Can Multi-level Marketing of Essential Oils Still Be Sustainable and Ethical?
We don't rely on their claims alone when we vet companies for inclusion in the askBelynda product suggestions. It’s standard practice to also check what independent third parties are saying about the sustainability of a company, and I have made it a ritual to google “(company name) criticism” quite early in my research and read the first handful of results. And boy, did I get a lot of results when doing that for doTERRA.
doTERRA is a multi-level marketing company that sells essential oils and was one of the companies portrayed in the 2020 Netflix documentary (Un)Well, a series that itself has gotten quite mixed reviews… so there was a lot to unpack here.
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The company markets itself as an impact brand with a focus on ethically sourced crops and giving back through its non-profit foundation. I did extensive research on that and found great stories and initiatives to share with you here, but before that, I’ll comment on the two main topics of criticism: The multi-level marketing scheme and unsubstantiated health claims.
Is Multi-level Marketing a Scam?
For a lot of people, the term "multi-level marketing" (MLM) is synonymous with pyramid schemes and scams. But for others, it's a legitimate way to make money from home selling products you love.
MLMs have come under increased scrutiny, particularly from regulators and lawmakers around the world who say that they can be deceptive and harmful to consumers. In fact, the Federal Trade Commission (FTC) has been investigating different MLMs for decades now, starting with a 1979 investigation into Amway that ended with a settlement, in which Amway had to compensate its distributors for losses caused by deceptive claims.
doTERRA is currently not considered a pyramid scheme but a legitimate direct-selling business. However, there are a few red flags, mainly the incentive to recruit a “downline” and the monthly minimum purchase volume that can easily exceed the revenue. I honestly don’t know enough about MLM to evaluate how good a “business opportunity” this is, but overall, multi-level marketing is only ever profitable for a small percentage of distributors, a fact that is often glossed over. If you’d like to learn more about MLM, this Forbes article is a great point to start.
Unsubstantiated Health Claims
Essential oils are increasingly popular, and not only for making your house smell nice. A short google search will turn up many “health applications” ranging from folklore and traditional usage to outright dangerous health advice. The marketing structure with direct marketing in personal networks by wellness advocates opens the door for unsubstantiated health claims and anecdotal evidence. After all, no one will check up on what a distributor tells her friends in her living room.
In the Netflix documentary, essential oils are touted as cures for almost everything from autism to diabetes to cancer. While the companies themselves are careful with their health claims and always add small print about the product not being meant to diagnose treat or cure disease, they certainly benefit from the belief that “essential oils are the secret that big pharma doesn’t want you to know about”.
I’ll leave it up to you to form an opinion about these two topics and focus on the mission that I feel sets doTERRA apart from other MLM companies.
The challenge when offering a wide range of essential oils is that you automatically get a global supply chain. The highest quality oils come from aromatic plants that grow in the ideal environment. Soil, climate, and farming traditions are all equally important, and a lot of the best places to grow these herbs are developing countries.
doTERRA decided to turn this challenge into a chance for a positive impact. Their mission when it comes to sourcing is this:
As many of our essential oils grow best in developing countries, doTERRA is in a unique position to build and support ethical supply chains that benefit rural communities in need. Often times, experienced essential oil farmers, harvesters, growers, and distillers in underdeveloped areas are paid unfairly or taken advantage of, limiting their ability to escape poverty. Co-Impact Sourcing provides the tools needed to help lift these families and communities out of poverty and promote economic development.
Providing Communities with What They Need
The “Healing Hands Foundation” was founded by doTERRA to give back to the communities that are involved in the production of their essential oils. When you look at the sheer number and variety of their projects, it might seem a bit haphazard. However, I love how they choose their projects: They talk to the community leaders, the farmers, and their families and find out what’s needed most.
And if it turns out that many pupils in rural Albania, especially girls, go home early from school because of the sanitary situation, renovating a school bathroom is not just a fancy project for a charity flyer. It measurably impacts school attendance and thus improves equal access to education.
Another great example, and maybe the biggest project so far is a hospital in rural Somaliland. The heart of the frankincense harvesting area is traditionally underserved in public health infrastructure, and the opening of the Sanaag Specialty Hospital provides first-time healthcare access for a region with more than 600,000 inhabitants. doTERRA did not only partner with local organizations to build the hospital but raised funding for the continued operation via an endowment fund.
Natural essential oils are not an endless resource, and it’s important to make sure the production is sustainable. When it comes to annual crops, this can easily be done by training the farmers in sustainable practices, but what about ingredients that come from trees?
The endangered Hawaiian sandalwood tree has been overharvested for generations, and something had to be done about that:
As doTERRA grew, we realized that if we wanted to continue offering Hawaiian Sandalwood essential oil in a sustainable way, we needed to do it ourselves. In 2018, we developed the Kealakekua Mountain Reserve (KMR) as a wholly-owned subsidiary of doTERRA.
From the 2021 Impact Report
Conservation of sandalwood forests is incredibly complex since the tree is a hemiparasitic plant. This means that while it can produce its own energy, it relies on a host for some of its nutritional needs. Therefore the plant needs a diverse environment to fuse its root with other trees for water and nutrients so that the reforestation effort also includes other native Hawaiian trees.
Reviving Traditional Industries
Did you know that Bulgaria used to be a center for essential oil production? I didn’t, at least not before I read the chapter on Bulgaria in the doTERRA Impact Report. After the end of the Soviet era, this industry fell into decline, and most farmers switched to heavily subsidized food crops.
However, the farming knowledge and superior soil and climate remain in Bulgaria, and doTERRA is reviving an industry that has almost completely decayed.
Our mission in Bulgaria is simple: to help rebuild the essential oil industry, improve the market for small-scale and independent farmers, and become a significant force for facilitating sustainable, diversified development in Bulgaria
From the 2021 Impact Report
They opened a world-class production center that includes distilling and farming operations in the heart of an eastern Bulgarian region that is perfect for aromatic herbs such as melissa and lavender. In addition to supporting local farmers, the center itself provides over 100 jobs in the area and allows for fragile herbs to be distilled on the day of harvesting.
These are just a few examples that I found in the extensive resources doTERRA provides on their websites. They offer so many insights about the plant they use, the people who grow them, the regions they source from, and their efforts to make a difference.
I am still not sure what I think about multi-level marketing, and if they could handle the health claims more responsibly. But I feel that their mission to do good in their supply chain is very authentic and impactful.
Jennifer Scales is a photo artist and train travel enthusiast. When she is not vetting companies for askBelynda, she spreads her love for sustainable travel by capturing the beauty of nature seen through the train window.