August 26, 2016

World News

This Week: Amway’s Rebirth in China, Oriflame’s Expansion in India

Catch up on the latest direct selling chatter with these click-worthy links:

  • The Economist features the resurgence of Amway’s business in China, where a 1998 ban halted direct selling activities in the country for several years. Despite adjusting its business model to comply with new regulations, Amway remains the biggest direct seller in the market, with sales exceeding $4 billion in recent years.
  • Oriflame India has occupied a new, larger headquarters facility in the city of Chennai, as the Swedish cosmetics maker responds to growing demand in the market, according to a report from The Times of India. The new headquarters offers a variety of services to consultants, including the ability to directly place orders and attend trainings and opportunity meetings organized by the company. Oriflame officials also disclosed plans to establish 30 new service points, where customers can place orders and learn about the company, in India by the end of 2016.
  • A report from The Wall Street Journal suggests that Carl Icahn, longtime supporter of Herbalife in its battle against activist investor Bill Ackman, has discussed selling his 18 percent stake in the company, which recently settled a Federal Trade Commission investigation into its business practices. Sources told the paper that one group in talks with Icahn includes Ackman himself, who presumably would be interested in cutting Icahn’s stake to diminish confidence in Herbalife’s stock.
  • The Observer provides a window into J.Hilburn’s recent annual conference in Dallas, which included a runway show featuring the latest styles from the custom menswear brand. J.Hilburn is carving out a niche for itself by bringing high-quality, personalized garments to new audiences.
  • What J.Hilburn is to custom apparel, Gardenuity is to gardening. Forbes spoke to Donna Letier, Co-Founder of the Dallas-based startup, about using social selling and technology to simplify gardening. Letier discusses her own background in big business and how Gardenuity is appealing to busy professionals.

August 26, 2016

U.S. News

USANA’s New InCelligence Technology Speaks Language of the Cells

USANA Health Sciences this week unveiled InCelligence technology, a scientific advance that harnesses the body’s natural ability to renew and protect itself.

Researchers at Utah-based USANA developed the cell-signaling technology by studying the natural intelligence of human cells, which carry out processes essential to health. The company’s patent-pending InCelligence Complex directly triggers these processes, rather than simply supporting them, as traditional multivitamin supplements do.

Cells generate energy to power bodily functions, right down to the heartbeat, said Dr. Kevin Spelman, USANA Executive Vice President of Research and Development. “But this process can also generate free radicals that can damage the mitochondria within the cell. Fortunately, our cells have a natural process that helps clean any damaged mitochondria out of the cell to help renew efficient cellular function.”

CellSentials, from the company’s new InCelligence line, helps to activate the renewal process and nourish the cells, allowing them to function at high capacity. At its 2016 International Convention, which runs through Saturday in Salt Lake City, USANA also has introduced Proglucamune, a supplement that helps immune cells respond and adapt to stress.

The new technology positions USANA at the cutting edge of nutritional supplement research, according to company Founder Dr. Myron Wentz. “USANA continues to build a reputation as an innovator in the science of cellular health and nutritional supplementation.”

In addition to CellSentials and Proglucamune, two existing USANA supplements—Hepasil DTX for liver detoxification and Procosa for joint support—will now incorporate InCelligence technology.

August 25, 2016

U.S. News

Gold Canyon Moves beyond Home Fragrance with GC Lifestyle

Photo: A selection of GC Lifestyle Scented Jewelry.


Candle maker Gold Canyon is diversifying its offerings with the launch of GC Lifestyle, a new imprint coming in September.

GC Lifestyle will include scented jewelry and home décor collections that take their cue from Gold Canyon’s existing designs. The Arizona company currently sells candles and other home fragrance products, as well as a limited range of home décor. In a statement announcing the launch, GC Lifestyle is described as a “more contemporized brand” that opens new avenues for Consultants to build their businesses.

“This launch represents a natural evolution of our strong heritage in candles and fragrance to become a premium brand that offers accessories for our customers’ personal fashion and for their homes,” said Thomas Kelly, CEO of Gold Canyon. “It’s a perfect fit for our brand and for our network of consultants.”

The company’s new scented jewelry line will feature trendy necklaces and bracelets, with pendants and charms that double as fragrance diffusers. Customers initially will have the choice of three fragrances exclusive to the line. The expanded home décor collection will include vases, trays and throw pillows that reflect Gold Canyon’s fresh, playful feel.

August 25, 2016

U.S. News

Total Life Changes Announces First Acquisition

Photo: TLC’s headquarters in Fair Haven, Michigan.


Total Life Changes recently announced the acquisition of Ryte Inc., a Utah-based benefit corporation with a portfolio of wellness products.

The acquisition, a first for Total Life Changes (TLC), signals a new approach for the Michigan company, as it actively seeks to acquire “smaller companies in need who share our ideals,” in the words of Founder and CEO Jack Fallon. In the case of Ryte, Fallon and his team saw an opportunity to expand TLC’s customer and distributor base—Ryte has just under 1,000 sellers—and introduce them to a wider portfolio of health, wellness and beauty products.

Ryte launched in December 2014 with three dietary supplements that target common needs such as energy, weight loss, mood, relaxation and sleep. The company has since discontinued operations, but founders Riley Shaugaard, Dave Stewart, and Jeff Wilson, have been seeking an organization that could take Ryte’s products and assets and expand upon its original vision.

“We were introduced to the good people of Total Life Changes a few months ago and have found that company,” said Wilson. “TLC is an organization led by people who share our values and understand the great and largely untapped potential of our products.”

TLC has been in business since 1999, but in recent years growth has accelerated, as company executives shared in the April issue of DSN. In 2015, as revenue rose to $76.8 million, TLC upsized its headquarters from a 1,600-square-foot facility to a 24,000-square-foot facility in Fair Haven, an hour outside Detroit. The company also has opened a new branch in Salt Lake City that will support its merger and acquisition strategy.

August 24, 2016

World News

Nu Skin Supplies 500 Million Meals to Malnourished Children

Photo: Children in Malawi, Africa, receive VitaMeal.


Nu Skin Enterprises on Tuesday announced that it has reached a milestone in its Nourish the Children initiative, with 500 million meals donated to date.

The beauty and wellness company launched Nourish the Children in 2002 to combat poor nutrition, which causes nearly half of deaths in children under five, or about 3.1 million each year, according to the World Food Programme. The cornerstone of the initiative is VitaMeal, a nutrient-dense food formulated by Nu Skin nutrition scientists. The rice and lentil meal was crafted specifically for malnourished children, and combines essential vitamins and minerals with a balance of carbohydrates, protein, fat and fiber.

“I’ve seen firsthand the difference that VitaMeal has made in my country,” Malawi’s former first lady, Madam Callista Mutharika, said in the company’s announcement. “Its impact has been life-changing for thousands of kids. Children who were once hungry are now healthy, strong and able to go to school. Mothers who had no food can now provide their loved ones with a warm and nutritious meal.”

Nu Skin distributors, customers and employees support the cause by purchasing VitaMeal, and then opting to donate the product to Nourish the Children. The for-profit structure enables distributors to receive commissions on VitaMeal purchases. The price covers production and distribution costs, with a minimal profit margin for the company.

“It is heartwarming to think of the impact of providing 500 million meals to malnourished children,” said Steven Lund, Executive Chairman of Nu Skin’s board and Executive Director of Nourish the Children. “Reaching such a significant milestone is a testament to the compassion and generosity of Nu Skin’s sales leaders, customers and employees and to the collective good we can do.”

To distribute VitaMeal, Nu Skin partners with third-party nonprofits that specialize in supplying aid to those suffering from malnutrition and famine. The company’s aim is to provide consistent levels of food on a sustainable basis. Thus far, Nourish the Children has helped to feed children in 50 countries.

August 24, 2016

World News

Oriflame Sees Gains on ‘Solid Performance’ in Asia and Turkey

Photo: Oriflame’s Ecobeauty range.


The latest financial report from Oriflame shows a solid first half of 2016 for the Swedish cosmetics maker.

The No. 14-ranked direct selling company in the world saw local currency sales increase 14 percent in the first two quarters. Reported revenue was up 1 percent to €615.4 million, versus €608.9 million in the same period last year.

“The solid performance in Asia & Turkey and Latin America continued and further improvements could be seen in Europe, while the situation in Africa was continuously challenging,” Magnus Brännström, Oriflame CEO and President, said of the company’s performance in the most recent quarter. “CIS experienced local currency growth in the quarter although margin improvement challenges remain.”

In the six months ended June 30, Switzerland-based Oriflame posted a profit of €28.8 million, or €0.51 a share, up from €20.4 million, or €0.37 a share, a year earlier. EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to €68.3 million, surpassing the prior year’s €52.6 million.

Moving into the second half of 2016, the company is preparing to implement a new outsourcing partnership with IBM. The seven-year contract enlists the tech firm to drive Oriflame’s digital business transformation in IT and Finance.

*At the time of this writing, €1.00 was equal to $1.13.

August 23, 2016

U.S. News

USANA Names New Chief Scientific Officer ahead of 2016 Convention

Photo: Robert Sinnott, USANA’s new Chief Scientific Officer.


Nutrition and personal-care products maker USANA Health Sciences has appointed Rob Sinnott, Ph.D., a veteran of the nutritional supplement industry, as its new Chief Scientific Officer.

The news comes as USANA is gearing up for 2016 International Convention, its annual salesforce meeting, which will kick off Wednesday in Salt Lake City. According to company officials, ongoing research efforts will be front and center during the event as the Utah company shares its latest scientific breakthrough with independent Associates.

Sinnott is coming on board to grow the research and development team and drive product innovation to the next level, said USANA Co-CEO Dave Wentz. “Rob gained our attention because of his exceptional leadership and experience in our industry.”

The company’s new Chief Scientific Officer brings 25 years of scientific experience, including more than 18 years in the nutritional supplement space. In undergraduate and post-graduate studies at Arizona State University, Sinnott’s focus was on applied sciences, including biotechnology and plant medicinal chemistry. He holds five patents issued in the U.S., Australia, New Zealand, South Africa and Singapore.

“USANA has a long-standing reputation in the industry for producing premium quality health products that improve lives,” Sinnott said in the company’s release. “I look forward to building on that legacy and leading this world-class R&D team into the future.

The latest innovation to come out of USANA’s research and development lab is MySmart Foods, the brand’s first-ever food product line. MySmart Foods protein shakes and bars allows customers to combine flavors and ingredients that fit their tastes and wellness goals, in alignment with the company’s growing “personalization” strategy.

August 23, 2016

World News

Herbalife Announces First Casa Herbalife Partner in New Zealand

(Photo courtesy of Herbalife Family Foundation)


The charitable arm of nutrition company Herbalife is bringing its Casa Herbalife program to New Zealand, in partnership with the local Starship Foundation.

The Herbalife Family Foundation (HFF) aims to improve the lives of children in need, primarily by providing critical nutrition on a number of fronts. In 2005, HFF launched the Casa Herbalife program, which focuses on reaching those in need by partnering with charities already on the ground serving children.

The first partner identified by Casa Herbalife New Zealand is the Starship Foundation, the charity of New Zealand’s national children’s hospital. HFF donations will help fund Starship’s services to families caring for sick children, including supermarket vouchers to purchase groceries.

“Many Starship families from all over New Zealand will face some of the toughest challenges of their lives when caring for a critically ill or injured young patient,” said Brad Clark, Starship Foundation Chief Executive. “This aid will assist these families with their food and nutrition needs and help them through the hard times.”

Herbalife members and employees, as well as their friends and families, currently support more than 130 Casa Herbalife programs worldwide through recurring or one-time donations to the Herbalife Family Foundation.

August 22, 2016

World News

ACN Targets Asia in First Market Expansion in Two Years

Essential services and health products firm ACN is expanding internationally for the first time in two years with the launch of operations in Japan.

Initially, the company is making its Benevita health and wellness line available to Japanese consumers. ACN introduced Benevita three years ago in select international markets, diversifying a longstanding portfolio of essential services such as wireless, Internet, and gas and electricity. ACN plans to roll out some of those services in Japan in the future.

The move into Japan puts the company in 26 markets worldwide. The island country is the first market ACN has added since July 2014, when operations commenced in Mexico. The North Carolina company branched into Asia in 2010 with the launch of its South Korea business.

“As the fifth-largest direct selling market worldwide, Japan was incredibly appealing to us,” said Greg Provenzano, President and Co-Founder of ACN. “But it was the people that sealed the deal when selecting Japan to continue our Asian expansion.”

The market will be served by a new regional headquarters located in Tokyo. In addition to corporate offices, the facility houses meeting spaces, a call center and a retail storefront. ACN’s Vice President of Sales, Danny Bae, will oversee operations in the country. Bae, who initially joined ACN as an Independent Business Owner, has been key to the company’s expansion into Asia.

August 19, 2016

U.S. News

Direct Selling Firms Are among Utah’s Growth Leaders

Utah has long been a hot spot for direct selling companies, and a new list from Utah Business magazine recognizes the fastest-growing of the bunch.

Four direct selling companies appear on this year’s Utah Business Fast 50, an annual ranking based on five-year compound growth as well as a revenue component. Financial data is submitted to an independent accountant for analysis.

Three of the honorees are established direct selling firms, perennially ranked on DSN’s own Global 100, a list of the top companies in the channel by revenue. The fourth, at No. 49 on the Fast 50, is Lehi-based Xyngular, a health and wellness company founded in 2009. Xyngular’s network of nearly 33,000 distributors generated revenue of $49.7 million in 2015.

Another health and wellness company hailing from the Salt Lake City area, LifeVantage, leads the direct selling contingent on this year’s list. LifeVantage came in at No. 6, despite 2015 sales that fell 11 percent to $190 million. In a recent Top Desk feature, CEO Darren Jensen explained how the company is implementing new technologies and training to expedite the process of bringing new products to market.

Salt Lake City’s USANA and Provo’s Nu Skin also lead the state in growth. USANA, No. 38, has broken its own revenue records for 13 straight years. In 2015, the nutrition company recorded sales of $918 million. Nu Skin’s wellness and beauty offerings brought in $2.2 billion last year. The 32-year-old company ranked No. 42 on the Fast 50.

August 19, 2016

World News

Amway El Salvador Partners with Local NGO to Fight Malnutrition

Less than a year after bringing its Nutrilite Power of 5 Campaign to El Salvador, Amway is providing critical nourishment to hundreds of children in the country.

The campaign to raise awareness of global malnutrition, and in particular the need for proper nutrition in the first five years of life, is one of Amway’s largest corporate social responsibility initiatives. It supports funding and distribution of Nutrilite Little Bits, a daily micronutrient supplement containing 15 essential vitamins and nutrients.

Around the world, Amway often partners with established local organizations to distribute Nutrilite Little Bits to those who need it most. In El Salvador, the company has teamed up with the Gloria de Kriete Foundation (GKF), which provides complementary education and health services in impoverished communities across the region.

“As we were looking to launch the Nutrilite Power of 5 Campaign here, we looked for a strong local partner, one that had a solid reputation and was well known in the community. GKF had just that!” said Cameron Juarez, Marketing Manager for Amway Central America.

Amway launched the initiative in El Salvador last October, and the company’s participation has helped to fill a gap in the services available through GKF. “The concept of a private company joining forces with an established social organization that has experience working with the mother-child duo, further consolidates the overall process in the fight against poverty,” said Celina de Kriete, the foundation’s Executive Director.

At this time, Amway’s strategic partnership in the country is supplying critical daily nourishment to more than 700 children, including 1-year-old Axel, who weighed in at just 19 pounds when he entered the program six months ago. The company reports that today Axel is a happier and more active child, and at 24 pounds is no longer showing symptoms of malnourishment or anemia.

August 19, 2016

World News

Natural Health Trends Celebrates 15th Anniversary in Hong Kong

Photo: Hong Kong skyline.


Natural Health Trends Corp. recently hosted more than 10,000 at a Hong Kong event celebrating the company’s 15th anniversary.

Over the past 15 years, California-based Natural Health Trends has logged a compound annual growth rate of 19 percent, but last year sales climbed 113 percent from the prior year, reaching a record $264.9 million. Hong Kong is the company’s primary market, accounting for about 90 percent of sales. Natural Health Trends sells beauty, personal-care and wellness products under the NHT Global brand.

During its anniversary celebration, held Aug. 13–14, the company unveiled three new additions to its wellness line, including OcuFocus, an eye health supplement; NaturalGlo, a vegan beverage promoting skin health; and FE Enzyme Toothpaste, a lysozyme-derived paste with anti-bacterial and anti-inflammatory properties.

“I would like to thank all of our members that attended the event to celebrate our 15th anniversary, as well as the thousands more who have spent the time and effort to enrich themselves and other members in their shared passion for wellness.” Chris Sharng, Natural Health Trends President, said in the company’s release.

The two-day event also included a charity auction to fund the company’s ongoing philanthropic projects. The fundraiser brought in more than $65,000 from members and guests in attendance.

August 18, 2016

U.S. News

Inc. 5000: Which Direct Selling Companies Made the Fastest-Growing List?

A number of direct selling companies made Inc. magazine’s newly released Inc. 5000, an annual list of the fastest-growing private companies in America.

To compile its ranking of U.S.-based, privately held companies, Inc. measures percentage revenue growth over the past three years, in this case 2012–2015. The list is published each September, and while a handful of direct selling companies consistently make the cut, results vary considerably from year to year as revenue ebbs and flows and new players enter the market.

Topping the 2016 list is Los Angeles-based Loot Crate, which sends a monthly themed mystery box of gadgets, art, apparel, and other items tailored to “geeks and gamers.” The company also produces supplemental content to foster the kind of community found at Comic Con and similar events.

Florida-based Jeunesse Global is the sole direct selling company on this year’s Inc. 500, a special ranking of companies in the top 10 percent. The maker of cosmetics and personal-care products recorded a whopping 791 percent revenue increase in the period, which was capped by 2015 sales of $1.09 billion. Also named one of the 2016 Best Places to Work in Direct Selling, Jeunesse expanded operations earlier this year with the opening of a second corporate office in the Salt Lake City area.

In all, the 2016 Inc. 5000 features eight direct selling companies, whose offerings span the categories of consumer products and services, travel and hospitality, health, and retail. As shown in the table below, with the exception of Jeunesse, three-year growth ranged from 48 percent at Pure Romance to 581 percent at WorldVentures. Arizona-based Isagenix has spent 10 consecutive years on the list, and is one of just 74 companies to make the list 10 times.

481

Jeunesse Global

791%

$1b

Consumer Products & Services

581

WorldVentures

581%

$567.4m

Travel & Hospitality

886

Nerium International

450%

$515.7m

Consumer Products & Services

1546

ARIIX

246%

$111.7m  

Consumer Products & Services

2206

Isagenix

166%

$889.7m

Health

4005

Xyngular$73%$47.6mHealth

4588

Market America

53%

$791m

Retail

4768

Pure Romance

48%

$163.9m

Consumer Products & Services

August 17, 2016

U.S. News

Morinda Celebrates 20 Years of Business with Local Service Project

Photo: Morinda delivers sensory exploration kits to Kids on the Move.


As part of the wellness company’s 20th anniversary celebration, Morinda recently held a service project to give back to the local community.

Morinda’s entire corporate staff took part in the project, which benefited three organizations serving Utah County, home to Morinda’s American Fork headquarters. The company’s past philanthropic work has taken place both within the community and around the world, particularly in Tahiti, where Morinda sources the noni fruit found in its top-selling Tahitian Noni product line.

“We’re proud to continue the tradition that Morinda has created over the last 20 years and do something to give back to other people,” said Jon Hallstrom, Morinda’s Senior Director of Sales.

To mark the two-decade milestone, Morinda employees donated more than 500 pounds of food to the Utah Community Action Food Bank. The nonprofit takes a two-step approach to ending local poverty, by first meeting the immediate needs of individuals and families, and then providing education and a support system to help them rebuild their lives.

“Food drives like this one are critical to our success as we help those in need meet their very basic needs,” said Grace Thomas, Community Action’s Communications Director. “We can’t do what we do without generous community members.”

The company also compiled 200 sensory exploration kits for Kids on the Move, a local organization serving children with special needs and their families. Services are tailored to children with developmental delays and autistic spectrum disorders, and those in low-income families.

