December 19, 2014

U.S. News

LegalShield’s Executive Restructuring Brings New Focus on Digital

In his first six months at LegalShield, CEO Jeff Bell has restructured the company’s top leadership and created an Office of the Chief Executive (OCE) to streamline communication between key areas of the business. The legal services provider is gearing up for future growth, particularly with enhanced digital support of its sales associates and clients.

The OCE comprises LegalShield’s new COO, Kathy Pinson; CFO Steve Williamson; Don West, Vice President of Human Resources and Leadership Development, and two newly created roles: Executive Vice President of Network and Business Development, Darnell Self; and Vice President of Regulatory Compliance and General Counsel, Keri Norris. The company is also actively searching for a chief technology officer who will oversee internal support of LegalShield’s associates.

“We’re 43 years young. We’ve got a lot of legacy systems that need to do a better job of letting sales associates know where they are in their career, how they’re advancing, and what are we doing today in terms of helping them achieve success,” Bell told DSN.

In addition to strengthening internal databases and systems, Bell and his team are working to build out more web and digital tools. To head up that effort, Bell recently brought on Chris D’Alessandro, formerly of interactive marketing agency Razorfish, as LegalShield’s first chief digital officer. One item on D’Alessandro’s agenda was the company’s MyLegalShield member app, which launched this week for iOS and Android.

“In our world, because we’re a direct selling organization for a service, it’s a little different. If you’re selling lipstick or vitamins, you can carry it with you. We’re selling an idea or a service,“ Bell said. “…Now we have the ability to tap on our member app and say, ‘No really, when you join our family for $20 a month, you push this button and you’re talking to a lawyer.’”

LegalShield’s digital team is also refining its strategy for managing leads, which will include a stronger hub site to ensure no potential customers or associates fall through the cracks. Lead management is familiar territory for Bell, a former executive at Ford and Chrysler, who described automotive sales as a “massive lead management business.”

“It’s all about being able, when people raise their hand—whether they do it over the phone, on the Web, in writing—to funnel that lead to an individual in their community who is actively engaged in the business,” Bell explained.

Through more robust digital offerings, the company aims to provide a better explanation of its competitive legal plans and identity theft protection. It represents a means of generating awareness and supporting LegalShield’s associates in the field, as Bell emphasized, not a substitute for human interaction.

“Our Chief Commercial Officer, Alan Fearnley, has said technology is direct selling’s friend, and he’s right,” said Bell. “The whole concept of speaking person-to-person doesn’t need to be replaced, but enhanced.”

December 19, 2014

World News

Avon China Probe Concludes with $135 Million Settlement

The Department of Justice will defer criminal prosecution of Avon Products Inc. for three years, according to a bribery probe settlement disclosed Wednesday. A six-year federal investigation of the company has ended with Avon’s Chinese subsidiary pleading guilty and accruing $135 million in fines.

The investigation focused on the period from 2004 to late 2008. The SEC alleged that Avon China’s inaccurate and incomplete bookkeeping during that period conceals payments to government officials who ultimately awarded Avon the country’s first direct selling license.

According to the SEC’s Manhattan court filing, Avon violated the Foreign Corrupt Practices Act (FCPA) by bankrolling $1.65 million in travel, meals and entertainment for Chinese officials. The company also provided $8 million in cash and gifts without properly recording the expenses. Additional payoffs went to state-owned media outlets to help the company avoid negative press.

The direct selling leader has spent about $300 million on an internal investigation launched in 2008. In the settlement, the DOJ recognized Avon’s cooperation and the “extensive remediation” it has undergone to improve compliance and internal controls.

Avon stated in May that it would settle the probe, which includes $68 million in fines to the DOJ and $67 million to the SEC. The agreement includes a corporate compliance monitor to oversee monitoring and reporting obligations for three years. With the company’s ongoing compliance, the charges will then be dropped.

December 17, 2014

World News

Mannatech Launches in Spain with Mission 5 Million

Dallas-based Mannatech is advancing its Mission 5 Million movement with the launch of its operations in Spain. The wellness and skincare company, which celebrated its 20th anniversary this year, has now expanded into 24 markets worldwide.

“Adding Spain to our European market was an essential and natural fit for Mannatech,” said Dr. Robert Sinnott, CEO and Chief Science Officer, in the company’s release. “We have seen a demand for our products and business there that is unprecedented, and we believe that this initial launch will precede an era of long-term growth for this region.”

Mannatech reports that it has targeted additional European markets for expansion following its launch in Spain. Europe, the Middle East and Africa (EMEA)—currently Mannatech’s lowest sales region—generated 8 percent of net sales in 2013. For the quarter ended Sept. 30, 2014, EMEA net sales increased to $4.9 million, up 32.4 percent over third quarter 2013. Mannatech attributes its growth in the region to a rising number of active associates and members.

December 16, 2014

U.S. News

Thirty-One to Offer Artisan Jewelry Following Jewel Kade Acquisition

Photo above: Jewel Kade Founder Janet Kinkade (left) and Thirty-One Gifts Founder Cindy Monroe.


Thirty-One Gifts is ringing in the new year with a new addition to its family of brands. The Columbus, Ohio-based company has announced the acquisition of Utah-based direct seller Jewel Kade, an artisan jewelry brand founded in 2009. Beginning in spring 2015, Thirty-One will offer JK by Thirty-One jewelry in addition to its handbags, totes and home organization products.

Similar vision and values make the two companies a great fit, said Thirty-One Director of Communications Kate Hannum-Rose. Like Thirty-One Founder Cindy Monroe, Janet Kinkade launched Jewel Kade from her basement with the hope of equipping and empowering women to succeed on their own terms. Both brands also bring a personal touch with the option to customize various products. Jewel Kade now partners with a network of 1,500 stylists nationwide and has been featured on The Today Show, Ellen and American Idol.

JK by Thirty-One is not the only fresh offering coming to Thirty-One customers in 2015. The company has also acquired upscale accessories brand Jewell, a direct selling startup co-founded in 2013 by Monroe and her sister, Christie Jewell Woodfin. These strategic acquisitions bring new growth opportunities to a company that has achieved annual net sales of $763 million in its first decade.

“Years ago, Thirty-One offered gifting categories like jewelry and purses, and these acquisitions are great opportunities to bring some of these successful products back in our product offering, along with the other amazing bags, totes and home organization products in our spring catalog,” said Hannum-Rose.

With the acquisition, Thirty-One is offering Jewel Kade stylists the opportunity to join its family of consultants. Kinkade will also carry on her role as the principal jewelry designer for JK by Thirty-One.

December 16, 2014

World News

Natura Becomes World’s Largest B Corps Certified Brand

Natura Cosméticos, Brazil’s leading cosmetics, fragrance and toiletries maker, has built its business on a commitment to sustainable development. The brand’s purpose-driven practices emphasize respect for and preservation of the planet, as well as a strong sense of social responsibility. Pursuing that core philosophy, Nature has now become the largest—and first publicly traded—company to attain B Corps certification.

The nonprofit B Lab certifies B Corporations for voluntarily meeting rigorous standards of social and environmental performance, accountability, and transparency. More than 1,000 Certified B Corps across 33 countries and more than 60 industries are currently working to give new meaning to success in business.

Like its fellow B Corps, Natura leverages the power of business to solve social and environmental problems. For example, the company has long used refill packaging with less than half the environmental impact of conventional versions, and consistently works to reduce its consumption of water, energy and raw materials. Natura is also working to preserve Brazil’s biodiversity through a research program in partnership with Brazilian universities. A focus on people and place has led Natura to build “equitable” relations with numerous traditional communities to obtain ingredients found in local flora.

Natura joins two other large, high-profile businesses recently added to the B Corps ranks. Crowdfunding platform Kickstarter and energy company Green Mountain Power both announced certification earlier this month. With these latest additions—Natura is a 7,000-employee company with $2.65 billion in net sales last year—B Corps has added considerable heft to its community of small, privately owned companies.

December 12, 2014

U.S. News

This Week: CEOs in the Media Edition

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

  • Fortune spoke to Amway Chairman Steve Van Andel about criticisms of the direct selling model, Amway’s China success, and the next steps in the company’s international expansion. As a recent Chairman of the U.S. Chamber of Commerce, Van Andel also addressed U.S. manufacturing prospects and the value of “Made in the U.S.A.”
  • Stella & Dot Founder Jessica Herrin appeared on MSNBC’s NewsNation with Andrea Mitchell. Featured on the show’s Born in the U$A segment, Herrin shared how her social selling company is empowering women.
  • As President and CEO of the No. 14 company in direct selling, Stream Energy’s Mark “Bouncer” Shiro has seen many distributors come and go. This week Entrepreneur published his four essentials for retaining and motivating salespeople.
  • Tupperware CEO Rick Goings joined CNBC’s Brian Sullivan and Fortune’s Alan Murray on MSNBC’s Morning Joe. The segment explored the growth of the middle class and female leadership abroad.
  • Advertising and PR giant Havas Worldwide released its annual trends report. In a piece for Forbes, the company’s North America CEO, Marian Salzman, notes that the time-honored art of matchmaking is currently one of the hottest concepts in business. Salzman points to personal styling service Keaton Row as one example of this trend.

December 11, 2014

World News

LifeVantage Supports Asia Pacific Growth with New Hong Kong Office

After two years operating in Hong Kong, LifeVantage is opening a corporate office to support its growing customer and distributor base in the region. The state-of-the-art facility in the Empress Plaza will serve as a hub for business meetings and training sessions as well as a corporate office.

Asia Pacific is the primary focus for LifeVantage outside its business in the Americas. The wellness company began building a presence in the region in October 2012, with the opening of its Tokyo office. The formal launch of its Hong Kong business followed in December 2012. For its fiscal year 2014, LifeVantage reported revenue of $214.0 million, up 2.8 percent over 2013. Thirty-four percent of total revenue came from its business in the Asia Pacific region.

“We talk a lot about responsible growth, and we’re in seven countries today. We’re building this company for generations to come,” LifeVantage President and CEO Doug Robinson told DSN in a recent interview. “That means that our distributors can go all in and be assured that the company will be there for them through thick and thin, good times and bad. The more distributors we attract, the bigger growth engine we’ll have.”

The science behind LifeVantage products promotes health, wellness and anti-aging at the cellular level. The company’s flagship Protandim supplement reduces the oxidative stress caused by free radicals. LifeVantage has developed additional offerings that combat the effects of oxidation, including its TrueScience beauty system and AXIO energy drink powders.

LifeVantage Meeting Space
Inside one of the office’s meeting spaces.

LifeVantage Meeting Space
The view from LifeVantage’s Empress Plaza office. (photos: LifeVantage)

December 09, 2014

U.S. News

Be Connected 2014 Delivers Marketing Tactics for Today’s Audience

Direct sellers, suppliers, marketing professionals and a host of other industry influencers gathered in Dallas from Dec. 3-5 to exchange ideas and resources at the Direct Selling Association’s 2014 Be Connected Conference.

This year’s conference focused on marketing and communications and once again featured a special session on Wednesday for young and growing companies to interact with more seasoned executives. This Smart Start Seminar included roundtable discussions on topics such as marketing via grassroots efforts and social media, developing the salesforce and building the corporate team.

Thursday contained a full day of networking, learning and sharing as speakers addressed the audience from one main stage. DSA President Joseph Mariano welcomed attendees and provided some context on the industry with his Presidential Report. In the coming year, the DSA will advance its “three Ps” agenda of policing, promoting and protecting the industry.

The programs Mariano outlined demonstrate the ways in which DSA is working to demystify the sales channel for policymakers and the general public and tell the story of how direct selling positively affects the lives of millions of Americans. One of the ways that happens is by ensuring companies are behaving in the correct manner in the marketplace, which is the aim of the Association’s Code of Ethics.

Modern Marketing for a Classic Brand

Conference Master of Ceremonies Sheryl Adkins-Green, Mary Kay Inc.’s Chief Marketing Officer, opened the morning’s General Session by sharing her strategy for extending the marketing reach of this iconic brand.

“In some respects, the game for us as an industry has never changed,” she shared. “We’ve always known it’s about customers, we’ve always known it’s about connections and we’ve always known it’s about credibility. I love the fact that the economy is now appreciating the value we bring as a direct selling industry.”

To successfully execute various marketing initiatives and engage its field on a daily basis, Mary Kay gets by with a little help from some “cool” friends. The company has partnered with BMW, the maker of its newest bonus car; Neiman Marcus, whose flagship store in Dallas paid tribute to the company on its 50th anniversary; and Conan O’Brien, who filmed a Mary Kay segment for his late night comedy show. The cosmetics giant is also the official beauty sponsor of the hit show Project Runway.

The 50-year-old brand is also engaging the younger audience that will take its business into the future. Mary Kay went backstage as a sponsor of the 2013 Teen Choice Awards, and has connected to students across the country through its Mary Kay Beauty 101 College Tour, now in its fifth year. Mary Kay’s Manager of Corporate Communications, Rebecca Gibson, later shared how the company’s media relations efforts are supporting its brand positioning and philanthropic programs.

Fortune Favors Bold Experimentation

Keynote speaker Luke Williams, a Professor of Innovation at the NYU Stern School of Business and Executive Director of the Berkley Entrepreneurship Center, led Thursday’s lineup with a talk on “gamechanging, disruptive innovation.”

Luke challenged leaders to avoid incremental innovation in favor of bold new experiments. New ideas and ongoing experimentation are key to being a gamechanger in any industry, yet many companies approach change complacently, opting to innovate around their existing asset base.

“Where are the leaders coming in to stop those short-term patterns of behavior and provoke introspection—is this still the best product or service we can offer consumers, is this still the best model for our business, is this still the right narrative, is this still our competition?” asked Luke. “It doesn’t happen enough on a regular basis, but this sort of provocation drives 21st-century business. To disrupt the marketplace, you have to change the way you’re thinking about your business and the way you interact with your customers every day.”

Philanthropy Is Changing the Game

General Session II opened with Nu Skin’s Head of Corporate Communications, Kara Schneck, who shared how the company’s intense commitment to its nonprofit work and social entrepreneurship programs create excitement and loyalty among its entire community of sales representatives, customers and employees.

On its mission to be a force for good in the world, Nu Skin has found a sweet spot where business overlaps philanthropy. The company established a for-profit social enterprise called Nourish the Children, which supplies a nutrient-rich Vita-Meal product to malnourished children around the world. Distributors and employees purchase Vita-Meal and donate them through the company’s charity partner, Feed the Children. Thus far, Nu Skin’s initiative has fed more than 400 million meals to children around the world.

Wednesday’s series of “Rapid-Fire” segments included Mark Rawlins, CEO of InfoTrax Systems, who spoke about rewarding specific behaviors in commission planning; Jan Gilmore, Principal at Jan Gilmore & Associates, who offered tips and strategies about keeping the field active; and Jonathan Gilliam, President of Momentum Factor, who addressed how to manage a company’s reputation within social media outlets. Jay Leisner, President of Sylvina Consulting, also spoke on compensation plan motivation.

Doing the Next Right Thing

On Thursday afternoon, Anne Aldrich of Artemis Strategy Group, DSA’s third-party research consultant, provided key insights from a series of industry studies commissioned by DSA. The afternoon also included a CEO panel featuring Jewel Kade’s Brett Blake, Kerry Shea Penland of All’asta, Britney Vickery of Initials Inc., and Ruby Ribbon’s Anna Zornosa. Their discussion centered on “Creating the Groundswell” that boosts organic growth in the field.

For companies pursuing the next stage of growth, Shea noted, the basics remain the basics along the way. “So much of what we focused on in the first year, I think, is still critical—keeping it simple and doing the next right thing better. There’s a lot of patience needed in this industry, because there’s such a temptation to do fast-track growth.”

Tory Johnson, a weekly contributor to Good Morning America and the No. 1 New York Times bestselling author of The Shift, closed out Thursday’s sessions with a fire hose of insights. Though not associated with a particular company, Tory expressed strong support of direct selling and the opportunities it provides. During her talk, she challenged attendees to shift their perspective—and gain a sense of accomplishment—by identifying three things to do on a daily basis and sticking to them.

Friday’s General Session opened with WineShop At Home President and CEO Jane Creed, who shared the “Wine Is Social” philosophy behind her company’s vibrant online community. DSN’s own General Manager, Lauren Lawley Head, followed with key consumer insights from the recent Harris Poll study commissioned by Direct Selling News.

Friday’s session also covered the dos and don’ts of online leads, with a Rapid-Fire segment from IdeaDrenaline’s Brett Duncan and a panel discussion between Initials Inc. Marketing Manager Brandy Aycock and Jen Fong, Senior Vice President of Marketing and Communications at SwissJust.

Marketing in Real Time

Author David Meerman Scott delivered the day’s final burst of energy with insights from one of his international bestsellers, The New Rules of Marketing and PR. Scott provided practical tips for engaging with your audience and encouraged attendees to interact in real time to boost sales.

“When people are interested, that’s the right time to engage. If a buyer is on your site, that’s a sales signal. How can you reach them at the moment they’re visiting your site? If someone opens an email, that’s a sales signal. How can you reach someone at that moment?”

Also featured on Friday morning was a presentation from the Direct Selling Education Foundation (DSEF) as the organization provided its annual Pack a Present donation to this year’s recipient: Operation Homefront. Conference attendees once again provided generous donations, this time supporting Dallas-area families of military service members and veterans.

December 09, 2014

U.S. News

Herbalife-Backed LA Galaxy Make MLS History

Photo above: LA Galaxy captain Robbie Keane salutes the crowd.


Major League Soccer’s LA Galaxy donned their Herbalife jerseys on the way to a historic win on Sunday. The team defeated the New England Revolution in the final game of this year’s MLS Cup, becoming the only team in the league’s history to win five championship titles.

Los Angeles-based Herbalife has partnered with the Galaxy for the past seven years, both on and off the field. Most recently, the Herbalife Family Foundation joined LA Galaxy players to serve Thanksgiving dinner to 1,000 local members of the Los Angeles community. Herbalife Chairman and CEO Michael O. Johnson congratulated the champions in an official release.

“It was a great day for Los Angeles sports and for the LA Galaxy, as they also created history by becoming the first MLS team to win five championship titles,” said Johnson. “As the LA Galaxy’s sponsor and nutrition partner for seven years, and as a Los Angeles resident for nearly 35 years, Herbalife is extremely proud of its association with this great club and this great city.”

December 03, 2014

U.S. News

SimplyFun Makes $200K Donation to Toys for Tots

This Christmas, board game developer SimplyFun is giving the gift of play to thousands of children nationwide. The Seattle, Washington-based company has made a $200,000 product donation to the Marine Toys for Tots Campaign, which provides new toys to children in need during the holiday season.



SimplyFun has developed more than 100 award-winning products, sold by the company’s network of independent Playologists. The educational games take a fun approach to teaching children skills such as language development, math and critical thinking. The company is a national corporate sponsor of this year’s Toys for Tots campaign.

“We are very pleased to welcome SimplyFun on board as a national corporate sponsor of the 2014 Marine Toys for Tots Campaign,” said retired Marine Major Bill Grein, Vice President of the Marine Toys for Tots Foundation, in the company’s release. “With their generous contribution of toys and games, along with their willingness to assist us in the difficult work of raising dollars for our annual children’s program, we will be able to fulfill the Christmas holiday dreams of thousands of less fortunate children who otherwise would likely be overlooked this year.”

December 03, 2014

Event Production

Solomon Group


December 02, 2014

U.S. News

CVSL Withdraws $60 Million Public Offering ahead of Uplisting

CVSL has scrapped plans for a $60 million public offering on the NYSE MKT, according to a Monday release from IPO investment manager Renaissance Capital. The company’s planned uplisting will occur within the next several trading days despite the halted equity raise.

Through its strategy of acquiring and improving direct selling companies, CVSL has built a portfolio of eight independent businesses, which benefit from the company’s combined back office expertise. CVSL reported $89 million in sales for the 12 months ended Sept. 30, 2014.

Shares in CVSL are currently traded over the counter, with a market cap of about $350 million on the OTCQX. The Plano, Texas-based company first filed its S-1 in May and received authorization in late August. Renaissance Capital previously reported the company’s strategy to raise $60 million with an offering of 6.7 million shares priced at $8.00 to $10.00.

December 02, 2014

U.S. News

Lia Sophia Says It Will Shut Down in February

Photo above: Celebrities Jessica Alba, Camilla Belle and Ali Larter step out in lia sophia jewels.


Jewelry seller lia sophia will close its doors in February, according to an announcement on the company’s website and social media pages. The family company said a “challenging business environment” is driving its decision to end operations in the U.S. and Canada.

The Chicago-based brand launched in 1986 as the jewelry division of Remington Products Company, a personal-care product empire. Tory Kiam has led the jewelry business since the death of his father, Remington owner Victor Kiam, in 2001. He and his wife, Elena, relaunched the company in 2004 under the lia sophia brand, named after their two daughters.

“We are so proud of building lia sophia over the past 28 years into an outstanding company that has empowered women, and whose jewelry has been a favorite of so many,” Elena Kiam, the creative director behind lia sophia’s designs, wrote Monday on her company blog. “However, given the challenging business environment, we made the painful decision to wind down lia sophia in the United States and Canada by December 31, and cease operations by the end of February.”

December 01, 2014

World News

Avon Fights Domestic Violence with #GivingTuesday Campaign

The Avon Foundation for Women is partnering with the National Domestic Violence Hotline to celebrate #GivingTuesday on Dec. 2, 2014. Following the shopping extravaganzas of Black Friday, Small Business Saturday and Cyber Monday, #GivingTuesday celebrates generosity with a global day of giving back. The Avon Foundation is taking part to raise $1 million in support of domestic violence organizations.

As its name suggests, the Avon Foundation for Women focuses on critical issues affecting women, particularly breast cancer and domestic violence. The Avon Foundation has donated nearly $38 million to domestic violence programs and services in the U.S.

The National Domestic Violence Hotline’s highly trained advocates provide support, crisis intervention information and referral services in over 170 languages. A recent census funded by the Avon Foundation found that, on average, hotlines nationwide receive more than 20,000 calls per day. Nearly 10,000 of those requests for services go unmet due to a lack of resources.

“I am saddened to learn that across the world, one in three women will experience domestic violence, and she could be your sister, daughter, friend or neighbor,” tennis star Maria Sharapova, a supporter of the Avon Foundation, shared in a statement. “One simple and powerful way to give back on this holiday season is by donating to The National Domestic Violence Hotline.”

The Avon Foundation partnered with the Hotline for a 2013 #GivingTuesday campaign that generated more than $83,000 in contributions, as well as a $200,000 Avon Foundation grant. The donations enabled the Hotline to respond to over 23,000 calls, chats and text messages for help. This year the Avon Foundation has committed a matching gift of $500,000 to help raise $1 million for the Hotline.

December 01, 2014

Magazine

90 Days of Direct Selling

by Lauren Lawley Head

CELEBRATE WITH US!
September 17 to December 15


Our goal in this 90 Day campaign: 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.

We’ll keep this page updated with the commentary, interviews, profile posts and other information as we move through the 90 Days.

Come join the conversation!


Click on the links below to discover 90 Day content:
(more will be added each week)

- See what we’re celebrating in our December issue!

- See what we’re celebrating in our November issue!

- See what we’re celebrating in our October issue!

- DSN Global 100 Profiles


INTERVIEWS

- Alessandro Carlucci: WFDSA Hosts 14th Annual World Congress in Rio
- An Interview with Nu Skin’s CEO Truman Hunt

PAY IT FORWARD

- Direct Sellers Pay It Forward on Capitol Hill

RAISE THE BAR

- Industry Events Help You Raise the Bar

RESEARCH

- What 90% of Direct Sellers Say

SOCIAL MEDIA

- Use #DirectSelling90 and spread the news!

December 01, 2014

Stock Watch

Stock Watch, December 2014


December 01, 2014

DSA News

DSA’s Annual Women’s Leadership Summit Empowers and Connects Women Executives

by Nancy M. Burke


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


When women come together, great things happen.

The U.S. economy is strengthening in large part due to women’s advances in the workplace. According to McKinsey & Company, the additional productive power of women who have entered the workforce since 1970 accounts for about one-fourth of the current GDP.

Although women have become increasingly active and successful in academic pursuits, there remains a large discrepancy between academic achievement and professional advancement. Women earn more than half of all graduate and doctoral degrees, yet they make up only 16.9 percent of board members of S&P 500 companies. More surprising than that, a disproportionate 14.8 percent of U.S. companies have at least three women on their boards. Earlier this year, Fortune reported there are 24 women CEOs in the Fortune 500 and just 27 in the Fortune 1000 (5 percent and 3 percent, respectively).

Studies show gender diversity has a positive impact on business culture and growth, so why do so few industries have large numbers of women rise to the top? As different sectors of the U.S. economy play catch-up in encouraging gender diversity, the direct selling industry is leading the pack. Of the 16.8 million people involved in direct selling in the U.S., 74 percent are women. Additionally, with each passing year, more and more direct selling CEOs and C-level managers are women. DSA is proud of these advances and is dedicated to the empowerment of women in this sales channel.

To continue to embrace this critical aspect of direct sales leadership, DSA annually coordinates a special venue for women executives to network with each other and continue to foster their leadership abilities. DSA’s fourth annual Direct Selling Women’s Summit took place in early October, providing 25 industry executives with a prime development venue.

“As always the most valuable part of the event is the networking, and sharing in this very small intimate setting is invaluable. I always learn things from my fellow executives,” said Mary Julich, Partner at Symmetry Corp.

A special mentoring session was a featured aspect of this year’s event, providing participants with this necessary professional development tool. Professor Kathy Korman Frey of The George Washington University’s School of Business and The Hot Mommas Project—the world’s largest digital case study library featuring female role models—led this session, and during her opening remarks she noted, “You’ve elevated the women’s leadership game. Your culture is different and special. You’re five to 10 years ahead of most industries, which is inspiring.”

In addition, these leaders also discussed engaging with the Hispanic market and political activism with two subject matter experts. Janet Murguia, President of the National Council of La Raza, and Gail Kitch, Chief Operating Officer at The Voter Participation Center, both conveyed special insights regarding women’s empowerment and, specifically, a deeper engagement with Latinas.

“Our mission is to open the doors to the American dream for Latinas,” Murguia stated to the executives. “The Hispanic community represents your future consumers and employees, and we want to be a resource for you as you engage with them.”

Kitch shifted the conversation to voter engagement and activism among female voters—one of the most underrepresented populations in the U.S. “You are the local storytellers, and the Congressional staffer you’re talking to is deeply invested in hearing those stories,” she noted as she reflected on the group’s upcoming Capitol Hill meetings. “Be that vital link back to their community.”

Meetings on Capitol Hill enabled the women to flex their political muscles as they each participated in several meetings with Hill staffers. They introduced their companies, product lines and field opportunities to Congressional offices and formed important relationships.

“Our product is women’s empowerment—helping women rise up,” observed WineShop At Home CEO Jane Creed.

“We’re in the people development business. It’s tremendous to watch them be transformed,” Shaklee Director Marjorie Fine told a staffer in Senator Claire McCaskill’s (D-Mo.) office.

Across the day-and-a-half retreat the 25 industry leaders mentored and invigorated one other, encouraging all participants to continue to pave avenues for opportunity for women within their companies to benefit their field members and communities.

It’s no surprise that the direct selling industry is experiencing growth with such wonderful women leaders involved. DSA is committed to advancing gender diversity and plans to hold another Women’s Leadership Summit in 2015. For more information, or if you are interested in participating in future events, contact me at nburke@dsa.org.


Nancy BurkeNancy M. Burke is Vice President, Membership, at the U.S. DSA.

December 01, 2014

Financial News

Financial News, December 2014

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


CVSL Plans $60 Million NYSE Uplisting

IPO investment manager Renaissance Capital has reported the terms of CVSL’s planned uplisting to the NYSE MKT. The direct-selling conglomerate is looking to raise $60 million with an offering of 6.7 million shares priced at $8 to $10. That would place CVSL’s midrange market value at $308 million. Shares in CVSL are currently traded over the counter, with a market value of about $293 million on the OTCQX.

To comply with NYSE MKT terms, CVSL implemented a 1-for-20 reverse stock split of its common stock. Though it had no impact on the par value per share, the split reduced CVSL’s shares of common stock from 487,975,986 to approximately 24,398,800.

CVSL has built a portfolio that now includes seven direct selling or “micro-enterprise” companies across the home improvement, gourmet foods, skincare and nutrition industries. The brands operate independently of one another, while benefitting from combined expertise and efficiencies in finance, IT and the supply chain.


USANA Posts Record Q3 Profit

USANA Health Sciences Inc. (USNA—NYSE) announced a record profit of $19.5 million, or $1.47 EPS, when it released its third quarter earnings statement. Earnings increased by 16.4 percent, compared with $16.8 million during the prior-year period with EPS beating estimates of 10 cents, according to Zacks Investment Research. Earnings per share for the quarter increased by 26.7 percent, compared with $1.16 in the third quarter of 2013.

For the third quarter of 2014, net sales increased by 10.5 percent to $191.9 million, compared with $173.7 million in the prior-year period. This beat estimates by $1.4 million. The increase in net sales was driven by overall associate growth of 18.8 percent, which was generated by the company’s Asia Pacific region.

The increase in earnings per share was attributable to higher net earnings and a lower number of diluted shares outstanding due to the company’s share repurchases during 2014. Weighted average diluted shares outstanding were 13.3 million as of the end of the third quarter of 2014, compared with 14.4 million in the prior-year period.

During the quarter, the company repurchased approximately 1.1 million shares under its authorized repurchase program for a total investment of $76.6 million.

2014 guidance includes consolidated net sales between $780 million and $790 million, versus the previous outlook of between $770 million and $790 million, and earnings per share between $5.85 and $5.95, versus the previous outlook of between $5.50 and $5.65.


Herbalife Shares Drop, but CEO Optimistic

Global health and wellness company Herbalife Ltd. (HLF—NYSE) reported its third quarter earnings, disappointing investors with its earnings miss and a lower than anticipated fourth quarter outlook. Adjusted net income for the quarter was $125.1 million, or $1.45 per diluted share, compared to $152.1 million, or $1.41 per diluted share, for the same period in 2013.

On the news, shares dropped 11 percent to $49.60 during after-hours trading on Nov. 3, 2014, the day of release, according to MarketWatch, and continued to fall to $44.26 by close on Nov. 4. Wall Street expected earnings per share to come in at $1.51, up from $1.41 at the same time last year.

On a positive note, Herbalife reported net sales of $1.3 billion, reflecting an increase of 4 percent compared to the same period in 2013, and, according to CEO Michael O. Johnson, the quarter saw volume increases in two-thirds of the company’s 91 countries, especially Russia and China.

Johnson sought to allay concerns about the company’s forecast during its earnings call with investors on Nov. 4. “While the third quarter represented a record level of net sales, our performance was below expectations, and this performance was clearly out of character for us,” Johnson said. “There was a confluence of factors—some external and some internal—that had an impact on our results. The main factors were Venezuela, FX and the short-term effect of structural changes that we are making to our business.”

Net income fell 92 percent to $11.2 million, or 13 cents a share, down from $142.0 million or $1.32 per diluted share for the same period in 2013. Third quarter 2014 reported net income was negatively impacted by $139.5 million in pre-tax charges, or 97 cents per diluted share after tax, related to the remeasurement of the Venezuelan Bolivar, and $17.5 million in pre-tax charges, or 13 cents per diluted share after tax, related to a legal reserve.

According to Johnson, Herbalife continues to implement a global expansion of marketing plan enhancements to improve productivity, activity, and retention of sales leaders, driving a more consistent and sustainable growth model.

“We are making changes to the business model that will not only improve our way of doing business, but also improve our results,” he told investors on the call. “This period of transition for the company is an important chapter in our history, and one that will make us stronger. Some of these changes, however, take time to be digested and implemented by our members, and as a result this has affected our performance for the short term.”

Guidance for fourth quarter FY 2014 included an unfavorable impact from currency rates of approximately 31 cents compared to the prior year, inclusive of approximately 22 cents from Venezuela. Guidance for FY 2015 includes a currency headwind of approximately 66 cents, including approximately 45 cents from Venezuela.


Avon Beats Q3 Expectations, Still Shows Signs of Struggle

The release of Avon Products Inc. (AVP—NYSE) third quarter results surpassed earnings expectations while missing revenue forecasts. The company reported adjusted net income from continuing operations of $99 million, or 23 cents per diluted share, beating expectations of 16 cents, according to the Zacks Consensus Estimate, and jumped approximately 64.3 percent from 14 cents, or $60 million, for the third quarter of 2013.

“We began the year with the expectation that the second half of 2014 would show improvement relative to the first half, and Avon’s third quarter results are consistent with modest improvement on both top and bottom line,” said Avon CEO Sheri McCoy. “We saw good results from our EMEA region, while sluggish performance in Brazil contributed to softer results in Latin America. Despite the strong headwinds in a number of markets, we continue to make progress on Avon’s turnaround journey.”

Still shares dropped over 9 percent when earning were released on Oct. 30, 2014, according to Zacks, after results fell short of revenue forecasts. The global cosmetics company posted revenue of $2.14 billion in the period, down 8 percent, or up 1 percent in constant dollars, from $2.32 billion during the prior year period. Analysts expected $2.15 billion, according to Zacks. Revenue was negatively affected by weak foreign exchange rates and lower sales volume, partially offset by the favorable net impact of mix and pricing, primarily due to inflationary pricing in Latin America.

Beauty sales declined 9 percent, but increased 1 percent in constant dollars. Fashion and home sales declined 11 percent, or 4 percent in constant dollars.

Brazil is the company’s largest market and Latin America is its most profitable region, yet Brazil revenue was up only 1 percent, or relatively unchanged in constant dollars. According to the company, this was partially impacted by high levels of competitive activity.

“In addition, the Brazilian economy has not recovered as anticipated after the World Cup. Consumer spending also seems to be impacted by the uncertain economic environment, the election cycle and high cost of debt,” McCoy said during the earnings conference call on Oct. 30. “That being said, while growth may be slowing, Brazil remains a highly attractive market, and we are committed to participating in its longer-term growth.”

Further results showed that third quarter 2014 gross margin was 61.9 percent and adjusted gross margin was 62.0 percent. Adjusted gross margin was 110 basis points lower than the prior-year quarter.


Nu Skin Q3 Sales Drop, Earnings Rise

At Nu Skin Enterprises Inc. (NUS—NYSE), third quarter revenue was $638.8 million, down 30 percent over the prior-year period. The revenue dip partially reflects a limited-time introduction of Nu Skin’s ageLOC® TR90® weight management system in Q3 2013. The personal-care company reported earnings of $1.12 per share, ahead of Nu Skin’s 90 cents to 95 cents guidance for the quarter. The company expects fourth quarter revenue of $590 million to $610 million, with earnings per share of 72 cents to 77 cents.

“Our sales results are heavily impacted by our product launch schedule. Last year’s second-half launch, which generated approximately $550 million in sales, provides a difficult year-over-year comparison,” Nu Skin President and CEO Truman Hunt shared in the company’s report. “However, excluding product launch sales, the core business has stabilized and is trending positively sequentially.”


Primerica Sales up 9%

Primerica Inc. (PRI—NYSE) reported third quarter revenue of $339.2 million, up 9 percent year over year. Net income was down 3.7 percent to $41.6 million, or 75 cents per diluted share, impacted by accelerated equity compensation expenses related to retirement plan modifications and higher claims incurred in the quarter. The financial services provider lagged 8.43 percent behind the Zacks Consensus Estimate, but investors reacted positively to Primerica’s results. The company’s stock price gained 0.38 percent on the news Nov. 5, 2014, to close at $52.16.


Nature’s Sunshine Revenue up, Earnings down

Nature’s Sunshine Products Inc. (NATR—NASDAQ) reported increased revenue for the third quarter on Nov. 5, 2014, with $94.9 million, up 2.6 percent from $92.5 million in the third quarter of 2013. Results showed lower earnings though, with 6 cents per diluted common share or net income of $1 million, compared to 29 cents, or $4.9 million in the third quarter of 2013. It was the fifth consecutive quarter of record sales for the health and wellness company’s Synergy WorldWide business, driven by South Korea, Japan and a return to growth in Europe.

“Sales in NSP North America have begun to improve with NSP United States and NSP Canada posting net sales growth for the first time since the second quarter of 2013 and the first quarter of 2012, respectively,” said Chairman and CEO Gregory L. Probert. “We remain cautiously optimistic about the future of this core market as our new products and sales programs continue to gain traction.”


Medifast Q3 Results ahead of Consensus

Medifast Inc. (MED—NYSE) third quarter results came in ahead of expectations on Nov. 5, 2014 with net income of $4.9 million, or 39 cents per share. Excluding non-recurring costs, adjusted earnings came to 47 cents per share, or $5.9 million net income. The weight-loss company posted net revenue of $74 million. This was a decrease of 14 percent from net revenue of $86.5 million in the third quarter of 2013. Revenue in the direct sales channel, Take Shape For Life, decreased 11 percent to $49.9 million in the third quarter of 2014, compared to $56.2 million in the same period last year.

Guidance for Q4 revenue and EPS is below consensus, with net revenue to be in the range of approximately $69 million to $73 million and EPS in the range of 31 cents to 34 cents. For fiscal year 2014, the company now expects revenue to be in the range of $310 million to $314 million and EPS in the range of $1.59 to $1.62. As trading closed on Nov. 5, 2014, shares hit $30.09, an increase of 23 percent in the last 12 months.


EDC’s Home Division Continues Record Sales Trend


Educational Development Corp. (EDUC—NASDAQ) reported results for the fiscal second quarter and the six months ended Aug. 31, 2014. For the six months ended Aug. 31, 2014, EDC reports net revenue of $14.0 million, a 19 percent increase of $2.3 million when compared to $11.7 million for the same period in the previous year and net earnings of $235,800 compared to $123,000. Earnings per share were 6 cents compared to 3 cents the previous year on a fully diluted basis.

The home business division, Usborne Books & More, has now recorded 16 consecutive months of revenue growth after nine years of decline. Net revenue for the first six month of fiscal year 2015 were up 30 percent over the same period in fiscal year 2014, and for this quarter sales are up 41 percent, and the trend continued in September as sales were up 58 percent over September last year.

The net earnings for the quarter were negatively impacted by two separate non-reoccurring charges, including additional marketing and promotion expense and recording a prior year’s sales tax audit assessment, which resulted in a $164,000 pretax impact.


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.

December 01, 2014

News in Brief

News in Brief, December 2014

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


14th Triennial World Congress Held in Rio

The World Federation of Direct Selling Associations kicked off its 14th triennial World Congress Nov. 10 in Rio de Janeiro, Brazil. As the first order of official business, the WFDSA’s CEO Council elected Amway President Doug DeVos as Chairman to succeed Natura’s Alessandro Carlucci at the end of the event.

DeVos will serve a three-year term as chairman and has pledged to continue to support the organization’s long-range plan. That plan encompasses four key objectives: improve processes and structures of direct selling associations and the World Federation; promote alignment of direct selling companies; promote ethics; and strengthen direct selling’s image.

“For the committees in the organization, what I want to do is to be able to enable and support the work of those committees so that we can continue to build on our foundation and move more quickly to better positions,” DeVos said. “As we have improved our operations every year, every cycle we get better at that. I would love to take another step forward in that process.”

During a joint press conference, Carlucci and DeVos highlighted the WFDSA’s recent research report, which found direct selling generated more than $178.5 billion in retail sales globally in 2013. The World Congress host country was the world’s fifth-largest direct selling market last year, with retail sales of nearly $14.2 billion, a 7.2 percent increase from the prior year. (For more in-depth coverage of the global report, see the cover story in our October 2014 issue on Billion Dollar Markets.)

They also discussed the theme of the 2014 World Congress, “Direct Selling: the Original Social Network.” It is a crucial topic to tackle, Carlucci said, because customers continue to dramatically change the way in which they prefer to buy products and services, using technology more and more. If handled correctly, this offers a huge opportunity for direct selling companies. “It is not Natura or Amway selling a product, it is more than that,” he said. “It is someone that has a name and a surname from each one of these companies who is recommending a product. They are saying, ‘Look, this product is very good. I use it or I have some clients that are using it.’ This is very contemporary, when we think about what is happening in social media where we are relying much more on the number of stars or referrals from our friends… than on advertising.”

The theme carried through much of the World Congress programming, including a presentation by Facebook Vice President of Global Marketing Solutions Dan Levy on the start of Day Two, which also featured sessions and workshops entitled, “New Generations: Enchanting consumers through innovative relationships” and “Direct Selling: social engagement and mobilization.”

There is no doubt direct selling companies must embrace new technology strategies in order to connect with the next generation of consumers and distributors, but the fundamentals of the business remain the same. “This is still a direct selling business,” DeVos said. “All the technology is there to enable and empower people, not to go around them, not to eliminate them from the way in which direct selling operates.”

>> Watch for more coverage in our January issue and online at www.directsellingnews.com.


Immunotec Opens First U.S. Sales Office

Immunotec has bolstered its presence in the U.S. with a new Sales Office in Commerce, California. The 7,200 square-foot facility opened recently to support strong sales and distributor growth across the country’s southwestern region.

Canada-based Immunotec reported Q3 revenue of $22.3 million, up 55 percent over the prior year period. In the U.S., revenue increased 27 percent in the third quarter. The nutrition company now operates regional offices in the U.S. and in Mexico, in addition to its Quebec headquarters.

Immunotec offers an extensive family of nutritional products targeting health, wellness, and weight management, as well as energy and fitness. The Immunocal family of products is supported by over 40 published articles and supporting science in medical and scientific literature.


J.Hilburn Pop-Up Shop Returns to NYC

Custom menswear brand J.Hilburn suited the masses Oct. 23 through Nov. 15 with its second brick-and-mortar store: The J.Hilburn Pop-Up Shop. Combining the sophistication of custom clothing, the highest quality fabrics and craftsmanship, and an accessible price point, J.Hilburn launched its pop-up shop at Manhattan’s Refinery Hotel.

J.Hilburn builds one-on-one relationships between brand and customer through a nationwide network of over 3,000 personal Stylists. Last fall’s highly successful pop-up, A Fortnight in Soho, was J.Hilburn’s first foray into establishing a physical presence in New York City.

Leveraging a state-of-the-art custom supply chain, J.Hilburn is able to deliver custom shirts in seven business days. To date, the brand has sold over 500,000 custom shirts across 48 states nationwide. The brand also offers made-to-measure suiting, which has grown over 115 percent annually since launching in 2011. In 2014, the company will deliver over 40,000 made-to-measure suits.

The J.Hilburn Pop-Up Shop partnered with Uber, Lexus, J Brand Jeans, AG Jeans, DL 1961 Premium Denim, Blind Barber, Paul Evans Footwear, Balblair Whiskey, Balvenie Whiskey, Kings County Whiskey, Tap 357 and Perrier.


Nerium Creates Scientific Advisory Board

Anti-aging skincare company Nerium International has announced the establishment of a Scientific Advisory Board, comprised of the following notable scientists and dermatologists: Dr. Adam Friedman, Dr. Neal Bhatia, Dr. Mira Stotland, Marie Bertrand, Dr. Debra J. Wattenberg and Dr. Karthik Krishnamurthy.

The mission of the Nerium International Scientific Advisory Board is to educate consumers about the efficacy and safety of Nerium’s products, while also providing feedback on new product development. The board will be chaired by Adam Friedman, MD, FAAD, and Director of Dermatologic Research at the Unified Division of Dermatology of Montefiore Medical Center, Albert Einstein College of Medicine.

With the primary goal of product safety and quality, Nerium has taken great care with respect to the formulation of its products. Nerium’s product portfolio includes the NeriumAD product line, sold in the United States, and the Optimera product line, sold internationally.


Jusuru Launches Vitamin Angels Partnership

Nutraceutical company Jusuru International has refined its charitable program through a new partnership with Vitamin Angels. The global organization supplies life-saving vitamins to chronically undernourished populations—specifically pregnant women, new mothers, and children under 5.

In the past, Jusuru has given back through a variety of nonprofits and critical causes. Now, the California-based company is focusing and growing its efforts by way of a formal partnership. Jusuru has made donations to Vitamin Angels possible through its online shopping cart. With each purchase, customers and distributors can add a $1, $5 or $10 donation, which Jusuru will match.

Vitamin Angels is a 20-year-old organization that boasts seven consecutive four-star ratings from Charity Navigator for financial health, accountability and transparency. This year, the nonprofit is working to provide vital nutrients to 40 million children in approximately 45 countries. The aforementioned $10 donation would supply Vitamin A supplements and multivitamins to 40 children for an entire year.


Medifast Introduces Digital Dashboard, Fitbit Partnership

Medifast Inc., a leading U.S. manufacturer and provider of clinically proven weight-loss products and programs, recently announced the launch of customized digital dashboards, which allow Medifast and Take Shape For Life customers to track nutrition, exercise, meals, weight, sleep, well-being and more, and enable Medifast to provide additional tools to help with long-term weight management and overall wellness.

The Habits of Health Dashboard and Community was developed for Take Shape For Life clients and Health Coaches, offering a Healthy Mind component, which tracks well-being and mindfulness. The Habits of Health Dashboard also features a unique Coach Console that allows Health Coaches to review client progress via their dashboards and work more intimately with clients to provide one-to-one feedback on their journey to Optimal Health.

Medifast also announced a partnership with Fitbit®, the market leader and pioneer in the connected health and fitness space. Consumers with one of Fitbit’s award-winning activity trackers can now have their activity data linked to their personal Medifast Dashboard. Fitbit Flex®, Fitbit Zip®, Fitbit One®, and Aria® will be available for purchase through the Medifast sales channels to complement Medifast’s weight-management and healthy living products, programs, tools and technologies. 


Amway Leads Global Sales of Air Treatment Systems

Amway’s ATMOSPHERE brand of premium home air treatment systems is No. 1 in the world, according to new research by Verify Markets. A study of 2013 global sales revealed that Amway commands a 15 percent share of the total global market for air treatment systems.

Last year, China generated the highest demand for Amway’s residential air purification systems. According to a World Health Organization estimate, 4.3 million deaths—or 7.7 percent of total mortality—were attributable to household air pollution (HAP) in 2012. The Western Pacific region of the world, including China, accounted for 1.6 million of those deaths.

ATMOSPHERE is not the only leading brand developed by Amway. The direct selling powerhouse has also built NUTRILITE, the world’s No. 1 selling vitamin and dietary supplement brand, and ARTISTRY, one of the top five premium skincare brands in the world.


Indian Professor Joins Tupperware-Backed Global Links Program

Dr. Sharmistha Banerjee, a Professor of Business at the University of Calcutta, has been selected as the first Indian scholar for the Global Links: Empowering Women through Education & Opportunity program, launching in India. The public-private partnership is an initiative between the U.S. Secretary of State’s Office of Global Women’s Issues, Tupperware Brands and Rollins College, Winter Park, Florida.

The innovative program is designed to train female Indian professors in social entrepreneurship. The program utilizes the train-the-trainer model with the goal of creating a pool of students who will support and mentor women in the community in starting their own businesses.

As the scholar in residence, Dr. Banerjee will participate in curriculum at Rollins College in the Business and Social Entrepreneurship department and the Crummer Graduate School of Business. The curriculum includes coursework on human-centered design thinking, entrepreneurship, and small and medium enterprise development. Subsequently, the professor will participate in an externship at Tupperware Brands, where she will gain practical experience and learn the fundamentals of direct selling, market analysis and management.


Ambit Entrepreneur Pens a Book for ‘The Ambitious Woman’

Esther Spina has spent years as a sales representative and national consultant for Dallas-based Ambit Energy, where she also coaches fellow entrepreneurs through her Ambitious Women network. The author, speaker and businesswoman is now sharing her knowledge through The Ambitious Woman, a new book designed to help women build success in every area of life.

Released through Next Century Publishing, The Ambitious Woman is a look at what true ambition requires, and how it can help women shape fulfilling careers and personal lives—without stepping on others along the way. Spina explores the subject through her own experiences as well as the lives of women such as Mother Teresa, Dr. Maya Angelou, and American author, journalist and long-distance swimmer Diana Nyad.

Through her network at Ambit, Spina has developed a success and mentoring club that provides strategies, tips and support to women entrepreneurs. The group also gathers for an annual Ambit-ious Women Conference, where attendees can glean insights from business coaches, social media strategists, sales consultants and other women leaders.

December 01, 2014

Publisher's Note

Note from the General Manager, December 2014

by Lauren Lawley Head


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


2014: A Year of Growth


LaurenI’m writing this letter from my hotel room in marvelous Rio De Janeiro, home to the 2014 World Congress of the World Federation of Direct Selling Associations. The event has brought together approximately 400 people from companies based around the world, all united for one purpose: supporting the direct selling path of entrepreneurship and the opportunity it presents to people from all walks of life. It also serves as time to reflect on the state of our community today: the challenges we face, the lessons we’ve learned and the opportunities ahead.

