September 01, 2014

Exclusive Interviews

Executive Connection with John Parker, Chief Sales Officer, Amway


John ParkerJohn Parker

In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with John Parker, Chief Sales Officer for Amway, about leadership, always learning and finding fun in everything you do.

DSN: What is the one thing you enjoy most about being the Chief Sales Officer for Amway?

JP: The engagement with our field—Amway Business Owners. At the end of the day, it’s their success that adds up to create Amway’s results. Their passion for helping other people helps make Amway what it is.

DSN: What has been your proudest accomplishment?

JP: Having been a part of teams that have seen our business through some challenging times. It’s easy to lead in good times when all is going well, but I think you add more to the team and organization when times are tough and you’re able to work together. It’s most satisfying. Sometimes the best work is done during times when results don’t show right away, but they follow.

DSN: What’s been the most fun?

JP: I enjoy learning. For me a lot of my learning came while transitioning from a smaller to a larger role. I’ve also enjoyed learning from generations younger than I am. They’re not just different in how they think, but they’re fundamentally different in their personal relationships. I can’t be effective in my role if I don’t understand that. The process of learning and trying new things is really fun and exciting. Also, the adventure of travel has been fun—having a chance to go around the world, experience different cultures, people, customs and food. You either love that or struggle with it. I love it.

DSN: What do you tell Amway Business Owners to lead and inspire them?

JP: The primary message is that our business—our whole industry—is centered around helping other people. The individuals who are the most successful Amway leaders realize at some point in their journey that it’s not about them. It’s about helping others. That’s when it becomes more fun, more rewarding; and it leads to an environment of more success as well.

DSN: You’ve held several key positions at Amway. Which one shaped your management style the most?

JP: When I was President of Amway Japan because it really forced me to reflect on my style, strengths and weaknesses, and adapt my style to be with different people and cultures. As leader it’s sometimes easy to take the mindset that I have one way of leading and communicating. But if you work across geographies and cultures, you need to be more flexible in how you lead and communicate. I think that shaped me more than anything else.

DSN: If you could relive one period of time since you’ve been at Amway, either to enjoy it again or have a do-over, what would it be?

JP: Maybe the first five years of my career, because there’s an excitement around that initial stage of learning. I had such great mentors here in the company. I’d love having the chance to go back and soak up that learning I got from them. It really was fun, too.

DSN: Is there one basic principle that governs your leadership at Amway?

JP: I really think it’s about putting the focus on others, not on yourself. Those leaders who are in it for themselves may have success in the short term, but people see through that. Over the long term you won’t develop real followership unless your focus is on the bigger cause that our businesses stand for.

DSN: Has someone ever given you a bit of really great advice you can share with us?

JP: I’ll point to my wife, who says to listen more than you talk. It’s true. If you spend more time talking and less time listening, you’ll be less effective than if you flip it around.

DSN: What’s something that few people know about you?

JP: I want to retire to Australia someday, mostly for the golf, surfing and beaches.

DSN: What’s on your bucket list?

JP: I want to play golf on every state in the country. I’ve probably got 25 states to go. I also want to surf in every ocean and sea in the world and to get to every baseball stadium in America.

August 29, 2014

U.S. News

J.D. Power Survey Ranks Ambit Highest in Customer Satisfaction

Bigger and better don’t necessarily go hand-in-hand when it comes to maintaining rapid growth and superior service, but Ambit Energy is proving it can be done. As a result of its annual customer satisfaction survey, J.D. Power and Associates has named Ambit “Highest in Residential Customer Satisfaction among Retail Electric Providers in Connecticut, New Jersey and Pennsylvania.”

The J.D. Power study measures retail electric providers across five key factors: price, communications, corporate citizenship, enrollment/renewal and customer service. In Pennsylvania, Ambit performed particularly well in the communications factor, earning a total score of 718 on J.D. Power’s 1,000-point scale. The company outperformed its competitors with scores of 705 and 718 in Connecticut and New Jersey, respectively.

The survey of more than 25,757 retail electric residential customers was conducted September 2013 through June 2014. In J.D. Power’s inaugural study last year, Ambit ranked highest in customer satisfaction among New York residents.

The news comes as Ambit Energy Consultants gather in Dallas for the company’s annual AMBITION conference, running Aug. 27-30. With more than 8,000 attendees on hand, Ambit has reason to celebrate. The company surpassed $1 billion in annual sales last year, making it the No. 12 company on the DSN Global 100 and the leading energy provider in the direct selling industry.

“The power that drives the success of Ambit Energy comes from the amazing spirit of the entrepreneurs and small business owners who will be coming to AMBITION,” said Co-Founder and CEO Jere Thompson Jr. “We aim to make AMBITION a springboard for our Consultants to reach greater heights and achieve greater success as they work to build their businesses and generate economic opportunities for themselves and others in their communities.”

August 27, 2014

U.S. News

Isagenix Features Make-A-Wish Reveal at Annual Event

Photo above: As part of Isagenix’s support of the Make-A-Wish Foundation, 11-year-old Ben—who recently completed chemotherapy treatment—was asked to participate in a live magic show while his mom, dad and 8-year-old brother watched him help perform the grand finale.


Over the past two years Isagenix has raised more than $1.5 million as a sponsor of the Make-A-Wish Foundation, and during the company’s 2014 Celebration this week, more than 10,000 attendees got to witness firsthand one of those wishes coming true.

The event included a performance by magician Gerry Katzman, owner of Hollywood’s Magic Castle. Katzman had some help from special guest Ben, an 11-year-old boy who recently completed his last chemotherapy treatment for acute lymphoblastic leukemia. Thanks to the support of Isagenix Associates and employees, Ben’s wish to perform in a live magic show was granted in a big way.

“Make-A-Wish makes such a big difference in the lives of families going through hard times,” Ben’s dad, Ingolf, shared.

During the performance, Ben also learned that he and his family will travel to Australia to check off another item on his wish list: meeting a platypus. Australia is the only place in the world where the unique mammals remain in the wild.

“I’ve always dreamed to see a furry creature who is a mammal and lays eggs,” was Ben’s response. “I can’t believe that I’m going to Australia with my entire family to do this.”

Prompted by a $100,000 matching challenge from Isagenix Board Member Jim Pierce and his wife, Tammy, audience members also raised more than $200,000 in support of Make-A-Wish. To date, Isagenix has granted over 190 wishes in partnership with the foundation. The company received Make-A-Wish America’s prestigious 2013 Cause Champion Award in recognition of its cash contributions, employee support and outstanding partnership internationally.

August 27, 2014

Networx Online


August 27, 2014

90 Days of Direct Selling

by Lauren Lawley Head

CELEBRATE WITH US!
September 17 to December 15


Here Is What We Are Going To Do:

Lauren Lawley HeadLauren Lawley Head
General Manager
Direct Selling News

We’re heading into the final quarter of 2014, a key period for any business that sells products and services to consumers. But since its inception, direct sales has been about more than just the bottom line. In recognition of that, Direct Selling News is launching a 90 Days of Direct Selling celebration. Our goal: fuel ongoing conversations about the positive impact the direct selling community has on people and economies around the world. As our current DSA Chairman Truman Hunt has emphasized, let’s show the world we are a force for good!

Starting Sept. 17, you’ll see us ramp up our coverage online and through social media to expand the conversation. In fact, we’re inviting the entire direct selling community to join the celebration and hope to share your stories about how you and your organization have marked 90 Days of Direct Selling.

View the chart below to see how you can participate!

August 27, 2014

World News

Direct Sellers Make up 15% of Beauty Industry’s Top 100

Fashion, beauty and retail hub Women’s Wear Daily has published its annual Beauty Inc Top 100, and the list shows direct selling companies are sitting pretty. The Top 100 ranks the world’s largest beauty manufacturers based upon annual sales. In an industry that generated $204.61 billion in revenue last year, direct selling companies represent 15 percent of the Top 100.

“For most in the Top 100, 2013 was positive, with 77 companies posting increased revenues, 18 reporting declines and three remaining flat,” WWD reports.

Generating nearly 15 percent of all cosmetics sales, French behemoth L’Oréal sustained its prominent leadership position within the industry. Avon Products claimed the No. 6 spot, despite major restructuring within its U.S. business and a dip in the company’s active representative numbers. The New York-based firm reported total beauty sales of $7.1 billion in 2013.

Direct selling companies ranked on this year’s Beauty Inc Top 100 include:

6. AVON PRODUCTS
15. MARY KAY
17. AMOREPACIFIC CORP.
18. NATURA COSMÉTICOS
19. ALTICOR (AMWAY)
21. BELCORP
22. ORIFLAME COSMETICS
24. POLA ORBIS HOLDINGS
26. LG HOUSEHOLD & HEALTH CARE
31. NU SKIN ENTERPRISES    
46. JAFRA COSMETICS INTERNATIONAL
49. TUPPERWARE BRANDS CORP.
62. NOEVIR HOLDINGS CO.
88. FABERLIC
99. HERBALIFE

August 26, 2014

Exclusive Interviews

Executive Connection with Truman Hunt, CEO, Nu Skin Enterprises Inc.


Truman HuntTruman Hunt

In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with Truman Hunt, CEO of Nu Skin Enterprises Inc., about leadership, sustainability and being a force for good.

DSN: What is the one thing you enjoy most about being the CEO of Nu Skin?

TH: I love being part of a global family of like-minded, positive people. And I get to see how Nu Skin has changed the lives of so many people in different ways. For some this change has been financial, for others it has been a change in their appearance or health, and for many Nu Skin has given them empowering and wonderful ways to help make the world a better place.

DSN: What has been your proudest accomplishment?

TH: My proudest accomplishments are actually at home, where I focus my attention on six children. But from a business perspective, it’s really rewarding to set challenging growth objectives and then see the organization rise to the challenge. Organizations that are aligned in purpose can produce remarkable results.

DSN: What do you tell Nu Skin distributors to lead and inspire them?

TH: One of the things that is striking about our sales leaders is that they are inherently highly talented and motivated. They are the ones who do the inspiring! However, I think continually reminding our distributors how important it is to be a force for good in the lives of all who come into contact with our business is something that inspires us in the corporate office and also inspires our sales leaders.

DSN: What is your vision for Nu Skin?

TH: Our vision is straightforward and unwavering: to become the world’s leading direct selling company by generating more income for our sales leaders than any other company.

DSN: If you could hit “replay” on any part of your own Nu Skin journey, either to enjoy the moment or to do something different, what would it be?

TH: That’s a tough question since we’ve had so many incredible moments at Nu Skin. I guess I would have to say I’d love to relive the moment when we first hit $1 billion in annual revenue. Why? Because when Blake, Steve and Sandie were first building the company, there were so many people who doubted their ability to make Nu Skin—and their vision—a success. It was really gratifying to prove to ourselves and to the world that Nu Skin was growing and thriving and making a real difference in millions of people’s lives.

DSN: What’s been the most fun part of the recent rapid growth at Nu Skin?

TH: The larger we become, the more people benefit. And that will always be what gives all of us the most satisfaction.

DSN: What advice would you give an executive at a young direct selling company to help them achieve strong, sustained growth?

TH: The measure of success is not whether you can reach $100 million in sales. The measure of success is whether you can sustain growth. Many startups rely on the notion of their company being a “ground floor” opportunity. But to me the measure of success is whether a company can sustain growth after it’s been around for many years. The formula for doing that is simple in some ways and complex in others. It goes beyond being a “ground floor opportunity.”

DSN: Is there one basic principle that governs your leadership at Nu Skin?

TH: My leadership, and the leadership of all of us at Nu Skin, is based on our philosophy that we want to be a force for good throughout the world. It was the vision of our founders, and it continues to drive every aspect of the business today. It’s how we try to operate, and it permeates our culture in every way.

DSN: What’s one piece of advice that you’ve found especially useful?

TH: One bit of advice that has stuck with me perhaps like no other was the definition of leadership offered by Jim Collins at our recent DSA annual meeting. He defined leadership as “the art of getting people to want to do the things that must be done.” I think the definition hits the nail on the head. And it’s why leadership of a business is probably the most challenging job in the world. It’s one thing to dictate to people what to do. But real leadership is the ability to get people to want to do critical things. That’s when the magic happens. 

DSN: What do you like to do when you just want to relax?

TH: When I need relief from the daily pressures I usually do one of a few things: read a book, work on my really bad golf game, or play the ukulele. The uke works best because it requires total focus. It’s a good way to escape for a few minutes.

August 25, 2014

World News

Epicure Launches ‘Good Food. Real Fast.’ Movement

What did you eat for lunch? Who grew that food? Did you prepare it yourself? How far did it travel to reach your plate? Those are the kinds of questions Epicure Selections, a Canadian food and cookware company, is posing through its newly launched Good Food. Real Fast.™ movement.

The movement encourages individuals—even those who think they don’t have the time or the kitchen savvy—to cook and eat real food. To simplify mealtimes without compromising on health or taste, Epicure has created a website dedicated to recipes, quick meal ideas, cooking tips and expert advice. The Good Food. Real Fast. community can also contribute ideas and inspiration by tagging social media posts with #goodfoodrealfast.

This is a critical time to change the way the world thinks about food, says Epicure CEO Amelia Warren. “We want to dispel the myth that cooking is hard and time consuming. To be healthy, you have to cook. We want to show you how easy, quick and delicious healthy, real food can be.”

Good Food. Real Fast. is a an extension of Epicure’s philosophy and product offerings, which include seasonings, sauces, condiments, meal shortcuts and timesaving cookware. The company participates in the Non-GMO Project and emphasizes clean eating, with no added MSG, fillers, or artificial flavors or colors. For each person who signs on to the Good Food. Real Fast. movement, Epicure has pledged to donate $1 to the Epicure Foundation, which supports grassroots food initiatives across Canada.

August 22, 2014

U.S. News

4Life Bolsters Scientific Research with Auburn University Partnership

A new partnership between wellness company 4Life Research and Auburn University will advance academic studies on the safety and effectiveness of 4Life products. The company recently made a $100,000 gift in support of The Molecular and Applied Sciences Laboratory in Auburn’s School of Kinesiology.

The research will range from specific ingredients and how they affect physiological systems, to safety studies and new ingredient discovery. 4Life has developed a product line based upon its trademark Transferceutical Science, which supports the immune system in remembering and responding to potential health threats.

“Companies are always looking for ways to generate scientific credibility in their research, and this is an area where 4Life is truly committed,” said Vice President of Communications Calvin Jolley.

4Life has collaborated with a number of universities in the past, but the Auburn partnership is by far the most significant. The company’s willingness to invest resources in academic research was a major draw for Chief Scientific Officer Chris Lockwood, Ph.D., CSCS, who joined 4Life last year.

“Prior to coming to 4Life, I did consulting with a lot of different companies within the industry,” Lockwood told DSN. “It’s been great to see the support our founders, David and Bianca Lisonbee, have given to exploratory research that doesn’t necessarily guarantee results.”

Lockwood met Auburn’s Dr. Michael Roberts, Director of the Molecular and Applied Sciences Lab, when the two worked together at the University of Oklahoma. Since then Lockwood has continued to run research through Roberts, whom he calls “an incredibly brilliant and gifted person.”

The studies will take place in the 58,000-square-foot, state-of-the-art kinesiology research facility that opened on Auburn’s campus last fall. “When we first visited the facility, we were shocked to realize the depth of their research capabilities across the spectrum of anything we would want or need to do,” Lockwood shared.

The Auburn partnership will support 4Life’s in-house R&D department in its commitment to innovation, substantiation and education. 4Life also enlists the expertise of physicians and nutrition experts worldwide who sit on its Health Sciences Advisory Board (HSAB). The board gathered last week for its annual HSAB Symposium, where members have the opportunity to share insights on product evaluation, scientific study, and technical interpretation.

 

August 22, 2014

Stock Watch, September 2014


August 21, 2014

U.S. News

Fast Growth Propels Direct Selling Brands onto Inc. 500

Inc. magazine has announced its 2014 Inc. 500|5000, and the exclusive ranking once again features several direct selling brands. The Inc. 5000 is a list of America’s fastest-growing private companies, with the Inc. 500 representing a special ranking of companies in the top 10 percent.

Limited to U.S.-based, privately held companies, the Inc. 5000 measures revenue growth from 2010–2013. This year’s list includes direct sellers Plexus Worldwide (No. 8); Jeunesse Global (No. 258); It Works! (No. 290); North American Power (No. 476); Ambit Energy (No. 2074); WorldVentures (No. 2333); Viridian Energy (No. 2381); 5LINX (No. 2916); YOR Health (No. 3528) and Isagenix (No. 3764). The full Inc. 500 list will appear in the September 2014 issue of Inc. magazine.

Plexus Worldwide, the highest ranking direct seller on the list, got its start eight years ago in Scottsdale, Arizona, and has since expanded into Canada and Australia. With a strong focus on weight-loss and pain-relief products, Plexus is the No. 2 health company in this year’s ranking. The direct seller generated 16,458 percent growth over three years, closing out 2013 with $159.8 million in revenue.

“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,” Plexus CMO Alex Clark shared in a recent feature for DSN. “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.”

Based in Altamonte Springs, Florida, Jeunesse Global recorded 1,788 percent growth over the past three years. Jeunesse has expanded aggressively into 92 markets since launching in 2009. The company’s personal-care and nutrition products generated sales of $224 million in 2013.

With three-year growth of 1,565 percent, It Works! ranked No. 290 in its fourth consecutive year on the Inc. 5000. The company generated revenue of $456.2 million in 2013 and recently upsized its corporate headquarters to a new facility in Bradenton, Florida. It Works! markets a line of health and wellness products anchored by its Ultimate Body Applicator, a 45-minute tightening and toning wrap.

In 2011, Forbes named North American Power to its list of America’s Most Promising Companies. The U.S. energy provider has lived up to its promise with 991 percent growth over the past three years. North American Power’s retail electricity and natural gas services generated $263.2 million in revenue last year.

August 20, 2014

Culture of Celebration

by Lauren Lawley Head

Photo above: Origami Owl Co-founders Bella and Chrissy Weems


Culture of Celebration

Whether it was a 45th birthday party for the Mary Kay Pink Cadillac or a social media-fueled fundraiser for Thirty-One Gift’s philanthropic partner Ronald McDonald House Charities, celebration, personal growth and giving back were in full force at direct selling events the past few months, showcasing the powerful role this plays in business growth and development.

“For us, events is a culture function that has the sales tools to support,” Origami Owl Founder and Co-President Chrissy Weems told Direct Selling News during a break at the fast-growing company’s second national convention, “because we believe when you build the person holistically that the sales will come.”


Herbalife Analyst Details the ‘Death Blow’ That Wasn’t

This summer marked a significant development in the ongoing battle activist shareholder Bill Ackman is waging against one of the world’s largest direct selling companies: Los Angeles-based Herbalife Ltd.

Ackman gave a three-and-a-half-hour presentation in late July designed to convince investors, journalists and regulators of the validity of his short position on Herbalife stock. He said his team spent $50 million on its investigation of more than 240 nutrition clubs.

Scott Van Winkle, Managing Director of the capital markets firm Canaccord Genuity Inc. who follows Herbalife, spoke with Direct Selling News after the presentation. “The ultimate takeaway,” Van Winkle said, “is that Ackman thinks multilevel marketing is a pyramid scheme.”

Though Ackman was careful not to comment on the business practices of any other direct selling companies, he didn’t pull any punches when it came to criticizing people who have worked with Herbalife, including former Secretary of State Madeleine Albright and soccer star David Beckham.

“Taking those personal shots discredits the presentation,” Van Winkle said. “Unless you are just simply trying to scare away Herbalife’s service providers.”

In the days leading up to the presentation, the price of Herbalife shares dropped as Ackman made the media rounds promising a “death blow” to the company. Investors were unimpressed by the presentation itself, sending share prices back up 25 percent. A few days later, weaker-than-expected financial results pushed the share price down again. Until the Federal Trade Commission concludes its investigation, stock volatility seems likely to continue.

“The direct selling industry needs to stay focused on whether the FTC is looking at multilevel marketing as a channel and business model more so than Herbalife specifically,” Van Winkle said. “I think the reality is that if there is any outcome here for Herbalife short of the worst case scenario, all of the publicly trading direct selling companies will be valued higher down the road.”


NEW MEMBERS

The Direct Selling Association recently approved seven new members:

Boisset Wine Living At Home
Direct-to-consumer marketing arm of Boisset Family Estates winemakers
Web: www.boissetwineliving.com

Country Gourmet Home
Direct seller of gourmet food mixes and wickless wax melts
Web: www.countrygourmethome.com

Jamberry Nails
Nail wraps for at-home application
Web: www.jamberrynails.net

Lulu Avenue
Jewelry
Web: ww.luluavenue.com

Magnabilities LLC
Jewelry and scarves
Web: www.magnabilities.com

MiA Bath & Body
Customized bath and body products
Web: www.miabathandbody.com

National Motor Club
Emergency roadside assistance and other services
Web:nmc.com


Author NameI know that summer is supposed to be a time to relax and recharge, but this season has been packed! I’d love to hear what you and your organizations have planned for fall. As always, thanks for reading. I know that summer is supposed to be a time to relax and recharge, but this season has been packed! I’d love to hear what you and your organizations have planned for fall. As always, thanks for reading.

Lauren Lawley Head
General Manager
lawleyhead@directsellingnews.com

August 20, 2014

3 Keys to a Powerful Event Experience

by John Killacky

Another year, another convention. How will this year’s event be different? What can you do to bring fresh excitement and new energy? It’s not as daunting as it may seem. Take a deep breath. You got this.

When you focus on three important elements of your event, you can provide your guests (and even those who can’t come) an impactful, meaningful—and fun—event experience. Let’s start by identifying your event’s stakeholders and what’s important to each of them.

The Players

Your guests: Each consultant who registers for, travels to, and attends your event comes in search of something. Information, celebration, fun—whatever it is, they’ll take it back home with them, and it will affect their business. So it’d better be good.

Your organization: You have important messaging to deliver. That means what’s said, how it’s said, how it looks and how it feels to the audience.

Your boss: C-suite execs want to see that the number of attendees is robust, their enjoyment is obvious, the event is polished and effective, and the budget remains intact. No pressure.

Can all those objectives be met? Absolutely, when you focus on three simple elements: pre-event prep, fabulous recognition and social media.

Plan Ahead

The importance of thorough pre-event preparation can’t be overstated. Once you’ve determined the “skeleton” of your event—who, what, when, where—you can begin talking with production companies. You know what’s most important to your company and this specific event; ask the questions that matter most, and listen carefully when they talk about their experience. Have they worked with companies in your industry? What do they bring to the table that others don’t? What kind of people are they; what’s their corporate culture? How do they handle changes in direction, and onsite challenges?

Ask for samples of their work and references from other clients—and then take a few minutes to call those clients. And, do a gut-check: Would you enjoy working with them? This is a big decision; you’re entrusting the success of your event in large part to this company. Again, no pressure.


The importance of thorough pre-event preparation can’t be overstated.


Let’s assume now that you’ve chosen an event partner that fits. Congratulations! Now, make full use of the partnership—that’s why you have them. Give them full access to your team and execs; being fully invested in the partnership will make your event even stronger. Ensure that they know your company, your mission and your execs (and what’s important to each of them). Collaborate with your production partner to create meaningful content. In your event “skeleton,” you’ve determined the direction, the tone and the look you want. Work with your event team to bring those concepts to life in onstage content, video and graphic support. Push them to make it everything you’ve envisioned. That’s their job.

Rock-Star Treatment

One of the most important parts of an annual convention or an incentive trip is recognition—the sweet sound of applause (and their own name) as honorees take their walk of fame. What could be better?

Doing recognition right is so important! It’s exciting for the individuals being recognized, it’s aspirational for the guests watching the awards ceremony, and it’s a chance for your company to truly thank and honor those individuals who make you shine. Your top achievers are the face of your company to their customers; you want those faces to be smiling and happy.

Your production company should know how important recognition is to your audience and honorees, and make it a priority in pre-event planning. Creating a memorable experience start-to-finish for each honoree is important. It can—and should—be awesome from backstage to onstage. There are very real and very important reasons that they’re onstage. They’ve racked up incredible sales or sponsoring numbers. They’ve met goals, they’ve made new commitments or they’ve partnered with your organization’s charitable efforts to change the world. Whatever it is, they’ve excelled. And their moment in the spotlight should be all excitement, and zero stress.

Make sure your event partner takes care with each honoree so that they’re comfortable and know what’s going to happen. Where they’ll wait backstage, how they’ll know it’s time to walk out, who will escort them, where they should stand. The more they know, the more they can relax and enjoy the experience. And the harder they’ll work to get back onstage next year!

Also there’s this: Check, double-check, and triple-check that names are spelled and pronounced correctly. Amazingly, this doesn’t always get checked, and it’s a real downer for the honoree when that happens. Do whatever it takes to make them feel like the rock stars they are!

Pin, Post, Tweet, Share

Social media: It’s not just for breakfast anymore. You’ve used Facebook, Twitter, LinkedIn and your company’s website to drive attendance to your event. Now you’re done, right? Actually, you’re just getting started.

Social media can be a living, evolving, exciting part of your event, throughout the entire event experience. It seems appropriate to use a statistic now, so here it is: Nearly 75 percent of all Americans are actively engaged in social media, including your guests. Don’t tell them to turn off their phones—engage them!

There are many different social media platforms, and you should know those that your consultants use the most. Just think: Each platform is a new way to directly reach consumers, consultants and event attendees. You’re nodding your head. Yes, that makes sense. But few organizations use social media to its maximum advantage at their events.

Just about everything you do for event guests can also be accessed and enjoyed by those who couldn’t come. They’ll stay connected to the event and to your organization, and—fingers crossed—they’ll make sure they attend the event next year.

Post (and tag!) photos of new products, displays, field presenters and crowd excitement on Facebook. Keep your YouTube channel up-to-the-minute current with videos of the CEO’s speech, an amazing recognition segment, new product reveals and all of the excitement in the convention center hallways. You may want to consider creating an app specific to your event—for instance, the event agenda. It’s hip, happenin’ and green. All the cool kids are doing it.

Create a fun, interactive digital scavenger hunt in which attendees earn points throughout the event by “checking in” at different displays or sessions, or taking a selfie with a sales field leader, or scanning a product display. Draw for prizes on Twitter rather than on the stage. Have the CEO or other execs answer questions via live tweets throughout the event. Create an event-specific hashtag.

Sometimes social media is considered “anti-social” because we’re all looking down at our phones, clicking and scrolling. Done the right way, it can actually create a more communal experience at your event—and well beyond.


Nearly 75 percent of all Americans are actively engaged in social media, including your guests. Don’t tell them to turn off their phones—engage them!


It’s a Wrap

So there you go. The three ways you can ensure a great event experience for your guests and a solid return on the investment you’ve made.

  • Solid pre-event prep
  • Rock-star recognition
  • Effective use of social media

Do your homework, trust your event partner and enjoy building an event that’ll leave them more excited—and more productive—than ever.


Jeff TurneyJohn Killacky is Managing Director, National Sales & Marketing at Bartha. Bartha is a leading provider of high-quality events, production and staging for the direct selling industry.

August 20, 2014

Solving the Challenges of Global Commission Payments

by Jeff Turney

How to break down five common cross-border payment barriers

Expanding into international markets can be a double-edged sword for many direct selling organizations. While new revenue sources are a cause for celebration, overcoming the many challenges associated with cross-border compensation plans isn’t always easy.

As more direct selling organizations pursue global expansion objectives, treasury and finance departments are under increasing pressure not only to mitigate risks, but also improve efficiency, cut costs and ensure future scalability. It’s a tough job, but for good reason. Payments and other transaction services, including prepaid card and incentives management, are at the core of a direct selling organization’s economic and distributor relations.

Not surprisingly, this is why many of the industry’s top performing organizations are partnering with professional payment providers in order to scale rapidly, ensure regulatory compliance and meet the demand for more convenient international payment options. As business models continue to adapt to global growth and expansion priorities, innovative cross-border payment products are emerging that offer greater payment flexibility and security.

The Challenges of Global Payments Distribution

Is your payments solution ready for the rigors of international expansion? The following points may be worthy of deliberation as you consider if your company should “go it alone” or work with an expert to outsource this side of your business:

1. Developing a Financial Network

While large direct selling organizations typically have multiple bank accounts in the jurisdictions where their subsidiaries operate, difficulties arise when an organization tries to find economical and efficient ways of introducing their product into a new country. In these cases, cross-border payments—SWIFT wires or international checks—are typically the only way that direct selling organizations can internally manage their payment process. The result? High fees are incurred by both the organization (upon sending) and distributors (at pick-up). On the administrative end, your accounts department will have their work cut out for them managing complex SWIFT instructions, collecting banking information from distributors and, in the case of checks, dealing with lost or delayed deliveries. Managing different payment file formats, along with account reconciliation and handling errors, can further exacerbate the process.


As business models continue to adapt to global growth and expansion priorities, innovative cross-border payment products are emerging that offer greater payment flexibility and security.


Partnering with a strong international payment provider will mitigate many of these costs and hassles through their existing financial networks. Now, instead of executing payments through multiple channels, you’ll have the ability to manage all of your treasury needs through a single integration point.

2. Foreign Exchange Costs

Every organization has different goals when it comes to the management of their treasury department. In most cases, the focus includes eliminating foreign currency fees for distributors, as well as reducing internal processing costs.

Processing high international payment volumes can quickly throw internal accounting practices into turmoil, never mind the hassles created by foreign banking holidays, exception handling, time zones and language barriers. Partnering with a strong international payments provider can help your organization manage all of these currency complexities effectively, reducing risk and handling errors.

3. Unreliable Mail Distribution

According to Storm Trading Group, more than 14.5 million pieces of mail are lost or misplaced in the U.K. each year. And that’s in a country where the postal service is professionally maintained and managed. Therefore, it’s not surprising that internationally posting payments—whether they’re in check, money order or prepaid credit card format—is becoming increasingly frustrating and risky.

When analyzing payment options and providers, be sure to inquire about any digital or real-time payment options. While traditional bank transfers can help to mitigate the risk of lost payments, the cost is often too much for distributors to stomach. Alternative options, such as virtual prepaid cards, mobile airtime top-ups and the ability to deposit earnings onto an already existing credit card, make it easier for distributors to access their commission payments faster and without any unexpected lifting fees or bank charges.

That being said, some payment products such as prepaid cards and checks simply cannot be delivered without the postman’s help. In these instances, you’ll want to work with your payments provider to mitigate unreliable mail services through the use of expedited bulk deliveries. Top providers can arrange to batch-deliver these products to local head offices using secure, tracked mail services. From there, the local office can go about delivering each individual payment in the most efficient manner.


Having the ability to solve unexpected payment issues quickly will help you ease frustration and build trust amongst your new recruiting base.


4. Urgent Payments

Traditional payment solutions offer very little flexibility in regard to nonstandard payments, especially when it comes to cross-border issuance. From hardship payments and corporate expense reimbursements, to manual one-off or missed payments, handling these unique cases can be extremely time-consuming. While workarounds can be used to somewhat alleviate these issues, these inefficient solutions can result in poor data quality, creating additional downstream inefficiencies, errors and costs, as well as tarnishing your reputation with your distributors.

Having the ability to solve unexpected payment issues quickly will help you ease frustration and build trust amongst your new recruiting base. Remember this when it comes time to review your payment practices. If your international subsidies aren’t able to accommodate urgent requests easily using instant-issue prepaid cards and real-time card loads, it might be time to consider a new approach.

5. Accommodating Underbanked Members

While the majority of your distributors may be well-served by direct bank deposits or checks, those without formal banking relationships will find these payment options to be too restrictive, if not entirely inaccessible.

When developing an underbanked payments strategy, it is important to understand what the driving factors are behind the financial decisions of your new distributors. While banks play a prominent role in North American and European nations, there are many markets where people prefer to address their financial service needs outside mainstream institutions.

In addition to providing distributors in these areas with the appropriate products and services, you’ll want to make sure that every effort is made to reassure your new distributors of the trustworthiness of your payments system.


According to a 2009 study by the Center for Financial Services Innovation (CFSI), most members of the underbanked community strongly emphasize intangibles such as respect, trust, safety, security and a sense of belonging.


According to a 2009 study by the Center for Financial Services Innovation (CFSI), most members of the underbanked community strongly emphasize intangibles such as respect, trust, safety, security and a sense of belonging. Unfortunately, many commission payment methods can be viewed as quite intrusive, requiring rigorous identity verification in order to abide by financial institutions’ overly strict interpretation of regulatory policies. These privacy requirements are often enough to discourage members of the underbanked community from joining a direct selling company. In these instances, corporate closed-loop payment services—such as corporate incentive prepaid card products that can only be loaded with funds by the corporate entity (not the cardholder)—can be used to minimize the identification verification process for payees, effectively opening up a direct selling organization’s recruitment opportunity to a much wider audience.

Providing commission payments in a timely and cost-efficient manner is a major challenge that gets compounded even further when international payments are introduced. Many organizations can benefit from working with a trusted international payments provider, as it will allow them to focus their efforts on new business development rather than on financial administration.


Jeff TurneyJeff Turney is an Account Manager, International Payments at hyperWALLET Solutions Inc. A leading global payments provider, hyperWALLET was recently awarded the 2014 DSA Ethos Award for Partnerships.

August 20, 2014

Controlling the Conversation: Balancing Product and Opportunity

by Lori Bush

At Rodan + Fields, when we made the decision to pivot from our department store marketing channel to direct sales, a great deal of consideration was given to protecting the brand equity that derived from our founders’ legacy in the skincare segment of the beauty industry. As we looked to transform our go-to-market strategy, we wanted an independent business ownership model with low cost of entry that afforded our Independent Consultants the opportunity to compete with other industry players. The key here is what we define as our “industry.” While there are many definitions for the word industry, the most relevant ones read something like this: noun \ˈin-(ˌ)dəs-trē\: a group of businesses that provide a particular product or service. By this definition, Rodan + Fields is in the beauty industry. The business opportunity derives from product leadership coupled with our sales and marketing strategy: The opportunity itself is not our principle product.

Sounds simple enough, right? But gaining buy-in and protecting and advancing this aspect of our brand equity is a challenge that requires rigor in monitoring and compliance, especially when it comes to engaging direct selling veterans as employees or as Independent Consultants. Our investment in product and brand development is materially eroded when a successful business-building Consultant is dismissive or even disparaging to those who want to engage as product ambassadors rather than promoting the business model. The worse-case scenario of this is the proclamation that “it doesn’t matter what you’re selling as long as the compensation plan works.” Not only does this fly in the face of who we are, but it generates ill will and validates the position of those who challenge the legitimacy of our business model.


Out of a deliberate exercise to define the soul of our company, a clear set of business values emerged, which we call our “True Colors,” and we constantly assess our people and programs for demonstration of these values.


So what is direct selling to Rodan + Fields if it’s not an industry? We see direct selling as crowdsourcing our marketing and sales initiatives. And with the advantages of social, mobile and web-based tools for customer acquisition, engagement and monetization, it is a highly effective, modern business model that provides individual micro-enterprises the opportunity to participate and capture market share in an important, lucrative and growing consumer products category.

Soul Searching

When we launched our current business program in 2008, we believed we had the opportunity to help shift public perception of direct selling and went as far as to bake this notion into our mission statement: “Our mission is to redefine independent business ownership with brand presence and transformational products and programs that change skin and change lives.” It didn’t take us long to learn that walking the talk requires constant commitment to education and compliance because, when it comes to salesforce behavior and performance, the simple fact that something works doesn’t necessarily make it right.

Another part of our mission statement, the creation of “an enduring legacy for our Consultants and our employees,” led us to take a deep dive into the soul of our company. To truly have a company soul requires a shared understanding by everyone who is involved as to purpose and values. Out of a deliberate exercise to define the soul of our company, a clear set of business values emerged, which we call our “True Colors,” and we constantly assess our people and programs for demonstration of these values. One of these key values is Assurance.

Assurance is about brand and business integrity; it’s the commitment to our Consultants and their customers that what they signed up for is what they get. If we promise a unique brand and uplifting culture one day and they show up to find a generic, hardcore moneymaking scheme the next day, our soul is eroded. “Assuring” that the Rodan + Fields brand and business models continually meet or exceed expectations requires surveillance of how our programs manifest into and through our sales organization.


We have a responsibility to our sales organization, their customers and the direct selling community at large to control the conversation so that it doesn’t become controlled for us.


Responsibility

I recently attended a training conducted by members of our field development team and discovered that some important aspects of our program had drifted away from our original intent in response to preferences of some of our Independent Consultants. Even though these preferences could, arguably, accelerate the rate of growth of a Consultant’s income, they could put the long-term value of the brand and business opportunity at risk. In a nutshell, there was an overemphasis on recruiting and building an organization without a balanced focus on engaging and servicing customers. Both aspects of the business model are important, but the training was heavily biased toward the former without first firmly establishing the brand, product experience and our overall approach to social commerce. We recognized the need to make an adjustment to our approach in order to reinforce key aspects of our value proposition.

Instilling an understanding of the rationale for our vigilance helps our internal team and our Consultant leaders appreciate the importance of governing the execution of our business programs in the marketplace. No matter how carefully we craft our compensation program and articulate our Policies and Procedures, if we promote or turn a blind eye to practices that undermine our brand value proposition, a handful of rogue players can wreak havoc and lead to significant net detractors for our products, our programs and even direct selling in general. We have a responsibility to our sales organization, their customers and the direct selling community at large to control the conversation so that it doesn’t become controlled for us.

A direct selling business model enables us to collaborate with passionate micro-entrepreneurs to market compelling, innovative products and services that might never see the light of day in risk-averse brick-and-mortar retailing models. Our future is dependent on continuous introspection as to how we guide our Independent Consultants to appropriately communicate our brand and business values. The meaningful marketplace value of our opportunity is part and parcel of our compelling product proposition. If we present this the right way, the word pyramid should never enter anybody’s mind, much less the conversation.


Lori BushLori Bush is President and CEO of Rodan + Fields.

August 20, 2014

Amway: Rising to the Top

by Barbara Seale

Company Profile

Founded: 1959
Headquarters: Ada, Michigan
Founders: Rich Devos and Jay Van Andel
Products: Nutrition, wellness, beauty and home products


Amway watchers have many things to admire: an impressive 55 years in business, sales growth of almost $1 billion in 2012 and 2013 combined, and brands that are among the leaders in their category. The company’s 2012 sales allowed it to climb to the top of the Direct Selling News Global 100 list, where it remains. Last year sales reached $11.8 billion.

Those imposing figures are just the latest in a history that includes growth in 13 of the past 14 years. The secret to its recent success? A strategy it calls Growth Through Innovation.


“[Our rigorous testing of products] gives Amway Business Owners confidence in the quality of the products, validates the health benefits of the products as part of a healthy lifestyle and helps them explain ‘why Nutrilite, why Amway?’ ”
—Audra Davies, Vice President of Nutrilite Product Development and Analytical Science


Now seven years into the strategy, the company has approximately doubled its size—its original goal. In fact, Amway executives can point to many successes. Most of its top 10 markets grew in 2012 and 2013, despite political turmoil and economic crises in some of them. As the company grows, its manufacturing capability grows, too. Amway is in the middle of a $332 million global expansion of it manufacturing and research and development, including four facilities in the U.S. that support the Nutrilite® brand, a new manufacturing facility in India, a second manufacturing site in Vietnam and an R&D center in China.

Amway has fueled its growth by focusing on the basics, providing products customers want to buy and creating an experience that satisfies the entrepreneurial needs of its 3 million Amway Business Owners (ABOs). Along the way, Amway has learned to customize its approach so that it creates success in many markets at the same time.

“The priority we’ve set around the world is on the experience of both customers and Amway Business Owners,” says Amway Chief Sales Officer John Parker. “We try to ensure that we’re providing the right support, tools, products and training to create an environment that helps people achieve their goals. It takes hard work, and there was no silver bullet—not one single product or initiative. Achieving growth around the world has required getting the right portfolio of strategies in place, strong partnerships in our regional organizations, and executing effectively.”


Global R&D expansion was one of the goals met by Amway’s Growth Through Innovation strategy.


Cultural Customization

In China, a fairly new market where the country’s unique regulatory environment requires direct sellers to adapt their traditional business models, Amway focused on brand-building, lots of training and ensuring that its products meet the unique needs of Chinese consumers, where nutrition and herbal remedies are a core part of the culture. The work is paying off. Amway earned about 40 percent of its 2013 revenue in China.

In stark contrast with China, the company’s business in Japan is more developed. Parker says that some of Amway’s most innovative work in the last few years has been done in Japan. Though it has been a challenge, a stagnant economy coupled with uniquely demanding, sophisticated consumers tests every company.


“Achieving growth around the world has required getting the right portfolio of strategies in place, strong partnerships in our regional organizations, and executing effectively.”
—John Parker, Chief Sales Officer


John ParkerJohn Parker

“For our business in Japan to get on a growth track, we needed to understand the unique nuances of the Japanese consumer,” Parker says. “One issue is the level of service they demand. As Americans, it’s hard to appreciate the service demands there, but our team there did a fantastic job of understanding where we weren’t delivering against service expectations and raising the bar uniquely in Japan. Again, it wasn’t just one magic bullet, but the right combination of initiatives: delivery, customer service, and the type of experience we offer in training centers and brand centers in Japan. Product launches created growth there, and the launches of skincare products that appealed to Japanese consumers have been very successful.”

Amway coupled product launches in Japan with training, tools and innovative events in clubs and on beaches that focus on brand-building, but without the traditional business presentations. Many initiatives are especially focused on achieving the right combination of initiatives for ABOs, and a focus on customer satisfaction drove excitement in the under-35 demographic of consumers
and ABOs.

“At the end of the day there are certain things we’ll do well at headquarters and certain things we must empower our teams around the world to do,” Parker explains. “We had to figure out the formula.”


Now seven years into its Growth Through Innovation strategy, Amway has approximately doubled its size—its original goal.


Market Domination

The second half of the formula revolves around products, especially the company’s star brands—Nutrilite and Artistry®—which open doors for ABOs around the world.

Nutrilite, the company’s line of wellness products, pre-dates Amway itself. This year Amway celebrates the 80th anniversary of Nutrilite. In fact, Amway founders Jay Van Andel and Rich DeVos started their direct selling careers in 1949 as Nutrilite distributors. The brand was already 15 years old. Rich has said that without Nutrilite, there would be no Amway. Jay and Rich introduced the Nutrilite brand to Amway distributors in 1972 when they acquired a 51 percent interest in Nutrilite. They gradually acquired more and more of Nutrilite stock until 1994, when they purchased Nutrilite Products in full. According to Euromonitor International Limited, today Nutrilite is the world’s No. 1 selling vitamins and dietary supplements brand, accounting for almost half of Amway product sales. One of the earliest wellness products, Nutrilite Double X®, is still the company’s flagship nutrition product.


Nutrilite, the company’s line of wellness products, pre-dates Amway itself. This year Amway celebrates the 80th anniversary of Nutrilite.

The company’s other mega-brand is Artistry. Also according to Euromonitor, for years the product line has been in the world’s top five largest-selling premium skincare brands, and among the world’s top 10 largest-selling premium cosmetic brands. The product line was born in 1959, the same year Amway was founded. Today it includes 250 products that are sold in 50 countries around the globe. Some 25 percent of Amway product sales are Artistry products.

Amway founders launched the company with one of the first biodegradable products, L.O.C.™ (Liquid Organic Cleaner) Multipurpose Cleaner. Today the L.O.C. name has morphed into the LEGACY OF CLEAN® brand, which includes an extensive line of products made with naturally derived ingredients. The company also offers eSpring water treatment and purification systems—now the world’s No. 1 selling brand of home water treatment systems*—as well as XS® Energy Drinks. While Amway offers all these product lines, its revenue workhorses are the Nutrilite brand of nutrition products and Artistry skincare and cosmetics. With some 450 individual products, Amway is a beauty and wellness powerhouse, offering products and the Amway opportunity in more than 100 markets around the world.



Family Features

Artistry and Nutrilite share some characteristics beyond their goliath revenue-production abilities. They’re both backed by science and developed by robust research and development teams. They have the support of Scientific Advisory Boards. And they were birthed by entrepreneurial creative teams comprising the founding families at Amway and Nutrilite Products. Today their legacies continue. Dr. Sam Rehnborg, son of Nutrilite Founder Carl Rehnborg, is now President of the Nutrilite Health Institute, while Steve Van Andel and Doug DeVos follow in their fathers’ footsteps, serving as Chairman and President of Amway, respectively.

A look at Amway’s approach to the Nutrilite brand reflects the way it manages others in the company. It starts with Amway’s commitment to innovation and quality in all of its products.

Kanan BanerjeeKanan Banerjee

“The secret is if you are true to your roots, that commitment becomes part of your DNA. It’s second nature to every employee,” says Kanan Banerjee, Vice President, Global Brand Management, Nutrition and Wellness. “No matter which function you talk to, it’s our benchmark, as well as our legacy.”

When Amway develops Nutrilite products, it ensures that they are rooted in nature, differentiated by their phytonutrient story, and best-in-class. To that foundation of plant-based ingredients, Amway adds science, which often allows products to provide a targeted benefit, such as memory support. And Amway ensures that products are relevant, conducting research into key consumer needs.

“With the number of scientists we have, the number of ideas for products can grow exponentially,” explains Audra Davies, Vice President of Nutrilite Product Development and Analytical Science. “We must prioritize all those ideas, so the criteria of consumer relevance, combined with science, combined with our nature story, create a winning combination.”

Part of the product-science combination includes the publishing of basic scientific research, such as a report published in August. Released by the Nutrilite Health Institute of Amway, The Global Phytonutrient Report highlights a significant shortfall in fruit and vegetable consumption in global diets, preventing individuals from receiving crucial health benefits. It reveals that the majority of adults worldwide would have to at least double their current consumption of fruits and vegetables to meet the World Health Organization’s minimum recommendation of five servings per day. The vast majority of adults worldwide—60 to 87 percent across 13 geographic diet regions—fell short of this recommendation.

Audra DaviesAudra Davies

The research indicates a global gap between the recommended amount of fruits and vegetables and what adults are actually eating, despite a growing body of research, which suggests that eating foods rich in phytonutrients—organic compounds found in fruits and vegetables—provides a range of health benefits, such as supporting the body’s antioxidant defenses and immune system.

Reports such as this one help reinforce the relevance of Amway products. Davies regularly takes the story of the science behind Nutrilite products to meetings of ABOs. She believes that they value the company’s commitment to science.

“It differentiates our brand and validates our product offerings in the marketplace,” she notes. “Sometimes products have gone through hundreds of thousands of tests before being launched. That gives ABOs confidence in the quality of the products, validates the health benefits of the products as part of a healthy lifestyle and helps them explain ‘why Nutrilite, why Amway?’ ”


“The secret is if you are true to your roots, that commitment becomes part of your DNA. It’s second nature to every employee. No matter which function you talk to, it’s our benchmark, as well as our legacy.”
—Kanan Banerjee, Vice President, Global Brand Management, Nutrition and Wellness

Amway ensures that ABOs have access to communications and sales tools that meet the needs of both the ABOs and their customers. Tools such as videos, unusual events, free training, digital apps for a variety of functions and even endorsements all increase credibility and ease the sales and prospecting process. And realizing that the under-35 demographic is becoming a larger part of the salesforce, Amway is developing new methods and frequencies of recognition.

“We haven’t cracked the code yet,” Parker says, “But I think we will need to adapt our recognition programs as a company to deliver more recognition earlier and in new ways—online, for example. Likewise, we need to empower leaders in the field to help them provide more recognition earlier in the Amway experience. We’re thinking about how we can build recognition into social media platforms. Those things are part of the psyche of the next generation, so we have to figure out how to deliver there. It’s not going to be a nice-to-have. It’s a requirement.”

Such efforts reflect the customization in Amway’s global business these days. Parker believes that the next 10 years will see Amway focused on getting the right growth initiatives implemented in the right markets based on local entrepreneurs and consumers.

“For a big company like Amway, it would be easier if we had the same three initiatives around the world. Sometimes that will be the case, sometimes not,” Parker says. “We’ll meet consumers where they’re at with products and messages that resonate. We measure our success based on the success of our business owners—how many people are achieving the goals they set in their Amway business each year; how compelling are the products, training and events we’re doing every year; and we have to add the social dynamic into the mix as well. If we can create an atmosphere where people are enjoying what they’re doing, that’s an important part of the equation for our business. It might look different around the world, but the outcome is the same.”