The third organization selected by Morinda was the Boys & Girls Club of Utah County, which received 500 school supply kits and additional craft supplies. Boys & Girls Clubs of America is dedicated to helping young people realize their full potential as responsible citizens and leaders. The kits will be distributed to underprivileged youth who participate in the club’s after-school programs and other initiatives.

August 17, 2016

World News

Oriflame Partners with IBM to Take IT and Finance Services Digital

Oriflame Holding AG has inked a seven-year deal outsourcing its IT and finance operational services to IBM, the beauty company announced Tuesday.

The partnership will enable Oriflame to reduce costs and advance the digital transformation of its business, drawing upon IBM’s expertise in analytics, cognitive systems and cloud-based services. The resulting services and tools will help to drive customer focus, productivity and automation at the $1.3 billion company, which sells a wide portfolio of Swedish, nature-inspired beauty products.

“For Oriflame, being already advanced in the online area, this partnership will be another leap forward in our digital business transformation,” said Gabriel Bennet, Oriflame Chief Financial Officer. “IBM’s innovation in cognitive analysis for IT and financial transactional services will provide us with valuable business insights.”

Over the course of the partnership, IBM will roll out custom tools based on its proprietary technology platform, Watson, to provide spend analytics, payment terms optimization and cash forecasting. The technology firm also will introduce cloud-based enabling tools for increased accuracy and efficiency. Switzerland-based Oriflame said it will continue to manage the IT portfolio and develop its core systems.

“We have implemented IBM Design Thinking techniques to help build solutions which deliver a better user experience,” said Anita Karlsson-Dion, Vice President of Client Services for IBM Global Business Process Services. “We’re very confident that this will bring a customer-oriented focus to the delivery of IT and financial services for Oriflame.”

The partnership with IBM is slated to begin next month, with implementation across the entire Oriflame group by the end of 2017.

August 16, 2016

U.S. News

Origami Owl to Roll Out Dreamworks-Inspired Collections

Photo: Products on display at an Origami Owl Jewelry Bar event.


Though the designs are still under wraps, this fall customizable jewelry company Origami Owl will introduce character-inspired collections through a new licensing deal with Dreamworks Animation.

The collaboration is Origami Owl’s largest to date, and the first foray into social selling for Dreamworks, creators of Shrek, How to Train Your Dragon, Kung Fu Panda and other popular film franchises. Origami Owl will launch its first character-inspired offerings Oct. 1, in connection with the release of Trolls, a new animated comedy from Dreamworks. The Arizona-based company said the collection will include its signature Living Lockets, Charms, Dangles and even new product categories.

“It’s been wonderful to collaborate on the pieces,” said Chrissy Weems, Origami Owl President, who co-founded the company in 2010 with her then 14-year-old daughter, Bella. “The film’s themes parallel Origami Owl’s core values and mission ‘to love, inspire and motivate others.’ The feature’s vibrant colors and upbeat, happy music also reflect the sense of joy and energy evoked by the Origami Owl brand.”

Though no specifics have been announced, the company said its agreement with Dreamworks is a long-term one. Following the launch of the Trolls Collection, Origami Owl customers can expect to see additional collections inspired by favorite franchises and characters.

August 15, 2016

U.S. News

Youngevity Adds Nature’s Pearl to Growing Direct Sales Platform

Photo: Muscadine grapes.


Youngevity on Monday announced the acquisition of Nature’s Pearl Corp., a grower, manufacturer and seller of Muscadine grape products primarily for the personal-care and nutrition categories.

Nature’s Pearl is Youngevity’s second acquisition in as many weeks, following a deal with Renew Interests LLC, which includes the SOZO Global and Integris brands. The acquisition of Renew Interests expanded Youngevity’s nutrition, coffee, weight-loss, energy and skincare offerings.

In a statement announcing the most recent deal, Jerry Smith, Founder and CEO of Nature’s Pearl, called Youngevity “the clear choice” to help introduce Nature’s Pearl products to a wider customer base. Nature’s Pearl has a database of 17,000 distributors and 45,000 customers across the U.S. and international markets. The company is on track to generate $9 million in annual revenue.

California-based Youngevity sells a wide range of nutrition, coffee and lifestyle products through its growing direct sales platform, described as a “network of networks.” The company’s vertically integrated coffee business also serves the commercial and retail channels.

“We are pleased and excited to acquire the assets of Nature’s Pearl, a company that brings an array of products based on the benefits of the Muscadine grape,” said Steve Wallach, CEO of Youngevity. “Upon closing and full integration on September 1, 2016, Youngevity will be the only direct selling company to offer Muscadine personal-care products to its distributors and customers.”

In recent studies conducted at Wake Forest School of Medicine, the Muscadine grape extract used by Nature’s Pearl was found to have significant anti-oxidative and immunity-boosting benefits. The research, made possible by a $20 million philanthropic grant, also showed that the extract provides critical support for heart and circulatory health. Muscadine grapes are grown exclusively in the American South.

August 15, 2016

World News

Nerium Set to Launch in Hong Kong in Q4

Nerium International, a maker of anti-aging skincare and nutrition products, recently announced plans to launch operations in Hong Kong in the fourth quarter.

The Dallas-area company has appointed Eris Ching as General Manager of the region, which will be served by an office in central Hong Kong. “Nerium’s leadership team looks forward to bringing our unique business model and revolutionary products to the cosmopolitan city of Hong Kong as we continue to expand Nerium International into the Asia-Pacific market,” said Jeff Olson, Nerium Founder and CEO.

Nerium’s expansion strategy in 2016 is largely focused on the Asia Pacific region, which accounts for 46 percent of global direct sales, according to research from the World Federation of Direct Selling Associations. After launching last year in South Korea, its first Asia-Pacific market, the company expanded into Japan last month. Nerium has targeted the fourth quarter to commence operations in both Hong Kong and Australia.

The company said it initially will roll out four products in Hong Kong, namely its Optimera Formula Age-Defying Day Cream, Age-Defying Night Cream and Firming Body Contour Cream, as well as an Age-Defying Eye Serum.

August 12, 2016

U.S. News

Youngevity Posts Record Q2 Revenue amid Continued Acquisitions

Youngevity International Inc. (YGYI—OTCQX) on Thursday said revenue rose 10 percent to a record $42.5 million in the second quarter, compared to $38.7 million in the same period last year.

The California-based company sells a range of health, beauty, and home products through its direct selling division, which accounted for 87 percent of quarterly sales. Youngevity is also a producer of gourmet coffees sold through commercial, retail and direct selling channels.

Management said about 4 percent of revenue growth in the quarter resulted from new acquisitions, a strategy that continued earlier this week with the acquisition of Renew Interests LLC, which includes the SOZO Global and Integris brands.

“While we intend to continue to expand our distributor base, we also intend to remain diligent in identifying additional products, either developed internally or through acquisitions, which quarter after quarter has proven to be an increasingly predictable and sustainable business model,” said Davie Briskie, Youngevity President and CFO.

In the quarter ended June 30, the company posted a loss of $109,000, compared with a year-ago loss of $408,000. Adjusted EBITDA was $2.6 million, compared to $3.3 million a year earlier. Gross profit rose 7 percent from the prior-year period to $25.4 million.

August 12, 2016

U.S. News

J.D. Power Study Names Ambit Energy a Leader in Customer Satisfaction

Ambit Energy once again has been named a leading retail electric provider, based on an annual customer satisfaction study by J.D. Power.

The 2016 Retail Electric Provider Residential Customer Satisfaction Study evaluates the 91 providers in nine competitive markets across the U.S. In all, 20,000 customers were queried to determine satisfaction in five key areas: price, communications, corporate citizenship, enrollment/renewal and customer service.

Breaking down the responses by state, J.D. Power reports that Ambit ranked highest among retail electric providers in Connecticut for the second consecutive year. The Dallas-based company scored 735 on a 1,000-point scale, with particularly high marks for communications and enrollment/renewal. In New Jersey, Ambit ranked second with a score of 687, and in Illinois the company was third with 644.

Overall, the study found that switching and renewal rates are falling as customers find fewer incentives to shop around. “Historically, the key differentiator between retail electric providers and regulated providers has been price, but that price gap has shrunk,” said Andrew Heath, Senior Director of J.D. Power’s utility and infrastructure practice.

Across the nine states included in the study, half of those J.D. Power labels delighted customers—with overall satisfaction scores of 900 or higher—say they “definitely will not” switch providers, as do 37 percent of pleased customers (750-899) and 25 percent of indifferent customers (550-749).

What would it take to win over the average customer? Those labeled indifferent said they would consider switching for a cost savings of $30 a month, while pleased customers would require $35 in monthly savings. Delighted customers are even more resistant, citing a level of $46 a month to consider switching.

August 12, 2016

World News

Herbalife to Sell Direct in Three More Chinese Provinces

Herbalife recently obtained three new direct selling licenses in China, giving the nutrition company the green light to expand operations in the country.

Due to strict regulations on direct selling activities, China’s Ministry of Commerce grants permits on a province-by-province basis, following a review of the applicant’s existing operations in the country. Herbalife is now licensed to do business in the provinces of Gansu, Ningxia and Inner Mongolia, which have a combined population of 57 million.

The company has 300,000 service providers in China and licenses to operate in 25 other provinces. In the first half of 2016, Herbalife logged revenue of $459.9 million in China, making it the company’s second largest region behind North America.

“Our business continues to expand as more consumers see Herbalife as a trusted, convenient and accessible nutrition brand,” Herbalife’s Senior Vice President and Manager of China Operations, Jerry Li, said in a statement.

In July, Herbalife opened a new manufacturing facility in Nanjing, the capital of Jiangsu province, to meet growing demand in China. The 372,000-square-foot factory doubles Herbalife’s production capacity in the country to 60 million units annually.

August 11, 2016

U.S. News

Isagenix Raises $5 Million in 4 Years for Make-A-Wish

Photo: (left to right) Travis Garza, Isagenix Chief Sales and Marketing Officer, with wish recipient Jordyn, her parents, Don and Beverly, and Isagenix team member Elizabeth Martinsen, who lost her child to cancer.


During its 2016 Celebration event this week, health and wellness company Isagenix International raised more than $100,000 in support of charitable partner Make-A-Wish.

Associates who traveled to Las Vegas for Celebration experienced firsthand the work of Make-A-Wish, which grants the wishes of children with life-threatening medical conditions. In what has become a tradition for the company, Isagenix featured one wish reveal live from stage, while raising funds for the nonprofit throughout the five-day event.

This year’s recipient was Jordyn, a 16-year-old diagnosed with a rare form of liver cancer. The teen’s longtime wish to travel to London and take in its culture and history was granted before an audience of more than 14,000. It is one of 580 wishes Isagenix has helped to grant through its partnership with Make-A-Wish.

“Isagenix customers and employees remain committed to positively impacting and improving world health through our support of Make-A-Wish, to enrich the human experience with hope, strength and joy,” said Travis Garza, Isagenix Chief Sales and Marketing Officer.

The Arizona company has raised more than $5 million for Make-A-Wish since partnering with the charity in 2012. In 2013, Isagenix received Make-A-Wish America’s prestigious Cause Champion Award for its outstanding contributions.

August 10, 2016

U.S. News

Youngevity Acquires Renew Interests, Owner of SOZO and Integris

Youngevity International LLC on Tuesday announced the acquisition of Renew Interests LLC, which includes the SOZO Global and Integris brands.

California-based Youngevity sells a wide range of nutrition, coffee and lifestyle products through its growing direct sales platform, described as a “network of networks.” The company’s vertically integrated coffee business also serves the commercial and retail channels.

The addition of SOZO and Integris, part of Youngevity’s ongoing acquisition strategy, will expand both the company’s salesforce and its product offerings across the nutrition, coffee, weight-loss, energy and skincare categories.

“The brands we acquired in this transaction exceed our high and stringent quality standards,” said Steve Wallach, CEO of Youngevity. “I believe SOZO’s emphasis on the coffee berry as an ingredient will have particular appeal to our growing customer base.”

SOZO Global’s Co-Founder, President and CEO, Mark Adams, said Youngevity’s extensive product lines, business structure and support system, and experienced management team made joining forces an attractive proposition. “Our team at SOZO Global viewed the unique opportunity provided through Youngevity’s platform as an opportunity we could not pass up,” said Adams.

Founded in 2009, SOZO takes its name from a Greek term meaning health, rejuvenation and wholeness. The Austin, Texas-based company sells a range of wellness and personal-care products. Integris, launched in 1996, is a maker of health supplements and shakes formulated with natural ingredients.

August 10, 2016

World News

In Nepal, doTERRA Partners with CHOICE on Earthquake-Ready Schools

Photo: Nearly a year after the 2015 earthquake, rubble still fills the streets of Bhaktapur, Nepal.


Essential oil seller doTERRA International and CHOICE Humanitarian recently completed the first two earthquake-resilient schools in Nepal, after a 7.8-magnitude quake devastated the region last year.

In September 2015, doTERRA announced that it would team up with CHOICE to provide aid and create jobs for poverty-stricken communities in Nepal. The international nonprofit is dedicated to ending extreme poverty and improving quality of life through a self-developing, village-centered approach. In Nepal, that approach has included the construction of local schools. The first two, built in partnership with the doTERRA Healing Hands Foundation, are also the first in the country to comply with new structural regulations instituted by the Nepali government.

“Through the amazing generosity of our doTERRA Wellness Advocates and those working in Nepal, together we’ve been able to help families begin to reestablish themselves,” said Emily Wright, doTERRA Co-Founder and Vice President of Sales and Marketing. “Something as simple as having a school to attend or a safe home makes all the difference. We are honored and happy to be able to play a part.”

In the past year, doTERRA and its Wellness Advocates have donated more than $636,000 to rebuilding efforts in Nepal. The company also has sent several groups to assist in projects CHOICE is orchestrating on the ground. On the manufacturing side, doTERRA is investing in some of the most affected regions of the country through Co-Impact Sourcing of its wintergreen essential oil. The company’s co-impact initiative is focused on forming long-term partnerships with small-scale growers and distillers to bring sustainable income to underdeveloped economies.

August 09, 2016

U.S. News

Primerica Reports Q2 Growth Boosted by Life Insurance

Primerica (NYSE: PRI) beat analyst estimates with second quarter earnings growth of 8 percent on total revenue of $379.2 million, compared to the second quarter of 2015. Operating revenue jumped 7 percent to $375.8 million for the quarter.

Diluted earnings per share were $1.19. That’s an increase of 27 percent and 13 cents better than the analyst estimate of $1.06.

The Duluth, Georgia, company reported growth in its life insurance segment:

  • 14 percent boost in life insurance policies issues.
  • 11 percent increase in life insurance licensed representatives to 112,365.

CEO Glenn Williams says Primerica continues to see strong performance throughout the business.

“Our sales force leaders delivered distribution growth and strong life insurance productivity in the second quarter,” Williams says.

Primerica’s investment and savings products (ISP) also performed well despite uncertainty in the market. ISP revenue dropped 2 percent to $132.7 million. Income before income taxes decreased 4 percent to $36.1 million compared to a year ago. These results show a 6 percent decline in product sales to $1.47 billion. The company says this is due to lower variable annuity sales.

August 09, 2016

U.S. News

Mannatech Reports Higher Sales, Net Loss in Second Quarter

Health firm Mannatech Inc. (MTEX—NASDAQ) reported higher second-quarter sales on the heels of a company rebranding that ushered in new products and systems.

The new look and feel helps position Mannatech as a compelling and relevant choice for today’s consumer, President and CEO Al Bala told DSN. “We deliberately and conscientiously decided to take our time and understand the new Mannatech and who we are today, versus who we’ve been for 21 years, because a lot of things have changed in the industry and in the wellness space in general.”

With the introduction of new offerings and tools at the start of the quarter, sales in the period were the highest the company has seen in seven quarters. Overall revenue was $48.8 million, up 4.5 percent from a year earlier. Notably, in Mannatech’s largest regions, Asia-Pacific and the Americas, net sales per active independent associate and member increased 10 percent and 13 percent, respectively. Markets outside the Americas accounted for approximately 61 percent of revenue.

For the quarter ended June 30, the Texas company posted a loss of $1.3 million, or 49 cents a share, compared with a profit of $3.1 million, or $1.15 a share, in the second quarter of 2015.

August 09, 2016

U.S. News

Nature’s Sunshine Reports Sales Up, Driven by Growth in Asia

Nature’s Sunshine Products Inc. (NATR—NASDAQ) on Monday reported second-quarter net sales revenue of $89.4 million, up 10 percent compared to sales of $81.2 million in the second quarter a year ago.

This marks the eighth consecutive quarter of net sales growth for the company’s operations in the U.S. and Canada.

The natural health and wellness company said it recorded net income of $2.4 million for the quarter, or 14 cents per common diluted share. On a local currency basis, net sales revenue jumped 11.5 percent.

The Lehi, Utah-based company’s Synergy Asia division delivered 28.5 percent local currency growth in the second quarter.

Unfavorable currency exchange rates caused a negative impact of $1.3 million on net sales revenue. The company also saw sales decline in NSP Russia and its Central and Eastern European segments.

For the first half of 2016, net sales revenue hit $171.8 million, up 4 percent from $165.1 million compared to the first six months of 2015. The growth is driven by an $8.9 million or 23.7 percent increase in Synergy Asia and incremental net sales revenue increase of $4.4 million related to sales through Hong Kong.

Net income for the first six months of 2016 is $4.2 million or 24 cents per diluted common share.

Chairman and CEO Gregory Probert says, “Sustained local currency growth in both NSP United States and NSP Canada continues to reflect the strong foundation within our most mature markets and is a reflection of our high quality products and effective business model. The improvements we have put in place at Synergy WorldWide are delivering strong results across all geographical regions.”

Probert is optimistic about its new market opportunity in China and remains encouraged by the success of Nature’s Sunshine’s patent-pending IN.FORM weight-loss and daily habit of health program.

Nature’s Sunshine shares have risen 25 percent since the beginning of the year. In the final minutes of trading on Monday, shares hit $12.66, a decrease of 2 percent in the last 12 months.

August 08, 2016

World News

Your Inspiration at Home Earns Top Honor at Fine Food Awards

Australia-based Your Inspiration at Home was voted best in show at the recent 2016 Royal Agricultural Society of Tasmania Fine Food Awards.

The company’s spice blends, dip mixes and specialty oils and vinegars proved popular at the gourmet food competition, earning a total of 108 medals. “The third-party judging and award process is a fantastic way to showcase our commitment to the quality of our product range and our commitment to our global community,” said company Founder, CEO and Spice Curator, Colleen Walters.

Your Inspiration at Home launched in 2011 to bring unique international flavors to kitchens everywhere. The brand has since come under the umbrella of JRJR Networks and expanded its operations to New Zealand, the United Kingdom, Ireland, the U.S. and Canada. To date, the spice maker has collected 480 fine food awards, including 12 Champion and Reserve Champion awards for best in class.

In the most recent competition, the company’s Raspberry, Cranberry & Hibiscus Balsamic Vinegar was named Champion Savoury Preserve and awarded the Richard Langdon—Best Exhibit in Show trophy, beating out a pool of 1,415 entries for overall best product. Your Inspiration at Home’s Chinese Five Spice blend was also recognized as the overall Herb & Spice Category Reserve Champion.

August 08, 2016

U.S. News

Medifast Beats Earnings Expectations, Revises Outlook

Medifast Inc. (MED—NYSE) recently announced second-quarter earnings that beat expectations, despite narrowly missing on revenue.

The weight-loss firm, including its largest division, direct selling arm Take Shape For Life, posted quarterly earnings of 63 cents a share from continuing operations, topping the analyst consensus estimate of 51 cents. The bottom line reflects a $6.1 million non-cash asset impairment charge, resulting from the company’s decision to abandon software in development, after an analysis found lower-cost alternatives now on the market.

In the quarter ended June 30, Medifast’s strategy of better differentiating its business segments was a key performance driver, according to Chairman and CEO Michael MacDonald. At Take Shape For Life, that strategy brought about a company-wide rebranding, which will be phased in over the next year, and the rollout of exclusive products under the new Optavia brand.

Overall revenue was $71.14 million in the period, compared to the $72.01 million expected by analysts. Revenue was down 1.5 percent from a year earlier. In the Take Shape For Life unit, revenue rose 10 percent to $57.4 million, versus $52.3 million in the second quarter of 2015.

