Scentsy: Analysis of a Successful Direct-Selling Party Plan Model


Scentsy is one of the most successful multilevel marketing companies specializing in home and personal fragrance products.

With its flagship product line featuring scented wax and wax warmers, it was ranked 17th globally in the 2022 DSN Global 100 list of top direct selling companies. The company operates primarily on a party plan model, where independent consultants promote products through social events.

This in-depth article explores everything about this party plan success story.


Section 1 – The Company

This section presents an overview of Scentsy, evaluating its market performance, history, and other company details.


Overview of Scentsy (video)

Scentsy, an American multilevel marketing company, is an international leader in home and personal fragrance. Officially registered as Scentsy, Inc., a private corporation, the company is currently owned by Heidi and Orville Thompson.

The company’s flagship product line features scented wax and wax warmers as an alternative to traditional scented candles. Other products include cleaning solutions, on-the-go fragrances, laundry care, and luxurious personal care products.

Scentsy primarily operates on a party plan model, where independent consultants promote products through social events.

Market performance

Scentsy has been amazingly successful, achieving revenues worth $1.02 billion in 2021.

Currently, the company operates in roughly 13 countries, including the United States, Canada, Mexico, Germany, and Australia. It also has well over 1,000 employees serving customers worldwide.

Moreover, the company has developed licensed partnerships with several recognizable brands, like: Walt Disney World® Resort, NHL®, Harry Potter™, NFL, Marvel, Star Wars™, and The Mandalorian™. So far, the company has grown to serve almost one million customers in 2021.

History

Scentsy started as far back as 2003 when Kara Egan began making wickless candles in an unfinished basement, with her sister-in-law, Colette Gunnell.

After nine months, the business became so popular that they couldn’t manage it. So, they sold it to an Idaho entrepreneur, Orville Thompson, in 2004. Orville re-launched it on July 1st, 2004 as a direct selling, party-plan company.

The company’s revenue totaled about $140,000 in its first year. And seven years later, it made $535 million.

Scientsy's logoPin

Who founded Scentsy?

Kara Egan came up with the idea of a wickless candle business, and asked her sister-in-law, Colette Gunnell, to start the business with her.

Since July of 2003, they ran Scentsy out of an unfinished basement before selling it in 2004.

After buying Scentsy, Orville and his wife, Heidi Thompson, re-birthed it as a multilevel marketing company in 2004. They first located it in a 40-foot ocean container within a small Idaho sheep farm.

Who is the CEO of Scentsy?

The current Scentsy President, Dan Orchard, is also serving as interim CEO in the absence of the Thompsons. Orville and Heidi Thompson’s (the co-CEOs) absence is due to their role as a mission president couple within The Church of Jesus Christ of Latter-day Saints. The role will last from July 2021 to June 2024.

Who is the owner of Scentsy?

Scentsy is privately held, and owned by Orville and his wife, Heidi Thompson.

The original founders, Kara and Colette, are currently independent Scentsy consultants as well as members of the board of directors.

Where is the Scentsy headquarters?

The Scentsy headquarters is located in Meridian, Idaho, USA, within a 73-acre office space at 2701 E. Pine Ave. Meridian, ID 83642.

Company mission and charity work

Scentsy states that its mission is to bring value to the world by providing industry-leading and family-friendly business opportunities. Such opportunities feature selling of creative, artistic, and high-quality products that “Warm the Heart, Enliven the Senses, and Inspire the Soul”.

The company also supports charitable giving through the Scentsy Family Foundation. So far, Scentsy has donated over $15.5 million USD to charities worldwide.


Section 2 – Business Model

In this section, we analyze Scentsy’s business model by exploring its marketing strategy, the compensation model for its independent sales force, and overall business opportunity.


How does Scentsy market its services?

Scentsy uses a direct sales, party-plan model to market its products.

Scentsy’s independent consultants promote products to multiple customers during social events, either in-person or online. Through the company’s multilevel marketing plan, consultants earn commissions from product sales and building teams.

Scentsy compensation model explained

Scentsy’s compensation model has eight consultant ranks.