Nutrilite: Celebrating 80


Photo on left: Amway Co-Founders Rich DeVos and Jay Van Andel (bottom row, second and third from the right, respectively) pose with Nutrilite Founder Carl F. Rehnborg and his wife Edith Rehnborg, in 1956. (Amway) Photo on right: Carl F. Rehnborg in his Buena Park, California, office, circa 1950. (Amway)
Dr. Sam RehnborgDr. Sam Rehnborg

Eight decades of success deserves a party, and Amway is celebrating the 80th anniversary of Nutrilite by launching the second edition of The Nutrilite Story: Past, Present and Future. The first edition was published five years ago. The update, which Amway published as an ebook, adds five chapters that chronicle the brand’s tremendous growth from 2009 to 2014. That growth reflects advancements in research that drive innovative product development, investment to expand global manufacturing capabilities, and the unique global agribusiness approach that supports Nutrilite organic farms. The book also adds entries from more than 100 top-selling Amway Business Owners.

The book’s author, Dr. Sam Rehnborg, is the son of Nutrilite creator Carl Rehnborg and the President of the Nutrilite Health Institute. “Dr. Sam,” as he is affectionately known throughout Amway, inherited his father’s passion for creating optimal health through a plant-based diet and plenty of exercise. And like his father, he recognizes that people around the world simply don’t live the lifestyle needed to reach their optimal health. Supplements help fill dietary gaps. That’s been the role of Nutrilite for 80 years.

“It gives me intense pleasure to see people awakening to the connection between nutrition, health, and disease prevention,” Dr. Sam says. “The heart of the Amway business is exactly what my father was after—people taking charge of their lives. When you do, you take responsibility for your health, your wealth and the health of the planet.”

He points with pride to the Amway sales model—also his father’s brainchild—which is based on satisfied customers getting excited about the product and sharing it with others. And he is proud that the products themselves are supported by scientific research and ingredients harvested at Amway farms—over 6,400 acres in the U.S., Mexico and Brazil. Nutrilite is the only global vitamin and mineral brand to grow, harvest and process plants on its own certified organic farms.

Proceeds from the sale of the book benefit the Nutrilite Power of 5 Campaign, which partners with nonprofit organizations to provide a micronutrient supplement to malnourished children through Nutrilite Little Bits, a one-gram nutrient powder packet containing 15 vitamins and minerals that can be sprinkled onto any food.

Dr. Sam explains, “Recent research has shown that if you can provide children through 5 years of age with good nutrition, they have a chance to fulfill their potential. If they’re malnourished, children will never be able to achieve their ultimate potential.”

Linked to the Nutrilite anniversary celebration and the Power of 5 Campaign is a ribbon cutting and open house on Sept. 17 that will showcase the newly designed Center for Optimal Health and rooftop replica of Carl Rehnborg’s historic Quonset hut, which served as his early home and lab. The ceremony is one of a series of events at more than 100 locations where Amway distributors have invited guests to donate their handprint to help in the fight against childhood malnutrition. For every handprint received, Amway will contribute $1 and match donations up to $400,000 to CARE International to support the Power of 5 Campaign.

August 20, 2014

The Changing U.S. Market: A $4 Trillion Opportunity

by DSN Staff

It’s every marketer’s dream—a growing market, consumers ready to buy, with money in hand. Trillions of dollars, in fact. But are all direct selling companies aware of this growing, ready and willing group? Even more, are their executive teams and salesforces knowledgeable about how to reach them to influence those trillions of dollars they are willing to spend?

Perhaps, the most startling numbers on these graphics are those representing the jump in buying power between 1990 and 2017 among all four of these minority groups. The Asian-American percentage change in buying power shows an increase of nearly 800 percent between 1990 and 2017, increasing from $115 billion to $1 trillion.

Close behind these staggering numbers is the Latino buying power, increasing almost 700 percent in the same years, from $210 billion to $1.7 trillion. Also breaching the trillion-dollar mark, the African-American buying power will climb to $1.3 trillion by 2017. And beyond that? The U.S. Department of Commerce projects steady increases in these numbers, expecting minority purchasing power to exceed $4 trillion in a few short years.

Emergence of the Total Market

America has long been called the melting pot of the world—a term referring to the various ethnic and racial heritages of over 300 million individuals who live here. The truth is that unless one is a Native American, every U.S. citizen has ancestors that have come here from somewhere else.

For the last five or six decades, the term General Market has referred to the group that makes up the largest percentage of customers in the U.S. marketplace. This group has been mostly represented by what the U.S. Census Bureau refers to as “non-Hispanic whites,” also commonly called Caucasians or “Anglos.” This General Market has been mostly constructed of descendants of Eastern, Western and Southern Europeans.

Entire sales and marketing structures have been built over the generations geared toward this General Market. Other segments of the population—large Chinese and other Asian communities, Hispanic families, and African-American populations—in commercial terms have long been considered sub-groups to the General Market. These sub-groups might have been completely overlooked in the construction of sales and marketing budgets, or more likely, allocated dollars in accordance with their population percentage. In other words, a company might have determined a specific amount for their sales and marketing budget and, having checked the U.S. Census Bureau data, had specific percentages of that budget allocated toward Hispanic, African-American, or Asian-targeted marketing. From a company standpoint, this has worked fairly well; however, it won’t for much longer.


The U.S. Department of Commerce projects a steady increase in minority purchasing power, expecting total dollars to exceed $4 trillion in a few short years.


This approach is becoming increasingly outdated because the face of America is literally changing. Through marriage and family building across ethnic and racial lines, as well as continued immigration, the General Market and its sub-groups no longer fit into distinct categories. This is evidenced by the fact that Americans are finding it more difficult to identify themselves within one single category.

In 1977, the U.S. Census form had only five categories of race: Indian, Asian, Black, White or Hispanic. Only one box could be checked. According to an article by Jens Manuel Krogstad and D’Vera Cohn published by the Pew Research Center in March 2014, U.S. Census official Nicholas Jones is quoted as saying, “Increasingly, Americans are saying they cannot find themselves on census forms.”

The Bureau is attempting to address this issue, and its complexity is plainly visible on the form, as there are now 15 options that make up five race categories—white, black, American Indian/Alaska Native, Asian, or Native Hawaiian/Other Pacific Islander. A separate question asks whether individuals are of Hispanic, Latino or Spanish origin.

The Census Bureau statistics simply indicate we have moved into a time in which multi-culturalism isn’t just an idea, or a marketing plan, but the reality of most Americans. And this reality is changing the way companies do business.


To see this graphic larger Click Here.


Language Shifts

The substantial changes in demographic makeup have led many in the marketing world to talk about shifting the language that describes customers. The idea of a dominant General Market with a few sub-segments is no longer a viable marketing description of consumers. Marketers are increasingly looking for new and better ways to reach consumers, and are embracing new labels to more accurately describe the buying public.


The largest contributing group to the multicultural expansion is the Latino population, which will triple in size and account for most of the U.S. population growth through 2050.


In the graphic below, you can see the changing face of the U.S. market by age segment, most clearly indicated by those in the under-40 and youngest categories. These young people will be the customers, consultants and corporate employees of tomorrow. Marketers are increasingly aware that their messaging needs to match up with what these populations consider to be important in order to best leverage their strategic plans. The largest contributing group to the multicultural expansion is the Latino population, which will triple in size and account for most of the U.S. population growth through 2050.

The transition from viewing the consumer landscape in segments to viewing the total landscape as one made up of varied cultures is now so marked that some believe the time has come to dismiss race altogether as a useful social indicator. Instead, companies should focus on strategies that will appeal across the multiple cultures, and layer on strong, engaging and connective ethnic values. In other words, focus on the human elements and find commonalities across all segments, thus delivering marketing content that is engaging and appropriate.

New marketing terms—such as Total Market, New Mainstream and others—are working their way into the lexicon of business executives who are attempting to manage these ideas into workable strategies.



Capturing Market Share through Content

Here at DSN, we’ve been writing about the importance of content marketing for some time. Marketing entrepreneur and blogger Seth Godin, along with author and social media guru Gary Vaynerchuk and others, has convinced us that outreach to customers in the social network and digital age is all about content, content, content.

But now, the message of that content is ever more important because the audience that is receiving it is changing as well. Joe Pulizzi, founder of The Content Marketing Institute, says, according to his website, that the content of your message delivers “information that makes your buyer more intelligent. The essence of this content strategy is the belief that if we, as businesses, deliver consistent, ongoing valuable information to buyers, they ultimately reward us with their business and loyalty.”

It will not do a company any good to produce marketing messages and advertising content for their goods and services that do not connect with the intended audience. Even if those messages have connected in the past, the profile of the customer is changing so much that even that success may no longer count. So what does matter?

According to Cuban-American entrepreneur and author Glenn Llopis, who heads up the Glenn Llopis Group business consultancy, culture is the new universal language of marketing. In a Forbes article on capturing the Hispanic Market segment, Llopis writes, “Cultural intelligence must replace the misguided notion that simply translating English copy into someone’s native language is all you need to do to reach them. Embracing cultural sensitivity has become critically important to the design of new business models, leadership development and the relationships that brands earn with their consumers.” Llopis makes the point that brands don’t necessarily need to communicate in a language to reach ethnic consumers, but they do need to communicate in the language of the group’s culture.



The Messages

Translating existing English copy into various languages has been a common business practice in the past. That practice may never have been the best solution for the targeted market, but the expansion of cultural practices across the broader market is making it more and more outdated, not to mention embarrassing.

Take for example, the translation of the California Dairy Board’s very popular “Got Milk?” campaign into Spanish. Because they didn’t take the time to consider cultural nuances, the Dairy Board created a campaign that asked, “Are you lactating?”

Similarly, General Motors wanted to market the Chevy Nova to Latin American customers. They didn’t pay attention to the fact that “no va” in Spanish means “no go.” After much wasted time and effort, they renamed the car for that market.

Mistakes as blatant as these are not happening every day; however, any misfire created by a lack of understanding is wasted effort. How exactly will all this affect your company’s bottom line in recruiting, sales, and even hiring employees? Well, it’s difficult to draw dramatic conclusions, but it does seem clear that companies seeking to understand the market changes that are occurring will benefit more in the acquisition of customers, consultants, and general brand approvals.

Some of the cultural messages that are moving to the forefront of the total market might seem simple, but including them in your marketing messages can create a deep resonance in the market. For example, the number of households containing extended family—whether that is two or more generations living together, or includes cousins and aunts and uncles—is growing rapidly. Those companies whose marketing messages value these family relationships are more likely to engage these consumers.

Securing a place among these multiple trillions is, or should be, the goal of any modern marketer. Though the cultural messages and nuances are vital to any successful campaign, it is useful to remember that everyone, regardless of background or heritage, seeks quality and authenticity in the goods and services they utilize. With that as the starting point, those companies who strategically plan to reach the total market and all of its diversity will certainly gain a competitive edge.

August 20, 2014

USANA: Delivering a Message of Health and Hope

by Lin Grensing-Pophal


Company Profile

Founded: 1992
Headquarters: Salt Lake City
Executives: Dr. Myron Wentz, Founder and Chairman; David Wentz, CEO
Products: nutrition, diet and energy, and personal care


Dr. Myron WentzDr. Myron Wentz
David WentzDavid Wentz

Can you imagine a world without disease? Dr. Myron Wentz can. And, in fact, he’s made it his life’s mission to contribute to creating a world free from disease and focused on wellness and health products that have impacted people in countries all over the world.

A microbiologist and immunologist, Dr. Wentz is a pioneer in the development of human cell culture technology and infectious disease diagnoses. From the beginning of his career, his focus on improving people’s lives has been driven by a strong interest in medical science, the development of tests for viral diseases (he developed the first commercially available test for diagnosing infection with the Epstein-Barr virus), and broad humanitarian efforts.

Commitment Leads to Action

Dr. Wentz channeled his personal passion when he founded USANA Health Sciences Inc., because he believes disease prevention is as important as disease detection, and the single most effective way to prevent degenerative diseases is proper nutrition.

“If we can nourish the human body in a comprehensive way on a daily basis with the full spectrum of essential nutrients in the right forms, amounts, and in the proper balance, we can sustain long-term health and effectively avoid degenerative disease,” he says.

USANA’s nutritionals provide the high-quality vitamins, minerals and antioxidants that bodies need for good health, while its diet and energy products provide meal-replacements and snacks for weight loss and energy. The company has also introduced personal-care items to cleanse, refine and replenish skin and hair. USANA’s strong commitment to health and well-being even extends to the specific needs of children, with the creation of Usanimals™, a multivitamin especially designed for children in their formative years.

USANA’s nutritional supplements have found a loyal customer base, and the company has expanded to new markets in North America, Europe and the Asia Pacific region. Today, USANA is a high-performing and growing organization with sales of about $718 million in 2013 (compared to about $649 million in 2012 and about $582 million in 2011), with net earnings available to common shareholders of $80 million in 2013. Sales are generated from nutritionals (80 percent), foods (11 percent) and personal-care products (6 percent), with purchases coming from associates and preferred customers. Associates are independent distributors of the company’s products who may also purchase products for their own use, while preferred customers purchase products strictly for their personal use. As of the end of 2013, the company had 265,000 active associates and 78,000 active preferred customers worldwide.


Today, USANA is a high-performing and growing organization with sales of about $718 million in 2013 (compared to about $649 million in 2012 and about $582 million in 2011).


Driving Change through Humanitarian Efforts

Jim BrambleJim Bramble

With this success comes more opportunity for the company to expand in an area that is already close to its leaders’ hearts—charitable giving. Jim Bramble, who has been with USANA for 17 years, is Chief Legal Officer and General Counsel for USANA Health Sciences and sits on the board of USANA’s foundation: the USANA True Health Foundation (UTHF). During his tenure, he says, the message and commitment to “giving back” has been driven home continuously. “This comes from our founder and his son, David [the company’s CEO]. They have very large hearts, and they’re very concerned with the fact that we’re very blessed but not everybody is.”

This strong personal commitment, says Bramble, led the company to partner early on with the Children’s Hunger Fund (CHF) and to join them in opening hospitals in Malawi, Uganda and Cambodia.

“We have had an amazing partnership with USANA now for 14 years,” says Dave Phillips, President of Children’s Hunger Fund. “Through the contributions of Dr. Wentz, USANA corporate and the USANA True Health Foundation, the USANA family has played a substantial role in our growth and impact over the years with nearly $20 million donated to provide nutrition for children and families in need.”

In 2012 the USANA True Health Foundation was formed with a mission of providing the most critical human necessities—nutrition, clothing, shelter, medical assistance and health education to those who are suffering or in need. The foundation focuses on three areas:

  • Area of Greatest Need: releases funding and aid for worldwide disasters where immediate help is needed.
  • Children’s Hunger Fund (CHF): a nonprofit organization that works to alleviate the suffering of children in impoverished regions across America and around the world.
  • Sanoviv Medical Assistance: provides funding to Sanoviv Medical Institute patients who are otherwise not able to pay for their care.

The foundation is registered in seven countries where donors are able to receive tax benefits for their contributions, and it has received donations from people in 23 countries. Since its inception it has impacted more than 25,000 people, in 12 countries, through disaster relief and providing nutrition to underprivileged children and their families. About 15,000 people were impacted in 2013. One of these efforts involves a relationship with Dr. Mehmet Oz and his charitable foundation HealthCorps, which focuses on nutritional education for inner-city youth in North America.

Contributions to the foundation may be made in a variety of ways. Individuals, distributors and USANA employees may: donate a monthly amount; donate through the foundation’s website at www.usanafoundation.org; participate in the annual USANA Champions for Change 5K in August; or donate Usanimals™ vitamins to the Children’s Hunger Fund to help underprivileged children around the world. 

In 2013, during USANA’s Success on the High Seas cruise, more than 700 distributors were asked to bring items to make life better for children living in the Foyer de Sion orphanage, when the ship stopped in Haiti. Thirteen children from the orphanage met the associates and received the gifts, which included much needed diapers, formula, nutritional supplements, toothpaste, soap and many other essential items.

There are other individual efforts as well. Teddy bears are sold at USANA’s Asia Pacific convention to benefit the foundation, and Philippine associates recently held a 5k to benefit victims of Typhoon Haiyan. Support is also provided to distributors who wish to hold their own fundraisers.


In 2012 the USANA True Health Foundation was formed with a mission of providing the most critical human necessities—nutrition, clothing, shelter, medical assistance and health education to those in need.


Serving the World

On Jan. 12, 2010, a 7.0-magnitude earthquake struck and devastated Haiti’s capital city, killing 230,000 people and leaving 1.5 million homeless. Japan’s epic 9.0-magnitude earthquake and subsequent tsunami occurred the following year, on March 11, 2011, killing more than 15,000 people. Bramble says the tragedies weighed heavy on the heart of USANA CEO David Wentz.

Wentz went to the management team and asked, “How can we use the incredible power of direct selling, where people network together, to harness that energy to help in situations like these?”

Because of USANA’s global reach these tragedies are very personal. Says Bramble, “We have distributors who are our family in Japan, and we can’t work together as an entire community of USANA to respond to disasters like this because we have nothing in place.”

The USANA True Health Foundation was founded to respond to these types of situations. Through a partnership with International Relief Teams, USANA is now poised to respond when disasters strike throughout the world, especially in areas where USANA has a presence, he says.

“Our partnership with USANA True Health Foundation is invaluable,” says Barry LaForgia, Executive Director of International Relief Teams. “Knowing USANA will provide funding gives us the assurance to quickly apply resources during the critical early days after a disaster when lives are literally in the balance. USANA’s support also allows us to continue helping survivors, by not only enabling us to address their basic needs for temporary shelter, food and medical assistance while they are displaced, but also to help them recover through programs that restore livelihoods and permanent shelter.”

Donations to support the foundation come from multiple channels, including associates, employees and preferred customers. In some countries, participation is close to 100 percent of all employees, says Bramble.


“When I went to Uganda [during our missionary trip]… you just come back with those experiences that make it more personal—you gain a personal understanding of how you are really making a difference.”
—Jim Bramble, Chief Legal Officer and General Counsel, The Health Foundation board member


Making It Personal

USANA’s efforts around the world are very personal to its employees and distributors. In many cases distributors see firsthand, not through a statistic but through the impact they individually have on others, the power of their commitment to helping those in need.

“One of our most successful markets is the Philippines,” Bramble says. It’s a country that has been through a lot in terms of natural disasters over the past few years, he notes. “Because we have so many distributors on the ground in that country, they’ve been able to participate not only in fundraising but also in donating to help their home.” In addition, he says, distributors have become personally involved by actually going into the cities that have been devastated and helping to rebuild.

“One thing we do is to encourage executives and associates alike, anyone who has a lot of influence in the field, to attend yearly missionary trips that the Children’s Hunger Fund sponsors,” he says. “Those who have donated on their own dime go together as a group with the CHF to different areas of the world and work with their hands in that area.”

Bramble himself has been directly involved in these efforts, and those experiences are very powerful, he says.

“For instance, when I went to Uganda we went to different villages in the inner city and passed out food and medicine. We went to an orphanage, and you just come back with those experiences that make it more personal—you gain a personal understanding of how you are really making a difference.”

In fact, Bramble says, “It really, in a lot of ways, was one of the most defining trips of my life.” That was back in 2008, but “there isn’t a day that I don’t at least dwell on it for a moment because it was so powerful.” It was a country that he says he didn’t know anything about, other than the name. He and his wife went with a group of about 30 people from the Children’s Hunger Fund and other distributors who wanted to participate.

Uganda Medical CentreDr. Myron Wentz visits the hospital he founded in Uganda.

According to the International Monetary Fund, Uganda is one of the 20 poorest countries in the world, with 37.7 percent of the population living on less than $1.25 a day. This poverty has contributed significantly to the widespread undernutrition of the country’s people, with 38 percent of children chronically undernourished or stunted, according to Feed the Future, the U.S Government’s Global Hunger & Food Security initiative. “It’s to the extent that it will cause their deaths someday,” Bramble says. “It’s substantial malnourishment.” Most of these children are orphans because Uganda is a country that has been heavily hit by AIDS.

While in Uganda the group went to three locations. They went to the recently founded Wentz Medical Centre and Laboratory to visit and read to people suffering from malaria, to an orphanage on an island in Lake Victoria that was heavily impacted by both AIDS and civil unrest, and to the inner city, which was a place of extreme poverty. During each of these visits the team visited with people and delivered food and vitamins—the Usanimal™ vitamins that USANA produces.

“To me it was life-changing,” Bramble says. “I remember one specific instance, as I think back, of seeing this little girl who was 6–8 years old, and my daughter at the time was the same age. This little girl was wearing this paper dress—literally made of paper. And I thought of my daughter and this huge closet we have full of clothes, and how she never has to wear the same dress to church twice because she has so many. And I just thought ‘I need to be involved somehow to help little girls like this.’ ”

When Bramble returned home he went to CEO David Wentz and asked how he could become involved in more of these activities.

“That’s why it might seem strange to have the General Counsel be the person on the Board of Directors for the Foundation, but that was the experience that gave me the interest and led to my involvement,” he says.


“The truth is that it is not only the right thing to do, but it makes good business sense to involve your salesforce in charitable activities because it creates loyalty.”
—Jim Bramble


How Others Can Make a Difference

Direct selling companies are businesses first and foremost. They and their distributors are interested in sales and business success. Because of that, acknowledges Bramble, there can be a hesitancy to divert the efforts of staff and distributors from selling to other activities—like charitable and humanitarian efforts.

But, he stresses, this fear is misplaced. “The truth is that it is not only the right thing to do, but it makes good business sense to involve your salesforce in charitable activities because it creates loyalty and it creates a feeling that ‘I’m involved with a company that does good things.’ ” That, he says, “helps you with your retention; those are people who are going to stay with you—they are going to sell products longer.

“Don’t be afraid of wasting resources on something other than your bottom line, because the bottom line is not as important anyway. And, in the end and over the long run, it will be better for the bottom line as well.”

In addition, he advises companies to find alignment between their business and their charitable passion. But make sure that the organizations you choose to partner with or support “have a really good infrastructure, are very efficient and already know how to deliver the aid where it is needed.” Direct sales companies shouldn’t attempt to deliver or recreate these systems on their own. “If you try to recreate, that’s a lot of dollars wasted on administration that someone else has already done.” In addition, he says, “It allows you to let your donors know that the help they’re providing goes directly to those who need it.”

Delivering a message of health and wellness to the world is something that resonates not only with employees and distributors, but with USANA’s customer base as well, Bramble says. It is through these collective efforts that Dr. Myron Wentz’s vision of wellness around the globe may someday be achieved.

“Our customers are very interested in health. Their charitable activities can help increase health, and then it’s a natural draw.”

August 20, 2014

Family Heritage: Protecting Customers for 25 Years

by Sarah Paulk


Company Profile

Founded: 1989
Headquarters: Cleveland, Ohio
Executives: Chairman, CEO and Founder Howard L. Lewis
Products: life and supplemental health insurance


Howard L. Lewis.Howard L. Lewis

Direct sales has proven to be a channel that is equally receptive to service companies as it is to those that sell physical products, especially with the growth of the energy and essential services sector—so why not insurance? Selling an intangible like insurance may not provide the same glitz and adrenaline rush for customers as perhaps shopping for jewelry or home décor items might, but for Family Heritage Life Insurance Company of America, that unlikely niche is exactly where they like to be.

“Many people buy insurance through their employer,” says Doug Kelly, Chief Marketing Officer of Family Heritage. “There are people whose employers do not provide supplemental insurance, people who are self-employed and people who are retired who cannot obtain insurance products this way. We provide products to this underserved market segment. It is a difficult market to reach so most insurance companies avoid it. This means the competition is not as intense in this market, and that makes it attractive.”

Family HeritageFamily Heritage headquarters in Cleveland, Ohio.

The Evolution of Coverage

Family Heritage’s life and supplemental health insurance aims to provide what families are looking for: protection. Everyone wants to know that they, along with their families, would be taken care of in the midst of a health crisis or tragic accident. And unlike traditional health insurance, supplemental insurance pays money directly to the customer.

Simplicity and efficiency are top priorities for Family Heritage, so it is no surprise that their products reflect those objectives. The company’s life insurance policies emphasize an uncomplicated underwriting process, which requires no medical exam, convenient billing and immediately effective coverage. Heritage Life Extra, an innovative life insurance product, was introduced in 2006. Juvenile Life, designed to protect customers’ children, was launched just this year.

Additional policies within the company’s product line include accident, hospital indemnity, intensive care, and heart attack and stroke policies. Family Heritage’s top seller, cancer insurance, is also its flagship product and is the company’s avenue to provide relief to families who are enduring the exhausting and expensive journey that often accompanies this diagnosis.


“The original vision [of Family Heritage] was to build an insurance company in which all participants, both home office and Sales Professionals, were stockholders. We met that goal, and many had their financial dream fulfilled.”
—Ed Rocheck, Senior Vice President and Chief Administration Officer


Over the years, the company’s cancer insurance has evolved to meet customers’ needs and to inspire healthy choices. The addition of a wellness benefit, for example, encourages customers to get cancer screenings annually by paying benefits for examinations like mammograms and PSA (prostate-specific antigen) testing.

“As medical procedures evolve, the product is updated to reflect those changes,” Kelly says. “A recent example is the chemotherapy benefit. Family Heritage has always paid a benefit for chemotherapy, but in recent years, the medical community has been moving away from toxic chemotherapy agents toward less disruptive agents known as targeted therapies. Family Heritage broadened its chemotherapy benefit to include these agents in our most recent revision.”

Recruiting with Passion, Working with Compassion

Providing comfort and financial relief during crisis is the mission behind the commitment and effort of Family Heritage’s team of Sales Professionals. This mission, reinforced by an unofficial motto of “work with passion and compassion,” creates a relationship between Sales Professionals and their clients. As a result, customers feel comfortable calling on their personal Sales Professional in the event that a claim needs to be made. While this caring salesforce is certainly the lifeblood of the company today, it was surprisingly the company’s greatest obstacle at one time.

“Over the years, recruiting a salesforce has been a challenge,” says Henry Grendell, Family Heritage Vice President and General Counsel. “The leadership addressed this by developing a recruiting process that highlighted the importance and value of the products and the financial rewards that are available to Sales Professionals, and also shared best practices across sales organizations so that a robust portfolio of recruiting methods and sources were used.”

The term ASAP (All Sources; All Places) was coined to describe the multifaceted approach Family Heritage relies on to recruit new team members. Active participation in job fairs and online career boards, placing newspaper ads in locations where organizations are seeking to build their teams, and field recruitment—presenting the opportunity to friends, family or customers who appear to have potential—are all proven methods that successful Family Heritage Sales Professionals use to expand their organizations.

“Family Heritage grows by finding sales leaders who want to build organizations and businesses of their own,” Kelly says. “When we find an effective sales leader, sales grow in that geography.”

The company’s recruiting efforts continue to pay off as the number of Sales Professionals increases exponentially, from 22 agents during the company’s inaugural year of business to more than 1,600 active Sales Professionals today. The company also serves over 250,000 families across the U.S. and has 127 employees at the home office. Aside from creating a healthy, large organization, the leadership prides itself on knowing that the building of a strong Sales Professional base is ultimately the fulfillment of a goal they set 25 years ago.

“The original vision was to build an insurance company in which all participants—both home office and Sales Professionals—were stockholders,” says Ed Rocheck, Senior Vice President and Chief Administration Officer. “We met that goal, and many had their financial dream fulfilled.”

This vision was the one that Howard L. Lewis, Chairman, CEO and Founder of Family Heritage, set himself. Having the principles of service and integrity instilled in him early on in his professional career in both the financial services and insurance industries, he felt that those who help build the company should have the opportunity to become owners of the company.

This business model has offered Sales Professionals and corporate office members alike a unique and often prosperous financial opportunity. The company’s acquisition by Torchmark Corp. in November 2012 for $218.5 million has broadened that opportunity even further, offering a new stock purchase program. McKinney, Texas-based Torchmark (TMK—NYSE) is a holding company for several life and supplemental health insurance subsidiaries, including two other direct sales companies—American Income Life and Liberty National Life.

Tools of the Trade

The introduction of new parent company Torchmark brought with it new resources, including new tools to help identify viable candidates and modernized processes that use the latest Internet technology to locate and recruit new team members. As with any organization in today’s marketplace, technology plays a vital role in the company’s success. Social media platforms are must-haves for any company wishing to stay relevant, and Family Heritage uses them to communicate cultural aspects of the company that could be easily missed in the tone of a formal website. Those who view the company’s Facebook, LinkedIn and Twitter pages will see pictures of awards Family Heritage has won, fundraising events it has taken part in, and videos of its salesforce and home office employees showing how much they love being a part of the FHL family. These platforms provide Sales Professionals and employees a place to share successes and advice, and they allow potential recruits to learn more about the culture of Family Heritage.

For Sales Professionals, the opportunity to dig deeper past the public website into a password-protected portal offers training videos and commission and sales reports exclusive to each of their individual organizations. A robust internal system nicknamed SOAR (Service, Outstanding performance, Adaptability, Reliability) is available to home office personnel, allowing them to easily access information for customers and conduct transactions on a customer’s behalf.

Continued personal development is essential for success, and Family Heritage addresses that with a variety of training opportunities made available to Sales Professionals throughout their careers. Sales Academy is a Sales Professional’s starting point, explaining the ins and outs of the Family Heritage products and sales process. This weeklong course uses exercises and role-playing in addition to traditional presentations to give Sales Professionals a basic understanding of the business.

Beyond Sales Academy, national sales meetings are hosted twice annually with a heavy training component, and online training videos and weekly conference calls provide continuing education and tips from successful Sales Professionals.

While technology is important, the leadership emphasizes that it is not the catalyst for success at Family Heritage. “The key to success at Family Heritage is our people who have a can-do attitude and who treat customers as if they were part of the family,” Kelly says. “Technology helps them do it, but technology alone would not be sufficient.”

In addition to the company’s training, individuals are also required to have a state license to sell insurance. In order to receive a license, all states require applicants to pass an exam and complete an insurance application. Depending on the state, applicants may be required to attend a pre-licensing course as well. Family Heritage also conducts a background check on all applicants. Most states require that agents complete continuing education courses each year to retain their licenses.


Providing comfort and financial relief during crisis is the mission behind the commitment and effort of Family Heritage’s team of consultants.


A Bird in the Hand

Since its launch in 1989, Family Heritage has stretched its active operations into 49 states, plus the District of Columbia and Puerto Rico. While sales are greater in some areas, depending on the concentration of the salesforce, the leadership continues to set its gaze upon the horizon and how it can improve or positively affect its current program.

One of its opportunities is expansion, including geographic expansion into areas like New York and Canada. Until this expansion becomes a reality, the leadership is placing greatest emphasis on its current assets, as they see these areas as the best opportunity for growth. The key for creating growth for the company during this season, Kelly says, is continued recruitment.

Product awareness will play a strategic role as well. “The opportunity for better utilization of the existing portfolio of products is huge,” Kelly says. “In 2014, cancer insurance sales represent almost 60 percent of the company’s sales. With a portfolio of six products, there are tremendous opportunities for growth by offering the other products to new and existing customers. Programs have been developed to facilitate this type of cross-selling, and results to date have been favorable.”


“The key to success at Family Heritage is our people who have a can-do attitude and who treat customers as if they were part of the family.”
—Doug Kelly, Chief Marketing Officer


Celebrating a Silver Anniversary

Although it has faced its share of obstacles, growth has seemed to come naturally for Family Heritage throughout its two and a half decades’ reign. At its launch in 1989, the company brought in a meager $5,848 in revenue. The next year, in 1990, revenue soared to $523,728. This past year, 2013, saw revenue reach $192.5 million—earning it the No. 66 spot on the DSN Global 100 list of the world’s largest direct selling companies.

As Family Heritage reflects on the success of its past and prepares for the future, the company is making plans to celebrate its silver anniversary in style by awarding and recognizing the heart of the company—its sales team. A four-day celebration at the end of December will bring together 700 Sales Professionals and home office employees for an exhilarating celebration at The Rock and Roll Hall of Fame Museum in Cleveland, Ohio, its headquarters. Excellent catered food and live bands will set the mood for a weekend that leaders of the 25th anniversary committee describe as “not low-key at all.”

The purpose of the event, with the theme of “the heritage of our past, the promise of our future,” is to thank and pay homage to the agents who work year after year investing in and building the company. A highlight of the event allows agents and home office employees to rekindle old relationships and make new connections.

“We are proud of the opportunity we have created for our employees and Sales Professionals,” Grendell says. “Prior to the sale of the company in 2012, every employee received, and every Sales Professional could qualify for, stock in the company. When the company was sold, many Sales Professionals and employees received significant payments for their stock, which permitted them and their families to improve their standard of living. Likewise, Sales Professionals receive lifetime vested renewals, and employees have an excellent benefits program. We are proud to see our employees and Sales Professionals become financially secure as a result of our success.”

Family Heritage also continues to receive awards and recognition for its customer service and workplace environment. This year alone, the company received Corporate Social Responsibility Program of the Year for the second time from the American Business Awards; Customer Service Department of the Year (both through the ABAs and the Sales and Customer Service Awards several times throughout the years); and Customer Service Department of the Year by Customer Sales and Service World Awards. In previous years, it has won the World Class Customer Service Award several times by Smart Business magazine and The Plain Dealer Top Workplaces for 2010 and 2011.


“The goal for the next 25 years is to continue to grow and to make Family Heritage a common part of most American families’ protection plans.”
—Henry Grendell, Vice President and General Counsel


The Next 25

Customer service is a dominant theme in the culture of Family Heritage. It is evidenced in even the smallest details of the business, such as their commitment to never have an automated attendant answer their phones and ensuring that all documents are scanned into the company’s system and accessible when customers call in.

Helping customers in this way by dealing with their concerns with both efficiency and compassion has contributed to Family Heritage’s longevity and success. “The goal for the next 25 years is to continue to grow and to make Family Heritage a common part of most American families’ protection plans,” Grendell says.

August 20, 2014

Financial News, September 2014

Herbalife Ltd.

Herbalife Ltd. (HLF—NYSE) announced second quarter 2014 results, with earnings falling a penny short of expectations—adjusted earnings per share of $1.55 versus estimates of $1.56. This was the first time since 2008 that Herbalife missed estimates. Despite this difference, earnings increased 10 percent compared to the prior year.

The global nutrition company reported net sales for the quarter ended June 30, 2014, at $1.3 billion, reflecting an increase of 7 percent compared to 2013. Estimates had been $1.35 billion. Second quarter worldwide volume growth was 5 percent compared to the prior year period.

Adjusted net income for the quarter was $141.4 million, compared to 2013 second quarter adjusted net income of $150.7 million. On a reported basis, second quarter 2014 net income was $119.5 million, or $1.31 per diluted share, compared to $143.2 million, or $1.34 per diluted share for the same period in 2013.

For the quarter ended June 30, 2014, the company generated cash flow from operations of $156.9 million, invested $39.6 million in capital expenditures and repurchased $581.3 million in common shares outstanding under its share repurchase program.

During the second quarter the company repurchased 9.8 million shares at an average cost of $59.41. There is currently $232.9 million remaining on the existing $1.5 billion share repurchase authorization.


Tupperware Brands Corp.

Tupperware Brands Corp. (TUP—NYSE) announced its second quarter results, reporting that sales for the quarter were $674 million, down from $688 million for the same period last year. While sales were down 2 percent (up 3 percent in local currency) versus the previous year, emerging markets achieved a 10 percent increase in local currency, accounting for 66 percent of sales. Established markets were down 7 percent in local currency, largely driven by poor results in Germany.

GAAP net income of $47.6 million for the second quarter ended June 28, 2014, includes $22.2 million from the impact of currency devaluations in Venezuela. Net income of $47.6 million was down 38 percent, or 93 cents per diluted share, from the previous year’s $76.3 million, or $1.43 per diluted share. Excluding foreign currency, net income was down 31 percent versus the prior year. GAAP diluted EPS was 93 cents, versus $1.43 last year with adjusted diluted EPS of $1.47, up 11 percent in local currency.

Second quarter cash flow from operating and investing activities was $45 million, versus $49 million in the prior year, primarily reflecting planned higher capital spending.

In the second quarter the company returned $47 million to shareholders through a dividend payout of $33 million and the repurchase of 171,000 shares for $14 million. Since 2007, 20 million shares have been repurchased for $1.2 billion, with $800 million left under an authorization that runs until February 2017.


USANA Health Sciences Inc.

USANA Health Sciences Inc. (USNA—NYSE) reported financial results for its fiscal second quarter 2014, missing earnings estimates by 14 cents at $1.36 per share (according to Briefing.com the Capital IQ Consensus Estimate was $1.50).

For the second quarter ended June 28, 2014, net sales decreased to $188.3 million, down 0.4 percent compared with $189.1 million in the prior-year period. Net sales, on a comparative basis, were negatively impacted by: $7.0 million of incremental sales in the second quarter of 2013 that occurred ahead of policy changes, which included restricting Associate purchases to their country of residence; $3.3 million from unfavorable changes in currency exchange rates; and price discounts that the company implemented in 2013.

Net earnings for the second quarter were $19.3 million, compared with $24.2 million during the prior-year period. Earnings per share for the quarter were $1.36, compared with $1.72 in the second quarter of the prior year. Weighted average diluted shares outstanding were 14.2 million in the second quarter of 2014, compared with 14.1 million in the prior-year period.

During the quarter, the company accelerated its share repurchase activity by repurchasing approximately 682,000 shares under its authorized repurchase program, for a total investment of $49.1 million. Additionally, as of July 25, 2014, the company has spent $21.4 million during the month of July to repurchase approximately 285,000 shares.


Avon Products Inc.

(AVP—NYSE) Avon Products Inc.’s second quarter 2014 results still show a struggle for the beauty company, but its ongoing turnaround plan is slowly making itself known as sales improve in key regions. Avon’s revenue came in at $2.2 billion, falling 13 percent (or 3 percent in constant dollars). Adjusted earnings were 20 cents per share, a penny below the Zacks Consensus Estimate, dropping 31 percent from 29 cents the previous year.

While the volume of products sold dropped 6 percent and active representatives worldwide were also in decline, average orders went up by 3 percent in the quarter. The company also reported that quarterly sales grew in the U.K. for the first time since 2010, up 11 percent, or 1 percent in constant dollars, primarily due to higher average order.

Second quarter 2014 gross margin and adjusted gross margin were 63.0 percent. Adjusted gross margin was 30 basis points lower than the prior-year quarter, primarily due to the unfavorable impact of foreign exchange driven by Latin America and Europe, Middle East & Africa.

Operating profit was $93 million and operating margin was 4.3 percent in the quarter. Adjusted operating profit was $186 million and adjusted operating margin was 8.5 percent, down 100 basis points from the second quarter of 2013.

Second quarter 2014’s net income from continuing operations was $20 million, or 4 cents per diluted share, compared with net income from continuing operations of $85 million, or 19 cents per diluted share, for the second quarter of 2013. Second quarter 2014’s adjusted net income from continuing operations was $91 million, or 20 cents per diluted share, compared with adjusted net income from continuing operations of $127 million, or 29 cents per diluted share, for the second quarter of 2013.

Net cash used by operating activities was $7 million for the six months ended June 30, 2014, compared with net cash provided of $70 million for the same period in 2013, unfavorably impacted primarily by lower earnings. The overall net cash used during the six months ended June 30, 2014, was $330 million, which was comparable with the same period in 2013.

Avon’s net debt (total debt less cash) at June 30, 2014, was $1.9 billion, up $240 million from the year-end 2013 level, and $170 million lower than at June 30, 2013.

Avon also declared a regular quarterly dividend on its common stock of 6 cents per share, payable Sept. 2, 2014, to shareholders of record on Aug. 14, 2014.


Blyth Inc.

Blyth Inc. (BTH—NYSE) reported sales and earnings for the second quarter of 2014 with net sales for the three months ended June 30, 2014, decreasing approximately 25 percent to $157.8 million from $211.7 million for the comparable prior year period.

The results were significantly impacted by the company’s Health & Wellness segment, ViSalus, which had second quarter net sales of $53.6 million versus $101.5 million for the same period last year, a decline of 47 percent, largely reflecting the reduced promoter base in North America. At the end of the second quarter, qualified independent North American promoters totaled approximately 28,700 versus approximately 57,200 at the end of the prior year’s second. In the company’s Candles & Home Décor segment, PartyLite, sales were $72.7 million in the second quarter versus $77.8 million for the same period last year, a decline of 6 percent.

Blyth’s operating loss for the second quarter was $2.8 million this year versus profit of $1.2 million last year, largely driven by the decline in sales. Net income attributable to Blyth Inc. was a loss of $4.4 million for the three months ended June 30, 2014, compared to a loss of $1.4 million in the prior year period. Diluted earnings per share attributable to Blyth Inc. were a loss of 28 cents per share for the three months ended June 30, 2014, compared to a loss of 8 cents per share in the prior year period. Net loss attributable to Blyth Inc. common stockholders was $4.9 million in this year’s second quarter compared to a loss of $3.2 million last year. Diluted earnings per share attributable to Blyth Inc. common stockholders were a loss of 30 cents per share compared to a loss of 20 cents per share in the prior year period.

Second quarter operating loss for the Candles & Home Decor segment was $0.7 million versus a loss of $0.3 million in last year’s second quarter. Excluding allocated corporate expenses of $1.8 million this year and $1.6 million last year, PartyLite’s operating profit was $1.1 million this year versus $1.3 million last year.

Health & Wellness second quarter segment operating loss was $1.3 million this year versus operating profit of $2.8 million last year. Excluding allocated corporate expenses of $0.7 million this year and $2.4 million last year, second quarter operating loss for ViSalus was $0.6 million this year versus $5.2 million operating profit in the second quarter of 2013.


Relìv International Inc.

Relìv International Inc. (RELV—NASDAQ), a maker of nutritional supplements that promote optimal health, reported its financial results for the second quarter of 2014.

Net sales for the quarter were $14.5 million, a 6.2 percent decrease from the second quarter last year. Net U.S. sales totaled $10.8 million, down from second-quarter 2013 net sales of $11.8 million. Net sales outside of the United States increased 1.8 percent in the second quarter of 2014 compared to the prior-year quarter, buoyed by a sales increase of 14.5 percent in Europe.

The net loss for the second quarter of 2014 was $289,000 or 2 cents per diluted share, compared to a net loss of $214,000 or 2 cents per diluted share in the 2013 second quarter. The loss from operations for the second quarter of 2014 was $475,000 compared to a loss of $222,000 in the same quarter of 2013.

Net sales in Europe increased to $2.24 million in the second quarter of 2014 compared to $1.96 million in the prior-year second quarter.

Net sales for the first six months of 2014 were $28.9 million, which represents a 15.6 percent decrease from the same period in 2013. Relìv’s international net sales increased 1.2 percent in the first half of 2014 compared with the first half of last year. In the United States, net sales declined 20.2 percent.

Relìv reported a net loss of $440,000, or 3 cents per diluted share in the first six months of 2014, compared to net loss of $19,000, or zero cents per diluted share, in the same period of 2013.

Relìv had cash and cash equivalents of $4.93 million as of June 30, 2014. This amount compares to $6.66 million as of Dec. 31, 2013, and $4.26 million as of this date last year.


Educational Development Corp.

Educational Development Corp. (EDUC—NADSAQ) reported results for the fiscal first quarter ended May 31, 2014.

For the first quarter of fiscal 2015, EDC announced net revenues of $7.2 million, a 20 percent increase compared to $6 million for the same period last year and net earnings of $239,700 compared to $66,600. Earnings per share were 6 cents compared to 2 cents the previous year on a fully diluted basis.

The company made the decision in January 2012 to eliminate sales to large Internet sellers and most wholesale accounts in an effort to support its base of retail outlets and its home business division, Usborne Books & More. This decision has proven very successful as EDC Publishing finished fiscal year Feb. 28, 2014, with a record year of net revenues and the first quarter ending May 31, 2014, with a 17 percent increase in net revenues.

Usborne Books & More has also significantly benefited from this decision. This division has now recorded 13 consecutive months of revenue growth after nine years of decline. Net revenues for the last four months—February, March, April and May—have shown 20 percent plus gains year over year and the trend has continued in June with a 23 percent net revenue gain. The company has not recorded a losing quarter in 27 years and fully expects to maintain its historical dividend.


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.

August 20, 2014

Letter from John Fleming, September 2014


It’s Fourth Quarter!

Conventions and annual meetings have served to inspire. A few hundred thousand lives have been personally touched by the many corporate events of the past few months. Last month, in this column, we provided an optimistic outlook on 2014 direct selling industry performance based on our collective observations and views.

John Fleming On July 28 the research team supporting the World Federation of Direct Selling Associations posted their worldwide results for 2013. Total global retail sales were $178.5 billion for 2013, up 8.1 percent from 2012’s total of $165.2 billion. The number of independent contractors globally rose as well, up 7 percent to 96.2 million. (To see the full global statistics go to www.wfdsa.org) This data also confirmed our outlook—direct selling is growing as a channel of distribution around the world! We should really expect no less. Any channel of distribution that can serve to engage people from basically all walks of life has to be considered for its relevancy during times of growing interest in entrepreneurship. The strengths of this most unique channel of distribution are many, and over the past year much more attention has been directed toward the industry. Therefore, as we now move through the final quarter of the year, projections for year-end results will begin to set the stage for reflections on what we have learned from 2014 in particular. We certainly believe the number of media impressions about direct selling is probably up over prior year. There is always a mix of opinions, and there is no way to quantify the balance between positive and negative press—there is always some of both. Local and niche media have actually done an excellent job on many occasions of publishing some very impressive and positive stories. And, I might add, DSN published an excellent insert that was distributed in The Wall Street Journal (reprints are still available).

As we (DSN) reflect on this past year, in particular, the following thoughts appear to be noteworthy:

  1. Journalists covering direct selling need to be encouraged to keep an appropriate balance between the stories that are a reflection of the best of the industry and those that show concern about the direct selling business model and how it is being utilized and promoted. This is an industry that self-regulates probably better than any other and one that has available a very strong code of ethics developed by the Direct Selling Association. We must simply find more ways to advocate the best of what the industry stands for. Better balance is essential, and each player has the opportunity to influence what gets reflected in the media. Ultimately, better balance will negate the perception that the media only desires to cover the negative.

  2. Every company using the direct selling model in any of its many variations, regardless of the label being used, is an actor/actress on the big stage. The big stage is the global marketplace where the audience tends to recognize the direct selling industry as “ONE,” regardless of the label being used. ONE was actually the theme of this year’s Direct Selling Association’s Annual Meeting, a very appropriate theme for an industry that is searching for its redefinition of who we are and what we do. Regardless of how we are defining ourselves individually, the audience tends to see ONE; therefore, it behooves us to realize even more so that the audience is always there. The audience is often learning, enjoying the play, and marveling at its uniqueness, it’s symphony of talent, its mix of ingredients and the results of the production. Some in the audience are simply there to report, and what they report can often be what they see, not what they understand—meaning all characters in the play are quite important. Therefore, it’s our duty to pay attention to all characters.

  3. Industry growth means a lot of things are going well and a lot of people are finding success! Growth should support an ever increasing positive perception of what the industry does and how it accomplishes so much through a channel of distribution based on engaging people from all backgrounds. As the cast continues to develop—the many companies who are utilizing and growing through use of the direct selling model—the cast will find itself performing before a larger and ever growing audience that is informed and often equipped to share their observations and experiences quickly and effectively. Each of us can ensure that the play is one of the finest productions ever brought to stage by simply playing our unique roles well and with authenticity! And as we do, we will capture the imagination of the audience and deliver on the promise of a better future! No need to overpromise… this industry provides opportunity like no other!

One of the ways we can leverage the cast is to celebrate what we have accomplished and what we will accomplish as we now work toward the close of 2014. There are fewer and fewer days left in this year. On the next pages, Lauren Lawley Head will unveil DSN’s 90 Days of Direct Selling, and how we plan to celebrate our great industry!

Enjoy the issue!

John Fleming
Publisher and Editor in Chief

August 20, 2014

Executive Announcements, September 2014


Medifast Inc.

Medifast Inc., a manufacturer and provider of clinically proven, portion-controlled weight-loss products and programs, announced the addition of three new members to its Scientific Advisory Board: Simon Barquera, M.D., Ph.D., Susan Barr, Ph.D., R.D, and Steven Heymsfield, M.D.

With the recent additions, Medifast’s Scientific Advisory Board now comprises nine medical and scientific experts in the food science, nutrition, and weight-management arena.

“What sets us apart from other weight-loss companies is that our products and programs are rooted in medicine,” said Michael MacDonald, Chairman and CEO of Medifast. “The addition of these esteemed health professionals reinforces that commitment and demonstrates our dedication to evolving with medical advancements.”

Simon Barquera, M.D., M.S., Ph.D., is a medical surgeon and public nutrition researcher at the National Institute of Public Health in Mexico City. He has been a consultant for the WHO, the Pan American Health Organization, the World Bank, the International Food Policy Research Institute and the International Association of Agricultural Economists in the fields of nutrition, obesity and chronic diseases. Barquera is also President of the Nutrition Board of Professors at the Mexican School of Public Health as well as Director of the Nutritional Epidemiology Division at the Nutrition and Health Research Center.

