April 23, 2014

World News

2014 DSN Global 100 List

DSN 100

Since 2004 Direct Selling News has been dedicated to telling stories focused on relating the opportunities direct sellers provide to millions of independent business owners around the globe. So it seemed only fitting for DSN to further recognize the industry by compiling a comprehensive list, starting in 2010, of the top direct selling companies in the world.

The DSN Global 100 list offers a unique perspective on the global impact of the industry on economic and social realms. It provides a range of mutual learning not only for industry members but also for researchers, investors and—most important—those seeking opportunities within the industry.

In an effort to support transparency and verify authenticity, DSN implemented a new standard for the 2011 ranking, which we have continued each year since: the Revenue Certification Form (RCF). In addition to an updated profile, each company is asked to submit an RCF signed by the CEO and CFO or designated agent. Some privately-held companies choose not to participate in the Global 100 process, and therefore do not appear on this list. We encourage all companies to submit the required forms.

We thank all the companies that willingly participated in our survey as well as our dedicated team of researchers who helped us present to you the remarkable achievements of direct sellers around the globe.

The following contains the ranking for the 2014 DSN Global 100 (based on 2013 revenues), our annual list of the top revenue-generating direct selling companies in the world. The list is published in the June issue of Direct Selling News.

Click here to celebrate your company's achievement with customized recognition prints.



2014 Rank

Company Name

2013 Revenue

2 Avon $9.95B
5Mary Kay$3.60B
7Nu Skin$3.18B
12 Ambit Energy$1.20B
13Telecom Plus$1.10B
14Stream Energy$867M
21New Era$678M
22Market America$547M
23Amore Pacific $520M
24Forbes Lux$489M
27It Works! Global$456M
28Noevir Holdings$455M
33Better Way$407M
34Nature’s Sunshine$378M
35For Days$376M
37Team National$332M
39Team Beachbody$328M
40LR Health & Beauty Systems$323M
45Viridian Energy$267M
47North American Power$256M
49Southwestern Advantage$253M
50Origami Owl$233M
52Take Shape For Life$229M
55LG Household & Health Care$215M
55Organo Gold$215M
57Naris Cosmetics$214M
61HEIM & HAUS$200M
63Naturally Plus$199M
64Rodan + Fields$196M
66Family Heritage Life$192M
68Huis Clos$184M
73BearCere’Ju $166M
75Hy Cite$164M
77Princess House$154M
78Gano Excel$150M
81Zhulian Marketing$127M
85Vision International People Group$96M
85Arsoa Honsha$96M
87New Image$95M
91Tastefully Simple$79M
97Ion Cosmetics$70M

Click here to celebrate your company's achievement with customized recognition prints.

April 23, 2014

U.S. News

Direct Selling News commissions Harris Poll to show prevalence of direct selling

Findings show two-thirds of U.S. adults have purchased from direct sellers

LAKE DALLAS, Texas — With millions of adults actively engaged in buying products or services from independent sales representatives, the prevalence of direct selling is high, new research from Harris Poll shows. The study was commissioned by Direct Selling News, the industry’s leading trade publication.

The online survey of 2,060 U.S. adults 18 and older found that 156 million people , 66 percent of U.S. adults, have made a purchase from a direct seller — buying a consumer product or service person-to-person away from a fixed retail location. Of those, about 81 million people have done so within the past six months.

“Direct selling has evolved a lot over the past 50 years,” said John Fleming, publisher and editor in chief of Direct Selling News. “Today, many of the companies that utilize the distribution channel refer to it as social selling, network marketing or referral marketing. But whatever the name, with one in three U.S. adults making a purchase in this way in the past six months, it is a powerful part of the economy indeed.”

Other key findings from the survey include:

  • Generation Y embraces direct sellers. Among adults age 18-34, 54% of men and 42% of women have made a direct selling purchase in the past six months.
  • Direct selling consumers are embracing technology. Online is the most common way for customers to make a purchase from a direct seller, with 42 percent of all adults ever having done so.
  • But face-to-face interaction continues to drive success in this way of doing business. Among adults age 18 or older: 33% have purchased from a direct seller in a group setting, such as a party, in someone else’s home; 24% have purchased from a direct seller at a demonstration for a product or service; 22% have purchased from a direct seller one-on-one in their own home; 21% have purchased from a direct seller at a trade show or similar type of event; 20% have purchased from a direct seller in a group setting, such as a party, in their own home; 20% have purchased from a direct seller one-on-one in another setting; and 12% have purchased from a direct seller at a seminar or presentation for a product or service.

This survey was conducted in advance of a larger, custom research project Harris Poll will undertake on behalf of DSN.

“Direct selling is an experience shared by millions of Americans. Our goal is to better educate and explain its scope today,” Fleming said. “It is our hope that this research and our continued work with Harris will provide better value for industry leaders, regulators, consumers and anyone else interested in better understanding this channel of distribution and tapping into the strength that it offers.”


This survey was conducted online within the United States by Harris Poll on behalf of Direct Selling News from April 3 to April 7, 2014, among 2,060 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and complete definition of direct selling, please contact DSN Publisher and Editor in Chief John Fleming, jfleming@directsellingnews.com.


Direct Selling News is the only trade publication serving the executive-level ranks of direct selling companies and their suppliers. Based in Lake Dallas, Texas, DSN is celebrating its 10th anniversary.


On February 3, 2014, Nielsen acquired Harris Interactive and The Harris Poll.  Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.

For more information on the survey results, download the fact sheet here.

April 22, 2014

U.S. News

Nerium Targets $1 Million Goal for Big Brothers Big Sisters

On its mission to “Make People Better,” the team at Nerium International is setting a high bar for charitable giving in 2014. The fast-growing skincare company has made a $1 million fundraising commitment in support of its partner organization, Big Brothers Big Sisters (BBBS).

BBBS is a volunteer-powered mentoring network that partners children and teens (Littles) with adult volunteers (Bigs). The program aims to help children succeed through positive, one-on-one relationships that have a direct, lasting effect. Over 100 Nerium Brand Partners have partnered with a Little through the organization, and more are currently undergoing the volunteering process.

Amber Olson Rourke, Nerium Co-Founder and VP of Marketing and Culture, says the company’s ambitious goal for 2014 has received positive feedback from Brand Partners. “The response so far has been great!” Rourke told DSN. “We have already raised over $250,000 so far this year. Our Brand Partners believe in making a difference and the power of mentorship, so the mission of BBBS really resonates with them.”

Last year the just-2-year-old Nerium contributed over $400,000 to BBBS. For its efforts, the company earned the prestigious Big Brothers Big Sisters Community Impact Award in June 2013. The award recognizes a donor whose generosity has greatly impacted the community of the mentoring organization.

Nerium uses a variety of avenues to raise funds, including a commission donation program that enables Brand Partners to donate a specified amount from their monthly commission checks. At all of its events, the company includes a BBBS table where Brand Partners can enter to win prizes by donating. Nerium also promotes a nationwide bowling for kids fundraising event, where Brand Partners gather locally to bowl and raise money for BBBS.

April 18, 2014

U.S. News

MonaVie Leads Utah Businesses in Trademark Innovation

In its mission statement, health and wellness company MonaVie includes helping people experience “healthy living through innovative products,” and that innovative spirit recently won the company top honors at the 2014 Utah Genius Awards. The awards recognize the leading minds behind Utah’s creative economy, including the state’s top inventors and top companies by patents issued and trademarks registered.

Brian GillLast year MonaVie registered 18 new trademarks, more than any other business in the state. Vice President of Communications Brian Gill told DSN the achievement came about as a natural extension of MonaVie’s mission. “We study the way our communities interact, what they need and want, and then create products and services to intersect with them at various points,” Gill explains.

As MonaVie’s offerings have expanded to meet the needs of consumers, so too has its trademark count. The company has been named the state’s top registrant each consecutive year since 2011. Utah Genius, begun in 2009 by a local patent attorney, bases its ranking upon objective statistics from the U.S. Patent and Trademark Office. In total, MonaVie has obtained 82 registered trademarks.

Pictured left: Brian Gill (Photo credit: MonaVie)

April 16, 2014

U.S. News

Origami Owl and Childhelp Take on Abuse, Bullying Epidemic

Origami Owl has garnered plenty of attention following the company’s rapid growth, and the leadership team is seizing the opportunity to shine a spotlight on the cause of child abuse and bullying prevention. The customized jewelry seller has partnered with Childhelp, an organization that has spent more than half a century advocating for abused and neglected children.

Childhelp recognized Origami Owl’s support during its recent Childhelp Day of Hope luncheon, where the organization’s Co-Founder Sara O’Meara presented the National Day of Hope Corporate Award to Origami Owl Founder Bella Weems.

A donation from Origami Owl will go toward Childhelp’s “Speak Up Be Safe” prevention education program. The company’s support will place the program in the hands of millions of students through a curriculum expansion and the launch of a virtual campus to teach facilitators nationwide. Origami Owl’s sponsorship will enable Childhelp to expand its current first- to sixth-grade curriculum to include all grade levels.

The initiative will also focus on Origami Owl’s home state of Arizona. In an effort to propel nationwide adoption of the program, the company is funding a large-scale push to introduce “Speak Up Be Safe” to over 100,000 Arizona students.

“We are so thrilled to partner with Origami Owl for this important project, not just in Arizona but across the United States,” O’Meara said in a statement. “There is an epidemic of abuse going on in this country, and we aim to halt it in its tracks with the Childhelp Speak Up Be Safe curriculum. We hope this comprehensive prevention education curriculum can help put us out of business, and we are so grateful for Origami Owl’s great heart in supporting this cause.”

April 15, 2014

U.S. News

In Internet Age, Person-to-Person Sales Still Appeal

In a recent Los Angeles magazine piece, Joan Renner shares how a flea market find gave her a new appreciation for the era of the “Avon Lady.” The writer, lecturer and social historian contrasts today’s online shopping carts with the personal, relational direct sales experience.

“Internet shopping has replaced door-to-door salespeople, and we have traded the opportunity to bond with a friend over a cup of coffee and the perfect red lipstick for a convenient point-and-click purchase from a laptop,” Renner writes.

The door-to-door saleswoman may be a thing of a bygone era, but the opportunity to sample and purchase product from friends or acquaintances, in an intimate setting, remains as appealing as ever. Globally, the direct selling industry includes more than 90 million independent salespeople who sell nearly $154 billion of goods and services per year.

The Washington Post explored the current iteration of the “Avon Lady” model at a recent Stella & Dot trunk show in Washington, D.C. Partygoers spanning several generations and a range of occupations expressed their enthusiasm for the relaxed, social setting—away from stores with an up-close look at the product.

Read the full story from The Washington Post.

April 10, 2014

Submit Global 100 Information Now!

It’s January 2014, which means that here at DSN we begin our task of compiling the Global 100 list, based on revenue generated by our industry’s top companies during 2013. This will be our fifth year of researching and compiling this list. Your feedback has told us the Global 100 is inspiring, motivating and very helpful in educating the general public about our tremendous industry.

We are proud to be a trusted resource on information pertaining to the direct selling method of distribution of goods and services. We want everyone—customers, private equity investors, academics, consumer advocates and regulatory personnel—to know about the remarkable companies that are bringing incredible opportunities to millions of people across the globe. We are also excited about the feedback that achieving the Global 100 list is an inspiring and motivating factor for many management teams.

The online submission form is now available on our website HERE. After you’ve filled out the online submission form, you can download the Revenue Certification Form to complete and return to DSN. Companies who return the form are eligible to be ranked in the Global 100 list. Companies who do not return the form will not be included in the list.

We have already received news of new companies who will achieve the list, as well as existing companies who will move up in rank due to their great success in 2013. The new ranking will be announced and celebrated April 23, 2014, at our Global 100 Celebration Dinner, held at 7 p.m. at the Gaylord Texan Resort. The final list will be published in our June 2014 issue.

Make your plans to attend the Direct Selling News Global 100 Celebration Dinner!

April 23, 2014 • 7 p.m.
Gaylord Texan Resort
Grapevine, Texas
Tickets available at:

April 10, 2014

World News

Dubai to Host Monumental Nu Skin Trip

Nu Skin Greater China is taking more than 16,000 of its sales leaders from mainland China, Taiwan, Hong Kong and Macao to Dubai for a training and recognition trip. Zawya, a Middle East business and finance online news site, reports the trip will be one of the largest tourist groups to ever visit the city. According to Zawya, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, was so excited about the upcoming visit that he posted the news on his Twitter page.

The events run from April 6 to April 17, and participants will come in seven waves with each wave averaging slightly over 2,000 people. More than 200 flights have been booked, including two chartered Emirates flights. The Nu Skin participants will stay in 38 different hotels and have booked approximately 8,000 rooms.

Nu Skin will use 400 buses to transport guests to a variety of locations including: Sharjah, Burj Khalifa, Sheikh Zayed Grand Mosque, Ferrari World, Dubai Maydan City and Yas Marina Circuit.

Andrew Fan, President of Nu Skin Greater China, told Direct Selling News, “Nu Skin Success Trips recognize the hard work and achievements of our sales representatives, and we believe the United Arab Emirates represents a fitting destination for this event given the country’s commitment to becoming a world-class tourist destination.”

Read the story here.

April 08, 2014

World News

Coming Soon: The 2014 Bravo Award Winners

On April 23, industry leaders will gather at the Gaylord Texan Resort in Grapevine, Texas, for the fifth annual DSN Global 100 Celebration. The event will reveal the top revenue-generating companies in direct selling, as well as the recipients of this year’s Bravo Awards.

Revenue is just a number, but behind each number is a story of success, failure, hours invested, lives changed, leaps taken and lessons learned. The Bravo Awards are an opportunity to share some of those stories by honoring individuals and companies for exceptional achievements in 2013.

One outstanding individual will receive the Bravo Leadership Award. The recipient is one who personifies leadership by guiding those around him toward greater good, progress and achievement, while also earning the respect and admiration of those he leads. Last year the prestigious award went to Alessandro Carlucci, CEO of Natura and Chairman of the World Federation of Direct Selling Associations (WFDSA).

Two companies will receive the Bravo Growth Award. The first will honor the company that has achieved the highest percentage of growth over the prior year. The second Growth Award will go to the company that reported the highest dollar-amount growth for 2013.

DSN will also present the Bravo Humanitarian Award. Direct selling companies contribute countless resources—whether people, product or funding—to a wide range of charitable causes and organizations. Every month, DSN’s Industry with Heart feature spotlights one company’s work to give back, both locally and globally. The Humanitarian Award honors a company that is leading the way in these efforts and leveraging its resources to make a real and tangible difference.

Follow our live Facebook and Twitter updates on April 23 for a first look at this year’s Bravo Award winners.

April 07, 2014

U.S. News

Conan O’Brien Becomes Mary Kay Consultant

Photo above: Conan O’Brien greets enthusiastic employees at Mary Kay headquarters in Addison, Texas, while filming a Mary Kay segment for his talk show. (Photo Credit: Meghan Sinclair/ Team Coco)

While taping his popular late-night talk show in Dallas last week, Conan O’Brien made a stop at the Mary Kay headquarters to realize his dream of becoming an Independent Beauty Consultant.

In the ensuing segment, the comedian undergoes corporate training, dons a black beauty coat and heads to a party in a signature pink SUV, while shouting out the window, “I’m off to sell cosmetics!”

Conan generated that same enthusiasm throughout the taping, observed Pio del Castillo, Manager of Corporate Communications at Mary Kay. When the show’s producers first reached out to Mary Kay, Castillo saw an opportunity for the brand to approach a relatively untapped market. Conan’s viewership skews female and younger than Mary Kay’s established base of consultants.

“It was also an opportunity to be a little more relaxed about the brand,” Castillo told DSN. “We helped them a lot and were very happy working with them.”

After some back-and-forth on a concept, Castillo’s team went several weeks without further communication from the show. Then a call came through late Friday afternoon. The segment was a go, and they wanted to film Monday morning.

“Everyone got on board quickly,” said Castillo. “We had done our homework.”

The team even compiled 1,700 gift bags stuffed with Mary Kay products—for men and women—to distribute to Conan’s audience when the segment aired the following day at the Majestic Theater.

The experience was a positive one for Mary Kay, Castillo said, calling Conan’s producers the “best and nicest” he has encountered in 20 years of experience. To close out the segment, Conan greeted an enthusiastic crowd of employees in the Mary Kay lobby—where he led a chant of “Mary Kay! Mary Kay!”—and took the time to say hello to each fan.

The response from Mary Kay’s salesforce has also been overwhelmingly positive. Asked how his team is going to follow up on the Conan segment, Castillo says with a laugh, “Jimmy Fallon, Oprah—why not?”


April 04, 2014

World News

Natura Ranks among ‘World’s Most Ethical Companies’

Natura, the largest player in Brazil’s cosmetics, fragrances and toiletries industry, has been named one of the “World’s Most Ethical Companies” in the annual ranking by Ethisphere magazine.

Ethisphere spotlights companies that not only incorporate rigorous compliance and ethics programs internally, but also lead their respective industries in developing best practices. The evaluation process determines each company’s corporate Ethics Quotient (EQTM), according to Ethisphere’s proprietary rating system. The ranking reflects Natura’s performance in five core categories:

  • Ethics and Compliance Program
  • Reputation, Leadership and Innovation
  • Governance
  • Corporate Citizenship and Responsibility
  • Culture of Ethics

Natura’s new sub-brand Sou, launched last year, provides a glimpse into the company’s ethical standards with regard to its products. The line of 27 hair and skincare products was designed to consume the least possible amount of materials and ingredients, while retaining quality and affordability. Even the packaging production uses 70 percent less plastic and produces 60 percent less pollutant gases. Natura is taking the practices learned through the creation of Sou and adopting them companywide.

Last month, Natura completed construction on a production facility in Ecopark, an industrial complex located in northern Brazil. Built with sustainable business practices in mind, Ecopark provides space and infrastructure where participating companies can use sub-products generated by the others. Natura’s soap production facility was the first installation at the site.

That spirit of collaboration and innovation carries over into all aspects of Natura’s business. For example, the company’s research and development team operates through an open innovation platform, with a network of some 180 partners. Natura’s policy also advocates benefit sharing with its wide community of suppliers.

April 03, 2014

U.S. News

Direct Selling’s ‘Influential Women’ Collect Top Honors

DSN recognizes direct selling’s Most Influential Women as a force within the industry, but their impact reaches far beyond the scope of direct selling. Two recent examples include Thirty-One CEO Cindy Monroe and Mary Kay CMO Sheryl Adkins-Green, both recognized for their achievements among America’s leading businesswomen.

Enterprising Women magazine has named Thirty-One’s Cindy Monroe as one of its 2014 Enterprising Women of the Year. The prestigious award honors women who, in addition to leading fast-growth businesses, support other women entrepreneurs and take on leadership roles within their communities. Monroe was a winner in the top category, representing companies that generate more than $25 million in annual sales.

Monroe has described her own leadership style as both hands-on and hands-off. “I’m really good at setting the vision and telling them that I can roll up my sleeves and be there to help them now, but I do know when it’s time to back off and let them shine,” Monroe told DSN.

Brand Innovators, an exclusive community of brand marketers from the world’s top brands, has recognized Sheryl Adkins-Green among its Top 50 Women in Marketing. The Mary Kay marketing chief ranked No. 26 on the list, which honors standout marketing professionals—particularly those who successfully leverage digital media and emerging tech platforms.

“The most important thing that I’m focused on is inviting more women—a lot more women—to discover Mary Kay,” Adkins told DSN in a recent interview. “I believe that if they experience the customized service of an Independent Beauty Consultant and learn about the Mary Kay ‘Pink Changing Lives’ initiatives in the community, they will fall in love with the brand!”

April 02, 2014

U.S. News

DSA Nominates Industry Execs to Board of Directors

At its annual board meeting held Monday and Tuesday in Washington, D.C., the Direct Selling Association (DSA) approved the nomination of several industry executives to its board of directors.

In place of two resigning members, the board approved the nomination of Erik Johnson, President and CEO of Hy Cite Enterprises, to serve through 2014 and Dana Mehrer, General Counsel of Silpada Designs, to serve through 2015.

Additionally, the committee recommended a new slate of directors for terms expiring in 2017, along with officers to serve the upcoming 2014-2015 term. The board will vote on the nominees at the DSA’s Annual Meeting in June 2014.

Officers nominated for 2014-2015 terms include:

  • Chairman, Truman Hunt (Nu Skin Enterprises)
  • Vice Chairman, David B. Holl (Mary Kay Inc.)
  • Vice Chairman, Lori Bush (Rodan + Fields)
  • Immediate Past Chairman, Orville Thompson (Scentsy Inc.)
  • Past Chairman, Brett R. Chapman (Herbalife)

Directors nominated to serve through 2017 include:

  • Erik Johnson (Hy Cite Enterprises LLC)
  • Allison Levy (AdvoCare International LP)
  • Douglas Robinson (LifeVantage Corporation)
  • Frank VanderSloot (Melaleuca Inc.)
  • John Wyckoff (Dove Chocolate Discoveries)

April 02, 2014

U.S. News

Cookie Lee Jewelry Reveals New Ownership

Cookie Lee left the corporate world in 1985 to found her eponymous jewelry company, Cookie Lee Inc. After nearly 23 years at the helm, Lee is handing over the California-based business to Debbie Millar, a founding partner of real estate group HÔM, which reported $1.4 billion in sales for 2013.

Over the past two decades Cookie Lee has built up a base of 40,000 independent consultants and carved out a share of direct selling’s $2.5 billion jewelry and accessories market. The party plan company, which has focused primarily on costume jewelry, is looking to diversify its offerings under Millar’s direction. To appeal to a wider audience, the company plans to branch into accessories such as scarves and sunglasses.

Cookie Lee has also hired on Shawn Forbes to help direct that expansion. Forbes brings 15 years of fashion industry experience to her role as Director of Product Development. Millar also has a background in fashion and formerly ran her own direct sales jewelry company, BambooPink, before she and her two partners sold the business for an undisclosed amount. As an entrepreneur and mother of six, Millar shares Lee’s passion for empowering women to succeed through their own home-based businesses.

Read more on the sale of Cookie Lee.

April 01, 2014

U.S. News

Herrin: Stella & Dot ‘Ready to Revolutionize Again’

For boutique-style jewelry retailer Stella & Dot, the last couple years have focused on scaling operations to keep pace with rapid growth. Now, Founder Jessica Herrin is looking to expand the Stella & Dot family of brands and reach more customers in the U.S. and beyond.

In a recent interview, Herrin told Bloomberg TV the company’s “high-tech, high-touch” social selling opportunity appeals to women around the world. “We know that it’s universal—the need to have passion, recognition, incremental income, flexibility, great community, continued professional development. That is a need that translates very well to other countries,” said Herrin.

Herrin created the business that would become Stella & Dot in her living room back in 2003. Four years later, the company had rebranded and ramped up sales with a direct selling model. Now, Stella & Dot “trunk shows” are popping up in the living rooms of women across North America and Europe, and the company has paid out more than $200 million in commissions.

Stella & Dot is also giving back through the Stella & Dot Foundation, which focuses on the family by partnering with charities that empower women and children. For Autism Awareness Month in April, the company has launched a capsule collection of signature accessories. Net proceeds of every purchase will benefit the HollyRod Foundation, which supports children with autism and their families.

Despite being poised for further growth at Stella & Dot, Herrin retains a long-term perspective on success. “I don’t want to be trying to make the quarter; I want to make the century,” Herrin says. “I want to make an impact.”

View the full interview from Bloomberg TV.

April 01, 2014

Executive Announcements

April 2014

Primerica Inc.

Cynthia N. DayCynthia N. Day

Primerica Inc. announced the election of Cynthia N. Day to the company’s board of directors. Day has been the President and CEO of Citizens Bancshares Corp. and Citizens Trust Bank since February 2012. She served as COO and Senior Executive Vice President of Citizens Trust Bank from February 2003 to January 2012 and served as its acting President and CEO from January 2012 to February 2012.

Day currently serves on the board of directors of Aaron’s Inc., Citizens Bancshares Corporation and Citizens Trust Bank. She also serves as a member of the boards of directors of the National Banker’s Association and the Atlanta Business League. She is a member of the Georgia Society of CPAs and a member of the Rotary Club of Atlanta.

“We are thrilled to have Cynthia join our Board,” said Rick Williams, Chairman of the Board and Co-CEO of Primerica. “As a result of her many years with Citizens Bancshares, she understands the needs of middle-income households and the financial challenges faced by those families. Primerica is focused on helping those households succeed, and Cynthia’s experience and expertise will be invaluable to us as we fulfill that mission.”

In other news, Primerica Inc. announced that John Adams, CEO of PFSL Investments Canada Ltd. (PFSL) and Primerica Life Insurance Company of Canada (Primerica Canada), has been named Second Vice-Chair of the Toronto-based Investment Funds Institute of Canada (IFIC).

Adams has been on the IFIC board since 2005. He joined Primerica Canada and PFSL in 2000 and has risen through the ranks. Previously, he served as Primerica Canada’s and PFSL’s Chief Financial Officer.


Amway Corp.

Sundip ShahSundip Shah

Amway India, a wholly owned subsidiary of Amway Corp., has appointed Sundip Shah as Chief Marketing Officer. Shah takes over the responsibility from Naveen Anand, who has been elevated to a global role at Amway’s corporate headquarters in Michigan.

Shah will be based at Amway India’s headquarters in Gurgaon and will lead the entire marketing operations of the company.

Shah has more than 23 years of experience in sales, marketing, advertising and new product development. Prior to joining Amway, Shah was with Heinz India, where he was responsible for the marketing of the brand and its product and accelerating business.


The Pampered Chef

Vera VogelmannVera Vogelmann

The Pampered Chef has announced that former Sales Director Vera Vogelmann has been named as its new General Manager in Germany. Since joining the company in April 2012, she has led the Germany business in successful growth. The number of consultants and managers was increased by three times and net sales by 121 percent.

Vera Vogelmann brings 24 years of experience in direct selling, including time spent at another company, where she worked as a regional manager.

The Pampered Chef is a direct seller committed to developing multipurpose kitchen tools, providing expert cooking tips and creating simple recipes that enhance shared mealtime and suit busy lifestyles. Founded in 1980, The Pampered Chef was acquired by Berkshire Hathaway in 2002. The company operates in five markets through its network of over 65,000 independent salespeople.



Charles FunkeCharles Funke

ASEA has announced the appointment of Charles Funke as CEO. Funke joined ASEA in 2011 and held the position of Executive Vice President before being named as CEO.

Prior to joining ASEA, Funke spent 17 years in the financial services sector. During this time he held a number of executive positions including the Chairman, President and CEO role at Beneficial Investment Services.

Founded in 2008, ASEA is a global direct selling organization committed to the manufacturing and distribution of a highly effective patented redox signaling product designed to support and sustain long-term health. The company has operations in 19 countries throughout North America and Europe.


Youngevity Inc.

Ricardo SpilmanRicardo Spilman

Youngevity announced that it has appointed Ricardo Spilman as Director of Sales and Operations for Eastern Europe and Israel. In this role, Spilman is expected to help advance Youngevity’s commitment to ongoing, international expansion.

Spilman joins Youngevity from a Europe-based direct seller of health, wellness and beauty products. He was an Advisor and was responsible for managing companies, including in areas of business development, international expansion, negotiations with major suppliers, and developing training programs for distributors. Spilman has 30 years of experience in the direct selling industry.

“We are pleased to add Ricardo Spilman to our executive team,” said Dave Briskie, Chief Financial Officer of Youngevity International. “His experience and proven track record for success is just what we were looking for to lead this effort [of expanding into Eastern Europe and Israel]. We are planning the opening of an office in Moscow by the third quarter of this year, along with a number of distribution points to cover the region.”



Kay Bailey HutchisonKay Bailey Hutchison

CVSL Inc. has announced that former U.S. Senator Kay Bailey Hutchison has accepted an appointment to join the board of directors of CVSL Inc.

“During her many distinguished years of service at the highest level of government, Senator Hutchison has shown great leadership in supporting and defending the free enterprise system and she has been an eloquent champion of economic opportunity,” said CVSL Chairman John Rochon.

Senator Hutchison served for two decades as a U.S. Senator from Texas, from 1993 to 2013. She is the only woman ever elected to represent the state in the U.S. Senate. In the Senate, she served on the Appropriations Committee and was ranking Republican on the Commerce, Science and Transportation Committee.

CVSL also announced that Richard Holt has been named Vice President of Finance and Controller. Holt has for the past two and a half years served as Chief Financial Officer at Agel Enterprises, which became part of CVSL last September. He previously spent five years as corporate controller for Raser Technologies Inc. in Provo, Utah. During a previous stint at Agel, he was instrumental in the early stages of that company’s development.

His 13-year experience working at the corporate headquarters of two industry giants has given him a comprehensive understanding of the financial operations within the micro-enterprise sector.

In his new role, Holt will report to CVSL Chief Financial Officer Kelly Kittrell.

“Bringing Richard into this key role in CVSL’s finance team is another important step as we continue ramping up to grow by acquisition and as we effectively manage the companies within CVSL,” said John Rochon Jr., CVSL’s Vice Chairman. “Richard has a strong background in the micro-finance sector, and he will be an important part of our finance team’s leadership.”


Origami Owl

Deb BurseleyDeb Burseley
Tricia ChiodoTricia Chiodo

Custom jewelry company Origami Owl announced that Deb Burseley has been appointed as Chief Marketing Officer and Tricia Chiodo as Chief Financial Officer.

Deb Bursley, who joined the company in early 2013 as Senior Vice President of Marketing, directed a series of successful initiatives, including restructuring the marketing, communications and creative departments, and filling key leadership positions.

Bursley has more than 20 years of experience in leadership-level positions in marketing and communications, leveraging expertise she’s gained at other companies in the direct selling industry.

Chiodo brings with her more than 20 years of experience, most recently serving as Chief Financial Officer at RSC Equipment Rental, where she led an IPO and secured more than $1 billion in Asset Based Lending and High Yield Debt. She will bring this public and private sector experience, combined with her knowledge of operational efficiency, to Origami Owl as it works to maintain strategic expansion.

“Both Deb and Tricia have proven invaluable through this amazing year. They’ve positioned us well, and will be essential to our continued success,” says Robin Crossman, CEO of Origami Owl.


Regal Ware Inc.

Tracy PearsonTracy Pearson

Regal Ware Inc. has announced the appointment of Tracy Pearson to the position of Senior Vice President and Chief Financial Officer of the corporation. In this role she will join with the Regal Ware senior management team to drive growth and seek improvements in operational processes. Pearson will provide financial reporting to all levels of internal management, as well as externally to Regal Ware’s board of directors and investment partners. The finance and IT departments will report to her.

Tracy brings more than 25 years of expertise in all facets of finance and operations, and has extensive public and private company experience in healthcare, distribution, technology services, and energy sectors.

Regal Ware is the direct seller and manufacturer of high-quality stainless steel cookware and cast aluminum cookware in the United States. With a history that dates back to 1911, Regal Ware’s products are available direct to the consumer through independent distributors worldwide.


ForeverGreen Worldwide Corp.

ForeverGreen Worldwide Corp., a provider of nutritional foods and other healthy products, announced that Joseph Jensen has joined the executive team as Vice President of Sales.

For 25 years he has built successful sales teams in the pharmaceutical, health and beauty, training, direct selling and software industries.

“Joseph’s success in the network marketing profession is an ideal fit for our sales organization,” said ForeverGreen President Brenda Huang. “He’s a great leader, a great listener and will be an outstanding development resource for our top distributors.”


April 01, 2014

News in Brief

News in Brief, April 2014

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.

Amway Announces College Football Sponsorships

Amway recently announced a partnership with the USA TODAY Sports Media Group (USATSMG) and the American Football Coaches Association (AFCA) in a landmark deal to sponsor some prominent assets of college football.

Amway’s new partnership includes the first-ever exclusive title sponsorship of the AFCA Coaches Poll. The Amway Coaches Poll, formerly the USA TODAY Coaches Poll, is the only poll where college football coaches vote for the Top 25 teams over a 17-week period during the season. Amway will also present the first fan version of the poll, the Amway Fan Poll, which enables fans to vote and see side-by-side analysis of their own Top 25 in comparison to the Amway Coaches Poll.

The partnership grants Amway an exclusive, presenting sponsorship of the AFCA Coaches’ Trophy, featuring the iconic Waterford Crystal football, presented by Amway, which will be awarded to the No. 1-ranked team, and national champion, in the Amway Coaches Poll following the conclusion of the college football season.

Founded in 1959 by entrepreneurs Rich DeVos and Jay Van Andel, and based in Ada, Mich., Amway offers consumer products and business opportunities through a network of more than 3 million distributors in more than 100 countries and territories worldwide.

Herbalife Honored among ‘Best Social Projects in Russia’

For the second year in a row, global nutrition company Herbalife made the top 20 list of the “Best Social Projects in Russia” for its corporate social responsibility efforts in 2013.

The “Best Social Projects in Russia” recognition program is conducted in collaboration with the Russian Federation government. Its main objective is to identify best practices and social projects among businesses, society and the state, and to promote socially oriented projects of companies.

The top 20 listing recognized Herbalife’s charitable activities through its Herbalife Family Foundation (HFF) and Casa Herbalife Program, and placed Herbalife alongside top national and international companies such as IBM, Sanofi and KIA.

Herbalife also recently announced that it will continue as the official nutrition sponsor of the Seoul Samsung Thunders, a South Korean professional basketball team, for the 2013-2014 season. As part of the sponsorship, Herbalife will contribute to the physical conditioning of the team’s players, coaches and trainers by providing them with high-quality, science-based nutrition products.

Herbalife Ltd. sells weight-management, nutrition and personal-care products intended to support a healthy lifestyle. Herbalife products are sold in more than 90 countries to and through a network of independent distributors.

WorldVentures Expands to Puerto Rico

WorldVentures™, a direct seller of vacation club memberships, recently announced its expansion into Puerto Rico. The company offers its award-winning DreamTrips Memberships and business opportunities for entrepreneurs in 27 worldwide markets. WorldVentures launched in four of those markets within the last year: Iceland, Poland, Malaysia and now Puerto Rico.

The company now offers Puerto Rican travel enthusiasts the opportunity to purchase an exclusive travel club membership. Members of the vacation club enjoy unique global travel experiences along with discounts on local entertainment deals. This is also an opportunity for aspiring Puerto Rican entrepreneurs who would like to sell DreamTrips Memberships to new travel aficionados in any of WorldVentures’ markets. 

WorldVentures is a social commerce, peer-to-peer marketing company and a seller of vacation club memberships including DreamTrips™. With a network of more than 110,000 independent representatives in 24 countries, the privately held company is headquartered in Plano, Texas.

Medifast Announces V Foundation Partnership

Medifast Inc., a U.S. manufacturer and provider of clinically proven, portion-controlled weight-loss products and programs, recently announced its partnership with The V Foundation for Cancer Research, one of the nation’s leading cancer research funding organizations. As part of this multi-faceted partnership, Medifast will fund research grants that explore the link between obesity and cancer and the impact of healthy living on preventing cancer-related diseases.

The partnership kicked off in March with the Medifast Slam Dunk Contest, wherein Medifast matched clients’ contributions to the foundation. All received donations directly benefit The V Foundation for Cancer Research, which has funded more than $115 million in cancer research grants nationwide, with 100 percent of cash donations funding cancer research.

In additional company news, Medifast has announced that it will expand its international presence by launching in Canada in the first quarter of 2014. Initially, this expansion will take place through Medifast Direct, the company’s e-commerce sales channel, and Medifast Medical Providers, a network of healthcare providers who, where available, will offer Medifast’s program and products. 

Founded in 1980 and based in Owings Mills, Md., Medifast sells its products and programs via four unique distribution channels: the Web and national call centers, the Take Shape For Life personal coaching division, Medifast Weight Control Centers, and a national network of physicians.

ViSalus Expands into Germany, Austria

ViSalus Inc. recently announced its expansion to Germany and Austria through its subsidiaries, Vi Germany GmbH and Vi Austria GmbH. The company has appointed industry veteran Thorsten Mueller as General Manager to lead the expansion in Germany and Austria. 

More than 3 million people have now used the Body by Vi Challenge™ to lose weight and achieve their health and fitness goals. ViSalus has also given away more than US$100 million to date in free product and prizes to Challenge participants.

Founded in 2005 with headquarters in Los Angeles and Troy, Mich., ViSalus is the company behind the Body by Vi™ Challenge, a 90-day weight-loss and fitness transformation platform. ViSalus is majority-owned by Blyth Inc.

AdvoCare Supports Food Banks Nationwide

AdvoCare International, a health and wellness company based in Plano, Texas, recently contributed $20,000 to the North Texas Food Bank, in celebration of its 20th anniversary year, and in an effort to give back to the communities it serves.

This is the first of 20 donations to be made in 20 cities across the U.S. coinciding with AdvoCare’s leadership training events in 2013. The $400,000 total contribution will support local food banks in those respective areas.

Additionally, AdvoCare recently kicked off a pledge among its distributor base to commit to giving 20 hours of their time to a local charity over the next few months. Distributors will pledge their commitment over that time period and share stories of their volunteer projects when they reconvene at Success School at Cowboys Stadium in August.

Founded in 1992, AdvoCare is a health and wellness company offering general nutrition, weight-loss, energy and sports performance products. AdvoCare operates through a network of more than 250,000 independent distributors.

Traveling Vineyard Wines Win 8 Awards

The Traveling Vineyard recently announced that eight of its wines have been awarded an array of gold, silver and bronze medals by The Beverage Institute.

The Chicago-based Beverage Institute’s annual sampling netted two golds, four silvers and two bronze wins for The Traveling Vineyard. With each winning wine priced at $24.99 or less, the recognition affirms the company’s belief that value and quality don’t have to be mutually exclusive.

Using a specifically designed tasting space, The Beverage Institute’s panel of expert judges score only 30 wines per tasting to ensure fresh palates and fair assessments. The Traveling Vineyard’s winning wines include everything from a Lodi Syrah to a Chilean Cabernet Sauvignon.

Founded in 2001, The Traveling Vineyard seeks to share an enthusiasm for wine and to demystify the wine tasting and selection process. The company’s Independent Wine Consultants educate and inform through a unique in-home wine tasting concept.

LegalShield Announces IndyCar Series Sponsorship

LegalShield, a provider of legal safeguards for individuals, families and small businesses, recently announced that it has reached an agreement with Indianapolis 500 winning team Bryan Herta Autosport (BHA) and Bowen & Bowers Motorsports (BBM), to sponsor the No. 98 Honda driven by Jack Hawksworth. 

Hawksworth, 23, joins BHA for his rookie IndyCar season following success last season in the Firestone Indy Lights Series where he won three races and finished fourth in the championship. LegalShield will serve as associate sponsor of his No. 98 Honda throughout the 2014 season, which consists of 18 IndyCar Series races across North America, including the 98th running of the Indianapolis 500.

With over 4 million users, LegalShield provides legal services in 49 states and four Canadian Provinces. For a low monthly fee, members gain access to quality law firms without high hourly costs. 

USANA Announces Extended WTA Partnership

USANA Health Sciences, a global vitamin and health supplement manufacturer, recently announced the renewal of its partnership with the Women’s Tennis Association (WTA) through 2016. USANA, the Official Health Supplement Supplier of the WTA, first partnered with the WTA in 2006, and will continue to provide its nutritional products to more than 160 WTA athletes.

Under the extended agreement, Eugenie Bouchard (Canada), Madison Keys (U.S.), Monica Puig (Puerto Rico) and Zhang Shuai (China) will join Sloane Stephens (U.S.), Samantha Stosur (Australia) and Zheng Jie (China) as USANA Brand Ambassadors. The enhanced partnership will also feature WTA Legends appearances and several USANA-sponsored WTA events worldwide, such as this year’s WTA Championships in Singapore.

In addition, USANA is launching its inaugural “Aces for Humanity” campaign. Every ace served at Premier-level WTA events will translate into a donation to the USANA True Health Foundation, whose mission is to provide the most critical human necessities to those who are suffering or in need around the world.

Founded in 1992, USANA Health Sciences is a nutritional company that manufactures high-quality supplements and personal-care, energy, and weight-management products in Salt Lake City. USANA’s products are sold directly to preferred customers and associates in 18 international markets.

Youngevity Launches Inaugural Fashion Line

Youngevity International Inc. announced the formation of MK Collaborative, a wholly owned subsidiary of Youngevity International Inc. This new venture positions Youngevity in the direct selling industry with the potential to market a line fully developed by a celebrity fashion designer.

Marisa Kenson’s patent-pending design for the “invisible belt dress” was incorporated into the line, and she has also hand selected the design team, stylists, and multimedia marketers that make up MK Collaborative. The line premiered at the Sundance Film Festival, which took place in Park City, Utah, from Jan. 16–26. The line was also revealed during a showcase along with other Youngevity products at The Academy Awards in March.

Youngevity plans to launch Marisa Kenson’s inaugural collection within the MK Collaborative in May with the first trunk of clothing, jewelry, and corresponding makeup and skincare items. A new trunk collection is anticipated to be unveiled every eight weeks thereafter.

Youngevity International Inc. is a multi-dimensional consumer products company offering a wide range of consumer products and services. The company is also a vertically integrated producer of fine coffees for the commercial, retail and direct sales channels.

Regal Ware Announces Scholarship Recipients

Regal Ware recently named Kevin Etta and Olivia Krautkramer the 2014 recipients of J.O. Reigle Scholarships. The scholarship program was established in 1963 in honor of Regal Ware’s founder, the late J.O. Reigle. The award recognizes the outstanding scholastic achievements of one or more graduating high school seniors in Kewaskum, Wis.—site of the corporate headquarters for privately held cookware manufacturer Regal Ware—and is designed to assist the recipients in their pursuit of a college education.

To be eligible for the $18,000 J.O. Reigle Scholarship, a student must have attended Kewaskum High School for at least the previous two years and maintained at least a “B” average for the first three and a half years of high school. Each student will receive $4,500 per year for each of his or her four-year college programs.

Regal Ware is a U.S. direct seller and manufacturer of high-quality stainless steel cookware and cast aluminum cookware with a history that dates back to 1911.

April 01, 2014

Financial News

Financial News, April 2014

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.

Avon Partners with Coty

Avon Products Inc. (AVP—NYSE) and Coty Inc. have executed a letter of intent regarding a commercial arrangement where Avon Brazil would market and sell select Coty fragrances and its ancillaries through Avon’s 1.5 million independent Sales Representatives in Brazil.

Although the details are still being finalized, the intent is for Avon to carry a collection of Coty’s celebrity and lifestyle fragrances in the Avon Brochure in Brazil.

Avon’s strong direct sales footprint, broad geographic coverage and extensive service model in Brazil will give Brazilian consumers improved access to an expanded portfolio of fragrances. The broad portfolio of Coty’s celebrity and lifestyle brands has strong consumer appeal, allowing Avon Representatives to better serve their customers, grow their consumer base and increase their earnings.

The arrangement is subject to final documentation, which the companies plan to complete over the next few months.

2013 Annual and Quarterly Results

Herbalife Ltd.

Global nutrition company Herbalife Ltd. (HLF—NYSE) reported record fourth quarter 2013 and full-year results.

2013 Fourth Quarter Results

For the fourth quarter ended Dec. 31, 2013, net sales were $1.3 billion, reflecting an increase of 20 percent compared to the same period in 2012, on volume point growth of 13 percent. Net income for the quarter was $123.5 million, or $1.15 per diluted share. On an adjusted basis, adjusted net income for the quarter was $137.2 million, or $1.28 per diluted share, as compared to 2012 fourth quarter net income of $112.2 million and EPS of $1.00.

In regional results, net sales in North America were $210.3 million, compared to $197.1 million for the same time period the previous year. Mexico net sales of $142.6 million were an increase over $132.1 million in the same period of 2012. South and Central America sales were $290.1 million, also an increase over the prior year sales of $203.3 million. EMEA sales were $197.6 million, compared to $164.7 million. Asia Pacific sales of $279.6 million dropped from $295.2 million in 2012. China sales were up at $148.4 million, compared to $67.1 million in the prior year.

