April 01, 2015

Company Spotlight

Utility Warehouse: Bundles of Growth

by Barbara Seale


Company Profile

Founded: 1996
Headquarters: London, England
Executives: CEO Andrew Lindsay
Products: Utility and essential services throughout most of the United Kingdom

Andrew LindsayAndrew Lindsay

In a country where network marketing is a small, not-well-understood industry, Utility Warehouse is growing by being the utility supplier you’d recommend to your mum.

The company offers discounted rates on energy, landline and mobile phones, and broadband service throughout most of the United Kingdom. Its nearly 50,000 distributors promote Utility Warehouse, which markets utility service bundles that give its members the option of flat monthly rates on a single bill for all services. Members can pick and choose the services they’d like to get from Utility Warehouse, but the more services they include in their bundle, the more they save on each service, and the more their Utility Warehouse distributors, or Business Partners, earn.

Utility Warehouse serves almost 600,000 residential and business customers, about 2 percent of the U.K. market. The customer base has grown over the years, taking the company from $731 million in 2011 to $1.1 billion in 2014. Utility Warehouse comprises approximately 99 percent of Telecom Plus LLC’s business. Telecom Plus trades on the London Stock Exchange under the symbol TEP.

Utility Warehouse HeadquartersInternational headquarters of Utility Warehouse and its parent company Telecom Plus in London, England.

Utility service deregulation in the U.K. has followed a similar path as in the United States. It started with telecommunications in the 1990s. Telecom Plus was an early pioneer in the deregulated utility industry, going into business in 1996 to offer deregulated phone service. Service offerings have expanded over the years into mobile phones and broadband, and then into energy when it was deregulated in 2001.

“The vision of the company’s founder Charles Wigoder had always been that we should be a multi-utility provider,” explains Andrew Lindsay, MBE, CEO of Telecom Plus PLC, who joined the company in 2007. “People didn’t tend to get looked after well by the big companies. They just came home to another bill that needed paying. But he had a vision that a multi-utility provider could give the convenience of a single bill based on the principles of good customer service. Then in 2006 he came across a new route to market for the U.K.: network marketing. Our business plays to that strength.”

He adds, “About 70 percent of our customers choose to be billed in equal installments each month. It’s a big messaging thing for us. In the U.K., no one knows how much they spend on utilities. We give them visibility to know how much they’re spending. It’s their biggest nondiscretionary budget item. It might be £2,000 (about US$3,082) a year across all their services.”

The company adopted its Utility Warehouse brand in 2003 to broaden public perception of the services it offers. The shift has even changed the way employees and managers view the company.

“Increasingly we don’t view ourselves as a utility business,” Lindsay observes. “We view ourselves as a discount club. Our customers become members, and we try to look after them the way golf or country club members would like to be looked after. We give them value. Our rates are not necessarily the very cheapest, but they’re always fair, and we make sure existing members are always the first to benefit from any new, lower prices that we introduce. Two years ago we stated our mission to be the nation’s most trusted utility supplier—the one you’d recommend to your mum.”

The mission has become the compass for decision-making within the company as it grows. Managers and even lower-level decision-makers ask themselves, “Is this decision consistent with being the nation’s most trusted utility supplier?” Lindsay notes that the company has almost 800 employees now, and more and more of them must make decisions that are guided by what the company is trying to achieve. “This mission must be part of our DNA,” he insists. “We must live and breathe it, and our business practices must demonstrate it—both in our culture with Partners and our staff internally.”

Utility WarehouseUtility Warehouse executives engage the audience at its recent international convention.

For example, Utility Warehouse’s competitors run endless advertising campaigns enticing customers to switch to them. Lindsay says that the pitch typically offers a year’s free broadband service or discounted energy—all introductory tariffs.

“Existing customers are paying about 2 to 3 percent of their costs a year to fund those advertising campaigns and teaser tariffs,” he says. “We fundamentally disagree with that. We can’t expect our Partners to recommend our services to mum when a year later she’s going to get ripped off. She must know that she’s with a trustworthy provider. Virtually all our competitors will hook mum in on a year’s free broadband service or a big energy discount for the first year and then start charging over the odds. We don’t do that. But our members will be paying less than they were to their previous suppliers before they switched. It’s all based on trust, savings and simplicity of service.”

Reserved Approach

Lindsay notes that one of the company’s challenges is the British culture and the limited understanding of network marketing. Over time the company has had to adjust its approach to better reflect its marketplace.

“There’s a British reticence to talk with friends and family about money,” he explains. “Americans are bold, confident. We are more reserved. When I joined the business there was much more marketing to prospects around ‘the opportunity.’ That’s a much more American model. We’ve wound that back. We focus more on generating an income that pays for basics—the mortgage, fuel or education expenses.”


During last April’s month-long promotion, Business Partners recruited about 3,000 Partners, about triple the usual monthly number. Customer growth followed.


Even so, over the next year the company plans to reach many more interested prospects. According to Lynda Mills, Director General of the U.K. DSA, people in the U.K. are turning to direct selling as a real alternative to traditional employment, with 68,000 direct sellers (17 percent) working full-time hours (more than 30 hours a week). This is up 20,000 from 12 percent in 2011. “Direct selling here in the U.K. really has entered the mainstream,” Mills says.

While Utility Warehouse has Partners who achieve a full-time income, the company’s focus is on the average person who wants to supplement his or her salary by working part time, equipping them to gather members who save money on as many services as they choose. While the company sponsors opportunity meetings, most recruiting and member gathering is one-on-one. Partners earn a small commission each time they recruit a member, but the real value is in the monthly residual income they get from that member for as long as that member is with Utility Warehouse.

Telecom PlusTelecom Plus CEO Andrew Lindsay (center) celebrates with Utility Warehouse Partners during an incentive trip.

A few Partners identify prospects outside their warm market by exhibiting at town hall meetings and other community events. They invite attendees to enter a prize drawing for a car, providing their contact information and answering questions about the utilities they use. The Partners then use that data to recruit and gather members. Lindsay says that the tradition has been “remarkably fruitful over the last 10 years,” and has enabled the company to reward top Partners, who can earn the use of a Mini Cooper. Around 600 Partners across the U.K. drive the Utility Warehouse-branded white vehicles with purple stripes.

“What’s clever are the savings we make from a corporate perspective,” Lindsay says. “If I’m selling you gas or electricity, I need to make a margin. If I’m adding mobile phone or broadband, I have the same overhead, but now I have additional revenue streams. My costs didn’t go up, but my revenue goes up. I can afford to make a lower margin on the services. We’re competitive for each product, but if I can put them all together, then we become disproportionately more competitive with each service. It’s a strong incentive for members to choose all of them and a clear incentive for Partners to upsell so that they make more commission and stay with us longer.”

Utility Warehouse helps those Partners earn money and rewards members for sticking around by offering several ways to help them save money. In addition to the savings on their utilities, the company offers a CashBack card—a prepaid MasterCard that members can use to shop in-store and save between 3 percent and 7 percent at more than 40 leading retailers. Then by using the company’s exclusive online portal, which it calls The Clubhouse, members also can save up to 20 percent at some 2,000 online retailers, including eBay and Expedia. The company also helps take the worry out of paying utility bills through its optional Bill Protector service. For an optional monthly payment of £2, (US$3) members can benefit from £10,000 (US$15,400) of accidental death insurance and up to six months of payments of Utility Warehouse bills if they are unable to work. The offerings help further differentiate Utility Warehouse from its competition. Lindsay says that the options are possible through the company’s robust, integrated IT system.


“We want to offer a life-changing opportunity, but that isn’t necessarily about megabucks. It’s about generating an income that pays the mortgage, fuel or education expenses as opposed to buying a penthouse.”

—Andrew Lindsay, CEO, Telecom Plus PLC


Tech/Marketing Partnership

The same IT system also enabled the company to launch its new online application process in March 2014. Partners loved it. Some 10,000 of them flocked to training during the quarter following its launch—about 400 percent more than usual during that period. The huge numbers tested the company’s training resources, but the results were worth it. Right away Partners began using the new process for around 75 percent of all residential customer applications.

With an updated, streamlined customer application process in place, the company then turned its attention to recruiting new Partners. It introduced a half-price “joining offer.” But the offer went far beyond a simple promotion. Utility Warehouse hired U.K. celebrity Sir Terry Wogan to become its brand ambassador. Wogan has been a leading media personality in the U.K. since the late 1960s. He recorded a video that now headlines Utility Warehouse’s new website, which was revamped to support the video’s messaging. Then Utility Warehouse offered Partners a free Samsung Galaxy tablet equipped with all the digital tools they needed to sign up new members—and build their teams. The cherry on top: The half-price promotion.

Incentive tripPartners enjoy the view during a recent incentive trip.

“It was a lesson in psychology,” Lindsay says. “If I tell our Partners they can earn a bigger commission for a month for signing up new members, I get a little response. But if I say that they can offer a special incentive to each new member, they go mad! They now have a reason to go out and talk to prospects. They get incredibly busy. Distributors are much keener and more active if they have something great to talk to people about. So we have begun to offer periodic time-limited promotions. We typically see extraordinary upticks in activity.”

During last April’s month-long promotion, Brand Partners recruited about 3,000 Partners, about triple the usual monthly number. Customer growth followed. Partners gathered 16,739 new customers during the quarter, compared to 13,372 during the same quarter of 2014. The company repeated the half-price promotion in January 2015. Results weren’t yet available when Lindsay spoke with Direct Selling News, but he expected results to be as strong as they had been in April.

Those new Partners learn to run their businesses through initial online training, followed by classroom training in one of Utility Warehouse’s 60 training centers. In those centers, experienced Partners who are qualified trainers run six-hour courses, usually for about 20 Partners at a time. At all centers combined, some 3,000 Partners a month learn the ropes or enhance their skills.

Ample Accolades

The company’s culture and resulting success are being recognized in multiple ways. Company-sponsored surveys reveal that more than 93 percent of members say that they would recommend Utility Warehouse to a friend. About 30 percent of new members also express confidence in the company by choosing the company’s five-service bundle, the Double Gold Bundle, which gives them the best possible rates. The company was recognized as “Most Trusted Broadband Supplier” in the Moneywise 2014 Customer Service Awards, and nominated by Which? magazine in two categories at its 2014 Annual Awards, including the award for “Best Customer Service.” The company was named Best Gas and Electricity Provider in both the value and service categories in the 2014 Moneywise Home Finances Awards and was recently nominated as a finalist in the 2015 European Business Awards.

Utility Warehouse-branded Mini CooperThrough membership sales top Partners earn the use of a Utility Warehouse-branded Mini Cooper.

The tributes create credibility that helps the company grow. Lindsay predicts continued growth, not so much in new types of service, though some are on the horizon. (He says that insurance is another service industry that is ripe for the company to enter, for example.) But the greatest opportunity he sees is to continue growing the company’s current customer base. Lindsay says that growth will be methodical, steady and as risk-free as possible. Meanwhile, Utility Warehouse will continue to invest in the building blocks that support its growth. In March it moved into a new facility that gave it about three times the office and call center space it had previously.

“We’ve got 2 percent of 25 million households as members,” he notes. “We see a huge opportunity to take our business to many more of those customers over the coming years and to become a household name that Partners are proud of and that resonates with customers.”

April 01, 2015

Company Focus

Youngevity: Acquisition Is the Name of the Game

by Andrea Tortora


Company Profile

Founded: 1997
Headquarters: Chula Vista, California
Executives: CEO and Chairman Steve Wallach; Co-Founder Dr. Joel Wallach, Chief Operating Officer Michelle Wallach; Chief Financial Officer Dave Briskie; and President Bill Andreoli.
Products: Health and Wellness, Beauty and Care, Food and Beverage, and Home and Family


Steve WallachSteve Wallach
Dr. Joel WallachDr. Joel Wallach
Michelle WallachMichelle Wallach
Dave BriskieDave Briskie
Bill AndreoliBill Andreoli

Youngevity is proving its mettle with consistent double-digit revenue growth and a knack for acquiring brands that build out its portfolio and encourage people to buy across various categories. Never designed to be a one-product company, the publicly traded Youngevity (YGYI—OTCQX) is launching energy broker services and preparing to be the first direct sales provider of K-Cup® coffee pods. The Chula Vista, California, marketer of nutritional and lifestyle products also is expanding into Russia, Mexico and the Philippines.

Youngevity was started by Dr. Joel Wallach, his wife, Dr. Ma Lan, and Steve and Michelle Wallach. Dr. Wallach, Steve’s father and a renowned researcher, veterinarian and naturopathic physician, made his first significant discovery in 1978 at Emory University when he found that a rhesus monkey had cystic fibrosis, which demonstrated that nutritional imbalances—such as a selenium deficiency—could contribute to the disease. For this discovery he was awarded the 2011 Klaus Schwarz Commemorative Medal, which honors trace element researchers who have made significant discoveries in the field. 

Youngevity began in 1997 as a seller of vitamin and mineral supplements and quickly expanded into skincare, beauty and personal-care products. The company now offers more than 1,000 products in four categories: Health and Wellness, Beauty and Care, Food and Beverage, and Home and Family. (See sidebar below.) For 2014, Youngevity posted annual revenue of $134 million.

Energy Service Powering Growth

The firm’s growth strategy is to partner with and acquire companies and products that fit the Youngevity mission to deliver high-quality items that people use and need on a regular basis. The addition of energy services fits right in, as energy industry deregulation in states like Texas opens up huge sales opportunities for independent brokers. On Jan. 1, Youngevity announced a partnership with Energy Professionals in Clearwater, Florida, to provide energy and natural gas products to Youngevity distributors and customers.

Youngevity headquarters in Chula Vista, California

“This is another consumable product that people use anyway, and it allows us to offer something in addition to our existing product line,” says CEO Steve Wallach.

Youngevity distributors do not need to become energy experts. They just need to tell their networks about the new service. Energy Professionals contracts with 10 top energy providers, and its team will handle the business side of signing up new customers. The greatest benefit lies in the ease of use—customers don’t need to be educated on how to use energy.

Youngevity will pre-launch its energy offerings in Texas, and services will expand to other deregulated states later this year. Options include a green or renewable energy choice to help offset one’s carbon footprint. This dovetails with Youngevity’s “Be the Change” initiative. Additionally, adding energy feeds the Youngevity network and makes the company an attractive buy, says Brandon Primack, an analyst with SeeThru Equity, an equity investment research firm.

“They have a robust network of direct sellers who are hungry for new products,” Primack says. He adds that the green energy offering should help Youngevity reach a younger, healthier and more planet-conscious market. “That could bring in another 50,000 users of a service into their network,” he says.

Healthy Start Pak

CEO Steve Wallach says what works best in mergers is when Youngevity brings on smaller companies and provides them with a platform that allows the founders or entrepreneurs to “lead their people and build upon what they started.”


Acquisitions: More to Come

Wallach says he always keeps an open ear to potential acquisitions. “This leads to opportunities that we may not be planning on, but we see an opportunity to work with great people and offer new products to our field and customer base and membership,” he says.

This philosophy led to the addition of financial services when Youngevity acquired Financial Destination Inc. in August 2011. Youngevity became a public firm in the summer of 2011, when it acquired the Javalution Coffee Co.

What works best in these mergers is when Youngevity brings on smaller companies and provides them with a platform that allows the founders or entrepreneurs to “lead their people and build upon what they started,” Wallach says. He adds, “Direct selling companies are started by entrepreneurs with a vision and excitement and passion around it, and what they tend to find—as many of us do—is that the day-to-day is not what we signed on for.”

That’s where Youngevity comes in, and its track record is impressive, Primack says. “They acquire a firm growing at 5 percent to 10 percent organically, and they take it to 20 percent or 30 percent because they find a way to cross-sell,” Primack says. “It is pretty dramatic.”

Today Youngevity International manages two wholly owned subsidiaries:

  • CLR Coffee Roasters grows, processes and distributes coffee to commercial and retail customers and is a large supplier to the North American cruise line industry.
  • MK Collaborative, launched in January 2014, is a jewelry and clothing line designed by Marisa Kenson and sold through direct selling and an e-tailing boutique.

The firm’s growth strategy is to partner with and acquire companies and products that fit the Youngevity mission to deliver high-quality items that people use and need on a regular basis.


International Expansion

Youngevity ranked 89th among the top 100 global direct selling companies in 2014, according to the DSN Global 100 with nearly 85 percent of its sales coming from the U.S.

Wallach says much of 2014 was spent laying the legal and financial groundwork to begin selling in these markets. “Our plan and model is further international expansion,” Wallach says. Some of Youngevity’s products are easier to export than others. For example, supplements and nutraceuticals require more rigorous approvals from other governments than products without health claims attached to them.

Coffee should also lead to larger sales. CLR Coffee Roasters is now shipping and selling green coffee beans from its plantation in Nicaragua to be roasted by its customers. The margins are slimmer when compared to selling roasted beans, but it is a good business, nevertheless. Once Youngevity solidifies the manufacture of its Javafit, Josey’s Java House and You Be the Change K-Cup® coffee pods, that product will enter Youngevity’s direct sales network.


“[Youngevity] acquires a firm growing at 5 percent to 10 percent organically, and they take it to 20 percent or 30 percent because they find a way to cross-sell. It is pretty dramatic.”

—Brandon Primack, analyst, SeeThru Equity


Technology as a Differentiator

To stand out in a crowded marketplace, Youngevity invests heavily in technology. “As an industry, we are graded against Amazon and Yahoo,” Wallach says. “People expect our e-tailing tools and websites and internal systems to be as good as or better than what they experience in their daily life.”

He says the company is constantly working to make its technology work as smoothly as possible to deliver a superior user interface. “We have that plus—the human element—which is so much more powerful,” Wallach says.

Thanks to Chief Operating Officer Michelle Wallach, Youngevity is rapidly expanding into Twitter, Instagram and Pinterest. She also posts regularly on Facebook and works with Youngevity’s more than 120,000 distributors to help them utilize social media. As a public company, Youngevity’s financials are transparent, and the Wallachs like to keep that same sense of openness on social media as well.


“As an industry, we are graded against Amazon and Yahoo. People expect our e-tailing tools and websites and internal systems to be as good as or better than what they experience in their daily life.”

—Steve Wallach, CEO


Building the Ranks

In Steve Wallach’s words, Youngevity is “simply another channel of providing goods and services to the same people who shop on retail sites and in traditional stores.” To win business, Youngevity must offer superb products and work to continuously improve them, all while providing value. Distributors educate others about products, and customers fill their orders through Youngevity’s online autoship service.

Those who want to sell with Youngevity have multiple avenues through which to find products they are passionate about. The company encourages distributors to “lead” with whatever products get them most excited. Then the remaining product portfolio is also available to them for cross-selling. As a public company, Youngevity also offers stock options, which serve as rewards for top sellers as well as a way to attract and retain top people, Wallach says.

Even acquisitions are consumer-driven, he adds. When customers want certain products, Youngevity will seek them out. Sometimes, customers might recommend a company to Youngevity and “one thing leads to the next.” Wallach says, “What it all comes down to is the person-to-person interaction.”

What’s in Store from Youngevity

Youngevity now offers more than 1,000 products in four categories. Its growth is fueled by acquisitions. The company has recently acquired: Heritage Makers, GoFoods Global, Biometics International, Good Herbs and Beyond Organic.

CEO Steven Wallach talked with Direct Selling News about growth and what’s ahead for each segment.

Health and Wellness

This is the category where Youngevity got its start. The segment includes products for nutrition and physical and emotional health. Supplements target overall well-being, bones and joints, and the cardiovascular system, to name a few. Co-Founder Dr. Joel Wallach began with a mega-supplement in liquid form and followed that with intensive research. Now Youngevity uses soluble powders and continues research and development in the field. The health and wellness division offers hundreds of products, many of which were added through acquisitions.

“We will continue to innovate and introduce new products,” Wallach says. “It is part of our DNA. Our goal is to introduce these to other places in the world.”

Memory-Keeping

On the emotional side is Heritage Makers, a line of digital memory scrapbooks acquired by Youngevity in 2013. Wallach said Heritage Makers fits into Youngevity because people from both companies’ networks were already using the other’s products, and Heritage Makers was heavy on technology that Youngevity could harness and apply across its platforms. When Heritage Makers joined Youngevity it was generating about $1 million in revenue each quarter. In second quarter 2014, Heritage Makers reported $2 million in revenue, only to top it the next quarter with $2.7 million.

Beauty and Care

About five years after its launch in 1997, Youngevity expanded into skincare and cosmetics. Wallach said people were asking for mineral makeup to complement Youngevity’s mineral supplements. Wallach wanted chemical-free and preservative-free products. One acquisition included a vitamin C skin cream formulated by a female physician. When the Heritage Makers digital scrapbooking company joined the Youngevity fold, another 10,000 female distributors came along with it, making for some ready-made customers.

“The same thing happened with our essential oils,” Wallach says. “We had a great line, and that spills over into other markets and lines. And we see with international markets opening that cosmetics are really embraced and understood from the direct sales side of things.”

Beauty-care products come with very little barrier to entry in foreign markets, which allows for rapid expansion without having to navigate a regulatory maze.

Food and Beverage

Acquisitions are taking Youngevity into the functional foods arena as well. GoFoods Global was acquired in October 2013. GoFoods makes storable healthy bars and other foods that are lightweight and easy to ship. Wallach says Youngevity is expanding formulations on some of these products and will add a nutritional bar. Other offerings in the category include healthy chocolates and a liquid antioxidant juice based on a high-caliber cocoa that is added to meal-replacement shakes.

“Things like gluten-free or non-GMO and preservative-free or certified-organic—all of these are so much more important and consumer-driven over the last few years,” Wallach says. That point is what drove the expansion of CLR Coffee Roasters into purchasing a coffee plantation in Nicaragua. The coffee is shade-grown, Rainforest Alliance Certified and Fair Trade Certified. “We don’t have to outsource any aspect of it,” Wallach says. “It creates the efficiency in a huge market with real opportunity.”

Home and Family

Wallach wants to expand this segment in 2015 with a line of green household cleaners and other environmentally sound home-and-garden products. Talks are underway with manufacturers.

Youngevity already offers its minerals in certified-organic agricultural products, and it plans to add pet products, too. It fits, Wallach says, because people love their pets as much as their children, and his father got his start as an exotic animal veterinarian. “It all goes back to our interest to never be a single product or focus firm,” he says. “Like Apple, we want to positively impact your life at every touch point we can.”

April 01, 2015

Company Focus

Ava Anderson Non Toxic: Youthful Passion Drives Legacy Forward

by Courtney Roush

Photo: A very young Ava Anderson poses with her grandfather, the late Charlie Collis, a direct selling industry icon.


Company Profile

Founded: 2009
Headquarters: East Providence, Rhode Island
Executives: CEO Ava Anderson; President Kim Anderson
Products: Personal and home care

Ava Anderson Logo


What pops into your head when you hear the word “teenager”? Odds are good that you don’t picture a fiercely passionate entrepreneur with a vision to change chemical policy in America. Or someone who delivers a TEDx Talk with some alarming information about harmful ingredients in personal-care and home products. Or a CEO at the helm of a direct selling company that attracted some 1,000 new Consultants in the last 70 days. While we often recognize direct selling for its ability to transform lives, we may not realize the legacies it creates, which can impact multiple generations in profound ways—and extend the reach of this industry far beyond what we thought possible. College student Ava Anderson, who also happens to be running a multimillion-dollar direct selling business, is one shining example of that generational promise.

Ava AndersonAva Anderson

Her story starts seven years ago, when at age 14 Ava spotted a report about potentially harmful chemicals found in teenagers’ bloodstreams that could be attributed to personal-care products. Those words sparked a fire inside that would become her passion and mission.


Ava Anderson’s grandfather is the late direct selling industry icon Charlie Collis, who founded Princess House®, a direct seller of home and entertainment products.


She took to the blogosphere to air her concerns and start a conversation with others on the subject, and it wasn’t long before she had several thousand followers. She’d hit a nerve; consumers cared deeply about this issue. It seemed to her that Americans were placing their trust in product labels without knowledge of their ingredients and the possible long-term effects of exposure, or “body burden.” But what was the solution? After almost a year’s worth of research, Ava could not find a full line that she could use or recommend with confidence. So she proposed a bold idea to her parents: She wanted to start her own line of products that people could trust.

With the support of her parents and friends, Ava located a private manufacturer capable of developing and producing the kind of products for which consumers were hungry. In December 2009, Ava Anderson Non Toxic® was born with six skincare products and an executive team of two: 15-year-old Ava as CEO and Ava’s mother, Kim Anderson, as President. Kim believed so strongly in her daughter that she left retirement to join the cause. The former owner of a successful home-goods store in the family’s hometown of Barrington, Rhode Island, Kim knew what it took to run a business—and she had every confidence in her daughter. This entrepreneurial drive may be atypical for a 15-year-old, but Ava was no ordinary teenager.

A Direct Selling Legacy

Ava’s grandfather is the late direct selling industry icon Charlie Collis, who founded Princess House®, a direct seller of home and entertainment products. His tireless work ethic and compassionate principles had been handed down through the generations, and the family was no stranger to direct selling or its power to change people’s lives.

The direct selling model was a natural fit for Ava Anderson Non Toxic®, not only because of the family’s familiarity with the channel—“we had close to 100 years of direct selling experience and advice within our family,” Kim says—but also because “there isn’t enough room on the back of a bottle to explain this issue of toxic chemicals in products,” Ava adds. “Direct selling is the only way to fully convey our mission and how revolutionary these products are.”


The story of Ava Anderson Non Toxic® starts seven years ago, when at age 14 Ava spotted a report about potentially harmful chemicals found in teenagers’ bloodstreams that could be attributed to personal-care products.


Ava’s father, Frohman Anderson, stepson of Charlie Collis, told her that she couldn’t have a successful direct selling business without a minimum of 300 Consultants, “so Ava and I reached out to everyone we knew by phone, blogging, emailing, any way we could get the message out,” Kim says.

“We created our products to become a platform for the message,” Ava says. “Changing people’s health and financial lives is our focus. This has never been about profit for our family. We don’t have shareholders or investors to satisfy. If our Consultants change lives and make a good income doing something worthwhile, something they can feel really good about, that’s success for us.” In fact, while the Andersons made a small family investment to start the company, it’s the ongoing success of Ava Anderson Consultants that organically funds the company’s tremendous growth.

Throughout the next few years, while other teens were busy with extracurricular activities, Ava was running her business. The hard work clearly has paid off. With more than 7,000 Consultants, the company offers 75 products in 11 different categories—skin care, cosmetics, hair care, body care, men’s products, baby care, sun care, pet care, scents, bug spray and home cleaning products—with many more products currently in development. Its growth since 2009 has been due in large part to youthful idealism, a message that resonates with consumers in all 50 states and Puerto Rico, and to a direct selling legacy in which the sky’s truly the limit and anything is possible.

As with any new business, Ava hit speedbumps, though hers were somewhat unique. “My age was certainly an obstacle at first,” Ava says. “People didn’t think I knew as much about the issue as I did. I couldn’t legally sign a check, purchase orders or contracts for the business before age 18. But once people met me and heard me speak, they could see this was my passion.”


“We created our products to become a platform for the message. Changing people’s health and financial lives is our focus.”

—Ava Anderson, CEO


Sharing Her Passion, Leaving Her Mark

Like any company executive, Ava spends a fair amount of time on the road. She’s helping educate Consultants and consumers, motivating potential leaders, even lobbying on Capitol Hill in support of more stringent chemical regulation. In October 2013, she presented a TEDx Talk, “Toxic Baggage: A Journey to Healthier Living,” at her high school alma mater, Moses Brown School, in Providence, Rhode Island. That’s all while continuing her studies at Babson College in Wellesley, Massachusetts, an institution well-known for its entrepreneurship program, where she’s majoring in business and has perfected the fine art of time management.

Last year, Forbes.com named Ava one of its “Five Entrepreneurs Inspiring College Students.” And she holds the distinction of being the only third-generation Direct Selling Association (DSA) member. Her father and grandfather bought a direct selling company in 1992 where Frohman served as General Manager.

Ava’s extremely well-versed on the subject of chemicals in personal-care products, having pored over all the research she can find. Ava points to a few figures that are important to share: Europe currently bans more than 1,400 chemicals from its personal-care products, while the United States bans only 11. “The average woman in this country puts on almost 200 chemicals before breakfast, some with known and suspected links to disease,” she says.

Director of Training Marianne Friedlund says, “Our mission is to educate consumers—and when we focus on that mission, the sales follow. Most of our Consultants consider themselves educators, not salespeople. Once people know this information, they can’t ‘unknow’ it.” She adds, “By continuing to share important studies, articles and our wonderful product testimonials, our Consultants are finding great success. This is a trending issue, and we’re making a difference, one household at a time, by reducing the body burden of families.”



CEO Ava Anderson and her mom, President Kim Anderson (front, center), welcome sales leaders to the home of Ava’s personal-care products company.


‘If Consultants Are Happy, Everyone’s Happy’

Charlie Collis passed away in 2014 at the age of 99, but his legacy remains firmly intact. Considered a pioneer of direct selling, he started Princess House in 1963, and was named to the Direct Selling Association (DSA) Hall of Fame in 1981. His family members hold dear memories of his humorous one-liners, or “Charlie-isms.” He took a genuine interest in others, calling the rising stars in his independent salesforce “gems.” “He was so fond of his gems—they were the highlight for him,” Ava says. “He’d tell us stories about them, and he wanted to know all about the gems in our salesforce. He was driven to make Consultants happy. His philosophy was, if Consultants are happy, everyone’s happy.”

LeadersAva Anderson takes time out with sales leaders during Leader Day at her company’s headquarters in East Providence, Rhode Island.

And at Ava Anderson Non Toxic®, there’s much to be happy about. The company saw more than a 400 percent increase both in sales and sponsoring in 2014. To what does Ava attribute that phenomenal growth? You can hear Charlie’s influence in her answer. She explains that her grandfather’s mindset of personal connection is put into practice from Day One. Company executives call every single new Consultant to extend a warm welcome and share the big vision and opportunity for success. As Consultants continue to grow their business and qualify for incentives, Kim says, “everyone in the running for promotions and achievements gets a personal email from us. Our field knows that we truly want them to succeed.”

As new Consultants engage in a 90-day “Quick Start” path, they’re encouraged to take advantage of twice-monthly live training webinars, weekly national training calls and monthly team meetings. Training materials are designed to be simple and easily replicable. Consultants have access to a desktop and mobile back office (avaOFFICE) of training documents, a video training library and regular program updates.

Top performers may be eligible to participate in an invitation-only 10-week VIP program led by Friedlund and comprised of group and individual coaching. And a series of events throughout the year deliver targeted training for new Consultants all the way to seasoned veterans.

The company maintains a strong presence on social media, including a corporate Facebook page followed by more than 62,000 (Ava and Kim personally respond to comments posted there), and a personal Facebook forum managed by each salesforce Executive (Ava Anderson Non Toxic® currently has more than 75 of these top salesforce performers), where they engage Consultants directly, answer questions and offer support. Being a young, tech-savvy company, “We consider ourselves social entrepreneurs,” Ava says.


Last year, Forbes.com named Ava one of its “Five Entrepreneurs Inspiring College Students.”


Parties Are the Foundation

Despite all of this technology, however, Ava Anderson Non Toxic® will always be a party plan company. “There’s no replacing the power of gathering 10 or more people in a room and sharing this information with them personally,” Kim says. “If Consultants rely only on social media, they won’t realize a level of success anywhere near those who follow the party plan model, and use social media as another powerful business tool. Parties [called avaHOURS] are the backbone of our company—they’re where the true value of this business lies, and where long-lasting relationships are born. Those who have been consistent, holding one to two parties a week, have built empires with this opportunity. And that’s just how Charlie did it.”

The company offers rich incentives for hosts and Consultants alike, including what they call one of the most lucrative compensation plans in the direct selling industry. “We believe in the value that independent business owners bring to their communities and the power they have collectively as a voice of change in this country,” Ava says. “Our compensation plan has been designed to help them succeed early, realize their dreams through the income potential and develop without limitations.”

What drives people to Ava Anderson Non Toxic®, Kim says, is a sincere interest in product ingredients and a desire to help change the world. “We’re able to leverage the growing passion for this issue and the power of direct selling to give Consultants the opportunity to do something
they really care about,” Kim says. “We share the safest full line of personal-care and home products on the market. We’re not a beauty company; we’re a wellness alternative.”


“We’re not a beauty company; we’re a wellness alternative.”

—Kim Anderson, President


“Our Consultants are caring, passionate and well-informed,” Ava says. “We have a lot of young moms, but the salesforce includes all ages, and it’s gender-neutral. Our philosophy is that everyone deserves to be informed on these issues and have access to healthier product choices.”

Founded on the values of hard work, persistence and vision, Ava Anderson Non Toxic® maintains a strong commitment to helping others—particularly young women—realize their entrepreneurial dreams. The company funded the United States’ first college women’s entrepreneurial accelerator, at Babson College, two years ago. Each year, between 25 and 30 students participate and have the opportunity to take their ideas from initial “pitch” all the way to business launch. Mentors coach them throughout the process.

“We want to give other young entrepreneurs a leg up on their great ideas. Our family believes that entrepreneurship truly can change the lives of everyone in this country,” Kim says.

Ava Anderson Non Toxic’s other philanthropic commitments include donations to breast cancer foundations, domestic violence groups, homeless shelters, veterans’ homes and others. In 2014, more than $250,000 in product was sent to these groups. The company also raised funds for more than 20,000 meals for Edesia Global Nutrition Solutions, a global children’s malnutrition solution, last fall.


“If you have passion and determination, you can change the world.”

—Ava Anderson


Next Milestone: Graduation

Changing the national conversation on product ingredients is a lot to juggle in between college courses and exams, but Ava will continue that fine balance until she graduates Babson in 2016, after which she’ll focus full-time on her namesake company.

Ava Anderson is living proof that the millennial generation holds tremendous promise, passion and drive to leave the earth a better place than how they found it. And perhaps no other vehicle can turn those dreams into reality better than direct selling.

“If you have passion and determination, you can change the world,” she says. “And our family, our company, our Consultants are doing just that.”

Now that’s a legacy of which Charlie would be proud.

April 01, 2015

Stock Watch

Stock Watch, April 2015


April 01, 2015

Publisher's Note

Every Experience Has Something to Teach Us

by Lauren Lawley Head


Experience is an unusual word. When you hear it, odds are good that your first thought is of something positive: The trip will be the experience of a lifetime. She has the experience we’re looking for in our next hire. You have to experience this amazing product. But, of course, all experiences aren’t pleasant. While we may wish to forget them, we’ve all experienced disappointment or loss, difficult economic times and even outright mistakes. Though our tendency may be to block those sorts of experiences from our minds, we would do well to study them, at least long enough to extract the valuable lessons they contain.

Lauren Lawley Headl

Our cover story this month, “Don’t Forget the Basics,” does just that. Writer Andrea Tortora researched the experiences of companies that have opted to close their direct selling businesses in recent years and interviewed industry experts and business leaders in search of commonalities. The insights she shares in the piece provide opportunities for companies of all sizes and at all stages of development to learn the valuable lessons without paying the price of first-hand experience. Among them is this gem from former Direct Selling Association President and CEO Neil Offen: “There has to be a synergy between the efforts of the corporation and the efforts of the field to work together as partners. You have to always respect the field and care about them and love them to be truly successful.”

While it is important to look at lessons from the past, there also is great value in looking to the future. This is a dynamic time for direct selling as new generations of entrepreneurs begin to carve their own path and, in doing so, begin to shape new paradigms for the channel. On Page 58, writer Courtney Roush will introduce you to one of our community’s rising leaders: Ava Anderson. At just 15 years old, Anderson launched her eponymous skincare company, Ava Anderson Non Toxic. Today, she is juggling her responsibilities as CEO of the company while completing her business degree at Babson College in Wellesley, Massachusetts. She is committed to staying true to her original mission of educating today’s consumers about the importance of knowing what goes into their personal-care products. But as the granddaughter of Princess House Founder Charlie Collis, Anderson also brings to her company a deep understanding and appreciation for direct selling’s legacy in the United States.

“We created our products to become a platform for the message,” Anderson says. “Changing people’s health and financial lives is our focus. This has never been about profit for our family. We don’t have shareholders or investors to satisfy. If our Consultants change lives and make a good income doing something worthwhile, something they can feel really good about, that’s success for us.”

Also in this issue, the Direct Selling News team takes you inside two established direct selling companies: England-based Utility Warehouse and California-based Youngevity. Each one is pursuing a unique approach to growth in today’s marketplace, just as each of you are doing inside your organizations. If you’re ready to share your story, please let us know. With the first quarter of 2015 behind us, there is still plenty of time to make this year an extraordinary experience.

All the best,

Lauren Lawley Head
General Manager

April 01, 2015

News in Brief

News in Brief, April 2015


Herbalife’s Overhaul of Sales Plan Shows Promise

Herbalife Ltd. (HLF—NYSE) has had a busy year. Though its fourth quarter revenue dropped and 2015 guidance was lowered, the bigger picture shows a company in transition. Throughout the year, the nutritional company has continued to implement significant adjustments across its entire sales channel, retooling it to better accommodate new distributors as they start their businesses. Herbalife is applying this conservative sales approach in an effort to give them more time to qualify for financial incentives, which puts less pressure on them to buy products within a certain time frame.

This “Gold Standard” compensation plan was initiated in Russia in 2008, and has since been expanded to the rest of the world. Improved retention and productivity have already been seen in the China and EMEA markets where these rules are in place. Because the plan is just being introduced in other markets it negatively impacted sales in the U.S., South Korea, Mexico and Brazil in the fourth quarter.

“2014 was a record year in terms of net sales, volume and sales leader retention,” Chairman and CEO Michael O. Johnson stated. “It was also a year of transition, as we continue to implement changes that we believe will create a stronger company with the ideal combination of growth and sustainability.”

For the full year, the company reported net sales of $5.0 billion, a 3 percent increase compared to 2013. Herbalife posted net income of $308.7 million, or $3.40 per diluted share. Adjusted EPS of $5.93 increased by 10 percent versus 2013.

For the fourth quarter, Herbalife beat Wall Street expectations as well as its own consensus when the company reported adjusted earnings of $121 million in the fourth quarter 2014, or $1.41 per share. Consensus estimates for the nutritional company had been $1.16 per share, with Herbalife’s own outlook range being $1.30 to $1.40.

Earnings were overshadowed by a drop in quarterly revenue, which totaled $1.1 billion, down 11 percent from the comparable period a year ago.

The company’s updated 2015 guidance was also lower than anticipated. Herbalife expects a sales decline of 12.5 percent to 15.5 percent in the first quarter 2015, and 6 percent to 9 percent for the year.


Foreign Markets Drive 7% Growth at Mannatech

Nutrition and skincare company Mannatech Inc. posted strong 2014 earnings despite a dip in fourth quarter sales brought on by currency issues.

The Dallas-based company (MTEX—NASDAQ), which ties its business to fighting childhood malnutrition through the Mission 5 Million (M5M) program, reported revenue for the full year was $190.1 million, a 7.1 percent increase from 2013. Mannatech’s Asia Pacific revenue climbed 15.1 percent to $92.4 million. Net income totaled $6.5 million, up from $3.2 million in 2013 to $2.40 per diluted share. The company reported a net deferral of $4.2 million in revenue connected to its loyalty program.

In 2014, Mannatech also carried out its mission of social entrepreneurship through the M5M program. For every automatic product order, the company donates PhytoBlend—a nutrient-packed powder that can supplement any food—to orphanages and relief organizations around the globe. Mannatech has disclosed that its 2014 donations totaled 20 million servings of PhytoBlend to children in need. The company formed the nonprofit M5M Foundation in November 2014 to facilitate its expanding charitable efforts.

Revenue for the fourth quarter was $45.2 million, down 2.8 percent from the same period in 2013. In constant dollars, revenue increased 0.6 percent. Net income for the quarter totaled $1.9 million, or 68 cents per diluted share, compared to 94 cents a share in fourth quarter of 2013.

Mannatech’s business outside North America accounted for a growing share of the company’s consolidated net sales. Both in the quarter and the full year, operations outside North America generated 57.5 percent of sales, up nearly 4 percent from 2013.


Fortune Ranks Tupperware among World’s Most Admired Companies

Tupperware Brands has once again landed on Fortune’s annual ranking of the World’s Most Admired Companies. The global brand has now spent eight consecutive years on the list, where it falls under the Home Equipment, Furnishings category.

To compile its report card on corporate reputation, Fortune ranks nine key attributes such as use of corporate assets, social responsibility and long-term investment value. Tupperware ranked highest in its category for global competitiveness, and second for innovation and use of corporate assets. The company markets its kitchenware, beauty and personal-care products through an independent salesforce of 2.9 million in nearly 100 countries.

“The strength of our mission and our people propels us as a company to continue our success,” Rick Goings, Chairman and CEO, said of Tupperware’s work to empower and support women. “Global competitiveness is one of the priorities of the business, along with the other categories the list is derived from, and we are honored to be ranked on the World’s Most Admired Companies list for the eighth year in a row.”

As an extension of its business model, Tupperware aims to impact lives through opportunity, support and relationships—a philosophy embodied in its Chain of Confidence program. Goings and his wife, Susan, Global Ambassador for the program, recently accepted the Sewall-Belmont House & Museum’s Voice for Women Award in recognition of their work. Goings also represents Tupperware on U.N. Women’s Private Sector Leadership Advisory Council, an initiative focused on economic and political advancement for women.


Oriflame Consolidates Russia Operations in New Production Plant

Oriflame Cosmetics S.A. has completed another step toward streamlining its Russia business with the inauguration of a new production facility in Noginsk. The Swedish beauty and hygiene products group sold its production site in Krasnogorsk to consolidate operations in the turbulent market. The new facility dovetails with Oriflame’s strategy to focus and simplify its business amid geopolitical tensions in Russia and Ukraine.

The $170-million complex, including production facilities, warehousing and a LEED-certified distribution center, enables Oriflame to cut down on lead times and prices in Russia, where it draws a third of its business. The company has scrambled to increase prices in the region, and it anticipates further increases this year as the devaluation of the ruble continues to impact its core business. Oriflame is countering economic uncertainties by focusing on leadership development, introducing a retooled compensation plan and ramping up promotion of its skincare and wellness offerings, particularly the brand’s daily skincare regimen and product sets.


Wellness International Network Unveils New Name and Product Offerings

A major transition is underway at Plano, Texas-based Wellness International Network. The 23-year-old nutrition company is moving to new offices and relaunching under the WIN Worldwide brand, which will feature all-new products and a revised business model.

The husband and wife team of Ralph and Cathy Oats founded WIN in 1992, six years after they took up direct sales to earn an extra $100 in weekly income. Now, a second generation of Oats family members fills key marketing and operations roles within the company.

“For any company to remain successful it must be open to change, and WIN is no exception,” Ralph Oats told DSN in an email. “We realized it was time to launch a more contemporary business model. We are committed to innovations and changes that will grow WIN.” 

WIN’s existing business plan and product line is rolling over to a new company, Physician’s Health & Diet (PHD) Program LLC, which will transition away from multilevel marketing. Its product distribution will remain focused on the physician-oriented market. With WIN’s relaunch, leadership aims to carve out a new niche in the industry and build “a multi-level marketing company that offers products and opportunity for anyone, anywhere, anytime,” said Director of Marketing Sheri Matthews.

WIN has made a “financial commitment to innovate,” in Matthews’ words, that extends to every part of the business. The company has developed a new product line which includes WIN Daily Lift, a powdered-drink mix that contains 59 superfoods. For brand partners, WIN has developed simple, action-oriented tools such as a new launch kit, a program that enables customers to earn free product, fresh marketing materials, product sampling options, and an improved online shopping cart and back office. The company is also introducing a new compensation plan that incorporates weekly payments, bonus pools, promotional iPads and a luxury car program.

“We view our WIN family as our No. 1 asset, and we do everything we can to help ensure they are positioned for success,” said Founder Cathy Oats. “We believe our latest innovations will help to ensure WIN continues to prosper for decades to come.”

To develop its new branding and distributor tools, WIN engaged DSN parent company SUCCESS Partners, a producer of marketing tools, videos and personal development materials for the direct sales industry as well as the publisher of SUCCESS magazine and Success from Home. The collaboration produced not only a fresh look and feel for WIN, but also a buyer for the company’s existing headquarters facility. SUCCESS Partners has purchased the 81,000-square-foot building with plans to relocate its own corporate headquarters from nearby Lake Dallas, Texas.

WIN has found a new home in Plano’s 2220-acre Legacy Development, neighboring prominent corporations such as Dr Pepper/Snapple, Frito Lay, JC Penney and Toyota. The company plans to hold a grand opening celebration in June 2015 after occupying its new space.


China Gives Morinda the Green Light on Direct Selling

Morinda Inc. is the latest company to secure a direct selling license from China’s Ministry of Commerce, which has issued just 48 licenses since the country lifted its direct-selling ban in 2005. Morinda plans to market its juice blends and TruAge nutrition products in the city of Chongqing, a hub of over 32 million people, as it awaits additional permits.

“We’ve spent several years and a lot of effort pursuing this license,” said Morinda President John Wadsworth. “This is an expression of our commitment to the future of Morinda.”

Though China is the industry’s fastest-growing market—accounting for $27.3 billion in 2013 retail sales—the country’s narrow regulations have posed challenges to many companies within the industry. In the same year, only eight new companies received approval to launch direct selling operations.

Since launching in 2003, Morinda’s Chinese subsidiary, Tahitian Noni Beverages (China) Ltd., has established offices in nine cities across the country. The company also opened its own GMP (Good Manufacturing Practice) plant in Chongqing in July 2014.


Mary Kay Renews Sponsorship of Dating Abuse Helpline

Crayton Webb and Katie Ray-JonesCrayton Webb (left), Vice President Corporate Communications and Corporate Social Responsibility for Mary Kay Inc., and Katie Ray-Jones, CEO for the National Domestic Violence Hotline. (PRNewsFoto/Mary Kay)

At Mary Kay, empowering women is about much more than lipstick and pink Cadillacs. Through its Don’t Look Away campaign, the global cosmetics brand has become a strong advocate for victims of domestic violence, including the one in three teens who experience dating abuse. Following a three-year partnership with text-for-help service loveisrespect, Mary Kay has announced plans to sponsor the helpline for another three years through an additional $1.25 million grant.

“Mary Kay has long been a leader in working to end dating abuse in our communities, and we are thrilled about the continuation of our partnership,” National Domestic Violence Hotline CEO Katie Ray-Jones shared in a statement. “This gift will help provide critical resources to teens and young adults and ensure that someone is always available when a young person is ready to reach out for help.”