Susan Barr, Ph.D., R.D., is a professor at the University of British Columbia, where she teaches human nutrition. She has served as chairperson of the Institute of Medicine’s Subcommittee on Interpretation and Uses of Dietary Reference Intakes and as a member of Health Canada committees working on revision of Canada’s Food Guide and on dietary sodium reduction. She is a Fellow of the Dietitians of Canada. Her research focuses on associations between nutrition, physical activity and bone health in women.

Steven Heymsfield, M.D., is the George A. Bray Chair in Nutrition and professor at Louisiana State University’s Pennington Biomedical Research Center. He has both academic and industry experience and formerly served as President for The American Society of Clinical Nutrition and The American Society of Parenteral and Enteral Nutrition, and he now serves on the Council of The Obesity Society. Heymsfield is well known for his expertise in basic science, clinical and population science related to weight and energy balance, and dietary supplements.


USANA Health Sciences Inc.

Kevin G. GuestKevin G. Guest

USANA Health Sciences Inc. has announced that Kevin G. Guest has been promoted to President of USANA worldwide. He will focus his efforts on sales growth, customer growth and salesforce development. Guest has been with the company since 2003 and has served in a variety of leadership positions there over the last 11 years. Most recently, he has served as President of the Americas, Europe and South Pacific since October 2012, where he has designed and executed initiatives that have generated growth in these regions.

“Kevin has been extensively involved with USANA since the company was founded more than 20 years ago,” said CEO David Wentz. “His vision for the business, dedication to customers and employees, and overall integrity and leadership have been and will continue to be invaluable to our organization.”


LegalShield

Jeff BellJeff Bell

LegalShield, one of the nation’s leading providers of affordable legal plans and identity theft solutions for individuals, families and small businesses, announced that Jeff Bell has joined the company as CEO. Bell succeeds Rip Mason, who will now serve as Executive Chairman of the Board.

Bell comes to LegalShield with over 20 years of corporate leadership and consumer marketing experience for global brands including Microsoft, Chrysler, Ford and NBCUniversal. While serving as Corporate Vice President, Global Marketing, Interactive Entertainment Business (Xbox) for Microsoft Inc., Bell saw tremendous success, leading the business to its first profitable year in its existence. In addition, he led the growth of Xbox LIVE from 4 million to 12 million members in two years, including the addition of Netflix. After serving as Vice President of the Chrysler and Jeep Divisions for DaimlerChrysler, in 2012 he was called upon to lead NBCUniversal’s marketing efforts in the health and fitness market. There he developed the “Challenge America” campaign, which became the theme for “The Biggest Loser” television show. In addition, Bell has been the recipient of Advertising Age’s “Interactive Marketer of the Year” in 2005 and was named the Advertising Age “Entertainment Marketer of the Year” in 2007.

“Having Jeff join LegalShield is a great step forward for the company as we continue to raise awareness around the need for affordable legal protection,” said Rip Mason, Executive Chairman of the Board for LegalShield. “Jeff’s ability to raise consumer awareness and lead the industry’s best sales and service team will allow LegalShield to address one of the most important challenges our society faces—ensuring affordable and quality legal counsel for every American.”


Mary Kay Cosmetics Ltd.

Lynda RoseLynda Rose

Mary Kay Cosmetics Ltd. (Mary Kay Canada), a top beauty brand and direct seller, announced that Lynda Rose has been named General Manager, following the retirement of Ray Patrick after 34 years of service. Rose formerly served as Vice President of Sales & Marketing and has worked at Mary Kay for 16 years.

With more than 25 years in sales, sales education and sales management in the cosmetics field prior to joining Mary Kay in 1998, Rose started her Mary Kay career as Director of Sales Development and by August 2001 was promoted to Vice President of Sales Force Support and later Vice President of Sales & Marketing.

Along with close involvement with the Direct Sellers Association of Canada (DSA), and direct selling as a whole, Rose has provided her leadership as Chair of the DSA Board, and as a result, in 2010, she was honored with the Ivan P. Phelan Award. She was also one of four Mary Kay employees who received the distinguished Queen Elizabeth II Diamond Jubilee Medal for their significant contribution to the direct selling industry. Today, Rose serves on the boards of the DSA, the Canadian Cosmetic, Toiletry and Fragrance Association and its Foundation.

She says, “I’m excited and ready to assume this new role because of Ray’s perpetual and positive leadership, and because the company has an amazing independent sales force that believes in the product and the Mary Kay opportunity. Together, we can accomplish anything.”


MonaVie

Beau CoplinBeau Coplin

Direct selling company MonaVie announced that Beau Coplin has been promoted to Vice President of IT, and joins the company’s executive management team.

As Vice President of IT, Coplin works directly with key markets and leaders to ensure MonaVie’s systems meet the needs of its distributors worldwide. He also directs the company’s global technology strategy and provides guidance relative to emerging technologies that will improve processes, increase efficiencies and provide high-quality solutions for MonaVie distributors and corporate users worldwide.

Dan ZhuDan Zhu

Coplin has 20 years’ experience in the Information Technology field within several industries. Since joining the MonaVie family in 2008, he has excelled in a variety of key roles, and was instrumental in setting up operations and IT infrastructure for MonaVie’s international markets.

MonaVie has also announced the promotion of Dan Zhu to President of Asia Pac and the addition of two new members to the Scientific Advisory Board, Mark Macdonald and Diane Miles.

Mark MacdonaldMark Macdonald

Previously, Zhu had been serving as President of Greater China for MonaVie. His responsibilities are expanding to include the following markets: Australia, New Zealand, Malaysia, Singapore, Thailand and Korea. Zhu has 18 years of leadership experience in the direct selling industry and has successfully launched and developed markets throughout Asia at other successful direct selling companies. He joined MonaVie in 2010 as Vice President of Greater China and has spearheaded the launches of MonaVie Hong Kong (February 2010) and MonaVie Taiwan (September 2010).

Diane MilesDiane Miles

Nutrition and fitness expert Mark Macdonald joined MonaVie’s Scientific Advisory Board (SAB) after being its nutrition and fitness expert since 2011 and having been influential in helping formulate MonaVie’s RVL and CORE line of products. The addition of Macdonald will add expertise to support current product development plans and necessary substantiation for research and development.

Cosmetics industry veteran Diane Miles joined the SAB to help round out the company’s science and research with her skincare and beauty product expertise and will play a key role in helping guide product development efforts into potential new market segments for MonaVie. Miles brings more than 25 years’ experience to MonaVie within the prestigious skincare, makeup and fragrance sectors. She has exceled in a variety of key roles at renowned companies, including as CEO of skincare company Perricone, MD; president of Bare Escentuals; and CEO of Benefit Cosmetics.


CVSL Inc.

Roy DamaryRoy Damary
Bernard IvaldiBernard Ivaldi

CVSL Inc. announced that Roy G.C. Damary and Dr. Bernard Ivaldi have been elected to the company’s Board of Directors.

“We are delighted that Roy Damary and Bernard Ivaldi will be bringing their long and distinguished international experience in business and academia to CVSL’s board of directors, particularly their understanding of the dynamics of global commerce,” said John Rochon, CVSL’s Chairman.

Roy Damary combines a wide range of academic activities with global business experience. He began his professional career as a research engineer at the Battelle Institute in Geneva, Switzerland, and later created and headed the MBA program at Webster University’s Geneva campus.

He is President of the INSAM Foundation in Geneva; head of business studies at Robert Kennedy College, Switzerland; and is an honorary professor at the Ural State Forest Engineering University of Ekaterinburg, Russia. He owns Technomic Consultants SA, and is a British citizen residing in Geneva. He is a member of the board of directors of CVSL AG and JRJR AG, in Luzern, Switzerland.

Bernard Ivaldi, Ph.D., has for more than 40 years held a variety of senior positions in business, law and academia in the United States and Europe. A French citizen and a resident of Switzerland, Dr. Ivaldi serves as Chairman of Tatiana Faberge SA (Switzerland). He has broad experience in the fields of administration, financial management, personnel management and training, and he is a former chairman of the International Schools Association, an international NGO with consulting status to UNESCO and ECOSOC.

In 1994 he founded BI Conseil and Associates. He is currently President of FEBP, a Swiss foundation promoting business ethics. He is a member of the boards of CVSL AG and JRJR AG in Luzern, Switzerland.


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

August 20, 2014

News in Brief, September 2014

Mary Kay Sponsors Emmy-Nominated Project Runway

Mary Kay is the official beauty sponsor of season 13 of Lifetime’s Emmy-nominated hit series, Project Runway. The show’s celebrity makeup artists will exclusively use Mary Kay products on the show as aspiring designers compete for fashion’s top spot.

The iconic beauty company will take center stage in front of a weekly, national audience as a new group of up-and-coming designers finish their runway looks in the Mary Kay Color Design Studio in every episode. Fans of the hit show will get a behind-the-scenes look and learn how to achieve runway-inspired looks at home.

The show, which concludes in October, features budding designers going head-to-head during weekly challenges in order to leave a lasting impression on Emmy winners Heidi Klum and Tim Gunn, in addition to well-known guest judges. While this is Mary Kay’s first sponsorship of the flagship series, Project Runway, the company also served as the official beauty sponsor of Project Runway All Stars Season 3 in 2013 and will continue the partnership for Project Runway All Stars Season 4 later this year.


Herbalife Announces China Manufacturing Expansion

Global nutrition company Herbalife Ltd. recently announced plans to expand its manufacturing capabilities in China, in preparation for anticipated growth in this strategically important market. Herbalife has existing manufacturing facilities in Suzhou and a botanical extraction plant in Changsha.

Herbalife has selected an existing, newly built facility in Jiangning High-tech Industry Park (JHIP), Nanjing, as the site of its new facility. Herbalife will invest up to US$40 million in a first phase of development, to bring the facility up to the highest operating standards. This first phase is expected to be complete and the facility operational by the end of 2015, with the potential for a second phase of development.

The new facility will ultimately provide up to 65 percent of the company’s total product requirements in China. Herbalife received its first direct-selling license in China in March 2007 and now has licenses for the company to conduct its direct-selling business in 25 provinces, municipalities or autonomous regions.


Stella & Dot Foundation Aligns with Every Mother Counts

Fashion and accessories brand Stella & Dot recently re-launched its foundation in partnership with Every Mother Counts, a campaign dedicated to making pregnancy and childbirth safe for every mother. The Stella & Dot Foundation was created in 2010 to further the company’s mission of helping women style their own lives.

Every Mother Counts currently operates in Indonesia, Haiti, Uganda, Malawi and the United States. The organization was founded by Christy Turlington Burns, a model, entrepreneur and activist named one of TIME’s 100 Most Influential People of 2014. Burns directed the documentary No Woman, No Cry to raise awareness of the women dying—287,000 every year—due to largely avoidable complications during pregnancy.

To kick off the new partnership, all net proceeds of the Stella & Dot Foundation’s new Enlighten Bracelet will benefit Every Mother Counts. At Every Mother Counts, 100 percent of every donation goes to programs supporting its mission around the world.


Tomboy Tools Unveils New Name and Products

Tomboy Tools recently unveiled a new name and logo, new products, new categories and new marketing initiatives. The company will now do business under the name Project Home™, with the tag line, “Making your vision real.” 

The company will continue to use the brand name Tomboy Tools for its line of tools designed especially for women. The brand’s revamped product categories include safety and security; beautification (painting, picture hanging, cabinet hardware); organization; outdoor; Tool School™ and home maintenance. 

Tomboy Tools was founded in 2002 with a mission of building confidence and empowering women through education, quality products and an independent business opportunity. Its products are sold by its more than 1,000 Home Consultants in the United States and Canada through home parties, using hands-on education that is fun and practical. The company moved its headquarters from Colorado to Newark, Ohio, last year.


Medifast Awards $100,000 Cancer Research Grant

Medifast Inc., a manufacturer and provider of clinically proven weight-loss products and programs, recently announced a $100,000 grant to The V Foundation for Cancer Research, one of the nation’s leading cancer research funding organizations.

The grant is the product of a multi-faceted partnership between Medifast and The V Foundation, to explore links between obesity and cancer and the impact of healthy living on preventing cancer. Clinical research will be led by Parveen Bhatti, Ph.D., from the Fred Hutchinson Cancer Center in Seattle, Washington.

Founded in 1980 and based in Owings Mills, Maryland, 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.


Ahni & Zoe Closes Its Doors

After emerging from its second bankruptcy in five years, Ahni & Zoe—formerly Creative Memories—announced it would close its direct selling business in August. The St. Cloud, Minnesota-based scrapbooking company terminated contracts with its consultants Sept. 3.

Calling the decision “disappointing and disheartening,” CEO Chris Veit informed consultants of the company’s agreement to sell the assets of the Antioch Liquidating Trust (formerly Creative Memories) and Ahni & Zoe to Flowerdale Group Limited of Hong Kong.

Flowerdale Chairman Caleb Hayhoe informed consultants of the group’s plans to relocate to a new manufacturing facility in St. Cloud and invest in a new business that builds and improves upon the existing product line. Under the Creative Memories brand, the company employed as many as 1,100 people and supported 70,000 consultants worldwide.

Ambit Energy Launches Power Payback Program

Retail energy provider Ambit Energy recently introduced its Power Payback program to reward Texas customers who reduce energy use during periods of extreme electricity demand. The program provides users with bill credit if they reduce their consumption during designated time periods.

Under the program, customers in Texas who have Smart Meters will receive advance notification of an impending period of extreme electricity demand. They then have the opportunity to cut back on their electricity use during the specified time. If their electricity usage during this time is lower than their average during that period, they receive a bill credit of $1 for every kilowatt-hour saved.

Based in Dallas, Ambit Energy provides electricity and natural gas services in deregulated markets across the United States, primarily marketed through a direct sales channel of more than 150,000 independent consultants.


ViSalus Sponsors American Youth Football

American Youth Football & Cheer Inc. (AYF) recently selected weight-loss and nutrition company ViSalus as its Official Nutrition and Wellness Sponsor. In this year’s fundraisers, AYF athletes will cash in on personal health goals by selling ViSalus nutrition products.

AYF works within communities to train children in football or cheer, with a strong emphasis on positive traits like self-confidence, teamwork, self-discipline and community involvement. The organization, which often establishes programs where children cannot access them through the school system, serves more than 1 million members nationwide.

ViSalus offers its users an added weight-loss incentive through the PROJECT 10 Kids program. The company’s trademark PROJECT 10 Challenge encourages customers to lose 10 pounds of fat or add 10 pounds of lean muscle. Every time a person meets the challenge, the company donates 30 of its Vi-Shape Nutritional Shake Meals to a child in need.


DSA Canada Announces Industry Honors

The Direct Sellers Association of Canada announced its 2014 award recipients at the association’s 60th Annual Conference held in Halifax, Nova Scotia. DSA Canada represents over 700,000 Canadian independent sales contractors who generate nearly $2 billion per year in sales. The following individuals were honored for their contributions to the direct selling industry:

  • Ivan P. Phelan Award—Joan Lee, DSA Canada
  • Mark of Distinction Award—Yali Ma, Nu Skin
  • Community Spirit Award—Mark Ma and Xueyun Lin, Amway; Kathryn Wall, lia sophia
  • Making a Difference Award—The Arbonne Charitable Foundation
  • Industry Innovation Award—Amway Canada
  • DSEF Circle of Distinction Award—Janice Gerol, The Pampered Chef
  • Distinguished Service Award—Angela Abdallah, Amway Canada; Dahna Sanderson, The Pampered Chef; and Tracie Graham, PartyLite Gifts

DSA Canada also awarded five $1,000 scholarships to either deserving children of active Independent Sales Consultants (ISCs) of DSA member companies, or ISCs who themselves are students. This year, the DSA also awarded one new scholarship in the amount of $1,000 to a deserving child of a DSA member company employee. The six recipients of the 2014 DSA Academic Scholarships are:

  • Madeleine Assiniwe, Mary Kay Cosmetics
  • Joanna Lai, Amway Canada
  • Naomie Levesque Savoie, Scentsy Canada
  • Andrei Purcarus, USANA Health Sciences
  • Jessica Rempel, PartyLite Gifts
  • Alexandra Smith, Mary Kay Cosmetics

Grants for educational initiatives are made possible through support from the Direct Selling Education Foundation of Canada (DSEF). The DSEF is a not-for-profit organization established by the Canadian DSA in 1994. The foundation promotes public awareness of the direct selling industry in Canada and serves the public interest through educational programs and research into direct sales and micro enterprise.

 

August 20, 2014

U.S. News

Nu Skin Ranked among Fortune’s Fastest-Growing Companies

Fortune recently published its annual roundup of the fastest-growing public companies in American business, and direct selling powerhouse Nu Skin came in at No. 68 on the list.

In a testament to America’s booming shale business, a quarter of this year’s 100 Fastest-Growing Companies represent the oil and gas industry. Household brands such as The Hunger Games and Divergent distributor Lions Gate Entertainment (No. 15), K-Cup maker Keurig Green Mountain (No. 48) and Apple (No. 88) also appear. Fortune’s ranking reflects profit, revenue and stock growth over the preceding three-year period.

Nu Skin, a seller of skincare and nutrition products, grew its business by half in 2013 alone. The Provo, Utah-based company reported sales of $3.18 billion, a $977-million increase over 2012. With industry-leading growth in 2013, Nu Skin earned DSN’s Bravo Growth Award based on revenue and the No. 7 ranking on the DSN Global 100. For 2014, the company reported revenues down 3 percent to $650.0 million in the second quarter.

August 18, 2014

U.S. News

Tomboy Tools Unveils New Name and Product Offerings

Direct seller Tomboy Tools has revamped its brand with a new name and logo, as well as expanded product categories and marketing initiatives. The company now operates under the name Project Home, with an approach reflected in its tag line, “Making your vision real.”

CEO Janet Rickstrew and CTO Mary Tatum founded Tomboy Tools in 2002 to supply women with tools designed specifically for them. The company’s unique offerings and home parties earned it a spot on Entrepreneur magazine’s 100 Brilliant Companies list in 2010. In October 2013, Tomboy Tools joined the CVSL Inc. family of companies, a lineup of direct selling brands that includes The Longaberger Company, Your Inspiration at Home, Agel and others. CVSL’s strategy of distinguishing itself through company acquisitions has brought rewards of significant growth. Just last week, CVSL reported second quarter 2014 results with a 19.5 percent increase in gross revenue compared to the second quarter of 2013. CVSL had gross revenue of $24.6 million, compared to gross revenue of $20.6 million in 2013.

The newly unveiled Project Home will offer the company’s signature pink Tomboy Tools under one of six product categories. The brand now encompasses Safety and Security, Beautification, Tool School, Organization, Outdoor and Maintenance. Project Home parties provide education and products tailored to one category, Rickstrew shared in an email to DSN.

The Beautification party, for example, addresses projects customers can do around the home to beautify their surroundings. “This would include painting—we offer several painting tools and a paint partner through which our sales consultants can sell and earn a commission—and projects such as changing or installing window coverings and changing cabinet knobs,” said Rickstrew. “Generally, we show which tools you need and how easy it can be. We combine tools with applications.”

“Do it yourself” projects of all kinds are increasingly ubiquitous, thanks in part to popular web service Pinterest. Dubbed a “visual discovery tool” by its creators, the site allows users to curate and share collections of visual bookmarks or “pins” from around the web. Rickstrew says Pinterest is already a popular tool with Project Home Consultants, and it’s a platform the company plans to tap into on a corporate level as well.

The new name and initiatives enable Project Home to reach a much larger market, and according to Rickstrew initial feedback from the company’s consultants has been enthusiastic. “Some women had no interest in picking up a tool on their own,” she said. “With the new categories, it resonates with a much larger group and expands into the all-inclusive home. I don’t believe there is anyone that doesn’t care about the safety and security of their family and home.”

August 15, 2014

U.S. News

ForeverGreen Reports Record Q2 Sales, up 253%

ForeverGreen Worldwide Corp. (FVRG—OTC.BB), a provider of nutritional foods and other healthy products, reported Thursday record Q2 revenues of $14.1 million, an increase of 253 percent from $4.0 million for Q2 2013.

For the quarter ended June 30, 2014, the company achieved its fifth consecutive quarter of operating profitability and second consecutive quarter of growth in operating and net income.

Gross profit rose to $11.2 million compared to $2.9 million during Q2 2013, a 294 percent increase. Gross profit margins increased to 79.5 percent versus 71.1 percent during the comparable quarter during 2013. Operating income was $412,360 compared to $92,653, a 345 percent increase. Net income totaled $454,856 or 2 cents EPS versus a net loss of $5,383.

“Gross margins, operating margins and net profit margins all continue to improve,” said CFO Jack Eldridge. “We believe during the next 12-18 months our operating margins will improve to 12-15% and our net margins will increase to 7-9% as we continue to benefit from overall efficiencies and lower COGS. We remain on track to meet or exceed our previously announced revenue guidance of $41-50 million, anticipating net margins of 4-7%. We will continue to develop ForeverGreen into one of the largest and most diversified global companies in our industry.”

Read the full results here.

August 15, 2014

U.S. News

Blyth Appoints KWG Chief to Board of Directors

Blyth, parent company of direct selling brands PartyLite and ViSalus, recently made some changes to its board of directors. The Greenwich, Connecticut-based company announced the retirement of Neal I. Goldman and welcomed Jim Williams as its newest board member.

Goldman, President of investment advisory firm Goldman Capital Management, served as a Blyth director for 23 years. Williams is President, CEO and Managing Partner of Karlen Williams Graybill Advertising (KWG), whose clients include a number of Fortune 500 companies and some of the nation’s fastest growing business startups. He also owns a controlling interest in I.M. Productions and the communications business Better Brand Initiatives, licensor of the televised mini-show FYI Before You Buy.

“Jim brings leadership, strategy and a strong knowledge of marketing, social media and global consumer insight,” Blyth CEO Robert B. Goergen said in a statement. “I look forward to the new perspective that Jim brings to the company.”

Blyth operates in 21 countries through PartyLite, a designer and marketer of candles and accessories for the home, health and wellness brand ViSalus, and a handful of brands sold through the catalog/Internet channel. The company reported a rocky second quarter as sales continued to wilt, decreasing approximately 25 percent from the prior year period to $157.8 million. The weak performance was largely a result of declining salesforce numbers at ViSalus North America, said Goergen.

“ViSalus management is focusing on rebuilding the North American market through leadership development programs while right-sizing the cost structure in North America to regain profitability, as well as building their international business,” Goergen shared in the company’s financial release. “In the second quarter, ViSalus continued its geographic expansion initiatives, opening in Ireland, with two additional markets planned to open this year and an additional seven markets in 2015.”

August 15, 2014

Credit Card/Payment Processing

PacNet Services Ltd.


August 14, 2014

U.S. News

New LegalShield CEO Talks ‘Equal Access to Equal Justice’

Equal access to equal justice—it’s nearly unimaginable in many countries, and it’s what attracted new chief executive Jeff Bell to LegalShield. Bell joined the legal services provider this month following the three-year tenure of Rip Mason, who now serves as Executive Chairman of the Board.

At first, Bell told DSN in an interview, he deemed the company’s $20-a-month prepaid legal plan too good to be true. Across North America, LegalShield employs over a thousand lawyers dedicated solely to serving its members. The Ada, Oklahoma-based company also retains 6,000 referred attorneys who can take on member cases. Unlike many of its competitors, who vie for spots on various rosters of providers, LegalShield takes its plans directly to consumers through a network of Sales Associates.

Jeff Bell

In a July LegalShield survey of more than 500 Americans, 30 percent of adults reported facing an issue where legal services should have been enlisted but were not. Nearly half (44 percent) stated that hiring a lawyer is intimidating. People need access to simple, affordable legal services, notes Bell, but they also need someone to walk them through the details. That’s where the company’s Sales Associates come in.

“LegalShield is a beautifully disruptive model in an age where products and services, as well as opportunities like direct sales, are changing the way Americans do business and interact in the marketplace,” says Bell.

Though new to direct selling, Bell has honed his marketing and leadership skills at brands like Ford, Microsoft, Chrysler and NBCUniversal. As Vice President of DaimlerChrysler’s Jeep and Chrysler Divisions, Bell launched the Chrysler 300 and marketing initiatives that included the Dodge “Grab Life by the Horns” campaign. During Bell’s tenure at DaimlerChrysler, Advertising Age named him “Interactive Marketer of the Year” in 2005. In the role of Corporate Vice President, Global Marketing, for Microsoft’s Interactive Entertainment Business (Xbox), Bell received the Advertising Age “Entertainment Marketer of the Year” title in 2007.

His decision to join LegalShield, Bell says, hinged on the integrity of the product itself—universal access to quality law firms without the high hourly costs. The company has a salesforce over 100,000-strong, ranging from full-time Associates to those seeking a supplemental income, and serves well over 1.5 million members. “My question,” Bell submits, “is why don’t we have 15 million?”

For someone who led Xbox to its first profitable year ever and managed a growth spurt that took Xbox LIVE from 4 million to 12 million members in just two years, it’s not a flippant question. Bell is also quick to point out that he is building upon a solid foundation at LegalShield.

“I have nothing but the most profound respect for the sales organization that has been developed, and the founders and co-founders of this incredible business,” he shares.

Making quality legal services accessible to all is, as Bell describes it, a rare opportunity to do well while also doing good. “We have a chance to create a better future and better opportunities for the next generation, and that’s what motivates us.”

August 06, 2014

Company Spotlight

Nu Skin Enterprises Inc.: 30 Years of Innovation for an Anti-Aging Giant

by Barbara Seale

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


Company Profile

Founded: 1984
Headquarters: Provo, Utah
Executives: Truman Hunt, President and CEO
Products: Comprehensive anti-aging portfolio including both skincare and nutritional


Nu Skin Logo

Truman HuntTruman Hunt
Joseph ChangJoseph Chang

When a company reaches its 30th anniversary, it can bask in its maturity. But while 30-year-old anti-aging company Nu Skin Enterprises celebrates its decades of success, it revels in its history of innovation.

Innovation isn’t easy to achieve consistently, but it’s one of the key elements of the Nu Skin culture. From its forever-young business opportunity to its science-based approach to the development of its robust anti-aging product line, the company defies any stereotypes that getting older equals slowing down. It even had a jaw-dropping 49 percent annual revenue increase in 2013—a cool $977 million in growth, placing it in the No. 7 spot on the Direct Selling News Global 100 list.


Joseph Chang, Ph.D., Chief Scientific Officer and Executive Vice President, Product Development, believes that the company’s strategic focus on anti-aging has been the most significant product decision in its history.


All that innovation has helped the company succeed in one of its key areas of focus: increasing commissions to distributors. In its 30-year history, the company has paid more than $10 billion in total commissions and sales incentives. It is proud to offer what it calls one of the most rewarding commission structures in the industry, with 45 percent of revenue paid out in sales compensation and promotional incentives in 2013.

So how does it achieve such laudable success? President and CEO Truman Hunt, who this year alone received the Direct Selling News Bravo Leadership Award and was elected the new Chairman of the U.S. Direct Selling Association, points to three keys.

Secrets to Success

First, he notes that the company has worked hard to continually renew the vibrancy of its business opportunity throughout its 53 countries.

“We were one of the first companies in direct selling to offer sales leaders the opportunity to do business globally and be compensated for sales volume in their home market through our seamless global compensation program,” he recalls. “It’s a reflection of our commitment to innovation.”

Second, its anti-aging product line includes both skincare and nutrition product lines, and revenues are equally strong from each. In fact, Joseph Chang, Ph.D., Chief Scientific Officer and Executive Vice President, Product Development, believes that the company’s strategic focus on anti-aging has been the most significant product decision in its history.

“From a product perspective, we built a bridge between the two categories so that we have a single story and a single common thread that goes through skin care and supplements,” he explains.


“When people know what product is coming down the pike and can get behind it, we find we get more impact than when sales leaders show up not knowing and we surprise them. There’s great power in alignment.”
—Truman Hunt, President and CEO


Finally, the company’s unique product launch process has driven sales leaders and revenue growth. Nu Skin calls it their Limited Time Offer. Distributors learn about a new product a year in advance, rather than in a surprise convention announcement. That lets them get personal experience with the product, build a testimonial on it and align their teams around it. Then when Nu Skin launches the new product formally, it gets great attention and helps leaders move forward.

“With every launch we’ve learned new things that help us launch products with increasing impact,” Hunt says. “Perhaps one of the most critical insights we’ve gained is that it’s based on the power of alignment. When people know what product is coming down the pike and can get behind it, we find we get more impact than when sales leaders show up not knowing and we surprise them. There’s great power in alignment. We’ve always known this from a corporate perspective. To be able to transition that same principle has produced the magic of executing a great product launch.”


Nu Skin EmployeesIn June employees participated in Nu Skin’s annual Force for Good Day by volunteering to assemble school supplies for local students. ce President, join Truman Hunt, President and CEO, for the company’s 30th anniversary celebration. Nu Skin ProductsNu Skin founders Steve Lund, Executive Chairman of the Board, Executive Director of Nourish the Children, and Sandie Tillotson, Executive Vice President, join Truman Hunt, President and CEO, for the company’s 30th anniversary celebration.

Those launches are built on commitment that started 30 years ago with the company’s founders—Blake Roney, Sandie Tillotson and Steve Lund. They decided to build a company that would combine innovative personal-care products with ingredients that subscribed to the philosophy of “all of the good, none of the bad.” They were concerned that many artificial ingredients found in traditional skincare products weren’t actually good for the skin when used continuously. Some of the then-new company’s first products became so cherished by users that they are still being sold today in updated formulas.

“Historically we know that natural ingredients are good for the skin without causing potential side effects,” Chang notes. “Natural ingredients are still our major focus, and we couple that focus with additional insights through scientific studies.”

Nu Skin’s commitment to products backed by scientific research and testing is a key method for maintaining product innovation. It’s also one of the main reasons Chang became part of the Nu Skin management team. He was an executive at Pharmanex when Nu Skin acquired it in 1998. Previously he had served as both President and Chief Science Officer at Binary Therapeutics and at OsteoArthritis Sciences Inc., not to mention that he held various executive research management positions at Wyeth-Ayerst, Rhone Poulenc Rorer and other biotech companies with numerous articles, reviews and books to his name. With his impressive credentials, he could have worked anywhere in the world if he had decided to make a change. But Nu Skin’s commitment to science convinced him to stick around.

“The promise they made was that Pharmanex would be a great strategic fit with Nu Skin because of its robust research and development organization and the scientific engine we had built to support products. That engine would be equally applied to the skincare line, as well,” Chang recalls. “That promise was what drew me, and the company has always kept that promise. The R&D budget and investment have always gone up. When an acquirer makes a promise, it often dissipates over time, but Nu Skin hasn’t gone back on its word. That’s critical, because to innovate you need to do R&D.”

A Foundation of Goodness



When Vice President of Public Affairs Ruth Todd joined Nu Skin Enterprises Inc. in January, she had heard the company’s mission statement, “to be a force for good.” But when she experienced it herself, she was dazzled.

“Our commitment to being a force for good is baked into every decision on every level,” she says. “As a new person, it was impressive to see that the commitment lives in the company from day to day.”

While that culture permeates the company’s actions, nowhere is it more front-and-center than in Nu Skin’s philanthropic projects. From the Force for Good Foundation to the Nourish the Children initiative, Nu Skin reaches out with its money, its products and its efforts to make life better—to create smiles, as they affectionately say—around the world.

In 2013 alone, the nonprofit Force for Good Foundation and its charitable partners contributed nearly $5 million to improve the lives of children throughout the world by offering hope for a life free from disease, illiteracy and poverty. The foundation is funded by Nu Skin distributor and employee donations, as well as by 25 cents from the sale of each Nu Skin Epoch product. Nu Skin covers all administrative and overhead costs, allowing 100 percent of donations to be used for humanitarian and charitable causes.

Its Nourish the Children initiative recently surpassed 350 million donated meals. Since its inception in 2002, Nourish the Children has been supported by a steady stream of VitaMeal purchases and donations from generous Nu Skin employees and distributors. Nu Skin produces VitaMeal, specially formulating it for malnourished children and their families.

The efforts of the Nu Skin Force for Good Foundation and the Nourish the Children initiative converge in Malawi, Africa, where in 2007 the School of Agriculture for Family Independence (SAFI) was founded. Many residents were small-scale farmers, and the drought drained the natural resources they relied on to survive, creating a crisis for families who were forced to travel from village to village just to find food. SAFI initially recruited mothers and fathers from 30 families, housing them and their families on an acre of land in the SAFI village for a year, and teaching them agricultural techniques, animal husbandry, and nutrition information that helped them better use the natural resources available to them. During that year, their children attended school. The experience and knowledge they gained completely changed the families. When they returned home, they were able to improve their agricultural yields by as much as 700 percent. Just as importantly, they now teach others the techniques they learned.

Nu Skin then collaborated with government agricultural workers to develop Brighter Future, an extension of the original program, which teaches many families at one time in villages throughout the region.

“We partnered with locals and asked, ‘What do you need and how can we be helpful?’ That set us apart from the beginning,” notes Kara Schneck, Nu Skin’s Senior Director of Corporate Communications. “Where Nu Skin is especially strong is in its direct selling model that helps people run a business and then turn around and help others do the same. We’ve used a similar model in Malawi as we help families learn life-saving agricultural skills and then empower them to share their skills with those in their community.”

Nu Skin philanthropies are as far-reaching as its 53 markets, and the future is unlimited.

“Going forward, we have a great foundation and a company with a great mission,” Todd says. “When you talk about the circle of entrepreneurship, what’s unique about it at Nu Skin is there is a consistent level of charitable donations. The economy may be up or down, but we have a very giving, compassionate group of distributors and sales leaders who are able to be a force for good and help children around the globe.”

Innovation = Growth

Today the company’s full team of in-house scientists conducts research on the ingredients that go into Nu Skin products. They collaborate closely with the Nu Skin marketing team, which keeps tabs on trends and consumer needs. When marketing identifies a need in a particular product category, they bring that need to the scientists.

“That type of collaboration between marketing and scientists has driven us to focus on the anti-aging category,” Chang points out. “That has led us to be a leading anti-aging company, both in skin care and supplements.”

The most visible result of that collaboration is Nu Skin’s ageLOC family of skincare and weight-management products and supplements. The science behind the products—a genetic approach to product development—combined with the company’s brilliant product launch process created the company’s most successful product launch ever. Since the line was introduced in 2008, the ageLOC family of products has delivered $3 billion in sales. Customers are so committed to ageLOC and other Nu Skin products that many subscribe to them through auto-ship. The predictability is good for the publicly held corporation and equally as good for distributors.

Culture of Integrity

If innovation is Nu Skin’s muscle, its mission to be a force for good throughout the world is its heart and circulatory system.

“It’s so much a part of our culture that sometimes we take it for granted,” Hunt says. “It’s how we define our very existence. It’s our mission statement. Those elements really have been part of our DNA from the very beginning. Our founders were people of such strong character and values that we have always wanted to make sure that when people encounter Nu Skin, they have a good experience and come away a better person. Whether through our product integrity, the opportunity we offer or the culture we promote, we try to be a force for good.”

He adds, “I recall a quote by one of our founders Blake Roney: ‘Being a force for good may be only 5 percent of what we do on a daily basis, but it’s 95 percent of who we are.’ That whole notion of ultimately overcoming skepticism by being people of sound character and values is part of what has enabled us to survive and thrive for 30 years.”


If innovation is Nu Skin’s muscle, its mission to be a force for good throughout the world is its heart and circulatory system.


And indeed, Nu Skin has thrived. The company announced 2013 revenue of $3.177 billion, a 49 percent year-over-year improvement. So how did it celebrate those impressive accomplishments on its 30th anniversary? How else? By doing good things around the world. Starting at this year’s annual sales convention, a gala attended by sales leaders raised $2.2 million for the Force for Good Foundation, Nu Skin’s philanthropic organization. Then on June 5, Nu Skin celebrated its official 30th Anniversary and annual Force for Good Day by donating children’s books and assembling school supplies into learning kits to benefit local schools with high percentages of disadvantaged children. Throughout June, distributors around the globe continued the celebration, individually and collectively doing everything from picking up trash to raising funds for worthy causes. Just a few of the projects: In Southeast Asia distributors continued their long-term support of the Children’s Heart Fund by raising funds for heart surgeries for children whose families don’t have the means to pay for the surgeries; in Russia they helped in an orphanage; in Malaysia distributors took gifts to children in hospitals; distributors in Northern Europe raised 32,000 Danish Krona (US$5,800) to buy 30 beds for a Romanian orphanage; and Canadian distributors made lunches for homeless families. (See sidebar for more information on Nu Skin’s philanthropic efforts.)

Whatever projects employees or distributors chose, each reflected their pride and gratitude in being part of a company that has provided opportunities and a better life for people around the world for 30 years.


“We at Nu Skin don’t feel we’ve arrived yet where we want to be, even though we’ve enjoyed record levels of growth, commissions paid to the salesforce, and the good we’re doing for society through our corporate social responsibility initiatives.”
—Truman Hunt


“We at Nu Skin don’t feel we’ve arrived yet where we want to be, even though we’ve enjoyed record levels of growth, commissions paid to the salesforce, and the good we’re doing for society through our corporate social responsibility initiatives,” Hunt says. “Our ambition is to be the world’s leading direct selling company by generating more income for our sales leaders. We have the goal of being a $10 billion company by the year 2020. That will enable us to pay between $4 billion and $5 billion to our salesforce. As we look at the environment, we believe that we can generate that level of success.”

August 06, 2014

Company Focus

Stemtech International Inc.: Pioneering a New Technology

by Jennifer Workman Pitcock

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


Company Profile

Founded: 2005
Headquarters: Pembroke Pines, Florida
Executives: Ray C. Carter Jr., President and CEO;
Christian Drapeau, Chief Science Officer
Products: stem cell nutrition


Ray C Carter Jr. Ray C. Carter Jr.
Christian Drapeau Christian Drapeau

In the eight years since its founding, Stemtech International Inc. has seen amazing growth, having brought its unique stem cell technology to market, backed by scientific research. Pioneering a brand-new category of healthcare products, the company has already launched in 30 countries worldwide.

With only about 10 percent of its 200,000-plus Independent Business Partners (IBPs) based in the United States, Stemtech expects to see the U.S. market grow exponentially as interest grows in the role that adult stem cells play in the body’s daily repair.

Known as the Stem Cell Nutrition Company®, Stemtech has also garnered national and industry recognition in a short time. It made Inc. magazine’s list of fastest-growing private companies based in the United States for the second time in four years in 2013 with a 2012 revenue of $58.1 million—it first entered the list in 2010. It had already been recognized by the Direct Selling Association as one of three finalists for the DSA’s prestigious Rising Star award in 2009.


Stemtech made Inc. magazine’s list of fastest-growing private companies based in the United States for the second time in four years in 2013 with a 2012 revenue of $58.1 million—it first entered the list in 2010.


The Stemtech Story

Though Stemtech got its start less than a decade ago, botanical researcher and neurophysiologist Christian Drapeau, MSc, began researching the science the company is founded on during the 1990s. Having learned of the health benefits people experienced when eating nutrient-rich algae known as Aphanizomenon flos-aquae (AFA), Drapeau and fellow scientist Dr. Gitte Jensen began examining how AFA supports health. In their research, Drapeau and Jensen discovered that AFA supports the body’s release of adult stem cells. Soon Drapeau developed a nutritional product based on these findings.

Around the same time, Ray C. Carter Jr. took a position with a direct selling company. He was brought on to increase the company’s U.S. market and then take over as president. With a bachelor’s and MBA under his belt, Carter also had decades of industry experience in direct sales and marketing. He understood the business from the distributor side, having built a successful organization with a telephone reseller as well as with other direct sales companies before becoming an executive.

Carter began seeking a product that would breathe new life into his company. His search led him to Drapeau, who had recently secured a patent for a new nutritional product that supported the body’s renewal system by increasing the number of adult stem cells available to repair the body’s organs and tissues.

Drapeau was looking for a home for his product, and Carter found him. Both men were elated when Carter’s company gave the green light to begin the process of acquiring it. But a month later, Carter was called in by the board, who informed him that they had decided to pass on Drapeau’s stem cell technology. Carter then left the company to help Drapeau find a home for the product. Despite significant interest among some of the major direct selling companies, months of negotiations and red tape kept the technology from reaching the market.

“In hindsight, I can see that trying to pioneer a new dietary supplement product category based on stem cell science was too risky for an established company at that time,” Carter says. “It was more suited for a new startup company.” So in the summer of 2005, Carter and Drapeau co-founded Stemtech, with Carter as President and CEO and Drapeau as Chief Science Officer.

“Three months later, we were in business, and we did nearly $1 million in sales our first month,” Carter says.

Stemtech Products

Growing Globally

Within the year, Stemtech was receiving inquiries from all over the world. People wanted Stemtech’s products and opportunity to be made available in their countries.

“Ray was smart,” says Don Karn, Stemtech’s Vice President of North American Markets. “He put a focus on not just growing North America, but on growing internationally.”

Carter began placing vice presidents in various regions of the world, and soon the company’s global growth was outstripping domestic growth. With such robust international sales, the company was unscathed by the 2008 recession.

Now active on six continents, Stemtech continues to expand as demand for Stemtech’s products increases globally.

A New Home

This summer, Stemtech moved its headquarters from San Clemente, California, to Pembroke Pines, Florida. The move is part of Stemtech’s global growth strategy. The company currently employs over 200 people in over 20 countries.

“Florida is a very friendly state to do business in,” Karn says. “And the proximity to Miami International Airport gives us the opportunity to easily grow the international business.”

The company’s headquarters is located in the historic Miami Herald Building, which has been renamed Stemtech Square. Stemtech’s research and development lab and manufacturing facility will all be housed in the same complex.

“In addition to executive offices and international activities, we have all of our North American activities there, and we have distribution for half of the United States coming out of our new offices,” Karn says.

The move will create 90 jobs, which will help support the local economy.

Ongoing Research and Development

When Stemtech launched, the company had a single product, StemEnhance®, created with the purpose of enhancing the body’s production of adult stem cells. Since then Stemtech has added products, but the company has not lost focus. “We have stuck to our mission to be the Stem Cell Nutrition Company®,” Karn says. “All the products we’ve released are related to stem cell nutrition. And we intend to stay focused on these types of products.”

In 2011, Stemtech launched an improved version of StemEnhance, SE2®. Additionally, Stemtech’s product line includes other items that work in conjunction with the company’s flagship product. As its product line has grown, Stemtech has continued its scientific studies to demonstrate the products’ effectiveness. The company has participated in many studies, which have been published in peer-reviewed medical journals such as Cardiovascular Revascularization Medicine and Cell Cycle.

Commitment to Giving Back

For Stemtech, giving back continues to be important. The company has its own 501(c)3 organization, The Stemtech Global Foundation, and it is committed to supporting the less fortunate in each country where it does business. “In each country we go into, one of the first tasks of the GM is to find a charity we can support that serves children, animals or the environment,” Karn says.

Choosing the direct sales channel to market Stemtech’s products is also based on the co-founders’ commitment to improving the lives of others. Stemtech’s mission is to spread wellness and prosperity around the world.

“We do business through a model that does not bring all the income into our pockets,” Drapeau says. “We actually share it through the direct sales model. What we try to do in our company is to bring both health and wealth to people.”

Carter agrees. He wants to use his income from Stemtech to help support charities worldwide. “In my view, the definition of wealth is how many people you can help. You become ‘wealthier’ by helping more people,” he says.

Training Leaders

As the economy continues to improve, Stemtech expects to see significant growth inside the United States, as well as continued global expansion. With that in mind, Stemtech has invested in state-of-the-art training tools. Not only do Independent Business Partners have their own website available in their native language (and 14 others), but Stemtech is also making it easier for IBPs to complete training, track their sales and monthly progress, and share with others.

Whether they are sponsored by a dynamic leader or a friend who joined the previous day, Stemtech wants to ensure that all IBPs get the training they need. In 2015, the company will launch new tools in their back office. “They’ll have online business training—not only training videos but also an email responder and a list where they can track which of the five most important things to do every day they’ve already completed. Leaders can set up fun competitions, and IBPs will be able to see themselves compete with others on their team in real time in Back Office,” says Chris Simonian, Vice President of Global Marketing.

Additionally, IBPs will be able to share materials and track how many exposures it takes before potential customers take the next step to buy or join. “Everything will be mobile-driven,” Simonian says. “IBPs can send a video to your phone or iPad, and the system will indicate if you watched it—or even how much of it you watched.”

The company will also use online training to make sure their IBPs are aware of compliance issues. Simonian says, “Companies are being held more accountable for compliance. What we’re talking about is something like a certification program. IBPs will complete a training session online and then test on what they may and may not say about the products.”

The new tools will not take the place of other proven methods of training. Along with conference calls, webinars and videos, Karn has recently added new staff to help train and lead meetings. Two are Spanish-speaking, as one of Stemtech’s initiatives for growth is to create diverse, ethnic markets in the United States. “We already have Spanish-speaking and Chinese markets outside the U.S.” says Karn, who believes Stemtech’s multilingual tools, along with the company’s sensitivity to individual cultures, will give the company a “leg up” on building these ethnic markets inside U.S. borders.


“The most valuable information you can own is what people think about you.”
—Chris Simonian, Vice President of Global Marketing


The company is also focusing on another frontier—social media. Stemtech has both an internal and external team focused on raising the company’s profile on social media. Along with communicating with IBPs using social media, Stemtech will train IBPs to better utilize the platform to grow their own businesses. “With that in mind, Stemtech will be implementing a very targeted training on social media,” Simonian says.

Building a Brand

So far, Stemtech has focused its energy on the science and the products themselves. As the company has matured, it has become increasingly focused on branding. Simonian believes the best way to find out how people perceive Stemtech is to ask them. “The most valuable information you can own is what people think about you,” he says.

That means interviewing people both outside and inside the company and zeroing in on who the company says they are and how that lines up with people’s perceptions. “Branding is much more than a color or logo change,” Simonian says. “A brand is a promise that when you go to buy a product or a service, that product or service is going to deliver on exactly what it tells you it’s going to do.”

As part of its branding, Stemtech intends to ramp up its recognition of IBPs. “We want to show people that we value them at Stemtech,” Simonian says. The company plans to do more to showcase IBPs’ accomplishments in Stemtech magazine articles, on the website, in conference calls and in other media, as well as continue to build a solid recognition program.

The company hopes that its recognition and rewarding of IBPs becomes one of Stemtech’s hallmarks. “When people think of our brand, we want them to know us as a company that really cares about its distributors,” Simonian says.

Stemtech knows crafting their brand will take time. Creating a brand is like constructing a giant puzzle of elements, including the brand’s promise, the emotions the brand inspires, and the way the products look and feel. “When all the pieces start to fit, then it becomes a beautiful picture,” Simonian says.


““Our long-term goal is to touch as many lives around the world as possible.”
—Ray C. Carter Jr., President and CEO


The Future of Stemtech

Carter knew Drapeau really had something special when he took a risk on Drapeau’s pioneering technology. His bet was a winning one. This year alone, the company expects to see 50 percent year-over-year growth from 2013. “Many markets around the world are breaking records every month. We just opened two more major markets, Russia and Indonesia, and we have inquiries from over 100 other countries around the world,” Carter says.

But for Stemtech’s co-founders, the company’s most important contribution goes far beyond the financial. “Our long-term goal is to touch as many lives around the world as possible,” Carter says. “We want to give an opportunity to those who currently have limited options to improve the quality of their lives.”

August 06, 2014

Working Smart

Stepping Out with Social Public Relations

by Joyce Elven

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


The Way It (Almost) Wasn’t

Back in 2009, when PartyLite first stepped out with social media, Facebook for business was only a little past “new.” Our Facebook page was opened despite some normal, internal executive skepticism: “We don’t have the people or internal resources for that!” and “That’s just for college kids, isn’t it?”

But we believed that somewhere in the midst of pet photos and personal opinions, we could utilize the user power of sharing what Facebook and other social media inherently possessed. We didn’t want to wait for the internal skepticism to die down before attempting to harness some of that power. As Director of Communication I became the needed internal resource, and with the help of a social media strategist the PartyLite social media program took off. We developed our Facebook page first. Then our YouTube channel. Twitter feed. A blog we named PartyLite Magazine. Pinterest. Instagram. LinkedIn. We wanted to utilize social sharing through every vehicle we could find.


“Perhaps in the same way that someone, one day, somewhere, decided to put chocolate and peanut butter together, we thought, “Oh, social media + public relations.”


In the early days, we measured success with fan counts and click-throughs. We were quite thrilled that, within the first year, the PartyLite Facebook page became the top referring source to PartyLite.com. We were stoked over our early social media success! But we also knew that our public relations outreach wasn’t as robust as we wanted. It wasn’t exactly on life support because we popped an occasional nitro tablet—in the form of press releases and outreach to editors—to keep the ticker going. However, we decided to merge social media and public relations.