2013 Annual Results

For the 12 months ended Dec. 31, 2013, the company reported record net sales of $4.8 billion, an 18 percent increase, on 13 percent growth in volume compared to 2012. For the same period, the company reported net income of $527.5 million, or $4.91 per diluted share. On an adjusted basis, adjusted net income of $577.4 million, or $5.37 per diluted share, reflected increases of 24 percent and 36 percent respectively, over 2012 net income of $464.0 million and EPS of $3.94.

For the year ended Dec. 31, 2013, Herbalife generated cash flow from operations of $772.9 million, an increase of 36 percent compared to 2012; paid dividends of $123.1 million; invested $162.5 million in capital expenditures; and repurchased $297.4 million in common shares outstanding under the previous share repurchase program.

Herbalife recently announced that the board of directors approved an increase in its share repurchase authorization to $1.5 billion. Following repurchases made in connection with the company’s recent financing transaction on Feb. 7, 2014, the remaining authorized capacity under the repurchase program is $814 million.

Herbalife reported that its board of directors has also approved a dividend of 30 cents per share to shareholders of record March 4, 2014, which was payable on March 18, 2014.

Nu Skin Enterprises Inc.

Nu Skin Enterprises Inc. (NUS—NYSE) announced record fourth quarter and full-year results for 2013.

2013 Fourth Quarter Results

For the fourth quarter, revenue was $1.06 billion, an 82 percent improvement over the prior-year period. Revenue was negatively impacted 4 percent by foreign currency fluctuations. Earnings per share for the quarter were $2.02, a 108 percent year-over-year improvement.

In Greater China, fourth quarter revenue increased 248 percent to $481.6 million, compared to $138.3 million in the prior-year period. Fourth quarter revenue in North Asia was $286.3 million, compared to $246.9 million for the same period in 2012. Revenue in South Asia/Pacific was $99.5 million, a 57 percent increase compared to the prior year. In the Americas, revenue improved 59 percent to $126.1 million, compared to $79.1 million in the prior-year period. Revenue in Europe was $62.3 million, a 21 percent improvement over the prior year.

The company’s operating margin was 17.9 percent for the quarter, compared to 15.4 percent in the prior year. Gross margin during the quarter was 84.4 percent, up 80 basis points over the prior-year period.

The company’s cash and short-term investment position at the end of the quarter was $547.1 million. Dividend payments during the quarter were $17.6 million, and the company repurchased $50.0 million of its outstanding shares, leaving $395 million in the company’s repurchase authorization at year end.

2013 Annual Results

The company reported full-year 2013 revenue of $3.177 billion, a 49 percent year-over-year improvement. Annual revenue was negatively impacted 3 percent by foreign currency fluctuations. Earnings per share for the year were $5.94, a 69 percent increase over 2012. Operating margin for the year was 17.4 percent, up 140 basis points compared to 2012.

In response to recent media reports in China and the ensuing investigation by Chinese regulators, the company’s audit committee recently began an internal review of the company’s China operations. The company is unable at this time to predict the timing and outcome of the review. Given this review and the possibility that various components of its annual report on Form 10-K could be impacted, the company’s board of directors had determined that it could not file its annual report by the March 3 due date. The company currently expects that the audit committee will have made sufficient progress in its review to enable the company to file its annual report by the March 18 extended filing deadline.

Nu Skin Enterprises Inc. also announced its board of directors has declared a 15 percent increase in its quarterly cash dividend to 35 cents per share, compared to the previous dividend of 30 cents per share. The dividend is payable on March 26, 2014, to stockholders of record on March 14, 2014. The increase would move the company’s annual dividend to $1.38 per share, subject to regular quarterly determination by the board of directors, compared to $1.20 per share for 2013.

Tupperware Brands Corp.

Tupperware Brands Corp. (TUP—NYSE) announced record fourth quarter and full-year 2013 operating results.

2013 Fourth Quarter Results

For the quarter ended Dec. 28, 2013, net sales were $717 million. Emerging markets, accounting for 63 percent of sales, achieved a 12 percent increase in local currency, driven by large populations, greater penetration and emerging middle classes. Established markets were down 5 percent in local currency, a 3 percentage point improvement over the third quarter.

GAAP net income of $89.7 million versus $74.5 million in the prior year, which included $13.2 million pretax more of expense items, was up 21 percent in dollars and 29 percent in local currency. Adjusted diluted EPS of $1.81 included 9 cents of negative impact versus 2012 from changes in foreign exchange rates, which was 3 cents worse than assumed in October’s guidance.

Full-year cash flow from operating activities net of investing activities was $263 million, $29 million over 2012 and $13 million over the high end of October’s guidance range.

In the fourth quarter, the company returned $107 million to shareholders through a dividend payout of $32 million and the repurchase of 832,000 shares for $75 million. Since 2007, 20 million shares have been repurchased for $1.2 billion, with $0.8 billion left under an authorization that runs until February 2017.

Europe sales were down 1 percent versus last year reported and down 2 percent in local currency. Continued strong results in Turkey and Tupperware South Africa’s and France’s return to growth were offset by the impact of low activity primarily in other established markets and CIS.

Asia Pacific sales were up 1 percent reported and 12 percent in local currency, driven by the emerging markets up 17 percent in local currency, led by China up over 20 percent, Indonesia, up 33 percent, and Malaysia Singapore up 17 percent.

Tupperware North America sales were up 4 percent reported and in local currency. Tupperware Mexico was up 14 percent, including an eight-point benefit from higher B2B sales. Beauty North America sales were down 14 percent reported and 13 percent in local currency.

South America sales were up 17 percent reported and 28 percent in local currency, primarily as a result of continued growth in Brazil, which was up 19 percent in local currency driven by an 18 percent salesforce increase.

2013 Annual Results

For the year ended Dec. 28, 2013, the company reported net sales of $2.67 billion, up 3 percent reported from $2.58 billion in 2012. For the year, the company’s GAAP net income of $274.2 million is up 42 percent from $193.0 the previous year, and diluted earnings per share of $5.17 are up 51 percent from $3.42 the prior year.

LifeVantage Corp.

LifeVantage Corp. (LFVN—NASDAQ) reported financial results for the fiscal 2014 second quarter ended Dec. 31, 2013.

2014 Second Quarter Results

For the second fiscal quarter ended Dec. 31, 2013, the company reported net revenue of $51.5 million, compared to $53.4 million for the same period in fiscal 2013. Revenue growth of $2.3 million, or 7.2 percent, in the Americas and $1.9 million from Hong Kong was offset by lower sales in Japan. Revenue for the quarter was negatively impacted $3.6 million, or 6.7 percent, by foreign currency fluctuation.

Gross profit for the second fiscal quarter ended Dec. 31, 2013, was $43.6 million, compared to $38.8 million for the same period last year, delivering a gross margin of 84.6 percent, compared to 72.5 percent in the prior year period.

Operating income for the second fiscal quarter of 2014 was $5.2 million, compared to $0.5 million in the same period last year, including one-time expenses. Operating margin for the current quarter was 10.0 percent.

Net income for the second fiscal quarter of 2014 was $3.3 million, or 3 cents per diluted share. This compares to net income in the second fiscal quarter of 2013 of $209,000, or zero cents per diluted share, including one-time expenses.

Direct Selling News has accumulated this information from public sources, including press releases and SEC filings. The information is presumed accurate and reliable. However, it is not an endorsement of any investment opportunity. Proper and considerable due diligence should be completed before making any investment.

April 01, 2014

Stock Watch

Stock Watch, April 2014

April 01, 2014

Company Spotlight

Sunrider International: Perpetual Balance

by Beth Douglass Silcox

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.

Sunrider International Evens the Scales between Product and Opportunity

Company Profile

  • Founded: 1982
  • Headquarters: Torrance, Calif.
  • Founders: Dr. Tei-Fu Chen and Dr. Oi-Lin Chen
  • Executives: Wendy Teng, Vice President of Marketing; Dr. Reuben Chen, Project Manager; Sunny Beutler, International Operations Director; Eric Chen, Operations Director, Sunrider Manufacturing; and Jonathan Chen, Global Information Technology Director
  • Products: Nutritional supplements, weight management, skincare and cosmetics, household cleaners, and oral care

Ancient Chinese herbalism transformed a scrawny Taiwanese youngster named Tei-Fu Chen into a more healthful young man, who eventually mixed his herbalist grandfather’s teachings with Western science and created Sunrider International. This diversified, privately held company was built on a product-focused direct selling business plan. While products like its new SunTrim® are still of utmost importance, today Sunrider seeks balance within its business model by having a simplified business and compensation plan and by embracing a more overt campaign to train and recruit a younger generation.


Thirty-two years ago, West was just beginning to meet East. The nutritional and healing philosophies of Eastern cultures like China were new to Western consumers. Tei-Fu Chen, who by then had earned a doctorate in pharmacy and immigrated to the United States with his wife, Oi-Lin, was poised to improve human health by balancing Western science with traditional Eastern herbalism.

Dr. Tei-Fu ChenDr. Tei-Fu Chen
Dr. Oi-Lin ChenDr. Oi-Lin Chen

Decades earlier in his southern Taiwan home, Dr. Tei-Fu Chen—then affectionately known as Chopstick—watched his grandfather boil down ground herbs, Chinese yams and mucilage. The result was a drink for better nutrition and health, which eventually cost him the skinny nickname but more importantly, he says, saved his life.

By 16, Dr. Tei-Fu Chen was poring over his grandfather’s ancient herbal manuscripts, and by 20, he’d distilled thousands of years of Chinese herbal research into his own Philosophy of Regeneration®. It would take him a few more years to formulate his first prototype product, SunBreeze®, to ease the ache of muscles following judo workouts at Brigham Young University, where he went to school. The popularity of his initial ointment with students, however, foreshadowed his ultimate success in formulating and manufacturing healthful products.

While Oi-Lin earned her Doctor of Medicine degree and gave birth to the couple’s five children, Tei-Fu worked in research and development, grew more passionate about herbalism and became increasingly convinced his Philosophy of Regeneration® had something unique to offer consumers.

In 1982, with Dr. Oi-Lin Chen running a medical clinic, he stepped away from his position to found Sunrider International—so named because, Dr. Tei-Fu Chen says, “If we face the sun, the shadows will always be behind us.” The company would go on to introduce the world to products that balance Western science with the holistic principles of the East.

Philosophy of Regeneration®

“We promote real food and concentrated food. To us, the herb is just like food, so it is very unique,” Dr. Tei-Fu Chen says. “In the Western world, most people focus on vitamins, which are chemicals. In Sunrider’s thinking, we don’t really need chemicals. We have too many already. What we need is real food. The key is how you combine all this different food.”

The Philosophy of Regeneration® is the blueprint from which each Sunrider nutritional product develops. It must satisfy both yin and yang, in other words, nourish and cleanse the body. From this perspective, nourishment must come from food, not chemicals, and because no one ingredient can adequately fill nutritional gaps and maintain optimal health, there must be variety. Also, formulation and concentration depends on expertise, diligence and integrity, which Sunrider possesses.

Heroic Philanthropy

Sunrider International answers the call for help from whatever corner of the world it may originate. In fact, Founder Dr. Tei-Fu Chen’s generosity to philanthropic causes on behalf of his company landed him on Forbes Asia’s 2009 list of the “World’s Heroes of Philanthropy.”

It matters not if it’s matching hundreds of thousands of dollars in IBO disaster relief donations for China’s Sichuan Province, the Philippines or New Jersey, or donating $1 million to meet the needs of kids in developing countries through UNICEF’s “Say Yes for Children.”

Sunrider has participated in a joint effort to rebuild schools after devastating earthquakes in China, provided long-term sponsorship of charity runs and AIDS walks, donated to distributors affected by natural disasters, and made sure that children and adults in remote areas of the world received vision care from Eye Train optometrists and eye doctors.

Recently, Sunrider donated $2.5 million for the technology needs of the Torrance Memorial Medical Center’s new surgical center near their California headquarters. The Chens wanted to give back to the institution that not only skillfully treated a family member, but also improves the health of so many beyond the local community.

“Balance is key to nourishing the whole body.” —Dr. Tei-Fu Chen, Founder

“We do our research and development, extraction and formulation in-house—about 90 percent of our products we make ourselves, and that’s what we’re most proud of,” says Dr. Oi-Lin Chen, Sunrider’s President.

Sunrider owns and operates eight manufacturing facilities worldwide, totaling some 2 million square feet, where impressive and costly technologies clean, grind, extract and condense herbs through a proprietary process, then concentrate them into pill and liquid forms.

The company controls every step of product development, from initial concept to manufacturing, distribution and marketing. In fact, their nine-acre, 350,000-square-foot headquarters in Torrance, Calif., even includes a botanical garden—a playground of sorts for R&D. Control like this enables creativity and innovation and ensures the highest-quality products.

Balancing the Body and Business

The human body needs more than the West’s magical, single ingredient ascorbic acid, for instance, packed into pills and swallowed once a day, according to Dr. Tei-Fu Chen. He says that vitamin C is most beneficial to overall health when it’s contained within the whole orange—a reflection of an Eastern nutritional philosophy. In Sunrider products, East balances West and West balances East because, he explains, “Too great an emphasis either way is not good. Balance is key to nourishing the whole body.”

Sunny Beutler, International Operations Director and one of the Chens’ daughters, says, “People are looking for natural. People want real food. Generally speaking, I think most people are looking, but maybe they just haven’t found it. Sunrider is the perfect way for them to get the right nourishment in the natural way. We have a real focus on finding balance and nourishing the body through real food. All our products are derived that way.”

And balance, it turns out, is key to nourishing a company as well. The product-driven nature of Sunrider for the past three decades, according to Dr. Tei-Fu Chen, has been both pro and con.

No doubt, quality products have meant fantastic sales and enormous success for Sunrider International, which was part of the Direct Selling News $100M Club in 2012. The list comprised companies that industry experts believed reached or exceeded $100 million in sales, but for which sales data was not released to the public.

But as a direct selling company that wants to multiply and increase the income of their independent business owners, Dr. Oi-Lin Chen says more emphasis needs to be placed on Sunrider’s business opportunity. “This is what we want to do. We will do it 50/50. Good products, good business opportunity,” she says.

While there are Sunrider International distributors in China and Taiwan who have been successful and earn significant annual incomes, Dr. Tei-Fu Chen says most distributors are very humble, loyal people who feel most comfortable sharing products, not opportunity. “Most times they don’t really understand how to talk about the business opportunity. Our people go out and do house sales. Our people are humble enough that they don’t really tell people, ‘Oh, I make so much money!’ ” he says. And that is precisely what the company aims to bring into balance, so that Sunrider can help more people bring health, beauty and prosperity to their families.

“We want to make sure our products are excellent—the best of the best—and we want to make sure that our business plan is fair and exciting,” Dr. Tei-Fu Chen says. A recent simplification of the company’s business and compensation plans, as well as a new online training program and the expansion of social media and other technologies, are important first steps to achieving the balance Sunrider seeks.

This is not the first time Sunrider has sought balance of some sort. Prior to 1996, the company’s sales in China were reportedly more than $1 billion annually, then came harsh government restrictions on MLM companies because of industrywide abuses. Back then, Sunrider abandoned the MLM business model in China in favor of a retail business model and helped their most successful distributors establish storefronts.

This move created a new international, hybrid direct selling business model for the company. They combined the more traditional Independent Business Owner (IBO) model for countries like the United States with a franchising component of Authorized Business Owners (ABOs) and Sunrider® Authorized Stores, first in China and then later in countries such as Korea, Taiwan and Malaysia, as well as company stores in countries such as Australia, Vietnam and Israel.

The changes caused sinking sales in China initially, which rebounded over nearly two decades. Today, Dr. Tei-Fu Chen says, “In China, we run successfully again. Business is always challenging, but without challenge you can’t grow.”

Sunrider does its own research and development, extraction and formulation in-house.Sunrider does its own research and development, extraction and formulation in-house. Founders Drs. Oi-Lin and Tei-Fu ChenFounders Drs. Oi-Lin and Tei-Fu Chen

“We spend a lot of our time and effort to make sure that ours are the best products on the market, and we really regard the integrity of the company highly in our business plan and in how we provide compensation to our IBOs, too.” —Dr. Reuben Chen, Project Manager

International Messaging for a New Generation

“We spend a lot of our time and effort to make sure that ours are the best products on the market, and we really regard the integrity of the company highly in our business plan and in how we provide compensation to our IBOs, too,” says Dr. Reuben Chen, Project Manager overseeing R&D and business development.

He believes Sunrider’s is one of the most generous business and compensation plans of any network marketing company in the world, but spreading that message among existing and potential distributors is Sunrider’s current challenge.

Founders Drs. Oi-Lin and Tei-Fu Chen (center) are pictured with their five children who are also involved in the family business: (from left) Jonathan Chen, Eric Chen, Sunny Beutler, Wendy Teng and Reuben Chen.Founders Drs. Oi-Lin and Tei-Fu Chen (center) are pictured with their five children who are also involved in the family business: (from left) Jonathan Chen, Eric Chen, Sunny Beutler, Wendy Teng and Reuben Chen.

“In direct sales it is a person-to-person business, and we want everyone to know that we are partners with them, especially since they are investing their time and money with us.” —Sunny Beutler, International Operations Director

Because of the company’s immense global footprint—36 offices, tens of thousands of ABOs and IBOs doing business in some 50 countries—Sunrider is technologically adept at using webinars, teleconferences, Point Across and YouTube. “All those things are for better communication with our distributors because that’s very important in the direct selling industry. With technology, we can achieve that more easily,” Dr. Oi-Lin Chen says.

And Sunrider is also looking to technology to help balance a product-focused distributor base and give them the tools they need to effectively promote the company’s new, straightforward business plan and recruit a younger generation of distributors.

While raising their social media presence will help, a new interactive training site called Sunrider University also goes live this summer to further educate IBOs on the company and its products. “People will be able to take courses online. Customer service, follow-up, product knowledge on how to make sales, how to keep track of leads—all the things that IBOs need on a daily basis—will be there,” Beutler says. “We are excited about the website. It will be a lot easier to gain knowledge, keep track of courses, and ask questions.”

Sunrider University will also provide an additional layer of support to a company culture already based on accessibility. “It’s very common for me and for my parents to interact directly with people who are using our products and with our business builders,” says Dr. Reuben Chen, the Chens’ son. “We encourage those people to communicate with us about what things they feel are good about the company and what things we can improve.”

Beutler adds, “In direct sales it is a person-to-person business, and we want everyone to know that we are partners with them, especially since they are investing their time and money with us. We want them to know we are listening to them.”

Feedback, they say, is especially important as the company launches new products and a global initiative to combat obesity this spring. SunTrim® Plus is central to the company’s new holistic weight-loss program called SunFit. SunTrim® Plus is a natural extraction of cocoa and green coffee beans and herbs that allows people to enjoy food but not overeat. “What we try to do is tell your body to control itself. So far we’ve not had any products that can achieve this kind of effect before, so we’re excited about this,” Dr. Tei-Fu Chen says.

Beutler adds, “Our focus is to have people throughout the world really see that there is another way to fight obesity in the U.S. and across the world and to also have a healthier lifestyle.”

“Sunrider can be for many generations. As some of the people who are working with us are getting older, we can now introduce it to another generation.” —Dr. Oi-Lin Chen, Founder

The SunFit Program originated at Sunrider headquarters, where staff members balance nutrition and physical fitness to improve health and lose weight. “Now we’re trying to reach outside our office and pass along our SunFit Program,” Beutler says. “We’ve had a lot of people lose a significant amount of weight on it in just 90 days. We’re working on initiatives on the local level and also internationally for fitness, weight loss and lifestyle.

“This whole push—Sunrider University, social media and The SunFit Program—is to reach a younger demographic. We are reaching for people in their 20s, 30s and 40s,” she says.

“Sunrider can be for many generations,” Dr. Oi-Lin Chen adds. “As some of the people who are working with us are getting older, we can now introduce it to another generation.”

Both founders look forward to yet another era of success at Sunrider, as all five of their grown children—a master in information systems management, two lawyers, a medical doctor, and a doctor of organic chemistry—have returned to the fold and bring valuable layers of expertise to the family-owned and family-run business.

Dr. Tei-Fu Chen relishes that Sunrider brings prosperity and health to the world, and in the end, he says, “We are not a really high-profile company. We have been here for 32 years and we are happy every day, but we are very proud that we run a good company and our product is good.”

April 01, 2014

Cover Story

The Road to $1 Billion

by J.M. Emmert

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.
DSN Cover, April 2014

When Inc. magazine named Ambit Energy America’s fastest-growing private company in 2010, the then 4-year-old company’s annual revenue already had reached $325 million, making it one of the 40 largest direct selling companies in the world.

A year after the Inc. article appeared, the revenue number had doubled to $664 million. And 24 months later, Ambit did what very few direct selling companies have been able to do: break the billion-dollar barrier.

Hitting $1 billion in revenue is a milestone for any business, and to do so in seven years puts Ambit’s growth on a trajectory in line with some of the most recognizable brands of the past few decades: Apple (six years), Facebook (six years), Amazon (four years), eBay (seven years) and Google (five years).

Technology certainly helped. Co-Founders Jere Thompson Jr. and Chris Chambless have pointed to the company’s data processing technology as a key factor in Ambit’s rapid expansion. And Ambit, like all modern direct sales companies, leverages the connectivity afforded by the Internet as well as social media platforms in its sales strategies.

Yet despite the ubiquitous nature of technology, the billion-dollar milestone remains elusive for many direct sellers. In order to better understand what it takes to break through that barrier, we decided to study some of the members of direct selling’s Billion Dollar Club: six from the United States—Ambit, Amway, Avon, Herbalife, Mary Kay and Nu Skin, as well as Germany’s Vorwerk, Brazil’s Natura and Peru’s Belcorp.

What is it that makes them billion-dollar companies? What do they have that other companies are still trying to learn and to possess? In our review, we identified four key drivers behind the members of the Billion Dollar Club.

Growth Comparison ($0-$1 Billion)

1. They were founded by outstanding leaders.

Which one would you invite to dinner: the visionary, the revolutionary, the dream-builder, the groundbreaker, the risk-taker, the mover, the shaker or the history-maker? In the Billion Dollar Club, you’ll find them all sitting at the table.

Take Amway’s Jay Van Andel and Rich DeVos, for example. Van Andel was a firm believer in and fierce advocate for free enterprise, and DeVos was among the first proponents of teaching distributors to start with believing in themselves.

“We were just two guys from Ada, Michigan, USA, who wanted to have a business of our own,” DeVos says on the company’s website. “We were two kids (it still feels like that sometimes) who were hungry for success and who wanted to give others the chance to be in business for themselves, too.”

The current generation at Amway is building upon that foundation. Co-CEOs Steve Van Andel and Doug DeVos have led the company to record sales growth marked by continued global expansion to more than 100 countries and territories.

Avon offers a similar lesson in the power of strong foundational leadership. As a salesman in the 19th century, David McConnell was far ahead of his time in recognizing that women could be successful sales professionals. Beginning in 1886 with Mrs. P.F.E. Albee, he tapped the power of a female salesforce to go door-to-door extolling the virtues of products from the California Perfume Company, the forerunner of Avon. By 1920, he had built a $1 million business, which adjusted for inflation would be nearly $12 million now.

Today, CEO Sheri McCoy, whom Fortune magazine ranks as among the 50 most powerful women in business, exemplifies McConnell’s vision of building the company for women. She joined the Avon team in April 2012, bringing with her 30 years of experience with Johnson & Johnson, and now leads a $10 billion business with more than 6 million independent sales representatives.

2. They offer distinctive, high-quality products or services.

Having bold, visionary leaders is critical to building a billion-dollar company. So, too, is creating products that bring true value to the marketplace. The club members reviewed here have done just that.

The United States has the largest cosmetics industry in the world, with estimated revenue of nearly $55 billion. Amway, Avon, Mary Kay and Nu Skin are all able to thrive because they continue to be at the forefront of scientific research, developing new products designed to enhance the lives of customers.

Nu Skin, for example, spent more than $46 million on research from 2011 to 2013 and has made several key acquisitions that brought new technology into the company. Its Pharmanex health supplements product line comes from the acquisition of Simi Valley, Calif.-based Generation Health Holdings Inc. in 1998. Since then, Nu Skin has gone on to purchase substantially all of the assets of Madison, Wis.-based LifeGen Technologies LLC in 2011 and Malvern, Pa.-based Nox Technologies Inc. in 2012, which added more anti-aging technology to the Nu Skin portfolio.

Avon significantly upped its research and development game in 2002, announcing plans for a state-of-the-art R&D center and a $100 million increase in research spending from 2002 to 2005. The company has continued that commitment, spending $67.2 million on research and development in 2013 and launching more than a dozen new products.

Unlike its personal consumer product peers, Ambit is using direct sales to introduce customers to a relatively new product category: energy. Deregulation in many utility markets is giving consumers a choice when it comes to purchasing their retail electric and gas services.

Since its launch in Texas in 2006, Ambit has used direct selling to spread the word. Co-Founder Jere Thompson Jr.’s mother and father were the company’s first customers, and received the first bill. Today, Ambit has more than 1 million active customers.

3. They target growing markets.

In order to hit the $1 billion mark, choosing where to sell can be just as critical as choosing what to sell. Of the nine companies in our report, six of them have a presence in more than 35 markets around the globe. Only Belcorp (16), Natura (seven) and Ambit (one) have managed to make the Billion Dollar Club with less.

According to a September 2013 DSN report, advanced markets—the United States, Japan, Korea, France, Germany, the U.K., Taiwan, Italy, Canada and Australia—accounted for $89 billion in retail sales in 2012. Emerging markets such as China, Brazil, Mexico, Malaysia, Russia, Colombia, Thailand, Venezuela, Argentina, Peru, Indonesia, India and the Philippines accounted for $65 billion. Those markets, however, are home to 85 percent of the world’s population; gaining a foothold there now establishes a foundation for future growth.

Take Brazil, for example. Natura has established itself as the biggest cosmetics company in its home country. The No. 2 cosmetics name in Brazil? That was U.S.-based Avon, which counts Brazil as one of its largest markets and where it keeps some research and development operations.

4. They invest in their people.

In the end, while leadership can create a desired path, quality products can help establish a business, and new markets can help bring a company’s story to a worldwide audience, it all comes down to the people who say yes to the opportunity to represent the brand.

The nine companies in this report have more than 20 million salespeople combined across the globe. Those salespeople are of every age and ethnicity, with diverse educational backgrounds and diverse reasons for wanting to be an entrepreneur. In fact, according to the U.S. Direct Selling Association, most people who join direct selling come for one of five things: supplemental income, recognition, rewards, social connections or product discounts.

Six of the nine companies currently have more than 1 million salespeople who, for the most part, are compensated on a multi-level structure. The most-frequently used sales method is person-to-person, which accounted for 80 percent of sales in 2012. Vorwerk, Mary Kay and Belcorp employ the party plan method as well.

The founders and leaders of the Billion Dollar Club companies recognize and value the diversity among their salesforces. Family men like Belcorp’s Eduardo Belmont and the brothers Carl and Adolf Vorwerk have shown that fostering a culture of love and respect brings in the greatest returns on investment. Motivators like Herbalife’s Mark Hughes and Natura’s Luis Seabra set out to help people change themselves so they could, in turn, change more lives for the better. And Nu Skin’s Blake Roney, Sandie Tillotson and Steve Lund are among the many philanthropists in direct selling who have reached out a helping hand to those in need.

A key to becoming a billion-dollar company is to have people talking about it. So whether the talk comes from the standpoint of a 150-year-old legacy or a new, spirited startup that has re-energized the industry, happy salespeople translates to happy customers; and happy customers is always a winning formula.

The Road to $1 Billion | The Billion Dollar Companies | Billion Dollar Club: Who’s Next?

April 01, 2014

Company Focus

Plexus Worldwide: A Partnership for Success

by Jennifer Workman Pitcock

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.
Photo above: Plexus Worldwide corporate offices in Scottsdale, Ariz. (Photo Credit: Dustin Revella Photography)

Company Profile

  • Founded: 2006
  • Headquarters: Scottsdale, Ariz.
  • Executives: Alfred Pettersen, International President; Tarl Robinson, CEO; and Alec Clark, Chief Marketing Officer.
  • Products: nutrition, weight loss, skincare, pain relief, detoxification and breast health

Plexus Worldwide may be the biggest company in the direct sales industry that you’ve never heard of. But Plexus executives don’t expect that to be the case for long: In the last two years, the company’s revenues more than quadrupled. With a strong weight-loss pillar and a recently added pain-relief pillar, the company is growing exponentially.

The Plexus Story

“I wanted to do network marketing as it could be done and should be done.” —Alfred Pettersen, International President

Two of Plexus’ owners got their start in the industry as distributors—Plexus’ International President Alfred Pettersen and CEO Tarl Robinson. Pettersen joined his first direct sales company in 1992. Soon he became one of the company’s top distributors in his home country of Canada. “I thought I had a horse that I could throw my retirement saddle on and ride into the sunset,” Pettersen says. But then, in 2001, his company merged with another direct sales company. The first month, he saw his earnings drop by half. After 9/11, sales got even worse. It was then that Pettersen decided he wanted to own his own network marketing company someday. “I wanted to do network marketing as it could be done and should be done,” he says.

He got his opportunity when he discovered a company called Plexus Worldwide in Scottsdale, Ariz. Plexus had only one product, and it was non-consumable. They were selling a Breast Chek Kit to help women screen themselves for breast cancer. Pettersen was marketing a breast cream that he believed could increase the company’s sales, but Plexus turned him down after months of negotiation. The founder had discovered he had a life-threatening illness and planned to shut the company down. Instead, he agreed to sell the company to Pettersen.

But Pettersen needed an investor. Though still quite young, Robinson had been a successful distributor at various direct sales companies. Now he was looking for investment opportunities in the industry. The two men hit it off, and Robinson became Pettersen’s partner.

Plexus’ corporate offices in Scottsdale, Ariz.Plexus lobby at company headquarters. (Photo Credit: Dustin Revella Photography) Plexus’ executive team: Alec Clark, Tarl Robinson and Alfred Pettersen.Plexus’ executive team: Alec Clark, Tarl Robinson and Alfred Pettersen.

The Plexus Plan

The two men took over the company in May 2008. The first thing Pettersen and Robinson did was change the comp plan from a binary plan to what the company calls “the Plexus Plan.” “We both knew what it was like to be on the distributor side, and we said we’re going to treat our Ambassadors—that’s what we call our distributors—as partners,” Pettersen says.

So they set about creating a new comp plan, developed primarily by Pettersen. A key feature is profit-sharing. It’s open to Ambassadors who pay the company’s annual fee of $34.95 to join. To qualify, Ambassadors must turn on a Back Up Order—an automatic shipment of products of the Ambassadors’ choosing that gets sent automatically on the day of their choice every month—but only if they don’t have enough personal volume to qualify. If Ambassadors do this, they can earn a share of Plexus’ profits.

The revenue sharing is just one of several ways Ambassadors can earn money in the company’s comp plan. The Plexus Plan spreads revenues across the field and doesn’t simply cater to top performers. “Our comp plan has eliminated competition within the company,” Pettersen says. “When any Ambassador increases their average sales, it increases the profitability of the company, and everyone gets rewarded.”

Recession Blues

Just a few months after Pettersen and Robinson bought Plexus in 2008, the recession hit. “Our one consumable product was a skincare product for breast health,” Robinson says. “When it was a choice between dinner on the table or a cream for breasts, the breast cream quickly went out the window. It was a period in time when, regardless of whether their finances were changed or not, people were playing it close to the vest.”

“In my opinion, weight-loss products are king if you can find a product that works.” —Tarl Robinson, CEO

Pettersen and Robinson think Plexus might not be around if their next product hadn’t walked through the door—literally. A couple of formulators came into the Plexus headquarters with a weight-loss drink. Robinson was intrigued. “In my opinion, weight-loss products are king if you can find a product that works,” he says. But the product they brought—what is now Plexus Slim—came in a 12-ounce bottle. Robinson saw several big drawbacks. Storage and shipping issues with a liquid made him hesitate.He suggested that the formulators put it into a powdered form, which they did.

That was June 2009. By July, Plexus had sample packets, which they gave to their top Ambassadors. It quickly became known as “the pink drink” because of its unique color.

“By the middle of August, we were getting amazing feedback on what this product was doing. We had told our Ambassadors not to change their diet or exercise routines. We needed to see how this product was going to work for them on its own merit. We were getting fabulous results,” Pettersen says.

They launched Plexus Slim in 2009 and immediately saw sales jump. Plexus’ executives knew they had a winner.

Accelerating Sales

Just a few months later, the company caught another break. An Ambassador realized a product she had bought at the health food store was having a synergistic effect with Plexus Slim. She had dropped from a size 8 to a size 2 in 90 days.

Plexus’ product formulators confirmed that the products worked together, and they reformulated it to make it more compatible with Slim. They called the new product the Accelerator. Plexus launched it at the beginning of 2010. Sales took off as a result of the combined weight-loss products.

Another Partner

As Plexus began to grow, Pettersen and Robinson realized they needed someone who would bring them industry contacts on the executive side. So they brought on Alec Clark as the company’s Chief Marketing Officer. Clark had worked on the corporate side of a company where both Pettersen and Robinson had been distributors. “We needed someone who knew both of us and who respected what we had done,” Pettersen says. “We have a very different way of doing business here, so we didn’t want him to simply transplant his experience in the industry. He had to filter it so that it fit in with the Plexus culture.”

Soon the company was growing so fast that Clark relocated to Arizona and became Plexus’ third partner.

The Plexus Culture

Plexus’ executives are proud of the culture they have created within the company. The comp plan is just one example of the way Plexus puts its Ambassadors at the heart of the business. “We truly feel we’re partners with them,” Clark says. “All the decisions we make are focused toward them. We want their lives to be better because of Plexus.”

This also carries over to the company’s training. Although Plexus utilizes online tutorials and videos, Ambassadors are usually the ones guiding and teaching. “Our Ambassadors are out there in the field, and they know what they’re training on,” Clark says. For the past two years, Plexus has held a “Super Saturday” training the first Saturday of the year. The company creates a curriculum for the year, and top Ambassadors do training sessions around the country. “This last year we sent two or three Ambassadors to 30 cities on Super Saturday,” Clark says. All meetings around the company are open to any Ambassadors, regardless of what team they are on.

Their culture of inclusiveness seems to be working—they saw 600 percent growth in Ambassadors in 2013, with a total now of about 135,000. Though a high percentage of Plexus’ Ambassadors fit the profile of a typical network marketer—middle-aged and female—the company is starting to see a wider range. “Some of our top positions are filled by Ambassadors in their 20s,” Robinson says.

Products That Work

Last year, Plexus surveyed its Ambassadors to see why they were with the company. An overwhelming 92 percent said it was because the products work. Plexus Slim’s active ingredients include proven weight-loss components such as chromium and a proprietary blend of chlorogenic acid extract, garcinia cambogia fruit extract, and alpha lipoic acid. Accelerator also contains chromium and a proprietary blend of other ingredients, including many natural plant extracts that may aid in weight loss, such as green tea extract.

Plexus Slim’s active ingredients include proven weight-loss components such as chromium and a proprietary blend of chlorogenic acid extract, garcinia cambogia fruit extract, and alpha lipoic acid.

Plexus’ website shares numerous video testimonials of people who have seen tremendous results from using the products, and the company’s executives have heard from thousands more. They love going to meetings and listening to the ways the products have changed people’s lives. “People talk more about the health benefits than the weight they’ve lost,” Pettersen says. He believes that the products help to bring the body back into balance, which improves users’ overall health.

Recently, Plexus added two more products. Bio Cleanse addresses issues with the digestive tract. “It has become one of our top products,” Pettersen says. “We also added a product called ProBio5 that helps get intestinal flora to its peak.”

Along with its weight-loss products, the original Breast Chek Kit, Plexus Body Cream, and a multivitamin called Plexus X Factor, a line of pain relief products rounds out Plexus’ offerings. “People love them and are seeing real results,” Pettersen says.

Move into Social Media

In 2014, Plexus hired Vincent Orleck as its Social Community Coordinator to handle all of the company’s social media channels. He is the first employee the company has hired who is solely dedicated to the social media space.

Though he has only been with Plexus a short time, Orleck is already seeing results. “People are asking lots of questions about the products,” he says. “They’re asking how to become Ambassadors.”

When he arrived, the company already had a fairly robust following on Facebook and Twitter. He plans to increase the company’s presence on other platforms, such as Google+ and Pinterest. “Our audience is on Pinterest,” Orleck says. “I think that will be a big channel for us.”

His goal for all of Plexus’ social media platforms is to be more innovative. “I want to teach our Ambassadors how to use social media to their advantage,” Orleck says. “It’s not about being sales-y. People don’t want to see that on Facebook. They turn that off.”

Instead, Orleck says it’s all about the relationship aspect. “It’s about making it personal and keeping it personal—not making two personal posts and then hitting them with the sale.

“If you think about it, using social media in direct sales makes sense,” he says. “MLM is all word-of-mouth, and that’s exactly what social media is—a tool to get the word out.”

Room for Growth

When the partners took over Plexus, they were housed in a 2,400-square-foot space. Today, they’re in their third building. And they’re outgrowing their 36,000-square-foot facility—they will need to move again by 2015.

But that’s nothing compared to the growth they expect to see in the field in the near future as they move into other markets.

Within the United States, Plexus still sees a great deal of potential as well. “There are big cities where we’ve hardly scratched the surface,” Clark says. “I think we’re just getting started.”

Building a Legacy

From the beginning, one of the goals of Plexus Worldwide has been to create a legacy company. The company’s core beliefs are Be Trustworthy, Be Honest, Be Reliable and Be Responsible. Building on this foundation, the partners are working to make sure this vision will be realized. “We’re working to create something that will withstand our time here, a company that will keep its values and nature and culture. We’re creating a company that will keep our Ambassadors’ and employees’ best interests in mind as it moves forward,” Robinson says.

“At Plexus, our mission is to enhance the health, wealth and happiness of our Ambassadors and employees. And we’re seeing that happening across the country.” —Alec Clark, Chief Marketing Officer

This includes continuing to add products. They have a long-term plan in place to grow their offerings to around 22–25 items. They will continue to enhance and improve their weight-loss pillar while adding two to three more. Though they’ve laid projected growth plans, they believe that the best way to become a legacy company is to be ready for opportunities when they arise. “We like to be nimble on our feet,” Robinson says. “If a great product jumps into our laps, it doesn’t always make sense to push it out 24 months. Just because it wasn’t in the plan doesn’t mean we can’t do it if we put some timing and strategy behind it.” They also believe being a debt-free company with money in the bank gives them the security and resources to continue to build for the future.

“At Plexus, our mission is to enhance the health, wealth and happiness of our Ambassadors and employees. And we’re seeing that happening across the country,” Clark says. “Eventually we’ll see it happen across the world. I anticipate being here for a long time because what Plexus has is a true partnership between its executives and Ambassadors.”

Plexus’ partners want their company to one day be the definitive weight-loss company in the direct sales space. “We have our blinders on,” Clark says. “We have a laser focus on where we want to go in the future, and we’re not looking to the left or the right.”

April 01, 2014

Industry with Heart

4Life Research: Hope to See beyond Tomorrow

by Karyn Reagan

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.
Foundation 4Life

Company Profile

  • Founded: 1998
  • Headquarters: Salt Lake City
  • Founders: David and Bianca Lisonbee
  • Products: immune support, general wellness

Foundation 4Life service projects focus on equipping disadvantaged individuals around the world with the tools they need to move beyond bare survival.

David Lisonbee was searching for answers to health issues that were not responding to anything he tried when he stumbled across a scientific finding from 1949. New York University professor Dr. H. Sherwood Lawrence, an immunology pioneer, wrote about how immune system experiences from one mammal could be transferred through factors in the body to another mammal. The receiving mammal’s immune system could be educated by those factors, now known as transfer factors. Lisonbee gave his own immune system the boost it needed using clues from the research, and the results were convincing.

According to Calvin Jolley, Vice President of Communications at 4Life Research, when Lisonbee shared the success with his wife, Bianca, she felt that this discovery should be made available to the world. He agreed, and in 1998 they launched the company with a signature product dubbed Transfer Factor Classic.

4Life has grown every year since its formation and now has a presence in over 23 countries around the world.

Lisonbee’s experience in direct selling and publishing in the health and wellness sector supported his decision to use direct selling as the marketing vehicle. 4Life has grown every year since its formation and now has a presence in over 23 countries around the world. And the original signature offering has been joined by a full line of Transfer Factor products that support various body systems.

In addition to the results of the products, 4Life’s growth is due in part to the extensive training offered to its distributors as well as its use of technology. “We are heavily involved in social media, including photos, action items, company news and product updates,” Jolley says. “Our e-news, which has received recognition by the DSA, is sent around the world via email providing current updates and information. We also utilize text messaging, Facebook (with over 70,000 likes on our page), Pinterest, Instagram and YouTube to communicate with our distributors regarding company news, product updates and action items for business building. Every medium carries consistent weekly messages.” There is even a mobile app that distributors can utilize to access account information, company news and training materials wherever they have an Internet connection. 4Life also hosts corporate sponsored conference calls, inviting corporate and field leaders in the company as guest speakers to inspire and motivate attendees.

Commitments That Lead to Change

The Lisonbees built 4Life on a three-tiered foundation of Science, Success and Service. “The science of the products has brought the success of the company and its distributors, who are then encouraged to serve those in need,” Jolley says. In 2006, the charitable work that the company had always engaged in was formalized into a nonprofit entity called Foundation 4Life.

“We look for projects where we can enter into a long-term relationship and build a new legacy of hope for otherwise hopeless situations.” —Tracie Kay, Director of 4Life Service

Tracie Kay is the Director of 4Life Service, which includes Foundation 4Life and the 4Life Fortify nutrition program. She explains that the focus of the foundation is to lead a community in need to a place of self-sustainability. “We look for projects where we can enter into a long-term relationship and build a new legacy of hope for otherwise hopeless situations,” she says. “Our focus is to provide the essential needs of children—nutrition, shelter, and education—but the cycle of poverty is most heavily influenced through education on several different levels for both the children and the parents.” The foundation partners with entities already working in the community and commits to getting them to a level where the individuals they are helping can stand on their own feet. “We teach educational skills to kids and parents as well as basic survival skills such as gardening, baking and even managing chicken farms. It depends on the culture,” Kay says. “For example, if a family can grow and manage their own food, we have started them on a path of newfound hope. It’s definitely a long-term commitment.”

Currently, there are philanthropic projects taking place in over 30 countries where 4Life distributors are active. “We encourage distributors to become involved in the projects,” she says. “Some are even drawn to the business by first being involved in what we are doing in their community.”

5-year-old Juanita attends kindergarten in a Honduras community where Foundation 4Life has committed to help families and children. 5-year-old Juanita attends kindergarten in a Honduras community where Foundation 4Life has committed to help families and children. Aneurys Perez, a recipient of Foundation 4Life’s giving in the Dominican Republic, returns the blessing to his aging grandparents.Aneurys Perez, a recipient of Foundation 4Life’s giving in the Dominican Republic, returns the blessing to his aging grandparents.

A Glimpse at the Global Impact

The first country Foundation 4Life reached into with assistance was the Dominican Republic, specifically through La Casa Rosada, an orphanage for children with HIV. “We launched the Foundation in 2006 with a major donation to expand the facility operated by the Catholic Church,” Kay says. “Once there was sufficient shelter for the orphans we went to work on providing educational opportunities.” There was a need for some of the 3- to 5-year-old children to be better prepared for school on a social level. “They had a tendency to act up and get kicked out of regular schools,” she says. “The sisters running the orphanage recommended a Montessori-style preschool. We acted on their suggestion and have seen great results with the social and academic preparedness of the children for mainstream schools, and they are able to learn like their peers.” Montessori teaching is characterized by an emphasis on independence, freedom within limits, and respect for a child’s natural psychological, physical and social development. The on-site preschool teachers also work with individuals with special needs. 4Life Fortify and other 4Life Transfer Factor products are also donated to the orphanage to provide better nutrition for all who live and work there.