You’ll start as an Escential Consultant and advance to a Certified Consultant by achieving 1,000 points in lifetime Personal Retail Volume (PRV). Alternatively, you can buy the Shooting Star Enhancement Kit and achieve the Scentsational Start Awards to become a Certified Consultant.

Scentsy compensation planPin

Consultants then move up through the following leadership ranks:

  • Lead Consultant
  • Star Consultant
  • Superstar Consultant
  • Director
  • Star Director
  • Superstar Director

Here is a more detailed look at the rank requirements and incentives:

Image: Scentsy compensation plan

The company also offers a Host Rewards Program, which rewards hosts for opening their homes and bringing prospects together to experience Scentsy’s products.

Here’s an overview of the Host Rewards Program Chart:

Host Rewards
guest sales$150-$249$250-$399$400-$999$1,000+
free product10%10%15%15%
half-price items1234

Additionally, Scentsy Club members earn 1 point for every $1 they spend in Scentsy Club, and 2 points for every $1 their referred members spend. With that, they’ll get $1 off their orders for every 25 points earned.

How much does it cost to join Scentsy?

When joining, you need to buy the Starter Kit which is currently $99 plus tax and shipping. The kit comes with necessary items to start your business, including a best-selling warmer, catalogs, scented wax testers, order forms, product samples, and more.

After joining, you’ll get a free three-month subscription to your own Personal Website (PWS), which you can use to promote your business, collect online orders, and announce online parties. After the free trial, the PWS monthly subscription fee is $10, which includes Scentsy’s monthly e-newsletter service.

You must have a PWS to sponsor new consultants, or sell and sponsor outside the U.S.

There are also optional monthly kits available, including:

  • Scent of the Month Kit for $35/month, containing products to help you promote a brand new scent each month
  • Scent & Warmer of the Month Combo Kit for $60/month, including the Scent of the Month Kit plus a brand new warmer
  • International Service Fee of $5/month in-region or $10/month out-of-region, to sell and/or sponsor outside of your “home” country

How many Scentsy consultants are there?

The company states that they currently have more than 250,000 independent consultants.

How to make money on Scentsy 

There are three main ways to make money or earn rewards on Scentsy.

You can earn as:

  1. A consultant:

Consultants earn 20% product-sale commissions on the first 1,000 points in Personal Retail Volume (PRV), and 25% on all sales after that. They also earn up to a 9% bonus on Personal Wholesale Volume (PWV/ team volume), based on rank, as well as a 5% bonus on 2,000+ points in monthly PRV.

Additionally, consultants earn leadership bonuses based on downline sales, and get rewarded with incentive trips.

  1. A host:

Hosts of Scentsy parties earn credits worth $20 to $150; plus, half-priced-product credits for hosting.

  1. A Scentsy Club member:

Members of Scentsy Club (a subscription service for consumable products) earn points on their spending for discounts on future orders. Through the Scentsy Club rewards and referrals program, members also get 10% discounts on orders above $30, plus additional half-priced items on orders above $60.

What are the requirements to become a Scentsy consultant?

To become an Escential Consultant, the first consultant level, you must fulfill the following qualifications:

  • be at least 18 years of age or the age of majority in your state of residence
  • have U.S. citizen or be a permanent resident
  • provide a valid Taxpayer Identification Number (Employer Identification Number or Social Security Number)
  • accept the Independent Consultant Agreement
  • buy a Starter Kit

How to become a Scentsy consultant

To become a Scentsy consultant, simply visit the Scentsy personal website of an existing consultant (Consultant’s Personal Website (PWS)). Then, click “Join,” select your Starter Kit, and follow the steps to enroll.

You can also earn a Host-Exclusive Starter Kit by hosting a party and using your Host Rewards.

If you don’t have any sponsoring consultant, Scentsy’s website provides options to connect you with a consultant within your area.

How much money can you make with Scentsy?

Scentsy provides a useful chart of Independent Scentsy Consultants’ earnings in the United States in 2021.

The chart categorizes two groups of consultants:

  • Group 1 – active for 12 months
  • Group 2 – active for less than 12 months
Group 2Group 1
number of consultants152,02159,736
minimum annual commissions$0$133
maximum annual commissions$71,510$1,311,053
average annual commissions$300$2,925
median annual commissions$152$1,022

How can you sell Scentsy’s products?