“In Take Shape For Life, we have built a strong foundation for continued success and are pleased with the double-digit revenue growth in this business unit in the second quarter, which was the highest level of year-over-year growth in three years,” said MacDonald.

Management’s full-year revenue guidance remains in the range of $275.0 million to $282.0 million. Taking into account the impairment charge, the company now expects per-share earnings of $1.38 to $1.43, compared to its previous outlook of $1.75 to $1.80.

August 05, 2016

U.S. News

Le-Vel Donates $240K in Support of Hoyt Foundation

Photo: Jason Camper (left), Dick Hoyt and Paul Gravette at Le-Vel’s annual convention.


Health and wellness company Le-Vel Brands LLC recently announced a $240,000 donation to the Hoyt Foundation, an organization dedicated to improving quality of life for those living with disabilities.

The funds came from sales of Le-Vel’s limited-edition Hoyt Derma Fusion Technology (DFT), a patch worn on the skin to support the body’s metabolism process. In June, Le-Vel allocated $5 from every purchase to the Hoyt Foundation, which aims to build the individual character, self-confidence and self-esteem of America’s disabled young people through inclusion in all facets of daily life.

Last year, the company ran similar cause marketing promotions in support of the National Breast Cancer Foundation and Toys for Tots, generating nearly $400,000 in overall donations.

The Hoyt Foundation was formed in 1989 by Dick Hoyt, a retired lieutenant colonel, and his son, Rick, who was born with cerebral palsy and is unable to speak our use his hands and legs. Despite these challenges, the father-son team has gained recognition for competing in more than 1,100 athletic events in the last 37 years, including 32 Boston Marathons and six Ironman competitions, with Dick pushing his son in a custom-made wheelchair as they run.

“The Hoyts are proof that, with perseverance, belief and a strong support system, we can achieve incredible things,” said Paul Gravette, Co-Founder, Co-Owner and Co-CEO of Le-Vel. “On behalf of our employees, independent Brand Promoters and their customers, we’re honored to support Team Hoyt and the Hoyt Foundation in their tireless efforts to help the disabled and physically challenged live their lives to the fullest.”

The contribution is part of an ongoing partnership between Le-Vel and Team Hoyt. The virtual company, which uses cloud-based technology for its day-to-day operations, previously donated $50,000 to the Hoyt Foundation, and the senior Hoyt was a surprise headline speaker at Le-Vel’s annual salesforce convention in April.

August 05, 2016

U.S. News

Nu Skin Announces Q2 Results, New Board Appointment

Nu Skin Enterprises Inc. (NUS—NYSE) topped its own sales guidance with second-quarter revenue that climbed 7 percent, the beauty and wellness company said Thursday.

In the quarter ended June 30, the Utah company logged revenue of $600.5 million, surpassing its $560 million to $580 million forecast. Currency fluctuations negatively impacted sales by 10 percent.

Notably higher sales in the South Asia/Pacific and Greater China regions—up 36 percent and 18 percent, respectively—were offset by a 19 percent decline in the Americas. In its largest market, Greater China, the company also recorded 22 percent year-over-year growth in the size of its independent salesforce.

Earnings per share were 79 cents, cut 13 cents by currency exchange rates, but up from 75 cents a year earlier. The results were in line with analysts’ expectations, according to data compiled by Thomson Reuters. The company expects third quarter earnings of 80 to 84 cents a share.

“Our balance sheet continues to be strong, boosted by positive cash flow from operations for the quarter of $139 million, with continued improvements to our inventory balance,” said Truman Hunt, Nu Skin President and CEO. “Our cash balance includes approximately $200 million of proceeds from the recent investment by Ping An Securities during the second quarter, which we plan to deploy in repurchasing shares over the balance of the year.”

Following its recent investment deal with Ping An ZQ China Growth Ltd., Nu Skin also announced that it is adding one of the group’s representatives, Simon Shen, to its board of directors. Shen is a founding member of ZQ Capital Ltd., with a background in Asian capital markets and extensive experience in mainland China.

The company boosted its full-year revenue guidance to between $2.20 billion and $2.24 billion. Earnings per share are expected to fall in the range of $2.44 to $2.54, or $2.80 to $2.90 when excluding a non-cash Japan customs charge taken in the first quarter.

August 04, 2016

U.S. News

Herbalife Beats on Earnings, Boosts 2016 Guidance

Herbalife Ltd. (HLF—NYSE) boosted its guidance for the year in its latest earnings report, released late Wednesday and watched closely by investors following the nutrition company’s settlement with the Federal Trade Commission.

Results exceeded Wall Street estimates for the quarter ended June 30, just weeks before Herbalife announced a settlement with the FTC. The long-awaited deal concluded a U.S. probe into the company’s business practices that had stretched on for more than two years, following accusations by hedge fund manager Bill Ackman that Herbalife rewards distributors for recruiting new members rather than sales of its shakes and supplements. Ackman has backed his claims with large bets against the company’s stock.

In its complaint, the commission did not accuse Herbalife of being a pyramid scheme, and the company is able to continue its U.S. operations, with some new restrictions. Herbalife agreed to pay a $200 million judgment and implement various policy and procedural changes, including distinguishing between those who sign up to sell products and those who only wish to purchase products at a discount.

Additionally, to compensate distributors at current levels, at least 80 percent of Herbalife’s product sales must be to legitimate end-users, rather than for the distributor’s personal consumption.

Taking into account the impact of these changes, management expects full-year adjusted earnings of $4.50 to $4.80 a share, up from May guidance of $4.40 to $4.75.

The company recorded a second-quarter loss of $22.9 million, or 28 cents a share, including a $203 million charge related to regulatory settlements. Excluding items, earnings were $1.29 a share, up 4 percent from a year ago. Analysts polled by Thomson Reuters had predicted $1.21 a share.

Overall sales rose 3 percent to $1.20 billion, in line with the $1.19 billion expected by analysts.

The company is developing new tools and apps to help distributors implement agreed-to changes within the 10 months provided by the FTC. During a call with investors, Chairman and CEO Michael Johnson said Herbalife will “likely roll out” many of the changes globally, once it has studied affects in the U.S.

August 03, 2016

World News

Avon Sees Higher Profit in Second Quarter

After spinning off its North America business in March, Avon Products Inc. (AVP—NYSE) began to improve its bottom line in the most recent quarter.

The beauty company is implementing a cost-cutting plan introduced in January that will include trimming its staff and supply chain and moving its headquarters to the United Kingdom. After three years, the plan is expected to save Avon $350 million a year before taxes.

In the quarter ended June 30, the company cleared a profit of $33 million, up from $28.8 million a year earlier. Per-share earnings slipped to 6 cents from 7 cents a year ago. On an adjusted basis, earnings were down from 9 cents a share to 7 cents a share. Analysts polled by Thomson Reuters had expected earnings of 2 cents a share.

Revenue fell 8 percent to $1.43 billion, beating the $1.41 billion predicted by analysts. 

Earlier this year, the beauty company inked a deal with Cerberus Capital Management LP for majority ownership of Avon’s domestic operations. Cerberus agreed to inject $435 million into the business, which it then took private as New Avon LLC, along with another $170 million investment in Avon Products.

Revenue was down across the company’s remaining segments, hurt by foreign exchange rates. Constant-dollar revenue was up in all segments except Asia Pacific, where the company logged a 5 percent decline.

“Our performance improvements were broad-base with nine of our top 10 markets growing in local currency,” said Sheri McCoy, CEO of Avon Products. “We continue to make steady progress on a number of fronts: improving pricing discipline; driving additional cost out of the business; and continuing to build our brand and enhance the Representative experience,” said Sheri McCoy, CEO of Avon Products.

Following Tuesday’s release, shares in Avon climbed as much as 21 percent to $5.04—the stock’s biggest intraday jump since Feb. 12. Ahead of the report, the shares were up 2.7 percent this year.

August 01, 2016

U.S. News

Thirty-One Gifts, Nationwide Children’s Hospital Launch ‘Girls Take Flight’

Bags, accessories and home décor company Thirty-One Gifts is partnering with Nationwide Children’s Hospital to launch Girls Take Flight, an initiative to support girls facing mental illness and behavioral health illnesses.

Through its charitable arm, Thirty-One Gives, the company will help to fund behavioral health research conducted by Nationwide Children’s, the nation’s largest not-for-profit freestanding pediatric healthcare system. Thirty-One said it already has collected $37,000 in personal contributions from its independent sales leaders. The company also pledged to donate all proceeds from its September “Gives Round Up!” program and make a contribution during its “Standing Strong for Her” initiative in October.

“Mental illness is a crisis for girls, and the statistics are staggering,” said Cindy Monroe, Founder, President and CEO of Thirty-One. “This initiative marks the first time Thirty-One Gifts will be supporting ground-breaking medical research, and we couldn’t be more excited about it.”

The Ohio company introduced Girls Take Flight during Thirty-One Conference, an annual salesforce meeting held this month in Columbus, Ohio, and Salt Lake City. The event featured a keynote speech by New York Times best-selling author Andy Andrews, who has championed the work of Nationwide Children’s Hospital. Thirty-One tied its new initiative to the message of Andrews’ popular book, The Butterfly Effect, which explores the ripple effect of small decisions.

“At Nationwide Children’s, we strongly believe in the butterfly effect of small gestures helping families we may never meet,” said Jim Digan, Nationwide Children’s Hospital Foundation President. “The generosity and advocacy of the independent sales consultants and customers will change lives for the better. We are humbled and honored to work with them on this vital mission.”

Thirty-One said it will equip its 70,000 consultants with resources to raise awareness and reduce the stigma of mental and behavioral health illnesses. The company also released a new thermal tote product printed with butterflies, which symbolizes the Girls Take Flight campaign and the hospital’s logo.

August 01, 2016

Stock Watch

Stock Watch, August 2016


July 31, 2016

Company Spotlight

Embracing Optimal Wellness: The Evolution of Take Shape For Life

by Nicholas Sakelaris


Click here to order the August 2016 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 2003
Headquarters: Owings Mills, Maryland
Executives: Mona Ameli, President of Take Shape For Life
Products: Healthy meals, snacks, bars and products
2015 Revenue: $202 million


NameMona Ameli
NameMike MacDonald

Since 2003, the Owings Mill, Maryland company Take Shape For Life (TSFL) has been battling American obesity through the support and encouragement offered by its Health Coaches to Clients utilizing weight-loss plans and products provided by the parent company, Medifast.

But Mitch Pinheiro, a senior research analyst for the Tennesse-based investment firm Wunderlich, which follows the company, hasn’t felt that TSFL is fulfilling its potential. In a June interview, Pinheiro, who covers the consumer sector with an emphasis on consumer staples and health and wellness companies, says he’s taken a “cautious” approach to the company, saying something needs to change for the company to gain momentum. He cited the fact that most of the company’s products were also available elsewhere through the parent company Medifast, noting that this lack of exclusivity created challenges for the direct selling division.

Indeed, TSFL has been focused on the medical heritage of Medifast, and its 100-calorie, fortified meal replacement products, which are utilized in the weight-loss plans. But unbeknownst to Pinheiro, or anyone outside the organization for that matter, Mike MacDonald, the Chairman and CEO of Medifast, agreed.

He had felt for some time that TSFL—the direct selling division of publicly traded Medifast (MED: NYSE)—had more to offer, and has been working since 2014 to bring about the internal changes necessary. That year, he recruited Mona Ameli as President to lead Take Shape For Life. He also brought on board a brand strategist from the U.K. Together, the new team tackled the issues, and the resultant strategy emerged after two years of many planning sessions, working with top field leaders and much testing, both domestically and internationally.

MacDonald’s efforts are now coming to fruition. By the time this article goes to print, Take Shape For Life will have held its annual convention in Austin, Texas, and launched the beginning of a complete rebranding effort. MacDonald credits Ameli’s leadership and the input of top field leaders for much of the company’s success as it launches its new plans to the field. “The timing of all of it was very, very good,” MacDonald says. “We’ve been able to bring in a lot of new ideas and new thinking and some great product innovation.”


“For the past 13 years, our products have been available elsewhere. Now, we are finally able to be an exclusive brand, as well as be understandable and ‘exportable’ to the rest of the globe.”
—Mona Ameli, President


Optimal Well-Being

The company’s financials are already in good shape—revenue has gone up the past five quarters, Ameli says, and globally, the company ranked 66th on the 2016 Global 100 list by Direct Selling News. The rebranding effort is not about turning the company around. According to MacDonald, it’s about evolving the brand to better represent the inherent philosophy of TSFL, and provide the foundation for growth and expansion outside the U.S.

Ameli agrees: “We are positioning ourselves to tell the full story of our offering, shifting away from being a ‘diet’ company to being a lifestyle company. We are really interested in the optimal well-being of our Clients, not just in their weight loss.” 

The transformation is beginning with a product line introduction at Annual Convention that will carry the new name Optavia™, pronounced opta-via and meaning “the optimal way” in Latin, and the new logo instead of the Medifast name. Both the name and logo were market tested extensively internally and externally, as well as domestically and internationally before adoption. The line includes 13 brand-new products made with premium ingredients sourced from around the globe. Each product is non-GMO, contains no artificial ingredients and includes a probiotic blend. All of the products in the Optavia™ line work within Take Shape For Life’s established weight-loss plans.

TextMona Ameli (center) at the TSFL National Convention in 2015 with Field Leader and Integrated Presidential Director Dan Bell (left) and Dr. Wayne Scott Andersen, Co-Founder, Field Leader and Integrated Presidential Director.

Over the next year, the company will add more exclusive health products with the same nutritional profile as the Optavia™ launch. Existing products will be upgraded to the new standard set by Optavia™, and by convention in July 2017 the entire company will transfer over to the new branding and name. Take Shape For Life will fully evolve to become Optavia™.

One of the most obvious benefits to the new branding is that TSFL can become independent of its parent company and operate as its own entity, offering exclusive products. Ameli says, “For the past 13 years, our products have been available elsewhere. Now, we are finally able to be an exclusive brand, as well as be understandable and ‘exportable’ to the rest of the globe.”

The company has been adding new employees in anticipation of the changes, doubling their headcount since 2014. Ameli has even added a brand-new division called Field First Support, exclusively dedicated to the Health Coaches. Though most direct selling companies have support services for their field, TSFL only had support for end Clients. The Health Coaches felt neglected.


The rebranding effort is not about turning the company around. It’s about evolving the brand to better represent the inherent philosophy of TSFL, and provide the foundation for growth and expansion outside the U.S.


“Through ongoing trust-building and team building, such as incorporating the field in key decisions like the rebranding effort, we’ve helped re-ignite their engagement level and excitement about our future. We’ve also begun focusing more intently on supporting the Health Coach and not just the Client. The result is evidenced in the growth over the past 18 months after many years of low growth or decline,” says Ameli. Since Ameli’s arrival, the profit levels at TSFL are the highest they have ever been.

And the company plans to keep hiring. “We want to bring in people here who can help execute the programs that support what we want to do,” MacDonald says.

The Health Coach Advantage

The weight-loss industry is ultra-competitive, with many companies offering products and systems. Pinheiro pointed out several things that Take Shape For Life has done to stand out, starting with the Health Coaches.

“We believe Take Shape For Life has an advantage with the one-on-one coaching,” Pinheiro says. “There’s a relationship between the Health Coach and their customers. In the last year, they focused on helping the Health Coaches build the business. There’s a huge number of people who need to lose weight who would be perfect for Take Shape For Life.”

“It’s much better than seeing it on a billboard or seeing an ad in a magazine,” Pinheiro says. “You’re a walking billboard. When you see results face to face or with a social acquaintance, they say ‘I’m a Health Coach. I’ll show you how I did it.’ That’s how Take Shape For Life can actually work.”

Text

Ameli wholeheartedly agrees with this assessment, and believes that the transition to Optavia™ will open even more doors, since the new branding is broader than weight loss. “Yes, we’ve been growing,” she says, “But in order to tap into the full potential of what we have to offer, we needed a brand that represented all aspects of TSFL, which is really the total well-being of a person and the connection to serving the community.”

Optavia™ will emphasize the four main components of the business model:

  • A Health Coach who has often gone through a similar health journey and provides information, support and accountability for the Client. “They help the client to achieve the ideal goal,” Ameli says.
  • The Habits of Health System that helps permanently change a person’s habits so the journey towards health will be sustainable. This systematic approach was developed by TSFL’s Co-Founder, Dr. Wayne Scott Andersen. “It’s really teaching you through the Health Coach about the habits of health, the right behaviors, the shifts of how to stay healthy long-term,” Ameli says.
  • A community that celebrates success and creates a bond between like-minded people through the support of a mission-driven mindset.
  • The products, called Fuelings, that provide a balance of protein, carbohydrates, fat, sugar and other elements that are a catalyst to weight loss. The Optimal Weight 5 & 1 Plan guides people through what to eat and offers five meal replacements per day. There’s also a lean and green meal that people prepare themselves. 

A Different Approach

Even under the Take Shape For Life name, this company has never been conventional in its business model or approach. Most direct sales companies offer wholesale pricing to their distributors, who then resell the products at retail. This has proven to be an attractive model, but it’s not the way Take Shape For Life is set up. Here, there is no wholesale discount and everyone pays the same price; no one signs up as a Health Coach only to receive a discount. As a result, the 12,600 active Health Coaches are very mission-driven.

“The majority of our sales are coming from end Clients,” Ameli says. “Though you can be a Health Coach and still use the products. In fact, a lot of them started out as Clients. They experienced results, and they really liked the community and decided to pay it forward by helping other people.”

This approach has helped Take Shape For Life stand out since it started in 2003, Ameli says. She adds that it’s especially important when federal regulators take a closer look at the direct sales channel as a whole, preferring to see a sharp line between customers and distributors. “The biggest scrutiny that comes to our network is people saying distributors are your consumers,” Ameli says. “We are completely at the different end of the spectrum. It stands out in a very crowded and a little bit of a controversial space currently to the public eyes, where people wonder whether this is the public company to join.”

Small Company Feel

Though Medifast is a giant company, with Take Shape For Life being the biggest part of that, MacDonald says they have kept that “small company” mentality.

“You’re able to join a family company that is a public company on the New York Stock Exchange but still has kept the values of being a family company focused on integrity, transparency and loyalty, which is extremely appealing,” MacDonald says.

Ameli adds that the executive team works really hard to stay involved with the employees on a day-to-day basis, fighting against the tendency to work in silos. She also says that MacDonald’s management style is based on interaction and engagement of all employees, regardless of rank. As a result, employees at the lowest level feel that they have a voice and that their input matters to the executive team. Ameli says, “Many of our employees are also parents, and we incorporate flexibility into their schedules. They know we care not just about them and their work, but also about their overall well-being and families.”

Complete Transformation

The company transformation process will be complete at Annual Convention 2017 as Take Shape For Life evolves to Optavia™ in every aspect of its being. MacDonald emphasizes that the company itself has been on a journey similar to what Clients and Health Coaches go through—learning from their experiences and making adjustments along the way, always striving for improvement.

“We see this as being the biggest, most important event that we’ve had in my five years of running the company,” MacDonald says. “We’re going down a common path to improve the health of people here and around the world. This whole new branding is really designed to demonstrate who we are, what we stand for and the difference we want to make in people’s lives, here in the U.S., and soon around the world.”

July 31, 2016

Company Focus

SeneGence International: Company Takes Village Approach to Help Women Grow Abundantly

by J.M. Emmert


Click here to order the August 2016 issue in which this article appeared or click here to download it to your mobile device.



Company Profile

Founded: 1999
Headquarters: Irvine, California
Top Executive: Joni Rogers-Kante, Founder and CEO
Products: Skincare, anti-aging, cosmetics, body care


nameJoni Rogers-Kante

Joni Rogers-Kante lives an intentional life. Her resolve to do so happened upon her by accident—literally. As a small girl growing up in Sapulpa, Oklahoma, Rogers-Kante’s adolescent sense of adventure and lack of regard for boundaries caused her to nearly lose her life. While riding her bicycle in front of her family home, she was struck by a pickup truck. What she remembers of that accident is not an “out-of-body” experience but rather an intense feeling of being enveloped by warm, comforting light and a clear voice telling her that it was not her time to leave—that she had much work yet to do.