Aneurys Perez is one of the first two residents at La Casa Rosada to graduate from high school. His mother died of HIV when he was young, and because his grandparents were unable to support him and his younger brother the orphanage became their home. “Foundation 4Life was able to provide Aneurys with a full scholarship, including room and board, to a local Santo Domingo university,” Kay says. “He was also given his first job by a local 4Life distributor who needed administrative support running his 4Life business.” Aneurys later applied to work at the local airport, was hired as an immigration officer and has since received promotions as he continues to work on his bachelor’s degree in marketing.

Through education and hands-on experience, Foundation 4Life hopes to train as many families as possible how to sustain themselves and their community.

Aneurys has learned the power of giving and now returns the blessing to his aging grandparents. He has paid for them to install running water in their modest home, pays their monthly water bill and purchased a washing machine and refrigerator for them. He is also funding extra-curricular classes for his younger brother in preparation for high school graduation this year. “It feels great to have been a part of changing a life and a legacy for Aneurys and his family,” Kay says.

In Honduras, parents send their children into the streets to sell a variety of items or do odd jobs in order to add a dollar or two to the meager family income. Kay says that often education is not a priority; survival is. “In response to the desperation of the people of Jardines del Norte, Honduras, we have made a six-year commitment to reach out through programs at a community center for which we sponsored the construction,” she says. “We are working hard to create a paradigm shift, changing a mindset adopted through years of poverty.”

Through education and hands-on experience, Foundation 4Life hopes to train as many families as possible how to sustain themselves and their community. “Many mothers join their children at the center and are offered classes specifically designed for them,” Kay says. “Lessons in good hygiene and nutrition are at the top of the list. We also teach jewelry-making skills, providing the mothers a way to contribute to the household income.” And there is a huge garden on the property to teach families how to plant and harvest their own food to consume and sell. “The people of this community shop for one meal at a time because that is all they can afford. There is a sense of desperation and day-to-day survival,” she says. “We work to offer them hope to see beyond tomorrow.”

Closer to Home

Through Foundation 4Life’s support, Juanita is able to receive a healthy meal and school materials.Through Foundation 4Life’s support, Juanita is able to receive a healthy meal and school materials.

In the United States, Foundation 4Life implemented a program in 2009 to help less fortunate children at the Guadalupe School in Salt Lake City. “Every year we provide school supplies to those who cannot afford them, and two years ago we began sponsoring the early childhood education program at the school. Additionally, Foundation 4Life was a major contributor for the construction of their new school that is currently on track to open this fall,” Kay says. “Last fall we extended our educational initiatives to three additional cities in the country.” Local 4Life distributors rallied to help in Barberton, Ohio; Miami, Fla.; and Downey, Calif., distributing backpacks and hygiene supplies, depending upon the needs of the students.

“During the holiday season Foundation 4Life also gave follow-up donations to high-risk students in each school,” she says. “For instance, over 200 uniforms were provided to the school in Miami. Two hundred sweatshirts were given to students in Downey to help them through the cooler winter months, and three families were treated to a substitute for Santa by local distributors.” Children at the school in Utah received additional school supplies, and 4Life supported a Christmas store where parents could procure gifts for their children. “When we heard from mothers of the kids who received the gifts, they were overwhelmed by the support of total strangers,” Kay says. “And although some of the projects are small, these four schools know they can count on us to lighten their financial burdens two to three times each year for an indefinite period of time.”

Foundation 4Life is funded by the generous donations of its distributors. The methods of giving include:

  • a one-time donation added to any product order
  • a recurring donation from bonus checks
  • purchasing an autoship pack of products that includes a built-in donation

Another way to give to the charitable arm of the company is by participating in the 4Life Fortify program. “We implemented this program in 2010 as a way for distributors to participate in providing essential nutrition directly to children in need,” Kay says. “4Life Fortify is a separate for-profit arm of the company that focuses specifically on fighting childhood malnutrition. Our Fortify product is made up of a great-tasting blend of red beans, lentils, and long grain white rice, plus a complex of the vitamins and minerals that growing kids’ bodies desperately need.” At any time, distributors may purchase Fortify, which is then sent to a hungry child by the company. She says distributors do earn commission volume for the purchase, providing a great opportunity for them to build their 4Life business while helping service the nutritional needs of children around the world.

At the Top of Their Game

Through the power of networking, some 4Life distributors have shared their nutritional supplements with athletes who have experienced noticeable results. The athletes include world hall-of-famers, a discus thrower in Germany, Denver Broncos team member Manny Ramirez and 2010 World Series MVP Edgar Renteria. “Once they become customers, the distributors let us know and we engage in a public relations initiative with the athlete and provide them with products at no charge,” Jolley says. “We do not pay them, but they are invited to join Team 4Life and endorse our products. Once they have joined the Team, we look for ways to incentivize the relationship through opportunities such as speaking at district and national 4Life events.”

“The commitment [of founders David and Bianca Lisonbee] to making life better for as many less-fortunate people as possible is the reason that 100 percent of every dollar donated actually goes to fund one of our projects.” —Tracie Kay

A beautiful picture of giving back can be found in the generosity demonstrated by the athletes on Team 4Life as they are involved in community and youth leagues. “Edgar Renteria has actually opened a baseball academy in Colombia,” Jolley says. “He takes kids off the streets, puts them in a stadium in a baseball uniform, and teaches them teamwork and leadership while they play the game.” His commitment to helping these kids has encouraged other Major League Baseball players to join Team 4Life. The foundation recognizes that Renteria’s mission is in perfect alignment with theirs and donates a sizeable annual contribution to the baseball academy. “He doesn’t want pay,” Jolley says. “But he gladly welcomes financial support as he works to save the lives of as many young people as he can in Colombia.”

With so many needs in the world, choosing which ones to address can be a unique challenge. Kay says, “The strategy implemented by our 4Life Service programs is to look in markets where there is strong 4Life distributor leadership and presence. We also have an outside board of reviews that officially signs off on all projects and spending.”

But both Jolley and Kay desire to make it clear that the generosity that gives life to every 4Life Service program was etched into the culture of the company from the moment it was established by David and Bianca Lisonbee. “Their commitment to making life better for as many less-fortunate people as possible is the reason that 100 percent of every dollar donated actually goes to fund one of our projects. All operating costs incurred by our programs are paid by 4Life,” Kay says. “And as the company continues to grow, so will our service to the needs of the world.”

April 01, 2014

Publisher's Note

Letter from John Fleming, April 2014

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.
John Fleming

For our 2014 DSN Global 100 list, the information is still being processed, and the ranking is almost complete. In a few short weeks we will announce this year’s list during our annual banquet on April 23. It’s been an amazing year with amazing results—true indicators of the role direct selling opportunities have played in the lives of people during 2013. Every time we compile the information needed to publish our global ranking, it becomes more and more obvious to us that free economies benefit enormously from the direct selling business model! Every number we process is a reflection of lives engaged and people served with products, services and, yes, opportunity! This is precisely why we are proud to tell the stories that need to be told.

The DSN Global 100 is approached with the preceding in mind. We celebrate with you the enormous achievements of all companies who collectively make the industry what it is. We especially thank those companies who choose to share with us, for the benefit of all, their accomplishments, significance and relevance, particularly in a world that needs to better understand how the masses can be engaged and rewarded through use and distribution of some of the most unique products and services available. We especially extend our respect to those privately held companies that submit their revenue even when there are decreases versus prior year. This ranking is not about the placement number as much as it is about a collective of companies that form the foundation for a most unique pathway to entrepreneurship throughout the world.

The facts are: Others are watching. And they are watching to better understand direct selling, to more clearly identify with who does what within the industry, and to determine the overall positive impact the business model may have on economies local, national and global. There are some who use the direct selling business model and do not identify with the industry, so our DSN Global 100 ranking is never inclusive of every company utilizing the business model.

It is noteworthy, however, that in looking at the data, we see the top 50 companies grew by approximately $3 billion; $2 billion of that growth comes from the top 10 companies. In 2012 the top 50 companies represented approximately $64 billion in revenue, and in 2013 that same group grew to approximately $67 billion in annual revenues. Ambit is the fastest company ever to reach $1 billion—just seven years.

Our cover story this month shares the highlights of nine direct selling companies that have surpassed the milestone of becoming a billion-dollar company. It is most fitting that these stories are being told in the timeframe of our 2014 Global 100 release. All companies in the DSN Global 100 top 10, as well as at least three others, have surpassed the billion-dollar mark, and several more are on the door step. What got these companies there and how long did it take? More importantly, what are the common denominators to getting there? You will find the answers to these questions and more as you read the article. Once again, the cumulative impact on lives engaged and often changed for the better, people served, and communities of positive, like-minded individuals developed (the sales organizations) represents far more than what the revenues of these billion-dollar companies depict.

In the shadow of all of the amazing results we will release later this month at our DSN Global 100 Banquet on April 23—we will be posting to Facebook and Twitter live from the event—is the ongoing story involving the accusations of a hedge fund manager against Herbalife, one of the top 10 direct selling companies in the world. As we prepared to go to press, Herbalife announced and welcomed the FTC investigation called for and initiated by the hedge fund manager’s accusations. Most interesting has been the recent article in The Wall Street Journal and the recent investigation by The New York Times revealing tactics used by the hedge fund manager to solicit those who have been used as complainants against Herbalife. Investigations are a part of the checks and balances built into our culture and democratic form of government. However, when accusations are built upon profit motives on the part of an accuser and turn into possible lies or misinformation or use unethical tactics, every citizen should pay close attention.

The world of journalism is often accused of focusing too much on the negative side, but there is also the positive side, which often helps to keep the scales of justice in balance. We believe this investigation will dispel much of what has become media chatter, and that is why Herbalife extended the welcome. In the meantime, the 3+ million Herbalife distributors around the world did not waiver in 2013, which is an example of what underlies the strength of all sustainable companies—a culture and community of people who believe in their chosen endeavor and the mission, principles and values upon which the company is built.

Until next month… enjoy the issue! 

John Fleming
Publisher and Editor in Chief

April 01, 2014

Working Smart

Why Supply Chain Transparency Is Key to Your Company’s Success

by Noel Datko

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.

Traditional supply chains, once only intended to be accessible internally, are coming out of the closet. Companies are being called on to offer complete visibility into their labor practices, energy consumption, waste and carbon emissions measurement, and water supply management.

The real, bottom-line benefits of taking your supply chain transparent are simple: It boosts your company’s image, increases customer loyalty, and can put you light-years ahead of your competition. Transparency means offering consumers real insight into your environmental and social initiatives, and your efforts to improve the quality and cost of your products. It gives you a whole new standard of excellence to live up to—and your customers notice.

As I previously mentioned, responsible and ethical supply chain focus, plus transparency around those initiatives, is becoming essential to your company’s public image. And with social media able to directly impact a company’s reputation, public image more and more affects your bottom line.

The real, bottom-line benefits of taking your supply chain transparent are simple: It boosts your company’s image, increases customer loyalty, and can put you light-years ahead of your competition.

Even more, transparency offers a significant competitive advantage: It’s a consumer’s privilege to buy a product blindly, either ignoring or not caring about its supply chain footprint. But transparently offering an ethical, compliant global sourcing strategy becomes a true competitive differentiator.

It’s how companies gain, and keep, customer loyalty, not to mention making themselves an employer of choice. High-quality potential candidates are attracted to companies that demonstrate they understand that business is, and should be, more than just driving straight ahead to make a profit.

Once you’re on board with the reasons you need to offer a transparent supply chain, the next concern is how. Your ability to be transparent is directly proportionate to just how complex your supply chain is. And the way you design, implement and support transparency initiatives is directly related to how your company currently plans, designs, makes and ships products.

What new requirements will you have to implement in your process? How deeply will changes need to go? Where do you need to start? You can look at everything from how and where you source your materials to how and who assembles them. Consider reducing emissions in your shipping practices, implementing a green packaging initiative, and more. Then you need to consider how to make your initiatives visible to the public.

Nike, for example, has put a Nike Responsibility initiative into place. They developed the Materials Sustainability Index (MSI), a database that, over seven years of research, assembled information on 77,000 materials. Its supply chain team is thoroughly trained to make smart, creative choices regarding material choices when designing and sourcing for their new products. This means that accountability becomes a companywide value.

Supply chain transparency is about harnessing the right combination of innovation and environmental, social, quality and cost best practices. When you operate with full visibility, you’re opening your company up to a new standard of excellence, and redefining what success means. It goes beyond big business, bottom lines and ROI—it’s about operating smartly, ethically and in a sustainable way, now and into the future.

Noel Datko is Marketing Director at IntegraCore LLC., a company that offers outsource turnkey fullfillment center and distribution warehousing services.

April 01, 2014

New Perspectives

What Does the FTC Inquiry Really Mean? A Direct Selling News Point of View

by DSN Staff

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.

When Herbalife announced March 12 that it was facing an FTC inquiry, the company said it welcomed the news given the tremendous amount of misinformation in the marketplace.

“We are confident that Herbalife is in compliance with all applicable laws and regulations,” the company said. “Herbalife is a financially strong and successful company, having created meaningful value for shareholders, significant opportunities for distributors, and positively impacted the lives and health of its consumers for over 34 years.”   

The past two years of relentless attacks on the Herbalife business model by one hedge fund manager in particular, as well as others known to have very negative opinions about the direct selling business model, have captured the attention of an entire industry and the wider public. 

The direct selling industry has been down this road before, and challenges are to be expected when utilizing any non-traditional model for distribution of goods and services. Traditional brick-and mortar-retail is being confronted by e-commerce to the extent that many predict an end in sight, or at least a drastic redesign of the concept of attracting people to a physical shopping environment.

So what can be expected from the recently announced FTC investigation of Herbalife, and what are the real issues? The role of personal consumption will certainly be explored, as well as the vulnerability for personal loss. The FTC addressed the basic issues surrounding personal consumption back in 1979 [In the Matter of Amway, 93 F.T.C. 618 (1979)]. As to the question of personal loss by distributors, reputable direct selling companies have, for many years, offered a buy-back provision in their code of ethics, and the Direct Selling Association insists that its members have such a policy. Leading direct selling companies have these policies and stand by them, thus protecting the consumer.

The recent investigation concerns Herbalife, but it also has ramifications for direct selling in general, network marketing, party plan, personal selling, and social selling or social commerce. This is about every business model that uses any form of compensation that allows independent contractors to become micro-entrepreneurs who benefit, in various ways, from enrollment and the enrollment of others who purchase and/or sell products and services.

An old argument—in fact, an argument that was won by our industry—has become a fresh one, and once again a major company has come under examination. It behooves our industry to pay attention, stand together, be united in speaking out about our good points, and collectively examine ourselves on behalf of the millions of distributors and consumers that we serve.

April 01, 2014

Working Smart

Processes over Personality: Build Systems to Achieve and Maintain Growth

by Paul Adams

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.

A company executive tells me they have a “GREAT rep.” He is killing it—making lots of money and bringing lots of people into the organization. Then, in the next sentence, the exec tells me the company just isn’t growing as they would like or have expected, and they can’t figure out why.

OK, I’m no genius, but something doesn’t seem connected between those two things. Almost always, the reason for slow or no growth when there is a top rep who is “doing great” is that the rep is doing something that is not repeatable. Often, from the outside, the example the GREAT rep is setting makes it look way too difficult, and others cannot “see themselves” doing it.

And the problem continues because the executive in charge of the company is catering to this GREAT rep and not creating tools and systems that more people can utilize. I just don’t understand…

If the exec truly believes that more people should be successful in the company, why won’t he explain to the GREAT rep that in order for more people to succeed, things have to change? The reality is that processes, systems and tools are the things that will support true success, not one rep, even a “great” one who is successful—but not duplicable. Sadly, it’s sometimes difficult for the executive to see this reality. Why? The answer is usually pretty simple. The exec is likely fearful of two things:

No. 1: Losing the revenue they already have, even if it’s not at all what they think it should be. 

No. 2: Losing the rep who has gotten them to this point—even if the GREAT rep will never take them to the next level of success.

Here’s a cold hard fact of life: Often, the people who helped get your company here are not the people who will help you get where you want or expect to go. It sounds harsh, but it’s true. It happens in your corporate structure. It happens on sports teams. It happens everywhere. Growth requires the right people in the right spots, and the right systems, tools and processes to help individuals maximize their efforts. 

In my opinion, the executive has two choices. Either let the GREAT rep keep doing what he is doing and let the overall success of the company remain in his hands, or build a system and provide the tools that allow others to succeed. And, get the GREAT rep on board and building like everyone else is expected to. One of these options is scalable and puts the executive back in control of the company. 

Without a doubt, as a business continues to grow, executives are approached over and over by independent business owners (IBOs) who say they want to join the organization and bring their knowledge and their way of growing a business into the company’s world. They want to help “explode” the business and reach entirely new and, up to now, unreachable levels of success. All the executive has to do is let them bring their systems into the business and watch it grow.


Franchises are perhaps the closest cousin to the direct selling business model. Do you think McDonalds, 7-Eleven, Chick-fil-A, or any one of the dozens of other franchise businesses allow their new business owners to do it “their way”? Of course not!

I am very sure that during the selection/interview process at Chick-fil-A, if the prospective owner starts talking about how they have better ideas and a better way to run the business, they are turned down as an owner. It’s too important to Chick-fil-A—they simply don’t want a single owner to fail. It’s bad for everyone—the business owner, the company and the brand.

The secret to the success of the franchise model is that it relies completely on the ability of the business owner to follow the predetermined system that will lead them to succeed in their own business. After that, the owner needs to be good at a few other critical things—hiring, firing, scheduling, basic accounting, and so on.

Almost every day, I talk to a high-level executive at a direct selling company that is leaving the process of succeeding in the hands of the IBO. To me, that sounds like playing Russian roulette with the business.

Like franchises, I am completely convinced that success in direct selling is process-driven and systematic. Without a system to teach your newest IBO, you are allowing your old IBOs to run the business. You are completely reliant on their system, their knowledge, their charisma. That’s scary!

My advice to all new companies and any company that doesn’t have a system to teach: Get one! Now! Create a system that teaches consistent prospecting and recruiting, along with business practices.

If you have an existing organization, get the buy-in of your current IBOs so everyone agrees that the system is one that everyone will endorse. At first, it may feel threatening to the current field leaders. It won’t take long to realize it is good for everyone if the entire organization is focused on a unified system.

Then, in the new distributor kit, “hold their hand” and teach that new person what to do first. You wouldn’t teach someone geometry if they don’t know how to add and subtract. So, start with the basics. Teach them what they need to know now—on Day One! If done properly, they will quickly become better and will want to know how to be more effective. Then, explain step-by-step what to do on Day Seven, then Day 14, then Day 30. It is the systematic progression that will get them and keep them successful.

Take the first step. Take control of the business by designing and building the systems to achieve and maintain growth. The investment will be well worth it!

Paul AdamsPaul Adams is Senior Vice President of Strategic Marketing for VideoPlus, which is celebrating 26 years of partnering with direct selling companies.

April 01, 2014

New Perspectives

Amway Shares Global Findings with Public

by DSN Staff

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.
NOTE: Since 2011, Amway has engaged its global resources to conducts surveys and studies on various topics related to entrepreneurialism and self-employment. Amway President Doug DeVos and Chairman Steve Van Andel both conveyed their enthusiasm for the report’s findings in a recent conversation with Direct Selling News’ Publisher, John Fleming. Van Andel said, “To me, the greatest finding in the report is that over two-thirds of the people surveyed really support entrepreneurialism. So when you look at the industry, we’re sitting in just the right place—the sweet spot. We think having a group of entrepreneurs driving the business is where you need to be.”

The goal of the annual Amway Global Entrepreneurship Report (AGER) is “to stimulate discussion of topics relevant to the encouragement of entrepreneurs and the advantages of self-employment.” The entire 2013 report is available to the public at AmwayEntrepreneurshipReport.com. With permission from Amway, DSN is reprinting sections of the report in this column.

Key Results of the Amway Global Entrepreneurship Report 2013

Despite the recent economic uncertainties, people are positive about entrepreneurship. Our respondents name independence as the most important motivation for becoming self-employed. Yet, fear of failure remains a severe obstacle to starting a business. Policymakers should address these fears and take the necessary steps to remove them and foster an entrepreneurial culture.

Entrepreneurship is an important pillar of economic growth. To better understand motivations behind entrepreneurial attitudes the 2013 Amway Global Entrepreneurship Report surveyed 26,000 respondents in 24 countries. The results show that entrepreneurship continues to enjoy a high reputation. Of respondents to the 2013 Amway Global Entrepreneurship Report, 70 percent have a positive attitude towards entrepreneurship, and 39 percent can imagine becoming self-employed. Yet, the gap between potential entrepreneurs—people that have a latent preparedness to embrace an entrepreneurial opportunity—and actual entrepreneurs is still large. So why do so few potential entrepreneurs make the move?

Key Drivers of Entrepreneurial Intentions

Independence and income are important drivers of entrepreneurial intent, whereas perceptions of risk represent an obstacle to becoming self-employed.

The survey results yield a clear answer as to what motivates people: Independence is a more important driver for becoming self-employed than income. Respondents name being independent from an employer and realizing their own ideas as the dominant reasons for starting a business, while income-related aspects such as a second income or return to the job market were less important.

However, two patterns suggest that people think of starting a business out of necessity rather than due to opportunity. First, in countries with relatively low GDP per capita, entrepreneurship as a second source of income becomes a main driver. Second, in countries involved in the European economic crisis, people consider entrepreneurship as a way out of unemployment.

Still, the fear of failure represents a strong obstacle to becoming self-employed, and 70 percent of the respondents confirm this assertion.

The consequences of failure can be grouped into three categories: social, psychological and financial. The fear of the financial consequences of business failure is an obstacle to becoming self-employed (41 percent). Social consequences such as disappointing family, friends, and co-workers and psychological consequences like personal disappointment all rank far behind financial consequences.

In countries directly involved in the European economic crisis more than every second respondent views the crisis as a severe obstacle. National culture influences the evaluation of entrepreneurial intentions as well. Countries that are more individualistic or less “uncertainty avoidant” value independence higher. Income as a motivation is not affected by culture. The survey also reveals a strong relationship between uncertainty avoidance and fear of failure. For example, in the U.S., only 37 percent of the respondents name fear of failure as an obstacle to becoming self-employed, while in Japan it is 94 percent.

Fostering Entrepreneurship

Given that more than two-thirds of the respondents consider fear of failure as an obstacle to becoming self-employed, policymakers need to implement measures to help potential entrepreneurs overcome these obstacles and take action. For example, the European Commission recently presented an action plan for fostering entrepreneurship. This action plan builds on three areas: entrepreneurship education, role models and a fertile environment for startups. The results of the survey suggest that implementing such measures may reduce the fear of failure and ease the startup phase.

Respondents to the survey confirm the encouraging effect of entrepreneurship education on becoming self-employed (33 percent). Respondents with a university degree expect entrepreneurship education to be a stronger facilitator for starting a business than those without a degree. In part, this might be caused by intensified teaching of entrepreneurship skills at universities. Consequently, the rate of respondents that can imagine starting a business is substantially higher among university graduates.

Based on the study’s findings, we also believe that established and successful entrepreneurs may also function as role models for potential and new entrepreneurs. Through mentoring programs and business networks, potential entrepreneurs and actual entrepreneurs may obtain crucial firsthand information on the startup phase. Interestingly, again respondents with a university degree value this option more.

U.S. Respondents Have a Clear Opinion on What Entrepreneurship Is Like

The U.S. is the country with the highest percentage of respondents who are not afraid of failing with an enterprise (62 percent).

Through all demographic groups, the most appealing aspect for Americans to start a business is “independence from an employer and being one’s own boss” (65 percent; International average: 43 percent).

The chance of “self-fulfillment and possibility to realize one’s own ideas” is the second most important aspect of respondents to start up their own business (62 percent), followed by “better compatibility of family, leisure time, and career” (53 percent).

  • On average, more than every second (56 percent) respondent in the U.S. has a positive attitude towards self-employment.
  • Evaluating the results of the different age groups, we see a very positive attitude towards entrepreneurship among respondents aged between 30 and 39 years (70 percent) and between 40 and 49 years (79 percent).
  • Four out of 10 of the American respondents (42 percent) can imagine starting their own business.

Fearless U.S. Entrepreneurs

The U.S. is the country with the highest percentage of respondents who are not afraid of failing with an enterprise (62 percent). While in other countries, the fear of failure is invariably present and composed by different factors, such as “financial burdens up to bankruptcy” (42 percent), “threat of the economic crisis” (32 percent), “threat of unemployment” (16 percent), “personal disappointment” (15 percent), the fear of “taking over the responsibility” (13 percent), and “legal consequences such as lawsuits” (13 percent), in the U.S. only “financial burdens up to bankruptcy” (23 percent) and the “threat of the economic crisis” (15 percent) frighten more than 10 percent of the respondents.

Entrepreneurship Education Encouraging the American Entrepreneur

When thinking of encouraging factors to the foundation of businesses, people in the U.S. agree that “entrepreneurship education and teaching of business skills” are indispensable (40 percent). This is 7 percent more than the average of the polled countries (33 percent). But also “public funding and startup loans” (U.S.: 33 percent; International: 42 percent), “backing from family and social networks” (U.S.: 30 percent; International: 27 percent), and “mentoring, support through business networks” (U.S.: 30 percent; International: 24 percent) might reinforce people’s decision to start up their own business.

U.S. Votes Itself Most Entrepreneurship-Friendly Country

U.S. respondents voted their country the most entrepreneurship-friendly among polled countries.

In comparison, the average of the countries polled worldwide disperses with 46 percent on each side, stating that their country is equally entrepreneurship-friendly and -unfriendly.

Closer Look at Obstacles and Possible Explanations for the Entrepreneurial Gap

In previous editions of Amway’s Entrepreneurship Report, the “fear of failure” has been among the highest obstacles to becoming self-employed. It’s those obstacles and fears that lead to a high gap between people that can imagine starting a business and those actually putting their plans into action. Is the gap because they do not believe in their abilities, their networks and ideas, or because they do not feel supported by their environment? This raises the question as to why some people are willing to take risks more than others and what fear of failure overcomes? This year’s report therefore aimed to find out more about the inner thoughts that go along with starting up a business and what can be done to encourage more entrepreneurship.

Risks and Obstacles Hindering Entrepreneurship

Among the polled countries worldwide, for 41 percent of the respondents “financial burdens up to bankruptcy” and for 31 percent “the economic crisis” turn out to be considerable obstacles against starting one’s own business. This turned out to be even truer for the member states of the European Union, where 43 percent and 37 percent, respectively, see it that way. Among the remaining (non- E.U.) participants of the AGER 2013, the economic crisis seems to have left less trace, as only 21 percent of the respondents feel threatened by it, and also financial burdens restrain only 38 percent of the respondents from starting a business. However, despite the existence and threatening cognition of risks and obstacles to entrepreneurship, still a considerable number of people seem ready to give consideration to starting their own business.

The average self-employment potential in all surveyed countries lies at 39 percent. Even if it is lower when evaluating the results of the EU member states, still over one-third can imagine starting their own business (36 percent). Breaking it down to the single countries, the highest potential can be found in Colombia (63 percent) and Mexico (56 percent), while Greece, despite its financial problems, remains Europe’s palladium of entrepreneurial potential, with a solid 53 percent (50 percent in 2012).

The other end of the line is held by Germany, with only 26 percent of the respondents considering the possibility to start their own business, and Japan, which ranks last with only 17 percent. To implement the aforementioned potential, political decision-makers need to help prospective entrepreneurs to put their ideas into action, as a long-term decline in startups and entrepreneurial activity—and thus in small- and medium-sized business—is a threat to every nation’s economy and society as a whole. To present an example: The traditional mid-size business culture in Germany is hit hard by this development. Projections of the German Chamber of Industry and Trade (DI HK) expect 1 million less self-employed people in 2050 compared to the status quo. The comparably well-functioning German labor market may serve as one explanation, but an at least equally important reason is believed to be that the fear of failure is very high in Germany. Of all polled Germans, 79 percent reply yes to the question “In your opinion, is the fear of failure an obstacle to starting a business?” When asked, which aspects contribute the most to this fear of failure with an enterprise, 59 percent of the polled Germans confirm that “financial burdens up to bankruptcy” constitute the main obstacle. Thus, it is no surprise that it is other countries that lead the ranking of successful entrepreneurship: The number of people confirming that they are already self-employed is highest in Greece (21 percent), Japan (18 percent), and Colombia (17 percent). Germany along with Finland, Australia, Poland, and the Ukraine is at 5 percent. Denmark, France (each 4 percent) and Russia (3 percent) rank last.

Great Entrepreneurial Potential not Fully Implemented

One crucial aspect of the worldwide survey is the entrepreneurial gap. For the average of all polled countries, this gap between participants showing entrepreneurial potential and those already self-employed is at 31 percent (resulting from an average self-employment potential of 39 percent versus an average rate of 8 percent of people who are actually self-employed).

This entrepreneurial gap is comparatively high in Mexico, Colombia and Australia. On the other hand, the lowest figures for the entrepreneurial gap can be observed in Japan, Germany (21 percent) and Spain (22 percent).

Encouraging Entrepreneurs, Eliminating the Fear of Failure

So why is it that countries like Colombia and Mexico have big entrepreneurial potential, but show low self-employment rates? One explanation could be structural obstacles: Respondents do not really fear to fail with an enterprise, but see “public funding and startup loans,” “entrepreneurship education,” and “support through business networks” as essential preconditions to starting their own business. However, in the eyes of these same respondents in Colombia and Mexico, government, media, and society in general are nowhere near providing those encouraging conditions (How entrepreneurship-friendly is society in your country? Colombia: 66 percent unfriendly; Mexico: 45 percent unfriendly).

In 2013, and in years past, the study’s findings emphasized the significant role of cultural, social and political environments in fostering entrepreneurship, and the need to set up incentives, bring down bureaucratic hurdles, and provide education and financing to help people start up their own businesses.

To download a copy of the full AGER2013 report, visit www.AmwayEntrepreneurshipReport.com.

April 01, 2014

DSA News

Direct Selling Proclamation and Compact: Affirm Your Commitment to the Industry

Click here to order the April 2014 issue in which this article appeared or click here to download it to your mobile device.

If you were asked to think of all the people you know personally whose lives have been bettered because of direct selling, how many people would come to mind? The answer is probably hundreds, or even thousands. Expand that to consider all direct sellers around the world and the answer would be tens of millions.

But who will tell the story of these millions of individuals who have defined their own version of success through direct selling? In cooperation with DSA member companies, the Direct Selling Association hopes to do just that through what is being called the “Direct Selling Proclamation and Compact.” This positive and inspiring statement of support for and commitment to direct selling has already been affirmed by more than 15,000 direct sellers—but in order to make an overwhelming statement about the positive impact of direct selling, the opportunity to sign this document needs to become nothing less than viral!

Take a look at just a few of the inspiring stories told by those who have signed the Proclamation:

“I am the mother of an autistic 5-year-old boy. My job in direct sales has allowed me to earn a paycheck for my family while setting my own hours and being there for every doctor’s appointment, therapy session, or special class my son’s condition requires.”
— Kelli R. (Enon, Ohio)

“Direct selling supplements my household income and provides me with opportunities to meet new people in my community. Running my own small business allows me to challenge myself, reap the rewards of my hard work, and take pride in building something of my own.”
— Christie C. (Higden, Ark.)

Kelli R. and Christie C. are two among thousands who have stood up for the direct selling industry by sharing their inspirational stories and signing the Direct Selling Proclamation and Compact. But we need more. We need our voices to be heard and our stories told. The beauty of this industry is the abundance of inspirational stories unfolding every day. All direct selling companies are asked to make their field sellers aware of the Proclamation and Compact and encourage them to sign on. It takes just a few minutes and will certainly provide a mental boost when they know they are joining thousands of other direct sellers in support of a business model that has helped them create a better life.

“My husband and I wanted to have children and I wanted to be able to stay at home with them. I needed to bring in an income. My company fits perfectly into that situation. I moved into a management position and was able to stay at home with our two children. Now they’re 14 and 15, and I still love the flexibility, opportunity and the freedom that a home-based business gives me. My business pays for the mortgage on our new home and then some. I am so thankful for the freedom a home-based business gives to me and my family.”
— Jill U. (Detroit Lakes, Minn.)

“Direct selling resulted in my first job out of college. It gave me purpose and training and an experience to add to my resume that was unmatched by any regular job I could have had in the same time.”
Benjamin M. (New Paltz, N.Y.)

The Direct Selling Proclamation and Compact can be accessed online at www.dsa.org/proclamation.

To get the message out to your field, DSA can provide you with a sample newsletter article and links to Facebook posts, tweets and LinkedIn articles you can use to spread the word. To see the thousands of stories that have already been submitted, visit www.dsa.org/signatures. (The proclamation is also available in Spanish at www.dsa.org/proclamacion.)

For more information or materials you can use to spread the word about this opportunity to your field, contact Amy Robinson at arobinson@dsa.org.

Amy M. RobinsonAmy Robinson is Senior Vice President and Chief Marketing Officer of the U.S. Direct Selling Association.

March 31, 2014

World News

Amway Manufacturing Expansion Rolls on with Vietnam Plant

Photo above: Architectural rendering of Amway’s new Vietnam facility.

In the midst of a $375 million manufacturing and R&D expansion, Amway has broken ground on a new NUTRILITE™ manufacturing facility in Binh Duong, Vietnam. The company says it will complete construction on the $25 million facility in 2015.

The Binh Duong site is Amway’s second in Vietnam, where the company has been operating since 2009. The global direct seller is also building four U.S. facilities (two in Michigan and one in California and Washington) that will support its leading NUTRILITE brand, a manufacturing plant in India, and a botanical research and experience center in China. Amway has slated completion of all its ongoing expansion projects by 2016.

Following record sales of $11.8 billion in 2013, Amway is building upon its success in new as well as existing markets. The company recently announced the launch of its business in Kazakhstan, expanding upon Amway’s operations in more than 100 countries and territories.

March 31, 2014

U.S. News

Primerica Ranks among Georgia’s Top Workplaces

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

Primerica Inc., a financial services company founded in Atlanta in 1977, has been recognized among the best workplaces in Georgia by the Atlanta Journal-Constitution. Based upon employee feedback, Primerica received the highest ranking of any public company, landing the No. 18 spot just ahead of mobile giant Sprint.

To determine the ranking, the Journal-Constitution and its partner Workplace Dynamics surveyed more than 50,000 employees from 211 companies in the Atlanta metro area. Primerica’s ranking falls under the Top 25 “large companies” category (500+ employees in the region).

Primerica Chief Human Resources Officer Karen Fine says the company’s culture is a unique one, where employees have a track record of staying with Primerica for the long haul. “The average tenure of our employees is 14 years, with 62 percent of employees serving 10 or more years with the company,” Fine said in a statement. “I believe that says everything about Primerica and the kind of work environment we have.”

On the representative side of the business, Primerica recently hosted more than 5,000 attendees at its 14th Annual African American Leadership Council (AALC) Meeting in Orlando. Some of the company’s top African American leaders launched the event as a way to empower other African Americans in Primerica. The three-day conference features a wide range of leadership and business training for representatives.

“Today, middle-income families are faced with tough financial challenges and most are way behind saving for retirement,” said John Lennon, Senior National Sales Director and Co-Chairman of the AALC. “We want our representatives to be better prepared to help these families—meeting face-to-face with them in their homes—to educate them about basic financial principles.”

March 28, 2014

U.S. News

Bella Weems Talks Explosive Growth at Origami Owl

Photo above: Origami Owl Jewelry Bar display.

Yahoo! Finance recently sat down with Origami Owl Founder Bella Weems and CEO Robin Crossman. Weems, an Arizona teen who is now a senior in high school, says she plans to grow the social selling jewelry business for many years to come.

To raise money for her first car, then 14-year-old Weems began crafting her signature lockets and selling them in a mall kiosk and at parties hosted by friends. As the popularity of the pieces grew, Origami Owl began signing on independent distributors, called Designers, interested in selling the jewelry themselves. The direct selling model the company adopted in 2012 “exploded the business,” says Crossman.

Just two years later, 60,000 Designers are hosting Origami Owl Jewelry Bars across the country. The company’s revenue grew from $20 million in its first year to $250 million in 2013.

For those who are aspiring to be entrepreneurs, Weems has a word of encouragement: “Never think that a dream is too big. When I was 14, I never would have even thought this could happen, and it’s just been a dream come true.”

View the full interview from Yahoo! Finance.

March 27, 2014

World News

Mannatech Temporarily Halts Operations in Ukraine

Photo above: State flag of Ukraine.

Dallas-based Mannatech Inc. has temporarily suspended its international operations in Ukraine, citing the “current political turmoil” and “ongoing instability” in the region.

Ukraine’s business environment has grown increasingly unfavorable amid mounting tensions between Russia and the West. Last Tuesday, Russian President Vladimir Putin announced the annexation of Crimea following what Western and Ukrainian leaders say was an “illegal” referendum. In a speech at the EU-US Summit in Brussels on Wednesday, President Barack Obama denounced Russia’s actions, threatening tougher sanctions and greater isolation should Putin continue to flout Ukrainian autonomy and international law.

“America and the world and Europe have an interest in a strong and responsible Russia, not a weak one,” The New York Times quotes Obama in his speech. “But that does not mean that Russia can run roughshod over its neighbors. Just because Russia has a deep history with Ukraine does not mean it should be able to dictate Ukraine’s future.”

The President has spent much of his time in Europe meeting with NATO leaders, rallying member nations in support of measures against Russia and economic recovery in Ukraine. The U.S. has already reinforced its presence in the region with the deployment of additional military forces to Poland and the Baltic states.

“We support the people of Ukraine and want to give them the best business opportunity available,” Alfredo Bala, Mannatech’s President of International and EVP of Sales and Marketing, said in a statement. “Unfortunately that is not possible under the current conditions so we will suspend operations for the time being as we monitor conditions in Ukraine.”

March 27, 2014

U.S. News

Getting into the Rhythm: Q&A with Nerium’s Jeffrey Dahl

Fast-growing Nerium International recently welcomed industry veteran Jeffrey Dahl to its executive suite, naming him Co-CEO alongside Founder Jeff Olson and tasking him with building an international team and launching new markets.

Prior to joining Nerium, Dahl led a five-year business transformation initiative with a regional team covering 12 countries in Central and South America for another direct selling company. Before entering the direct selling space, Dahl served across Asia and Europe with Coca-Cola and Lufthansa.

Last year, Nerium received the DSN Bravo Growth Award for 3,900 percent revenue growth in 2012. Following a fall 2011 launch, the anti-aging skincare company generated $100 million in revenue, earning it the No. 86 spot on the 2013 DSN Global 100. Nerium achieved those results by marketing one product—NeriumAD Age-Defying Treatment—in one market—the U.S.

Jeff DahlNow five weeks into the job, Dahl spoke with DSN about Nerium, his new role and what’s so special about direct selling:

DSN: What motivated you to join the team at Nerium?

JD: Over the years, I have spent considerable time studying competitors, talking with distributors across multiple regions of the world, and building a personal list of what I like and do not like in our industry. There was a buzz in the industry about Nerium, and so I took the time to dig deeper into their business model. What I found truly excited me. They were delivering all the key elements I determined essential to building a sustainable direct selling business. 

Some companies just roll with a compensation plan and a product, but Nerium built a more comprehensive business model with company-led training and personal development, industry-leading business support systems, corporate citizenship programs, a distinct value system and culture, and a unified field community. And they have a product with real science that delivers real results, and one that instills pride in the field organization. Jeff Olson calls this the Nerium “Rhythm.” I quickly saw the opportunity of taking this “Rhythm” around the world.

DSN: You’re filling a new position as Co-CEO alongside Nerium Founder Jeff Olson. How do you and Jeff plan to share that role?

JD: Jeff Olson will always be the foundation of the company, and an influential leader in the industry. His vision and passion will continue to drive the greater enterprise, while I will focus primarily on the international marketplace and supporting the HQ team as needed. He has done a great job attracting and blending skill sets within the organization. It’s great working with a leader like Jeff.

DSN: You began your career outside direct selling, with big names like Coca-Cola. What attracted you to the industry?

JD: At first I was skeptical, as are many who come into the industry from big brands where advertising and product are king. In fact, I almost quit during the first year. However, one day I was on stage presenting an award to a single mom in Rio De Janeiro, Brazil. She had come from a local favela, where she had lived in a shack with ropes for locks. Her two kids rarely made it to school due to security. Now she was living in an apartment and making steady income, and her kids were attending a new school. And it hit me: We can really impact lives in this industry! Yes, it is hard work, and many don’t stick with it, but this is the best business opportunity many can find due to education, skills or other socio-economic barriers.  It really is a level playing field with equal access for all.

March 26, 2014

World News

Direct Selling Poses Alternative to Mounting Childcare Costs

A less-than-booming job market and rising childcare costs have created a considerable barrier to parents, particularly mothers, seeking employment opportunities. According to Paula Gorry, UK Business Development Manager for Stampin’ Up!, it’s a challenge direct selling uniquely equips parents to overcome.

Writing to entrepreneurs on balancing work and family, Gorry highlights recent childcare research from the UK-based Family and Childcare Trust. The Trust reports that average fees for one child in part-time nursery and another in an after-school club will set parents back £7,549 ($12,501) per year. That part-time rate is roughly equivalent to the average annual UK mortgage payment—estimated at £7,207 in 2012.

In its 2013 report on Parents and the High Cost of Child Care, leading market resource Child Care Aware® of America released similar statistics. For example, in every region of the United States, average childcare fees for an infant in a childcare center were higher than the average amount families spent on food.
For today’s childcare costs parents could, literally, put a child through college. Child Care Aware reports that in 31 states and the District of Columbia, the average annual cost for an infant in center-based care was higher than a year’s tuition and fees at a four-year public college.

Despite steep childcare costs, many households require some source of supplemental income. That’s where direct selling offers a viable alternative to the traditional workforce, says Gorry. The business model offers busy parents flexibility, enabling them to set their own pace and goals. In addition, direct selling brings together people with a passion for a common product or service—whether centered on crafting, nutrition, cosmetics or one of countless other offerings.

Read the full piece by Gorry.

March 25, 2014

U.S. News

Icahn Gains 3 Board Seats in Herbalife Tug-of-War

Herbalife will name three Icahn nominees to its board of directors during its annual shareholder meeting in April. Activist investor Carl Icahn is the nutrition company’s largest shareholder with a 16.8 percent stake in Herbalife.

Tomorrow marks two weeks since Herbalife announced the Federal Trade Commission (FTC) would open a civil investigation into the company. The FTC inquiry comes 14 months into investor Bill Ackman’s campaign to discredit Herbalife’s business practices, an effort that has played out both on Wall Street and in Washington, D.C.

“Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC,” the company commented at the time. “We are confident that Herbalife is in compliance with all applicable laws and regulations.”

The inquiry follows closely upon Sen. Edward Markey’s (D-Mass.) written request that the FTC investigate Herbalife’s practices. The Boston Globe has since followed up on the Senator’s alleged Herbalife victims, some of whom say Markey’s office inflated their claims in his letters to regulators.

The Senator told the Globe that, while his staff was aware an FTC probe would potentially benefit Ackman’s short position on the company, that information was not relayed to Markey. The Senator’s spokeswoman would not divulge whether Markey conducted any of his own research before signing the letters.

Icahn has remained Herbalife’s strongest backer since the 78-year-old investor announced an initial 13 percent stake in the company in February 2013. The latest agreement will secure a total of five Icahn nominees to Herbalife’s 13-member board.

“We remain resolute in our commitment to the long-term success of Herbalife,” said Icahn in a statement. “We continue to have confidence in its board and management team, and believe in the company’s great potential. We thank the board for their trust in us and hope and believe our directors will enhance value and contribute to the long-term success of the company, as we have done at so many companies over the past decade.”