Break the Cycle and the National Dating Abuse Helpline launched loveisrespect.org as a tool for young people, with extensive information regarding dating abuse, as well as chat, text and phone crisis services. Since Mary Kay signed on as lead sponsor in 2012, the number of communications received over the helpline has increased by 48 percent. In 2014 alone, loveisrespect responded to nearly 56,000 texts, online chats and phone calls from across the nation.


Nu Skin to Launch Essential Oils Line

Nutrition and skincare company Nu Skin Enterprises Inc. has announced plans to introduce a new line of essential oils in its U.S., Canada and Latin America markets this month. The Utah-based brand will launch Epoch Essential Oils through a sales promotion available to qualifying distributors on Thursday, April 9.

The initial Epoch offering will consist of three single oils and five oil blends, which the company plans to introduce as a package, along with a diffuser, a mini diffuser and topical blending oil. Nu Skin says it will begin selling individual products in July and, later in 2015, introduce the line in China and Europe.

Essential oils, used topically or aromatically, are gaining popularity as natural alternatives to pharmaceutical drugs and antibiotics. In the past five years essential oil manufacturing in the U.S. has grown 3.5 percent annually to $1 billion in revenue, according to a recent report by IBISWorld. Nu Skin CEO Truman Hunt said the brand is looking to differentiate itself from competitors by “applying Nu Skin scientific rigor” to the category.

Epoch product sales will contribute to improving the lives of children through the Nu Skin Force for Good Foundation, which supports humanitarian projects in more than 50 countries. The company has pledged to donate 25 cents from each sale to the foundation’s efforts to alleviate disease, illiteracy and poverty.


Nature’s Sunshine Posts Flat Earnings, Launches New Research Center

Nature’s Sunshine Products Inc. (NATR—NASDAQ) is taking its annual and fourth quarter financial results in stride with its forthcoming entry into China and the launch of a multimillion-dollar research center. The company reported full-year revenue of $366.4 million, down 0.9 percent from 2013, or a 0.5 percent decrease in local currencies. Operating income also fell 19.2 percent to $19.0 million, compared to $23.6 million in 2013. In November, Nature’s Sunshine pulled out of Venezuela due to economic uncertainties stemming from import controls and inflation.

Still the supplement firm is forging ahead with its plan to enter China in 2015 through a joint venture with Fosun Pharma, which accounted for $2.2 million in startup costs.

The company’s nutrition and personal-care products generated $86.7 million in fourth quarter revenue. Earnings were 5 cents per share, coming in 18 cents below the consensus estimate of 23 cents a share.

Like many companies operating in Russia and Eastern Europe, Nature’s Sunshine felt the adverse effects of an increasingly strong dollar underscored by geopolitical challenges in the region. Strong sales in Korea, Japan and Europe boosted the company’s Synergy WorldWide subsidiary, which accounted for $30.8 million in quarterly revenue, an increase of 8.3 percent over the prior-year period.

Nature’s Sunshine followed up its earnings report with the grand opening of the Hughes Center for Research and Innovation, a new state-of-the-art facility located at its corporate headquarters in Lehi, Utah. Utah Gov. Gary Herbert was on hand to officially open the 5,400-square-foot center, where the Nature’s Sunshine R&D team will research how nutritional supplements interact with the body at the molecular level. The center’s research will combat health trends driven by diet and lifestyle choices through natural, nutritionally therapeutic products, said Chairman and CEO Gregory Probert. The new facility features labs and clinical space, as well as exam rooms for consultations and clinical studies.


CAbi Expands Partnership with Opportunity International

Los Angeles-based apparel company CAbi has expanded its partnership with the nonprofit microfinance organization Opportunity International. The new initiative, Women Entrepreneurs are CAbi, or W.E. are CAbi, will make a donation to Opportunity International in the name of each new consultant who joins the company. Opportunity International will use the money to fund small business loans and training programs for female entrepreneurs in developing countries.

Based in Illinois, Opportunity International works in 22 countries providing access to savings, small business loans, insurance, training and entrepreneurial support to more than 5 million people working their way out of poverty. The organization’s Board of Advisors includes The Pampered Chef Founder Doris Christopher. Since 2008, CAbi has raised $615,000 for Opportunity International through a program that allows customers to round their order amount to the nearest dollar and donate the change. CAbi says its goal is to reach more than $4 million in total giving by 2020.

Clothing designer Carol Anderson and 11 co-founders launched CAbi (Carol Anderson by invitation) in 2002. In 2012, investment firms J.H. Whitney and Irving Place Capital took equity stakes in the company. The following year, the company tapped Lynne Coté, a retail executive whose experience has included Jones New York, Anne Klein and Nine West, as CEO.

April 01, 2015

Cover Story

Don’t Forget The Basics: A Cautionary Tale

by Andrea Tortora

When companies leave direct selling, their stories present keen lessons for the entire industry. Interviews with industry experts and business leaders, as well as extensive research, show many common challenges and mistakes. The most notable? Forgetting the basics. As companies mature, they become complicated and drift away from their core. This can create weakness in a business’ culture and attitude.


“There has to be a synergy between the efforts of the corporation and the efforts of the field to work together as partners. You have to always respect the field and care about them and love them to be truly successful.”

—Neil Offen, former President and CEO, Direct Selling Association


To remain strong and growing in the industry requires an understanding of many complex issues, but foremost among them is a foundational principle—what makes direct selling tick are personal relationships. This remains true regardless of product offering, level of new technology utilized, or even what label is attached to the process—whether it’s group selling, party plan, social selling or one-on-one.

While it remains important for nearly every business today to maintain a commitment to technology expansion in some form, the manner in which each company embraces technology should never supersede the organization’s commitment to its people who function within that technological framework. Parties and gatherings may move to a more virtual landscape, but the people involved are still the ones engaged in the process and business channel. Indeed, the rapidly evolving landscape in business in general requires everyone to stay nimble enough to respond to market pressures and consumer preferences in ways that align with their company’s true principles.

People First

Every time a good company exits direct selling, it hurts the industry as a whole. There are many recent examples from which we can learn, including two energy companies that closed their direct selling segments: North American Power and NRG, whose business unit operated as Independence Energy Alliance. Other companies include At Home America, lia sophia, Lindt Chocolate RSVP, Gigi Hill, Jamie Oliver At Home, Jockey Person to Person and Body Shop at Home, to name a few. The fundamental thing to remember is that the industry is totally dependent on a volunteer army of individuals who can leave at any time, says Neil Offen, former President and CEO of the Direct Selling Association. Independent consultants want to be proud of the company they represent.

“There has to be a synergy between the efforts of the corporation and the efforts of the field to work together as partners,” Offen says. “You have to always respect the field and care about them and love them to be truly successful.”

The field can make or break a company. Which is why when a company moves out of direct selling—for any reason—the most difficult issue for leaders to work through is managing and taking care of its independent consultants. Sometimes, corporate leaders are able to prepare their field for the change. The end of business operations often is a shock and a hardship to the thousands of consultants who bought into the company—financially and emotionally—and they must face the loss of their livelihood.

“People decide to join a direct selling company because they trust the brand and the people representing it,” says Sue Rusch, who led Crayola’s Big Yellow Box direct selling business through its closure in 2007 and now works as a consultant for top direct selling brands. “It is a relationship business. People have a belief system that says if they dedicate themselves to the brand, and work smart, it will be there. That trust is broken when they pull the plug.”

The strong attachment to a company’s culture and mission can make it difficult for consultants to find another home, says Lisa Brandau, who founded decorative home products company At Home America with her sister Becky Wright. The company closed in 2012 after new owners and investors took over. At Home America was active for 30 years. For Brandau, the saddest part of watching the company she started fold was the loss of people. “When the company goes away that attachment is hard for them and hard for other companies to overcome,” Brandau says.

A Closer Look

lia sophia

The Chicago-based jewelry seller announced its closing in December 2014. The company said it would cease operations by the end of February 2015, ending 28 years in business. Lia sophia worked with more than 27,000 advisors who sold more than $100 million in jewelry a year.

The company started in 1986 as the jewelry division of Remington Products Co., which sold personal-care products. Owners Tony and Elena Kiam relaunched the business under the lia sophia brand, named for their two daughters. The company cited market pressures and economics as the cause of its downfall. It held a conference call to tell consultants the news. Within two hours of the announcement some consultants were already receiving recruiting calls.

North American Power

The Norwalk, Connecticut, power supply company discontinued its direct selling operations in January 2015. This affects its North American Power and Thrive customer referral programs.

Independent representatives can no longer refer new customers but will continue to receive residual payments. In 2014, North American Power reported $256 million in revenue, earning it the No. 47 spot on the DSN Global 100.

North American Power is still actively marketing to and enrolling new customers, and serving all of its existing customers, including those enrolled through its direct selling channel.

Independence Energy Alliance

The Princeton, New Jersey, power supply subsidiary of NRG Energy Inc. ceased direct selling operations in February 2015. Customers enrolled by direct sellers will continue to be serviced by NRG, and applicable Associates will continue to receive monthly residual income for the customers they enrolled.

Lindt Chocolate RSVP

Lindt & Sprungli is a premium maker of Swiss chocolate. It launched its direct selling home party business in April 2011. It shut down the venture in December 2013.

The company refunded annual fees if paid within 30 days of the closing announcement, and it did a product buy-back at 90 percent of costs as long as products were in good condition and not used.

Gigi Hill

Friends Gabrielle DeSantis-Cummings and Monica Hillman founded Gigi Hill in Yorba Linda, California, in 2010. The company designed and manufactured handbags and totes and attracted millions in venture capital. It closed in July 2013 after failing to secure additional funding or reach an acquisition agreement. Its credit line had been pulled in January 2013. The company sold more than $23 million in handbags, tote bags, luggage and accessories while in business.

Jockey Person to Person

Deborah Waller started Jockey Person to Person in 2004. The direct selling division of Jockey International worked with “comfort stylists” to sell its line of attractive active wear.

Waller announced the closure in a letter posted on the company website. As of this writing, operations were to cease in March 2015. The company was selling its last collection at a 50 percent discount.

Jamie Oliver At Home

Tim Brown started Jamie Oliver At Home in 2013, after a year of planning. With a license from British chef Jamie Oliver himself, Brown was ready to boost Oliver’s brand recognition in the U.S.

Everything quickly came to a halt in November 2014, when the new CEO of Jamie Oliver’s enterprises began a strategic change for the chef’s empire that did not include direct selling.

Solavei

Opened in 2012 by Ryan Wuerch, Solavei uses a customer referral model to provide mobile phone service for $49 a month. It also offers loyalty cards that entitle customers to various discounts.

Solavei filed for Chapter 11 bankruptcy in June 2014, restructuring its debt to be more “manageable with current operating income.” In March 2015 the company announced the completion of this restructuring by merging with Netherlands-based ASPIDER, a global mobile infrastructure and services company. Solavei will continue to operate through the direct selling channel.

The Antioch Cos. (former parent of Creative Memories)

The Antioch Cos. first filed for Chapter 11 protection in 2008 as the popularity of digital photos took hold. After emerging from that filing, the company still was struggling. The St. Cloud, Minnesota-based firm was the parent to Creative Memories, the scrapbooking company. The filing cites $28 million in debt and $33.5 million in assets. It filed again in 2013, renaming itself Ahni & Zoe and offering predesigned albums and pages. But operations shut down in August 2013, with the business employing less than 100. That’s a big change from the 1,100 staff supporting 70,000 consultants in its heyday.

CM Holdings Group, new owners of the Creative Memories brand, relaunched it in November 2014, making some Creative Memories and Ahni & Zoe products available for former consultants and the public.

Essentials to Success

How can direct sellers avoid pitfalls that may have contributed to recent challenges—and in some cases closures—of other companies? By keeping a laser-sharp focus on a few key factors crucial to success. These points differ between the corporate and field sides of the business, but both are equally important.

From the corporate viewpoint:

  • Product. Whatever a company is selling, it needs to be a compelling offering, and not simply a commodity product, which might be found in numerous other channels. The product needs broad appeal to people of all ages, with a balanced price point. The company must also give customers a reason to come back for more.
  • Channel clarity. A lack of channel clarity is often at fault when direct selling companies stumble upon hard times. The corporation must craft a compensation plan that rewards the field for the work it does to benefit the brand. Consultants need to know that the work they are doing furthers their own business, too.
  • Entrepreneurial culture. Parent brands that are large often put this quality in the rearview mirror, but it is so important. Small companies that retain entrepreneurial qualities can react and change faster than a large corporate player. Being nimble means being willing and able to act on new insights and innovation.
  • Patience. It takes time for direct selling firms to grow, and business expectations must be a result of well-thought-out, realistic strategies.

From the field perspective:

  • Prospecting. In her book Selling It Softly, Rusch writes, “Success is not the result of reacting to interest; it is the result of creating interest.” Sellers, or independent consultants, should not rely on brand recognition to carry them forward. Instead, they need to generate that curiosity themselves. Technology and social media elevate prospecting to a new level.
  • Time. Building a successful business does not happen overnight. It takes time, even if the direct sales are backed by a well-known name such as Lindt or Jockey. The reputations of those brands open doors and cause people to be interested, but consultants must still do the work on the sales side.
  • Team building. Companies grow when teams grow, and teams grow when leaders have a passion and commitment for investing in their people—both consumers and their salesforce.

Plan for Success

Companies need leaders who can guide them through difficult financial times and market fluctuations as well as ensure that they are properly funded for growth. They need leaders who know how to manage order fulfillment and distribution. They need leaders who put a premium on training and motivating their consultants to sell and recruit. And they need leaders who are willing to change the corporate infrastructure in the best interest of the company and its people. “Recognize the Peter Principle and make the changes necessary to keep growing,” Offen says.

A solid business plan goes a long way toward making sure leaders are empowered to make the tough decisions often required when a company hits a rough patch. Leaders from other selling avenues, such as retailing or direct marketing, need to learn direct selling principles. They also need to know when and how to incorporate other channels of distribution into their model and how to utilize new technologies, Offen says.

Offen notes that many direct sellers overcomplicate their business as they become more mature, especially the compensation plan. Even if a change in a comp plan benefits the field, taking the risk of making a mistake here can derail the trust between the company and its sellers. Paying out too much can also mean trouble.

Employing people with direct sales as well as other business backgrounds may also avoid simple yet costly issues. For example, before Rusch joined Big Yellow Box, parent company Crayola had already decided that each kit would be sold in a large yellow box. The boxes cost a lot to make and ship, and the decision was a costly one that could have been avoided with different insight.

Offen says a solid business plan sets up milestones that leaders need to strive for before they launch into the next successive growth phase. This is planned and controlled growth that keeps costs in check and requires proper investments to make additional growth happen.


Don’t forget the basics. As companies mature, they become complicated and drift away from their core. This can create weakness in a business’ culture and attitude.


When Closure Is a Must

Smart companies think about all aspects of their enterprise, including what to do when things go wrong. Doing this accomplishes several things: It can save reputations for the brand and its people, it preserves trust, and it takes care of the field.

When parent companies Crayola and Hallmark closed their Big Yellow Box direct selling arm in 2007, they made good-faith gestures to honor their relationship with the field in several ways. A cash award replaced an incentive trip that went unfulfilled, travel expenses incurred by the field were refunded, and consultant investments in unsold materials and supplies were refunded.

For Jamie Oliver At Home, the company’s end was a fast surprise for Founder Tim Brown. He started the U.S.-based business with a licensing agreement from British chef Jamie Oliver in early 2013. He is passionate about Oliver’s mission of “better food for better life.” A similar direct selling entity called Jamie at Home began in the United Kingdom about nine years earlier, and Oliver’s team shared that model and leads with Brown. The startup launched strong, growing by 32 percent in September 2014 and up 50 percent by last October. Brown had approval to add more Oliver brands to his offerings and was lining up more financial partners.

Then things changed with Oliver’s business. A new CEO came onboard, charged with doing “fewer things better,” Brown says. The change in strategy dictated a lesser interest in the direct selling channel, which meant Brown would lose his license in 2015, resulting in the closure of Jamie Oliver At Home in the U.S.

What lessons did he learn? “Our company did not fail, but we didn’t project correctly what we thought we could do in the first few years because we had a huge lead base coming from the U.K. I would have started with lower expectations.” That fact is something Brown hopes others take note of, especially if they are starting up a direct selling venture based on an existing big brand.


“Our company did not fail, but we didn’t project correctly what we thought we could do in the first few years because we had a huge lead base coming from the U.K. I would have started with lower expectations.”

—Tim Brown, Founder, Jamie Oliver At Home


Operating Pressures

On the surface, running a direct selling company may look simple, but as those in the know will share, it’s not easy. Many entrepreneurs who start companies excel at building and growing a business initially but are not as skilled at managing it well in the later stages of the business. Early successes are not sustainable if company leaders have large gaps in financial management, or in operational issues such as supply chain management. Hiring the right people can be challenging, especially in a fast-growth company.

Company founders must remember that the need to work 24/7 continues long after the early profits roll in. Executives must recognize the need to hire people with additional skill sets who can help them maintain and sustain the business. Capital investing and spending acumen are essential, because companies need enough money to maintain inventory to avoid backorders. And analytics are also vital to the process to accurately forecast what is needed. A backorder means making excuses to the field and customers—and can be a sign of weaknesses in various functional departments.

In fact, troubles in the back-office side of the business—customer service, inventory management and order fulfillment, for example—can create disruption throughout the entire business. An inaccurate forecast can cause backorders, which create frustration and stress in the sales organization as independent representatives sell product that can’t be shipped. With the world-class delivery systems of Amazon, Zappos and other retailers continuing to put pressure on all businesses to meet growing customer expectations, we cannot fall far behind.


How can direct sellers avoid pitfalls that may have contributed to recent challenges—and in some cases closures—of other companies? Our research shows that while every situation is unique and nothing is ever clear-cut, it starts with embracing the field, focusing on the essentials, and having a fail-safe in place. But don’t forget about holding operations in check, monitoring trends and having a positive attitude. That can go a long way. 


Several companies we observed hit bumps, some fatal, when they sought financial help from outside investors. In this environment overleveraging a direct selling company’s assets can create enormous debt. When investors are involved, financial goals may not always incorporate enough focus and investment on the development of the people who are the company’s most precious asset, resulting in even greater challenges.

When these companies close, competitors may act quickly to snap up newly available salespeople, leading to the “vulture mentality.” Sales leaders often find themselves desperate for income to make a mortgage or car payment, and they might company-hop to maintain their income while losing that most important passion for the product. The moves to a new company may look like growth for the firm that gains new members. But often that growth is incorrectly perceived. And in some cases, the strongest selling factor—the consultant’s passion for the product—can be completely lost.

Attitude Is Everything

The human dimension is what makes direct selling work, and in some cases it is being ignored in favor of new tools, new technologies and the promise of bigger payouts. As the market evolves, companies will continue to come and go. When Southern Living at Home burst into the direct selling channel, it was the first big-name brand to join the industry. The firm found quick traction as it hit its stride just as the Internet was being leveraged as a sales tool. The rapid success story inspired other name brands to try their hand at direct selling, too.

It’s a fine line to walk, however. Technology as a tool can aid any company seeking to grow, but sometimes technology can be perceived as a substitute for that personal connection. As social media use in business sharing continues to grow, people seem to continually find new networks to connect on and new ways to sell. Currently, it seems that online parties may be more convenient than in-home get-togethers, thus becoming more and more popular, though this may simply be the current trend. It’s critical that companies do not lose touch with the sales field and that the sales field does not lose touch with their own leaders and customers. It is essential to create and sustain the attitude that electronic communication and access are merely tools, not the endgame.

Technology has certainly broadened an independent representative’s ability to reach a larger audience at one time. The speed of communication and the number of people touched by a single message has increased enormously in just the past 10 years.

But the critical point here is that executives need ways to assess what works for their brand. A strong technological shift might not be the right answer for everyone. How do you know? Embracing the sales field as a strategic partner can actually provide companies with a built-in and knowledgeable focus group to test new ideas. Company executives could find out a wealth of information from attending a home gathering or being on the buying end of a sales associate.


It is essential to create and sustain the attitude that electronic communication and access are merely tools, not the endgame.


Research Advice

Our research did turn up plenty of advice from individuals who’ve been involved in companies that have closed. Here’s some of it: Plan for success. Remember that plateaus can hit at any point. Monitor trends in sales and in salesforce development. Think about fresh ways to attract new talent and enter into different demographics within the U.S. market. U.S.-based companies should saturate the American market before going international. Remember that an aging field is a sign of an aging company, so appeal to younger generations.

Positive attitudes can move mountains. Embrace the field. They are proud of their company and want to see it succeed. Remain close to the consultants and sales leaders, and they will provide excellent input about the changes they see every day.

While we may not be able to point to one common denominator as the reason that companies leave direct selling, we can certainly point to one common result: Closures hurt all the people involved who invested their time and money in an opportunity they had belief in. When companies close, it’s the people who lose.

April 01, 2015

Executive Announcements

Executive Announcements, April 2015


Nature’s Sunshine Executive Takes on New Role

Wynne RobertsWynne Roberts

As part of an internal reorganization of the company to target major growth opportunities, Nature’s Sunshine Products (NSP) announced the appointment of Wynne Roberts as CEO of Synergy Worldwide. He will hold responsibility for the Synergy Worldwide business as well as NSP’s business in Russia, Central, and Eastern Europe. Dan Norman will continue as President of Synergy Worldwide.

Roberts joined Nature’s Sunshine as President and Chief Operating Officer in February 2012. Prior to that, he served as Chairman of the Board for a Romanian direct sales company. From 2005 to 2009, he was Senior Vice President, EMEA (Europe, Middle East and Africa) at one of the world’s largest direct sales companies. He also served as President, International for DMX Music. In addition to broad consulting experience, he has held senior international executive general management positions at XE Systems Incorporated (a subsidiary of Xerox Corp.) and NCR Corp.

Looking forward, Synergy will continue operating in 29 markets across Asia, Europe, and North America, with scope to drive substantial growth through penetration in these markets and expand into new countries.

“Over the past three years, I have had the pleasure of working closely with, and reporting to, Wynne Roberts, and have been impressed by his leadership, commitment, and vision,” Dan Norman says. “With Wynne’s new role and focus, together with our world-class corporate team, we will perfectly position Synergy for accelerated growth as we share our products and opportunity with the world.”


Nikken Chief Operating Officer Succeeds Leader of the Company

Ben WoodwardBen Woodward
Kurt FulleKurt Fulle

Kurt Fulle, previously Chief Operating Officer of Nikken International, has been promoted to Chairman and CEO. Toshizo “Tom” Watanabe will step down from his position as Chairman and serve as Chairman Emeritus. Ben Woodward, most recently Managing Director of the company’s European market, will assume the position of President of Nikken International.

Prior to serving as Chief Operating Officer and taking on overall responsibility for business operations, Fulle was Chief Financial Officer of the company, and before that he was Controller when he joined Nikken in 2003. Before Nikken, Fulle led operations in the durable consumer products industries. He used his 21 years of manufacturing and seven years of public accounting experience to help guide Nikken in the pursuit of best practices.

To assume his new position as President, Woodward relocated to the United States from his post in Europe. He joined Nikken as Director of Sales for the European market in 2011 and was named the market’s Managing Director soon after. A council member of the U.K. and European DSAs, he brings experience in the areas of marketing, training, and sales management and has worked for a range of businesses, from startups to multibillion-dollar organizations.


SimplyFun Taps Play Experts for Newly Formed Advisory Council

Dr. Toni LinderDr. Toni Linder
Matt BrownMatt Brown
Patty PearcyPatty Pearcy
Alan LuceAlan Luce
Jen LeuJen Leu

Educational board game developer SimplyFun Inc. is serious about play, as evidenced by the brand’s newly formed Play Advisory Council. SimplyFun has introduced Professor Emeritus Dr. Toni Linder and play expert Matt Brown as founding members of the council, alongside company President and CEO, Patty Pearcy, and Chairman of the Board, Alan Luce.

A specialist in early childhood development and early childhood special education, Dr. Linder has authored books on transdisciplinary play-based assessment (TPBA) and intervention (TPBI), the method she developed for identifying a child’s strengths and needs through play.

Brown is an industry veteran and consultant who has worked for companies like Scholastic, LeapFrog, Conteneo and Speck Design. He also sits on the PBS KIDS Next Generation Media Advisory Board.

The Play Advisory Council formed as a result of SimplyFun’s ongoing partnership with Brown and Linder, who have helped identify key learning and skill elements in the brand’s award-winning games. As members of the council, they will contribute to SimplyFun’s strategic direction and future offerings.

In other company news, Jen Leu is joining the company as the Director of Product Development. Her appointment coincides with the retirement of Product Director Mary Ecklund.

Leu’s career focus has been on developing products that appeal on a personal level, inspiring connections and shared experiences. And as a mother and a product developer, she says she understands the power of play in children’s learning and in the quality of family time.

“It’s an incredible opportunity to work with SimplyFun—a talented, dedicated team focused on creating reliable, high quality products for kids and families,” says Leu.


Tupperware Welcomes Its Next Managing Director in Germany

Christian DornerChristian Dorner

Christian Dorner has been named CEO and Managing Director of Tupperware Germany. He succeeds Georges Jaggy, who held the position for six years.

Dorner’s career with Tupperware Germany began in marketing. He then joined the sales team and, after a short time, was promoted to Regional Director. In 2011 he became Managing Director of Tupperware Switzerland.

The generational change at the top of the business shows a significant strategic change for the company as well. The new CEO has taken up the cause of rebranding the Tupperparty® and says while the core of the party’s design will be preserved, it will be revamped.

“Our goal is to reach the younger generation,” Dorner says. “The Tupperparty® is still up to date. Also for the younger generation it is not enough just to shop online and be virtually connected. Personal contact is desired. That is exactly what the modern Tupperparty® can provide.”


DubLi Hires Chief Network Officer for North America and Asia/Pacific

Dubli

Jerry Yerke has joined global cashback rewards company DubLi as Chief Network Officer for North America and Asia/Pacific. Yerke is based in Santa Monica, California, and will travel extensively to support DubLi Network.

Yerke has 20 years of experience in direct selling as a top distributor, investor, and corporate executive.

Most recently, he served as Chief Network Officer of a global direct selling company where he was the communication bridge between the company and its network of distributors.

Headquartered in Fort Lauderdale, Florida, DubLi provides cashback rewards and value-based travel, along with discounted insurance, financial services and telecommunications.


Youngevity Adds to Its International Team

Ben HoBen Ho

Nutritional and lifestyle company Youngevity International Inc. announced plans to expand its presence in Asia and open a wholly owned subsidiary in Singapore under the name “Youngevity International (Singapore) Pte. Ltd.” The company has also appointed Ben Ho as the Vice President of Asia to lead this expansion. Youngevity plans to open a distribution and sales support center in Singapore later this year.

Ho is a seasoned executive with nearly 20 years of direct selling industry experience in Asia with leadership in growth and sales in the Asia-Pacific markets. He has an extensive background working with various direct selling companies in establishing sales and distribution in countries across the region. Formerly, Ho was a Managing Director of another direct seller in Southeast Asia and managed the entire setup and sales process in the company’s expansion throughout Asia.

Youngevity CEO Steve Wallach says, “Ben’s strong background in direct selling, business development and international expansion makes him an ideal addition to our management team to strengthen our global expansion strategy.”

Youngevity also announced the appointment of Nathalie Martineau as Country Manager for Canada. Martineau previously worked as a Canadian market specialist for another direct seller and played a role in the company’s expansion throughout the region. She was responsible for all Canadian marketing materials in both French and English and managed the marketing processes, events, and relationships throughout
the country.

“…We are fortunate to be able to tap into the experience and dual language capabilities that will be provided by Nathalie Martineau as Country Manager for Canada,” says Dave Briskie, CFO and President of Commercial Development for Youngevity, who has been leading the company’s global expansion campaign. “Our distributors and customers have demonstrated a substantial demand for our products and business opportunity, and we felt it was time to establish a corporate presence in Canada.”


NHTC Expands Its Board of Directors

Personal-care and wellness company Natural Health Trends Corp. announced that in connection with its approval for listing on the Nasdaq Capital Market, the company’s board of directors was expanded to provide for five directors, and Kin Y. Chung and Christopher R. O’Brien were elected to fill the newly created vacancies.

Chung is recently retired from Bioherb Technology Company, Ltd., a private Hong Kong company that served as an importing company for food and food manufacturing products, which Chung founded and for which he served as President. O’Brien is a principal with the national law firm, Polsinelli LLP, where he specializes in corporate law. Both Chung and O’Brien qualify as independent directors.

“Kin Chung and Chris O’Brien bring outstanding backgrounds and experience to our Board, and I have no doubt they will make important contributions to the Company,” said Chris Sharng, President of Natural Health Trends Corp.

Trading on the Nasdaq Capital Market was expected to commence on Tuesday, Feb. 17, 2015, and the company’s common stock will continue to trade under the symbol “NHTC.”


TLC Names Vice President of North American Sales

Kenny LloydKenny Lloyd

Kenny Lloyd has become the new Vice President of North American Sales for health and beauty company Total Life Changes. Since joining the company over a year ago as a distributor, Lloyd has shown leadership qualities while providing training as well as leadership accountability for distributors in his business organization.

A former top earner in the industry, he will bring that drive to the corporate office as it continues to grow. With a vested interest in Total Life Changes, Lloyd says he looks forward to contributing to the vision of the company.

Future plans for Total Life Changes include a new office in Houston, Texas. It will be an extension of the two corporate offices in Ira, Michigan, and Fontana, California, handling customer service and local product fulfillment.

Total Life Changes offers a line of health and beauty products and was created by CEO Jack Fallon 15 years ago with a single product, Nutraburst, and has grown to include the Iaso™ brand of products.


Submissions: Please submit news of executive promotions and hires at your company to be included in the Executive Announcements section of Direct Selling News.
» pr@directsellingnews.com

April 01, 2015

Working Smart

Facebook: A New Era in Building Relationships

by Jim Lupkin and Brian Carter

Back in 2003, one of the most successful network marketing distributors of all-time told us, “If someone could figure out how to build relationships online, they would build the largest team of distributors in the history of network marketing… because no other medium can match the speed with which it informs people.”

Facebook entered the scene one year later in 2004, and that distributor’s remarks have proven true. Facebook connects more than 1.35 billion people around the world and is five times more popular than the next most popular social network. In fact, it makes building relationships easier than any other social site.

Already you can stay more in touch with your mother, father, brother, sister, cousins and friends with Facebook than through any other communication method. While you share pictures and videos your nuclear family and extended family are reunited. Friends all over the world grow closer. Facebook pulls everyone into the same experience.

How does this relate to your business? The more your independent distributors share your products, the greater your company’s success will be. Since product sharing is one of the most important aspects of your business, wouldn’t it make sense for your distributors to join the community with the most people and the easiest ways for them to connect with others? That’s why we believe they should be active on Facebook. After meeting with and gathering input from thousands of independent distributors, we put together a few tips to help you coach your field on how to best utilize Facebook.

Here are four tips to help your distributors be successful on Facebook:

1. Facebook Is Part of the Strategy, Not the Whole Strategy

If Facebook is a distributor’s only strategy, it will fail. When distributors use it as part of a bigger strategy, it helps them develop deep, meaningful relationships with people who become customers and distributors.

Developing new relationships with people on Facebook is great, but personal contact is still key—relationships grow when people speak face-to-face, on the phone and at live events.

And relationships are wonderful, but people still need to experience the products. If your distributors aren’t passionate about the network marketing profession, your company or your products, how can they excite others on Facebook? They can’t.

Network marketing is a people business. You have to genuinely care about people. If your distributors don’t enjoy making new friends, they won’t be very good at it on Facebook either. Have you ever had a distributor get a friend excited only to have that friend join another company because the distributor gave way too much detail about your company and product? Of course, it happens every day. If your distributors don’t have strong communication skills then they’ll talk too much on Facebook as well.

Takeaway: Mastering the basic, in-person skills of a network marketing professional helps you become more effective on Facebook.

2. Facebook Group Takes Distributor Culture Online

Distributors can move mountains when they belong to a group of passionate people who are working toward the same goals and supporting each other every day. Facebook Group is a tool that can empower leaders in the field to work with every distributor.

For example, let’s say Trisha joins your company and is the only distributor in Phoenix. She’s excited about the new opportunity, but has no experience with network marketing. Her direct upline lacks the leadership to help, so she quits within a month. What if Trisha could have worked directly with corporate and the strongest leader in the upline? That’s what you can make available to your downline with a Facebook Group.

Here’s how a Facebook Group works:

Do you have any really excited distributors? They can immediately share their passion with everyone, and that enthusiasm spreads virally.

Are any of your distributors frustrated? They can share their feelings with everyone so that others can lift them up and provide advice and tips that they can use.

Do any of your distributors have questions? They can ask everyone and get answers quickly to resolve any obstacles in their way.

Here are some tips to share with your independent distributors:

Advise your distributors to check into the group several times a week. They should always like other distributors’ posts. They should reserve commenting for when they believe they have something meaningful to share. They can post new material several times a week, such as a question, words of motivation, pictures or videos. Encourage them to be creative and be social. A Facebook Group is as powerful as a live event, but it happens 24 hours a day! Run correctly, it can become the cornerstone of a distributor’s Facebook success.

Takeaway: Facebook Group creates support for every distributor.

3. Your Facebook Profile Is Who You Are Online

When people know, like and trust your distributors, they’re more willing to sample products, become a customer and share the products with friends. With their profile picture, cover image and “About” section, distributors can become known, liked and trusted on Facebook.

Here’s how a Facebook Profile works:

Leanne is contacted by one of your distributors on Facebook named Sarah about trying a sample of your company’s product. Leanne notices Sarah’s big smile on her profile picture, so she decides to visit her Facebook Profile. While on the profile, Leanne smiles because she sees Sarah’s cover image of three gorgeous little girls playing outside. At this point, Leanne knows and likes Sarah. She decides to click on Sarah’s “About” section and read her work history, where she went to high school, favorite books and movies, and much more. Sarah is an open book to her Facebook friends. Trust is created and Leanne responds to Sarah’s message by saying, “Sure! Send me a sample. Sounds like something my family and I would enjoy.”


Mastering the basic, in-person skills of a network marketing professional helps you become more effective on Facebook.


Here are some tips to share with your distributors:

Coach your distributors to understand that their profile picture is the first impression given to others on Facebook.  Since it’s small, encourage them to use a close-up. Since potential customers and recruits will be doing business with the distributor, not their spouse or pet—encourage them to make it a picture of just them.

The cover image is another opportunity for the distributor to give people a snapshot of his or her life and personality. Encourage distributors to constantly change it to keep it current with their lives and business. There are many opportunities in utilizing the cover image to create strong and lasting impressions. For example, pictures of the kids create a family-oriented impression. Photos of vacations and travel can inspire others. Displaying a reward or recognition can be encouraging to others who are reaching for the same goals. Everyone’s life is ever-evolving, and this is the place to share it.

The “About” section on Facebook is the most overlooked but powerful part of the profile. Encourage your distributors to fill it out completely; it’s like a personal and business resume. It’s an opportunity to be more credible and provide more personal details. A blank “About” section can actually limit how well a person connects to others on Facebook, since it tells people the distributor is not interested in developing relationships. A completed one says the person is open and has nothing to hide. Trust builds quickly when people are open with one other.

Takeaway: A complete Facebook Profile gets you known, liked and trusted.

4. Why It’s Critical to Stay in Touch with Friends on Facebook

Distributors succeed when they stay in touch until their friends are ready to become customers or distributors. And Facebook makes it easy to stay in touch.


On Facebook, post about personal stuff 80 percent of the time, and post about business matters the other 20 percent.


Here’s how that works:

Your distributor, Tom, offers to share the products with his friend, Sherry. She declines. Over the next two months, Sherry sees many personal and business posts from Tom. They like and comment on each other’s posts. Two months after Tom initially shared the products with her, she begins to be interested. Since they stayed in touch on Facebook, Sherry reaches out to Tom rather than another distributor. Tom now has a new customer and potential new distributor. If Tom didn’t stay in touch with Sherry, she might have found a different distributor, or even an alternative product.

Tips to share with your distributors:

There are two ways of staying in touch on Facebook:

  • Posting quality content and
  • Interacting with friends’ posts.

Teach your independent distributors that posting quality content is an art. They must balance business posts and personal posts. Too much of either and they could fail. If they can learn correct balance though, they can greatly increase success for themselves. 

As a general rule, personal posts should be about 80 percent of all posts. People do business with the people they’re closest to, so showing “real life” can be very important on Facebook.  Distributors should post about business matters the other
20 percent.

Facebook is very interactive, and activity is generated by activity. The more a distributor interacts with friends, the more they’ll interact in return. This also causes Facebook to show the business posts in their Newsfeed. More importantly, a distributor’s friends will see him or her as a real friend, not someone who’s just trying to sell products. Comments on friends’ posts should be from the heart. As a caution, remind distributors that many people will see whatever it is they write on their pages, so they should always be responsible and respectful.

Takeaway: Staying in touch with friends on Facebook is efficient and builds deeper relationships than all other follow-up methods.

In our research, we found that many distributors who make six- and seven-figure incomes openly share the impact Facebook has had on their businesses. Long gone are the days of wondering whether Facebook is a tool that helps distributors. It’s definitely time for you to incorporate Facebook as part of your company strategy and turn these tips into actionable consistent behavior for your field.

Set up a weekly webinar with your field teaching strategy, and share your computer screen so they get it by watching you navigate Facebook the right way. Go the extra mile, by having a leaders only call to discuss high-level strategy to support their teams. Nothing beats face-to-face, so during your live events conduct break-out sessions focusing on social media problem areas for improvement. Teach these ideas to the field, and watch their success—and ultimately your success—continue to grow.


Jim Lupkin and Brian CarterJim Lupkin and Brian Carter are the authors of Network Marketing For Facebook. Lupkin is a social media expert as it pertains to network marketing, and Carter is a consultant, author and keynote speaker with expertise in digital marketing and social media strategies.

April 01, 2015

DSA News

On Reputation, Audience is Key

by Paul Skowronek


Prior to joining the Direct Selling Association (DSA) staff a little more than six months ago, most of my professional life in Washington, D.C., was devoted to public affairs and strategic communications consulting, where I helped large, highly regulated industries and companies make a compelling, value-driven case for themselves. I was like an attorney, only I sought to defend clients from attacks that contributed to a negative reputation by changing the conversation in the court of public opinion.

Many of my former clients were in the health-care business, and, at face value, improving people’s quality of life and health, saving lives and keeping health-care costs affordable for millions of Americans should have been huge assets to the industries and companies I served. The reality, of course, was starkly different: Organizations with noble missions established to do some good in the world were rarely, if ever, perceived positively. On the contrary, it was they who were seemingly responsible for nearly every problem in health care: costs, quality, access and errors.

After joining DSA with this background, I was amazed at how many assets we have within reach that could help our industry enhance its reputation over time. Our challenge isn’t finding tactics to implement. Rather, our challenge is determining the right way to unlock the best of direct selling to leave a positive impression with the audience that provides the greatest opportunity to move the bar.

For every industry, enhancing reputation must begin and end with selecting the right target audience. Having a positive story to tell is not enough; that message must also resonate with its intended audience to be effective.

Many big companies spend tens or even hundreds of millions of dollars on integrated, multi-year reputational efforts because success demands a continual play for volume of consumers—that is convincing large numbers of people to make purchases, which drive revenue targets. Because sales could come more easily when the buying public has a positive opinion of or identifies with a corporation, multinationals like Microsoft, The Coca-Cola Company, IKEA and Target are recognized for expensive, highly visible campaigns that may enhance already well-established brands. These companies recognize rightly that such efforts offer a competitive advantage in the marketplace.

Headquartered in Washington, D.C., and committed to working with policymakers at the federal and state level on initiatives that protect consumers, DSA is substantially different from companies driven primarily by marketing to generate sales. Therefore, it is logical that our biggest opportunity to enhance direct selling is by focusing efforts to improve reputation directly at these same policymakers. The justification is straightforward: Policymakers, uniquely among Americans, hold the power to legislate or regulate against direct selling companies if their opinion of our industry is negative, or if they believe our self-regulatory approach doesn’t go far enough.

Influencing policymakers is admittedly a nuanced business. On one hand, most are intently reactive to public opinion, which is why grassroots will always be in demand and some reputational campaigns are directed at the general public. Yet at the same time, what might resonate with Joe Q. Public—for example, a big company headlining an annual charitable event—may be taken for granted by, or not substantially resonate with, a policymaker audience. This is especially true in climates when the company, or the company’s industry, has come under scrutiny and negative headlines begin to circulate. A positive message on its own—or even concrete actions that don’t address criticism raised in the marketplace—isn’t usually enough to move the bar on reputation with policymakers.

As we seek to influence them on direct selling, the good work that our industry does can only be part of the conversation. Added to these positive stories of opportunity and resolve must be a deliberate effort to clarify our business model that will allow policymakers to see more clearly the substantial value derived from it. We also need to provide more evidence of our economic impact through credible research that can better help us make this compelling case. Focusing on direct selling’s strong commitment to ethics and responsible business practices that protect consumers is another critical area where we have an extremely positive story to tell.

Finally, and importantly, if we are to be successful at moving the bar with policymakers, we must continue to find ways to increase our relevance in the news cycle so that we are able to inject our point of view into forums and discussions we know policymakers will notice.

As someone who has spent most of his career focused on reputation for big industries and companies, I am extremely excited to throw my energy into these challenges and opportunities. Enhancing the reputation of direct selling among policymakers cannot be achieved in a communications silo. It must be a true public affairs effort that touches our entire program, including the conferences and events we host, the industry research we release and, of course, the policy positions we pursue.


Author NamePaul Skowronek is Senior Vice President, Public Affairs, at the U.S. Direct Selling Association.

March 30, 2015

U.S. News

Don’t Miss our Global 100 Celebration in April!

The annual DSN Global 100 dinner and awards ceremony recognizing the Top 100 Direct Selling Companies in the World is drawing near. On April 8, hundreds of company executives will gather in Dallas, Texas, at the InterContinental Hotel to discover this year’s top companies and celebrate their own achievements during the 2014 year.

If you are a direct selling executive and have not yet registered for this celebratory industry event, please visit our site to purchase your tickets. All executives are invited to the party! Your company does not have to appear on the list for you to enjoy the evening applauding our great industry.

The event will include a spectacular dinner as well as a special opportunity to listen to Jere Thompson, CEO of Ambit Energy, as he delivers the keynote speech of the evening. The deadline for submitting your company information and Revenue Certification Form for consideration to be included in the DSN Global 100 is Friday, March 20.

We hope to see you at this amazing event honoring the Top 100 Direct Selling companies and our entire industry!

Click here to purchase your tickets to the Global 100 celebration.

March 30, 2015

U.S. News

Room for Growth: Plexus Worldwide Breaks Ground on New HQ

Photo: Plexus’ executive team: Alec Clark, Tarl Robinson and Alfred Pettersen.


Plexus Worldwide held a groundbreaking ceremony on Monday at the site of its new corporate headquarters in Scottsdale, Arizona.

The fast-growing supplement and weight-loss brand, which currently operates from multiple offices, will consolidate its 200 employees in one location at Scottsdale’s Pima Center. Plexus recently relocated its warehouse operations to the site, after outgrowing its third facility in less than a decade. When completed the facilities will total more than 100,000 square feet.

“Building our new headquarters adjacent to our warehouse facility allows us to create a functional campus where we can truly get the most out of each building design while increasing the coordination between our talented employee teams, which currently work in various locations around Scottsdale,” CEO Tarl Robinson told AZRE magazine.

From less than $1 million in annual revenue four years ago, Plexus shot onto the 2014 Inc. 500 with 16,458 percent three-year growth. The company ranked No. 8 on the list of America’s fastest-growing private companies. In 2014, Plexus’ network of 220,000 Ambassadors generated more than $300 million in revenue.

March 27, 2015

U.S. News

Primerica African American Leadership Council Hosts 3,000 at Annual Meeting

Primerica’s African American Leadership Council (AALC) kicked off its 15th annual conference on Friday in Orlando, Florida. The term life giant estimates that 3,000 representatives will attend the three-day event.

The AALC consists of top leaders among Primerica’s African American representatives, and in the lead-up to the 2015 Primerica Convention in July its annual meeting will provide mentoring, training and recognition focused on the African American market. A 2012 report by Nielsen estimates that the collective buying power of African American households in the U.S. will reach $1.1 trillion this year.

“From its simple beginnings in January 2000, the AALC has grown into a significant force within Primerica,” Primerica Senior National Sales Director and AALC Co-Chairman Ivan Earle shared in a statement. “Our mission remains the same today as then: Empower African Americans in Primerica with leadership and resources to establish a legacy of financial independence through entrepreneurship.”

The AALC conference builds on the strong momentum Primerica has experienced in the first quarter. In the company’s release, incoming CEO Glenn Williams reports that sales, recruiting and licensing numbers are all up in the first two months of 2015 versus the prior year. In the same period, Primerica has seen a 9 percent increase in salesforce cash flow.

March 26, 2015

World News

Viridian Energy Brings Sustainable Power to Nicaraguan Community

Photo: The Viridian Energy team works to install solar panels in the village of Potrero Platanal, Nicaragua. (Viridian Energy)


This year residents of a rural Nicaraguan village turned on a light switch for the first time, thanks to Viridian Energy and its 7 Continents in 7 Years global sustainability initiative.

Connecticut-based Viridian launched the initiative in its first year as a company, looking to impact every continent through its sustainable offerings. In its fifth year, the renewable energy company set its sights on Central America and the remote village of Potrero Platanal. There Viridian partnered with GRID Alternatives, a nonprofit organization that provides off-grid solar power to rural communities in Nicaragua.

Viridian brought 36 of its top-performing associates and employees to the village, where they worked to bring solar power and light to 40 families. The team of “voluntourists” received special training before transporting the custom systems by hand or horseback and installing them throughout the village.

“As our fifth project, completed in our fifth year of operation, the work in Portrero Platanal represents our most ambitious project to date, as well as a significant milestone for Viridian,” Founder and CEO Michael Fallquist said in the company’s release. “I was personally proud to be a part of this installation as it serves as further proof of Viridian’s holistic efforts to fulfill our obligation as a responsible, global, corporate citizen.”

7 Continents in 7 Years began with reforestation efforts in the Amazon, where the company has returned annually and planted more than 1,700 trees through its Amazon Preservation Project. Viridian has also brought solar power and lighting and clean water pipelines to villages in Indonesia, Ghana and Fiji.