There’s no question that direct selling is enjoying a period of growth. Direct selling companies generated combined revenue of $180 billion worldwide in 2013, with the World Congress host country alone reporting 7.2 percent growth. As writer Judith Emmert explores in our cover story, beginning on page 16, more than a dozen U.S. companies have surpassed $500 million in annual revenue this year and are continuing to climb toward the $1 billion peak. During the reporting for the cover story, USANA President Kevin Guest told us, “As we knock on the door of $1 billion, most of our challenges have related to becoming a $1 billion organization before we actually hit that level of sales. This means that we need to think, act and behave like a $1 billion organization before we can become one.”

Here at Direct Selling News, 2014 included a number of significant initiatives designed to support growth throughout direct selling. First and foremost was our groundbreaking survey work conducted with the team at Harris Poll. We began the relationship by commissioning Harris Poll to conduct a survey in the spring answering the question: How prevalent are direct selling products in the United States. (The answer: Very! Two-thirds (66 percent) of adults—an estimated 156 million people—have ever made a purchase from a direct seller. One-third (34 percent) have done so in the past six months.) In late August, we went back to the field with a more in-depth study examining both direct selling consumers and distributors, and we look forward to continuing to bring you more in-depth analysis from this exclusive research. During the year, we also published a special insert in The Wall Street Journal, crafted to communicate the positive attributes and dynamic nature of direct selling with the Journal’s high-level audience, and a special edition during the U.S. Direct Selling Association’s Annual Meeting, highlighting the event’s content and awards.

It was my privilege to join the Direct Selling News team in February, and I look forward to continuing to expand our work as we head into 2015. I could not have asked for a more gracious welcome and am particularly thankful for the continued support and guidance of Publisher and Editor in Chief John Fleming. The stories of companies dedicated to serving as beacons of hope and opportunity through direct selling throughout the world are captivating.

Until next time, I wish you and your teams a holiday season filled with joy.

All the best,

Lauren Lawley Head
General Manager

December 01, 2014

Working Smart

Business Intelligence for Everyone

by Serena Ayscue

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


Your organization has been busy. You’ve been focusing on acquiring representatives and customers, increasing sales, decreasing cost without losing quality, building revenue and profitability, and outpacing the competition. While your organization has worked hard to improve operating efficiencies, you may begin to feel the need to analyze more specifics about what is happening in your business. For example, you may be wondering in what city your reps are performing best, or want to know the buying habits of your best customers. You might wonder what city represents your best sellers, or why a product seems to be struggling. You might have a lot of data, but not many useful reports that dissect that data. You might, like one company, be setting records for the amount of data one Excel spreadsheet can hold. If this picture describes you, it could be time to understand what business intelligence can do for you.


Dresner Advisory Services published a 2014 study indicating that BI usage has increased 53 percent since 2012.


What Is Business Intelligence (BI)?

Business intelligence (BI) is a broad set of methodologies that bring very specific bits of information to you about your business, like those aspects mentioned above. For many years, the budgets that could afford good business intelligence were relegated to those large companies who had deep pockets and talented technical resources to implement the complex systems. Recently, with the power of the cloud, business intelligence has been making its way into medium- and even small-sized companies. Dresner Advisory Services, a Nashua, New Hampshire, company that focuses on the implementation of business intelligence, published a 2014 study indicating that BI usage has increased 53 percent since 2012. As more companies begin to understand the power of business intelligence, it is expected that this growth will continue. 

The general definition of BI is that it focuses on a set of performance indicators that measure past performance and guide future business planning. It encompasses methods and tools that businesses use to analyze and understand the data that is important to them. When you start a direct selling company, you don’t have a ton of data to analyze of course, but as your company grows the collected data grows.

As this data grows, trends start to emerge that allow you to have control over key indicators within your business. Most software systems in use in small to medium companies collect all of this data in its raw state, which basically means none of it is presented in a meaningful report. For example, you may have all of the addresses of all of your customers and what products they purchased, but no process that can turn that data into an answer to the above question about what cities represent the best product sales. You might have a gut feeling that Cincinnati is your most popular city for Product X, but wouldn’t you rather know? BI is what allows you to let go of “gut feelings” and focus on hard facts, in order to make better future plans.


Turning raw data into meaningful information allows medium- and small-sized companies to compete with or even have an advantage over industry giants.


How do You Know When You Need BI?

  • Your visibility into your business is limited – Your customer and representative base may have expanded greatly, but you aren’t sure which areas are the best recruiting opportunities.
  •  
  • Your business people are having to become tech experts – Your staff has a job to do; their time may not be best spent focusing on learning how to program SQL (Structured Query Language).
  • Your company is using “gut feelings” to guide business decisions – Sometimes gut feelings are accurate, but better to know the actual facts to eliminate wasted money and opportunity.
  • You don’t know what to change or where to invest – You don’t know where things are falling apart and where they are gaining momentum. With BI you know exactly where to focus your attention.
  • You are hearing multiple versions of the truth – Different departments may be reporting different stories of the same truth and arguing about who has the right data.

BI and the Medium- to Small-Sized Organization

The bottom line is that BI helps your company turn raw data into meaningful information that you can act upon. This information allows your team to make better-informed, timely decisions. Having this view allows medium- and small-sized companies to compete with or even have an advantage over industry giants since they are more nimble and can implement data-driven business decisions faster.

BI can be used by a medium- or small-sized organization to:

  • Determine what city has the most reps or customers
  • Discover what product has the most sales and what products are most often combined in an order
  • Determine the buying patterns of customers to make decisions about purchase incentives
  • Determine where your marketing money is best spent
  • Determine the best places to hold your convention or conduct educational trainings based on rep concentration and activity
  • Determine your average party sales
  • Combine multiple growth statistics to determine what products are your best sellers
  • Adjust the manufacturing production cycle and supply chain logistics to reduce inventory costs based on previous orders
  • Find patterns and trends in recruiting, rank performance, turnover and advancement

The above list contains just a few examples of the meaningful data that can be accessed with BI. Your ability to analyze and utilize data can improve your overall decision making. Better decision making leads to better performance, and better performance leads to meeting your goals.

Collect the Data in a Usable Form

Write down a list of all the areas in which you want more data and visibility. In the case of BI, there are a lot of factors in play. If you have a back office provider, speak to them about their business intelligence solution. They should have the ability to allow you to comb through your data as well as provide you with some easy starter templates for reporting. If you have your own data, you may have a little more work to do to organize and catalog it.

Within your back office system, there is a ton of raw data, but raw data is not very useful. It mostly appears as an abundance of numbers with very little explanation. Most of the data you have is not helpful, and finding the necessary data can be very challenging. The ability to gain value is like searching for a needle in a haystack. However, business analytics can help you use data to your advantage. Using the right tools, you are able to apply a magnet to the haystack and draw out the needles. Once you figure out those questions you want to ask, you have to understand what data you need to answer those questions. This will require some type of data catalog to work from. If one does not exist it will need to be created.

You will need to know:

  1. What data is available? (Fields, table, object and properties)
  2. How do you access the data? (Downloads, API, directly from the database?)
  3. How regularly can your data be updated? (Once a day, hourly?)

If there is a gap between the information you need and the information that is available, you will need to do an analysis and determine how you can get the information you need, whether from an internal or external source. How you jump into your data will be determined by how your back office is set up.

Everyone has data but how well it is set up for BI is as individual as your company. Some organizations have all the data they need but there is no definitive source for how it is set up, who owns it, where it is or how it can be accessed. Other businesses have strong data warehouses that catalog all the data in extremely organized systems.

Analyze Your Data

So you finally have the right data collected, now what? Once you have collected it into a usable form you need to apply a BI tool to analyze it. Typically this means turning the data into tabular forms. You also need to be able to store this data. Databases such as Microsoft SQL, Oracle, MySQL and many, many more can meet your needs. 


It is my belief that if BI is done well, you will see a significant impact in your growth, and your ability for decision making will become stronger.


Data Scrubbing and Normalization

You have your data, and now you will be very excited to see what it says! Before you get too excited you need to understand nothing is as easy as you want it to be. Most data sets have problems. Data comes from a lot of people typing into computers. The computer records every misspelling, duplicate, missing data and every other issue known to man. The first step once you have data is to scrub the anomalies. Typically this is done by an extract tool.

I know that was a lot of dry technical stuff, but it is incredibly important to understand. The old “garbage in, garbage out” adage is very true, and you want your data to tell you the right information. Once you get your data clean, you can then begin to use a variety of tools to analyze it. Some tools are as simple as PowerPivot in Excel, and others are more complex. The tools will allow you to dissect the data in ways that provide you clarity and information. Most answers are not immediately clear, but over time you will be able to pull that needle out of the haystack.

If after reading through this, you decide you do not have the staff, time or patience to do this type of work, there are many companies that provide this service. Costs have come down as accessibility has gone up, but it is an investment. Ultimately, you will have to determine if it is the right investment for your company. It is my belief that if it is done well, you will see a significant impact in your growth, and your ability for decision making will become stronger. The stronger your company, the better prepared you are for the growth that is headed your way.


Serena AyscueSerena Ayscue is Executive Vice President of ByDesign Technologies. ByDesign offers a full suite of software products to service your growing direct selling company.

December 01, 2014

Working Smart

When Direct Selling Goes Digital

by Fred Bendaña and John Schnettgoecke

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


Adapting to a Changing Environment

“It is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change.”

—Charles Darwin

We’ve entered a new era—one that requires both adaptability and flexibility above all else.

We’re currently experiencing one of the most disruptive shifts in business since the 1950s. Brian Solis, highly regarded author, marketer and futurist, has famously said that we’ve entered the era of “Digital Darwinism”—or a time when technology and society are moving faster than most organizations’ ability to adapt. Put more simply—“nature’s way of weeding out the average business.”

Perhaps the biggest challenge facing most businesses—direct selling organizations, in particular—is that of velocity. Velocity refers to the notion that the external environment now changes at a faster rate than an organization’s ability to adapt. This raises questions of relevance and focus as direct selling organizations prioritize where to invest their resources.

What’s more, there is now a stark generational gap between baby boomers and millennials—who are now starting to enter their 30s and outnumber boomers and Gen Xers by millions. For the first time in history, the shift in buying power lies with these “digital natives,” individuals who’ve literally grown up during the digital age. Most direct selling organizations now face a similar challenge—how do you unlock the hearts, minds and wallets of this massive group of consumers?

Direct sales has the opportunity to “set the standard” in a new era of one-to-one marketing.

This type of opportunity requires the ability to intimately understand the constantly evolving needs of the salesforce, relevantly market to an ever-changing consumer, improve efficiencies between distributors and consumers, effectively manage brand requirements in never-before-seen consumer channels, and provide a superior experience throughout the entire value chain.

The direct selling space has always placed a premium on high-impact messaging delivered via unique, storytelling mediums. New technologies have created a shift in power from supplier to consumer. Mediums have evolved—from print media, including catalogs and direct mail, to digital technologies, including web, email, e-commerce, push and text messaging, short codes, and digital coupons that can all be accessed anytime and anywhere.

Direct sales organizations must find new and non-traditional ways to both grow and foster meaningful relationships in places where messages are most likely to be heard and received. Very simply, direct sellers must do a better job leveraging technology to more effectively attack this massive opportunity.


Perhaps the biggest challenge facing most businesses is that of velocity, which refers to the notion that the external environment now changes at a faster rate than an organization’s ability to adapt.


Start with a shift in thinking—treat technology like a product, not an “add on.”

Most organizations can start by changing their thinking. Instead of treating technology as an “add on,” treat technology as a product. Thinking of technology as a product requires a different mindset—and, depending on the circumstances, a unique building process. When done right, organizations balance a build versus buy mentality, resulting in productive, technology-driven experiences that produce results.

Identify your objectives, then start focusing on five, immediate opportunity areas.

The exact starting points for most direct sellers will be dictated by a variety of custom variables, including business prioritization, financial feasibility, and existing tools and systems, just to name a few. Nevertheless, most direct sellers (if they haven’t already) should immediately begin to think how technology could augment existing processes or systems in order to:

  1. Generate qualified leads and improve conversion.

    Many direct sellers have introduced new tools—particularly for the salesforce—aimed at improving one-to-one communication efforts and lead generation. Lead nurturing is just as important. Once a potential lead has been identified, can that lead be quickly qualified and an appropriate course of action determined? What tools and systems exist that allow an interested customer to seek more information? What roadblocks exist that may be prohibiting conversion? Many times, a conversion optimization assessment of current tools will uncover outages and opportunities for improvement.

  2.  

  3. Improve consultant onboarding, empowering your salesforce.

    The salesforce holds the proverbial keys to the kingdom. Training and engagement is the most readily available opportunity for immediate, high-impact growth to an organization’s bottom line. There are a number of both custom and off-the-shelf solutions, including a variety of “software as a service” (SaaS) platforms that can help your organization improve salesforce training.

  4.  

  5. Provide salesforce tools that enable seamless transactions—anytime, anywhere.

    Consumers are now in control of information, and more importantly, which types of messages they want to see. Consumers now expect pervasive connectivity, namely, both channel and device-agnostic branded experiences. This seismic shift negates much of the advantages of interpersonal information sharing. Direct sellers must be architecting—and offering—digital tools wired for fast, accurate transactions between supplier, salesforce and consumer.

  6.  

  7. Leverage collected data, connecting the supplier, salesforce and consumer in new ways.

    To think that most organizations have completely mature, integrated data warehouse systems is ambitious at best. Though a great goal, it often takes time to connect all the wires. Nevertheless, direct sellers can begin to take steps now to expose and “free” incredibly important data that can be used in current marketing efforts.


  8. Direct sellers should intentionally invest time and resources to remain on the bleeding edge—this is called “disruptive innovation.”


     

  9. Encourage innovation and test high-risk tech initiatives in low-risk environments.

    Direct sellers should intentionally invest time and resources to remain on the bleeding edge—this is called “disruptive innovation.” By introducing mechanisms that introduce new ideas, rigorously prioritize those ideas and control costs, you can limit risk and expedite results. When you choose to introduce disruptive innovation practices, you’re infusing into the way your organization thinks, acts and operates.

Don’t be complacent—adapt, flex and embrace digitally driven opportunities.

Most organizations will fall in wildly different spots on the continuum of digital and technology adoption. That’s okay. No one is doing everything 100 percent. That’s not expected, nor is it a particularly realistic goal. When and where possible, however, always consider how digital technology can augment or improve your business. If the thought of doing something makes you uncomfortable, it’s probably something you should do.

When compared to other industries, direct sellers have been slower to both pilot and adopt new and emerging technologies up until this point. Those that make a concerted investment in technology will put themselves in the best position to reap the rewards and remain relevant. Heed Darwin’s advice—adapt, flex and embrace digitally driven opportunities.


Fred Bendaña is Senior Vice President at Creative Producers Group, and John Schnettgoecke is Senior Product Owner at RevUnit. Creative Producers Group is a creative and experiential engagement agency, specializing in brand experiences and distributor engagement. RevUnit is a product-focused digital agency who helps clients innovate faster and on smaller budgets through the latest product development techniques. Creative Producers Group and RevUnit are members of the Nitrous Effect, a cross-agency collaboration across marketing disciplines that delivers powerful brand solutions. To learn more, visit www.nitrouseffect.com.

December 01, 2014

New Perspectives

Simplicity in the Messaging: What Is Your Story?

by Paul Adams

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


“Simplicity is the ultimate sophistication.” —Leonardo daVinci

This is one of my favorite quotes for sure. True to its meaning, it says so much by saying so little. Anyone in a leadership position would be wise to adopt daVinci’s way of thinking. Yet, many of the executives I work with seem to want to overcomplicate things. Brilliance isn’t exhibited by how much we know. It’s exhibited by understanding how to use our knowledge and communicate it effectively.

One area of direct selling where this is very evident is in corporate messaging. We are passionate about our products and companies. There is no doubt that the research and knowledge we have used to create something special is worth being proud of.

Creating a product and starting a company is hard. It takes time, perseverance and money. So, when it’s time to share our story with the world, the challenge becomes how much of the story to share and how to share it. Here is where executives often fall into overcomplicating the messages sent to the field. Often, executives feel that the average person needs to know everything they know and have come to understand in the building of the business. This depth of information, however, is rarely necessary. The question one should ask is something like this: What does a real live person in Omaha (or any area) need to know about our new product or company in order to get excited and have a chance to succeed?

Over the past couple of decades, I have had this debate with lots of people. Some owners and executives insist that the more knowledge they can impart to their new reps, the better equipped the reps will be to run their businesses and achieve success. For example, if they are in the nutrition business, that means talking science and ingredients. It definitely means having a scientific advisory board.

It could also mean explaining why having the highest ORAC rating on the planet is something to be proud of. Apologies in advance to a couple friends of mine, but I believe that very few people even care what an ORAC rating is. Yet, sometimes, we insist that the new rep not only learn about ORAC but also how to explain it to others.

We want to teach them to be amateur scientists. This sentence should scare some people. Amateur and scientist should almost never be used in the same sentence. Rarely have I seen a company sustain long-term growth with a bunch of “amateur scientists” running around the country. In fact, these people may acquire just enough knowledge to make them dangerous. Misrepresenting a product or the science behind it is of great concern to many legal experts, who would question whether we should teach anyone to talk science in the first place. Without the proper knowledge and expertise, stories have a way of getting twisted, which often leads to health claims. Nobody wants the FDA to target them for regulatory breaches. 

Instead, reps should be trained to talk about the benefits of the product rather than the features. It’s a powerful distinction. I’ve always liked the analogy to using tools: Nobody wants a half-inch drill bit, but many people want a half-inch hole in something. We should be training reps to focus on the real needs and desires of the customers and prospects, and talk about that.

I’m definitely not trying to target nutrition companies. This is an equal opportunity mistake. It reaches across all boundaries and product categories in our industry.

So, the question to ask is what’s your story? You know, the story that customer or prospect would be interested in and a rep can share without fear of messing it up, or imparting misleading information. The answer to this question will form the basis of what your messaging should be without overcomplicating it.

When we visit with clients and work on their messaging with them, we tend to talk about a few key pieces to the storytelling puzzle. Here are the basic questions we ask in order to arrive at the best communication plan for a company, regardless of what product or service is being sold.


Reps should be trained to talk about the benefits of the product rather than the features. It’s a powerful distinction.


What makes you and your product special? What is your unique selling proposition?

You must have something that makes you stand out as being worthy of a customer wanting to purchase and/or commit time to. As amazing as it sounds, some people think that talking negatively about the competition is a good way to go. It’s not! Period! Being “better than XYZ product” only draws attention to XYZ and makes you look bad. It clearly says you’re not unique, only different. Your product must be able to stand alone without saying anything negative about your competition.

What are the benefits of your product?

Be careful, this is not a question about features. Features tend to get us deep in the weeds of explanation rather than helping someone understand how the product might make someone feel, live better, be more comfortable, etc. For example, a home theater system can have the most technically advanced DVD player on earth, but only a few people will understand what those technical advances are. However, most people will understand the experience the DVD player will deliver.

Who cares?

Who is your target audience, and are you talking to them clearly in a voice and with messaging they will respond to? You must know your target demographic. And, you must know that your demographic actually wants the product. Too often, companies create a great product that completely misses the mark by providing a great product that no one wants. A little research goes a long way. 

Is it teachable?

Can a new rep understand and repeat the company and product message within a day or two of signing up? If someone has to go through your “online university” before they can begin, you’ve created something that is way too difficult. Make it as simple as possible, and then make it simpler.


The new rep does not need to understand everything you know about the business in order to be successful.


Does the product and story create emotion?

Do you solve a problem or deliver a product that offers something really special to the new customer or rep? Face it, in direct selling, especially, we are offering something that most other companies and products do not: hope and opportunity. The product has to be real and incite interest from the prospect, and the business has the opportunity to drive emotion.

Here’s an exercise for you.

In 30 words or less, in your own words and using only your memory, write down the message that is currently being delivered to new customers and prospects via your reps. Even better, have several members of your sales, marketing and executive team complete the exercise separately and then compare notes.

I have yet to see a group do this and not be surprised by something someone on the team wrote down.

Consistency is key. If everyone is not saying the same thing the same way, your brand, your company, your product and your opportunity are not being represented properly. Clarity and focus will provide the greatest accelerants for your business.

You, the company, must own the story. It’s yours. But remember that the new rep does not need to understand everything you know about the business in order to be successful. Let simplicity be your guiding principal, and you will equip your reps with exactly what they need to run a solid business.


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

December 01, 2014

Company Focus

IDLife: Success and Wellness through Innovation

by Brenda Matamoros

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


Photo above: IDLife’s entryway to its current headquarters in Frisco, Texas.


Company Profile

Founded: 2014
Headquarters: Frisco, TX
Founder: CEO Logan Stout
Products: Nutritional and weight management


Logan StoutLogan Stout, Founder & CEO
Mark BennettMark Bennett, COO & General Counsel
Scott UnclebachScott Unclebach, Director of Field Leadership
Joe O’ConnerJoe O’Conner, Chief Financial Officer
Darryl SmithDarryl Smith, President of Field Development

Logan Stout’s desire is to help people from all ages, backgrounds and educational levels reach true success. His passion for health and wellness is evident in his new business venture. When you combine his experience, passions and drive to improve the lives of others, the result is a very young but booming business.

For over 17 years, a group of doctors, scientists and nutritionists have been developing what is today known as IDNutrition, a customized nutritional supplement program based on an individual’s medical history, health conditions, prescription medications, heredity, disposition, eating and drinking habits, sun exposure and other factors. Based on the information collected, an assessment is made by the company that is then backed by over 7,500 third-party, peer-reviewed clinical studies. The result is a program designed for the specific needs of each client.

At present, with the endorsement of some very notable figures—including Dallas Cowboys Hall of Famer Troy Aikman and celebrity fitness expert Larry North—as well as the help of an executive team under the leadership of a very experienced businessman/former professional baseball player, IDLife launched into the channel of direct sales in May 2014. Despite the fact that the company isn’t officially a year old, it has 58 employees and 10,000 associates have already taken the helm of their own direct selling businesses with IDLife.

“It’s incredible what the IDLife team has created. It is evidence-based. I think that’s the reason the company is doing so well because the program takes the guesswork out of what you need,” says IDLife CEO Logan Stout. “Everyone wants to look and feel better. I’ve never in my life asked a human being, ‘Hey do you want to look and feel better’ and they said no. Everybody wants to, and so they go buy stuff but they don’t know what to buy. IDLife takes the guesswork out of it.”


For over 17 years, a group of doctors, scientists and nutritionists have been developing what is today known as IDNutrition, a customized nutritional supplement program based on an individual’s specific needs.


Wellness for Everyone

Stout’s interest in nutritional supplements began when he played professional baseball with the Fort Worth Cats. To keep the team in peak health, nutritional supplements were introduced into the players’ diets. One thing Logan noticed: Every single ball player was basically given the same nutritional supplement, with just a few options. He asked himself, how can everyone take the same dietary nutritional supplement if everyone is different? It was his personal history that engaged his thinking about health and wellness.

Through their struggle to have children, Logan and his wife, Haley, began to eat a very organic-based diet. “When you look back to the links, there are all kinds of reasons for infertility and other health-related issues. But I think a big reason is the fake foods, synthetic foods that we’re putting in our bodies every day over an extended period of time,” Stout says. “My wife became very passionate about all-natural, all-organic foods and products. By the grace of God, we had two boys and we became very excited about that whole premise—all-natural, all-organic, gluten-free, casein-free, soy-free, etc.”

While all IDLife products are not all-organic, the company is currently pursuing Certified Organic accreditation for products that qualify.

An Approach to Healthy Living

In March 2013, Stout was approached by a group of formulators, doctors, scientists and nutritionists who were ready to take their product live, but not sure how to launch the product.

These investors knew Stout’s reputation as an accomplished business leader, success coach, speaker, and best-selling author of Stout Advice: The Secrets to Building Yourself, People, and Teams, as well as a leader of one of the largest direct selling companies in the world and founder of one of the largest youth baseball organizations in the world, The Dallas Patriots and Premier Baseball Academies. All this experience made him a key factor to their new business.

Stout agreed to do some research, and after completing the Health Insurance Portability and Accountability Act (HIPAA) compliant assessment he was very impressed with what he found. Through the integration of thousands of medical and scientific studies and answers individuals provide to the free HIPAA compliant IDAssessment, the program takes the answers and relates them to the science in the studies to deliver a report with recommendations for each person.

“After you complete your IDLife assessment, it shows you why it is saying you need whatever supplements it suggests, and it has the journal article from the third-party, peer-reviewed medical study,” Stout says. “It was insane what they had created. I’m sitting there asking these guys, what do you want from me?”

They wanted Stout to take the products and form a company. Stout agreed, but under one condition: He would be given control of how to run the company because he felt he knew of one particular way to reach the market they desired.

“I’ll never forget the light bulb that turned on in my head. I thought, This is the perfect network-marketing product because you take the advantages of both service-based and product-based companies. But you also take out the downsides to product-based companies and the downsides of service-based companies,” Stout says. “And that’s what you have with IDNutrition. It’s the best of both worlds!”

With his experience in tow, Stout began what is now IDLife. He owns 60 percent of the company, which manufactures its 50 products in the U.S. At present the products are offered nationwide, but Stout’s plans include taking them into the global market in the future.

Direct Selling Strategy

Stout also has history with network marketing as an associate and independent rep, and has a fondness for the business model. He says this history is why he chose to use network marketing when he bought this asset.

Stout brought on some friends who became his partners and, like him, believed in IDLife 100 percent. Those partners included former Dallas Cowboys and Hall of Fame quarterback Troy Aikman; ACS Founder and billionaire Darwin Deason; Patrick McGee, Co-Founder of Brazos Private Equity Partners; Chris Camillo, one of the world’s top-performing, self-directed investors and author of Laughing at Wall Street; Len Critcher, early innovator in online car buying; Daryl “Razor” Reaugh, commentator of the Dallas Stars; Josh Bell of the Pittsburgh Pirates; and others.

“I put together a good group of strategic investors and partners because I know what I know, but I know there are things I don’t know. I wanted to have a great board of great people,” he says.


IDLife Founder and CEO Logan Stout’s interest in nutritional supplements began when he played professional baseball with the Fort Worth Cats.


Assessments

It is no secret that the health and wellness market is confusing, and it is Stout’s goal along with his team to make it as easy as possible to navigate.

Once the IDLife assessment is made, the client then chooses flavor combinations. With this information the IDLife team puts together a personalized kit that combines a meal replacement shake, a natural weight-management product that provides a boost to the metabolism and supports the preservation of lean muscle mass, an energy product that can give the client the sustained energy to keep going throughout the day, and the proprietary appetite-control chews that keep hunger pangs under control and increase the body’s thermogenesis.

According to the company, when the IDTransformation Kit is combined with a client’s personal IDNutrition, a complete foundation is laid to help him or her achieve their health and wellness goals.

“When you marry that with convenience, no more bottles, the best quality of ingredients that are safe, it’s a fraction of the cost of what people are typically currently paying. And the fact that this stuff actually works because it’s geared specifically to you, means this company is going to succeed. What it all boils down to are the products,” Stout says.


“What direct sales is, it’s basically a compensation plan for the freedom mindset.”
—Logan Stout, Founder and CEO


Earning Your Life, Liberty and Pursuit of Happiness

IDLife’s corporate headquartersIDLife’s corporate headquarters

The IDLife Compensation Plan pays 15 ways. Direct sellers can start earning immediately and can even earn startup costs back in the first 72 hours. The program is based on retail commissions and programs like the Business Builder Bonus and Preferred Customer Match. A free sample kit is offered for every Preferred Customer enrolled. Other levels include 10-Level residuals with dynamic compression, matching residuals, volume match, global pool, a car bonus and incentive trips.

There is no need to stock any inventory, ship any product or make any deliveries. Each seller has a replicated IDLife website, which makes it easy for customers to place IDLife orders and for the seller to earn commissions automatically. The IDLife Office gives reps the ability to manage their businesses with a suite of automated business tools. The organization provides a paperless and inventory-free business opportunity.


The company manufactures its 50 products in the U.S., and while at present the products are offered nationwide, plans are underway to take them into the global market in the future.


According to the business plan, the real power of the IDLife opportunity comes from the income an individual can build as they grow their network of customers, members and associates. IDLife’s compensation plan enables a person to earn income based on the sales of the whole team—with an unlimited number of levels.

“I believe that the direct selling business model is the greatest way to move a product offering. I’m saying that as an individual that owns traditional companies. I’m not biased toward network marketing or direct sales. I’ve done both,” Stout says. “But to me, it’s a no-brainer.”

Stout says his working philosophy stems from the Declaration of Independence and its famous phrase of “Life, Liberty, and the Pursuit of Happiness.”

“For me, direct sales enables individuals to be business owners. It gives them autonomy,” he says. “When you look at the great companies like Mary Kay, Primerica and others, what they’ve done for individuals all across the globe is to allow them to design the life of their dreams. It’s phenomenal.”

Troy AikmanDallas Cowboys Hall of Famer Troy Aikman endorses IDLife’s products as a partner in the company.

This is why the company was named IDLife, which stands for individually designed life. Stout is a firm believer that people want to get back to designing each day of their lives.

He also believes millennials are changing the whole way the world works: It’s faster and quicker with instant gratification and the ability to express themselves; it’s the millennials’ desire to be part of something bigger than themselves.

“Do you know why Facebook, Twitter and Instagram exist? It’s because of the millennials. Why do they exist? Because people want to express themselves,” Stout says. “If they like something, they want to hit a button that clicks like. If they disagree, they want to be able to post a comment that says why they disagree. What direct sales is, it’s basically a compensation plan for the freedom mindset. That’s what it is. It’s a compensation plan built for the millennial mindset.”

IDRevolution, a regular conference featuring IDLife, recently had more than 3,000 attendees. The next conference will be held at the Fort Worth, Texas, convention center April 9–11, 2015, featuring John C. Maxwell, Troy Aikman and other distinguished partners. IDLife will continue to host three-day conferences each spring and fall while also providing training and workshops.


Logan Stout brought on some friends—including Dallas Cowboys Hall of Famer Troy Aikman and celebrity fitness expert Larry North—who became his partners and, like him, believed in IDLife 100 percent.


Part of IDLife’s training is what the company calls its Fundamentals to Freedom, and according to Stout, these seven fundamentals are the building blocks of growing a direct selling business with the company. He says all the tools and resources the company provides are there to streamline the process for the individual associate because IDLife strives to take the guesswork out of what associates need to be successful.

“We’re excited about the company. We’re very excited about our customers and clients,” Stout says. “Bottom line: We are building a legacy company to change people’s lives mentally, physically, spiritually, financially and emotionally. I believe every person is unique and designed for greatness, and my goal is to sell people on themselves even more so than on IDLife. We aren’t just a company, we are a movement!”


IDLife’s lobby wall displays current product offerings.

December 01, 2014

Company Spotlight

LifeVantage: Adding Sizzle to the Steak

by Barbara Seale

Photo above: LifeVantage President and CEO Doug Robinson addresses the crowd at a recent company event.


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


Company Profile

Founded: 2003
Headquarters: Salt Lake City, Utah
Executives: President and CEO Doug Robinson
Products: Wellness, anti-aging and energy products that use Nrf2 science to reduce oxidative stress at the cellular level


Doug RobinsonDoug Robinson
David PhelpsDavid Phelps
Shawn TalbottShawn Talbott

Many executives have had the experience. They launch or join a young company that is growing quickly, but over time the momentum slows. That was the story at LifeVantage Corp., and its experience has made it a believer in the necessity to embrace change. Its first major change was relaunching as a direct selling company. And within the last year the company has taken numerous steps to re-energize its brand, product line and distributors.

LifeVantage launched in retail stores in 2003 with a single, innovative nutritional supplement, Protandim. The science behind the product is still compelling today. Its natural, indirect antioxidants actually signal the body’s genes to increase production of antioxidant enzymes that work together as the body’s first line of defense against free radicals. In 2005, ABC’s television news magazine Primetime featured an overwhelmingly positive segment on a human clinical study of Protandim. They reported the results of the study, which showed that the product decreases oxidative stress by more than 40 percent.

What happened next was every company’s dream. Sales skyrocketed. So did the price of the company’s OTC stock. But there was a hitch. The young company was still small and wasn’t set up for the surge. They didn’t have the infrastructure to keep up with orders, and quickly its sudden multimillion-dollar monthly sales volume trickled down to about $250,000. Its income statement was never in the black, and the dream quickly became more of a nightmare. But it was also a turning point. Executives who were already sold on the product’s potential for health had seen its massive commercial possibilities. But what could they do about it?

The answer: direct selling. In 2009, its first year as a direct seller—and with a single product—LifeVantage saw revenue almost triple and then continue to grow. In 2011 it hired new President and CEO Doug Robinson, who had joined the LifeVantage board of directors about six months after it became a direct seller, bringing his 25 years of health care business management expertise. He injected the company with the operational discipline he had learned over the years.

“The next year we were at $39 million in topline revenues,” he recalls, “but more important to me, we turned the operations of the company around and were finally $4 million in the black.”

Sustaining Success

A growth chart like that one is hard to sustain, but Robinson was determined to nurture it and ensure that LifeVantage had a vibrant future. He believed that an injection of new ideas, expertise and energy was needed in the management team. Robinson started bringing in solid leadership in key roles and moved the stock to the NASDAQ (symbol LFVN) in 2012.

Two of those new executives, Chief Sales Officer Dave Phelps and Chief Science Officer Shawn Talbott, Ph.D., joined the company within the last year. They have introduced additional products and sales initiatives that are infusing new enthusiasm into distributors and opening new markets that weren’t available in the past.

Talbott’s first step was to crystallize the company’s product strategy. He was familiar—and impressed—with the science behind Protandim even before he joined LifeVantage. He believed that Protandim alone could be the foundation for a billion-dollar company. But he foresaw that the science behind it could do even more. Infused into other products that help people feel, look or perform better—the company’s product strategy—Protandim could drive the creation of other effective products that worked synergistically and also opened new demographic doors.

Talbott explains, “If you want to help people feel better, perhaps by increasing their energy, you could give them caffeine or sugar. But the problem is that if you haven’t gone upstream biochemically and their oxidative stress is out of balance, they’ll always be out of balance.”

So how does that knowledge suggest new products? Talbott notes that there’s no demand in the market for a product that addresses oxidative stress, at least not in those words. But people do want other things: youthful-looking skin, more energy, better mood, a thinner body and improved sports nutrition. Products can deliver those by reducing oxidative stress, using the same Nrf2 science contained in Protandim. Within the last few months LifeVantage introduced products that address some of the conditions that arise from oxidative stress, but which people identify by other names.


LifeVantage has introduced products that address some of the conditions that arise from oxidative stress, but which people identify by other names, such as aging skin, lower energy and depressed mood.


Product Prowess

First, it introduced TrueScience™, a beauty system proven in a clinical study to visibly address the signs of aging by combating oxidative stress in the skin. Then it went a step further with the introduction of AXIO, the company’s brand of two energy drink powders that deliver better mood and improved mental focus. By entering the energy drink market, LifeVantage expanded the marketplace for its products to millennials, but the drink’s promise for improved mood and mental focus as well as quick and sustained energy gave it baby boomer appeal.

Talbott notes that AXIO fits into LifeVantage’s product portfolio strategy by helping users both feel and perform better. He adds that the company’s original focus in developing the product was to attract millennials, but his experience since then has shown him that AXIO’s promise of multidimensional energy resonates with every age.

Recognizing that AXIO would attract a younger demographic than Protandim or even anti-aging skincare line TrueScience, LifeVantage prepared by developing and offering a three-day seminar it calls “Rules of Engagement.” The new seminar is designed to teach, train and mentor young distributors, a group it calls Young Entrepreneurs for Success, or YES. It was offered first in September with presentations done by eight of the company’s top distributors in the millennial age group. Chief Sales Officer Dave Phelps describes it as “monumentally successful. We’re already getting requests to do it every three months.”


The strategic reinvention of LifeVantage includes simplified messaging, a greater emphasis on recruiting distributors, an infusion of leadership development, and finally, a big dose of excitement.


The seminar is just one element of a four-point reinvention strategy designed to reinterpret the company’s solid science by injecting sizzle and energy.

“Any company that isn’t able to reinvent itself doesn’t have as much success as when it is able to adapt and to love change,” Phelps says. His strategic reinvention of LifeVantage includes simplified messaging, a greater emphasis on recruiting distributors, an infusion of leadership development, and finally, a big dose of excitement. In many areas, such as training for millennials, the areas overlap. As young leaders learn, they can also invite prospects, helping them to develop a knowledgeable and excited team.

Phelps describes the company under reconstruction as LifeVantage 2.0. He says that for too long the company’s messaging was too complex, relying on scientific information and results from clinical studies—topics that, unless they are simplified for the average listener, can be hard to understand and then relay to others. Both sales presentations and science education are being simplified and presented in a language anyone can understand.

The Duplication Dynamic

Heating up the Product Story: Science to Sizzle

LifeVantage describes itself as a science-based sales and marketing company. Its products are developed through cutting-edge scientific research and backed by clinical studies. That’s the company’s “steak.” Unfortunately, the steak was sometimes served with a presentation that only a scientist could love. The new LifeVantage is translating the science into language and descriptions that add sizzle to the meal.

With such rock-solid science behind the products, the steak will always be the main course. Expanding on the innovative Nrf2 science that helps the body produce its own antioxidants that combat oxidative stress at the cellular level, future products are building on that foundation to include additional science-based benefits. What’s new is the way the company talks about it. Chief Science Officer Shawn Talbott, Ph.D., has a new take on how to position those products to the company’s 68,000 distributors—about 65 percent of them in the Americas—and the consumers they reach.

“What we’re seeing in the marketplace is a convergence of several industries at the same time,” Talbott says. “Foods, supplements and pharmaceutical drugs are all coming into this gigantic feel-better bucket. The common theme is that people are selecting products—antidepressant drugs, energy drinks, coffees, donuts, junk foods and others—when they don’t feel well. They’re depressed, fatigued or they have brain fog and can’t concentrate. When I think of the characteristics involved with feeling your best, there’s mood, mental focus, stress levels and energy levels. To me, that’s one category. For the next couple of years, product development will focus there.”

The ability to discuss science and LifeVantage products in terms people can understand is a key skill Talbott seeks when he hires his staff. He seeks scientific storytellers.

“I have brought in people who are experts at scientific communication—information people can consume,” he explains. “That’s especially important in the network marketing environment. From my perspective, you get to develop the coolest products in network marketing because you’re able to tell a story.”

With more simplified product and opportunity descriptions comes a greater ability to recruit and build teams. LifeVantage distributors, sold on the science, had focused on product sales rather than on recruiting.

“One of the great hallmarks of achievement of LifeVantage 1.0 was the dramatic enrollment of customers by the tens of thousands because of the strength of the Protandim product,” Phelps says. “We’ve needed to change their mindset and ingrain the power of duplication. We’ve seen an enthusiastic response from the distributor field—a distributor enrollment revolution. They’ve realized that it’s a great thing to acquire customers, but it’s a triple-great thing to enroll distributors. We’re not at 100 percent yet, but a lot of people are thinking differently. As we continue to train and mentor, we’ll continue the positive results we’ve started to see.”
Following the successful prototype first used in the Rules of Engagement program, the company held its first-ever Hispanic event in November in West Palm Beach, Florida. LifeVantage already has a large core group of Hispanic leaders in the United States and Puerto Rico, and it has expanded support to them by offering materials prepared in Spanish, along with hiring either native or acquired Spanish speakers.

In addition, it is also planning an initiative to recruit women and provide them with specific leadership development. Phelps notes that, unlike at most companies where some 70 percent of distributors are women, at LifeVantage men and women are equally represented. In early 2015 LifeVantage will hold Empowering Women, a business-forward, women-only event designed to attract more women to the company. Like the millennial and Hispanic events, it will be open to prospects. Female leaders are already telling Phelps that they plan to bring every woman they know.

“I have a gigantic vision for what this will mean for our company,” Phelps says. The Young Entrepreneurs, Empowering Women, the Hispanic initiative—together, they’re bigger than life, and they are being embraced by the LifeVantage family in a dramatic way.”

Phelps’ long direct selling career taught him that direct selling is leadership development disguised as a business. As soon as he joined LifeVantage in late 2013 he launched leadership training.

“In my network marketing experience, whether a company has an outstanding compensation plan, a compelling product story or great management, its success ultimately rises and falls on the strength and development of leadership in the company,” he says. “We’re going to transform LifeVantage into a world-class leadership development company with teaching, mentoring and training. You can’t expect people to become leaders without a leadership track, and that’s in process now.”



Through its ongoing partnership with nonprofit Families Helping Families, LifeVantage Legacy builds and furnishes houses in poverty-stricken areas of Mexico during a recent Volunteer Service Trip.


Shifting Perception

Finally, working in concert with the other strategies, the company is pumping up the volume everywhere, and adding sizzle to the LifeVantage steak.

Phelps explains, “LifeVantage used to be viewed as boring, conservative, and not very exciting, but always solid, and always rooted in great science. It had a couple of S words: solid and science. The two S words it didn’t have were sexiness and sizzle. But we’re transforming the company to have a lot more sizzle and excitement, more wow, more cool. It’s happening as we speak.”

For example, LifeVantage 1.0 launched products with PowerPoint presentations and information. LifeVantage 2.0 still has plenty of information, but in radically different packaging. The change is evident in events, training and even product education. Take events, for example.

“In the past, our events were more boring and functional. Now they’re dynamic, they grab you by the heart and imagination so you understand the possibilities with the company,” Phelps says. “When we launched AXIO, for example, we required people to think in a way they had never thought before. We launched our energy product in a loud, raucous, effective way with music and special effects. It was a sight to behold. This is a business about emotion, and when you put that emotion side by side with stellar information, you have a winning combination.”


The company invested $1.6 million in the launch of the MyLifeVenture program, which stimulates distributors to view LifeVantage as the road to their dreams.


The company also delivers sizzle through the new MyLifeVenture program, launched this year. The company invested $1.6 million in the launch of the program, which stimulates distributors to view LifeVantage as the road to their dreams. The key symbol is the Jeep, a vehicle that represents adventure, freedom and fun—all attributes of the culture the company is working hard to develop. Mid-level distributors and above can earn the title to the car, paid in full. At the time LifeVantage spoke with Direct Selling News in late October, 24 families already had earned a Jeep.

All the new initiatives should keep the company growing strong. Its track record is already drawing attention. In late October MountainWest Capital Network, which recognizes the 100 fastest-growing companies in Utah, ranked LifeVantage No. 3 on its 2014 list, based on revenue percentage growth from 2009 through 2013. It was LifeVantage’s third consecutive year of being honored on the list. The award symbolizes the legacy that CEO Robinson wants LifeVantage to have.

“We talk a lot about responsible growth, and we’re in seven countries today. We’re building this company for generations to come,” Robinson says. “That means that our distributors can go all in and be assured that the company will be there for them through thick and thin, good times and bad. The more distributors we attract, the bigger growth engine we’ll have.”

December 01, 2014

Cover Story

Who Will Summit Next?: Reaching $1 Billion

by J.M. Emmert

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


“Life’s a bit like mountaineering,” said Sir Edmund Hillary. “Never look down.”

It’s what direct sellers do, too—never look down. The direct selling industry is an industry comprising people who seek to achieve things never thought possible, scaling new heights, whether reaching inside oneself to achieve personal goals or driving a company toward what is considered the Mount Everest in direct selling, the $1 billion summit.

But like Hillary, only a few direct selling companies have managed to reach that elite status. In the 159-year history of direct selling in the United States, Avon was the first to achieve the feat in 1972. Amway followed in 1980. In 1996, Mary Kay Inc. and Tupperware both reached $1 billion. In 2004, Nu Skin and Herbalife joined the group. But another nine years passed before the next company, Ambit Energy, reached $1 billion in sales. Many companies are turned back in their efforts to reach that summit. But why? What makes it so difficult?

The simple answer is that growing a company to such an extraordinary level brings with it new challenges, and, like experienced climbers, extraordinary companies know to stop when the footing gets treacherous, even if the summit is close. Because it is an industry focused on people, direct selling companies understand that the welfare of the entire team is more important than putting up numbers. One tragic misstep and the whole team could come tumbling down.

Orville Thompson, CEO of Scentsy and a former chairman of the U.S. Direct Selling Association, once analogized direct selling and the quest to reach $1 billion to scaling Borah Peak in Idaho. At 12,668 feet, Borah Peak, or Mount Borah, is the highest mountain in the state and among the 100 highest summits in the Rocky Mountains. The most popular route to the top of Borah Peak follows the southwest ridge, ascending 5,262 vertical feet from the trailhead in a little more than 3.5 miles. Just prior to reaching the top, climbers encounter Chicken Out Ridge, a thin ridge of rock with steep slopes so intimidating that many abort their summit attempt.

For those chasing after the $1 billion summit in direct selling, the biggest challenge, says Thompson, is simply finding the right path to follow, those “smooth areas worn down by countless others who have blazed trails.” When they reach that direct selling version of Chicken Out Ridge, they must “challenge their skills and test their fears” in the face of new obstacles.

Despite the risks, more companies than ever appear to be chasing the summit. Direct Selling News research has identified 13 U.S. companies with net sales at or approaching the $500 million to $1 billion range and experiencing strong growth. Having as many companies on their way to the $1 billion summit as there are currently at the peak is a testament to the strength of the channel. Here is a closer look at the contenders:

On the Summit Push

ACN
In 2011 ACN posted $550 million in sales, down from the previous year’s $553 million. However, the company came back strong the past two years, achieving $582 million in 2012—a 5.8 percent increase—and $700 million in 2013—a 20.2 percent increase. This June, the telecommunications and essential services company launched in Mexico, the seventh-largest direct selling country and the company’s 24th market.

Stream Energy/Ignite
Stream Energy/Ignite has been camped near the billion-dollar summit for the past four years, breaking the $900 million ceiling in 2010. After two years of down sales, the company came back strong in 2013 with $27 million over the previous year—a 3.2 percent increase—putting it at $867 million. The company has seen continued growth, particularly in Hispanic markets, and has significant expectations for company growth across the board in 2014 and beyond as it diversifies its service offerings, allowing it to sell nationwide.

Thirty-One Gifts
Of the 13 companies, only Thirty-One Gifts uses the party plan method of selling, joining Mary Kay and Tupperware as the only companies in the Top 17 of the Global 100 ranking that employ this sales approach. What makes that especially interesting is that, according to the U.S. Direct Selling Association, the party plan method of selling has decreased 4 percent in each of the past two years, going from a high of 31 percent in 2011 to just 23 percent in 2013. The person-to-person method, on the other hand, accounted for two-thirds of sales in 2013, according to the DSA.

Thirty-One also has made one of the fastest ascents in recent years. The company posted sales of $100 million in 2010 and then climbed to $482 million in 2011, a 382 percent increase. Sales continued to rise in 2012—a 48.9 percent increase to $718 million. In 2013, Thirty-One achieved a 6.2 percent increase, ending the year at $763 million. Its four-year growth rate: 663 percent.

USANA
USANA, which surpassed $100 million in its first six years, has been the steadiest climber in the group over the past few years. It has maintained an average of $67 million in sales growth annually for the past three years—ranging from a 10.6 percent to 12.5 percent increase—to bring it to $718 million. The company reported $182.4 million in sales for the first quarter of 2014, a 7.9 percent increase over the prior year; second quarter results saw a 0.4 percent decrease, with $188.3 million compared to $189.1 million in 2013; and the third quarter saw record sales of $191.9 million, a 10.5 percent increase over the prior-year period of $173.7 million. For the first half of 2014, USANA generated sales and customer growth in nearly every market in which it operates. Strong growth was seen particularly in Mainland China, the Philippines, Singapore and Mexico.

Expectations are that the wellness industry in particular will continue to thrive in the coming years. In a Sept. 29 article on the health and wellness industry’s global performance, Euromonitor International reported that the United States was leading all countries in 2014 with more than $160 billion in sales. The global industry is expected to reach $1 trillion by 2017, fueled by the general population’s preference for healthier products.

Rapid Ascent


Growing a company to such an extraordinary level brings with it new challenges, and, like experienced climbers, extraordinary companies know to stop when the footing gets treacherous, even if the summit is close.