“From that moment on, I was aware that I was put on this earth for a specific purpose still unknown,” Rogers-Kante says. “I started to live intentionally and took up a sense of fearlessness in everything I set out to do. I knew because I was given that confidence from God that I could—and would—accomplish the feat of which I was destined. I had Him guiding me in everything that I did, and I didn’t waste one single day.”

That destiny would slowly reveal itself through direct selling, and today, that fearlessness helps Rogers-Kante lead the beauty and cosmetics company SeneGence International. “I know that it is my purpose in life to offer products and a career that really works to women all over the world, using this mission as a tool to give women confidence, security and abundance for themselves and their loved ones,” says Rogers-Kante. “That sense of purpose and determination has shaped the person I’ve become and also the mission of SeneGence.”

No Limit to Aspirations

What also helped to shape both Rogers-Kante and SeneGence was a relationship with one of direct selling’s icons: Mary Kay Ash. “She was my first business mentor, outside of my family,” says Rogers-Kante. “The way she approached entrepreneurship resonated with me. Mary Kay always looked for the good in people and encouraged her mighty salesforce to do the same, instead of prejudging their limitations.”

This approach was different from what Rogers-Kante had experienced in the corporate world, and because of the insight into the business model from Mary Kay, she realized direct sales was the industry that could actually make a direct impact on the lives of independent contractors. “I found a calling to help teach women how to run a successful business from home while caring for their family,” she says. “Mary Kay exemplified how a strong and determined woman could lead in a loving way, leaving a positive footprint of changing lives for the betterment of society. I found that to be irresistible.”

TextJoni Rogers-Kante hands out treats and toys to excited school children living on the islands of Vanuatu, where SeneGence sources ingredients for its products. The Make Sense Foundation is actively helping to rebuild their schoolhouse, which was destroyed by Cyclone Pam in 2015.

Rogers-Kante started SeneGence in 1999 with LipSense® Liquid Lip Color as its leading product. Currently the company has more than 300 products and accessory items in its SeneGence line—SeneDerm® anti-aging skincare, SeneDerm Solutions™ specialized treatment products and SenseCosmetics® patented, long-lasting color cosmetics—and primarily operates in the United States, Canada and Australia with a presence in 13 additional countries.

The growth of the company has shown Rogers-Kante not only that the business model works, but something even more important, and that is that women everywhere have the same desires. “I have been privileged to meet women from all corners of the globe,” she says. “These interactions have, of course, shown me the wide range of beautiful diversity in the world, but, most importantly, have shown me that women around the world aren’t so very different from each other after all. All women want a fulfilling life, whether that means a booming career, a happy and healthy family, a rich social life or all of the above. No matter from which country, women want to feel welcomed and accepted and work in a safe and loving environment where they are free to learn new skills that directly impact the well-being of their family. In this, we all speak the same language.”

SeneGence offers that business opportunity to women regardless of their educational background or their skills. It also offers a work-life balance that Rogers-Kante feels is critically important. “Gone are the days when women have to choose whether to have a successful, active career or a family,” she says. “Today’s woman does not limit her goals or her aspirations. I know she can achieve it all given the right opportunity. With direct sales, her life and her business understand each other, blend together and work hand in hand to accommodate the achievement of her goals. It’s amazing to think the busier a mom and her children are the more successful a woman can be simply because of ‘exposure’ to others that help support local entrepreneurs.”


“I know that it is my purpose in life to offer products and a career that really works to women all over the world, using this mission as a tool to give women confidence, security and abundance for themselves and their loved ones.”
—Joni Rogers-Kante, Founder and CEO


A Record-Breaking Year

The SeneGence opportunity has touched many across the globe and the company has experienced more than 100 percent sales growth year over year in each of the past three years. In fact, 2015 was a record-breaking year, with positive growth in both sales and sponsoring in all the countries in which it operates. 
However, SeneGence has had its share of ups and downs over the years, as all companies do. “Consistency has been one of the biggest contributing factors to our growth,” she says. “We have stayed true to and focused on our vision and mission and have never wavered from the original intention of SeneGence: to make a difference in the lives of women around the world sharing products that really work though a career opportunity that really works.”

To ensure a sustainable and secure financial base, the company has been very conservative in overhead through the years and has accomplished its goals with a skilled and versatile staff of less than 100. This has enabled the company to direct its focus on connecting with the field in the most personal manner possible. “Whether it is a local training event, a note from me or a phone call, we strive every day to make each distributor, employee, vendor, supplier, service provider, fulfillment worker, manufacturing personnel or anyone who is a part of this company feel appreciated and valued,” says Rogers-Kante.


Joni Rogers-Kante started SeneGence in 1999 with LipSense® Liquid Lip Color as its leading product. Currently the company has more than 300 products and accessory items in its SeneGence line and primarily operates in the United States, Canada and Australia with a presence in 13 additional countries.


Of course, growing a company does come with its challenges, and for SeneGence one of the major issues it has faced is its facilities. The company has outgrown its current office, pick and pack, warehouse and manufacturing space and is currently planning on moving into a new—and much larger at 50,000 square feet—space this fall. “This will be our third move to increase footage to date,” says Rogers-Kante. “It’s a daily challenge, from our corporate team doubling up in offices to our warehouse team adding extra shifts. We also had to overcome some out of stock product issues due to our amazing growth in order volume. All the growing pains allow us to constantly learn and find ways to better our branding, our marketing and our product offerings to continue to be a premier global skincare and cosmetics company.”

Growing the Distributor Base

Steady growth also has occurred in the number of independent distributors who have joined the company. With distributors already totaling tens of thousands, SeneGence has been successful in attracting new distributors through social media and the old-fashioned way—face to face.
“We have a wonderful ‘Wowing’ technique that our distributors have perfected, called showing their ‘stripes,’ ” says Rogers-Kante. “This is where they paint a line of our waterproof LipSense long-wearing color on their hands and then go about their day, constantly attracting attention and inquiries as to what is on their hand. When a distributor shows the interested party that the product does not budge when rubbing her hand, invariably the interested party says ‘Wow,’ no matter what language.”


2015 was a record-breaking year for the company, with positive growth in both sales and sponsoring in all the countries in which it operates.


While the “Wowing” technique has opened many doors to conversations about SeneGence’s products and career opportunity, the company also has started visiting areas where the growth has occurred to further increase distributor interest. “We study our demographic trends across the countries and take corporate-sponsored events or training to where they are needed most,” Rogers-Kante says. “This allows us to touch many new distributors and engage them in a way that is enduring. As well, our fabulous team of field leaders has organized a well-thought-out plan of informative and motivational training to support ongoing growth throughout each country.”

That training includes weekly interactive webinars hosted by an executive team member or a field leader distributor, as well as regular regional trainings and corporate-sponsored quarterly events, and each focuses on a different facet of business, from cosmetics application to social media, branding, managing people, and even etiquette training and public speaking. “We think it’s important to offer training in a wide variety of areas so that each leader feels more confident as her role in a leadership position takes on more notoriety and responsibilities that come with that,” says Rogers-Kante. “We always include recognition anywhere we can, as we believe that is a vital element to both our success and the individual distributor’s success.”


“No matter from which country, women want to feel welcomed and accepted and work in a safe and loving environment where they are free to learn new skills that directly impact the well-being of their family. In this, we all speak the same language.”
—Joni Rogers-Kante


Respect for the Global Community

In addition to supporting distributors to achieve financial success, SeneGence also has a mission to support the global community at large. Community responsibility is one of the core foundations of SeneGence and an integral part of the corporate culture. The sense of responsibility and care for others is reflected in the support given to charities in the distributors’ local communities as well as the international communities in which the company operates or gathers its natural ingredients.

Rogers-Kante founded the Make Sense Foundation™ (MSF) in 2002 to assist women and children in need, and the Foundation’s giving has expanded to include the American Breast Cancer Foundation, Oklahoma Tornado Relief, American Red Cross, CASA, CHOC, Make-A-Wish Foundation, Working Wardrobes, Laura’s House, Christopher’s Clubhouse, Walter Hoving Home and many more. The Foundation also held its first fundraising drive for a college scholarship for young women entering higher education this year. The goal was $10,000 and more than $25,000 was raised, allowing the Foundation to share the funds among multiple well-deserving young women in need, all of whom will attend college this fall through support from MSF.


Joni Rogers-Kante founded the Make Sense Foundation™ (MSF) in 2002 to assist women and children in need, and the Foundation’s giving has expanded to include the American Breast Cancer Foundation, Oklahoma Tornado Relief and Make-A-Wish Foundation, among others.


Tiana B., this year’s first place recipient of a MSF scholarship, says that by receiving the financial assistance, she was motivated even further to reach for her own personal goals, no matter life’s challenges. “As an African-American woman who comes from a low socio-economic area, entering college with the intentions of attaining a mechanical engineering degree, it moves me greatly to know that I have selfless, caring women who support my dreams and aspirations.”

Rogers-Kante adds, “Over the years, through distributor and employee donations and fundraisers, the MSF has been able to give to dozens of charities around the country, many of which were nominated by our distributors. It has been amazing watching our distributors give back to their communities and seeing the way real change is effected through their efforts with the MSF.”

Additionally, the company’s Partner-for-Profits program offers opportunities for distributors to raise even more money for charities. As they take orders, their “partner” in the order (business manager, hostess, or other figure coordinating a group) can then earn a portion of the order total back in profit, in free product or as a donation to the charity of their choice.

While local and national support is a priority, SeneGence also assists the international community. One example of the company’s worldwide efforts is in the Vanuatu string of islands in the South Pacific, where SeneGence responsibly gathers many beneficial botanicals and minerals for its SeneDerm SkinCare. The MSF has come to the aid of islanders several times over the past few years, including fundraising efforts to help with the aftereffects of Cyclone Pam, which devastated the area last year. “It is a precious place to us, and the people who call it home are even more precious to us,” says Rogers-Kante. “Throughout the years, Vanuatu has experienced some natural disasters that have left its people in need. Through the MSF, we have been able to help rebuild village schoolhouses and donate goods to support our Vanuatuan friends.”

Living and Working Intentionally

Leading a growing company and supporting numerous charities can—and is—a full-time challenge. If you are going to remain sane and maintain a happy family while operating a successful business, says Rogers-Kante, the key is to master the skill of carefully planning personal and business time. She does this by blocking her time in a balanced manner and then respecting and following through with the commitments she makes at work and at home. “The real key for me and my family is to include them in business activities whenever possible,” she says. “That way we work, play and travel together.”


“One thing I know to be absolutely true is that it takes a village, both at home and in business.”
—Joni Rogers-Kante


True to those early years when she promised herself to live intentionally, Rogers-Kante makes the most out of every second in the day. Whether it is play dates with her youngest son, William, or quality time spent with her oldest, Alan, or when riding in the car to a distributor training event, she takes advantage of every bit of time to make calls, scan social media channels, talk to the product development team, attend to emails or read the next book during flights.

“One thing I know to be absolutely true is that it takes a village, both at home and in business,” she says. “My hardworking, amazingly versatile, responsible, talented and dedicated staff and incredibly supportive family keep the wheels turning.”

July 31, 2016

Company Focus

Boisset Collection: Mixing the Wine Business with Passion for Life

by Heather Martin


Click here to order the August 2016 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 2012
Headquarters: St. Helena, California
Top Executive: Jean-Charles Boisset, Owner and Co-Founder
Products: Wine, gifts and accessories
Salespeople:1,800


nameJean-Charles Boisset
nameMelissa Lynch

Jean-Charles Boisset talks about wine the way most people talk about love.

“Wine is magical,” he says. “It’s a beautiful gift that Mother Nature has granted to us.”

Boisset owns Boisset Collection, a family of wineries in France and Napa Valley, California, that also operates a growing direct sales channel. But wine is so much more than a business for Boisset. For him, wine transcends the grape and the glass—wine is a life changer. And that’s exactly what the Boisset Independent Ambassador program is all about, say Boisset and the program’s Co-Founder and National Director, Melissa Lynch: changing people’s lives by giving them a chance to be financially independent and discover the world of wine in the process.

Boisset might be as zealous about direct selling as he is about wine. “It’s the most exciting thing I’ve personally ever done,” he says of the program, now in its fourth year. “There’s no other model that allows you to have a limitless amount of people energized by what you do.”

Lynch says Boisset’s energy for this venture is palpable. “He’s the No. 1 recruiter we have,” she says. “When you can get him in front of a room, he moves everybody to want to do better.”

The Ambassador program is still in its infancy and, as a private company, Boisset Collection doesn’t publicly share sales information. But Boisset says the program is doubling its revenue every year and has enrolled more than 1,800 Ambassadors to market and sell Boisset Collection wines. As is the case for many executives in direct sales, the people numbers are the numbers that matter most to Boisset.

“Our profit is secondary,” he says. “There’s no rush. There’s no ultimatum. There’s no quarterly insane results necessary.”


“Wine is magical. It’s a beautiful gift that Mother Nature has granted to us.”
—Jean-Charles Boisset, Owner and Co-Founder


Boisset says the program, which launched in 2012, accounts for a very small percentage of revenue at his wineries, which also distribute to retail locations and restaurants. But it is the fastest-growing percentage, he says. The Ambassador program also has created more brand awareness for the overall company, and Boisset says he is confident that over the next several years, he will see a return.

If recent wine sales in the United States are any indication, the market does seem ripe for a direct wine sales channel. According to Wines & Vines, a publication that tracks the players in and the health of the wine industry, overall wine sales in the United States totaled $38 billion in 2015. This is an increase of about $1 billion a year, or an average of 3 percent annually, based on total nationwide wine sales of $34.6 billion in 2012, as reported by the Wine Institute. Perhaps more compelling, though, is the growth in direct-to-consumer shipments—the way Ambassador program customers receive their wine. According to Wines & Vines, the retail value of such shipments was $2 billion in 2015, an increase of 34 percent over 2012.

Boisset’s Ambassador program also may benefit from the fact that direct selling for wine companies is still a relatively new concept—and the space isn’t very crowded. Only three other similar companies appear in a list of top Google search results.


Historic image of the harvest at Buena Vista Winery in Sonoma, California. It is the oldest commercial winery in the state and was founded in 1857.

Heirloom Vines

Boisset says he’s been intrigued by the idea of social selling since he was a teenager in his native Burgundy, France. In the 1960s and 1970s, he watched his parents and grandparents grow the family vineyards while cultivating a community of people to share in their passion for wine and for the personal connections they believed it could create.

Boisset

“People would come to our dining room, and my mother would serve glasses of wine to people from all walks of life,” Boisset says. And then his grandfather would write hundreds of letters to the people who had tasted the family’s wines, saying things like, “It was a pleasure to meet you—we have a new wine coming up and you may want to try it.” Boisset says that even at age 6 or 7, he was drawn to his family’s way of blending business and personal relationships. “I was doing my homework at the table and seeing them sending their letters and building their clubs. I think it was really magical.”

Now, decades later, Boisset sees the entire Ambassador community as a scalable version of those family gatherings around the dining room table. An Ambassador shares wines at what the company describes as “intimate home-tasting experiences,” introducing guests to small-production wines priced at $25 and up, most of which are made in such limited quantities that they are sold only in tasting rooms or through a Boisset Ambassador. The goal of the Ambassador program is to give anyone a chance to access these wines, even if they can’t travel all the way to Napa, Sonoma or Burgundy, Boisset says. “We bring the tasting room experience to them in a social, engaging and comfortable environment.”

This accessibility can be rare in the wine industry, Boisset continues. “The wine world is often a very opaque, intimidating world,” he says. “No one should be intimidated by wine.”

The chance to demystify and break down barriers to wine were major motivators for Lynch to work with Boisset on this initiative, she says. “We’re reaching a whole new demographic of people we haven’t been able to reach before and are helping other people be successful.”


“We’re reaching a whole new demographic of people we haven’t been able to reach before and are helping other people be successful.”
—Melissa Lynch, Co-Founder and National Director


Prior to joining Boisset, Lynch had been in the wine business for more than 15 years, having co-founded another direct selling company, so she was familiar with the mechanics of selling wine this way. One of the things she loves about the Boisset direct selling program is that the Ambassadors can visit the wineries and meet the growers who are tending the vines. “It’s an authentic experience,” she says.

A World of Opportunity

While Ambassadors do come from various backgrounds, Boisset says 80 percent of Ambassadors are women in their 30s, 40s or 50s who have children and a wide network of friends and family and want to work part time. Some men have joined the program, too—often teaming up with their wives—as a supplement to another direct selling venture they’re running, he says. An Ambassador home-tasting party will generate between $750 and $1,000 in sales—with some higher-performing Ambassadors booking as much as $3,000 on average, Boisset says. As with many direct selling businesses, Ambassadors earn a commission on those sales and also can earn commission on sales made by Ambassadors they recruit.

Some Ambassadors do book very large orders because they have a network of high-income contacts looking for high-dollar wines, in the $300, $400 or even $500 per bottle range. One California Ambassador in particular has organized wine events for such A-list tasters as Sharon Osbourne, Pharrel Williams and pre-Oscar partygoers. “We have some people in Texas with incredible networks, too,” Lynch says, noting that there was a tasting in Texas that booked more than $40,000 in sales in one night. “We have people blowing the doors off.”

TextJean-Charles Boisset celebrates with the company’s Ambassadors.

The company also sees opportunity to target event planners and caterers, who would have substantial built-in customer bases. Continued geographic expansion is on the radar, as well. About 60 percent of the company’s Ambassadors are in California—which is 20 percent less concentrated than in 2013. And Boisset ships directly to about 30 states, not including those that still prohibit interstate wine shipments. Lynch says that laws are changing all the time, though, and she sees the Midwest and East Coast as the next big frontiers for the channel.

Wherever they are based, most Ambassadors begin modestly—in network and in knowledge. Beginner Ambassadors usually know nothing about wine when they start, Boisset says, and they don’t have to become sommeliers to be successful. But the company does support its associates with training—not just on how to run a tasting but on how to discuss such things as wine and food pairings and the chemistry of wine, Lynch explains.

Ambassadors also connect with Boisset himself on regular conference calls, and they come to the Napa Valley for retreats once a year to share best practices, visit the wineries and learn the stories behind the wines they will introduce to guests. Sharing these stories about the wines is an important part of the Ambassador experience, Boisset says, because they reveal the traditions behind and the history of the wineries as well as highlight the company’s commitment to environmental sustainability—which includes such things as organic farming methods and solar-powered vineyard operations.

A related and promising revenue stream for Boisset Collection is the Circle of Boisset Wine Club, Lynch says. Since the direct selling channel launched, more than 3,000 people have joined the club, and Boisset is preparing to increase the frequency of shipments, which is only quarterly right now.

Generations of Commitment

Boisset’s passion for wine and direct selling seems matched only by his passion for family and for keeping the Boisset collection of vineyards close to home. He visits his parents, who are now in their 70s, regularly in France and is still very close to his grandmother, who is 103. He hopes that his twin 5-year-old daughters will feel that deep connection to family and to wine when they grow up and will want to manage the business. At the very least, he’s made sure they will inherit everything he and his family have built. “We have vineyards which are so spectacular, I would not want them to part ways with them,” he says. For Boisset, wine makes his living, but it also makes his life. And when he sees investors jumping in and out of the industry, hoping for short-term gain, he just sits back and watches.

“Good for them,” Boisset says, with a wink in his voice. “At the same time, I’m smiling because I know where we’re going. I’m going to keep building and building, and it’s going to keep getting stronger. You cash in and for what? You go to the beach? That’s not going to happen.”

He says his focus is on continuing to create great wine and grow opportunities for more and more people to join him on what he says is the best journey someone can take.


“The wine world is often a very opaque, intimidating world. No one should be intimidated by wine.”
—Jean-Charles Boisset


While Boisset prefers not to share revenue projections, he says he would like to enroll as many as 8,000 Ambassadors, which is more than quadruple the number on board right now. He’s looking for people who see wine like he does, as kind of an existential portal. “The Ambassador program helps you discover yourself. It’s the future to anyone who wants to be connected with the essence, the source of anything we do in life.”

July 31, 2016

Working Smart

5 Ways Third-Party APIs Are Reshaping the Direct Selling Industry

by Bill Crowley


Click here to order the August 2016 issue in which this article appeared or click here to download it to your mobile device.


