subject: Melaleuca's CDM Structure- A MLM In Disguise? [print this page] Melaleuca's CDM Structure- A MLM In Disguise?
Melaleuca strongly dislikes MLMs, and have publicly voiced their negative opinions on the business model. The company operates a Consumer Direct Marketing (CDM) structure, which is designed to be more beneficial to the customers and the executives. However, the format is remarkably similar to MLMs- you earn commission by building a down-line and earning commission on both your own and your down-line's referrals. What's so different about Melaleuca's CDM model?
Well, not much. But just like there are subtle differences between Pepsi and Coca-Cola, CDM and MLM are not quite the same. A key difference is in the compensation structure. With MLM firms, you earn a decreasing commission on your down-line's sales. For instance, you earn 7% on your first level, 4% on your second, 2% on your third... The low rates of commission usually means that the fastest and most efficient way to earn a good level of income is to grow your down-line at a rapid rate. With CDM, you earn a constant level of commission on every generation of your down-line; 7% on your first level, 7% on your second, 7% on your third... This takes the pressure off of recruiting, meaning you can earn a decent commission with only 2 or 3 in your down-line.
This also shifts the emphasis back on to introducing customers to the products, rather than trying to push starter kits. Compensation is only paid based on your referred customer's bill total- you do not receive commission or bonuses based on recruiting/signing up customers. Melaleuca restrict down-lines to seven levels, limiting how big you can grow your team. Because you can only grow your team to a certain extent, the way you can earn large revenues is slightly different. If you introduce your down-line to more products, and try to have them increase their monthly order with Melaleuca, then you will receive a higher compensation payment. The focus on products rather than recruiting is an important difference between CDM and MLM.
So is Melaleuca's CDM structure a MLM in disguise? Pretty much. Melaleuca have just put their own twist on the MLM model.