March 25, 2014

World News

Nu Skin Reports Fines to Follow China Review

Photo above: Nu Skin’s symbol displayed outside its new global headquarters in Provo, Utah.

Shares in Nu Skin surged 18 percent on Monday following the company’s update on regulatory reviews of its China business. Following two months of uncertainty, Nu Skin’s stock price jumped in response to the relatively light action taken by China’s State Administration of Industry and Commerce (SAIC).

The SAIC fined Nu Skin China $524,000 for distributing products not registered for direct sale under the country’s tight regulations. Nu Skin was fined an additional $16,000 for product claims that authorities deemed unsubstantiated.

The company also reported that six of its salespeople were fined a total of $241,000 for alleged unauthorized promotional activities. The investigation followed criticisms of the company’s sales and marketing tactics published in a January article by the Communist Party’s People’s Daily newspaper.

At the onset of the administration’s probe, Nu Skin voluntarily suspended distributor recruitment in China and reinforced training in proper business practices. Chinese regulators have now asked that Nu Skin enhance the education and supervision of its salespeople.

China’s SAIC also announced plans to increase the level of regulation and crack down on illegal behavior in its wider direct sales market.

“The company is already taking steps to correct the issues raised in the AIC reviews, and is not aware of any other material enforcement investigations currently pending in China,” Nu Skin said in a statement. In 2013, Greater China accounted for 43 percent of Nu Skin’s total revenue.

“We continue to believe in the potential of China’s large and growing market,” said Dan Chard, President of Global Sales and Operations. “We remain committed to working cooperatively with the Chinese government to ensure the healthy, long-term growth of our business.”

March 24, 2014

U.S. News

More Publicly Held Companies Publish 2013 Results

The DSN Global 100 Celebration is just around the corner, and with it comes the 2014 ranking of the top 100 revenue-generating companies in direct selling. As April 23 approaches, we are compiling information and comparing numbers from across the industry. The following is a round-up of the latest publicly held companies to announce year-end results.

Despite an overall net revenue decrease of 7 percent in the fourth quarter, Medifast reported steady sales in its Take Shape For Life personal coaching division. The direct sales channel generated revenue of $51.7 million in the fourth quarter, compared to $51.8 million in the prior year.

Medifast closed out 2013 with net revenue of $356.9 million, just beating the prior year’s $356.7 million. The company reported diluted earnings per share of $1.73, up 49 percent from $1.16 in 2012.

Blyth, which sells directly to consumers through its PartyLite and ViSalus brands, reported sales of $261.2 million for the fourth quarter, a decrease of 21 percent versus prior year. Sales dropped primarily as a result of a shrinking salesforce at ViSalus. Conversely, Blyth reports favorable consultant trends across many of PartyLite’s European markets. 

For the full year, Blyth saw net sales decrease 25 percent to $885.5 million, versus $1.2 billion for 2012. The company’s diluted earnings per share was 15 cents, compared to $2.55 for the prior year. Due to the many variables associated with ViSalus’ planned expansion into five international markets this year, Blyth declined to provide EPS guidance for 2014.

Mannatech’s skincare and nutrition offerings generated fourth quarter sales of $46.5 million, up 9.9 percent from $42.3 million in the prior year. For the full year, net sales increased to $177.4 million, up 2.3 percent from $173.4 million for 2012. Mannatech deferred net sales of $5.5 million due to its newly implemented global loyalty program.

Mannatech’s 2013 growth stemmed from the company’s Asia-Pacific sales, which increased 13.7 percent to $80.3 million. Sales decreased 5.0 percent and 8.6 percent in North America and Europe, the Middle East and Africa (EMEA), respectively.

Health and wellness company Nature’s Sunshine Products (NSP) reported record fourth quarter sales in its Synergy business and double-digit growth in NSP Mexico and NSP Central America. Fourth quarter net sales increased 5.7 percent to $95.5 million, up from $90.4 million in the prior-year period. For the full year, NSP reported net sales up 2.9 percent to $378.1 million, compared to $367.5 million in 2012.

March 22, 2014

U.S. News

6.2 Million Liters and Counting: World Water Day at Mary Kay

Today is World Water Day, an opportunity to focus on a critical resource and promote sustainable practices in the realm of water and energy. We are commemorating the day with a look at the impressive conservation efforts going on behind the scenes at Mary Kay.

Mary Kay’s internal focus on environmental initiatives began back in 1989 with a comprehensive corporate recycling program. In 2008, the cosmetics giant launched a global environmental sustainability program under the banner of Pink Doing Green—a nod to Mary Kay’s signature color.

We reached out to Dr. Cristi Gomez, who heads the Pink Doing Green committee, a group of employees that have rallied behind the cause of increased sustainability. According to Gomez, the program has evolved as a sort of grassroots initiative, but one that has always received the support of Mary Kay CEO David Holl.

To move toward greater sustainability, the company first needed to take stock of its current environmental performance. Two years ago Mary Kay corporate began measuring waste production, along with water and energy consumption.

“This year, we really wanted to put a focus on water. It’s something that’s important to us as a cosmetics company,” said Gomez, who serves as Director of Product Safety & Environmental Compliance at Mary Kay. “And being located in Dallas—an area in the midst of severe drought—it hits especially close to home.”

When the company’s U.S. distribution branches realized the volume of water flowing into their operations, they began to implement their own conservation measures. Last year, the branches saved a combined 6.2 million liters of water. In the same period, Mary Kay Canada cut water use by almost 20 percent. “It was not something they were directed to do; it was just the right thing to do,” said Gomez.

While Mary Kay’s water conservation efforts focus on the corporate side, the company has also created programs with the salesforce in mind. For example, consumers can recycle product packaging through Mary Kay’s Caps and Cases program. For every 10 cases returned, the company plants a tree through its partnership with the Arbor Day Foundation. Mary Kay has committed more than 1 million trees to planting and reforestation efforts in China, Russia, Mexico, Malaysia and the United States.

March 21, 2014

U.S. News

LegalShield Rolls out IndyCar Sponsorship

This season, fans of IndyCar racing and the famed Indianapolis 500 will see a new name on the track. LegalShield, a provider of legal safeguards for individuals, families and small businesses, has joined the Bryan Herta Autosport (BHA) and Bowen & Bowers Motorsports (BBM) team sponsoring Jack Hawksworth’s No. 98 Honda.

Distributors are the primary brand ambassadors in direct selling, but when it comes to more traditional marketing, the industry has a rich history of reaching wider audiences through sports partnerships. Some prominent examples include Herbalife and the LA Galaxy, Oriflame and the Women’s Tennis Association, and USANA’s recent sponsorship of nearly 200 Sochi athletes.

The IndyCar sponsorship marks LegalShield’s first foray into the sporting world. The company has signed on to sponsor Hawksworth through his rookie 2014 season, which will feature 18 races nationwide. Hawksworth racked up three wins and took fourth place in the championship during last season’s Firestone Indy Lights Series.

“We’re very happy to welcome LegalShield to the BHA/BBM Family as a sponsor of the No. 98 car this season,” team leader Bryan Herta said in a statement. “More than ever, people need strong legal protection, and for over 40 years LegalShield has been fighting for the legal rights of their customers. The 2014 season is shaping up to be our best one yet!”

March 20, 2014

U.S. News

Blyth Founder Receives Horatio Alger Association Honors

Photo above: Horatio Alger portrait (photo credit: Library of Congress)

The Horatio Alger Association of Distinguished Americans has named Blyth Founder Robert Goergen to its prestigious Class of 2014. Goergen, who currently serves as Executive Chairman of the Board, joins 11 other business and civic leaders recognized for their “courage, resilience and commitment to higher education.”

The Association honors the legacy of 19th-century author Horatio Alger Jr., whose novels epitomize the rags-to-riches tale of overcoming adversity through a strong work ethic, courage and honesty. Goergen’s induction as a member honors his own determination and commitment to personal and professional excellence.

The Horatio Alger Association furthers the cause of higher education through privately funded scholarships. Its National Scholarship Program has provided more than $100 million in undergraduate, graduate and specialized scholarships since 1984.

Goergen’s own investment in higher education includes serving as a trustee of his alma mater, the University of Rochester, and launching the Goergen Entrepreneurial Program at the University of Pennsylvania Wharton School of Business. Education is also a primary cause championed by The Goergen Foundation, which he founded in 1976.

Blyth’s small beginning grew from Goergen’s purchase of Valley Candle Manufacturing in 1979. Prior to founding Blyth, he was a Partner with McKinsey & Company and served with Donaldson, Lufkin & Jenrette, McCann-Erickson and Procter & Gamble. The company entered the direct selling space in 1990 following the acquisition of Colonial Candle of Cape Cod and its direct selling division, PartyLite. Blyth now sells products directly to consumers through its ViSalus®, PartyLite® and Two Sisters Gourmet by PartyLite® brands.

“Mr. Goergen’s life experiences exemplify opportunities that exist through our free-enterprise system for individuals with vision and the drive to succeed,” said Association President and CEO Tony Novelly.  “We are proud to welcome Mr. Goergen as a lifetime Member of Horatio Alger, and we believe he will be an outstanding role model for our Scholars.”

Read more on Goergen’s work and recent recognition.


March 19, 2014

U.S. News

On Board at CVSL: 3 Questions with Kay Bailey Hutchison

CVSL recently introduced former Sen. Kay Bailey Hutchison (R-Texas) as the latest addition to its board of directors. Hutchison joins CVSL at a time when the executive team is working to acquire a wide range of micro-enterprise companies. In less than a year, CVSL has added seven distinct brands, the most recent being Uppercase Living’s line of personalized home décor products.

Kay Bailey Hutchison“We’ve built a strong base and proven that the CVSL strategy works, so now we’re moving on to the next opportunities,” Vice President Russell Mack told DSN via email. “It’s a really exciting time for CVSL, and we feel that we have tremendous momentum.”

Mack says Hutchison stood out as an “eloquent supporter of free enterprise and entrepreneurship” with a “global perspective” gained through years of service at the highest level of government.

“For another thing, a great many micro-entrepreneurs are women,” said Mack, who also serves on the CVSL board. “As the only woman ever elected to represent Texas in the U.S. Senate, Sen. Hutchison obviously has a keen desire to bring opportunities to women in every field of endeavor.”

We reached out to Hutchison as she begins her new role, and she shared her thoughts on CVSL’s strategy, the power of micro-enterprise and the importance of expanding opportunities for women.

DSN: What attracted you to CVSL’s unique group of companies?

SH: I was attracted to the way CVSL is bringing together the power of micro-enterprise and combining it with the power of social connections and social media. I like the way CVSL is bringing together under one umbrella a family of different companies that offer different kinds of products and services. And of course, the company executives at CVSL have a proven track record in this arena.

DSN: How do you, as an entrepreneur yourself, view the potential of micro-enterprise around the world?

SH: Micro-enterprise can build economies in emerging markets, and it can especially enhance the capability of women to contribute to the well-being of their families and in a broader sense to their country’s GNP. One of the most powerful aspects of micro-enterprise is that it has tremendous benefits in nations at all levels of development, whether it be in fully developed economies like the U.S. or in emerging economies elsewhere in the world.

DSN: You have described your new role as a meaningful way to touch women’s lives. What do you consider some of the most effective means to empower women personally and professionally?

SH: In countries where women have equal educational opportunities and the ability to participate in business, the professions and community building, the overall stability and economic output is exponentially higher. Child mortality rates are lower; life spans are longer. CVSL is built on this premise and hopes to help women produce in micro-businesses the quality of life for their families that lifts the society as a whole.

March 18, 2014

World News

Oriflame Takes a Hit amid Ukraine Crisis

Rising tensions amid Ukraine’s political unrest have triggered a currency decline that is taking a toll on businesses across the region. With a weakening Ukrainian hryvnia and Russian ruble, Swedish cosmetics company Oriflame has seen stock fall 24 percent in 2014.

On Sunday, Crimea’s Russian-backed government held a referendum on seceding from Ukraine and unifying with Russia. The U.S. and EU have announced they will not recognize the results and have issued sanctions against top officials in Russia, calling for an end to its military activities in the region. Russian forces have occupied the former Soviet republic since late February.

During intraday trading on Friday, shares in Oriflame dropped to 145.3 kronor in Stockholm trading, their lowest price since April 2005. The company, which generates half its business in the Baltics and the states constituting the Russian Commonwealth, is no stranger to political unrest.

“It’s of course worrisome when two of our biggest markets are in conflict with each other, but we continue as usual with our business,” Johanna Palm, head of investor relations at Oriflame, told Bloomberg.

U.S.-based direct sellers with a stake in the region include Amway, Avon, Herbalife, Mary Kay, Morinda and Nu Skin.

Read more on Oriflame’s business in Ukraine.

March 14, 2014

World News

Euromonitor Publishes Top Beauty, Personal Care Trends

A free e-book offering from Euromonitor International provides key insights into the beauty market across North and South America. The market research firm studied 15 countries to isolate their top five trends in beauty and personal care, a category that comprises 35 percent of global direct sales.

According to the report, direct selling represents the fastest-growing distribution channel in Ecuador. It also leads all channels in beauty and personal care, positioning those categories to reach a wider range of socioeconomic groups with more specialized products.

In Bolivia, intense competition has driven direct sellers toward more traditional advertising strategies such as TV spots and magazine advertisements. The report states that a healthy growth rate among Bolivia’s direct selling companies reflects the success of this hybrid approach.

Costa Rica and Venezuela have seen a growing demand for premium products. Despite Venezuela’s predominantly low-income population, the country’s premium fragrances category outperformed the total beauty and personal care market in 2013. Costa Ricans opt for premium skincare products, particularly cleansers, toners and moisturizing creams.

BB creams, promoted as all-in-one facial products, are strong sellers in the U.S., Mexico and Brazil. Brazil also shows big potential in the men’s grooming category, as male consumers spend an increasing amount on products tailored to them. Argentina, on the other hand, continues to resist the men’s grooming trend in favor of more traditional, basic offerings.

Download the free e-book for more information.


March 13, 2014

World News

Extreme Makeover: Mary Kay Shatters Women’s Day Record

Photo above: Mary Kay celebrity makeup artist Virginia Linzee demonstrates one of the brand’s latest looks.

Iconic cosmetics brand Mary Kay celebrates women year-round, and International Women’s Day was no exception. On March 8, the company hosted its second annual Mary Kay Makeover Day featuring a live-streamed event at its Dallas headquarters and thousands of parties around the world—and, of course, plenty of makeup.

The company’s Independent Beauty Consultants joined forces to complete a staggering 58,808 makeovers, surpassing last year’s record of 44,250 in a single day. During the event, Mary Kay celebrity makeup artists Virginia Linzee and Mariela Bagnato debuted fresh makeup looks that will soon appear in the spring edition of People StyleWatch and People en Español.

Throughout the day, Mary Kay consultants could pin their party on the company’s virtual Buzz Map. The result shows nearly 5,000 parties logged around the world, with a sea of pink pins covering the U.S., Canada and Mexico.

March 13, 2014

U.S. News

LifeVantage, USANA Present at ROTH Conference

This week, both USANA Heath Sciences and LifeVantage Corp. participated in the 26th annual ROTH Conference presented by ROTH Capital Partners, an investment banking firm focused on small-cap public companies. The firm’s prominent investor conferences showcase emerging growth companies across a variety of sectors.

Chief Financial Officer Paul Jones presented for USANA. The wellness company closed out its 11th consecutive year of record sales in 2013 with a 10.5 percent net sales increase in the fourth quarter. Sales totaled $718.2 million in 2013, up 10.7 percent over the prior year. The company’s earnings per share climbed to a record $5.56 for 2013.

President and CEO Douglas C. Robinson presented for LifeVantage, a marketer of science-based products promoting healthy living. In February, LifeVantage reported its second quarter fiscal 2014 results. Net revenue totaled $51.5 million, compared to $53.4 million for the same period in 2013. Though foreign currency fluctuation negatively impacted total revenue by 6.7 percent, the company saw revenue in the Americas increase 7.2 percent compared to the prior year. This week, LifeVantage’s board of directors authorized a $3 million share repurchase program, with an additional $3 million to accelerate the company’s debt pay down.

March 12, 2014

U.S. News

Industry Execs Speak out on Income Disparity, International Trade

As direct selling leaders promote economic opportunity and confront challenges facing their own businesses, they also influence the conversation on those issues at both the local and global level.

Tupperware Chairman and CEO Rick Goings has followed up his participation in the World Economic Forum in Davos with a call for business and government leaders to pursue women’s economic empowerment, both in developed and emerging markets.

Published in The Huffington Post, Goings’ commentary on “Changing the Tone When We Talk About Gender” highlights the role that gender plays in income disparity, which the Forum’s Global Risks 2014 report calls the No. 1 challenge facing the world.

Particularly in emerging markets, Tupperware has experienced the ripple effect within families and communities when organizations equip women with “pragmatic tools and personal training-based contribution” to increase their income level.

Read Goings’ full piece for The Huffington Post.

Amway Chairman Steve Van Andel, who currently serves as Chairman of the Board of the U.S. Chamber of Commerce, also wrote a recent op-ed addressing the need for stronger economic growth in the U.S.

Writing in Florida’s Sun Sentinel, Van Andel focuses on the priority of expanding international trade, particularly through two free trade agreements: the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TIPP).

Through TPP, U.S. businesses would receive access to the Asia-Pacific region, a center of global economic growth. The TTIP would eliminate all tariffs on EU-U.S. trade, bolstering investment and standardizing regulations. Both agreements depend upon the passing of the Trade Promotion Authority (TPA), which authorizes Congress to guide trade negotiations and grants it the deciding vote.

Read Van Andel’s full piece for the Sun Sentinel.

March 11, 2014

U.S. News

New York Times: Ackman Seeks Washington Sway on Herbalife Bet

Fourteen months after hedge fund investor Bill Ackman denounced Herbalife’s business model as an elaborate scheme preying upon consumers, The New York Times has brought forward extensive information on Ackman’s carefully orchestrated campaign and its tactics.

As an efficient means of driving down Herbalife stock, Ackman has pressed state and federal regulators to investigate the company’s practices. In addition, Ackman has widely publicized letters written to regulators and pointed to Latino groups that rallied against Herbalife, while failing to disclose his own firm’s instigation and guidance in those efforts.

Calls to action regarding Herbalife have raised red flags in the minds of some officials. Connecticut Attorney General George Jepsen received five letters from separate individuals, and each letter sported nearly identical text, claiming “Herbalife is a complex and abusive pyramid scheme” and “Herbalife unfairly targets minority groups and falsely markets itself as an easy business opportunity.” One individual represented a government relations group hired by one of Ackman’s lobbying firms, while some declined to comment on who asked them to write the letter, and yet another claimed he neither wrote the letter signed with his name nor knew anyone harmed by Herbalife.

Ackman’s campaign to discredit the company has begun to resemble “an effort to move the price rather than spread the truth,” according to Harvey L. Pitt, a former Chairman of the Securities and Exchange Commission. “If you are trying to spread the truth, that is O.K.,” Pitt told the Times. “If you are trying to move the price of a stock to vindicate your investment philosophy, that’s not O.K.”

Read the full feature from The New York Times.

March 10, 2014

U.S. News

Tupperware Ranks among Fortune’s ‘Most Admired Companies’

For the seventh consecutive year, Tupperware Brands Corp. has been recognized on Fortune’s annual list of the World’s Most Admired Companies. The 68-year-old brand’s corporate reputation ranks second in the Home Equipment and Furnishings category.

Within the category, Tupperware leads its competitors in global competitiveness and ranks second in innovation, social responsibility and quality of products/services. Those attributes align with the company’s key business priorities, notes Tupperware Chairman and CEO Rick Goings.

The rapidly changing face of the Tupperware consumer reflects the extent of the company’s global competitiveness. In the fourth quarter, emerging markets accounted for 60 percent of sales, and Goings projects that figure will grow to at least 80 percent by 2019. For 2013, the company posted strong growth in Indonesia (33 percent); South Africa (28 percent); Turkey (24 percent) and China (20 percent).

A recent infographic from Tupperware showcases the impact of its direct selling opportunity in Indonesia, its fastest-growing market. Tupperware surveyed women who have spent at least three years in the company’s salesforce, and their responses provide insight into the increased skills, self-confidence and financial security that have resulted from their experiences with the company.

Read more on Tupperware’s global recognition.

March 07, 2014

World News

USANA Extends WTA Partnership to 10-Year Mark

USANA Health Sciences has announced the extension of its partnership with the Women’s Tennis Association through 2016. As the Official Health Supplement Supplier of the WTA’s 2,500 players, USANA continues a relationship that began in 2006.

WTA athletes Eugenie Bouchard (CAN), Madison Keys (USA), Monica Puig (PUR), Zhang Shuai (CHN), Sloane Stephens (USA), Samantha Stosur (AUS), and Zheng Jie (CHN) have signed on as USANA Brand Ambassadors. The renewed agreement also includes several USANA-sponsored WTA events worldwide, including this year’s WTA Championships in Singapore.

USANA’s likeminded philosophy has made for a successful ongoing partnership, says WTA Chairman and CEO Stacey Allaster. “In 2006, the WTA searched for a company that would fulfill a longtime request by players for nutritional supplements that are guaranteed to be free of banned substances on the WADA Prohibitive List. USANA stood out as an organization that felt so strongly about the quality and purity of its product, and we look forward to our continued partnership with this great company.”

USANA backs the purity of its products with a unique Athlete Guarantee Program, which states that any WTA athlete who tests positive for a banned substance as a result of taking USANA products will be compensated for lost revenue up to $1 million.

As a part of the partnership, USANA is simultaneously launching its “Aces for Humanity” campaign benefitting the USANA True Health Foundation. The WTA will donate $5—$10 for USANA ambassadors—to the foundation every time a player serves an ace at Premier-level WTA events.

Read more on USANA’s role as Official Health Supplement Supplier.

March 06, 2014

Working Smart

Women’s History: A Tradition of Breaking through Boundaries

by Barbara Seale

Click here to order the March 2014 issue in which this article appeared or click here to download it to your mobile device.

Photo above: Delegates to the first International Congress of Working Women held in Washington, D.C., ca. 1919. (Library of Congress)

The long and winding road of women’s progress in society and the business world has had an amazing number of twists, turns and mountains to climb.

Viewed from today’s world, where Facebook COO Sheryl Sandberg encourages women to Lean In, the trail that women blazed in the not too distant past seems surprisingly bumpy.

On March 31, 1776, Abigail Adams wrote a letter to her husband, John—who later became our second president—urging him and the other members of the all-male Continental Congress to keep the country’s women in mind as they fought for America’s independence from Great Britain.

“I long to hear that you have declared an independency,” she wrote, “and, by the way, in the new code of laws, which I suppose it will be necessary for you to make, I desire you would remember the ladies and be more generous and favorable to them than your ancestors. Do not put such unlimited power into the hands of the husbands. Remember, all men would be tyrants if they could. If particular care and attention is not paid to the ladies, we are determined to foment a rebellion, and will not hold ourselves bound by any laws in which we have no voice or representation.”

Abigail Adams became one of the first in a long line of American women to use any influence they had to allow themselves and other women to develop and use their full talents and abilities.

John and Abigail’s relationship was filled with mutual trust and admiration, and they often discussed public policy. So perhaps John was teasing his wife when he replied that he could not help but laugh at her “saucy” letter. If he had been able to peer into the future, he would have known that his wife had become one of the first in a long line of American women to use any influence they had to allow themselves and other women to develop and use their full talents and abilities. If John Adams had taken his wife’s pleas to heart and convinced his fellow Continental Congressmen to extend the privileges of citizenship to all residents of the new country, including women, the history of this country and even the world might have been very different.

In Women’s History Month, it seems appropriate to reflect on how far women have come in the nearly 238 years since Abigail Adams’ letter. It would be almost two centuries before women began making their mark in direct selling, but when they did, they were as tenacious and innovative as our nation’s second first lady herself.

Educational Barriers

These young female workers were among the first women ever to operate a centerless grinder machine in a Midwest tool factory, 1942. (Library of Congress)These young female workers were among the first women ever to operate a centerless grinder machine in a Midwest tool factory, 1942. (Library of Congress)

Abigail was fortunate, she was educated at home. But the future first lady never had a formal education—possibly the reason she became a passionate advocate for public schools to offer girls an education that was equal to the ones given to boys. If a young woman was lucky enough to attend a school, her education focused on developing her skills at household duties and chores. In fact, an academically educated woman was unusual and considered not particularly desirable as a wife.

All but a few towns in New England specifically barred girls from town schools until the late 18th century. Even then girls were often taught separately from the boys. In the South during colonial times, the education of slaves was strictly forbidden, and South Carolina even passed a law prohibiting anyone from teaching a slave to read or write, so many female ancestors of today’s accomplished African Americans were likely illiterate. The notable exception: Phyllis Wheatley. Born in West Africa, she was sold into slavery at 7 years old to the Wheatley family of Boston. They taught her to read and write and allowed her to study astronomy and geography. Then when they recognized her talent, they encouraged her poetry. She became the country’s second published African-American poet and first published African-American woman.

Phyllis Wheatley and other American women of that time started their lives before college educations were available for women. In 1831—before the Civil War—Mississippi College became the first coeducational college in the United States to grant a degree to a woman. That year it granted degrees to two women, Alice Robinson and Catherine Hall. But the situation was so rare that one of the key demands of the Women’s Rights Convention, held in Seneca Falls, N.Y., in 1848, was for coeducation for women—not the separate and unequal institutions that were available to women at the time. Very slowly, change began in the landscape of education, and through education, women’s lives began a gradual alteration. In 1870, less than 1 percent of the female population went to college. That percentage slowly rose, and by 1900 the rate was 2.8 percent. Twenty years later it was still only 7.6 percent.

Overcoming the Odds

Fay Hubbard, a 19-year-old advocate for women gaining the right to vote, sells suffragette papers on the streets of New York in 1910. (Library of Congress)Fay Hubbard, a 19-year-old advocate for women gaining the right to vote, sells suffragette papers on the streets of New York in 1910. (Library of Congress)

Women finally gained the right to vote in 1920, signifying the beginning of a new attitude toward a woman’s contribution outside the home, and the number of college-educated women continued to climb decade by decade. In fact, by the 1980s more women than men began attending college. Today’s women have advanced educationally beyond the level that Abigail Adams or Phyllis Wheatley probably ever dreamed. Now, more women than men earn an advanced degree, as well as a bachelor’s degree. While having a degree doesn’t automatically lead to ambition or success, women’s expanded societal roles did follow their advances in education. It also coincided with greater entrepreneurialism—both in traditional and direct selling companies.

It is interesting to note that through the decades, and even centuries, with or without education, women have achieved, led and innovated. As far back as 1809, Mary Kies became the first woman to receive a patent, which was for her method of weaving straw with silk—a process which then-first lady Dolly Madison called a boost to the nation’s hat industry. History is peppered with the forgotten stories of female entrepreneurs—Eliza Lucas Pinckney, who grew and exported indigo in the 1700s; publisher, printer and businesswoman Mary Katherine Goddard, who in 1789 was forced to resign after 14 years as Baltimore’s postmaster because of her gender; Bridget “Biddy” Mason, who was born into slavery in 1818, sued her owners for her freedom, and eventually became a real estate mogul and philanthropist; Elizabeth Arden and Estee Lauder, savvy businesswomen who built empires based on beauty in the 20th century; and Katharine Graham, publisher of The Washington Post and the top executive of the Washington Post Company, who became one of the most powerful women in business.

In the direct selling industry, women were initially buyers of products from the early companies such as The Southwestern Company (now Southwestern Advantage), Fuller Brush and Avon. Since many products were directed to women, they also became distributors. Fuller Brush was the first direct selling home for many of the women who moved from distributorships to the corporate ranks. Some of them were pioneers who helped shape the industry. In 1931 Catherine O’Brien, an associate with the Fuller Brush Company, teamed up with Stanley Beveridge, a VP at Fuller Brush, to launch a new direct selling company, Stanley Home Products. Initially the company sold its high-quality household cleaners, brushes and mops door-to-door, but it soon began encouraging homemakers to invite small groups of friends to their homes for a product demonstration and light refreshments. This allowed the hostess to receive a gift of choice from the Stanley dealer, who took orders from attendees.

Mary Kay Ash, Mary Crowley, Brownie Wise and JAFRA founders Jan and Frank Day were all Stanley Home Products Dealers. On the long road to success, each of them stepped on the accelerator. Wise became a Tupperware representative and was so successful selling at her home parties that Earl Tupper himself recruited her to become a corporate executive in 1951. At the time, Tupperware was sold at retail stores, but home sales soon topped retail sales and Wise’s “party plan” method took over. She also innovated many practices that today are standards at every direct selling company—rewards, recognition, sales conventions and incentives such as extravagant trips. Her success in implementing marketing styles and recognition systems that appealed to women led her to become the first woman featured on the cover of Business Week magazine in 1954.

Jan Day and her husband, Frank, combined their first names to create the moniker for their company, JAFRA, which they founded in 1956. They wanted to offer women an excellent skincare program along with an appealing business opportunity. Within a year they invented the signature product that would be the foundation of the company for years to come: Royal Jelly Milk Balm Moisture Lotion. Its formula remained unchanged for more than 50 years. Gillette bought the successful company in 1973, and then international direct selling giant Vorwerk acquired it in 2004. Today it offers its product through some 573,000 independent consultants worldwide.

Mary Crowley also put her Stanley Home Products experience to good use when she established Home Interiors and Gifts in 1957. She had moved from Stanley to a new company, World Gift, and proved her sales and leadership skills by developing a 500-person organization in the company. Its response: The owner limited the amount of commission the female sales staff could earn. That apparently didn’t sit well with Crowley, who quit to start her own home décor company. By the 1990s Home Interiors and Gifts had surpassed $850 million in sales.

Today 10 companies on the 2013 Direct Selling News Global 100 list were founded or co-founded by women entrepreneurs.

Mary Kay Ash followed her friend Mary Crowley’s example, launching Mary Kay Cosmetics in 1963 after a man she had trained was promoted over her and paid twice her salary. She created a salesforce of women—unusual in the 1960s—and fueled them with pink Cadillacs, compensation plans that paid consultants for building teams and, of course, her famous phrases of wisdom and encouragement that 13 years after her death still make her one of the industry’s most quotable icons. Her formula was wildly successful. Last year Mary Kay Cosmetics had net sales of more than $3 billion worldwide.

So many female business founders have helped make direct selling the thriving, innovative industry it is today, and many more are joining the ranks. Today 10 companies on the 2013 Direct Selling News Global 100 list were founded or co-founded by women entrepreneurs.

Impressive and Puzzling

According to the National Women’s History Museum, women’s ventures have come to comprise about a third of all U.S. businesses —and growing.

According to the National Women’s History Museum, women’s ventures have come to comprise about a third of all U.S. businesses—and growing. If you shrug when you read that, remember that less than a century ago American women couldn’t even vote. But once women had role models, they seemed to be increasingly drawn to entrepreneurship.

In 1972 women owned just 4 percent of all American businesses; by 1991, that figure had climbed to 38 percent. Additionally, since 1997 the growth in the number and economic contributions of firms owned by women of color is nothing short of remarkable. Comprising just 17 percent of women-owned firms 16 years ago, firms owned by women of color now account for one in three women-owned firms in the U.S. The total number of women-owned businesses has risen by 200,000 over the past year alone, which is equivalent to just under 550 new women-owned firms created each day. There are now 8.3 million women-owned businesses in the United States. Those businesses generate revenues of $1.3 trillion—more than the combined market cap of Apple, Microsoft, General Electric, Google and Sony. Plus, revenue has grown more than twice the amount of U.S. population growth during the same period of time.

Yet executive positions have eluded most women. As far as women have come, The Wall Street Journal (WSJ) still reported last year that women make up only 16 percent of directors at Fortune 500 companies, 4 percent of chief executives at Standard & Poor’s 500 companies and 10 percent of chief financial officers at S&P 500 companies. Even below the executive levels, salaries for women lag behind those for men. According to WSJ, women earned 76.5 cents for every dollar that men did in 2012, moving no closer to narrowing a gender pay gap that has barely budged in almost a decade. The numbers are puzzling when research also shows that companies with high gender diversity simply make more money.

Organizations with the lowest rates of gender diversity had average sales revenues of $45.2 million, compared with averages of $644.3 million for businesses with the most gender diversity.

Miriam Muléy, CEO of strategic marketing consultancy and research company The 85% Niche LLC and former General Manager at Avon Products Inc., points to a study by sociologist Cedric Herring that was published in the American Sociological Review. Herring found that gender diversity accounted for a difference of $599.1 million in average sales revenue. Put that in perspective: A company with net sales of $600 million would have been No. 22 on last year’s Direct Selling News Global 100 list. Organizations with the lowest rates of gender diversity had average sales revenues of $45.2 million, compared with averages of $644.3 million for businesses with the most gender diversity.

Given the heavy doors women have historically pushed open and their documented growth in starting businesses, it’s surprising that the direct selling industry isn’t buzzing with stories of concentrated efforts to create greater gender diversity, mentoring programs and executive development tracks for women in its corporate offices. Considering the industry’s pride and experience in its personal development programs for distributors, direct selling is uniquely equipped to fuel the power of its female corporate employees and executives.

Will your company be the industry-leading organization that supercharges its growth by unlocking the untapped talents and abilities of women? Which company will lead the caravan that’s sure to follow? We can’t wait to see.

Cover Story | Women’s History | Sheryl Adkins-Green | Claire Bancino | Meredith Berkich | Lori Bush | Dr. Oi-Lin Chen | Doris Christopher | Angela Loehr Chrysler | Kathy Coover | Shelli Gardner | Jessica Herrin | Wendy Lewis | Candace Matthews | Sheri McCoy | Cindy Monroe | Kay Napier | Joani Nielson | Meg Sheetz | Pam Sowder | Jill Blashack Strahan | Connie Tang | Heidi Thompson

March 06, 2014

Cover Story

The Most Influential Women in Direct Selling

by Beth Douglass Silcox

Click here to order the March 2014 issue in which this article appeared or click here to download it to your mobile device.

Cover | March Issue

This issue of Direct Selling News is dedicated to celebrating the women of direct selling. Tenacity has certainly been a consistent trait among the women of our nation, as well as the women of the world. Always fighting to better the situation for their families, and for themselves, women have had to be tenacious to overcome all of the obstacles in their paths. Take into consideration that women couldn’t even go to college, vote, hold professional positions or practice law or medicine until our very recent past, and you will see that entrepreneurial stubbornness has been a necessity to get where we are now.

It is important to reflect on the past, in order to make the future better. It is especially important now since opportunity for women has become so much more widespread, and the daughters of this generation may struggle to even believe that their great-grandmothers couldn’t vote or have options in the professional world.

It is in celebration of all the women who fight for opportunity—those in the past and those currently fighting—that we bring you this issue. We asked 21 of the most influential executive women in direct selling questions about their specific journeys, their motivations and inspirations, and their preferences for mentoring other women along the way.

The path each woman took to the heights of direct selling corporate management is as unique as the individual. Yet all 21 are inextricably linked by the influence they have on the lives of hundreds of thousands, even millions of women across the globe who work in direct sales to enrich their families, make a difference in their communities and in the lives of others, and reach for their own dreams.

Direct Selling News selected this group of women based upon their executive leadership roles in companies that achieved inclusion in the DSN Global 100 list and the $100M Club. It comprises women who help guide our industry through their leadership and vision. There are many women hard at work in far more companies than we’ve listed here. But by proudly honoring these 21, Direct Selling News salutes every female leader—corporate or field—who strives for more, respects those who blazed the trail, and reaches out to those on the way up.

Cover Story | Women’s History | Sheryl Adkins-Green | Claire Bancino | Meredith Berkich | Lori Bush | Dr. Oi-Lin Chen | Doris Christopher | Angela Loehr Chrysler | Kathy Coover | Shelli Gardner | Jessica Herrin | Wendy Lewis | Candace Matthews | Sheri McCoy | Cindy Monroe | Kay Napier | Joani Nielson | Meg Sheetz | Pam Sowder | Jill Blashack Strahan | Connie Tang | Heidi Thompson

March 06, 2014

DSA News

Breathing New Life into the American Dream

by Amy M. Robinson

Click here to order the March 2014 issue in which this article appeared or click here to download it to your mobile device.

The American Dream is no doubt evolving. Gone may be the days when a house, two and a half children, a dog and a white picket fence were universally accepted as the be-all and end-all. But, the founding principle of this nation’s vision—the opportunity for prosperity, success and upward social mobility—remains highly sought-after, even as technological advancements, rising costs of education and economic challenges have changed the way many of us define success.

For those of us long familiar with direct selling, we understand wholeheartedly the many ways in which this industry touches the lives of millions each day. We see firsthand how mothers, recent college graduates, military spouses and post-retirement individuals pursue economic success, social networking and career advancement by way of the business opportunity. We take pride in direct selling’s ability to provide much-needed support to social causes around the world, and we experience the direct selling difference ourselves each time we stop to listen to a distributor’s success story.

While this industry presents a truly equal opportunity for both men and women, it is no secret that women have played an active role in transforming direct selling into what it is today: an industry that changes lives for the better.

Of the 15.9 million direct sellers in the United States, roughly 77 percent are women. What’s more, these 12.2 million women comprise a diverse group, not simply in terms of age or race, but also in terms of education, career experience, skills and interests. In fact, according to the DSA’s National Salesforce Study, more than half of all direct sellers have a bachelor’s or advanced degree. And, still, more than half of direct sellers have children under 18 at home.

Perhaps most telling is the fact that these numbers reveal an overlap between the two groups. Even as women in the direct sales channel pursue higher levels of education, many still balance family responsibilities and career aspirations simultaneously. These numbers not only reflect similar trends in the U.S. national workforce, but they also support recent findings regarding women’s perceptions of the American Dream.

According to a recent Forbes survey, 84 percent of working women say that staying home to raise children is a financial luxury to which they aspire either temporarily or long-term. This number is particularly astounding when one takes into consideration how the rising cost of living has made this dream more difficult to achieve.

In 2010, the Department of Commerce issued a study revealing what it would take for families to achieve the aspirations of the middle class—which it defined as home and car ownership, opportunities for vacations, access to health care and enough savings to retire and contribute to the children’s college education. The study concluded that even two-earner families today would have more difficulty achieving middle-class status than they had two decades ago.

Direct selling certainly offers a solution, which no other industry can match. Even more, countless women stand as mentors to those who follow in their footsteps, looking to provide much-needed support at home without sacrificing the opportunity to build a successful business.

These women not only serve as leaders in the field, but also at the executive level. The female perspective of the direct selling industry is widely represented by women so inspired by the opportunity that they have risen to top-level positions in efforts to provide guidance to those who look to the sales channel as a source for supplemental income, social empowerment and personal growth. These women give selflessly of their time to spark a passion for social causes, raise funding for charitable organizations and drive more people to channel their creative energy to give back to others. These women also work tirelessly to remind key policymakers and regulators about the impact of direct selling on the national economy and otherwise slow-to-improve employment rates.

Perhaps most importantly of all, they inspire us each and every day to establish our own definition of the American Dream—such that we might carve our own paths for achieving it.

Amy M. RobinsonAmy M. Robinson is Senior Vice President and Chief Marketing Officer of the Direct Selling Association.

March 06, 2014

Stock Watch

Stock Watch, March 2014

March 06, 2014

Executive Announcements

March 2014

Click here to order the March 2014 issue in which this article appeared or click here to download it to your mobile device.

Mary Kay Inc.

Thomas S. ChoThomas S. Cho

May Kay Inc., a top beauty brand and one of the largest direct sellers in more than 35 markets around the world, announced the appointment of Thomas S. Cho as Chief Supply Chain Officer.

In his new position, Cho is responsible for end-to-end supply chain operations including supply chain strategy, manufacturing, research and development, engineering, procurement, distribution, planning, transportation, inventory management and quality. As Mary Kay Inc. continues to expand worldwide, Cho will determine the appropriate assets, footprint and network to support global operations while making supply chain a competitive advantage for the company.

Cho joins Mary Kay Inc. from Transilwrap Company Inc. where he held the position of Chief Operating Officer. Prior to Transilwrap, he served as the Chief Operating Officer at Cosmetic Essence Innovations (CEI), a third party provider of personal-care products.

Thomas also served in the U.S. Army. In addition to English, he speaks fluent Spanish, Portuguese and conversational Korean.

With 3 million Mary Kay Independent Beauty Consultants and $3 billion in global annual wholesale sales, Mary Kay is one of the largest direct sellers of skincare and color cosmetics in the world.


Avon Products Inc.

Nilesh PatelNilesh Patel

Avon Products Inc. announced the appointment of Nilesh Patel as Senior Vice President and President, Asia Pacific Region. Patel will report to Sheri McCoy, Avon’s CEO, and will join the company’s Executive Committee. 

Patel will oversee all of Avon’s Asia Pacific business. In this role, he will be responsible for stabilizing the market and strengthening and growing the Avon business throughout the region.

Patel joins Avon following a 26-year career with the Heinz Company, where he served in various roles. Throughout his tenure, he acquired deep experience across multiple functions from supply chain management to marketing, and built a solid record of success, most notably in emerging Asian markets such as Indonesia and India.

Most recently, Patel served as President, Director and Regional CEO of the Heinz ASEAN Region, where he oversaw business in Indonesia, Malaysia, Singapore, the Philippines, Vietnam and Thailand. The position was an expansion of his role as head of Heinz ABC Business in Indonesia, where Patel has been credited with turning around the business and more than doubling revenues over a five-year period.

Avon, the company for women, is a leading global beauty company, with nearly $11 billion in annual revenue. As one of the world’s largest direct sellers, Avon is sold through more than 6 million active independent Avon Sales Representatives in over 100 countries.



James RosseauJames Rosseau

LegalShield, one of the nation’s leading providers of legal safeguards for individuals, families and small businesses, announced that James Rosseau has joined the company as Executive Vice President and President of LegalShield Solutions. Rosseau will be responsible for growing and expanding the brokerage and small business divisions along with affinity sales.

With over 20 years of professional leadership experience, Rosseau has a strong background in revenue generation and B2B relationship development across the financial services, healthcare and retail sectors. Prior to joining LegalShield, Rosseau served as the President of Allstate Affinity Solutions where he launched a number of unique innovative partnerships differentiating Allstate in the insurance industry, driving customer acquisitions, loyalty, and revenue growth. Earlier in his career, Rosseau served as a Senior Vice President at JPMorgan Chase Card Services, where he was responsible for Affinity & Co-Brand partner relationships.

Rosseau is the author of Success on Your Own Terms, a soon-to-be-released book providing advice for young adults on defining and obtaining success.

LegalShield offers legal service benefits plans that cover more than 1.4 million families and 3.5 million lives across North America, as well as an affordable identity theft plan. More than 34,000 companies offer the LegalShield plan to their employees as a voluntary benefit.  LegalShield has dedicated law firms in 49 states and four provinces in Canada that members can call for help.



William C. LooneyWilliam C. Looney

Blyth Inc., a direct-to-consumer company and designer and marketer of health and wellness and beauty products as well as candles and accessories for the home, announced that William C. Looney has been named Chief Financial Officer of PartyLite, its direct seller of candles and accessories for the home. In his new role, Looney will direct PartyLite’s essential support services in Supply Chain and Technology in addition to overseeing the finance leaders throughout the organization.

Looney joined PartyLite in 2003 as Vice President, Worldwide Finance, and in September 2008 he was promoted to Senior Vice President, Worldwide Finance. Prior to joining PartyLite, he was the U.S. Controller for Serono Inc., a biopharmaceutical company based in Switzerland. 

PartyLite is a party plan company with nearly 45,000 independent PartyLite entrepreneurs.


4Life Research

Steve TewSteve Tew

4Life Research announced that President Steve Tew was named the company’s CEO. Former CEO, company Founder David Lisonbee, will continue in his position as Chairman of the Board. Co-Founder Bianca Lisonbee will assume the role of Vice Chairwoman of the Board.