AdvoCare
Four years ago, Plano, Texas-based AdvoCare had $89 million in sales and placed No. 91 on the DSN Global 100 ranking for 2010. This year it landed at No. 26 in the ranking, due to $460 million in sales for 2013. The wellness company has achieved tremendous growth over the past three years: a 55 percent increase in 2011 to $138 million; an 84.7 percent increase in 2012 to $255 million; and an 80.3 percent increase in 2013 to $460 million.

doTERRA
An essential oils company that has not previously participated in the Global 100 list, doTERRA International LLC provided a window into its growth when it received state economic development incentives at the time it decided to locate its global headquarters in Pleasant Grove, Utah, last year. The company pledged that the $60 million headquarters would bring $83 million in estimated new state tax revenue and 330 new full-time employees to the community over the next 10 years. Founded in 2008, doTERRA says it has more than 1 million independent consultants, which it calls Wellness Advocates.

Isagenix
Isagenix, which had a modest increase of 2.3 percent in 2011, has seen increases of 27.4 percent and 34.1 percent in the past two years, putting it at $448 million for 2013. Co-Founder and Executive Vice President Kathy Coover estimates that the company will achieve $720 million in 2014 and $1 billion the following year. “It will happen in 2015; we are tracking on that right now,” she says. “We have a goal to hit $1 billion in 2015. We really don’t think of it as a money goal; we think of it as how many lives we’re going to change. That’s what we equate dollars to, lives being changed.”

It Works!
It Works! placed in the Top 30 for the 2013 Global 100 ranking, achieving a 128 percent increase from 2012 to 2013. Over the three-year period, the company grew by 1,565 percent, going from $27.4 million in 2010 to $456 million in 2013. Founder and CEO Mark Pentecost predicts that 2014 will be the company’s strongest year yet for sales, continuing the streak of 14 consecutive years of growth.

Team Beachbody
Team Beachbody first landed on the DSN Global 100 ranking with net sales of $218 million for 2012. Last year the wellness company achieved a 50.5 percent increase over the prior year, achieving $328 million in sales.

Climbing Strong

Arbonne
After a slight decrease in sales in 2011, Arbonne has responded over the past two years with increases of 6.7 percent and 9.5 percent, placing it at $413 million. In 2014 the company is experiencing growth across all of its product categories in existing and new offerings. “All Arbonne markets have been growing double digits for the past six months, including the U.S. market,” says CEO Kay Napier. “We expect to approach, if not achieve, $500 million for our Arbonne business this year, which has been a key goal of ours for the last five years—and then on to $1 billion!”

Market America
Founded in 1992 in Greensboro, North Carolina, Market America has achieved steady increases of $46 million, $43 million and $42 million over the past three years, respectively, including 2012 when it surpassed $500 million in sales. The product brokerage and Internet marketing company grew from $416 million in 2010 to $462 million in 2011, an 11 percent increase; achieved $505 million in 2012, a 9.3 percent increase; and posted $547 million in sales in 2013, an 8.3 percent increase. At its August annual convention, the company announced it was expanding its Emerging Markets Program to enable the purchase of its products by customers throughout the world, and thus help it springboard into new territories. The program is currently available in nine markets, including New Zealand, Spain, Panama, Singapore and Jamaica.

Shaklee
Shaklee had hovered around the $500 million level for a few years before posting $515 million in 2012, and then jumping $135 million in 2012, landing at $650 million.

Young Living
Lehi, Utah-based Young Living, which celebrated its 20th anniversary this year, has achieved steady growth since its founding. However, over the past few years the essential oils company has really taken off, achieving triple-digit growth that has continued into 2014. “Today we are at 165 percent growth, which as you can imagine, is like a comet taking off,” says Jared Turner, Chief Sales & Marketing Officer.”

Maintaining Focus


“We want to ensure that when we launch a country, not only is ACN ready and positioned with the right products and services, but also that the market is ready for ACN.”
—Greg Provenzano, Co-Founder, ACN


So how do companies in that $500 million to $1 billion range prepare to take their organizations to the next level? Maintaining focus, even during expansion, is critical.

For Cindy Monroe, CEO of Thirty-One Gifts, keeping her company on track requires three things: staying focused, staying on purpose and staying authentic. “Focus can be tough for entrepreneurs especially. Our creative desire to find bigger and better ideas creates a perfect environment for distraction if not kept in check,” she says. “We believe that by being purposeful and minimizing distractions, we can maintain focus on the things that make the most impact and keep us on track toward a bright future.”

To further the vision of Founder Dr. Myron Wentz, who dreamed of a world free from pain and suffering, USANA has established core values that are centered on producing the highest-quality, science-based nutritional and personal-care products in the world.

“Our vision and core values are part of our DNA, so staying true to them has not really been a challenge,” says President Kevin Guest. “That’s not to say, however, that there have not been challenges as we have grown. As we knock on the door of $1 billion, most of our challenges have related to becoming a $1 billion organization before we actually hit that level of sales. This means that we need to think, act and behave like a $1 billion organization before we can become one. Our customer base has also become much more diverse and international as we have grown, so we have had to navigate how to best serve the wants and needs of a more diverse audience. Focus is another area we have had to keep under control during growth. It’s easy to get distracted by every new opportunity you learn of, but you never achieve your goals if you let that happen.”

According to Turner, Young Living’s executive team has really bridged the gap between the vision of the founder, Gary Young, and what the field is doing. “They have really aligned the purpose of the company and the ‘why’ of the company with the ‘why’ of the field in terms of education, and that has really resonated with our people,” he says. “The ethos of our company is quality.”

ACN Co-Founders Greg Provenzano, Robert Stevanovski, Mike Cupisz and Tony Cupisz have kept their commitment to the company’s independent business owners by continuing to put the needs of the company above their own personal needs. Their growth plans have always been based on stability and longevity. Sound business practices plus integrity, they believe, equate to strength and size.

“While our core values have remained the same, we continue to reinvent ourselves as a company,” says Provenzano, whose company now serves 23 countries on four continents. “We are always reviewing our product line and our business support, asking ourselves how we can make our product offerings and the opportunity for our IBOs even better.”

Pentecost of It Works! acknowledges that keeping a growing team focused on the big picture and maintaining a company’s culture is a top challenge for any growing company. “Distractions are constant and never-ending,” he says. “‘We can do anything, but we can’t do everything’ is a message we live by here at corporate. We’ve learned at times that saying ‘no’ is not a consequence but a necessity.”

Investing in Infrastructure


Of the 13 companies, only Thirty-One Gifts uses the party plan method of selling, joining Mary Kay and Tupperware as the only companies in the Top 17 of the Global 100 ranking that employ this sales approach.


While maintaining focus is critical to growth so, too, is ensuring that a solid infrastructure is in place to support any growth or expansion. Even companies with tremendous momentum can be stopped dead in their tracks when considering what further growth entails: Do we have enough inventory to keep up with demand? Is there enough warehouse space for our products? Do we have the support staff to meet increased orders? Are we providing our consultants and independent business owners with the tools they need to succeed during this substantial growth period?

The companies driving toward $1 billion are cognizant of these possible stumbling blocks and have taken steps to ensure the growing process comes with as little pain as possible.

At its 2014 International Convention in August, USANA launched an all-new digital marketing suite for its worldwide Associate base. “The all-new tool suite consists of a back-office Hub, personal websites, and advanced communication and marketing tools, all of which significantly enhance our Associates’ ability to manage, promote and build their USANA business in today’s demanding eBusiness environment,” Guest says. “These new tools were designed to simplify conducting a USANA business, enhance communications and provide an online atmosphere that is personal to the Associate and highly engaging for the customer.”

At Young Living, accelerated growth over the last two years has caused the company to address several issues with infrastructure, including information technology, operations, warehousing and shipping. “Our warehouse is meant for $200 million to $300 million worth of product sales a year, and now we are far surpassing that, so we have decided to triple the size of our warehouse,” Turner says. “We are at capacity with pick lines, manufacturing lines and packing stations, so we are adding a new mezzanine level to double the number of packing stations.”


“We need to think, act and behave like a $1 billion organization before we can become one.”
—Kevin Guest, President, USANA


Young Living is now running two shifts a day, seven days a week, to keep up with orders. In addition to investing in its IT teams, the company is working with outsource partners to accommodate the growth. Turner says Young Living’s more than 720,000 active members have been patient and kind throughout the process. “The infrastructure can strengthen, not constrain, commission payout, so it has been great for everyone. We turned a corner with all our infrastructure improvements, and we’ll be able to sustain the growth into the future.”

At Stream Energy, CEO and President Mark Schiro and his team have been making improvements to IT, customer service and marketing to handle its growth. “Our goal at Stream is to create a world-class organization,” Schiro says. “We’ve organized ourselves in such a way to support this growth, and we look forward to becoming a world-class company on both an internal and external level.”

Arbonne will launch a totally new web-based platform early next year that will position the company for more growth and facilitate international expansion. “Our biggest challenge is replicating the incredible culture and brand we have with Arbonne,” Napier says. “I know we will succeed, but it will take careful consideration and strong execution.”

Acquiring and Onboarding Talent


“We have a goal to hit $1 billion in 2015. We really don’t think of it as a money goal; we think of it as how many lives we’re going to change. That’s what we equate dollars to, lives being changed.”
—Kathy Coover, Co-Founder and Executive Vice President, Isagenix


According to Malcolm Gladwell, author of The Tipping Point, a person can only realistically develop relationships with a maximum of 150 people. That’s why in the direct selling industry, says Scentsy’s Thompson, a company must have the executive team in place to maintain its influence with the downline. The goal is to scale effectively, always growing leaders to match the growth of the company.

Earlier this year USANA promoted three Asia-Pacific vice presidents to executive vice president status in a strategic effort to give more representation from its A-P markets in the company’s Executive (Chief Officer) Meetings. It also put into action leadership and strategic planning training as well as sessions for the executive staff to strengthen the team as a whole. “There have been skill-specific trainings added, such as negotiation strategy,” Guest says. “In addition, tied to the executives’ compensation is a mandate that they all must participate in leadership trainings and seminars year-round.”

It Works! increased its corporate staff by 60 percent in 2014. “When we say ‘One Team,’ it’s not a marketing campaign, it’s a mission,” Pentecost says.

Isagenix’s Coover realized the need to adjust her company’s corporate team by bringing on experienced executives to manage the exponential growth. “We really set ourselves up for success when we brought in some heavyweights. It got to the point where Jim and I said, ‘This is beyond us; we need help.’ So we brought in three people from ConAgra that have run multibillion-dollar companies. They have the strength and experience to run this, and they have great teams.”

At Arbonne, Napier brought in Joe Wojcik, an industry veteran who has experience in expanding businesses both in direct selling and outside the industry. Wojcik will serve as Senior Vice President of International, focusing on the company’s ongoing development of foreign markets. Improvements in technology infrastructure at Arbonne during the past few years also are starting to show, with earnings growth ahead of revenue growth, says Napier.

Finding the Right New Markets


“Our biggest challenge is replicating the incredible culture and brand we have with Arbonne. I know we will succeed, but it will take careful consideration and strong execution.”
—Kay Napier, CEO, Arbonne


There is a common belief that to grow one must expand into new markets. Yet it’s interesting to note that of the 13 companies driving toward $1 billion, seven companies—Stream Energy/Ignite, Shaklee, Market America, Thirty-One Gifts, AdvoCare, Team Beachbody and Arbonne—are currently in less than 10 markets.

Stream Energy, which does business in the U.S. market only, will be undergoing a significant expansion in early 2015 when it introduces a premium nationwide product offering, Stream Mobile Services. “We have partnered with two of the top four mobile carriers in the U.S. to build our very own Stream branded mobile service,” Schiro says. “Stream will be aggressively expanding into new markets as we roll out mobile services nationwide.”

USANA, which is in 19 markets, has a careful approach for international expansion. Typically, the company creates a solid foundation in one market over an 18-month period before venturing on to another. The expansion into France and Belgium in 2012 was actually initiated by the company’s Associates, who requested the new territories due to the tremendous success in Quebec, which is one of the company’s largest markets. Because the company’s nutritional supplements have a loyal customer base, USANA now has 265,000 active Associates in North America, Europe and the Asia-Pacific region.

“International expansion, product innovation and enhanced technology are all important aspects of USANA’s growth strategy,” Guest says. “The key aspect of our strategy, however, is generating customer growth. In 2013 we made several enhancements to our product pricing structure and our Associate compensation plan in an effort to promote customer engagement, success and loyalty with USANA. These enhancements have been successful and generated meaningful customer growth for USANA over the last 12 months.”

At ACN, any expansion discussions have always been met with caution and restraint. “We want to ensure that when we launch a country, not only is ACN ready and positioned with the right products and services, but also that the market is ready for ACN,” Provenzano notes. “We see no need in launching a new country unless we are 100 percent confident that the launch, and more importantly our business operations for the long-term, will be a success—and timing plays an incredible part in determining that success.”

That approach seems to be working. The last market ACN entered, Korea, has made the company a powerhouse in the Asia-Pacific arena. Next up for the company is Latin America, where Provenzano believes there are limitless opportunities.

At Isagenix, which is in 12 markets, Australia recently surpassed Canada as the company’s second-largest market, up 350 percent in new enrollments and sales. “It’s not going to stop,” Coover says. “The U.S. is still our biggest market and was up 50 percent over last year.”

Arbonne launched in Poland on Oct. 1, and the reception the company received has left Napier and the executive team with high hopes for future expansion plans. The company expects to open its first market in Asia within the next two years.

Young Living has expanded into several foreign markets over the past few years. The company recently held a grand opening in Malaysia, bringing the number of Asia-Pacific markets to five (the others are Australia, Singapore, Hong Kong and Japan). The company is also established in Canada, Mexico, Ecuador, Peru, the U.K., Sweden, Germany and Austria. Every market is reporting high double-digit or triple-digit growth for 2014.


There is a common belief that to grow one must expand into new markets. Yet it’s interesting to note that of the 13 companies driving toward $1 billion, seven companies are currently in less than 10 markets.


Because It’s There

Over the next few years, several companies will face the challenges and opportunities brought on by the desire to grow their companies, and perhaps, one day, join the $1 Billion Club.

In that quest to reach the top, what remains the most important part of the journey is staying true to the core values of the company, maintaining that integrity that reflects on the reputations, businesses and families of customers and independent business owners.

Never looking down is easy enough to do. Looking up and seeing the possibilities to achieve the seemingly impossible and how it affects millions takes careful planning.

December 01, 2014

Industry with Heart

Party Plans on Fire

by Andrea Tortora

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


Ignited by emotional connections forged with customers, access to products once only available at expensive salons and an embrace of social media, a handful of party plan companies are seeing their business boom—with no signs of a slowdown.

Nail wrap creator Jamberry, beauty products firm Younique, personalized jewelry maker Origami Owl and two newcomers—jewelry boutique Chelsea Row and nontoxic cosmetics maker Beautycounter—are experiencing significant advances in profits and popularity at a time when overall growth for the party plan model is stuck in a plateau.

Data from the U.S. Direct Selling Association’s 2014 growth and outlook report reveals that between 2008 and 2013, party plans dropped from 26 percent to 23 percent of market share as a direct selling platform.

“Home parties in terms of their success are fairly cyclical,” says DSA President Joe Mariano. “When we think it is hitting a low point that is when we see a rebirth.”


While 40 million business-related fan pages exist on Facebook, only 17 percent are equipped to sell directly through the social media channel. This is where direct selling has an edge.


Top-Ranked Companies

These five standout companies are evidence of that resurgence. Two of them—Jamberry and Younique—are in the Top 10 six-month trend rankings at HomePartyRankings.com and MLMRankings.com, which track public interest and Internet popularity of most party plan direct sellers.

Jamberry reports revenue is more than $10 million a year. Younique’s distributors have said the company sold more than $25 million in September, up from $1 million in December 2013.

Origami Owl is consistently listed in the Top 5 for overall rankings at both sites. It posted 2013 revenue of $233 million and grew by 870 percent for the year. As a reflection of this growth it was ranked at No. 50 on the 2014 DSN Global 100 and received the DSN Bravo Growth Award Based on Percentage this year.

Chelsea Row, launched in September 2014, is too new to have its own rankings. A spinoff of e-commerce selling platform company Kitsy Lane, Chelsea Row is turning the traditional home party on its head with vParty—a truly immersive, real-time virtual party that lets guests shop together online while being connected on audio and video.

Beautycounter launched in March 2013 and offers a safe and nontoxic line of skincare products that work. The company now counts 4,000 consultants in more than 44 states, with 23 percent average monthly revenue growth. Between January and October 2014, Beautycounter posted 424 percent sales growth.


Beautycounter’s “Never List” is “a robust roundup of ingredients that you will never find in Beautycounter products,” as many are known or believed to cause irritation, allergic reactions or cancer.


Embracing Social Media

The founding philosophies of these companies are rooted in a desire to better the lives of women by empowering them with products that aid self-expression and by providing the flexibility, resources and training needed to build a career. Each utilizes social media such as Facebook to drive sales, although the strategy is different for each business.

To maintain growth, diving deep into social media selling is likely to yield even larger dividends. Here’s why: An analysis by marketing firm Vocus projects that by 2015, half of all web transactions will occur through social media, accounting for an estimated $30 billion in sales. While 40 million business-related fan pages exist on Facebook, only 17 percent are equipped to sell directly through the social media channel. This is where direct selling has an edge.

The Power of Virtual Parties

Jamberry, Younique and Origami Owl use the Facebook event model to host virtual parties.

Younique sells almost exclusively on social media. Jamberry and Origami Owl independent consultants use Facebook events to supplement the home party experience. Origami Owl Chief Sales Officer Sandy Spielmaker says the technology “extends the reach of the home party.”

Best known for its 3D fiber lashes, Younique built its selling model on virtual parties for two reasons, Co-Founder Melanie Huscroft says. “The overall feeling among women was they are so over the traditional home party and having to clean the house, make the food and send their husband and kids away,” she says. “The virtual platform allows the invite list to be limitless, and location doesn’t matter.”

Virtual parties typically run for seven to 10 days, with independent consultants making frequent posts to encourage interest and spotlight products. Consultants do not carry inventory. They sell through their own branded e-commerce websites.

Many consultants also create videos or use those provided by Younique, Jamberry or Origami Owl to explain how to use the products and suggest ways to mix them up to create new styles. Guests link to these videos through the Facebook event page for their specific party.

The model is working for Younique. In the near future, its virtual party model will also work on other social media platforms, such as Twitter and Pinterest. At 2 years old, Younique now counts 121,285 presenters in five markets. When it entered the U.K. on Oct. 1, 999 presenters signed up within 26 minutes.

Huscroft says people want to sell Younique because of its “simple and generous” compensation plan. Younique pays presenters within three hours of making a sale. Each presenter receives a bank account and a Younique debit card.

“It doesn’t matter what the compensation plan is from a corporate perspective. Everyone pays out 42 to 45 percent,” Huscroft says. “We are paying out the same amount as other companies. Ours is just structured in a way that benefits a larger amount of people.”


“Home parties in terms of their success are fairly cyclical. When we think it is hitting a low point that is when we see a rebirth.”
—Joe Mariano, President, DSA


Home Parties Find Their Niche

For some brands, home parties still reign supreme as the best way to experience the products.

Jamberry was founded by three sisters—Lyndsey Ekstrom, Christy Hepworth and Keri Evans—who wanted to recreate the group salon experience in a more affordable, accessible way. Jamberry and its customizable nail wraps are hugely popular. They are an alternative to nail polish, and they come in 500 colors and patterns. Customers can also create their own designs.

At Jamberry parties, consultants demonstrate the nail wrap application and help guests try one-finger samples. These parties make having stylish nails a simple at-home application for women who do not regularly frequent salons but still want to look polished.

What women say they like about the nail wraps is how easy they are to apply and remove and the fact that they last. The wraps are sold in $15 sheets, with enough for two to three applications.

In less than four years, Jamberry Nails has grown 2,700 percent and exploded into a network of more than 20,000 independent consultants in the U.S., Canada, Puerto Rico and Guam.

Origami Owl capitalizes on the more traditional home party because “it’s really about how we make people feel,” Spielmaker says. “Our products help you express a vision for your future, or a piece of your family history.”

Origami Owl uses a “jewelry bar” concept that allows party guests to see and touch some of the 350 charms for their personalized lockets. This enables every guest to take part in storytelling and make connections.

Customers keep coming back because they expand to different looks or decide to honor a different season in their lives, Spielmaker says. It could be the mom who creates a Living Locket for each sport her child plays, or the daughter who builds a locket of memories with her grandmother.


The patent-pending vParty allows a Chelsea Row boutique owner, the hostess and party guests to connect by computer to an online party where everyone can be seen and heard.


Origami Owl now works with more than 70,000 independent designers in the U.S. “It really is all about emotions,” Spielmaker says. “You feel this connectivity because it is personal.”

Retail entrepreneur Gregg Renfrew launched Beautycounter in March 2013 after watching a documentary about the many toxic products included in today’s cosmetics. She has said from that point forward she made it her mission to do something about it and work to get safe products into everyone’s hands. Consultants sell cleansers, moisturizers, oils and sunscreen on personalized websites and at “socials.”

Renfrew brings vast experience to Beautycounter. She sold her startup bridal registry The Wedding List to Martha Stewart Living Omnimedia and is a former CEO at the Best & Co. children’s retail group. She has consulted for high-profile clients such as Bergdorf Goodman, Ann Taylor and Jessica Alba. And she says that Beautycounter’s story “is best told person to person” through direct selling.

Introducing vParty

BEAUTYCOUNTER

Founded: 2013
Santa Monica, California

Consultants buy an $85 starter kit that includes marketing materials and training guides, a 25 percent discount on personal purchases, and a personal website where clients can shop. From that initial investment, $10 is donated to one of three nonprofit charities that Beautycounter supports: EWG, Safe Cosmetics Campaign, or Healthy Child. Prices for skincare products and sunscreen start at $18 and run to $75.

Consultants must make $150 a month in sales to remain in the network. They can earn up to 35 percent commission on sales, as well additional bonuses as they build their teams.


JAMBERRY


Founded: 2012
Salt Lake City, Utah

Independent consultants pay $99 for a starter kit with catalogs, brochures, order forms, nail tools, sample cards, product samples, and three months’ use of a personal website. Nail wrap sheets are $15 each.

Consultants earn 30 percent retail commission on their personal sales, plus additional commission on downline sales if they recruit others. Earning potential increases as they achieve higher pay ranks.


KITSY LANE/CHELSEA ROW


Founded: 2012
Boston, Massachusetts

Boutique owners can create an online storefront for free. Kitsy Lane provides step-by-step assistance and social media marketing tips. Jewelry prices range from $20 to $250.

Boutique owners earn 25 to 35 percent commission on every sale, including their own purchases, plus a percentage of the commission from other boutique owners they sponsor.


ORIGAMI OWL


Founded: 2010
Chandler, Arizona

Independent designers can start with the Basic Business Package for $149.99, which includes four lockets, 48 charms, jewelry supplies and one month’s use of a personalized website. The company also offers the Holly Jolly Box of Happy for $199, which has the added bonus of 15 new holiday charms plus other jewelry supplies. More extensive packages are available, from $399 to $2,599. Most items are priced at under $25.

Designers earn 50 percent on charms and 30 percent on all other jewelry. Designers can buy jewelry from the company at 30–50 percent off. They can earn more by mentoring a team.


YOUNIQUE


Founded: 2012
Lehi, Utah

Younique presenters log into their Facebook account and sign up through Younique’s Facebook application. The starter kit is $99 and includes social media tools, a personalized website, a startup manual, 100 product cards, 250 business cards, a Younique presenter status charm, pens, and a bank account with a debit card to easily access their earnings.

Presenters earn personal sales commissions and sponsorship bonuses when they welcome someone into the company. Commissions start at 20 percent and grow.

After achieving quick success with a low-touch social marketing e-commerce platform at Kitsy Lane, CEO Andy Fox wanted to find a way to enable his wife, Amy, to hold jewelry trunk shows online.

The Chelsea Row vParty launched in September. It is like a Skype call on steroids. Kitsy Lane and Chelsea Row boutique owners build their own online storefronts with jewelry items they select from the companies’ offerings.

The patent-pending vParty allows a Chelsea Row boutique owner, the hostess and party guests to connect by computer (and soon by tablets and mobile devices) to an online party where everyone can be seen and heard.

The boutique owner shows off different pieces of jewelry. Guests play online games in real time and they can shop together no matter where they are physically located. Before the party ends, guests buy a shopping voucher at different pricing levels, and they finalize their purchases online later. Most guests buy four pieces.

“We are taking this women’s entrepreneurship thing that is happening, and we are making it real,” says Lauren Nagel, Senior Vice President of Marketing. Fox adds that Kitsy Lane shows that anyone can be an online retailer. The company has registered 220,000 boutique owners since 2012.

“We hold daily flash sales and constantly come up with new things to say to customers,” Fox says.

Chelsea Row empowers a charismatic direct seller by removing geographic barriers. A vParty includes all the elements of a home party minus the food. They last about 45 minutes, and sales average between $500 and $800. That compares to average sales of $200 for a Facebook event party, Nagel says. “When you shop with someone you know and trust you buy a lot more.”

And in the time it usually takes to conduct one traditional home party, a Chelsea Row boutique owner can complete three vParties. Top salespeople bring in $900 per party. Nagel says the income potential is equivalent to a full-time career.

Though anyone can buy a startup kit, Chelsea Row is handpicking boutique owners for one-on-one sales mentorship and training, Nagel says. While Kitsy Lane owners earn 25 percent of sales, Chelsea Row owners make between 25 and 35 percent of sales.

Party Plan Growth on the Horizon

The power of social media to influence purchases and reach costumers can’t be denied, especially in direct selling. A party plan company can use its social base to understand emerging trends and shifts in its markets. Social media can help package customer-relationship marketing, SEO, and back office functions all in one place. And by building relationships with customers, companies like Chelsea Row, Jamberry, Origami Owl, Younique and Beautycounter can send targeted communications about the issues and products they know matter most to their customers.

At Beautycounter this approach attracted $15 million in funding. What makes Beautycounter such a hot commodity? It’s the game-changing focus on ingredients. Renfrew and her team painstakingly researched thousands of ingredients as they developed their nontoxic yet effective line of skincare products. Along the way, they created a “Never List.” This is “a robust roundup of ingredients that you will never find in Beautycounter products,” according to the Beautycounter website. Many are known or believed to cause irritation, allergic reactions or cancer.

With its work, Beautycounter also hopes to change the way the cosmetics industry is regulated in the United States. Renfrew said in an Oct. 2 interview on Bloomberg TV’s Market Makers that she wants to see Congress take action. She says that the last U.S. law regulating the cosmetics industry was passed in 1938. Today about 80 percent of the ingredients in U.S. beauty products are not tested for safety. In fact, there are only 11 toxic ingredients banned for use in the U.S. That contrasts with Europe, where more than 1,300 harmful substances are banned.

For other party plan companies, connections with customers are strengthened with an emphasis on a philanthropic effort, such as the Younique Foundation’s focus on helping women who were sexually abused, or Origami Owl’s partnership with Childhelp. Women love helping other women, Younique’s Huscroft says. “There is nothing more empowering than feeling like you are making a difference in the lives of others,” she says.

There is no doubt that there are obvious benefits to using social media to convene people, whether they gather at a traditional home party or through an online event, DSA’s Mariano says. “I think that the integration of technology and the party plan concept, however it is done, will be responsible for further growth of this segment.”

December 01, 2014

Executive Announcements

Executive Announcements, December 2014


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


In Memoriam: Industry Legend Harland Stonecipher

Harland C. StonecipherHarland C. Stonecipher

Harland C. Stonecipher, the Ada, Oklahoma, businessman who more than 40 years ago founded Pre-Paid Legal Services, now known as LegalShield, passed away on Nov. 10. He was 76. Stonecipher founded LegalShield in 1972 after he was involved in an automobile accident that opened his eyes to the non-existence of affordable legal services, an industry that is now $1 billion-plus. From there, Stonecipher grew the company from a single-room operation to being listed on the New York Stock Exchange. The company was taken private by Mid-Ocean Partners in 2011.

“It is with great sadness and extraordinarily heavy hearts that we learned and now share with the public, the passing of Mr. Harland C. Stonecipher,” said Jeff Bell, CEO of LegalShield. “Mr. Stonecipher founded Pre-Paid Legal Services Inc. in 1972 and led the company to greatness throughout his 40 years at its helm. To many of us, he was, first and foremost, a leader of men and women and a business giant. Closer to home, we knew of his love for his family and the outdoors.”

He is survived by his wife, Shirley; his oldest son, Allen and wife, Karen; and two grandsons, Greg and Zane.


The Pampered Chef Ltd.

Tracy Britt CoolTracy Britt Cool

The Pampered Chef Ltd., a premier direct seller of high quality kitchen tools and a Berkshire Hathaway company, announced that it has appointed Tracy Britt Cool as CEO.

Cool has been with Berkshire Hathaway for five years, serving as Financial Assistant to Chairman and CEO Warren Buffett. In this role, her responsibilities included conducting investment research, analyzing acquisition opportunities, and advising Berkshire Hathaway subsidiaries in various industries. Cool will continue to serve as Chairman of Berkshire Hathaway companies Benjamin Moore, Larson-Juhl, and Oriental Trading Co., and will remain on the board of the H.J. Heinz Co.

Over the past year, Cool served as an advisor to The Pampered Chef’s Founder and Chairman Doris Christopher, who has led the company as interim CEO since December 2013. Both Cool and Christopher will continue to work closely together, reporting directly to Buffett.

“I couldn’t think of a better leadership duo at the helm of The Pampered Chef,” said Buffett. “With Tracy’s experience helping Berkshire companies reach their full potential and Doris’ passion for both The Pampered Chef’s consultants and products, I see great things in the company’s future.”

Christopher welcomed and praised the appointment, stating, “I’m thrilled that Tracy is joining our company. I’ve come to respect her leadership immensely, and I look forward to partnering with her to enhance The Pampered Chef’s offerings for our 12 million annual customers and 60,000 independent consultants.”


Nature’s Sunshine Products Inc.

Richard ZhangRichard Zhang
Henry ZhouHenry Zhou
Dr. Nigel GerickeDr. Nigel Gericke
Dr. Ingrum BankstonDr. Ingrum Bankston

Nature’s Sunshine Products Inc. (NSP) announced the appointment of Paul Noack as President of China and New Markets as well as Richard Zhang as Managing Director, China for NSP, and Henry Zhou as Managing Director, China for Synergy WorldWide.

Noack has extensive experience in direct selling and the consumer products industry and will play an instrumental role in managing NSP entry into China through its strategic alliance with Shanghai Fosun Pharmaceutical (Group) Co., Ltd., as well as the company’s global expansion strategy in new and emerging markets. Zhang and Zhou will help in this endeavor, leading growth in the China market and bringing their experience in direct selling and consumer products as well as developing and managing business in China.

Prior to joining NSP, Noack served as president of another direct seller where he was responsible for the execution of the company’s international expansion strategy. Noack successfully launched the company’s operations into European markets and established a European hub to manage sales, marketing and operations in Western and Central Europe. He further directed the turnaround of the company’s Canadian business.

Zhang is a seasoned executive with over 20 years of experience, including 10 years of general management experience in various industries such as consumer packaged goods, over-the-counter/ pharmaceuticals and technology. He most recently served as General Manager, Asia Pacific at Welch’s Foods Inc. where he was responsible for launching operations in China.

Zhou has over 12 years of experience in direct selling. Prior to joining Nature’s Sunshine, he most recently served as Deputy Managing Director, China at another direct seller where he was responsible for long-term strategy, sales, marketing, cross-cultural communications management and organizational restructuring.

Nature’s Sunshine also announced that Dr. Ingrum Bankston of Tuscaloosa, Alabama, and Dr. Nigel Gericke of Cape Town, South Africa, have joined the company’s Medical and Scientific Advisory Board. Dr. Bankston is a board-certified urologist and practicing surgeon, and Dr. Gericke is a medical doctor, ethnobotanist and ethnopharmacologist specializing in unique product development from medicinal and food plants.


PartyLite

Kathleen LuceKathleen Luce

PartyLite, a member of the Blyth family of companies, has announced that Kathleen (Kat) Luce has joined the company as Vice President of Marketing and Communication for North America.

Luce will be responsible for integrating and maximizing marketing programs to build the PartyLite brand and drive revenue for the company and its independent salesforce. She will work closely with the executive team and departments across the company to develop and execute integrated marketing programs and campaigns to help meet corporate objectives. Reporting to President of North America Joan Connor, Luce will be based at PartyLite corporate headquarters in Plymouth, Massachusetts.

Prior to joining PartyLite, Luce was Director of Marketing and Communication for DTZ, a $1.1 billion global company in the integrated property services industry.

“We are extremely pleased that Kat has joined our team,” said Connor. “Kat not only brings extensive corporate marketing experience to the role, but she also has been a long-time PartyLite customer and party host and was an independent PartyLite consultant for two years—all experiences that have uniquely prepared her for this important role.”


LegalShield

LegalShield, a provider of legal safeguards for individuals, families and small businesses, announced that Claire Terrell has joined the company as Vice President of Marketing for LegalShield Business Solutions. Terrell will be responsible for the marketing strategy and tactics within the Broker, Affinity, Small Business and Group Channels.

“[Claire Terrell’s] extensive expertise at a major global brand in the fields of marketing and sales will be a welcome addition to our team, and we look forward to tapping her unparalleled talent to raise awareness for LegalShield Business Solutions and its unique value proposition within the prepaid legal services market,” said James Rosseau, President of LegalShield Business Solutions.

She joins after having spent 31 years at AT&T in marketing and business development, where she most recently served as Executive Director of Marketing for AT&T Small Business and Alternate Channels. In this role, she led the development of new offerings and campaign developments focused on meeting the needs of the small- to mid-sized business customer. 

LegalShield Business Solutions is the business to business division of LegalShield that specializes in employee benefits and small business legal safeguards in the U.S. and Canada.


LifeVantage Corp.

John GennaJohn Genna

LifeVantage Corp. has announced the appointment of John Genna as Vice President of Public Relations and Corporate Partnerships, Ann-Celeste Billings as Vice President of Marketing, and Calli Mott as Vice President of Sales Administration.

Genna has been with LifeVantage since August 2012, most recently as Vice President of Marketing and Communications. He has more than 20 years’ experience in marketing, communications, public relations and sports management roles. His new role allows Genna to focus on driving public awareness for LifeVantage, maximizing the jersey-front sponsorship of Real Salt Lake of Major League Soccer, and identifying additional brand-building partnership opportunities on behalf of the company.

Billings has 18 years of global network marketing experience and has created numerous global brands and launched more than 200 products during her career. She has held senior management positions at other companies in the direct selling industry and has provided strong leadership for achieving strategic sales goals.

Mott also brings global network marketing experience to LifeVantage. She has worked for the past eight years at another direct seller in significant roles in customer service, global expansion, business development, sales and nearly every facet of distributor-facing roles. Her background also includes extensive experience implementing strategic sales initiatives in North America and multiple markets in Asia.


Vector Marketing Corp.

Ryan LongRyan Long

Vector Marketing Corp., a direct sales company and primary distributor of Cutco Cutlery, announced that Ryan Long, a veteran with the company, has been named Content and Public Relations Manager.

In this new role, Long will be a key member of the firm’s National Digital Strategy Department and will be responsible for enhancing the Vector brand and improving the company’s reputation through various forms of online media. She will also serve as corporate spokesperson for the media.

“It is a distinct pleasure to announce Ryan’s promotion to this important position,” said Mike Monroe, Digital Manager for Vector Marketing. “She has been with Vector Marketing for almost 10 years in a variety of positions. Ryan has a deep loyalty to the company and understands our values and goals as we continue to expand throughout North America.”

Long first joined Vector Marketing as a student sales representative in 2003. During that time she was ranked as one of the leading producers among the thousands of college students who make up the salesforce for Cutco products.

Long quickly moved up the ranks with Vector, serving as a district manager and overseeing the operations of several offices. From 2007 to 2014 she served in several executive-level capacities, including as a division recruiting manager and campus recruiting manager/university relations.


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

November 28, 2014

U.S. News

This Week: Herbalife Serves Thanksgiving Dinner, AdvoCare Sponsors FC Dallas

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

  • ​Herbalife has been the official jersey sponsor of Major League Soccer’s LA Galaxy for nearly a decade, but the organizations have partnered off the field as well. This week, the Herbalife Family Foundation joined LA Galaxy players to serve Thanksgiving dinner to 1,000 local members of the Los Angeles community.
  • ​​​Speaking of soccer, Dallas fans will be seeing the AdvoCare logo for years to come. The Texas-based health and wellness company has extended its FC Dallas jersey sponsorship through 2020. AdvoCare also plans to donate $250,000 to the FCD Foundation to help fund a community soccer field for local children.
  • ​​For the second year, Thirty-One Gifts has awarded the Cindy Monroe Values and Vision Scholarship to one outstanding Tennessee student. Monroe, a Chattanooga native, founded Thirty-One Gifts with a vision to empower and celebrate women. The $12,400 award goes to a Chattanooga-area girl who embodies Monroe’s values of building relationships, leadership and community involvement.
  • ​The U.K.‘s Deputy Prime Minister, Nick Clegg, took to social media in support of the Wall of Silence campaign launched by Avon U.K. and Glamour magazine. Thousands have posted online selfies in support of the campaign, which aims to break the silence surrounding the crime of domestic violence.
  • ​The Montreal Gazette profiled Canadian direct selling company Epicure. The spice seller has generated double-digit annual growth over the past decade, and Montreal is currently its fastest-growing market.

November 26, 2014

World News

4Life Follows Record Month with Germany Launch

Following a record sales month in October, 4Life is celebrating the launch of its 24th international market. The wellness company has launched in Germany with a new office in Hamburg, where 400 guests attended a ribbon-cutting ceremony over the weekend. The facility includes meeting spaces, a computer lab and a business library to serve distributors as they build their businesses.

“4Life Germany is in a strategic location to drive growth and support the field,” said Rafael Fernández, 4Life Vice President for Europe, in the company’s release. “This office offers great opportunities for our entrepreneurs to develop their businesses and relationships.”

With offices on five continents, the company—based in Salt Lake City, Utah—has increased sales 13 percent thus far in 2014. October set a new sales record for the company, with Hong Kong (135 percent) and South Korea (126 percent) reporting the highest percentage growth.

November 25, 2014

World News

Nerium Mexico Expansion Features Revamped Product Line

Amid expansion into Canada and Mexico this year, Nerium International has tweaked its product offerings with an eye toward future growth. The anti-aging brand promises international consumers the same “real science, real results,” but its signature skincare line has gotten a makeover.

Nerium’s U.S. line consists of NeriumAD Night and Day treatments and a separate body contouring cream. In place of the NeriumAD brand, the company has introduced Optimera skincare to international consumers. The new product shares the same fundamental science as NeriumAD, said Nerium Chief Marketing Officer Amber Olson Rourke, with the added benefit of being globally compliant. According to the company’s website, Optimera Night and Day Creams include an “exclusive, patent-pending SAL-14 extract with a cutting-edge plant cell duplication technology.” The overhaul reflects a deliberate, long-term approach to expansion.

“For Canada and Mexico, we took a lot of the same properties, and the things we’ve found to be effective from an anti-aging perspective, to form a true global product built on the same foundational elements,” Rourke shared.

In Mexico, where Nerium launched in October, the company has hosted thousands at its grand opening events across the country. The connections formed by Latino Brand Partners in the U.S., as well as the groundwork laid by Nerium, created a warm market for the company.

“We didn’t do a soft launch. We spent a lot of time preparing to launch—we had an in-country executive team, in-country logistics and in-country support,” Rourke noted. “We were able to take what we’d done in the past and apply it to Mexico.”

Nerium has found that its values, culture and business model—with a focus on teamwork, home parties and selling to friends and neighbors—resonate with Latino customers and Brand Partners. Another aspect that has made an impression on Rourke is the enthusiasm and dedication of Nerium’s partners in Mexico.

“In the U.S., people kind of dip their toe into the water,” she notes “…There they are all in, excited, grateful and committed to the work it takes for anyone to change their lives and build a business.”

November 22, 2014

U.S. News

This Week: Creative Memories Reopens, Gardening Meets Social Selling

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

  • Ahni & Zoe, the Minnesota-based scrapbooking brand that closed its doors earlier this year, has re-launched under new ownership. The company, formerly Creative Memories, supported 70,000 consultants worldwide before undergoing two bankruptcies within five years. Caleb Hayhoe, Chairman of Flowerdale Group Ltd., now owns the Creative Memories and Ahni & Zoe brands, collectively reopened as CM Group Holdings Inc.
  • With a starter kit that includes seeds, compost and disposable gloves, Dallas-based Gardenuity is looking to turn a hobby into a social selling business. The young company is using a network of associates to train nongardeners in cultivating their own food. In addition to gardening tools; seeds; plants and other lifestyle products, Gardenuity has produced an app that enables associates to create a personalized garden plan for each customer.
  • Digital marketing company iMakeNews Inc. (IMN) announced that it will host an upcoming Twitter Q&A on the changing face of direct selling. Hosted by Michelle Larter, IMN Worldwide Director of Direct Selling and winner of the 2013 DSA Ethos Award for Partnership, the chat will take place on Tuesday, Dec. 9.
  • PartyLite is helping its historic hometown of Plymouth, Massachusetts, celebrate Thanksgiving during the America’s Hometown Thanksgiving Celebration Parade. The candle company is sponsoring a special float honoring the 200th anniversary of “The Star-Spangled Banner,” as well as the Plymouth 400 Illuminate mobile app, which allows people in Plymouth, Massachusetts, to engage with participants in sister city, Plymouth, England.
  • An Inc. slideshow featured the “new guard of direct selling,” an up-and-coming group of entrepreneurs with a modern take on the classic model.

November 21, 2014

U.S. News

J.Hilburn Opens Dallas Showroom to the Public

Custom menswear brand J.Hilburn is opening the doors of its Dallas showroom to the public. The newly renovated space, previously available by appointment only, showcases J.Hilburn’s full collection of luxury clothing and accessories.

J.Hilburn launched in 2007, selling its trademark custom shirts at prices ranging from $99-$169. While expanding its luxury offerings, the company has kept prices low by cutting out the middle man and bringing its pieces direct from the manufacturer to the consumer. Now, customers can choose from made-to-measure pants, suits and outerwear, as well as a range of accessories.

The many customization options available are on display at the company’s showroom, located near Dallas Love Field, the main hub of Southwest Airlines. J.Hilburn personnel remain on hand to assist visitors, and J.Hilburn Stylists can use the space to introduce the brand to new clients and guide them through their selections—including custom Italian fabric, collar, button, thread color and monogram options.

In a Top Desk feature for DSN, J.Hilburn Co-Founder and former CEO Hil Davis predicted that the future of retail would be “bricks, clicks and personal sidekicks”—a fusion of physical storefronts, online platforms and local brand representatives. The brick-and-mortar presence of J.Hilburn’s showroom, combined with its New York City pop-up shops, direct sales model and digital tools, is a big step toward realizing that vision.


November 19, 2014

World News

Born or Made? Amway Global Entrepreneurship Report Explores the Education Factor

If entrepreneurs are the engine of business, Amway’s Global Entrepreneurship Report provides a regular check under the hood. The annual report assesses the state of entrepreneurship around the globe, and for direct selling companies the results show plenty of potential. This year’s study includes a record 38 markets, where on average 75 percent of respondents expressed positive attitudes toward entrepreneurship.

The entrepreneur fever is at its highest among younger people, specifically those under 35, where positive respondents increased to 80 percent. In 37 of the 38 countries polled, a majority believed that entrepreneurship can be taught; however, one region of the world remains polarized on the question. Eighty-three percent of Chinese respondents—more than in any other market—affirmed the ability to learn entrepreneurial skills, while Japan represented the other end of the spectrum at just 40 percent. On the whole, training in basic business skills is the education people desire most.

While education is a crucial factor, location is also key to striking out as an entrepreneur. The survey asked respondents to gauge their society’s attitude toward entrepreneurship based on politics, media coverage and personal experience. The responses show that Denmark is most friendly toward entrepreneurs, while direct selling’s largest market, the United States, appears 13th on the list.

The insights in this year’s report come from a survey of 43,000 people, ages 14-99. Amway once again partnered with Technische Universität München (TUM) and leading research firm Gesellschaft fuer Konsumforschung (GfK) to create the report. The company has also partnered with an academic advisor in each market to assist in interpreting the data.

Find more information at amwayentrepreneurshipreport.com.

November 18, 2014

U.S. News

Primerica Funds Scholarship Programs at Local College

Photo above: Pictured from left are The Primerica Foundation’s Karen Fine Saltiel, President and Chairman; Anne Soutter, Vice President and Vice-Chairman; Margaret Halbert, Secretary; and Bill Nemetz, Treasurer; and Dr. D. Glen Cannon, President, Gwinnett Technical College. (courtesy of Gwinnett Tech)


New funding from The Primerica Foundation will assist students at a local college. Primerica Inc. has made its home in the Metro Atlanta area for nearly four decades, and the company has a history of giving back to Georgia communities. The financial services provider recently continued that tradition with a $75,000 donation to Gwinnett Technical College.

Located near Primerica’s global headquarters in Gwinnett County, Gwinnett Tech has received $260,000 in donations from Primerica over the last 17 years. The latest gift will support several career-focused college programs and establish two scholarship funds, The Primerica Foundation Scholarship and The Barbara T. King Scholarship for Women. The funds will provide tuition and supplies, in the amount of $1,250 annually per student, to 40 low-to-moderate income students.

The late Barbara King was a Primerica executive, community leader and advocate of the college who served on the Gwinnett Tech board from 1997-2003. The scholarship honoring her memory provides funding for female students enrolled in a Gwinnett Tech associate degree program within the Health Sciences division.

“Primerica and Gwinnett Tech have grown up together in the same community—we have a long history of supporting the college,” Karen Fine Saltiel, President and Founding Chairman of The Primerica Foundation, shared in the college’s release. “We also have a vested interest in the success of Gwinnett Tech, because the students of today are the workforce of tomorrow.”

Primerica contributed to the college in a different way during a recent community cleanup challenge. Employee volunteers worked with the Horticultural Department of Gwinnett Tech to plant a sustainable garden and a dozen trees on the college’s campus. Primerica’s participation earned it a Grow Green Award from local nonprofit Gwinnett Clean & Beautiful.

November 14, 2014

U.S. News

PartyLite Sponsors The Humane Society’s 60th Anniversary Gala

Jonathan Adler’s second collection for PartyLite will debut in December, but guests of The Humane Society of the United States will get a preview during the organization’s annual black-tie gala. As a sponsor of the HSUS 60th Anniversary Gala, PartyLite is furnishing the evening’s centerpieces with designs from Adler’s latest collection.

More than 500 guests will attend the New York City event on Nov. 21 to raise funds for the nation’s largest animal protection organization. Each table will feature PartyLite candles, candleholders and animal sculptures by Adler. Additionally, each guest will take home a pet-friendly gift, a Fresh Home by PartyLite™ Perfect Pet Odor Neutralizing 3-Wick Jar Candle.

Adler, a popular potter, designer and author, first collaborated with PartyLite earlier this year to produce a fall 2014 collection. The Gala centerpieces will feature designs from the forthcoming Jonathan Adler for PartyLite Safari Chic Collection.

November 14, 2014

World News

World Congress CEO Panel Discusses Future of Direct Selling

A powerhouse panel of direct selling company CEOs spent nearly two hours on stage as part of the World Federation of Direct Selling Associations 2014 World Congress in Rio de Janeiro, Brazil.

Mary Kay Inc. CEO David Holl, Amway President Doug DeVos, Oriflame Cosmetics CEO and President Magnus Brannstrom, Herbalife International CEO Michael O. Johnson, Avon Products Inc. CEO Sheri McCoy and Nu Skin Enterprises CEO Truman Hunt participated in a conversation moderated by WFDSA Chairman Alessandro Carlucci. Their topic of discussion: “The Future of Direct Selling in an Increasingly Connected and Borderless World.”

Their message: Each company must choose the right technology, at the right price and right time, and then provide the right training in order to maximize the return. At the same time, it is important to remember that direct selling, at its core, is not about technology at all. It is about one person sharing a product or opportunity with another.

“One of the things that I have championed and people who have come before me, I think, have championed as well is to keep this business simple,” Holl said. “You can come up with a lot of technology. In my opinion if you let the IT department lead you down that path, it will be great technology but the sales force might not use it because it is overwhelming.”

DeVos echoed that advice to keep things simple, recounting Amway’s experience with its launch of the Internet-focused company Quixtar. “We got ourselves upside-down in the late ’90s, in that we wanted to be a technology opportunity,” he said. “We were trying to be something we weren’t.  …Our experience there helped us say, ‘We’ve got to figure this out in a different way.’ It’s about people. It’s about keeping it simple. It’s about the right pace to have technology be empowering and enabling to our salesforce.”