March 25, 2015

U.S. News

Happy Employees Vote Primerica One of Georgia’s Top Workplaces

Photo above: Primerica’s corporate headquarters in Duluth, Ga.


For the second consecutive year, Atlanta’s daily newspaper has named Primerica Inc. one of the top workplaces in Georgia.

The Atlanta Journal-Constitution conducts an annual poll in partnership with Workplace Dynamics to determine the region’s best workplaces. Based upon employee feedback, the financial services provider ranked No. 7 out of 25 large companies, or those with 500+ employees. Primerica employs approximately 1,600 people at its Duluth, Georgia headquarters.

Primerica Chief Human Resources Officer Karen Fine Saltiel said the company’s culture sets it apart and attracts employees for the long haul. “The average tenure of our employees is 14 years, with 60 percent of employees serving 10 or more years with the company. We are proud of this because as an employer, it shows that we’re doing things right at Primerica.”

The company climbed from the No. 18 spot in last year’s ranking. The “Top Workplaces” list includes public and private companies as well as nonprofit organizations.

March 24, 2015

U.S. News

Fox Business: Herbalife to Launch Million Dollar Ad Campaign

Herbalife is once again going on a public relations offensive with a major advertising campaign reportedly hitting radio, TV, print and online outlets as early as Wednesday.

FOX News Senior Correspondent Charlie Gasparino reports on FOX Business Network that the supplement maker is crafting a “seven-figure” campaign aimed at changing the narrative around the company as it continues to push back against short seller Bill Ackman and his Pershing Square firm. On Monday’s Countdown to the Closing Bell, Gasparino told host Liz Claman the buy will initially focus on the Los Angeles and Miami markets, potentially including spots during the NCAA March Madness tournament.

The report comes a week after a Los Angeles judge dismissed a lawsuit by Herbalife shareholders, who claimed they lost money because the company is operating a pyramid scheme. The lawsuit echoed many of the allegations brought against Herbalife by activist investor Ackman in his two-year campaign to discredit the company as an illegitimate business that victimizes its salespeople.

U.S. District Judge Dale S. Fischer ruled that the “plaintiffs did not show that accusations by activist investor Bill Ackman proved fraud by Herbalife,” AP reports. Finding no evidence of misrepresentation on Herbalife’s part, the judge dismissed the allegation that the company caused its shareholders to suffer losses.

“Herbalife welcomes the decision by the U.S. District Court for the Central District of California to dismiss the case,” the company stated in response to the ruling. “As we have consistently stated, we are confident in the strong fundamentals of our business model and remain committed to helping people and communities improve their nutrition.”

The LA-based nutrition company has seen its stock price climb more than 40 percent in March.

March 23, 2015

World News

Thirty-One Hits the Gas on Two-Year Expansion into Canada

Following its February 2015 expansion into Alberta, Canada, Thirty-One Gifts has announced plans to launch its business in seven additional Canadian provinces next month.

Columbus, Ohio-based Thirty-One has operated in Canada since 2012, when the company launched in Ontario. The forthcoming expansion, scheduled for April 7, will bring Thirty-One’s line of totes and accessories—including its recently acquired Jewell and JK by Thirty-One brands—to customers in British Columbia, Nova Scotia, Manitoba, Saskatchewan, Prince Edward Island, New Brunswick, and Newfoundland and Labrador.

“We’re expanding further into Canada thanks to the amazing growth and success we’ve experienced so far in Ontario and Alberta,” Thirty-One Founder, President and CEO Cindy Monroe said in a statement. The company has signed on 3,050 independent consultants in the country, currently its only market outside the U.S., where Thirty-One operates through a network of 99,509 consultants.

In its statement, the company said it has taken a “cautious” approach to expansion, initially setting up shop in Canada’s most populous province, Ontario, to gauge interest in the products and business opportunity. Thirty-One is looking to draw from its existing leadership and relationships in the country as it moves into nine of Canada’s 10 provinces.

March 20, 2015

U.S. News

Jeunesse Announces Acquisition of MonaVie and mynt

Two prominent brands in the health and wellness segment are joining forces in a strategic acquisition announced this week.

Skincare and supplement manufacturer Jeunesse Global has completed the acquisition of MonaVie LLC, a nutrition company that markets juice blends, energy drinks and shake mixes. The acquisition includes the MonaVie-backed mynt brand, which launched in 2014 as a platform to attract a younger generation of tech-savvy, community-minded entrepreneurs.

It’s the second acquisition for Orlando, Florida-based Jeunesse. In 2011 the company acquired GreatLife Intl., another direct seller in the health and wellness niche.

Jeunesse’s leadership was not aggressively looking to acquire, Chief Visionary Officer Scott Lewis told DSN, but they found the brands compatible in more than just the shared French origin of their names. The companies have developed similar cultures and established global brands. MonaVie is operating in key markets such as Brazil, which Jeunesse has targeted as a strategic next step in its international expansion. Through its mynt brand, MonaVie is also actively courting young entrepreneurs.

“From a strategic point of view, we’ve been trying to come up with strategies to penetrate Gen Y and attract a younger demographic as well,” said Lewis. Jeunesse has announced plans to launch the mynt brand in Europe this summer and in Japan soon thereafter.

Another factor that came into consideration was the loyalty MonaVie has inspired among its sales leaders. “We respected the fact that a lot of the top leaders who have been there since the heyday are still there,” Lewis noted. “There is a lot of attrition, but when you look at the top distributors, a lot of them have remained loyal.”

Salt Lake City-based MonaVie launched in 2005 and soon experienced exponential growth. After posting three-year revenue growth of 5,883 percent, the company appeared on the 2009 Inc. 500, an annual list of the fastest-growing companies in the U.S. MonaVie ranked No. 18, with $854.9 million in 2008 revenue.

In the following years, MonaVie experienced growing pains and incurred considerable debt, which Jeunesse has cleared as part of the acquisition agreement. The company has not disclosed further details of the transaction.

“This is an exciting step forward for MonaVie and our distributors,” MonaVie President Mauricio Bellora said in a statement. “Our diligent work over the past two years has resulted in a right-sized company with innovative products and an efficient sourcing platform.”

Under the Jeunesse umbrella, the combined businesses represent a network of more than 4 million distributors in more than 100 countries. The two brands will carry on business as usual, maintaining their respective product lines and distributor structures, as they undergo a gradual integration.

“We’re not in any rush,” Lewis emphasized. “We want to get the company profitable, make sure they have the support to grow and see what happens.”

March 19, 2015

U.S. News

Direct Selling Businesswomen Launch Initiative to Support Women Entrepreneurs

A group of businesswomen within the direct selling industry is coming together to bring entrepreneurial opportunities to women in developing countries.

Women United for Change is made up of direct selling entrepreneurs looking to leverage their own success to empower women worldwide. In its flagship effort, the group is partnering with Project Concern International (PCI), a nonprofit working in some of the poorest communities in Asia, Africa and the Americas. PCI’s initiatives are geared toward preventing disease and transforming communities through sustainable development.

Women United for Change is backing the organization’s global Women Empowered (WE) initiative, which invests in women as agents of economic and social change. Prior to this week’s official launch, the leaders of Women United for Change had already raised more than $100,000 in support of WE.

“The women in network marketing and direct sales have a great deal of influence and a strong desire to make a difference in the lives of others,” Sonia Stringer, a business coach and one of the founders of Women United for Change, shared in a statement. “We are women whose lives have been transformed through entrepreneurship, so it’s only fitting that we help women in need transform their lives by building businesses of their own.”

WE works within communities by forming self-managed and self-sustaining savings groups, which receive up to 18 months of in-depth training. As the women develop confidence and leadership skills, the training also supports them in starting and growing a micro-business.

March 19, 2015

U.S. News

Wellness International Network Unveils New Name and Product Offerings

A major transition is underway at Plano, Texas-based Wellness International Network. The 23-year-old nutrition company is moving to a new corporate office and relaunching under the WIN Worldwide brand, which will feature all-new products and a revised business model.

The husband and wife team of Ralph and Cathy Oats founded WIN in 1992, six years after they took up direct sales to earn an extra $100 in weekly income. Now, a second generation of Oats family members fills key marketing and operations roles within the company.

“For any company to remain successful it must be open to change, and WIN is no exception,” Ralph Oats told DSN in an email. “Technology advances and changes in the ways people connect and make purchases made us realize it was truly time to launch a more contemporary business model. We are committed to innovations and changes that will grow WIN and leverage us toward our goal of becoming a billion-dollar company.“

WIN’s existing business plan and product line is rolling over to a new company, Physician’s Health & Diet (PHD) Program LLC, which will transition the business away from multilevel marketing. PHD reflects the identity that Wellness International Network developed over the years, as its product distribution increasingly focused on the physician-oriented market. With WIN’s relaunch, leadership aims to carve out a new niche in the industry and build “a multi-level marketing company that offers products and opportunity for anyone, anywhere, anytime,” said Director of Marketing Sheri Matthews.

WIN has made a “financial commitment to innovate,” in Matthews’ words, that extends to every part of the business. The company has developed a new product line that “helps to fill the gap between what you eat and what you don’t eat.” Central to the line is WIN Daily Lift, a powdered-drink mix that contains 59 superfoods, including fruits, vegetables, enzymes and beneficial algae—and no wheat, dairy, GMOs, MSG or artificial ingredients. For brand partners, WIN has developed simple, action-oriented tools such as a new launch kit, a 3 for Free program that enables customers to earn free product, fresh marketing materials, product sampling options, and an improved online shopping cart and back office. The company is also introducing a new compensation plan that incorporates weekly payments, bonus pools, promotional iPads and a luxury car program.

“We view our people, the WIN family, as our No. 1 asset, and we do everything we can to help ensure they are positioned for success,” said Founder Cathy Oats. “This approach, coupled with a strong belief in our high-quality product line, is the foundation of our company. We believe our latest innovations will help to ensure WIN continues to prosper for decades to come.”

To develop its new branding and distributor tools, WIN engaged DSN parent company SUCCESS Partners, a producer of marketing tools, videos and personal development materials for the direct sales industry as well as the publisher of SUCCESS magazine and Success from Home. The collaboration produced not only a fresh look and feel for WIN, but also a buyer for the company’s existing headquarters facility. SUCCESS Partners has purchased the 81,000-square-foot building with plans to relocate its own corporate headquarters from nearby Lake Dallas, Texas.

WIN has found a new home in Plano’s 2220-acre Legacy Development, neighboring prominent corporations such as Dr Pepper/Snapple, Frito Lay, JC Penney and Toyota. “The facility has more of what WIN needs and less of what WIN doesn’t need,” said Matthews. The company plans to hold a grand opening celebration in June 2015 after occupying its new space.

March 18, 2015

U.S. News

Solavei to Carry on Mobile Services with Merger Plan

Mobile services provider Solavei LLC will merge with Netherlands-based ASPIDER, in the latest report to come out of Solavei’s bankruptcy proceedings.

ASPIDER and its Delaware-based U.S. subsidiary provide mobile infrastructure and services to mobile carriers, with a focus on driving revenue and loyalty. According to its website, ASPIDER supports 200 million subscribers worldwide. The merger will give Solavei members access to ASPIDER offerings such as “in-network” international calling, global roaming and mobile payments.

Solavei Chairman and CEO Ryan Wuerch, who will continue in his role with the company, called the merger a “tremendous value” for both brands. “For Solavei, it will provide the opportunity to leverage ASPIDER direct connections with global mobile operators, add technology resources to enhance and expand mobile services for our members, and broaden Solavei’s reach to enable us to rapidly expand the Solavei brand around the world.”

In June 2014, Solavei filed a Chapter 11 bankruptcy and announced that services would continue uninterrupted as its business underwent restructuring. According to its statement, the Seattle-area company has signed on more than 400,000 people to its mobile service plans in the past two years.

Solavei’s bankruptcy filings, obtained by John Cook of GeekWire, point to the company’s commission model as the source of its woes. An unsustainable commission structure stressed the company’s working capital and liquidity, ultimately prompting Solavei to restructure.

The amount of commission payments owed to members for referrals and network building activities exceeded initial expectations. The Debtor had initially targeted and agreed to pay 50 percent of its gross profit to members in the form of commissions. However, as members found ways to maximize their commissions in ways not anticipated under the commission plan, the company was actually paying some 83 percent or more of its gross profits to members. The Debtor substantially revised the commission plan in March 2013 and again in January 2014, to bring its overall payout closer to the sustainable 50 percent level.

March 16, 2015

U.S. News

Avon Drops off S&P 500 after 50 Years

Avon Products Inc. is ending a 50-year run on the S&P 500 in yet another symptom of the company’s poor performance over the past few years.

Index manager S&P Dow Jones Indices announced late Friday that it will transfer the beauty products manufacturer to its MidCap 400 index after the close on Friday, March 20.

Used by investors as a benchmark to gauge overall stock market performance, the S&P 500 focuses on the large-cap segment of the market. Companies are selected based upon criteria such as market capitalization, liquidity and industry grouping.

S&P Dow Jones Indices attributed the move to Avon’s shrinking market value, which has fallen to $3.2 billion, well below the $4 billion minimum generally imposed upon potential S&P 500 candidates. Also dropping to the S&P MidCap 400 are oil and gas firms Denbury Resources Inc. (DNR) and Nabors Industries Ltd. (NBR). The three companies moving up to the S&P 500—including apparel manufacturer Hanesbrands Inc. (HBI), which will replace Avon—each have a market cap exceeding $12 billion.

New York-based Avon has been among the worst performers on the S&P 500 in recent years, as the company’s revenue sank from $11.3 billion in 2011 to $8.9 billion in 2014. Shares in Avon fell 5.7 percent on Monday to $7.28.

Avon has been a fixture on the S&P 500 since May 1964. The Pampered Chef parent Berkshire Hathaway joined in January 2010, but Avon is the only company on the index to operate exclusively through direct sales.

March 13, 2015

U.S. News

This Week: FBI Probes Herbalife Stock Manipulation, Disney Star Teams with Mary Kay

Catch up on this week’s industry chatter with these click-worthy links:

March 12, 2015

World News

Herbalife Sets Guinness World Record with Global Workout

In a global event held Saturday, nutrition company Herbalife Ltd. nabbed a Guinness World Record for most participants in a High Intensity Interval Training (HIIT) workout in 24 hours. Thousands of Herbalife members across more than 80 countries participated in the bid, which kicked off at 9 a.m. local time in Auckland, New Zealand.

In the U.S., more than 150 locations hosted workout sessions throughout the day. At the largest event, held in Herbalife’s hometown of Los Angeles, the company put an additional record on the books. Herbalife’s Director of Worldwide Fitness Education, Samantha Clayton, led a workout at the Nokia Plaza at L.A. LIVE, where a crowd of nearly 4,000 filled the space with Herbalife’s signature green. The live-streamed session set a world record for number of people in a High Intensity Interval Training Workout in one location.

“It was great to be there in person to see so many excited and enthusiastic people all working out together,” said Guinness World Records Adjudicator Michael Empric, who was on hand at Herbalife’s Los Angeles event. “I was delighted to be able to confirm the record had been set and personally present the certificate to the company.”

The event doubled as a fundraiser benefiting the Herbalife Family Foundation (HFF) and its Casa Herbalife Program, which partners with existing charities to bring proper nutrition to children in underserved areas of the world. HFF currently serves more than 120,000 children daily through Casa Herbalife.

March 09, 2015

U.S. News

Nu Skin to Launch Essential Oils Line

Nutrition and skincare company Nu Skin Enterprises Inc. has announced plans to introduce a new line of essential oils in its U.S., Canada and Latin America markets next month. The Utah-based brand will launch Epoch Essential Oils through a sales promotion available to qualifying distributors on Thursday, April 9.

The initial Epoch offering will consist of three single oils and five oil blends, which the company plans to introduce as a package, along with a diffuser, a mini diffuser and topical blending oil. Nu Skin says it will begin selling individual products in July and, later in 2015, introduce the line in China and Europe.

Essential oils, used topically or aromatically, are gaining popularity as natural alternatives to pharmaceutical drugs and antibiotics. In the past five years essential oil manufacturing in the U.S. has grown 3.5 percent annually to $1 billion in revenue, according to a report by IBISWorld. Nu Skin CEO Truman Hunt said the brand is looking to differentiate itself from competitors by “applying Nu Skin scientific rigor” to the category.

“Indigenous cultures have long known the value of botanical substances and have used them for their healthful benefits,” Chief Scientific Officer Joseph Chang, Ph.D., said in the company’s release. “Nu Skin has partnered with one of the world’s leading ethnobotanists to bring this knowledge to our modern lifestyle.”

Epoch product sales will contribute to improving the lives of children through the Nu Skin Force for Good Foundation, which supports humanitarian projects in more than 50 countries. The company has pledged to donate 25 cents from each sale to the foundation’s efforts to alleviate disease, illiteracy, and poverty.

March 06, 2015

U.S. News

This Week: Tupperware Exploding in Indonesia, Nu Skin Optimistic in China

Catch up on this week’s industry chatter with these click-worthy links:

  • The New York Times took a look at Tupperware Indonesia, currently the company’s biggest market. An emerging middle class, including many women finding new opportunities in the workforce, has contributed to Tupperware’s rapid growth in the market, where the kitchenware company has built up a salesforce of 250,000.
  • Nu Skin is optimistic about its business in China despite the country’s lowered GDP growth target, Nu Skin’s Vice President for the market, Li Chaodong, told China’s Xinhua news agency. The skincare and nutrition company generates about 30 percent of its business in China, where officials this week projected that GDP growth for 2015 will total about 7 percent, less than the country has experienced in a decade.
  • USANA’s Executive Director of Communications, Amy Haran, spoke to national legal firm Ogletree Deakins about fostering information flow and employee engagement within the corporate office. Haran also shared one simple best practice that has made a major impact on USANA’s award-winning workplace.
  • Speaking to premiumbeautynews.com, Natura’s Managing Director in France, Thierry Aubry-Lecomte, shared how the Brazilian beauty and home-care brand has spent the last decade developing its European model in France, where Natura operates through a physical retail store and an e-commerce site in addition to its 2,000 independent advisors.
  • A diamond may be forever, but moissanite is currently having a moment. The affordable, sustainable alternative to the diamond is gaining popularity, and that’s good news for direct seller Lulu Avenue, a subsidiary of jewelry manufacturer Charles & Colvard. COO Steve M. Larkin told The Street how the brand’s trademarked Forever Brilliant moissanite helped boost Lulu Avenue’s fourth quarter sales by 69 percent.

March 05, 2015

U.S. News

Growth in Foreign Markets Boosts Earnings at Mannatech

Nutrition and skincare company Mannatech Inc. posted strong 2014 earnings on Wednesday despite a dip in fourth quarter sales brought on by currency issues.

The Dallas-based company, which ties its business to fighting childhood malnutrition through the Mission 5 Million (M5M) program, reported revenue of $45.2 million for the fourth quarter, down 2.8 percent from the same period in 2013. In constant dollars, revenue increased 0.6 percent. Net income for the quarter totaled $1.9 million, or 68 cents per diluted share, compared to 94 cents a share in fourth quarter of 2013.

Mannatech’s business outside North America accounted for a growing share of the company’s consolidated net sales. Both in the quarter and the full year, operations outside North America generated 57.5 percent of sales, up nearly 4 percent from 2013.

Revenue for the full year was $190.1 million, a 7.1 percent increase from 2013. Mannatech’s Asia Pacific revenue climbed 15.1 percent to $92.4 million. Net income totaled $6.5 million, up from $3.2 million in 2013 to $2.40 per diluted share. The company also reported a net deferral of $4.2 million in revenue connected to its loyalty program.

“Our independent associates, particularly in the Asia Pacific region, have embraced Mannatech’s offer of products and opportunities to expand their sales base,” Dr. Robert Sinnott, Mannatech CEO and Chief Science Officer, said in the company’s release. Across Asia Pacific and the company’s other foreign markets, Mannatech expanded into the skincare category with its Ūth anti-aging cream, which accounted for $11.3 million in additional sales compared to 2013.

In 2014, the company also carried out its mission of social entrepreneurship through the M5M program. For every automatic order of a Mannatech product, the company donates PhytoBlend—a nutrient-packed powder that can supplement any food—to orphanages and relief organizations around the globe. Mannatech has disclosed that its 2014 donations totaled 20 million servings of PhytoBlend to children in need. The company formed the nonprofit M5M Foundation in November 2014 to facilitate its expanding charitable efforts.

March 04, 2015

World News

Mary Kay to Make International Women’s Day a ‘Day of Beauty’

Mary Kay Inc. is celebrating International Women’s Day with a new Global Day of Beauty initiative. On March 8, the iconic beauty brand will kick off a global effort to provide complimentary makeovers to women in need. The multi-month initiative will launch in the U.S., where Mary Kay consultants in Miami, Washington, D.C., New York and Los Angeles will host a day of beauty and pampering for local domestic violence survivors.

The international event is not Dallas-based Mary Kay’s first makeover rodeo. To commemorate its 50th anniversary in 2013, the brand introduced a global Makeover Day and rallied consultants in a world-record bid for the highest number of makeovers in 24 hours. After bringing back Makeover Day in 2014, the company is shifting focus with its Global Day of Beauty. The initiative ties Mary Kay’s celebration of women to the causes of dating abuse and domestic violence, the focus of Mary Kay’s Don’t Look Away campaign. 

“For many of the women attending our Global Day of Beauty events, they are living in emergency housing or in transition after surviving unspeakable abuse,” Crayton Webb, Vice President of Corporate Communications and Corporate Social Responsibility, said in the company’s release. “Mary Kay hopes this Day of Beauty serves as a reminder that these survivors are special, beautiful and deserve, like all women, to be treated with respect and dignity.”

Mary Kay’s newest Don’t Look Away Cause Champions, actress and singer Debby Ryan and fashion designer Abi Ferrin, will also take part in Day of Beauty events. Ryan, who most recently starred in the Disney Channel TV show Jessie, shares her story in the campaign’s latest video, 1 in 4.

March 03, 2015

U.S. News

CAbi Expands Partnership with Opportunity International

Los Angeles-based apparel company CAbi has expanded its partnership with the nonprofit microfinance organization Opportunity International. The new initiative, Women Entrepreneurs are CAbi, or W.E. are CAbi, will make a donation to Opportunity International in the name of each new consultant who joins the company. Opportunity International will use the money to fund small business loans and training programs for female entrepreneurs in developing countries.

“CAbi has been an important partner the last eight years, and this new W.E. are CAbi program will help women around the world break the cycle of poverty, transform their lives, and strengthen their families and communities,” Opportunity International Global CEO Vicki Escarra said in a press release. “We’re grateful to CAbi for helping us expand our reach to more people in need and empowering the next generation of female leaders and entrepreneurs.”

Based in Illinois, Opportunity International works in 22 countries providing access to savings, small business loans, insurance, training and entrepreneurial support to more than 5 million people working their way out of poverty. The organization’s Board of Advisors includes The Pampered Chef Founder Doris Christopher. Since 2008, CAbi has raised $615,000 for Opportunity International through a program that allows customers to round their order amount to the nearest dollar and donate the change. CAbi says its goal is to reach more than $4 million in total giving by 2020.

Clothing designer Carol Anderson and 11 co-founders launched CAbi (Carol Anderson by invitation) in 2002. In 2012, investment firms J.H. Whitney and Irving Place Capital took equity stakes in the company. The following year, the company tapped Lynne Coté, a retail executive whose experience has included Jones New York, Anne Klein and Nine West, as CEO.

March 03, 2015

U.S. News

Nature’s Sunshine Posts Flat Earnings, Launches New Research Center

Photo: (from left) Gene Hughes, Nature’s Sunshine Founder; Kristine Hughes, Founder and Vice Chairman of the Board of Directors; Utah Gov. Gary Herbert; Pauline Hughes, Founder; Dr. Matthew Tripp, Chief Scientific Officer.


Nature’s Sunshine Products Inc. (NATR—Nasdaq) is shrugging off a rocky fourth quarter with the launch of a multimillion-dollar research center and its forthcoming entry into China.

The company’s nutrition and personal-care products generated $86.7 million in fourth quarter revenue. Earnings were 5 cents per share, coming in 18 cents below the consensus estimate of 23 cents a share. Like many companies operating in Russia and Eastern Europe, Nature’s Sunshine felt the adverse effects of an increasingly strong dollar underscored by geopolitical challenges in the region.

Strong sales in Korea, Japan and Europe boosted the company’s Synergy WorldWide subsidiary, which accounted for $30.8 million in quarterly revenue, an increase of 8.3 percent over the prior-year period. The results represent a 13.0 percent increase in local currencies, impacted by declining sales at Synergy North America.

Nature’s Sunshine reported full-year revenue of $366.4 million, down 0.9 percent from 2013, or a 0.5 percent decrease in local currencies. Operating income fell 19.2 percent to $19.0 million, compared to $23.6 million in 2013. In November, Nature’s Sunshine pulled out of Venezuela due to economic uncertainties stemming from import controls and inflation.

The supplement firm is forging ahead with its plan to enter China in 2015 through a joint venture with Fosun Pharma, which accounted for $2.2 million in startup costs. The brand has brought on Paul Noack, an industry executive with experience in the Asia Pacific region, to serve as President of China and New Markets, as well as additional recruits to its China leadership team.

Nature’s Sunshine followed up its earnings report with the grand opening of the Hughes Center for Research and Innovation, a new state-of-the-art facility located at its corporate headquarters in Lehi, Utah. Utah Gov. Gary Herbert was on hand to officially open the 5,400-square-foot center, where the Nature’s Sunshine R&D team will research how nutritional supplements interact with the body at the molecular level.

“The Hughes Center for Research and Innovation incorporates some of the most advanced technology in the industry,” said Dr. Matthew Tripp, Chief Scientific Officer. “For example, the Flexmap3D can analyze 500 analytes, such as genes and proteins, from a single human sample, such as a drop of blood.”

The center’s research will combat health mega-trends driven by diet and lifestyle choices through natural, nutritionally therapeutic products, said Chairman and CEO Gregory Probert. The new facility features labs and clinical space, as well as exam rooms for consultations and clinical studies.

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March 02, 2015

U.S. News

Herbalife Tops Expectations but Lowers 2015 Guidance

Photo: REUTERS/Lucy Nicholson


Herbalife Ltd. (HLF—NYSE) beat Wall Street expectations as well as its own consensus Thursday when the company reported adjusted earnings of $121 million in the fourth quarter 2014, or $1.41 per share. Consensus estimates for the nutritional company had been $1.16 per share, with Herbalife’s own outlook range being $1.30 to $1.40. Fourth quarter earnings rose 10 percent from the same period in 2013, when the company earned $1.28 per share.

Earnings were overshadowed by a drop in quarterly revenue, which totaled $1.1 billion, down 11 percent from the comparable period a year ago—and the worst result since early 2009. The drop compares to a 20 percent revenue increase in the fourth quarter of 2013.

The company’s updated 2015 guidance was also lower than anticipated and includes an unfavorable impact from currency rates in Venezuela, which has already affected fourth quarter 2014 net sales. Herbalife expects a sales decline of 12.5 percent to 15.5 percent in the first quarter 2015, and 6 percent to 9 percent for the year. The Los Angeles-based company forecasts adjusted earnings of $1.30 to $1.40 a share for the first quarter and $5.30 to $5.70 for the year.

Also significantly impacting the company’s growth was its adoption of a new sales program called the “Gold Standard” initiative. The new compensation plan initiative takes a more conservative financial approach to sales and gives new distributors more time to qualify for certain financial incentives, so they can buy a particular amount of product, even later in the period, and still qualify for the same rewards.

“2014 was a record year in terms of net sales, volume and sales leader retention,” Johnson stated in the company’s earnings release. “It was also a year of transition, as we continue to implement changes that we believe will create a stronger company with the ideal combination of growth and sustainability. We have seen the success of these changes in early adopter markets and remain confident that our other markets will follow a similar pattern through 2015 and beyond.”

For the full year, the company reported net sales of $5.0 billion, a 3 percent increase compared to 2013. The company also reported net income of $308.7 million, or $3.40 per diluted share. On an adjusted basis, net income of $538.5 million decreased 7 percent versus adjusted net income of $577.4 million for the same period in 2013. Adjusted EPS of $5.93 increased by 10 percent versus $5.37 for 2013.

March 02, 2015

U.S. News

Creative Memories Finds a New Home and New Backing

After undergoing two bankruptcies within five years only to close its doors in 2014, the iconic Creative Memories (CM) brand has reopened with new ownership and a streamlined direct sales strategy.

The company reemerged from its second bankruptcy with a new name—Ahni & Zoe by Creative Memories—before again closing its doors in late summer 2014. That’s when an unexpected twist occurred: Caleb Hayhoe, Chairman of Flowerdale Group Ltd., and previously, Founder and CEO of RT Sourcing, made a decision to buy the Creative Memories Japan business and in North America the Creative Memories® and Ahni & Zoe™ brands, patents, artwork, products and manufacturing equipment—and reopen once again as a direct selling company. Now debt-free and backed financially, CM is looking to carve a new path.

Hayhoe became involved with Creative Memories in 1997 when the company approached his product design and sourcing company—which then was operating with over 300 employees in Asia—to add to their product line. Hayhoe himself attended many CM events, workshops and even parties, inspired by the passion of the consultants. So when he learned the company was for sale, it was natural for him to consider the purchase. He personally knew many consultants as well as the staff at the home office in St. Cloud, Minnesota, and was convinced that with the right adjustments, the company could once again be successful for consultants and consumers.

The new business is operating just around the corner from the old Creative Memories building in St. Cloud. A small, dedicated team of employees, whose average tenure with Creative Memories is 10 to 12 years, has stayed on to work with CM Group Holdings. DSN staff spoke with Hayhoe about his strategy and vision for the company. 

DSN: What factors led to your decision to reopen as a direct selling company?  

Hayhoe: Among the thousands of decisions involved in a startup, having a direct sales element was never a question. With many tens of thousands of former Consultants who loved the products, mission and the difference the opportunity made in their own families, our leadership team was united in offering a compelling earnings plan. There was also much learning from the past, which included a deep understanding of our audience and their preferences. We wanted to support the former leaders who relied on Creative Memories and/or Ahni & Zoe for a substantial income, as well as those who joined to work occasionally and be part of a warm community. 

With our unique hybrid model we put quite a few traditional direct sales sacred cows out to pasture. Like minimums, titles and leadership requirements, to name a few. All Advisors are welcome, valued and equal, with equal earnings opportunities, whether they joined during our November launch in 2014 or join five years from now. We’re just a few months in, and there’s already a group earning more than they had before, with many leaping up the levels of the plan. There’s also a whole group who’s happy to work at their own pace and share with friends and family. We’re thrilled to be able to help people share and earn as they choose. 

DSN: Creative Memories underwent two bankruptcies before reopening as Ahni & Zoe, only to close again. What strategies are you putting in place to revive these struggling brands? 

Hayhoe: It’s important to separate the former companies’ financial difficulties from the brands. The Creative Memories® brand has enormous recognition and respect worldwide for its quality products and caring Consultants. Beyond North America, there is also considerable interest in large international markets like Australia and Germany, and the 14-year-old Japan business is thriving.

The Ahni & Zoe™ brand had less time to gain traction, but in its six months of life Consultants were able to reach an entirely new group of busy people who found Fast2Fab albums the ideal way to enjoy beautiful finished albums in no time.

We believe that what CM Group is offering now is the best of both brands, with a flexibility and modern e-commerce platform neither prior company offered. CM Advisors can sell the products they like (most sell both brands) and run their businesses as entrepreneurs. Our strategy is to offer exceptional products, service and a unique earnings plan that allows for some of the most generous profit-sharing in the industry, while maintaining a lean, relentlessly efficient operation.

The new CM annual Advisor Earnings Plan had to pass the “easy to explain, easy to share, easy to earn” test. Basically, Advisors achieve a higher profit rate on the products they sell, and higher commission rate on their downline group sales, based on the sales balance in their own account. Each consultant pays a $49 annual fee to stay in the program. It’s very basic and simple.

DSN: In response to the CM launch, what kind of feedback have you gotten from former Ahni & Zoe representatives? 

Hayhoe: The reaction from former Consultants has exceeded our wildest expectations. Ahni & Zoe Consultants were quick to join, and there’s also been a huge revival of Creative Memories Consultants who missed the products and mission and like the simplicity and flexibility of the new business. With the simple, welcoming plan and freedom to sell one or both lines, they’re able to serve new people who are after fast albums that look good as well as those who love scrapbooking. It’s been great fun hearing from former Consultants who have reactivated their networks and are gathering people for workshops and retreats with a whole new level of energy. 

DSN: Will you utilize online sales apart from direct sales through Advisors? How will the two channels work together? 

Hayhoe: CM’s in the interesting position of having a 30-year legacy brand while also being a startup. We encourage Advisors to cultivate direct relationships with their customers and sell in person or via their personalized link. Our desire to protect that relationship is behind us encouraging Advisors to use one of the many excellent free/cheap, email/contact management systems available, as well as providing an Advisor locator, so long-lost customers can connect with their Advisor of choice. Customers also have the choice to shop and/or sign up directly with CM if they wish. 

DSN: Forever Inc. announced last month that it had acquired the Creative Memories digital catalog. Does CM plan to focus solely on physical scrapbooking products? 

Hayhoe: Currently, yes. As part of the Creative Memories closure in 2014, the software was transferred back to its developers. The latest announcement was the last piece of that deal, which is not connected to CM. Though the digital market is highly commoditized, our team believes there is potential to differentiate and offer something that is uniquely CM. It’s part of our plan to explore in 2015. 

DSN: Is CM looking to expand into additional categories in the near future? 

Hayhoe: Our near future will be focused on continuing to support our CM Advisors, offering exceptional service and quality and rounding out the product line. As a memory-keeping company, there’s potential for all sorts of interesting new directions in the future, though this will be done thoughtfully and carefully. Our focus is on simplicity, maintaining our reputation for exceptional quality, staying true to our Advisor community and mission, and running a lean, profitable, sustainable business.

March 02, 2015

Company Spotlight

Equal Access, Equal Adaptability: LegalShield’s Moral Imperative to Grow

by Beth Douglass Silcox

Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 1972
Headquarters: Ada, Oklahoma with Executive Offices in Dallas, Texas
Executives: Jeff Bell, CEO; Kathy Pinson, COO; Steve Williamson, CFO; Alan Fearnley, President of Consumer Marketing and Brand and Chief Commercial Officer; James Rosseau, President of LegalShield Business Solutions; and Darnell Self, Executive Vice President of Network and Business Development.
Product Categories: Legal and Identity Theft Services for individuals, families, and businesses


Jeff BellJeff Bell
 Kathy Pinson Kathy Pinson
 Steve Williamson Steve Williamson
 Alan Fearnley Alan Fearnley
 James Rosseau James Rosseau
 Darnell Self Darnell Self

When LegalShield brought on a new CEO with consumer marketing and corporate leadership credentials the likes of Microsoft, Chrysler, Ford and NBCUniversal last summer, they once again affirmed the company’s adaptable nature. This pioneering, service-focused direct selling company has a long history in meeting the changing needs of the consumer marketplace with innovations like 24/7 legal counsel and identity theft protection, as well as rising to broader corporate and industry challenges.

CEO Jeff Bell’s goal, as he sees it, is to make LegalShield a household name, much like direct selling giants Mary Kay, Avon and Tupperware did for their product categories. Admittedly, skincare, cosmetics and food storage are more easily understood concepts than the disruptive business model that powers LegalShield’s mission of equal access to equal justice for all, but Bell and his team aim to change that. In fact, he says, “I believe our growth is not just a business imperative, it’s also a moral imperative.”

Today, the 43-year-old company offers individual and family pre-paid legal and identity theft plans, as well as products for home businesses, small businesses up to 100 employees, and larger companies that elect to provide a LegalShield option within employee benefits packages. LegalShield’s memberships number 1.4 million covering 3.7 million lives, and its call center fielded 2 million member calls for legal assistance in 2014.

One Car Accident Away

LegalShield, originally incorporated as Pre-Paid Legal, arose from the rolling hills of Ada, Oklahoma, following Founder Harland Stonecipher’s head-on automobile collision in 1969. Despite insurance coverage for life, auto, and health, life insurance agent Stonecipher realized his family’s vulnerability to unexpected legal fees after being sued for an accident that was not his fault.

As he recovered, Stonecipher mulled over the fate of his family and the hundreds of thousands of other families who could fall into this gap at a moment’s notice. Surely something existed to provide assurance to everyday people needing legal counsel, but research proved otherwise.

So in 1972, he forged ahead on his own from a one-room office in a local mini-mall. Within seven years, the company offered connectivity to legal services in six states, and by 1982 had become the conduit between a membership network of people who needed access to legal help and an attorney provider base that could deliver it. COO Kathy Pinson, who has spent 35 years with the company, says, “The provider attorney system is our key competitive advantage today.”


“I believe our growth is not just a business imperative, it’s also a moral imperative.”

—Jeff Bell, CEO


Competitive Advantage

LegalShield’s provider attorney system hinges on extensive vetting and long-term contracting with a single, large and established law firm within each U.S. state and Canadian province in which they do business. Average length of service for a LegalShield firm is 14 years with attorney experience levels averaging 20 years.

Because that firm represents all LegalShield members in that state or province, LegalShield’s business can comprise a big part of the firm’s overall business. According to Alan Fearnley, President of Consumer Marketing and Brand, this creates a scenario whereby attorneys become “almost evangelical” in their support of the business model, which in turn generates fantastic customer support for members, assures LegalShield members receive legal guidance from experienced professionals, and establishes vital connectivity between law firms and the field, which makes LegalShield’s various services easier to sell.


“The provider attorney system is our key competitive advantage today.”

—Kathy Pinson, Chief Operating Officer


“The very way that we’re set up allows us to have additional quality measures over those attorneys that no one else has,” Pinson says.

LegalShield quantifies member experiences with attorney providers, effectively putting a number to their “bedside manner” and holds lawyers accountable for the service they render. LegalShield has experienced a considerable rise in their Net Promoter Score® (NPS), a customer loyalty scale used to measure overall satisfaction with a brand or product. The scale ranges from -100 (everyone is a detractor of the company or product) to +100 (everyone is a supporter of the brand or product). Attained by survey, any score above zero is somewhat positive; a score of 50+ is excellent. Fearnley happily reports that Legalshield’s score, which ranged in the mid-40s a few years ago, now stand at 57. He says, “By allowing attorneys to see that score and by training around it, our service levels are really terrific and that’s helped the quality of the business.”

From the view of LegalShield’s associate field, where Darnell Self, Executive Vice President of Network and Business Development, spent 15 years, the attorney provider network is something competitors just don’t have. Decades in the making, the time and resources necessary to put the right law firms and communications in place, Self says, makes it unlikely to be duplicated. That’s a highly sought after attribute for those seeking direct selling opportunities.

LegalSheild

A Mission for All

“We deliver products that promote peace of mind,” Bell says. “We believe that our mission applies both to our members and our sales associates. We want to improve their lives by teaching them life-transforming skills, giving them peace of mind and confidence in a world oftentimes uncaring and selfish.”

In fact, Harland and Shirley Stonecipher’s founding mission centered on equal access to justice for all people. “That doesn’t mean that we’re here to guarantee that people who break the law aren’t held accountable—far from it. We just want to make sure that every citizen in every community in the United States is able to exercise their rights of living under the law, that they are able to have representation in all circumstances and that it is not only available to those with higher incomes,” Bell says.

Leveling the legal playing field, righting the wrongs that exist in North America, providing equity where there is inequity—those messages resonate with everyone associated with LegalShield. “It’s an entire eco-system that we have. Whether it’s the employees, the members, the associates or the provider attorneys, they are all very passionate about that cause,” Chief Financial Officer Steve Williamson says.

Congregating that shared passion is a huge part of LegalShield’s business strategy, which is driven by intimate gatherings of 20, galvanizing affairs numbering 15,000 and everything in between.


Representing roughly 30 percent of the company’s overall business, some 47,000 small businesses used LegalShield services in 2014, and 34,000 larger companies offered LegalShield legal and identity theft plans to their employees.


“I can’t tell you what the next product’s going to look like. I can’t tell you what’s going to be half price next week. But what I have is a passion and conviction for what we are doing and for people who feel the same way. People need to be there because they want to renew their vows and see people who are involved in the cause,” Fearnley says.

It was a Las Vegas event last summer that convinced Bell to venture into this, his first foray into the direct selling industry. He was very, very moved to hear the testimonies from lawyers who worked on behalf of members who faced criminal warrants or warrants for money they didn’t owe, as well as from people whose identities were stolen and reclaimed through the investigative efforts of LegalShield’s Identity Theft partnership with Kroll.

“With this particular initiative, because of the very nature of our mission, this is a chance for people to work hard, but also to feel like they are making a contribution,” Bell says. “I believe this is bigger than me. I think this is bigger than any selling associate or any individual or entrepreneur who decides to take up a LegalShield business opportunity.”


“Our mission is to help people improve their lives by teaching life-transforming skills and to deliver exceptional products and services that promote peace of mind and confidence in a world oftentimes uncaring and selfish.”

—Jeff Bell


Changing of the Guard

Bell’s words reflect Stonecipher’s principles when he founded Pre-Paid Legal, originally named the Sportsman’s Motor Club, in 1972. In 1976, the company changed its name and incorporated as Pre-Paid Legal Services, Inc. The next evolution was a public offering in 1984. Stonecipher served as CEO until 2010.

In 2011, a change in corporate leadership and a transition back to private hands occurred when MidOcean Partners, a New York-based private equity firm, purchased the company for $650 million. Later that year, the company refreshed its brand and took the name of one of its most popular products—LegalShield.

In the end, Bell says, “We went private because private equity was looking to invest. Quite frankly, the business is phenomenally robust. This business generates a lot of cash and has one thing that they really want, which is the opportunity to grow.” That growth potential is eventually what brought Bell into the fold in 2014.

Today, LegalShield’s associate field consistently reflects a simple set of values that threads throughout the entire organization: Believe in the good in all people; do the right thing when no one is looking; give clarity to everybody’s purpose; and empower people’s passions. And Bell says, “We’re growing our associate base for the first time in several years, and we’re doing it for the right reasons and with the right people.”

Adaptable Sales Opportunity

LegalShield is not a hobbyist direct selling opportunity. “You really join the company to learn the skills, to network with other people, and to interact and to sell to other people,” Fearnley says.

LegalShield’s associate demographic skews a bit older, yet is gender-balanced. Associates tend to be business-oriented people like insurance brokers, sales professionals who have built networks before, those looking for a second career to transition into retirement, and even retired attorneys who understand the need for and value of LegalShield’s products.

“When people have got something to lose, then that’s when they want to protect it,” Fearnley says. It’s also when they want to share it with others, and LegalShield offers an adaptable business opportunity depending upon associate needs and goals. “We want them to operate our business in any way that’s a potential opportunity,” he says.

The intangible nature of LegalShield’s products and the varied audiences to whom associates must sell, however, present a specific training challenge. “We’re not training people how to demonstrate products. I can’t let people feel the texture of something. So it’s really important to get people talking and sharing and going about it in a way that normal sales people talk about things. In other words, relationships and good, essential selling,” Fearnley says.

Basic associate training includes online coursework and live training with interaction and role-playing, and then LegalShield scales it up at larger events where top income earners and rising stars inspire associates looking for more. “They should come out better than when they arrived. They’re more equipped for the world in general. You don’t just sell our products, you pick up selling skills,” Fearnley says.

While some LegalShield members enroll and earn money by selling memberships without any intention of recruiting or building an organization, others enter into the business with networking as a focus, and some eventually matriculate to LegalShield Business Solutions sales.

James Rosseau, President of LegalShield Business Solutions, says before associates can graduate to new levels of LegalShield sales, deeper levels of training for not only product sales but also business-to-business sales, and the intricacies involved, are required.

Rosseau’s business sector offers a lucrative space in which to grow LegalShield’s overall business. “Today, only about 6% of employers offer legal plans as part of voluntary benefits packages, so we have a lot of upside opportunity,” he says. Some 47,000 small businesses used LegalShield services in 2014, and 34,000 larger companies offered LegalShield legal and identity theft plans to their employees. This segment represents roughly 30 percent of the company’s overall business, which was estimated at $400 million last year.


“When people have got something to lose, then that’s when they want to protect it.”

—Alan Fearnley, President of Consumer Marketing and Brand and Chief Commercial Officer


The Way Forward

Making an intangible service more tangible to consumers was an ongoing dilemma for LegalShield until the simple click of a mobile app opened the door to adaptability once again. “You push a button and up pops a screen. You can do one of four things: call your law firm, call your identity theft/credit advisor, call member services, or 24/7, 365 days a year push the red button if you’re being arrested or have a crisis. We’ll get a lawyer on the phone in 15 minutes,” Bell says. “Nobody in this business makes that promise.”

Fearnley adds, “New technology is going to make this product shine even more brightly than ever before. Believe me, it’s no secret that we’re going after that technology in terms of support and the opportunity and the dollars. The brighter that technology shines and the brighter that product shines, the brighter that opportunity shines.”

March 02, 2015

Company Focus

Guts Lead to Glory at Usborne Books & More

by Barbara Seale

Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 1989
Headquarters: Tulsa, Oklahoma
Executives: Founder and CEO Randall White and Vice President Heather Cobb
Products: Educational children’s books



 Randall White and Heather Cobb Randall White and Heather Cobb

It was a David and Goliath decision—one that would make any direct seller proud. More importantly, it set the stage for growth for Usborne Books & More, one of the direct selling industry’s few book sellers.

Usborne Books & More (UBAM) is the direct selling division of Educational Development Corp. (EDC), which has been in business in the United States since 1978. It sells children’s educational books primarily at parties, and some of the consultants also sell at book fairs, as well as to libraries and schools. UBAM has always been a bit of a rebel-with-a-cause, gaining its first steady market of home schoolers and being led by outspoken EDC CEO and Usborne Books & More Founder Randall White. The thorn in its side: Amazon.com.

Amazon was buying EDC’s books primarily from a wholesaler and slashing the retail price to the bone, including large orders sold to libraries and schools. If you’ve ever thumbed through a book at a retail store but then purchased it online at Amazon to save a couple of bucks, you have done what some Usborne Books & More customers have also done—much to the chagrin of UBAM consultants.

When the Usborne Books & More consultants who sold to schools and libraries—about 20 percent of the company’s business—encountered the practice, it didn’t just frustrate them. It threatened their business. The consultant might have gone through layers and layers of administration, making repeated presentations on book collections, getting enthusiastic, positive feedback, only to have the library make its final purchase through Amazon. It’s not a situation that leads to consultant retention. By 2012 the practice hit the company hard. Consultants started quitting, and sales dropped 20 percent.