And Then, a Flash of Light

Perhaps in the same way that someone, one day, somewhere, decided to put chocolate and peanut butter together, we thought, “Oh, social media + public relations.” Immediately we created our social public relations program with a fresh way of looking at both disciplines—together! For the last couple of years, our social media strategist, public relations consultant and I have become the closest of colleagues.

To beef up our PR efforts within this new context, we knew that we needed effective web release services in both the United States and in Canada, where we operate a significant business. At first, we hoped to find just one affordable, bilingual service for both countries. Ultimately, we came to understand that finding just one service for both countries was not going to happen.

My strategist persistently pursued conversations with services and helped us zero in on exactly what we needed: separate services for the United States and Canada. Today, we engage all of North America, not just the United States, with our combined efforts.

When we send a web release, we share it across social channels, too. The result is what I call “exponential resonance.” Our efforts have increased traffic to our U.S. and Canadian websites, but one of the best benefits of the combined social media and PR efforts—along with the expanded e-commerce team’s SEO and banner ad efforts—has been that we’ve pushed down some very old negative and/or untrue “stuff” that used to come up in a search. I’m talking “way old” negative stuff. Now, a basic Google search brings up newer, fresher, positive results about PartyLite, like web releases, social channels and other positive information. That is a huge win.

Last fall, we wanted to focus our social public relations on holiday entertaining and how to spruce up a home with candles. Big message, small budget. The solution was a satellite media tour—a dynamic public relations tool with a follow-up social strategy. For less than $20,000, live interview placements on 369 news programs and 275 radio stations garnered an audience of a whopping 10.3 million people—and that’s not even counting the follow-up social reach on Facebook, Twitter, YouTube, our PartyLite blog and more! This campaign truly created the exponential resonance we’ve come to expect with our social public relations strategy.

SEO Expands the Reach

With the help of an SEO manager at PartyLite, we’re integrating even more digital expertise into our strategy and are excited to see even greater results ahead. Although we were convinced internally that combining all of these efforts was the right course of action, it was validating to come across a blog post by Jessica Maccio, head of PR for a digital marketing agency.

“PR is moving away from operating in isolation from the digital team to becoming an integrated function that aligns closely with brand, content, social media, and SEO efforts,” Maccio says. “The simple truth is that each and every piece of content that you share and communicate is going to play a greater role in affecting how people in your online audience find and engage with your brand.”

Maccio’s post was one more confirmation that, by integrating PartyLite social public relations with all supporting marketing plans, we are moving in the right direction.


In essence, the medium is not the message. The message is the message.


After All, It’s Still About Relationships

In essence, the medium is not the message. The message is the message. Smart public relations messages travel to their intended audiences faster, sooner, more affordably, more personally and more effectively when we utilize social media. Ultimately, whether it’s a formal press release or a captioned Facebook photo, or a 140-character Tweet, or a new product on Instagram, content remains king.

At the same time that we were redefining the channels for our messaging, PartyLite was redefining its party. What exactly is a party in 2014? Many things! It’s still often a traditional gathering at a host’s home. But it’s also a few people in a restaurant for lunch, or meeting for a drink after work or just a simple online relationship between a customer and a consultant who becomes her or his own personal shopper—even if they’ve never met. It’s not “where” that matters, it’s “what.” And the “what” is, of course, the relationship—which begins when communication about PartyLite makes an impression and grows through ongoing messaging in social media.

The combined efforts of PR and social media work best when we want to reach a large number of key people with a targeted message that also functions as growing public awareness of our brand. For example, we’ve pushed out the following communication through our social media channels and had great response:

  • New fragrances are like fashion items—what’s hot now?
  • Decorating advice—how to create groupings and centerpieces, great ideas for outdoor entertaining, expressing your own personal style, making a big design statement without redecorating.
  • Seasonal gift ideas for holidays, weddings, Mother’s Day, Father’s Day, graduation, Valentine’s Day.
  • Working for a direct selling company—questions to ask, sources for good information, assessing your earning potential.

Still it is perhaps the personal stories—those times when individuals share their experiences through their own channels and we pick them up and share them—that create the most compelling of all social public relations messaging. Given that we are the ultimate relationship business, this is not surprising.

We are very excited about continuing our combined efforts in social public relations. As new channels and ways to share our brand and products continue to expand, we plan to be in the middle of it all!


Joyce ElvenJoyce Elven is Director of Communication and Social Media at PartyLite North America.

August 05, 2014

U.S. News

New Orleans Saints Kick off Training Camp at New AdvoCare Center

The National Football League’s (NFL) annual training camps are underway across the country, and Dallas-based AdvoCare International is getting in on the action. The health and wellness company recently secured naming rights for a new professional sports facility that will serve as the training grounds for the New Orleans Saints.

Located in West Virginia, the AdvoCare Sports Performance Center at The Greenbrier is not the company’s only link to the New Orleans franchise. Saints quarterback Drew Brees is an AdvoCare national spokesperson who also collaborated with the company last year on its DB9® Signature Series products.

“AdvoCare is very proud to give its name to this new training facility that New Orleans football players, coaches and fans will call home for the next few weeks,” AdvoCare CEO Richard Wright said in a statement. “We are excited for the exposure AdvoCare will receive as a result of the crowds the facility will attract in the next month, as well as down the road.”
 
A purveyor of nutrition, weight loss and sports performance products, AdvoCare has inked sports sponsorships on both the local and national level. AdvoCare is the first-ever jersey sponsor of Major League Soccer’s FC Dallas team and a sponsor of college football’s Texas Bowl and Cowboy Classic games.

The company has also established a multi-year primary partnership with NASCAR’s No. 6 Ford car, owned by Roush Fenway Racing. AdvoCare has signed on as title sponsor of the car, piloted by 2011 Daytona 500 winner Trevor Bayne, for the upcoming Sprint Cup Series season.

August 01, 2014

U.S. News

Profits Drop for Avon Products during Second Quarter

(AVP—NYSE) Avon Products Inc.’s second quarter 2014 results still show a struggle for the beauty company, but its ongoing turnaround plan is slowly making itself known as sales improve in key regions. Reporting before markets opened Thursday, Avon’s revenue came in at $2.2 billion, falling 13 percent (or 3 percent in constant dollars). Adjusted earnings were 20 cents per share, a penny below the Zacks Consensus Estimate, dropping 31 percent from 29 cents the previous year.

While the volume of products sold dropped 6 percent and active representatives worldwide were also in decline, average orders went up by 3 percent in the quarter. The company also reported that quarterly sales grew in the U.K. for the first time since 2010, up 11 percent, or 1 percent in constant dollars, primarily due to higher average orders.

“As anticipated, our second-quarter results were tough,” said Avon CEO Sheri McCoy. “While Avon’s turnaround remains challenging, we are putting the people and processes in place to lay the foundation for returning Avon to sustainable, profitable growth. As we move to the second half of the year, we continue to expect improved performance.”

Second quarter 2014 gross margin and adjusted gross margin were 63.0 percent. Adjusted gross margin was 30 basis points lower than the prior-year quarter, primarily due to the unfavorable impact of foreign exchange driven by Latin America and Europe, Middle East & Africa.

Operating profit was $93 million and operating margin was 4.3 percent in the quarter. Adjusted operating profit was $186 million and adjusted operating margin was 8.5 percent, down 100 basis points from the second quarter of 2013.

Second quarter 2014’s net income from continuing operations was $20 million, or 4 cents per diluted share, compared with net income from continuing operations of $85 million, or 19 cents per diluted share, for the second quarter of 2013. Second quarter 2014’s adjusted net income from continuing operations was $91 million, or 20 cents per diluted share, compared with adjusted net income from continuing operations of $127 million, or 29 cents per diluted share, for the second quarter of 2013.

Net cash used by operating activities was $7 million for the six months ended June 30, 2014, compared with net cash provided of $70 million for the same period in 2013, unfavorably impacted primarily by lower earnings. The overall net cash used during the six months ended June 30, 2014 was $330 million, which was comparable with the same period in 2013.

Avon’s net debt (total debt less cash) at June 30, 2014 was $1.9 billion, up $240 million from the year-end 2013 level, and $170 million lower than at June 30, 2013.

Avon also declared a regular quarterly dividend on its common stock of 6 cents per share, payable Sept. 2, 2014, to shareholders of record on Aug. 14, 2014.

Read the full results here.

August 01, 2014

Software/Technology Solutions

Xirect Software Solutions


August 01, 2014

Stock Watch

Stock Watch, August 2014


August 01, 2014

U.S. News

Thirty-One Gifts Conference Brings Spirit of Giving to Columbus

Thirty-One Gifts welcomed more than 14,000 attendees to Columbus, Ohio, for its National Conference July 22-25. The annual event made a big impact on the local community, well beyond the estimated $17.5 million economic footprint it left behind.

At this year’s conference, Thirty-One launched the #Share31 movement to celebrate its host cities and its hometown of Columbus. The fashion, accessories and home decor brand, which takes its name from the Bible’s Proverb 31, encouraged its salespeople to pay it forward with random acts of kindness throughout the community—whether by picking up a stranger’s tab, giving up a parking spot or leaving a 31 percent tip.

Individuals could then share each act of kindness on social media using the #Share31 hashtag. For each post, Thirty-One made a 31 cent donation to its philanthropic partner, Ronald McDonald House Charities. The company maxed out its goal of $10,000 in donations to both the Ronald McDonald House of Central Ohio and of Denver, where Thirty-One held another Conference event two weeks earlier.

The company fully anticipates its consultants will continue to build the movement as an ongoing effort, says Wendy Bradshaw, Thirty-One Director of Community Relations & Philanthropy.

“In the end the campaign surpassed our expectations and allowed us to walk into our host cities with our heart on our sleeve,” Bradshaw told DSN. “…It created an amazing energy around the hotels, restaurants and convention staff as we interacted during the week.”

Approximately 60 percent of the crowd that filled Columbus’s Nationwide Arena were first-time conference attendees. The company rolled out its fall product line and celebrated its salesforce, which generated revenue of $763 million in 2013. The conference also included a tribute to retiring President Andy Neri.

With Founder Cindy Monroe at the helm, Thirty-One is the fastest-growing woman-owned company in the world and the No. 17 company in direct selling. The company employs more than 1,400 at its warehouses and supports more than 118,000 independent sales consultants in the U.S. and Canada.

August 01, 2014

Commission Payment Services

Chexx Inc.


July 31, 2014

World News

Amway Leaders Express Relief at India CEO’s Release

After two months in detention, Amway India CEO Bill Pinckney was released on bail Monday.

According to The Times of India, Pinckney was arrested May 26 at Amway India’s headquarters and is accused, along with the company, of financial irregularities by Amway.

Chairman Steve Van Andel and President Doug DeVos issued a joint statement expressing their relief at the news.

“We are thankful that after these many weeks he is finally able to be with his family, yet profoundly dismayed that this unnecessary detention occurred at all, and are even more troubled that it lasted so long,” they said. “Our focus is squarely on efforts to ensure that nothing like this happens again.”

Amway remains committed to the India market and is working with the various governing bodies there to craft clear legislation that distinguishes legitimate direct selling businesses from frauds. It continues to invest in the country and has a new manufacturing facility in Tamil Nadu that is scheduled to come online later this year.

The company also plans a vigorous defense of the charges that led to Pinckney’s arrest, said Samir Behl, Regional President, Europe, South Africa & India.

“We have much work to do to define specific legislation which regulates the activities of the direct selling industry in India,” Behl said in a written statement. “In the absence of such legislation, some authorities have, on a mistaken understanding of the direct selling model, taken the view that direct selling companies are covered under the Prize Chits and Money Circulation Schemes (Banning) Act. This act does not distinguish between genuine direct selling companies and illegal schemes, nor was it intended to. In fact, this act was never intended to cover the distribution of real products and services and is being misapplied against genuine direct selling companies like Amway.

“We are a legitimate direct selling company, which sells more than 140 daily use products across categories like nutrition, beauty, personal care and home care through individuals who make personal recommendations regarding the use of distinctive high quality products and earn commissions only on the sale of Amway products. Amway products are widely recognized and appreciated for their quality and value. The Amway business costs nothing to join, and all Amway products are backed by a money-back guarantee for 100 percent satisfaction of use.

“The business community in India has supported us in this hour of crisis and pledged its continuing support in our pursuit of fair legislation that also protects Indian consumers. Leading industry associations like FICCI, IDSA, Amcham, CII, USIBC and the Kerala Chamber of Commerce openly support our cause. We are thankful to them.”

July 30, 2014

U.S. News

USANA Reports Second Quarter, Growth in Associate Numbers

USANA Health Sciences Inc. (USNA—NYSE) reported financial results for its fiscal second quarter 2014 after the markets closed on Tuesday. While missing earnings estimates by 14 cents at $1.36 per share (according to Briefing.com the Capital IQ Consensus Estimate was $1.50), the company reaffirmed net sales and earnings guidance for 2014.

For the second quarter ended June 28, 2014, net sales decreased to $188.3 million, down 0.4 percent compared with $189.1 million in the prior-year period. Net sales, on a comparative basis, were negatively impacted by: $7.0 million of incremental sales in the second quarter of 2013 that occurred ahead of policy changes, which included restricting Associate purchases to their country of residence; $3.3 million from unfavorable changes in currency exchange rates; and price discounts that the company implemented in 2013. The number of active Associates for the second quarter increased 11.4 percent year-over-year, and 6.8 percent sequentially, largely as a result of the initiatives implemented by the company in 2013.

Net earnings for the second quarter were $19.3 million, compared with $24.2 million during the prior-year period. Earnings per share for the quarter were $1.36, compared with $1.72 in the second quarter of the prior year. Weighted average diluted shares outstanding were 14.2 million in the second quarter of 2014, compared with 14.1 million in the prior-year period.

During the quarter, the company accelerated its share repurchase activity by repurchasing approximately 682,000 shares under its authorized repurchase program for a total investment of $49.1 million. Additionally, as of July 25, 2014, the company has spent $21.4 million during the month of July to repurchase approximately 285,000 shares.

“USANA generated solid results during the second quarter, notwithstanding several factors that created a challenging year-over-year comparable,” said Dave Wentz, USANA’s CEO. “As we execute our 2014 strategies, we are confident that our performance will continue to accelerate during the second half of the year and we will deliver another year of record results in 2014.”

The company reaffirmed guidance for fiscal year 2014 with earnings per share between $5.50 and $5.65 (versus $5.66 Capital IQ Consensus Estimate) and consolidated net sales between $770 million and $790 million (versus $784.99 Capital IQ Consensus Estimate).

Read the full results here.

July 30, 2014

U.S. News

Origami Owl Sees Double Attendance for Second Annual Conference

Photo above: Origami Owl Co-Founders Bella and Chrissy Weems celebrate the company’s second annual conference, highlighted by record attendance, exciting new product launches and recognition of charitable giving.


One of the fastest-growing companies in direct sales, 4-year-old jewelry company Origami Owl, held its second national conference July 24-26.


O2 Grow Experience pulled 4,400 designers to the Phoenix Convention Center, near the company’s Chandler, Arizona headquarters. A year ago, the conference had approximately 2,200 attendees. With a large portion of out-of-town delegates, the convention center estimates the 2014 event generated more than $4.3 million in direct spending for the area.

Origami Owl Founder and Co-President Chrissy Weems said the growth in attendees felt unfathomable.

“It really speaks to our mission and who we are as a company and our genuine intention to make a difference in the world,” she told Direct Selling News. “…More than anything, we’re just unbelievably blessed.”

Origami Owl had $233 million in revenue in 2013, earning it the No. 50 spot on the DSN Global 100 list of the world’s largest direct selling companies. That was an 870-percent increase—the largest gain of any company on the list—from $22 million in 2012, its first year using the distribution channel. This financial feat also secured the company this year’s DSN Bravo Growth Award Based on Percentage.

During the convention—between a schedule packed with inspiration, new product announcements and learning—Chief Operating Officer Kevin Raulston shared from the stage some of the improvements the company has made in managing its supply chain and customer service. Since last year, Origami Owl has seen an 84 percent increase in orders and a 128 percent increase in call volume. Yet, it has improved order accuracy from 85 percent in June 2013 to more than 97 percent in June 2014, decreased backorders from 30,000 to zero and reduced the speed of answer in its call center from an average of 62 minutes to just 41 seconds.

“Managing growth has been a challenge all along the way,” Weems said. “We really have been guided to the right people. Finding the right talent, with the right cultural fit, to really help our organization and bring in expertise. We might not have certain knowledge, but there is someone out there who does, and for some reason they always find their way to us.”

Among the newest hires is Chief Sales Officer Sandy Spielmaker, who brings with her nearly seven years of experience in direct selling as well as marketing, sales and management experience with other consumer product companies. She introduced herself to the Origami Owl designers from the convention stage just three days into her new role. Another recent hire is Vice President of Information Technology Mike Green, who brings more than 13 years experience in IT for direct selling companies. And Tricia Chiodo, who joined the company in January, has taken on the role of Co-President while she remains acting CFO.

“As we’ve grown, we meet the critical needs when they come about,” Weems said. “With Sandy in particular, we needed a chief sales officer. We’ve grown to that point where we need her expertise, but more than that, we need someone who can lead us into the future. She has global experience, and so it’s a game-changer for us.”

As the company grows, so too does the array of benefits available to its independent salesforce. Origami Owl announced a partnership with Plano, Texas-based benefits company Agentra to give designers access to health insurance plans. And the company also unveiled an online education platform built with help from San Francisco, California-based 6connect and leadership consultant Casey Reason. Dubbed O2 Academy, the program includes professional and personal development modules as well as access to college credit through a partnership with Grand Canyon University.

Don’t expect to see Origami Owl slow down anytime soon, Weems said.

“I really, truly believe Origami Owl is in the infancy of our growth,” she said. “We’re just barely getting started, and we’ve done exceptionally well, but we have a much more grand vision than where we are now—and that is to be a global force for good.”


Founder Chrissy Weems
Photo Above: At this year’s conference, Founder Chrissy Weems introduces Origami Owl’s newly launched collection of elegant crystal embellished jewelry, made by the world-renowned crystal brand, Swarovski.

July 29, 2014

U.S. News

Herbalife’s Second Quarter Earnings Weaker Than Expected

Herbalife Ltd. (HLF—NYSE) announced second quarter 2014 results after the markets closed on Monday with earnings of $1.55, falling a penny short of expectations. According to the Wall Street Journal’s Money Beat, analysts polled by Thomson Reuters expected Herbalife to report earnings of $1.56 a share. This was the first time since 2008 that Herbalife missed estimates. Despite this difference, earnings increased 10 percent compared to the prior year.

The global nutrition company reported net sales for the quarter ended June 30, 2014, at $1.3 billion, reflecting an increase of 7 percent compared to 2013. Estimates had been $1.36 billion. Second quarter worldwide volume growth was 5 percent compared to the prior year period.

Adjusted net income for the quarter was $141.4 million, compared to 2013 second quarter adjusted net income of $150.7 million. On a reported basis, second quarter 2014 net income was $119.5 million, or $1.31 per diluted share compared to $143.2 million, or $1.34 per diluted share for the same period in 2013.

“Herbalife has once again delivered strong results in sales and profitability while demonstrating our continued ability to enhance our earnings per share,” said Michael Johnson, Herbalife’s Chairman and CEO. “Our performance is a testament to the enthusiasm our millions of consumers and members have for our products. Additionally, our independent members are successfully executing numerous growth strategies to further develop customer loyalty and encourage individuals across our network to lead healthier, nutritious lives.”

For the quarter ended June 30, 2014, the company generated cash flow from operations of $156.9 million; invested $39.6 million in capital expenditures; and repurchased $581.3 million in common shares outstanding under its share repurchase program.

Herbalife’s guidance for third quarter EPS is a range of $1.49 to $1.53, and full-year EPS is a range of $6.17 to $6.32.

During the second quarter, the company repurchased 9.8 million shares at an average cost of $59.41. There is currently $232.9 million remaining on the existing $1.5 billion share repurchase authorization.

Read the full results here.

July 25, 2014

U.S. News

Stella & Dot Foundation Now Partnering with Every Mother Counts

This week, social seller Stella & Dot re-launched its Stella & Dot Foundation in partnership with Every Mother Counts, a campaign dedicated to making pregnancy and childbirth safe for every mother. The foundation was created in 2010 to further the fashion and accessories brand’s mission of helping women style their own lives.

“We are committed to making a difference in women’s lives,” Stella & Dot Founder Jessica Herrin shared in a statement. “It’s important for us to extend that mission to impact the lives of women and their families, at home and around the world through the Stella & Dot Foundation.”

Every Mother Counts currently operates in Indonesia, Haiti, Uganda, Malawi and the United States. The organization was founded by Christy Turlington Burns, a model, entrepreneur and activist named one of Time’s 100 Most Influential People of 2014. Burns directed the documentary No Woman, No Cry to raise awareness of the women dying—287,000 every year—due to largely avoidable complications during pregnancy.

“Every Mother Counts is excited to partner with Stella & Dot’s mission-driven community to help us achieve our goal to make pregnancy and childbirth safe for every mother,” said Burns. “We know we can’t do this work alone and are always reassured that there are others who want to contribute in meaningful ways.”

To kick off the new partnership, all net proceeds of the Stella & Dot Foundation’s new Enlighten Bracelet will benefit Every Mother Counts. At Every Mother Counts, 100 percent of every donation goes to programs supporting its mission around the world.

July 24, 2014

DSA News

Direct Selling Tops Record

by Lauren Lawley Head


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


When you’re busy running your business, it can be tough to keep abreast of developments around the rest of the direct selling community. I hope you enjoy this snapshot and take a moment to appreciate the power of what we achieve together.


QUOTABLE

“If the CMO of a company has only one responsibility, it is to keep it relevant. I don’t mean trendy, but relevant.”

— Doug Braun, CMO, USANA


U.S. consumers bought more product through the direct selling channel in 2013 than ever before—an estimated $32.67 billion in retail sales—new data shows.

The figures, published by the Direct Selling Association, quantify the size, scope and continued strength of direct selling. Retail sales were up 3.3 percent from 2012 and 15.3 percent from 2009.

“Direct Selling has much to celebrate, and this most recent data from 2013 gives us even more reason,” said DSA President Joe Mariano. “We continue to be a robust, growing and important part of our communities. The increase in sales and salespeople is further evidence of what we already innately understand, we are a force for good creating better lives for all Americans.”

In coming weeks, the World Federation of Direct Selling Associations is expected to follow suit with updated global statistics. Watch for more coverage in an upcoming issue.

Source: Direct Selling Association
Note: Estimates were based on survey data and extrapolated from secondary sources.


WHERE TO BE

European Direct Selling Conference
Who: Seldia, the European Direct Selling Association
When: Oct. 4
Where: Radisson Blu Royal Hotel, Brussels, Belgium
Registration: www.directsellingconference.eu

Global Regulatory Summit
Who: Direct Selling Association
When: Oct. 15 to 16
Where: The Fairfax at Embassy Row, Washington, D.C.
Registration: www.dsa.org

World Congress XIV
Who: World Federation of Direct Selling Associations
When: Nov. 10 to 12
Where: Rio de Janeiro, Brazil
Registration: www.wfdsa2014rio.com


Author Name
Lauren Lawley Head
General Manager
lawleyhead@directsellingnews.com

July 24, 2014

Top Desk

Making Direct Selling a Dynamic Force for Good

by Douglas C. Robinson

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


The challenge is out there: Make direct selling a Dynamic Force for Good. Truman Hunt, newly seated Chairman for the Direct Selling Association, put forth this mantra when he outlined his vision for the coming year during the 2014 DSA Annual Meeting in Orlando earlier this summer. So, how can we act on that vision and put those visionary words to work? Here are just a few things we could all do to act upon Chairman Hunt’s vision, and in doing so, make a very positive difference, not only in our industry but also in our world.

First, regardless of your roles and responsibilities, and regardless of the company that you work for or represent, personalize this challenge. Ask yourself, “Am I a Dynamic Force for Good? Am I making a difference—for the good? What did I do to make a difference in my company, in my community, and more broadly, in the direct selling industry this past year? What can I do to improve upon that this year? How can I make a bigger difference in my company, my community, and the direct selling industry this coming year?” Formalize your goals—otherwise the year will get away from you, and you likely won’t accomplish all that you set out to do. Include a personal statement with respect to this mantra of transforming yourself into a Dynamic Force for Good.


Let’s look beyond our fantastic products and the incredible opportunity, and connect with our true purpose.


Second, conduct yourself with the highest ethical standards. Again, regardless of where you find yourself within your company, work hard, be honest and be transparent. Go about your everyday routine looking for positive solutions to the challenges you face—look for reasons why you should do something versus focusing on the reasons why you shouldn’t do something. Simply put, when you aspire to make a positive difference, you will. And, in doing so, good things will happen.

Third, connect with your purpose. As involved as we all are within the direct selling industry, it goes without saying that we are all selling something—products as well as the business opportunity itself. But let’s look beyond our fantastic products and the incredible opportunity, and connect with our true purpose. And that purpose will be different for each of us because what drives us to do what we do is different.

A good friend of mine from Austin, Texas, Roy Spence Jr., focused on this concept perfectly in his book, It’s Not What You Sell, It’s What You Stand For. We all sell something. So, what differentiates those who are truly working toward being a Dynamic Force for Good from those who are not? Roy would suggest it is those who are driven by purpose, and I would wholeheartedly agree. Connect with your purpose and allow yourself to be driven by it. In doing so, you will absolutely be a Dynamic Force for Good.

I love the industry of direct selling. Done properly, it changes lives for the better. I’ve only been a part of this incredible industry for nearly five years. I spent the first 25 years of my career in health care—namely within strategic consulting to the Fortune 100. I was first introduced to the direct selling industry when I was asked to join the Board of Directors of LifeVantage in the fall of 2009, just a few months after the company began selling its products in the network marketing channel. Previously, the company sold its flagship dietary supplement product, Protandim, in the retail channel. About 18 months later, after an extensive search for a new president and CEO, I was honored to be asked to assume that role for LifeVantage. And over the course of these last three and a half years, I believe we’ve touched many people’s lives for the better by going about our business, realizing that we can and should be a Dynamic Force for Good.


I believe we’ve touched many people’s lives for the better by going about our business, realizing that we can and should be a Dynamic Force for Good.


LifeVantage will be a steward for all that Chairman Hunt is espousing, not only in the communities and countries where we currently conduct our business, but also in all those countries where we are laying the groundwork for expansion in the months and years ahead. Our employees and independent distributors connect with tens of thousands of people every day. They can and should be doing so with the mantra of being a Dynamic Force for Good.

It’s a great time to be in this industry. Years from now, I am confident that we will look back upon these times and see less of the challenges and attacks against our great industry and more of the difference we made in millions of people’s lives by connecting them with great products and business opportunities that profoundly improved their lives and their health.


Douglas C. RobinsonDouglas C. Robinson, President and CEO of LifeVantage Corp. (LFVN—NASDAQ), was recently elected to the Board of Directors for the Direct Selling Association (DSA). His term began on June 2, 2014, and will last three years.

Robinson’s nomination expands his involvement with the DSA, where he has served as a member of the World Federation of Direct Selling Associations’ CEO Council since 2013.

July 24, 2014

New Perspectives

The BurnLounge Court Decision Clears the Air on Many Issues

by Kevin Thompson

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


Editor’s Note: On the publication of the Ninth Circuit Court of Appeals’ opinion on the BurnLounge case, attorney Kevin Thompson published an article on Seeking Alpha detailing the decision and what each aspect of the Court’s opinion meant for the direct selling industry as a whole, and Herbalife in particular. This article contains excerpts of Thompson’s longer article, which you can access on SeekingAlpha.com or Thompson’s website.


On June 2, 2014, the Ninth Circuit published its long awaited BurnLounge Opinion. Within hours, both sides of the Herbalife (HLF—NYSE) battlefield issued statements claiming victory about the decision. One thing is clear: The gray space in MLM law separating legitimate direct selling companies from pyramid schemes has been minimized considerably.

BurnLounge was held by the court to be a pyramid scheme. In its opinion, the Ninth Circuit clarified a lot of contentious issues surrounding the industry. The factors assessed in reaching that determination are informative for long and short investors going forward. And of course, the factors are informative for the industry as a whole. While the people betting against Herbalife have argued that the entire industry has been propped up with bubble gum and duct tape over the years with clever interpretations of case law, this opinion clears the air considerably.

Thoughtful Analysis Regarding the Definition of “Ultimate User”

The Court dedicated an entire section to the definition of “ultimate user.” Before diving into the law, it’s important to understand the basics: The practice of paying commissions on purchases made by distributors for self-consumption and/or resale is known as “internal consumption.” The opposite is when distributors buy primarily to qualify for bonuses, i.e. buy things they would never buy at prices they would never pay without the financial opportunity. In BurnLounge, the Court held that participants in the plan can be counted as “ultimate users” provided that the participants bought the products for legitimate “internal consumption,” i.e. personal use.

The Court held, “BurnLounge is correct that when participants bought packages in part for internal consumption, the participants were the ‘ultimate users’ of the merchandise and that this internal sale alone does not make BurnLounge a pyramid scheme.” (BurnLounge Decision, p. 19). The Court went on to say, “Whether the rewards are related to the sale of products depends on how BurnLounge’s bonus structure operated in practice.” Bottom line: Factors need to be weighed when assessing whether commissions are driven by “ultimate users.”

What Is an “Ultimate User”?

In this regard, the Court looked to the FTC’s 2004 Staff Advisory Opinion for guidance. The section quoted by the court reads, “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 critical question for the FTC is whether the revenues (that support the commissions) are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in the money-making venture,” (emphasis mine).

BurnLounge was held to be a pyramid scheme because “the rewards BurnLounge paid were primarily for recruitment, and (distributors) were clearly motivated by the opportunity to earn cash rewards from recruitment.” (BurnLounge Decision, p. 3-4). The Court weighed several factors in reaching its conclusion that the majority of the rewards were tied to recruitment, not legitimate product sales to “ultimate users.”

Retail vs. Non-Retail

It’s now a moot point. Up until this case, critics argued that the majority of a company’s revenue must come from retail sales, i.e. sales to customers outside of the network. Their rationale: Rewards via internal consumption were “recruitment rewards,” thus, the majority of revenue must come from customers instead of participants. While external sales remain a strong indicator of product value, it’s not a bright-line, determining factor. More importantly, it’s not a requirement.

In its opinion, the Court made itself clear that purchases made by the participants can be counted as legitimate sales PROVIDED… and this is key… there’s legitimate consumer demand for the products. In other words, the Ninth Circuit affirms the idea that there are essentially two categories of purchases: (1) those by ultimate users inside or outside the network, and (2) those derived via opportunity driven demand, i.e. people inside the network buying to qualify for commissions, otherwise known as “channel stuffing,” “garage qualifying,” “inventory loading,” etc.

Factors the Court Used in Finding that BurnLounge Lacked Sufficient “Ultimate Users”

It’s now reality beyond debate: Revenue from participants inside the network must be carefully considered when assessing a company’s legitimacy. The resulting commissions from internal consumption cannot be blindly treated as “recruitment rewards” as critics would prefer.

What are the factors that the Ninth Circuit used?

  • Purchasing patterns
  • Lack of value
  • Requirements to buy to qualify
  • Lack of consumer safeguards
  • Emphasis of the marketing

While these factors were not centrally located, they were referenced in various locations throughout the opinion. They’re discussed more fully below.

Purchasing patterns: The Court was disturbed by the fact that 95 percent of distributors bought the premium products while only 35 percent of non-distributors (customers) bought the same. (BL Decision, p. 14). The Court said, “If package purchases were driven by the value of the merchandise included in the packages rather than by the opportunity to earn cash rewards, one would expect to see comparable numbers of (distributors) and (non-distributors) buying the same packages.”

Lack of value: The Court held that the BurnLounge products had limited value, thus, the primary motivation leading to the purchases was NOT for legitimate product consumption. (BL Decision, pages 10, 19). Instead, the BurnLounge distributor was motivated to enhance earning potential. The Court held, “In practice, the rewards BurnLounge paid for package sales were not tied to consumer demand for the merchandise in the packages; they were paid to (distributors) for recruiting new participants. BurnLounge, through its recruitment efforts, created its own synthetic market.”

Requirements to buy to qualify: In BurnLounge, participants were REQUIRED to buy the premium packages to qualify for deeper commissions. Since the motivation driving distributor consumption is crucial in pyramid scheme analysis, BurnLounge was immediately dead in the water when it required distributors to buy. The Court held, “The district court found that because purchasing a package was required for participation as a Retailer or Mogul, and because Moguls earned cash for selling packages, (distributors) by default received compensation for recruiting others into the program.” (BurnLounge Decision, p. 10). Plus, distributors had to recruit several additional participants to qualify for the basic bonuses (“concentric retail bonuses”). Without question, the plan forced people to focus on recruitment and buy items they never would have bought at prices they never would have paid but for the income opportunity.

Lack of consumer safeguards: This is a point that’s more nuanced. While the Court did not reference the “Amway Safeguards” specifically, they did note that Amway was found to be legitimate due to its policies. As a recap, the FTC held Amway to be a legitimate enterprise largely because of its consumer safeguards. Specifically, Amway had a 70 percent rule (where 70 percent of all purchases needed to move to other people), the 10 customer rule (where distributors had to certify that products went to at least 10 customers each month) and the buyback rule (where distributors had 12 months to return sellable inventory). These safeguards were not specifically referenced in the opinion. However, in response to BurnLounge’s argument that it was just like Amway, the Court said, “Though Amway created incentives for recruitment by requiring participants to purchase inventory… it had rules it effectively enforced that discouraged recruiters from ‘pushing unrealistically large amounts of inventory onto’ recruits.”

In my opinion, the 70 percent rule and the 10 customer rule are no longer relevant. Those rules are vestiges from an era that pre-dates direct fulfillment. In those days, the “directs” had to purchase inventory on behalf of their entire organizations and fulfill the orders; thus, warranting rules that ensured the inventory was moving to “ultimate users.” Today, unique orders can be shipped to individual homes. The risk of inventory loading is greatly reduced provided that there’s a robust, easy-to-understand and clearly communicated buyback policy.

The Court held that BurnLounge had zero policies to prevent bonus buying. Once bought, the products were non-refundable.

Emphasis of the marketing: The Court held that BurnLounge participants focused primarily on recruitment over product value. The Court wrote, “The district court also found that BurnLounge’s marketing focus was on recruiting new participants through the sale of packages.” (BurnLounge Decision, p. 10). In BurnLounge, the pay plan literally required participants to recruit several people to achieve the basic levels in the plan. Plus, the products had minimal value, leaving distributors with little choice but to focus on the financial opportunity.

What Does This Mean Going Forward?

Network marketing companies will get more intelligent in delineating between “ultimate users” and everyone else. The market is already moving toward preferred customer programs where people can receive product discounts as preferred customers WITHOUT joining the business. Since we know these are metrics the courts want, it’s important to show clean data. Absent clear delineation, we have the factors provided in the BurnLounge case to help. Currently, when people join to save money on product (as my friend recently did with an essential oils company), short sellers treat them as “victims” or “failures” for purposes of beefing up the failure rate and finding a pyramid scheme. As the BurnLounge opinion makes clear, it’s not proper to make such distinctions without carefully considering the motivation driving the sales.


KevinKevin Thompson is an MLM attorney specializing in working with direct selling companies, large and small. He is a founding member of Thompson Burton PLLC and a Supplier Member of the Direct Selling Association.

July 24, 2014

Working Smart

Incentive Travel That Pays

by Anne Hamilton

Photo above (center): Distributor Denise M. has daughter Samantha work to earn a spot on an incentive trip with her mother.


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


Learning what motivates performers—and non-performers—is key to maximizing ROI.

Incentives have been at the heart of direct sales since before the days of the pink Cadillac. And much like the exhilaration of earning a car bonus, incentive travel brings with it endless bragging rights and a lifetime of memories.

While the program design is the frame of the car, the award is the sizzle, the chassis. The trip—by definition, an experience they could not create on their own, regardless of how much money they have—is what they’re buying into.

“With independent or direct sales reps, you don’t have the same levers for motivation as you do with an internal employee,” says Melissa Van Dyke, President of the Incentive Research Foundation. “The trip serves a dual function because often it’s the only time the reps get to meet face-to-face with the people they work with all year. They don’t have the opportunity to create that relationship like you would if you were in an office.”

Travel Matters

Yet few companies consult with their most important stakeholders—their salesforce—about their program design or destination decisions. The exceptions tend to be an obligatory end-of-program survey, which only offers feedback from participants, not from the people who didn’t qualify for the trip.

In a four-part study by the Site International Foundation and the Incentive Travel Council of the Incentive Marketing Association, researchers explored 1,000 participants’ (as well as non-earners’) views on incentive travel. What they found was that the length of the trip and variations in the destination appeared to be as important to some participants as the destination itself. In fact, 85 percent said they would be more motivated by longer trips (despite the trend over the past few years of shortening trip lengths by up to a full day), and 70 percent said they’re motivated by having more choices of destinations.

Economic times have forced many companies to shift from international to domestic destinations, with little negative response from the qualifiers. The big winners have been the warm weather destinations, such as Florida and California, which consistently top the lists of incentive destinations. Hawaii’s appeal is timeless; in the financial services industry, there are companies that have been using it as a biennial destination for years. Orlando is also a popular repeat choice. With always-evolving attractions and venue options, it has been used by many direct sales companies.

Whatever the destination choice, highly driven salespeople who have been living the 24/7 lifestyle are looking to be whisked away for a few days spent at a more relaxed pace. The vast majority of respondents to the site survey (75 percent) said they would be motivated by having more leisure time and fewer mandatory functions (70 percent). The good news is that those two strategies can cut trip costs—and increase ROI.

Incentive design is all about gathering insights on what matters most to potential qualifiers. This includes things like the length of the trip, type of hotel, whether or not to invite families, and what side trips and activities to offer. Drilling down to demographics—such as age and gender—helps further determine what types of trips will have the greatest ROI.


Incentive design is all about gathering insights on what matters most to potential qualifiers.


For example, do younger, single attendees dream of a sun-and-fun location? Do working parents prefer to travel with their children to family-friendly places, where they can carve out a family vacation at the same time as the company trip? What motivates a 50-year-old single woman could be very different from what motivates a father of three with a working spouse.

The youngest generation of workers, Gen Y (ages 18–33), will compose half the workforce by 2020 and 75 percent of the workforce by 2025. So it’s impossible to talk about incentive travel without considering this group.

The average job tenure of millennials is only 1.8 years, and 76 percent of them plan to leave their jobs as the economy improves, according to Dr. Bob Nelson, one of the world’s leading experts on employee recognition and rewards. “Companies need to hold onto this group, and one way to do that is through incentive travel,” he says. “But what appeals to them is not their father’s incentive trip, where they go to Hawaii and play golf half the time. They’re looking for the REI trip to Peru, where they are with other people of their own age and truly have an adventure, then go home and brag about it on Facebook to their friends.” Instead of sitting around a bar, he says, “Take them bungee jumping.”

This is also a socially conscious generation, but they’re not interested in CSR trips that just scratch the surface for an afternoon; they want to do something aligned with their values—to address a real-world need, such as global warming, or the lack of clean water. “Physical labor for a day would just be the opening ante for this age group,” Nelson adds. “Meaningful incentives geared toward their work, such as visiting their colleagues at their plant in Germany—perhaps with some fun thrown in, like cycling along the Rhine—would be more on target.”


“People need to be incented at every level of success, and there’s always that next level to reach for, with the top being travel.”
—Melissa Van Dyke, President, Incentive Research Foundation


Program Design

Just as it is essential to tailor your travel program to what motivates your direct sellers, it’s equally important to design objectives that are harmonious with your company’s culture, that motivate the middle and not just top performers, and that don’t end up creating unwanted behaviors among salespeople.

For example, in “Direct Sales Case Study: ROI of Incentives,” the Incentive Research Foundation explored the program structure at one company where some of the top performers were holding back on booking sales until the start of each year’s contest. This, in turn, was discouraging other reps. By adding additional awards, the company created an additional incentive for them to sell throughout the program period.

The key here is that the company realized the design was not working. Sometimes, incentive programs create unintended consequences and behaviors—that’s why they must be continuously monitored and adjusted.

One of the three tenets of a successful incentive structure is that the goals are attainable. Programs often fail when they are designed around what the organization wants, rather than around what is actually achievable and realistic for the sales team in the current economy and competitive landscape. Equally detrimental are programs that are too complicated or include or introduce exceptions that create frustration among participants.

A second tenet is that people need to understand what is expected of them. At the same time, if the communications about the program lack clarity, this will have the same consequences.

“When you’re designing incentive programs for direct salespeople, the key is to make the plan very simple and straightforward,” Van Dyke says. “People need to be incented at every level of success, and there’s always that next level to reach for, with the top being travel.”

Programs with the greatest ROI engage participants on many fronts: a web portal with all the program details, emailed progress reports, social media and e-newsletter updates, pep rallies at live meetings, destination promotional pieces mailed to the home.

Timing is a third tenet. It is very important. It has been proven that the sooner after a success you offer reinforcement, the more engaged people will be in the program. That is why many companies are adding gamification elements to engage, inform and reward participants throughout the cycle.


According to an Oxford Economics study based on interviews with 300 executives, it is estimated that incentive travel can increase individual performance by 22 percent and group performance by 44 percent.


Does Incentive Travel Pay for Itself?

Since incentive trips are paid for by the incremental revenue they create, program cost is a portion of profit.

Ask these questions: What is the incremental profit you will gain from the program? What is the trip cost if 20 percent of participants make the trip?

Don’t leave out the intangible benefits in your analysis. In the site survey, 86 percent of respondents stated that earning motivational travel “makes me feel recognized by my company and peers.” Feelings of increased loyalty and trust toward the company and a sense of appreciation are quite real for the participants—regardless of their generation.

It’s not just the incentive industry touting the ROI of incentive travel: According to an Oxford Economics study based on interviews with 300 executives, more than 70 percent of respondents indicated that incentive travel has a significant impact on employee performance, and the study estimates that it can increase individual performance by 22 percent and group performance by 44 percent. To achieve the same return as incentive travel, it concluded, employee base compensation would need to be increased by 8.5 percent.

Numbers like these—combined with the intangible benefits—reflect the significant ROI that incentive travel brings to companies that use it thoughtfully and consultatively.

The Biggest Payoff

Denise M. of Orland Park, Illinois, has spent the past 11 years earning incentive trips at one direct selling company. A team mentor, she and her husband have traveled to Mexico, Arizona, California—all over. She always qualifies for one trip a year, but this past year, she qualified for four. “I’m a total carrot chaser,” she admits. “The biggest perk of direct sales is that you can win these trips and go on vacations you might not normally have gone on.”

So it’s no surprise that, growing up around this, her 11-year-old daughter Samantha would want to go on an incentive trip, too. What was surprising was what she decided to do to qualify.

One afternoon, when Samantha expressed that she felt she does even more to help her mom than her dad does (“So why does he get to go on all the trips?”), Denise decided to make it a teachable moment. “I explained what was expected of me to qualify for a trip, how I earn points, how many parties a week I have to have and how many sales. We sat there together and did the math.”

Denise told her to devise a plan of how she might earn a spot on the next trip, a cruise. Samantha came down the stairs a couple of hours later with a complete presentation on poster board, with charts listing the grades that she needed to earn in different subjects, which would give her a certain number of points.

She will continue working toward the trip when she enters sixth grade in the fall. Says Denise, “For my family, this opportunity has been such a blessing. My children have learned to set goals because they’ve watched me with my boards and stars, and moving my ladder up as I achieve my own goals.”

With attainable goals, good communication and the setting of expectations, and proper attention to timing, planning an incentive trip can encourage a company’s sales field to repeat desired behaviors and provide a lasting and motivational experience.

Where will you go next?


Anne HamiltonAnne Hamilton is Vice President, Resort Sales and Services, Disney Destinations.

July 23, 2014

U.S. News

Tupperware Brands Sales Slow in Second Quarter

Tupperware Brands Corp. (TUP—NYSE) joined a wave of public companies as it announced its second quarter results today, reporting that sales for the quarter were $674 million, down from $688 million for the same period last year. While sales were down 2 percent (up 3 percent in local currency) versus the previous year, emerging markets achieved a 10 percent increase in local currency, accounting for 66 percent of sales. Established markets were down 7 percent in local currency, largely driven by poor results in Germany.

Rick Goings, Chairman and CEO, commented, “While sales results slowed this quarter, we were still able to achieve adjusted EPS in our guidance range. Overall, the business continued to grow, with several markets achieving 20%+ local currency sales increases, including Brazil, China, Italy and Turkey. Both businesses in our North America beauty segment also showed significant sequential sales improvement.

“Having said this, the quarter was challenging in several aspects,” he said. “We were up against strong comparisons from prior year when we had our strongest quarterly local currency sales growth at 8%, as well as some external and internal challenges, particularly in Germany. However, our 2.9 million sales force members continue to operate their businesses and earn income to help support their families.”

GAAP net income of $47.6 million for the second quarter ended June 28, 2014, includes $22.2 million from the impact of currency devaluations in Venezuela. Net income of $47.6 million was down 38 percent, or 93 cents per diluted share, from the previous year’s $76.3 million, or $1.43 per diluted share. Excluding foreign currency, net income was down 31 percent versus prior year. GAAP diluted EPS was 93 cents, versus $1.43 last year with adjusted diluted EPS of $1.47, up 11 percent in local currency.

Second quarter cash flow from operating and investing activities was $45 million, versus $49 million in prior year, primarily reflecting planned higher capital spending.

In the second quarter, the company returned $47 million to shareholders through a dividend payout of $33 million and the repurchase of 171,000 shares for $14 million. Since 2007, 20 million shares have been repurchased for $1.2 billion, with $800 million left under an authorization that runs until February 2017.

The company also lowered its full-year earnings guidance, down to between $5.40 and $5.50 per diluted share from its previous outlook of between $5.66 and $5.81 per diluted share.

Read the full results here.

July 23, 2014

Executive Announcements

Executive Announcements, August 2014


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


Amway

Gary WilliamsonGary Williamson

The Nutrilite Health Institute, a worldwide collaboration of experts dedicated to helping people achieve optimal health, announced Gary Williamson, Ph.D., has joined its Scientific Advisory Board. The Scientific Advisory Board provides guidance on new and emerging nutrition science and technology, public health issues, product development and strategic direction for Nutrilite, sold exclusively by Amway and the world’s No. 1 selling brand of vitamins and dietary supplements.

“We’re honored to welcome Professor Williamson as an esteemed colleague and advisor to our board of scientific leadership,” said Keith Randolph, technology strategist for Nutrilite. “He is one of the premier thought leaders in the field of food science and nutrition.”

A biochemist and enzymologist, Williamson is a professor of Functional Food in the School of Food Science and Nutrition at the University of Leeds, U.K.

He has published more than 350 refereed scientific publications and book chapters, and is ranked by the Institute for Scientific Information as a highly cited author in Agricultural Sciences.

His scientific discoveries include major advances in understanding dietary polyphenol bioavailability, including the structures of metabolites, their metabolic pathways and biological activities.


Primerica Inc.

 Beatriz R. PerezBeatriz R. Perez

Primerica Inc. announced the election of Beatriz R. Perez to the company’s Board of Directors. Perez has been employed by The Coca-Cola Co. since 1994. She has been Chief Sustainability Officer for Coca-Cola since July 2011. Prior to her current position, Perez held the positions of Chief Marketing Officer for the North American Division of Coca-Cola; Senior Vice President, Integrated Marketing for the North American Division of Coca Cola; and Vice President, Media, Sports and Entertainment Marketing.

Perez also is the Chair Emeritus of the Grammy Foundation. She has served on the boards of HSBC Finance Corp., HSBC North America and HSBC Bank Nevada, N.A.

“We are thrilled to have Beatriz join our Board,” said D. Richard Williams, Chairman of the Board and Co-CEO of Primerica. “She brings extensive marketing experience and a clear understanding of consumer behavior that will be very valuable to our board and management team.”


PartyLite Worldwide

 Joan M. ConnorJoan M. Connor

Blyth Inc., a direct-to-consumer company and designer and marketer of health, wellness and beauty products, as well as candles and accessories for the home, announced that its PartyLite division, the world’s largest direct seller of candles, candle accessories and premium home fragrance products, has promoted Joan M. Connor to President, PartyLite North America.

Connor, who joined PartyLite in 2010, was most recently Vice President, Marketing & eCommerce, collaborating with the sales and technology teams to complement the core business model of home parties with technology-driven initiatives to enhance the customer and PartyLite consultant experience.

