MLM Editorial: Is Melaleuca A Scam, And Who Is The Real Frank Vandersloot?

Yesterday I shared my perspective on a current legal issue surrounding Melaleuca and two of its former top distributors Terry Dorfman & Natalie Foeller and the Melaleuca policy 20. A couple of the responses I received did not have to do with the topic at hand, but were more directed as Frank Vandersloot and Melaleuca as a viable direct sales company. So my goal is to answer those concerns.


Is Melaleuca A Scam Or Viable Direct Selling aka Network Marketing Company?

My short answer is Melaleuca is one of the strongest and most viable Wellness Companies, using the direct selling channel to move their products and services.

Melaleuca uses a “revenue share” most folks know as direct sales or network marketing to reward their independent sales force known as “Marketing Executives” to sell their products.

Now, one of the things Melaleuca still does is use the orignal business model of network marketing created by such legacy companies as Amway, Fuller Brush, Shaklee and Avon to cut out the middleman, and pay their network marketing sales force with some solid residual income based on product sales.

Since Melaleuca doesn’t use traditional advertising, they are able to thow those dollars into a compensation structure that rewards many levels personal sales activity and sales leadership levels. Melaleuca has paid out over $3 Billion in commissions since 1985.

Now unlike some wellness companies in direct sales, which promotes having a billion in sales in less than five years, and are really referring to cumulative sales. Melaleuca since 1985 has grown from a few hundred thousands in sales to over $1 billion in annualized sales in 2011. According to Melaleuca marketing collateral these sales come from 800,000 households per month.

Melaleuca has been given the Better Business Bureau Torch Award, and has been listed as one of Inc Magazine’s Fastest Grossing 500, five consecutive years! (you can read about the above by clicking here)

Now I am not going to dig deep into the compensation plan. But you can review the Melaleuca IDS (Income Disclosure Statement) for 2003, 2010 and 2011 below.

Melaleuca 2003 IDS

Melaleuca 2010 IDS

Melaleuca 2011 IDS

Melaleuca Full Compensation Plan – USA




Who Is The Real Frank Vandersloot?

Now instead of me trying to articulate who the real Frank Vandersloot really is, I decided to show what others have stated are the two sides of Frank Vandersloot. Personally, I do not think there are two sides, I think there is just Frank!


In Frank Vandersloot’s Own Words!!!

If you have investigated the various pages on this site, then you know that the writings of Frank VanderSloot are sprinkled throughout. As much as possible, I have tried to let Frank speak for himself. He tends not to blow his own bugle, though, so it has been necessary for me to interject a comment here and there.
Frank doesn’t know this, but he has become a mentor to me. His common sense, value-based philosophy has added to and sharpened my personal vision, and his dedication to hard work and helping others to reach their goals has inspired me to rededicate myself to my own ambitions.
If there is anything I am certain about, concerning Frank VanderSloot, is that he cares. Frank cares about this world and its people. He cares about you and he cares about me. I know that to be true from personal experience, and I have seen how he relates to others–going out of his way to acknowledge their contributions. (Click here to read the full article!)

But… What About What The Critics Have To Say About Frank Vandersloot?




Billionaire Romney donor uses threats to silence critics

Frank VanderSloot is an Idaho billionaire and the CEO of Melaleuca, Inc., a controversial billion-dollar-a-year company which peddles dietary supplements and cleaning products; back in 2004, Forbes, echoing complaints to government agencies, described the company as “a pyramid selling organization, built along the lines of Herbalife and Amway.” VanderSloot has long used his wealth to advance numerous right-wing political causes. Currently, he is the national finance co-chair of the Mitt Romney presidential campaign, and his company has become one of the largest donors ($1 million) to the ostensibly “independent” pro-Romney SuperPAC, Restore Our Future. Melaleuca’s get-rich pitches have in the past caused Michigan regulators to take action, resulting in the company’s entering into a voluntary agreement to “not engage in the marketing and promotion of an illegal pyramid”‘; it entered into a separate voluntary agreement with the Idaho attorney general’s office, which found that “certain independent marketing executives of Melaleuca” had violated Idaho law; and the Food and Drug Administration previously accused Melaleuca of deceiving consumers about some of its supplements.

But it is VanderSloot’s chronic bullying threats to bring patently frivolous lawsuits against his political critics — magazines, journalists, and bloggers — that makes him particularly pernicious and worthy of more attention. In the last month alone, VanderSloot, using threats of expensive defamation actions, has successfully forced Forbes, Mother Jones and at least one local gay blogger in Idaho to remove articles that critically focused on his political and business practices (Mother Jones subsequently re-posted the article with revisions a week after first removing it). He has been using this abusive tactic in Idaho for years: suppressing legitimate political speech by threatening or even commencing lawsuits against even the most obscure critics (he has even sued local bloggers for “copyright infringement” after they published a threatening letter sent by his lawyers). This tactic almost always succeeds in silencing its targets, because even journalists and their employers who have done nothing wrong are afraid of the potentially ruinous costs they will incur when sued by a litigious billionaire. (Read On Here)


Don’t let Mitt Romney’s anti-gay billionaire backer whitewash his intimidation of critics

Billionaire anti-gay campaigner and Mitt Romney campaign co-finance chair Frank VanderSloot is whitewashing his tarnished image with a public relations campaign. After years of trying to silence journalists critical of him and his record, all that’s left to do is dodge the difficult questions.