By early 2012 White had had enough. He asked the wholesaler, which at the time accounted for 20 percent of EDC’s sales, to stop selling the company’s books through the online retailer. The wholesaler refused, but White was determined. He cancelled its account, all but eliminating the sale of EDC’s books directly from Amazon.com.


Usborne Books & More has now recorded 19 consecutive months of growth, with the past six months each posting monthly gains in excess of 40 percent over the same months in 2013.


Growth Genesis

The action was bold, and it spoke loudly to UBAM’s consultants. They loved it. It told them that White had their backs. Even though slinging a stone at giant Amazon was a risky move, as White told The New York Times in his characteristic style, “You never have the chance to make 7,000 women happy in one day.”

White calls it the most important action he, as the company’s founder, has ever taken. Consultants were energized to hold more parties and approach more schools and libraries, knowing that consumers would purchase from them, rather than online. That confidence led to recruiting, as well. Fueled by additional incentives from Usborne Books & More, selling and recruiting have increased, creating a snowball effect. Growth has hit an all-time high. Since its low point in 2012, the company more than doubled its number of active consultants by the end of 2014 and now has 8,000 active consultants. More importantly, growth has continued.

From February to June 2014 revenue grew more than 22 percent. Then from June through December the rate exceeded 50 percent. EDC’s earnings release for the third quarter ended Nov. 30, 2014, said that Usborne Books & More had recorded 19 consecutive months of growth, with the past six months each posting monthly gains in excess of 40 percent over the same months in 2013.

Usborne Books & More Vice President Heather Cobb says that growth was caused by a perfect storm that brewed for two years.  “It started with Amazon,” she reflects. “Plus, our new branding has been in place long enough to have taken effect. Our graphics have continued to get better—more on target—and our books continue to be the best. In addition, we’re offering the right type of incentives to consultants, such as a trip to Ireland. One of the things we do from the home office is set the bar of expectation. The higher we set it, the higher they reach.”

From Lukewarm to Life-Changing

Usborne Books & More, a division of Educational Development Corporation (trading as EDUC on Nasdaq), was created to concentrate exclusively on selling U.K.-based Usborne children’s books. According to its website, EDC has twice been recognized by Forbes magazine as one of “The 200 Best Small Companies in America” and three times by Fortune magazine as one of “America’s 100 Fastest Growing Small Companies.” In 2014, Usborne Books & More marked its 25-year anniversary.

CEO Randall White launched the company’s direct selling division in 1989 at the suggestion of the head of Usborne Books, but he wasn’t enthusiastic about the idea.

“Peter Usborne told me that his company, which is our supplier, had a home sales division in England and suggested that I should start one,” White recalls. “I wasn’t crazy about the idea, but he talked me into it. I thought, I’ll do it as long as we don’t mess up our real business: selling to stores. Then someone talked me into going to a DSA national convention, and oh, my gosh, it was life-changing for me. After they scraped me off the ceiling, I knew we had to do this.”

He appreciated that as he prepared to launch his new division, industry icons such as Doris Christopher and Dave Longaberger freely offered their expertise and advice. He held his organizational convention, knowing that he had to reach out to everyone who had expressed interest. About 30 attended, including a woman who became the company’s top producer.

In late 2008, EDC acquired Kane Miller Publishing, an internationally known publisher of award-winning children’s books with more than 20 years in the industry, and added it to the lineup of books its consultants could offer. By late 2014 the company’s sales library had grown to 2,000 titles.

Growth has been a roller coaster for the company. Initially it grew steadily, but hit a financial rough patch when EDC struggled through nine years of declining revenues. It turned the corner in 2012. By December 2014 EDC reported that Usborne Books & More had achieved 19 consecutive months of growth. In October TheStreet.com recognized its strong dividends, rating it third in its short list of buy-rated dividend stocks.

Today, White’s reluctant creation, Usborne Books & More, is EDC’s largest division, and his definition of his “real business” has turned around along with company revenue. Usborne Books & More is now a $20 million company.

Luggage Love


“One of the things we do from the home office is set the bar of expectation. The higher we set it, the higher they reach.”

—Heather Cobb, Vice President, Usborne Books & More


Setting a high bar isn’t just about trips. Smaller incentives have had a big impact, too. For example, at its last convention in June 2014 the company introduced a simple incentive that has netted stellar results. They offered a two-piece, hard-sided, 360-degree rotation, customizable, branded suitcase set from Spot My Bag. The crowd gasped. To earn the set, consultants had to sell $5,000 of books—wholesale—in any one month from July through December. That equates to $7,000 in retail sales in a single month. It would be a stretch for distributors in many companies, but especially for Usborne Books & More consultants. The average price of a book is less than $10. The outcome? More than three times the number of consultants reached the monthly goal than in the previous year.

When White first heard the suitcase idea, he wasn’t sold. “I was skeptical,” he freely admits. “I was wrong.” Cobb believes that the effect of the incentive was psychological. “We had enough faith in them to say that we would give them a prize to reach that level,” she notes. “They knew that we wouldn’t give them the challenge if we didn’t think they could do it. So many have thanked us for stretching them. The biggest benefit has been that they learned so much in the process.”

Randall WhiteFounder and CEO Randall White reinforces the company’s culture of accessibility by writing daily personal notes on outgoing packages at the company’s distribution center.

Return Customers

Repeat sales are relatively easy, according to White. Once a customer attends a party and experiences Usborne Books & More’s high-quality books, they welcome an opportunity to buy more, he says. He notes that some of his customers become fanatics—Usborne and Kane Miller “freaks,” as White calls them. The Kane Miller brand is an internationally known publisher of award-winning children’s books, which EDC acquired in 2008.

Those Usborne and Kane Miller freaks return for more books, which are often offered as a series. When parents buy the first book of a series and see how much their children love it, they come back for more. Plus, as Cobb notes, “New babies are born every day who need to learn their 1-2-3s and A-B-Cs.”

Most consultants and customers are young moms—a built-in millennial market—or grandmothers who have experienced the books’ benefits and want to share the educational wealth. Usborne Books & More is flexible about party presentations. Some consultants do presentations that focus on the books’ educational and developmental features. Others get creative with a fun demonstration. Usborne provides plenty of statistics supporting the importance of reading aloud to small children and the effects of lifetime literacy.

TiarasNew leaders are crowned like princesses at Usborne’s annual convention.

The improved branding and communication that Cobb introduced when she joined the company in February 2011 guide consultants to recruit during their presentations, as well. For example, consultant training in addition to catalogs now lead with Five Ways to Save: collections of similar types of books; monthly customer specials at a reduced rate; combined volumes, which include two or three books under one binding; hosting to earn free books; and joining the team, which offers a lifetime book discount, plus a starter kit stocked with books. The idea was developed years before, but with her background as a direct selling consultant, Cobb put it front and center.

Cobb says that the consultant demographic is gradually becoming younger and younger because of the branding, programming and incentives. In addition, White notes that Facebook is changing the company’s traditional sales model. He says that consultants began holding Facebook “home parties” that produced $800 in sales. Facebook created new dynamics for the consultants holding them. Prospective customers and recruits may be less intimated to attend an online party, and the consultant can even momentarily “leave” the party, click into another group online to ask a quick question while guests browse, and return to the party almost without being missed. And online parties are typically over in 30 to 40 minutes. The experience results in sales and also entices prospective recruits with its simplicity.

“It opened up a whole new avenue for people to recruit,” Cobb notes. But having that first new recruit or two in another state challenges most consultants’ comfort level. “Most people don’t know how to work with someone who lives across the country. They can’t be there for their launch party to help them and to cheer them on in person.”

At the same time, though, that person could sign up in the afternoon, have their e-commerce site and consultant ID instantly, and hold their own Facebook party that night, even before their physical starter kit has time to reach them. Facebook lets the sponsor “attend” the party online and provide the benefit of her experience.


“Literacy is so important. It’s the key to everything.”

—Randall White, EDC CEO and UBAM Founder


Sales that Lead to Savings

But when online sales were to consumers in multiple states, Usborne Books & More’s cost structure for shipping had to change. The company had spent as much as $9 to ship an order through UPS—Usborne Books & More is the largest UPS shipper in its Tulsa, Oklahoma, hometown—so it started exploring more options. It asked the U.S. Postal Service to make a proposal. Their pitch was so attractive that the company now uses Priority Mail to ship small orders, especially to Alaska and Hawaii, as well as UPS. The impact was great enough that in its December earnings release the company noted that improved shipping rates negotiated during the quarter would materially affect the earnings for that quarter and future quarters.

Usborne Books & More continues to invest in technology that supports its consultants’ business. In early January it announced at its leadership conference that it would launch new financial and direct-selling software, which rolls out this year. Some of the features of the software have been available cafeteria-style to consultants in technologies that UBAM built in-house, but the new outsourced software—made financially feasible by recent growth—consolidates and simplifies their use. It will also be available for about $100 a year, compared to the $20 a month subscription consultants currently use. White believes it will help drive growth.


Facebook is changing the company’s traditional sales model by letting them hold Facebook “home parties,” thus creating new dynamics for the consultants holding them.


“We’re finding that the new people joining—young people 25 to 30—have grown up in the smart phone generation,” White notes. “They’re impatient with anything that’s not quick and slick. Growth has allowed us to invest significant money to have the latest thing available to consultants.”

White is bullish about the future. “We are a debt-free company; the last few months have been spectacular; so I think there’s a huge market we can tap,” he emphasizes. “I think we can hit $100 million in four or five years.” He adds, “Literacy is so important. It’s the key to everything.”

High Touch and Tiaras

Every woman should get to feel like a princess. At least, that’s the philosophy Usborne Books & More executives adopt at convention time.

Along with motivating music, training and incentives, the company has one more flagship tradition. Everyone who reaches the company’s leadership level is brought onstage and crowned with the company’s trademark tiara, which they proudly wear for the rest of the convention.

“People want that tiara!” says company Founder Randall White. “It’s the recognition, and you can never have too much of it. It’s the outward sign that you’ve reached the leadership level. We give it as early in the convention as possible. It’s a status symbol to wear it at the convention. People walk up and ask how you did it, how long it took.”

The tiara is just one symbol of the company’s unique culture. Accessibility is another. Executives are so approachable that when White travels on business, consultants often invite him to stay in their homes. And he does. He also talks personally with any consultant who calls the home office and asks to speak to him. He reinforces the culture by making a daily visit to the company’s distribution center, selects several outgoing packages and writes on them: Hi! (smiley face) Randall White. He also writes personal notes to the top 50 salespeople each month, and he “friends” his consultants on their Facebook pages. Each month he personally writes “Randall’s Ramblings” for the consultant newsletter, often describing personal events and connecting them to some element of the Usborne Books & More business.

“We’ve tried to create a culture of family and fun,” he emphasizes. “Doing these things shows that I care about each one of them and wouldn’t do anything that was harmful to them because I know them and their families.”

While White acknowledges that some of those practices will be hard to maintain as the company grows, he wants to do it.

“It’s my life,” he says, “and I love it.”

March 02, 2015

Industry with Heart

Rodan + Fields: A Prescription for Change

by Karyn Reagan

Left: Student participants in buildOn, an inner-city education and service program, speak during a “Jobstacle Course” led by employees at Rodan + Fields’ headquarters.

Right: BuildOn students from an Oakland, California, high school were treated to a day of learning with workshops on resume writing as well as mock interviews to help them prep for job opportunities.


Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


At Rodan + Fields, transformation is not just skin deep as they support programs helping educate underprivileged youth.


Company Profile

Founded: 2008
Headquarters: San Francisco
Executives: President and CEO Lori Bush; Co-Founder and Chairman Amnon Rodan
Products: Cosmetics and personal care


Amnon Rodan Amnon Rodan
Lori BushLori Bush

While at Stanford University Medical Center in the early 1980s, Dr. Katie Rodan and Dr. Kathy Fields forged a friendship for the same reasons most girls do, but they were also drawn to each other for a practical reason—there just weren’t too many women in the program. After graduation, they each started their own thriving dermatology practices, but the friendship proved lasting and together they have become recognized experts in their field, co-authored two books, and created products and companies that are now household names. “Their goal is to create products that bring the dermatological experience out of medical practice and into the hands of consumers,” says Amnon Rodan, Co-Founder and Chairman of Rodan + Fields as well as Katie’s husband.

The women’s first experience with selling products was the creation of the highly successful acne treatment product, Proactiv Solution™. Since that time, the anti-aging skincare market has grown exponentially, and Katie and Kathy researched and developed a line of products they now market through their company, Rodan + Fields. “In 2002, we created the brand and started selling the skincare line through high-end department stores,” says Rodan. “Within six months, our products caught the eye of Estée Lauder, who offered to purchase our company, so we sold it to them. But in 2007 we felt it was time to buy it back and offer the products through a different channel. Our vision was so much bigger than what traditional retail could offer.”

After studying the various marketing methods available that best served the skincare industry, the distribution channel that rose to the top was direct selling. “We bought the company back in 2007, reopened it in 2008 as a direct selling company, and it has been the best decision we’ve ever made,” says Rodan. “In our first year we did $3 million in business, and now, just six years later, we finished 2014 with $329 million in sales and 75,000 Consultants.” Rodan + Fields also has accumulated five DSA awards since 2008, including the ETHOS award for product innovation in 2014.



Seventy-five high school students from Oakland, California, affiliated with buildOn, took part in Rodan + Fields’ Jobstacle Course, a day of learning their way through the obstacle of job hunting.


A Better Way

Rodan explains that the main reason they chose direct selling was because it was, in their opinion, the best way to connect the brand with consumers. “We looked around and concluded that retail selling is about selling today and yesterday—the numbers we sold yesterday compared to the product that moved off the shelves today. But the way forward is about the combination of offline and online selling, which is social commerce,” says Rodan. “Taking that thought further, the best way to attain product exposure is through social networking. Combine that with e-commerce and the result is what we call social commerce. It is the way of the future.” 

Rodan + Fields was built in the digital age as a digital company with the added consumer benefit of personal contact with a consultant from the company. “The result is a much more heartwarming experience than buying a product off the shelf,” says Rodan.

An added benefit is that most of the consultant’s activities are done online, allowing Rodan + Fields to closely track who is buying what and when. “In the retail channel, there is no efficient way of knowing who is buying product, when they are buying or how often they are purchasing,” Rodan says. “Market research and studies would have to be conducted in order to have a somewhat accurate assessment.”

“Consultants are the stars at Rodan + Fields,” he says. In tandem with the desire of the founders to change skin, they equally desire to help their consultants to build their businesses, develop personally and change lives. Rodan + Fields’ salesforce development team is led by regional and area managers, who are employees. These individuals work directly with the field, and are a vital part of the organization. Rodan says, “They are a great support to the Consultants and keep a finger on the pulse of what is happening in the field. They assist with events, training, opportunity meetings and skincare education.” Support is also offered at the most anticipated event, the annual convention, where active consultants receive product introduction, training, motivation and recognition.

To keep up with the growth of the company and advances in skin care, Rodan + Fields also employs a large team of product developers who leave no stone unturned to find the most innovative formulas possible. “To get the best efficiency out of our new products, we must search all over the globe for the highest quality and most cutting-edge ingredients,” says Rodan. “And although the team creates most of them, Katie and Kathy still approve every product that is added to our line.”

The driving force behind creating the highest quality and most efficient product line possible is the desire to help people feel better about the way they look—ultimately making a difference. “We are motivated by the necessity for our lives to matter, to make a difference in the lives of others in the brief time we are on this planet. On a physical level, the business is about improving the appearance of people’s skin, which leads to feeling better about themselves on the inside,” says Rodan. “The next level of influencing change is in our communities and being involved in the responsibility of helping others in need.”


Rodan + Fields was built in the digital age as a digital company with the added consumer benefit of personal contact with a consultant from the company.


Offering a Hand Up

buildOnSeventy-five high school students from Oakland, California, affiliated with buildOn, took part in Rodan + Fields’ Jobstacle Course, a day of learning their way through the obstacle of job hunting.

As a practical response to the desire to impact communities, Rodan + Fields formed a foundation at the same time they launched the company into the direct selling arena. They named the foundation Prescription for Change (PFC), and the focus is to encourage people to align with a greater purpose and with the idea of being involved in something bigger than they are.

“In September of 2014 at our annual convention we announced that the new focus of our foundation is education—it’s the great equalizer. The mission statement for the foundation is: The PFC Foundation supports students in need on their journey to becoming a prescription for change in their communities by fostering belief in themselves. At PFC we believe if you can educate people you are giving them a hand up, not just a hand out,” says Rodan. “High school dropout rates have become a national crisis. That lack of education often leads young people into a dark funnel swirling them into the prison systems. The need is most acute in poverty-stricken neighborhoods in large cities across the United States.” Rodan explains that they are very excited to have found the perfect organization with which to partner in order to make the greatest impact—buildOn. 

Founded in 1992, buildOn works to break the cycle of poverty, illiteracy and low expectations through service and education. Across the nation in 62 urban high schools in seven regions, the organization runs intensive afterschool programs that support education, community service and international school-building. Kari Hayden Pendoley—the PFC’s Senior Manager, hired specifically to oversee the work of the growing Foundation—says, “The size and philosophy of the organization mirrors our own allowing us to grow together.”

“With a 92% high school graduation rate, and many going on to college, these students exemplify doing well by doing good,” she says. “To date, Rodan + Fields has supported over 71,411 buildOn program days for students in need.” A buildOn program day is measured by the dollar amount it costs for a student to be part of buildOn for one day. The current rate is $4.


We are motivated by the necessity for our lives to matter, to make a difference in the lives of others in the brief time we are on this planet.”

—Amnon Rodan, Co-Founder and Chairman of Rodan + Fields


Pendoley also emphasizes that the consultants are a very important part of the Foundation’s growth. “Most of our Consultants are natural social influencers, and we want them to be able to incorporate that giving aspect of themselves into their business and be celebrated for it,” she says. According to Pendoley, in the last 18 months, the Foundation has more than doubled efforts across all categories of giving, including staff, grants, donor contributions and monetary donations by Consultants. “The total grants given for 2014,” she says, “including cash and non-cash grants, exceeded $350,000.”

Fundraising in Action

In July 2014, PFC invited consultants to participate in a simple social media fundraising initiative known as Go Naked Day. “For each no-makeup selfie tweeted during that particular day, $1 was donated to buildOn,” says Pendoley. “It was a huge success and $30,000 went to support students traveling to build a school abroad.”

Another outreach event coordinated by the Foundation was what they called a Jobstacle Course. Seventy five high school students from Oakland, California, affiliated with buildOn were treated to a day of learning their way through the obstacle of job hunting. “The students were given an in-depth tour of our headquarters in San Francisco learning about the various positions that exist within a company. We also exposed them to résumé writing and held mock interviews, providing feedback on what to say, how to say it, etc., in order to help them prepare for future job opportunities,” says Pendoley. “The students thoroughly enjoyed it and were extremely appreciative.”

Five buildOn alumni, now in college, were invited to attend the annual Rodan + Fields convention for the purpose of building brand awareness for the partnership while helping the students to gain exposure to the direct selling industry along with the training and excitement that comes with such an event. Their interest was piqued and they wanted to learn more about the industry. “We put them in front of about 100 Consultant leaders. They fielded questions about buildOn and shared the impact buildOn has made in their lives,” says Pendoley. “Since the students were from five different cities, it also showcased the success buildOn has had across the country.”


Rodan + Fields partners with nonprofit organization buildOn, which works with urban high school students to break the cycle of poverty, illiteracy and low expectations through service and education.


At the conference, consultants also filled 800 trendy backpacks filled with supplies to give to high school students as a thank you for joining one of the buildOn programs available throughout the country. “Sometimes students require some extra motivation to attend buildOn programs. Perhaps this is due to a lack of understanding of the benefits of the program or the lure of other things vying for their time that might not be the best choice,” says Pendoley. “We had feedback from buildOn across the country about the great success of the program. We will be looking to do more to support these types of efforts on a larger scale in the future.”

The Prescription for Change Foundation has committed to partner with buildOn. “They have a presence in Canada and Rodan + Fields expanded into that country in February of this year, allowing for a seamless transition into our new market,” says Pendoley. “Education is our global platform, so as our company expands, we will continue to look for like-minded organizations to support this vision in new regions.”

Commitment to education is a priority, and if a consultant has already established a relationship with an education-based charity or discovers one in his or her community, the Foundation has a product donation and check-matching program. “Once a year eligible Consultants can support a charity that fits within the parameters we have established,” says Pendoley. “This also allows Consultants to showcase our mission through their local organizations.”

As an incentive for involvement in their communities, PFC chooses one consultant each year to receive the prestigious Prescription for Change Foundation Award. It shines a light on the work the consultants do to improve their communities and help those in need. Consultants nominate their peers, with each nominee and the award winner recognized on stage at the annual Convention Award Gala, and a donation is made in their name to support students in need.

When Pendoley discusses the many life-changing activities in which the Foundation is involved, she can’t contain her excitement. “I love our new tagline—Believe in More. Empower Change,” she says. “As the company grows, so will our commitment to impact hundreds of thousands of young lives, enabling a better legacy for them while also building one for ourselves.”


“As the company grows, so will our commitment to impact hundreds of thousands of young lives, enabling a better legacy for them while also building one for ourselves.”

—Kari Hayden Pendoley, Senior Manager, Prescription for Change


As the company and the foundation move hand in hand toward the future, Rodan says that their commitment is five-fold:

  • to keep the consultants the No. 1 focus by doing the right thing in every situation the company faces;
  • to never compromise the principles of integrity in business;
  • to educate consultants that Rodan + Fields is not a money-making scheme but a true and honest brand;
  • to make it clear that consultants are invited to join the company in order to improve their lives on every level and not just win a car or trip;
  • and to let everyone know that it is never too late to change one’s life for the better.

“The heart of the brand is giving back, not just to neighboring communities, but also to our own Consultants and employees,” says Rodan. “Our desire has always been to provide education, not just a product, and that education includes whatever we can share that will improve the lives of those around us.”

March 02, 2015

Working Smart

It’s That Time of Year

by William W. Olsen

Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


Do New IBOs Know What to Do with Their 1099?

When a new independent business owner (IBO) gets recruited to a new opportunity, the “business owner” part of the term IBO doesn’t always sink in at first or with the breadth of what that status means to them. Even if they are aware that they are now a business owner, most do nothing about it until they get their first 1099. By then, the tax year is over and it’s too late to take full advantage of the opportunities available to them. 

For some, it’s “old hat” and they know what and how to track for tax purposes. But for most, who are used to receiving a W-2 from an employer, getting involved in their own business is as unfamiliar as going to a foreign country where everyone is speaking a different language. It’s fun and exciting at first because it’s new and different. But soon—very soon for some—they get frustrated in this “foreign” environment and quit before they see any benefit from it. 

Receiving a 1099 from a company is very different than receiving a W-2. We all know how employers withhold FICA, Medicare, Social Security, federal income tax and (if applicable) state income tax. A net paycheck is called “take home pay” because the employer takes out all of the taxes and remits them to the respective government entities on behalf of the employee. However, a 1099 is different. It’s for the full amount received, and many don’t realize the multiple levels of taxes owed, including self-employment tax and income tax. They can no longer rely on the fact that the “employer” took care of the taxes on their behalf; they are forced to take matters into their own hands, or pay more than they should in taxes. 

The good news is that if they are presented with the right training up front, from a positive and proactive perspective, new IBOs can be shown that business ownership has advantages in the form of special tax treatment. The amount of the 1099 income becomes the top line revenue on a Schedule C (filed as part of the Form 1040) from which deductions can be taken. If the net result from a profit-motivated endeavor is a loss to the IBO, that loss can offset other income on their return, including W-2 income and it can reduce their overall tax bill. This can make their “investment” into this new venture a little easier to swallow, until they start making more money.


If they are presented with the right training up front, new IBOs can be shown that business ownership has advantages in the form of special tax treatment.


When success comes and they have a net profit in their business, their tax perspective changes from the tax benefit of the losses to the tax savings from every deduction. Depending on their tax circumstances, most IBOs will save anywhere from 25 cents to 50 cents or more for every dollar of deduction on their Schedule C. Either way, losses or profits, tracking tax deductions should be one of the highest priorities for all IBOs. 

The following are some of the typical concepts or deductions IBOs should be aware of:

Start Date

Determining the business start date is important because of the timing of expenses incurred. Technically, any business-related expenses paid before the official start of the business are considered “startup expenses” and are treated differently. Even though the net effect of these “expenses” will be treated the same as if they happened after the official start date in most cases, having them separated out and having an official “start date” is a good idea and will arm a tax preparer with the correct information.

Automobile Expenses

For tax purposes, a specific vehicle should be established as a “business use” vehicle. At the very least, on the day the business starts the IBO should record the odometer reading of the vehicle and then keep a business mileage log to track each time the vehicle is used for business. Each log entry should have three things: the date, miles driven, and the business purpose. 

Business Use of Home (or Home Office)

The IBO may already be using part of their home as an office or work space. Most of the deductions related to the business use of the home are calculated from documents that are sent to the IBO after the end of the tax year, such as year-end mortgage interest statements, including total payments for insurance, as well as real estate taxes. However, planning to take a deduction for the business use of the home requires some forethought. 

To take this deduction, the Business-Use portion of the home cannot be for casual and occasional business use. IBOs must use that area of their home regularly and exclusively for business. If they have an office at home, or even a place to store business products, the square footage of that area—in relation to the total square footage of the home—is the percentage used for all the home office deductions. Making sure the use of the area is managed properly is the key to being able to take this deduction. 

Cell Phone

If IBOs have a cell phone used for business they can deduct a portion of those expenses. Technically, they write off the portion of business use calculated as the portion of minutes used for business calls vs. minutes used for personal calls. (An experienced tax preparer should be able to offer alternative methods of determining the deductible portion of cell phone expenses.)

Meals and Entertainment

This is a special category of expenses that only qualify for 50 percent of the amount spent. IBOs also should keep in mind that these expenses only qualify if they are entertaining someone for business purposes. When treating a prospect, a client or customer, or an employee to lunch, IBOs should record the name of the person treated and a brief description of the business discussion or business purpose. 

When treating a business prospect to some form of entertainment just before or after an event in which business was conducted, make sure records document who was involved and the business purpose.

Meals for the IBO while traveling for business are deductible but have the same 50 percent limit. 


Once your IBOs are engaged in the “business practice” of consistently tracking deductible expenses and mileage, and in turn reap the rewards of their newfound consistency, their entire mindset will experience a shift.


Travel

When traveling overnight for business and there are more travel days than personal days, IBOs can deduct the cost of transportation as well as other costs associated with their travel. A business day is defined as one in which more than four hours of business is conducted. If the IBO has more business days than personal days, the travel costs to get there and back are considered business days. (This is for domestic travel only. Consult a tax professional for the rules that apply to foreign travel.)

There is a reward for taking a proactive approach and helping your IBOs understand and commit to this important part of their business.

Once your IBOs are engaged in the “business practice” of consistently tracking deductible expenses and mileage, and in turn reap the rewards of their newfound consistency by saving hundreds if not thousands of dollars on their tax bill, their entire mindset will experience a shift. 


To take the deduction for business use of the home, this portion of the home must be used regularly and exclusively for business.


They will move from a perspective of experimentation to one of entrepreneurship. They will see their business as a business rather than a short-term endeavor undertaken to try to earn some extra money. 

Your reward is multiplied. You gain a business owner who is more dedicated to your company’s opportunity and more willing to keep going in months two, three, and four, even if profits haven’t yet surpassed expenses because they understand that the monetary gains in tax savings can be greater than the monthly cost of their autoship. And that IBO will now teach the importance of this “business practice” to his or her organization.

This is where true retention begins. 

Disclaimer: This information is being shared as examples of what to track and is in no way intended to be a complete or comprehensive list of deductions available to business owners, nor is it intended to be tax advice. It is recommended that IBOs consult their tax professional for further clarification of all tax rules and how each applies to their circumstances before filing a tax return.


Willaim W. OlsenWilliam W. Olsen, CPA, CVA, MAFF, is Co-Founder of Deductr, a provider of tax-related software services for businesses. He has been in public accounting for over 20 years.

March 01, 2015

Stock Watch

Stock Watch, March 2015


March 01, 2015

DSA News

Sharpening Our Focus; Securing Your Future

by Gary Huggins


Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


Six months ago, I joined the Direct Selling Education Foundation (DSEF) as Executive Director, pledging to raise our visibility within the direct selling community to reinvigorate our effort to educate external constituencies about the value of the entrepreneurial opportunity associated with direct selling.

As we move forward with this work, it is important to note that our close-knit and collaborative community already understands and appreciates the direct selling business opportunity and how it empowers millions of Americans and many more millions around the world. DSEF’s role must go well beyond preaching to an already-committed choir. 

Our longstanding mission is to engage and educate the public about how direct selling empowers individuals, supports communities and strengthens economies. The key question is better defining which audiences DSEF engages within the general public. Every organization, even nonprofits like ours, must prioritize their stakeholders and target audiences. To be as effective as we can be in carrying out our mission, DSEF must hone in on the constituencies that offer the greatest opportunities to move the needle.

It is essential that the Foundation educate and partner with leaders beyond our industry that can be most effective in correcting and ultimately changing false perceptions about direct selling over time. Compelling academic research, public discussion and education will go a long way in helping us address the lack of understanding, and even misinformation, which continues to cast a shadow over direct selling. Ours is a different role than the Direct Selling Association (DSA), but complements the Association’s critical work to advance industry interests on many other fronts.

We are committed to continuing to cultivate and strengthen the partnerships with academics for which the Foundation is best known. For example, we are creating a new Academic Advisory Council that will collaborate with us to bring consistent attention and thought leadership to key issues as they publish research and articles as well as engage in public commentary to grow the discourse and advance understanding about direct selling, helping our community communicate a positive story.

We will also expand the reach of DSEF partnerships with consumer organizations to touch those at the state level, particularly in states with high concentrations of direct sellers, and pursue new organizations, such as those focused on economic opportunity, women and Hispanic Americans that can help our stakeholders appreciate that direct selling is an entrepreneurial opportunity for all.

The opportunities that this long-term, focused engagement presents are many and include advancing awareness among DSEF stakeholders about what direct selling is and isn’t, as well as demystifying our business model and explaining how it adds value to the entrepreneurial landscape. Income generation potential is only one aspect of direct selling’s value proposition. Factors such as work satisfaction, life balance for families and a compelling business opportunity are important in attracting the millions to join our industry.

In furthering the Foundation’s role in serving the public interest, we will expand efforts to advance knowledge among important constituencies about consumer protection and ethical business practices. One aspect of that work will be to demonstrate how direct sellers are held to the highest standards of ethics as we seek to broaden public understanding about how self-regulatory instruments, including DSA’s own Code of Ethics, protect consumers. 

You will hear from us as we commemorate the Federal Trade Commission’s National Consumer Protection Week (NCPW) this month. The Foundation’s longtime support of this annual event serves as a reminder to the entire direct selling community about the important role that education plays in helping consumers—as well as policymakers and other stakeholders—understand and appreciate our enterprise.  I’m excited by what I see on the horizon and hope you will join with us on this important journey.


Author NameGary Huggins is Executive Director of the Direct Selling Education Foundation. Find out more at DSEF.org.

March 01, 2015

Publisher's Note

On the Move

by Lauren Lawley Head

Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


I’m thrilled to announce that a significant change is coming to Direct Selling News later this year: We’re moving into a fantastic new headquarters building!

The new facility, approximately 20 miles from our current home in Lake Dallas, Texas, will make us neighbors with some of the biggest corporations in North Texas, including Dr Pepper/Snapple, Frito Lay, JC Penney and Toyota. We’ll also be once again back under the same roof as our parent company, SUCCESS Partners, the leading producer of marketing tools, videos and personal development materials in the direct sales industry as well as the publisher of SUCCESS magazine and Success from Home. The company’s warehouse, manufacturing and fulfillment operations will remain at SUCCESS Partners’ Lake Dallas facility. In all, about 150 employees will make the move.

“We are thrilled to be moving into this new world-class home that will better serve us and our partners in the direct sales industry as we continue to expand and build a platform for the future,” said SUCCESS Partners Founder and CEO Stuart Johnson. Johnson hired architectural firm Corgan Associates Inc. to design the renovation of the building and expects the work to be completed in time for a late-summer move. Plans call for an open, inviting atmosphere designed to support creativity and teamwork.

The new building represents a significant moment in the life of the organizations involved. For our parent company, SUCCESS Partners, the move marks a milestone in the company’s growth. When it acquired its current headquarters in 1990, the company had just 13 employees providing communication tools and services for the direct selling space. Nearly 25 years later, that nondescript building on Swisher Road is packed to the gills, housing more than 200 people in warehouse, manufacturing, fulfillment, sales, service and creative operations. In fact, Direct Selling News moved out of that building in June 2011 and into its own office space to make room for more growth at both organizations.

“The new headquarters will be a great reflection of who we are and who we will be in the future,” said SUCCESS Partners Senior Vice President of Strategic Marketing Paul Adams. “It will give us the space and the ability to interact better and collaborate more, and we will be a better organization because of it.”

For DSN, the move signals our commitment to continuing to grow our brand, bringing direct selling executives more news and information that will support your business, and telling the story of direct selling to the world. The new building will give us the space we need to expand and improve our print and digital offerings, and it also will give our staff members more opportunities for collaboration and professional development. Some of our new officemates will be our colleagues at SUCCESS magazine, and I am looking forward to seeing that fantastic team every day. With 80,000 square feet of space spread over two stories, there will be plenty of room for growth all around.

Our parent company, with its visionary leadership and commitment to the direct selling industry, always has enabled Direct Selling News the opportunity to serve the community in a unique manner. Our commitment to journalistic relevance will be even more effective in the new space, as we will be able to add to the tremendous talent we have already attracted. To our advertisers, we will always be grateful for the honor to spread your message, and to the leaders of the direct selling industry, I can only envision a bigger, bolder, more research-focused journalistic resource to serve the future of this most incredible channel of distribution we love to write about.

I’ll share more details as we get closer to moving day. Until then, it’s back to business. In this edition of Direct Selling News, you’ll learn what’s new in the competitive world of sports sponsorships, what happened when one direct selling CEO stood up to Amazon and much more. We’re also making one final call for submissions to the 2015 Global 100 list. If your company has not yet updated its information, or submitted the Revenue Certification Form (RCF) for this important ranking, please visit directsellingnews.com today.

In closing, I’ll leave you with this quote from Rodan + Fields Co-Founder and Chairman Amnon Rodan about the evolution of direct selling and how his company is growing right along with it:

“We looked around and concluded that retail selling is about selling today and yesterday—the numbers we sold yesterday compared to the product that moved off the shelves today. But the way forward is about the combination of offline and online selling, which is social commerce. Taking that thought further, the best way to attain product exposure is through social networking. Combine that with e-commerce and the result is what we call social commerce. It is the way of the future.”

May your future be filled with success,

Lauren Lawley Head
General Manager

March 01, 2015

News in Brief

News in Brief, March 2015

Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


Creative Memories: A Respected Brand Finds a New Home and New Backing

The iconic brand of Creative Memories (CM) has undergone its share of struggles in the past, including two bankruptcies in the last seven years. The second bankruptcy saw the emergence of a new company name—Ahni & Zoe by Creative Memories—which also closed its doors in late summer 2014. That’s when an unexpected twist occurred: Caleb Hayhoe, Chairman of Flowerdale Group Ltd., and previously, Founder and CEO of RT Sourcing, made a decision to buy the Creative Memories Japan business and in North America the Creative Memories® and Ahni & Zoe™ brands, patents, artwork, products and manufacturing equipment—and reopen once again as a direct selling company. Now debt-free and backed financially, CM is ready to carve a new path. 

Hayhoe became involved with Creative Memories in 1997 when the company approached his product design and sourcing company—which then was operating with over 300 employees in Asia—to add to their product line. Hayhoe himself attended many CM events, workshops and even parties, inspired by the passion of the consultants. So when he learned the company was for sale, it was natural for him to consider the purchase. He personally knew many consultants as well as the staff at the home office in St. Cloud, Minnesota, and was convinced that with the right adjustments, the company could once again be successful for consultants and consumers. The new business is operating just around the corner from the old Creative Memories building in St. Cloud. A small, dedicated team of employees, whose average tenure with Creative Memories is 10 to 12 years, has stayed on to work with CM Group Holdings.

DSN staff spoke with Hayhoe about his strategy and vision for the company. 

DSN: What factors led to your decision to reopen as a direct selling company?  

Hayhoe: Among the thousands of decisions involved in a startup, having a direct sales element was never a question. With many tens of thousands of former Consultants who loved the products, mission and the difference the opportunity made in their own families, our leadership team was united in offering a compelling earnings plan. There was also much learning from the past, which included a deep understanding of our audience and their preferences. We wanted to support the former leaders who relied on Creative Memories and/or Ahni & Zoe for a substantial income, as well as those who joined to work occasionally and be part of a warm community. 

Caleb HayhoeCaleb Hayhoe

With our unique hybrid model we put quite a few traditional direct sales sacred cows out to pasture. Like minimums, titles and leadership requirements, to name a few. All Advisors are welcome, valued and equal, with equal earnings opportunities, whether they joined during our November launch in 2014 or join five years from now. We’re just a few months in, and there’s already a group earning more than they had before with many leaping up the levels of the plan. There’s also a whole group who’s happy to work at their own pace and share with friends and family. We’re thrilled to be able to help people share and earn as they choose. 

DSN: Creative Memories underwent two bankruptcies before reopening as Ahni & Zoe, only to close again. What strategies are you putting in place to revive these struggling brands? 

Hayhoe: It’s important to separate the former companies’ financial difficulties from the brands. The Creative Memories® brand has enormous recognition and respect worldwide for its quality products and caring Consultants. Beyond North America, there is also considerable interest in large international markets like Australia and Germany, and the 14-year-old Japan business is thriving.

The Ahni & Zoe™ brand had less time to gain traction, but in its six months of life Consultants were able to reach an entirely new group of busy people who found Fast2Fab albums the ideal way to enjoy beautiful finished albums in no time.

We believe that what CM Group is offering now is the best of both brands, with a flexibility and modern e-commerce platform neither prior company offered. CM Advisors can sell the products they like (most sell both brands) and run their businesses as entrepreneurs. Our strategy is to offer exceptional products, service and a unique earnings plan that allows for some of the most generous profit-sharing in the industry, while maintaining a lean, relentlessly efficient operation.

The new CM annual Advisor Earnings Plan had to pass the “easy to explain, easy to share, easy to earn” test. Basically, Advisors achieve a higher profit rate on the products they sell, and higher commission rate on their downline group sales, based on the sales balance in their own account. Each consultant pays a $49 annual fee to stay in the program. It’s very basic and simple.

DSN: In response to the CM launch, what kind of feedback have you gotten from former Ahni & Zoe representatives? 

Hayhoe: The reaction from former Consultants has exceeded our wildest expectations. Ahni & Zoe Consultants were quick to join, and there’s also been a huge revival of Creative Memories Consultants who missed the products and mission and like the simplicity and flexibility of the new business. With the simple, welcoming plan and freedom to sell one or both lines, they’re able to serve new people who are after fast albums that look good as well as those who love scrapbooking. It’s been great fun hearing from former Consultants who have reactivated their networks and are gathering people for workshops and retreats with a whole new level of energy. 

DSN: Will you utilize online sales apart from direct sales through Advisors? How will the two channels work together? 

Hayhoe: CM’s in the interesting position of having a 30-year legacy brand while also being a startup. We encourage Advisors to cultivate direct relationships with their customers and sell in person or via their personalized link. Our desire to protect that relationship is behind us encouraging Advisors to use one of the many excellent free/cheap, email/contact management systems available, as well as providing an Advisor locator, so long-lost customers can connect with their Advisor of choice. Customers also have the choice to shop and/or sign up directly with CM if they wish. 

DSN: Forever Inc. announced last month that it had acquired the Creative Memories digital catalog. Does CM plan to focus solely on physical scrapbooking products? 

Hayhoe: Currently, yes. As part of the Creative Memories closure in 2014, the software was transferred back to its developers. The latest announcement was the last piece of that deal, which is not connected to CM. Though the digital market is highly commoditized, our team believes there is potential to differentiate and offer something that is uniquely CM. It’s part of our plan to explore in 2015. 

DSN: Is CM looking to expand into additional categories in the near future? 

Hayhoe: Our near future will be focused on continuing to support our CM Advisors, offering exceptional service and quality and rounding out the product line. As a memory-keeping company, there’s potential for all sorts of interesting new directions in the future, though this will be done thoughtfully and carefully. Our focus is on simplicity, maintaining our reputation for exceptional quality, staying true to our Advisor community and mission, and running a lean, profitable, sustainable business.


Herbalife’s $100M Plant Brings Hundreds of Jobs to N.C.

Herbalife is marking a company milestone two years in the making. The global nutrition company recently celebrated the grand opening of its fourth and largest Herbalife Innovation and Manufacturing (HIM) facility. The Winston-Salem, North Carolina, location will produce an estimated 150 million units of made-in-the-U.S.A. product each year.

In 2012, Herbalife announced plans to convert an existing, 800,000-square-foot building in Winston-Salem, an investment of $130 million. The NSF-certified facility came online in 2014 and currently houses approximately 350 employees. That number will top 500 when the site reaches full production capacity later this year.

“The economic impact of this facility will be felt throughout the Winston-Salem area, particularly for the hundreds of talented workers who will contribute to its success,” said Rep. Virginia Foxx (R-N.C.), on hand with other officials and business leaders to celebrate the grand opening. “It gives me great pride to see national companies like Herbalife recognize all North Carolina has to offer, and I believe today’s event is another sign that our best days are ahead of us.”

With a sister site in California and two in China, HIM Winston-Salem is the largest facility ever built by Herbalife. The company will distribute nutrition powders, liquids and teas from the plant to more than 50 countries worldwide. Within its one-mile loop, HIM Winston-Salem also houses Herbalife’s Global Technical Operations Center and a state-of-the-art quality and testing lab.

“This is an incredibly important project for Herbalife as we strengthen our influence throughout our supply chain—from seed to feed—and increase capacity to meet the growing demand for our nutrition products,” said Michael O. Johnson, Herbalife Chairman and CEO.


Amway Boosts Business with XS Energy Acquisition

Industry giant Amway has acquired XS Energy, the brand behind its popular line of nutritious, sugar-free energy drinks. Amway says the move is part of its strategy to connect with young entrepreneurs, who represent a growing number of Amway business owners.

“According to our research, no demographic is more positive about entrepreneurship than those younger than 35, which is the precise target group for the XS brand,” Chairman Steve Van Andel shared in the company’s release. “Bringing Amway and XS together will strengthen our efforts in the years ahead and create more opportunities for aspiring business people.”

Former Amway business owner David Vanderveen co-founded XS Energy in 2001, and Amway became the exclusive distributor of the company’s products in 2003. Available in 38 of Amway’s international markets, XS Energy has now topped $150 million in annual sales. With the help of Vanderveen, who has signed on as Vice President and General Manager for the XS brand, Amway is looking to build upon its success in the $27.5 billion energy drink market.


It Works! Founders Donate $3 Million to Michigan State Athletics

A $3 million gift from It Works! Founders Mark and Cindy Pentecost will fund improvements to the men’s basketball program at Michigan State University. The donation supports MSU’s ongoing Empower Extraordinary campaign, which launched publicly in October 2014. Running through 2018, the campaign aims to raise $1.5 billion for the university. The Pentecosts support Empower Extraordinary alongside more than 30 other leaders and volunteers on the Athletic Director’s Campaign Leadership Council.

Mark Pentecost, It Works! President and CEO, grew up among Spartans fans in MSU’s hometown of East Lansing. As a former basketball coach, he has also witnessed firsthand how athletics can impact an individual’s life. The Pentecosts’ gift will help MSU extend that impact with updates to the men’s basketball offices and practice facilities at its Alfred Berkowitz Basketball Complex. The donation also establishes an endowment for further facility improvements in the future.

“Prior to entering the direct selling industry, I was a teacher and high school basketball coach trying to help kids accomplish their goals. I still feel like I get to be a coach every day, but now on a larger scale with thousands of It Works! team members around the world,” Mark Pentecost told DSN. “Giving back to the student athletes at MSU is something we’ve always wanted to do, and we hope it’ll help them continue to perform at the highest level and reach their dreams.”


USANA Sees Sales Surge in Fourth Quarter

Strong salesforce incentives contributed significantly to USANA’s (USNA—NYSE) positive results for fourth quarter 2014, not only in customer sales but also associate growth. USANA’s revenue was up 22.3 percent at $227.9 million for the quarter, while earnings were $21.3 million, or $1.65 per share, an increase of 17.0 percent, though lower than the Capital IQ Consensus Estimate of $1.92.

Sales incentives introduced in the quarter drove the number of active Associates up 31.7 percent, particularly in the company’s Asia Pacific region, which contributed to a sales surge of 34.1 percent to $163.3 million in the region, compared with $121.8 million for the fourth quarter of the prior year. Net sales also increased by 25.4 percent on a sequential quarter basis.

Full-year results included a profit of $76.6 million, or $5.60 per share, with revenue of $790.5 million, compared with $718.2 million the previous year. Earnings per share for the year increased by 0.7 percent to $5.60, compared with $5.56 in the prior year.


North American Power Terminates Direct Selling Enterprise

North American Power recently brought its direct selling operations to an unexpected halt. In a statement posted to its representative site, the U.S. energy supplier announced the termination of its North American Power and Thrive customer referral programs, although it will continue to operate through its other business channels.

Veteran energy executives Kerry Breitbart and Carey Turnbull founded the Connecticut-based company in 2009, and by 2013 North American Power had reported $256 million in revenue, earning it the No. 47 spot on the DSN Global 100. The company will continue to grow its direct-to-consumer channels, enroll new customers, and serve its existing customer base, North American Power’s Director of Corporate Communications, Chad Klein, told DSN in an email.

“Although we are no longer accepting new enrollments through our referral network, our Independent Representatives will continue to receive residual commissions on customers that have been referred to date,” said Klein. “We are truly grateful for all of our Representatives’ efforts throughout this memorable journey, and wish them the very best of luck in the future.”


UK-based Kleeneze to Join CVSL’s Family of Companies

CVSL Inc. is adding another direct seller to its line-up of brands. The Dallas-based company has signed an agreement to purchase health and household company Kleeneze from Findel PLC of the United Kingdom for $5.5 million.