But even as each company represented on stage strives to keep their technology implementations simple, the CEOs agreed doing so requires a significant financial commitment. To that end, McCoy underscored the importance of testing new technologies on a small scale before an enterprise-wide rollout. “As we are trying to learn more, more experimentation and testing differing things in different markets is more important to me than the amount of money,” she said. “If it works, I’m willing to spend, but my message to the team is, ‘Let’s look at the return on investment, and are we driving growth through our field force?’”

Of course, technology is not the only avenue for growth in a connected, global economy. Geographic expansion is certainly another popular path, and the World Congress agenda included deeper discussion of two markets: China and Latin America. However, the panelists agreed, many companies may find opportunities for growth in their own backyards. “To me, the only place in the world where direct selling is the predominant channel to the consumer in our main categories, health and beauty, is right here,” Hunt said. “Avon and Natura have done such a phenomenal job maximizing the value of our channel here in Brazil, but nowhere else is that the case. …There is so much potential in existing markets. We don’t even necessarily need new markets, we need to maximize the potential of the markets we are in.”

For his part, Brannstrom challenged the audience to look into the future to discover new categories for direct selling that don’t exist today. Don’t restrict your thinking to the way your business is today, he advised. “This personal recommendation is a profound difference between us and many others, which will take direct selling into new categories that we aren’t even in.”

The panel also discussed some of the challenges facing direct selling globally today, particularly around issues of reputation and government regulation. One of the key strategies to overcoming these issues, the group agreed, is demonstrating a willingness and commitment to self regulate, both at the company and DSA level. Another is to encourage the millions of independent business owners in direct selling to be more active in their communities and more vocal about their positive experiences with the profession.

“Outside this room and outside a distributor’s life every day, this business is mysterious to people,” Johnson said. “There is an elite group out there who gets to package our business for us, which is very unfortunate. They package it in the media and they package it sometimes at the regulatory level and they get to package it sometimes for their own self-interest, and it’s easy to do because if we don’t self regulate, there is going to be a victim every now and then of our business. And, unfortunately, they get a volume level that is way higher than the normal reality of our business day in and day out: people working hard, people making a few bucks, people making a few more bucks or people making a lot of bucks if they really work hard at building a huge organization.”

The real message, he said, has to be local. It also will take long-term effort. “If you get your people … engaged in city councils, in nongovernmental organizations, in state and national representation, you are going to be much better off for it.”

Read more coverage of the 2014 WFDSA World Congress.

November 12, 2014

U.S. News

Mannatech Bolsters Social Entrepreneurship Model with Nonprofit Arm

With a mission to aid millions of malnourished children, Mannatech is laying the infrastructure to support its social entrepreneurship platform. In 2013, the nutrition and skincare company launched Mission 5 Million (M5M), a movement to supply potentially life-saving nutrients to 5 million children worldwide. Mannatech has announced the formation of the nonprofit M5M Foundation to facilitate its ongoing charitable efforts.

Faced with the knowledge that an estimated 5 million children die each year from malnutrition, Mannatech utilized its real-food technology to develop supplements such as PhytoBlend, a nutrient-packed powder that can be added to any food. Since 1999, the company has purchased, donated and delivered PhytoBlend through the 501(c)3 organization MannaRelief. In 2010, Mannatech shifted away from charity model philanthropy and integrated social entrepreneurship into its business model. For every automatic order of a Mannatech product, the company donates PhytoBlend powder to orphanages and relief organizations around the globe.
 
Beginning in January 2015, the company’s intensified distribution efforts will shift from MannaRelief to the newly formed M5M Foundation. Mannatech’s Director of Human Resources, Sarah Bowen, will take on the role of executive director.

“What we’ve been able to accomplish by working alongside MannaRelief has laid an incredible foundation for seeing this vision realized,” Dr. Robert Sinnott, Mannatech CEO and Chief Science Officer, shared in the company’s statement. “The establishment of a dedicated organization whose sole purpose is to expand and enhance these efforts is a natural progression for Mannatech and the M5M cause.”

November 11, 2014

World News

WFDSA Kicks off World Congress in Rio de Janeiro

The World Federation of Direct Selling Associations kicked off its 14th triennial World Congress Nov. 10 in Rio de Janeiro, Brazil. As the first order of official business, the WFDSA’s CEO Council elected Amway President Doug DeVos as Chairman to succeed Natura’s Alessandro Carlucci.

DeVos will begin his three-year term as chairman at the close of the event. He has pledged to continue to support the organization’s long-range plan, which encompasses four key objectives: improve processes and structures of direct selling associations and the World Federation; promote alignment of direct selling companies; promote ethics, and strengthen direct selling’s image.

During a joint press conference, Carlucci and DeVos highlighted the WFDSA’s recent research report, which found direct selling generated more than $178.5 billion in retail sales globally in 2013. The World Congress host country was the world’s fifth-largest direct selling market last year, with retail sales of nearly $14.2 billion, a 7.2 percent increase from the prior year.

They also discussed the theme of the 2014 World Congress, “Direct Selling: the Original Social Network.” It is a crucial topic to tackle, Carlucci said, because customers continue to dramatically change the way in which they prefer to buy products and services, using technology more and more. If handled correctly, this offers a huge opportunity for direct selling companies.

“It is not Natura or Amway selling a product, it is more than that,” he said. “It is someone that has a name and a surname from each one of these companies who is recommending a product. They are saying, ‘Look, this product is very good. I use it or I have some clients that are using it.’ This is very contemporary, when we think about what is happening in social media where we are relying much more on the number of stars or referrals from our friends … than in advertising.”

The theme will carry through much of the World Congress programming, including a presentation by Facebook Vice President of Global Marketing Solutions, Dan Levy, on the start of day two. The event also features sessions and workshops entitled, “New Generations: Enchanting Consumers through Innovative Relationships” and “Direct Selling: Social Engagement and Mobilization.”

November 11, 2014

World News

Bestseller: Amway Leads Global Sales of Air Treatment Systems

Amway’s ATMOSPHERE brand of premium home air treatment systems is No. 1 in the world, according to new research by Verify Markets. A study of 2013 global sales revealed that Amway commands a 15 percent share of the total global market for air treatment systems.

Last year, China generated the highest demand for Amway’s residential air purification systems. According to a World Health Organization estimate, 4.3 million deaths—or 7.7 percent of total mortality—were attributable to household air pollution (HAP) in 2012. The Western Pacific region of the world, including China, accounted for 1.6 million of those deaths.

Increased awareness of health issues related to air quality has boosted the company’s sales, says Mitchell Urbytes, Director of Home Brands for Amway. “Through the Verify Markets research, we found the key drivers for the sales of air purification systems were poor indoor air quality and awareness about poor air quality,” Urbytes shared in the company’s statement.

ATMOSPHERE is not the only leading brand developed by Amway. The direct selling powerhouse has also built NUTRILITE, the world’s No. 1 selling vitamin and dietary supplement brand, and ARTISTRY, one of the top five premium skincare brands in the world.

November 07, 2014

World News

This Week: Forbes Lux Combines Cultures, Oriflame Gets Relief in Russia

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

  • The Economic Times featured a key aspect of the merger of Mumbai-based consumer durable company Eureka Forbes and Lux International, the direct selling arm of Stockholm-based Electrolux. To bring top management from both companies to the table, Eureka Forbes Chairman Shapoorji Mistry formed the Forbes Lux Centre of Excellence (FLCE), an eight-member think tank aimed at bridging the two diverse company cultures.

  • The USANA True Health Foundation got into the spirit of the season with its annual USANA Turkey Trot 5K, held Nov. 6 at the company’s Salt Lake City headquarters. Angie Larsen, Senior Manager of Corporate Relations for USANA, spoke to the local ABC affiliate about the event, where USANA employees donated more than 800 pounds of food to the Utah Food Bank.
  • Shares in Oriflame experienced their biggest jump in more than a decade following the company’s quarterly report. The Luxembourg-based brand has reported tumultuous sales in Russia amid economic and political unrest in the region. Sales stabilized in the third quarter, rising 1 percent at local currency rates, partly due to changes in the company’s compensation plan.
  • The U.K. entrepreneurial site Startups featured the results of a new study by the U.K. DSA, which found that the direct selling party model has gained popularity in recent years. Nearly 900,000 Britons attended a direct selling party in 2013, and the number of gatherings has grown by over 150 percent since 2009.

November 07, 2014

U.S. News

More Public Companies Report Q3 2014 Results

The following is a round-up of the latest publicly held companies to announce third quarter results:

At Nu Skin (NUS—NYSE), third quarter revenue was $638.8 million, down 30 percent over the prior-year period. The revenue dip partially reflects a limited-time introduction of Nu Skin’s ageLOC® TR90® weight management system in Q3 2013. The personal-care company reported earnings of $1.12 per share, ahead of Nu Skin’s 90 cents to 95 cents guidance for the quarter. The company expects fourth quarter revenue of $590 million to $610 million, with earnings per share of 72 cents to 77 cents.

“Our sales results are heavily impacted by our product launch schedule. Last year’s second-half launch, which generated approximately $550 million in sales, provides a difficult year-over-year comparison,” Nu Skin President and CEO Truman Hunt shared in the company’s report. “However, excluding product launch sales, the core business has stabilized and is trending positively sequentially.”

Primerica Inc. (PRI—NYSE) reported third quarter revenue of $339.2 million, up 9 percent year over year. Net income was down 3.7 percent to $41.6 million, or 75 cents per diluted share, impacted by accelerated equity compensation expenses related to retirement plan modifications and higher claims incurred in the quarter. The financial services provider lagged 8.43 percent behind the Zacks Consensus Estimate, but investors reacted positively to Primerica’s results. The company’s stock price gained 0.38 percent on the news to close Wednesday at $52.16.

Nature’s Sunshine Products Inc. (NATR—NASDAQ) reported increased revenue for the third quarter on Wednesday, with $94.9 million, up 2.6 percent from $92.5 million in the third quarter of 2013. Results showed lower earnings though, with 6 cents per diluted common share or net income of $1 million, compared to 29 cents, or $4.9 million in the third quarter of 2013. It was the fifth consecutive quarter of record sales for the health and wellness company’s Synergy WorldWide business, driven by South Korea, Japan and a return to growth in Europe.

“Sales in NSP North America have begun to improve with NSP United States and NSP Canada posting net sales growth for the first time since the second quarter of 2013 and the first quarter of 2012, respectively,” said Chairman and CEO Gregory L. Probert. “We remain cautiously optimistic about the future of this core market as our new products and sales programs continue to gain traction.”

Medifast Inc. (MED—NYSE) third quarter results came in ahead of expectations on Wednesday with net income of $4.9 million, or 39 cents per share. Excluding non-recurring costs, adjusted earnings came to 47 cents per share, or $5.9 million net income. The weight-loss company posted net revenue of $74 million. This was a decrease of 14 percent from net revenue of $86.5 million in the third quarter of 2013. Revenue in the direct sales channel, Take Shape For Life, decreased 11 percent to $49.9 million in the third quarter of 2014, compared to $56.2 million in the same period last year.

Guidance for Q4 revenue and EPS is below consensus, with net revenue to be in the range of approximately $69 million to $73 million and EPS in the range of 31 cents to 34 cents. For fiscal year 2014, the company now expects revenue to be in the range of $310 million to $314 million and EPS in the range of $1.59 to $1.62. As trading closed on Wednesday, shares hit $30.09, an increase of 23 percent in the last 12 months.

November 06, 2014

World News

It Works! Brings ‘That Crazy Wrap Thing’ to New Zealand

It Works! has officially opened for business in New Zealand, the 19th market to offer the company’s skincare and nutrition products.

Fast-growing It Works! is recruiting New Zealand “wrapreneurs”—named after the brand’s signature tightening and toning wrap—to join its 90,000 active distributors around the world. The company has already expanded into neighboring Australia, Canada and select areas of Europe.

“We’re eager to welcome New Zealanders to our team and help spread black, green and bling across the world,” It Works! CEO Mark Pentecost said in a nod to the company’s signature colors.

The 13-year-old brand has generated three-year growth of 1,565 percent, earning it the No. 290 ranking on this year’s Inc. 500 list. Earlier this year, It Works! relocated to a new $10-million global headquarters in Palmetto, Florida. The waterfront property contains space for the company to increase its 100-member corporate team by half.

November 05, 2014

U.S. News

12 DSA Candidates Win Congressional Seats

The Direct Selling Association backed 13 congressional candidates in the Nov. 4 election who have taken a strong stance on direct selling and entrepreneurialism. Twelve of the 13 candidates won.

The endorsements appeared across the country in a newspaper ad campaign funded by Direct Selling Empowers Americans, the newly formed super PAC associated with the DSA.

“We supported candidates on both sides of the aisle who stood with direct sellers and are pleased that nearly every DSA-endorsed candidate will go on to represent our interests in Washington, D.C.,” DSA President Joseph Mariano shared via email.

“We are hopeful that the next Congress will embrace entrepreneurialism and the pursuit of the American dream, and we look forward to working with members around the country to advance these goals on behalf of nearly 17 million Americans who create better lives for themselves and their customers through direct selling.”

In addition to Democratic Rep. Steven Horsford of Nevada, who lost his seat to Republican candidate Cresent Hardy, the DSA endorsed the following challengers and incumbents:

  • U.S. Senate candidate Joni Ernst (R-Iowa)
  • Congressional candidate Mia Love (R-Utah)
  • Congressional candidate Alex Mooney (R-W.Va.)
  • U.S. Rep. Marsha Blackburn (R-Tenn.)
  • U.S. Rep. Tony Cardenas (D-Calif.)
  • U.S. Rep. Eddie Bernice Johnson (D-Texas)
  • U.S. Rep. Gregory Meeks (D-N.Y.)
  • U.S. Rep. Reid Ribble (R-Wisc.)
  • U.S. Rep. Juan Vargas (D-Calif.)
  • U.S. Rep. Marc Veasey (D-Texas)
  • U.S. Rep. Tim Walberg (R-Mich.)
  • U.S. Rep. Ted Yoho (R-Fla.)

November 05, 2014

U.S. News

Herbalife Shares Drop, but CEO Optimistic

Global health and wellness company Herbalife Ltd. (HLF—NYSE) reported its third quarter earnings on Monday after markets closed, disappointing investors with its earnings miss and a lower than anticipated fourth quarter outlook. Adjusted net income for the quarter was $125.1 million, or $1.45 per diluted share, compared to $152.1 million, or $1.41 per diluted share for the same period in 2013.

On the news, shares dropped 11 percent to $49.60 during after-hours trading, according to MarketWatch, and continued to fall to $44.26 by close on Tuesday. Wall Street expected earnings per share to come in at $1.51, up from $1.41 at the same time last year.

On a positive note, Herbalife reported net sales of $1.3 billion, reflecting an increase of 4 percent compared to the same period in 2013, and, according to CEO Michael O. Johnson, the quarter saw volume increases in two-thirds of the company’s 91 countries, especially Russia and China.

Johnson sought to allay concerns about the company’s forecast during its earnings call with investors on Tuesday. “While the third quarter represented a record level of net sales, our performance was below expectations, and this performance was clearly out of character for us,” Johnson said. “There was a confluence of factors—some external and some internal—that had an impact on our results. The main factors were Venezuela, FX and the short-term effect of structural changes that we are making to our business.”

Net income fell 92 percent to $11.2 million, or 13 cents a share, down from $142.0 million or $1.32 per diluted share for the same period in 2013. Third quarter 2014 reported net income was negatively impacted by $139.5 million in pre-tax charges, or 97 cents per diluted share after tax, related to the remeasurement of the Venezuelan Bolivar, and $17.5 million in pre-tax charges, or 13 cents per diluted share after tax, related to a legal reserve.

Guidance for fourth quarter FY 2014 included an unfavorable impact from currency rates of approximately 31 cents compared to the prior year, inclusive of approximately 22 cents from Venezuela. Guidance for FY 2015 includes a currency headwind of approximately 66 cents, including approximately 45 cents from Venezuela.

Read the full results here.

November 04, 2014

Credit Card/Payment Processing

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November 04, 2014

World News

Amway Celebrates 40 Years in Hong Kong, Opens Shanghai Business Center

Photo: Amway President and Co-CEO Doug DeVos (third from left) joins Amway China leaders at the grand opening of the company’s Shanghai Experience Center.


Amway celebrated a milestone week in China, where President and Co-CEO Doug DeVos attended Amway Hong Kong’s 40th anniversary celebration and the opening of Amway’s first experience center in the country. Located in Shanghai, the center takes Amway Business Owners (ABOs) and customers beyond the traditional retail transaction through a high-tech, interactive experience.

Marking a relatively new approach for the company, Amway centers or plazas enable customers to sample products, view product demonstrations and learn more about Amway’s science and product development. China Daily reports the company’s plans to build a network of similar centers, with locations slated to open in Shenzhen later this year and in Beijing next year.

The experience center represents a big opportunity for Amway to tell its story in China, where regulations prohibit network marketing models. China ABOs can operate as representatives who earn commission solely on their own sales or as a government-authorized business, selling products through a traditional shop.

Amway has sprinkled its brick-and-mortar promotional centers across Europe and Russia. In September, Amway Turkey opened a second plaza in Ankara, the country’s second-largest city. The country’s first plaza, opened in Istanbul in July 2011, serves almost 10,000 visitors every month. The direct selling leader introduced the model to U.S. customers in 2013 with the launch of its Amway Business Center at CitiField.

November 01, 2014

DSA News

Politics, Like Direct Selling, Is All about Relationships

by Emily Reagan


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


“Just because you do not take an interest in politics does not mean politics won’t take an interest in you.” Pericles made that statement in 430 B.C., but the Direct Selling Association is sending the same message today. At the DSA Annual Meeting in June, Chairman Truman Hunt set an objective to build the association as a force for good. Securing vital political influence is one step toward that goal, and the DSA’s Government Relations team has held two training sessions this year—one at Nu Skin’s headquarters in Provo, Utah, and one at Mary Kay’s Addison, Texas, headquarters—to provide a practical approach to legislative relationship building.

The Government Relations Training Session is now available in a series of videos at www.dsa.org. The DSA is continually reaching out to officials and advancing the conversation around direct selling; however, unified action by member companies and their employees could exponentially multiply those efforts. In the videos, five speakers outline the “why” and “how” of building relationships with members of Congress.

“Unrelenting effort on behalf of each and every company, no matter its size or political acumen, is going to be required if the industry is going to be successful,” says Michael Lunceford, Chair of the DSA’s Government Relations Committee and Senior VP of Public Affairs at Mary Kay.

Mary Kay’s VP of Government Relations, Anne Crews, outlines areas of major concern to direct selling companies, such as the independent contractor status, restrictions on door-to-door selling, labeling requirements, and onerous consumer protection laws on products and services. With a firm grasp of the issues, companies can maximize their efforts through coalition building or grassroots lobbying. Whatever the strategy might be, says Crews, effective action will require support from top-level executives.

“For a government relations strategy, you’ve got to have buy-in from the top,” she states. “Your CEO, your president, your executive leadership team have to understand the importance and the priority of lobbying.”

The session also covers the finer points of meeting and interacting with representatives. Rod Givens, District Director for Democratic Rep. Eddie Bernice Johnson of Texas, explains what to do—and not to do—when visiting a member’s office. According to Givens, getting involved in the political process is all about building relationships, regardless of whether a company anticipates resistance or support on a specific issue.

“Even if you believe this might not be an issue that one party will agree with, go see them,” says Givens. “One more point: When you go see them, make sure you bring a constituent. Make sure you bring someone who lives in that district.”

Take Action

  • Bring policymakers to your facilities to better understand direct selling.
  • Promote the Direct Selling Proclamation and encourage your field members to sign it.
  • Send your salespeople to DSA’s Direct Selling Day on Capitol Hill.
  • Encourage your salespeople to share their political connections with you—and with the DSA.
  • Engage in and support the DSA’s new political action effort, Direct Selling Empowers Americans.

DSA Attorney Jeff Hanscom drives home the importance of bringing constituents into the conversation. “There is no limit to the number of touches—the number of communications—that you can have with legislators, but the biggest thing they want is to hear from their constituents,” says Hanscom, who specializes in issue advocacy at the state level. “How is this going to impact them? If you have facilities in their district, if you have independent contractors in their district, they want to know that.”

For companies looking to take the first, or simply the next, step in their political strategy, the DSA offers a variety of tools. The Government Relations team sends out regular issue alerts with specific calls to action. This summer, the DSA launched an online “Who Do You Know?” tool that enables companies to survey their salespeople and discover existing contacts. The Association also raises funding through its PAC and Super PAC to support candidates across the country.

“Reach out to us,” Hanscom urges members. “We are working for you, and we want to make sure that we provide you with the information and give you the tools to get involved.”

November 01, 2014

U.S. News

Avon Beats Q3 Expectations, Still Shows Signs of Struggle

The release of Avon Products Inc. third quarter results Thursday before markets opened surpassed earnings expectations while missing revenue forecasts. The company reported adjusted net income from continuing operations of $99 million, or 23 cents per diluted share, beating expectations of 16 cents, according to the Zacks Consensus Estimate, and jumped approximately 64.3 percent from 14 cents, or $60 million, for the third quarter of 2013.

“We began the year with the expectation that the second half of 2014 would show improvement relative to the first half, and Avon’s third quarter results are consistent with modest improvement on both top and bottom line,” said Avon CEO Sheri McCoy. “We saw good results from our EMEA region, while sluggish performance in Brazil contributed to softer results in Latin America. Despite the strong headwinds in a number of markets, we continue to make progress on Avon’s turnaround journey.”

Still shares dropped over 9 percent Thursday, according to Zacks, after results fell short of revenue forecasts. The global cosmetics company posted revenue of $2.14 billion in the period, down 8 percent, or up 1 percent in constant dollars, from $2.32 billion during the prior year period. Analysts expected $2.15 billion, according to Zacks. Revenue was negatively affected by weak foreign exchange rates and lower sales volume, partially offset by the favorable net impact of mix and pricing, primarily due to inflationary pricing in Latin America.

Beauty sales declined 9 percent, but increased 1 percent in constant dollars. Fashion & home sales declined 11 percent, or 4 percent in constant dollars.

Brazil is the company’s largest market and Latin America is its most profitable region, yet Brazil revenue was up only 1 percent, or relatively unchanged in constant dollars. According to the company, this was partially impacted by high levels of competitive activity.

“In addition, the Brazilian economy has not recovered as anticipated after the World Cup. Consumer spending also seems to be impacted by the uncertain economic environment, the election cycle and high cost of debt,” McCoy said during the earnings conference call on Thursday. “That being said, while growth may be slowing, Brazil remains a highly attractive market, and we are committed to participating in its longer-term growth.”

Further results showed that third quarter 2014 gross margin was 61.9 percent and adjusted gross margin was 62.0 percent. Adjusted gross margin was 110 basis points lower than the prior-year quarter.

Read the full results here.

November 01, 2014

Company Spotlight

It Works!: Taking It to a Whole ‘Notha Level

by Jeremy Gregg

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


Photo above: The official ribbon-cutting at the new It Works! headquarters in Palmetto, Florida.


Company Profile

Founded: 2001
Headquarters: Palmetto, Florida
Executives: Mark Pentecost, CEO; Pam Sowder, Chief Networking Officer; Mike Potillo, Chief Sales Officer; Doug Nooney, CFO; Chris Burns, CIO; Don Klein, COO; Janne Heimonen, President of International Operations; Don Hamilton, Senior Director of Operations.
Products: Skincare and Nutrition


Founded in 2001, It Works! is one of world’s fastest-growing skincare and nutrition direct sales companies. Ranked at No. 290 on the Inc. 500 list for 2014, the company has enjoyed an impressive 1,565 percent growth rate over the past three years.

Originally based in Grand Rapids, Michigan, It Works! recently invested over $10 million to build a new global headquarters in Palmetto, Florida. Reaching across the U.S. and into at least 17 other countries, the company has amassed 90,000 active independent distributors, supported by the 100 full-time employees of It Works!.

Of the company’s 32 different products, the largest seller remains its first offering: the Ultimate Body Applicator, a non-woven cloth wrap that is infused with a powerful, botanically based formula. The company’s distributors—called “Wrapreneurs”—primarily market this product through home parties that offer their friends and families a way to achieve a tightened, toned and firm body in as little as 45 minutes.

Origin

Before It Works!, Mark Pentecost was a high school teacher and basketball coach living in the small town of Allegan, Mich., with his wife, Cindy, and their three children. Around 1995, the Pentecosts had joined a home-based business in the telecommunications industry, through which Mark Pentecost had become a top-10 earner. While they did not know it at the time, the Pentecosts’ success in direct selling had given them a vision for the future of It Works!.

In 2001, It Works! was founded on Pentecost’s belief in the impact of operating “debt-free” as an individual, but also as a company. He embraced the opportunity to share this message with the company’s distributors. “Debt Free Is the New Sexy” then became the mantra to align the field with the corporate philosophy of debt freedom.


It Works! achieved a 1,565 percent three-year growth from 2010 to 2013, placing it at No. 290 on Inc. magazine’s annual list of the 500 fastest-growing privately held companies in America.


Growing through a Tough Economy

It Works! was entering a major growth period when the economy began to fall off the cliff in 2008 and 2009. Catastrophic economic events were leading many other businesses to retreat in their expansion plans, take on enormous debt to maintain existing operations, or both. Despite these trends, Pentecost and the leadership team at It Works! were inspired to go against the grain: Pursue rapid growth while becoming debt-free.

The move paid off. Unencumbered by debt, the company grabbed a new vision for its future. It Works! achieved a 1,565 percent three-year growth from 2010 to 2013, placing it at No. 290 on Inc. magazine’s annual list of the 500 fastest-growing privately held companies in America.

“I truly believe we have a great team in our field leaders and corporate,” Pentecost says. “I’m confident in our strategic plans to grow both our U.S. and international markets. It Works! will be a recognizable force around the globe.”

Mike Potillo, Mark Pentecost and Pam Sowder welcome guests to the new It Works! headquarters.

Offering a Different Kind of Incentive

In January 2012, It Works! formalized its debt-free concept with the launch of the G.O.O.D. Bonus, which stands for “Get Out of Debt.” Based on performance, the bonuses have ranged from $10,000 to $75,000 on top of commission. Qualifiers are encouraged to use the money to pay off student loans, mortgages, credit cards and other debts.

Pentecost states: “The world today needs to hear about fiscal responsibility. At It Works!, we put a stake into the ground and decided to mentor our team on why getting out of debt is a good thing. It gives you freedom. We’re going to model that in everything we do.”

It Works! Gives Back Foundation


The It Works! Gives Back Foundation recently donated $25,000 to The V Foundation for Cancer Research.



The It Works! corporate team handed out over 500 backpacks and supplies to children in the Palmetto community.

In 2014, It Works! launched the It Works! Gives Back Foundation to support charities that align with its values. The foundation also supports victims of natural disasters and humanitarian crises in America and around the world. CEO Mark Pentecost describes the foundation as “the heart of our company.”

“We encourage everyone to start giving back, whether it is through financial, practical or emotional support,” he says. “Our goal is to make a lasting difference in our communities locally and globally. Both our field and corporate team participate in various give-back events throughout the year. We believe that if everyone does a little, it will add up to make a huge impact.”

The foundation has supported efforts such as The V Foundation for Cancer Research, Selah Freedom, the National MPS Society, and the Children’s Cup.

Sunnier Days Ahead

In 2011, It Works! moved its global headquarters from its birthplace in Grand Rapids, Michigan, to a new home in Florida. The new corporate headquarters was located just 20 minutes away from multiple world-class beaches.

“I’m always looking for an adventure,” Pentecost says. “I knew that if we were in a warm climate, people would want to visit us more often. It’s easier to get people to Florida during the winter than it is to Michigan!”

Pentecost also shares that Florida offered some “very helpful” tax incentives that made the decision to move his company that much easier. The move even allowed him to achieve a long-time dream: owning his own golf course, the Stoneybrook Golf Club of Bradenton (down the road from the It Works! headquarters).

“Here in Florida, we could have it all: a waterfront property, a golf course, and a ranch to let out your inner cowboy. It’s all part of the experience. It is a great place to entertain.”

The facility became a major draw for leadership meetings, which always included trips to the beach and games at Stoneybrook. The new location also became home to companywide “Green Carpet Experiences,” which treated distributors from all over the world to fun and fellowship with the corporate leadership. In fact, Pentecost saw such great returns from the move that he began to dream even bigger.

The Office That the Team Won’t Leave

Within three years, Pentecost moved his growing company into even fancier digs: a 50,000-square-foot building in Palmetto, Florida, right along the Manatee River that leads out to the Gulf of Mexico. Opened in 2014, the building “stands out among all others,” according to the local Herald-Tribune as a “five-story corporate palace, fronted with a cascading waterfall and the [It Works!] logo.”

Each floor has a different feature that has been designed to encourage a fun, team-focused atmosphere. Some examples include a coffee bar on each floor, an in-house sports bar, a rooftop fire pit, a putting green, three bistros, bumper pool table… and a remarkable, 50-foot slide that carries people from the third floor to the second. The Tampa Bay Business Journal recently listed the building on its top five “Coolest Office Spaces” in Tampa Bay as well as its Reader’s Choice winner.

The building cost over $10 million to purchase and renovate. For Pentecost, the investment was small compared to the long-term value that it will produce: “The It Works! culture is friendships, fun and freedom, not only in the field, but also with our corporate team. It’s who we are—what we call the It Works! Way. Our office had to be an experience that makes life fun. We like to enjoy the journey!”

Pentecost goes on to say, “Our long-term vision is to continue expanding, and the office was certainly built for growth. I see us entertaining here for years to come, whether it is our top leaders, strategic partners or corporate team. It was my goal to build an office where I’d have to kick the team out at night and say ‘You have to go home!’ because they don’t want to leave. When you walk into the building, I want you to feel the energy and passion of our team.”

The approach is certainly a major differentiator for his company in the Palmetto area, but Pentecost believes that other direct selling companies should look toward including these kinds of “wow” factors more often within the physical spaces where they operate. He states: “In the direct sales industry, your salesforce has such a direct impact on your bottom line. We definitely considered how we could add an entertainment value and connection value to the space [along with] a reflection of our mindset and culture.”

The new facility also contains plenty of room for growth, including enough office space for It Works! to add another 50 employees to its quickly growing team of 100.


“The It Works! culture is friendships, fun and freedom, not only in the field, but also with our corporate team. It’s who we are—what we call the It Works! Way.”
—Mark Pentecost, CEO


 

The new It Works! headquarters building overlooks the Manatee River that leads out to the Gulf of Mexico.

The Rapid Growth of It Works!



It Works! began to hit its stride in 2010, when the company was first recognized by Inc. magazine as one of the 5,000 fastest-growing privately held companies in the U.S. The company has improved its ranking each year.

                                           
YearRevenueInc. 5000 Ranking
2010$27 millionNo. 720
2011$46 millionNo. 662
2012$200 millionNo. 436
2013$456 millionNo. 290

International Growth

It Works! has been expanding internationally since 2010, when it first launched in Australia and select areas of Europe. Today, the company has distributors in 18 countries outside of the U.S. These distributors are supported by a growing It Works! team throughout Europe that can provide dedicated support to these international markets.

Pentecost foresees significant growth for his company in these new markets. To capitalize on this opportunity, the company has adopted several important new initiatives:

  • Trading in multiple currencies
  • Adding local warehouses and manufacturing centers in other countries
  • Expanding customer service to optimize support for different languages, cultures and hours of operation
  • Launching corporate-hosted events around the globe
  • Localizing its marketing tools and websites to further support international markets

The company also recently announced the hiring of Janne Heimonen as President of International Operations. With over 20 years in the direct sales industry, he will oversee operations and field management in all markets outside of the United States where It Works! currently operates. Heimonen is excited to pursue expansion.

“At It Works!, we are making it our mission to go out and build an international dream team,” Heimonen says. “We will continue to build a solid foundation when it comes to our international operations and communication.”

That level of disciplined focus is part of the reason why Pentecost believes Heimonen is the right fit to help spread the “It Works! Way” globally.

The Keys to Growth

As It Works! expands both domestically and abroad, Pentecost sees several common elements that his company needs in order to succeed in every market: “innovative mobile technology, staying ahead of the curve, and building a strong foundation by adding the right people to the team.”

One person whom Pentecost has tasked with all three of those key elements is Chris Burns, the company’s Chief Information Officer. Burns states that the company has invested “substantial” resources in expanding its IT department, including a “world-class architect and development team who deliver solutions lightning fast.”

When he was building his team, Burns truly wanted to hire people “who ‘get’ our industry and not just a group of developers that produce software. Every line of code that is written has heart behind it, knowing it plays a part in changing someone’s life.”


“At It Works!, we are making it our mission to go out and build an international dream team!”
—Janne Heimonen, President of International Operations


To achieve this, It Works! created its own custom solutions for its global ecommerce website and back office tools. Rather than rely on off-the-shelf solutions, Burns believes that this approach will position the company for scalability and performance.

He says, “Enrollment and shopping experiences need to be flawless and accurate. We’ve accomplished that by developing a solid technical design. Our entire IT team is cross-trained to functionally support whatever is put in front of them.”

The strength of that infrastructure is now helping It Works! on its quest to become a billion-dollar brand.


“Someone can earn freedom of time or finances through hard work and innovation. That is what we built this country on. That’s what our industry does—it gives people that opportunity.”
—Mark Pentecost


A Bright Future for the Industry

“We have been blessed with not only products and an opportunity that withstood the financial market of recent years, but sales that have skyrocketed from 2009 onward,” Pentecost says. “We want to pour hope and goodness into people’s lives through our product solutions and the It Works! opportunity, and we are honored to be able to touch more and more lives every year.”

Pentecost sees opportunities for similar success across the direct selling industry. “I believe we’ll see tremendous growth over the coming years in direct selling; it is one of the greatest industries,” he says. “It shows you that the American Dream is still alive and well. Someone can earn freedom of time or finances through hard work and innovation. That is what we built this country on. That’s what our industry does—it gives people that opportunity. With international growth, I think we’re only seeing the tip of the iceberg right now. As people see the good our industry does—whether in personal development, financial freedom or giving back in the world—direct sales will only grow.”

November 01, 2014

Industry with Heart

Mannatech: Social Entrepreneurship: Helping People Help the World

by Barbara Seale

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


Company Profile

Founded: 1993
Headquarters: Coppell, Texas
Executives: CEO and Chief Science Officer Robert Sinnott
Products: Naturally sourced nutritional supplements and skin care


Robert SinnottRobert Sinnott

For a company based on the science of nutrition, Mannatech’s decision to help improve the health of malnourished children around the world through its charitable programs just made sense.

The effort started with Mannatech Founder Sam Caster and his wife, Linda. They were in the process of expanding their personal philanthropic activities as they adopted five children from all over the world. During that time they became involved in supporting a Romanian orphanage. That’s when they learned that in that single organization, 35 to 40 of its children died every year from malnutrition. Their hearts broke, but Caster knew exactly what to do. Mannatech donated a year’s supply of a special blend of its Real Food Technology solutions for every child in the orphanage. At the end of the year the results were astounding. Not one child had died. All were healthy. Mannatech executives made the only possible decision. Get their nutritional powerhouse products, such as PhytoBlend™ powder, into the mouths of as many malnourished children as possible.

Since Mannatech was founded in late 1993 it has been actively involved in children’s philanthropic efforts, and as the company and its product line have matured, Mannatech has aligned its charitable outreach with one of its corporate strengths, the real-food technology at the core of its products. In 1999, the Casters opened MannaRelief, a 501(c)3 organization dedicated to providing life-giving nutrients to children in need around the world. MannaRelief is a separate entity from Mannatech but partners with the company to purchase, donate and deliver Mannatech invention PhytoBlend, a highly concentrated powder of vitamins, minerals and other nutrients that can be added to any food. The independent associates and employees of Mannatech and MannaRelief wholeheartedly supported the cause for the first 10 years, and with the help of charitable donations, were able to feed thousands of children in more than 80 countries.

By 2013 the process had allowed Mannatech to donate more than 16 million servings of PhytoBlend powder during that year. Since Mannatech began donating to nutritional feeding programs 11 years ago it has distributed more than 80 million servings of PhytoBlend to 252,468 malnourished children around the globe. As impressive as those numbers are, Mannatech executives know they’re just a dent in the staggering numbers of undernourished children. Consider this: According to the World Health Organization, every year some 5 million children die from malnutrition—one child every six seconds.


Through social entrepreneurship, a donation to nutritional feeding programs is made for each and every sale of a Mannatech product.


Reflecting this statistic, Mannatech’s mission to fight global malnutrition became expressed most recently in Mission 5 MillionSM, or M5M, a movement to nourish 5 million malnourished children through the sales of Mannatech products to 5 million people. Every time a Mannatech product is purchased on automatic order, a donation is made to MannaRelief, which distributes PhytoBlend powder to orphanages and relief organizations all over the world.

The effort isn’t simply a philanthropic sidebar for Mannatech. It’s at the company’s very foundation. Injecting its direct selling model with a big dose of social entrepreneurship made both the company and its philanthropy more robust.

 

Mannatech Inc. headquarters in Coppell, Texas

Social Entrepreneurship, Direct Selling Style

It would be easy to think that social entrepreneurship was just one more moniker adopted by a direct selling company. After all, the industry describes itself in a variety of ways: social sellers, social marketers, direct marketers, just to name three. All the names refer to the one-to-one or—with the advent of social media—one-to-many interactions that result in the sale of merchandise by a distributor to his or her warm market.

But because direct selling companies are also known for their philanthropy, combining that generosity with merchandise sales by an army of enthusiastic and mission-committed direct selling distributors gets you social entrepreneurship, direct selling style.

“Mannatech’s philanthropy through social entrepreneurship is part of our core values,” explains CEO and Chief Science Officer Robert Sinnott. “Our company was built around helping people; helping improve the quality of their lives and financial positions; and giving back to the community at the same time.”

Through social entrepreneurship, a donation to nutritional feeding programs is made for each and every sale of a Mannatech product. That donation purchases PhytoBlend, which has a neutral flavor that allows it to be consumed in the wide variety of foods traditionally eaten in cultures around the world. That’s important. The problem with malnutrition isn’t simply that kids don’t get enough calories. It’s because the foods they eat are nutritionally poor. That nutritional neediness can lead to blindness, mental retardation or even death. For example, in many cultures throughout the world, rice is the staple food. It fills bellies but provides little nutrition. Fresh vegetables and fruits—along with the vitamins and minerals they contain—are scarce. PhytoBlend, Mannatech and social entrepreneurship turn those staple foods into mouthfuls of life-supporting nutrition.


Since Mannatech began donating to nutritional feeding programs 11 years ago it has distributed more than 80 million servings of PhytoBlend to 252,468 malnourished children around the globe.


Creating Consistency

Sinnott believes that social entrepreneurship is probably the most written-about subject in the last five years. He may be right. A quick Google search turns up 1.74 million hits. Mannatech became interested in it in 2008 when the world’s economic downturn created a philanthropic crisis at the same time it created even more people in need. In fact, 501(c)3 organizations everywhere saw their donations shrink along with the economy. At the same time, joblessness grew, homelessness increased, and hunger hurt more than ever.

One of the 501(c)3 organizations feeling the pinch was MannaRelief. Mannatech’s already-slumping profits were also affected. It was a tough time for both. From 2007 to 2012 Mannatech wasn’t profitable. But helping others was so embedded in the company’s culture that it never stopped its philanthropic programs.

“During that time we always continued our charitable giving because we had faith that through giving, you bring goodwill and blessings on the company,” Sinnott explains. “We stuck to our core values, knowing that it was important and nonnegotiable.”

Searching for a solution to the company’s struggle, Founder Sam Caster came across several articles published by Harvard Business Review that introduced him to a business concept he thought just might work to turn things around. According to the articles, social entrepreneurship combines the resourcefulness of traditional entrepreneurship with a mission to change society. To Caster, the description captured Mannatech perfectly.

Caster did his homework, and the more he studied social entrepreneurship, the more sense it made. He saw that he was sitting on the perfect opportunity to blend the powerful results of his product with a way to make a difference globally, all without relying on the charity of individuals and organizations. He learned that there are four key factors to this kind of approach:

  • Find a problem that has not been solved
  • Create an innovative solution to the problem
  • Tap into the passion the public feels for the cause
  • Find ways to compensate those who do the mission work

Many of the elements were already in place. It was a matter of establishing an amount—off the top—of the sale of each product and directing that to provide nutrition to children who desperately needed it.

“Before you take out company expenses, you set aside a certain amount that comes from top-line sales, and that goes to your cause,” Sinnott explains. “It’s really a great way of handling it because it’s very sustainable. For every sale we make, our associates know they’re contributing to this cause, regardless of how the company is doing or how profitable we are, or of even the global economy.”

Mannatech first introduced the concept to sales leaders in 2010. They embraced the vision, and Mannatech went all in. The model, blended with the company’s powerful direct selling foundation, enabled Mannatech to return to profitability in 2013 and to continue providing nutritional supplements to malnourished children even during the worst of times. From 2010 through 2013 the company donated $1,478,280 to MannaRelief, to distribute nutritional supplements such as PhytoBlend to malnourished children.

With a global outreach—Mannatech does business in 23 countries—it has a unique view of the scope of malnutrition around the world. “There’s a lot more need than we can fulfill, but we try to spread our donations evenly across the globe,” Sinnott says. “To the extent possible, we try to aid areas with the greatest need that we have access to. For example, we have a strong business in South Africa, and we have good connections with relief organizations and feeding programs. But we’re also able to reach into Guatemala, even though we have no business there, because we have a strong presence in Mexico. Guatemala is the most malnourished country in the Western Hemisphere, so we reach across the border of Mexico and are heavily involved there. In Asia, MannaRelief has been able to get some contacts in North Korea, so we’ve sent some shipments to that country. That’s been very important to our Asian associates.”

Mannatech’s direct selling social entrepreneurship model also provided its associates the opportunity to help champion the company’s vision and be compensated for not only helping link consumers to the needs of the world’s vulnerable children, but for building their own teams who are willing to do the same.

Sinnott says that the social entrepreneurship model wasn’t intended as a sales or recruiting tool, but it has turned into one of the factors people consider when they decide who to do business with.

“We have seen that social entrepreneurship, especially when it relates to childhood malnutrition, is something people relate to,” he says. “It creates added value. It’s a win-win-win for the company, our associates and the children.”


Social entrepreneurship, blended with the company’s powerful direct selling foundation, enabled Mannatech to return to profitability in 2013.


Manna-Marathon

Associates can get involved in Mannatech’s most recent social entrepreneurship endeavor, M5M, in several ways. Their sales support it, of course, and they can also travel on Mannatech mission trips to visit children being served and to assist in their care.

Associates have also supported a high-profile initiative called the M5M China Run. M5M Ambassador and ultra-endurance athlete Jason Lester is running the Great Wall of China—some 2,500 miles of extremely challenging terrain—in 100 days. The feat has never been accomplished before. The Wall attracts 100 million visitors annually, so the opportunity is unique. Lester’s goal is to raise awareness of childhood malnutrition and the solutions being provided. By running almost the distance of a marathon each day for 100 days, he hopes to collect enough donations to supply 50,000 children with a one-year supply of PhytoBlend powder.

Mannatech used the M5M China Run to boost its business, and therefore, its social entrepreneurship platform. It issued a 100-Day Challenge to its associates to join Lester by taking their business performance to the next level. The company provided associates with what it called proven methods and steps that, when executed on a daily basis, could lead to business growth.

Lester started the M5M China run on Aug. 1 and should complete it around the time of Mannatech’s early-November sales convention. Sinnott says that at the convention, the company will honor the ways in which Lester and his singular feat have contributed to the fight against global malnutrition. Mission 5 Million has always been a key message at the convention, and this year Mannatech plans to introduce new aspects of it that will make it even more effective—new partnerships that will be meaningful to associates; new geographical areas that will be served in the near future; and of course, new goals for increasing the number of children who benefit.


“I believe that, within this generation, we can eliminate the major causes of malnutrition through fortification programs—ours and other similar approaches.”
—Robert Sinnott, CEO and Chief Science Officer


As a father of three boys, Sinnott is passionate about Mannatech’s fight against childhood malnutrition.

“Last year we had the opportunity as a family to visit multiple feeding centers and schools in South Africa that received PhytoBlend,” he recalls. “We got to see firsthand how our product is improving the lives of children living in some of the harshest conditions in South Africa. That has become a huge driver of me as a professional and father. I believe that, within this generation, we can eliminate the major causes of malnutrition through fortification programs—ours and other similar approaches. We have a cost-effective way of getting supplementation into children’s lives.”

Jason LesterM5M Ambassador and ultra-endurance athlete Jason Lester

He notes that Mannatech’s financial improvements are inextricably linked to its ability to expand the M5M program.

“Now that we’re seeing a turnaround in our business, we’re also seeing an increase in the number of children we can reach in the areas we serve,” Sinnott reports. “Five million sounds like a large number, but we’ve already done more than 12 million servings this year, so I believe it’s completely doable within my tenure to reach that 5 million goal. It’s no more difficult a journey than the one being taken by Jason Lester as he runs the Great Wall. He’ll finish that journey because he’s taking it step by step and day by day. So will we.”

November 01, 2014

Executive Announcements

Executive Announcements, November 2014


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


Industry Champion Ross Creber Dies

Ross CreberRoss Creber

Ross Creber, former President of the Direct Sellers Association of Canada, passed away suddenly on Sept. 26, 2014, at the age of 73.

He is survived by his wife of 49 years, Bobbie; daughter, Dawn (husband, Dan); daughter-in-law, Lara; and grandchildren Colin, Erin, Grayden, Lochlan and Knox. He was preceded in death by his son, Steven.

Born in 1941 and raised in Toronto, Creber was the only child of Frederick and Olivena Creber. He attended Malvern Collegiate and graduated from Ryerson with a degree in marketing. In 1977 he began his 38-year career in the direct selling industry with his wife, Bobbie, running a Tupperware distributorship in Calgary and was later promoted to VP Marketing for Tupperware Canada. Creber worked for several companies within the industry, but found his passion in association management with the Direct Sellers Association. He served two different terms as its President, and, in between, worked internationally with the World Federation of Direct Selling Associations. He was the recipient of the Ivan P. Phelan Award, the most distinguished honor in direct selling, and the Queen’s Diamond Jubilee Medal for his commitment to the industry. Creber retired from the Canadian DSA in December 2013.

A devout Anglican, Creber attended and supported parishes in several major Canadian cities as well as London and Boston. An avid golfer, Creber was also a mentor and friend to many and will be dearly missed.

A funeral service was held on Oct. 2, 2014, at Holy Trinity Anglican Church in Toronto. In lieu of flowers, donations may be made to the Anglican Church of Canada or the Sleeping Children Around the World charity.


Herbalife Ltd.

Pamela Jones HarbourPamela Jones Harbour

Global nutrition company Herbalife Ltd. announced the appointment of Pamela Jones Harbour to the newly created role of Senior Vice President, Global Member Compliance and Privacy, reporting to Mark Friedman, Executive Vice President and General Counsel. Leading a global member compliance team across 91 markets, Harbour will develop and enhance policies and infrastructure that ensure effective education, training and mentoring programs for independent Herbalife members worldwide, underpinned by robust and consistent monitoring and enforcement procedures. In addition to her compliance responsibilities, Harbour will also coordinate the company’s global privacy and cyber security efforts.

“Pamela’s strong leadership capabilities will motivate and inspire our members to foster a culture of compliance and mutual respect,” said Friedman. “Her deep regulatory experience and expertise in consumer protection, privacy and data security are extraordinary, and I look forward to Pamela leading our efforts in these important areas.”

Harbour was formerly a partner at BakerHostetler, one of the nation’s largest law firms, and was Co-Leader of BakerHostetler’s national Privacy and Data Protection team. In addition to her roles in private practice, Harbour has spent time in government as a Commissioner at the Federal Trade Commission from 2003-2010 and as a prosecutor at the New York State Attorney General’s office for 12 years.

Dr. WangJae LeeDr. WangJae Lee

Harbour was selected as one of the top lawyers of 2014, chosen by her peers as one of Washington D.C.’s Super Lawyers. Among her other achievements, she was the 2010 recipient of the Electronic Privacy Information Center’s (EPIC) “Champion of Freedom Award” for her defense of consumer privacy as an FTC Commissioner.

In other news, Herbalife announced the appointment of WangJae Lee, Ph.D., M.D., an expert in immunology, to its Nutrition Advisory Board. Dr. Lee’s appointment further strengthens the board members to 27.

Dr. Lee is a distinguished professor at the Seoul National University’s College of Medicine. He is a member of Korean Society of Anatomists, Electron Microscopy Society of Korea, Korean Society of Immunologists and the American Association of Immunologists.