Tew was appointed President of 4Life in 2004 and has overseen the international expansion and growth of 4Life since joining the company in 2000. Under his direction, 4Life has opened offices in 21 countries around the world and is doing business through various business models in more than 50 countries.

As President and CEO, Tew will answer to the board of directors in all areas of growth—4Life Transfer Factor® research and development, operational proficiency, and the ongoing satisfaction of distributors and the company’s 700+ employees around the world.

Tew joined the direct selling industry in 1996. Prior to serving as President, he held positions as Chief Financial Officer and Chief Operating Officer with 4Life® and ShapeRite® Concepts, Ltd. In August 2000, ShapeRite and 4Life merged operations. He worked as a Certified Public Accountant for Price Waterhouse Coopers for six years, followed by various financial positions at retail and software development companies.

4Life has offices on five continents to serve a global network of independent distributors through science, success, and service.


LifeVantage Corp.

Dr. Shawn TalbottDr. Shawn Talbott

LifeVantage Corp., a science-based nutraceutical company dedicated to helping people achieve healthy living through a combination of a compelling business opportunity and scientifically validated products, announced Shawn Talbott, Ph.D., as new Global Chief Science Officer for the company.

Dr. Talbott is the recipient of a dozen competitive research awards and has published over 200 articles and 10 books on nutrition, health and fitness. He has served as a nutrition consultant and educator for elite-level athletes in a variety of sports, including professional triathletes, members of the Utah Jazz of the NBA, the U.S. Ski and Snowboard Association during the 2002 Winter Olympic Games, the Performance Enhancement Team for the U.S. Track and Field Association, and the U.S. Olympic Training Centers. Dr. Talbott is a Fellow of both the American College of Sports Medicine and the American College of Nutrition.

LifeVantage Corp., a leader in Nrf2 science and the maker of Protandim®, the Nrf2 Synergizer® patented dietary supplement, offers products that dramatically reduce oxidative stress at the cellular level.


Nerium International

Jeffrey DahlJeffrey Dahl

Nerium International announced the appointment of Jeffrey Dahl to the position of Co-CEO. Dahl will be responsible for leading the company’s global growth initiatives to build upon the success the company has experienced in its first two years of operation.

The appointment of Dahl brings to Nerium an executive with extensive experience both inside and outside the direct selling industry. Dahl was most recently President of Latin America at one of the largest direct sellers, where he led a regional team covering 12 countries in Central and South America. Dahl has had an extensive career across Asia and Europe with Coca-Cola and Lufthansa, two of the world’s most recognized brands. As an executive, he is known for his strategic leadership, consumer marketing and global general management experience.

Nerium International™, LLC, headquartered in Addison, Texas, markets and distributes its skincare products through independent contractors (Brand Partners) and is committed to products that are rooted in real science and produce real results.


Barefoot Books

Jessica KimJessica Kim

Barefoot Books, an independent children’s publisher, has announced that Jessica Kim has joined Barefoot Books as President, Barefoot Living, at a time when the company is poised for high growth as a global lifestyle brand.

Kim was previously CEO and Founder of BabbaCo. Barefoot Books recently acquired BabbaCo, the e-commerce subscription company dedicated to helping parents create fun, memorable experiences for their children.

Before founding BabbaCo in 2008, Kim was responsible for brand strategy at Kraft. Prior to that, she started Jessica’s Wonders, a baked goods company, at the age of 19 out of her college dorm room. She is also a Juilliard School trained concert violist.

Barefoot Books is an award-winning, independent children’s publisher with offices in Cambridge, Mass., U.S.A., and Oxford, England. Since 1993, Barefoot Books has created more than 600 books and complementary gifts for children. Barefoot Books are available from its grassroots community of home-based Ambassadors, in its flagship studios in Concord, Mass. and Oxford, in schools and libraries, and from carefully selected retail partners.


March 06, 2014

Financial News

Financial News, March 2014

Click here to order the March 2014 issue in which this article appeared or click here to download it to your mobile device.

2013 Annual and Quarterly Results

Primerica Inc.

Primerica Inc. (PRI—NYSE) announced financial results for the quarter ended Dec. 31, 2013. Total revenues were $327.2 million in the fourth quarter of 2013 and net income was $37.2 million, or 67 cents per diluted share. For the full year 2013, total revenues were $1.27 billion and net income was $162.7 million, or $2.83 per diluted share.

In the fourth quarter, operating revenues increased by 8 percent to $326.3 million and net operating income increased by 12 percent to $46.8 million compared with $303.4 million and $41.6 million, respectively, in the year ago period.

In the fourth quarter, net operating income per diluted share increased 22 percent to 84 cents and ROAE expanded to 16.4 percent.

For the full year 2013, net operating income declined to $171.0 million in 2013 from $174.5 million in 2012, primarily reflecting higher legal fees and expenses related to FRS. Results also reflect lower yield on invested assets and lower invested assets following the repurchase of $154.7 million of shares of common stock and warrants during the year to enhance shareholder value. Year-over-year, return of capital to stockholders drove a 9 percent increase in diluted operating EPS to $2.97 and a 70 basis points increase in ROAE to 15.0 percent compared with 2012.

As of Dec. 31, 2013, investments and cash totaled $1.98 billion compared with $1.91 billion as of Sept. 30, 2013. The company’s invested asset portfolio had a net unrealized gain of $100.0 million (net of unrealized losses of $17.0 million) at Dec. 31, 2013, down from $112.9 million at Sept. 30, 2013 due to rising interest rates.

The Primerica board of directors has authorized a share repurchase program, and the company expects to repurchase up to $150 million of common stock in 2014.

USANA Health Sciences Inc.

USANA Health Sciences Inc. (USNA—NYSE) announced financial results for its fiscal fourth quarter and full year ended Dec. 28, 2013.

2013 Fourth Quarter Results

For the fourth quarter of 2013, net sales increased by 10.5 percent to $186.3 million, compared with $168.5 million in the prior-year period. The company’s Asia Pacific and North America/Europe regions both reported sales and customer growth for the quarter. Unfavorable changes in currency exchange rates reduced net sales in the quarter by $2.9 million.

Net earnings for the fourth quarter increased to $20.3 million, a 9.9 percent improvement, compared with the prior-year period. Earnings per share for the quarter increased by 11 percent to $1.41 compared with $1.27 in the fourth quarter of the prior year. Weighted average diluted shares outstanding were 14.4 million in the fourth quarter of 2013 compared with 14.5 million in the prior-year period.

Net sales in the Asia Pacific region increased by 13.0 percent to $121.8 million, compared with $107.8 million for the fourth quarter of the prior year. This improvement was due primarily to sales growth in the Greater China and Southeast Asia Pacific regions with China and Singapore experiencing the most meaningful growth.

Net sales in North America/Europe increased by 6.1 percent to $64.5 million, compared with $60.7 million in the prior-year period. Every market in the region achieved top-line growth, with Mexico and Canada experiencing the largest increases.

2013 Annual Results

For the year ended Dec. 28, 2013, net sales increased by 10.7 percent to $718.2 million, compared with $648.7 million in the prior year. Net sales for the full year were negatively impacted by $2.8 million due to changes in currency exchange rates.

Net earnings for 2013 increased by 19.0 percent to $79.0 million, or $5.56 per share, compared with $4.45 per share in the prior year. Weighted average diluted shares outstanding were 14.2 million at fiscal year-end 2013, compared with 14.9 in the prior-year period.

Cash generated from operations totaled $99.9 million for the year ended Dec. 28, 2013. The company repurchased 414,000 shares in 2013 for a total investment of $18.1 million. The company ended the year debt-free with a remaining share repurchase authorization of approximately $13.6 million.

Avon Products Inc.

Avon Products Inc. (AVP—NYSE) reported fourth quarter and full-year 2013 results.

2013 Fourth Quarter Results

For the fourth quarter of 2013, total revenue of $2.7 billion decreased 10 percent, or 4 percent in constant dollars. Beauty sales declined 11 percent, or 4 percent in constant dollars. Fashion & Home sales declined 8 percent, or 2 percent in constant dollars.

Fourth quarter 2013 gross margin was 61.0 percent. Gross margin included a $5 million charge associated with highly inflationary accounting for the 32 percent devaluation of Venezuelan currency that occurred in the first quarter of 2013. Adjusted gross margin was 61.2 percent, 140 basis points higher than the prior-year quarter.

Operating loss was $17 million and operating margin was (0.6) percent in the quarter. Adjusted operating profit was $219 million and adjusted operating margin was 8.2 percent, down 100 basis points from the fourth quarter of 2012. The decline in adjusted operating margin was driven by the impact of the revenue decline with respect to fixed expenses.

Fourth quarter 2013’s net loss from continuing operations was $68 million, or 16 cents per diluted share, compared with a net loss from continuing operations of $36 million, or 8 cents per diluted share, in the fourth quarter of 2012. Fourth quarter 2013’s adjusted net income from continuing operations was $151 million, or 34 cents per diluted share, compared with $154 million, or 36 cents per diluted share, in the fourth quarter of 2012.

Latin America’s fourth quarter 2013 revenue was $1.24 billion, down 7 percent year over year or up 4 percent in constant dollars. Q4 revenue in Europe, Middle East & Africa was $867.7 million, down 4 percent, or down 2 percent in constant dollars. North America’s fourth quarter revenue was $370.8 million, down 21 percent, or down 20 percent in constant dollars, and Asia Pacific’s revenue was $192.4 million, down 22 percent year over year, or down 18 percent in constant dollars.

2013 Annual Results

Total revenue of $10.0 billion decreased 6 percent, or 1 percent in constant dollars. Total Beauty sales declined 7 percent, or 2 percent in constant dollars. Fashion & Home sales declined 4 percent, or were up 1 percent in constant dollars.

Operating profit was $427 million and operating margin was 4.3 percent, down 70 basis points from 2012. Adjusted operating profit was $791 million, and adjusted operating margin was 7.9 percent, up 130 basis points from 2012.

Full-year net loss from continuing operations was $1 million, or 1 cent per diluted share, compared with net income from continuing operations of $93 million, or 20 cents per diluted share, in 2012. Adjusted net income from continuing operations was $451 million, or $1.02 per share, compared with $373 million, or 84 cents per share, in 2012.

Cash flow from operations was $540 million for the 12 months ended Dec. 31, 2013, $4 million lower than in the same period in 2012.

Avon’s net debt (total debt less cash) as of Dec. 31, 2013 was $1.6 billion, down $376 million from Dec. 31, 2012. For the 12 months ended Dec. 31, 2013, the company reduced the overall debt balance by $475 million.

Preliminary Results

Nu Skin Enterprises Inc.

Nu Skin Enterprises Inc. (NUS—NYSE) announced preliminary fourth quarter results, with estimated revenue of $1.075 billion. Revenue was negatively impacted 4 percent by foreign currency fluctuations. Earnings per share for the quarter are estimated to be approximately $2.00 to $2.02.

“We are pleased with our 2013 results and are focused on sustaining growth in 2014,” said CEO Truman Hunt. “Given the current review of our business in China and our desire to provide the most informed guidance possible, we are rescheduling our full earnings release and investor call to later in the month. We look forward to discussing our 2013 results and our business plan and guidance for 2014 at that time.”

Direct Selling News has accumulated this information from public sources, including press releases and SEC filings. The information is presumed accurate and reliable. However, it is not an endorsement of any investment opportunity. Proper and considerable due diligence should be completed before making any investment.

March 06, 2014

News in Brief

News in Brief, March 2014

Click here to order the March 2014 issue in which this article appeared or click here to download it to your mobile device.

Direct Sellers Support Botanical Adulterants Program

Six direct selling companies have endorsed the ABC-AHP-NCNPR Botanical Adulterants Program, a program to educate members of the herbal and dietary supplement industry about ingredient and product authenticity and adulteration. Supporters include AdvoCare, Amway, Herbalife, Nature’s Sunshine Products, Nu Skin and Shaklee.

Three leading nonprofit organizations—the American Botanical Council (ABC), the American Herbal Pharmacopoeia (AHP) and the University of Mississippi’s National Center for Natural Products Research (NCNPR)—initiated this ongoing program in 2011. Under the guidance of an editorial committee, the group publishes detailed articles focused on both accidental adulteration that may occur due to inadequate quality-control procedures, as well as intentional adulteration of plant-based ingredients for financial gain. 

The ABC-AHP-NCNPR Botanical Adulterants Program is underwritten or endorsed by more than 100 natural product industry companies; independent analytical laboratories; contract research organizations; law firms; trade associations; and accredited institutions of education in natural medicine, all of which are stakeholders in the herbal dietary ingredients and supplements industry. 

Avon CEO among ‘Most Powerful’ Businesswomen

Fortune recently named Avon CEO Sheri McCoy to its list of “The 50 Most Powerful Women in Business: Global Edition.” McCoy ranked No. 19, followed by Google SVP Susan Wojcicki at No. 20. Following a distinguished 30-year career at Johnson & Johnson, McCoy joined Avon in April 2012 with a focus on stabilizing the business and driving long-term growth initiatives.

The inaugural global ranking evaluated executive power from an international perspective, taking into account the leader’s standing in the worldwide business community. Other assessments included the size, importance and health of the business, as well as the leader’s career arc.

Medifast Ranked among ‘Best Diets’

U.S. News & World Report recently evaluated 32 of the most popular diets to identify and rank the best eating plans available. The U.S. News panel of diet and nutrition experts ranked Take Shape For Life parent company Medifast No. 11 among “Best Commercial Diet Plans” and No. 25 on its overall “Best Diets” list.

Take Shape For Life incorporates Medifast Meals through the 5 & 1 Plan®, which supplements five 100-calorie Medifast products with one “lean-and-green” entrée per day. The program also features a personal Health Coach and the Habits of Health System, based upon the work of Dr. Wayne S. Andersen, Medical Director and Co-Founder of Take Shape For Life.

In additional company news, Medifast was recently named a “Future 50” Baltimore Blue Chip Award winner by SmartCEO magazine. The weight-loss brand was one of five large Blue Chip companies recognized for their leadership and success in the regional economy.

Founded in 1980 and based in Owings Mills, Md., Medifast sells its products and programs via four unique distribution channels: the Web and national call centers, the Take Shape For Life personal coaching division, Medifast Weight Control Centers, and a national network of physicians.

Mary Kay Presents Dating Abuse Awareness Day

Mary Kay Inc. and Break the Cycle, a national organization specializing in teen dating abuse prevention, recently presented in partnership with Verizon a national day of conversation and awareness called NO MORE Silence: It’s Time To Talk Day (www.itstimetotalkday.org).

The first-of-its-kind event on Feb. 4 focused on educating parents, mentors, youth advocates and others to start talking to teens about healthy dating relationships and encouraging them to make this issue a priority not only during February, National Teen Dating Violence Awareness and Prevention Month, but also throughout the year.

A number of celebrities, supporters and advocates—including Olympic Gold Medalist and Mary Kay cause champion Jordyn Wieber—heard from a panel of experts about available resources to help save the lives of countless teens at the talk-a-thon event in New York’s Times Square. As part of their “Don’t Look Away” campaign, Mary Kay has granted $1 million to the loveisrespect organization to support the nation’s first and only dating abuse text message helpline.

With 3 million Mary Kay Independent Beauty Consultants and $3.5 billion in global annual wholesale sales, Mary Kay is a top beauty brand and direct seller in more than 35 markets worldwide. 

4Life Receives 2013 Philanthropy Award

The Nutrition Business Journal recently named 4Life as the recipient of its prestigious 2013 Philanthropy Award. NBJ’s annual Business Achievement Awards issue features the nutrition industry’s most noteworthy business leaders of 2013.

The award honors 4Life’s global shelter and education efforts, along with its program to combat hunger by providing 3 million donated meals in 10 countries across the globe. The non-profit Foundation 4Life® and for-profit 4Life Fortify® programs were chosen to receive NBJ’s Philanthropy Award from among more than 300 entries.

4Life has offices on five continents to serve a global network of independent distributors through science, success, and service.

PartyLite Announces Jonathan Adler Collaboration

PartyLite has collaborated with renowned potter, designer and author Jonathan Adler for a line of candles, fragrances and home décor to be available exclusively through PartyLite consultants in Europe, North America and Australia.

The Jonathan Adler for PartyLite Collection will feature the designer’s bold, graphic style. Adler’s brand includes over 25 stores worldwide, an e-commerce site and a wholesale business serving over 1,000 locations globally. In addition to participating in a series of professional collaborations, Adler has authored four books. His collection for PartyLite will debut in Fall 2014, with new offerings to be introduced throughout 2015.

Based in Plymouth, Mass., PartyLite sells home-fragrance products and related candle accessories in 21 countries. The company was established in 1973 and is a member of the Blyth Inc. family of brands.

LegalShield Partners with Visiting Angels Franchisees

LegalShield, a provider of legal safeguards for individuals, families and small businesses, recently announced a partnership with Visiting Angels Living Assistance Services to offer its small business legal plan to Visiting Angels franchisees throughout North America. Visiting Angels is a home-care network with more than 450 franchises across the United States and Canada.

The partnership offers every Visiting Angels franchisee the opportunity to purchase a LegalShield Small Business Plan. The plan will give the franchisee access to LegalShield attorneys who will provide legal advice and counsel on any business legal issue, contract and document review, and more. Visiting Angels franchisees can also join the more than 34,000 companies currently offering LegalShield’s personal legal plans as a voluntary benefit to their employees.

In additional company news, LegalShield declared Jan. 28 National Will Day to heighten awareness of the need and options available for creating a will. To commemorate the day, LegalShield launched a dedicated page of its website (www.legalshield.com/willday) to provide resources for individuals to better understand the process of creating a will. 

With over 4 million users, LegalShield provides legal services in 49 states and four Canadian Provinces. For one low monthly fee, members gain access to quality law firms without high hourly costs. 

PM-International Acquires U.S. Company

European direct sales company PM-International AG has expanded its market presence onto the North American continent by signing for the purchase of Re-Vita Mfg. Co., LLC USA.

Re-Vita has 20 years of experience in development and production for distribution networks in the U.S. and in many Asian markets, as well as its own range of products. The company, based in Jacksonville, Fla., generates $18 million USD in sales. Re-Vita has won an excellent reputation worldwide through its development, manufacturing and sales in the “detox” food supplement category.

PM and the core group at Re-Vita will now join their two development teams and continue to operate from Jacksonville. PM also established a strategic partnership in the Mexican market in early January with an investment in traditional cosmetics company IDEAL.

Germany-based PM-International is a direct marketer of cosmetics, personal-care and wellness products. Founded in 1993, PM operates in over 35 countries through a network of 150,000 independent salespeople.

It Works! Opens in Six Additional Countries

Consumer wellness products and lifestyle company It Works! has announced plans for 2014 global expansion. The company’s skincare and body contouring products are now available in Denmark, Finland, Germany, Spain, Norway and Switzerland—putting It Works! in 18 countries total.

It Works! is also improving its systems in the 12 countries where it already operates. In the first quarter, It Works! is adding an additional warehouse in Europe so customers may receive products quickly and efficiently; Canada and Australia will receive in-country shipping from new It Works! facilities; and Australia’s economy is getting a boost with recently announced in-country manufacturing.

CEO Mark Pentecost made these announcements at the company’s annual conference in Tampa, Fla., where 10,000 people attended Freedom 2014 at the Tampa Convention Center. The conference had a $2.3 million economic impact, according to local convention bureau executives.

Founded in 2001 and based in Bradenton, Fla., It Works! offers an everyday, instant result product line starting with the one-of-a-kind It Works! Wrap contouring product.

March 06, 2014

Industry with Heart

Avon Products Inc.: Standing Together and Speaking Out

by Karyn Reagan

Click here to order the March 2014 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

  • Founded: 1886 
  • Headquarters: New York, N.Y.
  • Top Executives:  Sheri McCoy, CEO
  • Products: Beauty, fashion jewelry, apparel and home care

The Avon Foundation rallies support to raise awareness and find solutions for two causes affecting women worldwide.

The history of Avon reveals a heart for women that spans the generations. Just over 127 years ago, long before women were filling roles in the corporate world, 95 years before the first woman was appointed to the U.S. Supreme Court, and over three decades before it was legal for women to vote in the United States, Avon was offering women a way to create and manage their own businesses. What David H. McConnell started in 1886 as a door-to-door sales company with an offering of a small line of perfumes has grown to an international corporate icon continuing to offer women a chance at economic independence.

Fast-forwarding from those small beginnings into the mid-20th century provides a picture of Avon as a mature company with the same heart for women’s issues upon which it was founded. In 1955 Avon entered the world of corporate philanthropy by establishing a foundation. It serves as a perpetual reminder of the heart of the founder revealed in his quote from long ago: “to meet fully the obligations of corporate citizenship by contributing to the well-being of society and the environment in which it functions.”

According to Carol Kurzig, President of the Avon Foundation for Women, the Avon Foundation began as a small, private, corporate foundation funded by Avon Products and has grown to be the largest corporate-affiliated philanthropy focused on women’s issues globally. Since it launched the Avon Breast Cancer Crusade in 1992, Avon philanthropy has donated more than $815 million for breast cancer research and access to care programs. In 2004, the foundation adopted a second cause that women around the world told Avon was critical to them—reducing domestic violence and gender abuse. Avon philanthropy has donated an additional $57 million to organizations and projects focused on preventing partner violence and assisting victims.

“Meet fully the obligations of corporate citizenship by contributing to the well-being of society and the environment in which it functions.” —David H. McConnell, Founder, Avon

Its Breast Cancer Crusade began when Avon United Kingdom created one of the first cause-marketing programs in the world by selling pink ribbon products in 1992. By the next year the Avon campaign was adopted in the United States and in dozens of other Avon markets. Now more than 50 Avon countries support the Breast Cancer Crusade, and every October Avon introduces new breast cancer awareness programs and fundraising products.

According to the YWCA of Greater Baton Rouge, La., a grant they received from the Avon Foundation Breast Health Outreach Program made access to care available at the right time for one woman they helped. “Leisha was 41, a single mother, and starting a new job,” a YWCA staff member says. “Without health insurance and facing a diagnosis of breast cancer, she was devastated. Then Leisha found our Avon-funded ENCOREplus program. Our outreach coordinator got her the help she needed. Leisha survived her breast cancer and is now an advocate, teaching other women about the importance of early detection.”

Creating awareness in addition to raising funds for women’s causes has always been an Avon philanthropic priority. Back in 1992 breast cancer was not widely discussed. Creating awareness about the need for early detection and quality care was critical to improving outcomes in the early days of Avon’s Breast Cancer Crusade. Today, Avon-funded research brings attention to domestic and partner abuse and indicates that increasing discussions about this topic is vitally important to ending violence and teaching women and men how to build healthy relationships.

Participants in the Avon Walks for Breast Cancer join for many reasons, whether as survivors of breast cancer themselves, to support a loved one battling the disease or to honor someone who lost the fight.

Walking for the Cause

The Avon Foundation is well known in the U.S. for its Avon Walks for Breast Cancer. Since 2003 the foundation has conducted a series of Avon Walks annually, which attract tens of thousands of participants and more than a million donors. Currently, walk participants in eight U.S. events raise an average of $2,400 each and walk a marathon and a half (39.3 miles) over a two-day period.

“As a breast cancer survivor and an Avon Representative, it is very important to be as supportive to the cause as possible. I hope that our efforts will help save lives by early detection and hopefully eliminate this disease some day.” —Nancy N., participant, Avon Walks for Breast Cancer

Nancy N. has participated several times in the Avon Walk in Boston as well as the one in Charlotte, N.C. “Besides having great products at reasonable prices, I love Avon for the important causes that we support,” she says. “As a breast cancer survivor and an Avon Representative, it is very important to be as supportive to the cause as possible. To coin a phrase, I Walk [in the Avon Walk] because I can. I hope that our efforts will help save lives by early detection and hopefully eliminate this disease some day.”

According to Kurzig, each event starts off with an emotional early-morning ceremony, featuring participants telling their breast cancer stories before the walking begins. The well-planned weekend includes a small army of 200–300 volunteer crew members who camp out with the walkers in pink tents for two nights to be available to help them if needed.

“About five years ago we started a youth crew for kids ages 10–15. They must apply, write an essay and raise money to be considered for the team,” she explains. “Those selected are invited to cheer walkers on, hand out lunches and water, help set up tents, etc. Most of them are motivated by a personal breast cancer story, often a mom who is a victim or a survivor of the disease.” Youth crew teams have raised more than $25,000, and one young crew member is chosen as one of the four speakers at each Walk’s opening ceremony, along with a survivor, a family member and a member of the general crew. “There is not a single story that doesn’t bring tears to our eyes,” Kurzig says. “The spirit of community at the Walks is incredible.”

In 2005 Avon launched global walks, building on the U.S. model. About 50 Avon countries produce an Avon Walk Around the World for Breast Cancer annually. Almost 2 million walkers have participated globally, raising critical global awareness and funds, but most Avon global markets raise the largest portion of their philanthropic funds through the sale of their cause products. These Avon cause products have generated more than $370 million since 1992, and individual markets determine how to best support breast cancer and domestic violence programs in their countries with the funds they raise.

Improving Care Globally

For the 20th anniversary of its Breast Cancer Crusade in 2012, Avon launched a Breast Cancer Clinical Scholars Program. “We brought 24 doctors from countries all over the world to one of our Avon-funded medical centers to provide them with advanced training in a field of specialty related to breast cancer,” Kurzig says. “The original idea was to conduct this program in honor of our Crusade’s 20th anniversary, but the countries from which the doctors came have provided such compelling reports of the impact the training has made in their communities that we felt the need to repeat the program and will host another 24 international doctors again this year. The doctors are able to return to their countries and educate other doctors about the strategies and techniques learned, improving care for their patients and advising the Avon Breast Cancer Crusades in their home countries.”

A new Avon program in 2014 will be centered on metastatic breast cancer. “We are leading a new Metastatic Breast Cancer Alliance. Its initial project will be a study to identify and assess the services provided, treatments pursued and the gaps that exist in the care of metastatic patients,” Kurzig says. “We are collaborating with 16 breast cancer advocacy organizations and five pharmaceutical companies to look at what else can be done to better serve and treat patients whose breast cancer recurs.”

Another new initiative is the Breast Cancer Startup Challenge to accelerate production of innovative devices, tests or treatments for breast cancer. Avon is partnering with the National Cancer Institute (NCI) and the Center for Advancing Innovation to foster the creation of business plans to actualize some of the most promising research funded by Avon and NCI over the last decade. More than 60 teams have responded to the challenge to carry out one of 10 innovative projects. “Ten finalist teams will be revealed in March,” Kurzig says, “and they will work on the projects until June when one winner will be chosen to take their project to fruition.” The projects range from diagnostic tests to possible new treatments.

Sounding the Alarm

In 2004 the Avon Foundation felt it was capable of taking on a second cause. “Consulting firm McKinsey & Company provided pro bono services to us to discover what cause would resonate most with Avon’s representatives and consumers around the world,” Kurzig says. “The research indicated that domestic and gender violence and dating abuse are among the top three causes of concern to women in every Avon market.” Since this cause is consistently identified as important to women all over the world, and because Avon is a company primarily for women, the choice made sense. McKinsey also suggested that this was a cause in which Avon could make a significant difference, because, unfortunately, there are so few organizations currently providing funding in this area.

One innovative domestic violence project funded by the Avon Foundation is the Global Communications X-Change. “This is an innovative global digital library for identifying and sharing messages and campaigns focused on ending violence against women,” Kurzig says. “Materials and resources are exchanged via the X-Change website, allowing anyone to find or share materials to help create awareness and reduce violence against women worldwide.” The Avon Foundation provides grants to organizations with the best materials identified by an independent panel of judges each year from all those posted on the X-Change.

“Another 2014 project is a partnership with Vital Voices and the U.S. State Department to launch Domestic Violence Justice Institutes,” she says. “Many countries have laws against domestic violence, but often they are not well known or understood. Often they face challenges from cultural traditions, or are not well enforced.” These institutes will offer a four-day program conducted by U.S. and international experts to train and unite judges, prosecutors, district attorneys and law enforcement officers to help them better understand how to implement laws to save lives in their communities. The four countries to receive the first institutes in 2014 are South Africa, Mexico, India and Nepal.

Starting the Conversation

“The results of a recent survey we funded revealed that 70 percent of people know someone who is in an abusive relationship, but most are not talking about it,” Kurzig says. As a result of the survey findings, the Avon Foundation is funding the development of a training curriculum, including videos and role-playing that will be offered to schools, workplaces and anywhere people gather to encourage them to start talking about domestic, gender or dating abuse. These materials will be available by the end of 2014, with the goal of educating people about how they can encourage victims to feel free to talk about what they are experiencing.

“Imagine witnessing [domestic violence] as a child. How do they express themselves? I want to be a voice for others. Especially now.” —Shaundre, Avon Representative and domestic violence survivor

Shaundre, an Avon Representative and domestic violence survivor, says she and her family experienced domestic violence firsthand. “Imagine witnessing this as a child. How do they express themselves? I want to be a voice for others. Especially now. My 9-year-old son is the pride and joy of my own life.”

Kurzig says that the Avon Foundation is continuing its efforts to bring awareness of this issue to the forefront. “In March, the results of the Annual Domestic Violence Census funded by the Avon Foundation will be released by the National Network to End Domestic Violence. The Census reports how many individuals were helped by domestic violence service programs throughout the U.S. and how many service needs went unmet due to lack of resources and funding,” Kurzig says. “Like so many of the programs we fund, the Census will increase awareness of the issues surrounding abusive relationships, which will hopefully create a basis for providing help and ultimately lead to change.”

Another important Avon Foundation initiative is providing peer counseling on university campuses in order to assist victims of abuse and help alert young women to signs of potentially abusive situations. “In response to alarming reports of abuse and violence committed on campuses, we have funded the creation of model guidelines for colleges to adopt in an effort to reduce and better respond to dating abuse and violence,” Kurzig says. The guidelines alert the institutions and students to the danger of “The Freshman 15.” That term is commonly related to the 15 pounds of weight gained in a student’s first trimester of college. “But it also relates too well to the danger to young women in those first 15 weeks of school,” she says. “New students often don’t know anyone and are vulnerable to the potential for controlling and abusive relationships.”

Taking It Personally

Kurzig notes that both Avon employees and representatives often mention Avon’s philanthropic heritage and commitment as a point of pride and a reason for joining and remaining with the company. “Direct sales is a person-to-person business and is one of the earliest models of social networking,” she says. “Many representatives report that their customers, friends or family members are touched by the two causes we support.” Since one in three women around the world will be a victim of domestic, gender or dating violence, and one in eight will be diagnosed with breast cancer in her lifetime, most women are personally affected by these causes and welcome the chance to make a difference by embracing the mission of the foundation.

Kathleen T., a breast cancer survivor and Avon Representative who participated in the Avon Walk in Boston, says she is proud to work for a company that is actively involved in women’s health issues. “The support that Avon gives to the needs of women with breast cancer is very important.  As a representative of the largest corporate supporter of the breast cancer cause, I know that my contributions to the cause are part of a much more powerful support system when I walk in the Avon Walk for Breast Cancer.”

Since its inception, Avon has been forging new territory to offer opportunity and hope to women. “Avon is the company for women,” Kurzig says. “We take our commitment to women’s issues very seriously and in both causes we currently support, we are committed to working as hard as we can to find solutions that will change and save lives.”

March 06, 2014

Publisher's Note

Letter from John Fleming, March 2014

Click here to order the March 2014 issue in which this article appeared or click here to download it to your mobile device.

John Fleming

In our cover story for this issue, it is our honor to recognize “The Most Influential Women in Direct Selling.” The feature is focused on the role women play in the industry and the impact of their leadership. Our industry can be proud of the fact that 75 percent of the participants at the independent contractor level are women. These women are often mothers, wives, grandmothers, sisters and friends—and also leaders who impact the lives of others around the world. No other industry that actually delivers a product or service can claim as great a participation of women at the level of business transaction. Critics of the direct selling business model might serve themselves better if only they knew who really benefits from what direct sellers do. This is an industry we are proud to write about each month, especially when we have the opportunity to salute those we honor and cherish—the women!

I would also like to share that after Amway announced their 2013 results to the public on Tuesday, Feb. 4, we were eager to spend a few minutes on the phone with DSN’s currently ranked No. 1 company in the world, based on the Global 100 list. We spoke with the Amway communications team, as well as Chairman Steve Van Andel and President Doug DeVos about Amway’s reported revenue of $11.8 billion for 2013, a new record capping seven consecutive years of growth. This is, of course, a new revenue record for any single company in the direct selling industry. The largest direct seller of all time has been built over the past 55 years, from a humble beginning to a global company dedicated to making a free enterprise-based distribution system available to people from all walks of life.

What most may not remember about the Amway story are the battles they fought and won, the challenges they incurred due to negative press, the education they provided about the direct selling business model at a very critical moment in time, and the benefits gained by the entire industry. When we spoke with Steve and Doug about another year of incredible growth in 80 percent of their top 10 markets, we were not surprised with their very first comments—they both immediately spoke with reverence about the Amway Independent Business Owners (IBOs) around the world who build their businesses in pursuit of their own personal objectives, with the support of Amway brands and opportunity. Addressing a privately owned enterprise, we did not expect a conversation about margins, profits, brands (NUTRILITE and Artistry are two of the largest brands in the world), new products and increased market share; however, Amway is accomplishing all of these things while also enhancing the communities in which its people live and work.

The economic footprint that Amway is making on the world is enormous. From original office space in what was a former gasoline station to now 21,000 employees worldwide, 3 million IBOs, 15 manufacturing facilities around the world, 6,400+ acres of certified organic farmland on four farms dedicated to sustainable farming, and 75 R&D/Quality Assurance laboratories worldwide, Amway is changing lives.

In the Amway Global Entrepreneurship Report released last November (www.AmwayEntrepreneurshipReport.com), Amway researchers revealed for all of the direct selling public—and those who look to better understand the direct selling business model—why it works. The research sample included over 26,000 respondents from over 24 countries utilizing the primary research methods of face-to-face and telephone calls to collect the information. Key findings included the great potential for self-employment even though self-employment rates remain very low in most countries. The Amway report also reveals that 70 percent of the respondents (average) and 77 percent of respondents under the age of 30 had a positive attitude toward entrepreneurship. The primary challenges to involvement in entrepreneurship are related to the financial barriers to entry and the “fear of failure.” The report further points out that an interest in entrepreneurship is not all about the money. The desire for independence and “better compatibility of family, leisure time and career” is highly appreciated. The report is available to the public on the Amway website.

Another article of interest to executives in the industry as well as those who seek information about the direct selling business model is written by Ibi Fleming, Herbalife North America Senior Vice President and Managing Director. The article, a response to a question, was recently published in the Los Angeles Daily News. You can find a reference to the article in the Headline News section on the DSN website.

In summary, when you reflect on the positive attitude toward entrepreneurship around the world as well as direct selling’s pathway to entrepreneurship and its ability to eliminate major barriers, it is clear that the direct selling business model is at the forefront of satisfying a growing need around the world.

Until next month… enjoy the issue!

John Fleming
Publisher and Editor in Chief

March 06, 2014

Software/Technology Solutions

MultiSoft Corporation

March 06, 2014

U.S. News

Regulators Respond to Senator’s Herbalife Queries

Both the U.S. Securities and Exchange Commission and the Federal Trade Commission have responded to Sen. Edward Markey’s letters concerning global nutrition company Herbalife. The Massachusetts Democrat questioned Herbalife’s business practices and requested further investigation in the wake of investor Bill Ackman’s ongoing campaign against the company.

FTC Chairwoman Edith Ramirez communicated in her letter of response that Markey’s concerns are being “carefully considered” at this time; however, rules prohibit the disclosure of any particular actions. The letter outlines the commission’s history of protecting consumers from deceptive practices, as well as the factors considered in each case. Those factors include the type of violation alleged, the likelihood of future prevention and redress, and the number of consumers affected.

Markey’s January request received a similar response from SEC Chairman Mary Jo White, who stated that the agency is giving “every consideration” to the senator’s concerns. The chairman could not comment on Herbalife, but noted that in the case of MLM companies or pyramid schemes “each investigation depends on its particular facts and circumstances.”

As veteran MLM attorney Kevin Thompson writes in his recent New Perspectives feature, the FTC’s past evaluation of particular facts and circumstances has gone beyond raw sales data, such as Markey requests, to the more complex question of buyer motivation.

Read the full responses from the FTC and SEC.

March 06, 2014

Software/Technology Solutions


March 05, 2014

World News

Digital Tools Equip Next Gen Amway Sellers

Amway’s Australia business is at the forefront of the $11.8 billion company’s digital evolution, and Head of Sales & Marketing John Haines recently spoke to CMO about building a digital culture to empower Amway business owners and consumers.

In a recent interview with DSN, Amway Chairman Steve Van Andel noted the growing number of young entrepreneurs interested in the business. Haines points to that trend as a major factor shaping his team’s digital strategy. Amway supports 100,000 Independent Business Owners (IBOs) throughout Australia and New Zealand, and half of new distributors signing up represent Generation Y. Three years ago, the company began digitizing its resources in earnest to meet the needs of the current and next wave of IBOs.

In the first phase, Amway converted its print pieces into digital format—an initiative that reduced the company’s print costs by 70 percent. Those materials now live on the Amway Bookshelf app, which boasts 35 different publications and growing. Publications include sales toolkits, clinical research papers, and various articles and interviews highlighting R&D and manufacturing processes.

In the next phase, Amway plans to introduce new apps that will equip IBOs to better understand and manage their businesses. The “MyBiz” app set to launch in June will provide a real-time view not only of the individual’s business activity, but also that of his team. Amway Australia is currently rolling out a “check express” app to serve consumers at its business center locations. The app provides access to a video or audio presentation on each product through a simple barcode scan.

The company has beefed up regional and global staff to power its digital push, and provided training for older IBOs who are adapting to a new way of doing business. Ultimately, Haines says, the goal is to empower IBOs to reach more customers and prospects—whenever and wherever they choose to operate.

Read the full feature from CMO.

March 04, 2014

World News

Public Companies Announce Year-End Results

Several top publicly held direct selling companies have now published year-end results. The reports summarized below are a mixed bag, reflecting some common threads as well as unique achievements and challenges within the industry. As companies continue to report, we will compile the information to rank this year’s DSN Global 100, a list of direct selling’s top revenue-generating companies worldwide.

Nu Skin has closed out a record fourth quarter with revenue of $1.07 billion, up 82 percent over 2012. The company’s annual sales increased 49 percent year-over-year to $3.18 billion. Nu Skin also increased its EPS to $5.94, up 69 percent over the prior year. In the Greater China region, where the company has temporarily suspended normal business activities to address a Chinese regulatory review, fourth quarter revenue increased 248 percent to $481.6 million.

Avon reported fourth quarter earnings down 10 percent to $2.7 billion. The company’s annual revenue decreased 6 percent year-over-year to $10.0 billion. For 2013, regional sales dipped 17 percent in North America and 16 percent in Asia-Pacific, while Latin America and EMEA (Europe, Middle East & Africa) decreased 3 percent and 1 percent, respectively.

Global nutrition company Herbalife generated record net sales of $4.8 billion for 2013, up 18 percent year-over-year. The company reported an EPS of $4.91, and an adjusted EPS of $5.37, up 36 percent over 2012. Last year, Herbalife saw the greatest sales increase in its China region, where sales were up 69 percent. Asia-Pacific generated the least sales growth, up just 3 percent over the prior year.

Tupperware reported record fourth quarter sales up 1 percent and annual net sales of $2.67 billion, up 3 percent from $2.58 billion in 2012. For the year, the company’s GAAP net income of $274.2 million rose 42 percent from $193.0 the previous year, and diluted earnings per share increased 51 percent from $3.42 to $5.17. Tupperware generated the greatest sales growth in Indonesia (33 percent); South Africa (28 percent); Turkey (24 percent) and China (20 percent), countered by negative growth in the Commonwealth of Independent States (-31 percent), Germany (-14 percent) and the U.S. and Canada (-3 percent).

Brazilian beauty company Natura closed out the year with sales up 10.5 percent over 2012. Latin American sales outside the company’s core Brazilian market have grown rapidly over the last few years and now account for 14 percent of Natura’s business. In early 2013, the company advanced its strategy to expand its presence outside Latin America with the acquisition of Australian beauty company Aesop.

With a 10 percent sales decrease in the fourth quarter, Germany-based Oriflame reported annual sales down 6 percent from 2012. The company’s sales have stalled in the CIS and Baltics region, which represents about half of Oriflame’s global business but generated -16 percent growth in the fourth quarter. The company saw positive regional growth in Latin America and Asia.

March 02, 2014

U.S. News

State Sees Big Return on 5LINX Investment

The New York State Common Retirement Fund has reported a nearly fourfold $6.7 million return on its investment in local company 5LINX Enterprises Inc. The retirement fund also saw an estimated 21 percent internal return rate on the investment, according to state Comptroller Thomas DiNapoli.

Based in the Rochester area, 5LINX provides residential and business clients with essential products and services, including telecommunications and energy offerings. 5LINX’s growth has earned it eight consecutive years on the Inc. 5000 list of the fastest-growing privately held companies in America.

The state pension fund invested in the company through its In-State Private Equity Program, which supplies venture capital to New York-based companies. Between 2006 and 2009, 5LINX received three rounds of funding totaling $1.7 million.

“5LINX has gone on to experience significant growth and business success culminating in a return of capital to the Common Retirement Fund with a very attractive rate of return,” Christopher O’Donnell, General Partner for fund manager Trillium Group, said in a statement.

5LINX also recently penned a strategic marketing agreement with retail energy supplier U.S. Gas & Electric. The agreement designates USG&E as the sole supplier of natural gas and electricity for new 5LINX customers in all current and future USG&E markets.

Read more from the Rochester Business Journal.

February 27, 2014

World News

Increased Demand for Men’s Skincare in Asia

Across the Asia Pacific region, women are not the only customers driving record cosmetics sales. The Asian men’s skincare market accounted for 60 percent of global sales in 2012, making it the largest in the world.

Euromonitor International recently published a report on the growing demand for men’s skincare products in Thailand, where the market has seen double-digit year-over-year growth. Bloomberg Businessweek reports a similar trend in China, where sales of personal grooming products specifically targeted to men increased 7 percent last year.

Despite the rising demand, products tailored for men make up just 5 percent of China’s skincare market. Cosmetics giant Mary Kay is one brand poised to supply the growing beauty market. China—direct selling’s No. 3 Billion Dollar Market— is Mary Kay’s second fastest-growing market behind Brazil, generating more than $1 billion in annual revenue. Last week, The Wall Street Journal reported that Mary Kay is in talks to purchase its first office building in China, an 11-story facility in Shanghai.

Read more from Bloomberg Businessweek.

February 26, 2014

World News

Youngevity Announces Expansion into Russia and Israel

Photo above: Outside Youngevity’s corporate headquarters in Chula Vista, Calif.

California-based Youngevity International recently announced the expansion of its direct selling business into Eastern Europe and Israel. The multi-dimensional company markets nutritional and personal care products as well as gourmet coffee through commercial, retail and direct sales. 

Youngevity plans to establish a presence in Russia by the third quarter of 2014 with a distribution and sales support center in Moscow and various distribution points across the region. The company has appointed industry veteran Ricardo Spilman as Director of Sales and Operations for Eastern Europe and Israel.

The company is strategically positioning itself with an eye toward rapid international growth, said Steve Wallach, Youngevity’s Chief Executive Officer. “Youngevity currently ships its products to over 60 countries, but this accounts for only 8 percent of our revenue. We believe that the global demand for our products is apparent and we are poised to make an impact internationally.”

Read more on Youngevity’s international expansion.


February 25, 2014

U.S. News

5 World-Class Athletes Take the ViSalus Challenge

ViSalus recently announced that five world-class athletes are taking part in the nutrition company’s PROJECT 10™ Challenge. The challenge promotes a lifestyle of personal health and fitness supported by the Vi community and products.