Over the past decade, rapid developments in technology have fundamentally changed how direct selling organizations operate. From mobile apps to social media, digital tools have given companies new ways to connect with their customers and deliver better experiences to their distributors. But there’s one particular area of technological advancement that has yet to receive the attention it deserves from the direct selling community: It’s the API, and it’s going to change the way your direct selling organization does business.

Application programming interfaces, better known as APIs, are essentially sets of rules and protocols that dictate how one piece of software can communicate with another. APIs are the interface by which one program can command another to perform specific tasks, exposing pieces of its functionality for use by other applications. In itself that’s not particularly interesting, but new developments in cloud computing have made these connections between applications faster and easier to implement—and now they’re taking the tech world by storm.

Recently, a number of big-name platform providers like Facebook and Uber have exposed their APIs to the public, opening the doors for developers to plug their functionality into both new and existing applications. Think about the apps on your smartphone. Many have social media integration through Facebook and Twitter APIs. This makes it easy and seamless for you, as a user, to follow social feeds and share content to your profile without switching between apps. Other apps have integrated the Google Maps API to help users locate nearby restaurants, or use the Google Calendar API to quickly record event information to your Google account. Because developers don’t have to spend time building these services themselves, they’re able to deliver highly functional and frictionless experiences within their mobile apps in a fraction of the time it would have previously taken.


Recently, a number of big-name platform providers like Facebook and Uber have exposed their APIs to the public, opening the doors for developers to plug their functionality into both new and existing applications.


Enterprise APIs Are on the Rise

Of course, the trend toward APIs isn’t limited to social media and selfie sharing. A growing number of enterprise software systems are now seamlessly “talking” to each other through API calls and modular integrations. The motivation is simple: Developers have realized that much of the functionality they thought they needed to build into their software and/or apps is redundant as a result of what’s already been developed by other companies. Rather than reinventing the wheel, these companies are choosing to partner, tying into the pre-existing functionality they need through open and accessible APIs.

This shift is hitting many industries, and direct selling is no exception. Consider all of the behind-the-scenes operations and functions that are vital to keeping a direct selling organization on its feet: customer relationship management, enrollment, order processing and tracking, lineage management, reporting, inventory management, inbound payments, commission payouts, data analysis—it goes on and on. Traditionally, direct selling companies have had to tackle these processes on their own or rely on a collection of third-party software systems. Now they have another option: API integrations.

But why should companies opt for APIs over their existing software solutions? Below are five huge benefits of third-party APIs to direct selling organizations like yours.

No. 1: An Integrated Ecosystem

Given all of the operational processes listed above, it’s not surprising that companies often need to redirect their distributors outside of the corporate ecosystem to perform certain functions through a third-party provider. For instance, a direct selling organization might outsource their commission payments to a payments provider that only allows distributors to change their account settings or manage their earnings through a separate online portal. Some companies may not see that as an issue; others, though, will feel that it impedes distributor efficiency and ultimately dilutes the brand.

With API technology, companies can pull that kind of third-party functionality into their own application. In the above example, rather than sending distributors to a separate online portal or app environment, the direct selling organization could integrate third-party payment technology directly into their native application, allowing users to collect their commissions without ever leaving the app. Before API connectivity, the company would have had to build all of this payment functionality in-house. Now, direct selling companies can simply integrate with their commission payment provider’s APIs to create an integrated ecosystem within their application. As a result, distributors can easily manage their earnings without ever leaving the company’s digital space, providing a more fluid and efficient independent business experience.

No. 2: Improved Functionality

Third-party APIs give direct selling companies access to a far broader range of functionality than traditional software solutions. To give an idea, ProgrammableWeb maintains a repository of more than 15,000 APIs that are available to developers, including thousands categorized for enterprise users. Rather than settling just for the functionality available through rigid enterprise software, savvy direct selling companies can integrate unique capabilities into their applications through third-party APIs.


Third-party APIs give direct selling companies access to a far broader range of functionality than traditional software solutions.


No. 3: Fast and Flexible Implementation

Traditional enterprise software systems come with a unique set of challenges. For one, introducing them into a direct selling business is often an ordeal, as the company will need to migrate existing operations and processes onto a new platform. Secondly, customizing these out-of-the-box solutions to suit an organization’s unique needs is extremely difficult—if not outright impossible—meaning that companies often end up paying for functionality that they have no use for.

API technology alleviates both of these issues. Once a direct selling platform is equipped to connect with APIs, adding and removing functionality requires minimal effort. And because API-based SaaS (Software as a Service) suppliers typically break their functionality into smaller microservices, companies can integrate just the functionality that they actually need.

No. 4: Reduced Compliance Risks

When direct selling companies keep certain operational processes in-house, it can expose them to unnecessary administrative and security challenges. To draw on an earlier example, consider the process of commission payments, which—in order to conform with compliance regulations—requires that direct selling organizations store sensitive distributor information: Social Security numbers, banking information, and so on. Of course, handling this data requires that companies take the necessary security precautions to mitigate the associated risks. In contrast, API integration allows direct selling organizations to host these processes in their digital ecosystem without ever handling certain sensitive information—it can be routed to, and managed by, the appropriate third-party provider.


Tremendous benefits that come with third-party API integrations include improved efficiency, greater functionality and reduced cost.


No. 5: Powerful Mobile Apps

Mobile technology is improving every year, but our smartphones still have a finite amount of processing power and storage space. Instead of straining these limited resources, app developers are increasingly relying on third-party integrations to do most of the heavy lifting. With APIs, direct selling organizations can develop mobile apps that simply request and display information processed by a third-party host, dramatically reducing the storage space and processing power required to run the app. As a result, companies can deliver a range of independent business management and sales tools to a single, unified mobile interface.

APIs Are the Future

Consider the tremendous technological changes that have impacted the direct selling industry in recent years. Interactions that previously took place in person are now happening over social media. Training has gone mobile. Data processing has moved into the cloud. Make no mistake: APIs are the future. And, given the tremendous benefits that come with third-party API integrations—improved efficiency, greater functionality, reduced cost—it should come as no surprise that this is the direction enterprises and software vendors are trending.


Bill CrowleyBill Crowley is Chief Product Officer at Hyperwallet, a global payout platform specializing in commission distribution. Crowley has more than 15 years of experience building forward-thinking payment solutions for the direct selling industry.

July 31, 2016

Working Smart

The Case for a Chief Compensation Officer

by Kenny Rawlins


Click here to order the August 2016 issue in which this article appeared or click here to download it to your mobile device.


Over the past few decades, we’ve seen an increasing number of C-level titles. Traditionally, companies have had a Chief Executive Officer, a Chief Financial Officer and a Chief Operating Officer. Then Chief Information Officers and Chief Marketing Officers became more commonplace. Now there are dozens of unique C-level titles.

Why is that? Companies have realized that there are areas within their organization that are strategically important enough to warrant a C-level executive. Growing cyber-attacks and other risks created the need for a Chief Information Security Officer to secure a company’s physical and digital assets. An increasing number of companies have a Chief Sustainability Officer to oversee the corporation’s environmental impact. And because design is such an important aspect of their products, Apple has a Chief Design Officer. Apple’s CDO is not only responsible for the look and feel of Apple products, but also their packaging and retail stores.

In the direct selling industry, distributor compensation consumes an average of 40 percent of your revenue; it is the single largest expense for a company. Yet, in my experience, most companies do not have anyone who is directly responsible for ensuring that this expense is supporting the strategic goals of the company. I believe that it’s time to put someone in your C-suite in charge of your compensation strategy. It is time for a Chief Compensation Officer.

It’s true that all direct sales companies have teams or individuals who know the compensation plan and who audit and pay commissions. However, a CCO owns the compensation strategy. The CCO would be both architect and evangelist for your compensation plan. This executive would treat your compensation strategy and plan like the living thing it is, tailoring it to meet the changing needs of your organization.

But how can you justify bringing another C-level executive into your crowded C-suite? I believe there are six main areas where a CCO can bring extra value to your organization, saving you significantly in operating costs while giving you competitive advantage in your market space.


There’s a reason why I call this CCO position a chief compensation officer and not a chief commissions officer. It’s because a compensation strategy includes much more than just commissions.


Creating a Comprehensive Compensation Strategy

There’s a reason why I call this CCO position a chief compensation officer and not a chief commissions officer. It’s because a compensation strategy includes much more than just commissions. Such as:

  • Loyalty and incentive programs
  • Contests
  • Promotions (such as shipping and product discounts; buy one, get one free, etc.)
  • Leadership events (such as rallies, tours, conferences, fly-ins, etc.)
  • Exemptions, waivers and business development agreements

It’s not easy to figure out all of these different elements and bring them together cohesively. A poorly constructed contest or promotion can undermine your compensation strategy and incentivize behaviors that can be very hard—if not impossible—to correct.

It’s also difficult to pair the different kinds of direct sellers in your organization with the compensation that will best motivate them. While sales leaders find motivation in large commission checks and leadership recognition, social enrollers and customers are excited by your product, not the dream, and are better served by loyalty programs and promotions.

There is so much focus in our industry on the top performers that we tend to build our compensation plans to cater primarily to them. Compensation plans do not always take into account the types of distributors in an organization, the reasons that the distributors joined, and the thank-yous that they are looking for in the compensation plan for referring customers to purchase product. A CCO can tailor your compensation strategy to appeal to all segments of your salesforce.

A good CCO works closely with other executives in the company to ensure that your compensation plan is supported by your marketing strategy, sales strategy and internal policies.

Qualities of an Effective Chief Compensation Officer


A CCO sits at the crossroads of IT, sales and marketing, business development, finance and compliance. This executive must work closely with these teams to ensure your compensation strategy is properly executed. Now that you’ve determined that you need a CCO, what qualities should this person have? Here are some key traits I would look for:

  • Creativity. Finding solutions to the various demands that will be made, as you try to implement an effective worldwide compensation plan, takes a creative mind that finds solutions to problems.
  • Understanding of analytics. The use of data to measure and analyze the effectiveness of compensation plans is going to become increasingly important.
  • Experience. Your CCO should have experience with the specific demands of the direct sales industry. Ideally, your candidate should have working experience with more than one or two compensation plans.
  • Communication skills. Your CCO should be able to clearly and concisely define and explain your compensation plan. The CCO should be an evangelist, not only for your compensation plan, but for your entire organization.
  • Leadership. When it comes to your compensation plan, there will be no shortage of recommendations, questions and challenges coming from all directions. A CCO must be a leader who can take input from these various sources and properly execute your compensation strategy.

Keeping Your Plan Competitive

Compensation plans used to be simple (with two or three commission types) and not change for decades. Now, direct sales companies must stay relevant in an ever-evolving market. Because a CCO stays current on trends in the market, your CCO will know if the latest industry fad has a place in your compensation strategy or if the same behavior is already being incentivized elsewhere in your plan.

A CCO ensures that your plan stays competitive and is an advocate for your plan with your field leadership. A CCO works with the field development team to make sure your field understands the strengths of your plan.


You shouldn’t keep paying for ineffective incentives, and the CCO—with an eye on the data—can ensure that you don’t.


Measuring Your Plan’s Effectiveness


Today’s information technology gives us the ability to pinpoint trends with metrics and data analytics. Compensation strategy needs to evolve to take advantage of this information.

Using data analytics, a smart CCO can track which components of a compensation strategy work and which don’t. For example, a CCO can track the measurable results that occur after a promotion, contest or leadership event. A CCO should have the ability to see which incentives are successful (both in the short term and long term) and which are not. If you do not see quantifiable results after a particular promotion, a CCO could work with the team to re-evaluate the effectiveness of these activities. You shouldn’t keep paying for ineffective incentives, and the CCO—with an eye on the data—can ensure that you don’t.

A CCO can use analytics to answer questions about your compensation strategy, such as:

  • Which incentives lead to the best retention?
  • What milestones are most important in creating successful leaders?
  • What impact did a recent promotion have on the field?

A CCO also tracks customer and distributor growth, monitors shifts in organizational volume within leaders’ organizations, looks for leaders whose downline growth and retention outpace others, and reviews compensation to ensure that productive leaders are being rewarded appropriately.

Manage Legal and Compliance Issues


The legal landscape of the direct sales industry is constantly changing, and recent actions by the Federal Trade Commission have created compensation plan uncertainty. How is your compensation plan impacted by these actions? Who does your legal team work with to address concerns?

For example, in the preliminary injunction against Vemma, the court ordered that distributors only can earn commissions if a majority of the sales come from customers outside the compensation plan, not distributors. A savvy CCO would view this action and consider how the compensation plan provides appropriate incentive for selling products to new and existing customers.

graphicYou have several key executives overseeing portions of your revenue. But who oversees compensation – your biggest portion of your revenue?

In addition, you need someone who can anticipate and spot loopholes in your compensation plan. An unscrupulous distributor might exploit a loophole to earn commissions unfairly and stain the reputation of your organization. Even though distributors are independent contractors, they still represent your brand. You need someone who is fully invested in the details of your compensation plan to ensure that manipulation and “gaming” does not become the primary build strategy.

Adjust to Meet the Demands of Global Markets

In order to be successful in the global market, you depend on distributors who understand the culture of your local market. Compensation plans also need to be adjusted to work in tandem with the cultures, social norms and local regulations of the countries in which you do business.

Elements of your compensation plan that work well in one part of the world may not appeal to a distributor in another. The execution of your compensation strategy needs to be tailored to regional markets.

Avoid Costly Pitfalls

Over the years, I’ve known direct sales companies that have made very costly mistakes because they didn’t have an executive who understood the nuances of the compensation plan. Consider this hypothetical:

Suppose a company has a Platinum rank requirement of three personally sponsored Gold-qualified distributors, and the qualification for Gold is 10,000 monthly OV (Organization Volume). Now suppose that in updated literature the requirement for Platinum was inadvertently changed to “three personally sponsored Gold distributors who are qualified.”

Do you notice the subtle difference? Most plans allow distributors to be commission “qualified” with as little as 50 or 100 PV (Personal Volume). This subtle change could be interpreted as meaning that three title-rank Gold distributors with 100 PV each could fulfill the requirement for an upline Platinum distributor. If this misunderstanding goes uncorrected, it could have devastating consequences, drastically curb growth and devalue this company’s ranks.

This is a detail that would be caught by an effective CCO.

Conclusion

Most people realize that there are certain aspects of their business that demand the attention of a C-level position. Your compensation strategy demands the sort of attention that only a CCO can provide. Make sure that such a critical component of your organization is not neglected.


Kenny RawlinsKenny Rawlins is the Vice President of Commissions Operations for InfoTrax Systems and is passionate about helping companies define, implement and execute their compensation strategies.

July 31, 2016

Executive Announcements

Executive Announcements, August 2016



Click here to order the August 2016 issue in which this article appeared or click here to download it to your mobile device.


LegalShield Promotes Four to Office of Chief Executive, Adds to Board

TextLegalShield headquarters located in Ada Oklahoma

From within its own ranks legal services provider LegalShield is making four new appointments to its executive team.

The Oklahoma-based company said Patrick Hodges is stepping into the role of President, Network Marketing and Sales, overseeing the direct selling channel. John Long has been promoted to Chief People Officer, a new role focused on leadership development of employees and field associates. The company also has named Keri Norris Chief Legal Officer, and Claire Terrell will now serve as Senior Vice President, Marketing.

“We are building a culture and company that is—once again—changing the face of legal and identity theft protection services,” said Jeff Bell, CEO of LegalShield. “These moves further our commitment to combining industry-leading talent, unparalleled experience and a startup mindset to help protect people.”

LegalShield also announced two board appointments, including Jeff Bell and Pete Jarvis, Vice President of technology solutions firm TidalScale.

Since Bell stepped into the role of CEO, LegalShield has seen production increase 28 percent and active members increase 10 percent to more than 1.5 million.

Jarvis brings to the board a history of technology innovation and management, particularly in the realm of emerging knowledge and intellectual property. Like Bell’s, his career has included a stint at Microsoft, as well as Intellectual Ventures, Bell Northern Research and 3Com. Jarvis is one of the IAM Strategy 300, a list of the world’s top intellectual property strategists published by IAM magazine.


New Avon Hires Betty Palm as President, Social Selling

Betty PalmBetty Palm

Direct sales executive and consultant Betty Palm has joined the growing leadership team at New Avon LLC, as President, Social Selling in the U.S.

The former North American unit of Avon Products Inc., now privately held, is in the midst of establishing a leadership team under chief executive Scott White, who came on board in April. 

Palm has been working with New Avon for the past several months through her consultancy, B. Palm Group LLC, which focuses on the direct selling channel. Throughout her career, Palm has worked with a number of top direct selling companies in roles such as vice president of sales and marketing, executive vice president, and president of North America, in addition to leading the formation of direct selling divisions at Mars Inc. and Jones Apparel Group.

“By aligning the sales organization under a seasoned direct-selling expert like Betty, we will accelerate decision making and simplify processes,” said White. “Betty has already had a tremendous impact on New Avon, and I look forward to working with her to empower our Representatives, enhance their ability to serve customers and improve their earnings opportunity.”


Stream Appoints Chief Legal Officer and Corporate Secretary

Daniel TerrellDaniel Terrell

Home services provider Stream continues to build its executive leadership team with the addition of Daniel Terrell, Chief Legal Officer and Corporate Secretary.

Terrell previously held the same titles at PLH Group Inc., a portfolio company of Energy Capital Partners. PLH Group provides construction and maintenance services to the electric power delivery and pipeline industries, including many of the nation’s largest utilities.

“Daniel is an excellent addition to our executive team. His strong, relevant background as an accomplished general counsel and company leader will serve Stream well,” said Larry Mondry, Stream President and CEO. “His experience and track record in similar growth-oriented companies will be of tremendous value.”

Before joining PLH Group, Terrell served as division General Counsel for The Shaw Group Inc., a Fortune 500 company later acquired by steel engineering and construction conglomerate CB&I. He also has worked as a private lawyer with the firm Baker, Donelson, Bearman, Caldwell & Berkowitz, PC.

Terrell is one of several recent appointments to Stream’s executive team, under the leadership of new President and CEO Larry Mondry. The Dallas-based company, formerly known as Stream Energy, branched out from its traditional energy offerings in January 2015 with the launch of mobile services. Protective and home services soon followed in an ongoing strategy to diversify the business and reach new customers.


Youngevity Hires Loren Castronovo as Chief Marketing Officer

Text

Youngevity International has appointed Loren Castronovo, a marketing and brand management veteran, as the company’s Chief Marketing Officer.

Castronovo’s 30-plus years of experience has been gleaned at top beauty and fashion brands such as Chanel, Estée Lauder and Revlon, as well as companies within the direct selling channel. Throughout her career Castronovo has held the roles of Chief Marketing Officer, Executive Vice President of Sales and Vice President of Product Development, among others.

“Since 2010, Ms. Castronovo and her teams have won 21 Addy Awards; [Direct Selling Association] Ethos Awards in Education/Leisure, Product Innovation, and Sales and Marketing; the prestigious 2011 Rebrand Award and the 2011 Minnesota Best Brand,” said Steve Wallach, Youngevity Chairman and CEO. “We are excited to have such a winner join our winning company.”

According to Dave Briskie, Youngevity President and CFO, Castronovo stood out from other candidates for her considerable experience and ability to blend traditional marketing with direct selling. “Loren will certainly bring fresh vision to Youngevity, and all our distributors and customers will gain from her work,” said Briskie.


LifeVantage Brings Additional Strength to Leadership Team

TextCourtland Pearson

LifeVantage Corp. has hired another seasoned direct selling executive to help write the next chapter of its turnaround story.

The Salt Lake City-based supplement company named Courtland Pearson as Senior Vice President of International. Pearson brings nearly 25 years of experience in global business and direct sales. The addition of Pearson is the latest move in the company’s leadership overhaul, which began after direct sales veteran Darren Jensen was named President and CEO in May 2015.

“I’m thrilled to join the talented and experienced management team at LifeVantage,” said Pearson, who will focus on the company’s overseas markets, particularly Japan. “I see potential for tremendous growth at LifeVantage thanks to its world-class products, globally scalable business opportunity and proven field leaders around the world.”