Upon completion of the acquisition, CVSL will own one of the U.K.’s longest-operating and best-known direct selling businesses, which is also a founding member of the U.K. Direct Selling Association. Established in 1923, Kleeneze originally sold products through catalog. The company now offers household cleaning, health and beauty, home, and outdoor products through a network of more than 7,000 independent representatives in the U.K. and Ireland.

By joining the CVSL family of companies, Kleeneze will retain its own separate brand identity, salesforce and compensation plan but operate under the support of a growing portfolio of companies that include The Longaberger Company, Your Inspiration At Home, Agel Enterprises and Uppercase Living.


Nu Skin Reports 2014 Financial Results

Nu Skin’s (NUS—NYSE) regulatory review last year in Greater China has had a significant impact on the company’s recently posted 2014 fourth-quarter and year-end results. In response to the revenue drop in the company’s largest market to $213 million in Q4 from $482 million in the prior-year period, Nu Skin’s overall profit fell almost 63 percent for the quarter to $46.5 million, or 77 cents per share.

Despite the year-long decline in the region, according to President and CEO Truman Hunt, revenue began to stabilize there earlier in the year and has continued. Results were also negatively impacted by the strengthening of the U.S. dollar bringing revenue down by more than $100 million in 2014, and by $24 million consecutively from the third to the fourth quarter.

Total revenue for the quarter was $609.6 million, at the high end of the company’s guidance, compared to $1.06 billion in the prior-year period, but according to Hunt, the $550 million TR90 launch—the company’s largest product introduction—in the second half of 2013 accounts for the uneven year-over-year comparison. Nu Skin reported profit of $189.2 million, or $3.11 per share, for the year with revenue of $2.57 billion, compared to $3.18 billion the previous year.


Team 4Life Welcomes Olympic Gold Medalist

Australian professional snowboarder Torah Bright, who was a stand-out competitor and medalist in the 2014 Winter Olympics, has joined Team 4Life. Already a fan of the health and wellness company’s products, she will endorse 4Life’s Transfer Factor line.

Bright was a Silver medalist in the Half-pipe competition of the most recent Winter Olympics in Sochi, where she won Australia its first medal of that year’s Games. Adding to the Gold she had won in the same category in the previous Olympics in 2010, Bright became Australia’s most successful Winter Olympics athlete. She’s also won two Gold and two Silver medals for her performance in the Snowboard SuperPipe competition at the Winter X Games in Aspen, Colorado, and in 2013 took first place at the Sprint U.S. Grand Prix at Copper Mountain, Colorado.

Growing up in Cooma, New South Wales, Australia, Bright was first introduced to 4Life products in 2013 through her mother, Marion, who was already a long-time distributor for the company. Team 4Life gains another world-renowned athlete in Bright, who won Bronze in the Women’s Snowboard SuperPipe competition for the 2015 Winter X Games in Aspen in January.


Avon Losses Widen as Quarterly Earnings Drop

An increasingly strong dollar weakened fourth quarter sales at Avon Products Inc., and the beauty company expects to feel continued negative effects in 2015. The global brand projected that 2015 revenue will decline by 12 percentage points due to currency rates. Fourth quarter revenue decreased 12 percent to $2.34 billion; however, Avon reported modest 5 percent growth in constant dollars.

North America continues to pose the greatest challenge for Avon. The New York-based company saw regional sales fall 12 percent in the quarter and 17 percent for the full year. Avon posted global revenue of $8.85 billion for 2014, an 11 percent decrease versus the prior year, or relatively unchanged in constant dollars. The company reported a net loss of $331 million, or 75 cents a share, broadening its $69 million loss in 2013. Excluding one-time costs, operating profit totaled $734 million.

The company also reported declining sales outside the U.S., where it generates 88 percent of its sales. Revenue fell 7 percent in both EMEA (Europe, Middle East & Africa) and Asia Pacific. Latin America, Avon’s most profitable market, posted revenue of $4.24 billion for the year, a 12 percent decrease versus 2013.


Stella & Dot CEO Addresses Inaugural Silicon Valley Conference

Stella & Dot CEO Jessica Herrin joined an impressive lineup of speakers at the first-ever Watermark Silicon Valley Conference for Women. Hillary Rodham Clinton, fashion icon Diane von Furstenberg, and professor and best-selling author Dr. Brené Brown were among the women who delivered keynotes at the event. Also in the lineup was Dr. Gloria Mayfield Banks, an elite executive national sales director with Mary Kay Inc. as well as a motivational speaker and trainer.

Watermark is a community of executive women in the San Francisco Bay Area, home to tech industry hotbed Silicon Valley. For more than two decades, the nonprofit has worked to increase representation of women at executive levels, specifically through connection, development and advocacy programs.

The inaugural conference took place in Santa Clara, California, on Feb. 24. With the theme “Lead On,” the event promoted leadership as well as personal and professional growth. Throughout the day, more than 100 other speakers led discussions and interactive sessions on issues impacting women in the workforce.


Tupperware Closes FY 2014 Beating Q4 Consensus

In the fourth quarter 2014, Tupperware Brands Corp. (TUP—NYSE) beat EPS expectations by 19 cents, with earnings of $1.72 per share. The Orlando, Florida-based direct seller posted a profit of $82.3 million, down 8 percent versus prior year, but excluding the impact of foreign currency rates on the comparison, profit was up 6 percent versus 2013. Though down 5 percent in constant dollars compared to the previous year, net sales for the quarter ended Dec. 27, 2014, were $679.9 million, up 6 percent in local currency. Emerging markets accounted for 64 percent of the company’s fourth quarter sales.

Net sales for the full year were $2.61 billion, down 2 percent from the previous year. Gross margin was $1.72 billion compared to $1.78 billion in 2013. Net income totaled $214.4 million, or $4.20 diluted earnings per share, compared to $274.2 million, or $5.15 earnings per share in 2013.


Rodan + Fields Begins Global Expansion with Canada Launch

In its first step toward global expansion, Rodan + Fields is venturing beyond U.S. borders into Canada. Having outpaced its competitors in 2014 to become the fastest-growing premium skincare company in the U.S., according to a study by Euromonitor International, Rodan + Fields is looking to build momentum with its first market expansion into the rapidly growing Canadian skincare market. The San Francisco-based company has grown to more than $300 million in annual revenue since Dr. Katie Rodan and Dr. Kathy Fields, creators of the popular Proactiv skincare brand, launched the business in 2008.


AdvoCare Partners with MLS in Largest Sponsorship Yet

AdvoCare International is bolstering its sports performance products with the largest endorsement deal in the company’s history. Major League Soccer has selected the North Texas-based brand as its Official Sports Nutrition Partner. Kicking off this year, the partnership will run through the 2019 season.

Last fall, AdvoCare announced that it would extend its FC Dallas jersey sponsorship through 2020. As the league’s Official Sports Nutrition Partner, AdvoCare will have the opportunity to introduce all MLS clubs to its products. AdvoCare Rehydrate, a drink mix that promotes hydration, recovery and electrolyte balance, will be on the sidelines during league games as the Official Sports Drink of Major League Soccer. The company will work with individual clubs to utilize AdvoCare products in league locker rooms and team training.

March 01, 2015

Executive Announcements

Executive Announcements, March 2015


Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


Amway Plucks Asia Pacific CMO to Head up Global Marketing

Su Jung (SJ) BaeSu Jung (SJ) Bae
Candace MatthewsCandace Matthews
Anshu BudhrajaAnshu Budhraja

Amway has selected one of its Asia Pacific executives to   serve as the brand’s new Chief Marketing Officer. South Korea native Su Jung (SJ) Bae is transitioning from the role of Asia Pacific CMO to oversee Amway’s global brand, corporate social responsibility and public relations efforts. Former CMO Candace Matthews moved from the position to serve as Regional President for the Americas, with her focus on enabling success for business owners in this very important region for the company.

Bae’s Amway career began in Korea, where a recent independent survey found that 58 percent of households own at least one Amway product. She came on board at Amway Korea in 1995 to market the company’s Nutrilite supplements.

As Asia Pacific CMO, Bae led the Artistry brand sponsorship of the Busan International Film Festival and helped establish Amway’s Asia Beauty Innovation Center. Her team also worked with local companies to launch new technologies and product ideas across Amway’s global networks. Amway has built a strong presence in the Asia Pacific region, where direct selling is experiencing rapid growth. China, Japan and Korea trailed only the U.S. in 2013 retail sales, according to a World Federation of Direct Selling Associations report.

Heading up Amway’s global marketing efforts, Bae will oversee strategy and execution of category marketing for the company’s nutrition, beauty and home brands. In a statement on Amway’s blog, she expressed her intent to create “an environment where global marketing teams embrace the creative friction and trial and error needed for true innovation.”

In other company news, Amway has named Anshu Budhraja as General Manager, Amway India. Budhraja joined Amway in 1998 and served the company in various capacities across departments, including finance, IT and regional operations, before he was posted as Chief Operating Officer in 2013.


LifeVantage Establishes Office of the President

LifeVantage Corp. announced that President and CEO Douglas Robinson has resigned from the company, ending a tenure that began in 2011. The Salt Lake City-based brand reports that a search is currently underway for Robinson’s successor. In the interim, LifeVantage independent director Dave Manovich will serve as Executive Vice Chairman.

“On behalf of the entire company, I would like to thank Doug Robinson for his leadership and contributions to LifeVantage over the last five years,” said Gary Mauro, Chairman of the Board. “…We wish him the best in his future endeavors.”

Dave ManovichDave Manovich

As part of this change, LifeVantage has established an interim Office of the President to provide seamless leadership continuity and to direct the company’s daily operations. The office comprises Chief Science Officer, Shawn Talbott; Chief Sales Officer, David Phelps; Chief Financial Officer, David Colbert; and Chief Operating Officer, Bob Urban.

Manovich will oversee the Office of the President and manage the strategic and tactical direction of the company’s operations until a new CEO has been appointed.

“We are very pleased Dave Manovich has accepted the position of Executive Vice Chairman, and we believe this change will lead to greater success for our distributors and improved long-term growth for our shareholders,” said Mauro.

Manovich has been an investor in LifeVantage for over a decade and an independent member of LifeVantage’s Board of Directors since January 2012. Currently Managing Partner at private firm DNS Investments, he has filled a string of executive roles at tech companies such as Apple Inc., Fujitsu America Inc. and @Road Inc.


Avon Taps Seasoned Leader as New CFO

Five months after the resignation of its CFO, Avon Products Inc. has announced James S. Scully as the company’s new Executive Vice President and Chief Financial Officer.

Scully brings nine years of experience with specialty retailer J. Crew to lead all finance and IT functions at Avon, beginning no later than April 1. There he will work with leadership on improvements and strategy as the company continues its process of turnaround. Scully’s appointment follows recent changes to Avon’s management structure intended to support this multiyear plan. 

Having most recently led J. Crew’s international expansion efforts for nearly two years as Chief Operating Officer, Scully previously served as the company’s Executive Vice President and CFO as well as Chief Administrative Officer. Before that he had spent time at both Saks Inc. and Bank of America in financial strategy and corporate banking capacities.

“[Jim Scully’s] deep consumer expertise, track record of working in complex environments, and experience developing opportunities in international markets make him the ideal fit for Avon,” said Sheri McCoy, CEO of Avon. “He is a seasoned finance and operational leader with public company CFO experience and will play an integral role in driving sustainable and profitable growth at Avon.”

Avon’s previous CFO, Kimberly Ross, resigned from the beauty company last October to become CFO at oil field services company Baker Hughes Inc.


LuLu Avenue Parent Elects Goldman as Board Chairman


Charles & Colvard, Ltd., parent company of direct seller LuLu Avenue and the sole source of created moissanite, announced that its board of directors has elected Neal Goldman to serve as Executive Chairman of the Board. The announcement follows the decision by George R. Cattermole to step down as Chairman of the Board while remaining a board member. The board unanimously appointed Goldman to lead the company into its next phase of growth.

Neal Goldman became a director with Charles & Colvard in May 2014. His financial expertise and knowledge of the direct-to-consumer market span many years. He has served as President of Goldman Capital Management Inc., an investment advisory firm, since he founded the firm in 1985. Prior to that, Goldman was an analyst and portfolio manager at Shearson/American Express Inc.


Nature’s Sunshine Adds New Board Members

Rebecca Lee SteinfortRebecca Lee Steinfort
Hani Charles SoudahHani Charles Soudah

Rebecca Lee Steinfort has been appointed to the board of directors at natural health and wellness company Nature’s Sunshine Products Inc. Steinfort is a senior executive with extensive experience in strategy and marketing in consumer-product and health-care oriented businesses.

“We are excited to welcome Rebecca Lee Steinfort to our Board of Directors,” said Gregory L. Probert, Nature’s Sunshine’s Chairman and CEO. “Rebecca brings significant strategic and broad marketing experiences to Nature’s Sunshine that I am confident will be highly beneficial in our continuing efforts to transform the business into a multi-brand and multi-channel organization. We look forward to her guidance and strategic thinking as a member of the Board.”

Steinfort is currently the Chief Operating Officer of Paladina Health, a subsidiary of Davita Healthcare Partners Inc. Prior to Paladina Health, she was Chief Marketing Officer and Chief Strategy Officer at Davita Healthcare Partners Inc.

In other company news, Hani Charles Soudah, M.D., Ph.D., of the Washington University School of Medicine in St. Louis has joined the Medical and Scientific Advisory Board. Dr. Soudah is a doctor of internal medicine with a medical practice in St. Louis and is an expert in the field of obesity management. His service on the Advisory Board will include assisting with research activities, educating and training NSP and Synergy Worldwide distributors, and speaking at various company events.

Dr. Soudah currently serves as an Associate Professor of Clinical Medicine in the Department of Internal Medicine for Washington University School of Medicine and is the Visiting Associate Professor at Nanjing University Medical School.


Herbalife Creates Local Government Affairs Role


Marcus Reese has joined Global nutrition company Herbalife in the newly created role of Vice President, State and Local Government Affairs. Having spent more than 16 years in the public policy arena, he will manage the company’s relations with state and local thought leaders.

“Marcus is an important addition to the team as we continue to inform and educate key thought leaders about the positive impact Herbalife is having on communities across the nation,” said Alan Hoffman, Executive Vice President, Global Corporate Affairs. “I am pleased to welcome someone with Marcus’ knowledge and experience to Herbalife, and have no doubt he will have an immediate impact in this important area.”

Most recently Reese has served as Chief of Staff at Tusk Strategies, a public affairs consulting firm, where he managed state and local regulatory issues for corporate clients and issue advocacy organizations including Uber, AT&T and Wal-Mart.

Earlier in his career, Reese worked at global public relations firm Weber Shandwick, and later at crisis management and communications firm Smith & Co. where at both he provided legal and crisis communications counsel for clients. Reese has also served in various campaign and government roles for President George W. Bush; Staten Island District Attorney Dan Donovan; Lt. Governor Michael Steele and the Georgia State Legislature, among others.


Medifast Board Member Becomes an NACD Fellow

Barry B. BondroffBarry B. Bondroff

Medifast Inc., a U.S. manufacturer and provider of clinically proven weight-loss and healthy living products and programs, announced that Barry B. Bondroff, Lead Director on the Medifast Board of Directors, has become a National Association of Corporate Directors (NACD) Fellow. NACD is a membership organization focused on advancing exemplary board leadership, by identifying, interpreting, and providing insights and information to corporate board members.

As an NACD Fellow, Bondroff has demonstrated his knowledge of the leading trends and practices that define exemplary corporate governance today and has committed to developing professional insights through a sophisticated course of ongoing study.

A Director on Medifast’s Board since 2008, Bondroff also serves as a member of Medifast’s Audit Committee, Executive Committee, and Mergers & Acquisitions Committee. With over 40 years of accounting and financial experience, he is an Officer at Gorfine, Schiller and Gardyn P.A. accounting firm. 

“Barry’s leadership and business acumen have helped drive success at Medifast during his board tenure as Lead Director,” said Mike MacDonald, Chairman and CEO of Medifast. “As Medifast works to advance our strategic objectives and deliver strong shareholder returns, Barry provides exemplary guidance and direction.”


Mary Ann Luciano Joins Plexus Worldwide

Mary Ann LucianoMary Ann Luciano

Plexus Worldwide, a direct-marketing weight-loss and health-supplement seller, announced that Mary Ann Luciano will join the company as Vice President of Ambassador Education. In her new role, she will guide the education, recognition, culture and training of more than 200,000 Plexus Ambassadors from across the world and will help build sales training tools and personal development plans to support them as well.

“As Plexus continues its phenomenal growth, we’re very excited to add Mary Ann’s extensive network marketing sales and talent management experience to our team,” said Tarl Robinson, CEO of Plexus Worldwide. “Mary Ann will play a significant role as Plexus Worldwide continues to grow and expand.”

Highlights of Luciano’s previous direct selling experience include executive leadership in market expansion strategy and performance improvement guidance in existing markets, as well as the creation of a recruitment program to identify high potential candidates at leading undergraduate and graduate universities for roles in marketing, finance, and engineering.

Most recently, she led programs for talent management at technology distributor Avnet, in addition to leadership management, executive coaching and succession planning for Itochu International, one of the world’s largest global trading companies.


Submissions: Please submit news of executive promotions and hires at your company to be included in the Executive Announcements section of Direct Selling News.
» pr@directsellingnews.com

March 01, 2015

New Perspectives

The Rise of the Mission-Driven Marketplace

by Brian Knapp

Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


Nearly fifty years ago, a black-and-white television series called Star Trek aired for the first time on TV sets across America. Today, its iconic mission statement still resonates across the world:

“Space: the final frontier. These are the voyages of the starship Enterprise. Its five-year mission: to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.”

Today’s companies have adopted this spirit of exploration as a survival tool. With so many new companies on the horizon, and so much competition, you have to ask yourself: How can my company go where no one has gone before? What problem am I solving that no one else has? What is my mission, and why does it matter? 

In an effort to find a niche and attract more customers, businesses have melded ethical goals into their business strategy—and it’s worked. We walk an extra few blocks to buy fair trade coffee, we seek out shoes that support kids in the developing world, and we select cleaning and beauty products that are the epitome of eco-friendly. There is even a coveted recognition—the B Corps Certification—for companies whose mission is to benefit society as well as their shareholders.

This “doing good” trend is powered by another powerful trend: the rise of the Internet marketplace. Together, companies with a social mission that are powered by e-commerce are reshaping the way we consume goods and services. I believe we are witnessing the dawn of a new type of business: the mission-driven marketplace.

The Evolution of the Mission-driven Marketplace

There are mission-driven companies, and there are marketplaces; but only a small number of companies have actually combined their mission with a consumer-facing marketplace, resulting in a mission-driven marketplace.

I believe this term, “mission-driven marketplace” will become commonplace as we move toward an economy in which businesses give individuals the opportunity to make money in ways that matter to them, and impact their lives in a positive way.

The history of the mission-driven marketplace can be traced to the early days of the Internet, with Craigslist as the most notable example. Craigslist followed a horizontal model, meaning you could find listings for pretty much anything (and I do mean anything). However, the need for more specialized marketplaces became apparent, with sites like Zillow for real estate and Monster for job seekers emerging. These sites focused on one specific area, which led to better content, and more sophisticated, specific functionality.


I believe this term, “mission-driven marketplace” will become commonplace as we move toward an economy in which businesses give individuals the opportunity to make money in ways that matter to them.


More recently we’ve seen the rise of the “sharing economy.” Companies like AirBnB, Thumbtack, Poshmark and Etsy have created online marketplaces that have fundamentally transformed how people view online commerce. These companies have built businesses by creating connections between technology and the physical world. They focus on creating unique transactional experiences, rather than simply selling a service or product. For instance, AirBnB hosts are encouraged to act as tour guides for those staying with them. Etsy has people buying directly from the hands that made the product, while Poshmark has created an easy way for women to find clothes from other women’s closets, reducing consumption of new items. These companies all leverage social features to create a culture of human interaction and trust, and have experienced exponential growth and, in some cases, soaring valuations as a result.

Mission-driven marketplaces are the next step in this evolution. With these businesses, it’s about connecting people, not just the transactions. It’s about experiences—sometimes personally transformational ones—that improve the lives of people on both ends. Clearly, direct selling companies will play a major role in the mission-driven marketplace. Indeed, they always have.

Idealistic? Yes. But so was Gene Roddenberry’s idea for a TV show in the ‘60s that featured a multinational, multiracial cast to crew the U.S.S. Enterprise.


Already companies in the sharing economy leverage social features to create a culture of human interaction and trust, and have experienced exponential growth and, in some cases, soaring valuations as a result.


We are still in the early days of the mission-driven marketplace, but the opportunities are endless. Adoption of green energy is on the rise, and I predict there will be some innovative marketplace models to emerge out of that sector. The healthcare industry is also undergoing seismic changes, and marketplaces are already playing a role in bringing health coverage to millions more people. As mobile devices continue to bring billions of people online, including some of the world’s most marginalized populations, there too will be a wealth of possibilities.

The crew of the Enterprise succeeded because they had a clear, honest mission; it is my belief that companies who are creating mission-driven marketplaces will succeed for the same reason.

Preserving Memories for a New Generation

Legacy Republic is a new marketplace, launched in October 2014 by YesVideo, the largest home movies transfer service worldwide. Legacy Republic is aimed at preserving the 1.5 billion non-digital photo albums and videos deteriorating in basements and closets across the country. Through its team of consultants, Legacy Makers, the company educates friends, family, and community members about the importance of digitizing old media and helps them convert their family photos and videos into digital format. Its goal is to help rescue family photos and videos across America.

Legacy Republic provides the training and tools for Legacy Makers to educate others about the importance of media digitization, while enabling these micro-entrepreneurs to earn a profit in the process. It was a natural growth from YesVideo, enabling people to earn an income and preserve generations of history, and it is the first and only marketplace centered on the preservation of memories.

For 15 years, YesVideo has helped families protect and share generations of memories, and has done so for over 8 million families across the country.


Author NameBrian Knapp is Chief Revenue Officer and General Counsel of YesVideo and Head of Legacy Republic, its direct selling marketplace. Learn more at LegacyRepublic.com.

March 01, 2015

Cover Story

Getting Bang for the Buck in Sports Sponsorships

by Jeremy Gregg

Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.


Sports sponsorships have grown over the past few decades from a relatively unknown concept to one of the fastest-growing segments of the marketing industry. In fact, IEG—a global leader in sponsorship solutions with more than 30 years’ experience in the industry—forecasts that 2015 global sponsorship spending will surpass $57.5 billion.

Sports Marketing Fastest Growing

IEG reports that sports marketing is growing faster in North America than almost any other form of brand promotion. According to a January 2015 article from NY Sports Journalism on the just-released 2015 Sponsorship Report from IEG:

“Companies are expected to spend more on marketing and sponsorship deals this year than in the World Cup-Summer Olympics year of 2014. Sponsor spend by North American companies is projected to rise 4% in 2015 versus 2014. And even without such tent pole events as the Olympics, ad spend will grow 3.8% in 2015 driven by double-digit increases in digital spending, which should offset nominal growth for TV and out-of-home and declines in radio and print advertising.”

By contrast, other forms of marketing—including public relations, direct marketing and promotions—are only expected to grow 3.5 percent this year.

Herbalife signed an agreement in 2005 to serve as the official nutrition company of the LA Galaxy, a Major League Soccer (MLS) team based in California, for whom David Beckham famously played. And the company expanded that relationship in 2007 by becoming the official jersey and presenting sponsor. In exchange for cash to the team and products for the players, Herbalife now has its logo front and center on the chests of these globally recognized athletes.

In 2009, Amway announced a 10-year, $40 million naming rights agreement on Orlando, Florida’s brand-new city complex, which is also home to the Orlando Magic professional basketball team. This deal puts the Amway brand in front of millions of NBA fans around the world, in addition to the other types of events hosted at the arena. Clearly, companies are interested in making the sports marketing investment. But why?

The Pros’ Playbook

According to Kirk Wakefield, the author of Team Sports Marketing, there is a distinct difference between people who consider themselves loyal consumers of a product versus fans of a sports team. “Sports marketing is basic psychology,” he says. “We trust those we love; and if a company partners with someone or something that I already love, then I am more likely to trust them as well. Teams with jersey sponsors, for example, are generally very closely aligned with that sponsor, and fans can begin to feel the same way about the sponsor as they do the team.”

Sports marketing allows a brand to instantly tap into this community of consumers already deeply engaged with a complementary brand (i.e. what IEG refers to as the “exploitable commercial property”). For direct sellers, such relationships can be particularly effective ways to:

  • Secure a high level of consistent exposure, often at a lower cost than doing so via traditional advertising;
  • Build visibility among a devoted, and often rabid, fan base;
  • Leverage the aspirational value of this other brand to complement their overall messaging;
  • Most importantly, gain legitimacy and credibility by association with this trusted brand.

Ultimately, of course, what matters in marketing is no different than what matters in sports: delivering results that contribute to the overall success of the team. In the competition for customers, a growing number of direct
sellers are finding that sports sponsorships are part of a winning strategy.


A sports sponsorship recently brought a significant amount of exposure to the direct selling industry itself when AdvoCare announced that it was now the official nutrition sponsor for Major League Soccer (MLS).


Direct Sellers in the Game

In addition to the large companies such as Amway and Herbalife, smaller growing companies are also turning their attention to sport sponsorships. LifeVantage, a Utah-based dietary supplement company, has its name emblazoned on the jersey fronts of the Real Salt Lake Major League Soccer (MLS) team. While Salt Lake is one of the smallest markets in MLS, this particular deal is one of the league’s largest for a specific team, at $30 million over 10 years.

Another sports sponsorship recently brought a significant amount of exposure to the direct selling industry when AdvoCare announced that it was now the official nutrition sponsor for all of Major League Soccer (MLS). Beginning with the 2015 MLS season and extending through the 2019 season, this sponsorship is AdvoCare’s largest sports sponsorship and its first league sponsorship. As part of the agreement, AdvoCare Rehydrate will be the Official Sports Drink of Major League Soccer and will be featured on the sidelines of MLS games. The company first showed interest in MLS in 2012 when it became the first jersey sponsor for FC Dallas, and in 2014 AdvoCare extended that sponsorship through 2020.

AdvoCare also sponsors athletes in football, baseball/softball, basketball, bodybuilding, golf, hockey, lacrosse, motor sports and the Olympics with New Orleans quarterback Drew Brees as its national spokesperson.


“We are opportunistic buyers. If an athlete believes in our products, we want to work with them.”

—Brian McKinley, Vice President of Sports Marketing & Products, Herbalife


Richard Wright, President and CEO of AdvoCare, states: “This is an incredible opportunity to share the AdvoCare vision of physical wellness with dedicated soccer fans across the nation. Soccer is a rapidly growing sport in North America and our partnership with MLS makes perfect sense as we continue to grow together.”

Already AdvoCare’s announcement has created positive ripple effects for other direct sellers. According to Brian McKinley, Vice President of Sports Marketing & Products for Herbalife, “the biggest news in sports marketing is the partnership between AdvoCare and the MLS. This is getting the attention of the overall sports industry; they are more aware of direct selling companies and are getting better at talking to us.”

Herbalife began their sports marketing program 12 years ago by sponsoring a small triathlon in LA. According to McKinley, the program grew to three or four different sponsorships over the next two years. The success of those early ventures spurred additional investment, and today Herbalife invests over $30 million in 250 different sponsorships. The largest investments are in the LA Galaxy, and in Cristiano Ronaldo, a professional soccer player with the Spanish club Real Madrid and the captain of Portugal’s national team.

Amway CenterAmway’s brand is front and center on Orlando, Florida’s city complex, home to the NBA’s Orlando Magic.

For McKinley, who has worked for Herbalife since the beginning of their sports marketing program, these sponsorships present a strong opportunity for addressing the direct selling industry’s greatest marketing challenge.

“On one hand, since most of our revenue goes to distributors, traditional advertising is cost-prohibitive,” he says. “So, we rely on distributors to do most of our promotions. And yet, once you get to the size of Herbalife, the reality is that effectively branding a billion-dollar business can be a challenge without traditional advertising.”

By turning to sports marketing, companies like Herbalife, USANA, Amway, LifeVantage and 4Life have begun to address this challenge while establishing a level of credibility that may not have been possible through traditional advertising. Yet, this success has come with some important lessons learned. Direct sellers who are new to sports marketing may benefit from considering the following insights from these experts.

Why Target Sports Fans?

Kirk Wakefield, the author of Team Sports Marketing, describes how sports marketing seeks to create an “Affinity Transfer” among sports fans. He describes why sports fans are likely to support companies that sponsor their favorite teams and athletes:

A fan of a team, even a losing team, will likely:

  1. Identify with and follow the behavior of the team and individual players on that team, on and off the field;
  2. Purchase licensed merchandise promoting the team;
  3. Donate or pay for permanent seat-licenses (PSLs) in order to buy season tickets;
  4. Travel to see games of that team outside the local market;
  5. Support tax-based initiatives to pay for a new arena or stadium for the team;
  6. Be a supporter of the conference or league in which the team plays;
  7. Devote significant social time attending, watching and discussing the team with others devoted to the same or other teams.

Sports marketing, he explains at www.TeamSportsMarketing.com, seeks to transfer that level of passion to the sponsoring brands.

Mastering the Fundamentals

Sports marketing presents an exciting opportunity, but it is not a guaranteed recipe for success, according to Herbalife’s McKinley. His first piece of advice to companies considering sports marketing is to ensure that these sponsorships are a “core component of an overall marketing strategy,” and not a strategy in themselves.

The experts at IEG agree, determining that sponsorships work best when leveraged with other forms of marketing, particularly digital, social and mobile platforms. According to IEG, this allows sponsorships to become:

“…catalysts in driving interest, engagement and enthusiasm for their partners’ digital, social and mobile platforms through their nearly unparalleled ability to provide relevant content. As more marketers discover the ability to drive positive ROI by integrating digital and sponsorship efforts, the effect should be stronger growth for both segments.”

LA GalaxyThe MLS’s LA Galaxy with Herbalife as its jersey sponsor.

McKinley’s second piece of advice is to adopt very strict requirements for what kinds of properties a company will sponsor. At Herbalife, it all comes down to one core ideal: authenticity. “We are opportunistic buyers,” McKinley states. “If an athlete believes in our products, we want to work with them. If the product does not work for them or their sport, the answer is ‘no’… no matter how big a star they might be.”

For example, Cristiano Ronaldo was initially a user of Herbalife’s products. As someone whom McKinley believes “embodies nutrition at its best,” Ronaldo was a natural fit for being an Herbalife ambassador. After that, it was simply a matter of negotiating the sponsorship like any other business deal.

“Money is certainly a factor, along with what marketing rights you can get. But we treat sponsorships the same as any other part of our business: It’s about the relationship. We have to know who they are, and they have to know who we are,” says McKinley. “We use the LA Galaxy and Cristiano Ronaldo as global partnerships that work more like traditional marketing. But for others, such as an Indian cricket player whom we sponsor, the benefits are more aimed at meeting a regional need.”

The fundamental strategy does not change with the size of the relationship, McKinley continues. “What changes is how we leverage it.”

Zach LoydFC Dallas soccer player Zach Loyd endorses AdvoCare products

A similar approach drives the success of the USANA’s sports marketing efforts, says Dan Macuga, USANA Chief Communications Officer. These efforts began over a decade ago as “a natural partnership between USANA and several Olympic athletes [thanks to] the evolution of health and nutrition in high-profile sports.”

“We evaluate and pursue partnering with high-character individuals that also happen to be some of the most elite athletes in the world. Their dedicated commitment to living a healthy lifestyle and consuming only the highest-quality products truly reflects the same standards we espouse as a brand. These qualities make for a fantastic fit when it comes to being ambassadors that best represent USANA.”

Amway’s primary goal through its sports sponsorship programs is to build brand equity, especially with people under 35 years of age, says Jackie Nickel, Amway’s Chief Marking Officer for the Americas Region. “By associating with a sport that people feel passionate about,” she says, “we are able to engage our business owners and the public in a relevant way. But it doesn’t stop there. We’ve found sports marketing to be a terrific way to begin a conversation and connect with people.”

A Marathon, Not a Sprint

Even with all of the fundamentals in place, sports sponsorships are not a promise for overnight success. Many of the direct selling industry’s strongest sports sponsorship programs took years to develop.

Calvin Jolley has witnessed this first-hand over the past 10 years while working as Vice President of Communications at 4Life. The company launched Team4Life in 2006 and now has 23 athletes involved in the program. ”We have a rather unique model of athletic relationship development; every one of our sponsored athletes originally came to us from the field in one way or another,” he says. “Our athletes were first customers of the product who have some kind of a relationship with a distributor.”

Jolley cites the example of Manny Ramirez from the Denver Broncos. Ramirez first began using the product after his wife, Iris, fell in love with the products and signed up as a distributor. That information came back to Jolley, who then spent time cultivating the relationship with Ramirez.

The only consistent guarantee for 4Life’s sponsored athletes is that the company will put them on autoship for their products. The company then just asks them to do what they do best on the court or on the field.


“That [our sponsored athletes] are mostly product-sponsored is significant—it means these are not fiscal sponsorships. We provide them only with supplements and health products, and our athletes understand the value in that.”

—Dan Macuga, Chief Communications Officer, USANA


Scoring Major Points for Sponsors

Whether it is with one of their globally renowned soccer athletes or one of their more regionally recognized Russian players, Herbalife’s primary focus for its sports sponsorships remains the same: establishing credibility. “People trust Nike, Tylenol and Coke because they invest a half-billion dollars per year building trust. Direct selling companies can’t afford to do that,” McKinley states. He then outlines three critical goals that sponsorships can help direct selling companies to achieve:

  1. Establishing Credibility: Sponsorships are a stamp of approval from the sponsored team/athlete.
  2. Brand Awareness: Sponsorships soften the market for distributors and help them to attract customers.
  3. Tools for Distributors: Sponsorships provide high-impact marketing tools for distributors to build connections with customers (“unlike a 30-second spot on ESPN”).

“We are a person-to-person business with a high emphasis on training and nutrition expertise,” he continues. “These tools are crucial to that messaging.”

McKinley cites the LA Galaxy jersey sponsorship as a prime example of this. Not only are all of the LA Galaxy’s fans being turned into “walking billboards for our product,” but the jerseys are powerful tools to help Herbalife distributors build their own businesses. In fact, when the jerseys first became available, Herbalife’s own distributors purchased more than 60,000 of them. “The jersey says something different than other forms of Herbalife apparel. It is the embodiment of authenticity and credibility. It shows that the LA Galaxy chose us as much as we chose them,” states McKinley.

Verve LoungeVemma’s Verve! Energy Lounge™ at US Airways Center, home of the Suns.

At USANA, Macuga explains that they focus on the nature of their sponsorships to differentiate their sports marketing program. Macuga says that there are currently more than 700 “product-sponsored” Olympic and professional athletes that make up Team USANA. “That they are mostly product-sponsored is significant—it means these are not fiscal sponsorships. We provide them only with supplements and health products, and our athletes understand the value in that. Improving their health and performance is ultimately what the partnership is about.”

Macuga shares that USANA receives requests for product sponsorships every week from athletes all over the world. “Many of these athletes hear about USANA from their teammates or friends who have safely and effectively used our product. Because anti-doping regulations are so stringent, it’s important for athletes to only take supplements they know they can trust.”

“We’ve focused on gaining third-party credibility in every way we can. This makes us stand out,” Macuga explains. USANA then leverages its sports sponsorships to “prove our trustworthiness.”


“The main ROI is credibility from a third-party voice: people without the incentive of a paycheck. How can you place a figure on that? For supplement manufacturers like 4Life, athletes are the best way to do this.”

—Calvin Jolley, Vice President of Communications, 4Life


Maximizing the Investment

IEG reports that the nature of sports sponsorships is also changing. Gone is the transactional model of sponsorship, replaced by the partnership model. “A growing number of sponsors are looking to establish partnerships that create incremental value for both parties through efforts such as developing content, collaborating on activation and creating new products. Because of that, smaller properties that continue to rely on the one-dimensional and transactional model of sponsorship… will remain at a disadvantage.”

Herbalife has found a unique way to leverage their sports sponsorships: The company’s sponsored athletes serve as a combination of R&D team and focus group, representing Herbalife’s most valuable consumers. “Our sponsored athletes try many of our developing products and offer critical feedback,” McKinley shares. Based in large part on these relationships, Herbalife has now launched a sports skincare line that could better leverage their sponsorships. “The LA Galaxy is now one of our biggest skincare users.”

Verve LoungeTeam Herbalife takes on the 2014 Leadville Trail 100 Mountain Bike Race.

Sponsored athletes also play an important role in Herbalife’s training program. From attending major training events to hosting meet-and-greets with top distributors, Herbalife’s sponsored athletes make as much of an impact within the company as they do outside of it. “When world-class athletes are involved, you can just sense it at the events,” McKinley says.

Andy Sutherden, Global Head of the Sports Marketing+Sponsorship practice at Hill+Knowlton Strategies, writes that sports marketing is also blurring the lines between commercial sponsorship and CSR (Corporate Social Responsibility).“Nowadays, the two often unite. Western Union’s exclusive activation of its Europa League sponsorship through an educational cause initiative called PASS is just one case in point. Based on a further insight that 87% of people around the world believe companies should place as much importance on the ‘interest of society’ as on the ‘interest of their business,’ expect a similar pattern in 2015. Clients will place social purpose at the heart of their sponsorship/partnership strategy, and the year will see the maturing of sports’ ‘third sector.’ ”

This blended approach to sponsorships is embraced at 4Life, Jolley explains. He says that the company has found ways to leverage their sponsored athletes to complement their other third-party relationships. This includes industry partnerships as well as the UNPA (United Natural Products Alliance), the U.S. Chamber of Commerce, the Better Business Bureau, and academic associations that offer scientific validation. Integrating 4Life’s sponsorships into all of their work “establishes us as authentic and creates a sense of credibility.”

Examples of Sports Sponsorships by Direct Selling Companies

  • Herbalife – 250+ athletes, such as soccer superstar Cristiano Ronaldo, and teams ranging from baseball and rugby to cycling and soccer, including five-time MLS champions the LA Galaxy.
  • 4Life – 23 athletes on Team 4Life, including Manny Ramirez of the Denver Broncos.
  • USANA – 700+ affiliated athletes, including WTA, U.S. Speedskating Team and U.S. Ski & Snowboard Association.
  • Amway – Sponsor of the Amway Center, home to the NBA’s Orlando Magic, as well as college football’s Amway Coaches’ Poll powered by USA TODAY Sports.
  • AdvoCare – Official Sports Nutrition Sponsor of Major League Soccer and title sponsor of college football’s AdvoCare Texas Bowl, AdvoCare Texas Kickoff and AdvoCare Cowboys Classic. Sponsor of NASCAR’s No. 6 Ford piloted by Trevor Bayne.
  • LifeVantage – Jersey sponsor of Major League Soccer’s Real Salt Lake.
  • LegalShield – A sponsor of the Indianapolis 500 Bryan Herta Autosport and Bowen & Bowers Motorsports team.
  • Vemma – Official energy drink of the Phoenix Suns.
  • MonaVie – 19 endorsing athletes.
  • Shaklee – 53 Athletes on the Shaklee Pure Performance Team.

Determining the ROI

One of the major challenges with a sports marketing program is measuring the specific return on investment. Since the sponsorship creates a multi-faceted relationship, evaluating its true worth is hard to accomplish other than simply looking at the company’s overall progress during the time of the sponsorship. Nickel states that Amway tracks a number of metrics to measure program impacts, including traditional PR impressions and engagements. “But we also look at internal metrics,” she says, “such as how much program content is being used by the business owners.”

Still, measuring ROI, like PR itself, can be a tricky business. This is a frustration that Wakefield describes well in Team Sports Marketing:

Travis JaynerU.S. short track speedskater and bronze medalist Travis Jayner endorses USANA products

“For major sports and entertainment properties, sponsors spend millions of dollars to build brand equity. Yet, IEG tells us that 43% make no effort to determine if goals are met and another 39% spend one percent or less of the sponsorship budget to measure ROI/ROO. That leaves only 18% who might have a clue, or at least are trying to have a clue or two, whether or not the sponsorship investment is paying off. At the same time, sponsors count assistance in measuring ROI/ROO the No. 1 most valuable service that can be provided by properties.”

Jolley argues that, for 4Life, “the main ROI is credibility from a third-party voice: people without the incentive of a paycheck. How can you place a figure on that? What is the value of defending the industry’s trustworthiness and creating a sense of credibility in terms of the business opportunity? For supplement manufacturers like 4Life, athletes are the best way to do this.”

Similarly, Herbalife’s McKinley says that “sponsorships, and the sports industry overall, are not formulaic. It’s not one size fits all… yet in all of our sponsorships, we are focused on authenticity.” However, he states that one of the ways that he determines the success of sponsorships is through social media metrics that demonstrate whether members are actively engaging in the relationship.

“It’s never going to be traditional CPG marketing (Consumer Packaged Goods) in terms of numbers, but we know from the outset if a sponsorship will be successful,” says McKinley. While he does not cite specific numbers to any particular sponsorship, he states that “we’ve seen brand growth in each of the 12 years since launching our sports marketing program.”

Madison KeysMadison Keys of the Women’s Tennis Association is ranked No. 20 in the world. (USANA PHOTO)

Jolley agrees citing that sports marketing has helped 4Life to grow rapidly. “We have doubled in the last five years, from $150 million and No. 71 in the DSN Global 100 in June 2010 to $300 million and No. 41 in June 2014. While they certainly are not the only factor, sponsorships have played an important role in achieving that growth. And in 2015, we are positioned to grow to $320 million to $330 million.”

At Herbalife, there is not a specific part of the budget dedicated to sports sponsorships. McKinley explains that these costs are considered part of the advertising budget, all of which is included as part of the company’s cost of “equipping distributors.”

At USANA, Macuga states that the ROI is seen more from a global branding perspective. The athletes, he says are incredibly popular among the salesforce, providing fun and authentic stories that associates can share on social media. He says, “Our partnerships with these athletes and organizations also allow us to participate in some incredible events, such as the Olympics, and gain on-court/course branding seen by millions, on a global scale.”

For example, during the 2014 Winter Games in Sochi, nearly 200 USANA-sponsored athletes competed and recorded 30 podium appearances—13 gold, seven silver and 10 bronze. Macuga shares that if USANA were a country the company would have taken second place in the medal count right behind Russia.

The LifeVantage deal with the Real Salt Lake team creates high impact exposure as well, as the players appear on the field, and in appearances, including advertising, around the globe. LifeVantage’s name is associated quite intensely with the players and in prominent view on their chests. 


“Once you know what story you want to tell, it’s easy… You find the right athlete or team to help you tell it. The major pitfall is not knowing your story.”

—Brian McKinley


Are Sponsorships the Right Call?

McKinley suggests that there is a simple way to know whether or not launching a sports marketing program is a fit for your company. He says, “Once you know what story you want to tell, it’s easy… . You find the right athlete or team to help you tell it. The major pitfall is not knowing your story.”

Macuga suggests that sports marketing is the best fit for a “product-driven, science-based” company like USANA, since athletes can speak authentically about the quality of products. “They can say that they work, and they feel comfortable taking them. It’s a strong message to stand behind if you’re in direct selling; it makes your job that much easier.”Jolley states that “there is no magic bullet. But these relationships with athletes can play an integral role at establishing credibility with distributors, customers, and the general public.” The key is to anchor the sponsorship in an authentic relationship with the product first. Above all, always be looking for the story—the stories are out there.

March 01, 2015

Exclusive Interviews

Executive Connection with Randall White – Founder, President and CEO, Usborne Books & More


In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with Randall White, Founder, President and CEO of Usborne Books & More, about the difference between management and leadership, making bold decisions and staying true to a company’s vision.

DSN: What is the one thing you enjoy most about being the CEO of Usborne Books & More?

RW: Witnessing our sales consultants’ passion about literacy translate into having a successful business.

DSN: What has been your proudest accomplishment?

RW: Making a bold decision to discontinue selling to outlets that discounted our products and then watching our company respond with record sales.

DSN: What do you tell Usborne Books & More consultants to lead and inspire them?

RW: They can impact our nation’s literacy problem while building a successful business. Also, a message I always attempt to remind them of is that we want them to do this business for their family, not to their family.

DSN: If you could give a single bit of advice to the CEO of a young direct selling company that would help the company reach the 25-year mark, what would you say?

RW: Keep true to your vision and never waiver. And value your salesforce.

DSN: If you could relive one period of time—a year, a week, whatever—since you founded Usborne Books & More, what would it be? You could choose a great time to relive or a period where you’d change something.

RW: In looking back over 25 years, there have been many things I probably would like to have done differently. However, the obstacles and difficulties we overcame molded our philosophy and were instrumental in the success we are experiencing today.

DSN: Is there one basic principle that has governed your leadership at Usborne Books & More?

RW: Know the difference between management and leadership, and communicate. If you don’t believe the messenger, you won’t believe the message.

DSN: What do you see as the direct selling industry’s greatest challenge?

RW: I believe the greatest challenge is that the Internet has the potential to make every product a commodity and eliminate personal selling.

DSN: What’s on your bucket list?

RW: To continue to develop a strong team at the home office so we can maintain continuity and growth.

DSN: When you’re not at work, where are you most likely to be found?

RW: My life revolves around my family and Usborne Books & More. My family understands, so I am never “not at work.” I have been known to communicate with the field salesforce at 3 a.m. because they are the ones who have made this company. However, I do enjoy my summer lake house with the grandchildren making memories.

DSN: What is your long-term vision for Usborne Books & More?

RW: My long-term vision is to continue the current sales growth and reach the milestone of $100 million in annual sales.

February 27, 2015

World News

Oriflame Consolidates Russia Operations in New Production Plant

Oriflame Cosmetics S.A. has completed another step toward streamlining its Russia business with the inauguration of a new production facility in Noginsk. The Swedish beauty and hygiene products group sold its production site in Krasnogorsk to consolidate operations in the turbulent market. The new facility dovetails with Oriflame’s strategy to focus and simplify its business amid geopolitical tensions in Russia and Ukraine.

The $170-million complex, including production facilities, warehousing and a LEED-certified distribution center, enables Oriflame to cut down on lead times and prices in Russia, where it draws a third of its business. The company has scrambled to increase prices in the region, and it anticipates further increases this year as the devaluation of the ruble continues to impact its core business. Oriflame has also retooled its compensation plan and ramped up promotion of its skincare and wellness offerings, particularly the brand’s daily skincare regimen and products sets.