Nature’s Sunshine Products Inc.

Dr. William J. KellerDr. William J. Keller

Nature’s Sunshine Products Inc., a leading natural health and wellness company engaged in the manufacture and direct sale of premium-quality nutritional and personal-care products, announced that Dr. William J. Keller and Sang Geon Kim, Ph.D., have joined Nature’s Sunshine Products’ Medical and Scientific Advisory Board.

Dr. Keller currently serves as the Vice President of Health Sciences and Educational Services and Chief Scientific Resource Officer at Nature’s Sunshine, where he has worked since April 2001. He will continue to assist the company in this capacity and will lend support to ongoing research activities as well as help educate and train distributors at various company events.

Dr. Sang Geon KimDr. Sang Geon Kim

Prior to his coming to Nature’s Sunshine, Dr. Keller served in a variety of professional capacities. He has served as Secretary for the American Society of Pharmacognosy and has been a member of the Board of Trustees for the American Herbal Products Association. In the field of education and critical scientific review he has served on grant review panels, editorial boards and as a manuscript referee. Dr. Keller’s vast experience also includes almost 30 years as a professional pharmacist.

Dr. Kim is a professor of Pharmacology at Seoul National University in Seoul, South Korea. As part of serving on Nature’s Sunshine’s Medical and Scientific Advisory Board, Dr. Kim will assist with research activities, educate and train Nature’s Sunshine and Synergy distributors, and speak at various company events.

In 2010 Dr. Kim was honored by the President of the Republic of Korea, Ministry of Health and Welfare. Earlier that year, he was named the Scientist of the Month by the Ministry of Science and Education. Dr. Kim currently serves as Vice Director of the Research Institute of Pharmaceutical Sciences at Seoul National University. He is also the Director of the Innovative Drug Research Center for Metabolic and Inflammatory Disease (IDRC) at Seoul National University and maintains a professorship in the College of Pharmacy at the university.


PartyLite Worldwide

Celine MonnierCeline Monnier

PartyLite Worldwide, a leading party plan candle company, announced that Celine Monnier has been promoted to General Manager, PartyLite France.

Monnier joined PartyLite in 2011 as Area Sales Manager and was promoted to Director, Sales & Marketing. She has developed and tested new party formats and has collaborated with international peers to promote PartyLite’s vision to become Europe’s No. 1 social shopping experience.

“Celine has a strong knowledge of direct selling as well as a passion for supporting and developing her team,” said Robert B. Goergen Jr., CEO of Blyth Inc., parent company of PartyLite, and President of PartyLite Worldwide. “Her advancement symbolizes our company’s longstanding popularity in Europe and highlights the success of our unique PartyLite people-helping-people business model.”


Arbonne International

Joe WojcikJoe Wojcik

Arbonne International LLC, a direct seller of personal-care and wellness products crafted with premium botanical ingredients and innovative scientific discovery, has announced the appointment of Joe Wojcik as Senior Vice President of International. Wojcik will be responsible for leading Arbonne’s development of foreign markets, specifically international expansion into new markets, including Poland and Taiwan.

Before coming to Arbonne, Wojcik held international executive roles at two other direct sellers. He brings approximately 20 years of relevant experience to Arbonne, including international sales, strategic planning and expansion. Wojcik has extensive experience with diverse organizations, much of it specific to the direct sales industry and focused on Asia Pacific operations.


It Works!

Jannie HeimonenJannie Heimonen

It Works!, a skincare and nutrition company, announced the appointment of Janne Heimonen as President of International Operations.

As President, Heimonen will oversee operations and field management while spreading the It Works! culture of “black, green, and bling” throughout Europe, Australia and Canada. Heimonen is developing a local team to support all international markets, while planning future expansion.

Heimonen has over 20 years of industry experience, as both a distributor and corporate executive. Prior to joining It Works!, he worked as an independent consultant assisting U.S.-based companies grow their businesses in Europe.

“It is an exciting time to be part of It Works! as we continue to add to our corporate team to support our salesforce,” said Mark Pentecost, CEO of It Works!. “Janne embraces our culture, and we’re confident he is the right fit to help spread the ‘It Works! Way’ as we grow our international presence.”


Jusuru International

Dr. John A. GiannoneDr. John A. Giannone

Jusuru International, the company behind Liquid BioCell™, a new generation of nutraceuticals for healthy aging, active joints and younger-looking skin, announced that John A. Giannone, DVM, is the newest member of the company’s Scientific Advisory Board.

Dr. Giannone is currently the Medical Director and founding veterinarian of the Newport Animal Hospital in Newport Coast, California. A member of the Southern California Veterinary Medical Association, the American Veterinary Medical Association, and the California Veterinary Association, Dr. Giannone’s areas of particular professional interest include internal medicine, surgery, cardiology, critical and emergency care, and avian and exotics medicine.

“I am proud and honored to be invited to be part of such an illustrious group of physicians and equally honored to be involved with such a stellar product,” Dr. Giannone said of his appointment.


MONAT Global Inc.

Stuart A. MacMillanStuart A. MacMillan

MONAT Global Inc., a wholly owned subsidiary of Alcora Corp. and a U.S. based hair-care company, announced the appointment of Stuart A. MacMillan as President.

Prior to joining the company, MacMillan has held a number of senior management responsibilities across diverse functional areas, most recently as Managing Partner of IMPACT This Day, where he offered guidance to Alcora’s directors on the establishment of and strategic direction for their new subsidiary: MONAT Global.

MacMillan was most recently President of another direct seller’s regional business in Canada and also headed its sales strategy in the U.S.

“Stuart’s support has been key since the beginning of this project and we are thrilled to welcome him now as President to lead this team,” said Rayner Urdaneta, CEO of MONAT. “We are certain that his dynamism, impressive professional accomplishments, and advanced understanding of the industry will lead MONAT Global to a place of prominence in both the direct selling and hair-care industries.”

Alcora also announced the following appointments to its management team: Jillian Corley, Vice President of Marketing; Javier Urdaneta, Director of Operations; Jael Weber, Manager of Latin Markets; Teresa Epps, Regional Sales Manager Southern U.S.; and Angela Orrico, Regional Sales Manager Northern U.S.

MONAT Global was founded in 2014 and is a wholly owned subsidiary of Alcora Corp., whose holdings include L’EUDINE Global, an established direct selling company specializing in premium beauty and wellness products throughout the U.S. and Latin America, and B&R Products, their research, development and manufacturing laboratory subsidiary.


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

November 01, 2014

Financial News

Financial News, November 2014

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


Medifast Adopts One-Year Stockholder Rights Plan

The board of directors at Medifast Inc. (MED—NYSE) has put in place a one-year stockholder rights plan or “poison pill” intended to discourage a hostile takeover from outside the company. The weight-loss company adopted the plan “in response to the recent rapid accumulations of significant portions of Medifast’s outstanding common stock.” Waltham, Massachusetts-based ModusLink most recently built up a significant stake in Medifast. The supply chain and logistics company acquired 9.9 percent of Medifast stock through a series of transactions in July and August.

In its Securities and Exchange Commission filing, Medifast states that the plan was not adopted in response to any specific takeover bid or acquisition proposal. The rights plan would trigger should an outside investor acquire 10 percent or more of the company’s stock. Existing stockholders would then have the opportunity to purchase additional common stock at a discounted price.

Medifast markets its products through several channels, including the personal coaching division Take Shape For Life. The direct selling subsidiary is Medifast’s most profitable division. Take Shape For Life generated $229 million in revenue last year to claim the No. 52 spot on the DSN Global 100.


Youngevity Acquires Restart Your Life

Growing direct selling conglomerate Youngevity Essential Life Sciences, a wholly owned subsidiary of Youngevity International Inc. (YGYI—OTC.QX), announced that it completed the acquisition of the business of Restart Your Life, a dietary supplement company and provider of immune system support products and therapeutic skin lotions.

As a result of the business combination, Youngevity distributors and customers will have access to the unique line of high-quality products from Restart Your Life. In turn, Restart Your Life distributors and customers will gain access to more than 1,000 high-quality products offered by Youngevity, including health and wellness, lifestyle products and gourmet coffee.

Joyce Cordell, CEO of Restart Your Life, said, “The Restart Your Life story is one of scientific innovation and excellence in the field of immunology. By joining the Youngevity family we have become an international company with a solid foundation backed by the stability of an established leader in the direct selling industry. This expands the Restart brand globally and we could not be more excited for our entire distributor base.”

According to Steve Wallach, CEO of Youngevity, this represents Youngevity’s third strategic acquisition over the past three quarters of 2014.

In other company news, Youngevity International Inc. announced that its wholly owned subsidiary CLR Roasters has completed its previously announced $4.35 million secured convertible notes and financing for a total aggregate principal amount of $4.75 million. TriPoint Global Equities LLC acted as sole placement agent in the transaction.

The Notes, which mature in July 2019, are convertible into shares of the company’s common stock at 35 cents per share. The notes are secured by certain assets of the company’s wholly owned subsidiary, CLR Roasters LLC, personally guaranteed by CEO Steve Wallach, and bear interest at a rate of 8 percent per year. The warrants are exercisable for five years after the closing date of the purchase agreement. For each $100,000 of principal amount of notes, the holder received a warrant to purchase up to 391,304 shares of the company’s common stock at 23 cents per share.


ForeverGreen Growth Accelerates in Europe and Asia

ForeverGreen Worldwide Corp. (FVRG—OTC.BB) announced that growth is accelerating in several geographic regions, especially Europe and Asia.

“Several key indicators for Europe are trending strongly upward during the last several months. Our auto-ship orders, a key measure of brand loyalty and retention, have grown 64 percent since March. Total European sales have also grown significantly during this same time frame and now represent 36 percent of the company’s overall sales. I firmly believe that ForeverGreen Europe is positioned to continue its growth both in terms of sales and customer retention. We are working on several internal initiatives to make this possible, such as local distribution and the merger of the FG and FGX models. I could not be more confident of the direction we are headed and the initiatives in place to ensure continued upward growth,” stated Blake Schroeder, President of ForeverGreen Europe.

Bob Mower Steed, President of ForeverGreen Asia Pacific, has recently moved to Hong Kong to oversee the dynamic markets in the Far East.

“ForeverGreen Asia is experiencing unprecedented growth, and I jumped at the chance to play an active role in the build-out of one of the most dynamic, fast-paced regions in the world. With the product lines ForeverGreen currently has and some of those that we will be bringing to market in the near term, Asia represents a huge opportunity for us,” commented Mower Steed.

ForeverGreen is also seeing companywide sales growth, with August 2014 revenue (most recently reported) exceeding August 2013 sales by more than 300 percent.

“During August 2014, our sales exceeded $5 million for the third consecutive month,” said Jack Eldridge, CFO. “ForeverGreen is experiencing sales growth from every geographic region. We are continuing to meet or exceed our financial expectations and we are confident our sales will continue to accelerate quickly now that the summer months are done.”


Quarterly Results

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 fourth quarter and full fiscal year ended June 30, 2014.

Fourth Quarter Fiscal 2014

For the fourth fiscal quarter, the company reported revenue of $56.0 million, an increase of 8.8 percent compared to $51.5 million for the same period in fiscal 2013. Revenue for the quarter was negatively impacted $600,000, or 1.2 percent, by foreign currency fluctuation.

Operating income for the fourth fiscal quarter of 2014 was $4.8 million, generating an operating margin of 8.5 percent, compared to $200,000 and an operating margin of 0.5 percent in the same period last year. Operating income in the fourth fiscal quarter of 2013 included $3.3 million of one-time expenses.

Net income for the fourth fiscal quarter of 2014 was $2.4 million, or 2 cents per diluted share, calculated on 106 million fully diluted shares. This compares to a net loss of $200,000 in the fourth fiscal quarter of 2013, or zero cents per diluted share, calculated on 112 million fully diluted shares, including the aforementioned after tax-impact of one-time expenses.

Full Year Fiscal 2014

For the full year ended June 30, 2014, the company reported revenue of $214.0 million, compared to $208.2 million in fiscal year 2013. Revenue for fiscal year 2014 was also negatively impacted $10.4 million, or 5.0 percent, by foreign currency fluctuation.

Operating income for fiscal year 2014 was $19.5 million, generating an operating margin of 9.1 percent. This compares to operating income of $12.1 million, for an operating margin of 5.8 percent, in fiscal year 2013. Fiscal year 2013 operating income included approximately $8.3 million of one-time expenses associated with the company’s product recall. The remaining $3.3 million of expenses are associated with the aforementioned one-time costs.

Net income for fiscal year 2014 was $11.4 million, or 10 cents per diluted share, calculated on 112 million fully diluted shares, compared to $7.6 million, or 6 cents per diluted share for the prior year, including one-time expenses, calculated on 123 million fully diluted shares.

The company generated $12.1 million of cash flow from operations in fiscal year 2014, compared to $10.7 million in fiscal year 2013. The company’s cash and cash equivalents at June 30, 2014, were $20.4 million, compared to $26.3 million at the end of fiscal year 2013. The company repaid $16.2 million of debt during the year and throughout the year returned $46.2 million to shareholders in the form of share repurchases.


Immunotec Inc.

Immunotec Inc. (IMM—TSX VENTURE), a Canadian wellness company, released results for the three-month period ending on July 31, 2014. All amounts are noted in Canadian dollars unless otherwise indicated.

“In spite of the taxation challenges experienced by our industry in Mexico in the absence of clear laws, we are pleased to report year-to-date adjusted EBITDA of $3.8 million (US$3.4 million), reflecting continued leverage of our Canadian platform and our ability, via our direct-to-consumer model, to take advantage of significant growth opportunities in the U.S. and in Mexico,” said CEO Charles L. Orr.

“In 2010, we assumed control of the distribution channel in Mexico and, as a result, we have built a growing and sustainable business in that country. While business opportunities remain significant in Mexico, more importantly, we are confident in our ability to replicate our success in other countries in upcoming years.”

Revenues in the three-month period reached $22.3 million (US$20.0 million) compared to $14.4 million (US$12.9 million) for the same period in the previous year, representing an increase of 55.0 percent. The increase in revenues was due primarily to sales momentum in Mexico and the U.S. with currency-adjusted growth, respectively, of 99.4 percent and 27.0 percent.

For the three-month period, adjusted EBITDA was $1.7 million (US$1.5 million) compared to $700,000 (US$626,000) in the same period in the previous year, representing an increase of 151.7 percent over the same period in the previous year. This increase primarily reflects an improved product mix combined with operational leverage and is partially offset by higher field incentives reflecting the upfront costs related to new consultants.

Net loss for the three-month period ended July 31, 2014, totaled $4.3 million (US$3.8 million), as compared to a net loss of $100,000 (US$89,000) for the same period in the previous year. Total basic and fully diluted (loss) profit per common share for the three-month period ended July 31, 2014, was (6 cents) (US 5 cents), as compared to (zero cents) in the same period in the previous year.


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.

November 01, 2014

New Perspectives

Entrepreneurs Are Not Normal

by Darren Hardy

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


An excerpt from Darren Hardy’s upcoming book, The Entrepreneur Roller Coaster

NOTE: Darren Hardy’s new book, The Entrepreneur Roller Coaster, explores the passion and determination behind the entrepreneurial experience. Direct selling companies are often started by lone entrepreneurs who build their ideas into large companies which attract even more entrepreneurs as direct sellers of their products and services. We think you’ll enjoy this excerpt.


You’re a freak.

That’s right. A freak. And so am I. Don’t be offended—it’s a compliment. Let’s define freak.

freak |freek| noun: a person who is obsessed with or unusually enthusiastic about a specified interest.

If that’s not a definition for an entrepreneur, I don’t know what is. No doubt you have to be “unusually enthusiastic” and pretty freaky to get on this roller coaster. Most don’t have the courage to even step into the car of this thrill ride. But you do, and that is exactly why they will call you a freak.

Not only are you rare in your courage, but it turns out you’re unusual for even wanting to ride in the first place—only about 10% of people are entrepreneurs. That means the other 90% are “normal.”

Let’s define normal.

normal |nawr-muhl| adjective: conforming to the standard or the common type; usual.

Yuck! The “usual,” “common type,” or “standard” societal normal (that big, herd-like 90 percent) don’t like it when a “freak” steps out of line. That kind of nonconformity threatens them. It challenges their choices and identity. Rather than step out themselves, it’s safer for them to scorn your choices and attack you, in hopes of dragging you back into the herd so they can feel better about themselves.

So, yes. They will call you freak. They will call you crazy.

And that is good.

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.” —Apple Inc. ad, 1997 after Steve Jobs returned to Apple.

So hello, crazy one! Welcome to the freak show! The good news is you don’t have to catch cannonballs, swallow swords, or breathe fire in order to join this freak show. (Unless, of course, your business actually is running a circus.)

The bad news is that being a freak can be painful at first.

Beware the Crabs

I was once told about a type of crab that cannot be caught—it is agile and clever enough to get out of any crab trap. Yet these crabs are caught by the thousands every day, thanks to a particular human trait they possess.

The trap itself is simple: a wire cage with a hole at the top. Bait is placed in the cage, and lowered into the water. A crab comes along, enters the cage, and begins munching on the bait. A second crab sees the first crab and joins him. Then a third. For a time, it’s crab Thanksgiving. Eventually, though, all the bait is gone.

At this point the crabs could easily climb up the side of the cage and leave through the hole. But they don’t. They stay in the cage. And long after the bait is gone, even more crabs continue to climb inside the trap. Not one leaves.

Why? Because if one crab realizes there’s nothing keeping him in the trap and tries to leave, the other crabs will do anything they can to stop him. They will repeatedly pull him from the side of the cage. If he is persistent, the others will tear off his claws to keep him from climbing. If he persists still, they will kill him.

The crabs—by the power of the herd—stay together in the cage. All the fisherman needs is a tiny bit of bait. The rest is easy. Then the cage is hauled up, and it’s dinnertime on the pier.

When you chose to become an entrepreneur—to be different—and walk out on that 90 percent, something strange happens. Instead of encouraging and supporting you, your friends, family, and colleagues become crabby and start trying to drag you back down into the “trap.”

But why do they do it? Many of these people love you. Why would they want to hurt you (emotionally) and kill your hopes, dreams, and desire for something more?

There are two key reasons:

  1. You make them look bad. When you step outside the status quo, you become a giant mirror that reflects the reality of their life back to them. Instead of joining you, it’s easier to make fun of you, or try to convince you that what you’re doing is foolish, risky, or destined to fail in the hopes that you will give up, come back to the pack, and take the mirror away.
  2. They simply aren’t as courageous as you. What you’re doing just doesn’t fit their model of the world, and they aren’t brave enough to follow your lead. It’s easier to mock you than follow you.

What you’ll soon realize, though, is that it’s not about you at all. They are really saying ‘no’ to themselves. They’re rejecting their own inner voice that prods them to do more. To step out. To be brave. To take risks… like you.

This chapter is about dealing with crabs and other dips and drops on the entrepreneur roller coaster. It’s about accepting and loving your “freaky” nature. It’s about facing disapproval, discouragement, and downright ridicule, and coming back stronger and more resilient than ever.

I remember a great quote from Gandhi that I think every entrepreneur needs to keep close at hand:

“First, they ignore you, then they laugh at you, then they fight you, then you win.”


Author NameDarren Hardy is a successful entrepreneur, publisher of SUCCESS magazine, and New York Times bestselling author of The Compound Effect and Living Your Best Year Ever: A Proven Formula for Achieving Big Goals. His latest book is The Entrepreneur Roller Coaster. Find out more at: www.rollercoasterbook.com.

November 01, 2014

News in Brief

News in Brief, November 2014

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


Amway Funds Pioneering Research by Stanford University

The Amway Nutrilite Health Institute Wellness Fund has made a $10 million unrestricted gift to the Stanford Prevention Research Center. The contribution will fund The Wellness Living Laboratory (WELL), a first-of-its-kind research study to analyze how changes in diet and lifestyle can impact long-term wellness and contribute to healthy aging.

WELL will be designed, conducted, and analyzed by scientists at Stanford Prevention Research Center and, to safeguard investigative independence, will be entirely under the control of Stanford University with no involvement by Amway. The research, expected to begin in 2015, will continue for at least
five years.


Mary Kay Sponsors White House Event on Domestic Violence

Mary Kay Inc. and The Mary Kay Foundation recently sponsored a “Pillars of Empowerment” event in Washington, D.C., to recognize the past three decades of progress in domestic violence initiatives. Mary Kay partnered with the National Task Force to End Sexual and Domestic Violence Against Women in calling on lawmakers for a renewed commitment to address these crimes through new and existing programs.

Advocates and champions were recognized at a White House ceremony followed by a reception hosted by Vice President Joe Biden, who co-sponsored The Violence Against Women Act (VAWA) at its inception. Additional events took place at the National Archives and the National Museum for Women in the Arts.

In advance of Domestic Violence Awareness Month in October, The Mary Kay Foundation also awarded $3 million in grants to 150 domestic violence shelters in all 50 states, the District of Columbia, Puerto Rico and Guam. Each shelter received a $20,000 grant to maintain critical services and programs.

Direct Selling Companies Lead Home States in Growth

Arizona Corporate Excellence (ACE) has ranked Vemma Nutrition Co. the top business in Arizona on its annual “ACE Fastest-Growing Cos.” list. ACE researches and compiles its list based upon a proprietary formula of accounting firm CliftonLarsonAllen LLP. The formula measures revenue growth—in both actual dollars and percentage—over a two-year period.

In Utah, Zija International leads the “Fast 50,” Utah Business magazine’s annual ranking based upon revenue growth and revenue generation. Vivint (No. 10), Nu Skin (No. 13), and USANA (No. 28) also appear on this year’s ranking.

Since its founding in 2005, Zija has surpassed $140 million in annual sales. The company’s weight management, liquid nutritionals, energy and performance, and skincare products utilize superfoods derived from the Moringa plant.


USANA Ranks among America’s Best Workplaces—Again

For the sixth consecutive year, OUTSIDE magazine has named USANA Health Sciences one of America’s “Best Places to Work.” USANA ranked No. 53 on this year’s list, which recognizes the top 100 U.S. companies helping their employees strike the ideal balance between work and play. These companies encourage employees to lead an active lifestyle, are eco-conscious, and prioritize giving back to the community.

The list is a result of OUTSIDE’s rigorous eight-month vetting process in partnership with the Best Companies Group. The assessment includes employee feedback on corporate culture, role satisfaction, work environment and overall employee engagement.

For USANA’s 700+ employees in Utah, workplace benefits include an annual profit-sharing program, free monthly company health products, excellent health and life insurance packages, and regular health fairs. USANA’s efforts have also earned it standings on Utah Business magazine’s “Best Companies to Work for in Utah” and PR News’ list of “Top Places to Work in PR.”


Shaklee Introduces Brain Research Grant

Shaklee has established a new program within its Shaklee Grants Program to fund research on the role of dietary supplements in supporting brain health. The brain research grant will be funded by proceeds of Shaklee’s recently launched MindWorks™, a supplement developed to support short- and long-term cognitive health.

Researchers may submit brain health proposals until Nov. 30, 2014. Study questions most likely to receive funding under this program will involve evaluation of nutritional ingredients or ingredient combinations suitable for use in dietary supplements for either acute (e.g., short-term memory, concentration, reaction time) and/or long-term improvements to or maintenance of cognitive function in healthy adults.


Viridian Sustainability Initiative Takes on Fifth Continent

During its fifth annual PowerUP! Convention, Viridian Energy revealed the fifth location of its 7 Continents in 7 Years initiative. This year the Stamford, Connecticut-based company will focus its global sustainability efforts on the Central American nation of Nicaragua. In the rural, off-the-grid village of Potrero Platanal, Viridian will power 48 homes that previously had no prospects of energy supply.

Viridian’s energy offerings are up to 100 percent renewable, and the company reports that its residential and commercial customers have avoided more than 4.5 billion pounds of carbon emissions. Through 7 Continents in 7 Years, Viridian staff and top-performing Independent Associates take that spirit of sustainability to a different continent each year.


Nerium, Youngevity Make Room for Growth

Growing direct-selling conglomerate Youngevity has invested $1.1 million in improvements to its Chula Vista, California, headquarters. Updates to the 59,000-square-foot facility include a revamped distribution center—with doubled storage and throughput capacity—and a new state-of-the-art R&D lab. The company also expanded its customer service department, remodeled its lobby and installed new, water-efficient landscaping.

In North Texas, Nerium International has moved to a new headquarters twice the size of its former space. Nerium leased 75,912 square feet at a facility adjacent to its Addison, Texas, headquarters. The skincare company chose to remain in the area where it launched from a 5,432-square-foot office.

Since launching in 2011, Nerium has seen record-breaking sales, earned several industry accolades, and built a customer base of millions in the U.S. and in Canada. In October, the company expanded into Mexico, its second international market.
Nerium has announced plans to open several more countries in the near future.


Mannatech Opens Singapore Business Center

Mannatech recently opened a new Associate Business Center in Singapore, continuing the expansion of Mannatech’s Australasian operations in response to significant business growth in Singapore. The nutrition brand and creator of the M5M (Mission 5 Million) social entrepreneurial movement also established two new training centers in Korea in March 2014.

The Mannatech Business Center will facilitate and support Mannatech Associate activities, including meetings and training sessions. According to the Global Competitiveness Index 2013–2014, Singapore rates second only to Switzerland in economic performance among the top 10 countries globally.


Arbonne Launches in Poland

Through its subsidiary Arbonne Europe Sarl, Arbonne has officially opened its business in Poland, marking the 34-year-old company’s entry into continental Europe. With the launch, Arbonne introduces its botanically based beauty, health and wellness products for the whole family.

Arbonne’s continued growth is generating positive momentum to carry the company’s culture, sense of community, products and opportunity into Poland. In advance of the launch, Arbonne Poland events were held in Sopot, Warsaw and Krakow—with nearly 1,200 attendees. Entry into Poland makes Arbonne operational in a fifth country, along with Australia, Canada, the United Kingdom and the United States.


MonaVie Launches in Italy

Nutrition brand MonaVie has officially launched operations in Italy, its 39th market worldwide. The European Union is home to more than 4 million direct sellers, and Italy is one of the region’s most dynamic markets, with $3.1 billion in direct sales last year.

Italian consumers initially have access to six MonaVie products, including the company’s flagship acai berry juices. Those juices will ship from MonaVie’s brand-new manufacturing facility in Hohenseefeld, Germany—another significant investment in the company’s European business. MonaVie previously manufactured all of its European products in the U.S.


ASEA Launches in Mexico

Health and wellness brand ASEA celebrated the grand opening of its Mexico market with three events across the country. The tour—featuring ASEA Founders Verdis and Tyler Norton, President Jarom Webb, and Dr. Gary Samuelson—included stops in Mexicali, Colima and La Paz.

Since launching in 2009, ASEA has expanded into several EU countries, as well as Australia and New Zealand. ASEA products incorporate the company’s patented Redox Signaling technology, which supports cellular healing and replenishment.

November 01, 2014

Publisher's Note

Letter from John Fleming, November 2014


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


John FlemingNovember is always a special month! Gratitude flows as we move closer and closer to the designated day of Thanksgiving across the United States of America. Thanksgiving was essentially a harvest-related festival, a special day to acknowledge gratitude for a successful year of planting and reaping the food so essential to the lives of the people. Though Thanksgiving is said to have originated in America, a number of other countries celebrate harvest-related festivals with different names. Therefore, even though November may not be the month to celebrate Thanksgiving in other parts of the world, we take this moment to share with friends everywhere our gratitude for your friendship and partnership during the past year. We may not be exactly like the farmers who originally selected a special day to celebrate the harvest of crops, but in many ways we share our gratitude for the abundance of so many things—friendships and business relationships, businesses that offer the opportunity of harvest through salaries and wages for employees, and the entrepreneurs who come to the direct selling business model as a way to make some of their dreams come true… the business harvest of earnings.

This November also marks a special moment in time for Direct Selling News. I have served as Publisher for 105 months and have contributed to this page 104 times. It has been nothing less than one of my life’s most extraordinary pleasures! To serve with some of the greatest people I have met and publish many of the stories that needed to be told, and to be able to do it out of a commitment to be nothing less than a trusted journalistic resource that would add to the credibility and image of an industry you love so dearly…it just does not get any better! I am not leaving Direct Selling News, but the torch is being passed. Lauren Lawley Head was hired at the beginning of the year to lead the DSN effort to even bigger places and create even greater impact, not only here in America but eventually around the world. Lauren has the experience having been involved directly with business journals in major cities in the country, most recently as Editor of Dallas Business Journal. She is more than qualified. Her contributions as new General Manager, in a very short period of time, have been many! You have heard from her in previous issues, and it is now time to bring her to what I will refer to as the main stage… this page. I know you will enjoy Lauren’s insights and perspectives, and I will continue to share from time to time in other parts of the magazine.

As mentioned earlier, November is always a special month! This particular November has an even greater treat in store as we are delighted to release the top-line findings from the most recent research conducted on the direct selling industry, commissioned by Direct Selling News and conducted by Harris Poll. Lauren, as a new member of our staff, took the lead position on this project, which quickly became the most extensive research project ever conducted by Direct Selling News. Back and forth we went with the researchers to develop the right questions to truly explore both consumer attitudes and those of independent contractors. Over the past several months, we finally arrived at the questions. Once the questions were finalized, we anxiously awaited the completion of the process and the resulting data that was to be derived. The day we received the first round of data, joy would be the one word I might use to describe our enthusiasm! We had real data to share that reflects the population in its entirety. Our friends at DSA were made aware of the findings immediately, and we will work together to explore the many ways this valuable information can be used for the benefit of all of you! Enjoy the cover story in this issue… it’s all about the real direct selling industry!

We, like all of you, are busy preparing to close another year. It has been a good one for us because, once again, we were able to tell the stories that needed to be told. As we approach the new year, you can look forward to more from Direct Selling News. New pathways will be charted by Lauren, bringing even greater value to those we cherish and serve. Simply put… in 2015 DSN will bring you more!

Save the date, April 8, to join us in celebrating the sixth DSN Global 100 banquet! The event has grown each year with over 300 industry executives attending last year. A special and classy evening of reception and programing will also include recognition of special achievements during 2014.

On behalf of all of the DSN staff, please know that we are always grateful for the opportunities we experience in sharing the stories you create. To our supplier friends—our customers, the fuel that allows us to make it all happen—and to all of you who read this magazine, Happy Thanksgiving to each of you!

Until next month… enjoy the issue… and go Lauren!

John Fleming
Publisher and Editor in Chief

November 01, 2014

Working Smart

Do You Have Enough Gen Xers in Your Succession Plan?

by Judy Stubbs

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


When it comes to the U.S. working population, all age groups are not created equal. There are significant differences in the fundamental values and predominant work styles of different generations. That raises a wide range of talent-related issues for direct selling organizations, including how to attract, develop and retain executives at different stages of their careers. However, there is one overarching challenge today: finding and hiring executives in their mid-30s and 40s with the potential to become tomorrow’s CEOs, CFOs and other C-suite executives to lead direct selling organizations into the future.

Three Generations in the Workforce

Today, the U.S. talent pool is substantially larger at the top and the bottom of the working-age demographic groups than in the middle, according to a recent report from Pew Research Center, Generation X: America’s Neglected ‘Middle Child.’ The Pew report outlines the clear differences between the three generations now in the workforce.


By 2015, over one-third of our work force will be retiring.


At the top are the 77 million members of the baby boom generation, who are now in their 50s and 60s. In most organizations, the senior leadership team consists largely of boomers who have accumulated decades of on-the-job knowledge and experience, but are steadily leaving their careers behind. In fact, more than 10,000 baby boomers retire every single day. By 2015, over one-third of our work force will be retiring, according to a 2013 Social Security Administration report.

An even larger demographic group is now entering the nation’s workforce: the approximately 83 million millennials, including a large percentage now in their 20s and early 30s. Because these millennials are beginning their careers, few of them have developed the experience necessary for the responsibilities that come with a position in the C-suite.

In between these two generations are the 65 million Gen Xers, who range in age from 34 to 49. Gen X executives are in mid-career, developing skills and experience that can be groomed to prepare them to ascend to the C-suite. However, based on demographics, direct selling organizations will face a shortfall in talent in the next decade unless they make succession planning a top priority.

Fresh Perspective in the C-suite

Even as the relative scarcity of Gen Xers creates talent gaps, it also creates new opportunities for farsighted organizations to remain close to their customers as consumer habits evolve. For example, giving Gen Xers a significant presence in the C-suite can spur the development of new sales and marketing strategies, including innovative tactics based on the growing confluence of digital, mobile and social media. It can also provide organizations with fresh ideas and perspectives on changing customer values, attitudes and behaviors.

Direct selling organizations are not the only entities facing a transition in demographics—virtually all consumer and B2B markets are undergoing similar changes. Companies whose succession plans are aimed at moving Gen Xers into leadership roles are likely to have an edge on their competitors in serving their steadily evolving markets.

Understanding Gen X

The different perspectives, viewpoints and motivators of each generation can often result in misunderstandings and missed opportunities—especially in the workplace—and can be a recipe for disaster. Yet for all the media focus on the differences between the work styles of boomers and millennials, Gen Xers have received far less attention. Direct selling organizations need to take into account the values, motivations and drivers for mid-career executives in this age band, because there are some distinct generational differences in their work styles and motivators.

As the Pew report observed, “In most of the ways we take stock of generations, Gen Xers are a low-slung, straight-line bridge between two noisy behemoths. From everything we know about them, Xers are savvy, skeptical and self-reliant; they’re not into preening or pampering.”

There are some common factors to consider in recruiting, hiring, developing and retaining these mid-career executives. In many cases, Gen Xers value freedom and autonomy to a greater extent than either the boomers or millennials. Like the boomers, they are hard workers while still valuing family and personal time, and like the millennials, they appreciate an enjoyable workplace along with flexible work hours and location. All three generations share the value of trust and respect.

Also common among Gen Xers is a desire for self-sufficiency. Having grown up during a time of corporate downsizing and economic and political instability, they can be less attached to their employers—particularly companies that fail to engage them on a personal level. That makes it imperative for recruiters to highlight the company’s highest values and point out opportunities for senior executives to become involved in community, charitable and other causes that can make a positive difference in the world. Once onboard, these Xers need to continue to feel personally engaged and enriched in order to feel satisfied in their career.

Fortunately, most direct selling organizations have a readily available source of information about what drives Gen Xers today—their internal talent pool of managers and sales professionals in their late 30s and 40s. Online surveys, focus groups and individual interviews—as well as participation in various organizational activities—can provide invaluable insight into Gen Xers’ attitudes and behaviors and play a key role in developing an effective succession planning program.

Strategies for Succession Planning

One of the first steps in succession planning for direct selling organizations is to determine the size and skill level of the internal Gen X talent pool. Are there enough potential candidates at the mid-career level to replace the boomers in the company as they move into retirement? If the answer is no, then it’s time to begin a focused recruiting strategy to bring more Gen Xers into the organization. If your Gen X candidate pool is already sufficient, then you should be actively developing these young executives in order to retain them.

It’s vital to consider how to prepare these future leaders for spots in the C-suite, whether they are longtime veterans or new to the organization. This development process begins with having a clear picture of your company’s vision: how it can improve, how you can reach your customers better, how you can be invested more with your clients, etc.

Consider pulling together a strategic committee with executives from different disciplines who are comfortable sharing and evaluating individual ideas in order to come up with an overall vision for the future. Thinking this through can help identify who on your team would be the best fit to drive the company toward those goals.

Next, you should create a formal succession plan with a reasonable level of detail. For example, your plan might include the names of three Gen Xers who could become CFO in the next three to five years. List their strengths that make them a capable successor to the role, and also list the areas that need to be developed in order to make them successful. Be sure to specify where there are gaps in your plan that identify external recruiting needs. You should update your plan on a regular basis to reflect changes in both your organization and external market factors, and monitor the progress of these rising stars in their annual or quarterly reviews.

Once you have a succession plan in place, you can start working with your Gen Xers to develop them to ascend in your organization. These development plans can include both formal and semiformal learning settings, such as one-on-one coaching or lunch-and-learn sessions with a small group. You could also arrange to bring in a guest speaker or consultant to lead a classroom session or two devoted to specific leadership skills, such as motivating others or providing constructive feedback.

Potential Gen X leaders may also be encouraged to take educational courses that broaden their knowledge and skills. In some cases, an executive coach can provide one-on-one leadership training—an important consideration before moving someone into the C-suite.

In many cases, you can deepen an executive’s commitment to the company by creating opportunities for Gen Xers to develop a higher profile both inside and outside the organization. That could include putting them on the podium at trade shows or business events, or launching a blog that aligns their personal and professional interests with those of the company.


Your succession plan might include the names of three Gen Xers who could become CFO in the next three to five years.


Another strategy for building leadership skills is rotating Gen Xers through different assignments or managerial positions. These “stretch assignments” can be an effective tactic for deepening executive engagement as well as providing opportunities for them to develop new skills. It can be a key step in succession planning because it prepares a subordinate to step into the shoes of the current leader if that senior executive takes on a new role.

As with any professional development program, it’s a good idea to have a before-and-after comparison to determine the impact of these career-expanding activities. Your subordinates—and their managers—could write a brief statement about how they see their current leadership skills. You can also complete a more formal baseline assessment, perhaps with the help of an outside consulting firm.

After the coaching, teaching, speaking engagement or stretch assignment, you can have your Gen Xers update their essays, and/or complete new formalized assessments. In any case, you’ll have gained new insight into their ability to lead—as well as your own teaching abilities—while contributing to the strength of your organization.

As a senior executive, you can put this insight to good use by continuing the ongoing process of training, coaching and mentoring your Gen Xers in leadership skills. Not only will you be giving them an opportunity to grow and progress in their careers—and support your own succession plan—you’ll also get an opportunity to examine your own skill set.

A High Priority

Succession planning should be a high priority for all sizes and scopes of direct selling organizations—local, regional, national and global. Finding the right Gen Xers and grooming them for C-level positions—while also developing the next generation to take their place—is instrumental to achieving long-term sustainability. The injection of fresh ideas and new leadership styles can propel your company forward and take advantage of today’s evolving market opportunities. As you focus on the urgent daily challenges, be sure to look to the future by developing an effective succession plan.


Judy StubbsJudy Stubbs is Vice President and a retained executive search consultant with Pearson Partners International. With previous experience as the chief human resources officer of Mary Kay Cosmetics, she has been helping her direct selling industry clients build strategic leadership teams for more than 25 years.

November 01, 2014

Stock Watch

Stock Watch, November 2014


November 01, 2014

Cover Story

Groundbreaking Study Reveals the Real Direct Selling

by Beth Douglass Silcox

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


Direct Selling News Study Conducted by Harris Poll Sorts Direct Selling Fact from Fiction

In the age of 24-hour news cycles and quasi-news blogs, the direct selling industry experiences more than its share of fallout from the recirculation of misleading statements and misnomers. Noisy voices shouting falsehoods often overpower industry fact, putting the industry, its companies and sellers on the defensive. Whether these fallacies are motivated by malice or just a lack of information, one thing is clear—the direct selling distribution channel is misunderstood, and too often misrepresented.

To sort direct selling fact from fiction, Direct Selling News commissioned Harris Poll to conduct a comprehensive online study among 3,549 U.S. adults 18+ between Aug. 19 and Sept. 2, 2014 to more deeply understand the direct selling industry.

This month, Direct Selling News presents some of what we learned—gleaned from the study Harris Poll conducted on our behalf. New data not only dispels several accusations made in the court of public and online opinion; but also advances the industry’s ability to apply a fact-driven, strategic, pro-active offense to better educate the public and potentially quiet industry opponents.

What we found flips five common direct selling misconceptions 180 degrees.

  1. When it comes to money, 93 percent of current direct sellers reported earning income in the last 12 months.
  2. While personal product discounts are extremely appealing to current direct sellers, 50 percent also served the needs of six or more customers in the last month.
  3. Most current customers (82 percent) thought their last purchase was a good value.
  4. Seven in 10 current customers (69 percent) are likely to speak positively about their direct selling experience.
  5. Despite leaving their businesses, 76 percent of past direct sellers rated their experience fair or better and 67 percent purchased from the industry in the past year.

Let’s explore the findings of this survey and break down the facts behind each of these five statements.

What we found: When it comes to money, 93 percent of current direct sellers reported earning income in the last 12 months.

People join direct selling companies for a variety of reasons and people quit for a variety of reasons too. Not all of them revolve around money, but when it is their motivation (40 percent of current sellers seek supplemental income; 23 percent want to pay down debt; 25 percent want to save for the future), direct selling most certainly offers a way to earn. The study found an overwhelming majority (93 percent) of current direct sellers reported earning some amount of money in the last 12 months and only 16 percent of past direct sellers reported not making enough money as the reason for leaving their businesses.


It is in the social business atmosphere that so many direct selling customers find the fun and pleasure in buying direct. However they interact to make the purchase, 87 percent enjoy it!


Of course, the amount earned is up to the direct seller, their efforts and the time they dedicate to the business. The median current direct seller income was about $6,200 in the last year, with most current direct sellers showing a part-time level commitment, as 70 percent dedicate 15 hours or less each week to their businesses.

The impact of time spent working a direct selling business is typically seen in earnings, so it is no surprise that some direct sellers earn more than others. While 27 percent of current direct sellers earned less than $1,000 in the last 12 months, 51 percent reported higher earnings ranging from $1,000 to $49,999, and 15 percent exceeded $50,000.

Apply the study’s 15 percent of current sellers earning $50,000 or more in the past 12 months to the roughly 16 million direct sellers in the United States, and some 2.4 million direct sellers earned upwards of $50,000 in the last year. This 15 percent of current direct sellers beat the national average salary for men ($45,188) and women ($37,076), as well as the national median annual salary for all Americans working a 40-hour workweek ($48,872), as reported by the Bureau of Labor Statistics in December 2013. (These salary figures were not provided by Harris.)


Apply the study’s 15 percent of current sellers earning $50,000 or more in the past 12 months to the roughly 16 million direct sellers in the United States, and some 2.4 million direct sellers earned upwards of $50,000 in the last year.


Those earning figures are impressive, but it’s also worth noting that salaries reported by the Bureau of Labor Statistics are for full-time employment. Direct selling, on the other hand, tends to draw people who want part-time employment. Four in 10 current direct sellers report their income from their direct selling business is in addition to wages earned in other jobs (41 percent), while 15 percent say they are in addition to retirement, pension or disability. Therefore, it is logical to assert that current direct seller earnings reported in the study (66 percent in excess of $1,000) could be the result of part-time efforts and most often provide a second source of income to the seller’s family.

What we found: While personal product discounts are extremely appealing to current direct sellers, 50 percent served the needs of six or more customers in the last month.

Naysayers of the direct selling industry depict self-consumption as a negative. With a broad brush, they denounce the existence of what they call “real” customers and minimize the efforts of millions of direct sellers who serve the needs of clients every day.

The practice of self-consumption—the ability of direct sellers to purchase products and services at a discount—is similar to membership clubs like Costco, where people pay a fee for access to discounted products.


In much the same way Costco draws savvy shoppers, so too does the direct selling industry.


In fact, the top financial benefit of a direct selling business, according to 84 percent of current direct sellers in the poll, is discounts on products or services. Three in 10 (29 percent) past sellers cite access to discounted products as the reason they initially launched their direct selling businesses.

The study found that current direct sellers tend to be more active shoppers than other audiences studied. They say shopping makes them feel good (71 percent) and other people seek their advice on purchases (63 percent). As savvy shoppers, current direct sellers—who are predominantly female—understand the impact discount pricing can have on the bottom line of a household. In much the same way Costco draws savvy shoppers, so too does the direct selling industry. Discounted products, whether they are purchased at a big-box retailer or as a result of a direct seller ordering from the company she represents, puts money back into the household budget.

Of current direct sellers, 50 percent served only small groups of one to five customers in the last month. While industry detractors imply these direct sellers are dissatisfied, the poll shows 85 percent of all current direct sellers depicted their experience as excellent or good. Direct sellers who choose to operate microbusinesses like these small enterprises—and whose objective is to obtain product discounts—seem to be at ease with their level of engagement with the companies they represent.

We found that the remaining 50 percent in the current seller group served six customers or more in the last month. Current customers reported making purchases on at least a monthly basis (26 percent), at least once every three months (45 percent), or at least once every six months (64 percent).

Harris Poll Methodology



Direct Selling News commissioned Harris Poll to conduct a comprehensive online study among 3,549 U.S. adults 18+ between Aug. 19 and Sept. 2, 2014 to more deeply understand the direct selling industry through the eyes of four key audiences:

  • Current Customers—Those who have ever purchased from a direct seller in person or online and have made a purchase from a direct seller in the last 12 months (n=1025).
  • Current Direct Sellers—Those currently participating in direct selling (n=1002).
  • Past Direct Sellers—Those that sometime in the past participated as a direct seller (n=1020).
  • No Engagement—Those who have never made a purchase from a direct seller in person or online or made such a purchase more than 12 months ago (n=502).

The study explored attitudes and behaviors, as well as engagement and satisfaction levels. It also strived to provide a snapshot of the typical seller by uncovering goals, objectives and reasons for entering into direct selling, as well as explain why past sellers disengaged from their businesses.

Results were weighted as needed for: age, gender, race/ethnicity, education, region, and household income, as well as the respondents’ propensity to be online. Harris Poll applied post-weights for gender to reflect a more accurate representation of the population of current direct sellers, according to data from the Direct Selling Association.

What we found: Most current customers (82 percent) thought their last purchase was a good value.

An assertion floats around cyberspace and the media that direct selling companies offer inferior products at inflated prices. Truth be told, current direct selling customers and sellers are smarter and savvier than industry critics realize. They place product quality (96 percent, current customers; 93 percent, current sellers) and price (92 percent, current customers; 88 percent, current sellers) as top considerations when making any purchase decision, and their direct sales purchases do not disappoint (majorities are satisfied with these aspects of their direct selling experience).

Current customers most recently purchased products to accentuate their beauty (14 percent), improve their skin (10 percent), simplify home life and entertaining (food and beverage, 12 percent), and present their most fashionable selves (jewelry, 11 percent; and clothing/accessories, 9 percent). They want a treat, and direct sellers provide them with an easy way to make a purchase (70 percent are extremely or very satisfied with this aspect of direct selling). Four in 10 (40 percent) have most recently purchased online, while most made their last recent purchase one-on-one, at a home party, craft show or farmer’s market or at some kind of demonstration, seminar or presentation of a product or service.

The results of the product purchase questions show that customer and seller expectations about quality and price align closely with after-purchase satisfaction. Four in five (82 percent) current customers say their last purchase was a good value and 64 percent are extremely or very satisfied with the quality of their direct selling purchases. Half report being extremely or very satisfied with pricing too.

What we found: Seven in 10 current customers (69 percent) are likely to speak positively about their direct selling experience.

Happy and loyal customers drive direct selling’s relationship-based business model, and current customers feel strongly about both the items they purchase and the sellers who make it happen. They find intrinsic value in supporting small business owners (89 percent), and if that small business is owned by a friend, all the better. Eighty percent like purchasing from people they know and that desire is evident for majorities of all four audiences in the study.

The poll bears out what the direct selling industry has known for decades. The relationships direct sellers cultivate with their customers keep them coming back and bringing new people to the party. Three in 10 (29 percent) current customers report knowing the direct seller extremely or very well, and four in 10 (41 percent) say they knew the direct seller as a friend or through a friend.


The attitudes, beliefs, and actions explored by the study leave an over-arching impression that both direct sellers and the customers they serve are happy.


It is in that social business atmosphere that so many direct selling customers find the fun and pleasure in buying direct. Maybe it was a leisurely day at a craft fair or an evening at-home party with friends; perhaps it was a one-on-one coffee shop meet-up or a quick chat by cell or online; however they interacted, 87 percent enjoyed it! Not only that, but purchasing from a direct seller is perceived as easy (70 percent are extremely or very satisfied with this aspect of the experience), 61 percent are satisfied with the service, and direct sellers personally get high marks with 69 percent of current customers extremely or very satisfied with their most recent experience with a direct seller.

At the root of customer satisfaction is the human bond—the relationship between customer and direct seller. These connections are not to be taken lightly, as they have a tremendously positive impact on the consumer’s future purchases. Nearly nine in 10 (88 percent) current customers are at least somewhat likely to purchase again from the same direct seller as their most recent purchase. And it seems that once past direct sellers cross status to become a current customer only, they may remain supportive. Ninety-two percent of past sellers report they would be at least likely, if not extremely or very likely, to purchase from the direct seller who sold them their most recent purchase.