Ranked No. 69 on DSN’s 2016 Global 100 list, LifeVantage entered the direct selling space about seven years ago. While growth has been sporadic in recent years, executives say the company’s outlook has improved over the last eight months, noting that its per share price has increased from a low of $1.40 to an average of $8.00 or $9.00. And Jensen says that he is confident that, with talent like Pearson’s, the growth will continue. “I look forward to working with Courtland to enhance our growth strategies and communications… and moving all of our international markets forward,” he said.


Direct Selling Europe Elects New Board Chairman

TextAndres Ruff


Direct Selling Europe (DSE) has elected as its new Chairman, Andres Ruff, CEO of WIV AG. Announced at the annual General Assembly in Zurich, Switzerland, Ruff was elected unanimously, showing the cohesion and strength behind the decision. He succeeds R. Glenn Drake, former Group President, Tupperware Europe, Africa, and the Middle East and Chairman of DSE from 2009 to 2015.

“I’m deeply honored to chair the Board of Directors,” Ruff said. “I look forward to collaborating with all the members to continue ensuring the highest ethical standards for the industry that DSE Members represent.” Ruff and the entire Board of Directors thanked Drake for his successful leadership of the Association.

Ruff holds a degree in business administration and has a wealth of detailed knowledge in sales and marketing in the food and consumer goods industry. With more than 28 years of management experience, he has a proven track record in national and international small- and medium-sized enterprises and family companies. Prior to joining WIV as Chairman of the Executive Board, he held executive positions at Procter & Gamble, Holsten brewery and dairy Alois Müller, and served as Chairman of the Board of Directors of Apetito AG.


LEO Appoints Winnie Leung as General Manager of Asia Pacific Market

TextWinnie Leung

Winnie Leung has joined U.K.-based entrepreneurial consultation and education firm Learning Enterprises Organisation (LEO) as General Manager of Asia Pacific, the company’s largest market.

Leung has extended experience in training people in business acumen, communication skills, negotiation and learning skills, and she comes from a varied background, having worked in a number of different fields. For more than 20 years, she has served in a management role with numerous top-tier direct selling companies around the world. She is fluent in English, Mandarin and Cantonese.

“Winnie brings a wealth of experience to LEO,” said Dan Andersson, LEO President. “She has been very active in the direct selling industry for a number of years, and her expertise and knowledge will help take LEO’s Asia Pacific business to the next level.”

In other company news, industry veteran Paul Southworth, OBE, DL, who served as a past Director General of the U.K. Direct Selling Association, and former U.S. Rep. Steve Stockman have joined the LEO Advisory Board.

Founded in 2012 by Dan Andersson and Atif Kamran, LEO has built an entire ecosystem for entrepreneurs to network, create, and fund their companies and their own ideas using the principles of direct marketing and network-building.

July 31, 2016

Cover Story

Meet Direct Selling’s Billion Dollar Markets

by Andrea Tortora


Click here to order the August 2016 issue in which this article appeared or click here to download it to your mobile device.


The story of direct selling is one of sustained growth that keeps breaking records.

Global retail sales and the industry’s total salesforce both hit new highs in 2015. The World Federation of Direct Selling Associations (WFDSA) estimates that retail sales rose 7.7 percent in 2015 to $183.7 billion, up from $170.6 billion in 2014. The total salesforce jumped 4.4 percent, to 103 million people, up from 99.7 million in 2014. In all, 23 countries posted sales of $1 billion or more from direct selling.

“Direct selling is well positioned in today’s marketplace as consumers seek personalized service and quality products from people who they know and trust,” says Amway President and WFDSA Chairman Doug DeVos. “It results in a great opportunity for aspiring entrepreneurs, many of whom are seeking an opportunity to make a little extra while sharing products that they enjoy. With general attitudes toward entrepreneurship at very positive levels, the recent industry results are encouraging and the future is even brighter.”

Every region in 2015 reported sales jumps, and 80 percent of countries around the world showed increases in both sales and sellers. These are not just flash-in-the-pan bursts of activity, but sustained, steady growth spanning years.

“Given the mediocre performance of the global economy in 2015, I was pleasantly surprised by the steady and broad-based growth of direct selling during the year,” says Paul Bourquin, managing economist at Nathan Associates Inc. The Washington, D.C.-based economic consultancy works with the WFDSA to maintain confidentiality of incoming data, and to verify and vet the annual global data report.

The numbers are powerful because most national governments do not collect and report statistics on the direct selling channel, and “quite a few direct selling companies seek better or alternative information from that provided by syndicated sources,” Bourquin says. “The worth of the data is revealed by member companies wanting the information and dedicating the time and resources to do the research.”

The WFDSA also tracks the compound annual growth rate (CAGR), a measure of sustained growth over time. The global direct selling industry boasts a 7.2 percent three-year CAGR (2012-2015), with increasing sales from $149.3 billion to $183.7 billion.

The group of 23 countries with retail sales of $1 billion or more in 2015 claims 94 percent of all global sales. Sales are concentrated among the very largest direct selling markets, with the Top 5 countries accounting for 64 percent of all sales and the Top 10 accounting for 80 percent. The countries are an interesting mix of advanced and developing economies, which points to the strength and appeal of the selling channel in nations with a wide variety of infrastructure and technology as well as political and economic situations.

ABOUT THE research



The annual compilation of global statistics collects individual market data in local currency figures, and then converts them to U.S. dollars using current year (in this case 2015) exchange rates for all years. This practice eliminates the impact of currency fluctuation when comparisons are made to determine change across time, says Judy Jones, Market Research Insights Leader at Amway and Chair of the WFDSA Global Research Committee. Washington, D.C.-based economic consultancy Nathan Associates Inc. works with the WFDSA (World Federation of Direct Selling Associations) to gather and report the data.

The data collection effort is a collaborative, global effort of WFDSA, Seldia (the European Direct Selling Association), local direct selling associations and their member companies. The annual process takes more than 5,000 person hours, says Paul Bourquin, managing economist at Nathan Associates Inc. The research team uses a standardized process and continually works to make improvements.

The 2016 report comes with an expiration date of June 2, 2017, when the next year’s figures will be published. For some markets, sales are estimated until the respective country reports its official figures to the WFDSA, often based on official governmental reports. At that time, actual data is restated and accounted for the next year.

THE BATTLE FOR No. 1

China was predicted to eclipse the United States as the world’s largest direct selling market as early as in 2015, but growth of 4.8 percent meant the U.S. reached record sales of $36.1 billion, up from $34.5 billion in 2014 and enough for the U.S. to hold onto the No. 1 spot. There are now 20.2 million Americans involved in direct selling, up 11 percent from 18.2 million in 2014.

These latest numbers illustrate the industry’s “strength, vibrancy and vigor” in the United States, says Joseph N. Mariano, President of the U.S. Direct Selling Association. He says the sales growth rate outpaces growth for traditional retail sales and the overall gross national product in the U.S.

“It is gratifying to see record growth in direct selling in the United States for the past five years,” Mariano says. “Today, there are more people involved and more revenue is being generated than at any other time in our history. Direct selling remains relevant today, because in an age defined by technology, people still see great value in person-to-person interaction and demonstration.”

Industry watchers note that China exhibited strong sales growth of its own, with sales jumping 19 percent to $35.5 billion, up from $29.8 billion in 2014. (The number of people selling products for direct selling companies in China is unknown.) As the Chinese government continues to approve more licenses for direct selling companies to do business within its borders, sales in the industry can only skyrocket, and China will most likely overtake the U.S. position in direct selling in 2016 or soon after. Today there are 78 companies with a direct selling license. Within two years that number is expected to jump above 100.

China’s Ministry of Commerce keeps close watch on the direct selling channel but does plan to keep issuing licenses. Observers say the Chinese government wanted to see slow, controlled growth in the sector before allowing it to accelerate. There are established direct selling firms in China, including Amway, Herbalife, Vorwerk, Infinitus, Mary Kay, Perfect, Tupperware, Nu Skin and Tiens. At the same time, startup homegrown Chinese companies are seeking their own success in the channel. These firms sell nutritional, beauty and healthcare products and are experiencing 15 percent to 20 percent year-over-year growth. They include: Kangmei, Kasley Ju, Golden Sun and Ten Fu Tenmax.

There is no doubt that the Chinese market is definitely opening up. A recent example is a November 2015 direct selling symposium held in Beijing. Sponsored by the WFDSA and the Direct Selling Research Center at Peking University, the event brought together the WFDSA CEO Council members, which included companies like Amway, Shaklee, Mary Kay, Bestworld Lifestyle, Nu Skin and Tianshi, among others.

The benefits of direct selling in China also are catching the eyes of traditional retailers like France’s Millet, a seller of outdoor and mountaineering equipment. The brand is employing a variety of distribution channels, including single-brand stores and e-commerce as it tries to reach consumers in second- and third-tier cities.

Such specialty shops are how some direct sellers, including Avon and Amway, maintained a presence in the Chinese market during the country’s ban on direct selling between 1998 and 2005. When China reopened its borders to the channel, it imposed strict rules for acquiring a direct selling license.

At the same time, the Chinese government welcomed online sales with a goal of boosting online shopping to more than 5 percent of China’s total retail sales, in an effort to reach more consumers. China encouraged multi-channel sellers with traditional stores to also open online shops.


This model embraces the Chinese middle class and its younger generations, which have money to spend and a love of technology, especially smartphones. Social media apps such as WeChat are popular ways for distributors to build online stores that let them promote and sell products.

In fact, the Internet and social media play a much larger role in China’s economy than in the U.S. economy.


Click to enlarge image

WORLDWIDE APPEAL

On a global scale, the state of the economy has a dual impact on direct selling, says Carlo Ledezma, USANA’s Vice President for Latin America and a vice president for Mexico’s DSA.

“Our industry thrives on economic growth and prosperity in the micro-economic conditions of any country,” Ledezma says. “On the other hand, when things in the overall economy and in the country don’t go so well, there is an extra incentive for people to try and go out and pursue something outside of what they would usually do. That is when they look for opportunities in the direct selling industry.”

The number of people interested in starting their own businesses—which is what direct selling delivers for distributors—is high, according to the sixth annual Global Entrepreneurship Report commissioned by Amway. The 2015 report interviewed nearly 50,000 people in 44 countries, and 75 percent expressed a positive attitude towards entrepreneurship.

Companies that know how to leverage both sides of this economic coin truly benefit. Those that are smart use strategies that can capitalize during prosperous times. Those that are even sharper know how to pitch the opportunity to people looking for new ways to make money in tough times, Ledezma says.

This duality is part of the story of direct selling’s continued sustained growth. It is a narrative that can be told region by region:

Asia-Pacific. This region, which includes four of the Top 10 billion-dollar markets, boasts the largest sales and the biggest growth, with 46 percent of global direct sales, and a three-year CAGR of 10.6 percent. The region generated $84 billion in sales in 2015. Sales in China, Japan and Korea account for 79.9 percent of that amount.

Ten of the 23 billion-dollar markets are from the Asia-Pacific region:
2. China
3. Korea
5. Japan
9. Malaysia
11. Taiwan
13. Thailand
19. Philippines
20. India
21. Australia
22. Indonesia

While direct selling’s growth in China remains a top story, the channel quickly is becoming embedded in the cultures of many Asian and Pacific countries.

Malaysia, Taiwan and Indonesia all offer great opportunities for direct selling. Indonesia, with a salesforce of 12.7 million people, boasts a three-year CAGR of 11.9 percent on sales of $1.07 billion in 2015. The industry does well in this country, and has yet to realize its fullest potential. The Philippines and Malaysia also are perennial growth stories. In the Philippines, compound annual growth rate of retail sales over the three-year period was 9.8 percent; 2015 sales were $1.24 billion. In Malaysia, the CAGR is 9.4 percent with 2015 revenue of $4.44 billion. The world’s No. 3 market, Korea, saw 2015 revenue of $16.89 billion and a CAGR of 7.5 percent, while Taiwan’s 2015 retail sales were $3.35 billion with a 6.6 percent CAGR.

Finally, Vietnam is a market to watch. The country’s 2015 sales were just $492 million, but the channel posted three-year compound annual growth rate of 25.4 percent, the third-highest CAGR among all nations where direct selling data is collected and tracked.

New Zealand is enjoying the benefits of a strong economy and a very low unemployment rate. This means residents have the income to purchase goods. And while many in New Zealand have jobs, recruiting for the country’s direct selling companies is actually on the rise. The country’s direct retail sales grew by 13 percent in 2015 to $206 million. There are 104,256 people involved in the industry as independent direct sellers. New Zealand accomplished a CAGR of 4.8 percent.

Garth Wyllie, Executive Director of the Direct Selling Association of New Zealand, expects the growth trend to continue, based on reports from the country’s individual direct selling companies, the strong economy, a positive regulatory environment and a supportive government.

“The only possible headwinds would be if employment gets any flatter, we may struggle
to find people looking for the opportunity,” Wyllie says.

New Zealand is actually gaining population as people migrate to the country from Australia and Asian countries to find work and enjoy a less expensive cost of living. Many Asian students, for example, turn to direct selling for an additional source of income while completing their studies, Wyllie says.

Australia is battling an economic downturn and people are leaving the country for greener pastures. At No. 21 of the world’s 23 direct selling billion dollar markets, Australia’s 2015 sales of $1.11 billion was down 5.6 percent compared to 2014. Direct selling growth in the country has slowed, with three-year CAGR of just 0.6 percent.

The tough economic situation could prove beneficial for direct selling, Wyllie says. Higher unemployment in Australia means more people will be looking for ways to replace lost income or supplement existing income.

Americas. Direct selling has a long history in the Americas, which includes the U.S., Canada and South and Central American countries, and three of the Top 10 largest direct selling markets. The group accounts for 34 percent of global sales or $62.9 billion, up 4.6 percent from sales of $60.2 billion in 2014. The U.S. delivers 57.4 percent of that revenue or $36.12 billion, while Canada contributes 2.5 percent or $1.63 billion. Three-year CAGR (2012-2015) for the Americas region is 4.8 percent.

Central and South America combined provide 40 percent of the Americas direct sales or $25.2 billion.

Seven of the 23 billion-dollar markets are from the Americas region:
1. United States
6. Brazil
7. Mexico
14. Colombia
16. Argentina
17. Canada
18. Peru

Today, the channel continues to enjoy a large following in the United States, where more than 20.2 million people are involved. Direct sales and the number of people involved continue to grow, with more individuals generating more revenue in 2015 than ever before. The most popular sales method employed by companies remains person-to-person interactions at 71 percent, followed by party plans at 20.4 percent, according to data from the U.S. DSA. The gender mix of people involved in the industry showed a larger number of women, with 77.4 percent of consultants being female.

Direct selling is intertwined with many cultures in Latin America, where some of the big companies started distributing products as long as 60 years ago. The industry is well established in many growing nations as it began when infrastructure such as roads and transportation were not yet abundant, making person-to-person sales an ideal way to distribute goods.

In many ways, direct selling has grown up along with many of these countries. Take Mexico, which came in at No. 7 on the list of billion-dollar markets with 2015 sales of $6.93 billion. This is a middle-income country facing many financial challenges from exchange rates and governmental changes designed to bring about economic reforms. Although the overall economy is solid, the population is disappointed that changes are not taking place as quickly as they would like, says USANA’s Ledezma. Most direct selling firms active in Mexico are based in the U.S. That means a struggle exists for these companies to absorb the exchange rate in ways that do not increase prices for consumers and distributors.

“Directors and managers are dealing with these challenges and have to find very efficient ways to manage costs and investments and leverage economies of scale,” Ledezma says. To help weather this storm, the Mexican DSA fosters a sharing of best practices.

Despite these challenges, direct selling is expected to continue to grow in Mexico. Ledezma says this is because of Mexico’s reputation as a good market for the channel. People in the country are familiar with the model, and the collaborative environment among existing direct sellers is attractive to new entrants to the market.

“Companies thrive in Mexico when they have a good product and when they deliver on their promises to consumers,” Ledezma says.

As a whole, the DSAs in the Americas are working hard to educate potential consumers and distributors about the industry and to dispel myths. Ledezma and his colleagues are very intentional about “explaining what we do and how we do it. There is a difference between legitimate network marketing and a pyramid scheme,” he says.

Europe. With three of the Top 10 billion-dollar markets, the countries of western, central and eastern Europe claim 19 percent of global sales or $35.4 billion, up 5.7 percent from $33.5 billion in 2014. Western Europe delivers 83.3 percent of the region’s total sales, or $29.5 billion. Central and Eastern Europe generated $5.9 billion in direct sales in 2015. The European region’s three-year CAGR is 4.3 percent.

Six of the 23 billion-dollar markets are from the European region:
4. Germany
8. France
10. United Kingdom
12. Italy
15. Russia
23. Poland

EUROPE FACES UNCERTAIN ECONOMIC CHANGES

The full impact of the United Kingdom’s “Brexit” vote to withdraw from the European Union remains to be seen. At the very least, the new economic climate will include financial uncertainty, which may bode well for the direct selling channel as individuals look for ways to earn additional income and create stability for their household finances.

Just like any other industry, direct selling is impacted by the current macro and socio economic downward trend, says Katarina Molin, Executive Director at Seldia, the European Direct Selling Association. Yet the negatives can be offset by the need for individuals to earn an extra income, coupled with the increased consumer need for recommendation and explanation before buying decisions are made. In this light, Seldia predicts an increase of the direct selling business in several markets now facing an economic downturn, for several reasons.

Entrepreneurship is growing more popular all around Europe. A digitized economy and increased demand for more flexibility in balancing work and private time from Generations X and Y are driving the trend.

“We believe the future labor market in Europe will lead to a stronger demand for flexible working models, for which direct selling is an opportunity,” Molin says. The growth of the “shared economy,” which accounted for €28 billion in transactions in 2015 across Europe, also contributes to an increased understanding and recognition of flexible part-time income opportunities for individuals as an alternative to fixed employment.

Throughout Europe, direct selling has shown constant growth in the last five years. In 2015 sales as a whole grew by 4.5 percent compared to 2014, and in the European Union sales grew by 7.5 percent (compared to average retail trade in the EU, which grew by 3 percent in the same time period).

Just as the younger generations are embracing direct selling and its tech-friendly platforms, so are “senior entrepreneurs,” or those over age 50. The 2015 Amway Global Entrepreneurship Report shows an entrepreneurship potential for Europe at 38 percent, which has yet to be realized. Molin says the experience, knowledge and skills of this demographic is a huge asset to Europe, from a social and economic standpoint. By 2020, a third of the working-age population in Europe will be over 50, yet the Amway report finds that only 6 percent of the over-50 group is self-employed.

“The potential is enormous and remains largely unexploited in Europe,” Molin says.

Africa-Middle East. Direct selling is gaining a foothold in South Africa and other countries in this region, accounting for 1 percent of global sales or $1.3 billion, with a three-year CAGR of 3.2 percent. South Africa is the most active direct selling market in the region with 2015 sales of $597 million.

TOP PRODUCT CATEGORIES

Wellness, cosmetics and personal care, and household goods are the Top 3 product categories across the globe. Independent consultants also provide customers with clothing, utility services, financial services, food items, books and toys.

CONTINUED GROWTH

The number of people participating as direct sellers is on the rise across the globe. The salesforce in the Asia-Pacific region grew 4.5 percent in 2015 to 51.9 million people, according to the WFDSA.

The Americas jumped 6.0 percent to 35.1 million sellers.

Europe climbed 0.3 percent to 14.6 million distributors.

And Africa and the Middle East now are home to 1.7 million independent consultants, up 4.8 percent year-over-year.

The industry can only keep growing as more countries embrace the model and more individuals realize the benefits of being an independent consultant. What will ensure success is for direct selling companies to self-monitor, to uphold the high standards they have set and to continue to tell the real story of direct selling.

“The opportunity for direct selling right now is tremendous. People around the world are increasingly looking for ways to work differently, with more flexibility and independence,” says Amway’s DeVos. “These are benefits that direct selling has always offered. If we continue to set appropriate expectations around our income opportunities, highlight our product offerings and keep providing strong consumer protections, the potential for our industry has no limits.”

The outlook is bright closer to home, too, says the U.S. DSA’s Mariano. “In the years ahead,” Mariano says, “direct selling in the U.S. can continue to grow if we continue to embrace technology, appreciate the different expectations of different generations of salespeople and never lose sight of our customers, who demand great products and a great customer experience.”