“We continue our ambition of providing the most attractive offer in the markets—both when it comes to our beauty offer and business opportunity offer,” said Johanna Palm, Oriflame’s Senior Director of Investor Relations & Finance Projects, of the company’s strategy in Russia and Ukraine. “The improvements we have made to our compensation plan have definitely strengthened our position in the region, and will constitute a competitive advantage given the current challenges.”

In the quarter ended Dec. 31, 2014, Oriflame’s adjusted operating profit totaled 29.8 million euros ($33.7 million). Adjusted operating margin fell to 8.4 percent from 12.6 percent, slightly above the forecast. For 2014, the company posted net sales of 1.27 billion euros ($1.41 billion), down 10 percent from 2013 and up 1 percent in local currency.

Oriflame is working to counter economic uncertainties by working closely with its consultants and leaders and maintaining a well-managed product portfolio, said Palm. “This, in combination with price increases and administrative and organizational efficiency measures, should help us manage the challenges we see in CIS and Europe while ensuring continued strong momentum in Latin America, Turkey, Africa and Asia.”

February 26, 2015

World News

China Gives Morinda the Green Light on Direct Selling

Morinda Inc. is the latest company to secure a direct selling license from China’s Ministry of Commerce. Government officials have issued just 48 licenses since the country lifted its direct-selling ban in 2005. Morinda plans to market its juice blends and TruAge nutrition products in the city of Chongqing, a hub of over 32 million people, as it awaits additional permits.

“We’ve spent several years and a lot of effort pursuing this license,” said Morinda President John Wadsworth. “This is an expression of our commitment to the future of Morinda.”

China is the industry’s fastest-growing market, accounting for $27.3 billion in 2013 retail sales. In the same year, only eight new companies received approval to launch direct selling operations. The Chinese government’s narrow regulations have posed challenges to many companies within the industry, including Amway, which obtained a new license in 2006 after modifying its business to accommodate the ban.

“The rules in China are still unique,” Amway President Doug DeVos wrote of reinventing Amway China in a piece for the Harvard Business Review. “The way we operate our business and compensate our salesforce there is very different from what we do in other parts of the world. But we’ve learned a lot, and our revised business model is working.”

Since launching in 2003, Morinda’s Chinese subsidiary, Tahitian Noni Beverages (China) Ltd., has established offices in nine cities across the country. The company also opened its own GMP (Good Manufacturing Practice) plant in Chongqing in July 2014.

February 25, 2015

World News

Fortune Ranks Tupperware among World’s Most Admired Companies

Photo: Flickr/PeacockModern


Tupperware Brands has once again landed on Fortune’s annual ranking of the World’s Most Admired Companies. The global brand has now spent eight consecutive years on the list, where it falls under the Home Equipment, Furnishings category.

To compile its report card on corporate reputation, Fortune ranks nine key attributes such as use of corporates assets, social responsibility and long-term investment value. Tupperware ranked highest in its category for global competitiveness, and second for innovation and use of corporate assets. The company markets its kitchenware, beauty and personal-care products through an independent salesforce of 2.9 million in nearly 100 countries.

“The strength of our mission and our people propels us as a company to continue our success,” Rick Goings, Chairman and CEO, said of Tupperware’s work to empower and support women. “Global competitiveness is one of the priorities of the business, along with the other categories the list is derived from, and we are honored to be ranked on the World’s Most Admired Companies list for the eighth year in a row.”

Tupperware’s efforts on behalf of women extend beyond promoting financial independence. As a natural extension of its business model, the brand also aims to impact lives through opportunity, support and relationships—a philosophy embodied in its Chain of Confidence program. Goings and his wife, Susan, Global Ambassador for the program, recently accepted the Sewall-Belmont House & Museum’s Voice for Women Award in recognition of their work. U.N. Women also tapped Goings to represent Tupperware on its Private Sector Leadership Advisory Council, an initiative focused on economic and political advancement for women.

February 20, 2015

U.S. News

President Michael Somoroff Steps down from Longaberger

President Michael Somoroff has exited the Longaberger Co. after six months with the CVSL-owned brand. Longaberger did not elaborate on the decision, nor whether it is looking to fill the position.

“Michael Somoroff is no longer in a management position at The Longaberger Company,” spokesman Russell Mack confirmed to DSN in an email. “The company has a fine team at the Home Office, with Tami Longaberger and a very experienced management group. We also have a wonderful and loyal group of sales field leaders, and we have a strong supporting team at CVSL. So the leadership of Longaberger is in good hands.”

Formerly based in New York, Somoroff is also a photographer and filmmaker whose work has appeared in magazines such as Vogue, Elle and Harper’s Bazaar, and in commercials for Olive Garden and Red Lobster restaurants. He first partnered with Longaberger last April to help the brand reinvent its annual catalog, which now features merchandise alongside stories of the brand and its people in a magazine format, titled Storybook.

The Newark, Ohio-based basketmaker has cycled through seven presidents in the past decade, amid several rounds of layoffs that have reduced the company to a fraction of its former size. Somoroff succeeded Mike Trempe, who left Longaberger last June after a 15-month stint as President and COO. The position had remained vacant in the three years leading up to Trempe’s hire.

Dallas-based CVSL Inc. acquired Longaberger in March 2013, setting in motion its strategy to build a family of micro-enterprise brands. With the addition of U.K.-based Kleeneze this month, CVSL’s growing portfolio now includes eight direct selling companies. For the nine months ended Sept. 30, 2014, the parent company reported revenue of $75.3 million, up 53 percent over the prior year period, and a loss of $15 million.

February 18, 2015

U.S. News

SimplyFun Taps Play Experts for Newly Formed Advisory Council

Educational board game developer SimplyFun Inc. is serious about play, as evidenced by the brand’s newly formed Play Advisory Council. SimplyFun has introduced Professor Emeritus Dr. Toni Linder and play expert Matt Brown as founding members of the council, alongside company President and CEO, Patty Pearcy, and Chairman of the Board, Alan Luce.

A specialist in early childhood development and early childhood special education, Dr. Linder has authored books on transdisciplinary play-based assessment (TPBA) and intervention (TPBI), the method she developed for identifying a child’s strengths and needs through play. While working at the Sewall Child Development Center in Denver, she also developed a corresponding preschool curriculum—Read, Play, and Learn!­­—based upon her research and consultation with teachers, students and specialists.

Brown is an industry veteran and consultant who has worked for companies like Scholastic, LeapFrog, Conteneo and Speck Design. He also sits on the PBS KIDS Next Generation Media Advisory Board. As a consultant, Brown has helped develop educational systems for kids, new leadership approaches for companies, and collaborative cultures within communities and organizations.

The Play Advisory Council formed as a result of SimplyFun’s ongoing partnership with Brown and Linder, who have helped identify key learning and skill elements in the brand’s award-winning games. As members of the council, they will contribute to SimplyFun’s strategic direction and future offerings.

February 17, 2015

U.S. News

Endurance Athlete Endorses Morinda Products

As the youngest person ever to start and finish the seven-day TransRockies Challenge race—at age 16—cross-country cyclist Josh Brown is no stranger to sports performance products. The professional mountain biker has found a favorite in Morinda’s TruAge Rapid Fuel, and will don a Rapid Fuel cycling jersey as the company’s newest spokesperson.

Putting the protein and electrolyte supplement to the test, Brown found that Rapid Fuel enabled him to “train harder, longer.” The product contains a high-quality protein that assists in building lean muscle. Rapid Fuel earned its name from its patent-pending delivery system, developed by university scientists to transport protein more quickly than other means.

“Normally, with the protein and such in any other drink I would feel bloated, get side aches or simply feel sick, but it was as if I was only drinking a pure electrolyte drink,” Brown said of his experience with Rapid Fuel. “I’ve also been able to reduce my intake of solid foods because of the high-quality protein that Rapid Fuel contains.”

Brown, a 23-year-old Utah native, competed in his first mountain bike race at age 9. The Utah State University student has since claimed 11th place out of 98 racers in the USA Cycling Collegiate Nationals, third in the USA Cycling Marathon Nationals, and second in the Pierre’s Hole 50-mile competition, among other notable finishes.

February 16, 2015

U.S. News

Mary Kay Renews Sponsorship of Dating Abuse Helpline

Pictured left to right: Crayton Webb, Vice President Corporate Communications and Corporate Social Responsibility for Mary Kay Inc., and Katie Ray-Jones, CEO for the National Domestic Violence Hotline. (PRNewsFoto/Mary Kay)


At Mary Kay, empowering women is about much more than lipstick and pink Cadillacs. Through its Don’t Look Away initiative, the global cosmetics brand has become a strong advocate for victims of domestic violence, including the one in three teens who experience dating abuse. Following a three-year partnership with text-for-help service loveisrespect, Mary Kay has announced plans to sponsor the helpline for an additional six years.

Break the Cycle and the National Dating Abuse Helpline launched loveisrespect.org as a tool for young people, with extensive information regarding dating abuse, as well as chat, text and phone crisis services. Since Mary Kay signed on as lead sponsor in 2012, the number of communications received over the helpline has increased by 48 percent. In 2014 alone, loveisrespect responded to nearly 56,000 texts, online chats and phone calls from across the nation.

“Mary Kay has long been a leader in working to end dating abuse in our communities, and we are thrilled about the continuation of our partnership,” Katie Ray-Jones, CEO for the National Domestic Violence Hotline, shared in the company’s statement. “This gift will help provide critical resources to teens and young adults and ensure that someone is always available when a young person is ready to reach out for help.”

Mary Kay’s ongoing partnership with loveisrespect will include an additional $1.25 million grant distributed over the next three years. The organizations have also announced plans to continue working with the national headquarters of Alpha Chi Omega, providing healthy relationship education and tools to the sorority’s collegiate chapters nationwide.

February 13, 2015

World News

Mannatech Secures Its 100th Global Patent

This week Mannatech is celebrating a major feat of research and development. The nutrition company has received its 100th patent, issued in Korea for its PhytoMatrix dietary supplement formulation.

While industry giants such as Amway and Mary Kay—with more than 1,100 and 800 patents, respectively—have built up large patent portfolios, Mannatech is an aberration among mid-sized companies both in direct selling and in the nutritional supplement industry. Averaging nearly five patent awards per year, Mannatech has outpaced many larger, older brands.

Mannatech guards its core technology and formulations to keep its products from becoming “mere commodities” in the market, says Dr. Rob Sinnott, CEO and Chief Science Officer. “We believe this approach helps our Associates to build a successful business in major global markets around the world.”

Mannatech’s comprehensive quality assurance program complies with the U.S. Food and Drug Administration’s current Good Manufacturing Practices. Many of the company’s products have also attained third-party certification through NSF International, which imposes rigorous testing and compliance standards. In addition to its PhytoMatrix product, Mannatech has patented technology pertaining to its Ambrotose, Ambrotose AO and GI-ProBalance formulations.

February 12, 2015

U.S. News

Avon Losses Widen as Quarterly Earnings Drop

An increasingly strong dollar weakened fourth quarter sales at Avon Products Inc., and the beauty company expects to feel continued negative effects in 2015. On Thursday the global brand projected that 2015 revenue will decline by 12 percentage points due to currency rates.

Fourth quarter revenue decreased 12 percent to $2.34 billion; however, Avon reported modest 5 percent growth in constant dollars. Quarterly volume fell 3 percent, while the company’s average order increased 9 percent. Active representatives were down 4 percent.

Quarterly sales fell 14 percent in the Beauty category, with a 5 percent increase in constant dollars. Fashion & Home sales fell 13 percent and rose 1 percent in constant dollars.

North America continues to pose the greatest challenge for Avon. The New York-based company saw regional sales fall 12 percent in the quarter and 17 percent for the full year. Avon posted global revenue of $8.85 billion for 2014, an 11 percent decrease versus the prior year, or relatively unchanged in constant dollars. The company reported a net loss of $331 million, or 75 cents a share, broadening its $69 million loss in 2013. Excluding one-time costs, operating profit totaled $734 million.

“While progress against our financial goals in 2014 was slower than I would have liked, I am pleased with the sequential improvements we made in several key markets and categories in the second half of the year,” said CEO Sheri McCoy. “We have stronger management teams across our key markets and better discipline in executing consistently against Avon’s core processes.”

The company also reported declining sales outside the U.S., where it generates 88 percent of its sales. Revenue fell 7 percent in both EMEA (Europe, Middle East & Africa) and Asia Pacific. Latin America, Avon’s most profitable market, posted revenue of $4.24 billion for the year, a 12 percent decrease versus 2013.

The company says that it is working to mitigate the impact of foreign currency rates. In the meantime Avon has announced plans to pull out of Jamaica and other Caribbean islands, the Jamaica Observer reports. A Jan. 29 email from Pablo Muñoz, President of Avon North America, informed distributors that, effective Monday, they will no longer be able to place orders to the company. Avon’s regional managers were not available to provide comment on the contents of the email.

February 11, 2015

U.S. News

Fourth Quarter Results Show Sustained Growth at Primerica

Strong sales of investment and savings products contributed to a solid fourth quarter at Primerica Inc. (PRI—NYSE). This week the financial services provider posted quarterly revenue of $345.4 million, up 9 percent versus the prior-year period.

Fourth quarter earnings were 84 cents per share, narrowly missing the Zacks Investment Research consensus estimate of 85 cents. The company reported record annual sales of its investment and savings offerings, which increased 14 percent in the fourth quarter to close out the year at $5.68 billion. The quarter also yielded a 13 percent increase in new representatives, primarily due to improved incentive programs and messaging.

The Duluth, Georgia-based company logged another year of growth in 2014, generating revenue of $1.34 billion, a 9 percent year-over-year increase. Net income totaled $182.8 million. Primerica attributes the strong performance to growth in its Term Life net premiums as well as the aforementioned investment and savings category.

“Our full year 2014 results were marked by solid performance across segments including 11 percent growth in Term Life net premiums, 9 percent growth in ISP sales and an 8 percent increase in ending client asset values, while the size of the life insurance licensed sales force grew 3 percent,” said Rick Williams, Chairman of the Board and Co-CEO. “John Addison and I believe the positive 2014 results make this the perfect time for a leadership transition and are confident that [incoming CEO] Glenn Williams will take the company to the next level.”

Primerica’s board of directors has also announced an increased quarterly dividend of 16 cents per share for the fourth quarter of 2014. The company will pay out the dividend on March 16, 2015 to stockholders of record as of Feb. 20, 2015.

February 11, 2015

U.S. News

USANA Sees Sales Surge in Fourth Quarter

Strong salesforce incentives proved to be a significant contributor to USANA’s (USNA—NYSE) positive results for fourth quarter 2014, not only in customer sales but also associate growth. USANA’s revenue was up 22.3 percent at $227.9 million for the quarter, while earnings were $21.3 million, or $1.65 per share, an increase of 17.0 percent, though lower than the Capital IQ Consensus Estimate of $1.92.

Sales incentives introduced in the quarter drove the number of active Associates up 31.7 percent, particularly in the company’s Asia Pacific region, which contributed to a sales surge of 34.1 percent to $163.3 million in the region, compared with $121.8 million for the fourth quarter of the prior year. Net sales also increased by 25.4 percent on a sequential quarter basis.

Full-year results included a profit of $76.6 million, or $5.60 per share, with revenue of $790.5 million, compared with $718.2 million the previous year.

Net earnings for 2014 decreased by 3.0 percent to $76.6 million, compared with $79.0 million in 2013, due primarily to the pricing and compensation plan changes implemented during the third quarter of 2013. Earnings per share for the year increased by 0.7 percent to $5.60, compared with $5.56 in the prior year.

“2014 was another exceptional year for USANA,” said Kevin Guest, USANA’s President. “Our vision as a Company continues to center on improving the overall health and nutrition of individuals and families around the world through our world-class product offering. To further this vision in 2015, we will continue to execute our overall strategy, which focuses on promoting customer loyalty, enjoyment and success with USANA.”

USANA’s full-year outlook for 2015 includes revenue in the range of $850 million to $870 million and earnings between $6.40 to $6.70 per share.

February 10, 2015

World News

4Life India Moves into New Mumbai Headquarters

Pictured: 4Life India leaders light a traditional Indian lamp to inaugurate the new office.


4Life recently celebrated a milestone in India, where the company hosted employees and top leaders at the grand opening of its new office in Mumbai. The facility will serve as the new headquarters of 4Life India, which has operated from Mumbai, the capital city of the state of Maharashtra, since the market’s launch in 2008.

The Salt Lake City-based company has also announced an expansion of its Surabaya, Indonesia office. Like most direct selling companies, 4Life designs its offices with the independent distributor in mind. The Mumbai headquarters features meeting rooms for distributor training, a sales counter, and large office space for operations, marketing and distributor services.

“Our office includes a beautiful distributor area with ample space for distributors to interact with their prospects and share the message of 4Life,” said Manoj Shirodkar, 4Life India General Manager. “The look of the office is full of positive energy and represents the 4Life philosophy of Together, Building People.”

India is one of direct selling’s billion dollar markets, and while the regulatory atmosphere has posed challenges to many companies, industry sales show no signs of slowing. Retail sales topped $1.2 billion in 2013, an 11.7 percent increase over the prior year. India ranked sixth—behind China, Argentina, Venezuela, Indonesia and the Philippines—in terms of sales percentage growth.

February 09, 2015

World News

Rodan + Fields Enters Canada’s Growing Skincare Market

After seven years of business, Rodan + Fields is venturing beyond U.S. borders into Canada. The brand outpaced its competitors in 2014 to become the fastest-growing premium skincare company in the U.S., according to a study by Euromonitor International. Rodan + Fields is looking to build momentum with its first market expansion into the rapidly growing Canadian skincare market.

Rodan + Fields has grown to more than $300 million in annual revenue since Dr. Katie Rodan and Dr. Kathy Fields, creators of the popular Proactiv skincare brand, launched the company in 2008. The company’s targeted skincare regimens have driven high double-digit compound annual growth.

The Canadian launch is the first step toward further global expansion for Rodan + Fields, says President and CEO Lori Bush. “Our Canadian initiative not only addresses the demand for our products from our neighbors to the north, it validates the foundational infrastructure that will enable us to effectively extend our business model beyond North American borders.”

Rodan + Fields Canada is offering select skincare regimens, as well as its REDEFINE AMP MD and Macro Exfoliator tools, featuring the brand’s patent-pending technology. The company’s formulations, specifically designed to treat sun damaged and aging skin, target a growing segment of Canadian consumers. Euromonitor International reports that in 2012 sales of anti-aging products increased by 9 percent, faster than any other segment of the country’s skincare market.

 

February 06, 2015

U.S. News

UK-based Kleeneze to Join CVSL’s Family of Companies

CVSL Inc. is adding another direct seller to its line-up of brands. The Dallas-based company has signed an agreement to purchase health and household company Kleeneze from Findel PLC of the United Kingdom for $5.5 million.

Upon completion of the acquisition, CVSL will own one of the U.K.’s longest-operating and best-known direct selling businesses, which is also a founding member of the U.K. Direct Selling Association. Established in 1923, Kleeneze originally sold products through catalog, and now it offers household cleaning, health and beauty, home, and outdoor products through a network of more than 7,000 independent representatives in the U.K. and Ireland.

“Kleeneze has an extensive product line, a nearly century-long heritage, a well-known brand and a robust presence throughout the U.K. We believe Kleeneze will be an outstanding addition to our CVSL family of companies,” said John Rochon Jr., CVSL’s Vice Chairman and head of its investment committee. “Kleeneze gives CVSL a very significant presence in the U.K. and represents an important step forward in CVSL’s international expansion.”

By joining the CVSL family of companies, Kleeneze will retain its own separate brand identity, salesforce and compensation plan but operate under the support of a growing portfolio of companies that include The Longaberger Company, Your Inspiration At Home, Agel Enterprises and Uppercase Living.

“Becoming part of the CVSL family of companies will open an important and exciting new chapter in the long, distinguished history of Kleeneze,” said Lisa Burke, Managing Director of Kleeneze. “This will allow us to be part of a global, public company, while at the same time maintaining our own unique identity. We view this as the best of all worlds.”

Closing of the agreement is anticipated by the end of First Quarter 2015.

February 06, 2015

U.S. News

Financial Results a Mixed Bag for Nu Skin

Nu Skin’s (NUS—NYSE) regulatory review earlier this year in Greater China has had a significant impact on the company’s 2014 fourth-quarter and year-end results that posted Thursday. In response to the revenue drop in the company’s largest market to $213 million in Q4 from $482 million in the prior-year period, Nu Skin’s overall profit fell almost 63 percent for the quarter to $46.5 million, or 77 cents per share.

Despite the year-long decline in the region, according to President and CEO Truman Hunt, revenue began to stabilize there earlier in the year and has continued. Results were also negatively impacted by the strengthening of the U.S. dollar bringing revenue down by more than $100 million in 2014, and by $24 million consecutively from the third to the fourth quarter.

“Our business performed as we expected for the quarter, and we look forward to a solid 2015,” said Hunt. “…Despite the 2014 revenue decline, our three-year compounded annual revenue growth rate was 14 percent, reflecting longer-term business improvement.”

Total revenue for the quarter was $609.6 million, at the high end of the company’s guidance, compared to $1.06 billion in the prior-year period, but Hunt references the $550 million TR90 launch, the company’s largest product introduction, in the second half of 2013 for the uneven year-over-year comparison.

Nu Skin reported profit of $189.2 million, or $3.11 per share, for the year with revenue of $2.57 billion, compared to $3.18 billion the previous year.

The company’s outlook includes revenue in the range of $530 million to $550 million for the quarter, and full-year earnings of $3.80 to $4.00 per share, with revenue ranging from $2.5 billion to $2.56 billion.

The company announced an increase of its the quarterly cash dividend to 35 cents from the previous dividend of 34.5 cents per share, payable on March 18, 2015.

February 05, 2015

U.S. News

LifeVantage’s Flat Sales a Contributor to Management Change

Lagging sales in Japan continue to handicap quarterly results for LifeVantage. On Wednesday the wellness company reported second quarter revenue of $48 million, down 8 percent over the prior year period. Outside the Japan market, LifeVantage saw a 1.6 increase over 2013 revenue.

The report comes two days after the resignation of LifeVantage President and CEO Doug Robinson, who led the company for nearly four years. Independent director Dave Manovich will lead the company as Executive Vice Chairman until the board names Robinson’s successor. Manovich, currently Managing Partner at private firm DNS Investments, has filled a string of executive roles at tech companies such as Apple Inc., Fujitsu America Inc. and @Road Inc.

“The board believes this change in our management is necessary as our growth has reached a plateau,” Gary Mauro, Chairman of the Board, told investors during the company’s earnings call. ”The company is not progressing in line with our business model of a growth-oriented, science-based network marketing company.”

In 2014, LifeVantage diversified its business with the AXIO line of healthy energy drinks and TrueScience skincare products. The company is looking to build momentum around its newest offerings, while also doubling down on its efforts to revive sales in Japan. LifeVantage has brought on both a Managing Director and Vice President of Marketing and Sales in Japan to strengthen the country’s executive leadership team.

February 05, 2015

World News

Amway Plucks Asia Pacific CMO to Head up Global Marketing

Amway has selected one of its Asia Pacific executives to serve as the brand’s new Chief Marketing Officer. South Korea native Su Jung (SJ) Bae is transitioning from the role of Asia Pacific CMO to oversee Amway’s global brand, corporate social responsibility and public relations efforts. Former CMO Candace Matthews vacated the position to serve as Amway’s Regional President for the Americas.

Bae’s Amway career began in Korea, where a recent independent survey found that 58 percent of households own at least one Amway product. She came on board at Amway Korea in 1995 to market the company’s Nutrilite supplements.

As Asia Pacific CMO, Bae led the Artistry brand sponsorship of the Busan International Film Festival and helped establish Amway’s Asia Beauty Innovation Center. Her team also worked with local companies to launch new technologies and product ideas across Amway’s global networks. Amway has built a strong presence in the Asia Pacific region, where direct selling is experiencing rapid growth. China, Japan and Korea trailed only the U.S. in 2013 retail sales, according to a World Federation of Direct Selling Associations report.

Heading up Amway’s global marketing efforts, Bae will oversee strategy and execution of category marketing for the company’s nutrition, beauty and home brands. In a statement on Amway’s blog, she expressed her intent to create “an environment where global marketing teams embrace the creative friction and trial and error needed for true innovation.”

In other company news, Amway announced Wednesday that 2014 sales dipped to $10.8 billion, down 8 percent from the company’s record in 2013. Though it does not release sales figures by country, Amway cited foreign currency fluctuations and lower revenue in China. The company noted strong growth in neighboring South Korea and Taiwan, as well as several of its South American markets.

“Looking ahead to 2015 and beyond, we are optimistic and feel we are well positioned for growth,” Amway President Doug DeVos shared in a statement. “We will be opening five new manufacturing facilities and many new Amway Experience Centers to support our ABOs, and improving virtual experiences online. Additionally, attitudes toward, and interest in, entrepreneurship remain at all-time highs.”

February 04, 2015

U.S. News

Direct Selling News, SUCCESS Partners Plan Headquarters Move

Direct Selling News will move into a new headquarters later this year, shifting from its long-time home in Lake Dallas about 20 miles east to Plano, Texas.

The move will put DSN back under the same roof as its parent company, SUCCESS Partners, the leading producer of marketing tools, videos and personal development materials in the direct sales industry as well as the publisher of SUCCESS magazine and Success from Home. The company’s warehouse, manufacturing and fulfillment operations will remain at SUCCESS Partners’ Lake Dallas facility. In all, about 150 employees will make the move.

“We are thrilled to be moving into this new world-class home that will better serve us and our partners in the direct sales industry as we continue to expand and build a platform for the future,” said SUCCESS Partners Founder and CEO Stuart Johnson.

In January, SUCCESS Partners purchased a two-story, 80,000-square-foot building along a portion of the Dallas North Tollway that is home to such notable corporate offices as Dr Pepper/Snapple, Frito Lay, JC Penney, FedEx, Toyota, Hewlett-Packard, Intuit and USAA. Architectural firm Corgan Associates Inc. is designing the renovation, with work expected to be completed in time for a late-summer move. Plans call for an open, inviting atmosphere designed to support creativity and teamwork.

“As Direct Selling News moves into its second decade, the new facility will provide tremendous support for continued print and digital expansion,” said DSN General Manager Lauren Lawley Head. “This is an exciting opportunity to foster the growth of both the publication and of each of our valuable team members.”

SUCCESS Partners also sees the building and location as the perfect home for fostering its growth in the digital technology space while maintaining its roots in the physical creative and publishing world. “Our facility, vision and upcoming refurbishment activities will allow us to provide a highly collaborative, productive and healthy work environment for our team of professionals,” said COO Mark Layton. “This will give us a much-improved location and facility foundation to compete for the talented professionals we need to support our exciting growth plans.”

 

February 03, 2015

U.S. News

President and CEO Doug Robinson Exits LifeVantage, No Successor Named

LifeVantage Corp. announced Monday that President and CEO Douglas Robinson has resigned from the company, ending a tenure that began in 2011. The Salt Lake City-based brand reports that a search is currently underway for Robinson’s successor. In the interim, LifeVantage independent director Dave Manovich will serve as Executive Vice Chairman.

“On behalf of the entire company, I would like to thank Doug Robinson for his leadership and contributions to LifeVantage over the last five years,” said Gary Mauro, Chairman of the Board. “We appreciate his hard work and dedication to growing our company’s footprint, ensuring our transition from retail to network marketing, positioning our distributors for the next phase of growth and strengthening our product line. We wish him the best in his future endeavors.”

The announcement follows a period of steady growth for the company. For its fiscal year ended Sept. 10, 2014, LifeVantage reported revenue of $214.0 million, up 2.8 percent over the prior year. In the Americas, sales increased 6.1 percent over 2013. LifeVantage operates in seven countries, with Asia Pacific generating its strongest business outside the U.S. In December, the company completed a new Hong Kong office to support its growth in the region. LifeVantage will announce its second quarter results on Wednesday.

LifeVantage has established an interim Office of the President to direct the company’s daily operations. The office comprises Chief Science Officer, Shawn Talbott; Chief Sales Officer, David Phelps; Chief Financial Officer, David Colbert; and Chief Operating Officer, Bob Urban.

February 03, 2015

U.S. News

It Works! Founders Donate $3 Million to Michigan State Athletics

Photo: An artist’s rendering of planned updates to MSU’s Alfred Berkowitz Basketball Complex.


It Works! may have relocated its corporate headquarters from Michigan to Florida, but Founders Mark and Cindy Pentecost are still Spartans fans. Michigan State University has announced that a $3 million gift from the couple will fund improvements to its men’s basketball program.

The donation contributes to MSU’s ongoing Empower Extraordinary campaign, which launched publicly in October 2014. Set to conclude in 2018, the campaign aims to raise $1.5 billion for the university. The Pentecosts support Empower Extraordinary alongside more than 30 other leaders and volunteers on the Athletic Director’s Campaign Leadership Council.

Mark Pentecost, It Works! President and CEO, grew up among Spartans fans in MSU’s hometown of East Lansing. As a former basketball coach, he has also witnessed firsthand how athletics can impact an individual’s life. The Pentecosts’ gift will help MSU extend that impact with updates to the men’s basketball offices and practice facilities at its Alfred Berkowitz Basketball Complex. The donation also establishes an endowment for further facility improvements in the future.

“Prior to entering the direct selling industry, I was a teacher and high school basketball coach trying to help kids accomplish their goals. I still feel like I get to be a coach every day, but now on a larger scale with thousands of It Works! team members around the world,” Mark Pentecost told DSN. “Giving back to the student athletes at MSU is something we’ve always wanted to do, and we hope it’ll help them continue to perform at the highest level and reach their dreams.”

February 02, 2015

Exclusive Interviews

Executive Connection with Erik Johnson, Chairman and CEO, Hy Cite


Erik JohnsonIn this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with Erik Johnson, Chairman and CEO of Hy Cite, about leading his company as the second generation, recognizing people as his greatest asset and welcoming change.

DSN: What is the one thing you enjoy most about being the CEO of Hy Cite?

EJ: The wonderful relationships I have been able to develop with our distributors.

DSN: What has been your proudest accomplishment?

EJ: Taking over a family-run business and successfully moving that business forward as a second- generation family leader. Often the second generation doesn’t succeed. It doesn’t have the same view, knowledge, or respect for the business, and the statistics for their success aren’t very good. My brother also works in Hy Cite, and we are very proud of continuing the family’s success.

DSN: What do you tell Hy Cite/Royal Prestige distributors to lead and inspire them?

EJ: The main thing we talk about is that they have a real business opportunity to change their family’s and their children’s lifestyles. Success is in their hands. If they want it, their work effort and knowledge will bring them success. Their future depends on their motivation and their work ethic. They can be as successful as they want to be with Royal Prestige.

DSN: If you could give a single bit of advice to the CEO of a young direct selling company that would help the company reach the 55-year mark, what would you say?

EJ: Invest in your people, both within the company and in the field. Your people are your greatest asset.

DSN: If you could relive one period of time—a year, a week, whatever—since you’ve been working full time at Hy Cite, what would it be? You could choose a great time to relive or a period where you’d change something.

EJ: I would relive the years right after my father’s retirement. They were wonderful times of acceptance and success. Those early years working with the mature markets and starting up in Mexico as a new territory—those were great years. I like change and new things. I had a blank canvas. It was a great time in my life.

DSN: Is there one basic principle that has governed your leadership at Hy Cite?

EJ: Your distributors’ successes are your success. When they fail we all fail. Once distributors are with us three or four years, they don’t leave.

DSN: What do you see as the direct selling industry’s greatest challenge?

EJ: Attracting the new generation of direct sellers. Our challenge is always recruiting new talent to continue our growth.

DSN: When you’re not at work, where are you most likely to be found?

EJ: At home with my family. I’m very focused on work and family. Both of them bring me great joy.

DSN: What is your long-term vision for Hy Cite?

EJ: We have a vision to reach $500 million in retail business.

February 01, 2015

Executive Announcements

Executive Announcements, February 2015


Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


Primerica Leadership Shifts to Next Generation

Glenn Williams, currently Primerica’s President, was recently named the company’s new CEO as part of Primerica’s management succession plan. With this appointment, Williams will take on the role at this time split between Co-CEOs Rick Williams and John Addison.

With Williams’ promotion, effective April 2015, the longtime Primerica leaders will remain members of the board, holding non-executive positions.

DSN spoke with Glenn Williams and John Addison to discuss the succession process, the legacy of the company and its future.

John Addison

DSN: How did company leadership choose Glenn Williams as successor?

Addison: Glenn has served as Rick’s and my “right-hand man” for the past 15 years, and served as President for 10 of those years. He grew up in our company and understands our business as well as anyone I can think of. Over the years, we have developed a unique culture at Primerica, and one key aspect of that is developing the next generation of strong leaders across the company. I’ve often said that there’s no success without successors, and Glenn’s career path demonstrates that our program works. Glenn has all of the skills necessary to be successful as our next CEO: great leadership ability, impeccable integrity, and he knows and loves Primerica. He’s the ideal leader to take over at this point in our company’s history.

John AddisonJohn Addison
Rick WilliamsRick Williams
Glenn WilliamsGlenn Williams

DSN: What kind of legacy do you feel you will leave behind?

Addison: Without a doubt, the thing I’m most proud of is how we responded when the country’s recent financial crisis occurred. At that time, Primerica was a part of Citigroup, which was at the epicenter of the crisis. By fighting for our business and fighting for the thousands of family businesses that comprise Primerica, we were able to separate our company from Citi in a healthy, positive way. As a result, we’re able to give thousands of entrepreneurs the chance to build a “company within a company,” and create a business that will last for generations and make a tremendous impact on the lives of people throughout North America.

Glenn Williams

DSN: What are your goals as CEO?

Williams: I’m fortunate to take over the reins when the company’s in outstanding condition. The strategic direction set by John and Rick has positioned us for continued growth, and we’re riding a strong wave of momentum right now. My goal is for us to capitalize on that momentum and accelerate our success.

There are several ways we will accelerate the pace of positive change. Most importantly, we can continue to enhance the Primerica opportunity for our representatives by continuing to improve our incentive programs and improve our salesforce’s cash flow. We can accelerate our success by enhancing our award-winning technological offerings, which enable our representatives to be more effective in growing their businesses and serving their clients. And, we’re going to focus more of our attention on the millennial market. From the research I’ve seen, most millennials haven’t chosen their financial services provider—Primerica can and should fill that role.

DSN: What have John Addison and Rick Williams done to set Primerica up for success?

Williams: For the past 15 years, Primerica has had two of the best business leaders I’ve ever known running this company. In fact, they’re the longest-serving CEOs in our company’s history. John and Rick realized long ago that our company would be successful if we focused on distribution and increasing the size of our salesforce. They’re also responsible for our successful IPO, which was one of the top IPOs of 2010. This critical change allowed us to control our own destiny and has set our company on a growth trajectory.

DSN: How have they inspired you?

Williams: I’ve worked with both John and Rick for more than 30 years, including the past decade in my capacity as President. It would be an understatement to say that they are both role models for me—it goes way beyond that. I received a phenomenal business education from working with John and Rick, but I also developed strong friendships with both of them. They are men of great character and integrity, and they both have served as shining examples of how to conduct themselves professionally and personally. They’re great leaders, but also great people, and working closely with them has been a highlight of my career.


Jeff BellJeff Bell
Kathy PinsonKathy Pinson
Don WestDon West
Keri NorrisKeri Norris
Darnell SelfDarnell Self
Steve WilliamsonSteve Williamson

LegalShield Creates New Office of the Chief Executive

» In his first six months at LegalShield, CEO Jeff Bell has restructured the company’s top leadership and created an Office of the Chief Executive (OCE) to streamline communication between key areas of the business. The legal services provider is gearing up for future growth, particularly with enhanced digital support of its sales associates and clients.

The OCE comprises LegalShield’s new COO, Kathy Pinson; CFO Steve Williamson; Don West, Vice President of Human Resources and Leadership Development, and two newly created roles: Executive Vice President of Network and Business Development, Darnell Self; and Vice President of Regulatory Compliance and General Counsel, Keri Norris.

“These changes are made in an effort to better support LegalShield’s present and future growth strategies,” said Bell. “…Our management structure is cleaner, and it brings more clarity on accountability and authority for us to do what we need to do.”


Global Growth Encourages 4Life Promotions for 2015

Manny CastilloManny Castillo
Deborah DixonDeborah Dixon
Teressa StreetTeressa Street
Rick EastmanRick Eastman
Jenny BeanJenny Bean
Dr. David VollmerDr. David Vollmer

4Life Research has announced that Manny Castillo has been named General Manager of Peru, which opened as 4Life’s 16th international office in 2009. In this new role he will support the business growth of the company’s network of distributors and contribute to 4Life’s strategic growth plan for 2015 and into the future.

Originally from Trujillo, Peru, Castillo joined the marketing department of 4Life Research in 2009 as an international marketing manager. In 2011, he took a role in the international department as a market coordinator for the countries of Ecuador, Colombia, Brazil and Peru.

In the corporate office, new vice presidents include Deborah Dixon as Vice President of Field Development for Spanish Markets, Teressa Street as Vice President of Quality Assurance, and David Vollmer, Ph.D., as Vice President of Analytical and Quality Services.

Dixon’s new responsibilities include collaborating with Spanish-speaking distributors to develop relationships and achieve business objectives in the U.S., the Caribbean, Europe, South America, and Central America. Street will oversee the strategic development and tactical implementation of 4Life’s quality systems. Dr. Vollmer’s team will ensure that all quality testing at 4Life complies with worldwide regulatory requirements for dietary supplements, nutritionals and cosmetics. 

In addition, new 4Life directors include Jenny Bean as Director of International, and Rick Eastman as Director of Technical Support. Bean will provide operational direction to support Chinese-speaking distributors through the company’s Hong Kong and Taiwan offices. Whereas, Eastman will oversee operational support for technical assistance to 4Life’s global headquarters as well worldwide international offices in 24 countries.


New foru President Targets Growth

Sharon Morgan TahaneySharon Morgan Tahaney

» As foru International enters its third year of business, the skincare and nutrition company is welcoming a familiar face to its executive team. Foru has named Sharon Morgan Tahaney successor to company President Karl Krummenacher, who came on board when foru Holdings acquired the business in 2012.

Tahaney has held other executive leadership positions during her direct selling career, including a stint as president of foru predecessor GeneWize Life Sciences. Like foru, GeneWize marketed personalized nutrition products based upon an individual’s DNA results. Tahaney joined GeneWize just 8 months after the company launched in 2007. Prior to serving as president, she headed up the brand’s marketing efforts.

With the team at foru, Tahaney has developed a five-year plan that includes 100 percent growth in 2015, strategic philanthropic efforts, taking DNA swabs of 1 million people, and a DSN Global 100 ranking by 2020. Having laid out a clear vision for the company, Tahaney says her primary goal is “to keep us focused on the mission critical, not every new shiny thing that comes along.”


Susan M. ArmstrongSusan M. Armstrong

Nature’s Sunshine Announces New COO

Nature’s Sunshine Products Inc. announced the appointment of Susan M. Armstrong as Chief Operations Officer. Armstrong has previously served in the role of Executive Vice President, Operations with Nature’s Sunshine since joining the company in March 2013. In addition to her current responsibilities of manufacturing and worldwide distribution, she will also assume responsibility for the corporate IT function.

Prior to joining Nature’s Sunshine, Armstrong served as Senior Vice President, Value Chain at Metagenics, a manufacturer and distributor of dietary supplements and medical foods. At Metagenics, she was responsible for creating a new Value Chain team that spanned the entire end-to-end process to drive value to the customer as a result of internal collaboration.

Adrienne MurphyAdrienne Murphy

Winnie & Kat Announces New Hire

» Winnie & Kat, a women’s contemporary clothing brand, announced that it has hired Adrienne Murphy as Director of Sales and Leadership Development. Murphy brings 10 years of experience growing direct sales party plan companies. She has produced positive revenue results for those companies with her high energy and results-driven training methods, focusing on peak individual performance. Murphy is currently based in Kansas City and will travel to and from the home office, as well as visit Stylists in the field.

Seth SaundersSeth Saunders

Blendfresh Enters Industry

» Blendfresh LLC, a health and wellness startup providing nutrition through pure whole-food products, has hired Seth Saunders as their Vice President of Communication, Training and Recognition. Saunders has over 17 years of executive level experience in direct selling that covers a number of areas including, sales, marketing, communications, training and development, administration, operations, and information technology.



SUCCESS Partners Establishes New Position of Chief Brand Officer

Wayne MooreheadWayne Moorehead

» SUCCESS Partners, a marketing and branding partner to the direct selling industry, announced that Wayne Moorehead has joined the company as Chief Brand Officer. The newly created position allows the company to meet the growing demand for brand strategy within the industry.

Moorehead brings a depth of experience in marketing and branding to the role. He has more than a decade of experience in the industry, holding significant marketing roles such as Senior Manager of Marketing Communications, Senior Vice President of Marketing, and most recently as Chief Marketing Officer.

The breadth of his marketing experience also includes positions with New York-based creative agency Case and Hint Creative.

Moorehead will be based in Salt Lake City, where he will work closely with Partners to develop and strengthen brand image, experience and promise.

“I’ve admired and respected Wayne for over a decade,” notes SUCCESS Partners CEO, Owner and Founder Stuart Johnson. “He has done some of the most exceptional branding work in the industry. He’ll be an important part of our efforts to fulfill the visions of our Partners and the millions of entrepreneurs they serve.”


Wixon Hires New Controller

» Wixon, a company that has a 100-year history of providing seasonings, flavors and technologies for the food and beverage industry, has announced Jenny Vonckx as Controller. In her new role, Vonckx is responsible for managing the company’s accounting department, including financial reporting, implementing business policies and procedures, and strategic financial planning. She reports to Wixon’s Chief Financial Officer, Peter Caputa.

Prior to joining Wixon, Vonckx spent nearly five years as a Controller for several business segments of Jason Inc. and five years at PricewaterhouseCoopers, both based in Milwaukee.

February 01, 2015

Company Spotlight

 Hy Cite: The Recipe for Growth

by Barbara Seale

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

  • Founded: 1959
  • Headquarters: Madison, Wisconsin
  • Executive: Chairman and CEO Erik Johnson
  • Products: Cookware, air and water filtration systems, juice extractors, dinnerware, cutlery


Family-owned direct seller Hy Cite Corp. is a master chef when it comes to cooking up growth. They do it by actively and enthusiastically embracing a community that many direct selling companies seek to engage: the Latino community.

Peter O. Johnson, FounderPeter O. Johnson, Founder
Erik Johnson, Chairman & CEOErik Johnson, Chairman & CEO

Hy Cite’s engagement constitutes far more than simply speaking Spanish. Some 90 percent of its market and distributors are Hispanic. This demographic grew from three Hispanic distributors—two on one coast and one on the other—who were extremely successful in the early 1990s. Their legacy plus the commitment of Hy Cite managers to listen closely to the needs of distributors and consumers has resulted in a company that has grown by more than 15 percent average annual growth since the year 2000. In fact, except for the two toughest years in that economic period, growth has been closer to 20 percent.

Hy Cite was founded in 1959 as the Hope Chest Club (HCC) by Dave Johnson, but it was Peter O. Johnson, an unrelated college student, who carried the company into the future. Peter paid his college expenses by selling the company’s products to young women who collected its cookware, china and flatware as they anticipated their marriages. After college Peter worked for another cookware company for a short time to learn more about the cookware business. He was a fast learner, and he rejoined HCC as a partner in 1961. Dave eventually left the business, but Peter carried on. He grew the business and evolved it as the country’s culture changed and the “hope chest” market shrank. He expanded the original vision, and with that expansion came a name change.


Some 90 percent of Hy Cite’s market and distributors are Hispanic.


“As folklore has it, we realized we needed a different name, but we had a lot of letterhead that said HCC,” explains Hy Cite’s Chairman and CEO Erik Johnson, Peter’s son. “Things were tight right then, but the top managers had ‘high sights’ for the future. So they had a meeting and came up with a name that would let them maintain the corporate brand: HCC—Hy Cite Corporation.”

Erik wasn’t in that meeting in 1974. He hadn’t even had his first of many part-time jobs at the company: working in the warehouse during the summer at age 12. Throughout high school and college he continued to work in most departments, but, like his father, he went to work at another company after college. He spent five years at Procter & Gamble. Then he returned to his family business in 1995 as a project manager focused on improving its business systems. When Peter retired in 2000 Erik was named Chairman and CEO. He and his brother Peter, Hy Cite’s President and COO, continue to run the company.


Andrea Legarreta, a well-known TV personality in the Hispanic market, is the Brand Ambassador for the Royal Prestige® line of cookware.Andrea Legarreta, a well-known TV personality in the Hispanic market, is the Brand Ambassador for the Royal Prestige® line of cookware. Founded in 1959, Hy Cite has expanded into 20 countries over the last two decades.Founded in 1959, Hy Cite has expanded into 20 countries over the last two decades.

Improving Lives through Education

Hy Cite is committed to expanding the opportunity for a great life even beyond its own ranks. That’s why the company and its more than 2,200 distributors believe in supporting the communities throughout the world where it does business.

While the company has supported health-based organizations such as The United Way, Direct Relief International, March of Dimes, American Cancer Society, American Red Cross, and Kick AIDS, it has begun to focus its resources heavily on education.  

“We believe that education leads to prosperity and self worth, and with education you can improve people’s standard of living and overall life experience,” notes Hy Cite Chairman and CEO Erik Johnson. “In many of the countries our distributors come from, educational opportunities are not that strong. We want to make sure that people throughout the world have the chance to receive educational opportunities like they would in the United States.”

As a company that does 90 percent of its business in the Latino community, Hy Cite has become a major contributor to the Hispanic Scholarship Fund. Its scholarship grants provide educational opportunities, as well as another way to enhance brand awareness and loyalty for its Royal Prestige cookware line. The Royal Prestige Scholarship Program provides scholarships to low-income Latino students who are dependents of Royal Prestige’s customers and distributors. The program is designed to make a positive impact on students’ education and career preparedness, while creating a positive awareness of Royal Prestige as a potential employer and good corporate citizen.

Philanthropic donations to the University of Wisconsin, located in the company’s home town of Madison, have been a Johnson family tradition for decades. In fact, Hy Cite Founder Peter O. Johnson has been a longtime donor and ambassador of the University of Wisconsin-Madison, serving in a number of capacities over the years.

In Mexico Royal Prestige is also heavily involved with a telethon that supports the needs of children with developmental handicaps.