After a recent scathing commentary from Salon’s Glenn Greenwald, echoed nationwide on MSNBC by The Rachel Maddow Show, VanderSloot’s history of threatening critics was exposed. The game changed. But his efforts only highlight a long record of local campaigning whose dirty tricks and litigious tactics now deserve national attention.

The many companies run by VanderSloot, a Mormon family-values man on his fourth marriage, include Riverbend Communications, which operates a number of radio stations in his home state. But he is perhaps most widely known as the CEO of Melaleuca, a multi-Level network marketing company that sells household and nutritional products.

In Feb. 2012, I received a letter from Melaleuca accusing me of making “repeated characterizations” of Frank VanderSloot and his company “as anti-gay” on my website. Among other claims, it said these references “are inaccurate” and “mislead readers.” It said my blog contained “infringing material,” “defamatory statements” and suggested that I would be held responsible for mainstream media coverage which was “increasing the unlawful reputational damage” sparked by my reportage. (Read on by clicking here)


Frank Vandersloot Speaks Out About What His Critics Have To Say!!!

Extreme, far left blog sites have recently chosen to hammer Melaleuca and me personally because I had the audacity to support a conservative candidate for President of the United States. They chose to misconstrue the facts and post false and damaging data about us, and then criticized us for asking these sites to take down the false information. For those who are interested in the truth about us, we provide the following facts addressing the accusations:

ON BEING A “BILLIONAIRE”—I fear my financial status has been greatly exaggerated. I do own a majority interest in Melaleuca, a company we started 26 years ago. The company has done well. Some analysts have suggested that I could sell my share of the company for a lot of money. It’s hard to know how much. The problem is I would have to sell the company before I would ever see the cash. I’m not selling, so I will never be cash-rich. But that was never the intent.

That said, I’m paid a good salary and receive bonuses and residuals that are beyond what I deserve. In my youth, my family was poor, but we learned we didn’t need money to be happy. My father taught us to love manual labor. I grew up milking cows by hand and chopping wood for my mother’s cook stove. I never anticipated being wealthy. I never imagined it. I never desired it and I never even considered it as a possibility. But our little business has prospered and I have really enjoyed my business experience. The hardworking folks who have joined us have prospered with us. I am a strong advocate of the free enterprise system. Only in America could someone start out where I started and receive the kinds of opportunities I’ve had.

MY POLITICAL LEANINGS—I don’t consider myself either a Republican or Democrat. I’m quite conservative on most social and economic issues. And I’m pretty liberal on most environmental issues.

MELALEUCA’S BUSINESS MODEL—It’s unfortunate that someone would suggest that Melaleuca is something like Amway. It’s not. We started Melaleuca 26 years ago to market environmentally responsible products and to provide a business opportunity for folks who weren’t successful in climbing the corporate ladder and didn’t inherit wealth from their parents. We try to be champions of the little guy. My father was a little guy. And I still see myself as a little guy.

Contrary to those who do not know us, our business model is nothing like Amway or Herbalife. I challenge anyone to find any similarity whatsoever. There is no investment of any kind unless you want to call a $29 membership fee an “investment.” And anyone can get a refund on that by just asking.

We do offer a home-based business opportunity. But it is no “pyramid scheme.” We have long been critical of the many MLM/pyramid schemes operating in this country. I agree with those who say that typical MLM companies destroy people’s finances. Most are designed to attract people to “invest” in large purchases with the promise of “getting rich” quickly by getting others to invest. The guy at the top always wins and the guy on the bottom always loses.

In Melaleuca’s case there is no investment and no getting others to invest. We do pay commissions to those who have referred customers based on what those customers purchase. There is really no way to lose money on referring customers. And there’s no way for customers to lose either when they’re buying high-quality products at grocery store prices. Customers just order the products they use every month directly from the factory. We have hundreds of thousands of customers who buy from us each month. They don’t ever resell anything. They don’t invest in any inventory. There can be no pyramiding without some kind of investment. In 26 years, no one has ever complained that they lost money. It’s simply not possible. (Click here to read Frank Vandersloot’s full response)

So, my final conclusion is that Melaeuca is not a MLM or Network Marketing Scam, and although Frank Vandersloot some might believe Frank Vandersloot has two sides, I have found him to be straightforward and very opinionated… which is the exact same phrase some have used to describe me personally. 🙂

Living An Epic Adventure,
Troy Dooly