July 31, 2016

News in Brief

News in Brief, August 2016


Nu Skin Secures $210 Million Investment from China

TEXTNu Skin headquarters in Provo, Utah.

Nu Skin Enterprises has taken on a strategic investment in its largest geographic market. In June, the Utah-based company inked a deal with a group of investors led by Ping An of China Securities Hong Kong, one of China’s largest insurers, and additional investors affiliated with ZQ Capital Ltd. Under the terms of the deal, Ping An ZQ China Growth Ltd. purchased $210 million in convertible senior notes due in 2020. The agreement also stipulates that Shen Zheqing of ZQ Capital will be appointed to Nu Skin’s board.

“Ping An and ZQ Capital bring significant local market knowledge and valuable expertise that we believe will positively impact our long-term growth opportunities in this important region,” said Nu Skin CEO Truman Hunt. Nu Skin plans to invest a portion of the proceeds in its China business, which accounted for more than one-third of the company’s $2.25 billion in sales in 2015, and the remainder will be used to buy back shares in the company, boosting the stock’s value for shareholders.

Nu Skin is the 10th-largest direct selling company in the world, based on the 2016 DSN Global 100 rankings, and is truly an international giant with operations in 54 markets worldwide and the Nu Skin Force for Good Foundation, which focuses its charitable efforts on health, education, economic opportunity and disaster relief programs around the globe. On June 20, Nu Skin celebrated its 13th-annual Force for Good Day with a number of humanitarian projects, including a massive clothing drive in Greater China, donating clothes and toys to two orphanages in the Netherlands, and assembling 10,000 lunches for children in need at Nu Skin’s corporate headquarters.


Tupperware Donates $200K to Establish Brownie Wise Park

Brownie WiseBrownie Wise

A $200,000 donation from Orlando-based Tupperware will help to develop a new local park in honor of Brownie Wise, the kitchenware company’s pioneering saleswoman.

According to Osceola County officials, Brownie Wise Park will be located on the eastern shore of Lake Tohopekaliga, about four miles south of Tupperware headquarters. The site, previously known as Candella Island, and surrounding land was purchased by the county in 2014.

The donation from Tupperware will furnish the park with an information kiosk, dock area, picnic pavilion and canoe and kayak launch. The kiosk will provide information and history on Tupperware and Wise, who for a time lived in a lakeside mansion owned by the company.

Wise was a driving force behind the development of the party plan model and headed up Tupperware’s Home Party Division from 1951 to 1958, following a stint at another early direct selling company, Stanley Home Products. As her success grew, the charming and upbeat Wise became the face of Tupperware and an inspiration for women in business, even becoming the first woman to grace the cover of Businessweek.

The story of Wise and the early days of the company was chronicled in Tupperware Unsealed, a 2008 book by Bob Kealing. A film adaptation, starring Oscar winner Sandra Bullock as Wise, is currently in development.

The planned Brownie Wise Park and its surroundings will be named Tupperware Island Conservation Area. All told, the county plans to spend approximately $1.1 million on park amenities and habitat restoration. Tupperware and its employees will have exclusive use of Brownie Wise Park for four days per year for 20 years.


Makeup Artist Luis Casco Becomes Mary Kay Global Beauty Ambassador

TEXTLuis Casco advises Mary Kay independent sales consultants as Global Beauty Ambassador.

Renowned makeup artist Luis Casco and one of the world’s largest direct sales companies are taking their partnership to the next level.

Mary Kay Inc. has appointed Casco as its Global Beauty Ambassador, a role it created just for him, said Chief Marketing Officer Sheryl Adkins-Green. Casco made his name on such well-known television shows as The View and Project Runway and has represented the cosmetics company in various capacities since 1996. In this new position, he will advise Mary Kay on product and color development and will work more closely with independent sales consultants on beauty trends, beauty techniques and sales education.

Adkins-Green said the synergy between Casco and Mary Kay, ranked No. 4 on Direct Selling News’ Global 100 list, has always been strong. This new position will further leverage their shared vision. “Luis has an amazing ability to make women feel very confident about wearing color and how to apply color—that’s essential to the success of a makeup brand like Mary Kay,” she continued. “Just as Mary Kay Ash said, everyone has an invisible sign around their neck that says, ‘Make me feel important.’ His value system makes everyone feel important.”


JRJR Networks Reports Positive Trends in 2015

Dallas-based JRJR Networks, which operates a portfolio of 10 direct selling and direct-to-consumer company brands, finalized its 2015 financial statement in June, reporting annual revenue of $138.4 million, up 27 percent from $108.8 million in 2014.

Last year, JRJR Networks approximately doubled the size of its business with the acquisitions of two United Kingdom-based brands: Kleeneze and Betterware.

Gross profit totaled $71.8 million, versus the prior year’s $53.3 million. The company, formerly known as CVSL, said the release was delayed by a longer-than-anticipated audit of its portfolio companies, whose operations span 50 countries.

The company narrowed its loss to $18.8 million from $23.7 million a year ago. The results include a $1.7 million after-tax write-down on inventory at basket maker The Longaberger Company. “Excluding inventory impairments, in 2015, we cut our operating loss by more than half,” said CFO Chris Brooks. “We also reduced the earnings per share loss by half. We expect continued good progress on that front. We also expect to see EPS turn positive this year.”


Beachbody Goes International with Workout Streaming Service

Following an initial rollout in North America and the United Kingdom, Beachbody is bringing its fitness streaming app to more than 140 countries worldwide.

Beachbody On Demand International connects users to a broad selection of programs and workouts led by the brand’s celebrity trainers, including P90X with celebrity trainer Tony Horton and Insanity with Shaun T. The service, which carries a 30-day money back guarantee, also features programs created exclusively for Beachbody On Demand subscribers.

The Santa Monica, California, company initially offered the streaming service to its network of nearly 350,000 Coaches, or independent distributors, who provided feedback on the user experience. For every new international signup, Beachbody has pledged to donate $5 to International Justice Mission.

“We want to do more than just help people get healthy and fit. We want to help end human trafficking and slavery across the world,” CEO Carl Daikeler said on his corporate blog.

The nonprofit IJM has 17 field offices throughout Africa, Latin America, and South and Southeast Asia, where it works to transform the justice system on a local level. Partnering with local police, public prosecution and social workers, IJM rescues victims from ongoing violence, represents them in court and restores them to their communities. Through this process, the organization aims to identify and address weaknesses in the justice system.


WorldVentures, Nancy Lieberman Open Latest DreamCourt in Indiana

TEXTNancy Lieberman Charities and WorldVentures dedicate DreamCourt to NBA coach Del Harris, for Wayne County Boys & Girls Club in Indiana.

Partnering with Nancy Lieberman Charities, the WorldVentures Foundation recently dedicated DreamCourt No. 25 in Richmond, Indiana. The state-of-the-art basketball courts are installed in underprivileged communities to provide a safe area for children to play and interact. As is usually the case, the new DreamCourt is situated near a local Boys & Girls Club, where young people congregate for after-school programs. The court pays tribute to former NBA head coach Del Harris, who began his coaching career at nearby Earlham College.

“I came to Richmond over 50 years ago and played on the old court right here in this park,” Harris said earlier this month at the opening of the six-goal DreamCourt. “In fact, we won a tournament here and many of my teammates went on to be inducted into the Indiana Hall of Fame.”

The WorldVentures Foundation has built DreamCourts across the U.S. alongside charitable partner Nancy Lieberman Charities. Lieberman is a WNBA legend who joined the Sacramento Kings last summer as the second-ever female assistant coach in the NBA. Her charity aims to provide healthy physical, emotional and mental environments for young girls and boys to build their self-esteem and confidence.

“This court is not mine, it’s not Del’s, it’s yours,” Lieberman said to youth on hand for the ribbon-cutting ceremony. “And we hope that one day you will do the same for other kids.”


Immunotec Reports Record Quarterly Revenue

TEXT

Nutritional products maker Immunotec Inc. (IMM—CVE) reported record quarterly revenue and a new sponsorship deal with professional sailing team Artemis Racing.

In the quarter ended April 30, overall revenue was $25.6 million (Canadian), up 28 percent from $20.0 million a year ago. Quebec, Canada-based Immunotec logged a 38 percent sales increase in Mexico, a 27 percent increase in the U.S., and an 11 percent uptick in Canada.

“The increase of our sponsoring numbers is above 30 percent in all of our key markets, which indicates a strong momentum for the quarters ahead,” CFO Patrick Montpetit said of Immunotec’s customer and consultant tallies. “We are confident that we are on track to achieve $100.0M in revenues for fiscal 2016.”

Adjusted EBITDA also improved, amounting to $2.0 million versus $1.4 million in the year-ago period. Profit doubled year over year to $0.6 million.

In May, management announced a new sponsorship of Artemis Racing, which represents the Royal Swedish Yacht Club, one of the oldest yacht clubs in the world. Immunotec will be the Official Supporter of Artemis as it takes part in Louis Vuitton America’s Cup World Series events, leading up to the 2017 America’s Cup.

“The physiological demands of sailing the present America’s Cup foiling catamarans are immense, and keeping the guys healthy and optimizing recovery is crucially important,” said Pete Cunningham, Artemis Racing Exercise Physiologist. “That’s where I see Immunotec playing a major role with their products and also their clinical experts in this field.”

Health Canada last year approved the health claim that Immunocal, the company’s flagship immune support product, helps increase muscle strength and enhance performance when combined with regular exercise. Additionally, Immunocal and the second-generation Immunocal Platinum were recently certified by LGC, a globally recognized anti-doping lab. Cunningham said these factors, along with Immunotec’s long history of scientific research and publishing, were critical in deciding to partner with the company.


Festival Celebrates Direct Selling in China

TEXTLaunch ceremony of 9th annual World (China) Direct Selling Brand Festival in Wuhan, China.

Representatives from more than 50 companies participated in the 9th annual World (China) Direct Selling Brand Festival in Wuhan in June. The event is presented by DIR Group Management Co. Ltd., which provides industry research and consulting services to direct selling companies in China. It included a banquet, opening ceremony, general session, roundtable meeting for VIPs, workshop for distributors and leaders, and an awards celebration. The event also featured an exhibition of companies and suppliers. The next day, executives participated in a meeting focused on the analysis of the Chinese direct selling environment, followed by visits to several direct selling companies operating in China for site inspections and an exchange of ideas.


Nerium Targets Fourth Quarter for Entry into Australia

Nerium International has added Australia to the growing roster of markets the skincare company plans to open in 2016.

The news comes on the heels of Nerium’s Japan launch in July, where the company put fully integrated operations in place. From day one, Japanese Brand Partners and customers were supported by a regional office—including an in-house customer support call center—and a Nerium Brand Center set to open in Tokyo.

To date, the Dallas area company has expanded internationally into Canada, Mexico and South Korea. In addition to Australia, slated to open in the fourth quarter, management has disclosed plans to enter Colombia and another Asia-Pacific market, Hong Kong, by year end.

“Australia is a thriving market for both the global anti-aging skincare segment and direct sales industry,” Jeff Olson, Founder and CEO, told DSN. “Nerium’s leadership team looks forward to bringing our unique business model and revolutionary products to Australia as we continue to expand Nerium International into the Asia-Pacific market.”


LifeVantage, Usborne Books Parent Are Best in State for Annual Returns

Two direct selling companies appear in a new ranking by Forbes that identifies the top-performing public companies in every state.

In the past year, Oklahoma’s Educational Development Corp. (EDUC—NASDAQ) and Utah’s LifeVantage Corp. (LFVN—NASDAQ) produced the highest return on investment in their respective states. Forbes used data from FactSet, a financial research and analytics firm, to track the total return of every U.S.-based public company from June 2015 to June 2016.

Educational Development Corp. (EDC) publishes and sells children’s books through EDC Publishing and the larger Usborne Books & More direct selling division. After more than four decades in business, EDC is in the midst of three years of growth, following a nine-year stretch of declining sales. In first quarter 2016, the company logged record revenue of $22.9 million versus $9.6 million a year earlier. The stock yielded an annual return of 139.4 percent, according to Forbes.

LifeVantage led Utah-based corporations with an annual return of 253.6 percent, which puts it in the top five companies overall. In the past year, the maker of health and wellness products has made several key appointments to its executive team under the new leadership of Darren Jensen, who joined LifeVantage as President and CEO in April 2015.

July 31, 2016

Exclusive Interviews

Power of Attorney: LegalShield Unveils Tech Upgrade, New Services in 2016

by Emily Reagan


Click here to order the August 2016 issue in which this article appeared or click here to download it to your mobile device.


LegalShield held its annual convention last month in Oklahoma City, and if there was one key message CEO Jeff Bell hoped to convey to Associates, it was that LegalShield is a company whose time has come. The provider of legal and identity theft services has grown to a record 1.6 million members, yet, as Bell points out, there are 160 million households in the U.S. The sales and marketing veteran recently spoke to DSN about the slate of tools and services LegalShield is introducing this year, and why he believes the Oklahoma-based company is nearing a tipping point.

DSN: LegalShield is rolling out several new technology-based products and plans this year. Entering 2017, will this look like a different kind of company?
JB: I think the answer is yes, and I want to take a step back because in one way we’re unique in the direct selling and network marketing arena. I learned just this year that for the longest time the model was summarized by the slogan, “Wear the button, share the sample, show the plan.” I think one of the reasons we struggled to fit in is because we didn’t have a sample. … If you think about, for instance, skincare or food supplements like nutrition bars or powders, those things can be handed out. … What we’ve created is almost an ethereal concept. We tell people, “Hey, don’t pay a lawyer by the hour. Join our community, and with a monthly membership you can talk to a lawyer on any issue, and the meter’s not running. You’re not paying by the hour.” People find it interesting, but still kind of theoretical.

Now, we have the LegalShield App. Our Associates can pull out their phone, tap the app, and there it is—a press of the button will call your law firm. It knows who you are. This last week we added the Snap by LegalShield feature, which handles parking tickets by automatically sending a photo on to the law firm for processing. So now we suddenly have our sample. That’s a huge breakthrough. … That’s probably been the biggest change for us, but in many ways it’s back to the future—we’re becoming more like the direct selling and network marketing industry.

DSN: This evolution dates back at least to LegalShield’s acquisition of tech startup Shake Inc. in April 2015. What was the strategy there, and how has it enhanced the business thus far?

JB: Our first LegalShield App came out in fall 2014, and it was very simple. It made a phone call. It knew who you were as a member and it knew your law firm. Start simple, start small. With the acquisition of Shake Law, we added a really powerful functionality, which is the ability to create forms on your mobile phone or on the web, for free. We have added one significant benefit to what they originally envisioned, in that all the forms are prepared by the law firms in each of our U.S. states or Canadian provinces. Shake by LegalShield first asks you what state or province you’re in, and then the forms presented are specific to those jurisdictions. Additionally, we understand a do-it-yourself approach is taken by many because they think they can’t afford to pay a lawyer by the hour. We let them know the benefit of consulting a lawyer in preparing that form and some of the downside risks of going it alone, and then introduce the concept that they can join our community for as little as $17.95. …

The other thing the Shake team—located in Manhattan’s Little Italy—has done for us is launch an all-new app called Ask by LegalShield, which provides answers to more than 1,500 common legal questions. That app has already generated a lot of memberships for us. … Both Shake and Ask are prospecting tools for our Associates. Whenever they send an invitation to download those apps, they are deep linked. If someone decides to become a member after trying the app, that commission is attributed back to the referring Associate. We feel really good about the potential for these tools to raise awareness and close membership sales. We’ve had more than 200,000 downloads of the app, which in the app business is an awful lot.

DSN: Do you feel that services like Uber, Airbnb and TaskRabbit have primed the market for LegalShield’s new tech offerings?

JB: Yes. I say this with pride, but it might sound kind of funny. We in many ways were one of the founders of the sharing economy, and when I say we, I mean LegalShield—it predates me by 40 years. We’re bringing together a bunch of consumers using a crowd-sharing approach, and with the purchasing power of $20 a month our members retain a law firm. That’s a game changer. You’re not paying a lawyer by the hour; you’re retaining an entire firm. That’s because we have the scale of all our members, now 1.6 million-strong, which is an all-time record for our company.

DSN: How are these new or enhanced products and services translating into revenue growth for the company?

JB: It’s been very positive. This last quarter we grew by 33.2 percent year over year, and that was our strongest quarterly performance in my tenure. In 2015, first quarter growth was 3 percent, then 11 percent. By the third quarter it was 28 percent, and then 26 percent in the fourth quarter—our largest quarter. The first quarter of this year we were worried. We got down to 24 percent growth and thought, oh my gosh, are we slowing down? But then last quarter was great; it exploded to 33 percent.

DSN: You and TidalScale’s Pete Jarvis were recently appointed to the board of directors, and you’ve also expanded the Office of the Chief Executive. How are those changes impacting the company?

JB: I couldn’t be happier to have my friend Pete Jarvis join the board. He and I have worked together in venture capital and angel investing. We’re both former “Microsofties” or Microsoft employees. He is going to help us continue to accelerate our technical development, not only in mobile apps, but also in our core membership, communication and financial management as a company. It’s the second new board appointment in my tenure, following on the heels of the great John Addison, former Co-CEO of Primerica. … I think these additions affirm our financial success, membership growth and Associate success. We’re very excited that the number of ring earners has tripled in the last year as we head into convention, and our monthly commissions paid are approaching an all-time high.

DSN: What was the impetus behind LegalShield’s new profit-sharing plan?

JB: We have a lot of hourly employees, and we want them to be recognized as we succeed and improve our productivity and customer service. At the beginning of the year, we made a change and moved away from seniority bonuses and announced we would end the annual Christmas bonus. … Those things weren’t really tied to individual, department or company performance. We announced we would pay a performance-based bonus, and there were some Doubting Thomases—and that’s okay, by the way. … We were able to pay a profit-sharing bonus in June, and it was a complete surprise. … I think we raised belief that the best is yet to come, but it’s already getting better.

DSN: You came to the direct sales channel from traditional retailers like Chrysler, Microsoft and Ford. Two years in, what has surprised you about the business model?

JB: I love the business model, and interestingly, it has more in common with the automotive franchise model than a lot of people realize. The auto dealers and their employees aren’t employees of the manufacturers. You have to have the appropriate incentives, starting with outstanding products and services, compensation plans, and positive information and human service support. That’s my focus. We’re here to serve our Associates no differently than when I spent 17 years serving the auto dealer. I love that the incentives are all positive and performance-based. That’s what’s so incredible as a business leader about this model—it’s a win-win.

The other thing that excites me is being able to champion entrepreneurship. We’re in an election year, and whoever may be the next president of the United States, there are a lot of people who are unhappy and maybe even a little angry. However you look at that anger, whether it’s socially motivated or politically motivated, I can tell you that ultimately it’s always economically motivated. If people felt they are better off now than they were four or eight years ago, they wouldn’t be so angry. I feel that all of us in direct selling have an obligation to continue to be champions of entrepreneurship, to let everyone know there’s a chance to take control of their lives, feel better about themselves, and earn more money while selling incredible products and services.

July 31, 2016

Publisher's Note

There’s a Company behind Every Growth Story

by Lauren Lawley Head



Click here to order the August 2016 issue in which this article appeared or click here to download it to your mobile device.


Lawley Head

Direct selling generated 183.7 billion in global retail sales in 2015, a new record for the channel, according to the newest estimates from the World Federation of Direct Selling Associations. The total global direct selling salesforce also reached a new high, increasing 4.4 percent to 103 million people.

While the new data is important, the real stories are in the growing companies and consultants’ businesses that are fueling the growth.

One of the growth stories is California-based skincare and cosmetics brand SeneGence International, which has been increasing sales by 100 percent or more each of the past three years. And, while 2015 was a record year for SeneGence, Founder and CEO Joni Rogers-Kante is the first to point out that success in direct selling comes from a long-standing commitment to hard work. “I know that it is my purpose in life to offer products and a career that really works to women all over the world, using this mission as a tool to give women confidence, security and abundance for themselves and their loved ones,” Kante told writer J.M. Emmert for the story, which begins on Page 52. “That sense of purpose and determination has shaped the person I’ve become and also the mission of SeneGence.”