Product-Centric

Erik says that much of the company’s success is product-based. It has three brands of cookware—Royal Prestige, its first and biggest brand of top-quality products, especially in the Hispanic market; NutraEase, a high-quality stainless steel line sold at in-home dinner parties; and its latest, Kitchen Charm, which was introduced in early 2014 and is focused on the bridal market. Each includes supporting products, such as water filtration units, juice extractors and air purifiers, but the core product in each line is cookware. Both distributors and consumers know the company by its cookware brands, rather than by the corporate name. Distributors focus on a single brand to sell and build their businesses.

The decision to focus on the brands rather than the company name was made in the 1980s. “No one thought that consumers related to the name Hy Cite,” Erik explains. “We hired a marketing firm to come up with our own product brand name, which was Royal Prestige. Before that we had sold other companies’ brands. But we had gotten to the size and scale where we wanted consumers to recognize our own brand.”


The cocinaMAX™ magazine was created to nurture the connection of the customers with the brand. It is mailed to over 130,000 Hispanic households every quarter.

Consumers don’t just recognize the brands; they’re intensely loyal. Even though the cookware carries a 50-year warranty, consumers keep returning to the company to purchase its latest products. But since the cookware maintains its quality so long, they pass it along to family members and then buy more for themselves. Hy Cite and its distributors keep previous buyers informed about new products through direct mailers. Distributors often purchase local advertising, which Hy Cite supports with $3 million to $4 million of national television advertising on stations such as Univision and Telemundo in the U.S. and Televisa in Mexico.

Hy Cite also publishes a quarterly magazine, cocinaMAX™, which it sends free to consumers who have purchased products within the past two years. The company nurtures the connection to the brand and the cookware by publishing health tips, recipes and general information about cooking. It also runs recipe contests that keep customers cooking and using their products, and it features well-known Hispanic TV personalities, such as Andrea Legarreta.


Even though the cookware carries a 50-year warranty, consumers pass it along to family members and keep returning to the company to purchase its latest products.


Brand Fans

The marketing plan has driven Hy Cite brands to No. 1 among direct-sales cookware brands within the company’s target demographic in the United States. Brand recognition in the Hispanic marketplace exceeds 85 percent in the U.S. and almost 50 percent in Mexico. That brand recognition supports both recruiting and sales, even translating to repeat sales.

“We run over a 25 percent add-on rate,” Erik notes. “Our consumers are very pleased and enjoy our products, so they’re always looking to add to their collections. We even have consumers who call us to ask whether we have anything new.”

The answer to those consumers is often “yes,” and the new product has typically been developed because of consumer demand. Hy Cite stays in constant communication with its field salesforce, plus it gathers regular input from consumers to understand what they want in products for their kitchen. The company then incorporates technical cookware advances, such as a silicone-rimmed cover on the Royal Prestige line that allows food to be cooked with minimal liquid, preserving flavor and nutrients.

“We haven’t hung onto the past or to a single product,” Erik emphasizes. “We let the marketplace take us to where the marketplace is going, and that has led us to bring out new products that consumers are looking for.”

Those new products have helped Hy Cite grow. In addition to the completely new products, it made modifications to cookware, including detachable handles and a moisture-viewing window. Consumers eager for the latest innovations don’t hesitate to purchase them. The average order value is more than $1,200, and Hy Cite helps make those high-ticket purchases possible by offering consumer financing.

“One of our major differentiators is that we provide proprietary consumer financing that lets our end consumer pay for their purchase over 24 to 36 months,” Erik says. “That opens a purchasing door to someone who bought their cookware a few years ago, so they pass their older product to their daughter or son and they
buy new cookware.”


“One of our major differentiators is that we provide proprietary consumer financing that lets our end consumer pay for their purchase over 24 to 36 months.” —Erik Johnson, Chairman and CEO


Family Heritage

Hy Cite continually awards and recognizes the performance of its large network of distributors. Hy Cite continually awards and recognizes the performance of its large network of distributors.

That kind of support creates a thriving business for many distributors. It’s often a family business with entire families becoming involved over several months or years. One spouse may work full time in the family Royal Prestige business while the second spouse is employed elsewhere and is involved part time. Once the business grows large enough to replace the second spouse’s income, he or she also joins the business full time. Often their older children become involved as well and develop their own businesses when they become adults.

The process can also open doors to another group that most direct sellers want to attract: millennials. Erik says that they are a developing market segment for Hy Cite. Research on millennials shows that 25- to 35-year-olds are increasingly interested in cooking. He notes that many young Hispanics maintain the eating and food traditions they learned as they grew up.

“What has helped is making sure that we have cookbooks and sponsorships with Latino chefs, and we’re providing information that helps young people cook traditional dishes in our cookware,” he says.

In addition to providing consumer financing, Hy Cite supports distributors with product innovations, order processing and distribution, sales and marketing materials, and motivational incentives such as trips—areas where it can leverage size and scale. That frees its distributors to focus on selling, recruiting and training. Hy Cite is able to provide effective support to a salesforce in multiple countries through a corporate employee base that is around 80 percent bilingual. Many employees speak English and Spanish, but other languages are represented as well.

Hy Cite takes advantage of state-of-the-art technology and the latest trends to develop its different product lines.

Hy Cite takes advantage of state-of-the-art technology and the latest trends to develop its different product lines.


“We sell family values—working and eating together, health, and keeping the family together.” —Erik Johnson


That well-oiled system has worked well as Hy Cite has entered new territories that have expanded its revenue sources. When Erik became the company’s CEO in 2000, more than 95 percent of the company’s business was in the United States. Today the company has expanded into 20 countries and had 2014 revenue of approximately $177 million. Its U.S. market is still strong at 50 percent of sales, plus other markets have expanded. Mexico and Canada are thriving, and the fastest growth is in South America. One of its newest market expansions, Brazil, is growing by 300 percent annually. Erik explains that the quality of the company’s products and the quality of the business opportunity is appealing to entrepreneurs in the small but developing middle-class in South America.

The Royal Prestige business opportunity is something that people in those countries see as an opportunity to elevate their standard of living, and that of future generations. The company has been able to recruit highly educated, talented people who want to become distributors. Its current growth focus is in Brazil, followed by Colombia and Peru, which it opened in January. It prepared by establishing offices, service personnel and product distribution, as well as hiring sales management. They deployed two senior executives to recruit and train distributors, and to help them build their networks in South America. The company’s goal is to double its business in those countries every five years.

“Looking out 10 years, once we build out our business in the Americas, our next step will be expansion into Asia-Pacific,” Erik forecasts.

He notes that the element that unites Hy Cite—including employees, distributors and brands—is family.

“We sell family values—working and eating together, health, and keeping the family together,” Erik reflects. He notes that the same culture thrives at the corporate headquarters. “We believe that the field salesforce drives sales and much of our marketing and idea generation. We believe strongly that the entire organization learns from each other and that people help each other so that we are all successful together. After 55 years in business, we have a multi-generational family business being successfully led by the second generation. We’re very proud of that.”


Executive Connection with Erik Johnson, Chairman and CEO, Hy Cite

February 01, 2015

Company Focus

Beautycounter: Safer Products Changing Lives

by Andrea Tortora

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


Photo above: Beautycounter Founder Gregg Renfrew is committed to changing the beauty products industry for the better and getting safe products into the hands of customers.


Company Profile

  • Founded: 2013
  • Headquarters: Santa Monica, California
  • Founder: Gregg Renfrew
  • Products: Beauty and skin care

Beautycounter


Beautycounter is a content first, product second kind of company. The California-based upstart maker of safe, nontoxic beauty and skincare products is focused on advocating for public health as it defines its own way of doing business in a crowded market.

“We are not all-natural or organic,” says Founder Gregg Renfrew. “We are focused on safety. We make sure we don’t ever say we are perfect. It is about progress.”

Beautycounter defines itself as a “direct retail brand.” It sells to consumers through consultants, at beautycounter.com, and via strategic partnerships with companies such as J. Crew and Gwyneth Paltrow’s Goop.com.

Renfrew is on a mission to change the regulation of the beauty products industry, and she thinks telling the Beautycounter story through person-to-person interactions is the best way to do it. “We want to be an information first, disruptive beauty brand,” she says. Beautycounter’s mission: to get safe products into the hands of everyone.


“We are not all-natural or organic. We are focused on safety. We make sure we don’t ever say we are perfect. It is about progress.” —Gregg Renfrew, Founder


Explosive Growth

At just under 2 years old, Beautycounter is already making an impact on the $59 billion U.S. cosmetics and personal-care industry. In 2013, natural and organic personal-care products accounted for $12.6 billion in sales, according to data from Sundale Research.

Since January 2014, Beautycounter has grown over 550 percent. From its initial launch in March 2013, the company’s multi-channel strategy now claims more than 5,000 independent consultants. 

Renfrew started her company with a few SKUs for essential skin and body care. Today Beautycounter offers more than 75 products for men, women and children, including face and body collections, sunscreen, and a color collection.

The company’s e-commerce channel is also booming. The Band of Beauty membership program lets direct customers earn rewards and free shipping for online orders, all while supporting Beautycounter’s push to promote safe products. Loyal clients pay a $25 annual fee in order to receive extra online discounts; $10 is donated to one of three nonprofit groups that Beautycounter supports: Environmental Working Group, Breast Cancer Fund (which coordinates the Campaign for Safe Cosmetics,) or Healthy Child Healthy World.

In addition to the consultant base and their customers, there are now more than 6,000 consumers in the e-commerce Member Program who support Beautycounter’s social mission, Renfrew says, a fact of which she is very proud. “The only way we can bring about change is to be a large movement of lots of people.”

An Eye-Opening Start

Beautycounter is well on its way, says Janet Nudelman. She runs the Campaign for Safe Cosmetics and is Director of Program and Policy at the San Francisco-based Breast Cancer Fund.

“Beautycounter is one of the first companies to ever emerge in a public-facing way regarding safe cosmetics,” Nudelman says. “They start the conversation with the safety issue while most other companies bury it.”


“Beautycounter is one of the first companies to ever emerge in a public-facing way regarding safe cosmetics. They start the conversation with the safety issue while most other companies bury it.” —Janet Nudelman, Campaign for Safe Cosmetics


Renfrew’s eyes were opened to the lack of regulation of personal-care products after she watched the 2006 documentary, An Inconvenient Truth, about former Vice President Al Gore’s campaign to educate citizens about global warming. The film drove her to dive deep into researching what really goes into the products she uses. As a result, Renfrew changed many of the items she uses at home, from pots and pans to sunscreen. But she says she still was challenged to find products she loved.

A move to Los Angeles in 2008 led to Renfrew working with actress Jessica Alba. Alba hired Renfrew to research the personal-care industry and look at toxic and nontoxic ingredients. The work aided Alba as she launched the Honest Co., which makes nontoxic items for baby and home.
“That work helped me see that there was a void of products that were safe to use,” Renfrew says. Some of what she learned:

  • Only 10 percent of the 10,000 chemicals used in personal-care products have safety data.
  • Known toxins, such as lead and formaldehyde, are allowed in products.
  • The last time the U.S. passed a law to regulate ingredients in personal-care products was 1938.
  • The U.S. bans 11 ingredients; the European Union bans or restricts the use of more than 1,400 ingredients.

Science and Safety

Renfrew spent four years working full-time to lay the groundwork for Beautycounter. She teamed up with industry heavyweights Mia Davis, who had worked for the Campaign for Safe Cosmetics, and celebrity makeup artist Christy Coleman to formulate a line of products based on safety and performance.


Gregg Renfrew’s background includes starting her own bridal registry, The Wedding List, which she sold to Martha Stewart Living Omnimedia, and consulting for high-profile clients such as Jessica Alba.


Davis’ sourcing background led to a strict Beautycounter screening process and the company’s “Never List,” which can be found in its entirety on the Beautycounter website. This is a roundup of ingredients Beautycounter will never use in its products. It began with the 1,400 ingredients banned in the E.U. and grew by a few hundred more to include anything linked to cancer, reproductive issues or endocrine disruption. Many are known or believed to cause irritation, allergic reactions or cancer.

“We think we have the most health protective and strenuous process in the U.S.,” Renfrew says.

Beautycounter also provides an online Ingredient Glossary on the site, which describes every ingredient used in all Beautycounter products. Products are formulated and manufactured in the U.S.

According to Nudelman, Renfrew and her team are aligned with the Campaign for Safe Cosmetics and constantly lobby for public health. “The way they do business raises the bar for the rest of the cosmetics industry,” Nudelman says. “They are a small company, but they are doing so much more than firms 50 times their size. That speaks volumes for those firms that want to be a part of the solution.”

Building a Brand

A lot of work went into establishing the Beautycounter brand and making sure the message remains consistent across all channels. To Renfrew, this is key. She champions the motto, “A million voices, one brand.” Renfrew makes herself available on a weekly basis to answer consultant questions and to do her part to ensure that the brand message is consistent across all platforms.

She says most consultants are drawn to the direct selling segment of Beautycounter because of the firm’s mission. This is a company driven to educate customers and consultants. It aims to create and provide solutions with its products.

Passion for creating a grassroots demand for change at the federal level—and the passion that mission evokes in consultants and customers alike—is what keeps Renfrew energized to continue her quest for change in industry regulations.

“We are focused on people,” Renfrew says. “We are defining our own way of doing business, and we have tried hard not to look at other companies. Change is good and change is necessary.”

Trained to Educate

With a slew of retail, sales and entrepreneurial experiences under her belt, Renfrew is a newcomer to the direct selling world. She started out at Xerox. She later sold her startup bridal registry, The Wedding List, to Martha Stewart Living Omnimedia and is a former CEO at the Best & Co. children’s retail group. She has consulted for high-profile clients such as Bergdorf Goodman, Ann Taylor and Jessica Alba.

Renfrew says she is taking best practices from traditional and direct sales models, as she builds a comprehensive guide to a long-term sustainable business. “We really train hard on ingredients and being authentic in terms of our story and the ways in which we talk about our products,” she says.

Frequent and weekly trainings are offered for regional directors and all consultants through newsletters, videos, calls and webinars. And Renfrew makes a point to be available. “It is really important to be with the people who are working for you,” she says. “I do not like the arm’s length distance of management. We very much focus on internal clients and the end customer.”

Social media is one way Beautycounter reaches out, but Renfrew says the company is still learning how to use the platform. She encourages consultants to use their networks and break out of the mold of traditional home parties.

When Beautycounter trains consultants, it encourages organic information sharing, whether that takes place on the playground, at school or online. Consultants also get a personally branded website that ties into the main Beautycounter site.

“We make sure people are not just selling, but are interacting with others in ways that feel natural and comfortable,” Renfrew says. “We want them to put their personal touch on it but also be consistent with our message.”

Investing in Challenges

If you have several days, Renfrew will be glad to sit down and explain that trying to create products that are safe and work is not an easy process. It takes years. “What’s difficult is to create excellent and amazing products that really perform and are truly safe,” Renfrew says.


Investors like Beautycounter’s model of sharing relevant information through social networks. The company has raised $15 million to date and at the end of 2014 was getting ready to close on another round of funding.


Beautycounter is fortunate in that investors like its model of sharing relevant information through social networks. The company has raised $15 million to date and at the end of 2014 was getting ready to close on another round of funding.

While Beautycounter is experiencing explosive growth, it does not come without challenges, such as managing inventory on limited funds. Inventory lead-time has been long and sometimes raising capital is a struggle, Renfrew says.

As investors signed on, Renfrew used their dollars for product development and research to create the technology and infrastructure to support the field. She also created robust marketing and branding materials.

Renfrew says she invested heavily in people early on to create “less of a homegrown situation” and to ensure the long-term validity of the Beautycounter brand. This comes right back to the company’s larger worldview and passion for public and consumer health as well as the need for more regulation of the personal-care products industry.



Proof of Concept

What makes Beautycounter such an important company, Nudelman says, is that it proves the concept: You can be a safe and profitable company. “That is the message that the Campaign (for Safe Cosmetics) is trying to get out. That consumers will buy safer products,” she says.

Renfrew and Beautycounter take a strong position on the issue. Renfrew has made it her mission to affect change all the way to Washington.

“We want to be the face of the newer, safer, highly effective beauty company,” she says.

Renfrew and others with the Campaign for Safe Cosmetics are meeting with senators about cosmetics reform.

The issue is becoming a worldwide concern as more national governments take it seriously. Canada issued a “hot list” of chemicals, and Japan and China are also taking action, Nudelman says. Yet the U.S. is lagging behind as toxic chemicals still remain in cosmetics—from lead in lipstick to heavy metals in face paint for children.

For change to happen, Congress must authorize the Food and Drug Administration to regulate the cosmetics and personal-care products industry. The Safe Cosmetics Act has been introduced in Congress in the last three sessions, but has not advanced to a full vote. “Consumers are waking up to the problem,” Nudelman says.

In Renfrew’s view, there has never been a better time to be in the direct selling world, especially when looking to inform the public and find support for a worthy cause. “The whole direct selling industry can embrace what is going on at a macro level and share relevant information through social networks and use it to drive commerce,” Renfrew says. “Everyone has been touched by one of these issues. We are creating social impact and educating people so they can take control over their personal exposure to toxins.”

February 01, 2015

New Perspectives

Are We Winning?

by John Fleming

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


It’s hard to keep a scorecard on the direct selling industry! Those who tend to look for a way to criticize can always find something. Those of us who see within the industry and have the opportunity to interact with industry decision makers gain much insight and perspective. And this is a time of year to reflect. The corporate scorecard will be the year-end financial statements that will recap the business of the previous year. Businesses will win or lose depending upon the bottom-line numbers of profit or loss and the top-line number of revenue generated in comparison to the prior measurement period. But the question for those of us affiliated with the direct selling industry might be: What is the industry scorecard? Are we winning or are we losing?

Some scorekeepers like Bill Ackman, the hedge fund manager who has specifically targeted Herbalife with venomous attacks on the company’s method of conducting business (direct sales), completes his scorecard based on a set of very personal criteria that leads to an accusation and attack on, in this case, Herbalife in particular. However, this type of scorecard has implications for the entire industry. Direct selling, as a channel of distribution, is executed in many different ways, from what we often refer to as party plan to network marketing, social entrepreneurship, social selling, and social commerce, or even simply person to person. Today, the actual definition of direct selling is so very broad that direct sellers utilize online methods for delivering messages and transacting business as effectively as any channel of distribution.

In response to a scorekeeper like Bill Ackman and his staff, we remind such scorekeepers of the fact that the industry has a formal code of ethics as well as an informal code of ethics. The industry code and the more stringent company codes of ethics serve to govern the manner in which those who utilize the direct selling channel engage both employees of the company and the independent brand partners representing the company’s products, services and business opportunity. Independent contractors are also consumers as it simply makes sense to be your own best customer. 


Today, the actual definition of direct selling is so very broad that direct sellers utilize online methods for delivering messages and transacting business as effectively as any channel of distribution.


The formal Code of Ethics is provided by the U.S. Direct Selling Association, and this code is public information. Members of the U.S. DSA pledge to abide by the U.S. DSA Code of Ethics. Many non-members of the U.S. DSA (direct selling companies) have created their own company codes and often use the DSA Code of Ethics as their benchmark. In either case, the direct selling industry overall has done a good job of policing itself and has grown as a channel of distribution to over $30 billion in U.S. revenue and $150 billion in worldwide revenue, generated by approximately 16 million U.S. independent contractors and 90 million worldwide independent contractors.

Every organization and every business has some type of scorecard for reflection on previous-year results and the planning of the new year. It is part of our nature to desire a scorecard to determine if we are winning or losing. Each winter, the NFL hosts the ultimate scorecard in professional football, the Super Bowl, where thousands will witness the final score that determines the best football team of the year. The same process holds true for all professional sports teams and leagues wherever they are located in the world. Hundreds of millions watch these events on television.

Direct Selling News created a scorecard for the direct selling industry when we first published the Direct Selling News Global 100 listing in 2009. Each year, this enormous research project serves to identify the top 100 direct selling companies in the world who certify their revenue performance by submitting the DSN Revenue Certification Form and complete a profile of their company. This process results in the publishing of perhaps the most important scorecard on the industry issued by anyone.

However, there is more to score on a company-by-company basis, and we offer on this page a potential scorecard profile that we believe tells even more of the story about an industry that shows such diversity in its representation of people from all walks of life. Direct selling as a method of distribution provides people with hope and with training to learn the basic knowledge and skills to be able to build a business. This could be a small part-time effort or a more serious effort that not only develops customers but also provides the opportunity to recruit and train others to do this, resulting in a much larger business opportunity. Because a scorecard is so important, we encourage each direct selling company to submit your Global 100 information and profile, as in so doing you participate in a valid process for scoring an incredible industry.

In going through the scoring process, we remain optimistic that we will have experienced another year of overall growth with respect to the first two categories on the scorecard pictured. Within the growth, there will always be those companies that did not grow, and the reasons for that are many, some of which are mentioned below and are also being researched by Direct Selling News.

1. Restructuring and Refocus
2. A Shift in Momentum
3. Competition
4. Failed Strategies
5. Disruption to Normal Business
6. A Change in the Season of the Business
7. Fast Growth


Scorecard


Yes, We Are Winning!

Based on the results of 2013 and the anticipated reports on direct selling companies for 2014 performance, we find that people everywhere in every region of the world are seeking to engage in some form of entrepreneurship that is accessible and realistic for the average person, and provides the opportunity without the traditional risks. Direct selling is thriving around the globe. DSN’s Billion Dollar Markets story published last October reflected growth in 16 of 22 markets identified from the data of the World Federation of Direct Selling Associations, which provides proof that people everywhere are finding direct selling companies that fit their needs and desires. From beauty, wellness, gifts and accessories, home, and education, to beverages, telecommunications, financial, and energy, direct selling companies are providing an opportunity to engage in free enterprise. The barriers to entry and risks associated with starting one’s own direct selling business are virtually zero. Such opportunities are increasing in demand and interest, not shrinking—so yes, we are winning!


Direct selling companies and the opportunities they offer provide something that traditional jobs and opportunities do not provide as effectively: mission, purpose and a sense of community.


Direct selling companies and the opportunities they offer provide something that traditional jobs and opportunities do not provide as effectively: mission, purpose and a sense of community. Direct sellers appear to find a shared sense of purpose in the work they do, selling and serving customers while recruiting others who desire to learn to do the same. Worthwhile values like helping others better understand the products and services they are purchasing, promoting physical and financial health, being environmentally conscious, and doing personal shopping for almost anything sold through more traditional channels turn individuals into a community of people who share values for the work they do. It is this sense of community that is hard to duplicate in ordinary part-time jobs, which attracts many people to the direct selling industry. Mission, purpose and values play a huge role in this. “Much like teams in sports, communities have a goal in mind, and they will not rest until it’s met,” says John Parker, Chief Sales Officer at Amway.

The recent Harris Poll commissioned by Direct Selling News further found that social, emotional and intellectual fulfillment ranked very high amongst those who had experienced a direct selling opportunity. In fact, about eight in 10 current sellers say their direct selling business offers many opportunities, including valuable social interaction, the ability to connect with other people with similar interests, entrepreneurship, flexibility and freedom, and recognition of skills and achievements (See graphic below).

The Harris Poll also revealed that, when considering their most recent purchase, roughly six in seven current customers bought an item for themselves (85 percent strongly or somewhat agree) and really wanted the item they purchased (85 percent strongly or somewhat agree), and the majority were highly satisfied with the item (73 percent were extremely or very satisfied). Additionally, seven in 10 current customers reported high satisfaction of their experience with the seller (69 percent were extremely or very satisfied) and 87 percent enjoyed the sales experience a lot or a little (See graphic below).

These results reinforce the positive impact that direct selling companies and their independent contractors have on the social fabric of communities, as well as the significant economic impact the individual family has on the broader economy.

We are also winning because direct selling companies are good at what they do. The amount of time and investment most companies make in the development of their product or service would amaze anyone not familiar with the operational side of the business model. Amway is known to be the largest direct selling company in the world, but few realize that their NUTRILITE nutritional supplement brand is also the largest nutritional brand in the world, outside of the direct selling arena. Tupperware is known for its plastic bowls, but the brand has expanded into so much more. Mary Kay is a direct selling company but also one of the most-respected beauty brands in the world. Primerica sells financial services through independent contractors utilizing the direct selling model, but they also sell more term life insurance than any other insurance company in the world. Ambit Energy surpassed $1 billion in sales in less than eight years. Origami Owl with its line of personal jewelry and Nerium International with one anti-aging product surpassed $200 million in sales in less than three years.

Direct selling companies are winning because they offer quality products and services at competitive prices. Direct selling companies are also winning because they place a lot of focus on the compensation plans that reward their independent contractors for the time and effort invested. Direct selling companies are also nimble, quick to react and quick to implement some of the newest and most impactful uses of technology. The giant steps being made in extending new technology to the independent contractor levels the playing field. An application on a smartphone is now capable of providing the most remote direct seller with the information and even the presentation needed to impress the most sophisticated of prospective clientele.

With millions of customers being engaged by millions of independent contractors, supported by a variety of products, services and state-of-the-art technology, even the newest direct seller can now compete with the most established traditional retailer and in a far more personal manner.

Make sure your company submits its profile. The DSN Global 100 will recognize the top 100 direct selling companies in the world as ranked by Revenue Certification. We also look forward to publishing the profiles of all direct selling companies whose profile is received by and recognized by Direct Selling News as an authentic submission.

With all of the current talk about “social” and the importance of being social in all business relationships, we can point to the first social selling model—the direct selling model—and convincingly say, in accordance to our scorecard, YES, WE ARE WINNING!

February 01, 2015

New Perspectives

 Strategy Tinkering Can Stop Your Growing Business in its Tracks

by Robert Sher

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


Building a business through the direct selling channel can be a powerful strategy for rapid growth. Creating innovative products and services, along with leading-edge approaches to connecting with the field and motivating performance are similarly efficacious strategies. However, even great strategies aren’t enough to sustain success.

In-depth research has shown that there are seven silent growth killers that are particularly harmful for midsized companies (generally regarded as those with $10 million to $1 billion in revenue) that can offset the success coming from a great strategy. While each of the killers is deadly in its own right, this article will focus on the danger of “strategy tinkering at
the top.”

First, let’s start with an overview of the seven growth killers:

1. Letting Time Slip-Slide Away

Time—or rather, lack of appreciation for it—is the first silent growth killer. Midsized companies have big, complex projects they never experienced when small. As a result, projects seem to take too long, or get stuck altogether.

2. Strategy Tinkering at the Top

For midsized firms, tinkering with the business’ core strategy can be deadly, particularly when changes are made without proper research, planning and testing. Founders and entrepreneurial leaders are at risk of over-innovation, distracting the core business from scaling.

3. Reckless Attempts at Growth

In the effort to scale, organizations face increased risk and expense. If the attempt at growth costs too much and the revenue doesn’t match the expense, growth won’t materialize, but a cash crunch will.

4. Fumbled Strategic Acquisitions

Acquisitions can be vital to a growth strategy, but they can also derail an organization. Successful less than half of the time, acquisitions are less about the deal and the closing and more about selection and what happens afterward: the integration process and execution of the acquisition plan.

5. Operational Meltdown

A rapidly growing bottom line and a rigorously lean operation can be a death sentence under the cover of success. Leaders must be able to recognize early signs that an operational meltdown is looming. The magical time when the field hits the tipping point can be tarnished or destroyed when operations fails to deliver.

6. The Liquidity Crash

Running out of cash can happen to any organization—particularly those making reckless attempts at growth and those suffering financial erosion or a shock to the system.

7. Tolerating Dysfunctional Leaders

Having a strong, high-performing leadership team in place is critical to growth and to overcoming the other silent killers—or better yet, avoiding them in the first place.

These growth killers often grow out of sight and out of mind for midsized firms, and can drive even successful firms into extinction. Firms looking to survive the killers must proactively guard against them.


For midsized firms, tinkering with the business’ core strategy can be deadly, particularly when changes are made without proper research, planning and testing.


Let’s dig into the second growth killer: Strategy Tinkering at the Top. In theory, an entrepreneurial CEO is a dream-come-true. What executive wouldn’t want a boss who gets excited about good, new ideas and is willing to back them? But in reality, an entrepreneurial CEO can be a nightmare—especially for midsized companies, which simply can’t afford to experiment with too many new ideas and strategies at once.

Consider an online publisher whose CEO was highly innovative and in tune with his market. Every month, he would dream up two or more “fantastic” ideas and would order the team to give these new ideas top priority. When his staff would ask him about his previous month’s priorities, he gave them no guidance. His focus was squarely on the new idea of the moment.

This forced his team to steer from guardrail to guardrail as they tried to refocus on their new task. Of course, they couldn’t implement any of the new ideas; as soon as any headway was made, the ideas were discarded in favor of bigger, better ideas the CEO had cooked up. This is a classic case of strategy tinkering. As is typically the case with strategy tinkering, the team was demoralized, and the CEO’s most talented executives fled. The firm stagnated.

Some of his “fantastic” ideas were in fact fantastic, but due to the constant change of direction, they never got executed. While no one—not the board, the management team, or investors—should ever try to stop the CEO from generating ideas, there must be a process to select the best ideas from the CEO and test them without diverting the business’ operating team from their core mission.

Strategy tinkering becomes disastrous when the company and its leadership are driving hard toward a specific goal or mission. Complete focus on execution is required to reach the goal, and hard decisions must be made on allocating resources to this primary goal. Then comes talk of a different objective. Of a new competitive threat. Or a new opportunity. Some of the teams scatter to reconnoiter the new strategy. Another team thinks the core goal has already been replaced, so it begins work on the new one. Resentment builds when employees’ hard work feels wasted. Progress toward the core objective is slowed or stopped, and significant effort will be required to get everyone reoriented in the proper direction.

Such CEO strategy tinkering can be a bad habit, perhaps the product of an overactive urge to chase squirrels or pick up shiny objects. In addition, it may be a reaction to seemingly intractable problems like inconsistent revenue generation or low profitability.

An important indicator of CEO strategic tinkering is resistance from the executive team. Hard-headed, passionate CEOs often struggle to listen to the counsel of those around them—usually to their detriment.

Most CEOs won’t admit it, but oversight makes us better executives. The worst cases of strategic tinkering come from CEOs with complete freedom. Boards should act to require the CEO to stay within the firm’s approved vision and mission. CEOs who understand how a strong, involved board can help them will make sure their boards are stocked with experience and talent.

Of all the C-Suite executives, CFOs have the greatest chance to reign in a tinkering CEO. They are acutely aware of the effects of distraction and bad decisions on the financial statements. And it’s the CFO’s fiduciary responsibility to sound the alarm when targets are missed. Yet most CFOs won’t sacrifice their relationship with the CEO (or their jobs) in the face of a CEO who won’t listen. In fact, almost no one (other than a strong board) can deal with a CEO who refuses to listen.


There must be a process to select the best ideas from the CEO and test them without diverting the business’ operating team from their core mission.


CFOs need to understand that they’ll never be able to completely dissuade their CEO from tinkering, but even winning a 20 percent tinkering-reduction is a big win. CFOs should be persistent, and CEOs must remember to seek the CFO’s advice and listen carefully. This will encourage the CFO to keep presenting his or her opinions, even if the CEO doesn’t accept them all.

But CEOs can help curb their own tinkering impulse in a very simple way: by putting their vision for their company down on paper. Writing it down makes it real.

I’ve sat down with over 100 CEOs and asked them what their company’s most important priorities are. Generally, they quickly can outline the crucial key performance indicators (KPIs), the critical projects that must be executed and the three to five differentiators that make their business thrive. Unfortunately, most have never shared their insights with their team in a concise written document.

These simple plans, often just one page, can create clarity and agreement. They promote focus, and make it easy for everyone to assess the company’s performance and progress each month. As targets are missed and the team focuses on achieving them, the group becomes increasingly intolerant of the tinkering that gets in the way of execution. And when the tinkering starts, the CEO will face a team that will be able to ask how the tinkering fits into the CEO’s own written plan. And, if the new ideas are truly superior to those that preceded them, they can ask what parts of the original plan should be reprioritized.

This will stop many CEOs in their tracks as they remember the conviction with which they created and wrote down their plan in the first place. Again, even if this only stops 20 percent of the tinkering, it is still a major win.

Even at startups with relatively small leadership teams, being clear about the organization’s priorities and what work should be done first is essential. Operating plans, progress tracking and prioritization do not have to be bureaucratic or cumbersome. If the CEO is to be free to innovate, he or she must know that the rest of their team is getting the right things done each day. Yet planning and organization don’t come naturally to many founder-CEOs, and that job falls to their senior leaders.

One of my clients was a self-acknowledged tinkerer. She loved spotting new opportunities and chasing them, and found running the core business to be boring. But she understood that building value in her own company required that she slow down her tinkering. In fact, she became so excited at the prospect of formal planning as a tool to limit her own tinkering that she made a large poster showing the company’s one-page plan and posted it prominently on an office wall. She reasoned that if she started to tinker, it would be clear to everyone that she was violating her own plan.

So how can CEOs and their teams find the proper balance between strategic intransigence and the alluring temptations of tinkering? No CEO and no top team should ever stop thinking strategically. But they should keep such thoughts and discussions from the execution team. Top executives should be able to discuss strategy—and changes to it—without confusing it with or negatively affecting current execution priorities. For those leaders striving to have a more transparent organization, produce a brief and very high level summary after strategic off sites, just enough to stop misunderstandings and supposition.

If the reconnaissance work to explore a new strategy requires more than discussion, a separate team should be assembled to do just that. And keep it low-key. Most strategic ideas that at first appear to be brilliant are discarded upon review and testing. It’s best that this happens in the background until one new strategy rises to the level of a roll-out.

Disciplined processes such as business planning and monthly reviews of the plans, combined with broad visibility throughout the firm, will also play a strong role in keeping tinkering at bay, and keeping midsized businesses the healthier for it.


Robert Sher is Founder of CEO to CEO and the author of Mighty Midsized Companies: How Leaders Overcome 7 Silent Growth Killers (Bibliomotion; hardcover; September 2014). A regular columnist on Forbes.com, Sher has worked with executive teams at more than 85 companies to improve the leadership infrastructure of midsized organizations.

February 01, 2015

Top Desk

Taking Care of Your People So They Can Take Care of You

by Jere Thompson Jr.

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


Photo above: Ambit Energy co-founders Chris Chambless and Jere Thompson Jr.


Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


When I was a graduate student at The University of Texas, I spent a month in Washington, D.C., learning about the federal government and how it works. A couple of us in the program were given the incredible opportunity to visit the West Wing of the White House. James Baker, a fellow Texan and President Ronald Reagan’s Chief of Staff at the time, was our tour guide. The highlight, of course, was the Oval Office. While telling stories about President Reagan, Mr. Baker walked over to the President’s desk, opened a crystal jar and offered us some of his famous jelly beans. It was unforgettable, and so was a small brass plaque sitting next to the jar. It read, “There is no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.”

To me, President Reagan was emphasizing that success is all about teamwork, about attracting and retaining the best people and giving them the recognition they deserve. 

Today, Chris Chambless, my Co-Founder and our CMO; John Burke, our CIO; Laurie Rodriguez, our CFO, and I all have replicas of that brass plaque on our desks. From the very beginning we wanted to build a culture that would enable us to attract and retain the best talent. First, however, we had to decide what we wanted to focus on and what we were willing to say “no” to.  We had to narrowly target our limited startup capital and time. We kept repeating, “The main thing is to keep the main thing the main thing.”
 
At Ambit, we have three main things: our systems, our people and our standards.

Systems

Our entire executive team came from telecom backgrounds. In that industry, we had seen companies with great back offices and systems thrive and prosper while those with poor systems capsized, sank and disappeared forever when the inevitable data tidal wave hit them. We knew that operationally Ambit would be a data processing company. Everything we would do would involve the receipt, processing, storage, sharing, presentation and mining of data. 

At first, John thought we would be able to find a vendor to supply our systems. But what we wanted didn’t exist. He told us that we would have to build our own systems because the cost and the delays of modifying off-the-shelf systems would be prohibitive. Chris and I didn’t know what we didn’t know about coding. We just shrugged and with very little empathy said, “Let’s get started.” John turned pale, but the next morning he was loyally at his desk starting to code. John built our IT organization and systems from scratch. He started alone and today has 130 people in his IT department. Our systems have been patented, and we feel they are a key qualitative difference between Ambit and our competitors.

People thought we were crazy to build our own systems. Any time you do something unconventional, you get criticized. The first time I was invited to a telecom industry conference to speak on a panel, I was asked to describe Ambit. I told everyone that we were a data processing company that happened to sell electricity and used direct sales for gathering customers. There were snickers in the room. We heard them and ignored them. We didn’t want to be like them, act like them and have returns like theirs. In fact, we didn’t even want to think like them. We didn’t hire anyone from the utility industry for over four years. Any time we needed to learn about something, we Googled it. This approach had risk, but it succeeded because of talented, curious people.



People

Companies are collections of people. Their cumulative and collective knowledge multiplied by their focus and passion is what distinguishes one company from another. That’s what culture is all about. The question for us was how to begin creating a culture. There is an old saying, “First, we define our space and then our space defines us.” We set our culture in motion by moving into a 100-year-old warehouse space and tearing out all of the offices. Light immediately cascaded through the many windows onto the beautiful polished hardwood floors and red brick walls. We wanted open spaces so that we could more closely connect to the emotions of our business. We wanted to hear the excitement and concerns in voices to know what to applaud or what to address immediately. We wanted to sit in the open so that we could have hundreds of conversations a day without ever leaving our desks. 

Actually, our desks are $19 fold-up tables. They, too, were unconventional, and concerns were voiced that everyone would think we had no money and little chance of success. But we explained that we were going to invest all of our capital in great people and outstanding systems, not in fancy offices and elegant furniture. We told everyone that the smart people would understand this and not to worry about anyone else. Eight years later, we are a $1.5 billion company, and our executive team still sits at those same fold-up tables, next to each other and out in the open. 

If we started over tomorrow, we would do it exactly the same way. Smart, young people want a space with high energy that promotes speed, creativity and collaboration. They want to be surrounded by other smart people. We knew that only assigning IT the task of figuring out what was needed and how it should be designed, coded and then prioritized would lead to disaster. We were determined to enable companywide collaboration, believing that everyone had to be engaged in this process. Our space and open culture made that work. 

Standards

The very first time Chris and I sat down to map out the kind of company we wanted to build, we talked about our reputations and the reputations of consultants who would one day join us. We knew that consultants would be putting their reputations on the line every time they approached someone about becoming an Ambit customer or Ambit consultant, and we wanted to deliver as promised—not some of the time, but all of the time. So we committed to building the finest and most respected retail energy provider in America. Those were pretty bold words for a company with a couple of customers, but we knew the opportunity was enormous. To be the finest, we had to have great systems and outstanding people. To be the most respected, we could never sacrifice integrity for growth. 

Over the past few years in almost every speech I have made, I have emphasized that the only way to attract and retain the best people, whether it is inside an organization or in a consultant downline, is by maintaining high standards. We tell our people to be the finest and most respected, to never sacrifice integrity for growth and to never exaggerate. We explain that exaggeration is like quicksand, and once you slip into it, it is almost impossible to get out of. You cannot build a long-term sustainable business with a foundation built on quicksand. Build your foundation on rock. Build it on truth. 

Looking back over the past eight years, we have always tried to work our hardest and do our best. We have always tried to deliver as promised. We have always tried to attract and retain the best people. We have communicated our values repeatedly, and have enforced them when necessary. And along the way, we would like to think that we have built up a certain level of trust with our customers, with our consultants and with our people. That is why we have achieved what we have achieved.

President Reagan was right. Success is all about teamwork, about attracting and retaining the best people and giving them their well-deserved credit. Everyone can do that.


Jere Thompson Jr. is Co-Founder and CEO of Ambit Energy.

February 01, 2015

DSA News

DSA Membership: Perpetuating the Collaborative Culture of Direct Selling

by Joseph N. Mariano


Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


Like every industry, direct selling companies must compete for business, making product development, marketing and sales a highly competitive proposition, particularly at organizations that have business lines in common. This competition is healthy because it drives innovations that ultimately improve the experience of our customers and increase the likelihood they’ll come back to us.

Yet, in spite of the routine competitive pressures associated with operating a business at a high level, our industry is defined by a strong culture of collaboration that I would suggest is unique and adds significant value. As Mary Kay’s Michael Lunceford, Chairman of the Direct Selling Association’s (DSA) Government Relations Committee, likes to remind others in direct selling, we are fundamentally in the people business—certainly to a much greater extent than online and brick-and-mortar retailers.

The face-to-face engagement that characterizes direct selling invites knowledge sharing among companies, even among the fiercest of competitors. At every DSA conference, I am continually inspired by how generously executives from different—and sometimes even competing—companies work together to lend perspective on challenges and opportunities. Many view such collaborations as a way to pay it forward, grateful for critical information they received along the way. Learning from successes and failures of others helps all of us build a stronger direct selling industry together.

At DSA, we live this culture of collaboration every day and harness its power to live up to our mission of promoting, protecting and policing the direct selling industry. Our efforts to bring companies together and facilitate collaboration and conversation are on clear display during each of our conferences, but that is just the beginning. Through our committee and council structure, we create forums for companies of every size, marketing model, and product line to discuss pressing challenges and opportunities and, most importantly, implement solutions that benefit all of our member companies and the direct selling channel.

I appreciate this opportunity to discuss some of the ways in which DSA membership and our strong culture of collaboration can add tangible business value to your direct selling company this year—and for years to come:

  1. Government Relations. Each year, state legislatures meet to consider thousands of bills. Year after year, the Association’s collaboration with DSA member companies in this important area has prevented unnecessary or costly mandates from becoming law. We also pursue legislation proactively, including independent contractor measures in various states that protect the direct selling business model. The committee engages similarly with federal policymakers from our headquarters here in Washington, D.C.

  2. Ethics and Law. Direct selling companies cannot join us without undergoing a year-long, rigorous review process to ensure compliance with standards set by DSA’s Code of Ethics. Once on board, members on the Ethics Committee help us chart the future of our Code, identifying areas that further strengthen consumer and salesforce protections. Membership in DSA helps differentiate our companies from bad actors within the industry.

  3. Industry Research. DSA’s Industry Research Committee implements a program that helps our members stay abreast of and understand industry trends to make more informed business decisions. Our members receive timely access to market sizing, benchmarking and best practice reports.

  4. Executive Education. Each year, DSA’s Education Committee develops a wide-ranging calendar of networking opportunities, issue-oriented summits, and executive-level dialogue and learning experiences to provide members with the knowledge they need to succeed.

  5. Communications. Making sure that key external stakeholders, such as policymakers, understand the business model and appreciate the entrepreneurial opportunity associated with direct selling is important. Our Communications Committee guides efforts in this area and is pursuing a number of new activities this year.

To every direct selling company that has already renewed membership with DSA or is about to, please accept my sincere thanks. Our industry is stronger when as many companies as possible are represented at our table.

For those of you who are new to the direct selling space or are wondering how you can increase your exposure to industry experts and help us chart the future of the industry, I would be honored to welcome you to DSA. For more information, contact Nancy Burke, DSA’s Vice President of Membership, at nburke@dsa.org.


Joseph N. MarianoJoseph N. Mariano is President of the U.S. Direct Selling Association.

February 01, 2015

Cover Story

Show Them Who You Are: Driving Successful Events with Cultural Authenticity

by Beth Douglass Silcox

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


Excitement is palpable and anticipation electric. Energy fills the space and all eyes wait, fixed center stage. Perhaps no other industry rallies its salesforce in quite as spectacular fashion as direct selling, where participants create an atmosphere that resembles a professional sporting event, a national political convention and even a homegrown dance party.

DSN February 2015Large-scale events are the culmination of tens of thousands of smaller gatherings that push business growth forward and foster belief among the rank and file selling field. By the time the pockets hit the seats in hotel ballrooms, convention centers and stadiums across the globe, successful direct selling companies have made it their business to fascinate their sales fields. As that first spotlight welcomes believers, it is up to corporate to deliver an authentic experience that lives up to the fascination and defines how the company wants the world to see them.

At an event is clearly one of the few times when a voice from the corporate level goes out powerfully to the field. The independent contractors are present, attentive, and invested in hearing and learning. This is the place to deliver big on consistency in messaging. 

Events of all sizes are avenues where direct selling companies pass along their corporate culture. But it is the large-scale annual or semi-annual extravaganza that should capture the essence of a company’s culture in every conceivable way, from the personal development speakers who take the stage and ceremonial recognition of top leaders to the entertainment and extracurricular activities. Often, even the venue locales themselves, point back to the company’s authentic, true self—its culture.

Cultural expressions at these grand events range from Team National’s homegrown comfort, banquet-style roundtable seating, indoor beach volleyball games and sandcastle sculptures to NuSkin’s on-stage pyrotechnics, Cirque du Soleil style performances and innovative musical concerts by top-shelf artists like Seal.

While some companies because of the scale of their corporations or their cultural style may spend more money and offer more visual sizzle, the same event methodology applies to all. It’s not enough to simply tell the field who you are and what you stand for, you must show them.

Event-centric Culture


“If you can’t see it, feel it or experience it quickly, we don’t sell it. We’re all about the experience, and our company name really defines how our events strategy works—It Works!”
—Mike Potillo, Chief Sales Officer, It Works!


For direct selling companies, “showing” starts in living rooms, kitchens and coffee shops across the globe. Every gathering, whether it be just two people or 2,000, is an event, and each of these events layers one on top of the other to lead direct sellers to yet a larger event, culminating in attendance at a national convention.

Participating in local events provides the first degree of connection for the independent consultant to the company, and to other consultants. From this, an individual is much more likely to take that leap to go to a regional event or fly to a national conference. When a company’s strategy includes a layered event rhythm, independent consultants build relationships, gain knowledge and understand the value of that national conference. By layering events with specific intention, it reinforces the perception that the bigger national conference will provide significant value to the attendee.

Whether it’s an intimate one-on-one meetup or an on-stage affair in front of thousands, It Works! events—or parties as they like to call them—are central to the company’s overall business strategy. “The purpose of the event is to not only inspire your existing field, but to create new revenue, increase retention and give recognition,” says Mike Potillo, Chief Sales Officer. “If you can’t see it, feel it or experience it quickly, we don’t sell it. We’re all about the experience, and our company name really defines how our events strategy works—It Works!”

Where some direct selling companies cater their events, marketing, sales strategies, and business models to 100 percent of the potential market, It Works! pinpoints the segment of market share they want and caters only to them. In so doing, Potillo says, “We know that we can be ourselves. We can be who we are. We can be goofy. We can be silly. We can be the crazy one, but we’re going to pull a big percentage of what we want and they are going to be like us. We can truly have a lot more fun and not have to worry about how we are perceived. I think that the genuine authenticity of our company resonates with everyday people because that’s exactly who we are.”