Every week, ViSalus rewards $1,000 to 10 individuals who have lost 10 pounds or added 10 pounds of lean muscle during their Body by Vi Challenge™. As they shed pounds, participants also help the next generation live healthier lives. For each 10 pounds lost, ViSalus donates 30 Vi-Shape Nutritional Shake meals to supply a child with better nutrition through the company’s PROJECT 10 Kids program.

The latest athletes to sign on to the challenge share a successful history in their respective sports and a determination to pursue health regardless of age or circumstance. Jamaican bobsled competitor Devon Harris, whose team inspired the 1993 film Cool Runnings, joins U.S. Women’s Soccer team champion and three-time gold medalist Heather Mitts; 67-year-old National Ski Hall of Famer Suzy “Chapstick” Chaffee; hockey champion and silver medalist Nancy Drolet; and luge athlete Ann Abernathy, a six-time International Winter Games competitor for the U.S. Virgin Islands.

“I believe that being fit is a key component to successful living. Since I have been away from the rigors of competing at a high level, my fitness is not where it should be,” said Harris. “I am doing this challenge to improve my fitness level and also to inspire those with similar goals to pursue them.”

ViSalus has also announced its expansion into Germany and Austria. Co-Founder and CEO Ryan Blair says the company is taking its business overseas to tackle an obesity epidemic similar to that occurring in the U.S. “Germany and Austria share similar health and fitness demographics with North America and the UK, so our Promoters and products will deliver The Challenge at a critical time to change more lives.”

Read the full announcement from ViSalus.

February 22, 2014

U.S. News

Herbalife Briefs Lawmakers on Business Model

On Friday, Herbalife executives hosted congressional staffers for a Washington briefing on Herbalife’s business model and the wider direct selling industry.

The company’s Chief Financial Officer John DeSimone, along with VP and Managing Director of Herbalife North America Ibi Fleming, offered a presentation on “Direct Selling: An American Tradition” and welcomed questions from staffers.

The outreach follows hedge-fund investor Bill Ackman’s year-long campaign to discredit Herbalife’s business practices. The activist investor’s billion-dollar short bet against Herbalife has dropped 49 percent since inception, The Wall Street Journal reports, making it the biggest loss in the decade-long history of Ackman’s $12 billion Pershing Square fund. Last year Pershing Square exited its investment in J.C. Penney Co. with a slightly lower 41 percent loss.

Ackman’s claims have prompted action by a handful of lawmakers—most notably Senate Democrat Edward Markey of Massachusetts, who recently wrote letters urging further investigation of Herbalife by the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC). On Thursday, Markey spokeswoman Giselle Barry told Reuters the senator is still awaiting responses.

Despite Ackman’s claims and the subsequent hurdles faced by Herbalife, the company reported fourth-quarter sales up nearly 20 percent to $1.27 billion. For the full year, Herbalife reported an 18 percent increase in net sales. Following fourth-quarter results, the company also adjusted its 2014 sales forecast to between 7.5 percent and 9.5 percent, down from the previous 9 percent to 11 percent; however, Herbalife raised its earnings forecast to $5.85 to $6.05 a share, up from $5.45 to $5.65.

Read the full story from The New York Times.

February 21, 2014

World News

Oriflame, WTA Collaborate on High-Performance Product Line

Oriflame has served as Official Cosmetics Partner of the Women’s Tennis Association (WTA) since 2011, and now the international beauty company has collaborated with the world’s top female tennis players to create an exclusive line of products.

The WTA Strong is Beautiful range answers a need expressed by the athletes for “high-performance personal care for daily freshness and hydration.” Oriflame’s newest line of natural Swedish beauty products includes a moisturizing shower cream, hydrating body cream and a deodorant with 24-hour protection.

“Oriflame has always been a supporter of strong women, so the WTA’s Strong is Beautiful campaign was the perfect fit,” said Michael Cervell, Senior Vice President Global Direct Sales at Oriflame.

Caroline Wozniacki, former WTA World No.1, is a fan of the WTA Strong is Beautiful products. “When you’re training hard and travelling a lot, you need products that perform. You want to feel confident—and beautiful too.”

Oriflame isn’t the only direct selling company that supports the WTA, whose 2,500+ players represent 92 countries. USANA Health Sciences serves as the organization’s Official Health Supplement Supplier. Last year, USANA and the WTA partnered on a joint Champions For Change initiative in support of the USANA True Health Foundation, which works to provide the most critical human necessities to those suffering or in need.

Read more on Oriflame’s Strong is Beautiful line.

February 20, 2014

U.S. News

Vemma Recognized for Outstanding Packaging Design

BRAND PACKAGING magazine has recognized Vemma Nutrition Company in its 2013 Design Gallery. The gallery features stand-out brands that effectively communicate their story to the consumer through innovative packaging.

Vemma’s Verve Bold energy drink is one of seven products featured in the Metal category, and the company gets plenty of mileage out of its packaging, which is “designed to be sleek, hip and upscale and aims to invoke pulsating late night parties and busy college schedules while promising energy, mental clarity and focus,” BRAND PACKAGING notes.

The company’s Vemma antioxidant supplement is one of 10 in the Rigid Plastics category. The package’s white background is a nod to the company’s “clinical studies” and the “physician-formulated blend” which gives Vemma (vitamins, essential minerals, mangosteen and aloe) its name.

“The functional beverage industry is more competitive than ever. It is important to stay on trend with what consumers want in packaging and design. We are honored by these accolades and the positive feedback we have received from consumers and industry peers,” said Mark Patterson, Vemma’s Executive Vice President of Marketing and Brand Development.

Read the full announcement from Vemma.

February 18, 2014

World News

Avon, KORRES Announce Latin America Partnership

Avon and Greek skincare brand KORRES recently announced a strategic partnership in Latin America, home to six of direct selling’s Billion Dollar Markets.

KORRES, established in 1996 by Greek pharmacist George Korres, has granted Avon exclusive rights to develop, manufacture and market KORRES products in Latin America. The alliance presents an opportunity for Avon to build upon its strengths; Latin America is the company’s largest business unit, generating nearly half of total revenues.

“Latin America is a growing beauty market and a major component of the Avon portfolio,” says Avon CEO Sheri McCoy. “I’m very pleased that through this strategic alliance, we can leverage Avon’s extensive network and capabilities to bring the KORRES brand and products to more women across Latin America.”

KORRES has always viewed Latin America as a unique fit to the values and philosophy behind its natural formulations, says the company’s founder. “Avon is a strategic partner that can help us start this wonderful journey.”

Read the full announcement from Avon.

February 18, 2014

World News

Russian E-Tailer Delivers Human Element

Russia’s online retail sales lag well behind those of European competitors like the U.K. and Germany, partly due to the logistical challenges posed by an expansive land mass and unreliable postal service. Internet fashion retailer Lamoda is differentiating its business with a delivery model that provides in-store service at home.

Rocket Internet, an Internet “startup incubator” based in Germany, launched Lamoda three years ago. The company has focused on developing an infrastructure centered on a 215,278-square-foot warehouse in Moscow and 20 satellite centers across Russia. Lamoda is addressing shipping challenges with an innovative take on the direct selling model. The company employs 700 couriers—equipped with a fleet of 400 cars—to deliver products to customers.

Lamoda’s couriers not only provide free delivery, but also wait while the customer tries on the clothing. Furthermore, the couriers receive training to answer questions and provide basic fashion advice to customers, much like a traditional sales associate.

The unique model has attracted investments of over $200 million over the past two years. Mikhail Burmistrov, General Director of researcher Infoline-Analitika, forecasts that the company may cross over into the black in 2014 after seeing exponential sales growth last year.

An increasing number of retailers are vying with Lamoda for a slice of Russia’s online sales, which increased 26 percent last year. ASOS, the U.K.’s largest Web-only fashion retailer, launched a Russian iteration in 2013, and eBay will open its virtual marketplace to Russian merchants this year.

Read more from Bloomberg Businessweek.

February 14, 2014

U.S. News

Jessica Herrin Talks Stella & Dot Inspiration

Photo above: A stylist displays jewelry at a Stella & Dot trunk show.

In a recent interview for the Los Angeles Times, Stella & Dot Founder and CEO Jessica Herrin shares some of the inspiration behind her social selling business.

Herrin earned a bachelor’s degree in economics from Stanford University before dropping out of the MBA program to cofound a wedding content website that would become WeddingChannel.com—later acquired by TheKnot.com. When her next job brought her to Texas, Herrin had the opportunity to experience a Mary Kay convention during a business trip to Dallas. The passion and excitement of the women inspired her interest in the direct selling model.

Herrin, then working for the global e-commerce group at Dell, brought her tech savvy to bear in launching the jewelry business that would become Stella & Dot. She wanted to empower young women entrepreneurs, and those women had grown up with a new set of tools at their fingertips.

Stella & Dot also pays homage to an inspiring older generation of women. Herrin and Chief Creative Officer Blythe Harris named the company in honor of their grandmothers. “We wanted a name that really spoke to the spirit of the business, which is — it’s a company inspired by and created for strong women,” Herrin said.

Read the full profile from the Los Angeles Times.

February 13, 2014

U.S. News

Herbalife Exec Addresses Claims about Business Model

Photo above: The Herbalife Ltd. logo is displayed outside of the company’s corporate headquarters in Torrance, Calif.
(Photographer: Patrick Fallon/Bloomberg)

Amid the swirl of opinions that follow every fluctuation in Herbalife stock, a rare piece of commentary from one of the company’s own executives appeared recently in the Los Angeles Daily News. Ibi Fleming, Senior Vice President and Managing Director of Herbalife North America, outlines the fundamentals of Herbalife’s business model and addresses some disparaging claims about the company.

Fleming offers a response to the Los Angeles Daily News Group’s recent Question of the Week, which solicited feedback on whether Herbalife is a predator or an economic lifeline. With a product-centric retail model and extensive consumer protections in place, Herbalife’s business opportunity is “part of the thriving micro-business community in the United States,” Fleming states. She also notes that the company, whose 300-person compliance department receives an average of just 1.6 complaints for every 1,000 Herbalife members, welcomes the opportunity to address the claims of any individual citing a bad experience with the company.

Last week, Herbalife’s board of directors authorized an increased share repurchase program from the previous $653 million to $1.5 billion. The company also announced a $1-billion sale of convertible bonds to finance the share buyback, with the remaining proceeds slated for “working capital and general corporate purposes, including, without limitation, the repurchase of outstanding common shares,” Herbalife stated. The company identified Bank of America Merrill Lynch, Credit Suisse, HSBC and Morgan Stanley as the investors in Herbalife’s convertible notes.

Read Fleming’s full commentary in the Daily News.

February 11, 2014

U.S. News

Avon CEO among Fortune’s Most Powerful Businesswomen

FORTUNE recently named Avon CEO Sheri McCoy to its list of “The 50 Most Powerful Women in Business: Global Edition.” McCoy ranks No. 19, followed by Google SVP Susan Wojcicki at No. 20. GM’s Mary Barra, IBM’s Ginni Rometty and PepsiCo’s Indra Nooyi hold the top three spots on the list.

Following a distinguished 30-year career at Johnson & Johnson, McCoy joined Avon in April 2012 with a focus on stabilizing the business and driving long-term growth initiatives. In a third quarter report that showed revenue down 7 percent, McCoy stated that the company is nevertheless “headed in the right direction,” with progress toward its long-term financial goals. Avon will report later this week on fourth-quarter and full-year 2013 earnings.

FORTUNE’s inaugural global ranking evaluates executive power from an international perspective, taking into account the leader’s standing in the worldwide business community. Other assessments include the size, importance and health of the business, as well as the leader’s career arc.

View the full profile from FORTUNE.

February 07, 2014

World News

Direct Selling Empowers Developing World’s Entrepreneurs

Last year, the U.N. reported the striking statistic that more people around the globe have access to cell phones than toilets. Six billion of the world’s estimated 7 billion people have access to mobile phones, but only 4.5 billion have access to working toilets—and 2.5 billion of those don’t have proper sanitation.

The need for greater global access to essential products—goods that help alleviate poverty and disease—is one highlighted by Chuck Slaughter, CEO and Founder of Living Goods, in a recent piece for The Guardian. Amid technological leaps forward, like that which saw much of the developing world bypass a landline telephone infrastructure with the adaption of mobile technology, Slaughter identifies four forces that could facilitate a better way of life for those who need it most.

Those forces are microfinance, direct selling, social media and mobile technology. Microfinancing has already benefitted more than 500 million individuals around the world. Direct selling’s rapidly growing business model exploits what Slaughter calls “one the most powerful forces in markets and societies—the power of human networks.” Social media multiplies exponentially the potential of human networks and with it the individual’s ability to market and provide customer service. Mobile technology instantaneously connects entrepreneurs to their customers, transforming all aspects of business.

Living Goods is harnessing these forces in the developing world to provide essential products like anti-malaria treatments, clean-burning cookstoves, fortified foods and solar lamps. By distributing its goods directly through franchisees, the company also creates a livelihood for some of the world’s underemployed, who represent a third of the global population.

Read the full feature from The Guardian.

February 07, 2014

Executive Recruitment

Pearson Partners International

February 05, 2014

U.S. News

DSN Exclusive: Amway CEOs on Company’s Record Year

The industry’s top revenue-generating company for 2012 has announced another year of record sales. Amway reported its seventh consecutive year of growth with annual sales of $11.8 billion for 2013, up from $11.3 billion the previous year.

DSN spoke to the company’s Co-CEOs, Chairman Steve Van Andel and President Doug DeVos, who credit Amway’s growth to the leadership and motivation of its distributors. “It’s really their engine,” said Van Andel. “The great thing for us is that over longer periods of time, we see different groups coming into the business.”

Young people represent one group increasingly attracted to Amway’s entrepreneurial opportunity, Van Andel noted. “That bodes well for now, but it also bodes well for the future because that group will, I think, stay with us for a while and continue to have success, which contributes to the overall success of the business.”

The company’s 2013 Global Entrepreneurship Report, wherein two-thirds of the countries surveyed boasted a positive outlook on entrepreneurship, also bodes well for the future of Amway and the industry as a whole. “If people around the world support entrepreneurialism, if they support people going into business for themselves and operating their own businesses—they support our industry,” said Van Andel. “We’re very optimistic about the industry in that sense.”

The Co-CEOs expressed optimism about direct selling not only as a business opportunity, but also as a way to bring individuals into communities with a common purpose. “The people, plan and products by themselves are nice, but in Amway—and in direct selling—we have the capacity to bring them together. That’s what our industry does; it makes connections and creates community,” said DeVos.

One common purpose that Amway distributors and employees have rallied behind is the Amway One by One Campaign, which has impacted the lives of 10 million children worldwide. The organization has contributed 2.7 million volunteer hours and nearly $200 million to causes that support children in need.

The past year also saw Amway branching into a unique aspect of its business with the opening of a handful of physical locations around the world. Amway piloted its Amway Business Center model at New York’s Citi Field and most recently opened a center in Berlin, Germany. DeVos describes these physical locations as a place for people “to experience the business in a way that makes Amway real.”

Read the full announcement from Amway.

February 04, 2014

Call Centers

The Connection

February 04, 2014

Call Centers

E3 Results

February 04, 2014

U.S. News

Analysts Optimistic as Nu Skin Weathers China Storm

Photo above: Nu Skin’s symbol displayed outside its new global headquarters in Provo, Utah.

Nu Skin’s China business recently came under the scrutiny of state regulators as a result of a Jan. 15 article from China’s People’s Daily criticizing the company’s practices. China’s State Administration for Industry and Commerce said it would investigate the company’s operations, prompting a 33 percent decline in Nu Skin shares over the following two days.

In a response, Nu Skin stated that the People’s Daily article “contains inaccuracies and exaggerations that are not representative of Nu Skin’s business in China. The reporters did not attempt to verify any information with Nu Skin.” The stock rose for the first time on Jan. 22, following a prediction by Deutsche Bank analysts that the government investigation will likely conclude in less than two months, with a “modest fine” imposed upon the company.

Nu Skin has also stated that it remains “committed to working cooperatively with the government to ensure long-term, sustainable growth in this important market.” As a part of its ongoing compliance efforts, the company is conducting its own “province-by-province business review” and reinforcing business training and education. Mainland China, where Nu Skin has been operating for 11 years, generated 30 percent of the company’s $2.16 billion in revenue in the first three quarters of 2013.

Analyst Olivia Tong at Bank of America Corp. notes that network marketers such as Nu Skin “have always been questioned,” causing “outsized share price movements,” she wrote to Bloomberg. “There does not seem to be tangible evidence to validate negative claims targeted at the company thus far.”

Nu Skin is not the only business facing obstacles posed by China’s regulatory environment and state-controlled media. Last year, a report from China Central Television (CCTV) accused Starbucks Corp. of over-charging its customers. The same outlet claimed Samsung was selling defective smartphones to Chinese consumers—a charge that elicited an apology from the Korean electronics manufacturer despite its never being confirmed.

Last month, Wal-Mart Stores Inc. pledged to ramp up its vendor compliance in China after CCTV criticized the retailer’s quality-control measures. Wal-Mart has invested in a computer-based system to support compliance efforts that require the “collection, organization, filing and retention of well over 1 million documents annually,” according to the company.

China’s increasing regulatory scrutiny prompted The Economist to note last November that “it may be tough to find foreign firms that haven’t been on the receiving end of price, safety or hygiene scandals at some point.”


February 04, 2014

Exclusive Interviews

Executive Connection with Gregory L. Probert, Chairman and CEO, Nature’s Sunshine Products

Gregory L. ProbertGregory L. Probert

In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with Gregory L. Probert, Chairman of the Board and CEO of Nature’s Sunshine Products, about leadership, empowerment and transforming lives.

DSN: What is the one thing you enjoy most about being the Chairman and CEO of Nature’s Sunshine Products?

GP: Working with our fantastic distributors and hearing their inspiring stories of helping people transform their lives. The ability to personally connect with our distributors and customers is what inspires me.

DSN: While you’ve only been in your current position for a short time, you’ve been involved with the company for about three years. In that time, what has been your proudest accomplishment?

GP: I am very proud of the management team we have built. We have attracted many talented executives with long track records of achievement who have successfully teamed up with our veterans in the company. As with all great teams, it is more about working effectively as a team than about the skills of any one member. We have a very passionate, cohesive team that shares a vision for helping people improve their lives.

DSN: What has been most challenging?

GP: Finding ways to grow the company without changing what we stand for and staying true to our heritage of quality, service and integrity. We have a saying: It is OK to change what you do, but never change who you are.

DSN: What do you tell Nature’s Sunshine members to lead and inspire them?

GP: Never lose sight of why you joined Nature’s Sunshine—to help people live healthier, happier lives.

DSN: What is your vision for Nature’s Sunshine?

GP: To become the premier natural health, wellness and lifestyle company in the world.

DSN: Is there one basic principle that governs your leadership at Nature’s Sunshine?

GP: Empowerment. Surround yourself with great people, have a clear and shared vision of where you are going, and give people what they need to succeed and then let them shine.

DSN: Has someone ever given you a bit of really great advice you can share with us?

GP: My dad often told me, “Never ask someone to do a job you wouldn’t be willing to do yourself.” In other words, lead by example.

DSN: If you hadn’t become an entrepreneur, what career path would you have taken?

GP: Growing up in California, I was always surfing, swimming and scuba diving and would probably have become a marine biologist. My hero growing up was Jacques Cousteau.

DSN: Nature’s Sunshine has been in business for more than 40 years. What advice would you give an executive at a young direct selling company to help them achieve long-term success?

GP: Have a strong vision of what you want to be and never take shortcuts. Build a strong team; execute with excellence; and always remember that distributors are your greatest treasure and treat them that way.

DSN: What’s something that few people know about you?

GP: I love cooking and am a fairly decent chef. Perhaps my next career will be as a chef and restaurateur!

February 03, 2014

U.S. News

PartyLite Announces Jonathan Adler Collaboration

Home fragrance and décor company PartyLite recently announced its collaboration with potter, designer and author Jonathan Adler. Adler is teaming up with PartyLite to produce an exclusive line of candles, fragrances and home décor.

The Jonathan Adler for PartyLite Collection will feature the designer’s bold, graphic style. The modern offerings—Adler cites New York City as his inspiration—will include two new fragrances: Big Apple by Day and Big Apple by Night. “My collection for PartyLite captures the spirit of the city and will make your home vibrant and glamorous, no matter where you live,” said Adler.

Since launching his first ceramic collection in 1994 at Barneys New York, Adler has expanded his brand to include over 25 stores worldwide, an e-commerce site and a wholesale business serving over 1,000 locations globally. In addition to participating in a series of professional collaborations, Adler has authored four books. His collection for PartyLite will debut in Fall 2014, with new offerings to be introduced throughout 2015.

“The new Jonathan Adler for PartyLite Collection has a fresh, contemporary edge that we know our global audience will love. It’s an exciting opportunity to introduce Jonathan’s special brand of sophistication to style lovers worldwide—the PartyLite way,” said Rob Goergen, PartyLite Worldwide President.

Read the full announcement from PartyLite.

February 01, 2014

Stock Watch

Stock Watch, February 2014

February 01, 2014

Company Spotlight

Nature’s Sunshine Products: Transforming Business to Transform Lives

by Barbara Seale

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

Photo above: Jessica Braithwaite, Executive Vice President of Sunshine Heroes Foundation, spends time with children who are benefiting from the foundation’s support.

Nature's Sunshine

Company Profile

  • Founded: 1972
  • Headquarters: Lehi, Utah
  • Top Executives: Gregory L. Probert, Chairman and CEO; Wynne Roberts, President and Chief Operating Officer.
  • Products: Nutritional and personal care

Achieving potential. That’s what Nature’s Sunshine Products is all about—optimal health for the consumers of its products and robust businesses for its distributors. Now it aims to power up its growth.

Gregory L. ProbertGregory L. Probert
Wynne RobertsWynne Roberts

Nature’s Sunshine Products (NSP) has shown steady growth throughout its history, but its executives strongly believe in its potential to grow faster, and they’re investing in the company’s future.

Many elements are new in the 42-year-old company, beginning with several members of the management team. Gregory L. Probert was named Chairman in January 2013 and CEO in October 2013, after holding consulting and executive positions there since late 2010. Within the last few months the company has also hired a new chief scientific officer, a new EVP of worldwide operations and manufacturing, new VPs of Asia Pacific and Russian markets, and new heads of IT and human resources. They join Wynne Roberts, the company’s President and Chief Operating Officer, who became part of the NSP team in February 2012.

“We have spent a lot of time building one of the best management teams in the industry, including Wynne,” Probert says. “He and I worked together in a couple of other companies, Herbalife and DMX Music. We’ve been a team before, and that works well for the top two guys. We know each other’s work style, and we work together as a team very well.”

Roberts adds, “With the level of change that we’re driving in this business to realize our growth potential, the fact that Greg and I know each other well means that we can move quicker because we listen well, challenge each other’s ideas and trust each other. When you try to drive significant change, building on a strong foundation, that’s very valuable.”


It Started With a Stomachache

When Utah schoolteacher Gene Hughes developed a nagging stomach condition, a neighbor suggested a surprising treatment—cayenne pepper. It worked!

But swallowing that spoonful of cayenne pepper was almost as painful as the stomach condition. That’s when his wife Kristine suggested putting the spicy seasoning into easy-to-swallow gelatin capsules. Problem solved. Her brainstorm led the couple to start Nature’s Sunshine Products, which became one of the first companies to encapsulate herbs. Gene and Kristine soon enlisted the support of family—Dick and Pauline Hughes and Jay and Arva Hughes—to begin a small family business that sold encapsulated cayenne and other herbs and supplements to health food stores.

The little business soon became a mission as the family realized that they wanted to touch more lives with their products. They found the perfect vehicle to make it happen: direct selling. The model allowed them to educate consumers about the vitamin supplement products and provided their salesforce an opportunity to share in the success of the company.

Strength in Size

NSP’s strong foundation has been built on the high-quality products that it offers through its two distinct brands—Nature’s Sunshine and Synergy Worldwide. Today the company sells these products in more than 40 countries and has some 340,000 active independent managers, distributors and customers. Probert and Roberts believe that having global presence and more than 600 products presents a strong platform and opportunity for growth, but they also know focus is key. Creating that focus to leverage that strength is their goal.

“We have a large geographic footprint, and we have to make sure we’re focused on those countries that have the greatest growth opportunity,” Probert explains.

For example, in the third quarter of 2013, the company saw sales growth in NSP Mexico, South America, Russia, Central and Eastern Europe, as well as Synergy Europe and Asia, while sales in the U.S. grew in two of the first three quarters of 2013. Probert also sees huge opportunity in China, a market it has not yet entered.

“We’re also investing heavily in research and development to further strengthen our product catalog and are developing a three-year product strategy,” Probert adds. “We’re focused on launching innovative, science-based products that are aligned with the opportunities driven by consumer health megatrends such as obesity, inflammation, insulin resistance and diabetes, joint, cardio-vascular and anti-aging.”

NSP is developing differentiated product strategies for each of its operating businesses and is overlaying those strategies with history and sales figures. In Nature’s Sunshine Products, many customers initially came to the company because they were seeking a natural way to address a health condition. But when the condition improved, they believed that they had no reason to continue to buy. So the company has developed products and programs that support everyday wellness, as well as targeted health concerns.

NSP’s 600 products address one or more of 17 broad health conditions. Six of those conditions—cardiovascular health, digestive health, immune system, general health, weight management, and mood and anxiety—generate about 80 percent of the company’s sales. To make those areas more manageable, the company groups products into one of three key areas that support what it calls the Transformational Habits of Health: nutrition that supports weight management, daily essential supplementation that supports everyday good health, and specifically targeted care. Nature’s Sunshine works hard to help distributors effectively communicate how products can help consumers support their health in each of those areas.

Synergy Worldwide had historically been focused primarily on products supporting cardiovascular health, and the company has broadened its market opportunity by launching an innovative weight-management system, SLMsmart, in 2013.

Nature’s Sunshine Products operates in more than 40 countries and has some 340,000 active independent managers, distributors and customers.

Business Diversity

Add this to the challenge: Nature’s Sunshine distributors, which it calls members—or managers at higher levels—use a variety of methods to run their businesses. They may hold home gatherings, use traditional one-on-one network marketing methods, do Internet sales, partner with healthcare professionals or even have a retail business. Many Nature’s Sunshine Products distributors are natural healthcare consultants or practitioners. NSP supports that flexible approach to doing business, and it recognizes that each sales method has unique needs. It recently hired staff specialists to develop programs to help managers grow their business in all those areas.

“We have spent a good amount of time understanding the methods our distributors use to take products to market,” Roberts reports. “Then we identified where we had experience gaps in staffing. We set about hiring people who have expertise in practitioner consultant marketing, retail merchandising, and building networks. They have developed programs to support distributor needs in all those areas.”

Specialized sales support programs, along with the development of innovative, high-quality products—including daily nutritional supplements—are increasing sales and creating a stickier customer base.

For example, one of the specialists supports retail stores—some 750 NSP distributors run one—and focuses on merchandising in the stores to effectively communicate product strengths. Another works with NSP distributors who are natural health practitioners such as chiropractors, naturopaths and herbalists, and has developed a series of classes that practitioners use to help people improve daily nutrition and weight management. The programs were launched in October to the top 400 leaders, and a full national launch will take place at the company’s national convention in March. The number of groups being established is already increasing.

Those programs, along with the development of supporting products—especially daily nutritional supplements—are increasing sales and creating a stickier customer base.

“This has been a huge strategic shift in the company, in terms of building daily consumption,” Probert says. “Any successful business must have recurring sales. Add to that the targeted care that we’ve always done exceptionally well, and we have a robust formula for growth.”

Nature's Sunshine Products

Focus on Quality

Whether the product supports daily wellness, a targeted health condition or weight management, it’s probably produced in a Nature’s Sunshine 270,000-square-foot manufacturing and warehouse facility. More than 90 percent are. The advantages are numerous.

“There’s no question that we see self-manufacturing as key for speed-to-market and cost efficiency, but also for the high-quality standards we have,” Roberts explains. “All that would be hard to support if we didn’t self-manufacture.”

Nature's Sunshine ProductHe notes that the company goes to extremes to build in quality throughout its process. They’re demanding when they choose raw materials, selecting only those that pass NSP’s own tests for potency and safety. Even though they are highly selective when they choose suppliers, about 2 percent of raw materials still don’t meet the high standards of Nature’s Sunshine. Once the raw product actually goes to manufacturing, scientists subject it to even more rigorous tests. For example, to detect contamination, NSP’s manufacturing facility uses an ICP mass spectrometer that can test for parts per trillion—the equivalent of one drop of water in five Olympic-size swimming pools. That’s just one of the 600 quality control tests it uses, including post-manufacture testing. Since 2009, the company’s manufacturing facility has been certified by NSF, an independent international certification company that inspects and audits the Nature’s Sunshine manufacturing facility, procedures and products twice a year.

“There’s no question that we see self-manufacturing as key for speed-to-market and cost efficiency, but also for the high-quality standards we have.”
—Wynne Roberts, President and Chief Operating Officer

“It all combines to deliver the highest quality,” Roberts says. “It means that we’re able to prove the quality of our products, not just say it.”

Probert adds, “People want to trust the products they’re putting in their body, and when they’re taking products to improve their health, there’s a high level of trust that we live up to. Our product quality supports our tagline: Pure, potent, proven.”

Keeping track of all those diverse elements that drive quality and sales growth is a herculean effort. To handle it, Nature’s Sunshine has invested $40 million in an Oracle Enterprise Resource Planning system.

“When you’re working in more than 40 countries, having easy access to information across the business—from manufacturing to sales and everything in between—easy, rapid access to information is critical,” Roberts observes. “The investment we’re making in this system ensures that we have access to data on the ground across the world so that we can grow our business. It helps us have effective manufacturing, drive costs out and create financial strategies efficiently. In sales, we can quickly identify areas where ideas, business methods and products are getting traction, so we can provide more effective support and achieve faster growth. It will really enable us to provide much more effective tools to our distributors to build their businesses.”

“People want to trust the products they’re putting in their body, and when they’re taking products to improve their health, there’s a high level of trust that we live up to.”
—Gregory L. Probert, Chairman and CEO

Nature's Sunshine Product

Brand Building

Nature’s Sunshine is also investing in creating brand awareness and affinity. In addition to ensuring that it and its sister company Synergy have distinct brands and messages, NSP wants to increase its overall name recognition.

“Historically, we’re one of the best kept secrets in the industry,” Probert says. “We’re a $400 million company with two distinct brands, great products and fabulous distributors, but we don’t have the brand awareness of a company our size.”

To shore up its brand foundation, the company’s chief marketing officer led it through a vigorous rebranding process, and the company is now rolling out the results both internally and to distributors.

“This company has such a great legacy of natural health and product quality and integrity in the way we do business,” Probert says. “Distributors gravitate to this company for that. We also have a culture of service to distributors and our communities. We didn’t want to change that, just clarify it. We will also do certain things to build awareness publicly, such as sports sponsorships, and we will need to activate distributors around that so we can spread the word of what NSP stands for.”

Roberts adds, “We already have a very good platform that has grown stronger in the last few years. If we do this well, five years from now we won’t have to explain to anybody what we do. They’ll know that Nature’s Sunshine is the business that improves wellness and transforms lives.”

With so much happening to fuel the company’s potential, both Probert and Roberts are enthusiastic about the company’s future. They see international expansion opportunities in countries such as China, India and Brazil, and they’re excited about the high-quality, innovative products on the horizon that address the megatrends they’ve already identified.

“If you look at the team we’ve been able to attract, we’re all here for one reason: We see such untapped potential in the company, and we’re passionate about helping people transform their lives,” Probert says. “We also see that $400 million can grow into multibillions. There’s a huge need for what we do, and we have a huge opportunity to transform people’s lives all over the world. Direct selling is an incredibly vibrant business model and the best way to take our type of products to market. Our challenge is to focus, focus, focus on doing the right things that will grow the company.”

“If you look at the team we’ve been able to attract, we’re all here for one reason: We see such untapped potential in the company, and we’re passionate about helping people transform their lives.”
—Gregory L. Probert

Sunshine Heroes Foundation

Heroic Philanthropy

Nature’s Sunshine’s mission to transform lives reaches beyond its business and into its philanthropy. Many of its charitable projects have been in conjunction with the Sunshine Heroes Foundation, of which it is a founding partner. The foundation, formally Little Heroes Foundation, has reached out to the Utah community and across continents with products that have helped nearly 265,000 individuals. The foundation has also given out more than $540,000 since its inception in 2008 to support numerous organizations both domestically and internationally.

Little HeroesIn conjunction with the Sunshine Heroes Foundation and Mali Rising, Nature’s Sunshine recently helped establish the Sunshine Heroes Academy in Mana, Mali. Mali is among the 25 poorest countries in the world, and its people have severely limited educational opportunities. The Sunshine Heroes Academy, which features three classrooms and two administrative offices, will provide a resource for up to 200 children each year to get an education.

Nature’s Sunshine has aided Sunshine Heroes in the renovation of baby hospitals in Russia; built a health clinic in Nepal that was estimated to treat 20,000 people in 2012 alone and a clean water project in Zhongwei, China, that provides safe drinking water to an estimated 30,000 children each year; and distributed health supplements to an estimated 1,000 individuals throughout Ghana.

Nature’s Sunshine donates a portion of the proceeds from the Sunshine Heroes vitamin line, supports projects and grants, provides the Sunshine Heroes Foundation with opportunities to fundraise and helps cover administrative costs so 100 percent of the individual donations will go directly to benefit children. Through their partnership, Nature’s Sunshine and the Sunshine Heroes Foundation together have impacted the lives of more than 160,000 children and 265,000 individuals in 15 different countries around the world.

February 01, 2014

Publisher's Note

Letter from John Fleming, February 2014

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

Optimistic is the word that comes to mind as we now anticipate collecting information from many companies, which will lead us once again to the identification of the DSN Global 100. We are optimistic that John Flemingwe will find substantial growth to report within the industry. Inspired is another word that comes to mind when reflecting on some of the outstanding, record-breaking growth of some direct selling publicly held companies. We are able to see those results at the end of each quarter as a result of the published quarterly reports. The public companies that we watch—the ones using direct selling 100 percent as their method for revenue generation—indicate an average increase in share price of 188.25 percent (year-end 2013 over year-end 2012). The preceding represents 19 companies that are in our primary domestic group. Five foreign direct selling companies that we follow increased share price on average 14.94 percent. 

With such strong overall performance by publicly held direct selling companies in 2013, our outlook remains strong and positive for the performance of the industry overall. Such a performance provides us with many more stories that need to be told. That is why in April we have scheduled The Wall Street Journal for another insert to be distributed to its 1.2 million subscribers. This insert, unlike previous inserts, will be devoted strictly to editorial and will not include advertisements for specific companies. The story of customers satisfied and lives changed is a compelling one, and The Wall Street Journal provides a great platform to tell that story. We are grateful to all friends who have supported us in this effort, and we know you, as the industry, will be proud of the information we create and publish. Reprints will be made available to enhance the spread, life and impact of the information on the public we serve.

Our cover story this month highlights a group that is often behind the scenes but so very essential to the success and sustainability of any company. Suppliers are usually experts at what they do, and they consistently make very significant investments in their products and services. They have to do this in order to maintain competitive advantage and most importantly, to be able to provide clients with a source committed to keeping their business on pace and in front of trends and best practices. Newer companies just beginning to venture into supplier relationships will certainly appreciate the perspectives provided. We ventured into this article out of deep respect for the suppliers we have gotten to know via the publishing of this magazine. Because of them, we have gained so much knowledge about the industry and accumulated so much information. We have truly learned their value as strategic partners.

Nature’s Sunshine Products (NSP) has shown steady growth throughout its history, but executives strongly believe in its potential to grow more rapidly, and they’re investing in the company’s future. Many elements are new in the 42-year-old company, beginning with several members of the management team. Get to know them through our Company Spotlight.

Nerium International is still a young company when looking at years in business, but in that short time, the company’s impact on lives appears to be beyond measure. The company’s commitment to personal development and philanthropy represents another example of how a direct selling company can impact lives in such a positive way.

In this month’s Top Desk, Amway’s John Parker explores ideas of community and why community is such an integral part of a direct selling company’s success. In fact, John says, “Lasting communities form around causes or values—not products or brands.” This is a most interesting and valuable article contributed by the Chief Sales Officer of the industry’s top company.

Another article we think you will find interesting is the contribution by industry attorney Kevin Thompson. Here at Direct Selling News, we have not jumped into every conversation about the points of view that arose over the past year relative to some of the industry’s publicly held companies. Herbalife was the center of many conversations, and the success of the company in 2013—in spite of some very severe challenges—is another testimony to the strength of the direct selling business model, the quality of people attracted to it, the leaders developed by the company and, of course, the quality of the management team at the top of the company. Kevin points this out in his article, “Ackman’s Folly: 7 False Assumptions on Herbalife,” edited exclusively for Direct Selling News.

As we now move through the month of February and into March, we eagerly look forward to the year-end reports that will create many of the stories for 2014, and we look forward to seeing many of you at this year’s DSN Global 100 banquet. It will be quite a celebration!

Until next month… enjoy the issue!

John Fleming
Publisher and Editor in Chief

February 01, 2014

Cover Story

The Value of Developing a Strategic Partnership with Your Suppliers

by Teresa Day

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

DSN February Issue

Vendors and suppliers are often measured on their contribution to a company’s success on three simple factors: whether they deliver more quickly, more cheaply or more effectively. Yet many suppliers know that they have so much more to offer to companies who are willing to think outside these traditional supplier definitions. Indeed, in the rapidly changing technological environment, coupled with a challenging economic environment, a shift in perspective toward suppliers and their offerings may be a welcomed change for many company executives seeking to reconcile the balance sheet with the company’s long-term needs.

This month, DSN’s cover story takes a look at the various types of existing supplier relationships and seeks to shed light on the value of developing strategic partnerships.

Company executives know that long-term strategies, and the success hoped for in implementing them, must reach across all resources and include outside vendors and suppliers as an integral part of the whole. The shift to outsourcing parts of a business, or bringing in a specific supplier to take care of one aspect of the business—payroll for example—began many years ago and has been successful for many companies. What is the difference between those relationships with a supplier and what we are proposing here as a “strategic partnership”? Let’s begin that answer by defining the types of supplier relationships currently practiced.

Types of Supplier Relationships

Dear Reader,

As we celebrate 10 years of service to the direct selling industry through the publishing of Direct Selling News, we have gained much knowledge and accumulated much information on the industry and the companies that make it what it is. Indeed, this is perhaps the most unique channel of distribution in the world, and the only channel of distribution that engages people from all walks of life while offering the information, education, and even training and development needed to build a business when desired. As we have interviewed thousands of people and subsequently written close to 2,000 stories with our talented researchers and writers, we have also gained a perspective on what seems to work for direct selling companies and why sustainable success is often experienced by a company choosing to use this business model.

This publication was founded on the goal of serving the direct selling industry and becoming the journalistic source for information in support of the industry. Our DSN business model is dependent upon those who choose to advertise through our mediums, and to them we are always grateful. What we have found and experienced over the past 10 years is a relationship with a group of individuals and companies referred to as “suppliers,” which are always integral to the success stories of the direct selling companies that make this industry possible. As we have gotten to know so many supplier companies over the years, we have often been in awe of the pride and dedication they demonstrate for the direct selling industry. We are also impressed with the experience, skill set and subject matter mastery that so many possess. Our relationships are primarily, but not exclusively, with those suppliers that have chosen to become Supplier Members of the Direct Selling Association.

As we interviewed several who spoke on behalf of their entire group, we knew we had uncovered a story about those who are often unsung heroes. Without their strategic partnership, any company would be more challenged to meet its intended objectives.

—John Fleming, Publisher and Editor in Chief, Direct Selling News

Author Kevin Davis, in his book Slow Down, Sell Faster!, divides the supplier/company relationship into three levels, with each relationship having specific characteristics:

  • Approved Vendor
  • Valued Consultant
  • Strategic Partner

The approved vendor, according to Davis, is characterized by having an acceptable price and service, and is called upon by the company for the “sole purpose of acquiring a specific product or service at a competitive price.” Within this level of relationship between company and supplier, the company is looking for a transaction-driven solution and will turn to that vendor who has a good reputation for delivering on time and on budget.

Now, there is nothing inherently wrong with being an “approved vendor.” Though nobody wants to be thought of as lowest on the totem pole, having access to an excellent provider with stellar customer service of task-based transactions is a good part of any executive’s long-range plan. There is a place in all organizations for task-oriented solutions such as payroll processing or 401(k) management, among others.

The way a vendor with a task-oriented transaction differentiates themselves from the competition would be in such areas as follow-up, account management and customer service. There should be no question here concerning the reliability, deliverability or ROI of working with a supplier. Those aspects should be apparent before a supplier makes it onto your “approved” list. The point is there may be some strictly task-oriented services outsourced to an approved vendor, and in the scope of that job they are expert craftspeople who deliver good work. It is possible, however, that within some parts of your business, you could benefit from seeking a different type of vendor relationship.

In Davis’ hierarchy, the second level of supplier/company relationship is the valued consultant—one who provides not only a product or a service, but also exchanges information and shares knowledge with the company team members. This level of supplier exhibits a more forthright interest in helping the company succeed by offering helpful hints or otherwise contributing knowledge that might be in addition to the scope of the project.

Davis says that the valued consultant supplier is “perceived as the ‘go-to’ person,” and that the “variety of potential solutions is both valued and sought-after when a need arises.” Additionally, this level of supplier understands the company’s business processes and even preferences, possibly having been a part of developing them.

The final, and highest, level within Davis’ hierarchy is the supplier who not only delivers a product or a service, but also functions as a long-term strategic partner. A strategic partner, says Davis, helps a company “see the future faster, and in a new and different way.” This supplier continually seeks to add value to every situation, in addition to the products or services provided by the contract agreement. This supplier literally partners with the company and works toward “continuous improvement.”

A strategic partner is in it with you, helps to mutually develop solutions, knows and understands your business goals, turns their knowledge into action on your behalf, is thinking about you when you aren’t there and has a long-term relationship with you. A strategic partner doesn’t attempt a one-size-fits-all approach.

A strategic partner helps a company “see the future faster, and in a new and different way.”
—Kevin Davis, sales management and training expert and author of Slow Down, Sell Faster!

Value Rather Than Cost

Many companies rank the importance of their suppliers by how much money they spend working with them, but in order to determine which type of supplier you need to work with, money actually should not be a primary consideration at all. The rank of a supplier’s importance to the company should be measured by factors such as:

  • Does the supplier have a relationship with the company beyond the contract terms? In other words, is there a flow of communication?
  • How integrated is the supplier with company processes?
  • To whom does the supplier report? Strategic partners most often have relationships with senior or executive team members.

Judy Stubbs, Vice President at Pearson Partners International, a global executive search and talent management firm, says, “A supplier who seeks to become a strategic partner to the customer is in a far better position to build a lasting professional relationship as well as gain a more comprehensive sale for both. The conversation is now about value rather than cost.”

Good strategic partners are generally prepared to invest both time and capital into the building of a successful relationship with company executives.

Does every supplier need to be a strategic partner? Not necessarily. It largely depends upon the company’s needs and vision. Strategic suppliers are often woven into the fabric of the company’s daily operating structure, acting as extensions or full-time members for a period of time.

Good strategic partners are generally prepared to invest both time and capital into the building of a successful relationship with company executives. They are invested in supporting their client companies as well as their industry, and they desire to provide the best service possible.

Benefits of Strategic Partners

If developing strategic partnerships with suppliers takes more time and effort on the company’s part, what are the benefits of investing that time and money? The three main benefits, as DSN sees them, are explained below.

Benefit No. 1: Resource Strategy

The first benefit of developing strategic partnerships with suppliers is that doing so allows the company to concentrate its effort on those things deemed most important, while allowing the strategic partner to shoulder responsibility for some other aspects. Every company, no matter how large or how small, has restrictions in some areas—these could be resources, manpower or talent—and it is executive management’s priority to plan the long-term strategies within the confines of those restrictions.

