Can you make money selling Scentsy? Let’s take a look at Scentsy’s 2021 Income Disclosure Statement to find out.
As a reminder, I have an MBA, I am a Certified Public Accountant (CPA), and have almost 15 years working in finance and accounting. These are my opinions based on researched facts and my understanding of those facts. However, this is not legal, financial, or tax advice. If you need legal, financial, or tax advice, you should reach out to a professional for a 1:1 chat! All opinions are my own.
To skip right to the PDF of the Income Disclosure – Click Here.
What is Scentsy?
Scentsy is a multi-level marketing company or network marketing company. They were founded in 2004 and are primarily known for selling wax melts and wax warmers (think candles, but without flame).
Scentsy 2021 Income Disclosure Takeaways
Scentsy breaks out their income disclosure statement between consultants that were with Scentsy all 12 months of 2021 and those that were with Scentsy for less than 12 months in 2021.
Earnings Of Consultants who Were in Scentsy for all 12 months in 2021
This group is anyone who joined prior to January 2021 and stayed for the entire year.
- Labeled as Group 1 in their Income Disclosure
- Consisted of 52,736 Consultants which is 28% of all consultants
- Consultants earned from $133 – $1,311,053 in this group – a very wide span
- The average annual commission was $2,925 which was consistent with the prior year of $2,901
- The median annual commissions were $1,022 which is pretty consistent with the prior year of $869
While someone recruiting you to Scentsy will want to draw your attention to max possible earnings of over $1 million, the median is the true sense – $1,022. This means that half the consultants earned $1,022 or less. On average, Consultants earned around $3,000. The majority of people must be making very little income from Scentsy to bring the average down when the high is over a million dollars. Keep in mind, this is all before expenses are incurred.
Earnings Of Consultants who Were in Scentsy for less than 12 months in 2021
This group of statistics is for anyone who joined Scentsy in 2021 or left during 2021. Therefore they had less than 12 months with Scentsy.
- Labeled as Group 2 within the Income Disclosure Statement
- Consisted of 152,021 Consultants which is 72% of all consultants
- Consultants earned from $0-$71,510
- The average income in this group was $300, which is down slightly but mostly consistent with the prior year of $452
- The median annual income for this group was $152 which is consistent with the prior year of $203
Other Comparisons of the 2021 to 2020 Statement
- In 2021 there were a total of 211,757 consultants compared to 186,866 – this is an increase of 24,891 or 13%
- The total number of consultants that had been with the company for more than 12 months increased by 8,499 from 51,237 in 2020 to 59,736 in 2021
- The min/max, medians, and averages from each year did not change significantly
Is Scentsy a Scam?
When people talk about MLMs, terms like scam and pyramid scheme are thrown around. This is hard to prove because the required reporting needed isn’t there.
Let me tell you what my thoughts are on this being a scam. You can spend a lot of time working, with no guarantee of payment. Unless you are one of the first people to join, it is unlikely you’ll ever reach the top. Those that reach the top are making money off those in their downline that are losing money.
I would consider this a scam. However, it doesn’t matter what you call it. The business model is unethical, you’re likely to lose time and money and all of their income disclosure statements prove it.
Scentsy Compensation Plan
It costs about $100 to purchase a Starter Kit to join Scentsy. Once you join, you need to sell about 200 PV each month to be active. Scentsy has 8 different levels within its compensation plan. The ranks go from Escential Consultant to Superstart Director. As with all multi-level marketing (MLM) companies or network marketing companies, you must level up by building a downline to be eligible for the majority of bonuses which will result in larger annual earnings. The bonuses start at the 3rd rank, Lead Consultant after having at least one consultant in your downline. For the full compensation plan, you can find it on their website here: https://imagelive.scentsy.com/cmsimages/files/Join/Compensation-Plan/R1-CompensationPlan-USEN.pdf
Should You Join Scentsy?
In my opinion, you should not join any multi-level marketing company (MLM) or network marketing company, including Scentsy.
They also don’t seem to be very honest, in fact in their FAQs they completely dodge letting potential consultants know they are an MLM (they are!) They never acknowledge they are a multi-level marketing company in this response.
I wouldn’t want to start a business relationship with someone who wasn’t forthcoming with me, would you?
Why You Should be Skeptical of Network Marketing/MLMs
Network marketing also known as multi-level marketing (MLM) is something you should have a healthy skepticism of (and in my opinion avoid). Let’s talk about some of those things:
The majority of people who get involved with MLMs lose money.
This has been proven time and time again by reviewing income disclosure statements and this study that was published by the FTC.
This study is a little dated, however, I have reviewed many Income Disclosure Statements and find that the results are still valid. See all the Income Disclosure Statements I’ve reviewed here.
Focus on recruiting those already struggling financially.
Oftentimes, when people are recruiting others on social media, it starts with a relatable story about how that mother was struggling to help support herself or her children. Therefore recruiting someone who is unlikely to have money to spare for a “business opportunity” and will likely lose money.
Uplines Make Money Off Downlines Losses
The way multi-level marketing and network marketing businesses are structured is that those in the upline make money off the sales of those in the downline. Oftentimes, MLMs require a certain amount of personal volume (PV) to stay active in the company. This results in consultants spending money to buy products to remain active. This results in them losing more money while their uplines earn commissions off those “sales”
Lack of Transparency In Where Sales Come From
Currently, MLMs are not required to produce any reporting that identifies how much of their sales come from customers or from those involved with the “business”. This makes it very difficult to establish where the line falls between MLMs and Pyramid Schemes
The FTC warns that MLMs and Pyramid Schemes can look very similar.
The FTC has an entire article (click here to read) on its website that has a lot of great resources, including questions to ask someone who is looking to recruit you.
Many network marketers will argue their MLM isn’t a pyramid scheme because pyramid schemes are illegal. However, illegal things happen every day until people are caught. I would not give this any merit.
Final Thoughts on Scentsy 2021 Income Disclosure Statement
I’d love to hear from you if you have questions, comments, or differing opinions. Find me on Instagram, Facebook, or email me by going to my contact page. Or sign up for my newsletter to get monthly updates MLMs, fraud, and scams.