Robert B. Goergen Jr., CEO of Blyth Inc. and President of PartyLite Worldwide, said of Connor, “Her digital marketing know-how, along with her understanding of operations and technology, should provide the ideal underpinning to improving the overall customer and consultant experience, ultimately leading to profitable sales growth in North America.”

Connor joined PartyLite in 2010 as Senior Director, eCommerce. She was promoted to Vice President, Marketing & eCommerce in 2011.


Mannatech Inc.

Alfredo BalaAlfredo Bala
 Chris SimonsChris Simons

Mannatech Inc., a pioneer of nutritional glycobiology and innovator of naturally sourced supplements based on Real Food Technology® solutions, announced the appointment of Alfredo (Al) Bala as President of Mannatech Inc.; Chris Simons as Regional President, EMEAA; and Patrick Park as Regional President, Asia.

Bala has served in the direct sales industry for more than 35 years and joined Mannatech in October 2007 as Senior Vice President, Global Sales. He most recently served as Chief Sales and Marketing Officer. Prior to his time at Mannatech, Bala served as a field leader in the industry for 28 years, culminating in the position of Chief Operating Officer for another direct seller.

Patrick ParkPatrick Park

As President, he will oversee all global field development, sales, marketing and general management efforts for all Mannatech markets as well as focus on expansion of the company’s Mission 5 Million movement.

Chris Simons joined Mannatech in 2008 as Director of Sales, South Africa. He most recently served as Regional Vice President, EMEA. Prior to his time at Mannatech, Simons spent 19 years in the direct sales industry as a field leader and business manager for another direct selling company. Over his career, he has played an integral role in launching many new markets.

Patrick Park joined Mannatech in 2009 as General Manager, South Korea. More recently, Park served as Regional Vice President for Asia, leading the company’s overall operations in Japan and Taiwan, and was crucial in the launch and oversight of the Hong Kong market in 2013. Prior to joining Mannatech, Park served 13 years in the direct sales industry. Over his career, he has played a key role in expansion into new markets.


LifeVantage Corp.

 Jeffery Bean Jeffery Bean

LifeVantage Corp., a company dedicated to helping people achieve healthy living through a combination of a compelling business opportunity and scientifically validated products, announced that it has appointed Jeffery Bean as its new Managing Director in Japan. Bean brings 15 years of network marketing experience to LifeVantage, having worked in management positions for other direct selling companies during his career. He will be based in the company’s Tokyo office.

Douglas C. Robinson, President and CEO, said, “Our Japan market is very important to our overall business. We are excited to have Jeff join our team in Japan and we believe he will add a great amount of stability and value to our Japan market. Jeff brings a wealth of experience in the network marketing industry, particularly in Japan.”

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 founded in 2003 and headquartered in Salt Lake City.


Univera

 Tom Zimmer Tom Zimmer

Univera, a leader in the natural products industry, announced that it has named Tom Zimmer as President and CEO. Zimmer replaces Randy Bancino, who recently announced his retirement.

“We are excited to have Tom join the day-to-day management of Univera and to lead us further toward success,” said Bill Lee, Univera Chairman and Founder. “Tom is an accomplished executive with over 40 years of in-depth work experience that covers a broad spectrum of industries, cultures, and distribution channels. He is recognized as a highly skilled general manager with exceptionally strong motivational skills.”

During his career, Zimmer has demonstrated his ability to solve complex business issues with results-oriented strategies, financial acumen and passionate leadership. He has held positions as President, Chief Operations Officer, and Senior Vice President & Managing Director for several companies within the direct selling industry. He also held an executive-level position with Bloomingdales.


Youngevity International Inc.

 David Ori David Ori

Youngevity International Inc., a global direct marketer of nutritional and lifestyle products and also a vertically integrated producer of gourmet coffees for the commercial, retail and direct sales channels, announced the appointment of David Ori as the Vice President of International Development
for Youngevity®.

David Ori is an executive with nearly 20 years of direct selling industry experience and a proven track record of growth and sales in emerging and established markets, especially in Eastern Europe, Asia and Asia Pacific. Ori joins Youngevity from another direct seller, where he was the VP of International Expansion since 2011 and established new offices for the company in China, Hong Kong and Taiwan. Prior to that appointment, he was a managing director at another direct seller from 2000 to 2011, where he was a member of the board of directors, established the company in Israel and was responsible for thousands of distributors with operations in Israel and Eastern Europe.

“We are very pleased to welcome David Ori to the Youngevity executive team,” said Steve Wallach, CEO of Youngevity. “David’s significant international direct selling experience makes him an ideal addition to our team and fortifies our strategic global expansion strategy.”


RBC Life Sciences Inc.

 Steven E. Brown Steven E. Brown

RBC Life Sciences Inc. has announced that the board of directors has appointed Steven E. Brown to serve as Chief Financial Officer following the departure of Richard S. Jablonski, who resigned. Brown will serve in this capacity in addition to his current position as President. The appointment to Chief Financial Officer is an interim measure until a permanent replacement for Jablonski is found.

Brown previously served as Chief Financial Officer from May 1994 until being named President in June 2012 and as Executive Vice President from June 2011 to June 2012. He has also served as a director of the company since May 1994.

RBC Life Sciences develops, manufactures and markets high-quality nutritional supplements and personal-care products to a growing population of consumers seeking wellness and a healthy lifestyle.


LyfeStart International

 David L. Katz David L. Katz

LyfeStart International announced David L. Katz, M.D., MPH, FACPM, FACP, as the founding Chairman of the LyfeStart Medical Advisory Board. Dr. Katz is a leading medical expert on obesity in the U.S.

Dr. Katz is the founding Director of Yale University’s Prevention Research Center, a two-time diplomate of the American Board of Internal Medicine and a board-certified specialist in preventive medicine/public health. He is President of the American College of Lifestyle Medicine, and Founder and President of the nonprofit Turn the Tide Foundation, committed to reversing trends in obesity and chronic disease.

Dr. Katz is an active contributor to media and a prolific author. He has been featured on ABC News/Good Morning America and has written for a number of print and online publications. He is also Editor in Chief of the journal Childhood Obesity and has published nearly 200 scientific articles and textbook chapters.

Launched earlier this year, LyfeStart is a socially conscious, global network marketing company committed to providing sustainable solutions to the dual crisis of global obesity and worldwide hunger. LyfeStart empowers people to create change in their lives, so they can improve their health, achieve their potential, and provide nourishment for a child in need. For every Nourish Nutritional Protein Shake the company sells, LyfeStart provides a meal for a hungry child. LifeStart products are available in the United States and soon in Mexico.


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

July 23, 2014

Financial News

Financial News, August 2014

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


A.M. Best Affirms Primerica’s Strong Credit Ratings

Primerica Life Insurance Co. has received another round of superior ratings from global credit rating agency A.M. Best. The agency affirmed its A+ financial strength rating and aa- issuer credit rating (ICR) of Primerica Life and its affiliates in New York and Canada.

Declaring a stable outlook for all ratings, A.M. Best also affirmed the strong a- ICR of holding company Primerica Inc. and positive ratings of the company’s debt and preferred stock. Primerica (PRI—NYSE) met earnings expectations for 2013 with annual GAAP net income of $163 million.

On the Canadian side of the business, Primerica recently expressed opposition to the government’s proposed overhaul of the country’s life insurance licensing program. Canada represents approximately 10 percent of Primerica’s total life-licensed representatives.

The implementation, which would take place in early 2016, would “create unnecessary barriers” and “negatively affect access to life insurance products by middle-income Canadians,” Primerica told the Atlanta Business Chronicle.


ForeverGreen Sales Growth Increases over 300%

ForeverGreen Worldwide Corp. (FVRG—OTC.BB), a provider of nutritional foods and other healthy products, announced that June 2014 revenue exceeded June 2013 sales by more than 300 percent.

“During June 2014, we had another record sales month,” said Jack Eldridge, CFO. “We remain on track to meet or exceed our previously announced revenue guidance of $13 million to $15 million. While many companies are experiencing sluggish sales during the summer months, we continue to grow our revenues for the summer and the remainder of 2014. We are very pleased at how our company message is being received in the marketplace.”

In other company news, ForeverGreen recently opened its new global headquarters in Pleasant Grove, Utah, known as “Utah’s City of Trees.” The company’s new 50,000-square-foot facility combines offices with space for warehousing and manufacturing the company’s health, wellness and home-care products. The headquarters also includes film and recording studios, and a “family room” that allows the company to host up to 300 people at a time.

“This new building allows us to bond in an unprecedented way with our employees, customers, distributors and the community,” CEO and Founder Ron Williams said. “This milestone provides a platform to grow into the company we have always envisioned.”

In a congratulatory letter marking the grand opening, Utah Governor Gary R. Herbert commended ForeverGreen Worldwide for raising the bar of corporate citizenship through its generous giving and involvement in community projects.


Crius Energy Trust Announces Partnership

Crius Energy Trust (KWH-UN.TO—TORONTO) announced that Crius Energy LLC and Frontier Communications Corp. (FTR—NASDAQ) have further expanded their strategic marketing partnership to offer natural gas to Frontier residential and commercial customers in California. The natural gas offering, through FTR Energy Services, one of Crius Energy’s best-in-class energy brands, extends its current energy offerings in California of solar energy products.

“The addition of natural gas in California through FTR Energy Services—the first Crius Energy brand to offer natural gas in the state—further demonstrates the significant potential of our strategic marketing partnership channel,” said Michael Fallquist, CEO of Crius Energy. “Importantly, our new gas offering, like all of our FTR Energy Services offerings, is expected to benefit from the efforts of hundreds of Frontier call center agents who are actively selling FTR Energy Services products.”

The new offering will contribute to the increased diversification of Crius Energy’s business by both product and geography. Recently, Crius Energy began offering Frontier customers in California solar energy products through its Citra Solar™ brand.

“In addition to our recently announced acquisitions, we continue to execute on our multi-channel strategy to grow organically,” added Fallquist. “Unique to Crius, our strategic marketing partnership channel, which also includes relationships with Cincinnati Bell and FairPoint Communications, provides us with access to large customer bases that have established, trusted relationships with their telecom providers. These are customers that tend to use more energy and stay with us longer, providing more value to Crius Energy over their lifetimes.”

FTR Energy Services will provide natural gas at affordable rates plus 5 percent cash back on customers’ energy use. Frontier Communications customers can make their choice using either an easy online tool or by speaking to a trained FTR Energy Services customer representative who will help guide them through the enrollment process.


Quarterly Results


Nature’s Sunshine Products Inc.

Nature’s Sunshine Products Inc. (NATR—NASDAQ), a leading natural health and wellness company engaged in the manufacture and direct selling of nutritional and personal-care products, reported its consolidated financial results for the first quarter ended March 31, 2014.

Net sales revenue decreased 0.8 percent to $95.8 million, compared to $96.5 million in the first quarter of 2013. In local currencies, net sales revenue increased by 0.3 percent.

Operating income increased 3.3 percent to $7.2 million, compared to $6.9 million in the first quarter of 2013. Adjusted EBITDA increased 3.5 percent to $9.5 million, compared to $9.2 million in the first quarter of 2013.

Net income was $9.7 million, or 58 cents per diluted common share, compared to $4.9 million, or 30 cents per diluted common share in the first quarter of 2013, reflecting a one-time tax benefit related to intercompany dividends.

Cash and cash equivalents as of March 31, 2014, were $71.5 million, compared to $77.2 million as of Dec. 31, 2013. Shareholders’ equity as of March 31, 2014, was $114.6 million, compared to $105.3 million as of Dec. 31, 2013.

For NSP Americas, Asia Pacific and Europe net sales revenue for the first quarter decreased 4.6 percent to $50.7 million, compared to $53.1 million in the first quarter of 2013. For NSP Russia, Central and Eastern Europe net sales revenue decreased 6.8 percent to $15.0 million, compared to $16.1 million in the first quarter of 2013. For Synergy WorldWide net sales revenue increased 10.4 percent to $30.0 million, compared to $27.2 million in the first quarter of 2013.

The company’s board of directors approved a quarterly cash dividend of 10 cents per share, payable on June 2, 2014, to shareholders of record as of the close of business on May 21, 2014. On Aug. 8, 2013, the board of directors authorized a $10 million share repurchase program to be implemented over two years.


Medifast Inc.

Medifast Inc. (MED—NYSE), a U.S. manufacturer and provider of clinically proven, portion-controlled weight-loss products and programs, reported financial results for the first quarter ended March 31, 2014.

Operating income was $8.7 million, or 10.0 percent as a percent of net revenue, compared to $8.6 million or 8.9 percent as a percent of net revenue in the first quarter of 2013.

Net income was $6.0 million, or 45 cents per diluted share, compared to net income of $5.9 million, or 43 cents per diluted share for the first quarter of 2013.

For the first quarter ended March 31, 2014, Medifast net revenue decreased 10 percent to $86.5 million from net revenue of $96.0 million in the first quarter of the prior year. Revenue in the direct sales channel, Take Shape For Life, decreased 4 percent to $57.0 million in the first quarter of 2014, compared to $59.4 million in the same period last year. The decrease in revenue for Take Shape For Life was driven by a slight decrease in the number of health coaches and revenue per health coach.

Gross profit for the first quarter of 2014 decreased 12 percent to $63.9 million, compared to $72.4 million in the first quarter of the prior year. The company’s gross profit margin decreased 150 basis points to 73.9 percent in the first quarter versus 75.4 percent in the first quarter of 2013.

The company’s balance sheet remains strong with stockholders’ equity of $105.2 million and working capital of approximately $72.8 million as of March 31, 2014. Cash, cash equivalents, and investment securities for the first quarter of 2014 increased $9.6 million to $77.4 million, compared to $67.8 million at Dec. 31, 2013.


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 its fiscal 2014 third quarter ended March 31, 2014.

For the third fiscal quarter, the company reported net revenue of $55.1 million, an increase of 9.3 percent compared to $50.4 million for the same period in fiscal 2013. Revenue reflects a slight decline of 1.4 percent in sales in the America region, offset by an increase of 29.8 percent in the Asia/Pacific region due to growth in Japan and Hong Kong. Revenue for the quarter was negatively impacted $2.3 million, or 4.6 percent, by foreign currency fluctuation.

Gross profit for the third fiscal quarter ended March 31, 2014, was $46.6 million, compared to $43.5 million for the same period last year. Gross margin for the third fiscal quarter of 2014 was 84.6 percent, compared to 86.4 percent in the prior year period. The year-over-year decline in gross margin was primarily due to a $500,000 insurance claim benefit in the prior year related to the company’s 2012 product recall.

Operating income for the third fiscal quarter of 2014 was $4.5 million, for an operating margin of 8.1 percent, compared to $3.9 million, or 7.8 percent in the same period last year.

Interest and other expense in the third fiscal quarter of 2014 was $1.3 million, compared to interest and other income of $100,000 in the same period last year. The expense incurred in the current quarter is due to interest payments made on the company’s term loan, which did not exist this time last year.

Net income for the third fiscal quarter of 2014 was $2.5 million, or 2 cents per diluted share, calculated on 107 million shares outstanding. This compares to net income in the third fiscal quarter of 2013 of $3.4 million, or 3 cents per diluted share, calculated on 125 million shares outstanding.

The company’s board of directors has approved up to $4 million in stock repurchases in combination with a $12 million accelerated debt repayment. It expects to fund the $16 million through cash on hand and future cash flow from operations. The company recently completed the $6 million program it previously announced by using $3 million to repurchase 2.1 million shares.


CVSL Inc.

CVSL Inc. (CVSL—OTC.QX) reported financial results for the first quarter ending March 31, 2014. For the quarter, CVSL’s gross revenue was $26.7 million, compared to $4.3 million in the same quarter a year ago, more than a sixfold increase.

In the first quarter the company paid down its existing lines of credit from $9.8 million to $8.4 million. CVSL sold a manufacturing building in Ohio for nearly $1.4 million and paid off its term debt entirely.

The company noted that costs related to its ongoing integration of its acquired companies, as well as work related to potential future acquisitions, is a significant cost category and that it believes both represent a crucial investment in CVSL’s future growth.

CVSL said it continued to make good progress reducing excess inventory levels. The company’s overall inventory balance at the end of the first quarter was $1.2 million less than at the start of the quarter.

CVSL acquired its seventh micro-enterprise company during the quarter, signing a definitive agreement to acquire Uppercase Living. Salt Lake City-based Uppercase Living offers an extensive line of customizable vinyl expressions for display on walls. Its independent salesforce sells throughout the United States.


Youngevity International Inc.


Youngevity International Inc. (YGYI—OTC.QX), a global direct marketer of nutritional and lifestyle products and also a vertically integrated producer of gourmet coffees for the commercial, retail and direct sales channels, reported financial results for the first quarter of 2014.

For the three months ended March 31, 2014, the company reported net revenue of $26.4 million, compared to $20.8 million for the same period in 2013, an increase of 26.8 percent. Gross profit for the first quarter ended March 31, 2014, increased to $15.8 million, compared to $12.4 million for the same period last year, an increase of 27.5 percent.

Net Income for the first quarter of 2014 was $427,000, compared to a net income of $993,000 for the first quarter of 2013. Adjusted EBITDA was $1.7 million for the three months ended March 31, 2014, compared to $2.2 million in the same period for the prior year.

Cash and cash equivalents increased to $6.7 million as of March 31, 2014, compared to $4.3 million as of Dec. 31, 2013. Net cash provided by operating activities increased 45.0 percent to $2.7 million, compared to $1.8 million for the three months ended March 31, 2013.


Educational Development Corp.

Educational Development Corp. (EDUC—NASDAQ) reported results for the fiscal year ended Feb. 28, 2014, along with their quarterly cash dividend.

For the fiscal year 2014, the company reports net revenue of $26 million, an increase of $609,500 when compared to $25.5 million for the previous year, and net earnings of $357,600, compared to $802,900. Earnings per share were 9 cents, compared to 20 cents the previous year on a fully diluted basis.

The increase in net revenues for the company represents a significant turnaround. The publishing division, EDC Publishing, registered its largest sales year in history, even after sales to Amazon were discontinued. The sales increase came from existing and new customers who have shown support of this decision.

The home business division, Usborne Books & More, has also greatly benefited from that decision. The Usborne Books & More division responded by posting an annual net sales increase, reversing nine years of sales decline, and has now recorded 12 consecutive months of sales increases compared to the previous year.

The earnings per share were impacted by two significant items, an additional reserve to recognize potential losses in consignment inventory, and to completely reserve nonperforming assets. With these reserves, overhead reductions made during the year, and the anticipated continuation of the sales increase, fiscal year 2015 has begun on a stronger note.

The company continues to operate with minimal debt, has not had a losing quarter in 27 years, and fully expects to maintain its historical dividend.

The board of directors has authorized an 8-cents-per-share cash dividend. The dividend was payable on June 20, 2014, to shareholders of record June 13, 2014.


Natural Health Trends Corp.

Natural Health Trends Corp. (NHTC—OTC.BB), a direct selling company that markets premium quality personal care and wellness products under the NHT Global brand, announced record financial results for the quarter ended March 31, 2014.

Total revenues were $23.2 million, up 168 percent compared to $8.7 million in the first quarter last year and up 21 percent sequentially compared to $19.1 million for the fourth quarter last year. This was the fifth consecutive sequential quarterly increase in revenues.

Operating income was $3.1 million, up 968 percent compared to $292,000 last year, and up 88 percent sequentially from $1.7 million for the fourth quarter last year.

Net income was $3.1 million, or 26 cents per diluted share, compared to $283,000, or 3 cents per diluted share, last year and $1.6 million, or 14 cents per diluted share, for the fourth quarter last year.

Cash and cash equivalents increased to $23.3 million as of March 31, 2014, from $14.6 million at Dec. 31, 2013.

The board of directors also declared its second consecutive quarterly dividend. The declared dividend included a cash dividend of 2 cents per share on outstanding Series A preferred stock, which represents the accrued unpaid dividends through the declaration date, and a cash dividend of one-half cent per share on common stock outstanding, totaling aggregate dividends of $60,000, payable in cash on June 4, 2014, to stockholders of record on May 27, 2014.


Immunotec Inc.

Immunotec Inc. (IMM—TSX VENTURE), a Canadian wellness company, reported second quarter revenues for the three-month period ended April 30, 2014, reaching CAN$19.1 million (US$17.8 million), reflecting an increase of 50.9 percent as compared to the same period in the previous year. Net profit for the three-month period was CAN$800,000 (US$745,500) compared to CAN$700,000 (US$652,300), reflecting an increase of 16.8 percent, as compared to the same period in the previous year. Total basic and fully diluted profit per common share was 1 cent.

Adjusted EBITDA for the second quarter was CAN$1.4 million (US$1.32 million) or 7.4 percent of revenues, versus CAN$900,000 (US$838,600) or 7.4 percent for the same period in the previous year.

Mexico is the company’s largest geographic market, representing 54.6 percent of total revenue for the six-month period ended April 30, 2014. Mexican Network sales for the three- and six-month periods ended April 30, 2014, reached MXP 125.2 million (US$9.6 million) and MXP 224.1 million (US$17.5 million) increases of 98.2 percent and 72.8 percent compared to the same periods in the previous year.

The United States is now the company’s second largest geographic market, representing 24.1 percent of network sales after six-month period ended April 30, 2014. United States Network sales reached US$3.8 million and US$7.2 million, increases of 32.4 percent and 26.9 percent, compared to the same periods in the previous year.

Canada is now the company’s third largest geographic market, representing 17.3 percent of total revenue after the six-month period ended April 30, 2014. Canadian Network sales for the three- and six-month periods ended April 30, 2014, accounted for CAN$2.8 million (US$2.6 million) and CAN$5.7 million (US$5.3 million) or decreases of 8.7 percent and 8.5 percent of total revenues.


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.

July 23, 2014

News in Brief

News in Brief, August 2014

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


Direct Sellers Win Big in Stevie Awards

The prestigious Stevie Awards have announced the first round of winners in the 12th Annual American Business Awards. A ceremony held June 16 in Chicago revealed winners in the categories of customer service, human resources, corporate communications, marketing, live events, publications and videos. A second event in San Francisco on Sept. 12 will honor winners in all new product and technology-related categories.

A panel of 240 executives nationwide selected this year’s winners from more than 3,300 entries. Gold Stevie Award winners included Brandon Scott, CMO of Jeunesse; Allie Henderson, Public Relations Specialist at USANA; and BK Boreyko, Founder and CEO of Vemma. The following is a list of the direct selling companies honored in this year’s Stevie Awards.

  • Isagenix International—1 Silver, 5 Bronze
  • Jeunesse Global—1 Gold, 2 Silver, 3 Bronze
  • LIMU—5 Bronze
  • USANA Health Sciences—1 Gold, 6 Silver, 9 Bronze
  • Vemma Nutrition Co.—1 Gold, 1 Bronze

Avon Launches Global Reforestation Initiative

Avon recently announced a new global reforestation initiative, Healthy Forests, Beautiful World. The new program will continue Avon’s ongoing global commitment to the environment, raising funds through the sale of special products by Avon Sales Representatives and on Avon’s e-commerce sites to help end deforestation.

Avon has donated more than $6.8 million for global reforestation since 2010 to The Nature Conservancy and World Wildlife Fund to support the rain forests in Brazil and Indonesia, two of the most critically endangered ecosystems. In 2013 alone, Avon donated $1.3 million raised in more than 50 countries.

In additional company news, Avon has been named one of Interbrand’s Best Global Green Brands of 2014. The global brand consultancy ranked Avon No. 42 of the 50 companies leading the way in sustainability.

The New York City-based company is an industry leader in its reduction of greenhouse gas emissions. Between 2005 and 2012, Avon reduced water use by 200 million gallons and achieved an overall recycling rate of 83 percent at its manufacturing and distribution centers. Interbrand also noted the company’s environmental award-winning manufacturing facility in China and its new R&D Center in Shanghai, which has achieved LEED Platinum certification.


Tupperware Joins UN Women’s Leadership Council

Tupperware Brands recently announced its participation in U.N. Women’s new Private Sector Leadership Advisory Council. As a founding member of the Council, the kitchenware company has committed financial and human capital and cause-marketing support to further economic and political empowerment for women around the world.

As a part of the Council, Tupperware has made a $500,000 contribution to U.N. Women’s initiatives and plans to partner with the organization through cause-marketing efforts in key regions. The partnership will also extend to Tupperware’s salesforce, which will have the opportunity to impact U.N. Women’s programs worldwide.

Other founding members of the Council include Jean-Paul Agon, Chairman and CEO of L’Oréal; Dominic Barton, CEO of McKinsey & Company; and Muthar Kent, Chairman and CEO of The Coca-Cola Co.


Amway Brings Business to Bulgaria

Amway recently announced the opening of its newest affiliate, Amway Bulgaria. The nation joins more than 100 other countries and territories that are served by Amway Independent Business Owners worldwide.

Amway Bulgaria will offer several product brands, highlighted by Nutrilite™, the world’s No. 1-selling vitamins and dietary supplements brand; Artistry™, one of the world’s top five largest-selling premium skincare brands; and Amway Home™, in addition to various personal-care products.

Amway reported global sales of US$11.8 billion in 2013 and is in the midst of a $332 million manufacturing and R&D expansion to support continued growth.


Nature’s Sunshine China to Launch in Joint Venture

Nature’s Sunshine Products has announced plans to enter China in a joint venture with Shanghai-based Fosun Pharma. The agreement outlines a multichannel approach that places Nature’s Sunshine products in Fosun Pharma retail locations across the country and markets the company’s Synergy brand through a direct selling model.

Fosun Pharma will acquire a 15 percent stake in Nature’s Sunshine in a deal valued at just over $46 million. As a part of the agreement, Nature’s Sunshine will appoint one Fosun Pharma director to its board. The investment in Nature’s Sunshine will also fund a special $1.50 per share cash dividend to be paid out at closing.

The joint venture, Nature’s Sunshine Hong Kong Ltd., will be owned 80 percent by Nature’s Sunshine and 20 percent by a wholly owned subsidiary of Fosun Pharma. Pending regulatory approvals by the Chinese government, the venture will be capitalized initially with $16 million from Nature’s Sunshine and $4 million from Fosun Pharma.


Organo Gold Opens New International Headquarters

Gourmet coffee company Organo Gold recently announced the opening of its new global headquarters in Richmond, British Columbia. The 26,000-square-foot building boasts an eco-friendly design and houses approximately one-third of the company’s global staff.

The ribbon-cutting ceremony was attended by the Honorable Neil Frank Ferrer, Consul General for the Republic of the Philippines; the Honorable Sutthiluck Sa-ngarmangkang, Consul General for the Republic of Thailand; and Mr. Hyng Suk Lee, Consul for the Republic of Korea. Canada was equally represented, as the Honorable Linda Reid, Speaker of the Legislative Assembly of British Columbia and Member for Richmond East, joined in the festivities.

Founded in 2008, Organo Gold markets Ganoderma-enhanced coffee and other products. The company operates in 30 markets worldwide through its salesforce of 150,000 independent distributors and sells to consumers through its Coffee Connoisseur Club.


Herbalife Sponsors Events DC Nation’s Triathlon

Global nutrition company Herbalife is partnering with Competitor Group Inc. to sponsor the Events DC Nation’s Triathlon, one of the premier Olympic-distance triathlons in the United States. Herbalife will be the title sponsor of the “Herbalife Recovery Zone,” which will provide athletes with Herbalife nutrition products, nutrition tips and best practices to assist participants in training for this and future events.

The 9th Annual Events DC Nation’s Triathlon benefits the Leukemia & Lymphoma Society, the world’s largest health organization dedicated to funding research and providing patient education and services in the field of blood cancer. The Triathlon will take place on Sunday, Sept. 7, 2014, in Washington, D.C.

As part of the Triathlon, Herbalife will also sponsor the Herbalife Congressional Challenge, open to all Capitol Hill-based federal employees, including those who work for Administration offices and the White House. Participants may also compete in a race-within-a-race, including a Military Challenge and a Commander-in-Chief Challenge, open to military academy student participants, and the Tri Club Challenge, for triathlon club members.


SimplyFun Donation Supports Foster Care Programs

SimplyFun LLC, a developer and direct seller of award-winning games, was recently honored for donating $100,000 of product during National Foster Care Month to support the My Stuff Bags program.

The My Stuff Bags Foundation provides new belongings, comfort and hope to thousands of children across the U.S. who have been rescued from abuse, neglect and abandonment. By rallying widespread individual and corporate involvement through the My Stuff Bags program, the foundation addresses the immediate physical and emotional needs of rescued children, and helps support the agencies caring for them.

Founded in 2004, SimplyFun produces games designed for educating kids and connecting families. The Washington-based company markets its games through a network of Playologist consultants.


Regal Ware Sells Water Purification Business

Cookware company Regal Ware recently announced the sale of its home drinking water purification business unit to The Legacy Companies of Fort Lauderdale, Florida.

According to Jeff Reigle, President and CEO, the sale supports long-term growth initiatives being put in place by Regal Ware. No jobs will be lost as a result of the sale. Employees will be redeployed into other positions within the company.

The news comes on the heels of an announcement that Regal Ware was awarded low-interest loans from both Washington County and the City of West Bend for investment in their $5 million project to invest in new, highly technical equipment for their West Bend, Wisconsin, manufacturing facility. The new equipment will allow Regal Ware to improve efficiencies, expand production capacity and improve competitiveness with foreign producers.


USANA Joins Canadian Health Trade Organization

On a mission to advocate supplement regulation and the health industry on a global scale, USANA Health Sciences Inc. has joined the Canadian Health Food Association. There are currently more than 41,200 active USANA Associates and preferred customers operating in Canada.

CHFA represents the interests of thousands of natural health and organic product manufacturers and distributors in Canada. Its mission is to lead, empower and support its members. It also promotes the growth and advancement of the organic and natural health product industry, while working closely with government and regulatory bodies to ensure fair regulations.


AVA Digital Awards Honor Direct Sellers

Direct selling companies collected 43 awards in the 2014 AVA Digital Awards, an international competition recognizing excellence in digital communication. With the speed and flow of information through new technologies, audio-visual professionals are constantly innovating to engage audiences and communicate effectively. The AVA Digital Awards honor the people who are ideating, directing, designing and producing the best in digital media.

The Association of Marketing and Communication Professionals administered and judged 2,100 entries in this year’s competition. Entrants included production companies, web developers, advertising agencies, PR firms, corporate and government communication departments, and a slew of independent creative professionals.

Gold Awards honor companies for exceeding the high standards of industry norms, and Platinum Awards recognize excellence in terms of quality, creativity and resourcefulness.

Direct selling companies among this year’s AVA winners include:

  • ACN—7 Gold, 10 Platinum
  • LIMU—2 Gold, 4 Platinum
  • Origami Owl—2 Gold, 3 Platinum
  • USANA—9 Gold, 6 Platinum

July 23, 2014

Publisher's Note

Letter from John Fleming, August 2014


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


Could it really be August? From our point of view it seems like we are just getting started in working toward the many objectives we set for ourselves and this publication at the beginning of the year. However, after a quick count of the issues we have produced in 2014 (eight) we quickly realize… this year is rapidly coming to a close with one full quarter left.

John Fleming At this time of year, each of us begins to get a sense of how the year is shaping up overall. Two full quarters have closed, and many companies are in the midst of major conventions/meetings where new products are being introduced and plans are being laid out for the balance of the year. Attendance and predicted attendance is strong and record-breaking in several cases. Our listening provides us with a strong sense of optimism! We hear the excitement! New companies are emerging seemingly at a faster rate than the prior year, and private equity investors appear to be paying close attention with increasing interest in direct selling as a channel of distribution from both a startup and acquisition perspective. Companies recognized for their growth over the past few years are still growing, and we are feeling another year of progress.

In order to verify some of the qualitative feelings we have been experiencing through our DSN radar, I sent a message to Nancy Burke, Senior Director of Membership at the Direct Selling Association, to ask whether or not she was experiencing an increase in applications for DSA Membership over the prior year and, sure enough, DSA Membership Applications are indeed up. In fact, year to date 2014, DSA has already exceeded the total number of applications received for the full year of 2013. Based on this relatively unknown stat, along with what we are observing, we continue to look forward to another growing year on top of the recently released 2013 results by the U.S. DSA. Lauren Lawley Head discusses this more on this issue’s Back Page.

Most noteworthy, in addition to the comments in the previous paragraph, would be to reflect briefly on the happenings of the past 18 months. We know our industry experienced some of its most vicious attacks ever! An attack on one company is in many ways an attack on all. As a result, the direct selling business model is being evaluated possibly more than ever before, including every pseudo-expert one could imagine. Pseudo-experts can immediately create their own “press” and “media” to voice opinions. While this has been concerning at times, this freedom of speech through Internet media may also play to the advantage of the direct selling industry. Our own experts as well as qualified observers are also being published, and their points of view are duly noted. In our recently published Direct Selling News insert distributed in The Wall Street Journal, we described the direct selling industry in a manner supportive of the facts recently released. Direct selling is a growing industry. Growth in 2014 would represent three consecutive years of growth during what some refer to as very challenging years—another testimony to the value and receptiveness of the direct selling model.

Your human resources departments might take note of the availability of the DSN/Wall Street Journal insert, which can be ordered at: www.directsellingnewsproducts.com. The information contained makes for excellent reading by your corporate personnel who always need nurturing as to the merits and attributes of the direct selling model. The DSN/WSJ insert defines the industry, and of course, is very validating because of the informative manner of the articles and facts presented.

As we now move through the final months of the current year and prepare for another year, we also see adjustments and continued improvements in terms of business model effectiveness, especially in how customers are acquired and managed. Social tools continue to have a greater and greater impact on relationship building and the effectiveness of communication. Digital is consistently being redefined, and many of the newer companies are leading the way. A younger generation is providing a different perspective and also creating a different need in terms of what a direct selling company is expected to deliver. Social entrepreneurship is real and very appealing. Direct sellers have always expressed fun and enjoyment for what they do, but when you embrace new tools, break some of the old paradigms, and truly position the company as being a solution for social activity, products, and services, you get the new definition of what direct selling companies are becoming. You also have the added benefit of a business opportunity that you grow and manage on your own terms with the finest in support and service. We see where the industry is going. We see it happening, and we feel it.

This issue of our publication takes a look at how the marketing departments of direct selling companies have evolved. Thanks to all who contributed. We also put the spotlight on Nu Skin Enterprises, which grew by almost $1 billion (2013 vs 2012), and as always, the Nu Skin team shares a lot. Attorney Kevin Thompson also contributed a great review of the recent BurnLounge Opinion published by the Ninth Circuit Court of Appeals, so turn the page and continue the journey.

Until next month… enjoy the issue!

John Fleming
Publisher and Editor in Chief

July 22, 2014

U.S. News

Herbalife Ducks Ackman’s ‘Death Blow’ as Shares Skyrocket

Herbalife short seller Bill Ackman took to a Manhattan stage for nearly four hours Tuesday morning in his latest round against the global nutrition company. In a Monday interview with CNBC, Ackman claimed he would deliver Herbalife a “death blow” in the planned presentation, but it has had the opposite effect on the company’s stock. With one of its largest daily percentage increases thus far, the direct seller closed out the day at $67.77, up 25 percent.

“Once again, Bill Ackman has over-promised and under-delivered on his $1 billion bet against our company,” Herbalife said Tuesday afternoon in its response to Ackman. “After spending $50 million, two years and tens of thousands of man-hours, Bill Ackman further demonstrated today that the facts are on our side.”
 
The focus of Ackman’s presentation was Herbalife’s nutrition clubs, run by teams of distributors who rent commercial or industrial space to train and recruit others in a social environment. Ackman described the structured recruiting model as a “mini pyramid scheme” used by the company to target the “poorest of the poor” globally, and particularly U.S. Latinos.

At one point Ackman fought back tears recounting his own family’s American experience, which began when his grandfather emigrated from Germany. He claims Herbalife is “selling the American dream” by promising its salespeople success many will never achieve.

“Mr. Ackman’s claim about the earnings of Herbalife nutrition clubs is completely false and fabricated,” Herbalife included in its response. “In fact, according to a recent study commission by the company, 87.5 percent of nutrition club operators feel good about the money they earn, and 92 percent want to continue with their club.”

Ackman also took shots at Herbalife supporters and endorsers, including former Secretary of State Madeleine Albright and soccer stars David Beckham and Lionel Messi, saying they failed to perform due diligence on the company and are cashing in on a fraud. Albright’s connections likely enabled Herbalife to enter difficult markets like China, Ackman claimed.

Explaining how Herbalife has built a thriving multibillion-dollar business over more than 30 years, Ackman invoked the deception of totalitarian regimes, the Nazis and the mafia. “People generally believe big lies, because they’re so bold that how could they possibly be false?” said Ackman.

The Securities and Exchange Commission (SEC) launched a formal investigation of Herbalife in January 2013, but thus far has not made any charges against the company. “I think that’s a failure on the part of the SEC, even though they are hard-working, high-quality people,” Ackman noted.

The Federal Trade Commission (FTC) also opened an investigation into Herbalife in March of this year. In April, the Department of Justice, the FBI, and Attorneys General in New York and Illinois launched their own investigations into the company.

Today Herbalife also released the findings of an economic analysis performed by former FTC economist Dr. Walter Vandaele of Navigant Economics, LLC. Herbalife commissioned Vandaele to assess the company’s standing as a legitimate multi-level marketing (MLM) firm.
 
The assessment included factors such as end-use consumption of the product, as well as its intrinsic value and market demand. In summary, Vandaele found that “Herbalife’s U.S. business operations are consistent with the socially beneficial MLM model and inconsistent with the socially harmful pyramid scheme model.”

July 22, 2014

Cover Story

Marketing an Ever-Evolving Strategy

by Beth Douglass Silcox

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


Once the playground for little-understood creatives who whipped up sales collateral and spent the money sales teams earned, marketing departments grow more strategic and sophisticated by the day. In fact, the demand to understand and engage customers is driving an evolution in marketing and moving its role within the company straight into the executive suite—Chief Marketing Officer.

“Today, marketing plays a critical role in strategic planning and brand positioning, overall messaging and, perhaps most importantly for the direct selling industry, creating the lasting relationships every company, every brand and every direct seller desires,” says USANA CMO Doug Braun.

The gamut of responsibilities under the CMO umbrella is ever-expanding. Candace Matthews, Amway’s CMO, says her role, “encompasses all of the branding, positioning, and everything that goes along with establishing those brands at a global level—communications, PR, corporate social responsibilities, Amway’s brand and reputational work, as well as the digital side and market research.”

Sheryl Adkins-Green, CMO at Mary Kay Inc., adds, “My goal is to anticipate what women want, and then convert those insights into irresistible beauty products that women love. I’m responsible for leading the development of a product portfolio strategy that generates a sustainable stream of innovative skin care, color and fragrance products.”

There’s a lot of work to go around and much to keep track of. Divvying responsibilities differs from company to company. USANA, for instance, separates communications, PR and social media. But one thing is consistent: The marketing group and the individuals who lead the charge, whether they are CMOs or heads of departments, simply can’t be what they were a decade ago and expect to succeed.

CMOs today must be a new, eclectic species, able to execute the demands of traditional marketing while stretching into roles of sophisticated strategists, sector specialists, innovative champions, digital experts and business leaders, according to Advertising Age.

This isn’t, however, unique to the direct selling industry nor to the U.S. corporate world. In fact, The Guardian in the U.K. declared the traditional CMO role dead last February. Why the epitaph? Companies must drive deeper to develop customer intimacy and lasting consumer engagement. That, they say, is where true growth lies.


Companies must drive deeper to develop customer intimacy and lasting consumer engagement. That, they say, is where true growth lies.


At the Crossroads of Consumer Engagement

Today, a carefully crafted marketing message isn’t the one-way communication it was decades ago. Instead, it’s really a conversation starter between brand and customer—a conversation to be taken very seriously. “Now consumers and the general public have so much power with the Internet. They can say anything. They can create a following. So you need to have brand advocates and ambassadors within the people. It’s that relationship, that bond, and that common framework and common vision for what we’re doing that’s so important,” Matthews says of marketing at Amway.

Marketing leaders stand at a crossroads between consumers who yearn for engagement and companies who strive to meet that consumer need. And it’s the work that happens at this juncture that informs the way forward-thinking, direct selling CMOs see their jobs today.


“There’s not one area that doesn’t have some sort of interaction or dependency on the marketing department. I actually feel that it’s the driving force behind the business.”
—Alec Clark, CMO, Plexus Worldwide


“We [marketing] are the keepers of the entire, lifelong Nerium experience,” says Amber Olson Rourke, CMO, Nerium International. “How the customers come to know about the product—how they experience the product, how we treat them. We are also the keepers of the whole Brand Partner experience, whether it’s marketing the trials, their check-out process, their training, events they go to, the partnership they enter into with our charities like Big Brothers Big Sisters. It’s really all-encompassing.”

Alec Clark, CMO at Plexus Worldwide, adds, “There’s not one area that doesn’t have some sort of interaction or dependency on the marketing department. I actually feel that it’s the driving force behind the business.”

Marketing is nothing short of the “soul of the organization,” according to Braun, and deserves a seat at the strategic planning table. Working hand-in-hand with sales is the only way to successfully meet the promises direct selling companies make to their consumers.

“I look at the CMO as the connector, the integrator of products and experiences,” Matthews says. “I don’t see marketing and sales as independent functions. I see us fully integrating and putting our minds together to deliver what is the right thing for our IBOs.” It’s a holistic approach, meshing both the marketing and sales contributions that enable Amway’s IBOs to not only receive the company’s message, but also really get it. “It’s succinct, it is simple, and it’s very beautiful, and they can leverage it right away. That can be digitally or physically. It’s a unified thinking.”


The world’s leading information technology research and advisory company, Gartner, believes CMOs will outspend CIOs on IT by 2017.


There’s Power in Perspective

When Arbonne’s Chief Creative Officer Michael D’Arminio and Senior Vice President and Chief Sales Officer Heather Chastain sit down to the strategic planning table, each brings a slightly different perspective. “I want to make sure that everything our consultants feel, taste, smell and see embodies the best Arbonne experience,” D’Arminio says.

D’Arminio and Chastain come together, challenge each other, learn from each other and ultimately make the right decisions to formulate a three-year strategic outlook, annualized plan and bimonthly plan they call a cycle meeting. “We have both a long-term and short-term plan in place, knowing that we need to be agile in order to take advantage of key opportunities as they arise,” D’Arminio says.

Partnering with Chastain’s sales department, D’Arminio and his creative team get the kind of immediate feedback on products, innovations and ideas that can make slight course corrections for effectiveness more timely and successful. This blend of sales field insights paired with market trends and product innovations makes Arbonne’s ability to evaluate strategy, core initiatives, opportunity, return and risk more effective.

Strategic, Creative Innovators and Brand Stewards

The changing role of CMO is opening the creative floodgates to innovations and solutions for direct selling. The relationship building of the past still takes place at events, but as Clark says, “Masses of people are now contacted with one click. Technology has changed our whole industry and how it works.”

In fact, customer engagement is so dependent upon technology that the world’s leading information technology research and advisory company, Gartner, believes CMOs will outspend CIOs on IT by 2017.

Just spending the dollars, however, is no guarantee of success, and as the role of marketing expands so, too, does the CMO’s responsibility for strategic planning that balances the best use of technology with traditional brand stewardship and customer acquisition activities.

“If the CMO of a company has only one responsibility, it is to keep it relevant. I don’t mean trendy, but relevant,” Braun says. “It’s easy for us to get distracted by a shiny new ball, and every once in a while a shiny new ball is needed, and it’s fun. But as a CMO, I think it’s our responsibility to continue to be true to who we are as a brand, what we can be the best at, and remain relevant to the rest of the world.”

Matthews agrees, saying, “We are global and operate in over 100 countries and territories, so it’s important that people understand the position of the brand and of the company. Amway is the overarching brand, but how other brands link to it is equally important. To make it globally relevant, we have to stay within a global framework, and it must all align.” Amway’s leaders are more global and less market-specific as access to information via the Internet continually increases, and it has changed the way they perpetuate their brand. “It’s very important that the brand people see is consistent around the world,” she says.

Not only consistency of brand, but also of systems and culture played a huge role in Nerium International’s lead up to global expansion to Canada and beyond this year. “What we’re building from an online perspective is a global digital experience where every country uses the same technology and interface from a website standpoint, for the back office and for mobile applications,” Olson Rourke says. “It’s all tied into one universal platform and message. There are a lot of offshoots, but it will be one experience.”

This type of platform simplifies the Brand Partner experience of running a Nerium business anywhere in the world and allows the company to convey its corporate message on a global scale. “Making people better is our mission,” she says. “That’s reflected in the company’s relationships with charities like Big Brothers Big Sisters and Live Happy magazine, as well as the company’s focus on personal development. We’re truly focusing so much of our energy around that message of building people first beyond anything else.”

Getting an entire direct selling organization to walk the walk, talk the talk, and live the brand is complicated and depends as much on people as it does on technology. At USANA, Braun says the brand experience manager keeps the corporate office on message and everyone moving in the same direction. “They look at everything we’re doing from a different perspective—a brand perspective,” he says. “They have a seat at the table for those conversations, so that our experience doesn’t become different on the web than it is in our call center.”

Plexus’ Clark says, “Our content, our delivery, our message truly matter. We love our brand, and we take that very seriously. Hundreds of thousands of lives are affected if we make a bad decision and we start chasing rabbits down holes. So we need to keep our heads, look around and make sure we are doing the right things for the right reasons for all of our Ambassadors.”

Purveyors of a New Experience

Providing the right tools to inform, educate and support the direct selling field remains a critical responsibility for marketers, but today they also innovate the entire consumer experience. USANA refreshed its brand from top to bottom a few years ago, and it wasn’t just the look and feel that got an upgrade. “It was really properly positioning USANA as a brand to be relevant and be the brand of choice for a wider audience, not just for today but in the future,” Braun says.

USANA shifted corporate habits and internal language to reflect the brand refresh and introduced an online and iPad prospecting app called USANA True Health Assessment, which features a 10–15 minute health questionnaire that generates an overall health report, risk report and product recommendations at the end. Braun says, “It changed the introduction to the company. As an Associate, your methodology of bringing someone into the business or in as a customer isn’t through a meeting, a coffee shop or an event. It’s now through a one-on-one communication about health, and it becomes much more personal. You build the relationship. You build trust, and there’s value for the time spent, whether they do anything with USANA or not.”

He adds, “We always had Associates who believed in our product, believed in our science and manufacturing, but they weren’t as engaged in the brand. With this change, they are wearing the brand. They are participating in the brand in new ways. Their use of and how they talk on social media has increased significantly. From an activity base and from an engagement base with the brand, there’s been significant change.”

At Mary Kay, Adkins-Green oversees a wide variety of digital tools developed to engage customers and create experiences for them that keep them coming back. Their interactive eCatalog, which has generated over 23 million visits globally, has users spending an average of five minutes browsing, and viewing on average 34 pages per session. Adkins-Green says May Kay’s fan base has increased even more quickly than expected by the team’s creation and promotion of product trend updates, fashion news, and how-to tips across multiple social media channels. She says, “According to industry expert L2 (a subscription-based business intelligence service that benchmarks the digital competence of brands), Mary Kay has one of the highest social media engagment ratings in the beauty industry.”

Not all marketing innovations are technology based. One of the boldest customer acquisition strategies recently is a free inventory replenishment program from Nerium International called Nerium Gives Back. Only through a successful customer acquisition model, Olson Rourke says, can a company create sustainability. So when a Brand Partner brings a new customer or a new Brand Partner to the company, Nerium gives them free product back to replenish their stock. “It’s really revolutionary and drives the right behavior. We’re able to have higher retention of Brand Partners because of small inventory costs, and we can continue to have very high customer acquisition because Brand Partners are getting the product out there,” she says.

Plexus encourages its Associates by augmenting a tried and true tradition—events. By ramping up branding, the company strives to inspire engagement and also show support of the field’s business-building. “Leaders are born at events,” Clark says. “All those people share best practices. They hop across island to island and know they are not the only ones doing this. There are 8,000 people having the same trials and successes.” But to supercharge the synergy Plexus Associates felt, Clark and his marketing staff looked upon their recent annual convention with fresh eyes and new goals. “Whether it was the first person or the 8,000th person to see it, we wanted them to feel appreciated and important.” So Plexus branded Dallas.

Every light post hung the Plexus flag. Every bus wore the logo. They wrapped the hotel and even lit up the Dallas skyline with Plexus lights strung outside the Omni.

“The CMO’s role is still to enable the success of our IBOs,” Matthews says. “So everything we do has to be looked at through that lens. That may be to bring more consumers to them, provide programs that will engage them, or to engage others and bring them into the Amway business.” Sometimes that means innovating global compliance solutions, like the advent of Amway’s digital Nutrilite Recommender, which asks appropriate questions and enables IBOs to make vitamin and mineral supplement recommendations based only on the product line available to their market. Still for others it calls on global markets to promote a brand repositioning in some of the most relevant yet creative ways.