Put simply, supplier partners can focus on their area of expertise and allow the company to forgo hiring in that area. For example, instead of hiring an internal call center or a distribution center workforce in the traditional employee-based model, outsourcing these functions to a strategic partner can free up your head count and provide opportunities in other areas. Alan Pollard, Vice President of Sales at iCentris, a software design company specializing in tools for the distributor, believes that many companies can benefit from engaging a strategic supplier to be a partner from the beginning conversations.

Pollard says, “Often companies decide to do things in-house that could be better and more economically served by a strategic partner. They often may not see hidden or soft costs of doing business in-house.” Reaching out to a trusted partner to have those conversations can help a company build the right departments from the beginning.

In addition to focusing resources on other departments or projects, developing strategic partnerships with suppliers gains a company access to subject matter experts (SMEs) at a higher caliber of talent than the budget might allow for a direct hire. Their expertise can “be called upon for subject-matter expertise for navigating challenging waters,” according to Terrel Transtrum, Founder of ServiceQuest, a consulting firm specializing in distributor retention. He also adds, “The executive and supplier who get to a foundation of trust and common purpose enjoy more efficient, smarter, and potentially more cost-effective solutions. Who doesn’t want that?”

Even when a company hires a seasoned executive with a number of years under their belt and leadership at two to three companies, engaging a supplier as a strategic partner can greatly expand the realm of experience. Paul Adams, Senior Vice President of Strategic Marketing at VideoPlus, a media and marketing communications company, says, “Typically when we meet with a company, we’ve got a collective 50–60 years of experience in the room, and over 100 companies to draw from.”

Keeping pace with the speed of change has become much more challenging for all companies and their internal teams, especially in areas of technological progress. In some cases, strategic suppliers can respond with more flexibility than the company can. Scott Orlinski, President of Smart Office Solutions, a communications solutions company, says, “Suppliers have scalability of services that the direct selling companies themselves often don’t have. We consider the ability to scale to be our responsibility.”

And while it seems clear that companies in a growth spurt benefit from strategic supplier partnerships, so do established companies. Developing partnerships is an ongoing resource strategy for a company of any size. This feeling is echoed by Serena Ayscue, Co-Founder of software company ByDesign Technologies. Ayscue says, “It’s a mistake to think that once you become a big company, you have to bring everything in-house. The companies that are really successful have placed value in building their supplier relationships. In this way, the company can stay on top of the latest technologies, the newest efficiencies and new industry recommendations.”

“The executive and supplier who get to a foundation of trust and common purpose enjoy more efficient, smarter, and potentially more cost-effective solutions. Who doesn’t want that?”
—Terrel Transtrum, Founder of ServiceQuest, a consulting firm specializing in distributor retention

Benefit No. 2: Expanded Research and Development Capabilities

The second benefit of developing strategic partnerships with suppliers is that the process allows a company to greatly extend and expand their research and development capabilities. Suppliers invest in R&D in order to stay on top of their specific expertise. The cost is spread over several clients, and all companies gain the benefit of what may not have been a feasible investment for just one company.

“Suppliers can and should provide the R&D in their area of specialization so companies can keep up with growth and changing technology/practices,” Pollard says. “The internal teams at direct selling companies run the day to day, but suppliers can provide perspective on best practices and emerging trends and technologies from their involvement with many companies.”

Companies often take a “silo” approach to some of the most important components of the business model. For this reason, engaging a supplier as a strategic partner can provide great benefit, for the simple reason that suppliers have seen results from many implementations and many companies, and the learning can be passed on to other companies without infringing upon anything the company considers proprietary.

Paul Piscitelli, President at Paul Anthony Awards, an awards and gifts company, puts it succinctly: “We know what is working and what is not working in the industry. Without giving away private data, we can steer a team in the right direction while in the planning stages.”

There is also vast experience collected within the industry among suppliers who have respect for one another. The companies who engage them also benefit from the knowledge exchange among the experts in the supplier companies. Greg Fink, Vice President of Sales at Next Wave Logistics, a software development firm, explains: “There is respect among competitor suppliers. When companies look to outside suppliers that don’t know the direct selling space I cringe, because there is such a wealth of knowledge here that is being overlooked.”

In addition to addressing specific challenges within a company, engaging a strategic supplier as a trusted advisor can bring about answers to unknown questions. Kevin Griffin, CEO at software media company ROQlogic, says he has seen companies reach plateaus where they don’t know what they don’t know. “The company may not know what they are missing and that enhanced business services can be easily provided by the supplier.”

John Killacky, Managing Director of Sales at Bartha, an events and production company, agrees with Griffin. He says, “Companies sometimes overlook certain business practices that vendors just do as part of their routine and experience in their area of expertise.” In this way, Killacky believes the companies can greatly benefit from the knowledge of the supplier.

When suppliers are utilized more as “strategic partners” versus simply suppliers of a product or service, the company activates all of the resources that a supplier may have, including historical knowledge, experience and even data.

“We know what is working and what is not working in the industry. Without giving away private data, we can steer a team in the right direction while in the planning stages.” —Paul Piscitelli, President of Paul Anthony Awards, an awards and gifts company

Benefit No. 3: Having a Vested Advocate

The third benefit of developing strategic partnerships with suppliers is that the process creates an additional vested advocate in the success of the company, one who has resources and knowledge that can help the company reach its goals. The strategic supplier is motivated to bring solutions to the table. This can often include insights that spread to other parts of the business because suppliers that are embraced as strategic partners tend to offer far more than the product or service they are known for. This represents added value to the relationship between supplier and company and often results in time and dollars saved and gained.

“Many suppliers also become champions of the industry because they believe in the power of direct selling as much as companies.”
—Alan Pollard, Vice President of Sales at iCentris, a software design company specializing in tools for the distributor

But more than just providing a solution to a problem, developing a strategic partnership means the supplier is fighting for you and with you in the long-term, coming to understand your point of view, your culture, and your strengths and weaknesses, in order to better be a partner. A partner is someone who thinks about the business and engages in the goals more deeply than a non-partner. Adams says, “We’re not just trying to solve a current problem with our partner companies. We are always reaching ahead to figure out the challenges and provide the right solution for the future.”

A partner is someone who understands and aligns with the company’s core goals and strategies, and is actively working toward solutions with their own team of experts on your behalf. “Years of experience in the industry have brought us a wealth of knowledge,” Pollard says. “Many suppliers also become champions of the industry because they believe in the power of direct selling as much as companies. There are some great stories of ‘lifelong’ suppliers who have helped build the industry.”

The relationship is mutually beneficial. Stubbs says, “These partners truly want to have that kind of relationship with the client company, as that teamwork obviously benefits both in the long run. With clients who come to us outside of a search engagement to seek our advice and counsel, we have much deeper, longer term, and mutually beneficial relationships.”

Communication and Metrics

Excellent execution always needs two things to survive: communications and metrics. Communication must occur to keep all parties on task and the goal within sight, and unless a metric has been set no one will know whether the project succeeded. Developing a good course of communication between the company and the strategic supplier can be challenging, says Scott Smith, President of InfoTrax Systems, a software solutions company. When all people involved are busy with their various tasks, it takes effort to keep the communication flowing. But, he says, it’s necessary “to maintain top-level customer service.”

According to Chris Boyle, President and CEO of Access Technology Solutions, a sales and logistics company, the relationship works best when outcomes and roles are defined and communicated. He says, “Then you mutually define growth objectives, expectations, risk tolerances and measurable milestones and let each partner get things done the way they do it best.”

Setting good communication standards and clear metrics is a win-win for everyone, says Janne Heimonen, Founder at consultancy company Hyväheimo. She says, “When you make sure the deliverables are expressed in clear, sensory detail so that there is no doubt at the end of the day if the outcome was achieved or not, everybody wins. It becomes easier to check progress and to adjust the course if needed.”

Many suppliers who wish to function at the strategic partner level have a willingness to participate on committees, even advisory boards, as subject matter experts to ensure all quality measurements are designed, implemented and managed appropriately.

By taking the time to vet a supplier who is sought more as a strategic partner, companies strengthen their decision-making and their ability to execute the best solution possible. The cost of “ownership” of certain decisions versus the cost of “strategic partnership” to help with critical decisions is a new measurement that would benefit both the supplier and the company being served.

Boyle sums it up: “A strategic supplier partner helps chart your long-term future. Their focus is on transformation, not transactions. Together, you navigate unexpected currents and course-correct when industry dynamics shift. They open new doors. They help you see who you need to be, where you need to go and how to get there.”

Here at DSN, we want to thank the staff at the Direct Selling Association, and also Al Wakefield, Founder of executive search firm Wakefield Global and the current Chair of the Supplier Advisory Committee, for their suggestions and support in pursuing this topic.

The research and conversations that led to this article remind us of the value that Direct Selling Association Supplier Members represent. They are members because they have chosen to be and, in so doing, those we interviewed also have chosen to become a student advocate for the industry and a master of the product or service they represent. As in the selection of any important person or company that is considered for potential strategic partner status, diligent vetting of individual suppliers is required.

February 01, 2014

News in Brief

News in Brief, February 2014

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

Nu Skin Presents International Fireworks Display

Nu Skin Enterprises rang in the ‘Nu’ Year with a grand fireworks display that culminated in an illuminated Nu Skin logo on Taipei’s tallest building, the 101 Tower, during an international New Year’s Eve broadcast. The Taipei 101 Tower fireworks event—named one of the top-10 New Year’s Eve fireworks displays in 2012 by CNN—attracts more than 1 million people each year and is broadcast from Taiwan’s capital to more than 25 countries around the world.

The Taipei 101 Tower display and fireworks production featured a projection of the Nu Skin logo and the phrase “Happy Nu Year” displayed through Jan. 8, as well as a 218-second fireworks display and the launch of 24,000 pyrotechnics.

The display ushered in Nu Skin’s 30th year of operations in one of its fastest-growing regions. The company will officially launch its international 30th anniversary celebration in May 2014 with its top sales leaders at its annual Team Elite incentive trip, and the festivities will continue with a grand birthday celebration in June.

Nu Skin Enterprises Inc. demonstrates its tradition of innovation through its comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives. A global direct selling company, Nu Skin operates in 53 markets worldwide.

Herbalife Awarded for Healthy Nutrition in Russia

Global nutrition company Herbalife recently won the 2013 “Healthy Nutrition” award in Russia at a ceremony opened by the director of the Institute of Nutrition of the Russian Academy of Medical Sciences.

The “Healthy Nutrition” award is part of a wider campaign designed to raise public awareness about the importance of living a healthy and active lifestyle, including eating a healthy diet. The contest is organized by the Moscow government’s “Foundation for Social Projects and Programs.” Award winners include leading global companies that contribute significantly to the education and promotion of healthy nutrition principles.

In other company news, Herbalife has been formally recognized by the mayor of Seoul Metropolitan City for its efforts in developing and supporting child welfare initiatives across South Korea. Herbalife is the first direct selling company ever to win the award in South Korea.

Through its Herbalife Family Foundation, the company has established four Casa Herbalife programs in South Korea in collaboration with local charitable organizations to improve the nutrition and lives of vulnerable children. Through these programs, the Herbalife Family Foundation provides financial grants, fundraising, and volunteer support to assist in projects that promote good nutrition and health for children.

Headquartered in Los Angeles, Herbalife Ltd. sells weight-management, nutritional and personal-care products intended to support a healthy lifestyle. Herbalife products are sold in more than 85 countries to and through a network of 3.2 million independent distributors.

Primerica Wins 11th Consecutive DALBAR Award

Primerica recently received the 2013 DALBAR Service Award for exemplary customer service to its mutual funds clients. For over two decades DALBAR has conducted rigorous testing of service delivery. Following a full year of comprehensive evaluation, DALBAR identifies those mutual fund firms found to be above their peers in service to clients. This marks Primerica’s 11th consecutive year to receive the award.

DALBAR Inc. provides independent expertise to the financial community for evaluating, auditing and rating business practices, customer performance, product quality and service. Launched in 1976, DALBAR has earned recognition for consistent and unbiased evaluations of insurance companies, investment companies, registered investment advisers, broker/dealers, retirement plan providers and financial professionals.

Primerica Inc., headquartered in Duluth, Ga., is a leading distributor of financial products to middle-income households in North America. In addition, Primerica provides an entrepreneurial full- or part-time business opportunity for individuals seeking to earn income by distributing the company’s financial products.

USANA Extends Partnerships with Olympic Contenders

USANA Health Sciences has extended its individual partnerships with Sochi contenders U.S. freeskier Grete Eliassen and Nordic combined teammates Billy Demong, Bryan Fletcher and Taylor Fletcher through 2014. USANA now provides its NSF- and HFL-tested nutritional supplements to more than 600 world-class athletes.

Demong and the Fletcher brothers concluded last season with team bronze at the World Ski Championships in Val di Fiemme, Italy, while Eliassen secured a bronze medal at the World Championships in Voss, Norway. The accomplished skiers will continue to act as the nutritional company’s global brand ambassadors as they participate in the Winter Games.

In other company news, Utah Business magazine recently named USANA to its annual list of Utah’s “Best Companies to Work For.” The global nutrition company was recognized as one of the best employers in the state based on its unique and generous benefits, work-life balance and overall company culture. This marks the sixth time the company has made the list since 2002.

USANA has been recognized for its onsite workout facility, complimentary fitness classes, organic cafe, annual profit-sharing program and impressive health and life insurance packages, both locally and nationally. In August, USANA was recognized by Outside magazine, for a fifth consecutive year, as one of the “Best Places to Work For” in the nation.

Founded in 1992, USANA Health Sciences is a nutritional company that manufactures high-quality supplements and personal-care, energy, and weight-management products in Salt Lake City. USANA’s products are sold directly to preferred customers and associates in 18 international markets.

XANGO and AmeriCares Feed Afghan Children

Thousands of Afghan children have benefitted from a multi-year partnership between XANGO, a global wellness company, and AmeriCares, a global health and disaster-relief organization. Since 2007 the XANGO Meal Pack program has, in collaboration with AmeriCares and other partners, served more than 5 million meals in Afghanistan and more than a dozen other countries where extreme poverty, famine and political instability limit the opportunity for proper nourishment.

The calorie-dense XANGO Meal Packs contain many nutrients essential to a healthy diet for both children and adults. XANGO has partnered with AmeriCares to deliver Meal Packs to areas where they are most needed. The Meal Packs have aided in the fight against malnutrition for thousands of hospital patients and refugees in Afghanistan.

Global nutrition company XANGO LLC markets a premium mangosteen beverage to consumers worldwide. Based in Lehi, Utah, XANGO is privately owned and powered by a network of more than 2 million independent distributors in the U.S. and 40 international markets.

Amway India Develops Innovative Nutrition for Children

Amway India CEO William S. Pinckney recently told media the company will introduce a project to provide nutritional support to nearly 1.5 million malnourished children throughout the country. For the last five years the company has been developing a nutritional supplement specifically formulated to benefit children ages 4–12. The program represents one facet of Amway’s global corporate social responsibility (CSR) project focused on emerging economies.

Amway India plans to partner with sponsors, including its network of 1.4 million distributors in the country, to provide essential nutrition to children in need—a project that aligns with the company’s One by One Campaign for Children global initiative.

Amway’s latest CSR initiatives in India have also included establishing four computer centers for the visually challenged and working with nine orphanages in the eastern region of the country. Amway India and industry body FICCI also recently conducted a fashion show for the children of the National Association for the Blind.

Founded in 1959 by entrepreneurs Rich DeVos and Jay Van Andel, and based in Ada, Mich., Amway offers consumer products and business opportunities through a network of more than 3 million distributors in more than 100 countries and territories worldwide.

The Pampered Chef Aids Midwest Storm Victims

The Pampered Chef recently partnered with Feeding America and Peoria Area Food Bank to aid victims of massive storms that hit the Midwest in late 2013. The cookware company provided $127,000 worth of kitchen supplies to help residents replace what they lost to the natural disaster.

Pampered Chef volunteers in Washington, Ill., distributed bundles containing more than $125 worth of essential items, such as utensils, plates and can openers. The relief effort is a continuation of the company’s longstanding partnership with Feeding America, the nation’s largest domestic hunger-relief organization. Since 1991, The Pampered Chef has contributed more than $21 million to Feeding America.

The Pampered Chef is a direct seller committed to developing multipurpose kitchen tools, providing expert cooking tips and creating simple recipes that enhance shared mealtime and suit busy lifestyles. Founded in 1980, The Pampered Chef was acquired by Berkshire Hathaway in 2002. The company operates in five markets through its network of over 65,000 independent salespeople.

Organo Gold Launches in Singapore

Organo Gold, the global gourmet coffee company that caters to consumers’ active lifestyles, recently announced that it has expanded its Asian presence with the opening of operations in Singapore. Sunny Ooi, Regional Vice President Southeast Asia, will manage the company’s activities in the country.

Singapore marks Organo Gold’s sixth Asian market. Organo Gold Global Master Distributor and Co-Founder Shane Morand visited Singapore on Jan. 4–5. The weekend included leadership training for current OG Distributors and income opportunity training, which was open to guests.

Founded in 2008, Organo Gold seeks to bring the treasures of the earth to the people of the world through its Ganoderma-enhanced coffee and other products. Headquartered in British Columbia, Canada, the company operates in 30 markets worldwide through its salesforce of 150,000 independent distributors and sells to consumers through its Coffee Connoisseur Club.

February 01, 2014

Company Focus

ASEA: Building a Legacy

by Jennifer Workman Pitcock

Order custom reprints of this story here.

Photo above: ASEA headquarters in Salt Lake City.


Company Profile

  • Founded: 2009
  • Headquarters: Salt Lake City
  • Top Executives: Verdis Norton, Founder and Chairman of the Board; James Pack, Founder and Vice Chairman of the Board; and Tyler Norton, Founder.
  • Products: Redox Signaling Molecules suspended in a pristine saline solution

Verdis NortonVerdis Norton

When Verdis Norton retired at 57, he had held high-level executive positions at multiple iconic food companies, most recently as Vice President of Strategy at Kraft Foods. He had created enough wealth and success that he would never need to work again. But as much as Norton loved to golf, he wasn’t content to spend all his time relaxing. Soon after his retirement, he went to work for a biotech company. When he retired from that job four years later, he still wasn’t ready to become a full-time retiree.

So when his son Tyler introduced him to another biotech company, he agreed to sit on the board. He was particularly fascinated by a technology the company owned. Using salt water, the technology created redox signaling reactive molecules identical to those found in the human body. These molecules are necessary for life; they allow cells to communicate with each other. They help with immune system function and cellular repair-and-replace mechanisms.

What makes this technology so unique is that there is no other method to create these molecules outside the body. And as a person’s body ages, they create fewer and fewer of these molecules. Norton recognized that if the redox signaling molecules could be used by the human body, they had great potential health benefits. Though he was skeptical at first, Norton studied the company’s research on the technology and found that the science was good. He was intrigued.

Using salt water, ASEA’s technology creates redox signaling reactive molecules identical to those found in the human body. These molecules are necessary for life and become fewer as a person ages.

The ASEA Story

When Norton attended the first board meeting, he discovered that the biotech company was out of money. In fact, they were about $1 million in debt. He made an effort to raise money for the company, but it eventually folded. Still, he wasn’t ready to give up.

Tyler NortonTyler Norton
James PackJames Pack

Norton had made friends with a man who had moved to Park City, Utah, from New Hampshire, Jim Pack. Pack had retired at 43 from a very successful career in the communications industry. The two men enjoyed golfing together.

Pack says that he soon realized that Norton was something special. “I made the decision on the golf course as we golfed week after week that I was going to do something with this guy,” says Pack. One day they were golfing on the Park City municipal golf course. Norton started to tell him about a terrific product he’d been using. But the company was mismanaged. He told Pack he was going to put together an investment company to acquire this product.

“Jim pulled the golf cart over on the fairway,” Norton recalls, “and he reached in his back pocket and pulled out a folded check that was blank, and he said, ‘You got a pen?’ I handed him a pen, and he wrote a very big check and said, ‘Let’s go do this together.’ ”

Once they acquired the technology after further research to better understand why the product worked, the two men focused on stabilizing the redox signaling molecules. They knew that in order to sell the product they needed to extend its shelf life exponentially. They hired a team of scientists, including Dr. Gary Samuelson, and charged them with the task.

After months of work, the team succeeded. This was a huge breakthrough.

Finding the Right Channel

Kurt RichardsKurt Richards
Chuck FunkeChuck Funke

Once the product was stabilized, the possibility of selling it became a reality. Early on, the founders had the opportunity to sell the product to a global pharmaceutical company. But they ultimately decided not to. “ASEA is a foundational product,” says Executive Vice President Kurt Richards. “The fear was that if we sold the technology, rights, patents and all the research to a pharmaceutical company, it would either take years to bring to market, or they would never bring it to market at all.” The founders also worried that even if the pharmaceutical company did bring the redox signaling molecules to market, the product might be a specific treatment for one ailment. Then the general population would never reap the benefit.

“Because of the complexity of our product, there was the realization that
the product had to be sold with the story.”
—Chuck Funke, CEO

Ultimately, that’s what made the decision for Norton. He didn’t need to make more money or have more success. But he did want to make his mark. “I feel like this is my opportunity to make a difference that will last beyond my lifetime,” he told Richards.

Norton and Pack examined all possible distribution channels. “Because of the complexity of our product, there was the realization that the product had to be sold with the story,” says Chuck Funke, CEO. “And that’s how we got into network marketing.”

The Saltwater Challenge

Though the founders knew they had a great product, the science behind it was complex. How would ASEA convince customers that what they were selling wasn’t your garden-variety salt water—especially when those two items were the only ingredients on the label? Both because they wanted to bolster credibility and better understand how the product works, ASEA’s executive team has put a great deal of effort and capital into researching the product. A study conducted by the David H. Murdock Research Institute in 2012 confirms the presence of redox molecules in ASEA.

Today the company has nearly 30,000 active associates and is growing rapidly.

ASEA also increases the body’s production of natural antioxidants, glutathione and SOD by over 500 percent. This was discovered in an in vitro study performed by Pacific Northwest Institute in early 2009.

Perhaps one of the most promising studies was conducted by researchers at Appalachian State University and presented at the 2012 Experimental Biology Conference. The study results surprised even the researchers. After study subjects drank ASEA daily for a week, researchers discovered that ASEA had caused a significant metabolic shift in 43 metabolites, including fatty acids. This suggests that ASEA makes a person’s own fatty acids available to them, allowing users to burn more fat—especially the type that clusters in the belly and hips.

To date, ASEA has spent over $5 million on safety studies alone. All have shown the product to be completely safe for consumption.


ASEAThough explaining the product remains one of ASEA’s biggest challenges, it hasn’t held the company back. Six months after prelaunch, the company was already profitable. ASEA is completely debt-free. That’s due in part to the company’s strong customer base. “The product is so strong and the preferred customer program works so well that we have a very large base,” says Richards. “That means a stronger financial foundation.”

In fact, just three years after its official launch in 2009, ASEA expanded into Europe. It has been in Canada since 2010 and will open in Mexico later this year. Though this may seem quick, ASEA’s expansion has been done very cautiously. “Before we went into Europe, we spent eight to 12 months getting the product approved in Europe, getting all the proper registrations, setting up the proper companies, so that once we opened the market we wouldn’t have to worry about whether ASEA would have issues with regulators,” says Richards. “We waited until we had enough cash in the bank and enough dedication to make sure we did it properly.”

Today the company has nearly 30,000 active associates and is growing rapidly. A new initiative called the Triple A Plan is having a big impact. Following this plan, new Associates can build a lucrative business in 90 to 120 days.

Product in Demand

In order to support the company’s steady growth, ASEA opened a new $1.5 million production facility in August 2013. Its 33,000 square feet house offices, testing labs and a production floor. Storage and fulfillment take place in the warehouse portion of the building. The new facility will produce about 15,000 cases of product each week. That is only about 30 percent of the facility’s capacity, allowing plenty of room to grow as demand increases.

“Getting the facility online and doing that very quickly was an incredible moment for us,” says Vice President of Marketing Noah Westerlund. “We’ve been able to scale up our production and meet the market demand.”

“One thing we’ve always tried to stress is that your ego drive and your economic drive have to be underneath your principle drive.”
—Kurt Richards, Executive Vice President

Focus on Personal Development

Part of ASEA’s ethos is helping the company’s associates realize their potential. “Everything we do at ASEA is guided by a singular commitment to the personal development and education of our associates,” reads ASEA’s website. “One thing we’ve always tried to stress is that your ego drive and your economic drive have to be underneath your principle drive,” says Richards. With this in mind, Verdis and Tyler Norton share principles of their proprietary strategic and operational planning system, StrategicLink, in the training they give their associates. “At lower levels, we teach principles in general terms. As they increase in rank, we bring more of the steps in,” says Richards.

This training takes place in many ways, including the usual conference calls and webinars. But ASEA also does more intensive trainings for those who show promise at various ranks.

If associates hit certain ranks in a specified period of time, they’re invited to special events where this training takes place—boot camps, leadership summits and diamond retreats. They are shown what an average healthy business looks like at their rank. “It helps us to develop a road map for them. There are certain key metrics that we’ve identified, and then we train on those key metrics, leveraging our internal resources and our experienced field leaders. To give an example, one key metric is personal enrollment. Healthy associates at any rank have twice the personal enrollment of those who are not,” Westerlund says.

Finding a Voice Using Social

ASEAASEA is committed to strengthening its social media. Recently, ASEA has stepped up its use of social media to connect with associates. “For us it’s not just a messaging channel,” Westerlund says. “It’s a conversation channel. As important as it is for us to post information, we want to follow others and get their reaction to us. We want to engage in those conversations and really give them a sense of who we are and make them feel included.”

One step that ASEA took was hiring Tyler Gray to manage the company’s social media platforms and grow ASEA’s online presence. Though he has only been at ASEA a short time, he’s already seeing progress. Within two months of his arrival, the company’s Facebook likes were up 12 percent.

“For us [social media’s] not just a messaging channel. It’s a conversation channel. We want to engage in those conversations and really give [associates] a sense of who we are and make them feel included.”
—Noah Westerlund, Vice President of Marketing

“Our TAT, or ‘talking about this,’ score is a solid 2.5 percent. The TAT is a good metric to see how current and engaged you are with your audience. If you have a lot of likes and no one is talking about you, it doesn’t say much,” says Gray, Marketing Communications Specialist. “But if you are a small company that has a high percentage, it means that your posts and communications are having a good effect.”

Since coming on board, Gray has tried to make social media more active, answering questions and engaging with people on social media frequently. Right now he’s working on finding the right “voice” for the company. “A big goal of mine is to communicate our culture—who we are,” he says. “But since I’m new, we’re still trying to find that voice. And as a growing company, it’s going to evolve.”

Creating a Legacy

As ASEA grows, its executives are beginning to consider how they can tweak their message. “Right now our messaging is so much about explaining the science. As we look forward, we’re beginning to focus more on the opportunity,” says Richards.

“We seek longevity. A lot of the decisions we make today reflect the fact that we’re thinking decades down the line.”
—Kurt Richards

Funke agrees. “One of the primary initiatives we have for 2014 and beyond is to raise our opportunity message to match our product message,” he says.

One thing will not change: ASEA is committed to being a legacy company. “We seek longevity,” says Richards. “A lot of the decisions we make today reflect the fact that we’re thinking decades down the line.”

“That means we’re actually as concerned about controlling growth as creating it,” Funke says. “We’re all about consistency.”

Richards adds, “We want to provide distributors the opportunity to create a business that they can and will pass on to their family members. We plan on surviving well into the future to provide ASEA’s benefits to future generations.”

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February 01, 2014

Executive Announcements

February 2014

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

Avon Products Inc.

Sara MathewSara Mathew

Avon Products Inc. announced that its board of directors has elected Sara Mathew to the board. Mathew’s election increases Avon’s board to 11 Directors.

Mathew retired this year from her position as Chairman and CEO of The Dun & Bradstreet Corp., where she led a transformation of that company from a data provider to an innovative digital enterprise.

Mathew joined Dun & Bradstreet in 2001 as Senior Vice President and Chief Financial Officer. In 2007, after increasing roles of responsibility, she was named President and Chief Operating Officer, and in 2010 she was named Chairman and CEO. Prior to Dun & Bradstreet, she spent nearly 20 years with The Procter & Gamble Co.

Mathew is a member of the Zurich International Advisory Council and a director of Campbell Soup Company and Freddie Mac.

Avon, the company for women, is a leading global beauty company, with nearly $11 billion in annual revenue. As one of the world’s largest direct sellers, Avon is sold through more than 6 million active independent Avon Sales Representatives in over 100 countries.

Herbalife Ltd.

Maria OteroMaria Otero

Global nutrition company Herbalife announced the appointment of Maria Otero to the company’s board of directors. Otero has spent her career tackling poverty and empowering those less fortunate around the world, and she will bring this leadership, experience and insight to the Herbalife board.

Otero joins as an independent Director. She currently serves on the Council on Foreign Relations and serves on the boards of Kresge Foundation, Public Welfare Foundation and Development Alternatives Inc.

Born in La Paz, Bolivia, Otero came with her family to the U.S. when she was 12 years old. After studying economics in college with the intention of tackling global poverty, in 1986 Otero joined Accion International, one of the first micro-lending organizations in the world. She was later named President and CEO.

In 2000, President Bill Clinton appointed Otero to the board of the United States Institute of Peace. In June 2009, she was nominated to serve as Under Secretary for Democracy and Global Affairs, which made her the highest-ranking Hispanic official at the State Department, and the first Latina Under Secretary in its history.

On Jan. 17, 2012, Secretary Hillary Clinton named Otero as Under Secretary for Civilian Security, Democracy, and Human Rights.

Otero was recognized by Newsweek in October 2005 as one of the United States’ 20 most influential women, and by Hispanic Business magazine in its “Elite Women of 2007.”

Herbalife Ltd. is a global nutrition company that sells weight-management, nutritional and personal-care products intended to support a healthy lifestyle. Herbalife products are sold in more than 90 countries to and through a network of independent distributors.

Viridian Energy

Meredith BerkichMeredith Berkich

Viridian Energy has announced it has strengthened its management team through recent appointments.

Meredith Berkich was promoted to the role of President of Viridian Energy. Berkich was also appointed an Officer of the Trust. Berkich brings 20 years of experience in leadership and expertise in direct selling and will work to grow Viridian’s field sales systems. She will partner with field leaders and the executive team to strategize, build and enhance their growth through compensation, sales incentives, training programs and events.

Cami BoehmeCami Boehme

Cami Boehme was promoted to the newly created position of Chief Strategy Officer. In her new role, Boehme will oversee strategic product innovation and help plan the overall strategic direction of the company. Prior to her promotion, Boehme served as Senior Vice President Marketing and Brand Strategy for Crius Energy. Previous experience includes being Partner and Brand Director for a Utah-based creative services firm, as well as the Founder of Digital Slant, a Utah-based brand consultancy.

Chaitu ParikhChaitu Parikh

Chaitu Parikh was appointed to the position of Chief Operating Officer. Parikh has 16 years of experience in the retail energy industry, most recently serving as CEO/President of MXEnergy.

Also, Pradeep Tiwari was appointed to the position of Vice President of Information Technology. Tiwari has nine years of experience in the retail energy industry with energy retailers including MXEnergy and Constellation.

Located in Stamford, Conn., Viridian Energy is a socially responsible retail energy supplier offering customers the opportunity to make a difference by choosing affordable green energy for their home or business. Viridian is owned by Crius Energy Trust.

Regal Ware Inc.

Jose Luis OropezaJose Luis Oropeza

Regal Ware Inc. has announced the appointment of Jose Luis Oropeza as President of its Kitchen Fair® Division. In this role, he will lead Kitchen Fair’s internal and external management teams and be responsible for all components of the business. The Kitchen Fair Division of Regal Ware is located in Arlington, Texas.

Oropeza brings more than 25 years of direct selling experience in North and South America, with an emphasis in sales and marketing. He has held senior-level management positions and most recently headed his own consulting services company in Orlando, Fla.

Regal Ware is a U.S. direct seller and manufacturer of high-quality stainless steel cookware and cast aluminum cookware with a history that dates back to 1911. Kitchen Fair is a unique line of superior-quality cast aluminum cookware sold through a traditional home party plan.

Organo Gold

Daisuke (David) NakajimaDaisuke (David) Nakajima

Organo Gold, a global gourmet coffee company that caters to consumers’ active lifestyles, announced that Daisuke (David) Nakajima has joined Organo Gold as the Managing Director for Organo Gold Japan. Nakajima will oversee all facets of OG’s Japan business.

Nakajima brings over 25 years of experience in sales, marketing, finance and operations for such global brands as Nike, Adidas and Foot Locker. Most recently, he served as Vice President of Sales and Japan Director for another direct seller.

Founded in 2008 and celebrating its fifth anniversary, Organo Gold is a direct seller of Ganoderma-infused coffee and other products. Organo Gold offers its products through more than 150,000 Independent Distributors in 32 countries.

Zrii LLC

Matt WardMatt Ward

Zrii LLC announced that Matt Ward has been appointed Vice President of Global Sales. He will be responsible for driving a new marketing message and play a major role in building the field.

As a nine-year veteran of direct sales in both the field and corporate side, Ward was previously a top distributor at another direct seller. Before that he served as Marketing Director for the American Grand Prix.

Zrii, a maker of all-natural nutrition and wellness products, was founded in 2008. Zrii partners with the world-renowned Chopra Center for Wellbeing, headed by Dr. Deepak Chopra, to create premium health products that integrate ancient wisdom with modern science. Zrii products are sold through a network of Independent Executives throughout the United States, Canada and Latin America.

Vidacup International

Carrie RuelleCarrie Ruelle

Vidacup International, a marketer of a line of healthy coffee and functional beverages, announced the appointment of Carrie Ruelle as its new Vice President of Operations.

Ruelle began her direct sales career in 1995 and within two years rose to the top-ranking position in her first direct selling company. Over the next 10 years she obtained valuable experience as a successful field leader within the industry. Ruelle spent the following years as an instrumental partner in the creation of two successful healthy coffee direct sellers that have produced multimillions in sales and global expansion in over 50 countries.

Vidacup International is the exclusive distributor of an enzyme extraction of the Agaricus blazei mushroom super-strain.

Empower Network

Jonathan CronstedtJonathan Cronstedt

Software and web marketing company Empower Network named Jonathan Cronstedt as the company’s new CEO.

Cronstedt will manage the company’s growth and development as well as its brand and product development. He has experience leading direct marketing and Internet-based companies and previously served as the CEO of Digital Marketer. He is also the Chairman of Prodigy Consulting Group, a full-service finance and consulting organization.

Empower Network Co-Founder David Wood, who previously served as the company’s CEO, now becomes the company Chairman.

Empower Network offers six unique business and marketing software products and tools, including its signature product, a viral blogging system. Headquartered in St. Petersburg, Fla., and founded in 2011, Empower Network’s products are sold through 38,000 affiliates and 80,000 members.

Univera Inc.

Univera Inc. announced two new additions to its board of directors. Ken McDonald and Tom Zimmer join Univera’s board as independent members. McDonald retired from another direct selling company after decades in senior management positions, including Senior Vice President/Managing Director of the Americas. Zimmer also held senior positions within the industry, having served as President and Chief Operating Officer and Senior Vice President/Managing Director of North America.

Univera’s board of directors also includes Chairman and Owner Bill Lee, retired finance executive Barbara Anderson, ECONET President and CEO HY Sung, and Univera President and CEO Randy Bancino.

Univera Inc. is a direct seller in the natural products industry, delivering high-quality health products to hundreds of thousands of customers across North America. A part of the ECONET family of companies, Univera is fully integrated from farm to family.

February 01, 2014

Financial News

Financial News, February 2014

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

Herbalife Ltd.

Global nutrition company Herbalife (HLF—NYSE) announced that PricewaterhouseCoopers LLP, Herbalife’s independent registered public accounting firm (PwC), has completed its re-audit of the company’s consolidated financial statements for the fiscal years ended Dec. 31, 2010, 2011 and 2012, and the audit of the effectiveness of the company’s internal control over financial reporting as of Dec. 31, 2012.

The company filed an amended 10-K/A for the fiscal year ended Dec. 31, 2012, following the completed re-audit of the company’s 2010, 2011 and 2012 financial statements. Additionally, the company filed amended 10-Q/As for each of these quarters of 2013 following the completion of SAS 100 reviews of those periods by PwC. With these amended filings, the company is now up to date with its SEC periodic filings. There were no material changes to the company’s audited 2010, 2011 or 2012 financial statements included in the amended 10-K/A or to the company’s first, second or third quarter 2013 financial statements included in the amended 10-Q/A, compared with the company’s previously filed financial statements for and as of each of such periods.

As previously announced, the change in the company’s independent auditors to PwC, and the corresponding need to perform re-audits, was the result of the resignation of Herbalife’s former independent auditor, KPMG LLP, due to the impairment of KPMG’s independence resulting from its now former partner’s unlawful activities. As previously publicly stated by KPMG, their resignation was not related to Herbalife’s financial statements, its accounting practices, the integrity of Herbalife’s management, or any other reason.

Herbalife Ltd. is a global nutrition company that sells weight-management, nutritional and personal care products intended to support a healthy lifestyle. Herbalife products are sold in more than 90 countries to and through a network of independent distributors.

Primerica Inc.

AGF Investments Inc., PFSL Fund Management Ltd., and PFSL Investments Canada Ltd. announced the six-year extension of their Fund of Funds relationship agreement. The two organizations have been working together since 1986.

Under the extended agreement, in which both parties have been operating since 2006, PFSL, the trustee and investment fund manager of Primerica Concert Funds, will continue to invest directly in a tailored group of AGF Funds. The AGF-Primerica relationship was also strengthened by an additional agreement solidified in October 2012, which supports the Primerica Common Sense Funds. AGF will continue to support the needs of over 10,000 of Primerica’s representatives.

For more than 55 years AGF has remained one of the largest independent global investment management firms. With similar company roots, Primerica, the largest independent financial services marketing company in North America, shares in AGF’s mission of helping Canadian investors reach their financial goals. With the reaffirmation of this agreement, both AGF and Primerica will continue to deliver on their commitment to providing investment management excellence and superior client service.

Primerica Inc. (PRI—NYSE), headquartered in Duluth, Ga., is a leading distributor of financial products to middle income households in North America.

Quarterly Results

Crius Energy Trust

Crius Energy Trust (KWH-UN.TO—TORONTO) announced its financial results for the three-month period ended Sept. 30, 2013. All figures in U.S. dollars unless otherwise noted.

Revenue for the third quarter was $145.6 million. Revenue was driven by customer growth in the strategic marketing partnership and network marketing channels and seasonally higher electricity volumes. Gross margin was $30.0 million, representing 20.6 percent of revenue.

Adjusted EBITDA was $10.5 million, representing 7.2 percent of revenue and was impacted by $5.0 million due to weather variation from historical norms in July and August. Normalizing for weather impacts, Adjusted EBITDA for the quarter would have been $15.5 million.

Total cash and availability was $33.9 million, consisting of $16.8 million of cash, no long-term debt and availability under the credit facility with Macquarie Energy of $17.1 million as of Sept. 30, 2013.

Crius expanded its product suite to include residential solar energy products and services through a reseller agreement with SolarCity, a full-service solar provider in the U.S. Viridian Energy also started offering natural gas products in Maryland, Virginia and the District of Columbia.

The company’s Viridian Energy brand added both customers and independent contractors during the third quarter. Sales efforts for the network marketing channel ramped up in September at Viridian Energy’s annual convention, PowerUp!®, in Washington D.C. Management sees the higher-usage, higher- retention Viridian marketing channel as a key source of long-term revenue growth, and the addition of solar products and services will further promote long-term customer relationships within the channel.

LifeVantage Corp.

LifeVantage Corp. (LFVN—NASDAQ), a company dedicated to helping people achieve healthy living through a combination of a compelling business opportunity and scientifically validated products, reported financial results for the fiscal 2014 first quarter ended Sept. 30, 2013.

For the first fiscal quarter ended Sept. 30, 2013, the company reported net revenue of $51.3 million, compared to $52.9 million for the same period in fiscal 2013. Revenue for the quarter was negatively impacted 7.4 percent by foreign currency fluctuation.

Gross profit for the first fiscal quarter ended Sept. 30, 2013, was $43.5 million, compared to $45.1 million for the same period last year, delivering a gross margin of 84.8 percent, compared to 85.2 percent in the prior year period.

Operating income for the first fiscal quarter of 2014 was $5.1 million, compared to $6.9 million in the same period last year. Operating margin in the first fiscal quarter of 2014 was 9.9 percent, compared to 13.1 percent in the prior year period.

Net income for the first fiscal quarter of 2014 was $3.3 million, or 3 cents per diluted share. This compares to net income in the first fiscal quarter of 2013 of $4.2 million, or 3 cents per diluted share.

The company’s cash and cash equivalents at Sept. 30, 2013, were $28.0 million, compared to $26.3 million as of June 30, 2013. The company generated $4.9 million of cash flow from operations in the first fiscal quarter of 2014 compared to $0.9 million in the first fiscal quarter of 2013.

In the first fiscal quarter of 2014, the company completed its $5 million stock repurchase program that was implemented in the fourth quarter of fiscal 2013. In the first quarter of fiscal 2014 the company repurchased 1.1 million shares for $2.9 million.

LifeVantage Corp., a leader in Nrf2 science and the maker of  Protandim®, the Nrf2 Synergizer® patented dietary supplement, is a science-based network marketing company. LifeVantage was founded in 2003 and is headquartered in Salt Lake City.

Natural Health Trends Corp.

Natural Health Trends Corp. (NHTC—OTC.BB), a direct selling company that markets premium-quality personal care, wellness and “quality of life” products under the NHT Global brand, announced financial results for the quarter and nine months ended Sept. 30, 2013.

For the third quarter, total revenues were $14.2 million, up 52 percent compared to $9.3 million for the third quarter last year, and up 34 percent sequentially from the $10.6 million for the second quarter this year. This was the third consecutive sequential quarterly increase in revenues.

Operating income was $1.3 million, an increase of 68 percent compared to $789,000 last year, and an increase of 40 percent sequentially compared to the $948,000 in the second quarter this year. Net income was $1.3 million, or 12 cents per diluted share, compared to $747,000, or 7 cents per diluted share last year.

Cash and cash equivalents increased to $9.1 million as of Sept. 30, 2013, from $4.2 million at Dec. 31, 2012, and $6.7 million at June 30, 2013.

Total revenues for the nine months ended Sept. 30, 2013, increased 14 percent to $33.4 million from $29.4 million in the same period last year.

Operating income for the first nine months was $2.6 million compared to $2.2 million in the same period last year. Year-to-date net income increased 20 percent to $2.5 million, or 22 cents per diluted share, compared to $2.1 million, or 19 cents per diluted share, in the same period last year.

Natural Health Trends Corp. is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, North America and Europe. The company markets premium-quality personal care, wellness and “quality of life” products under the NHT Global brand.

ForeverGreen Worldwide Corp.

ForeverGreen Worldwide Corp. (FVRG—OTC.BB), a leading provider of nutritional foods and other healthy products, announced Q3 2013 earnings, for the quarter ended Sept. 30, 2013.

For the third quarter, sales increased to $4.8 million from $3.1 million for Q3 2012, a 56.6 percent increase. Gross profit reached $1.5 million, compared to $974,562 during Q3 2012, a 56.7 percent increase. Net income for the quarter was $326,929 or 2 cents EPS, versus a net loss of $107,585 or 1 cent EPS loss during the comparable period during 2012.

For the nine month ended Sept. 30, 2013, sales increased to $11.5 million from $9.8 million for 2012, an increase of 17.5 percent. Gross profit increased to $3.7 million from $3.0 million last year, a 22.5 percent increase. Net income for the nine-month period increased to $110,090 or 1 cent EPS, compared to a net loss of $273,248 or a 2 cents EPS loss for the first nine months of 2012.