Cultural authenticity also infuses Nerium’s events through the expression of its main core value: Be Real. Their approach is personal and humanizing and giving. “Our speakers and everyone we have on stage share from the heart and are transparent with their stories, their struggles. It’s not like we’re just showing a bunch of perfect people up on stage that aren’t relatable to our Brand Partners,” says Amber Olson Rourke, the company’s Chief Marketing Officer. “Our philosophy for events is to make it a time for giving back, investing knowledge and personal development into the field, giving them fun experiences and opportunities to network and really making them feel special. We see events as a way to give back to our Brand Partners and invest in them, and I think a company gets more in return if they look at events this way.”

While Viridian Energy shares a similar event escalation process, they take a distinctly business-like approach when addressing their independent associates at events. “They are sweat equity investors in our business because they invest their time and talent,” says President Meredith Berkich. “Our desire to honor that investment is taken super, super seriously. We open the majority of our events talking to our independent associates on a business level because they consider themselves the CEOs and presidents of their own companies. We want to take a very mature business approach with them.”

Viridian’s high-level business strategy posture at events attracts extremely professional associates to Viridian’s ranks, while corporate transparency in its sustainability efforts to minimize carbon footprints through renewable energy purchases solidifies the overall integrity of the company and increases trust. It’s a strategy that keeps Viridian growing.

To successfully grow in today’s marketplace, direct selling companies must know who they are and find authentic ways to skillfully exhibit it to their sales fields. Event choices—no matter how seemingly incidental—will read authentic or not to the direct selling field. It’s imperative that companies pay attention to the details, for it is the field that literally embodies the company’s culture when they return home to build their businesses, and it’s their first-hand accounts that will fill the seats of that next national event.


“We see events as a way to give back to our Brand Partners and invest in them, and I think a company gets more in return if they look at events this way.”
—Amber Olson Rourke, Chief Marketing Officer, Nerium


A Fascinating Formula

Meeting Technology

The use and applications of technology have grown in every aspect of business, including meeting planning. In fact, according to the Event Industry Trends Report 2015, published by Julius Solaris, Editor of the Event Manager Blog, the most exciting technologies for events in 2015 will be focused around attendees and maximizing their experience at events. Take a standard Q&A session, for example, a segment that can be challenging for audience participation. Traditionally, attendees would take turns at a solitary microphone, or attempt to pass around a few wireless ones, often creating awkward silences. 

A startup company called CatchBox has created an innovative and fun way to get the audience involved. A microphone and its required audio equipment are tucked inside a foam square that can literally be tossed around the room. The attendee simply catches the box and then speaks into it. When the question is answered, the attendee tosses the box to the next person with a question. This unique product promotes not only engagement, but also does what is traditionally very difficult—it motivates attendees to get involved.

New apps can also turn anyone’s mobile device into their own personal microphone, syncing up with the room’s sound system so they can be heard—with top-quality sound. These innovations work at two important levels—increasing audience engagement, which is always a goal, but also making the experience more personal and gamified, and thus reducing the stress usually associated with speaking out loud in front of strangers.

Apps on mobile devices will also replace paper event schedules, and even maps and guides, as the old standard “You are Here” map-on-a-wall becomes a micro-locating flag on your smart phone, ready to lead you to your next workshop.

ACN does a great job at building the belief level of new consultants, not only in the power of the business opportunity, but also the power of attending events. ACN regularly has new people—some only in the business for a few weeks—sign up for national conventions.

Successful companies establish formulaic events. They’ve got a standard set of objectives, and often a standard platform or schedule mixing general sessions with targeted workshops. Basically, each objective or segment should revolve around growth and getting people consistently doing the right things when they return to the field. The event is the largest and loudest “voice” during the year, but everything coming from the company all year long should layer into the messaging from the event, and keep the field going in the same direction.

That’s not to say that the companies should create a boring event that never changes or has surprises. Excitement is critical to a successful event. But it should be within the framework of consistency that the creativity of each company flourishes, instead of simply calling on the same people each year. New attendees generally always bring excitement with them, especially if the company has laid the groundwork leading up to the event. Ideally, the attendee list should be a mix of current leadership and a heavy number of brand-new attendees.

As for those escalation events like Viridian’s Road Shows and Super Regionals, Berkich says a 20 to 30 percent guest-to-associate ratio is a good rule of thumb. “If you get to the point that you have a lot of associates coming to a normal escalation event and they aren’t bringing guests with them, then the business is not growing,” she says. And direct selling companies are wise to heed that warning.

“We approach every event as if we are talking to a brand-new person,” Berkich says. “But the reality is that we all need recharging at times. You miss goals, and you have people out there trying to steal your dreams. Even people who have been in the business for some time need to come and build their own beliefs back up, and sometimes they need to borrow the belief of other people.”

Putting Pockets in the Seats

The same corporate people saying the same corporate stuff year after year can be a hard sell. Companies like ACN have drawn phenomenal speakers to their international training events over the years. These influential voices provide positive front-end promotion, give companies great bang for the buck and drive people into the seats time and time again. Other companies mobilize and utilize the talents of their own field leaders to provide the inspiration they know will reach their particular salespeople.

But personal development speakers and motivational messages are just part of a successful event framework that also includes major corporate announcements. There’s no better time to launch a new product, promotion or initiative than in conjunction with a major event when companies can build excitement for a brand, a message and a product. After all, a picture is worth a thousand words. Where better to paint a picture of success and excitement than at a national or international event?

Events offer the ideal show-and-tell playground for top leader recognition too. Regardless of the corporate culture’s style, these hard-working direct sellers must get their moments in the spotlight. Primerica’s Next Generation Giants walk away with enormous trophies and fine art portraits, while Ambit Energy awards cash prizes, iPad Minis and even a Cadillac CTS Coupe.

But it’s not only top leaders who benefit from attending events. One of the most important aspects of a successful event is also something that is relatively easy to do: Give people something they may not get elsewhere in their lives—recognition and appreciation. That could be as simple as seven minutes of applause while 100 people stream across the stage waving or handing the microphone over to an unpolished speaker so she can share with the crowd why she joined the company. Recognition is about making every single direct seller feel special because they actually made it to their goal, and it’s about inspiring the audience to earn their way on stage next time.


One of the most important aspects of a successful event is also something that is relatively easy to do: Give people something they may not get elsewhere in their lives—recognition and appreciation.



Events and Strategic Growth

“The biggest mistake most companies make at events is that they think they are just there to have fun,” Potillo says. In fact, making friends and having fun is only part of the equation. “When people leave our events, they don’t just leave with a good feeling that they had a good time. They leave with a specific goal, a specific path, and a very simple system for how to achieve that.”

Without such a game plan, Potillo says It Works! would not have posted year-over-year growth since 2010. “We had an event. We came together as a team, made a lot of friendships, had a lot of fun, put together a plan for freedom, and we jumped to $45 million in sales the next year,” Potillo says. They repeat the process each year, and have continued to experience high growth. Last year, It Works! placed No. 27 on the DSN Global 100 list for 2013 at $456 million.

Startup companies can use an aggressive event schedule to expose as many people as possible to their products and to encourage new consultants to take the first step of engaging with the company. Consistency in events also aids this process, as existing consultants know that the new people they bring to an event will have the same experience they did. It’s this kind of confidence that sparks the daily field behavior that grows events and, by extension, companies.

Still, for a lot of direct selling companies, lack of staff and resources can make such tight event schedules really difficult to execute. In this case, two events a year is an excellent beginning. It establishes the kind of event rhythm companies need in order to consistently gather a captive audience. This schedule creates a foundation to build upon, and part of that is also driving behaviors in the field with product and recruitment promotions that head toward that event.

In the simplest of terms, the field sees the event as a very real deadline for achieving goals. They want to be recognized at the convention, and they know what they need to do to meet their goals. A strategic event schedule allows the company to create deadlines that are good for business and, at the same time, a rhythm to drive the business.


Events are all about the people in the seats—connecting with them, recognizing their accomplishments, and driving and inspiring their behavior and growth.


But it’s a mistake for companies who are culturally ambiguous to believe they can host a large-scale event, give people some good information and see immediate success. Events are best utilized when they are part of a larger strategy to train, recognize and motivate the field to achieve their goals. After all, if the strategic plan is carefully orchestrated, when the field reaches their goals the company also reaches theirs.

Additionally, while it’s true events can facilitate rebranding or repositioning of a company, they are not a place to display ego or confirm the executives’ public speaking skills. Events are all about the people in the seats—connecting with them, recognizing their accomplishments, and driving and inspiring their behavior and growth.

The enemies of direct selling are time and distraction. The average direct seller has only a few precious hours to spend building a business each week with no time to waste trying to figure out what your company stands for or in which city you’re appearing next. Berkich says, “The element of surprise and ‘aha’ for a volunteer army is a slippery slope. You need those people to be able to engage on a level that they have set for themselves for their own personal goals and aspirations. You need to be able to maximize that precious time and provide an environment of stability and consistency.”

February 01, 2015

Stock Watch

Stock Watch, February 2015


February 01, 2015

News in Brief

News in Brief, February 2015

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


Janet Kincade and Cindy Monroe

Thirty-One Taps into Artisan Jewelry with Jewel Kade Acquisition

» Columbus, Ohio-based Thirty-One Gifts has acquired Utah-based direct seller Jewel Kade, an artisan jewelry brand founded in 2009. Beginning this spring, Thirty-One will offer JK by Thirty-One jewelry in addition to its handbags, totes and home organization products.

Like Thirty-One Founder Cindy Monroe, Janet Kinkade launched Jewel Kade from her basement with the hope of equipping and empowering women to succeed on their own terms. Both brands also bring a personal touch with the option to customize select products. Jewel Kade now partners with a network of 1,500 stylists nationwide and has been featured on the TODAY show, Ellen and American Idol.

JK by Thirty-One is not the only fresh offering coming to Thirty-One customers in 2015. The company has also acquired upscale accessories brand Jewell, a direct selling startup co-founded in 2013 by Monroe and her sister, Christie Jewell Woodfin. These strategic acquisitions bring new growth opportunities to a company that has achieved annual net sales of $763 million in its first decade.

With the acquisition, Thirty-One is offering Jewel Kade stylists the opportunity to join its family of consultants. Kinkade will also carry on her role as the principal jewelry designer for JK by Thirty-One.


Nu Skin Donates 400 Million Meals through Nourish the Children

Children in Malawi, Africa, receive meals supplied by Nourish the Children.Children in Malawi, Africa, receive meals supplied by Nourish the Children.

» As Nu Skin closed out its 30th anniversary year, the wellness and skincare company quietly celebrated a major milestone in its Nourish the Children initiative. Since the program launched in 2002, Nu Skin employees and distributors have donated more than 400 million meals to malnourished children around the world.

Nourish the Children supplies often life-saving nutrition through Nu Skin’s specially formulated VitaMeal product. The Provo, Utah-based company partnered with an expert on child malnutrition in third-world countries to develop VitaMeal, a blend of carbohydrates, protein, fat, fiber and other nutrients that easily supplements local ingredients.

When individuals purchase VitaMeal, Nu Skin matches the donation and distributes the meals to one of its authorized charity partners. The model answers a need for consistent sources of nourishment among the world’s neediest populations. Every day, nearly 100,000 children receive meals as a result of the initiative. Nourish the Children has also established education and disease prevention programs, such as the School of Agriculture for Family Independence (SAFI) in Malawi, Africa.


Natura Is the World’s Largest B Corps Certified Brand

» Natura Cosméticos, Brazil’s leading cosmetics, fragrance and toiletries maker, has built its business on a commitment to relationships, sustainable development and promoting well-being. The brand’s purpose-driven practices emphasize respect for and preservation of natural resources, as well as a strong sense of social responsibility. Pursuing that core philosophy, Natura has now become the largest—and first publicly traded—company to attain B Corps certification.

Certified B CorporationThe nonprofit B Lab certifies B Corporations for voluntarily meeting rigorous standards of social and environmental performance, accountability and transparency. Inc. magazine describes B Corp as “the highest standard for socially responsible businesses,” and the Sierra Club calls it “one of the most trustworthy eco-certifications.” More than 1,000 Certified B Corps across 33 countries and more than 60 industries have joined the initiative.

Like its fellow B Corps companies, Natura leverages the power of business to solve social and environmental problems. Natura’s internal performance evaluation includes execution of its social or environmental mission and goals. The company also provides generous benefits and training to employees, and more than 50 percent of its managers are women. Other factors highlighted by B Corps include Natura’s contribution to public education and community investment—both monetarily and through partnerships with small community suppliers—and the company’s close tracking of environmental aspects of its operations.

Natura—a 7,000-employee company with $2.65 billion in net sales last year—joins two other large, high-profile businesses recently added to the B Corps ranks. Crowdfunding platform Kickstarter and energy company Green Mountain Power 
both announced certification earlier this month.


DreamTrips by WorldVentures Named World’s Leading Travel Club

» The World Travel Awards (WTA), annual industry honors voted upon by travel professionals and high-end tourism consumers, has named WorldVentures’ DreamTrips vacation club the 2014 World’s Leading Travel Club. The club offers its members curated group travel opportunities and membership discounts, currently in 60 countries worldwide. DreamTrips members can also sign up to experience VolunTours, which combine voluntary service with travel.

The World Travel Awards have been setting travel and tourism industry benchmarks for more than two decades. Leading up to the international awards, DreamTrips and its travel agency partner, Rovia, were named this year’s Leading Travel Club for the North America, Europe, Asia and Africa regions.


Youngevity

 Youngevity to Offer Energy Services through New Partnership

» Youngevity International is adding another segment to its diverse direct selling business, this time in the services category. The San Diego-based company has branched into energy and natural gas services through a new partnership with Energy Professionals.

The new services, including green renewable energy options, launched for Youngevity’s Texas distributors and customers in January. The company anticipates that more deregulated markets will follow. Energy Professionals holds contracts with 10 of the country’s top 13 energy supply companies, enabling it to service more than 5 million residential customers and more than 50,000 commercial accounts.

Youngevity’s extensive offerings span the Health and Wellness, Beauty and Care, Food and Beverage, and Home and Family categories. Further diversifying its model with energy services allows Youngevity customers and distributors to participate in a
$500 billion industry, said President Bill Andreoli.


Foundation 4Life Brings Aid to Malaysian Flood Victims

» Foundation 4Life is bringing relief to Malaysia amid flooding on the country’s east coast, as well as in parts of neighboring Thailand and the Philippines. An unusually heavy monsoon season inundated the region from mid-December to early January, leaving nearly a quarter of a million people displaced from their homes.

4LifeThe flooding has caused dozens of deaths and extensive damage throughout the region. Initial estimates from the Malaysian ministry project that clean-up efforts will cost the federal government nearly US$60 million. 4Life reports that the disaster has affected more than 100 of its Malaysian distributors. The company has an office in Kota Bharu, a city in the northeastern state of Kelantan, where some of the most severe flooding occurred.

Foundation 4Life focuses on building people, family and communities wherever 4Life conducts business, and the company has repeatedly mobilized its network of distributors around the world to aid in disaster relief. In Malaysia, employees and distributors gathered at 4Life’s Petaling Jaya office outside Kuala Lumpur to prepare aid packages. The foundation delivered an initial shipment totaling nearly 2,000 pounds of food and necessities to Kota Bharu, followed by a second shipment exceeding 2,800 pounds.

4Life’s Vice President of Communications, Calvin Jolley, told DSN the company is also supporting local distributors with monetary donations and supplies. Foundation 4Life is holding a February event at its Kota Bharu office to meet with leaders, make donations, and assess next steps in the aftermath of the disaster.


Avon China Probe Concludes with $135 Million Settlement

Avon China» The Department of Justice will defer criminal prosecution of Avon Products Inc. for three years, according to a recently disclosed bribery probe settlement. A six-year federal investigation of the company has ended with Avon’s Chinese subsidiary pleading guilty and accruing $135 million in fines.

The investigation focused on the period from 2004 to late 2008. The SEC alleged that Avon China’s inaccurate and incomplete bookkeeping during that period conceals payments to government officials who ultimately awarded Avon the country’s first direct selling license.

According to the SEC’s Manhattan court filing, Avon violated the Foreign Corrupt Practices Act (FCPA) by bankrolling $1.65 million in travel, meals and entertainment for Chinese officials. The company also provided $8 million in cash and gifts without properly recording the expenses. Additional payoffs went to state-owned media outlets to help the company avoid negative press.

The direct selling leader has spent about $300 million on an internal investigation launched in 2008. In the settlement, the DOJ recognized Avon’s cooperation and the “extensive remediation” it has undergone to improve compliance and internal controls.

Avon stated in May 2014 that it would settle the probe, which includes $68 million in fines to the DOJ and $67 million to the SEC. The agreement includes a corporate compliance monitor to oversee monitoring and reporting obligations for three years. With the company’s ongoing compliance, the charges will then be dropped.


Young Living

Young Living Plans to Create Utah Jobs

» After surpassing the 1,000-employee milestone in 2014, Young Living Essential Oils has announced plans to grow its workforce by nearly 50 percent over the next seven years. The Salt Lake City-based company worked with the Utah Governor’s Office of Economic Development on a plan to bring new job opportunities to the state. The jobs would bring a major economic boost, with total salaries amounting to 125 percent of the county average income.

  • Founded: 1993
  • Members: 925,000
  • Employees: 1,375
  • New jobs projected: 445
  • Farms worldwide: 8
  • Global markets: 11

Beautycounter Backs Controls on Chemical Use

CFP» Nontoxic skincare and cosmetics brand Beautycounter has teamed up with a group of likeminded corporations and NGOs (non-governmental organizations) to introduce the Chemical Footprint Project (CFP). An initiative of BizNGO and the Lowell Center for Sustainable Production and Pure Strategies, the project is using a model similar to carbon footprinting to establish the first-ever common metric on corporate chemicals management.

Founder Gregg Renfrew launched Beautycounter in 2013 to offer products that are both safe and highly effective. Though the U.S. government has banned just 11 ingredients from personal-care products to date, the company has established its own “Never List” that currently includes 1,500 ingredients restricted from its products. With its partners in the Chemical Footprint Project, including companies such as Target Corp., Staples Inc. and the Environmental Defense Fund, Beautycounter is providing a means for consumers and investors to identify organizations committed to using safer chemicals.


Medifast

Medifast Shifts Focus

» Weight-loss company Medifast Inc. is shifting away from managing its own weight control centers to partnering with franchisees through its various distribution models. At the close of 2014, the Take Shape For Life parent company closed 34 of its corporate-owned Medifast Weight Control Centers. It also expects to sell the assets of 17 corporate-owned Medifast Weight Control Centers to existing business partners, which would then be transitioned to the franchise model. 

“Exiting the corporate center model is consistent with our long-term strategy and will allow us to focus on optimizing the performance of our franchise partners,” said Michael MacDonald, Chairman and CEO of Medifast. “We will continue to leverage our multi-channel distribution approach across franchised Medifast Weight Control Centers, Take Shape For Life, Medifast Direct, and Medifast Medical Providers. By providing unique support offerings, we meet customers where they are in their weight-loss or weight-management journey and provide healthy living tools for long-term wellness.”

The company offered severance to impacted employees and the unique opportunity to become a Take Shape For Life Health Coach. Affected Center members also had several options to continue their programs with Medifast.


ViSalus Orchestrates International Workout in World Record Bid

ViSalus» ViSalus helped people jumpstart their New Year’s health and fitness resolutions in a big way. At noon on Jan. 3, the healthy lifestyle company attempted to set a record for the World’s Largest Simultaneous Group Workout.

Troy, Michigan-based ViSalus invited individuals to participate by hosting or joining one of its Challenge Group events. The groups formed across North America as well as Europe, where the company operates under the Vi brand.

If the attempt proves successful, the record would not be the first set by ViSalus, which teamed up with celebrity Alfonso Ribeiro in 2012 to perform the World’s Largest Simultaneous Flash Mob. The flash mob featured Ribeiro’s “Carlton” dance, named for his character on television’s The Fresh Prince of Bel-Air. The famous moves also helped Ribeiro and his partner, Witney Carson, win the latest season of ABC’s Dancing With The Stars.

In addition to gunning for a world record, the Challenge Groups worked up a sweat for a good cause. For every person who participated, ViSalus donated 30 meals through its PROJECT 10 Kids program, which supplies Vi-Shape Nutritional Shake Meals to children in need.


Nu Skin Enterprises Hosts Annual Investor Conference

» Nu Skin Enterprises hosted its annual investor conference on Dec. 12, 2014, at the Nu Skin Innovation Center at its global headquarters in Provo, Utah. The company’s management team shared details of its 2015 and longer-term growth plans at the event.

The anti-aging and wellness company projects 2015 revenue of $2.50 billion to $2.56 billion, representing growth of 4 to 6 percent in local currency. This revenue level reflects a negative foreign currency impact of 6 percent. Earnings per share are estimated to be $3.80 to $4.00.

Nu Skin also announced that it has received official approval to commence direct selling activities in five new districts in Shanghai and two new cities in Jiangsu Province.


MonaVie China Lays Groundwork for Official Launch

» MonaVie rolled out big plans in 2015 with the launch of its business in China, direct selling’s second largest market. The health and wellness company has kicked off a pre-launch phase in the country with a ribbon-cutting ceremony at its new Shanghai administration office.

The Shanghai office is one of three that will initially support MonaVie’s Chinese distributors and customers. MonaVie has also opened an office in Guangzhou, the capital of South China’s Guangdong Province, and plans to open a Beijing location with its full market launch in April 2015.

February 01, 2015

Publisher's Note

The Power of Connection

by Lauren Lawley Head


Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


Lauren Lawley Head

Benjamin Franklin once said, “Energy and persistence conquer all things.” You will find echoes of that idea as you read this edition of Direct Selling News.

In the direct selling community, energy is never more palpable than at a major company event. When done right, new product announcements, inspirational speakers and critical training come together in a carefully designed blend to create an atmosphere of excitement and belief that take a company’s business—and that of its independent salesforce—to new heights. In this month’s cover story, writer Beth Douglass Silcox examines some of direct selling’s best event practices, providing a tip sheet for companies of all sizes that are looking to craft a cohesive, ongoing event strategy and maximize the return on the effort. Viridian Energy President Meredith Berkich is among the top executives who shared insights for the article. “We approach every event as if we are talking to a brand-new person,” Berkich says. “But the reality is that we all need recharging at times. You miss goals, and you have people out there trying to steal your dreams. Even people who have been in the business for some time need to come and build their own beliefs back up, and sometimes they need to borrow the belief of other people.”

The Direct Selling News team is powering up for a high-energy event of our own: the sixth-annual DSN Global 100 Awards. On April 8, at the InterContinental Dallas Hotel, we will unveil our exclusive list of the largest direct selling companies in the world. It is a celebration you won’t want to miss, and tickets to the gala dinner, open to direct selling executives, are available now at dsnglobal100.com. But the Global 100 is more than a night of recognition and celebration. As DSN Publisher and Editor in Chief John Fleming describes in his article “Are We Winning?” on page 58, the list has become “perhaps the most important scorecard on the industry.” As such, you’ll want to be sure that your company participates in this important research. To qualify, companies should submit complete profile and revenue certification forms by March 20, which also are available at dsnglobal100.com.

You’ll find a feature story of one of last year’s Global 100 companies on page 30 of this issue. Hy Cite Corp., which ranked No. 75 with 2013 net sales of $164 million, has found success by transitioning from selling female college students on cookware for their hope chests in the 1950s to offering multiple brands that have earned the respect of the U.S. Hispanic market and beyond. “We sell family values—working and eating together, health, and keeping the family together,” says Chairman and CEO Erik Johnson. “We believe that the field salesforce drives sales and much of our marketing and idea generation. We believe strongly that the entire organization learns from each other and that people help each other so that we are all successful together.”

At DSN, we believe that the entire community benefits when direct selling executives share their stories so that companies can learn from each other. As you continue to work your business and event plans for 2015 and further into the future, don’t hesitate to reach out so that we may continue to contribute to the body of knowledge for the entire channel.

All the best,

Lauren Lawley Head
General Manager

January 30, 2015

U.S. News

Thirty-One Brings its Totes and Accessories to Alberta, Canada

On the heels of its success in Ontario, Thirty-One Gifts’ first Canadian province, the company is expanding the sale of its products into Alberta. Beginning Feb. 10, Thirty-One will make available its entire line of personalized home organization products and totes as well as its new Jewell by Thirty-One line of faux leather purses and accessories.

The Columbus, Ohio-based company has worked to establish itself in Ontario over the past two years, and Alberta, with a strong economy and interest in Thirty-One products, served as a welcomed opportunity for the company’s movement into new markets. 

“We were purposeful about keeping to a single Canadian province for a period of time in order to thoughtfully introduce our brand and values to a new country,” said Thirty-One Founder, President and CEO Cindy Monroe. “Our business is about relationships and we’ve spent time focusing on building those relationships in Ontario, creating a strong foundation for growth and success as we expand into Alberta.”

Christina Snyder, Vice President of New Market Development, said she already sees a strong leadership base in Alberta, and looks forward to holding two upcoming opportunity events in Calgary, Alberta, for potential consultants.

“We’re going to show them we truly are a relationship company and we care about women having a fulfilling, enjoyable way to earn extra income,” Snyder said.

 

January 29, 2015

U.S. News

Avon Taps J. Crew Executive as New CFO

Four months after the resignation of its CFO, Avon Products Inc. has announced James S. Scully as the company’s new Executive Vice President and Chief Financial Officer.

Scully brings nine years of experience with specialty retailer J. Crew to lead all finance and IT functions at Avon, beginning no later than April 1. There he will work with leadership on improvements and strategy as the company continues its process of turnaround. Scully’s appointment follows recent changes to Avon’s management structure intended to support this multiyear plan. 

Having most recently led J. Crew’s international expansion efforts for nearly two years as Chief Operating Officer, Scully previously served as the company’s Executive Vice President and CFO as well as Chief Administrative Officer. Before that he had spent time at both Saks Inc. and Bank of America in financial strategy and corporate banking capacities.

“[Jim Scully’s] deep consumer expertise, track record of working in complex environments, and experience developing opportunities in international markets make him the ideal fit for Avon,” said Sheri McCoy, CEO of Avon. “He is a seasoned finance and operational leader with public company CFO experience and will play an integral role in driving sustainable and profitable growth at Avon.”

Avon’s previous CFO Kimberly Ross resigned from the beauty company last October to become CFO at oil field services company Baker Hughes Inc.

January 28, 2015

U.S. News

Tupperware Closes FY 2014 Beating Q4 Consensus

Reporting fourth quarter 2014 results before markets opened today, Tupperware Brands Corp. (TUP—NYSE) beat EPS expectations by 19 cents, with earnings of $1.72 per share. In response, shares spiked 11.9 percent in premarket trading, according to The Street. The Orlando, Florida-based direct seller posted a profit of $82.3 million, down 8 percent versus prior year, but excluding the impact of foreign currency rates on the comparison, profit was up 6 percent versus 2013.

Though down 5 percent in constant dollars compared to the previous year, net sales for the quarter ended Dec. 27, 2014, were $679.9 million, up 6 percent in local currency, due in large part to emerging markets, which were up 10 percent in local currency and accounted for 64 percent of the company’s fourth quarter sales.

Rick Goings, Chairman and CEO, said, “While there continue to be challenging external forces, this quarter’s results demonstrated we can and will continue to navigate through the environments we find ourselves in, with our strong global management team using our growth levers: innovative and demonstrable premium products; an entertaining selling situation and direct-to-consumer fundamentals driven through the relationships of our 2.9 million sales force worldwide.”

Guidance for first quarter 2015 shows an EPS in the range of 98 cents to $1.03 with earnings for the full year in the range of $4.90 to $5.00 per share. Both are below Wall Street expectations, which are $1.11 for the quarter and $5.20 for FY15, according to the Capital IQ Consensus.

Read Tupperware’s full results here.

January 28, 2015

U.S. News

Team 4Life Welcomes Olympic Gold Medalist

Australian professional snowboarder Torah Bright, who was a stand-out competitor and medalist in the 2014 Winter Olympics, has joined Team 4Life. Already a fan of the health and wellness company’s products, she will endorse 4Life’s Transfer Factor® line.

Bright was a Silver medalist in the Half-pipe competition of the most recent Winter Olympics in Sochi, winning Australia its first medal of that year’s Games. Adding to the Gold she had won in the same category in the previous Olympics in 2010, Bright became Australia’s most successful Winter Olympics athlete. She’s also won two Gold and two Silver medals for her performance in the Snowboard SuperPipe competition at the Winter X Games in Aspen, Colorado, and in 2013 took first place at the Sprint U.S. Grand Prix at Copper Mountain, Colorado.

Growing up in Cooma, New South Wales, Australia, Bright was first introduced to 4Life products in 2013 through her mother, Marion, who was already a long-time distributor for the company.

“Torah’s spirit, discipline, and character exemplify what we look for in Team 4Life members,” said Trent Tenney, Senior Vice President of Marketing. “I’ve had the pleasure of spending time with her at 4Life Global Headquarters and I can attest to the passion and determination she demonstrates in competition. We are thrilled to welcome her as the first new Team 4Life member in 2015.”

By joining Team 4Life, Bright, who just won Bronze in the Women’s Snowboard SuperPipe competition for the 2015 Winter X Games in Aspen last week, will become part of a group of world-renowned athletes who excel in their disciplines.

 

January 27, 2015

U.S. News

PartyLite to Centralize Global Innovation in State-of-the-Art Facility

PartyLite is bringing it all home—its manufacturing operations that is. The candles and home décor division of Blyth Inc. recently announced that it is creating a Global Center of Excellence in Batavia, Illinois, where the company currently houses one of its two facilities for the manufacturing and development of its candles. The second facility in Cumbria, United Kingdom, will be shut down as a result.

After a comprehensive evaluation of the two sets of operations, the company concluded that having one worldwide facility would provide a central location where it can best concentrate its expertise on candle-making innovation, research and development.

“The Global Center of Excellence in Batavia will represent a significant investment in a state-of-the-art, global manufacturing complex with advanced process control systems and unrivaled quality and service levels,” Robert B. Goergen Jr., CEO of Blyth and President of PartyLite Worldwide, said in the company’s release.

The project will launch early this year with management expecting financial results to include total annualized savings of $8.0 million, or $40.0 million over the next five years, and one-time and transitional costs of approximately $6.0 million and a $2.0 million asset write-down in Cumbria.

PartyLite continues to expand the reach of its products as acceptance of direct selling grows in other regions of the world along with popularity of its candles and accessories. The company recently made products available in both Turkey and Korea, expanding its total worldwide markets to 23.

January 23, 2015

U.S. News

This Week: Beauty Game Changers and Profit in the Party

Catch up on this week’s industry chatter with these click-worthy links:

  • Non-toxic skincare and cosmetics brand Beautycounter found itself in good company when women’s style magazine Elle featured the direct retailer as a “game changer” in the beauty industry, along with trendsetters in hair care and fragrance.
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  • With wine an internationally coveted commodity and parties always in style, at-home tastings are surging in popularity. Now more people have found opportunities through direct sellers such as U.S.-based Boisset Wine Living and Germany’s WIV Wein International.
  •  
  • What do you want for your birthday? A 14-year-old boy with autism received a surprise demonstration of his favorite “toy”: a Kirby vacuum cleaner.
  •  
  • Ryan Blair, Co-Founder and CEO of recently revitalized health and fitness company ViSalus, makes a “game” out of interviewing potential employees and found inspiration for his company’s latest product from a surprising source.

January 22, 2015

U.S. News

Stella & Dot CEO to Speak at Inaugural Silicon Valley Conference

Stella & Dot CEO Jessica Herrin has joined an impressive lineup of speakers slated for this year’s Watermark Silicon Valley Conference for Women. Hillary Rodham Clinton, fashion icon Diane von Furstenberg, and professor and best-selling author Dr. Brené Brown are among the women who will deliver keynotes at the first-ever event. Also in the lineup will be Dr. Gloria Mayfield Banks, an elite executive national sales director with Mary Kay Inc. as well as a motivational speaker and trainer.

Watermark brings together executive women in the San Francisco Bay Area, home to tech industry hotbed Silicon Valley. For more than 20 years, the nonprofit has worked to increase representation of women at executive levels, specifically through connection, development and advocacy programs. Watermark’s board of directors includes top executives from brands such as Intuit, Oracle and Deloitte & Touche LLP.

The inaugural Silicon Valley Conference for Women will take place in Santa Clara, California, on Feb. 24, 2015. With the theme “Lead On,” the event aims to promote leadership as well as personal and professional growth. Throughout the day, Herrin and more than 100 other speakers will lead discussions and interactive sessions on issues impacting women in the workforce.

Watermark is also using the conference as a platform to introduce its first Watermark Index. Based on a survey of Bay Area companies, the Index will highlight businesses actively supporting and developing the women in their ranks.

January 21, 2015

U.S. News

Direct Selling Association President Responds to NYT Op-Ed

Direct Selling Association President Joseph Mariano has a message for New York Times columnist Joe Nocera. Earlier this month, the opinion writer added to the abundant ink that has been spilled on the topic of activist investor Bill Ackman’s $1 billion Herbalife short. This week Mariano penned a Letter to the Editor addressing the questions raised by Nocera.

The salient question appears in Nocera’s headline: “Riddle of the Pyramids: What Is Herbalife?” He compares the volleys between Ackman and Herbalife, with its bullish investors behind it, to a “hotly contested political race”—very entertaining at times, but a sideshow to more serious issues. In Herbalife’s case, that issue is whether a company is duping millions of individuals through deceptive business practices.

It is a question currently under investigation by the Federal Trade Commission (FTC) and the Department of Justice. Though the FTC declined to provide comment to the Times editorial page, Mariano gives some background on the regulations governing pyramid schemes in his response.

“There is no riddle,” Mariano writes. “Federal law and statutes in a majority of the states clearly define a pyramid as an operation that pays salespeople primarily for recruiting additional members into a network instead of selling products. The Federal Trade Commission further warns that pyramids may require members to buy large amounts of inventory, meaning you couldn’t consume it yourself, or unwanted items.”

Mariano also points to the clear distinction between the multilevel marketing business model and illegal business operations—a distinction that falls through the cracks of Nocera’s argument. 

“We should consider the consequences to the individuals who sell and consume their products—and the communities their parent companies serve—before placing scarlet letters upon their legitimate businesses,” Mariano concludes.

January 21, 2015

U.S. News

USANA Named a Trusted Partner and Sponsor of ‘The Dr. Oz Show’

Photo: Dr. Myron Wentz (from left), USANA Founder and Chairman of the Board, Dr. Mehmet Oz and USANA CEO Dave Wentz. (Photo courtesy: USANA)


USANA Health Sciences and Dr. Mehmet Oz are making it official, so to speak. USANA has teamed up on several occasions with the heart surgeon and Daytime Emmy Award-winning host of The Dr. Oz Show. On Tuesday, the global nutrition company announced its new status as one of The Dr. Oz Show‘s Trusted Partners and Sponsors.

According to Dr. Oz, the relationship grew from a shared vision “to make a positive impact on the health of others.” In 2012, USANA became a national sponsor of HealthCorps, the charitable foundation that Dr. Oz and his wife, Lisa, founded in 2003. HealthCorps is a wellness movement to combat childhood obesity through in-school and community programming. The following year, Dr. Oz served as master of ceremonies at the USANA Champions for Change 5K, an annual superhero-themed event supporting the USANA True Health Foundation.

“For The Dr. Oz Show to call any company a Trusted Partner and Sponsor, it must meet certain criteria,” Dr. Oz shared in the company’s release. “Chief among them is integrity. We’ve done our research and found USANA to be an outstanding company—one that offers cutting-edge products that we here at the show would feel comfortable recommending to our wonderful audience.”

To kick off the partnership, USANA’s joint health supplement Procosa will appear this week on The Dr. Oz Show. The company’s award-winning products will also appear on Dr. Oz’s website and in future broadcasts.

January 20, 2015

U.S. News

Herbalife’s $100M Plant Brings Hundreds of Jobs to N.C.

Herbalife is marking a company milestone two years in the making. The global nutrition company recently celebrated the grand opening of its fourth and largest Herbalife Innovation and Manufacturing (HIM) facility. The Winston-Salem, North Carolina, location will produce an estimated 150 million units of made-in-the-U.S.A. product each year.

In 2012, Herbalife announced plans to convert an existing, 800,000-square-foot building in Winston-Salem, an investment of $130 million. The NSF-certified facility came online in 2014 and currently houses approximately 350 employees. That number will top 500 when the site reaches full production capacity later this year.

“The economic impact of this facility will be felt throughout the Winston-Salem area, particularly for the hundreds of talented workers who will contribute to its success,” said Rep. Virginia Foxx (R-NC), on hand with other officials and business leaders to celebrate the grand opening. “It gives me great pride to see national companies like Herbalife recognize all North Carolina has to offer, and I believe today’s event is another sign that our best days are ahead of us.”

With a sister site in California and two in China, HIM Winston-Salem is the largest facility ever built by Herbalife. The company will distribute nutrition powders, liquids and teas from the plant to more than 50 countries worldwide. Within its one-mile loop, HIM Winston-Salem also houses Herbalife’s Global Technical Operations Center and a state-of-the-art quality and testing lab.

“This is an incredibly important project for Herbalife as we strengthen our influence throughout our supply chain—from seed to feed—and increase capacity to meet the growing demand for our nutrition products,” said Michael O. Johnson, Herbalife Chairman and CEO.

 

January 19, 2015

U.S. News

North American Power Terminates Direct Selling Enterprise

North American Power brought its direct selling operations to an unexpected halt last week. In a statement posted to its representative site, the U.S. energy supplier announced the termination of its North American Power and Thrive customer referral programs, although it will continue to operate through its other business channels.

“Effective immediately, Independent Representatives will be unable to refer new customers or representatives to Thrive or North American Power. All referral sites have been disabled,” the notice reads.

Veteran energy executives Kerry Breitbart and Carey Turnbull founded the Connecticut-based company in 2009. Breitbart, a member of the National Energy Marketers Association Executive Committee, has been a key voice behind energy deregulation in New England, where North American Power has signed on a large percentage of its customers.

In 2011, Forbes magazine named the growing company No. 57 on its list of America’s “100 Most Promising Companies.” Last year North American Power reported $256 million in revenue, earning it the No. 47 spot on the DSN Global 100.

North American Power will continue to grow its direct-to-consumer channels, enroll new customers, and serve its existing customer base, a company spokesperson told DSN in an email.

“Although we are no longer accepting new enrollments through our referral network, our Independent Representatives will continue to receive residual commissions on customers that have been referred to date,” the company stated. “We are truly grateful for all of our Representatives’ efforts throughout this memorable journey, and wish them the very best of luck in the future.”

January 19, 2015

U.S. News

The New Talk Fusion Launches with Fresh Designs, Offerings

Moving at the speed of technology, Talk Fusion has overhauled its web-based business with fresh designs, product offerings and incentives. This week the video communications company unveiled its new look—and its new “Better with Video” slogan—during a Talk Fusion Dream Builder Broadcast by the company’s Founder and CEO, Bob Reina, and Vice President of Training and Development, Allison Roberts.

“At Talk Fusion, we’re constantly innovating, we’re constantly pushing the envelope to keep our video communication products exciting and ahead of the technology curve,” Reina told DSN. “This gives our Associates a huge competitive advantage with hot technology that’s the talk of the Internet.”

Talk Fusion’s newest offering is CONNECT Video Chat, an industry-first product that utilizes WebRTC to enable real-time video communication between any web browsers. Customers can try a free product demo via one of Talk Fusion’s newly redesigned websites, which introduce the company through videos in multiple languages.

The redesign extended to Talk Fusion’s full CONNECT suite of products, which features Video Email, Video Newsletter and Live Meetings as well as the chat tool. With its video communications technology, Talk Fusion has surpassed industry giants such as Yahoo, AOL, Viacom, CBS and MegaVideo to become the eighth-largest online video content provider in the world. Now in 140 countries, the company is setting its sights higher with a fresh look and innovative product offerings.

“Ultimately, our relaunch goal is to maximize the Talk Fusion brand worldwide, which has the additional benefit of helping our Associates achieve greater financial freedom,” said Reina.

As they build their businesses, Talk Fusion Associates will have the opportunity to earn new rewards for their work. The company has also revamped its compensation plan with incentives like Rolex watches, gold and diamond rings for milestone achievements, and a purchased Mercedes-Benz.

January 16, 2015

U.S. News

Amway Boosts Business with XS Energy Acquisition

If Amway’s history of building successful brands is any indication, the energy drink segment just got a bit more interesting. This week the industry giant acquired XS Energy, the brand behind Amway’s popular line of nutritious, sugar-free energy drinks. Amway says the move is part of its strategy to connect with young entrepreneurs, who represent a growing number of Amway business owners.

“According to our research, no demographic is more positive about entrepreneurship than those younger than 35, which is the precise target group for the XS brand,” Chairman Steve Van Andel shared in the company’s release. “Bringing Amway and XS together will strengthen our efforts in the years ahead and create more opportunities for aspiring business people.”

Former Amway business owner David Vanderveen co-founded XS Energy in 2001, and Amway became exclusive distributor of the company’s products in 2003. Available in 38 of Amway’s international markets, XS Energy has now topped $150 million in annual sales. With the help of Vanderveen, who has signed on as Vice President and General Manager for the XS brand, Amway is looking to build upon its success in the $27.5 billion energy drink market.

January 16, 2015

Events

DSA’s 2015 Annual Meeting


January 16, 2015

Events

2015 DSN Global 100 Event


January 16, 2015

Events

DSA Be Connected Conference 2014


January 16, 2015

Events

DSA’s 2014 Annual Meeting


January 16, 2015

Events

2014 DSN Global 100 Event


January 15, 2015

U.S. News

New Foru President Targets Growth with ‘Mission Critical’ Focus

As foru International enters its third year of business, the skincare and nutrition company is welcoming a familiar face to its executive team. Foru has named Sharon Morgan Tahaney as President, succeeding Karl Krummenacher, who came on board when foru Holdings Inc. acquired the business in 2012.

Tahaney has held other executive leadership positions in direct selling, including a stint as president of foru predecessor GeneWize Life Sciences. Like foru, GeneWize marketed personalized nutrition products based upon an individual’s DNA results. Tahaney joined GeneWize just 8 months after the company launched in 2007. Prior to serving as president, she headed up the brand’s marketing efforts.

A family move ended Tahaney’s work with GeneWize, but in the interim the company has relocated its corporate headquarters to her new hometown of Dallas. When the opportunity arose to rejoin the company, foru’s unique product and story once again drew her.

“I’ve always been fascinated by the fact that science and technology allow us to personalize nutrition and skincare according to our DNA,” Tahaney told DSN. “What’s missing from all the other product offerings out there is you—what do you specifically need and lack based on your genetic structure? We help people figure that out so they can look and feel their best.”

One of Tahaney’s first actions as President was to sit down with top foru Brand Partners and gather feedback on their needs and their vision for the future. She is reinforcing that same posture toward the company’s sales network among her corporate team members.

“We understand that we are a service organization to entrepreneurs in the field who are building their businesses,” said Tahaney, who has authored four personal finance books for independent entrepreneurs and a strategy book for direct selling executives.

To guide foru into the future, Tahaney and her team have developed a five-year plan that includes achieving 100 percent growth in 2015, advancing philanthropic efforts, taking DNA swabs of 1 million people, and earning a spot on the DSN Global 100. Having laid out a clear vision for the company, Tahaney says her primary goal is “to keep us focused on the mission critical, not every shiny new thing that comes along.”

Part of that mission is to create buzz and attract customers, and the young company is stepping up its media outreach and PR efforts, as well as its use of automated marketing tools. Last month, foru announced a strategic alliance with YEA Networks LLC, a media company whose lineup of popular, syndicated radio programs includes The Kidd Kraddick Morning Show. Two of the show’s hosts, J-Si Chavez and Jenna Owens, will promote foru’s products through YEA Networks’ online properties.

“This company has such an incredible story, and it’s been so unsung,” said Tahaney. “I want to change that.”

January 14, 2015

U.S. News

AdvoCare Partners with MLS in Largest Sponsorship Yet

AdvoCare International is bolstering its sports performance products with the largest endorsement deal in the company’s history. Major League Soccer has selected the North Texas-based brand as its Official Sports Nutrition Partner. Kicking off this year, the partnership will run through the 2019 season.

Last fall, AdvoCare announced that it would extend its FC Dallas jersey sponsorship and its presence at Toyota Stadium and Toyota Soccer Center through 2020. The club’s jerseys have displayed the AdvoCare logo since 2012, and new kits unveiled in 2015 and 2016 will also feature the brand.

As Official Sports Nutrition Partner, AdvoCare will have the opportunity to introduce all MLS clubs to its products. AdvoCare Rehydrate, a drink mix that promotes hydration, recovery and electrolyte balance, will be on the sidelines during league games as the Official Sports Drink of Major League Soccer. The company is also working with individual clubs to utilize AdvoCare products in league locker rooms and development team training.

“This is an incredible opportunity to share the AdvoCare vision of physical wellness with dedicated soccer fans across the nation,” Richard Wright, President and CEO, shared in the company’s release. “Soccer is a rapidly growing sport in North America, and our partnership with MLS makes perfect sense as we continue to grow together.”

 

January 12, 2015

World News

PartyLite Opens for Business in Turkey, Korea

Photo above: Front middle: Elçin Birben, Hürcan Haydar (holding flag), and Luca Pozzoli at the PartyLite Turkey Opening Ceremony in Istanbul.


PartyLite is jumpstarting 2015 by introducing its candle and home décor products in two international markets. The party plan company has launched its business in Turkey and Korea, expanding its global presence to 23 total markets.

In Turkey, its 18th European market, PartyLite has inked an agreement with third-party distributor PL EV DEKORASYON ÜRÜNLERİ TANITIM VE PAZARLAMA LTD. ŞTİ. Founders Elçin Birben and Hürcan Haydar launched the young company with a vision of becoming a major player in the Turkish direct selling industry, and it will serve as the sole distributor of PartyLite products in the country.

“Elçin and Hürcan are very ambitious individuals, and we have no doubt that they are capable of growing a successful direct selling business,” said Luca Pozzoli, PartyLite Vice President of Market Development, in the company’s release. “We are thrilled that they will be the exclusive distributors of PartyLite candles, home fragrances and home decor in Turkey. Their enthusiasm for PartyLite products is remarkable, and their excitement during the entire launch has been evident.”