Upscale and recognizable packaging, differentiated product formulations, a global face and consistent image are the pillars of Amway’s repositioning of its premium skincare brand, Artistry. Through sponsorships of artistic events in global markets, like China’s immensely popular figure skating event, “Artistry on Ice,” and Korea’s Busan International Film Festival, there’s a new level of engagement, which aligns the brand locally to the global position.

As with any cost-benefit analysis, there are qualitative and quantitative measurements to the value marketing brings. That value will become increasingly evident as more and more marketers are invited into the executive suite and those CMOs sit down at strategic planning tables to weigh in on a broad range of subjects, such as communications, social awareness, emotional touch points and consumer insights.

As the world continues to spin faster and faster, technologies mature and change again, and consumers demand something new, it will be the CMO who stays on the cusp of trends and emerging technologies, keeps tabs on what’s happening globally, and understands the cultures of the world. Stewarding that insight into the company may well be one of the most vital aspects of the CMO’s evolving role in direct selling.

July 22, 2014

U.S. News

TriVita to Refund $3.5 Million in Product Claims Settlement

In its ongoing campaign to combat exaggerated health claims, the Federal Trade Commission (FTC) has reached a settlement with cactus juice marketer TriVita. The Arizona-based company agreed to refund consumers $3.5 million, settling FTC allegations that TriVita deceived consumers with unsupported claims about the health benefits of its Nopalea wellness drink.

Advertisements for Nopalea, which sold for up to $39.99 plus shipping and handling, billed the product as “Inflammation Relief without a Prescription.” The company’s frequently aired infomercials claimed the “prickly pear” fruit drink would treat a wide variety of other health conditions as well. According to the FTC release, one featured TriVita’s Chief Science Officer, Brazos Minshew, linking inflammation to allergies, Alzheimer’s disease, heart disease and diabetes.

In an ad featuring celebrity endorser and former supermodel Cheryl Tiegs, the former Sports Illustrated model claims, “If you’ve suffered from inflammation or chronic pain for years, there’s something that can help,” the FTC release quotes.

The agency also charged TriVita with failing to disclose its connections to the individuals featured in a separate infomercial. The ad featured testimonials by satisfied customers who were in fact paid employees of the company.

“These kinds of unfounded claims are unacceptable, particularly when they impact consumers’ health,” Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said in the agency’s statement. “Advertisers who cannot back up their claims with competent and reliable scientific evidence are violating the law.” 

TriVita Executive Vice President of Legal Affairs Gene Henderson says the FTC did not accept the science TriVita provided to back its claims. “That was part of the 15 months that we went through our confidential investigation, and that was the reason we settled to say ‘we will not make the statements that were listed in the complaint until we get further scientific studies,’” Henderson told Natural Products Insider.

The FTC says TriVita violated Sections 5 and 12 of the FTC Act by:

  • making unsupported claims that Nopalea significantly improves breathing and relieves sinus infections and other respiratory conditions, and provides significant relief from pain, swelling of the joints and muscles, and psoriasis and other skin conditions.
  • making false claims that the health benefits of Nopalea were proven by clinical studies.
  • failing to disclose that supposedly ordinary consumer endorsers were in fact TriVita sales people who received commissions for selling the defendants’ products.

July 21, 2014

World News

Your Inspiration At Home Collects Prestigious Fine Food Awards

At just 3 years old, Your Inspiration At Home has already earned numerous accolades from people who know a thing or two about food. The company recently picked up four additional medals at the prestigious 2014 RASV Melbourne Fine Food Awards.

Founded in Australia and acquired by CVSL last year, Your Inspiration At Home is on a mission to help people prepare food “Inspired Globally—Enjoyed Locally.” The company incorporates flavors from around the world into its hand-crafted spice blends and gourmet oils and vinegars. Your Inspiration At Home now has a North American headquarters in Newark, Ohio, and a global salesforce of more than 5,000.

The Melbourne awards recognized three of the company’s balsamic vinegars—gourmet vinegar was named one of the top 10 food trends at this year’s Specialty Food Association’s Summer Fancy Food Show in New York. Your Inspiration At Home has collected more than 140 fine food awards since launching in 2011.

July 18, 2014

U.S. News

Field Goals: ViSalus Brings Fitness Challenge to Youth Football Sponsorship

American Youth Football & Cheer Inc. (AYF) recently selected weight-loss and nutrition company ViSalus as its Official Nutrition and Wellness Sponsor.

AYF works within communities to train children in football or cheer, with a strong emphasis on positive traits like self-confidence, teamwork, self-discipline and community involvement. The organization, which often establishes programs where children cannot access them through the school system, serves more than 1 million members nationwide.

The sponsorship came about through a ViSalus National Director whose family participates in AYF. The organization’s team fundraisers presented an opportunity to educate players about healthy nutrition while furthering AYF’s mission. This year the athletes will cash in on personal health goals by selling ViSalus nutrition products, with proceeds benefitting the youth football and cheer programs.

ViSalus offers its users an added weight-loss incentive through the PROJECT 10 Kids program. The company’s trademark PROJECT 10 Challenge encourages customers to lose 10 pounds of fat or add 10 pounds of lean muscle. Every time a person meets the challenge, the company donates 30 of its Vi-Shape Nutritional Shake Meals to a child in need.

ViSalus Co-Founder and CEO Ryan Blair recently spoke to Fast Company about his own youth and the mentors who helped him make the journey from gang member to successful serial entrepreneur. In 2013, Blair published his story in The New York Times bestseller Nothing to Lose, Everything to Gain: How I Went from Gang Member to Multimillionaire Entrepreneur.

July 18, 2014

U.S. News

Mary Kay Seminar Paints Dallas Pink

This week kicks off Mary Kay’s annual Seminar in Dallas, where the company will host more than 30,000 attendees over the course of 18 days.

During five consecutive events, the Seminar provides inspiration and education to thousands of the company’s Independent Beauty Consultants. Mary Kay will also award more than $7 million in recognition and prizes—including the latest addition to its Career Car program, a black BMW 320i—during this year’s Seminar.
 
Mary Kay has a long-standing partnership with the city of Dallas and the Kay Bailey Hutchison Convention Center, which has hosted the Mary Kay Seminar for four decades. During last year’s event, many of the city’s businesses and landmarks featured pink displays to commemorate Mary Kay’s 50th anniversary.

The Dallas Convention and Visitors Bureau (CVB) estimates this year’s Seminar will have a $32.1 million impact on the local economy. “The infusion of energy and enthusiasm that the Mary Kay sales force brings is integral to the spirit of Dallas and important to our city’s hotels and restaurants, providing a positive economic impact year after year,” Phillip J. Jones, Dallas CVB President and CEO, said in a statement.

July 17, 2014

U.S. News

Avon Walks Raise Millions to Fight Breast Cancer

Over the weekend, more than 2,000 walkers crossed the Golden Gate Bridge in the 12th Annual Avon Walk for Breast Cancer. The San Francisco event raised $4 million, bumping this year’s fundraising total to $19.1 million, with three cities to go.

The Avon Foundation for Women hosts the Walks in eight cities annually in support of breast cancer research and education. The project has raised more than $500 million since the first Avon Walk for Breast Cancer in 2003.

Participants raise a minimum of $1,800 to walk either a marathon (26.2 miles) or a marathon-and-a-half (39.3 miles) over the course of the weekend. The proceeds from the San Francisco event will benefit both national and local organizations, including the Women’s Cancer Resource Center ($100,000); Stanford University ($150,000); Project Open Hand ($200,000); and San Francisco General Hospital ($500,000), which houses an Avon Breast Cancer Center of Excellence.

July 14, 2014

U.S. News

Mary Kay Foundation Awards 2014 Cancer Research Grants

The Mary Kay Foundation has selected 12 of the nation’s top research institutions as recipients of its 2014 cancer grants. Totaling $1.2 million, the grants will fund research of the second leading cause of death for women in the United States.

The philanthropic arm of cosmetics giant Mary Kay, recently named to DSN’s $100 Million Growth Club, dedicates its resources to two causes: supporting research of cancers affecting women and increasing prevention and awareness of domestic violence.

Dr. Jerry Shay, Professor and Vice Chairman of the Department of Cell Biology for The University of Texas Southwestern Medical Center at Dallas, chairs The Mary Kay Foundation Scientific Review Committee. The committee of prominent medical scientists and doctors considered more than 80 applicants in its review process.

“This year, we ranked all grant applicants on a scale system and narrowed the pool to the top 12 most promising and innovative research teams, doctors and medical scientists in the country.” Shay said in a statement. “Thanks to grants like these, we are giving the medical community the tools to explore and develop early diagnosis and new treatments for cancers affecting women.”

View the full list of 2014 Cancer Grant Recipients.

July 11, 2014

World News

Beyond Brand: It’s about Community

Editor’s Note: The following article is excerpted from the latest 16-page insert produced by Direct Selling News for The Wall Street Journal. The complete insert was distributed to over 1.2 million WSJ subscribers. Reprints can be ordered here.


What is it that draws people to a particular product in the first place? Function, style and price can be part of the equation, but sometimes it’s the desire to be a part of something bigger. TOMS famously gives “one for one”—a pair of shoes is donated for every pair a customer buys. A shared value system and a sense of community buoy the most well-known and successful brands.

As millennials grow to be the largest sector of the workforce, a company’s focus on purpose will become even more important. A demographic known to prioritize meaning over money in choosing jobs, millennials want to be associated with causes that are life-changing.

Rather than being daunted by the world’s problems, today’s workers want to be a part of the solution. They want to give back. Workers are drawn to companies that build philanthropy into their mission, such as Nu Skin with its Force for Good Foundation. This nonprofit focuses on both helping its sales force to give back in their own communities and on improving the lives of children around the world through medical, educational, and agricultural support.

Having a shared sense of purpose centered on worthwhile values like helping others and promoting physical and financial health is what takes a group of individuals and turns them into a community. And it’s that sense of community that makes a job more than a paycheck—it becomes a shared vocation. “Much like teams in sports, communities have a goal in mind, and they will not rest until it’s met,” says John Parker, Chief Sales Officer at Amway.

Careers that offer people flexible hours and the ability to work from the beach or the ski slopes are appealing to this generation, but freedom from the cube alone is not enough. The real draw for millennials—and those of any generation who want to live meaningful lives—is being part of a community that shares their values.

July 11, 2014

U.S. News

ForeverGreen, Agel Open Global Headquarters in Utah

Pleasant Grove, Utah, gained two new corporate citizens at the end of June, when ForeverGreen Worldwide Corp. and Agel Enterprises opened global headquarters in “Utah’s City of Trees.”

Agel’s grand-opening celebration included a visit from CVSL executives John Rochon, Russell Mack and Kelly Kittrell. Agel markets gel-based nutritional supplements as a part of CVSL’s growing group of micro-enterprise companies, which includes The Longaberger Co., Your Inspiration At Home and others. Since the first quarter of 2013, CVSL has acquired seven micro-enterprise brands and increased gross revenue six-fold to $26.7 million.

Agel President Craig Bradley and Co-CEOs Jeff Higginson and Jeremiah Bradley also welcomed city officials, local business leaders and top representatives to the grand opening. The new headquarters will support Agel’s 57 markets worldwide.

ForeverGreen Worldwide’s new 50,000-square-foot facility combines offices with space for warehousing and manufacturing the company’s health, wellness and home-care products. The headquarters also includes film and recording studios, and a “family room” that allows the company to host up to 300 people at a time.

“This new building allows us to bond in an unprecedented way with our employees, customers, distributors and the community,” CEO and Founder Ron Williams shared in a statement. “This milestone provides a platform to grow into the company we have always envisioned.”

In a congratulatory letter marking the grand opening, Utah Governor Gary R. Herbert commended ForeverGreen Worldwide for raising the bar of corporate citizenship through its generous giving and involvement in community projects.

July 10, 2014

U.S. News

A.M. Best Affirms Primerica’s Strong Credit Ratings

Photo above: Outside Primerica’s global headquarters in Duluth, Georgia. (photo: Primerica)


Primerica Life Insurance Co. has received another round of superior ratings from global credit rating agency A.M. Best. The agency affirmed its A+ financial strength rating and aa- issuer credit rating (ICR) of Primerica Life and its affiliates in New York and Canada.

Declaring a stable outlook for all ratings, A.M. Best also affirmed the strong a- ICR of holding company Primerica Inc. and positive ratings of the company’s debt and preferred stock. Primerica met earnings expectations for 2013 with annual GAAP net income of $163 million.

On the Canadian side of the business, Primerica recently expressed opposition to the government’s proposed overhaul of the country’s life insurance licensing program. Canada represents approximately 10 percent of Primerica’s total life-licensed representatives.

The implementation, which would take place in early 2016, would “create unnecessary barriers” and “negatively affect access to life insurance products by middle income Canadians,” Primerica told the Atlanta Business Chronicle.

Read more on the methodology behind Primerica’s latest ratings.

July 09, 2014

U.S. News

Thirty-One Gifts Targets $1B in Sales

What do you do when your company has grown 1,900 percent in four years—faster than any other woman-owned company in the world? If you’re Thirty-One Gifts Founder and CEO Cindy Monroe, you set your sights on a bigger target and empower as many women as possible along the way.

As Monroe recently told The Business Journals site bizwomen.com, her current goal is to become a billion-dollar company. To build Thirty-One, Monroe is keeping a firm grasp on what has already made the company a success: offering women products that meet their needs and a significant income opportunity.

“I want to make sure that I always stay true to helping our U.S. consultants stay profitable and that it’s real income,” Monroe shared. “It’s not about the size of the company we are, and for me, it’s not even about the bottom line. It’s about helping these women.”

According to The Columbus Dispatch, Monroe resumed her role as president this month following the retirement of Thirty-One President Andy Neri. Formerly COO at Thirty-One, Neri stepped into the role of president in 2012. Monroe had previously served as both president and CEO.

July 08, 2014

U.S. News

Vemma Brews up Beverage Industry Favorite

This spring Vemma introduced Verve MoJoe, the latest in its healthy line of energy drinks. The coffee-based beverage lived up to its name in a recent bevindustry.com poll, where readers voted Verve MoJoe new product of the month for May.

Since camping out in the sparsely populated “healthy energy drink” category, Vemma has expanded its line with products like Verve ReMIX, Verve PARTEA and Verve Zero Sugar. Verve MoJoe is the company’s high-octane take on iced coffee, a perennial hot-weather favorite.

Vemma formulates its health-conscious brew with natural sweeteners, flavors and colors. One serving packs just 60 calories, 1.5 grams of fat, 6 grams of all-natural sweeteners and 80 milligrams of natural caffeine.

Beverage Industry is a widely distributed magazine reporting on North America’s $400 billion beverage market. A Reader’s Choice poll conducted in June determined the top products introduced on the site in May. Verve MoJoe beat out several other new beverages with 58 percent of votes.

July 07, 2014

U.S. News

Avon Ranked among ‘Best Global Green Brands’

Avon, this year’s Bravo Humanitarian Award recipient, has been named one of Interbrand’s Best Global Green Brands of 2014. The global brand consultancy ranked Avon No. 42 of the 50 companies leading the way in sustainability.

Interbrand defines a sustainable approach as “creating long-term value by embracing opportunities and managing risks derived from economic, environmental and social impacts.” The Best Global Green Brands ranking evaluates both market perception and environmental performance—from governance and operations all the way down the chain to products and services.

One of Avon’s greatest distinctions is its 6 million-strong salesforce, which extends the company’s environmental impact across the globe.  Avon has mobilized its salespeople through initiatives like Healthy Forests, Beautiful World—a program that raises funds and awareness in support of reforestation efforts by The Nature Conservancy and the World Wildlife Fund.

On the corporate side, Avon has met or exceeded several benchmarks in its quest for increased sustainability. The New York-based company is an industry leader in its reduction of greenhouse gas (GHG) emissions. Between 2005 and 2012, Avon reduced water use by 200 million gallons and achieved an overall recycling rate of 83 percent at its manufacturing and distribution centers. Interbrand also noted the company’s environmental award-winning manufacturing facility in China and its new R&D Center in Shanghai, which has achieved LEED Platinum certification.

View the 2014 Best Global Green Brands.

July 03, 2014

U.S. News

Chloe + Isabel Closes out $15 Million Funding Round

Three-year-old social jewelry retailer Chloe + Isabel is looking to expand its offerings and its reach following a successful $15 million venture funding round.

SoftBank Capital, an affiliate of Tokyo-based Internet and telecom conglomerate SoftBank Group, led the company’s recent Series C equity round. In the last couple of years, Chloe + Isabel has signed on 4,500 salespeople in the U.S. and developed proprietary technology in support of its sales, marketing and training. Now the company is looking to enter Asia and expand beyond jewelry, beginning with the launch of its first fragrance, Jardins du Midi, this past April.

Chloe + Isabel salespeople, known as merchandisers, market the company’s goods through customizable online stores. The merchandisers sell a selection of Chloe + Isabel inventory through their e-commerce sites or offline through trunk shows.

“Chloe + Isabel’s innovative, scalable tools and training offer a true social-selling experience and provide an entrepreneurial opportunity for today’s woman,” Scarlett O’Sullivan, Partner at SoftBank Capital, said in a statement. “We were drawn to the merchandisers’ stories and the way in which Chloe + Isabel’s disruptive selling platform, customized marketplaces and high-quality products are impacting merchandisers’ lives and allowing them to attain whichever goals they set for themselves.”

July 01, 2014

U.S. News

Direct Selling Association Publishes 2013 Industry Report

The Direct Selling Association has published its annual industry statistics report, based upon a survey of the Association’s member companies.

The 2013 numbers tell an optimistic story about the state of direct selling in the U.S. Sales increased 3.3 percent to a record high of $32.67 billion, rounding out a four-year upward trend that began amid the economic recession.

The Wellness and Service categories continue to gain market share, balanced by shrinking sales in the Home & Family Care and Personal Care categories.

As for people, the backbone of the model, participants in direct selling jumped 5.7 percent in 2013 to a record 16.8 million. The overwhelming majority (70 percent) of sales occurred person-to-person, while 23 percent took place through a party plan or online party model.

View the full report at dsa.org.

July 01, 2014

Stock Watch

Stock Watch, July 2014


July 01, 2014

Software/Technology Solutions

InternetNextStep.com Consulting Ltd


July 01, 2014

In This Issue

IMN


July 01, 2014

Acquisitions/Mergers

Southeast Bottling & Beverage


July 01, 2014

World News

Nature’s Sunshine to Enter China through Joint Venture

Nature’s Sunshine Products has announced plans to enter China in a joint venture with Shanghai-based Fosun Pharma. The agreement outlines a multi-channel approach that places Nature’s Sunshine products in Fosun Pharma retail locations across the country and markets the company’s Synergy brand through a direct selling model.

Fosun Pharma will acquire a 15 percent stake in Nature’s Sunshine in a deal valued at just over $46 million. As a part of the agreement, Nature’s Sunshine will appoint one Fosun Pharma director to its board. The investment in Nature’s Sunshine will also fund a special $1.50 per share cash dividend to be paid out at closing.

The company expects that Nature’s Sunshine Hong Kong will drive long-term growth and become a top market within five years, says Chairman and CEO Gregory L. Probert.

“We view this joint transaction as both a testament to the strength of our existing business as well as Fosun Pharma’s confidence in our ability to establish a substantial business in China,” Probert said in a statement. “It marks a significant step forward in our transformation to a global organization with multiple brands and distribution channels.”

June 29, 2014

Company Spotlight

Viridian Energy: Energized by Global Vision

by Barbara Seale

Viridian

Company Profile

Founded: 2009
Headquarters: Stamford, Connecticut
Executives: Michael Fallquist, Founder and CEO; Meredith Berkich, President
Products: Environmentally responsible electricity, natural gas and solar power


It may not be easy being green, but Viridian Energy has turned greenness into a multimillion-dollar direct selling powerhouse with a global vision: to create a path to a more sustainable future.

Many companies, both within and outside of direct selling, have sustainability initiatives, but at Viridian, it’s the whole ballgame. Not only does every product—electricity, natural gas and solar energy systems—promote environmentalism and sustainability, but the company even extends its vision through philanthropic projects and incentive trips where top earners celebrate success and also help create green energy solutions at their destinations.

Michael FallquistMichael Fallquist
Meredith BerkichMeredith Berkich

The company is the creation of Michael Fallquist, its founder and CEO. As a native of the Pacific Northwest, Fallquist had “green” in his DNA. His professional background was in the energy industry. When he decided to develop his own company, he knew it had to reflect his passion for environmentalism, sustainability and reducing the world’s carbon footprint. Green energy was his only acceptable choice.

But how do you market it? Retail energy is commonly sold directly to the consumer through advertising, telemarketing, direct marketing or door-to-door sales. But Fallquist knew he had to answer the consumer question, “Why use green energy?” He also knew that, as energy deregulation progressed, he wanted the consumer’s choice of product to be based on more than just price. Direct selling filled both of those needs. Viridian associates could explain deregulation as well as the benefits of exercising their personal energy choice to make a collective impact. In direct selling—as a result of associates’ personal relationships—customers tend to be more loyal, or stickier, than those of companies that compete solely on price.

So in 2009 Fallquist launched Viridian Energy, and the business immediately exploded. By its second full year in business, Viridian had broken into the Direct Selling News Global 100, and in 2013 it reached No. 45, with revenues of $267 million and 22,065 active Viridian associates in nine states. Last year alone the company’s green products reduced carbon emissions by more than 2 billion pounds. That number equates to recycling more than 7 billion soda cans, 15 billion two-liter plastic bottles or 164,000 Sunday editions of The New York Times. Those numbers have continued to grow. In the first quarter of 2014, Viridian enrolled more than 50,000 customers and 5,000 associates.


Last year alone, Viridian’s green products reduced carbon emissions by more than 2 billion pounds. That number equates to recycling more than 7 billion soda cans, 15 billion two-liter plastic bottles or 164,000 Sunday editions of The New York Times.


Sustainable Planet, Sustainable Business

Seven in Seven




When an energy company’s goal is to help create a more sustainable world, which requires a thoughtful approach to everything it does, the slogan “think globally, act locally” takes on new meaning. That’s exactly what’s happening at Viridian Energy.

Although it currently offers green energy in just nine states and the District of Columbia, Viridian plans for its sustainability efforts to reach around the globe through its 7 Continents in 7 Years program. Each year, Viridian will research and execute a sustainability project internationally that it believes will have a significant positive influence on the global community. The effort got underway almost as soon as the company did.

Each year since 2010, executives and top sales leaders along with their guests have traveled to points around the world to complete a sustainability project while they celebrated sales success. In Brazil they planted trees and worked on reforestation efforts. Then the sustainability initiative took them to Ghana, where they brought light, by way of solar panels, to villages that never before had electricity. Later they journeyed to Indonesia to reforest the previously cleared land and to bring fresh water and solar power to local communities. This year their destination was Fiji, where they completed solar installation and reforestation projects.

Mindful that sustainability starts at home, they also “act locally” through numerous projects in their northeastern U.S. markets. The company hosts at least one local event each month in its active states and markets and hosts as many as 30 during April each year for Earth Month.

On a number of occasions Viridian has partnered with NYC CoolRoofs, a group that brings together volunteers to paint New York City residential roofs with a white reflective coating that not only cuts cooling costs and energy use, but also prolongs the life of the roof itself.

A project at the nonprofit Silver Lake Nature Center in Pennsylvania included constructing an Earthship, an off-the-grid education center built from recycled materials, utilizing cutting-edge, sustainable designs such as solar thermal heating and cooling, onsite renewable energy generation and water-recycling systems.

Viridian also planted a monarch butterfly garden in New Jersey. Every year, monarch butterflies migrate as many as 3,000 miles to their “winter homes” in California or Mexico. The food they eat before and during their migration south must power them through the long journey and sustain them throughout the cold months. Viridian volunteers planted the special garden at the Manalapan Township Recreation Center in New Jersey, filled with the kinds of flowers monarchs crave. What was once lawn is now a beautiful butterfly habitat for visitors to learn from and enjoy.

A sustainability project in Southington, Connecticut, helped restock drinking water supplies in the Quinnipiac River Watershed. Fresh water is becoming increasingly limited due to pollution and overuse, but rain gardens help keep fresh, clean rainwater out of the sewer system, replenish groundwater and protect waterways from pollutants.

Viridian also responded when Hurricane Sandy wreaked devastation on the East Coast in 2012. The company’s associates traveled from as far away as Illinois to New Jersey, Staten Island and the Rockaways with their work gloves and tools to help clean up the storm’s damage and deliver critical supplies to families.

Whether the project is in one of its energy markets or on another continent, it reflects Viridian’s commitment to the environment. Viridian President Meredith Berkich explains: “Our approach is holistic. Can we make a real and lasting impact on the world? We think we must. We believe that this change is so much about who we are that we provide ways for associates to take part in it.” She adds, “The very core of who we are is making a difference in the world. Through these projects, people experience something they would never have been able to experience otherwise.”

Electricity, natural gas and solar energy are three environmentally responsible products Viridian offers. The company’s electricity products—Everyday Green® and Pure Green™—are already both backed by a high percentage of green energy, through the purchase of Renewable Energy Certificates (RECs). Everyday Green supplies electricity that is 50 percent renewable, in addition to the renewable portfolio standards set by most deregulated markets, and Pure Green is sourced 100 percent from wind power. Viridian’s Simply Right™ natural gas products offer consumers and businesses a thoughtful and practical way to address the biggest concerns related to natural gas, and the company mitigates customers’ emissions through carbon offset purchases. Customers may choose from Simply Right natural gas, which is 25 percent offset, or Simply Right 100, which is 100 percent offset. Viridian also contributes to a research fund to support more responsible extraction of natural gas.

But today’s energy products, as green and sustainable as they are, are expected to pale in comparison to energy’s new kid on the block: solar. Not only does it offer consumers—even those outside the sunshine belt—a money-saving, sustainable energy choice, but it also offers a great long-term solution for Viridian’s goal of longevity. Viridian Energy President Meredith Berkich explains why.

“When we looked at the solar energy market and how fast it was growing, we knew we had to get in on that,” she says. “Solar is growing wildly, and it’s an important method for how fast we can impact the world. Back in 2008, one solar energy system was being installed every 80 minutes. In 2013, one was being installed every four minutes. By 2016, it will be one every 80 seconds. If we had ignored the trend, continuing to offer only electricity and natural gas, our business would have gradually begun to diminish over time as consumers became their own generators. When we talk about being part of local change, we must constantly evolve to be relevant and provide value.”

To be part of that change, last year Viridian Energy partnered with SolarCity—the country’s No. 1 full-service solar provider—to offer solar energy systems to its customers and another valuable product to its associates. When a Viridian associate sells a solar energy system, several important things happen. First, SolarCity takes care of everything from permits to panels. All the customer has to do is soak up the sun and enjoy locked-in lower rates. Second, Viridian Energy gains a long-term customer. Third, the cleanest, most sustainable energy currently available goes into use. And finally, the Viridian associate earns a 20-year residual income on the solar energy system.


“[Viridian’s business opportunity is] about three helps: You’re helping your wallet, helping your friends with their business and helping the environment.” —Meredith Berkich, President


That type of innovation is just one of the things that attract Viridian Energy associates to the company. Another compelling magnet is that no inventory is required. For customers, changing energy companies is simply a matter of paying the utility bill they already pay.

“It’s about three helps: You’re helping your wallet, helping your friends with their business and helping the environment,” Berkich explains. “Associates like it because it’s all benefit-driven to their warm market, but definitely they appreciate the green component. This group seems to be very motivated by significance and community. They get to make a difference and be a part of something bigger than themselves. There’s something so appealing about that.”


President Meredith Berkich helps with beach cleanup in Fiji. President Meredith Berkich helps with beach cleanup in Fiji.


Predictable Income

While Berkich doesn’t call the energy business recession-proof, she does note that it suffers far less during tough economic times than a company that offers more optional consumable goods. For a company launched during a recession, that’s a big plus.

“I used to be in a nutraceutical company, and during economic downturns we watched autoships plummet,” she recalls. “People assessed their tight budgets and asked themselves what they could cut. But during the recession, people continued to use electricity and natural gas. Maybe they were more careful about turning their lights off, but no one stopped paying their energy bills. Even before people pay the mortgage and car payment, they’ll keep the heat on. That will never go away. It was a perfect time to start out as a network marketing company in the energy space.”

While the consistent demand for energy can create predictable income for Viridian associates, they have to learn some of the variables of the industry. Energy is deregulated on a state-by-state basis, and each state has the ability to implement different regulatory components. It is critical to Viridian’s success that its associates are informed on the local guidelines and requirements so that the company maintains a constant culture of compliance. Viridian ensures that its associates can discuss deregulation confidently with their prospective customers by requiring each new associate to complete training on energy deregulation and regulatory issues before they can enroll a single customer. They complete the training online in their back office in about 45 minutes. Then they are certified to represent Viridian to their family, friends and warm market. Additional training, updated monthly, is available in their back office on everything from market conditions and products to the future of the industry. They also receive Success on Demand, instant online access to a library of personal development content, at no additional charge. Education and compensation seems to pay off as the average Viridian associate enrolls 15 customers.

Founder and CEO Michael Fallquist participates in Fiji’s reforestation efforts.Founder and CEO Michael Fallquist participates in Fiji’s reforestation efforts.

“We consider associates our business partners,” Berkich says. “We’re asking them to invest their most precious resources: their time, their credibility, their talents, their name and their relationships. Money can’t buy those things. In honoring that relationship, we feel a responsibility to be transparent. We view them as investors, and that’s how we talk to them in all of our communication touch points.”

Passion Payoff

When Berkich discusses Viridian’s future, she looks beyond the company itself to all the ways it can improve the planet. One of them is the influence Viridian can have on other energy companies. It substantially exceeds regulatory requirements for the renewable energy sources for its products and takes transparency to unprecedented levels through its detailed annual accountability report.

“People ask us, ‘Aren’t you concerned about putting the whole business model and the method of operation in print?’ ” she says. “But the reality is that our devotion and commitment to responsible energy solutions isn’t only about Viridian making a difference. It’s also about other industry leaders being inspired and changing their business practices. We’re about global change and collective impact. We want to inspire our competitors to do what we do. It’s the only way we’ll get the ripple effect that will change the world.”


Creating Scale


Viridian President Meredith Berkich states it plainly: To be a sustainable energy company, scale matters immensely.

To create that scale, in 2012 Viridian Energy Founder Michael Fallquist established Crius Energy, which encompasses a family of brands that already serves more than 600,000 residential and commercial energy customers in 19 states and the District of Columbia, with plans to continue expanding its geographic reach. The company was listed on the Toronto Stock Exchange in 2012. The largest member of the Crius family—currently more than half of it—is Viridian Energy.

Like Viridian, the other companies under the Crius umbrella share the goal of making the world a better place to live. They are committed to being socially and environmentally responsible by supporting local communities and improving the planet. Crius headquarters are in a 23,000-square-foot, Energy Star-certified workspace in Stamford, Connecticut.

June 29, 2014

Company Focus

Le-Vel: Making ‘Free’ a Very Profitable Concept

by Angela E. Soper

Le-Vel

Company Profile

Founded: June 2012
Headquarters: Irving, Texas
Executives: Co-Founders/Co-Owners Paul Gravette and Jason Camper
Product Categories: Weight management, mental clarity, cognitive performance and inflammation support


Le-Vel Co-Founder/Co-Owner Paul Gravette has been in the direct selling industry since he was 23. He’s achieved seven-figure incomes and created large organizations as a distributor, and he’s founded and built successful direct selling companies of his own. His partner, Jason Camper, has over 17 years of experience in the industry as well, again, both as a highly successful distributor and as a company owner. They know what works and, perhaps more important, what doesn’t.

Like many people who create direct selling companies, Gravette and Camper wanted to build a company that improved people’s lives on multiple levels. From the moment they mapped out the company on “the napkin drawings” 36 months ago (it launched in June 2012) they were determined to create a business model with a revolutionary spin. They wanted Le-Vel to be product-driven and to enable the “everyday” person with zero or little experience or previous success in direct selling to actually benefit from the products at virtually no monthly cost—and have a real chance to earn money, make a monthly luxury car payment and take fun getaway trips.

And the spin of this business model is kept in perpetual motion, thanks to one powerful concept: Free.

Barrier-Free Entry

Paul GravettePaul Gravette
Jason CamperJason Camper

Thanks to Le-Vel’s cloud-based design, the company can give customers and promoters free tools to sell products or build a business. “Anybody can join our company for free, which is really one of the big reasons we’re growing like we are,” Camper says. “We don’t have any barriers of entry to the company.”

Gravette adds, “We don’t charge anybody a dime to be part of our company. We want to build a free affiliate-type program where the customer is our main focus.” If a customer eventually wants to become a promoter, he or she simply clicks on a button that says ‘I want to be a free promoter,’ and at that point the company turns on an incentive clock.

“If within your first two weeks of upgrading and ordering a promoter package—which is loaded with samples of all three of our products—you bring in qualified orders, we’ll reward you in personal bonuses,” Gravette says. And while promoters must purchase a package of products, there is no charge for the replicated website or back office, nor are they required to maintain a personal monthly auto-ship—the required dollar amount in orders every month can come from customers.

Impressive Growth Driven by Product Sales

This free program and the products themselves are helping Le-Vel set a blistering pace in overall growth. Camper says the company has grown 4,300 percent in the last 12 months, which equates to consecutive double- to triple-digit compounded growth each month. “We do a very large seven figures a month [in revenue], and we pay out seven figures a week in commissions,” Camper says.

Thanks to the product formulations and single-serve packaging, the products lend themselves to easy sharing—a design Gravette and Camper implemented from the beginning to make it easier for customers and promoters to let others sample the products. Plus, the product regimen adds icing to the cake for the products’ popularity.

“Our formulator has been integral since Day One,” Camper says. “The secret to everything we do lies in our formulas.” Camper and Gravette wanted to create a system that includes capsules, a daily lifestyle shake mix and a patent-pending wearable adhesive they call Derma Fusion Technology™—all designed to work together to offer people an eight-week, premium lifestyle experience. “The Thrive product line was [created] to help in all areas of someone’s lifestyle—weight management, mental clarity, cognitive performance, inflammation support—it’s really an all-in-one philosophy,” Camper says.

Product Results = Business Results

The key, Camper emphasizes, lies in how the regimen is taken: two Premium Lifestyle Capsules “before your feet hit the floor in the morning,” followed by the ultra-micronized Premium Lifestyle Shake Mix, and then the Derma Fusion Technology (DFT™) adhesive applied to clean, dry skin to boost metabolism. He adds, “Within 40 minutes from someone getting up in the morning, they’ve got three formulas circulating in their bloodstream and they’re done for the day.”

“We are where we are because of the product results,” Gravette says. “We don’t have to talk about our comp plan because our product works—that’s what is making our business explode. All of these people who are joining our company are naturally getting out there and talking about it, and so the [business] starts to grow.”



Le-Vel has grown 4,300 percent in the last 12 months, which equates to consecutive double- to triple-digit compounded growth each month.


It’s All about Trust

Along with a free program designed for everyday people, trust is another of Gravette’s passions. “I want to build a company people can trust,” he says. “It doesn’t matter if they order. We don’t want to twist their arm [and tell them] they have to pay to play. That’s not us.”

Gravette believes Le-Vel’s free enrollment helps build both trust and revenue. “We believe the No. 1 way to build trust is through building a free network,” he says. “We’re building a free social network, so over a period of time our conversion rates, we think, are going to be huge because people watch us for a day, a week, a month and then they decide to order, and they may never have ordered if they had not been able to be part of our network for free.”


“We believe the No. 1 way to build trust is through building a free network.”
—Paul Gravette, Co-Founder/Co-Owner


One part of building this network is through the use of social media, and Gravette believes you need to zero in on one social platform. “You’ve got to narrow it down, so when we started I wanted to keep the focus on Facebook, mainly because I want people to have a focal point.” And to him, the numbers don’t lie; in fact, they tell very defining truths about the company’s growth and stability. He is proud to point out that Le-Vel currently has about 44,000 Likes on its page—“all organic”—with about 6,000 who are active, and the number is growing by more than 200 people a day.

Camper and Gravette buck the common practice of encouraging business builders to attend meetings and events frequently. “You can build this business completely from a smartphone or a laptop,” Gravette says. In fact, they tell people not to spend gas money traveling. “We encourage people to stay at home and work with the people who are having success—work with them on the phone on private team calls and let them help you.”

Operating in the Cloud

A few things stand out when you take a closer look at Le-Vel, and they tie in to its “free” concept as well as the ability of promoters to work from home. First, there is no corporate headquarters housing highly paid executives and a large staff—the company uses what the partners call a vertically integrated system that is cloud-based. This does two things: One, it keeps Le-Vel’s operating expenses low so more of the profits can be allocated to the company’s promoters. And two, it enables Le-Vel to easily and instantly keep up with changes the company needs to make and communicate to the field.

“I think [our cloud-based platform] is one of the pieces that makes us exciting and powerful for our promoters,” Gravette says. “Anything that we need on the fly—when we want to run reports or if we want to add particular promotions or make any changes at any time—we’re not held by a timeline of vendors.”

This cloud-based infrastructure also enables Le-Vel to employ one-third fewer staff and to source some of the most talented people from all over the country. Its customer service is also handled completely online. “As long as you get back to people within 24 to 48 hours, they’re happy,” Gravette points out.

Gravette and Camper own all of their internal code and own and operate their own software infrastructure. They also personally oversee all aspects of the company’s operations, from raw ingredient purchases and product formulations to packaging and vendors. In other words, the founders have a very hands-on involvement with their company and are committed to ensuring that the products, the business model and the customer support meet very high standards.

A Matter of Honor

Another difference: If you check the company’s website, you will not see information about Gravette and Camper. This is intentional and goes back to the partners’ determination to keep Le-Vel focused on serving those everyday people and helping them create the success they want.

“I didn’t want my phone ringing and people saying, ‘Hey, I know you’re starting a company, and I want to talk to you,’ ” Gravette explains. “That’s not fair, because somehow they found out about the business through someone else.” He and Camper have insisted from Day One that people interested in the business enroll under the person who first shared the company with them. If you call them today, they will tell you exactly that—no one gets preferential treatment when it comes to the enrollment process. “They have to honor who talked to them about the business,” Gravette adds. “This is so important to me.”

To Gravette and Camper, individuals inexperienced in direct selling are most valuable. “I wanted to make sure we started our business with people who had no background in making $5,000 or $20,000 a month in a previous company,” Gravette says. “I wanted to build the nucleus of this network around good people who never had a history with another company. I wanted this to be their first.”

Taking the Time to Do It Right

When it came to launching their company, the partners went slowly so they could do it right. “We really took our time before we ever told anybody about this,” Gravette says. “We developed what we feel is perfection to us, but we were never pressured by any board members or any staff on how or when to launch the company. I think that’s been a huge blessing to us.”

Since direct selling has been their profession in one way or another since they were young adults, Gravette and Camper view Le-Vel as a company “built for promoters by promoters.” But they have designed Le-Vel to be unique.

“When I look at our business, I feel like we’re a hybrid of what the direct selling industry is and where the online customer acquisition world is going,” Gravette says. And to illustrate the point, he emphasizes the company’s dramatic growth in customer acquisitions. “In the month of April we had almost double the amount of customers sign up as we did promoters, which is not common in direct selling.”

Gravette says this growth is because, first, the products work; second, customers (and promoters) can get their products for free; and third, it doesn’t cost anything to sign up as a customer or promoter. And while getting products for free is not new to the industry, Le-Vel’s program is especially attractive because it requires a person to enroll only two customers.

“Our business says to your girlfriend, ‘You’re a customer. If you bring us two girlfriends who order online, we’ll give you the product free every month,’ ” he explains.

Their Focus Is Clear

Le-Vel does not, and will never, Gravette insists, highlight wildly successful top earners. They want the focus to stay on those who’ve never had success before. However, they do believe in rewarding promoters who put effort into building their businesses. The company’s car incentive program rewards those who reach a certain monthly team volume with a monthly payment for a luxury car, and those who maintain that volume for two consecutive months are invited to attend an all-expenses-paid Le-Vel VIP Getaway. The first Getaway for 100 was in Las Vegas in January. The company whisked 400 qualifiers to Cabo San Lucas in May, and a third trip is in the planning stages.

“When you get the big picture of our model, it’s exciting because it allows us to spend more money on our product from the ingredient perspective, and we’re growing at the rate we’re growing because we’re putting [profits] into the people, into the products and into the rewards plan,” Gravette says.

June 29, 2014

Industry with Heart

Natura: Building a Better World, One Mind at a Time

by Beth Douglass Silcox

Photo above: Natura Institute’s GENTE program connects students to technology and individualized learning.


Natura

Company Profile

Founded: 1969
Headquarters: São Paulo, Brazil
Executive: Alessandro G. Carlucci
Products: Cosmetics and personal care


Natura Impacts Brazilian Education and Latin American Life

Inclusive and equitable education for all, that’s what makes a better world. Nearly two decades ago, Natura, the largest manufacturer and direct seller of cosmetics, hygiene and beauty products in Brazil, mobilized its salesforce and committed to positively impacting public education in Latin America. Its mission was to build a better world, one mind at a time.

“The investment in education is one of the most cross-cutting to our company,” says Gabriela Callil, Manager of the Natura Movement Project. “We understand education as the driving force to make a sustainable, fairer and better world.”

Brazil’s discussions about public education were once dominated by topics related to teacher unions, student movements and government. Gradually, however, it began to change. “In the last few decades, the public education theme has involved more participants, such as the private sector through institutes and foundations,” says Pedro Villares, President of the Natura Institute.


“We understand education as the driving force to make a sustainable, fairer and better world.”
—Gabriela Callil, Manager, Natura Movement Project


Motivated Visionaries

With social entrepreneurship a basic tenet of its corporate culture, Natura welcomed the broadening conversation about Brazil’s public education. As a company, it believes social entrepreneurship is galvanized by motivated visionaries who turn adversity into new opportunities. So Natura put social entrepreneurism to work, looking at the issues confounding Brazil’s public education system and acting in the most impactful way it could.

Natura harnessed its brand—one of the most recognized, valued, reputable and sustainable in Brazil—and empowered a “restless network of resolute men and women doers, concerned with loving and caring for those around them.”

In 1995, Natura consultants began raising money to fund educational projects within Brazil’s public schools through the sale of Crer Para Ver (Believing Is Seeing) products. Each purchase of these non-cosmetic products allowed a child to explore different cultures and better understand the world around him or her.

Last year, more than 800,000 of Natura’s 1.6 million consultants participated in Crer Para Ver. Net revenue from product sales reached a record 17 million Brazilian real (US$7.5 million), with all profits going to public education projects.


Students use technology through one of Natura’s 
sponsored programs to build a remote-controlled car. Students use technology through one of Natura’s sponsored programs to build a remote-controlled car. Maria C. won Acolher support for a community street market.Maria C. won Acolher support for a community street market.

Evolving Commitment

Natura’s contribution and expanding impact to Brazil’s public education system has evolved alongside that of the private sector. In 2010, the then 41-year-old company formalized its philanthropic structure and formed the Natura Institute to autonomously manage its charitable efforts. Today, at the institute’s São Paulo headquarters, 30 dedicated professionals manage the company’s charitable initiatives.

Gabriela CallilGabriela Callil
Pedro VillaresPedro Villares

“We have worked in partnership with other institutes and foundations, companies, government authorities and even schools—people who have come together and believe in the value of education and who know that only collaborative work can lead to lasting and effective change,” Villares says.

To encourage lifelong learning, support excellence in public education management and foster educational technology innovation—that is the Natura Institute’s mission as a member of a cooperative Education Support Network of several partners and agents in the education field. The network brings together the best of the public and private sectors to develop and support educational projects with the potential for replication so they can guide public policy and, at times, become public policy.

For instance, the Trilhas de Leitura (Reading Trail) Project was created in 2009 as a social technology to improve literacy in the reading and writing process for younger elementary students. The project garnered attention in 2011, because teachers began seeing positive results after using the network-developed project materials for download and play in the classroom as well as for their own training, reference, organization and collaboration efforts. The Brazilian Ministry of Education called for Trilhas implementation as public policy in 2012, when the project reached 3 million students. Last year 93 percent of the 1,976 cities invited to participate enrolled. More than 700 teachers chronicled their successes with Trilhas in a publication called Municipio Leitor e Rede que Ensina in 2013. This year’s goal is to expand access to more schools and grant service in greater numbers to those with diverse backgrounds.

Another current Natura initiative is Schools That Innovate, which implements digital platforms to house and manage school activities as well as guide the routines of teachers and students. Other projects include Conviva Educacqo, which helps municipal education directors manage administration offices from a virtual environment; and GENTE, a pilot program that connects students directly to technology for individualized learning. Alice Andrés Ribeiro, GENTE Project Manager, says, “The school body and parents reported student progress in socio-emotional terms, particularly regarding autonomy, collaboration and solidarity.” According to Ribeiro, students have enjoyed being mixed in teams rather than in separate classes.

Of the company’s 17 million Brazilian real raised through the sale of the Crer Para Ver line, Natura invested 11.2 million Brazilian real (US$5.0 million) to fund educational projects in over 4,000 towns and 73,000 schools, benefiting 143 million teachers, coordinators and principals, and impacting the lives of millions of Brazilian and Latin American children. The remaining funds went toward administrative costs at the institute as well as investments in projects for the coming year.

The numbers show an astounding impact from 19 collaborative educational efforts, current and past, like the Chapada Project, a late ’90s training program for public elementary school teachers and the EJA Campaign-Education for Youngsters and Adults, which saw 162,000 people return to the classroom in four years.

Empowering One Another

The Acolher Program recognized librarian Jeferson G. for his social welfare activities. The Acolher Program recognized librarian Jeferson G. for his social welfare activities.

With the help of projects like The Learning Community, which instills the concept of co-responsibility in education and focuses on family and community involvement in Rio de Janeiro’s school activities, the Natura Institute and its partners are transforming social and educational attitudes. And Natura’s 1.6 million consultants are great ambassadors to the effort. “Our consultants have different roles in society, such as fathers, mothers, teachers, students or school employees,” Villares says. “These people are very close to the schools, and their involvement with education can generate a positive effect in the improvement of school quality.”

Callil adds, “We consider our consultants society-changing agents in the communities where they live.” Not only do their efforts through Crer Para Ver fund high-impact educational projects across Latin America and contribute to Natura Institute’s operational and management budget, but they also provide the kind of local change that only a dedicated network of social entrepreneurs can instigate at a grassroots level, she says. It matters little whether these initiatives are educational in scope or not. Where there is a need, Natura’s consultants step up.

“We always knew many of them were already committed with projects in search of improving their communities. However, we did not know who they were, where they were located and what they did, or what stories they had to tell,” Callil says.

Because social entrepreneurism and philanthropy hold such importance in Natura’s corporate culture, it was only natural for the company to create a program to identify, share and reward consultants engaged in social welfare activities. Three years ago, Acolher—which in Portuguese means “welcoming”—was launched to do just that. Since then it has become part of the larger company-wide initiative called Movimento Natura, which invites consultants to tell their philanthropic stories online (www.movimentonatura.com.br). Consultants record lessons learned and challenges met, and open new discussions about social commitment and philanthropy.

“All actions toward the common good are important and valuable, independent of size,” Callil says. “As we received the consultants’ initiatives, we realized they were infinitely more inspiring, particularly because they had a common context as a starting point and were part of the reality of most consultants.”

Since the Acolher Program launched, Natura has considered some 3,000 consultant-recommended philanthropic initiatives. Of those applicants, 36 projects have been recognized with financial and technical support, ranging from recycling and refuse collection and disposable diaper manufacturing to programs for the socialization of the disabled and sheltering of low-income minors.

Acolher prizes the abilities of each consultant, recognizing his or her actions and helping to find the means to achieve objectives by offering personal and project development coaching sessions for 12 months as well as initiative promotion through weekly TV broadcast features on “Aqui Tem Natura.”


Elementary children improve their reading and writing skills through the Trilhas de Leitura (Reading Trail) Project.Elementary children improve their reading and writing skills through the Trilhas de Leitura (Reading Trail) Project. Brazilian students participate in the educational program 
Comunidade de Aprendizagem (The Learning Community).Brazilian students participate in the educational program Comunidade de Aprendizagem (The Learning Community).

Relevance and Reward

For Natura, the scope of the Acolher Program goes beyond quantitative data. The company measures its success through the lives changed by consultants who are incentivized to invest in a network aimed at social change.