ForeverGreen Worldwide Corp. develops, manufactures and distributes an expansive line of all-natural whole foods and products to North America, Australia, Europe, Asia, South America and Africa.

Share Repurchases

Medifast Inc.

Medifast Inc. (MED­—NYSE), a U.S. manufacturer and provider of clinically proven, portion-controlled weight-loss products and programs, announced that, as of Dec. 9, 2013, it had completed the repurchase of 786,000 of its common shares under its existing 1.13 million share repurchase authorization at an average price of $25.46.

The company purchased the shares in the open market using cash on hand. The balance of 339,000 shares under the authorization remains open until May 29, 2014.

Medifast sells its products and programs via four unique distribution channels: the Web and national call centers, the Take Shape For Life personal coaching division, Medifast Weight Control Centers, and a national network of physicians. Medifast was founded in 1980 and is located in Owings Mills, Md.

Quarterly Dividends

Educational Development Corp.

Educational Development Corp. (EDUC—NASDAQ) announced their quarterly cash dividend. The board of directors has authorized an 8 cents-per-share cash dividend. The dividend was payable on Dec. 20, 2013, to shareholders of record Dec. 13, 2013.

Educational Development Corp. sells children’s books, including Usborne Books and the Kane/Miller line of international children’s titles, through a multi-level sales organization of independent consultants, through 5,000 retail stores and over the Internet.

Direct Selling News has accumulated this information from public sources, including press releases and SEC filings. The information is presumed accurate and reliable. However, it is not an endorsement of any investment opportunity. Proper and considerable due diligence should be completed before making any investment.

February 01, 2014

New Perspectives

Ackman’s Folly: 7 False Assumptions on Herbalife

by Kevin Thompson

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

Editor’s Note: Direct Selling News contacted Kevin Thompson directly and requested a condensed version of a longer article he recently wrote. We reprint his point of view because we feel it is a perspective that should be shared with our DSN audience.

The full article is also available on Thompson’s website at www.thompsonburton.com.

It’s been almost a year since Bill Ackman announced his short position on Herbalife (HLF—NYSE). With much media fanfare, he gave a 300+ slide presentation explaining the validity of his thesis. On Bloomberg, he confidently declared, “This is the highest conviction I’ve ever had about any investment I’ve ever made.” To the casual onlooker, it appeared that all hope was lost for Herbalife. But those of us who benefited from a little more context knew better. We’ve seen this movie before with convicted criminal, Barry Minkow. Admittedly, Bill Ackman is different than his felon predecessor. While Minkow concealed the fact he was paid for his attack (fraud), Ackman made his position clear from the start. And really, that was the only difference. They both relied on the same worn-out anti-MLM arguments. They both stitched together various quotes and articles, most of them out of context, in an effort to stretch the truth and create an appearance of filth.

They both ultimately failed. As I’ve watched the debate unfold over the past year, I’ve been greatly puzzled by the amount of effort Ackman has expended to kick down this “unsustainable pyramid.” While I don’t think he’s a bad person, I think he’s obviously crossed a line and gone from an objective fund manager to a mean-spirited fund manager. It can happen to anybody. I tell all of my children, “Thompsons control their emotions.” I started reciting this maxim when I noticed my 4-year-old daughter making poor decisions during one of her fits. Under the influence of strong emotions, we all make mistakes. Ackman is clearly under intense emotions when he says things like,

While I don’t think Bill Ackman’s a bad person, I think he’s obviously crossed a line and gone from an objective fund manager to a mean- spirited fund manager.

“This is not a trade for me, we are going to take this… to the end of the earth.” He’s ignoring basic fundamentals and investing purely on ego. At some point, he got off track. I’m calling the game. It’s over for Ackman’s bet, no matter how hard he postures. Herbalife is not going to be shut down as a pyramid scheme. I can count seven assumptions made by Ackman that have all turned out to be faulty. It was his reliance on these assumptions that led to his reckless confidence.

False Assumptions

1. He Assumed Bigger Means Better

Central to Ackman’s thesis is a legal report prepared by someone at Sullivan & Cromwell. To this date, Ackman has not provided this report, though he still falls back on it when pressed about his thesis. Sullivan & Cromwell is an enormous law firm based out of New York. With over 800 lawyers and $1 billion in revenue, it’s safe to place them in the “big firm” category. But bigger is not always better. While Sullivan touts a number of reputable brands as clients, they’ve likely advised zero clients regarding their sales in a network marketing format. I represent network marketing companies, and I know the competitive landscape of lawyers in my space. Candidly, Sullivan & Cromwell is completely off the map. With MLM law, being a generalist is a plan for failure. If someone at Sullivan & Cromwell told Ackman that Herbalife was a pyramid scheme, he or she lacked meaningful experience to know better.

Bill Ackman assumed the market would follow his “well-researched” logic. He thought wrong.

2. He Assumed He Could Hypnotize the Market

Ackman assumed that with the awesomeness of his initial PowerPoint presentation, the market would panic resulting in a massive selloff. And truthfully, the market did panic for a couple of weeks before growing immune. Bob Chapman and I published the first article that challenged Ackman’s position. (Chapman is the Founder of Chapman Capital LLC, a Los Angeles-based investment company, and was an activist versus Herbalife following the death of Herbalife Founder Mark Hughes in 2000.) Two weeks after Ackman’s initial presentation, when the wound was still fresh and the stock was trading in the low $30s (it’s now at $75 per share), we pointed out that the emperor had no clothes. Ackman did not anticipate large fund managers betting against him. As other funds began doing some due diligence, they all started piling on the long side based on the realization that Ackman’s only shot was government intervention. As the market sobered up, Ackman’s presentation was placed under a microscope and found to be grossly inadequate for purposes of finding illegality.

Bottom line: He assumed the market would follow his “well-researched” logic. He thought wrong. The most notable of long investors are Carl Icahn, George Soros and Bill Stiritz. Notable investors in Ackman’s camp: zero.

3. He Assumed the Salesforce Would Collapse

When I first saw Ackman’s presentation last year, I thought to myself, “There’s no way Herbalife distributors can build with this kind of negative publicity.” They surprised me, and they surprised Bill Ackman. Ackman’s presentation was almost a self-fulfilling prophecy. If the salesforce were rendered inert, the stock would tank, thus proving his theory that Herbalife is a volatile pyramid destined to collapse. While the collapse would have been directly tied to Ackman, he would have attributed it to the volatile nature of pyramid schemes. As stated earlier, the stock bounced back. As for the salesforce, they trudged forward, producing significant results under tremendous pressure quarter after quarter. It’s hard enough to build a network without impediments. If there’s negative press, it only compounds the difficulty. Somehow, the Herbalife distributor found a way.

4. He Assumed He Could Confuse the Public about Market Saturation

This is somewhat related to Assumption No. 2 where Bill Ackman expected to mesmerize the market with his logic. Ackman assumed that his argument regarding market saturation would actually fly. In theory, it seems to make sense. At some point, assuming everyone is successful at recruiting Herbalife distributors, the market would be exhausted. In Ger-Ro-Mar, the FTC tried to make this “geometric progression” argument and failed. In that case, the company was in the business of selling women’s lingerie. The court cleverly wrote, “We find no flaw in the mathematics or the extrapolation [presented by the FTC] and agree that the prospect of a quarter of a billion brassiere and girdle hawkers is not only impossible but frightening to contemplate, particularly since it is in excess of the present population of the Nation, only about half of whom hopefully are prospective lingerie consumers. However, we live in a real world and not fantasyland.”

In an article online, MLM consultant Len Clements said it best when he wrote, “I wonder, how many more years does a 32-year-old company like Herbalife have to exist, and continue to grow, before this notion of the MLM company succumbing to ‘inevitable market saturation’ becomes folly.” In his first presentation, Ackman asserted that Herbalife was running out of markets; thus, doomed to experience “market saturation.” Keep in mind, Amway is 22 years older than Herbalife, operates in 20+ more countries and has over three times the sales revenue of Herbalife—and they have yet to “saturate the market.” But I digress.

5. He Assumed He Could Confuse the Issue of Internal Consumption

Bill Ackman assumed he could stitch together an argument that criminalized heavy internal consumption. As a recap, “internal consumption” is a term used to describe the act of paying commissions on downline consumption/sales. If distributors buy the product for personal use (distributor = “internal”), commissions are triggered. The criticism of internal consumption: It can lead people to buy things they never would buy while they’re under the influence of a pay plan, i.e. “opportunity driven demand.” This issue is the main source of criticism of network marketing, and Ackman seized on it. First, the conclusion: It’s legal to pay commissions on internal consumption. The debate has always revolved around the appropriate amount. 

Given the low cost of entry into network marketing companies (oftentimes less than $100), this sort of black-and-white standard is intellectually disingenuous. Since it’s so easy for distributors to join a program to “give it a shot” or save money on product, it blurs the line between retail sales and distributor volume. In an oft-quoted FTC advisory memo in 2004, the FTC said, “In fact, the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme.” The key is motivation: What’s driving the consumption? If it’s opportunity driven demand, the motivation is misplaced. In its rebuttal presentation on Investor Day (Jan. 10, 2013), Herbalife released some data that put this issue to rest. Based on its objective data, 31 percent of all orders are drop-shipped to non-participants (found on page 50 of the presentation). This at least indicates that the products have legitimate value and are not merely token items. As for the issue of distributor motivation, 73 percent of all distributor orders are made by participants that are not qualified to receive commissions (page 59). As if that’s not enough, Herbalife commissioned Nielsen to conduct a study on the penetration of Herbalife distributors and end users in the United States. The results: Herbalife has over 7 million customers in the U.S. alone, which dwarfs its distributor numbers by 6.5 million. The verdict: The products have value.

Bottom line: Ackman is clamoring for the wrong piece of data. He’s asking that Herbalife reveal their retail sales data. The key factor is “motivation,” and motivation is not easily quantified. And given the low cost of entry for all network marketing companies ($60 for Herbalife), this piece of data is not the determining factor with respect to pyramid allegations. Does Herbalife have this data? Yes. Are they obligated to provide it? No. They’ve already shown some compelling statistics, and they’re tightening the screws with respect to distributor compliance. Going forward, I suspect Herbalife will do a better job of distinguishing its customers from business-builders.

Ackman’s failure has led to a more unified direct sales industry and bolstered support for outreach efforts. And quite candidly, it’s made the space better.

6. He Assumed He Could Launch a Surgical Strike on Herbalife

Ackman likely assumed that he could keep the pressure solely on Herbalife without agitating the rest of the direct sales industry. Keep in mind, the direct sales channel represents approximately $167 billion in global revenue, according to the World Federation of Direct Selling Associations. When he relied on common arguments used against all network marketing companies, he brought the entire industry into the melee. Initially, he was careful. On Bloomberg after his initial presentation, he said, “I’m not saying that companies like Amway are pyramid schemes.” Now, his arguments are growing broader with each presentation. With this in mind, every company in the industry benefits from his failure. It’s led to a more unified direct sales industry and bolstered support for outreach efforts. And quite candidly, it’s made the space better.

7. He Assumed He Could Refute the Value of the Buyback Policy

The value of Herbalife’s 12-month buyback policy cannot be understated. When I see former distributors crying foul about the money they’ve lost, I care, but I wonder if they knew about the return policy. Herbalife offers a 12-month refund on all unused/unsellable inventory (without a restocking fee). When people are upset about money lost, it’s clear that the issue is regret. They regret using the product. But they still used it and derived value from it. The 12-month buyback policy, which is adopted by Herbalife and strongly encouraged across the entire industry, is the ultimate consumer safeguard. It’s designed to help distributors get their money back on unsellable and unwanted inventory when they decide to exit.

When you factor this element with the 31 percent drop-shipping statistic + the 73 percent statistic of orders from non-qualified distributors + the 12-month buyback policy + the 0.2 percent return rate + the minimal amount of consumer complaints, it paints a clear picture: The products have legitimate value, and the consumer safeguards are sufficient.


Ackman’s gamble is over. This is not false bravado. I’m calling it now like I called it with Bob Chapman weeks after Ackman’s first presentation. Ackman can waste his investors’ money as long as they’ll allow. It does not change the fact that Ackman’s argument was premised on several assumptions, all of them faulty. It took little skill to craft an argument and seem convincing to those unfamiliar with the issues. The MLM space is murky, to say the least. But Herbalife has never taken ranks with the companies on the bottom rung. Ackman knew this, relied on an undisclosed legal report from a firm with zero experience in the category, relied on several other assumptions, took a gamble, and failed. Recent statements from Ackman seem to be coming from a man with a bruised ego, leading with his emotions and not his head. Herbalife is not a pyramid scheme, and with each passing day they evolve into a better company.

Kevin Thompson+Kevin Thompson is an MLM attorney with extensive experience in helping entrepreneurs to launch their businesses on secure legal footing. He is a founding member of Thompson Burton PLLC and a Supplier Member of the Direct Selling Association.

February 01, 2014

DSA News

Direct Selling Cannot Be Defined by Words or Numbers Alone

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

In some respects, there has been an unprecedented amount of attention focused on direct selling by media and the financial community lately. This has also been a unique time for in-depth research undertaken by the Direct Selling Association in an effort to quantify many aspects of the business model. Beginning with the Consumer Attitudes Survey in late 2012 and continuing in 2013 with the annual Growth & Outlook Survey, National Salesforce Survey and Sales Strategy Survey, DSA took a 360-degree look at the sales channel.

The result will be an enhanced ability to address misstatements and misinformation in the marketplace that can so easily cloud the perception of a sales channel that relies primarily on word-of-mouth instead of catchy advertising jingles and expensive retail shelf space.

But at the heart of all of the averages, percentage breakdowns and statistical analysis remain the stories of 16 million Americans—and millions more around the world—who look to direct selling to fulfill a particular need, whether financial or otherwise. While we stock our arsenal with facts and figures, we must not lose sight of the personal, human stories that form the basis of direct selling.

The following are but two examples of real stories that bring DSA’s research to life:

What the numbers say:
Fifty-seven percent of direct sellers report having signed up with their company to get the products at a discount, while 62 percent report continuing as a direct seller for this reason. Forty-eight percent of direct sellers report becoming a direct seller because they were seeking long-term supplemental income, but 62 percent report continuing as a direct seller for that same reason. Further, 23 percent of sellers said they started in direct selling hoping to make it a career, but 41 percent of sellers report continuing with direct selling as a career.

What sellers say:
Anita R., Battle Creek, Mich.: “I joined to get the discount, and what I found was a full-time job!”

What the numbers say:
Seventy-eight percent of direct sellers say direct selling has met or exceeded their expectations, and nearly the same percentage of direct sellers say they are likely to recommend that a friend or family member become a direct seller.

What sellers say:
Suzy F., Hudson, Wis.: “My experience with direct selling/network marketing has been nothing less than positive. I must admit that I was skeptical at first. However, I decided to educate myself about the industry and have determined it is a worthy profession that offers many personal and professional rewards.”

These findings and the complementary “real person” stories are of little surprise to those who have seen and experienced firsthand how direct selling changes lives. Numbers alone may be able to accurately describe some industries, but for a sales channel that is defined by so much more than profits, to omit the personal anecdote is to remove the essence of the direct selling experience.

Perhaps this is one of the reasons direct selling is so often undervalued and criticized by Wall Street, while 16 million people and their customers embrace it on Main Street. To this end, DSA is committed to a proactive campaign of pairing recent research findings with the real-life stories of those whose lives have been changed by direct selling, including highly influential legislators, regulators and business community leaders who support the channel.

Direct selling cannot be described with words or numbers alone. Each provides context for the other. We are all well-served to share these stories, to represent the men and women who rely on their independent direct selling businesses for income and personal achievement. It is our job to understand their needs and to recognize that, for so many, the intangible benefits of a career in direct sales mean so much more than the tangible rewards. And so often those intangible benefits go unreported and unappreciated. We hear so much about earnings statements, stock ratings, and recruitment and retention figures that we lose sight of what makes this industry so special. In 2014, join DSA in its efforts and rededicate yourself and your company to telling the story of direct selling.

Joseph N. MarianoJoseph N. Mariano is President of the U.S. Direct Selling Association.

February 01, 2014

Industry with Heart

Nerium: Making People Better—Together

by Karyn Reagan and DSN Staff

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

Photo above: Nerium Brand Partners celebrate during a recent incentive trip to Cabo San Lucas, Mexico, in 2013.


Company Profile

  • Founded: 2011
  • Headquarters: Addison, Texas
  • Top Executives: Jeff Olson, Founder and CEO; Renee Olson, Co-Founder and Corporate Liaison; Dennis Windsor, Co-Founder and President; and Amber Olson Rourke, Co-Founder and Vice President of Marketing and Culture.
  • Products: Anti-aging skincare

Nerium’s rapid growth and success is also activating a commitment and responsibility to serve. The company is still young—two full years in business—and already becoming a significant force in mentoring and changing lives.

What nobler mission could there be than to better the life of another? When the founders of Nerium International were pouring the philosophical foundation of their new company they were influenced by their own life experiences. They had learned that lifting others up often results in one’s own life becoming richer, and they desired to transfer that concept to all aspects of their new company.

It is this philosophy and unwavering belief in the importance of people to the success of the entity that brought the founders together to form, not only a solid company, but also a community of entrepreneurs who would embrace such a culture.

Jeff OlsonJeff Olson

Jeff Olson, Founder and CEO, had written a very popular book—The Slight Edge: Turning Simple Disciplines Into Massive Success—that laid the groundwork for the principles and values upon which to build the company. Renee Olson, Co-Founder and Corporate Liaison, would take on the responsibility of ensuring that this philosophy would be communicated to the field where relationships could grow and the concept could be cultivated. Dennis Windsor, Co-Founder and President, would integrate these values into the sales plan designed to attract people from every walk of life possible. To complete the team, Amber Olson Rourke, Co-Founder and Vice President of Marketing and Culture, would take on the responsibilities associated with the marketing of the products, and most important, the Nerium Culture. The mission of the company became quite simple: Make People Better.

Renee OlsonRenee Olson

Nerium markets two products focused on anti-aging. The marketing philosophy is built upon simplicity and results. Rourke explained the two-prong strategy: “Simplicity is addressed by offering one product for night use and one product for day use instead of a regimen of products. We share results actually through the excitement of Nerium customers. We knew this product worked and decided that the best way to share its impact is by showing before and after photos.”

Instead of providing pictures from the corporate office produced by a professional photographer, Nerium’s leadership asked users to provide their own photos, taken on their phones. This bold marketing tactic, in conjunction with the company philosophy of Nerium Gives Back, has played a major role in the company’s extraordinary success.

Dennis WindsorDennis Windsor

Windsor does not speak in traditional sales language when he discusses how Nerium Brand Partners actually build their businesses. He emphasizes the importance of understanding the value of serving, giving of one’s self, and making a positive impact on someone else’s life, family, neighbors and community. The company becomes a role model for giving and serving by making it possible for all Brand Partners to qualify for free product through performance. This ignites company giving, which in turn allows Brand Partners to “give through sampling” via their interactions with potential customers and prospective Brand Partners. Active customers who are purchasing regularly also have the opportunity to earn free product when they refer other customers who become active users. Rarely do Brand Partners have to invest in product to build their businesses. Their performance can qualify them for free product, which is the foundation of the sampling strategy.

Amber Olson RourkeAmber Olson Rourke

The company consistently looks for more and more ways to give and demonstrate their commitment to their people. Olson personally created a unique way to communicate this commitment by starting what he believes will evolve into a worldwide movement. The purpose of a newly introduced “Live Happy” project is to share with others the importance of personal responsibility, especially in the area of purposefully living a happy life. Live Happy magazine is completely separate from Nerium marketing material. The magazine is approximately 80 pages and does not contain Nerium branding or advertisement. It is entirely devoted to editorial that supports turning positive psychology into applicable life steps and why happiness should be thought of as a choice rather than a result. Scientific research has proven that happiness is a precursor to success, great relationships, health and more. The magazine is on newsstands and is unique in that it contains nothing of a negative nature. Most unique is that it is given free to all active Brand Partners and all active Nerium customers of Brand Partners.

Olson speaks with enormous pride and unflappable enthusiasm when he speaks about Live Happy. He sponsored The Positive Education Summit recently held at 10 Downing Street in London, which attracted some of the most notable thought leaders, educators and scientists on the subject of happiness. International Day of Happiness, sponsored by the United Nations, is March 20, and Live Happy staff is a participant in the planning.

As part of its Nerium Ripple movement, the company recently donated $300,000 to Big Brothers Big Sisters with the help of employees, Brand Partners and customers.As part of its Nerium Ripple movement, the company recently donated $300,000 to Big Brothers Big Sisters with the help of employees, Brand Partners and customers. During the BBBS signature fundraising event, Bowl for Kids’ Sake, people rallied at local bowling centers across the nation raising awareness of the challenges some children face.During the BBBS signature fundraising event, Bowl for Kids’ Sake, people rallied at local bowling centers across the nation raising awareness of the challenges some children face. A Nerium workshop for young people based on the book SUCCESS for Teens.A Nerium workshop for young people based on the book SUCCESS for Teens.

Growing with a Heart

In 2012, Nerium closed its first full year with $100 million in revenues, achieving the Direct Selling News Bravo Award for Growth that year, and it is on track to have another record-breaking year when 2013 numbers are released. “We always knew we would be a great skincare company and a great financial opportunity, but our real goal has always been around making people better,” Olson says.

“We always knew we would be a great skincare company and a great financial opportunity, but our real goal has always been around making people better.” —Jeff Olson, Founder and CEO

He reveals that a vast majority of Nerium Brand Partners have never been involved in direct selling. For Nerium’s leadership team this fact presents an opportunity to provide training to individuals hungry to learn the best way to build a Nerium business. “Our training is comprehensive, with resources for every level of knowledge,” Olson says.

As part of the training program there is a Fast Start Kit, online training for both new and experienced Brand Partners, monthly regional training meetings, corporate seasonal events, weekly corporate and field leadership conference calls, and an entire Nerium University in the form of topic-specific webinars. Most unique is the fact that 50 percent of all content is focused on personal development of the individual—and now on Live Happy. In support of this, Renee Olson ensures that the field sales organization experiences a feeling of having joined a family—one that believes in each other and believes a spirit of sharing is critical and essential to mutual success. She is admired by the sales organization and, along with the Brand Partner Relationship Team, devotes a lot of her time to interaction with Nerium Brand Partners and customers.

NeriumNerium also retained an esteemed leadership coach for its leaders. The coaching is not just about business building but most importantly about how to achieve life goals and work-life balance.

Jeff Olson says, “The focus on the importance personal happiness has on one’s life is simply smart business, and there is a predicted impact on both recruitment and retention. The concept of personal development is usually understood, but it often takes time to experience the personal benefit. However, when one understands that they can take control of their personal level of happiness, benefits can be derived in less than 30 days.”

Matching Missions

In the midst of record-breaking growth, the leadership of Nerium implemented its plan to give back to the community—a concept dear to the hearts of those at the helm. Olson says: “We know we have a responsibility as a successful company to give back, so we searched for an organization with the same core values and mission as ours. A few key considerations rose to the top of our list, such as a focus on mentorship, dreaming big, the power of relationships and the importance of focusing on one person at a time. All of these concepts are at the core of the relationship-building philosophy we encourage while training Brand Partners. These principles and values that we teach and stress are very important to us.”

The organization that rose to the top was Big Brothers Big Sisters (BBBS). For more than a century BBBS has been partnering children and teens (Littles), ages 6 through 18, with adult volunteers (Bigs) for the purpose of offering positive relationships that have a direct effect on these young lives. According to BBBS’s website, the Big Brothers Association was formed in 1904, and many years later it partnered with Big Sisters International, an organization of Catholic Sisters following the same plan as Big Brothers. Eventually, the partnership formed what is now BBBS. “Their philosophy of helping make people’s lives better perfectly matches what we strive to achieve at Nerium,” Olson says. “Their mission statement is essentially the same as ours.” At BBBS the mission is to provide children facing adversity with strong and enduring professionally supported one-to-one relationships that change their lives for the better, forever.

Nerium’s commitment to the national Big Brothers Big Sisters movement earned them the prestigious Big Brothers Big Sisters Community Impact Award in June 2013 for the great energy and generosity the company demonstrated. The award is given annually to a company whose generosity greatly impacts the community of the mentoring organization. Every day Nerium Brand Partners reach out through Big Brothers Big Sisters to offer their support in hometowns across the United States. Olson explains that most of the children in the BBBS program come from single-parent or low-income households or from families where a parent is incarcerated or serving in the military. Once they are paired with an adult mentor, or Big, that relationship is for their entire childhood. The results have been proven to be extremely positive. A national research study of BBBS conducted by Public/Private Ventures, an independent Philadelphia-based national research organization, found that after spending 18 months with Bigs, children were:

  • 46% less likely to begin using illegal drugs
  • 27% less likely to begin using alcohol
  • 52% less likely to skip school
  • 37% less likely to skip a class
  • 33% less likely to hit someone

“[Big Brothers Big Sisters’] philosophy of helping make people’s lives better perfectly matches what we strive to achieve at Nerium. Their mission statement is essentially the same as ours.”
—Jeff Olson

The Nerium Effect

Hundreds of Brand Partners have become Bigs, according to Nerium. Big candidates are vetted by BBBS and then selected based on completion of the application process. “Brand Partners are excited to be involved with an organization that makes such a positive impact on individuals and communities. It’s what we call the Nerium Ripple in action,” Rourke says. The Nerium Ripple was introduced at the 2013 annual conference as Brand Partners were encouraged to individually take responsibility and collectively change the world. At its core, the movement strives to create positive ripples in everyday life. She continues, “Partnering with BBBS is a very real way that we encourage Brand Partners and Nerium employees to create ripples in their communities. If one positive act can create a ripple effect that can change a life, imagine the impact that hundreds and thousands of positive actions can make on future generations.”

“If one positive act can create a ripple effect that can change a life, imagine the impact that hundreds and thousands of positive actions can make on future generations.”
—Amber Olson Rourke, Co-Founder and VP of Marketing and Culture

In addition to becoming Bigs to the BBBS Littles, Nerium employees and Brand Partners raise funds throughout the year to donate to the organization. Fundraisers are held at local, regional and national events. “Our partners have raised over $400,000 in just one year,” Rourke says. “Over $100,000 of that amount was raised at the BBBS signature fundraising event, Bowl for Kids’ Sake.” Half a million people rally at local bowling centers across the nation raising awareness of the challenges some children face.

“From the very first day that we announced Nerium’s support of BBBS, the Brand Partners have embraced the cause,” Rourke says. “They easily recognize the value of changing lives for the better.” In addition to becoming Bigs and participating in corporately sponsored fundraisers, the Brand Partners have creatively raised funds on their own and truly taken ownership of the cause. “Giving to this cause is part of our corporate culture. That’s very exciting because every $1,000 raised basically supports another Big and Little match,” she says.

Each Nerium starter kit contains information about BBBS and prepares new Brand Partners for fundraisers included at regional and corporate training events under the direction of BBBS Vice President of Corporate Sponsorship Lowell Perry. “It is very exciting when two organizations committed to personal enrichment lock arms around a common cause,” Perry says. BBBS provides a vehicle for Nerium Brand Partners to make a huge “ripple” that will support the mentorship children need regardless of current socioeconomic status or family situation. BBBS’s CEO Charles Pierson also took the opportunity to comment on Nerium’s impact. He says, “Nerium’s support and creativity are transforming how we carry out the service to our youth in communities around this country.”

Nerium’s workshops, based on the book SUCCESS for Teens, teach children how to get where they want to go in life, how to bolster their own self-esteem and how to develop the kind of leadership skills that will help them recognize opportunities and meet their goals.

Success Workshops

Kids learn about self-esteem, life goals and leadership during a Nerium workshop.Kids learn about self-esteem, life goals and leadership during a Nerium workshop.

Nerium International also brings personal development to young people. Based on the book SUCCESS for Teens, workshops are conducted in conjunction with all major events. Brand Partners bring their children along with their friends. “It’s a very special workshop because it shows kids that every day you can get 1 percent better,” says Victor Palomares, a high school literature teacher who leads the workshops. The workshops teach children how to get where they want to go in life, how to bolster their own self-esteem and how to develop the kind of leadership skills that will help them recognize opportunities and meet their goals.

Return on Giving

Nerium International falls into the new company category when looking at years in business. However, the company’s impact on lives appears to measure beyond its chronological age. The company commitment to give goes beyond dollars and cents and represents another example of why the culture of a direct selling company can have such a positive impact on lives.

So where does a company that has made such an impact go from here? Nerium’s plans for the future include creating a global presence, continuing to be a major corporate sponsor and provider of Bigs in support of BBBS, and growing their business by adhering to the three words of the mission statement: Make People Better.

February 01, 2014

Top Desk

We Don’t Need to Change Or Do We?

by John Parker

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

We’ve all heard that it’s lonely at the top, or that leadership is the other side of the coin of loneliness. Many have embraced this notion, but I would invite them to closely study—and experience—how direct selling really works. It just might change their minds.

Entrepreneurship in our industry is far from a lonely proposition. In fact, it’s just the opposite. As insiders, we know that. But when a well-respected business professor and author on global entrepreneurship recently asked me about it, I realized we still have a lot of work to do to prove it. She said, “I spend every day with students, both in the U.S. and abroad. If there is one thing they seem to have in common, it is a desire for work that is meaningful above and beyond what it pays them. They want their careers to leave a positive impact on society. How is your industry changing to prepare for them?”

My first thought was: Changing? But we don’t need to.

Direct selling companies are unique in how we create an environment where communities naturally form. If we were a sport, we would be a team, not an individual sport.

But here’s what I think is tough for us to grasp as industry executives: Lasting communities form around causes or values—not products or brands. In fact, some of the most successful organizations at Amway have discovered that what identifies them as a team is not the dietary supplements or anti-aging creams they offer. It’s about a shared value system and the “something bigger—achieved together” the professor was asking about.

In 2013, two legendary Amway leaders passed away. As we mourned, we also reflected on this very concept. We focused on the legacies they left in the world, not as entrepreneurs, but as people. Their legacies were about helping others, whether it was building orphanages together, ensuring no one who needed a wheelchair in one country went without, eradicating hunger in a rural school system, or raising millions of dollars for Easter Seals families.

They are two reflections of the many real and powerful stories that prove what direct selling—communities with a common purpose—can do. These stories have little to do with product or compensation plans.

Lasting communities form around causes or values—not products or brands.

The opportunity we have as leaders in this industry is to respond to and state our support for the desire that people—especially young people—have to leave a mark on the world. It’s an opportunity to meet their needs as a community without attempting to define and manage them at every turn.

We have the ability to do that. We can talk to prospects about their aspirations to leave a legacy, and about the platform direct selling gives them to do it. We can teach them to find others with similar passions. We can give people an opportunity to dip their toes in the water of entrepreneurship and economic freedom—all while building lasting relationships, developing others, and providing hope and change on a very large scale.

What better foundation than direct selling is there to make a lasting difference like this in the world?

The opportunity we have as leaders in this industry is to respond to and state our support for the desire that people—especially young people—have to leave a mark on the world.

The more I think about it, the more I realize this might make us uncomfortable because, as corporate employees, we exist outside of these naturally formed communities. We help them via our unique products, compensation plans, and support, but they live and breathe for each other, not for us. We’re not shy when it comes to talking to the media, or other influencers, about the unique “product + people + plan” equation that makes direct selling tick, but have we done our job describing our communities—and their passions—as fully as possible?

I believe the answer is “no.” Otherwise, questions like the one I was asked by that professor, and those by other outsiders, wouldn’t come our way.

We can start by reminding ourselves that “people” and “social networks” are not the same thing as “community.” Much like teams in sports, communities have a goal in mind and will not rest until it’s met. People are still individuals. Social networks allow people to communicate, but they don’t always inspire people to act on a common purpose or passion.

Communities share a common belief. Our industry community exists with the shared belief that individuals can control their futures and that raising up entrepreneurs is an important contribution to society. So we are a community, and we provide community. Great, but how do we help our next generation of independent representatives understand and embrace this?

Maybe it starts with less focus on independence. Perhaps our message should be: If you’re looking for a community in which you can make a difference, direct selling is already here! We allow and support you to make your mark on the world.

We need to use our time, treasure and talent to talk about the common-purpose communities that live within our businesses. Yes, it’s a little scary because those are the very communities we don’t always directly control. But it proves to others that direct selling is one very exciting, very doable, very legitimate route to working with others to achieve that “something bigger.”

In 2014, I challenge all of us to find the communities of direct sellers within our businesses making an impact that resonates with the next generation of entrepreneurs—to show prospects that we’re businesses that don’t exist for selfish reasons, but who work to solve the problems of one person, or one community, or one country.

Speak out about how direct selling communities are a unique way to pay it forward, and how direct selling embodies optimism, which is the first thing a person needs to change the world.

Modify the conversation about direct selling. Focus on how we have and how we will serve and better entire communities.

Show people that direct selling will help them make a difference in ways they can’t even imagine because of the sheer number of people they would be able to meet and energize around any cause they choose.

In other words, modify the conversation about direct selling. Focus on how we have and how we will serve and better entire communities. Use a new communications formula that every time includes product + people + plan, just as before, but adds “passionate purpose.”

Let’s prove that no one understands people’s desires to start socially conscious businesses better than we do, and let’s remind everyone that with a career in direct selling it’s never lonely at the top—or in any position along the way.

Before we know it, smart people won’t be asking us if we’re doing anything to prepare for a new wave of worker. They’ll be asking how they can follow in direct selling’s footsteps.

John Parker is Chief Sales Officer at Amway.John Parker is Chief Sales Officer at Amway.

February 01, 2014

Working Smart

The Promise of Digital Payment Systems for the Globally Unbanked

by Natalia Yenatska

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

The direct selling industry has always provided a means for ambitious individuals to gain career independence and achieve higher financial goals. Direct selling organizations have enabled individuals from all walks of life to simultaneously change their income levels, work lifestyle and profession. For these reasons, millions of people choose to embark on a career within this promising community, and as such the industry continues to grow year after year.

However, there is still a group within our worldwide community that has traditionally not been able to gain access to the opportunities that the direct selling industry provides. These individuals are the globally unbanked, and according to the World Bank’s Global Findex 2012 database, they account for over half of the world’s adult population, representing nearly 2.5 billion people.

The majority of unbanked individuals report that they do not have a bank account due to the lack of financial infrastructure within their respective countries. However, financial exclusion is not limited to the developing world. High banking fees, lack of steady income, and availability of alternative services, such as check cashing and walk-in bill pay also create this dynamic in more developed countries. For many, the lack of financial structure or costly banking represents an inefficient reality.

Historically, it has been nearly impossible for anyone to participate in global business without having a bank account. In fact, most global companies, including direct sales organizations, require sales representatives to have a personal bank account as a prerequisite for employment. This is not only a challenge for the unbanked, but it is also a missed opportunity for direct selling organizations. Given its entrepreneurial spirit and increasingly global scope, the direct selling industry could benefit from tapping into ambitious unbanked resources. The key to unleashing this economic potential can be found in digital payment systems.

Digital payment systems are forever changing the way global commerce is conducted, and direct selling companies are benefiting from this advanced form of transacting.

Digital payment systems are forever changing the way global commerce is conducted, and direct selling companies are benefiting from this advanced form of transacting.

A big challenge for the unbanked is their limited ability to transact. Unbanked individuals are often unable to easily purchase products within the global market, as they rely solely on cash transactions. Digital payment systems remove the need for a bank account while providing individuals with flexibility in how they withdraw or use their funds. The best systems will also provide additional options for depositing and retrieving funds. Digital payment systems that provide both options to an organization and its members are called closed loop systems. These systems allow direct selling organizations to safely and efficiently transact with their members while giving these individuals the flexibility to use their funds as and when they wish.

Conversely, direct selling companies need a secure way to accept and pay out funds to unbanked members globally and in multiple currencies. Providing payroll and commissions to unbanked individuals can cost an organization millions in transaction and transfer fees alone. Closed loop digital payment systems give organizations of any size the ability to tightly control and manage pay-in and payout transactions, while providing members flexibility and consistency in the way they manage their funds. In our experience at i-payout™, our clients often find that by utilizing our closed loop digital payment system, they are able to safely expand their global member base into previously untapped markets.

i-payout™ has seen a sharp rise in the rate at which direct selling companies have increased membership among the unbanked and especially in developing countries where banking infrastructure is limited.

Given that 91.5 million people worldwide are members of the $160 billion direct selling industry, the introduction of digital payment systems could prove to be a powerful catalyst for increasing their prosperity and general standard of living. The trajectory of technology is moving toward a more economically independent global population that is no longer bound by distance, banking inefficiencies or a lack of financial infrastructure, and digital payment systems are paving the way.

Natalia YenatskaNatalia Yenatska is the Chief Financial Officer of i-payout™, a provider of global payment solutions. She has experience in overseeing all aspects of business operations and speaks English, Russian and Ukrainian.

February 01, 2014

Working Smart

Considering a Mobile Point of Sale Solution? Six Key Questions to Ask Vendors

by Tim Thomas and Brad Bohn

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

Under a direct sales model, the success of any customer engagement hinges on two prime capabilities: ensuring a high level of customer confidence and gathering all of the information needed to close the deal at the point of sale. Even at Southwestern Advantage—the oldest direct seller in the U.S. and a trusted brand—we sometimes faced these dual challenges in the past, as customers were nervous about sharing credit card information with our college-aged representatives.

While nearly all direct sellers now accept credit and debit cards, until recently most Southwestern Advantage dealers still wrote out credit card information on paper forms for processing later. It’s a common practice, but we found that it sometimes led to lost sales, not only from those nervous customers but also from transaction declines due to incorrect or incomplete account numbers on forms and transaction chargebacks.

We recently piloted a mobile point of sale (mPOS) solution, and based on the success of that pilot we are now in the process of rolling it out to our 2,500-plus dealers.

The solution to this problem for direct selling companies is implementing a mobile point of sale (mPOS) solution. We recently piloted such a solution, and based on the success of that pilot we are now in the process of rolling it out to our 2,500-plus dealers. We predict that we’ll save tens of thousands of dollars per year on processing fees by taking advantage of card-present rates and greatly reduce declines and chargebacks. Because most of the cost associated with our mPOS solution is variable, the more business we do, the more we’ll save.

We learned, however, through our vendor evaluation and pilot that not all mPOS solutions are created equal. If you’re a direct seller considering a move to mobile POS, here are some key questions to ask vendors once you start your journey.

1. What kind of up-front investment is required?

At Southwestern Advantage, our sales model relies on entrepreneurial college students who offset their educational expenses by running their own business selling educational products to families in the communities they serve. We work to keep the investments our sellers make low and wanted to provide each with a mobile card reader for a small security deposit; unfortunately, some vendors required an investment of hundreds of dollars per reader. We wanted a solution provider with flexible pricing and ideally one that required a minimal up-front investment.

2. Is your product PCI compliant?

Be sure your provider offers end-to-end, strong encryption, robust data protection for all payment transactions and full compliance with regulations such as PCI.

This is a must for mobile POS. The main problem when cardholder information is gathered manually is that, in spite of a seller’s best efforts, there is really no way to ensure it is completely secured. Paper forms are by their nature not a particularly secure form of communication.

In our search for an mPOS solutions provider, PCI compliance was a major consideration. Ensuring that cardholder information would be encrypted before it entered the mobile device was vitally important. Be sure your provider offers end-to-end, strong encryption, robust data protection for all payment transactions and full compliance with regulations such as PCI.

3. Can we keep our current credit card processor?

Let’s face it, changing credit card processors is a labor-intensive, time-consuming process—one you shouldn’t have to undertake without a compelling business reason, which was why the ability to keep our current processor factored into our decision-making process. The solutions provider we selected was “processor agnostic,” allowing us to maintain our existing merchant processing relationship, an option not offered by all vendors. This benefit eliminated the hassle and expense of making a transition.

4. Can your solution integrate seamlessly into our existing infrastructure?

Like Southwestern Advantage, your organization has likely made major investments in a customer relationship management system or mobile commerce platform. You should focus your mPOS search on solutions providers that offer APIs (application programming interfaces) to support seamless transaction and reporting integration, whether a salesperson is transmitting cardholder data, checking inventory or tracking delivery. You’ll get so much more value out of mPOS if it’s the final step in a broad mobile commerce strategy, with capabilities such as branded receipts and the ability to review transactions from existing enterprise systems.

You should also ensure that your new mPOS solution will be compatible with all types of mobile devices. Southwestern Advantage supports more than 2,500 independent sales representatives who seem to rely on nearly as many different iOS or Android smartphones and tablets. Many mPOS solutions only support iOS.

5. Can we speak with some existing customers?

In our evaluation process, we discovered real advantages to working with a solutions provider with a proven track record in the payments space—and with a portfolio of clients already using their mPOS solution. We were able to leverage their advice and best practices during our pilot and implementation to make the rollout as smooth and seamless as possible.

6. Is your solution global-ready?

Every country has different rules and regulations, and obviously many have different currencies. If your organization is global, or thinking of expanding globally, it’s absolutely vital that your payments infrastructure—including any mobile POS tools—be global as well. One simple example is whether or not the system supports chip and PIN cards, chip and sign cards (used internationally), and the magnetic stripe cards used in the U.S. If it doesn’t, and global expansion is important to you, move on to the next vendor.

Mobile point of sale technology offers real promise for the direct selling industry, but the quality of solutions varies widely, and we found through our evaluation many are not truly enterprise-ready—they are designed for micro-merchants rather than large, established companies. To capitalize on the promise of mPOS, most effectively, you need a strong partner. Ask these six questions to help you arrive at the right one.

Tim Thomas Brad Bohn Tim Thomas is Director of Marketing, and Brad Bohn is IT Senior Business Analyst, both at Southwestern Advantage.

January 30, 2014

U.S. News

Medifast Ranked among “Best Diets” by U.S. News & World Report

U.S. News & World Report recently evaluated 32 of the most popular diets to identify and rank the best eating plans available. The U.S. News panel of diet and nutrition experts ranked Take Shape For Life parent company Medifast No. 11 among “Best Commercial Diet Plans” and No. 25 on its overall “Best Diets” list.

Take Shape For Life incorporates Medifast Meals through the 5 & 1 Plan®, which supplements five 100-calorie Medifast products with one “lean-and-green” entrée per day. The program also features a personal Health Coach and the Habits of Health System, based upon the work of Dr. Wayne S. Anderson, Medical Director and Co-Founder of Take Shape For Life.

Medifast was also recently named a “Future 50” Baltimore Blue Chip Award winner by SmartCEO magazine. The weight-loss brand was one of five large Blue Chip companies recognized for their leadership and success in the regional economy.

“As we look ahead over the next five years, we plan to expand to new markets domestically and globally, capitalize on our multi-channel approach, and introduce new products and programs to help more people in new places reach their weight and health goals,” said Medifast Chairman and CEO Mike MacDonald.

Read more from U.S. News and The Wall Street Journal.


January 30, 2014

World News

USANA Backs Nearly 200 Winter Games Athletes

Photo: USANA’s brand ambassadors and U.S. Nordic combined teammates Billy Demong, Taylor Fletcher and Bryan Fletcher.

Health and wellness company USANA Health Sciences supports more than 600 elite athletes worldwide. Nearly 200 of those sponsored athletes have been selected to contend in next month’s Winter Games.

The 2014 Games, held in Sochi, Russia, will feature 12 brand-new events, including the luge team relay and women’s ski jumping. “Team USANA” sponsored athletes, which hail from 11 organizations in four countries, will compete in 11 separate sports. They include former Game participants and current USANA brand ambassadors Meaghan Mikkelson-Reid (Women’s Canada Hockey), Billy Demong (U.S. Ski and Snowboard) and Taylor Fletcher (U.S. Ski and Snowboard).

The number of athletes representing Team USANA has doubled over the Vancouver Games in 2010. The contenders will be eligible for 82 of the 98 medal events held in February. USANA also supported more than 60 athletes at the Summer Games in London.

Read the full announcement from USANA.