Although consultants cannot sell through online platforms like eBay and Amazon, or retail outlets, they have various other personalized selling options.

Hosting parties is a popular choice, with such varieties as:

  • online parties
  • a launch party
  • in-home parties
  • open houses
  • basket parties

Consultants can also take orders online through their Consultant’s Personal Website (PWS).

Finally, Scentsy Club members can earn points by sending their unique referral link to friends and family members.


Section 3 – Products

This section reviews Scentsy’s products, highlighting the key product lines and how customers can buy such products.


What does Scentsy sell?

Scentsy offers a wide variety of fragrant products.

Their flagship product line includes Scentsy Bars that get heated in handcrafted warmers to produce a sweet aroma. They also offer all-natural and essential oils for their diffusers.

In addition, Scentsy sells on-the-go fragrances, cleaning solutions, and laundry care; as well as personal care products for men, women, and kids.

The exclusive fragrances come in different categories such as bakery, citrus, floral, fresh, fruity, spice, and woods.

Where are Scentsy’s products made?

The company’s wax is manufactured in Meridian, Idaho, USA, where 230,916 products are made per day.

After manufacture, products go through multiple distribution sites in

  • Meridian, Idaho, USA
  • Coppell, Texas, USA
  • Lexington, Kentucky, USA
  • Sydney, New South Wales, Australia
  • Warsaw, Poland

Where to buy Scentsy’s products

To buy Scentsy’s products, contact a consultan who can take your order or even host a party for you and your friends to experience the fragrances firsthand. For those who want regular shipments of consumables, the Scentsy Club is the way to go.

The club comes with exclusive perks such as “Always Get My Bar” ensuring you never run out of your favorite scent, even when it’s discontinued.

Customer feedback

Customers seem to highly appreciate the company’s products. This is evident from the fact that out of almost 1,000,000 customers in 2021, the return/ replacement rate was just .42%.

Are Scentsy’s products tested and certified?

Scentsy states that their fragrance products are formulated and tested to meet the requirements of:

  • EPA (Environmental Protection Agency)
  • IFRA (International Fragrance Association)
  • California Air Resources Board

The company also requires fragrance houses they work with to be active members of IFRA. IFRA determines ingredient safety and required levels in products.

Lawsuits and independent reviews of Scentsy

Scentsy has had several issues, including:

  • criticism for heavy recruitment of American military spouses who often struggle to find consistent employment due to frequent moves
  • being among various MLM companies accused of making false and unsubstantiated income claims to promote their business opportunity (either directly or through their sales force)

On the positive side, Scentsy has also been recognized for being one of America’s Best Employers for Women by Forbes, in 2022.

The company was also honored with the 2022 Product Innovation award (for the 14th consecutive year) by the Direct Selling Association, for their Scentsy Air Purifier.


Section 4 – FAQs about Scentsy

This last section tackles some critical questions and addresses various misconceptions about the company.


What is so special about Scentsy?

Scentsy’s unique wickless, wax-warming system is what sets it apart from traditional scented candles. Using a heating element instead of a flame, Scentsy’s electric scented wax warmers offer a safer and more family-friendly way to enjoy your favorite fragrances without worrying about fire hazards.

Are Scentsy’s products toxic?

Scentsy states that their wax and fragrance oils are made without harmful ingredients. They are free of BPA, lead, egg, gluten, formaldehyde, parabens, nut oils, or mineral oils. Plus, their body products are made with natural ingredients like shea, sunflower oil, aloe vera, and essential oils.

Does Scentsy have a monthly fee?

The monthly fees for various consultant kits are generally optional. However, to be an active Scentsy consultant, you must be active at least once in 12 months and generate sales worth 200+ points in Personal Retail Volume (PRV) in a single month. To retain your downlines when you sponsor consultants, you must be active at least once in four months.


Sources

  1. Top 9 MLM candle companies worldwide
  2. PartyLite

Author: Victor Nyorani

Victor Nyorani - Network Marketing Start

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