In the city of Varzea Grande, in the state of Mato Grosso, Natura consultant Maria C. won support for a family street market initiative called Feira da Familia. As president of the local Street Market Association, Maria led the transformation of a garbage dump into an area that now serves as a meeting point for the whole community. Due to her efforts, 41 families now generate income at that marketplace—and Maria has found the motivation to continue her studies.

Jeferson G., a librarian from Pocos de Caldas, Minas Gerais, fosters a literary culture in his town through children’s storytelling circles, theater performances and a traveling library bus. Since being recognized by Natura with the Acolher distinction, Jeferson has dedicated himself to selling Crer Para Ver products. He says, “I had no idea my work was this relevant, so Natura’s recognition showed that what I did was, indeed, important.”

“On the one hand, we have benefits for the individual, where the consultant is directly affected, has his or her self-esteem increased and is recognized for the work done,” Callil says. “On the other hand, we have collective benefits, since the consultants’ initiatives are enhanced through their improved actions and, consequently, improved conditions for the world.”

The wealth of material presented through Acolher consultant initiatives expanded Natura’s horizons for new types of collaborative efforts, as well as the way consultants function as a network and the opportunities to include other audiences.

Looking ahead, Natura plans to take Acolher beyond the prize stage and create new technical and financial support mechanisms, such as sponsorships of sub-brands, an additional incentive in crowdfunding, digital training programs and support from other companies. “We also have the ambition of building indicators that help us measure and expand our positive impact,” Callil says. Doing so, Natura believes it will enable the company to maximize results and promote better lives.

June 29, 2014

U.S. News

Direct Selling Association’s 2014 Annual Meeting Welcomes over 1,000 Attendees

Photo Above: CEO Panel discusses unity within DSA.


Exclusive Coverage | Shaklee’s Marjorie Fine Inducted into DSA Hall of Fame | DSEF Circle of Honor Welcomes Elizabeth Owen | 2014 Direct Selling Association ETHOS Award Winners | Roundtable with Direct Selling’s Female CEOs


The Direct Selling Association held its 2014 Annual Meeting this past June 1–3. More than 1,000 executives from direct selling and vendor partner companies gathered in Orlando to celebrate achievements and to discuss the challenges and opportunities that lie ahead for the industry.

Underscoring the meeting’s theme of ONE, the first two general sessions on Monday delivered a clear message about the importance of the industry presenting a united front and sharing the same message for those outside the industry: that direct selling offers a better life for 16 million Americans in addition to providing economic independence, a sense of fulfillment and a quality of life others cannot achieve through traditional workplace environments.

In the morning session, keynote speaker and acclaimed author of Good to Great and Great by Choice, Jim Collins, shared his extensive research on what produces great, enduring companies. “Whether we fail or thrive depends more on what we do to ourselves than what the world ‘out there’ does to us,” he told the crowd.

That sentiment was echoed in the afternoon session by the seven direct selling CEOs who took the stage to discuss unity across the entire industry. The panel, led by Nu Skin President and CEO Truman Hunt, included Natura CEO Alessandro Carlucci, Herbalife Chairman and CEO Michael O. Johnson, The Pampered Chef Founder, Interim CEO and Chairman Doris Christopher, Amway President Doug DeVos and Thirty-One Gifts Founder and CEO Cindy Monroe.

The group encouraged industry action to ensure companies can continue to thrive despite outside forces, such as the calculated attacks by short sellers and the regulatory challenges around the world, and affirmed the need to unite in securing vital political influence.

“This is a moment we should be thinking about unification more than ever before,” said Johnson, whose company has spent the past 18 months weathering attacks by Herbalife short seller Bill Ackman—a campaign Johnson described as “selfish, self-righteous and egregious in ways you don’t even know.”

New Officers, Directors for DSA Board

During the DSA’s 2014 Annual Meeting, the DSA Board of Directors nominated and approved Truman Hunt, CEO of Nu Skin Enterprises, as Chairman. In addition, the following executives will also serve for the 2015 term:

  • Vice Chairman: David Holl (Mary Kay)
  • Vice Chairman: Lori Bush (Rodan + Fields)
  • Treasurer: Matt Blok (Amway)
  • Immediate Past Chairman: Orville Thompson (Scentsy)
  • Past Chairman: Brett Chapman (Herbalife)


Eight new Directors will help form the class of 2017. They will serve three-year terms:

  • Doris Christopher (The Pampered Chef)
  • Jonathan Gelfand (Team Beachbody)
  • Erik Johnson (Hy Cite)
  • Allison Levy (AdvoCare)
  • Raymond Mily Jr. (The Kirby Company)
  • Doug Robinson (LifeVantage)
  • Frank VanderSloot (Melaleuca)
  • John Wyckoff (Dove Chocolate Discoveries)

The attacks aimed at Herbalife affect the entire industry, said Monroe. Party-plan companies like Thirty-One Gifts have a mutual interest in protecting the independent status of their salespeople, which is why the company has worked to ensure their earnings opportunity extends to all levels of the organization.

“With everything we do at Thirty-One, we try to make sure we’re helping the salesperson make as much money as possible,” she said. “As an industry, we have to show the statistics that our sales reps are making income, and they are making it regardless of whether they have to invest in tools.”

DeVos encouraged executives to actively support initiatives that give direct selling a greater voice in Washington. “We have to have a purpose, a plan and the financial and human resources necessary to stand up and be counted,” he said.

Christopher emphasized participation in the DSA and its initiatives as a key to furthering the conversation in Washington. “As a part of it, we all share reputation, responsibility and a love of the opportunity we offer to our independent contractors,” she said. “The most effective way to fight challenges is to do it together.”

During the three-day event DSA’s Board of Directors held its quarterly meeting. Among a number of items of business for the session, the group elected new executives and directors to the Board and unanimously approved a number of changes to the Code of Ethics.

“The most significant changes are to the explanatory provisions,” DSA President Joe Mariano noted. “The changes relate to how the Code defines a pyramid scheme, the buyback policy and inventory loading, and are the result of some self-examination of the industry due to the attacks we’ve been facing.”

The Code of Ethics is regularly evaluated to ensure it meets the demands of the current marketplace environment. Changes are considered continuously as challenges arise, and as the Code of Ethics Administrator indicates, they are necessary to continue the sales channel’s exemplary history of self-regulation.

The Board Directors were also introduced to the new executive director of the Direct Selling Education Foundation, Gary Huggins.

“I’m thrilled to welcome Gary to the Foundation,” said Amway Chief Sales Officer and DSEF Chairman John Parker. “Gary comes to us with a great deal of experience in advocacy roles for nonprofits in the education arena in particular. He’s here with us throughout the meeting, and I’d love for him to have the opportunity to talk to and learn from all the great leaders in this room about the industry.”

The Board was also briefed about ongoing and upcoming government relations activities in response to current marketplace challenges. Incoming Government Relations Committee Chairman Michael Lunceford of Mary Kay briefed the body about his expectation of industry activity at the federal level to respond to current events, either involving passing legislation friendly to direct selling or killing legislation that is harmful to it.

DSA Immediate Past Chairman Orville Thompson passes the gavel to incoming Chairman Truman Hunt.DSA Immediate Past Chairman Orville Thompson passes the gavel to incoming Chairman Truman Hunt.

“There are steps that need to be taken right now,” Lunceford advised the Board. “Get to know your Member of Congress—DSA can help you with this… and survey your field and ask them who they know. You’ll be surprised at the contacts they have…. Introducing a piece of legislation and passing it is arduous. It is far harder than trying to kill one. Do these small things to help yourselves.”

“To move the things we’re talking about takes a lot of time, money and effort,” noted DSA Executive Vice President Adolfo Franco. “It takes years… we need the commitment now for the long haul.”

Since 1910, DSA has worked to promote the impact of direct sellers and ensure a fair and open marketplace. The Annual Meeting provides an opportunity for industry executives to unite in the interest of their shared vision, message and future.

This year’s event featured an adjusted schedule from the previous years, including enhanced time in the exhibit hall for learning opportunities on Sunday afternoon, before the Grand Opening Reception. Express Learning Sessions featured more than 30 mini-workshops by vendor partners and a 90-minute interactive Perfecting Partnerships Roundtable helped executives and vendor partners forge deeper, strategic working relationships.

From innovative uses of technology to marketing tactics to international expansion fundamentals, the more than 40 speakers at this year’s DSA Annual Meeting offered a closer look at today’s crucial business-building topics.

The 2015 Annual Meeting will be held in San Antonio, Texas, from Sunday, May 31 through Tuesday, June 2.


Exclusive Coverage | Shaklee’s Marjorie Fine Inducted into DSA Hall of Fame | DSEF Circle of Honor Welcomes Elizabeth Owen | 2014 Direct Selling Association ETHOS Award Winners | Roundtable with Direct Selling’s Female CEOs


June 29, 2014

Cover Story

The $100 Million Growth Club

by Teresa Day

DSN Cover, July 2014

Several years ago, the staff at Direct Selling News began the research necessary to create an industry list that demonstrated the impact and contribution of direct selling companies worldwide. The DSN Global 100 list has become a respected ranking, and each year the research team increases its ability to gather the necessary and relevant information. This annual list creates an opportunity to understand the significance of our industry as a whole, and showcase companies above a certain revenue threshold, which marks them as significant contributors to local and global economies.

We have been very pleased to hear that “making the list” has become a goal for many company executives as they work through their strategic planning for growth. Though the Global 100 list only presents 100 companies, we recognize that there are hundreds of smaller companies all working within our industry that offer excellent products and services, and serve both the needs and dreams of customers and representatives alike. We celebrate and salute them all!

While at work on the 2014 list (which is based on 2013 revenues), the DSN research team recognized a remarkable pattern emerging among a significant number of companies—18 companies, to be exact. These 18 companies achieved such a remarkable milestone during their course of business in 2013 that we knew we had to write about it and share this achievement with you, our readers.

In fact, the achievement appears to be so rare in the general business world that there is actually little written about it anywhere, furthering our decision to bring the information forward. The achievement is this: Eighteen companies on the Global 100 list grew by over $100 million in one year.

While we were, at first, definitely impressed as we saw this pattern and thought about these 18 companies, it was in doing further research on the growth of companies in general that turned our admiration into downright astonishment, and ultimately, extreme pride in their achievements.


Very few companies in any industry ever achieve a growth level of $100 million or more, much less in a single year!


Here’s why: Very few companies in any industry ever achieve a growth level of $100 million or more, much less in a single year! With that knowledge we, of course, felt compelled to call out and celebrate this achievement, and further, discover what we could about how and why these companies could reach such a milestone.

However, before we move onto the commonalities of these companies, let’s point out a few pertinent differences. These companies range in age from 2 years old to over 50 years old in operating age. These companies sell vastly differing products, from jewelry to health and wellness and from energy and essential services to cosmetics and skin care. These companies operate in one market to dozens of markets. They are headquartered all over the U.S. and even the globe—Noevir in Japan, Vorwerk in Germany and Telecom Plus in the U.K. Maybe the most apparent and extreme difference in these companies is their size—companies that grew over $100 million ranged from those producing $24 million (Origami Owl) and $37 million (Plexus) in 2012 to five companies already in the billion-dollar range.

We point out all of these differences to emphasize that remarkable growth is possible, regardless of product offered, number of markets served and even company size. In other words, remarkable growth is not only the purview of an already giant, established company.

As we considered this growth number—the $100 million threshold—we found some very interesting commentary on the validity of this number measuring something important. Paul Kedrosky, Ph.D., a senior fellow at the Ewing Marion Kauffman Foundation, contributing editor with Bloomberg Television and founding partner at SK Ventures—an early-stage venture capitalist firm—has written about and studied this $100 million number in conjunction with business growth, and his thoughts on the subject are quite revealing.

In a report issued by the Ewing Marion Kauffman Foundation in May 2013, titled “The Constant: Companies that Matter,” Kedrosky writes, “There are few constants in entrepreneurship—perhaps none. That is why when something appears to be even semi-stable across meaningful periods, it is usually worth further investigation.” The “something” he is discussing in his paper is the question of how to measure a company “that matters.” In Kedrosky’s estimation, a company that can promptly go from founding to $100 million in revenue qualifies as a company that matters. Why? Because these companies impact the economy. Because these companies create jobs and wealth for stakeholders. But primarily because so few actually do it.

According to Kedrosky’s research, which is presented in this Kauffman Foundation short paper, there are roughly half a million (552,000) new “employer firms”—those that employ others as workers—opening in the U.S. each year, every year. Since 1980, the number of those firms that reach $100 million in revenue at some point has been pretty stable, and it’s a very small number—only between 125 and 250 firms out of the entire half a million.

Let’s break that number down into a percentage. If half a million employer firms are created every year, and at the high end, only 250 of them ever go on to achieve $100 million, that’s less than one-half of 1 percent. Supporting data from the U.S. Census Bureau shows that even during a six-year window, only 175 companies out of the half a million new ones every year ever achieve the $100 million mark. No wonder Kedrosky uses this achievement to qualify a company as one “that matters.”

This data says that ever reaching $100 million in annual revenue marks you as a company that matters; a company that has significant staying power; a company that puts you in the top quartile of companies within your industry, no matter what it is. But we feel that this stunning statistic makes our $100 Million Growth Club even more of an outstanding achievement for these companies, because not only have they achieved and exceeded a mark that less than one-half of 1 percent ever reach, but they have duplicated that effort in a one-year time frame! We again salute and celebrate these 18 companies for a truly remarkable achievement.

Of course, the natural next question is how on earth did they do it? So we took a hard look at this group of remarkable companies, and though they are incredibly diverse, we found that they did, in fact, have some best practices substantially in common. 

  • They have tremendous focus on their brand and product.
  • They utilize tools for their salesforce.
  • They invest in customer acquisition.
  • They emphasize personal development in their culture.
  • They focus on developing strong leaders.

Focus on Product/Brand

Staying focused has the natural result of bringing things into alignment, and since you can’t be focused on multiple things at once (focus just doesn’t work that way), staying focused automatically generates simplicity.

Peter Drucker, hailed as the father of modern management, very precisely puts it this way: “There is nothing so useless as doing efficiently that which should not be done at all.” In addition to identifying what should be done, focus helps identify those things which should not be done.

Staying focused requires discipline and attention. It can be difficult; it can feel ”boring”; it can feel like putting a straitjacket on creativity; it can feel too simple; it can feel that opportunities are passing you by as you focus on one main thing; however, those companies that have been able to do this have reached this remarkable achievement. Their leaders would tell you that the benefits of the discipline far outweigh any opportunity that would have distracted you.

It Works! is one of the 18 companies in our $100 Million Growth Club, and CEO Mark Pentecost is one executive who set his sights on “making the Global 100 list” a couple of years ago. Prior to this decision, it’s important to note that It Works! had been a successful company for nine years, and had grown at a respectable rate each year to $45 million in 2011. Placed against the data presented in this article, It Works! had already achieved success. But Pentecost wanted more, and he knew that by creating a simple message and staying focused upon it, his team could achieve it.

Pentecost says, “I’ll never forget that day near the end of 2011 when I met with members of our team—both corporate and in the field—and we made one decision that will forever be a milestone in our company history. We set a goal to double the company in 2012. That was a big goal. That meant we would create over $100 million in sales in the next 12 months.”

With singular focus, the small, respectable company truly exploded into growth. In 2013, the company debuted on the Global 100 at No. 56 with 2012 revenue of $200 million. This year, it moved up to No. 26 with 2013 revenue of $456 million.

“Anyone can complicate things,” Pentecost says. “It takes genius to simplify it. We had one message from the top down, and we worked hard to stay focused. We said no to anything else that came up.”

Researcher and celebrated business author Jim Collins writes about the “Stop Doing” principle, something he learned from a grad school professor at Stanford and has applied ever since to his own thinking. He writes, “… the ‘stop doing’ list became an enduring cornerstone of my annual New Year’s resolutions—a mechanism for disciplined thought about how to allocate the most precious of all resources: time.” Collins also incorporated the Stop Doing List into his criteria of what makes a company great in his celebrated book Good to Great, giving examples of great leaders who were able to make big decisions about what to stop doing in order to achieve the greatness they were capable of.


“Anyone can complicate things. It takes genius to simplify it. We had one message from the top down, and we worked hard to stay focused. We said no to anything else that came up.”
—Mark Pentecost, CEO, It Works!


Nu Skin President and CEO Truman Hunt and his team utilized the “Stop Doing” principle when they scaled back their products and brands to one anti-aging line, AgeLoc. The focus has clearly paid off. It was however, a very big decision. Nu Skin had expanded its operations to include three distinct opportunities: Nu Skin products, Pharmanex and Big Planet. Different management teams ran each division, and they competed with one another. Hunt decided to focus the opportunity on one path.

Hunt says, “We took advantage of that moment in time to evaluate all business issues. There were no sacred cows, and it resulted in an overhaul of our organization and strategy. The process was not without pain, but it was also clearly a key point in the growth of our company.”

Two companies among the 18 are exceptional primarily because of their extreme focus on offering one product in one market. Interestingly, the two companies couldn’t be more different—one is skin care, and one is energy. Nerium achieved over $200 million in revenue in its second full year with only one product in one country. Ambit has been the fastest company to achieve the billion-dollar threshold—within seven years—in only 14 states in the U.S. with one product. Focus clearly has played a central role at both of these companies.

Tools for Salesforce Support

Applying disciplined focus to your product line and brand will only get you so far if you don’t also carry that focus into your field support and training. No matter what product or service is being sold, every sales field needs simplicity and clarity in order to achieve the kind of growth our 18 companies achieved. It’s important to remember that those entrepreneurial souls who are your brand ambassadors are also very creative. In the absence of simple, clear and duplicable tools and systems, creative salespeople tend to create their own processes and selling methods. While this may produce enormous success for one or two individuals, it does not translate across the field to everyone. In order to achieve uniform success across the entire salesforce—which is necessary to generate $100 million achievements—the field needs simple and duplicable systems.

In just two remarkable years, Nerium has developed an expert ability to provide its salesforce with simple and duplicable tools. By so doing, they have maintained incredible consistency for their independent representatives in the form of support tools, training materials and back-end support, enabling even brand-new IBOs with no experience the ability to set up shop quickly and dive right into their businesses.

Each new representative receives the same starter kit, which includes a DVD that trains the individual on company business practices, along with other standardized materials to get them and keep them on the right track. From their first day in business, each representative has access to online support tools that are personalized for them. Every representative has the same experience, and every customer has the same experience, enabling the company to present a uniform, and clearly successful, approach to the business.

With two decades’ worth of experience in creating back office systems for other direct selling companies, Randy Ray and Wendy Lewis were well-versed in tech support tools when they decided to launch Jeunesse, the anti-aging skincare company, which grew from $126 million to $267 million in 2013 (growth of $131 million) and was seated at No. 46 on the Global 100 list. Their prospecting system easily allows a distributor to share a video on any social media platform, and the viewer can immediately request a free sample (paying only shipping). The company’s extensive tools support allows a distributor to enter the business and share products from almost anywhere in the world.

Most, if not all of the 18 companies on our list use consistent and simple tools to support and train their sales field such as DVDs, magazines and brochures, mobile apps and websites. Herbalife’s President Dez Walsh told DSN that he believes the continued use of systemized training methods to support distributors is a primary reason for his company’s sustained growth.

Investment in Customer Acquisition

Though in our industry many distributors are also customers, a business can’t grow to the levels we are discussing without creating a strong customer base.

In looking at our 18 growth companies, we found they had various means of reaching new customers, including investing in technology and reaching out to Gen Y, expanding physically into new markets and territories, and reaching out to new customers through sports sponsorship programs.

In all customer acquisition strategies, it is imperative that the company follow the customer. A company can no longer insist that a customer follow them; the balance of power has shifted, and it is now necessary for the company to meet the customer where they want to be met, whether it’s on Facebook or literally in a new market.

For example, Vemma has developed a customer acquisition strategy targeted at the very tech-savvy 80 million Generation Y’ers, the oldest of whom are now in their mid-30s. According to a study produced by Oracle on Gen Y’ers’ banking habits, their annual spending next year is projected to be $2.45 trillion. They don’t read newspapers, they don’t pay attention to TV advertising and they pretty much disregard anything that isn’t digitally produced. Vemma has captured their hearts and minds by tailoring the message and the messenger to be exactly what they want. Once these young people got their own revolution going at Vemma (YPR—Young People Revolution), they propelled an already somewhat successful company onto the Global 100 list at No. 81 with $117 million in revenue; and then skyrocketed the company to No. 53 on this year’s list with over $100 million in growth.

When Herbalife came to understand in some of their markets that people don’t shop the way Americans do—by stocking a pantry and large refrigerator with days’ and days’ worth of food—they made an effort to understand what was happening, and why. As a result of understanding their customers’ habits, they created a daily consumption model that mirrored the way people actually behaved in those markets.

The daily consumption and nutrition club model has also revealed additional benefits for Herbalife that have aided in their sustained growth. A social aspect has developed around the clubs, producing more and more frequent customers; and customers go to the distributor—rather than the distributor going out to them—which creates great efficiencies for the distributor.

AdvoCare puts its brand in front of millions of fans of NASCAR racing, professional soccer, and both college and pro football through its sports sponsorship programs. AdvoCare is the first-ever jersey sponsor for the Major League Soccer team FC Dallas—prominently displaying the company logo at every match, including those broadcast on national television. Other sponsorships include the No. 6 AdvoCare Ford Mustang in the NASCAR Nationwide Series in 2014, driven by the youngest-ever winner of the Daytona 500, Trevor Bayne. Drew Brees, quarterback of the New Orleans Saints and MVP of the Pro Football World Championship Game, is AdvoCare’s official National Spokesperson and helps lead the AdvoCare marketing efforts.

Expansion of the customer base is a foundational practice of each of the 18 companies on our list, regardless of their product, markets or even methods.

Emphasis on Personal Development

Today, personal development is an integral component of most direct selling companies, and its roots can be traced way back to the inspirational and motivational leanings of David McConnell, Mary Kay Ash, Mary Crowley and others who forged our industry.

Including a personal development program for representatives actually provides the company with great benefits. Mary Crowley, Founder of Home Interiors & Gifts in 1957, said, “If you grow your people, you will grow your business.” Many executives can testify to the truth of this statement. The 18 companies on our extraordinary growth list all pay attention to the personal development and growth of their salesforce.

Giving your salesforce access to personal development materials can take many forms, including utilizing tools, speakers, systems and opportunities to create a culture based around personal growth and awareness. It’s a cultural mindset and requires investment—just as product development and marketing efforts require attention and investment. Access to personal development material should be a critical part of the new representative’s first experiences. This can be accomplished by including CDs, DVDs, reading material such as magazines, or access to subscription services for personal growth.

Personal development and culture development can also be facilitated by your event strategy. Great events on consistent rhythms create great cultures. Great companies have powerful cultures. In fact, it’s that unique culture of your company that attracts the people you want in your organization and keeps them there.

ACN’s large-scale quarterly events represent an essential component to the company’s success system, which is why event after event, year after year, IBOs turn out in droves for its events. Almost 20,000 of them from around the world flocked to ACN’s hometown of Charlotte, North Carolina, for the company’s International Training Event last September, and they continue to host sold-out events quarter after quarter.

“It’s not a coincidence that the top people in ACN never miss an event,” observes Greg Provenzano, President and Co-Founder. “We hold them quarterly and they truly provide the motivation and fuel our IBOs need to build their businesses. For a brand-new person, there is nothing quite as powerful as walking into an arena of 20,000 excited, supportive IBOs. It truly is the best way to be exposed to our opportunity and to see the big picture of ACN firsthand.”

Vemma and It Works! recently went from a one-event-a-year system to four events a year. Many of the other growth companies are having at least two events a year on a national basis, plus regional and leadership events. These companies are creating consistent local, regional and national rhythms with their events as they try to build their culture and build their companies. By staying in front of your people, you can keep them engaged, keep them motivated, keep them fired up, keep them going when they don’t feel like it. We all know great events and great rhythms build great cultures. They also create an emotional attachment between your salesforce and the company—and the salesforce among themselves.

Focus on Developing Strong Leaders

Great cultures also create great leaders. The 18 companies in the $100 Million Growth Club all adhere to one final best practice: They create positive environments where people, particularly women, have the ability to grow into strong leaders capable of successfully replicating their business opportunities through others.

That positivity derives from the shared belief that anyone has the potential to succeed in direct selling. Two of the Global 100’s top 10 companies—one a network marketing company and the other a party plan company—have proved over the last half-century that focusing on leadership skills strengthens not only the individual but the business itself.

The No. 1 direct seller in the world, Amway, was founded by Rich DeVos and Jay Van Andel with the core belief that people, not products, were the greatest resource. The company, which recorded $11.80 billion in net sales in 2013, embraces “diversity of opportunity” which, according to current Amway President Doug DeVos, “enables stronger global expansion and [helps] manage change and opportunity.”

Amway IBOs are provided with leadership skills training upon joining the company and as they climb through the different levels of the organization: Platinum, Ruby, Sapphire, Emerald, Diamond and Double Diamond. They are also provided with the assurance that leaders in their upline maintain the highest levels of honesty, integrity, responsibility and accountability. “They can count on these values to be placed front and center when it comes to ensuring products are safe, individuals are reliable, compensation is fair, training is effective, and support and guidance are readily available,” Doug DeVos states.

Mary Kay, which broke into the Global 100’s top five this year with $3.60 billion, has since its inception been an organization that has grown exponentially because of its development of female leadership. Of course, such skill training was of the utmost importance to its founder, Mary Kay Ash, who in a 1985 Inc. interview stated, “I feel like I’m doing something far more important than just selling cosmetics. I think we’re building lives.”

Today the company’s beauty consultants can count on leadership training as they progress from consultants to sales directors and national sales directors. “You cannot keep a determined person from success,” Mary Kay once exclaimed. “If you place stumbling blocks in her way, she will take them for steppingstones and will use them to climb to new heights.”

The Clues of Success

The 18 companies that achieved over $100 million in growth in a single year did something so remarkable that very little is written about it. We hope this brief article showcasing these companies and sharing some of their common strategies will inspire many more to focus on a similar achievement for themselves. These companies have not been successful by accident; they have left clues for everyone else to see and follow.

We expect that next year even more companies will achieve the remarkable milestone of growing $100 million or more!


The $100 Million Growth Club

June 29, 2014

Publisher's Note

Letter from John Fleming, July 2014


Those of us who attend the DSA Annual Meeting in June always find something that serves to inspire us to the promise of the future. This is one of the most basic motivations for attending, along with that once-a-year opportunity to interact with those who we know have a common interest in entrepreneurship through the direct selling model. We have already posted highlights on our website, and our article in this issue will provide you with an overview of the meeting.

John FlemingOur most recent DSN insert in The Wall Street Journal (WSJ) was also distributed to subscribers of the WSJ on June 10, one week after the DSA Annual Meeting. Copies of The New Main Street: Where Entrepreneurship Meets Millions of Today’s Consumers were shared with all DSA Annual Meeting attendees, and the reprints are now available for purchase on our website at: https://directsellingnewsproducts.com/special-reprints.

The DSN/WSJ insert represents a concise and contemporary view of direct selling, the exact opposite of what has been published in many major media outlets as the accusations against one company and the industry received attention—much of which was reported in a biased manner that leaned toward the negative. Billion-dollar hedge fund managers do have a voice, but so do we. Through the DSN insert in The Wall Street Journal, we spoke loud and clear! Our collaborative effort included representation from a few companies as well as our friends at DSA. More importantly, we wanted this insert to be quite unlike any other we have done in the past. First, we did not want any company advertisements that would allow the insert to be perceived as a commercial advertisement. (Advice was provided by company CEO and C-level executives.) Secondly, we wanted the content to tell the story about direct selling as it should be told. Thirdly, we wanted this insert to be one of which every company and every direct seller could be proud, as this is the first major piece of information distributed through major media that informs, educates, shares the benefits of the direct selling experience and provides an outlook for the future of the industry and its alignment with trends. Highlights of the recent survey commissioned by Direct Selling News and conducted by Harris Poll are also included for the benefit of all. We know you will find the highlights to be valuable and supportive of the great future that lies ahead.

We are very proud of what we do here at DSN to provide the direct selling industry with support. There is no better example of our pride than the effort that goes into projects such as the DSN/Wall Street Journal insert, and I would be remiss not to mention the team that made this last insert possible. Teresa Day, our Editorial Director played her role as always in extraordinary fashion in leading the development of the insert content while Jennifer Mills and Emily Reagan carried on with the normal production process. Marci Allen did the layout with help from our SUCCESS Partners team. Lauren Lawley Head, our recently hired new General Manager, was incredible! She came to us with a great journalistic background and took on the role of Project Leader for the WSJ insert. The result is the very best insert we have ever published and all in support of you! Lauren takes The Back Page in this issue, but don’t be surprised when you see us flip flop between our pages. She has much to say, and you will love her perspective.

Now back to how and why the use of reprints can support exponential distribution of perhaps the best story told and shared through major media about direct selling thus far in 2014. Whether you define your company with the words direct selling or not, the story supports all. Only a few companies could be quoted in the limited space of 16 pages and six stories; however, the quotes used are representative of an entire industry, not just a company.

What if you order reprints to include in every new distributor/consultant starter kit for the next 90 days? What if every attendee at your next major meeting received a copy of the insert and you had the insert customized with your company story on the back cover? (If desired, we can do that for you.) What if you promote the availability of the inserts through your company communication vehicles, and you do it consistently for 90 days? Simply share this link for ordering, and you never touch any inventory: https://directsellingnewsproducts.com/special-reprints. What if the greater percentage of your distributors/consultants purchased at least 50 copies of the insert? What if your leaders purchased more copies? What if the majority of your representatives provided each of their customers with a copy of the insert in their next delivery of product or you included a copy in all product shipments for a period of 90 days?

I hope I have simply activated your thoughts as to how the messages in the latest DSN/Wall Street Journal insert might serve our industry beyond the 1.2 million WSJ subscribers that would have received a copy on June 10. We can grow the distribution exponentially… we know we can! This is our chance to spread the word! Our thanks and gratitude to those who made it happen!

Until next month… enjoy the issue!


John Fleming
Publisher and Editor in Chief

June 29, 2014

Executive Announcements

Executive Announcements, July 2014


Princess House Founder Charles Collis Passes Away

Charles CollisCharles Collis

Direct selling pioneer and founder of Princess House Charles Collis died on May 6, 2014, at his home in Barrington, Rhode Island. He was 99.

Born March 13, 1915, in Taunton, Massachusetts, Collis attended Huntington School in Boston and graduated from Dartmouth College in Hanover, New Hampshire, in 1937. After co-owning Armor Bronze and Silver Company, the largest manufacturer of copper and brass giftware in the world, he entered direct selling in 1948 as a co-founder of party plan cookware company Copper Craft Guild.

In 1963 Collis established his own company, Princess House Inc., which manufactures and sells handblown glass and giftware. Princess House impacted the lives of tens of thousands of women by offering them a career choice and economic opportunity. He sold Princess House to Colgate Palmolive in 1978.

Collis earned a number of professional awards and honors, including receiving the Free Enterprise Man of the Year award from the National Association of Manufacturers in 1978 and being inducted into the Direct Selling Association Hall of Fame in 1981. He also served on the DSA’s Board of Directors.

Collis supported many charitable causes in education, childhood development, medicine, programs for the disadvantaged and the arts.

In 1978 he donated $5 million to Dartmouth College. The gift was the largest in the history of the then-210-year-old institution. The Collis Center for Student Involvement stands on Dartmouth’s campus today in his honor.

He is survived by his wife, Elfriede A. Collis; his children; and seven grandchildren.

A Mass of Christian Burial was celebrated on May 12, at 12:30 p.m., in St. Luke’s Church, 108 Washington Road, Barrington. In lieu of flowers, memorial donations may be sent to Hasbro Children’s Hospital, P.O. Box H, Providence, RI 02901; or to the Boys & Girls Club of Taunton, 31 Court Street, Taunton, MA 02780.

www.princesshouse.com


Herbalife Ltd.

Carolin Eva Sophie KlussmannCarolin Eva Sophie Klussmann

Herbalife Ltd., a leading global nutrition company, announced that Carolin Eva Sophie Klussmann, Ph.D., is joining its Nutrition Advisory Board (NAB), bringing the number of NAB participants to 27.

For the past decade Dr. Klussmann has served across a range of international medical assignments, including working in hospital emergency and general surgery rooms in Cape Town, South Africa, and leading HIV research and treatment in Rondebosch, South Africa. She has also practiced general medicine, anesthesiology and dermatology in Munich, Germany. While practicing at the Technical University of Munich, department of dermatology, Dr. Klussmann led a team of physicians and nurses in the field of clinical dermatology, allergies, infectious diseases, operative dermatology, children’s skin treatment and cosmetic dermatology.

The Nutrition Advisory Board comprises leading experts from around the world in the fields of nutrition and health who inform, educate and train Herbalife members and customers on the principles of good nutrition, physical activity and leading a healthy lifestyle.

www.herbalife.com


Jeunesse Global

Kanwar S. BhutaniKanwar S. Bhutani

Jeunesse Global has announced the appointment of Kanwar S. Bhutani as President of Asia Pacific. Bhutani, who has more than 30 years of experience in direct selling, brings extensive industry knowledge as well as a deep understanding of salesforce motivation and brand building to his new leadership role. He has consistently established a clear, systematic growth strategy for businesses and has helped transform companies with declining sales into top earners.

Bhutani has led markets in some of the largest direct selling corporations in the world. Most recently he was Vice President for Sales, Asia Pacific for another direct seller before being named President and General Manager of Philippines. There he had been tasked with restoring field fundamentals while implementing a new multi-level compensation system for the salesforce. In previous positions, he served as Managing Director of Indian Operations and President of North America.

Jeunesse Global is a global business that combines breakthrough sciences in a product system that enhances youth by working at the cellular level. The company operates in 92 markets through its network of more than 250,000 independent salespeople.

www.jeunesseglobal.com


Mannatech Inc.

Joel Bikman Joel Bikman

Mannatech Inc., an innovator of naturally sourced supplements based on Real Food Technology® solutions and creator of the M5MSM (Mission 5 MillionSM) social entrepreneurial movement, announced changes to its executive management team. Joel Bikman is joining the company as Chief Marketing Officer. Bob Adam has been named General Manager, U.S. Sales, and Terrie Bayless has been named Assistant General Manager, U.S. Sales.

Joel Bikman joins Mannatech as Chief Marketing Officer, with many years of experience in marketing within both the direct sales and nutritional supplements industry. As Chief Marketing Officer, Bikman will oversee the company’s efforts in product marketing, creative services, communication and overall strategic marketing and research. He most recently served as Senior Vice President of Sales and Marketing for another direct seller.

Bob AdamBob Adam

Bob Adam will now serve Mannatech as General Manager, U.S. Sales. In this new role, he will oversee all sales and Associate advocacy efforts specifically for the U.S. market. Adam joined the corporate team in 2004 and served as an Independent Associate leader from 1997 until that time. Most recently, he created and led the Flight Team program, which focuses on training and coaching of both new and veteran leaders within the company.

Terrie BaylessTerrie Bayless

Terrie Bayless will now serve as Assistant General Manager, U.S. Sales. Bayless is celebrating her 20th year with Mannatech. During that time, she has served in several roles within the Sales and Marketing organization.

“I’m honored to add Joel Bikman to our team. His expertise in both marketing and direct sales provides a true advantage for Mannatech for the future,” said Dr. Robert A. Sinnott, CEO and Chief Science Officer. “I’m also pleased to have Bob Adam and Terrie Bayless step into new roles, where they can exercise not only their professional knowledge and leadership, but also their heart for and experience with Mannatech and its Associates in more influential ways.”

www.mannatech.com


Allyson Sellers Allyson Sellers
Peggy DavidsonPeggy Davidson
Laura BeitlerLaura Beitler

Mary Kay Inc.

Mary Kay Inc., a top beauty brand and direct seller in more than 35 markets around the world, announced the appointments of three vice presidents—Allyson Sellers, Peggy Davidson and Laura Beitler.

Selected by the global executive team as Mary Kay’s Leader of the Year in 2013, Allyson Sellers takes on a new role at the company as Vice President of Sales Force Communications and Creative Services, where she will drive communication and brand-building strategies to support business growth and brand strength in the U.S. market. Sellers began her career at Mary Kay in 1993. During her 21-year tenure, Sellers has held various positions in sales, human resources and marketing. Most recently she served as Director of U.S. Sales Force Communications.

With more than 23 years of experience with Mary Kay, Peggy Davidson assumes the role of Vice President of U.S. Sales. Davidson has held a broad range of positions since joining the company in 1990. Most recently she was Vice President of Sales Force Communication and Education. She also continues to serve as a board member for The Mary Kay Foundation. In her new role, Davidson will focus on helping Mary Kay independent salesforce members build their businesses.

As Vice President of Recognition and Events, Laura Beitler now leads the team responsible for developing and implementing Mary Kay’s independent salesforce recognition programs and special events in the U.S. Beitler joined Mary Kay Inc. in 2000 as a staff attorney and eventually transitioned to Vice President and Associate General Counsel. Mary Kay’s global executive team named her Leader of the Year in 2011.

“Peggy, Allyson and Laura bring a wealth of knowledge, expertise and leadership qualities to our organization and will be invaluable as we build on our efforts to provide irresistible beauty products while enriching women’s lives through our 3 million Mary Kay Independent Beauty Consultants worldwide,” said Darrell Overcash, President of Mary Kay U.S.

www.marykay.com


JAFRA Cosmetics International Inc.

Paulo MoledoPaulo Moledo

JAFRA Cosmetics International Inc. announced Paulo Moledo as President, JAFRA USA. In this new role, Moledo will lead the overall management and direction of JAFRA’s U.S. market and will also join JAFRA’s Global Management Board and Executive Committee, reporting directly to Mauro Schnaidman, President and CEO. As a seasoned global executive, Moledo’s vast experience has spanned various areas and industries, including extensive experience in direct selling.

“With his exceptional track record for helping well-known brands grow, I am confident that Paulo will play a crucial role in leading the overall growth strategy for the company, which will allow JAFRA to continue to transform the lives of women in the U.S. and across the globe,” said Mauro Schnaidman, President and CEO, JAFRA Cosmetics International.

Prior to joining JAFRA, Moledo held the position of General Manager at another direct seller’s Mexico and Argentina business, where he had direct responsibility for sales, marketing, supply chain, finance and communications. His résumé boasts achievements in high growth attainment, operating margin expansion and significant working capital improvements. In addition to his work in direct selling, Moledo held positions at other notable companies such as Ford Motor Co., Revlon and AOL.

www.jafra.com


Organo Gold

Eddy GerEddy Ger

Organo Gold, a global gourmet coffee company that caters to consumers’ active lifestyles, announced that Eddy Ger has joined Organo Gold as the General Manager, Peru. Ger will oversee all facets of OG’s Peru operations.

“Eddy is an important addition to the Organo Gold team,” said Bernardo Chua, Founder and CEO of Organo Gold. “His business passion and experience will be critical as we continue to build our global presence.”

Ger brings to Organo Gold over 20 years of experience in sales management leadership for global consumer packaged goods companies, having worked for leading brands such as Pepsico, Procter & Gamble, and Eastman Kodak, among others. Most recently he served as Managing Director of another direct seller, where he led the team that tripled sales growth in Peru.

Founded in 2008 with headquarters in Vancouver, British Columbia, Organo Gold is a global gourmet coffee company that sells Certified Organic Ganoderma lucidum through a variety of coffees, teas, nutraceuticals and personal-care products.

www.organogold.com


LegalShield

LegalShield, one of the nation’s leading providers of legal safeguards for individuals, families and small businesses, announced that Keith Sherman has joined the company as Vice President of Consumer Marketing, and Charles Rosenberry has joined as Vice President, Affinity. Sherman will be responsible for overseeing LegalShield’s brand, including public relations, product and advertising efforts, while Rosenberry will be tasked with growing and expanding business-to-business partnerships for LegalShield.

“We are excited to welcome Keith Sherman and Chuck Rosenberry to the LegalShield family and leverage their experience to maintain our position as a leading provider of legal services throughout the country,” said Rip Mason, CEO of LegalShield.

Sherman possesses a strong background in brand development and marketing, having worked on behalf of leading brands in the consumer, retail and financial service sectors. Prior to joining LegalShield, he served as the Executive Vice President of Marketing and Sales for Freeman + Leonard, where he led efforts for clients who received top honors in terms of brand recognition and sales in their respective categories.

With more than 20 years of experience in the financial services sector, Rosenberry has a background rooted in the development and marketing of business-to-business partnerships. Prior to joining LegalShield, he served as Senior Vice President of Business Development for Allstate Affinity Solutions, where he was responsible for acquiring more than 20 business-to-business partnerships that focused on both customer acquisitions and loyalty. 

www.legalshield.com


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

June 27, 2014

U.S. News

Endurance Athlete Takes on Great Wall in ‘Mission 5 Million’ Run

Mannatech started its Mission 5 Million (M5M) movement last year to fight global child malnutrition through “One Simple Act”—purchasing nutrition products. The company’s mission has inspired one long-time Mannatech user to contribute his own simple but remarkable act. Ultra-endurance athlete Jason Lester is preparing for a 100-day solo run along the Great Wall of China to raise awareness of childhood malnutrition worldwide.

The World Health Organization estimates that 5 million children under age 5 die of malnutrition every year. Mannatech has used its Real Food Technology ® to create a PhytoBlend powder that provides children with their daily nutritional needs. Through the company’s social entrepreneurship model, every purchase of a Mannatech nutrition product triggers a donation of PhytoBlend to a child in need.

“When I heard the number—that over 5 million kids die each year from malnutrition—the first thing that came to my mind was: That is not acceptable,” Lester shared in a promotional video. “I’m going to put my feet to action, and I already know that I’m not going to stop until I reach the finish.”

Lester’s herculean M5M China Run is raising support to provide a one-year supply of PhytoBlend to 50,000 children. Along the way, he might also become the first solo runner to complete the 2,500-mile Great Wall. The Running on Faith author has faced down bigger challenges in the past. At age 12, he was struck by a car while riding his bike. While recovering from 21 broken bones, a collapsed lung and a paralyzed right arm, Lester lost his father and sole guardian.

A few years later, Lester was competing in running and biathlon events. He would go on to become the first challenged athlete ever to complete the Ultraman World Championships in Hawaii on Nov. 30, 2008. For the uninitiated, ultramen swim 6.2 miles, bike 261.4 miles and run 52.4 miles to the finish line. ESPN awarded Lester its “Best Male Athlete” ESPY Award in 2009.

Lester helps others unleash their own potential in his roles as Founder, Chairman and Chief Inspiration Officer of EP1C Inc., Founder and President of EP1C Performance and Endurance Center in Kona, Hawaii—his current home—and Founder and Chairman of The NEVER STOP Foundation, aimed at helping youth overcome obstacles in their lives through a platform of arts and athletics.

June 26, 2014

U.S. News

BurnLounge Roundup: Unpacking the Ninth Circuit Decision

This month the United States Court of Appeals for the Ninth Circuit passed down a long-awaited decision in the case of FTC v. BurnLounge Inc. The Federal Trade Commission brought a pyramid complaint against the New York City-based company in 2007.

Digital music seller BurnLounge positioned itself as a breed of network marketing company that enabled independent retailers to sell music through online “BurnPages.” The company’s labyrinthine compensation plan included multiple income opportunities, with extra incentives based upon the sale of premium packages rather than actual merchandise.

The recent ruling upholds a 2012 judgment barring the defendants from operating a pyramid scheme and ordering the payment of $17 million in damages. The opinion provoked a flurry of related opinions on its implications, for Herbalife in particular and direct selling in general. We’ve rounded up commentary from industry legal experts and other interested parties to provide a better understanding of the precedent established in BurnLounge.

June 24, 2014

Financial News

Financial News, July 2014

Avon Products Inc.

Avon Products Inc. (AVP—NYSE) reported first quarter 2014 results for the quarter ended March 31, 2014.

For the first quarter of 2014, total revenue of $2.2 billion decreased 11 percent, or 3 percent in constant dollars. First quarter 2014 gross margin was 56.2 percent. Gross margin included a $116 million charge associated with highly inflationary accounting for Avon Venezuela and the company’s move from the official exchange rate to a new foreign exchange system (SICAD II) rate to remeasure its Venezuelan operations as of March 31, 2014. Adjusted gross margin was 61.5 percent, 120 basis points lower than the prior-year quarter.

Operating loss was $51 million and operating margin was -2.3 percent in the quarter. Adjusted operating profit was $134 million and adjusted operating margin was 6.1 percent, down 240 basis points from the first quarter of 2013.

First quarter 2014’s net loss from continuing operations was $167 million, or a loss of 38 cents per diluted share, compared with net loss from continuing operations of $12 million, or a loss of 3 cents per diluted share, for the first quarter of 2013. First quarter 2014’s adjusted net income from continuing operations was $52 million, or 12 cents per diluted share, compared with net income from continuing operations of $113 million, or 26 cents per diluted share, for the first quarter of 2013.

Latin America’s first quarter 2014 revenue was $1.07 billion, down 7 percent year over year or up 7 percent in constant dollars. Q1 revenue in Europe, Middle East & Africa was $654.8 million, down 11 percent, or down 5 percent in constant dollars. North America’s first quarter revenue was $295.7 million, down 22 percent, or down 21 percent in constant dollars; and Asia Pacific’s revenue was $166.4 million, down 17 percent year over year, or down 10 percent in constant dollars.

Net cash used by operating activities was $113 million for the three months ended March 31, 2014, compared with $117 million for the same period in 2013. The overall net cash used during the three months ended March 31, 2014 was $313 million. This compares with cash provided of $279 million for the same period in 2013.

Avon’s net debt (total debt less cash) for the first quarter of 2014 was $1.9 billion, up $299 million from the year-end 2013 level, and $239 million lower than at March 31, 2013.

During the first quarter of 2014, the company recorded costs to implement restructuring within operating profit of approximately $23 million pre-tax, or 4 cents per diluted share, primarily related to the company’s $400M Cost Savings Initiative.

During the first quarter of 2014, the company recorded an additional accrual related to the previously disclosed government Foreign Corrupt Practices Act investigations of $46 million, or 11 cents per diluted share, within operating profit, bringing the total liability accrued at March 31, 2014 to $135 million.

Avon also declared a regular quarterly dividend on its common stock of 6 cents per share, payable June 2, 2014, to shareholders of record on May 15, 2014.


Blyth Inc.

Blyth Inc. (BTH—NYSE), a direct to consumer company and leading designer and marketer of candles and accessories for the home, as well as health, wellness and beauty products sold through the direct selling and direct marketing channels, reported sales and earnings for the first quarter of 2014. Net sales for the three months ended March 31, 2014, decreased approximately 25 percent to $175.7 million from $233.1 million for the comparable prior-year period.

Blyth’s operating loss for the first quarter was $2.6 million this year versus profit of $6.0 million last year, largely driven by the decline in sales. Net income attributable to Blyth Inc. was a loss of $2.8 million for the three months ended March 31, 2014, compared to income of $2.6 million in the comparable prior-year period. Diluted earnings per share attributable to Blyth Inc. were a loss of 17 cents per share for the three months ended March 31, 2014, compared to earnings of 16 cents per share in the comparable prior-year period.

Net loss attributable to Blyth Inc. common stockholders was $3.3 million in this year’s first quarter, compared to income of $2.6 million last year. Diluted earnings per share attributable to Blyth Inc. common stockholders were a loss of 20 cents per share, compared to income of 16 cents per share in the prior-year period. This year’s results include a charge of $500,000, or 3 cents per share, for an adjustment to the redemption value for ViSalus redeemable preferred stock.

In Candles & Home Décor, PartyLite sales were $80.9 million in the first quarter, versus $91.0 million for the same period last year, a decline of 11 percent. PartyLite’s European sales during the quarter decreased 8 percent in U.S. dollars, or an 11 percent decline in local currency. PartyLite’s North American sales, comprising the U.S. and Canada, declined 19 percent versus the prior year period.

First quarter operating profit for the Candles & Home Décor segment was $2.1 million, versus $3.4 million in last year’s first quarter. Excluding allocated corporate expenses of $1.9 million this year and $1.5 million last year, PartyLite’s operating profit was $4.0 million this year, versus $4.9 million last year, with the decrease being driven by lower sales.

In the Health & Wellness segment, ViSalus’ first quarter net sales were $57.4 million, versus $104.3 million for the same period last year, a decline of 45 percent, largely reflecting the reduced promoter base in North America. Health & Wellness first quarter segment operating loss was $3.7 million this year, versus operating profit of $4.2 million last year. Excluding allocated corporate expenses of $1.2 million this year and $2.2 million last year, first quarter operating loss for ViSalus was $2.5 million this year, versus $6.4 million operating profit in the first quarter of 2013.


Herbalife Ltd.