Outstanding customer satisfaction fuels word-of-mouth marketing, which is so vital and effective for the industry. Direct sellers, like other marketers, seem to understand that it works well for them. As a result, seven in 10 current customers (69 percent) are likely to speak positively to others about their direct sales experiences, and two in five (39 percent) have already recommended a product or service they purchased.

What we found: Despite leaving their businesses, 76 percent of past direct sellers rated their experience fair or better and 67 percent purchased from the industry in the past year.

Opponents of the industry often try to tie seller turnover rates to misleading or broken promises made by companies, implying that disillusioned direct sellers discover some sort of hidden truth and leave their businesses and the industry as a result. We have long believed this is a false picture of why direct sellers engage and then stop engaging in their businesses. The poll indicates that past direct sellers leave their businesses for many of the same reasons people in any career make a change.


There is no overwhelming reason former direct sellers decide to close up shop. In fact, these direct sellers leave their businesses for many of the same reasons people in any career make a change.


What the data makes clear is that there is no overwhelming reason former direct sellers decide to close up shop. Lack of earnings and profitability do stand atop the list at 16 percent, but 15 percent of former direct sellers said they were just too busy and the business was too time-consuming for their schedules. Twelve percent simply lost interest.

Sometimes it was the “selling” that got in the way, with 6 percent feeling unqualified, 7 percent having trouble finding customers and booking parties, 4 percent deciding it was just too difficult, and 3 percent deeming it a hassle. Others took new full-time jobs (6 percent), moved away (5 percent), or left for health reasons (3 percent).

So what does the overall snapshot of a past direct seller look like? The majority (62 percent) worked their businesses part-time—15 hours or less per week. On average, they were direct selling for nearly three years, with a median duration of one year. Two-thirds (66 percent) of former direct sellers worked with only one company.

Despite leaving their businesses, 76 percent of past sellers rated their direct selling experiences fair or better, and 67 percent of them made a purchase from a direct seller in the last year. Obviously, the implication that former direct sellers became disillusioned and then disengaged from the industry with prejudice of some kind is untrue for at least two-thirds of past sellers.

The majority (66 percent) of past direct sellers who had access to at least one kind of training during their time in the industry found it to be extremely or very valuable. In fact, majorities found their training in sales, presentation, personal development and leadership to be extremely or very valuable. The poll showed these former direct selling professionals recognized the benefits of their direct selling experiences.


New data dispels accusations made in the court of public and online opinion and advances the industry’s ability to apply a fact-driven, strategic, proactive offense to better educate the public and quiet industry opponents.


A Way Forward

The poll gives the direct selling industry an unprecedented look at itself and confirms that current direct sellers are a devoted bunch. They plan to expand their customer bases (76 percent say this describes them extremely or very well) and expect to increase the amount of time they spend working their businesses (45 percent) in the coming year. Current direct sellers are also enamored by flexibility and freedom (81 percent say their direct selling business provides this a lot or a little), as well as the ability to pursue something they love (83 percent) and the feeling of success and fulfillment (82 percent) that comes with a career in direct selling.

Direct sellers’ energy, enthusiasm and expertise, as well as product quality and value cultivate brand and customer loyalty. The study reveals that one in four current customers (26 percent) and nearly six in 10 current sellers (58 percent) say they are more likely to purchase the same products again from a direct seller, after having made a direct selling purchase in the past. Even those who have disengaged from their direct selling businesses remain loyal to the industry by purchasing products and services.

The attitudes, beliefs and actions explored by the study leave an overarching impression that both direct sellers and the customers they serve are happy. And, perhaps, as a result of this Direct Selling News fact-finding mission, the direct selling industry can finally find a statistical and eloquent way to tell its detractors, “We knew it all along.”


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


 

October 31, 2014

U.S. News

USANA Posts Record Q3 Profit

USANA Health Sciences Inc. (USNA—NYSE) announced a record profit of $19.5 million, or $1.47 EPS, when it released its third quarter earnings statement after the market closed on Tuesday. Earnings increased by 16.4 percent, compared with $16.8 million during the prior-year period with EPS beating estimates of 10 cents, according to Zacks Investment Research. Earnings per share for the quarter increased by 26.7 percent, compared with $1.16 in the third quarter of 2013.

For the third quarter of 2014, net sales increased by 10.5 percent to $191.9 million, compared with $173.7 million in the prior-year period. This beat estimates by $1.4 million. The increase in net sales was driven by overall associate growth of 18.8 percent, which was generated by the company’s Asia Pacific region.

The increase in earnings per share was attributable to higher net earnings and a lower number of diluted shares outstanding due to the company’s share repurchases during 2014. Weighted average diluted shares outstanding were 13.3 million as of the end of the third quarter of 2014, compared with 14.4 million in the prior-year period.

During the quarter, the company repurchased approximately 1.1 million shares under its authorized repurchase program for a total investment of $76.6 million.

2014 guidance includes consolidated net sales between $780 million and $790 million, versus the previous outlook of between $770 million and $790 million, and earnings per share between $5.85 and $5.95, versus the previous outlook of between $5.50 and $5.65.

Read the full results here.

October 31, 2014

U.S. News

The Pampered Chef Names Buffett Protégé New CEO

The Pampered Chef announced this week that interim CEO Doris Christopher is passing on management of the Berkshire Hathaway unit to Tracy Britt Cool, a top adviser to Berkshire Chairman Warren Buffett. Christopher, who founded The Pampered Chef in 1980 and currently serves as Chairman, has filled the position since December 2013.

Having joined Berkshire fresh out of Harvard Business School, Cool is in her fifth year at the company. As Financial Assistant to the Chairman, she helps oversee many of Berkshire’s operations—including The Pampered Chef, where for the past year she has served as an adviser to Christopher. In addition to her new role, Cool will remain Chairman of Berkshire Hathaway companies Benjamin Moore, Larson-Juhl, and Oriental Trading Company, as well as serve on the board of the H.J. Heinz Company.

“I couldn’t think of a better leadership duo at the helm of The Pampered Chef,” Buffett shared in a statement. “With Tracy’s experience helping Berkshire companies reach their full potential and Doris’ passion for both The Pampered Chef’s consultants and products, I see great things in the company’s future.”

October 29, 2014

U.S. News

Jusuru Launches Charitable Partnership with Vitamin Angels

Photo above: Vitamin Angels distributes life-saving vitamins in Malawi. (©Matt Dayka/Vitamin Angels MW13)


Nutraceutical company Jusuru International has refined its charitable program through a new partnership with Vitamin Angels. The global organization supplies life-saving vitamins to chronically undernourished populations—specifically pregnant women, new mothers, and children under 5.

In the past, Jusuru has given back through a variety of nonprofits and critical causes. Now, the California-based company is focusing and growing its efforts by way of a formal partnership. Jusuru has made donations to Vitamin Angels possible through its online shopping cart. With each purchase, customers and distributors can add a $1, $5 or $10 donation, which Jusuru will match.

Vitamin Angels is a 20-year-old organization that boasts seven consecutive four-star ratings from Charity Navigator for financial health, accountability and transparency. This year, the nonprofit is working to provide vital nutrients to 40 million children in approximately 45 countries. The aforementioned $10 donation would supply Vitamin A supplements and multivitamins to 40 children for an entire year.

October 28, 2014

World News

Immunotec Opens First U.S. Sales Office

Immunotec has bolstered its presence in the U.S. with a new Sales Office in Commerce, California. The 7,200 square-foot facility opened last week to support strong sales and distributor growth across the country’s southwestern region, says Canada-based Immunotec.

The nutrition company reported Q3 revenue of $22.3 million, up 55 percent over the prior year period. In the U.S., revenue increased 27 percent in the third quarter. Immunotec now operates regional offices in the U.S. and in Mexico, in addition to its Quebec headquarters.

“Opening this new sales office in the southwestern region of the United States represents the result of the hard work and dedication of our Distributors who are investing in themselves, their families and everyone they touch as they share our mission to make Immunocal the nutritional choice of households worldwide,” CEO Charles L. Orr shared in a statement.

Immunocal is the company’s patented, specially formulated protein derived from whey. The immune health product, which has undergone over 40 years of clinical research and testing, played a key part in Immunotec’s recent research collaboration with Dr. Franco Carli, MD, MPh, Anesthesiologist at the McGill University Health Centre in Montreal. The study recorded the impact of surgical prehabilitation (preoperative intervention) versus rehabilitation on a patient’s recovery time.

“Surgical prehabilitation is a novel concept, aimed to aid patients to become stronger physically, nutritionally and mentally while waiting for an operation and therefore be in better shape to overcome the stress of surgery,” said the Lead Investigator, Dr. Franco Carli.


Immunotec’s Commerce, California, Sales Office Immunotec’s Charles Orr (left), CEO, and Juan Manuel Marín (right), Executive Diamond Distributor, cut the ceremonial ribbon

October 24, 2014

U.S. News

This Week: Herbalife CEO Speaks, J.Hilburn Pops up in NYC

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

  • Los Angeles magazine interviewed Herbalife CEO Michael Johnson for its web feature, “Big Shots with Giselle Fernandez.” Johnson shares his conviction in the integrity of his company, a message to Herbalife’s stockholders, and the challenges of dealing with “knuckleheads in bathrobes who blog.”

  • On Thursday, custom menswear brand J.Hilburn launched a pop-up shop in the heart of NYC at Midtown Manhattan’s Refinery Hotel. The shop, which runs Oct. 23 through Nov. 15, offers J.Hilburn’s entire Fall 2014 collection, including made-to-measure suiting and formalwear and ready-to-wear pieces. The J.Hilburn Pop-Up Shop partnered with several brands, including Uber, Lexus, J Brand Jeans and Perrier.

  • On Tuesday, home-automation giant Vivint hosted Utah Senator Orrin Hatch; Val Hale, Director of the Governor’s Office of Economic Development; Provo Mayor John Curtis and many others at the grand opening of its new Innovation Center. Located in Lehi, Utah, the center will house 320 employees.

October 24, 2014

U.S. News

CVSL Plans $60 Million NYSE Uplisting

IPO investment manager Renaissance Capital has reported the terms of CVSL’s planned uplisting to the NYSE MKT. The direct-selling conglomerate underwent a quiet period after filing with the Securities and Exchange Commission to raise capital in its uplisting bid.

CVSL is looking to raise $60 million with an offering of 6.7 million shares priced at $8 to $10. That would place CVSL’s midrange market value at $308 million. Shares in CVSL are currently traded over the counter, with a market value of about $293 million on the OTCQX.

To comply with NYSE MKT terms, CVSL last Friday implemented a 1-for-20 reverse stock split of its common stock. Though it had no impact on the par value per share, the split reduced CVSL’s shares of common stock from 487,975,986 to approximately 24,398,800.

CVSL has built a portfolio that now includes seven direct selling or “micro-enterprise” companies across the home improvement, gourmet foods, skincare and nutrition industries. The brands operate independently of one another, while benefitting from combined expertise and efficiencies in finance, IT and the supply chain.

October 23, 2014

U.S. News

Tupperware Q3 Earnings Fall Short of Expectations

As Tupperware Brands Corp. (TUP—NYSE) released its third quarter 2014 earnings Wednesday, shares dropped in reaction to the company’s lower than expected 2014 outlook. Tupperware traded 10 percent lower at $64.23 per share. Year to date, shares have fallen 24 percent.

With reported earnings of 90 cents per share, the company missed Wall Street estimates by 1 cent. This adjusted diluted EPS of 90 cents included a 14 cent negative impact versus 2013 from changes in foreign exchange rates, which were 2 cents below July’s guidance. Analysts surveyed by Zacks Investment Research had estimated earnings of 91 cents for the quarter.

Revenue fell 2.4 percent year over year to $588.7 million, compared to the $587.9 million consensus. The company also issued a lower guidance for fourth quarter with an EPS of $1.55 to $1.60 versus $1.70. Third quarter 2014 net sales in emerging markets accounted for 70 percent of sales, achieving an 8 percent increase in local currency. Established markets were down 4 percent in local currency.

GAAP net income of $32.3 million was down 35 percent versus prior year GAAP net income of $49.9 million. Excluding foreign currency, net income was down 24 percent versus prior year.

Read the full results here.

October 22, 2014

U.S. News

Take Shape for Life CEO Named One of Baltimore’s ’50 Women to Watch’

Take Shape for Life CEO Meg Sheetz is one of 50 Women to Watch in the Baltimore community, according to an annual list from The Baltimore Sun. Maryland’s largest daily newspaper whittled down more than 250 nominations to recognize an elite group of “the area’s most intriguing movers and shakers.”

“These are women who are very invested in Baltimore, and there is a lot of good being done out there,” said Sun Editor Anne Tallent. “Whether in advocacy or the arts or nonprofits or science and technology, they are making Baltimore a better place.”

TSFL is the direct sales division of Medifast, where the late Bradley MacDonald, Sheetz’s father and former CEO and Chairman of the Board at Medifast, brought her on board in 2000 as sales administration director. The 37-year-old is now Medifast’s President and COO, in addition to running the company’s TSFL division.

“Meg’s dedication and leadership at Medifast continue to make her an invaluable asset to our company. As the weight-management industry evolves, Meg has led the charge to help expand our position in the overall health and wellness arena,” Chairman and CEO Mike MacDonald shared in a statement. “We congratulate Meg on this noteworthy achievement.”

Her work at Medifast is one of many roles Sheetz plays in the Baltimore community. She is Managing Trustee of the MacDonald Family Foundation and the Take Shape For Life Foundation, which provides grants to support educational programs for disadvantaged students. Sheetz is also a member of the Villanova President’s Leadership Circle, and sits on the Board of Directors for Stevenson University, the Greater Baltimore Committee, and Siloam.

October 21, 2014

U.S. News

How USANA Became One of America’s Best Workplaces

For the sixth consecutive year, USANA Health Sciences has appeared on Outside magazine’s list of America’s “Best Places to Work.” The Salt Lake City-based company has also been named one of “Utah’s Best Companies to Work For” six times by Utah Business magazine. That kind of employee satisfaction doesn’t happen by accident. To get an inside look at the USANA culture, DSN reached out to Mike King, USANA’s Executive Director of Human Resources for North America and Europe.

DSN: How do you carry USANA’s mission of building healthy lifestyles over to the corporate office?

MK: USANA is known around the world for its mission of providing people with the opportunity to achieve “true health and true wealth.” That mission begins with our employees, who receive active encouragement to improve their health and numerous opportunities to advance their current and future financial situation. USANA employees can also count on a fun, open and community-focused workplace, managed by people who are committed to acting on employees’ ideas and concerns.

DSN: Is there a philosophy that guides USANA’s approach to dealing with employees?

MK: When USANA rebranded itself in 2012, its motto—Everything We Do Helps You Love Life and Live it™—became the focus of everything it does, including keeping its corporate employees happy.

We know that happy employees are more likely to work harder and enjoy what they do, which is why we encourage our employees to live their lives to the fullest and do what they love. USANA continues to strive to create a positive and engaging work environment by providing employees the tools they need to lead healthy, productive lives. That includes benefits such as a fully equipped gym, wellness consulting, monthly massages and an employee café stocked with affordable, fresh food.

DSN: How would you describe your corporate culture?

MK: USANA employees make up a true community with an open and caring culture, backed by a supportive management team and numerous opportunities to make a difference in the world.

We also strongly believe in celebrating our employees for their achievements and recognizing them for their hard work and dedication to USANA through special lunches, corporate summer parties at the local amusement park, and our annual Employee Awards gala.
                                                                                     
The full interview with King will run in DSN’s 90 Days of Direct Selling print coverage.

October 18, 2014

U.S. News

This Week: Door-to-Door Disciples, Safe Makeup, and the Hispanic Avon Lady

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

  • Pamela Jones Harbour, former FTC commissioner and new compliance chief at Herbalife, consumed the company’s shakes for years before it came under Ackman’s spotlight. A review of Herbalife’s business, plus her own experience, made her willing to stick her neck out at the company.

  • Last week, Vivint Solar’s initial public offering raised $330 million, valuing the company at $1.3 billion. Slate shares Vivint’s door-to-door path to becoming the second-largest solar panel installer in the U.S.

  • Tyra Banks chats with Fast Company about her new TYRA beauty line, her drive to empower women and learning to delegate.

  • Beautycounter is on a mission to change the face of the cosmetics industry. This week the safe skincare company introduced its first color Cosmetics Collection, formulated without the harmful ingredients banished to the company’s Never List.

  • Bloomberg gives an in-depth look at the experiences of Isabel Hernandez, one Hispanic Avon Lady in the Texas border town of McAllen.

October 16, 2014

U.S. News

Ambit Entrepreneur Writes a Book for ‘The Ambitious Woman’

Esther Spina has spent years as a sales representative and national consultant for Dallas-based Ambit Energy, where she also coaches fellow entrepreneurs through her Ambitious Women network. The author, speaker and businesswoman is now sharing her knowledge through The Ambitious Woman, a new book designed to help women build success in every area of life.

Released through Next Century Publishing, The Ambitious Woman is a look at what true ambition requires, and how it can help women shape fulfilling careers and personal lives—without stepping on others along the way. Spina explores the subject through her own experiences, as well as the lives of women such as Mother Teresa, Dr. Maya Angelou, and American author, journalist and long-distance swimmer Diana Nyad.

Through her network at Ambit, Spina has developed a success and mentoring club that provides strategies, tips and support to women entrepreneurs. The group also gathers for an annual Ambit-ious Women Conference, where attendees can glean insights from business coaches, social media strategists, sales consultants and other women leaders.

October 14, 2014

U.S. News

U.S. DSA Endorses 13 Congressional Candidates

As Americans head to the polls for early voting in October and Election Day on Nov. 4, the Direct Selling Association is backing 13 congressional candidates who have taken a strong stance on direct selling and entrepreneurialism.

“We want elected officials to understand that economic opportunity comes in many shapes and sizes,” DSA President Joseph Mariano shared in a statement. “The candidates we’re supporting this election cycle stand with direct sellers. That’s why we’re standing with them.”

The endorsements have appeared across the country in a newspaper ad campaign funded by Direct Selling Empowers Americans, the newly formed super PAC associated with the DSA. According to the PAC’s website, its efforts focus on enabling America’s 17 million direct sellers “to run their businesses—micro-enterprises—free from government constraints.”

The DSA has endorsed U.S. Senate candidate Joni Ernst (R-Iowa) and congressional challengers Mia Love (R-Utah) and Alex Mooney (R-W.Va.), as well as the following incumbents:

  • U.S. Rep. Marsha Blackburn (R-Tenn.)
  • U.S. Rep. Tony Cardenas (D-Calif.)
  • U.S. Rep. Steven Horsford (D-Nev.)
  • U.S. Rep. Eddie Bernice Johnson (D-Texas)
  • U.S. Rep. Gregory Meeks (D-N.Y.)
  • U.S. Rep. Reid Ribble (R-Wisc.)
  • U.S. Rep. Juan Vargas (D-Calif.)
  • U.S. Rep. Marc Veasey (D-Texas)
  • U.S. Rep. Tim Walberg (R-Mich.)
  • U.S. Rep. Ted Yoho (R-Fla.)

October 09, 2014

U.S. News

Tyra Banks Reveals Her Latest Venture, a Direct Selling Beauty Brand

Not everyone can be America’s Next Top Model, but now every woman can buy (and sell) runway-ready beauty products tested and approved by Tyra Banks, creator of the hit reality show. The enterprising former model, author and television personality has rolled out TYRA Beauty, a new cosmetics line sold directly through women who join the company as “Beautytainers.”

The fully self-funded venture has been four years in the making, but Banks has honed her own makeup expertise throughout a career in modeling and 21 cycles as producer and host of Top Model. The line features easy-to-apply products based on the three pillars of the TYRA Beauty experience: the TYover, the Smize and the It Factory.

TYover products come in a stick and incorporate proprietary “TY-Glide Technology” for versatile looks on the go. The Smize—a popular term from the Tyra lexicon for “smiling with your eyes”—pillar is all about eye makeup. And finally, the It Factory is a collection of cosmetics that combine unique textures and innovative formulas.

“Without makeup, I would have never been a supermodel.  I don’t wake up with naturally sculpted cheekbones—I paint them on! I believe makeup is the great beauty equalizer,” Banks shared in her announcement.

Tyra Beauty is also equalizing its distribution method through the direct selling channel. In a model the company has dubbed “CEOYou selling,” individuals can sign on as independent contractors and receive online training through Tyra University (TyraU). Of course, it’s not a catwalk without some mood music, and Banks has also collaborated with Jingle Punks, producers Dem Jointz and Ryan Toby, and Motown artist STORi to create the CEOYou Selling anthem, Bootyful.

October 08, 2014

U.S. News

Plexus CEO Shares 4 Keys to a Successful Direct Selling Business

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


In April, Plexus Worldwide made its debut on the Direct Selling News Global 100 list of the world’s largest direct selling companies. In August, Inc. magazine ranked it No. 8 on its Inc. 500 list of the nation’s fastest-growing private companies. In a recent interview, CEO Tarl Robinson highlighted some of the strategies he feels have been key to that success.

Build a bond with your field.
Plexus prides itself in having a partnership-style relationship with its salesforce of Plexus Ambassadors. Robinson said the company relies heavily on an advisory board of seven Ambassadors, chosen by the company’s top leaders. The executive team is in contact with the advisory board at least monthly, with three in-person meetings each year.

Make quality hires internally.
Because Plexus has made a name for itself in the Scottsdale, Arizona, market as a company with good compensation and benefits packages—not to mention its alluring growth story—the company has had no lack of applicants as it has grown. “It’s a unique and exciting position to be in as a company, that we really get to be selective about who we place in a role and take a lot of time and effort and thought process around our hiring,” Robinson said.

Top people deserve top income.
Enough said.

Company culture is key.
Creating, and maintaining, a strong, positive culture is no easy task. “Focus in on what you want that to be from an internal culture of your company, an external culture of your company and a field or ambassador culture of your company,” Robinson said. “You have to buy into it 100 percent.”

For more from the DSN interview with Robinson, see the November issue.

October 07, 2014

U.S. News

Herbalife Appoints Former FTC Commissioner to Head Compliance Efforts

Herbalife is bolstering its compliance team with the addition of a Senior Vice President of Global Member Compliance and Privacy. The nutrition company has appointed former FTC commissioner Pamela Jones Harbour to the new position, reporting to Executive Vice President and General Counsel Mark Friedman.

Harbour served as FTC Commissioner from 2003 to 2010 and also spent 12 years as a prosecutor for the New York State Attorney General’s office. At Herbalife, she will oversee the development and monitoring of the company’s training and mentoring programs. Harbour—who earned the Electronic Privacy Information Center’s (EPIC) “Champion of Freedom Award” for her FTC work defending consumer privacy—will also direct the company’s global privacy and cyber security efforts.

Herbalife also tweaked its executive team in July, when Alan Hoffman filled the newly created position of Executive Vice President of Global Corporate Affairs. Having served as Senior Vice President for Global Public Policy at PepsiCo, Hoffman brought expertise in public policy, communications and government affairs.

Amid short seller Bill Ackman’s campaign against the company, and the FTC civil investigation sparked by his efforts, investors responded positively to Herbalife’s latest hire. The company’s stock rose $2.69 on Monday to $47.30. For the year, shares in Herbalife are down 40 percent through Monday’s close. Herbalife will report its third quarter 2014 financial results on Monday, Nov. 3.

October 07, 2014

World News

MonaVie Says ‘Ciao’ to Italian Consumers

MonaVie is looking to grow its business in one of direct selling’s billion-dollar markets. Last week the nutrition brand officially launched operations in Italy, its 39th market worldwide.

The European Union is home to more than 4 million direct sellers, and Italy is one of the region’s most dynamic markets. With $3.1 billion in direct sales last year, Italy trailed only France, Germany and the U.K.

“We are committed to creating a long-term relationship with our customers, end users, and distributors in Italy and across Europe,” said Dario Colagiacomo, who joined MonaVie in August as Vice President of Europe. “It is our belief that it isn’t important what we think or say to others about who we are; our reputation is made by what others think and say about us!”

Italian consumers initially have access to six MonaVie products, including the company’s flagship acai berry juices. Those juices will ship from MonaVie’s brand-new manufacturing facility in Hohenseefeld, Germany—another significant investment in the company’s European business. MonaVie previously manufactured all of its European product in the U.S.

October 03, 2014

U.S. News

BeautyCounter Sets High Standard with Safety-Conscious Products

The cosmetics counter is chock full of four-syllable ingredients the average consumer can neither pronounce nor identify, and many of those ingredients are toxic chemicals. Direct retail brand BeautyCounter launched 18 months ago to promote safe ingredients and offer high-performing personal-care alternatives. BeautyCounter Founder and CEO, Gregg Renfrew, appeared on Bloomberg TV’s Market Makers to share the company’s vision.

“We are exposed every day to toxic chemicals through our personal-care products. Those chemicals can often be linked to cancer, reproductive issues and endocrine disruption,” says Renfrew, who founded the company as a result of her own research into environmental toxins and their links to prevalent health issues.

Over the past two decades the European Union has banned or restricted more than 1,300 ingredients, while the U.S. government has banned just 11 to date. As Renfrew notes, the U.S. has not passed a federal law regulating the ingredients used in personal-care products since 1938. In the midst of that regulatory vacuum, BeautyCounter has imposed its own standards, banning more than 1,500 ingredients from its products.

The company has signed on 4,000 consultants to market its natural beauty line, which is also available through its e-commerce website. Renfrew uses the term “direct retail” to describe the company’s multi-channel approach. BeautyCounter has generated 23 percent average monthly revenue growth, with 424 percent sales growth since January 2014.

View the full Market Makers segment at Bloomberg TV.

October 02, 2014

World News

Mary Kay Canada Head Joins Government Council on Women Entrepreneurs

The Government of Canada is supporting women entrepreneurs as an integral part of its Economic Action Plan, and Mary Kay is lending its expertise through the newly formed Advisory Council on Women Entrepreneurs and Business Leaders. Lynda Rose, General Manager of Mary Kay Canada, is one of 10 members who will share advice and insights on issues affecting women in business.

Canada’s Minister of Labour and Minister of Status of Women, Dr. K. Kellie Leitch, introduced the council at this week’s Women-Owned Businesses Powering the Economy Conference in Montreal. The list includes Joey Adler, CEO of Diesel Canada and Founder of the ONEXONE Foundation; Ernst & Young Partner Martin McGrath; and Rebecca MacDonald, Executive Chairman of the Board at Just Energy Group.

Earlier this month, the federal government also announced an Expert Panel on Championing and Mentorship for Women Entrepreneurs. Both forums will work to boost women-owned businesses, which according to BMO Financial Group employ over 1.5 million Canadians. RBC Economics estimates that increasing majority-owned women’s businesses by just 10 percent over 10 years would up their total economic contribution to $198 billion—a $15 billion net annual gain after inflation.

October 01, 2014

Top Desk

Focus, Focus, Focus

by Cindy and Scott Monroe

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


As our business has grown over the past several years, there has been one challenge that always seems to rear its head: focus. Even as our teachers and parents often reminded us to “focus, focus, focus” when we were children, still today, as business leaders, the ability to maintain focus in the midst of a growing and thriving business is one of the greatest challenges we face. Focus can be tough for entrepreneurs especially. Our creative desire to find bigger and better ideas creates a perfect environment for distraction if not kept in check. We believe that by being purposeful and minimizing distractions, we can maintain focus on the things that make the most impact and keep us on track toward a bright future.

Cindy Monroe: Purposeful is such an important word to us at Thirty-One that it is one of our 12 core values. We ask ourselves “why?” often. It seems elementary, but how many times have we all gotten deep into an initiative that’s just not working and found ourselves wondering why we started it to begin with? I’ve found that when I’m purposeful from the beginning and plan and get the right people around the table who work together as a team, we can determine ahead of time whether it’s going to become a distraction or not.

We should also constantly evaluate whether or not what we’re in the middle of is still on purpose. We all have to face it. Sometimes our greatest ideas that seem to start out as winners end up losing focus, losing purpose and ultimately getting off track. We have to be honest with ourselves and learn to let some things go or learn to let others be rebuilt. In the tactical execution it’s so easy to get distracted by all of the very important details and find ourselves quickly off-purpose. If you’re feeling bogged down on something in business or life, I want to encourage you to step back and examine it. Is it still purposeful? Are you focused or is it all cluttered with distractions? Are there lots of good things getting in the way of you doing great things? These are all questions we try to ask ourselves every week, and I think they’re questions we should all ask ourselves and our teams daily. Also, as top executives, it’s easy not to realize the amount of energy that executing an idea or initiative takes. Ask your team many times during the project for the amount of time the idea is taking compared to other initiatives or day-to-day core competencies.

Scott Monroe: In photography, there is the concept of depth of field. Many of the most beautiful photos ever shot have a very narrow depth of field. The subject is close and in perfect focus while everything else in the foreground and background are out of focus. It’s easy for us amateur iPhone photographers to want everything in focus but we find our all-inclusive shots, taken from a safe distance, to be distracting and uninteresting.

The same is true for our life and our business. We can have a great story with a lot of different angles and a lot of variety and possibilities. But if we don’t stay close and focused on what truly matters and what truly gets results, then we can easily end up with a very cluttered photo.

Cindy and Scott MonroeCindy and Scott Monroe

Cindy: We also have to work hard to minimize distractions. Distractions can be a lot of things. For entrepreneurs, it can be that next big idea. For business leaders, it can be new programs and incentives that we put in place hoping to get a lift in business. For individuals, it can be well-meaning people really trying to help. All of us get distracted, and I’m certain most distractions start off as good ideas. Focusing purposefully can help remove details that have become distractions.

Scott: One great distraction that seems to come our way a lot in business and in life is that of trying to be someone we’re not. That’s why another of our 12 core values at Thirty-One is authentic. The great English playwright Oscar Wilde said, “Be yourself. Everyone else is already taken.” There’s no shortage of great ideas out there, but it’s very difficult for us to always be innovative without becoming like someone else. The question we ask ourselves all the time is, “Is this us? Is this Thirty-One?” The most successful you is the real you. Be honest, no one does you better than you. When we try to be something we’re not, we are only fooling ourselves. Our consumers, distributors and peers all sense when we’re missing it. It’s important to remain purposefully focused on being true to ourselves as people and as a company.

Cindy: Even as top executives, it’s easy to get distracted with who we are supposed to be as individuals and as leaders. We watch other executives, read leadership books and see how different leaders are involved in their sales field, expansions, media/press or on the speaker circuit. Just like business initiatives can be distracting, so can comparisons or a lack of focus on your own role as an executive. Being a young executive, I can admit to the times when I have been confused about my own role. What my executive team needs me to play, what our sales field needs from me, responsibilities in our industry, president organizations and executive groups, and my desire to support board roles for philanthropic causes that I love, all begin to compete very quickly. While juggling all of these roles can be challenging, I think the real threat is getting confused with how to use your true gifts and what your role should be in your company! What are you doing that plays to your strengths and what you love to do? What are you doing out of obligation or that someone else could do better?

Scott: It’s not impossible to maintain focus. If we constantly ask the “why?” questions and remain purposeful, work to minimize distractions and stay authentic, I believe we can find our way to reaching more and more people with the powerful gift direct selling offers: an empowered life where they find financial freedom, and as countless thousands have told us, “Direct selling helped me find me.


Cindy Monroe is Founder, President & CEO, and Scott Monroe is Chief Brand Officer of Thirty-One Gifts.

October 01, 2014

DSA News

Industry Voices

by DSN Staff

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


Direct Selling News Publisher John Fleming recently spoke 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.

October 01, 2014

Company Spotlight

Gold Canyon: Turnaround Toward Growth

by Barbara Seale

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


Company Profile

Founded: 1997
Headquarters: Chandler, Arizona
Executives: Managing Directors Lynae Parrott and Gail Gioffredi
Products: Scented candles and accessories


After a season of sluggish sales, the sweet smell of success seems to be returning at Gold Canyon. The scented-candle seller and manufacturer has instituted sweeping changes that have boosted both morale and sales. Led by a new management team that streamlined everything from the product line to the sales process, Gold Canyon looks like a happier, more fun version of its former self.

Earlier this year the company appointed two new managing directors, Lynae Parrott and Gail Gioffredi, who lead Gold Canyon with a combination of company experience and new eyes. Parrott has been with Gold Canyon since its early days, starting in its field sales organization. In 2000 she was asked to join the corporate staff, where she learned the full scope of the headquarters organization by holding positions in several departments before leading its marketing efforts. Gioffredi joined Gold Canyon in January 2012 after gaining expertise in several other direct selling companies. Parrott explains that while she primarily leads the company’s internal team and Gioffredi predominantly focuses on external sales, the two work in lockstep to push the company into the future and to focus on creating the best possible opportunity for the field sales organization, which it calls Fragrance Consultants.

“One of the first exercises Gail and I did was to evaluate our vision of the company, and we quickly identified that our business was overly complicated,” Parrott explains. “It needed to be more simple, more fun. That was the premise of a lot of the changes we started to implement immediately.”

Lynae Parrot and Gail GioffrediLynae Parrot and Gail Gioffredi

Simple, Substantial

They asked themselves what they wanted the company to represent and what its mission was. Their answer: to empower others to create their own destiny.

They also identified the four core values that drive the company—both now and into the future:

  1. Do the right thing.
  2. Continually improve.
  3. Give back.
  4. Have fun!

The leaders embedded their mission and values into three key projects that would turn the company around. They emphasize proudly that throughout the turnaround Gold Canyon has been profitable, even increasing its profitability each month. But they believe that its new branding, enhanced career plan and Simple Selling System™, along with improved technology, will re-launch the company toward the growth it previously was struggling to achieve. Parrott and Gioffredi initially hired consultants to develop the bones of the career plan, but the Gold Canyon team fleshed it out, along with the rest of the turnaround plan.

The first step—because it had to be in place to launch others—was rebranding the company. The new look, revealed in February, had to work hard. It needed to reflect the company’s mission and values, but it also had to attract a younger demographic of Fragrance Consultants and customers.


In June the company had 79 promotions to leader and above, as well as 27 percent sales growth.


“We wanted the new brand to be happy, open, communicative, authentic, transparent, friendly, energetic—all those words resonate differently with different people,” Parrott elaborates.

Because a brand is more than a look, it had to have the backing of employees, too. So Parrott and Gioffredi worked hard to make sure that the staff was on board and understood what the brand stood for.

“They are our brand ambassadors,” Parrott says. “For us to achieve our strategic initiatives, they must be on board. We have been very open with them about what this brand stands for. Not only have we given them presentations, but then we have made a very conscious effort to walk the talk. When we talk about being happy and communicative, we are!”

Earning Trust

Both managing directors understood that employees had heard management promise open doors and open communication in the past, but follow-through had failed. The new executives had to earn trust. To follow up on their promise, they hold management meetings every two weeks, and they also created a Culture Club aimed at breaking down barriers and opening the lines of communication throughout the headquarters organization, including manufacturing. The group has already surfaced and addressed practices that were out of alignment with the company’s vision.

The workplace, including the 250,000-square-foot manufacturing and distribution facility, got a face-lift that reflects the new branding. The playful lettering and polka dots that adorn new marketing elements are also on company walls. Employees now enjoy a social area called the Company Lounge, complete with television, Wi-Fi, a pingpong table and a coffee bar where people gather. The objective: Create happy employees who are building relationships with each other while demolishing communication barriers among functional areas. In less than a year, the small steps have yielded big results. The formerly quiet work space now buzzes with life and laughter.


Gold Canyon’s new managing directors emphasize that throughout the turnaround Gold Canyon has been profitable, even increasing its profitability each month.


The energy filters into the field, too. Happy, more engaged employees help provide better service to the salesforce, whether they’re answering calls or fulfilling orders. Fragrance Consultants experience the energetic new brand beginning with catalogs and the starter kit, which is now dubbed the Dotty Box. The energy extends through the language of everything the company does. Parties are now called Mixers, a key printed piece in the starter kit is called the Know-It-All Guide, and the annual convention is called Palooza. The fresh, modern approach has pumped up sales leaders, who help drive home the company’s messages throughout their downlines.

Complementing the rebranding is a new compensation plan they refer to as their “enhanced career plan” that Gioffredi says simply makes more sense.

“The old career plan had unnecessary levels, complexities that didn’t serve a purpose and requirements that were too difficult,” Gioffredi says. “When the field doesn’t understand something, they freeze. Sales and sponsoring stop. A consultant’s long-term happiness is achieved by growth. We get there by rewarding the right activities and getting new people to join the business.”

Show Me the Money

Because growth comes from the bottom up, the new plan increases the income of early and mid-level leaders. First, they created an initial leadership level, simply called Leader. The new compensation plan gave that group a 40 percent increase on their Level One recruits’ results. Two levels up, team leaders received a 100 percent increase on their Level One recruits’ results, as well as an increase on Level Two. In June the plan also simplified the company’s luxury car program to make it more achievable for leaders to drive their choice of Mercedes. That month alone, the company had 79 promotions to leader and above, as well as 27 percent sales growth. July growth, especially sponsoring, was also strong. The company currently has about 200,000 Fragrance Consultants.

Parrott and Gioffredi emphasize that Gold Canyon’s internal team executed a flawless launch of the plan—the first in the company’s history.

“There were absolutely no technical hiccups,” Parrott points out. “Everything transitioned perfectly. Our inside IT department has created our own genealogy and commission structure. We now own that platform, which helps us control our own destiny. We believe that’s not only our purpose in the field, but internally as well.”

The enhanced career plan is designed to support Gold Canyon’s Simple Selling System, introduced in February. Preparing for that system required the company to reduce its unwieldy product line by 25 percent. Then with a more streamlined but harder-working collection of products, Gold Canyon introduced a three-step shopping guide to help customers choose the candles and accessories that matched their personalities and home décor. Step 1: A quiz guides customers to the scent category that fits them best, simplifying the process of navigating the 100 fragrances Gold Canyon offers. Step 2: They “shop the studio,” deciding whether they want their fragrance in traditional scented candles or wickless candles, like scent pods. Step 3: They choose their own style of candle holders and accessories to embellish their products.


“We’re creating the BLT: Believability, Likeability, Trustability. And we’d rather our consultants love us than like us!”
—Gail Gioffredi, Managing Director


The system encourages larger orders, as well as increases the net proceeds from each mixer, while it creates a fun, interactive, rewarding experience for attendees and hosts. Everybody wins.

In September, the company introduced a new scent-select candle that complements the Simple Selling System. Gold Canyon produces—to order—a jar designed with the customer’s choice of pattern and filled with a candle in the specific scent the customer chooses. The combination of scents and printed patterns generates some 250 customized options for Gold Canyon Fragrance Consultants to sell.

Philanthropic Re-Focusing



Giving back came early in Gold Canyon’s history. By its third year in business, Founders Curt and Karen Waisath started the Prayer Child Foundation to make a difference in the lives of children with physical and emotional challenges. Over its lifetime, Gold Canyon has donated $2.7 million. Later the company began donating to two different organizations that support U.S. and Canadian military troops, donating $30,000 to the two groups. More recently, it partnered with the Breast Cancer Research Foundation, contributing $205,000.

The company is proud of its commitment to charitable donations and has sustained the financial flow through the sale of specific candles dedicated to each cause. As the company identified its core values, it also looked at every aspect of the company to ensure that they were reflected, including philanthropy—not to reduce it, but to be sure that contributions were being made to the organizations closest to the hearts of its Fragrance Consultants.

At the time Managing Directors Lynae Parrott and Gail Gioffredi spoke with Direct Selling News, they had just asked Gold Canyon’s field sales organization to provide feedback on its philanthropic projects. They posted an online survey asking consultants to tell them the organizations and causes that are most important to them.

“We’re going to realign with our field to make sure we are all in agreement about the type of organizations we’ll support in the future,” Parrott explains. They also announced that they want consultants to walk the philanthropic talk, giving back through volunteering, serving others or—one of the company’s core values—just bringing happiness to others. And Gold Canyon will reward their efforts.

“We just launched a new philanthropic award process that will recognize the give-back philosophy,” Parrott says. “Consultants will be able to nominate other consultants for the award. Honorees will be on stage at Palooza next year, and Gold Canyon will give a donation to the organization they support.”

For the first time in the company’s history, Gold Canyon also will incorporate give-back efforts on sales incentive trips.

The new philanthropic practices will be one more step toward aligning all of Gold Canyon’s programs with its mission and core values.

Investing in Growth

Offering all those new options required Gold Canyon to invest in some new manufacturing machinery, and the company made sure it could deliver customized products accurately and in the same timeframe that existing customers and consultants had come to expect.

“We have done lots of test runs that have been very successful to make sure we’re up to production,” Parrott says. “We anticipate no delays. In our research of customization, we learned that it usually demands a 60 percent surcharge, but we aren’t passing the customization fee on to customers. With the efficiencies delivered by our focus on technology, we kept our cost in line. The price point remains the same as other candles in the same look and feel.”

The improvements are intended to have long-term benefits in sales and recruiting by creating more committed consultants.

“We’re creating the BLT: Believability, Likeability, Trustability,” Gioffredi notes. “And we’d rather our consultants love us than like us! Those are successful company ingredients. That’s what we’re building on. If consultants are excited and happy, they’ll spread the word.”

Even though Gold Canyon launched major improvements in the first half of 2014, it announced even more to come at its August convention, Palooza. Some changes, such as redesigned outer shipping boxes, were minor, but other announcements will change the face of the company over time. For example, it announced a soft launch into the Hispanic market, starting with new Opportunity Brochures and product catalogs in Spanish.

The company also announced the next phase of its technology upgrades: updated personal websites. The websites will be milestones on a number of levels. They will continue the company’s new commitment to controlling its own destiny by building its technology internally.

“One of the attributes we’re building is being tech savvy,” Parrott says. “As a company, we don’t have a high-tech reputation. It’s probably our biggest weakness. When Gail and I came into this, we knew we needed to build our own platforms. The ones in place at that time had Band-Aid on top of Band-Aid. Long term, that wasn’t sustainable, and we’re improving our technology dramatically.”

The new websites will be enhanced with features consumers have become accustomed to, such as mobile platforms, wish lists, social media links and customer reviews.

At the same time it upgrades its technology, Gold Canyon also will upgrade its human touch. The company’s service department, called Partner Support, will have extended hours. And with the expansion into the Hispanic market, the company added its first bilingual field development manager to support consultants and leaders.

Quality Continues

The numerous changes are built on the company’s strong foundation of candle manufacturing. Gold Canyon is proud to produce The World’s Finest® scented candles, using pure fragrances that waft throughout the home; cool, food-grade wax; and self-extinguishing wicks. Having its own manufacturing facility gives Gold Canyon more than a recognizable scent in its hometown. It also gives it a competitive edge.

“It allows us to respond to what consumers ask for,” Parrott says. “Our product development team and manufacturing team work together to get new ideas for products that set us apart from the competition. And that’s a great story for our field to tell. They’re not just offering a candle that is made in some unknown spot somewhere in the world. Instead, they’re proud that what they’re selling keeps people in America employed. And our Canadian consultants love it because the wax is from Canada.”


The Simple Selling System drives up the amount of the average order, as well as the net proceeds from each mixer, while it creates a fun, interactive, rewarding experience for attendees and hosts.


The managing directors believe Gold Canyon’s strong foundation and recent improvements are setting the company up for future success. They’ll know they are successful as they see Gold Canyon become a household name. Achieving their objective business goals—sustained double-digit growth, quadruple their sales field count, and international expansion—will make that happen.

“When Lynae and I took on this awesome responsibility of providing leadership to the company, we knew that many people were relying on us, from investment groups to vendors and the sales field,” Gioffredi says. “We have to balance them all and make sure that our Fragrance Consultants are successful. If they’re successful, we will be. We’re aligning everything to create that success.”

October 01, 2014

Company Focus

Zurvita: Successful Simplicity

by Courtney Roush

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


Company Profile

Founded: 2008
Headquarters: Houston, Texas
Executives: Mark and Tracy Jarvis
Products: Health and wellness


Mark and Tracy JarvisMark and Tracy Jarvis

After a rocky start, Zurvita chose the road less traveled—and built a salesforce determined to make the world a healthier place.

Though Houston-based direct seller Zurvita originally launched in 2008 as a service business with everything from cell and video phones to tech support, electricity and gas, the company arrived on the wellness scene in 2011. It was then that Zurvita introduced a suite of powerhouse products that, above all, were designed to simplify the pursuit of wellness. The company’s growth since then has been nothing short of spectacular. Annual revenue grew from $3.6 million in 2011 to $15 million in 2012 and $63 million in 2013. Revenue for 2014 is expected to fall between $80 million and $90 million. The company of 55 employees, with manufacturing operations in Dallas and Phoenix, has spent the last year greatly enhancing its information technology infrastructure to be able to support that incredible growth, and better serve the 30,000-plus independent consultants who represent the Zurvita brand.

Currently, the Zurvita independent salesforce is concentrated in the United States and Canada, primarily in small towns. According to Zurvita leadership, that surprising phenomenon is likely due to the fact that word-of-mouth travels faster in places like McAllister, Oklahoma, one of the most successful Zurvita towns, where you’ll hear the stories of farmers-turned-ambassadors (currently the highest level of the independent salesforce). And while Zurvita is working to spread the word of those powerful testimonials into larger North American cities, the company also just celebrated its expansion into five new international markets on July 1, 2014. For a direct seller that’s still a relatively new kid on the block, these milestones are impressive, indeed.


“When you give people something that changes their lives in a tangible way, they’re going to stick with you.”
—Mark Jarvis, Co-Founder, Co-CEO and President


During the early years, however, the company’s own journey to wellness was challenged with more than a few hurdles and a major detour, all of which make its present success perhaps that much more remarkable. This company is unrecognizable from where it was just six years ago.

When Zurvita launched in 2008, the company’s co-founders, Mark and Tracy Jarvis, were already power players in direct selling, having achieved seven-figure success as distributors with another direct seller. They’d taken an enormous leap of faith to walk away and attempt to build a company from the ground up, but they considered it a calling to start a direct selling business based on philosophical principles they shared: faith, humble leadership and plenty of opportunities for “wins” at every level.

But the maiden voyage wasn’t smooth sailing. Serving as an online shopping mall of sorts, “we were an unfocused, struggling company,” says Mark Jarvis, who also serves as Co-CEO and President. After losing an average of $300,000 a month during its first 42 months, it was time for the fledgling direct seller to make a radical change; the “all things to all people” approach simply wasn’t working. “By 2011, we were looking for an identity,” Mark says. “We made the decision to regroup and start over again with a single focus.”

Why wellness? Mark’s wife, Tracy, had always had a passion for the subject, but the choice was based more on the profound and tangible impact the couple knew that good health could have on people’s lives—and the power that such transformations have to influence others. “When you give people something that changes their lives in a tangible way, they’re going to stick with you,” Mark says.

Make no mistake: The transition from 11 products to one was anything but easy. “It was a courageous move on our part,” says Co-CEO Jay Shafer. Inspired by the book Good to Great by Jim Collins—who stated that behind every successful company was the pivotal decision to take a bold risk—the company reinvented itself. Quite telling was the fact that “our consultants in the field respected our decision to streamline and stayed with us,” Jay says.


One of the most interesting aspects of this company’s story is that its fastest-growing demographic comes from small-town America.


With that in mind, after extensive collaboration with scientists, physicians and researchers, the company launched Zeal Wellness, its flagship product, in 2011. Designed as an all-in-one formula of whole-food concentrates in a powder to be mixed with water or juice, Zeal is intended to deliver the body’s daily nutritional needs, promoting optimal health, a strong immune system and enhanced energy stores. Calling those days back in 2011 “a combination of faith and chaos,” though it wasn’t developed as a weight-loss product per se, Zeal Wellness was providing just that result for some, along with increased energy and, quite simply, a zest for life. Corporate leadership believed not just in the integrity of the product but also in the bang for the buck. “Above all, we wanted value for the customer,” Jay adds. “I don’t believe you can find a product that delivers what we do for less than twice the price.”

Zurvita later added three additional products: Zeal Advanced Formula Protein Shakes; the herbal and probiotic Zeal Cleanse for digestion; and a thermogenic fat burner, Zeal Burn. Consumers may purchase all four products bundled as the Zeal Weight Management Program. Those who want an extra shot of motivation during the program have the option to participate in the Zeal for Life Challenge. This support group of sorts includes regular conference calls on a variety of topics that, collectively, promote a holistic approach to wellness—one that extends far beyond mere numbers on the scale.

Product convenience is of paramount importance to the company. Every Zurvita product was designed to offer no-hassle, easy-to-take-and-share nutrition. Having witnessed the company’s exponential growth after streamlining its product line from 11 to just one, the Jarvises and Jay Shafer were committed to promoting a simple message everyone could understand: simple, convenient, economical.

