopes up too much. Don’t expect to earn a full time income. If you do join–start out just to make a supplemental income and see where that takes you.
That said, I’m not too big of a fan of MLM businesses as you can probably tell, and am not going to personally recommend joining to my readers.
Since you are looking for a way to make money on your own time from home, I would highly suggest taking a look at my top work at home income ideas.
I personally make a living with affiliate marketing, which is better than multilevel marketing in a number of ways. You can read my comparison article here.
Comments or questions? Leave them below and I’ll get back to you soon 🙂
Thanks for this information. I did decide to give this MLM a try but have not really spent much time trying build a business with it. I do like the products and would like to give it a try.