Herbalife Ltd. (HLF—NYSE) reported first quarter net sales of $1.3 billion, reflecting an increase of 12 percent compared to the same period in 2013 on volume point growth of 9 percent. Adjusted net income for the quarter was $151.1 million, or $1.50 per diluted share, as compared to 2013 first quarter adjusted net income of $137.4 million, or $1.27 per diluted share. GAAP net income for the quarter was $74.6 million, or 74 cents per diluted share, compared to $118.9 million, or $1.10 per diluted share for the same period in 2013, primarily due to a foreign exchange loss for Venezuela during the quarter ended March 31, 2014.

For the quarter ended March 31, 2014, the company generated cash flow from operations of $190.6 million, an increase of 39 percent compared to 2013; paid cash dividends of $30.4 million; invested $49.7 million in capital expenditures; and spent $685.8 million for approximately 9.9 million outstanding common shares under its prepaid forward share repurchase agreement. As of April 25, 2014, the company has spent $255 million during the month of April to repurchase approximately 4.5 million outstanding common shares under the existing repurchase program and pursuant to a Rule 10b5-1 trading plan.

As of March 31, 2014, the company moved to the SICAD I rate of 10.7 Venezuelan bolivar per U.S. dollar for US GAAP remeasurement purposes. This change impacted its 2014 Q1 reported results by $89.3 million before tax and the company has normalized this impact out of its adjusted results.

In regional results, net sales in North America were $247.9 million, compared to $221.5 million for the same time period the previous year. Mexico net sales of $142.7 million were an increase over $132.9 million in the same period of 2013. South and Central America sales were $244.6 million, also an increase over the prior-year sales of $219.5 million. EMEA sales were $211.1 million, compared to $169.6 million. Asia Pacific sales of $280.5 million dropped from $311.7 million in 2013. China sales were up at $135.9 million, compared to $68.4 million in the prior year.

The company’s board of directors also announced that, as part of its goal to accelerate cash returns to shareholders, it has approved terminating the company’s quarterly cash dividend and instead utilizing the cash to repurchase additional shares of the company’s outstanding common stock during the second quarter of 2014.

The company now expects to repurchase a total of $581 million of its outstanding common stock during the second quarter of 2014 as part of its previously announced $1.5 billion share repurchase program.


Mannatech Inc.

Mannatech Inc. (MTEX—NASDAQ), a leading innovator of naturally sourced supplements based on Real Food Technology® solutions, and creator of the M5MSM (Mission 5 MillionSM) social entrepreneurial movement, announced financial results for its first quarter 2014.

First quarter net sales for 2014 were $43.0 million, an increase of 3.1 percent compared to $41.7 million in the first quarter of 2013. Net sales increased 6.0 percent in constant dollars.

Net income was $200,000, or 8 cents per diluted share, for the first quarter 2014, compared to net income of $600,000, or 24 cents per diluted share, for the first quarter 2013.

During the quarter, the company suspended its operations in Ukraine and took charges to earnings of $500,000, consisting of $200,000 related to operations and $300,000 in inventory reserves due to the reduction in projected demand for Ukraine and European countries.

For the three months ended March 31, 2014, operations outside of North America accounted for approximately 52.8 percent of consolidated net sales, whereas in the same period in 2013, operations outside of North America accounted for approximately 50.8 percent of consolidated net sales.

For the three months ended March 31, 2014, Asia/Pacific net sales increased by $1.2 million, or 6.7 percent, to $19.0 million, compared to $17.8 million for the same period in 2013. In constant dollars, net sales would have increased 11.2 percent to $19.8 million.

For the three months ended March 31, 2014, EMEA net sales increased by $300,000, or 8.8 percent, to $3.7 million, compared to $3.4 million for the same period in 2013. In constant dollars, net sales would have increased 17.6 percent to $4.0 million.

North American net sales decreased by $200,000, or 1.0 percent, to $20.3 million, compared to $20.5 million for the same period in 2013.


Nu Skin Enterprises Inc.

Nu Skin Enterprises Inc. (NUS—NYSE) announced record first quarter results with revenue of $671.1 million, a 24 percent improvement over the prior-year period. Revenue was negatively impacted 4 percent by foreign currency fluctuations. Earnings per share for the quarter were $1.05, representing a 17 percent year-over-year improvement.

In Greater China, first quarter revenue increased 63 percent to $278.9 million, compared to $170.8 million in the prior-year period. The region’s results were positively impacted 2 percent by foreign currency fluctuations. First quarter revenue in North Asia increased 5 percent to $195.5 million, compared to $185.9 million for the same period in 2013. The region’s results were negatively impacted 4 percent by foreign currency fluctuations. Revenue in the Americas improved 6 percent to $79.9 million, compared to $75.7 million in the prior-year period. The region’s results were negatively impacted 12 percent by foreign currency fluctuations. Revenue in South Asia/Pacific was $71.2 million, a 6 percent increase compared to the prior year. The region’s results were negatively impacted 10 percent by foreign currency fluctuations. Revenue in the EMEA region was $45.6 million, a 9 percent improvement over the prior-year period. The region’s results were negatively impacted 2 percent by foreign currency fluctuations.

The company’s operating margin was 15.1 percent for the quarter, compared to 15.3 percent in the first quarter of 2013. Gross margin during the quarter was 84.1 percent, up 70 basis points over the prior-year period. Selling expenses, as a percent of revenue, were 46.7 percent in the first quarter, compared to 43.1 percent in the prior year. General and administrative expenses, as a percent of revenue, were 22.4 percent, compared to 25.0 percent in the prior-year period. Other income (expense), net reflected a loss of $3.6 million compared to a gain of $0.1 million in the prior year.

The company’s cash position at the end of the quarter was $284.6 million. Dividend payments during the quarter were $20.1 million, and the company repurchased $25.0 million of its outstanding shares.

Nu Skin also announced that its board of directors has declared a quarterly dividend of 35 cents per share, which was payable on June 11, 2014, to stockholders of record on May 23, 2014.


Primerica Inc.

Primerica Inc. (PRI—NYSE) announced financial results for the quarter ended March 31, 2014. Total revenues were $324.3 million in the first quarter of 2014 and net income was $45.1 million, or 81 cents per diluted share.

Operating revenues increased by 9 percent to $324.1 million and net operating income increased by 12 percent to $43.3 million, compared with $296.2 million and $38.6 million, respectively, in the prior-year quarter. Net operating income per diluted share increased 20 percent to 77 cents and ROAE was 14.9 percent in the first quarter of 2014.

In conjunction with its plan to deploy $150 million of capital in 2014, during the first quarter the company repurchased 283,000 shares of Primerica common stock for $13.1 million, with the majority of the year’s capital deployment anticipated in the second half of the year, subject to the regulatory approval of a reserve financing transaction. As of March 31, 2014, investments and cash totaled $2.01 billion, compared with $1.98 billion as of Dec. 31, 2013.

The board of directors of Primerica also approved payment of a quarterly dividend of 12 cents per share for the first quarter of 2014. The dividend was payable on June 16, 2014, to stockholders of record as of May 20, 2014.


Relìv International Inc.

Relìv International Inc. (RELV—NASDAQ), a maker of nutritional supplements that promote optimal health, reported its financial results for the first quarter of 2014.

Relìv reported net sales of $14.5 million for the first quarter of 2014, compared to net sales of $18.9 million for the first quarter of 2013. Net sales in the United States declined by 29.2 percent for the quarter compared to the same quarter in 2013. International net sales for the 2014 first quarter increased 0.7 percent, with growth in Europe of 15.3 percent and in Asia of 10.9 percent offset by declines in other regions, primarily Canada.

The company reported a net loss of $151,000, or 1 cent per diluted share, for the first quarter of 2014, compared to net income of $195,000, or 2 cents per diluted share, for the first quarter of 2013. The loss from operations for the first quarter of 2014 was $170,000 compared to income from operations of $435,000 in the same quarter of 2013.

Relìv had cash and cash equivalents of $4.88 million as of March 31, 2014, compared to $6.66 million on Dec. 31, 2013.


Tupperware Brands Corp.

Tupperware Brands Corp. (TUP—NYSE) announced first quarter 2014 operating results. First quarter 2014 net sales were $663 million. Emerging markets, accounting for 64 percent of sales, achieved a 14 percent increase in local currency. Established markets were down 4 percent in local currency, a 1 percentage point improvement over fourth quarter 2013.

GAAP net income of $52.2 million versus $58.2 million in the prior year, which included $12 million pretax more of net expense items primarily related to the impact from amounts on the balance sheet of the devaluation of the Venezuelan bolivar, was down 10 percent in dollars and up 1 percent in local currency. Adjusted diluted EPS of $1.31 included 12 cents of negative impact, versus 2013 from changes in foreign exchange rates.

Cash outflow from operating and investing activities was $29 million, versus an inflow of $5 million in 2013 that included $9 million associated with premiums and accrued interest on the sale of senior notes, and a much lower outflow from tax payments due to timing.

In the first quarter, the company returned $43 million to shareholders through a dividend payout of $33 million and the repurchase of 130,000 shares for $10 million. Since 2007, 20 million shares have been repurchased for $1.2 billion, with $800 million left under an authorization that runs until February 2017.

In Europe, segment sales were down 1 percent versus last year reported and up 1 percent in local currency, a sequential improvement from -2 percent in local currency in the fourth quarter of 2013. In Asia Pacific, sales for the segment were down 2 percent reported and up 9 percent in local currency, driven by the emerging markets up 12 percent in local currency.

In Tupperware North America, segment sales were down 2 percent reported and up 2 percent in local currency. In Beauty North America, sales for the segment were down 14 percent reported and 11 percent in local currency. Fuller Mexico sales were down 9 percent, but reflected a 2-point improvement versus prior quarter. In South America, sales were up 24 percent reported and 47 percent in local currency, driven by Brazil and Venezuela.


USANA Health Sciences Inc.

USANA Health Sciences Inc. (USNA—NYSE) announced financial results for its fiscal first quarter ended March 29, 2014.

For the first quarter of 2014, net sales increased by 7.9 percent to $182.4 million, compared with $169.1 million in the prior-year period. Net sales growth, however, was negatively impacted by unfavorable changes in currency exchange rates, which reduced net sales for the quarter by $5.0 million, as approximately 80 percent of the company’s sales are outside of the U.S. The challenging media and regulatory environment that emerged in China during the quarter also negatively impacted net sales.

Net earnings for the first quarter were $16.5 million, a 7.0 percent decrease, compared with the prior-year period. Earnings per share for the quarter decreased 10.2 percent to $1.15, compared with $1.28 in the first quarter of the prior year. Weighted average diluted shares outstanding were 14.4 million in the first quarter of 2014, compared with 13.9 million in the prior-year period. Additionally, the company ended the quarter debt-free.

Net sales in the Asia Pacific region increased by 13.0 percent to $118.6 million, compared with $104.9 million for the first quarter of the prior year. Net sales in the Americas/Europe region were essentially flat at $63.8 million, compared with $64.1 million in the prior-year period.

The board of directors has authorized up to $200 million in funding for share repurchases by the company of its outstanding common stock. This authorization is inclusive of the approximately $13.6 million that was remaining under the prior authorization as of the end of the first quarter of 2014.


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.

June 24, 2014

Working Smart

Today’s Shifting Direct Selling Landscape

by Michelle Larter

Increasingly, brands are using mobile and social as channels to interact and engage with customers and prospects. In the direct selling industry, consultants and brands continue to embrace the opportunities each provides to better run their businesses and drive leads. But just how much have these two impacted the way direct selling organizations do business—and what further changes can we expect to see this year?

Three shifts we are already seeing can be found in the use of social media, mobile devices and analytics.

Social Media Shift: From Facebook to More Private Channels

Social media today has become one of the primary ways that messages are getting out now. Any brand lacking a social media strategy today is at risk of becoming obsolete, as consumers increasingly discover and interact with brands through these channels. However, the social media landscape is changing, and what has worked in the past couple of years is no longer a guaranteed approach.

Consider Facebook. The popular social media site’s saturation has caused 20- to-30-somethings to increasingly utilize more “private” channels, including Instagram, Snapchat and Pinterest, to connect with peers. In fact, according to Nate Elliott, an analyst with Forrester Research Inc., consumers interact with brand posts on Instagram at a rate that far surpasses the interaction rates produced on Facebook and Twitter. This could mean that while Facebook has helped direct selling organizations and their consultants drive customer acquisition and sales with 20- to-30-somethings in recent years, it may not continue to generate the same level of results—and establishing or growing a presence on other social media platforms will be more effective.

The key for maintaining a successful social media presence is to understand where your customers are most active and provide them with valuable and relevant messages tailored to each social media outlet in order to cultivate those relationships. Instagram, for instance, provides an opportunity for a jewelry consultant to provide images of each piece being worn in order to showcase the versatility and real-life appearance of the jewelry for sale. On Pinterest, the same consultant can not only create boards showcasing all of the jewelry looks, but can also show her individual style suggestions. This enables her to show her creative side and projects an image to her customers that she can be a resource for accessorizing.


The key for maintaining a successful social media presence is to understand where your customers are most active and provide them with valuable and relevant messages in order to cultivate those relationships.


The content-sharing opportunities made possible through social media are compelling, and direct selling organizations and consultants who use them strategically can find that they truly engage with customers and prospects in new and fun ways, even as their social media preferences change.

Mobility Shift: Consumers—and Consultants—Are Always On

Mobile devices are increasingly an integral part of everyday life. And while mobile devices serve many purposes, both personal and professional, one of their most common uses is to access email anytime, anywhere. This can be an important point for the direct selling industry. The key is providing relevant and engaging content to keep them interested and informed. 

But it’s not just consumers who are impacted by the increasingly mobile landscape. Consultants are using iPads and tablets to run their businesses—conducting presentations on them at parties and using them for order management. We are starting to see a shift where printed materials—catalogs, order forms, invoices—are increasingly becoming electronic.

Think about the advantages: If you are hosting a party, you can easily look up information and show additional products that may not be showcased in the catalogs or as part of the live demonstration. Even if they are, it’s likely that online you can show multiple product images, giving the potential customer a clearer picture of the product. Order management is easier for both parties and processing is quicker, as well.

Outside of parties, consultants are more likely to be prepared for anytime sales, since most won’t leave home without their mobile devices (but may leave home without their product portfolio and paper order forms). The ability to immediately show customers what you are selling, even in moments when you least expect a potential sale, is changing the direct selling game!

Analytics Shift: Tracking ROI and Driving Leads

Consultants who are serious about marketing are increasingly using tools to help track ROI and drive leads. Along with managing their own social sites, consultants are increasingly tracking ROI on Google Analytics to see what’s working and what’s not by examining where their site visitors are coming from, how long they are staying on their site and how many are converting to leads. They’re using Facebook Graph Search as a new way to find new prospects and drive leads. This service helps users find more of the people, places and things they’re looking for and discover new connections based on what others have shared with them. They’re measuring the success of each of their email newsletters by examining open and click-through rates. All of this data is more readily available to consultants, who are increasingly empowered to track their successes and determine the most effective strategies for driving leads and sales. As more and more data analytics tools become available, the direct selling industry will continue to be impacted by the insight they provide.

As direct selling continues to evolve, the same overarching lessons remain true: Staying in front of the customer, delivering relevance and engaging with them via their preferred channels will be the key for driving direct selling success. While technology shifts can impact the communication channels, the same best practices ring true.


Michele LarterMichelle Larter is the Worldwide Director, Direct Selling, at IMN Inc. Larter has more than 20 years of experience in sales, including more than 10 years specifically with direct sales. She is a contributing writer to direct selling and technology publications and a frequent speaker at industry events. IMN Inc. was awarded the prestigious 2013 DSA Ethos Award for Partnership.

June 24, 2014

U.S. News

Avon Trims North America Business in Latest Turnaround Effort

In the latest phase of its turnaround efforts, direct selling giant Avon has announced plans to downsize its corporate organization and North America business.

On Monday the company stated it will cut 600 positions as a part of its initiative to save $400 million by 2016. The restructuring will result in up to $50 million in pretax charges, largely in the second quarter.

Avon North America sales dropped 17 percent in 2013. The company expects its latest efforts to result in annualized savings of $50 million to $55 million.

CEO Sheri McCoy is moving to stabilize Avon’s business by pulling out of unproductive markets, reducing spending and cutting jobs. Last year Avon U.S. divested its jewelry unit, Silpada Designs, to focus on its core business in the region.

In other company news, Avon’s board of directors has announced that former Warnaco Group President and CEO Helen McCluskey will join the company’s board in July. McCluskey also brings merchandising expertise from brands like Liz Claiborne, Sara Lee and Playtex Apparel.

“Helen has a valuable blend of branding, marketing and international experience,” said Doug Conant, Chairman of Avon’s Board of Directors. “Having led a public company previously, she brings a wealth of knowledge to Avon’s board, and we are excited to welcome her.”

June 23, 2014

New Perspectives

What’s Next? The Future!

by John Fleming

Editor’s Note: This article appears in our latest supplement to The Wall Street Journal, and was included in 1.2 million copies for subscribers. More information about the supplement and reprints can be found at www.directsellingnews.com. Contact Jerry Reagan (jreagan@directsellingnews.com) for ordering information.

Direct selling in the 21st century has become a sophisticated distribution channel that serves consumers in the most personal manner possible. Companies that use this channel are supported by state-of-the-art technology that brings catalog presentations, order entry and processing up to the gold standard of Amazon and Zappos, perhaps even better.


The DSN Global 100 list provides a glimpse at the direct selling companies that are the driving force behind the growth and expansion of the channel of distribution worldwide. The basics of the business model have remained rather consistent for over 100 years. Direct selling has always been about a personal presentation, personalized customer service and the importance of building relationships and building them in a social manner. Today, the word social is now on steroids. When we talk to the executives of any direct selling company about the role social plays in their business model, we find some of the most innovative ways of using the new social tools. Just go to Facebook and search for one of the companies in which you might be interested and join the conversation.

Chances are that many customers of today’s direct selling representatives would never imagine that they are dealing with an individual business owner, who no longer has the boundaries associated with having to travel to reach new customers, communicate with them or service them.

Around the world, direct selling is becoming the choice, the preferred way to purchase products and services. The more than 1.5 million sales consultants for Brazil’s Natura Cosméticos, for example, each have an individual web page and the technology to accept orders any time of day using a credit or debit card. Data mining and customer relationship management technology are playing an increasingly important role, says CEO Alessandro Carlucci. “Natura has invested in a CRM system that crosses different kinds of electronic information and gives us a better understanding of profile and behavioral patterns of our sales consultants and customers,” says Carlucci, who also serves as Chairman of the World Federation of Direct Selling Associations. “This enabled us to design a more personalized, targeted relationship strategy, with high performance and results.”

The same is true for Oriflame Cosmetics, a billion dollar direct selling company out of Sweden that markets a high-end beauty line through its independent consultants. The Oriflame website is spectacular and appealing; consequently Oriflame consultants are gaining the attention of prospective customers in other parts of the world. This could make international expansion far easier.



“In all of my travels across the globe, one thing has resonated: Everyone has a smartphone, regardless of their nation’s economy. I see direct sales going into an entirely mobile platform, and that gets me excited because our industry will have a much broader reach and appeal within that scope.” — Dave Wentz, CEO, USANA


A direct seller today who joins any number of reputable direct selling companies gains the sophistication of franchise-type business support without the risk of losing tens or hundreds of thousands of dollars. Entry is reasonable, and often less than a hundred dollars. Member companies of the Direct Selling Association offer money-back guarantees designed to protect a new direct seller from any loss for a minimum of one year.

Truman Hunt, President and CEO of Nu Skin Enterprises, says, “I am passionate about our product categories and the innovation we can put into the marketplace from a product perspective, but we’re really about improving people’s lives. Frankly it’s the thing I love the most about our business. We are changing lives when we give entrepreneurs the opportunity to start a business with very, very little capital at risk, that provides them with a significant upside and the ability to control their economic future. I just don’t see a better platform anywhere for entrepreneurs to do that.”

Direct selling has evolved into a contemporary format embracing new labels and new value propositions that are gaining attention, and rightfully so!

Direct selling companies are nimble, innovative and not stuck in their traditions because they are fueled by the very people that all companies are attempting to attract: customers. Every direct seller has to first be a convinced consumer of the product or service before they can ethically and convincingly represent and share the product or service. Though it sounds simple, this is the essence of referral marketing, which is something every brand desires to have active in the sales/marketing mix.

As an observer of the business landscape from the publisher’s chair at Direct Selling News, I’ve watched the job opportunities in America fluctuate for more than a few years. Training and retraining is important, and the role entrepreneurship will play in providing more opportunities is also important. However, the average person—the wife, the mother, the recent college grad with no job prospects, the young couple trying to earn more than they spend to remain debt free, or the challenged executive who finds himself or herself being replaced or displaced—cannot afford the investments required of traditional entrepreneurial opportunities.


“Our sales force is already being adapted to a world in which its relationship with customers is even closer, supported by high-level information technology and social networks.”
— Alessandro Carlucci, CEO, Natura


As for the millennials, well, they are not looking to work in the traditional manner. They are predicted to be more entrepreneurial than previous generations, but most of them are not going to invest thousands or hundreds of thousands in a business opportunity.

“Current students don’t have a lot of trust in business and their ability to succeed in traditional routes; they are far more interested in entrepreneurial opportunities,” says Linda Ferrell, Ph.D., Bill Daniels Professor of Business Ethics at the University of New Mexico and President of the Academy of Marketing Science.

And direct selling opportunities offer an excellent avenue, Ferrell says, for students and for companies in search of a distribution model. “Direct selling is a much more efficient model than traditional business. The independent business owner takes on more of the marketing and communications responsibilities, as well as customer service.”

Online businesses are growing at a rate far beyond traditional retail. Brick-and-mortar shopping malls are closing in some areas as a result. Though we can get everything we need via the Internet from our tablets or our smartphones, most of us still prefer dealing with a person who wants to know us by name. Most of us don’t buy until we have compared or asked a friend.

That’s where the new direct sellers come in. Women are predicted to remain the majority when looking at direct selling organizations, but men are now gravitating toward this model in larger numbers. Direct sellers fill the role of that caring person who knows what we want to know or at least provides us with an honest and informed opinion, not just another advertisement. And today, they are found to be representing just about any and every product or service we need.

More than 500,000 people each month say yes to a direct selling opportunity.

Those who do not understand this channel of distribution often get stuck in their past perceptions of it. We believe, based on all of the evidence we sift through 365 days per year, that direct selling is on the threshold of its greatest breakthrough.

We are a nation built upon the creative genius and brilliance of entrepreneurship. This industry is well primed. It is time-tested, entrepreneurial and truly the very first social business model.

Therefore, our position on this industry?

Very promising!

June 23, 2014

DSA News

A New Champion in Direct Selling Education

by Lauren Lawley Head

Gary Huggins

Education: Texas Christian University, bachelor of arts in political science and communication

Personal: A Dallas, Texas, native, Huggins now resides in Laurel, Maryland, with his wife and four children, ages 15, 13, 10 and 7

Point of interest: served on George H. W. Bush’s 1988 presidential campaign and Inaugural Committee


After an extensive search, the Direct Selling Education Foundation has chosen its next Executive Director, Gary Huggins.

Huggins comes to the Foundation with deep experience in education reform, innovation, policy and advocacy. He most recently served as CEO of the National Summer Learning Association, an organization that serves as a network hub for thousands of summer learning program providers and stakeholders.

Huggins also served as Director of the Aspen Institute’s Commission on No Child Left Behind, a bipartisan, independent effort dedicated to improving the No Child Left Behind Act, as well as Executive Director of the Education Leaders Council, Education Leaders Action Council, and CSCV, a coalition of corporations, small businesses, and consumer and environmental groups that promoted market-based environmental solutions.

“I am so pleased we were able to introduce Gary Huggins as DSEF’s Executive Director at DSA’s Annual Meeting,” said Amway Chief Sales Officer and DSEF Board Chairman John Parker. “Gary brings a wealth of knowledge and experience that will equip him well in leading DSEF.  If you did not have a chance to meet Gary in person in Orlando, I hope you do soon.”

Though he officially begins the role July 7, Huggins attended the Direct Selling Association’s Annual Meeting in Orlando in June and spent some time talking with Direct Selling News.

Industry voices

On June 5, the 9th Circuit Court of Appeals issued its long-awaited opinion in the case of the Federal Trade Commission vs. the multi-level music marketing company BurnLounge. The Direct Selling Association had filed an amicus brief in the case, asserting that internal consumption qualifies as a legitimate sale. The 9th Circuit affirmed the U.S. District Court’s decision that BurnLounge was an illegal pyramid scheme, but it also affirmed the principle that compensation to direct sellers based on their consumption is legitimate—excellent news for the direct selling community.

The opinion was issued while the DSA Annual Meeting was in progress, so it naturally got some attention. Here are some snapshots of what was said:

“The preliminary reading is actually quite good,” DSA President Joe Mariano told meeting attendees that afternoon. “…I think we can be positive and say that some of the work that we have been doing over the last year, two years and indeed for generations, has had an impact and effect on at least partially educating the 9th Circuit Court of Appeals.”

“I don’t think BurnLounge today is going to be the catalyst to change the short position on Herbalife,” Canaccord Genuity Managing Director Scott Van Winkle said during the question-and-answer portion of a workshop entitled The Wall Street View.  “I think it helps. I think it is one more building block.”

“I’m excited to be here and excited about this industry,” he said.

Huggins says he will be identifying and developing his priorities in the coming months but knows supporting the Foundation’s academic initiatives will be key. Having university professors and others understand the direct selling business model is important, he says, so that they include discussion of the channel when they teach students about entrepreneurship and entrepreneurial opportunities.

“My work in education has always been very supportive of entrepreneurship in education,” he said. “We (direct selling) ought to be part of Main Street conversations about entrepreneurship.”


It might be the middle of summer, but in many ways it feels like the start of a new year. The Direct Selling News Global 100 celebration and the Direct Selling Association’s 2014 Annual Meeting are behind us, and it’s now time to dig into the work ahead. These are critical times for the direct selling community. Let’s approach the opportunities—and tackle the challenges—head on.

Lauren Lawley Head


Lauren Lawley Head
General Manager
lawleyhead@directsellingnews.com


June 23, 2014

U.S. News

Social Sharing Drives Smart Business

by Angela Soper

Editor’s Note: The following article is excerpted from the latest 16-page insert produced by Direct Selling News for The Wall Street Journal. The complete insert was distributed to over 1.2 million WSJ subscribers. Reprints can be ordered here.

Americans love to talk about what they buy. And, as a natural extension of that love, millions of U.S. adults are actively engaged in buying products or services from independent sales representatives with whom they have forged a personal connection.

These types of transactions, whether called direct selling, social selling, relationship marketing or social sharing, have become a common channel of distribution. New research from Harris Poll and commissioned by Direct Selling News found that the prevalence of direct selling, buying a consumer product or service person-to-person away from a fixed retail location, is high. More than 156 million people—two in every three U.S. adults—have made a purchase from a direct seller. The online survey of 2,060 U.S. adults 18 and older found that more than 81 million people have done so within the past six months.

And that’s just the activity on the purchasing side of the equation. For millions of people, direct selling has become a viable business opportunity that has given them the ability to make a different choice for themselves and their families.

In a world of economic ups and downs, growing job insecurity and dismal retirement portfolios, building a direct selling business makes perfect sense for many. It offers an opportunity to supplement their household income to meet a specific goal, such as paying for a new appliance, covering a child’s private school tuition or managing a car payment. Some go on to expand their businesses to equal—or even exceed—their previous corporate paychecks.

The giant leaps in technology employed by companies level the playing field even further. With sign-up apps, point-of-sale technology, online sample requests, and social and email follow-up, a business owner’s digital tools can equal those of a much larger corporation. Further, social media has turned traditional marketing on its head, and companies of every design are scrambling to capitalize on digital marketing tools. For direct selling companies, social media just enhances the relationship-driven business model already in place.

In addition to offering a lucrative business model for entrepreneurial-minded individuals, direct selling companies also boost local economies where they operate. Companies on the list of the world’s 100 largest direct selling companies employ more than 175,000 people, spanning the full spectrum of corporate positions.

Amway, No. 1 on the DSN Global 100 list, prides itself on giving its independent business owners the training, education and mentorship they need to become successful. “We believe we are the cure for the common cubicle, offering entrepreneurs the possibility of self-fulfillment through hard work and dedication,” points out Managing Director Jim Ayres. The company also has a powerful, wide-reaching corporate presence; it recently announced a $375 million manufacturing and research and development global expansion that includes four facilities in the United States, a new manufacturing facility in India, and second sites in both China and Vietnam. Operating in more than 100 countries, the Ada, Michigan-based company employs more than 21,000 people worldwide.

With millions of customers, a wide variety of goods and services, and great performance on the stock exchanges, direct selling as a Main Street model of distribution seems to be working very well. “In an uncertain market, people gravitate toward security, and that is what the direct selling industry can offer,” says Dan Macuga, USANA Chief Communications Officer and Executive Vice President of Field Development for the Americas. “In direct sales, the security you have is the security you create… when you create your own business, you shape your own future.”

June 20, 2014

U.S. News

Herbalife Joins NO MAS HAMBRE Summit to Fight Hunger

Herbalife helped to take the cause of its Latino distributors to Washington, D.C., on Thursday as a sponsor of Latino Magazine’s NO MAS HAMBRE Summit. The event raises awareness of the hunger faced by many Latinos and encourages members of the community to get involved. Herbalife Vice President of Government and Community Affairs, Angela Arboleda, took part in a Summit panel addressing the need for greater access to nutrition.

“Herbalife is dedicated to helping people improve their nutrition, make healthy choices and lead active lives within the social environment of our Nutrition Clubs in communities across the country,” said Arboleda in a statement. “Herbalife shares LATINO Magazine’s commitment to addressing food insecurities in the Latino community and we are pleased to support the NO MAS HAMBRE summit to engage policymakers in Washington, D.C., for a discussion focused on combatting the nation’s hunger crisis.”

Other participants in the Summit included Congresswoman Michelle Lujan Grisham (D-NM) and representatives from Feeding America, Alliance to End Hunger, the U.S. Department of Agriculture and the U.S. Conference of Catholic Bishops.

Though Herbalife operates in more than 90 countries, Latinos make up at least 60 percent of the company’s distributor base. Since Herbalife short seller Bill Ackman launched a campaign attacking the company’s business practices, other Herbalife critics have come forward to accuse the company of exploiting low-income Latinos. Among them is Brett Wilkes, President of the League of United Latin American Citizens (LULAC), who has urged government officials to investigate the company.

Wilkes’ position reportedly has not gained popular consensus within LULAC nor the wider Latino community. Earlier this year, LATINO Magazine honored Herbalife with a spot on the LATINO 100, an annual list of top business opportunities for U.S. Latinos.

 

June 19, 2014

U.S. News

Direct Selling Companies Shine in 2014 Stevie Awards

The prestigious Stevie Awards have announced the first round of winners in the 12th Annual American Business Awards. Isagenix, Jeunesse, LIMU, USANA and Vemma all received honors in this year’s competition.

A ceremony held June 16 in Chicago revealed winners in the categories of customer service, human resources, corporate communications, marketing, live events, publications and videos. A second event in San Francisco on September 12 will honor winners in all new product and technology-related categories.

The American Business Awards cover all facets of personnel and organizations, from non-profits to support staff and customer service teams. A panel of 240 executives nationwide selected this year’s winners from more than 3,300 entries.

Gold Stevie Award winners included Brandon Scott, CMO of Jeunesse; Allie Henderson, Public Relations Specialist at USANA; and BK Boreyko, Vemma Founder and CEO. The following is a complete list of Stevie Awards presented to direct selling companies in this year’s competition.


Isagenix International

SILVER AWARD:

  • Viral Marketing Campaign of the Year—Share The Shot Viral Marketing Campaign

BRONZE AWARDS:

  • Company of the Year (Health Products & Services and Pharmaceuticals)
  • Communications Department of the Year
  • Executive of the Year (Health Products & Services)—Kathy Coover, Executive Vice President
  • Best Internal Recognition/Motivational Event—Isagenix Celebration Annual Recognition Event
  • Video—Experience Isagenix Video

Jeunesse Global

GOLD AWARD:

  • Marketing Executive of the Year—Brandon Scott, CMO

SILVER AWARDS:

  • Marketing Department of the Year—Creativity Means Doing Things Differently
  • Corporate Social Responsibility Program of the Year (Up to 2,500 Employees)—Jeunesse Kids

BRONZE AWARDS:

  • Company of the Year (Health Products & Services and Pharmaceuticals)
  • Video—How Do You Spell Success?
  • Video—The Secret of Jeunesse

LIMU

BRONZE AWARDS:

  • Best Internal Recognition/Motivational Event—2014 LIMU International Convention
  • Branded Entertainment—2014 LIMU International Convention Opener
  • Branded Entertainment—LIMU BMW CLUB
  • Video—#BLU2 Launch Video
  • Video—An Experience Like No Other

USANA Health Sciences

GOLD AWARD:

  • Communications Professional of the Year—Allie Henderson, Public Relations Specialist

SILVER AWARDS:

  • Communications or PR Campaign of the Year (Social Media Focused)—RESET: Destination Transformation 2013
  • Communications Professional of the Year—Angie Larsen, Senior Manager of Corporate Relations
  • Customer Service Department of the Year (100+ employees)
  • New Product or Service Introduction of the Year—USANA Protein Snacks
  • Support Department of the Year—USANA Maintenance
  • Support Staffer of the Year—Susie Derber, USANA True Health Foundation Executive Assistant

BRONZE AWARDS:

  • Management Team of the Year (Consumer Products and Consumer Services Industries)
  • Executive of the Year (Health Products & Services)—Jim Bramble, CLO and General Counsel
  • Communications or PR Campaign of the Year (Events & Observances)—#SOCHI14
  • Communications or PR Campaign of the Year (Social Media Focused)—USANA Social Media
  • Communications, Investor Relations, or PR Executive of the Year—Ashley Collins, Executive Director of PR, Social Media & Communications
  • Communications, Investor Relations, or PR Executive of the Year—Dan Macuga, CCO
  • Communications Professional of the Year—Mallory Moger, Public Relations Specialist
  • Communications Professional of the Year—Misty Dangel, Public Relations Specialist
  • Marketer of the Year—Jessica Reimer, Senior Marketing Manager

Vemma Nutrition Company

GOLD AWARD:

  • Executive of the Year (Health Products & Services)—BK Boreyko, Founder and CEO

BRONZE AWARD:

  • Best Internal Recognition/Motivational Event—Verve Leadership Academy

 

June 18, 2014

U.S. News

Willa Skincare Exits Retail, Markets through Teen Consumer Base

Four years ago, natural skincare company Willa launched with products created specifically for girls. As The Wall Street Journal reports, the company recently pulled its products from more than 300 stores nationwide in favor of selling directly through Willa’s teen and “tween” customers.

New research from Harris Poll and commissioned by Direct Selling News found that among adults age 18 to 34, 54 percent of men and 42 percent of women have made a direct selling purchase in the past six months. However, adults are not the only ones interested in buying and selling through their own social circles. In addition to offering product tailored to young consumers, companies like Willa provide an opportunity for budding entrepreneurs to hone their skills.

Founder and CEO Christy Prunier says Willa was inspired by her then 8-year-old daughter, Willa Doss. Prunier founded the company following a fruitless search for safe and effective skincare products for young girls. Willa offers natural products to help girls combat the lasting skin damage that largely occurs before age 18.

Now, Willa is giving its customers the opportunity to sell the products as well. Called “Willagirls,” the young sales reps can market the product at get-togethers or one-on-one and receive 25 percent of total sales. Girls (or their families) can also receive a percentage of sales by hosting a party, and the company is developing software that will allow Willagirls to host “virtual” parties online.

Willa’s story is not unique among direct selling companies. At Origami Owl, a company founded by a 14-year-old girl, about a third of sales reps are younger than 24. Origami Owl also trains Owlettes, girls age 12 to 17 who can sign on with a parent or other trusted adult as a partner.

Read the full story from The Wall Street Journal.

 

June 17, 2014

U.S. News

Maria Sharapova Brings Game Face to Newest Avon Fragrance

Avon, the No. 2 direct selling company in the world, is teaming up with star tennis player, businesswoman and philanthropist Maria Sharapova to introduce its newest fragrance for him and her, Avon Luck.

“I am excited to represent Avon Luck, a fragrance that reminds us to savor and truly enjoy our triumphs,” said Sharapova. “I always say the harder you work, the luckier you are because you strive for bigger goals. I love being able to partner with a company like Avon that empowers women around the world to accomplish their dreams.”

“When we created Avon Luck, we wanted to capture the intoxicating charisma of someone who creates her own luck in life,” Patricia Perez-Ayala, Avon Chief Marketing Officer, explained in a statement. “As one of the top-ranked tennis players worldwide, and a sophisticated natural beauty, Maria perfectly captures this sense of energy and possibility.”

As a part of Avon fragrance family, Sharapova joins a host of famous faces that has included Megan Fox, Olivia Wilde, Christy Turlington and Zoe Saldana. Avon Luck will launch in the company’s global markets this fall.


June 16, 2014

World News

UK DSA’s Southworth to Join Order of the British Empire

Photo above: The Royal Coat of Arms of the United Kingdom of Great Britain and Northern Ireland


Paul Southworth, outgoing Director General of the U.K. Direct Selling Association, has been named an Officer in the Order of the British Empire (OBE) in the Queen’s Birthday Honours list.

As part of the celebration honoring Queen Elizabeth II’s 88th birthday, the royal honors recognize individuals for their achievements in public life and their service to Britain. Southworth will receive the award “for services to Business, Arts and the community in Northamptonshire” from her majesty during a special investiture at Buckingham Palace.

“The award came as a complete surprise and I feel both honoured and humble to receive such recognition,” Southworth told DSN. “As always it could only have happened because of the incredible team of people I have the privilege to work with, and it is as much their recognition as mine.”

Southworth’s career in direct selling has included the role of President and CEO of Northampton-based Avon U.K. He has also chaired the Trustees Board at Northampton Theatres and sat on the Board of the Northamptonshire Arts and Management Trust. For nearly 10 years, Southworth was Chairman of the Northamptonshire Enterprise Partnership (NEP), previously Northamptonshire Enterprise Limited (NEL), where he helped secure millions of dollars in support of local economic development.

Southworth will continue to support the U.K. DSA in an ambassadorial role after retiring this year. The Association’s current Deputy Director General, Lynda Mills, will step into the role of Director General.

June 13, 2014

U.S. News

It Works! Opens New Global Headquarters

It Works! is making the move to its new corporate headquarters in Palmetto, Fla. The 50,000-square-foot space, complete with a slide connecting the second and third floors, will officially open for business next week.

The office will house 90 employees, with plenty of room for growth. It Works! earned the Bravo Momentum Award in 2013 for the leading first-time ranking, No. 56, on the DSN Global 100. This year the wellness and lifestyle company jumped to No. 27 with $456 million in sales, driven by its trademark Ultimate Body Applicator.

During an It Works! Green Carpet Experience event in July, the company will host an open house for its Independent Distributors. Top salespeople will have the opportunity to go to a “Whole ‘Notha Level”—a popular It Works! mantra—on the building’s roof space. Overlooking the Gulf of Mexico, the roof features two putting greens, a sports bar for entertaining, a fire pit, and a bumper pool table.

It Works! also recently announced that its Get Out of Debt (G.O.O.D.) Bonus program has paid out more than $23 million since its inception in 2012. Over 50,000 of the company’s Independent Distributors have qualified for bonuses to pay off student loans, mortgages, credit cards and other debts.


It Works! bistro The company’s rooftop putting green and fire pit

June 11, 2014

World News

Avon Launches Global Reforestation Initiative

Photo above: A view from the Atlantic Forest covering Brazil’s Ilhabela archipelago.


Avon, recipient of this year’s DSN Bravo Humanitarian Award, is marshaling its considerable resources behind a new global reforestation initiative, Healthy Forests, Beautiful World. Through a special line of products, the company will raise funds in support of The Nature Conservancy (TNC) and the World Wildlife Fund (WWF).

The Avon Foundation for Women has made major strides in raising awareness and support of women facing breast cancer and domestic violence. The Healthy Forests, Beautiful World program is a part of Avon’s ongoing conservation efforts, which contribute to the well-being of women and their families in another way. Since 2010, Avon has donated more than $6.8 million—$1.3 million in 2013 alone—toward global reforestation.
 
“Paper and forests are important to Avon’s business, and we are committed to making a difference in this area,” said Tod Arbogast, Avon Vice President, Sustainability and Corporate Responsibility. “The newly named Healthy Forests, Beautiful World program continues our work to tap the vast reach and commitment of Avon’s powerful worldwide network of Representatives, in conjunction with the expertise of WWF and TNC, to create a commanding force to help end deforestation.”

TNC works in one of the world’s most endangered and bio-diverse rainforests, the Atlantic Forest in Brazil. The WWF supports the tropical forests of Indonesia, another key region of endangered forests.

Avon has also brought its conservation efforts home through measures like the Avon Paper Promise and the Avon Palm Oil Promise, commitments to promote and practice sustainability in the use of limited natural resources.

June 11, 2014

World News

Tupperware Leadership Joins UN Council to Advance Women Worldwide

Photo above: Tupperware Chairman and CEO Rick Goings (pictured second from right) poses with fellow members of the U.N. Women’s Private Sector Leadership Advisory Council at U.N. headquarters in New York City.


Tupperware Brands recently announced its participation in U.N. Women’s new Private Sector Leadership Advisory Council. As a founding member of the Council, the kitchenware company has committed financial, human capital and cause-marketing support to further economic and political empowerment for women around the world.

The mission of U.N. Women is supported by the opportunity Tupperware provides to women through its direct selling model, says Tupperware Chairman and CEO Rick Goings.

“U.N. Women’s commitment to economic empowerment is perfectly aligned with Tupperware Brands’ unique business model,” Goings said during the Council’s launch last week at U.N. Headquarters in New York City. “We provide women with entrepreneurial training, mentorship and support to break through barriers in their way.”

Tupperware has taken that philosophy and created its Chain of Confidence program, a global mission to empower women, enable their financial independence, and change their lives through opportunity, support and relationships.

As a part of the Council, Tupperware has made a $500,000 contribution to U.N. Women’s initiatives and plans to partner with the organization through cause-marketing efforts in key regions. The partnership will also extend to Tupperware’s salesforce, which will have the opportunity to impact U.N. Women programs worldwide.

Other founding members of the Council include Jean-Paul Agon, Chairman and CEO of L’Oreal; Dominic Barton, CEO of McKinsey & Company; and Muthar Kent, Chairman and CEO of The Coca-Cola Company.

June 09, 2014

World News

Direct Selling Companies Win Big in Digital Media Awards

A handful of direct selling companies collected 43 awards altogether in the 2014 AVA Digital Awards, an international competition recognizing excellence in digital communication.

Ten years ago a Harvard University student founded a little social networking website called Facebook. Today, Facebook is a global Internet phenomenon with 1.2 billion users. More than 200 million active users are posting photos and videos to Instagram, and 58 percent of American adults have a smartphone.

With the speed and flow of information through these new technologies, audio-visual professionals are constantly innovating to engage audiences and communicate effectively. The AVA Digital Awards honor the people who are ideating, directing, designing and producing the best in digital media.

The Association of Marketing and Communication Professionals administered and judged 2,100 entries in this year’s competition. Entrants included production companies, web developers, advertising agencies, PR firms, corporate and government communication departments, and a slew of independent creative professionals.

Gold Awards honor companies for exceeding the high standards of industry norms, and Platinum Awards recognize excellence in terms of quality, creativity and resourcefulness.

Direct selling companies among this year’s AVA winners include:

  • ACN—7 Gold, 10 Platinum
  • LIMU—2 Gold, 4 Platinum
  • Origami Owl—2 Gold, 3 Platinum
  • USANA—9 Gold, 6 Platinum

June 05, 2014

U.S. News

Annual Meeting Concludes with an Evening at Epcot

This year’s Direct Selling Association Annual Meeting ended on a magical note at one of Orlando’s biggest attractions, Walt Disney World’s Epcot Theme Park.

After a welcome from one of the park’s resident superheroes, the evening kicked off with dinner and live music—Disney classics, of course. Dinner featured a visit from some very special characters, Frozen Princesses Anna and Elsa; Mickey and Minnie Mouse; and Mr. Incredible and Frozone of The Incredibles.

Guests had the opportunity to meet the Disney stars and take photos, an experience that in the case of Anna and Elsa would normally involve a three- to five-hour wait, according to a recent Fox News report.

From dinner, guests headed to an exclusive terrace at the park’s World Showcase, where visitors can explore the culture and cuisine of 11 countries. There they enjoyed a sampling of desserts and Epcot’s award-winning fireworks show, IllumiNations: Reflections of Earth.

A trip to Disney World isn’t complete without a ride, and for the DSA’s guests that ride was Soarin’. The Epcot favorite whisks riders 40 feet in the air for a “hang-gliding” flight over California. Projected onto a 180-degree IMAX dome, the adventure includes breathtaking scenes from Napa Valley, Yosemite’s Half Dome and the Golden Gate Bridge.

If the happy faces filing out of the park were any indication, Disney and direct selling are a good match.

June 04, 2014

U.S. News

Direct Selling Execs Share Insight in Women’s CEO Panel

Tuesday’s closing general session of the Direct Selling Association Annual Meeting featured an insightful roundtable discussion with four of the industry’s women executives.

While women have always represented the overwhelming majority of direct sellers, their presence in board rooms and executive suites has more closely resembled the makeup of wider corporate America. In 1972, only 4 percent of U.S. businesses were run by women. By 1991, that number had grown to 38 percent. Today, women run 8.3 million businesses nationwide.

To hear firsthand their perspective on challenges and opportunities facing the industry—and its women leaders—Ruth Todd, Nu Skin Vice President of Public Affairs, sat down with Lori Bush, President and CEO of Rodan + Fields; Traci Lynn Burton, Founder and CEO of Traci Lynn Fashion Jewelry; Kay Napier, CEO of Arbonne; and Connie Tang, President and CEO of Princess House.

From their vantage point, the women have witnessed many changes for their fellow women in the industry. A current trend, said Napier, is the increasing number of professional women, and men, entering direct selling.

“It’s become more of a legitimate choice to choose this profession and lifestyle, and not just as a side job, a hobby or a social outlet,” Tang agreed. “People see it more in terms of truly providing something meaningful for women and their families.”

The panel also shared some common misperceptions they encounter as women leaders, including the notion that they can’t handle constructive criticism. “By virtue of what position we’re in, people infer we don’t want feedback or to know when we’re wrong,” said Napier. “I’ve worked to surround myself with people who aren’t afraid to tell me when I’m off track.”

One point from Tang struck a chord with her fellow panelists, who enthusiastically agreed. “I think there’s a myth that we’ve figured out how to balance life and work. There is no such thing!” said Tang. “Balance is interpretive and unique to each individual. Work-life balance implies there are equal parts, and that’s a myth.”

When the conversation turned to connecting with salespeople in the field, Burton encouraged leaders to make sure their interactions involve more than just products and business.

“What I would suggest is that you give them a value add—something that has nothing to do with the product. If you want to develop that relationship, you have to have the value add of personal development,” Burton said.

Bush shared a piece of life wisdom she often tells her own salespeople at Rodan + Fields: “Embrace the journey. You might not find that success makes you happy; there’s a higher possibility that happiness will make you successful.”

June 03, 2014

U.S. News

Check out Ongoing Coverage of the DSA Annual Meeting

Click below to read our current stories covering the Annual Meeting’s events:


Every year, the DSA Annual Meeting provides opportunities for industry stakeholders to come together and celebrate our vibrant industry and the companies that comprise it. We connect with each other, learn from one another and support the association that does so much work on our behalf in Washington, D.C., and beyond.

For the 2014 Annual Meeting nearly 1,000 executives from direct selling companies and vendor partner companies descended on Orlando’s Hyatt Regency. Welcomed by DSA 2014 Chairman Truman Hunt, the meeting has lived up to its theme: One. The theme is a powerful reminder of our need, and of our privilege, to stand united in our efforts to impact lives with opportunity, and provide more choices for individuals seeking alternatives to traditional employment. One vision. One message. One future.

Among the speakers, Anthony Johndrow, a Managing Partner at the globally recognized Reputation Institute, challenged us to embrace reputation management to promote our greatest assets: our business model, engaged and extensive salesforces, and collaborative industry mindset.

“Detractors use what should be your reputation strengths as their re-framed talking points,” Johndrow said. “The time has come to take them back. To do this requires the industry and its member companies to proactively engage with a broader set of stakeholders to tell your stories from your point of view.”

Though our products and our compensation plans are unique, though we create differing cultures and experiences for our sales fields, we all stand united in our distribution model and in our creation of opportunity for people from all walks of life to create a better life for themselves.

Now, let’s go out and achieve greatness.