One of the most interesting aspects of this company’s story is that its fastest-growing demographic comes from small-town America. “Zeal Wellness has had almost an immediate impact in these smaller towns,” Jay says. “I would love to say that was our strategy, but it wasn’t—it just happened.”


Annual revenue grew from $3.6 million in 2011 to $15 million in 2012 and $63 million in 2013. Revenue for 2014 is expected to fall between $80 million and $90 million.


Even while Zurvita embraces its small-town growth, however, company leadership is thinking beyond borders. Effective July 1, Zurvita entered the Dominican Republic, United Kingdom, Hong Kong, Australia and Singapore. Corporate team members have partnered with Zurvita ambassadors (independent distributors who have achieved the highest level of success in the salesforce) to gain traction in each of these markets.

A new representative can start her Zurvita business as a sales consultant for a minimal amount, then move up to the managing consultant level after adding her first three new team members. From there, a managing consultant can progress to the senior, regional and executive consultant levels, then national and presidential director levels, followed by ambassador. The pinnacle of success is the level of crown ambassador, which takes five ambassador organizations to reach. Although nobody’s reached it yet, Mark estimates it to be just a matter of time.

Zurvita has embraced a grassroots approach to its growth strategy, entering each market slowly, deliberately, and with one product—Zeal Wellness. Then the company introduces additional products after it has established a loyal following in that market. “There’s no fanfare at the beginning,” Mark says. “We just get people on the product. It’s a conservative approach.”


Based on the philosophy “The higher you climb, the more you serve,” the company maintains an eye on succession within the independent salesforce, teaching Zurvita ambassadors to raise up their replacements.


‘Now’ Money

The company’s training and educational initiatives are based on helping new consultants to hit the ground running, before the dust can settle, so to speak.

The Zurvita Success System is designed to teach consultants how to achieve a quick win—earning a bonus during their first 30 days in business. During their second month in business, they’re shown how to repeat those earnings—and establish a success story as early as possible that they can share confidently and enthusiastically with others. Monthly promotions and contests are designed to encourage the maintenance of that early momentum. One such promotion is “Destination Success,” in which all consultants who move up in rank qualify for a cruise.

Zurvita’s high performers also may qualify to earn the use of cars; the company’s options include Mercedes, Cadillac and BMW, giving prospective and new team members a glimpse of the potential of this business opportunity.

Zurvita ranked No. 100 on the 2014 DSN Global 100 list.

Technology Boost

To better serve its consultants and support the company’s growth, Zurvita began developing a new IT infrastructure last year. Now equipped with more data and flexibility, plans are underway for the company to introduce additional technological tools that will help develop consultants’ business acumen and product knowledge and, ultimately, drive additional recruitment. In the meantime, consultants take advantage of company-provided, personalized websites, where their customers can shop around the clock. Some 50,000 people have liked the company’s Facebook page, where the news feed contains pointers for health and wellness and consultants relay their personal success stories.

Zurvita utilizes SMS technology to send a quick and easy offer that consultants can share with potential team members. After texting “Do you have a minute?” to their prospects, consultants text an informational video link to those who agree. The video includes the opportunity for prospects to try a Zurvita product sample pack. The intent is to blend the convenience of technology and the personal, grassroots approach for which Zurvita has become known. No matter how many technological offerings it rolls out, the company remains mindful of the fact that in many of its most successful markets, parties, personal testimonials and individualized service will never go out of style.


Zurvita’s leadership team, co-founders Tracy and Mark Jarvis and co-CEO Jay Shafer, shifted the company’s focus from services to wellness products because of the tangible impact good health could have on people’s lives.

Celebrating Wins at Every Level

The spotlight is big enough for everyone at Zurvita events. “You don’t see the same people on stage at all of our events. We showcase the next man up, so to speak,” Mark says. When you consider that Zurvita’s typical consultant has had no prior experience in direct selling before starting a Zurvita business, each win is justifiably reason to celebrate. The company strives to help new consultants realize their first win right out of the starting gate—and that tangible success can empower them toward a succession of more wins.

“Our job is really to build relationships with up-and-comers,” says Tracy. “We pull them in and make them feel totally connected to the company. We just love on these people and make them feel appreciated. It keeps people engaged and moving forward.” In fact, corporate leadership is so committed to empowering “the next man up,” they join Zurvita sales support staff to work the phones until midnight during every month-end close, reaching out to representatives who are on the cusp of promotion and offering that extra shot of encouragement.

Based on the philosophy “The higher you climb, the more you serve,” the company maintains an eye on succession within the independent salesforce, teaching Zurvita ambassadors to raise up their replacements. “We’re replacing our army, so to speak,” Jay says.



Zurvita employees and consultants volunteer to build water wells in Nicaragua.


Giving to Others


Zurvita’s corporate social responsibility initiatives are relatively recent, having spent its first few years as a struggling company in search of an identity. Now beginning to reap the rewards of its hard-fought success, Zurvita is in a place to share with others. In January 2014, employees and independent salesforce members ventured on a mission trip to Nicaragua to build two water wells—an experience they’ll repeat in Nicaragua in January 2015 under the name of “Zeal for Life.” On Aug. 23, 2014, Zurvita kicked off its “Feed 500” program, which challenges employees and independent salesforce members to feed at least 500 hungry people in 24 hours. During the inaugural event in Houston, volunteers packed lunches and delivered them everywhere they identified need, whether it was a homeless man on the street or an inner-city homeless shelter. It’s an experience Zurvita plans to replicate each month in various locations throughout the United States.

Three years after relaunching on a platform of wellness, the company is reaping the rewards of its deliberate, strategic approach to market expansion and brand marketing. Whether the results are seen in Zurvita’s revenue—potentially reaching $90 million for 2014—growth of its 30,000-plus independent consultants through a small-town network, or expansion already into five new international markets, the company plans to stay around for the long term, bringing wealth and wellness to an eager audience.

October 01, 2014

Cover Story

Billion Dollar Markets

by Andrea Tortora

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


Direct selling is an industry proving its mettle as it prepares to take advantage of major growth opportunities fueled by technology, increased entrepreneurial support and the new emerging market consumer.

Global estimated retail sales topped US$178 billion in 2013, up 8.1 percent from 2012, according to the most recent data from the World Federation of Direct Selling Associations (WFDSA). The worldwide salesforce also grew, up 7.2 percent to 96 million independent contractors. Both are record numbers.

In 2013 there were 23 countries with annual retail sales above $1 billion. That group accounts for 93 percent of global sales. Of special note is the industry’s 6.8 percent three-year cumulative growth rate (CAGR). The figures reinforce direct selling’s strength and show its potential, says Alessandro Carlucci, CEO of Natura Cosméticos and Chairman of the WFDSA. “The opportunity this industry has to really be even more powerful is in taking advantage of the fact that we are living in a moment in our society when technology is reinforcing relationships and allowing us to do more and better business,” Carlucci says.

STRONG SUSTAINABLE GROWTH

This most recent data clearly illustrates direct selling’s sustainable growth—especially in times of economic recovery and improved governmental policies to support entrepreneurship. Among the direct selling associations reporting their data to the WFDSA Research Committee, about three-fourths of the markets show solid, sustained growth in the three-year compound annual growth rate.

Here’s why that is important: “If the year-over-year percent change represents the snapshot, then the three-year CAGR represents the video and shows the long-term change or the trend. The sustained growth of direct selling is shown in a positive CAGR,” says Amway’s Judy Jones, Chairman of the WFDSA Global Research Committee.

Data is reported using constant 2013 dollars, to remove currency fluctuations from the equation. As more companies participate in sharing sales data with each country’s direct selling association (DSA), the entire industry begins to gain actionable knowledge it can use to enable sellers to better serve customers.


Global estimated retail sales topped US$178 billion in 2013, up 8.1 percent from 2012, according to the most recent data from the World Federation of Direct Selling Associations (WFDSA).


The sales of the 23 billion-dollar markets in 2013 are familiar to those who follow this annual ranking. The top five countries account for 60 percent of direct selling’s global sales. All but one report a positive CAGR:

1.  United States, 4.6 percent
2.  China, 23.3 percent
3.  Japan, -4.4 percent
4.  Korea, 8.0 percent
5.  Brazil, 8.6 percent

China moved into the No. 2 spot for 2013. If the current rates of growth in the United States and China remain steady, China could become the No. 1 direct selling market in the next year or two.

Interestingly, the billion-dollar markets that make up the bottom five show tremendous cumulative growth, particularly in emerging markets:

19.  Australia, 2.3 percent
20.  Venezuela, 15.7 percent
21.  India, 20.0 percent
22.  Philippines, 17.8 percent
23.  Indonesia, 12.0 percent


This most recent data clearly illustrates direct selling’s sustainable growth—especially in times of economic recovery and improved governmental policies to support entrepreneurship.


The numbers reinforce trends seen in the past two years. Direct selling is growing rapidly in the Asia Pacific region and Africa—dubbed the “new frontier” by Carlucci. Africa posted just over 9 percent year-over-year sales change for 2013, trailing only Asia Pacific at 12.6 percent.

“Africa is a place where everyone should put a seat now, because in 15 years it will be very relevant,” Carlucci says.

Following closely is the Central and South American region, which also posted just over a 9 percent year-over-year sales change. Six Latin American countries—Brazil, Mexico, Colombia, Argentina, Peru and Venezuela—are billion-dollar markets. More multinational companies are starting to do business in Central and South America, where consumers embrace direct selling.

POWERFUL NEW MARKETS

The desire to improve one’s socioeconomic standing remains strong in emerging markets, which translates to excellent growth potential for direct selling. In fact, seven of the billion-dollar markets with double-digit cumulative growth rates are emerging markets, according to the WFDSA data:

  • Argentina, 28.1 percent
  • China, 23.3 percent
  • India, 20.0 percent
  • Philippines, 17.8 percent
  • Venezuela, 15.7 percent
  • Indonesia, 12.0 percent
  • Colombia, 11.6 percent

Direct selling is a very relevant marketing and sales model for emerging markets, says Derrick Irwin, Portfolio Manager for the Wells Fargo Advantage Emerging Markets Equity Fund. In many of these countries, the retail industry is not fully developed and companies cannot put products on a Wal-Mart shelf. “There is also skepticism among consumers about counterfeiting and quality products,” Irwin says. “If items are being sold by someone they trust, it is powerful. The opportunities are very, very good.”

Companies like Avon know how important international markets are for growth. The global beauty direct seller derives 85 percent of its business outside the U.S., and 75 percent of revenues come from emerging markets, says CEO Sheri McCoy. Avon’s priority? Growing its top markets, which include: Brazil, United States, Mexico, Russia, Central Europe, Venezuela, Argentina, Colombia, United Kingdom, Philippines, Turkey and South Africa.

China is also a huge market with infinite business opportunities. Leo Zhou, Deputy Director of Media Affairs at Mary Kay China, believes direct selling is a perfect match for China’s huge population, and that the interpersonal interaction at the industry’s core is quite effective in low-tier cities. He says, “It ensures that the direct selling industry could get into contact with female consumers in a faster and more precise way, thus promoting sales growth.”

Despite being a more mature market for the industry, Latin America is still a developing region with an entrepreneurial middle class that is seeking ways to maximize individual and household incomes, as demonstrated by the number of countries represented on the list, and growing activities in even more. Miguel Francisco Arismendi, Amway’s Director General for the Andean area, based in Bogota, Colombia, says, “There is no doubt that direct selling provides opportunity.”


“Africa is a place where everyone should put a seat now, because in 15 years it will be very relevant.”
—Alessandro Carlucci, CEO of Natura Cosméticos and Chairman of the WFDSA


EMERGING MARKET CONSUMERS

The world’s new consumers are a diverse group. Some are affluent and ready to spend their newly robust income on fulfilling their dreams and ensuring a better life for their children. Others are just beginning to realize their buying potential as they are exposed to the wealth of available products. The new middle class in Indonesia, India, Nigeria, Ghana and Kenya are confident consumers who plan to buy more, save more and invest in education, according to research from Standard Chartered, a London-based international bank.

These emerging consumers have a wide range of incomes and a wide range of desires to follow, including such things as an appetite to travel and willingness to invest in a new car, and some can even consider buying luxury goods. In less developed markets, currency fluctuations and commodity prices impact the consumer spend. Wells Fargo’s Irwin says, “The problem in core countries is that so much of the family budget goes to food, so if those prices fluctuate that squeezes the budget for other things.”

Whereas an American will generally buy shampoo no matter what, in countries like India it may not be a regular purchase. To get around this hard economic truth, companies like Hindustan Unilever Limited offer single-use package sizes for the price of a rupee or two (2-4 US cents). “It takes creative marketing and strategies to really access these markets,” Irwin says.

Another example: In China, direct selling successfully advances the development of consumers’ personal-care habits in low-tier cities and stimulates their willingness to spend more on premium products. Consumers in fourth-tier cities spend an average of 220 yuan (about US$38) each year per capita at cosmetics stores, whereas in the direct selling channel, consumers spend 540 yuan (about US$88) each year. Mary Kay’s Zhou says, “This fully demonstrates the consumption potential of third-tier and below cities.”


The new middle class in Indonesia, India, Nigeria, Ghana and Kenya are confident consumers who plan to buy more, save more and invest in education, according to research from Standard Chartered.


As emerging market consumers flex their collective spending muscles, a preference for local or domestically based brands is becoming evident. In the past 20 years, multinational brands dominated consumer brand preferences. As locally based companies achieve scale and develop their own brand strength, they are beginning to compete with multinationals. Irwin says, “Consumers are more open to buying local brands to support local businesses and show their pride in the local market.”

In China, where consumers have long aspired to acquire products with names like Gucci, Nike and other big Western brands, local brands are gaining market share as they fill a niche in the middle ground between the luxury and inexpensive brands. China-based Belle International is one of them. The company makes mid-range women’s shoes and is like the Nine West of China, according to Irwin.

In India, the domestic Godrej Consumer Products now claims more than $1 billion in revenue, taking a stab at the more established Hindustan Unilever. “They are getting to scale, and they are creating disruptions,” says Irwin. This bodes well for direct sellers, who build their business on micro-local enterprises and interpersonal connections.

EMPOWERING ENTREPRENEURS

At the heart of direct selling is the ability to offer people the chance to feel empowered, to take control of their lives and to add value to society. This fuels entrepreneurship, self-employment and microenterprises. Research shows that such ventures strengthen a country’s economy.

Alan Finkelstein Shapiro, a researcher at the Universidad de los Andes in Colombia, finds that “economies with larger self- employment shares exhibit faster recoveries following a negative economy-wide productivity shock.”

The entrepreneurial aspects of direct selling empower women and can be attractive to those under age 35 who more often want to be their own boss while also helping others. Sandra Whittle, Managing Director for Partylite U.K. & Ireland, says a favorite quote she shares with those new to direct selling is, “If at first you do succeed—try to cover your amazement.”

Whittle says consultants must be willing to put in the work because experience cannot be bought, and it is particularly important to earn the respect of colleagues and of the field.

Just as important is harnessing the excitement of those who want to be sales leaders, says Andrea Slater, with Avon U.K. “We need to ensure that we capture that enthusiasm within a specific timeframe,” she says. “Then, we need to fan the flames and keep them motivated, engaged and rewarded.”

Mary Kay’s Zhou says that in countries like China, business startups and entrepreneurship are becoming easier to navigate on the policy front, as well as becoming more accepted forms of livelihood for the younger generation. He continues, “Direct selling can help them to fulfill their dream of initiating businesses, and to gain earning opportunities and freedom with the thinking approach and behavioral model of their own characteristics, which constitutes a career development mode catering to the ideal of modern youths.”

For women, in particular, direct selling is an opportunity to contribute money to the household and develop a degree of independence. This is especially true in rural areas and farming communities. Irwin cites Hindustan Unilever Limited as an example. The Mumbai, India-based consumer goods firm employs 65,000 women through its Shakti direct selling initiative. These women sell products in their villages, giving Hindustan Unilever and the women themselves a huge economic opportunity they wouldn’t have otherwise.


Alan Finkelstein Shapiro, a researcher at the Universidad de los Andes in Colombia, finds that “economies with larger self-employment shares exhibit faster recoveries following a negative economy-wide productivity shock.”


THE YOUNGER GENERATION

As an industry, direct selling companies recognize the importance of recruiting young people under age 35 to become consultants as well as consumers of its products. Doing this means using a technology-rich approach and being socially responsible, says Amway’s Arismendi.

In Latin America, direct selling is equipping consultants with social media tools that enhance day-to-day communications. Amway is aggressive in studying tools that promote the use of technology in the field. “This will not replace the personal touch, but it will complement it,” Arismendi says. “Direct communication and social networking can be much more effective than conventional sales and retail.”


SPOTLIGHT ON REGIONAL MARKETS

UNITED STATES

The No. 1 market for direct selling saw 2013 retail sales of $32.7 billion, up 3.3 percent from 2012. Between 2010 and 2013, the compound annual growth rate was 4.6 percent in the country. The U.S. accounts for 18 percent of worldwide direct selling sales, generating about $1 for every $6 retail dollars globally.

The U.S. salesforce also grew 5.7 percent, to 16.8 million people, which is a record high. The most prevalent sales method is face-to-face, with 70 percent of consultants using this avenue, according to the U.S. DSA.

The product groups with the strongest percent of market share are wellness and services, making up 28.5 percent and 22.9 percent of sales, respectively. New segments are also using direct selling, such as energy, says U.S. DSA President Joseph Mariano. “Direct selling is a smart, go-to-market strategy for many products, especially those that benefit from explanation or demonstration. In the case of utilities, most Americans aren’t used to having a choice in their provider, so they benefit from guidance to make an informed decision.”


“Direct selling is a smart, go-to-market strategy for many products, especially those that benefit from explanation or demonstration.”
—Joseph Mariano, President, U.S. DSA


CHINA

Given current rates of growth, China will most likely surpass the U.S. in market size for direct selling, becoming the industry’s No. 1 market. Its 2013 retail sales were $27.3 billion, up an astounding 41 percent from 2012. China also enjoys the industry’s highest cumulative growth rate at 23.3 percent.

“With the acceleration of the global economic integration progress, China promises tremendous market potential as the second largest economy worldwide today,” says Mary Kay’s Zhou. U.S. direct selling giants Amway, Mary Kay and Nu Skin are among the largest companies operating in China. Several domestic Chinese direct selling enterprises also are a noticeable force. Competition across the country is moderate, with 44 licensed enterprises.

Cosmetics consumption keeps growing at an average annual growth rate of 15 percent, despite an overall economic slowdown. China trailed only the U.S. and Japan in consumer cosmetics spending in 2012. Women play a key role in those numbers and are increasingly active in economic consumerism. “As the number of employed women increases and their status in social and economic development rises steadily, their role in consumption is also becoming more prominent,” Zhou says.

Chinese women now control 60 percent of domestic consumption and make 77.5 percent of household purchase decisions. This far exceeds the purchasing power of men and children.

As China grows and becomes a more relevant market, the WFDSA’s Carlucci believes that the industry must put more energy into “understanding how we communicate and maintain the fundamentals of the industry” in a way that can be understood regardless of the country.


“…The recent statement from Esther McVey, Minister for Employment, saying, ‘Being your own boss is as impressive as a degree,’ appears to give more credibility to self-employment than ever before.”
—Lynda Mills, Director General, U.K. DSA


EUROPE

Direct selling continues to grow at a steady pace in Europe. Retail sales topped $31.6 billion in 2013, and 12.7 million people work as independent consultants across Western, Central and Eastern Europe. “Europeans have embraced the entrepreneurial spirit and increasingly recognize direct selling as an appealing (and sometimes preferable) alternative to a traditional job,” says Marinda Chaplin, Vice President at SUCCESS Partners Europe.

As recovery continues from the economic recession, the U.K. is seeing more encouraging trends, especially in the area of self-employment. Lynda Mills, Director General of the U.K. DSA, shares that recent information from the Office for National Statistics reveals self-employment is at its highest level in 40 years with 4.5 million people. “This, coupled with the recent statement from Esther McVey, Minister for Employment, saying, ‘Being your own boss is as impressive as a degree,’ appears to give more credibility to self-employment than ever before,” Mills says. 

Mills reports that during the recent recessionary years, direct selling in the U.K. has seen year-on-year growth in a variety of demographics, and some direct sales companies are enjoying double-digit growth. With young people being notoriously risk adverse, direct selling is an ideal option for people in many age ranges and from varied backgrounds.

“We have seen more young people between 18 and 25 working in direct selling with 29 percent (75,000) of U.K. direct sellers under age 25,” Mills says. On average, 38 percent of direct sellers are over age 50, representing a rise of more than 32,000 people since 2011. 

Direct selling is also increasingly appealing to a multi-cultural audience. In a recent survey of its members, the U.K. DSA discovered that 30 percent of direct sellers (120,000 people) in the U.K. are non-British. DSA member companies attribute this to a rise in interest of people from places like Asia and Eastern Europe, according to Mills. 

People in the U.K. are turning to direct selling as a real alternative to traditional employment, with 68,000 direct sellers (17 percent) working full-time hours (more than 30 hours a week). This is up 20,000 from 12 percent in 2011. “Direct selling here in the U.K. really has entered the mainstream,” Mills says.

One factor in the sustainability of the industry is the increasingly digital nature of the world economy. Technology enhances the core aspect of direct selling. Embracing the digital age can ignite new growth in mature markets like the United Kingdom, which enjoys a 10.4 percent three-year compound annual growth rate and reported $3.3 billion in 2013 retail sales.

Germany posted a three-year CAGR of 5.8 percent. The direct selling model enjoys a positive image in the country, says Guido Amendt, Mary Kay Germany’s Director of Marketing. He adds that a sustainable increase in purchasing power per capita offers opportunities for consumers to buy high-quality products through direct selling.

In France, direct selling continues to grow regardless of the economic climate. When it comes to increasingly competitive markets such as cosmetics and jewelry, direct selling leverages innovation as a growth solution, says Jean-Laurent Rodriguez, Director of Communication and Training for the Federation de la Vente Directe, France’s DSA. In 2013, France recorded sales of $5.3 billion. The country’s cumulative annual growth rate between 2010 and 2013 was 3.4 percent.

Continued expansion in the industry is driven by several factors. France is enjoying a growing number of new companies with new brands and new products, such as textiles, shoes, home decoration, gastronomy and health care, Rodriguez says. These companies are international and national industrial groups, medium-sized companies and startup firms. Agreements between the Federation de la Vente Directe and government ministries (higher education, national defense and public institutions) ensure that direct selling is a viable option.

AFRICA

The WFDSA’s Carlucci sees Africa as an interesting continent right now for direct selling although, currently, the only DSA exists in South Africa. South Africa’s 2013 retail sales were $720 million, and its three-year cumulative growth rate is 6.8 percent. “Direct selling is very relevant here because it is a way to be an entrepreneur, and other retail channels are not developed,” Carlucci says.

Multinational companies are taking interest in the continent, says Wells Fargo’s Irwin. That’s because it is a huge market. Irwin cites Nigeria as an example. The country is home to 180 million people and just 10 supermarkets. “The rest are local markets and product distribution via trusted networks,” Irwin says.

LATIN AMERICA

Central and South America are comprised of fast-growing countries known for their entrepreneurship culture. Ernst & Young, in its G20 Entrepreneurship Barometer 2013, ranks Argentina, Brazil and Mexico as some of the best world economies for entrepreneurs. The same can be said for the region’s direct selling prospects. The industry is well established in Latin America, where customers like to buy from people they know. Additionally, it is a market with potential because retail is not well developed in many regions.

Latin America’s direct selling billion-dollar markets are:

  • Brazil, $14.2 billion
  • Mexico, $8.1 billion
  • Colombia, $3.3 billion
  • Argentina, $1.9 billion
  • Peru, $1.9 billion
  • Venezuela, $1.4 billion

In Latin America, the “family factor” is very important and makes direct selling attractive as a self-employment option. Unlike in the U.S., children look to go to college close to home and remain with their families. Many career decisions center on one’s family, which makes direct selling attractive as a source of income in addition to traditional employment.


“Direct selling is an opportunity to work but remain close to the family and to have additional income for the needs of the family. So this makes a difference. There is flexibility and management of their own time.”
— Miguel Francisco Arismendi, Director General for the Andean area (of South America), Amway


“Direct selling is an opportunity to work but remain close to the family and to have additional income for the needs of the family,” Arismendi says. “So this makes a difference. There is flexibility and management of their own time.”

Direct selling is also becoming a full-time work option, says Pio del Castillo, Mary Kay’s Manager of Corporate Communications. Brazil ranks No. 5 among the industry’s billion-dollar markets. Direct selling retail growth in the country is related to the economic recuperation of international markets, del Castillo says. The country posted year-over-year retail sales growth of 7.2 percent, making for a three-year CAGR of 8.6 percent. The number of sellers grew as well, reaching 1.3 percent, to 4.5 million.

Brazil also boasts a diverse market with access to information. One important factor boosting direct selling in the region includes traditional retailers such as O Boticario adding direct selling to their marketing efforts. Del Castillo says, “The Brazilian economy grew only 2.3 percent in 2012, but Brazil still remains one of the most important players in the direct sales market.”

TECHNOLOGY, DATA WILL FUEL FUTURE GROWTH

Technology in all its forms is an essential ingredient to the future growth of direct selling, according to industry executives and economists. “The Internet and digital technologies, mobile devices, social media and access to more robust data will allow direct selling companies to dramatically increase the level of service they offer to their salesforce and customer base,” says Alessandro Carlucci, CEO of Natura Cosméticos and Chairman of the WFDSA.

“We will be able to (and some companies now can) know who the final customer is, what their preference is, who the distributors are and how can we help them with good CRM systems and analytics,” Carlucci says.

Better information lets consultants individualize their service and marketing approach for each customer. Instead of a mass-appeal catalog, direct sellers could offer targeted online videos in an effort to deliver the right thing for the right customer. “We can skip the segmentation phase and leap frog from a mass approach to an individual approach, thanks to technology,” Carlucci says. “To me this is a revolution.”

The ability to harness technology’s benefits leverages relationships, according to Carlucci, who adds, “These efforts should also boost direct sales in mature markets because it will present newly available services.” The consumer’s direct selling buying experience could be even better than the Internet because of the product and experience support the personal connection offers.
 
The importance of the Internet, data and mobile Internet to emerging markets cannot be overstated, according to Derrick Irwin, Portfolio Manager for the Wells Fargo Advantage Emerging Markets Equity Fund. He says, “In many places it provides the only access to media and outside data that many people have.”

Consumer company models being developed in India, China and Brazil show a massive portion of advertising spend being allocated for mobile campaigns. And the marketing method is about to explode. Smart phones and 3G networks are established in China and are just beginning to take off in Brazil and India. In Africa, says Irwin, “there is no other way to talk to people. You can go to these countries where there are the poorest of the poor, and they are using mobile phones in ways that are so creative.”

In China, mobile technology is opening new markets and acting as a catalyst for the development of logistics networks into the far corners of the country’s low-tier cities, according to Leo Zhou, Deputy Director of Media Affairs at Mary Kay China. He says, “Consumers are becoming increasingly smart and are unprecedentedly connected with multiple media, being surrounded by a diversified web of information.”

The proliferation of information across the Internet, as well as easy access to it, makes it simple for any consumer to get the information and products they need and want. The rapid expansion of China’s e-commerce network into low-tier cities caught the attention of logistics companies, who brought their services to the same areas. According to Zhou, this increases product delivery speed and lowers operational costs.

All of these technology changes amount to a modernizing of the direct selling industry in the digital age. Companies should be looking at how much they are investing now to leverage the relationships they have and how they understand consumer behavior. “There are a lot of good questions we should be able to answer, and this is the time,” Carlucci says. “In 10 to 15 years we will live in a very different world. We need to take advantage of the technological opportunities now.”

October 01, 2014

Publisher's Note

Letter from John Fleming, October 2014


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


The Billion Dollar Markets are growing! One of our most popular cover stories of the year has now moved to the month of October due to the great work being done by the Research Committee of the World Federation of Direct Selling Associations. All of their information on country results for 2013 can be reviewed on their website (www.wfdsa.org). It is always our pleasure to be able to build stories around this information with additional research, interviews and insights. We know you will enjoy our quick trip around the world to showcase the billion-dollar markets.

John FlemingSeptember was also an exciting month for those direct sellers who journeyed to Washington, D.C., to participate in the U.S. DSA’s Direct Selling Day on Capitol Hill. Over 400 independent contractors from different companies joined together as one collective body to meet with elected officials from both the House of Representatives and the Senate. It was reported to have been a great day, and DSN got the story while it was happening. Kudos to the companies that selected or invited their sales leaders to participate, as these independent direct sellers, and the stories they represent, are most important for our elected officials to hear and understand.

Most unexpectedly, as this issue went to press, we received word that Avon Products Inc. had withdrawn its membership from the U.S. Direct Selling Association, the largest and most valuable of all of the associations that work to support and lobby on behalf of the common interests of the direct selling community. Throughout the year, DSA, more than any other supportive entity, keeps boots on the ground traveling to courthouses and the offices of attorneys general near and far to ensure the direct selling way of conducting business can thrive for the benefit of over 16 million independent contractors in the U.S. as well as those across the globe. Every DSA in the world is the result of what was founded and built by the U.S. Direct Selling Association.

We do not propose to understand Avon’s action in withdrawing membership from the DSA, but we do know the decision activates questions, and those questions will be many and varied as to what the decision really means. In a very unusual move, Avon posted its decision to withdraw from the DSA on its corporate website and left more questions than solid rationale. As those in boardrooms, hallways, living rooms and kitchens discuss this company’s decision to withdraw, Avon itself continues to struggle with many things. It is our hope that this unexpected action on the part of the company’s decision makers does not become another distraction from staying focused on its own house, and creating growth again. For it is a company still responsible for supporting the women we know as Avon Representatives—the women who join because of their affiliation with a company they believe can be a catalyst to make dreams come true.

The direct selling industry continues to grow, and as mentioned in this column last month industry growth means a lot of things. It certainly means a lot of things are going well—which leads me to our 90 Days of Direct Selling Celebration, kicked off on Sept. 17. The goal of the campaign is to fuel ongoing conversations about the positive impact the direct selling community has on people and economies around the world. You can follow the 90 day celebration on all of our social media and on our website.

Which leads me to another very exciting announcement—our Harris Poll has been completed, and we will bring you the results in our November cover story. DSN commissioned Harris Poll to conduct a comprehensive survey this summer on direct selling—surveying consumers on behaviors, attitudes, satisfaction and many other important factors. We will publish the information over the next few months and think you’ll be excited about the findings.

Turn the page to learn more about our 90 Days of Direct Selling Celebration. Then move on to read more about the Billion Dollar Markets… they are growing!

“With all its sham, drudgery, and broken dreams,
it is still a beautiful world.
Be cheerful.
Strive to be happy.”
 
© Max Ehrmann 1927 from the poem, the Desiderata

Enjoy the issue!

John Fleming
Publisher and Editor in Chief

October 01, 2014

News in Brief

News in Brief, October 2014

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


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); Isagenix (No. 3764) and Stemtech International (No. 4708). The full Inc. 500 list appeared in the September 2014 issue of Inc. magazine.


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. For 2014, the company reported quarterly revenues down 3 percent to $650.0 million in the second quarter.


4Life Announces 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.

Overseen by Auburn’s Dr. Michael Roberts, Director of the Molecular and Applied Sciences Lab, the research will range from specific ingredients and how they affect physiological systems, to safety studies and new ingredient discovery. It will take place in the 58,000-square-foot, state-of-the-art kinesiology research facility that opened on Auburn’s campus last fall in Auburn, Alabama.

The Auburn partnership will support 4Life’s in-house R&D department in its commitment to innovation, substantiation and education. 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.


Herbalife, Common Threads Partner on Nutrition Curriculum

Global nutrition company Herbalife recently announced a long-term partnership with national nonprofit organization Common Threads to sponsor nutrition programs in elementary and middle schools across the country. The program gives students in over 135 schools in Illinois, Washington, D.C., California and Florida access to nutrition and cooking skills curricula.

The program is geared towards students who do not otherwise have access to well-balanced dietary options in their community or at home. The schools selected for the program are located in neighborhoods across the country that do not have access to fresh produce and other nutritious ingredients. One of the criteria for school selection is that 80 percent of the students in the school must qualify for free school lunches.

As a result of the partnership with Herbalife, Common Threads will grow its existing programs and expand into five additional Los Angeles-area schools to serve over 600 students in the first year alone. Students participating in the program will receive lessons throughout the school year in good nutrition, healthy foods from across the world, planting and harvesting from a garden to make healthy meals, and meal planning and budgeting for healthy meals with family members.

In other company news, at the upcoming Herbalife North American Innovation Conference, businesses, entrepreneurs and nutrition industry visionaries will have the opportunity to present product ideas to top Herbalife executives. The global nutrition company is scouting out novel ingredients and technologies to enhance or extend its existing product lines.

Slated for Oct. 5-6, the Innovation Conference leads up to nutrition industry expo SupplySide West. The expo is the largest gathering of its kind in the world, and this year’s event will feature more than 1,700 ingredient suppliers and finished product manufacturers.

Herbalife is partnering with Nutrition Business Advisors and Nutrition Capital Network to present the North American Innovation Conference, a format launched about three years ago. The company hosts four to five conferences annually, each in a different region of the world. Applicants undergo screening by outside facilitator Nutrition Capital Network and the internal Herbalife team before presenting their ideas.


Ambit Ranks Highest in Customer Satisfaction

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.


Stream Energy CFO Receives Women in Business Award

The Dallas Business Journal has honored Stream Energy Chief Financial Officer Renée Hornbaker as one of its 2014 Women in Business.

After starting her career as a public accountant—and one of just two women at her firm—Hornbaker soon made the switch to corporate accounting, earning senior positions at Flowserve Corp., Shared Technologies Inc., Deloitte & Touche and the Phelps Dodge Corp. As CFO at Stream Energy, Hornbaker heads up a finance operation that reported $867 million in revenue last year.

Stream Energy markets residential and commercial energy services through its wholly owned direct selling subsidiary, Ignite. Ignite Associates number more than 250,000 across six states and the District of Columbia.


Epicure Launches Good Food. Real Fast. Movement

Canadian food and cookware company Epicure recently launched the 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. For each person who joins the movement, Epicure has pledged to donate $1 to the Epicure Foundation, which supports grassroots food initiatives across Canada.

October 01, 2014

Executive Announcements

Executive Announcements, October 2014


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


Herbalife Ltd.

Alan L. HoffmanAlan L. Hoffman

Global nutrition company Herbalife Ltd. announced that it has appointed Alan L. Hoffman to the newly established role of Executive Vice President of Global Corporate Affairs, reporting to Michael O. Johnson, Herbalife’s Chairman and CEO. Hoffman will lead public policy, corporate communications, government affairs, community relations and philanthropy.

Hoffman brings over 20 years of public policy, communications and government affairs experience to the corporate affairs role. Previously, he served as the Senior Vice President for Global Public Policy at PepsiCo, where he oversaw policy development, external relations and government relations. Before joining PepsiCo, he served as the Deputy Chief of Staff to Vice President Joseph Biden and Deputy Assistant to President Barack Obama. Hoffman was also an attorney at the U.S. Department of Justice in Washington, D.C., and was an Assistant U.S. Attorney in Philadelphia.

In addition, Herbalife announced that Barbara Henderson will retire as its Senior Vice President of Global Corporate Communications. Henderson will assist with the transition and will remain President of the Herbalife Family Foundation.

“We are thrilled to welcome Alan to the Herbalife team,” said Johnson. “He brings an unparalleled level of experience to our senior team, and we are confident that he has the experience and credentials to help us powerfully communicate the value Herbalife brings to our consumers, members, shareholders and communities.”


Blyth Inc.

Jim WilliamsJim Williams

Blyth Inc., a direct-to-consumer company and designer and marketer of candles and accessories for the home, announced the election of Jim Williams, President, CEO and Managing Partner of Karlen Williams Graybill Advertising Inc., to its board of directors. Also Neal I. Goldman has retired from its board.

Williams will serve on the Audit Committee. He has been chief executive at Karlen Williams Graybill Advertising Inc. since 1998. In 1993, he bought an equity stake in Karlen Advertising and since taking ownership, Williams has grown KWG into one of the country’s largest independent, full-service marketing consultancies. Prior to joining Karlen, Williams served as Associate Editor of Leaders magazine.

Williams owns controlling interest in I.M Productions and the communications business Better Brand Initiatives, licensor of FYI Before You Buy™. He is a member of the Ad Club of New York and the One Club. He sits on Gerson Lehrman’s Council of Advisors and is a board member and committee chair of The Cathedral School of St. John the Divine.

“We are delighted to welcome Jim to the board,” said Robert B. Goergen Jr., Blyth’s CEO. “Jim brings leadership, strategy and a strong knowledge of marketing, social media and global consumer insight. I look forward to the new perspective that Jim brings to the company.”

Goldman, who is a member of the Compensation and the Nominating and Corporate Governance Committees, has been a director since 1991. He is the President of Goldman Capital Management Inc., an investment advisory firm.


Mary Kay Inc.

Crayton W. WebbCrayton W. Webb

Mary Kay Inc., a top beauty brand and direct seller in more than 35 markets around the world, announced the promotion of Crayton W. Webb to Vice President of Corporate Communications and Corporate Social Responsibility.

In this position, Webb will continue to oversee global media relations, reputation management and public relations initiatives for the company’s more than 35 international subsidiaries. Webb also leads Mary Kay’s corporate social responsibility efforts, Pink Changing Lives®, which focuses on transforming, inspiring and empowering women around the globe through community involvement, philanthropy and volunteerism from its employees and consultants.

Webb joined the company in 2005 as Manager of Government Relations before his promotion to Director of Corporate Communications and Corporate Social Responsibility in 2008.

“[Crayton] walks the talk as it relates to community involvement, and we know his counsel will continue to be invaluable as we grow Mary Kay’s presence and continue to enrich the lives of women around the world,” said Nathan Moore, Chief Legal Officer and Secretary for Mary Kay Inc.

Prior to joining Mary Kay, Webb was Chief of Staff for Dallas Mayor Laura Miller and Director of Communications for the United Way of Metropolitan Dallas.


Origami Owl

Sandy SpielmakerSandy Spielmaker

Origami Owl has announced that Sandy Spielmaker has joined the jewelry company as Chief Sales Officer. Spielmaker has more than 30 years of experience in sales, marketing and general management, previously serving as Vice President of Sales at a top direct seller, both globally and in the U.S. She has also served as President and General Manager within the Watercraft division of Johnson Outdoors, as well as a variety of sales and marketing roles at SC Johnson.

Spielmaker combines her experience within direct selling and consumer packaged goods to drive innovative solutions across business insights and development, training and education, key account management, compensation, recognition and leader development.


ForeverGreen Worldwide Corp.

Michelle LeSueurMichelle LeSueur

ForeverGreen Worldwide Corp., a provider of nutritional foods and other healthy products, announced the appointment of industry expert Blake Schroeder as President of ForeverGreen Europe, and Michelle LeSueur as the Director of Product Education and Development.

Schroeder brings a wealth of experience and knowledge from the direct selling industry to ForeverGreen, and for the past seven years he has served in various positions at a major direct seller. Schroeder acted as legal counsel for a short time, but was mostly involved in and responsible for growing several international businesses. During that time he lived both in Israel and Portugal.

“Blake Schroeder is the right choice at the right time to take our European operations to the next level,” said Brenda Huang, President of ForeverGreen International. “As the second-fastest-growing market behind the U.S., we’re seeing explosive growth in both sales and new leadership in the region. Europe is strategically very important to our expansion strategy, and we’re delighted to welcome Blake to the team.”

LeSueur comes to ForeverGreen to educate and train current and new distributors and customers about ForeverGreen’s product line. She has worked with many individuals with a wide variety of health issues, including weight management issues, allergies, hormonal imbalances and autoimmune diseases. She is a Certified Nutritional Counselor, Certified Sports Nutritionist and Certified Personal Trainer. LeSueur has a Neuro-Endocrine & Anti-Aging Regulation Certification as well as several other certifications in related fields.

She has served as Vice President of Health and Nutrition, Director of Health and Nutrition and Director of Product Education and Development at multiple companies, where her responsibilities included educating, formulating and manufacturing products. She is also a published author and an experienced public speaker. LeSueur will help ForeverGreen continue to commercialize new and innovative product lines and provide customers and distributors with the knowledge and benefits of each product.


Zija International

Dave AlmarinezDave Almarinez

Zija International, a health and wellness company dedicated to living “Life Unlimited,” announced that Dave Almarinez has been named its new Managing Director for the Philippines, Australia and New Zealand. Currently, his role will be to effectively expand Zija’s products and business opportunity across Asia, the Pacific and other international markets.

With an education in global strategic management and applied business economics, Almarinez also has 17 years of network marketing experience. He is very active in civic affairs in his home province of Laguna, Philippines, where he was a publicly elected board member of the Provincial Government.


Initials Inc.

Initials Inc. announced that Laurie Langill has joined the company as Vice President of Training & Field Development, and Cindy Carpenter has joined as Field Development Director. Both Langill and Carpenter come to Initials Inc. with a rich background in direct sales and understand the industry from the field and corporate viewpoints.

Laurie LangillLaurie Langill
Cindy CarpenterCindy Carpenter

As a member of the executive team, Langill will provide strategic direction for all training and field development initiatives. She has more than 30 years of experience in direct selling.

In her role as Field Development Director, Carpenter will work closely with top field directors and leaders to enhance the overall nationwide field growth and individual team development. She has been in direct sales for 19 years.

Launched in 2005, Initials Inc. is a national direct selling company whose core belief is “There’s only one you!” This philosophy is brought to life by the thousands of independent Creative Partners (consultants) nationwide who sell personalized fashion handbags, accessories, jewelry and home organization products through home parties and online.


Tupperware Brands Corp.

Tupperware Brands Corp. announced that Gavin D. Little was promoted to Group President, Tupperware Europe, Africa and the Middle East, succeeding R. Glenn Drake who will retire at the end of 2014 after 44 years with the company.

Little, currently Senior Area Vice President, Central Europe and Strategy, has developed extensive knowledge of Tupperware Brands’ business through interaction with all of its regions. After a comprehensive orientation in Asia, Latin America and Europe, he became the head of Marketing and Strategy for Tupperware Brands. Since January 2014 he has been leading a portfolio of units in Europe.

Little’s background includes 26 years of startup, turnaround and growth experience in many markets across Europe, Asia and North America. He has held senior marketing and general management roles with ICI Paints, Johnson & Johnson, United International Pictures, British American Tobacco (BAT), Reynolds American and Mattel Corp.

“I’m extremely proud to promote Gavin to Group President,” said Rick Goings, Chairman and CEO. “We are confident that Gavin will be able to build on the momentum of the growing units in our Europe, Africa and Middle East portfolio, while also making the necessary changes and leveraging their results in those business units in which improvement is essential.”


Younique

Brian GillBrian Gill

Younique, a cosmetics direct sales company dedicated to motivating and empowering women, announced the addition of Brian Gill as the company’s new Executive Vice President of Marketing.

Gill leads the marketing team responsible for brand positioning, corporate and marketing communications, public relations and digital marketing. Younique Co-Founder Melanie Huscroft previously functioned in this role, as well as product development and sales. Huscroft is now Chief Product Officer and Chief Sales Officer, in addition to her role as co-founder.

“[Brian’s] industry knowledge and marketing experience more than qualifies him to lead our marketing efforts,” said Huscroft. “I can speak to his character and creativity, and have full confidence in his abilities.” 

Gill joins the Younique family with more than 14 years’ experience in direct selling and marketing. Prior to joining Younique, Gill was vice president of marketing communications at another direct seller, where he was responsible for global marketing communication, content marketing, public relations and social media.

Younique markets and sells almost exclusively through the use of social media. Founded in September 2012, the company’s product philosophy of Nature. Love. Science. ensures that its line of cosmetics and skincare products are found at the intersection of the best that science and nature have to offer.


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

October 01, 2014

Financial News

Financial News, October 2014

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


Nu Skin Enterprises Inc.

Nu Skin Enterprises Inc. (NUS—NYSE) announced second quarter revenue of $650.0 million, a 3 percent decline over the prior-year period. Revenue was negatively impacted 2 percent by foreign currency fluctuations. Earnings per share for the quarter were 32 cents, versus $1.22 in the prior-year period and were impacted by a $50 million write-down of Mainland China inventory, and a $25 million charge due to a transition to the SICAD II exchange rate in Venezuela. Excluding these items, earnings per share would have been $1.13 per share for the second quarter.

The company recently restated its consolidated financial statements for the quarter ended March 31, 2014, to include a $21 million charge to Other Income (Expense) to reflect a hyperinflationary adjustment for Venezuela, and $7 million of income related to a tax rebate for the company’s China headquarters. These changes, net of tax, negatively impacted net income for the three-month period ended March 31, 2014, by approximately $9.4 million, but had no effect on cash flow.

In Greater China, second quarter revenue declined 12 percent to $229.9 million, compared to $261.2 million in the prior-year period. The region’s results were negatively impacted 1 percent by foreign currency fluctuations.

Second quarter revenue in North Asia increased 1 percent to $196.0 million, compared to $194.8 million for the same period in 2013. The region’s results were positively impacted 4 percent by foreign currency fluctuations.

Revenue in the Americas improved 8 percent to $89.9 million, compared to $83.4 million in the prior-year period. The region’s results were negatively impacted 11 percent by foreign currency fluctuations.

Revenue in South Asia/Pacific was $81.7 million, a 5 percent decline compared to the prior year. The region’s results were negatively impacted 7 percent by foreign currency fluctuations.

Revenue in the EMEA region was $52.6 million, a 14 percent improvement over the prior-year period. The region’s results were negatively impacted 1 percent by foreign currency fluctuations.

The company’s operating margin was 8.4 percent for the quarter, compared to 17.1 percent in the second quarter of 2013. Gross margin during the quarter was 76.0 percent, versus 83.4 percent in the prior-year period. Operating and gross margins were negatively impacted due to the China inventory charge.

Cash and current investments at the end of the quarter were $233.7 million. Dividend payments during the quarter were $20.4 million.

Nu Skin also announced its board of directors has declared a quarterly dividend of 35 cents per share, payable on Sept. 26, 2014, to stockholders of record on Sept. 12, 2014.


Primerica Inc.

Primerica Inc. (PRI—NYSE) announced financial results for the quarter ended June 30, 2014. Total revenue was $331.1 million in the second quarter of 2014 and net income was $49.3 million, or 89 cents per diluted share.

In the second quarter operating revenue increased by 10 percent to $330.3 million and net operating income increased by 18 percent to $48.7 million compared with $300.0 million and $41.2 million, respectively, in the year-ago quarter. Net operating income per diluted share increased 25 percent to 88 cents and ROAE was 16.3 percent on an operating basis in the second quarter of 2014.

In conjunction with the company’s plan to repurchase $150 million in shares of Primerica common stock in 2014, it completed a redundant reserve financing transaction on July 31, 2014.

During the second quarter the company repurchased $21.9 million, or 480,902 shares of Primerica common stock for a total of $35.0 million, or 763,902 shares repurchased year-to-date.

As of June 30, 2014, investments and cash totaled $2.04 billion compared with $2.01 billion as of March 31, 2014. The company’s invested asset portfolio had a net unrealized gain of $138.5 million (net of unrealized losses of $5.6 million) at June 30, 2014, up from $113.2 million at March 31, 2014.

The Board of Directors of Primerica Inc. also approved a quarterly dividend of 12 cents per share for the second quarter of 2014. The dividend was payable on Sept. 16, 2014, to stockholders of record as of Aug. 20, 2014.


Nature’s Sunshine Products Inc.

Nature’s Sunshine Products Inc. (NATR—NASDAQ) reported its financial results for the second quarter ended June 30, 2014, and declared a quarterly cash dividend of 10 cents per share.

For the second quarter of 2014, net sales revenue increased 0.7 percent to $94.3 million, compared to $93.7 million in the second quarter of 2013. In local currencies, net sales revenue increased by 1.1 percent.

Operating income decreased 25.6 percent to $5.8 million, compared to $7.8 million in the second quarter of 2013. Normalizing for one-time transaction expenses, operating income would have been $7.7 million, or 8.2 percent as a percent of net sales.

Adjusted EBITDA decreased 18.0 percent to $7.9 million, compared to $9.7 million in the second quarter of 2013. Normalizing for one-time transaction expenses, adjusted EBITDA would have been $9.8 million.

Net income was $3.2 million, or 20 cents per diluted common share, compared to $6.1 million, or 38 cents per diluted common share in the second quarter of 2013. Normalizing for one-time transaction expenses, net income would have been $4.4 million, or 27 cents per diluted share.

Cash and cash equivalents as of June 30, 2014, were $68.6 million, compared to $77.2 million as of Dec. 31, 2013. Shareholders’ equity as of June 30, 2014, was $118.2 million, compared to $105.3 million as of Dec. 31, 2013.

In NSP Americas, Asia Pacific and Europe net sales revenue decreased 8.3 percent to $49.0 million, compared to $53.4 million in the second quarter of 2013. In local currencies, net sales revenue decreased by 5.4 percent compared to the second quarter of 2013.

In NSP Russia, Central and Eastern Europe net sales revenue decreased 14.3 percent to $12.8 million, compared to $15.0 million in the second quarter of 2013, primarily impacted by the escalation of political unrest in Ukraine and the weakness of its currencies.

Synergy WorldWide net sales revenue increased 28.5 percent to $32.5 million, compared to $25.3 million in the second quarter of 2013. In local currencies, net sales revenue increased by 23.9 percent compared to the second quarter of 2013, driven by increased sales in South Korea and Japan.

As previously reported, Nature’s Sunshine Products and Shanghai Fosun Pharmaceutical (Group) Co., Ltd., a leading health care company in the People’s Republic of China, signed definitive agreements with respect to the formation of a China joint venture.

The company’s board of directors also approved a quarterly cash dividend of 10 cents per share, payable on Aug. 29, 2014, to shareholders of record as of the close of business on Aug. 18, 2014.


Medifast Inc.

Medifast Inc. (MED—NYSE) reported financial results for the second quarter ended June 30, 2014.

For the second quarter, Medifast net revenue decreased 17 percent to $80.9 million from net revenue of $97.1 million in the second quarter of 2013. Revenue in the direct sales channel, Take Shape For Life, decreased 12 percent to $54.1 million in the second quarter of 2014 compared to $61.4 million in the same period last year.

Operating income was $7.4 million, or 9.2 percent as a percent of net revenue, compared to $10.6 million or 11.0 percent as a percent of net revenue in the second quarter of 2013. Net income was $5.7 million, or 44 cents per diluted share compared to net income of $7.1 million, or 51 cents per diluted share for the second quarter of 2013.

Gross profit for the second quarter of 2014 decreased 17 percent to $60.4 million, compared to $72.9 million in the second quarter of 2013. The company’s gross profit margin decreased 50 basis points to 74.6 percent in the second quarter versus 75.1 percent in the second quarter of 2013.

The company’s balance sheet remains strong with stockholders’ equity of $97.5 million and working capital of approximately $66.2 million as of June 30, 2014. Cash, cash equivalents and investment securities for the second quarter of 2014 increased $0.8 million to $68.6 million compared to $67.8 million at Dec. 31, 2013. The company repurchased 451,000 shares of common stock for $14.2 million during the second quarter as part of its current share repurchase authorization. The company remains free of interest bearing debt.


Mannatech Inc.

Mannatech Inc. (MTEX—NASDAQ) announced financial results for its second quarter ended June 30, 2014.

Second quarter net sales for 2014 were $46.3 million, an increase of 3.4 percent as compared to $44.8 million in the second quarter of 2013. Net sales increased 2.2 percent in constant dollars. Net loss was $0.7 million, or 26 cents per diluted share, for the second quarter 2014, as compared to net income of $0.8 million, or 30 cents per diluted share, for the second quarter 2013.

The company took charges to the inventory allowance of $0.8 million during the second quarter of 2014, which reduced gross profit margin to 79.0 percent as compared to 80.6 percent in the second quarter of 2013. The company generated operating cash flow of $7.4 million for the first six months of 2014 as compared to $5.3 million for the same period in 2013.

For the three months ended June 30, 2014, Asia/Pacific net sales increased by $1.5 million, or 7.5 percent, to $21.4 million, as compared to $19.9 million for the same period in 2013.

For the three months ended June 30, 2014, EMEA net sales increased by $0.4 million, or 11.1 percent, to $4.0 million, as compared to $3.6 million for the same period in 2013. In constant dollars, net sales would have increased 16.7 percent to $4.2 million.

North American net sales decreased by $0.4 million, or 1.9 percent, to $20.9 million, as compared to $21.3 million for the same period in 2013.


Crius Energy Trust

Crius Energy Trust (KWH-UN.TO—TORONTO) announced its financial results for the three month period ended June 30, 2014. All figures in U.S. dollars unless otherwise noted.

Revenue was $134.0 million, a 17.6 percent increase over $113.9 million. Gross margin was $33.7 million, representing 25.2 percent of revenue, compared to $27.6 million, representing 24.2 percent of revenue. Adjusted EBITDA was $13.2 million, representing 9.9 percent of revenue compared to $10.1 million, representing 8.9 percent of revenue.

Distributions paid in the quarter of $7.9 million, representing a payout ratio of 67.5 percent based on the adjusted EBITDA, compared to $9.5 million and 110.5 percent. This represents the company’s strongest performance since its IPO in November 2012.

Total cash and availability was $46.1 million, consisting of $10.8 million of cash and cash equivalents and $35.3 million of credit facility availability. This compares to $32.1 million consisting of $18.5 million of cash and cash equivalents and $13.6 million of credit facility availability.

The Trust acquired a portfolio of approximately 38,000 electric and natural gas customers together with other assets from Superior Plus Energy Services for an aggregate purchase price of approximately $3.8 million.

The Trust also acquired a portfolio of approximately 16,000 electric customers from HOP Energy LLC for an aggregate purchase price of approximately $1.5 million.


Youngevity International Inc.

Youngevity International Inc. (YGYI—OTC.QX) reported financial results for the second quarter of 2014.

For the three months ended June 30, 2014, the company reported net revenue of $32.7 million, compared to $20.9 million for the same period in 2013, an increase of 56.6 percent. The increase in revenue is attributed primarily to the increase in product offerings as well as the number of distributors and customers. Also, $3.8 million in additional revenues were derived from the acquisition of several companies over the last year.

Gross profit for the second quarter ended June 30, 2014, increased to $18.9 million, compared to $12.7 million for the same period last year, an increase of 49.2 percent.

Net income for the three months ended June 30, 2014, decreased to $544,000 as compared to a net income of $662,000 for the same period last year. Adjusted EBITDA was $2.0 million for the three months ended June 30, 2014, compared to $1.7 million in the same period for the prior year.


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.

October 01, 2014

Working Smart

MONEYBALL: Buying the Behaviors That Bring Success

by Mark Rawlins (with research and contributions from Mitch Stowell and Kenny Rawlins)

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


For more than 30 years my company and I have provided commissions processing software for the direct selling industry. Through all those years—working with hundreds of companies—I have struggled to find a simple way to describe our basic theory of commissions. It was somewhat shocking when the answer came to me in a movie theater:

“Your goal shouldn’t be to buy players. Your goal should be to buy wins. And in order to buy wins, you need to buy runs.” —economist and statistician Peter Brand in the movie Moneyball

A lot of things immediately fell into place; it was surprising to me that professional baseball had gone through the same challenges 15 years ago that the direct selling industry is going through today. I immediately purchased and read Michael Lewis’ book Moneyball, and still recommend that all my clients read the book or watch the movie.

Moneyball tells the tale of the Oakland A’s 2002 baseball season. Due to the limited revenue brought in by their market, the A’s had only $41 million to spend on salaries that season. In order to compete with larger market teams such as the New York Yankees, who would spend over $125 million in payroll during the same period, the A’s chose to actively acquire players who were undervalued by the league. This strategy gave the A’s the building blocks for a 20-consecutive-game winning streak—the longest streak in American league history—and took them to the playoffs.

The key to the success of the A’s was to ignore traditional methods of finding and valuing players that relied on “gut instinct,” “star power,” and conventionally used statistics such as stolen bases, runs batted in, and batting average. Instead, they focused on identifying statistics that better measured a player’s ability to win games—demonstrating that things like on-base percentage were more valuable than homeruns. After identifying the specific skills required to win, the A’s began to acquire players who were undervalued in the marketplace, rather than players with the “super star” qualities often sought by other teams.

The A’s proved that statistical analytics can identify the skills and behaviors most directly responsible for success, and that the smart use of limited funds can level the playing field with more powerful competitors.

So how does this relate to the direct selling industry? I think it relates in two ways:

  • Many companies feel that in order to be successful, they need to acquire distributors perceived as “rock stars”—people with known reputations for bringing in a lot of business—or keep their existing stars without looking at their actual contributions. These stars are expensive and may or may not be able to duplicate their past successes. Like ball players, these stars have careers that span a finite number of years. And while they may seem invaluable to one company, they may fail at another.
  • Like a Major League Baseball team, a direct selling company has a limited amount of money to spend. In my experience, most successful companies spend 41–48 percent of revenue on commissions, and they continually struggle with the question of how much of this money should go to “rock stars” and how much should go to role players. (Revenue is calculated based on the method used by most network marketing companies, which is the wholesale price or the price paid by entry-level distributors.)

It’s clear that, like A’s Manager Billy Beane, we need to focus on rewarding behaviors instead of buying distributors in order to buy “wins.”

Why This Matters Now: The Evolved Business World


“We’ve got to think differently.”
—A’s General Manager Billy Beane, speaking to his scouting and management staff in Moneyball


In our industry, there has never been a time that required a more fundamental shift in thinking than right now. Why do we need to think differently in 2014 than we have for the past 30 or 40 years? It comes down to two words: Internet and economics.

The Internet: Free Agency and Inflated Valuation of Top Sales Leaders

The Internet has changed the way the world conducts business, and this is especially true of direct sales. The rise of e-commerce has been a boon to the industry—people are now accustomed to ordering all kinds of products online and having those products shipped to them. A more subtle consequence of the Internet is that it has turned distributors into what are essentially free agents. Companies are now able to identify the leaders, or dream builders, within the industry and regularly recruit them, just as a sports team would recruit players. Dream builders themselves can use Google to learn about the products and compensation structures of other companies—and how much leaders in other companies earn. More and more, they are willing to switch teams when they see a more lucrative opportunity.

This competition for dream builders has inflated the earnings expectations of industry-best sales leaders, forcing companies to walk a fine line: They must compensate their dream builders enough to keep them, but not so much that they can’t compensate sales people and emerging leaders. After all, these “role players” can also use the Internet to better understand their own value—so it is important to remember that sales people are also “free agents” and can leave for better opportunities.

Economics: The 2008 Economic Reset

The bursting of the dot-com bubble in 2000 started to dampen expectations created by the booming 1990s, but the economic reset of 2008 seemed to firmly establish a shift in what Americans thought was possible and attainable in the future.

People living in this country have always found ways to make money, whether through manufacturing, technology or investments, but during the booming 1990s, that became an expectation—along with the expectation that it wouldn’t be particularly difficult. I remember a conversation with a vice president of sales back in the late ‘90s. He told me about a promising sales person who was a package delivery driver. When he approached the driver about “going full-time” for his company, he was shocked by the response. The driver told him that he was confident his company’s 401(k) would allow him to retire with over $1 million—so he wasn’t interested. This raised the question: “How can you attract people when truck drivers feel they will become millionaires through traditional methods?” This type of pressure drove many companies to drastically increase top leaders’ compensation at the expense of the role players. And at the time, it appeared to work; people didn’t worry about making a few hundred dollars a month—they thought they had the opportunity to get rich!

The dual shocks of the bursting of the dot-com bubble and the collapse of the housing bubble have caused the vast majority of Americans to reset their expectations. Belts have been tightened, and people seem to realize they have to make money the old-fashioned way. As a result, successful direct selling companies now focus more on a balanced approach to compensation between the top leaders and the sales people.

As I talk to other industry professionals, everyone seems to intuitively understand that the industry fundamentally changed in 2008. We’re living in a new world that requires new ways of competing. One positive impact of the change is that there are now more people seeking ways to make supplemental/non-traditional income—the very thing that our industry has always been good at providing! So, how does a company go about adjusting to this new reality?

Getting the Highest Return on Your Investment


“His on-base percentage is all we’re looking at now, and Jeremy gets on base an awful lot for a guy who only costs $285,000.”
—Billy Beane, speaking to detractors on his scouting and management staff in Moneyball


Going back to my “aha” moment from Moneyball, the goal is not to buy players; the goal is to buy the behaviors that create success. But what are those behaviors, and what are the metrics you can use to measure them? One thing that helped baseball was the availability of sabermetrics, a methodology created by dedicated individuals who had studied baseball and created a precise set of metrics that could be used to identify how specific activities contribute to creating wins.

We do not have the same type of universal statistical information for direct selling; each company has to identify the behaviors that create their success and establish metrics to track them. Let’s look at a simple example of how to do this.

One thing we know from experience is that people who buy from your company break down into four basic categories. (Graph 1, below, shows the sales people category broken into two groups—regular and hyper-recruiter.)

Graph 1

  • 60–70 percent are customers who sign up in order to buy the product. They will not enroll anyone else, and their continued ordering depends on satisfaction with the product.
  • 20–30 percent are social enrollers who like the product so much that they talk about it to friends and relatives—some of whom will also sign up.
  • Approximately 10 percent are sales people.
  • Significantly less than 1 percent are sales leaders and dream builders.

Within the context of these percentages, let’s visit two behaviors and look at some simple, concrete metrics you can use to measure how effective your compensation plan is at rewarding those behaviors.

Hyper-recruiting
In Graph 1, notice that although 10 percent of your distributors are sales people, only about 20 percent of those sales people are what we call “hyper-recruiters.” On average, these hyper-recruiters account for only 2 percent of a company’s distributors, yet they recruit up to 40 percent of the people who join that company. So imagine what could happen if you could bump that number up to 3 percent.

If we define a hyper-recruiter as a sales person who recruits 10 or more people, we can use a simple x-y graph to look for a correlation between earnings and organizational volume (OV). By color coding people who exhibit this behavior versus those who don’t, we can see whether a compensation plan is rewarding the behavior of hyper-recruiting. Graph 2 compares two groups: regular sales people and hyper-recruiters.

Graph 2

The graph shows a strong correlation between earnings and hyper-recruiting, showing that the compensation plan effectively rewards this behavior.

Non-high-leg volume
Another key behavior to incentivize is non-high-leg volume, that is, the percentage of OV from all legs of a distributor’s down line except the largest one.

While OV tells you how much business a given distributor built, non-high-leg-volume tells you the ability of that person to replicate success. If a high percentage of OV comes from only one leg, it means that the distributor recruited a good person who built the business. But if the distributor has four successful legs, it shows that he or she understands how to be successful and actively build a business.

Graph 3

Again, it’s easy to create and use simple x-y graphs (See Graph 3) to find the correlation between earnings and organizational volume—color coded for non-high-leg volume—allowing you to see the effectiveness of your compensation at rewarding this behavior.

As with baseball statistics, some distributor behaviors may seem, on the surface, to be essentially the same thing. If we look at organizational volume (OV) as being analogous to batting average, non-high-leg volume would be like on-base percentage. While there are similarities, the two behaviors can produce remarkably different results.

Conclusion

Moneyball is about using metrics to identify and buy the specific skills and behaviors required to win. Because even simple metrics like those shown in these graphs can make a real difference in revenue, it’s surprising how few companies take advantage of statistical analysis to make sure they’re rewarding the behaviors that will create their success.

Unlike baseball, each company will have a unique set of behaviors/metrics that matter only to them. This prized intellectual property can be assembled over time, and should include:

  • The behaviors that are important to your company’s success
  • The metrics you use to measure those behaviors
  • The metrics you use to measure the effectiveness of your compensation plan at buying those behaviors

Remember, we’re not trying to buy perceived “super stars”—we’re trying to buy actual, measurable behaviors. And at the end of the day, distributors need to see how their efforts at providing those behaviors will translate to increased earnings.


Mark RawlinsMark Rawlins is Founder and CEO of InfoTrax Systems and author of the recently published book, From Commission Plan to Compensation Strategy: Success for Today’s MLM Enterprise. Mitch Stowell is Vice President of Commissions Consulting, and Kenny Rawlins is Director of Commissions Operations, both of InfoTrax Systems.

October 01, 2014

New Perspectives

‘All In’ for the Third Time: ViSalus Co-Founder Blake Mallen Talks

by DSN Staff

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


On Sept. 2, Greenwich, Connecticut-based Blyth Inc. announced that the company had reached an agreement to sell the majority of its ViSalus subsidiary to the founders and certain other preferred stockholders of ViSalus. They completed the transaction, which involved exchanging shares of redeemable convertible preferred stock of ViSalus for shares of ViSalus common stock, on Sept. 4. Blyth now owns approximately 10 percent of ViSalus. DSN sat down with Co-Founder and Chief Marketing Officer of ViSalus Blake A. Mallen to discuss the deal. Here’s what he had to say.


DSN: Start at the beginning for us. This is quite a transaction. How did it all come about?

BAM: Yes, it’s obviously a big move. We think the ViSalus story is made up of three big “All In” moments. In the beginning, it was definitely kind of an “All In” spirit that gave rise to the company back in 2005. Nick (Sarnicola), Ryan (Blair) and I took all the money we had back then and acquired the assets of a failing company and birthed the idea of ViSalus and our mission. We had very humble beginnings—about 18 months or so without a single paycheck.

We had developed a great relationship with the Goergen family and Blyth when Nick, Ryan and I were still young executives in our mid-20s. By 2008, we felt that joining Blyth was the best move for ViSalus in order to provide a lot of the infrastructure and the operational expertise to help us accomplish what we wanted for the long term. So we created a partnership and a great relationship.

Shortly after we announced the deal with Blyth in 2008, the economy collapsed and Nick, Ryan and myself again took our last money that we had at the time to self-fund the company, and reinvent in 2009—our second “All In” moment. The irony is that this moment gave birth to the Body by Vi 90 Day Challenge, which is the brand that made us who we are today with the meteoric rise over the last few years.

Now we’re in a rebuilding and expansion mode, and we wanted to go all in again, so we approached Blyth a couple of months ago with the idea to buy back all the remaining shares that Blyth owned, minus 10 percent. They saw our passion, and they know we’re founders and ViSalus is our baby, and running it is something we want to do for life.

This last transaction is our third “All In” moment. Most of the transaction included money owed to us in the original agreement with Blyth. Basically, we walked away from it and rolled it back into the company. We took back, between us and our field, 90 percent of ViSalus. We’re all excited to have full ownership back and a new beginning and a new birth.

DSN: So when you look at that new beginning and new birth, how does this ownership change better position ViSalus?

BAM: Focus is probably the best word to use, and regaining the ability to put our resources 100 percent into things we believe will bring value to our customer and the promoter. Right now our focus is to be aggressively expanding all over Europe, and of course creating a new energy wave all over North America, and we really want all of our energy going into what adds value.

The initial deal with Blyth created a finish line; and we just realized, over time, that we don’t want a finish line. That’s a big point to make. We’ve accomplished what a lot of entrepreneurs would hope to accomplish, yet we’re pushing it all back in to go out there and do it again because it’s what we’re passionate about.

It’s really a story of belief and commitment… Belief in what we are capable of, belief in our partnership, belief in our business, belief in our leadership and our promoters, and belief in that what we’ve done is only a small percentage of what we’re going to do, and we want to do it for the rest of our lives. So, that’s more what this move means to me on a more personal level.

I would expect to see not only a renewed energy or renewed enthusiasm between myself, Nick and Ryan, but also that radiates throughout the whole ViSalus community, just based on the feedback we’ve already gotten.

DSN: You mentioned international expansion, and we’ve seen ViSalus add three new markets this year and you are looking at adding a couple more in 2015. Does your international expansion strategy accelerate at this point?

BAM: Our expansion strategy was already well under way, and I don’t know that this has any effect on our plans. U.K. was our first market outside North America, and we waited a year in that before we opened Germany, Austria, and Ireland this year and expanded into different languages. We’re building our operational muscle, and now we can go out there and pick up the pace without diverting focus.

DSN: You have the Vitality event next week (Sept. 12-13); do you have big plans to formally announce this news?

BAM: Yes, we’re going to be really telling the story. People look at the company and they bucket it as a company or a product or a comp plan, and they don’t realize that a company is really a community of people.  So we’re going to go on stage Friday night and tell the full story of the “All In” moments and why we’re doing what we’re doing.

Bob Goergen is coming out, which will be exciting. Blyth maintains 10 percent and Bob is the Chairman, so we plan to do something special for him as a thank you for everything he’s provided to us, in terms of mentorship and grooming us as executives and teaching us how to build a global business.

Before we were in the relationship with Blyth, we were a scrappy startup. Now we have a world-class finance team, everything on operations and reporting, world-class legal, tax best practices—a lot of the true back-end and operational functions. Blyth helped us build a solid backbone behind the scenes for us to build upon.

DSN: You all went to the Blyth team just a few months ago, and this transaction came together that quickly. That seems remarkable. Were you expecting it to move that smoothly and quickly?

BAM: I don’t think we had an expectation on the time frame; it was just a win/win/win situation, so it moved pretty quickly. For Blyth, it’s a win when it comes to their shareholders—obviously the stock has jumped quite a bit in the last couple of days. It’s a win for ViSalus in terms of us being allowed to have our entrepreneurial freedom and ownership and control over our destiny. I think it’s also a big win for all of our promoters who are now able to rebuild and move forward in that new spirit.

DSN: Talk a little bit about the health and wellness sector—what trends are you watching, apart from this transaction?

BAM: Our strategy has always been to be the largest healthy fast food provider in the world. Fast food has proliferated all over the world for obvious reasons—it’s simple, it’s fast, it’s super convenient, it tastes good and it’s cheap! And people need to eat, right? Our goal is to approach the market to provide the consumer with very similar benefits—simple, fast, convenient, good taste, affordability—but to obviously do it in a nutritious, healthy way.

We’re also seeing a big, big move when it comes to nutritious, on-the-go, all-natural snacking. That’s our next move when it comes to our product strategy. We already have two meals, with our shake and our Crunch—but now we’ll be moving into what people are doing in between meals.

DSN: Is there anything else you’d like to share with our readers?

BAM: The core of the Vi foundation has always been the entrepreneurial spirit. You know, we’ve always had a bit of a disruptive approach when it comes to innovation, whether it be technology or our culture. That entrepreneurial spirit, or swagger, was what made us who we were. And I think somehow over the course of the last couple of years as we’ve become a bigger company, it’s been harder to maintain that culture. 

So, our main focus is to bring that back—the entrepreneurial spirit and that kind of disruptive attitude and infuse that back into the culture both inside the walls and outside the walls.

October 01, 2014

Stock Watch

Stock Watch, October 2014


October 01, 2014

Exclusive Interviews

Executive Connection with Lynae Parrott and Gail Gioffredi, Managing Directors, Gold Canyon


In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with Lynae Parrott and Gail Gioffredi, Managing Directors of Gold Canyon, about leadership, dreaming big and empowering others.

DSN: What is the one thing you enjoy most about being the Managing Directors of Gold Canyon?

Parrott: I most enjoy the opportunity to drive change within the organization in an effort to create positive results for our Consultants and co-workers. 

Gioffredi: I most enjoy making an impact and a difference in people’s lives… really empowering others to create their own destiny.

DSN: What has been your proudest accomplishment?

Parrott: Above all, I am most proud of my family. My husband and I have been married for a blissful 21 years, and we’ve raised three children who have grown into upstanding young citizens.

Gioffredi: I am most proud of the recent enhancements of our Career Plan. Within the first month, we helped 79 of our Consultants become new Leaders, earn more money and live happier and more fulfilling lives.

DSN: What do you tell Gold Canyon Fragrance Consultants to lead and inspire them?

Parrott: You’ve heard the adage, “Actions speak louder than words.” I don’t think it is what I say that has the biggest impact on our Consultants as much as what I consistently exemplify. I believe my passion for this company, our product and this sales channel, combined with my drive to take action, inspire success.

Gioffredi: Dream your biggest dreams, believe in yourself and your ability to achieve your dreams, and commit to making them happen.

DSN: What is your vision for Gold Canyon?

Parrott: I envision one day Gold Canyon being a household name and a brand that evokes happiness.

Gioffredi: I visualize Gold Canyon becoming a household name.

Lynae Parrott and Gail GioffrediLynae Parrott and Gail Gioffredi

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

Parrott: This is a really hard question for me because I try to live my life in the moment—to relish each experience for the good or bad, learn from each experience and to have no regrets. I suppose I would enjoy another dose of that overwhelming mix of emotions I felt at our recent Palooza. There was a moment backstage when I witnessed the unfolding of all the blood, sweat and tears of our co-workers and the pride, joy and enthusiasm of our Consultants. It was a very rewarding moment.

Gioffredi: I would enjoy the fun and spending more time with our Consultants at our annual convention, Palooza. Every year it goes by too fast!

DSN: What project or accomplishment do you consider to be the most significant in your career?

Parrott: I’ve been with Gold Canyon since its inception 17 years ago. I started in the field as a seller and later joined the home office where I’ve been a key contributor in several positions.  Undoubtedly, being promoted to Managing Director last year has been the most significant accomplishment in my career.

Gioffredi: By age 27, I had realized my passion in helping others achieve their dreams, including helping over 75 women become stay-at-home moms or first-time home owners.

DSN: Is there one basic principle which governs your leadership at Gold Canyon?

Parrott: Yes, it is two-fold. I aim to treat others the way I want to be treated and to not ask of others what I personally wouldn’t be willing to do myself.

Gioffredi: Yes, to continually improve, but have fun while doing it.

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

Parrott: As a young leader I was influenced by Stephen Covey’s book, The 7 Habits of Highly Effective People. The habit, or piece of advice, that resonated most then, and that I’ve regularly kept at the forefront of my mind, is to “Begin with the end in mind.” Interestingly, I’ve found another habit surfacing as I’ve embarked on this new position, which has been helpful. “Seek first to understand, then to be understood.” They’ve both been useful pieces of advice for me.

Gioffredi: Change is inevitable—embrace it!

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

Parrott: This is a great question! I love to take long, hot baths to relax my muscles and let my mind unwind. This is also a time I use to recharge and get energized. I love my baths!

Gioffredi: I like to travel with my family, read inspirational books, and a little shopping never hurts!

DSN: What’s on your bucket list?

Parrott: I’m experiencing my bucket list wish right now! I have always dreamed of leading a company that would have a direct positive impact on women’s lives. This company and my position today are enabling me to empower women and men to create their own destiny! 

Gioffredi: I have had the opportunity to experience so many places and things, but with my love of travel, two places I have not had the opportunity to visit are the pyramids of Egypt and Dubai.

October 01, 2014

New Perspectives

Direct Selling Entrepreneurship Goes to Community College

by Donna Duffey

An Academic’s Journey Into The Direct Selling Industry

Student entrepreneurs at the community college level come with a variety of pathways in mind to reach their entrepreneurial dreams. Some are focused on innovation and plan to create a new product or service. Some plan to purchase an existing business and apply their entrepreneurial skills to make that business grow. Some are members of an existing family business and want that business to continue to be sustainable across generations. Others are planning to reach their entrepreneurial dream by owning and operating a franchise. Some choose to be intrapreneurs in existing businesses. We believe a missing link has been a curriculum for students seeking their niche as independent contractors in the direct selling industry.

As the academic chair for Johnson County Community College’s (JCCC) Entrepreneurship program, this realization—or the discovery of a “gap” in our program offerings—led me to start a conversation with the National Association of Community College Entrepreneurship (NACCE) and the Direct Selling Education Foundation (DSEF) during the summer of 2011 in Washington, D.C. The brainstorming session brought together both community college leaders of entrepreneurship initiatives and direct selling company executives from across the country.

The “working” objective of this brainstorming meeting between these two previously disconnected groups was to determine if educational material addressing this dynamic industry sector could be developed and delivered effectively through America’s community colleges. Our collective answer after two days of discussion yielded a unanimous “Yes, we can!”

So why should these two seemingly unconnected groups both care about the gap in entrepreneurship education in community colleges? While revenue and employment numbers are significant and growing, the direct selling industry reports turnover of direct selling entrepreneurs as a significant industry challenge. As a result, this turnover creates challenges for the maintenance and enhancement of quality customer relationships, and costs direct selling companies time and resources that can impact profit.

While entry into direct selling entrepreneurship is relatively simple and, in most cases, at minimal cost, the entrepreneur may have a great deal of passion for the product or service but not a full understanding of the business model. They may have little hands-on experience and clarity that an independent contractor actually owns their own entrepreneurial venture. As with any business enterprise, some of these independent contractors need to develop and sharpen selling skills, marketing skills, financial skills, organizational management skills, and customer relationship management skills—above and beyond the terrific training and support successful companies provide. One way to accomplish closing the gap is for colleges and the direct selling industry to develop and deliver high-quality educational programming at community colleges. The Direct Selling Entrepreneur Program (DSEP) was developed in a partnership between DSEF and NACCE and is now available nationally to all community colleges. It not only benefits students seeking to grow their direct selling businesses, but also helps students thinking about joining this segment of the workforce, and increases student knowledge.


The Direct Selling Entrepreneur Program is a 30-hour course designed to provide direct sellers—and those interested in direct selling—with the small-business management and entrepreneurship skills they need to succeed in this low-cost, low-risk, low-barrier-to-entry form of entrepreneurship.


Created to address direct sellers’ specific needs, the curriculum increases the options for entrepreneurship education in communities across the United States.

Developed for community colleges, the curriculum is divided into 10 modules and introduces the fundamental components of small-business management, including marketing, finance, legal issues, planning and ethics. In addition, course participants gain deep understanding of the wide variety of direct selling business strategies, including individual sales efforts, party plan and network marketing scenarios, online sales, and salesforce recruitment and training. (For more information, contact Nancy Laichas, Chief Marketing & Development Officer, Direct Selling Education Foundation, at nlaichas@dsef.org.)

At JCCC, I have been able to utilize this DSEP curriculum to add one three-credit-hour course, called the Fundamentals of Direct Sales, and pair this new course with several other existing courses to create an academic credential, the Direct Sales Certificate. The course and certificate met all necessary approvals, both within the institution and at the state level, to be accredited and qualifies for financial aid just like our Entrepreneurship degree and other certificates. In addition to the Fundamentals of Direct Sales course, the 15-credit-hour Direct Sales Certificate also includes Professional Selling, Business Professional Skills, e-Marketing, and Consumer Behavior.


Although DSEP was envisioned as a non-credit course that community colleges can offer through their Continuing Education or Workforce Development departments—with a committed college faculty champion—the curriculum can be adopted into the for-credit side.


Our inaugural offering of Fundamentals of Direct Sales was during the spring 2013 semester. Several students were already direct sellers—one a homemaker and direct seller, one a retiree and direct seller, and one a full-time student and direct seller. But, the largest group was of students considering entering the direct sales field. One student was seeking to learn how this industry sector operates and wanted to apply this distribution strategy to his work-in-progress on his business plan for his entrepreneurial venture. Student satisfaction was high, with comments as wide-ranging as “Wow, I had no idea how much I didn’t know about what I do” to “Wow, this really is an interesting business model.” Minds expanded, learning took place and new opportunities were created!

Johnson County Community College (JCCC) was founded in 1969 and is located in the southwestern quadrant of the greater Kansas City metropolitan area. The college serves approximately 20,000 credit students with programming for students desiring to transfer to baccalaureate institutions and students seeking an associate degree or certificate in 50-plus career fields. JCCC also delivers continuing education programming.

JCCC’s Entrepreneurship credit program began in 1992. Today the program offers 12 courses, an Associate of Applied Science (AAS) degree and five certificate programs. The department has created numerous additions, deletions and modifications to its Entrepreneurship offerings over the past 22 years. Working with the faculty team and the program advisory committee, and gathering information from graduates, it strives to keep the program current and topical, therefore consistently striving to create both learning content and a learning environment that yields successful and sustainable entrepreneurs.

Johnson County Community College has chosen the credit-based or academic pathway and recognizes that others are doing the same. We have also worked with numerous other community college leaders planning to launch the DSEP curriculum in their non-credit, continuing education, or workforce development divisions. Each community college is different and will identify where they can best serve their communities and positively impact their economies.

Now, at this critical time where a few colleges like JCCC have shown it can be done, I encourage more innovative and collaborative thought-yielding strategic partnerships between community colleges, direct selling companies and the Direct Selling Education Foundation to explore where direct selling entrepreneurship education can go in the future. It doesn’t matter who initiates the conversation, so community college leaders and direct selling company leaders need to get to know each other and let the conversations begin. The possibilities are unlimited. So, ask yourself, What can I do today?

America’s Community Colleges: What You Need to Know

  • The mission statements for community colleges focus on providing accessible and affordable educational programming leading to an educated and sustainable citizenry.
  • There are 1,132 community colleges in the United States—so there is one near you!
  • There are 12.8 million students attending community colleges. Sixty-one percent of these students are in credit programs; 39 percent are in non-credit programs—there is an abundance of students already present!
  • 49 percent of all students in America’s higher education institutions are in community colleges—community colleges are the place to be!
  • The average age of a community college student is 28, with 57 percent of students between the ages of 22–39—a perfect match for self-employment opportunities in the direct selling industry.
  • Women constitute 57 percent of the student population—this parallels participation in the direct selling industry.
  • 36 percent of community college students represent the first generation in their family to attend college, indicating that accessibility and affordability matter—community colleges are changing and will continue to change the educational (and economic) landscape of our nation. This is a shared value with the direct selling industry.
  • Community colleges embrace the ethnic diversity of their communities with a diverse student population of 51 percent White, 19 percent Hispanic, and 14 percent African-American—also a shared value with the direct selling industry.

American Association of Community Colleges’ 2014 Fact Sheet

The Direct Selling Industry: What America’s Community Colleges Need to Know

  • In 2013, the direct selling industry generated $31.67 billion in sales, yielding a 3.3 percent increase over 2012—this industry is not only sizable but also growing during a time when many industry sectors are not.
  • There are 16.8 million people in the U.S. involved in direct selling. Of the 313.9 million people in the U.S. population, this represents 5.4 percent of the population. Additionally, the percentage of households having a direct sales person as a member is 13.8 percent of U.S. households—this industry sector offers economic opportunity to many.
  • While many people don’t understand the method of direct retail sales, the 2013 data reports 70 percent of sales are made person-to-person and 23 percent of sales are generated utilizing the party-plan method.
  • Product categories offered to the consumer through direct selling methods range from aromatherapy to weight management. The primary product groupings include home and family care, wellness, personal care, services, clothing and accessories, and leisure and educational—product choices abound.

Direct Selling Association



Donna DuffeyDonna Duffey is Professor and Department Chair of the Entrepreneurship Associate of Applied Science degree program and its related certificate programs at Johnson County Community College, Kansas City, Kansas. She was the winner of the 2009 National Association of Community College Entrepreneurship (NACCE) Faculty of the Year Award.

September 30, 2014

U.S. News

Avon’s DSA Withdrawal Raises Questions

Avon Products Inc. surprised much of the direct selling community with its public withdrawal from the U.S. Direct Selling Association earlier this month.

Avon resigned its membership Sept. 9 with a letter to the DSA executive committee. It was a significant move. Avon is, after all, the world’s second-largest direct selling company (behind Amway) and an iconic U.S. brand. But the real news came three days later, when Avon posted a letter signed by Senior Vice President Corporate Relations and Chief Communications Officer Cheryl Heinonen and addressed to other U.S. direct selling companies on the media center of the Avon website attempting to explain the rationale behind its withdrawal.

“This decision came after careful consideration and more than a year of thoughtful discussion,” Heinonen’s letter says. “This decision was driven by two key issues: We believe the association’s agenda in the U.S. is overly focused on the issues of a few specific brands rather than industry-wide challenges. We believe that the U.S. DSA Code of Ethics requires updating to better reflect the current state of the industry in the U.S.”

Despite these statements, the real motivation behind Avon’s resignation remains unclear. Heinonen’s letter does not provide any specific examples of the issues on which Avon feels DSA is overly focused nor the Code of Ethics updates Avon seeks. On the second point, Heinonen’s letter emphasizes that Avon is not exiting the World Federation of Direct Selling Associations and will continue to abide by the WFDSA Code of Ethics. This distinction is a murky one, because the U.S. DSA Code of Ethics has tighter, more specific controls than the WFDSA Code of Ethics, which was constructed to serve as a model for local market DSA codes. In fact, the WFDSA code calls for companies to comply with the codes of the DSAs in the countries in which they are headquartered.

It also seems clear that Avon had not been actively advocating for change within the association prior to its withdrawal. U.S. DSA Chairman Truman Hunt, President and CEO of Nu Skin Enterprises, has said Heinonen had not raised the concerns she listed in her letter with him, nor with any other members of the executive committee nor with DSA management. In a letter to DSA supplier members, including Direct Selling News, DSA President Joe Mariano said: “The general observations about the Code which Avon described in connection with its decision have not been raised before now; nonetheless, Chairman Truman Hunt has requested further details from the company and specific suggestions that might be considered by the Ethics Committee, and if appropriate, by the Board.”

We can only guess as to why Avon really resigned from the largest and most valuable organization that works to support the direct selling model in Washington.  But by doing so in such an inflammatory way, the company has succeeded in, at least momentarily, keeping the focus on external factors as detractors look for pockets of weakness or dissent within the direct selling community. And that is a disservice to everyone involved, including the thousands of Avon representatives the company says it wants to protect.

Avon has challenges of its own. Shares in the company (NYSE:AVP) have fallen into the $13 range as it has posted net losses for the past two years and a turnaround effort has failed to reverse declining domestic sales. CFO Kimberly Ross resigned earlier in the month to take on the CFO role at the oil-field services giant Baker Hughes Inc. This spring, Avon agreed to pay $135 million to settle U.S. probes into corruption charges related to its business in China.

In our view, it is unfortunate that Avon decided to walk away from its seat at the industry table. But we remain confident that U.S. DSA will continue to work to foster the best interests of the companies and independent contractors from all walks of the direct selling life.

September 30, 2014

U.S. News

A Voice for Women: Tupperware’s Rick and Susan Goings

Photo above: The Sewall-Belmont House sits opposite the U.S. Capitol in Washington, D.C. (Photo: Library of Congress)


The Sewall-Belmont House & Museum in Washington, D.C., recently honored Tupperware Brands CEO Rick Goings and his wife, Susan, for their ongoing efforts on behalf of women worldwide.

The couple accepted the second annual Voice for Women Award during the museum’s Alice Award Luncheon, which pays homage to National Woman’s Party Founder Alice Paul. The historic party, a leader in the campaign for equal rights and women’s suffrage, owns and maintains the Sewall-Belmont House & Museum on Capitol Hill.

Along with the Goings, the museum lauded Democratic Sen. Barbara Mikulski of Maryland with its Alice Award. Both awards recognize individuals who have broken down barriers and advanced women’s progress toward equality.

Tupperware empowers women through its business opportunity and its global Chain of Confidence initiative, which Susan Goings represents as Global Ambassador. The Chain of Confidence is Tupperware’s commitment to equip women with the opportunity and support they need to thrive economically and socially.

The kitchenware company shares the vision of U.N. Women, which recently welcomed Tupperware’s CEO as a founding member of its Private Sector Leadership Advisory Council. After receiving the Voice for Women Award, Rick Goings wrote a Huffington Post piece calling for businesses and governments to unlock their economic potential by training, educating and hiring women.

September 29, 2014

U.S. News

‘Nashville’ Costume Designer Curates Exclusive Looks for Stella & Dot

Stella & Dot is partnering with veteran costume designer Susie DeSanto to bring its stylists fresh looks for fall. DeSanto’s designs currently appear on Connie Britton, Hayden Panetierre and other stars of the hit ABC country music drama Nashville. Now, DeSanto has launched her first-ever brand collaboration with four curated collections for Stella & Dot.

The fashion accessories brand is offering DeSanto’s picks in a range of ready-to-wear looks. The themed collections include Rocker Chic, Nashville Du Jour, Modern Classic and Star Power. To support its stylists, Stella & Dot has also incorporated online video with styling tips, a social media campaign and a trunk show incentive.

“Jewelry and accessories have the unique ability to transform an entire look. I’m thrilled to partner with Stella & Dot to bring this concept to life and offer a fresh, creative eye to their existing styles,” DeSanto shared in a statement. “Accessorizing can refresh an entire wardrobe making it wearable and current as well as a statement of individuality.”

DeSanto’s work has garnered three Costume Designers Guild nominations, for the film White Oleander and the first two seasons of Nashville. Her past projects include Miss Congeniality with Sandra Bullock, 13 Going on 30 with Jennifer Garner and One Fine Day with George Clooney.

September 25, 2014

U.S. News

Amway Contribution Spurs Ada Redevelopment Project

Photo above: Amway World Headquarters in Ada, Michigan.


Global direct selling leader Amway is taking part in a community-led effort to redevelop its hometown of Ada, Michigan. Amway will contribute $3.5 million in support of a plan to bring $13 million in improvements to the rural township, located on the eastern outskirts of Grand Rapids. The redesign centers on the quaint Ada Village area across the street from Amway World Headquarters.

“The community has long held hopes of further developing the small village and, since 2006, has led community planning efforts to help shape what it could become in the future,” Bill Payne, Amway Chief of Staff, told DSN. “We’re pleased to extend our support, from initially assembling land under one ownership group to speed advancement of the vision, to now offering financial support to cover a portion of public infrastructure improvement costs.”

Amway houses more than 4,000 employees at its world headquarters, which spans one mile from east to west and comprises 80 buildings and 3.5 million square feet of office and manufacturing space.

The proposed Ada Village redesign will make the area friendlier to bikes and pedestrians, improve traffic flow, and develop community spaces like a farmers’ market and an outdoor performance area on the Village’s riverfront.

“Amway is a good partner that has been a part of our community for more than 50 years,” said Ada Township Supervisor George Haga. “We are quite excited about this private-public partnership to redevelop Ada Village, and we look forward to tentatively starting the first project next spring.”

At the same time, said Payne, Amway is leading a separate community fundraising effort called Envision Ada. The initiative will contribute another $3 million to the planned improvements, with the final $6.5 million coming from the township.

“We look forward to great progress in the coming months and are excited by the efforts of the township to make the community’s vision a reality,” Payne shared.

September 24, 2014

World News

Viridian Takes ‘7 Continents in 7 Years’ Initiative to Nicaragua

During Viridian Energy’s fifth annual PowerUP! Convention last week, the company revealed the fifth location of its 7 Continents in 7 Years initiative. This year Stamford, Connecticut-based Viridian will focus its global sustainability efforts on the Central American nation of Nicaragua. In the rural, off-the-grid village of Potrero Platanal, the company will power 48 homes that previously had no prospects of energy supply.

Viridian’s energy offerings are up to 100 percent renewable, and the company reports that its residential and commercial customers have avoided more than 4.5 billion pounds of carbon emissions. Through 7 Continents in 7 Years, Viridian staff and top-performing Independent Associates take that spirit of sustainability to a different continent each year.

The initiative began with reforestation efforts in the Amazon, where the company has returned annually and planted more than 1,700 trees through its Amazon Preservation Project. In Indonesia, Viridian brought solar power and lighting to one remote village and a clean water pipeline to another. The initiative has also impacted key communities in Ghana and Fiji.

September 23, 2014

U.S. News

Morinda Generates TruAge Buzz at Emmys Style Lounge

Photo above: Celebrities learn about Morinda’s anti-aging products at the Kari Feinstein Style Lounge.

Age is a perennial topic in Hollywood, where Morinda recently brought its TruAge initiative to the Kari Feinstein Style Lounge presented by Paragon. The company’s anti-aging products created a buzz among celebrities and members of the media at the annual pre-Emmys event.

Stars from hit shows like Modern Family, Mad Men, Glee, Veep, Orange is the New Black and The Bachelor stopped by to try Morinda’s AGE Therapy Gel and TruAge Scanner. The patented scanning device, validated in over 100 published studies, non-invasively measures a person’s AGE levels. AGEs, or advanced glycation end-products, are damaging compounds that form in the body and trigger health issues and signs of aging.

“There was a lot of excitement around our TruAge area at the event because our product was the only anti-aging skincare product in this year’s lineup,” says Morinda Product Line Manager, Kira Davis, who took part in the two-day event. “People were so enthusiastic about the TruAge Scanner and discovering their TruAge that other celebrities and Style Lounge participants came over to our area to see what the excitement was about.”

After learning the TruAge of their bodies, participants had the opportunity to sample Morinda’s AGE Therapy Gel. The gel is one of several products formulated by Morinda to reduce external signs of glycation.

“There was a really positive response when the celebrities and media members tried the AGE Therapy Gel on their own skin,” says Davis. “They loved the smooth, light feel of the gel and they were also drawn to the fact that it fights aging with natural ingredients.”

Morinda’s participation in the Emmys Style Lounge, along with featured product roundups on Los Angeles television affiliates, has also given its salespeople something to talk about. The company reports positive feedback on the event from distributors sharing Morinda’s TruAge message with consumers.

September 23, 2014

U.S. News

Vemma Ranked Arizona’s Fastest-Growing Company

Photo above: Vemma spotlights the Platinum Club during its annual convention in Las Vegas.


Due south of Utah, where Zija was recently named the fastest-growing company in the state, another direct selling company is leading the field in growth. Arizona Corporate Excellence (ACE) has ranked Vemma Nutrition Co. the top business in Arizona on its annual ACE Fastest-Growing Cos. list. Scottsdale-based MT Builders ranked No. 2, followed by Phoenix transportation and logistics company GlobalTranz Enterprises.

ACE researches and compiles its list based upon a proprietary formula of accounting firm CliftonLarsonAllen LLP. The formula measures revenue growth—in both actual dollars and percentage—over a two-year period. Vemma jumped from No. 10 in last year’s ranking to claim the top spot. According to Vemma’s DSN Global 100 filings, the nutrition company increased revenue by 30 percent in 2012 and by 89 percent, with net sales of $221 million, in 2013.

“Our growth has come from a couple of different areas. Our international markets have done really well for us,” Vemma Founder and CEO BK Boreyko told the Phoenix Business Journal. “Our European markets finished at $50 million last year. This year, they’re tracking to do $100 million. New products have also done well, opening a broader range of potential customers.”

Vemma also collected accolades in the recent 12th Annual American Business Awards, commonly known as the Stevie Awards. From a field spanning public and private, for-profit and non-profit companies, Vemma received bronze awards in New Product or Service of the Year – Consumer Products, for Vemma Renew™, and in the Events App category, for Vemma All In.

September 19, 2014

World News

ASEA Launches Mexico Market with 3-City Tour

Photo above: ASEA headquarters in Salt Lake City.


Health and wellness brand ASEA is celebrating the grand opening of its Mexico market with three events across the country. The tour kicked off in Mexicali on Thursday, and will include stops in Colima on Sept. 20 and La Paz on Sept. 22.

Since launching in 2009, ASEA has expanded into several EU countries, as well as Australia and New Zealand. The privately held company has developed a breakthrough technology that replicates Redox Signaling molecules in a sustainable form outside the body. ASEA is the only company to market the patented technology, which supports cellular healing and replenishment.

“What we bring to Mexico is a groundbreaking product category and a ground floor business opportunity for those interested in owning their own business,” said ASEA CEO Charles Funke. “In the time since we opened this market, Mexico has become ASEA’s fastest growing international market.”

Funke will join ASEA Founders Verdis and Tyler Norton and President Jarom Webb to keynote the meetings, which aim to build the company’s distributor base in Mexico. The tour will also feature presentations by Dr. Gary Samuelson, an expert on ASEA’s flagship technology.

September 18, 2014

U.S. News

Nerium Doubles Office Space with New Headquarters

Nerium cultivates a familial culture at its corporate headquarters, and it looks like that family will be growing in the near future. The burgeoning skincare company, which incorporates Friday morning breakfasts for its employees, off-site recognition luncheons and complimentary chair massages at the close of each month, is moving to a new headquarters twice the size of its current space.

The home office will cover 75,912 square feet of a property adjacent to Nerium’s Addison, Texas, headquarters. The company chose to remain in the area where it launched in 2011 from a 5,432-square-foot space.

“As an employee-friendly company, we wanted to stay within three miles of our current location; we were thrilled when we found our new state-of-the-art facility, which will allow us to focus on our field as we continue to grow,” Chief Operating Officer Al Richey told DSN. “With its open floor plan, our new headquarters creates a collaborative environment that supports our ‘loving, caring, sharing’ motto.”

Having achieved annual revenue of $219 million in just two years, Nerium is now gearing up for international expansion. The company will open for business in Mexico next month, looking to build upon record growth in the U.S. and Canada. In its three-year history Nerium has maintained a laser focus on developing products backed by science and proven results. Currently, the company’s skincare line features just three products.

“Since inception we have aspired to create real products and real opportunities for our Brand Partners and our customers, and our focus remains the same as we grow,” shared Co-CEO Jeff Dahl, who joined the company earlier this year with a strong background in international expansion. “We believe launching the Mexico market creates huge opportunities for all Brand Partners to expand their businesses and exposes new prospects to the Nerium experience.”