New arrivals on the direct selling landscape also play an important role in driving growth in the channel. This month’s Young Company Focus, beginning on Page 66, offers a closer look at one of these upstarts. Jean-Charles Boisset turned to direct selling as a sales channel for the Boisset Collection family of wineries in 2012 and, since then, has seen its network of Ambassadors grow to 1,800. “It’s the most exciting thing I’ve personally ever done,” he told writer Heather Martin of the decision to move into direct selling. “There’s no other model that allows you to have a limitless amount of people energized by what you do.”

And of course, large, established companies also contribute to direct selling’s global success as they continue to evolve. In a story beginning on Page 40, writer Nicholas Sakelaris shares the inside story of Maryland-based Take Shape For Life as it embarks on an extensive rebranding journey. The company launched a new product line called Optavia at its annual convention in July, broadening the company’s focus from weight loss to wellness. By July 2017, the entire company will adopt the Optavia name. “We see this as being the biggest, most important event that we’ve had in my five years of running the company,” Mike MacDonald, Chairman and CEO of TSFL’s parent company Medifast, told DSN. “We’re going down a common path to improve the health of people here and around the world. This whole new branding is really designed to demonstrate who we are, what we stand for and the difference we want to make in people’s lives, here in the U.S., and soon around the world.”

At Direct Selling News, we hope that these stories of purpose, commitment and innovation will serve as an inspiration to others. We wish each of you the very best as you and your teams work to wrap up your summer season.

All the best,
Lauren Lawley Head
Publisher and Editor in Chief

July 31, 2016

DSA News

Using Technology to Address the Needs of Our Business Model

by Joseph N. Mariano


At the U.S. Direct Selling Association’s hugely successful 2016 Annual Meeting this June, I reported on some of the thoughts and observations shared with me throughout the year from direct selling executives, industry suppliers, members of the field, international peers and colleagues, investors, the press, policy makers and regulators. These “soundings” included the need to promote direct selling as a dynamic, ethical and innovative marketplace force; the question of how best to embrace and capitalize on social and technological change; and the need to be more responsive to our salesforce and customers. I think all should form the core of our industry’s strategic thinking moving forward. Here is a taste of some of those thoughts and observations.

Advances in technology and greater access to data give us the tools we need to monitor the market and ensure that the selling and buying experience we provide is of the highest quality. We have traditionally—and understandably—been closer to our consultants than to the ultimate consumer. But one of the greatest challenges I have in representing direct selling to various interested parties is explaining why we do not know our customers as well as we should. Analysts do not understand how we cannot be more in touch with our consumers, and regulators (and critics of the channel) cannot be convinced of the legitimacy of our model if we are unable to tell them with certainty who the people are who are using our products.

But now we have the opportunity to harness big data and the latest digital technology to become experts on who the people are who keep our companies afloat, what they want and how we can better serve them. The bonus here is that this will not only eliminate one of the biggest criticisms we face, it will help us win long term in the marketplace.

We also should recognize and define personal use of our products in new and accurate ways. Let’s use technology and data to demonstrate that consumers of all types—distributors and non-salespeople—are freely and legitimately using our products.

We can take advantage of our unique ability to embrace the growing trend toward a sharing economy and independent work and offer an environment where everybody who engages in our programs ultimately feels good about them and our companies. The motivations of independent contractors and how/why they work also are changing, with surveys suggesting that compensation is of less interest to the next generation of direct sellers, the Gen Xers and millennials.

Let’s promote what we deliver best: access to the brand and preferred pricing on products, interpersonal skill development, social networking, and potential for supplemental income and resources that afford anyone an opportunity to start their own business.

Be proud of the fact, too, that most direct sellers are satisfied with what they earn, even if the amounts are modest. Direct sellers do highly value the other non-income aspects of their businesses, so why invite the criticisms and misunderstanding of the model by touting the potential for huge incomes? Celebrate those few people who turn direct selling into a significant business endeavor because it’s quite an accomplishment, but also unabashedly acknowledge that the top earners are outliers and that although the possibility is there for everybody, most people will not achieve that level of income.

Additionally, let’s create mechanisms to clearly differentiate customer classes and better identify those who intend to sell as true direct sellers. DSA is ready to help each individual member company identify opportunities for the adjustments that will allow us to clearly demonstrate this reality of our business.

By embracing the tools of technology, data and the new economy, direct selling can become the preeminent business and economic force, because it is here that we can transform the public and regulatory perceptions of our business and become better understood and valued as the global model of entrepreneurship, empowerment and change.


NameJoseph N. Mariano is President of the U.S. Direct Selling Association and the Direct Selling Education Foundation.

July 29, 2016

U.S. News

Mannatech Sellers to Get Social Media Strategies at Two-Day Training

Associates of Mannatech Inc. are gathering in Dallas this weekend for a social media training event—the first ever hosted by the nutrition company.

The two-day event will be led by network marketing coaches Ray and Jessica Higdon, who have built their own business using both online and offline marketing. Mannatech’s Social, Mobile, Global Bootcamp will focus on using a variety of social media platforms to sell products, posting etiquette, populating newsfeeds and other strategies.

“We want to empower our sales Associates to take advantage of the YouEconomy, and this innovative training will open new opportunities for Mannatech entrepreneurs,” said company CEO and President Al Bala. “We believe we are the first company in our space that is providing two days of training on social media with the best experts available.”

In addition to hosting Associates in Dallas, home to its corporate headquarters, Mannatech will livestream the event on July 30–31 for online registrants.

Strategic initiatives like the Social, Mobile, Global Bootcamp are aimed at modernizing and expanding the 21-year-old company, which promoted Bala a year ago to lead the effort. During its annual salesforce meeting in April, MannaFest 2016, the company unveiled sweeping changes to its branding, compensation plan and product line.

July 29, 2016

U.S. News

Natural Health Trends Reports Strong Second Quarter Results

Natural Health Trends Corp. (NHTC—NASDAQ), a marketer of personal-care and wellness products under the NHT Global brand, has logged another quarter of double-digit revenue growth.

In the quarter ended June 30, 2016, revenue climbed to $80.4 million, up 15 percent from the prior-year period. The California-based company does the bulk of its business in Hong Kong, where revenue was up 13 percent to $73.3 million. Outside Hong Kong, revenue rose 43 percent to $7.0 million, compared to $4.9 million a year earlier.

Earnings slipped to $12.2 million, or $1.07 a share, from $12.3 million, or 98 cents a share, in the second quarter of 2015. Income reflects a $2.4 million tax provision for expected partial repatriation of profits from international operations. Excluding the tax, income increased 19 percent to $14.6 million, or $1.29 a share.

The company said it repurchased $23.7 million of its common stock in the first half of 2016.

“Through our strong cash generation, we are very well positioned to grow our business organically while simultaneously returning value to our stockholders through quarterly cash dividends and execution on our $70 million stock repurchase program,” said Chris Sharng, President of Natural Health Trends Corp.

On July 19, 2016, the board of directors authorized a dividend payout of 7 cents a share on the company’s outstanding common stock, upping the previous quarter’s dividend by 17 percent.

July 27, 2016

U.S. News

USANA Raises Earnings Guidance in Upbeat Q2 Report

Photo: USANA’s new MySmart Foods line. (USANA)


USANA Health Sciences Inc. (USNA—NYSE) raised its full-year earnings outlook following a second-quarter uptick in the company’s bottom line.

For the quarter ended July 2, 2016, the maker of health and wellness products posted a record profit of $25.76 million, or $2.07 a share, up from $25.42 million, or $1.92 a share, a year earlier. On average, analysts polled by Thomson Reuters had predicted earnings of $2.05 a share.

Quarterly sales totaled $258.5 million, a nearly 11 percent increase from the prior year’s $233.2 million. Analysts had predicted $256.7 million. Sales were up 16 percent in constant currency. The company recorded 15 percent sales growth in Asia Pacific, led by Greater China, where sales climbed 17 percent in dollars and 23 percent in constant currency. In the Americas/Europe region sales were essentially flat at $64.3 million.

“During the quarter, we held our Asia Pacific Convention in Singapore and initiated the launch of our ‘MySmart Foods’ products,” said USANA Co-CEO Dave Wentz. “Next month, we will hold our International Convention in Salt Lake City, where we will make another significant product announcement to an expected record-breaking number of attendees.”

For the full year, management expects earnings in the range of $7.90 to $8.20, up from its earlier guidance of $7.60 to $8.15. The Salt Lake City company affirmed its previous sales guidance of $1.02 billion to $1.05 billion.

July 27, 2016

U.S. News

Take Shape For Life to Take on New Name in Brand Evolution

Photo: Optavia Chia Berry Bliss Smoothie.


Take Shape For Life, the direct selling division of weight-loss firm Medifast Inc., introduced a new name and strategic vision to company Health Coaches during its recent National Convention.

The annual event took place in Austin, Texas, over the weekend, with more than 3,400 Health Coaches in attendance. From the stage, TSFL leaders unveiled a collection of new products under the Optavia brand, which it will adopt company-wide over the course of the next year.

“The announcement of Optavia marks a significant evolution in Take Shape For Life, putting it in prime position in the health and wellness market and the direct selling industry for growth and global expansion,” said Michael MacDonald, Chairman and CEO of Medifast.

The new name, meaning “optimal way” in Latin, is part of a wider effort to reposition the weight-loss company as a lifestyle company focused on optimal wellbeing. Since launching in 2003 as the direct selling arm of Medifast, TSFL has become the company’s largest segment, with revenue of $202 million in 2015. The parent company’s weight-loss plans and products also are sold through the web and national call centers, Medifast Weight Control Centers and a national network of physicians.

Under the Optavia brand, the company will operate as its own entity, offering exclusive products. “For the first time in the company’s history, we have created and built a fully exclusive offering that is only available to our family of Health Coaches and Clients,” said Mona Ameli, President of TSFL.

The company plans to add more health products, called Fuelings, to the Optavia line and upgrade its existing meals, snacks and bars to the new standard. The entire company is set to adopt the new branding and name by National Convention in July 2017.

For more in-depth coverage of Take Shape For Life’s brand transition to Optavia and new product roll-out, look for our August issue of Direct Selling News online and in print next week.

July 25, 2016

U.S. News

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

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


Primerica Life Insurance Co. and its subsidiaries, including direct selling company Primerica Inc., have received another round of superior ratings from global credit rating agency A.M. Best.

The agency affirmed its previous A+ financial strength rating and aa- issuer credit rating (ICR) of Primerica Life, based in Boston, with affiliates in New York City and Ontario. Declaring a stable outlook for all ratings, A.M. Best also affirmed the strong a- ICR of distribution arm Primerica Inc., headquartered in Duluth, Georgia, and an a- issue rating on company debt, amounting to $375 million or 4.75 percent in senior unsecured notes due in 2022. At the end of 2015, Primerica had more than 106,000 life insurance agents selling its term life and investment and savings products.

A.M. Best ratings are based on a quantitative and qualitative evaluation of balance sheet strength, operating performance and business profile. In the case of Primerica Life, a strong market position, experienced management team and solid financial performance boosted the company’s rating. A.M. Best also noted that Primerica Life’s risk-adjusted capitalization is sufficient to cover its current business and insurance risks, according to Best’s Capital Adequacy Ratio, a calculation based on the impact of various scenarios on an insurer’s balance sheet.

Factors that hurt the company’s overall rating were its somewhat narrow business profile and aggressive, or relatively high-risk, capital management strategy. Primerica Life has relied heavily on what is known as captive reinsurance to fund its Regulation XXX reserves, the U.S. statutory reserve requirements for term life insurers. A.M. Best assigns a lower-quality rating to an operating company’s capital when it cedes its XXX reserves to a captive—a company that is created and owned by the insurer for the purpose of insuring its owner—than when it self-funds those reserves.

July 22, 2016

World News

Isagenix Introduces ‘Prime Time’ Community Focused on Healthy Aging

Health and wellness company Isagenix is taking a strategic approach to building relationships through a new online community focused on healthy aging.

The Arizona-based company recently introduced the new group, known as Prime Time, along with an online portal at NowIsPrimeTime.com. By signing up, members get access to a Facebook group where they can communicate with other members and get health tips, as well as the chance to participate in healthy living contests. Members also can opt to receive regular Prime Time newsletters.

The Prime Time project was initiated by Patty Raphael, a Gen Xer and the company’s Vice President of Opportunity Solutions. “I spoke to a lot of Associates who felt Isagenix wasn’t quite hitting the mark when it came to the needs of my age group, and so we wanted to better support this community by building connections, having fun and providing tips on living life to the fullest,” Raphael said in the company’s announcement.

In many ways Prime Time is a counterpart to Isagenix’s START Your Life community, which aims to equip and inspire millennials—now the fastest-growing demographic among Isagenix Associates. Erik Coover, Senior Vice President of Global Field Development, told DSN the START Facebook page has built a following of more than 54,000. Coover, the son of Isagenix co-founders and executives Jim and Kathy Coover, has been instrumental to the development of START.

July 22, 2016

U.S. News

Mary Kay to Unveil Custom Sales App at Annual Seminar

At its annual salesforce meeting, which kicks off Monday in Dallas, Mary Kay Inc. will unveil a new, custom sales app, the result of a multi-year partnership with Dallas-based app development company Bottle Rocket.

The technology went live earlier this month, and company officials told DSN that early adoption of the app has exceeded expectations. On launch day the beauty company sent text notifications to consultants at the National Sales Director and Sales Director levels, alerting them to the availability of the app, Mary Kay myCustomers+. Within the first week, Mary Kay was halfway to its Oct. 1 goal for subscribers, who pay $4.99 a month to use the app. The company reports 5,100 subscribers to date.

Though not Mary Kay’s only app, myCustomers+ is the company’s most hardworking. A cross-departmental team set out to design a tool that enables the consultant to run a business from the palm of her hand. “We were looking for a customized solution for our salesforce,” said Jill Wedding, Mary Kay Director, Consultant Marketing. “They do so much every day in the field, and we wanted to make it something that allows them to easily track their inventory in real time and simplify how they run a Mary Kay business.”

One of the app’s primary features is the point of sale, where, rather than filling out a paper sales ticket, the consultant can pull up the customer’s profile and place a new order. Using a scanning tool, she can scan any product to automatically add it to the order. The scanning feature also assists in managing inventory, another focus of the app. When a consultant receives a new shipment, a scan of the Mary Kay shipping label instantly updates her inventory. The consultant is also notified when inventory levels fall below her set minimum.

Additional features support the daily activities of building a business. Consultants who have been with Mary Kay for any amount of time will recognize “My 6 Things,” a task list that appears on the screen in interactive bubbles. The list is based on a practice taught by Mary Kay Ash, the company’s founder, who trained consultants to make a daily “6 Most Important Things to Do” list. A tagging tool in the app allows the consultant to target designated groups of customers. She also receives a notification when a customer makes an order on her personal Mary Kay website or has an anniversary or birthday.

Despite the app’s numerous capabilities, Mary Kay wanted to provide a tool that anyone—tech savvy or not—could navigate with ease. That was the impetus behind what the team calls the “magic button,” a fixed button at the bottom of the screen that, depending upon what page is open, will automatically pull up the functionality most commonly associated with that page. “We wanted an app so easy to use that no matter who you are, when you open it up, it is intuitive and you can figure out where to find things and how to do things,” said Hope Elston, Manager of Digital Tools Consultant Marketing at Mary Kay.

Taking myCustomers+ from ideation to launch was a process of about three and a half years—or many lifetimes in technology years. According to Wedding, the team at Bottle Rocket transitioned fluidly whenever advances in technology added layers of complexity to the project. David Holl, President and CEO of Mary Kay, has called Bottle Rocket one of the best vendors ever to work with the beauty company. The app developer, which counts Coca-Cola, Disney and Vogue among its clients, pulled together a designated team of employees to collaborate with Mary Kay for the duration of the project.

The official launch of myCustomers+ will take place from July 24–Aug. 6, when 30,000 Mary Kay consultants converge upon Dallas for Seminar, the company’s annual salesforce training and recognition event. The Dallas Convention and Visitors Bureau estimates that Seminar 2016, which will take place in four waves, will pump close to $35 million into the local economy and support 2,000 jobs in the area. Mary Kay plans to promote myCustomers+ throughout the event with special expo areas, social media promotions and giveaways, and giant iTab touchscreens featuring the technology.

July 21, 2016

U.S. News

Q&A: CEO Jeff Bell on LegalShield’s Latest Offerings

In the first quarter of 2016, LegalShield recorded its strongest quarterly performance since Jeff Bell stepped into the role of CEO two years ago.

That was one of many achievements celebrated at LegalShield’s annual convention this week in Oklahoma City, where it hosted 10,000 independent Associates from across North America. During the event, the legal services provider also recognized 13 new lifetime million-dollar income earners, introduced a new ring recognition program and awarded nearly $1.5 million in bonuses. DSN recently spoke to Bell, a sales and marketing veteran whose career has included stints at Microsoft and Chrysler, about LegalShield’s recent growth and the slate of new tools and services coming in 2016.

DSN: LegalShield is rolling out several new technology-based products and plans this year. Entering 2017, will this look like a different kind of company?

JB: I think the answer is yes, and I want to take a step back because in one way we’re unique in the direct selling and network marketing arena. I learned just this year that for the longest time the model was summarized by the slogan, “Wear the button, share the sample, show the plan.” I think one of the reasons we struggled to fit in is because we didn’t have a sample. … If you think about, for instance, skincare or food supplements like nutrition bars or powders, those things can be handed out. … What we’ve created is almost an ethereal concept. We tell people, “Hey, don’t pay a lawyer by the hour. Join our community, and with a monthly membership you can talk to a lawyer on any issue, and the meter’s not running. You’re not paying by the hour.” People find it interesting, but still kind of theoretical.

Now, we have the LegalShield App. Our Associates can pull out their phone, tap the app, and there it is—a press of the button will call your law firm. It knows who you are. This last week we added the Snap by LegalShield feature, which handles parking tickets by automatically sending a photo on to the law firm for processing. So now we suddenly have our sample. That’s a huge breakthrough. … That’s probably been the biggest change for us, but in many ways it’s back to the future—we’re becoming more like the direct selling and network marketing industry.

DSN: This evolution dates back at least to LegalShield’s acquisition of tech startup Shake Inc. in April 2015. What was the strategy there, and how has it enhanced the business thus far?

JB: Our first LegalShield App came out in fall 2014, and it was very simple. It made a phone call. It knew who you were as a member and it knew your law firm. Start simple, start small. With the acquisition of Shake Law, we added a really powerful functionality, which is the ability to create forms on your mobile phone or on the web, for free. We have added one significant benefit to what they originally envisioned, in that all the forms are prepared by the law firms in each of our U.S. states or Canadian provinces. Shake by LegalShield first asks you what state or province you’re in, and then the forms presented are specific to those jurisdictions. Additionally, we understand a do-it-yourself approach is taken by many because they think they can’t afford to pay a lawyer by the hour. We let them know the benefit of consulting a lawyer in preparing that form and some of the downside risks of going it alone, and then introduce the concept that they can join our community for as little as $17.95. …

The other thing the Shake team—located in Manhattan’s Little Italy—has done for us is launch an all-new app called Ask by LegalShield, which provides answers to more than 1,500 common legal questions. That app has already generated a lot of memberships for us. … Both Shake and Ask are prospecting tools for our Associates. Whenever they send an invitation to download those apps, they are deep linked. If someone decides to become a member after trying the app, that commission is attributed back to the referring Associate. We feel really good about the potential for these tools to raise awareness and close membership sales. We’ve had more than 200,000 downloads of the app, which in the app business is an awful lot.

Read more from our conversation with Bell in the August issue of DSN.

July 20, 2016

U.S. News

Tupperware Beats on Profit, Lowers Full-Year Guidance

Tupperware Brands Corp. (TUP—NYSE) reported a sequential sales improvement in the second quarter, despite year-over-year comparisons that remain unfavorable.

Quarterly revenue totaled $564.7 million, down 4 percent in dollars and up 3 percent in local currency from a year earlier. Analysts polled by Thomson Reuters had predicted revenue of $559.9 million. The maker of kitchenware products reported strong sales in Brazil, China, Malaysia/Singapore and Mexico, partially offset by declines in Egypt and Turkey.

“When we look at the success of our large businesses in Brazil, up 22 percent in dollars and 41 percent in local currency, and Tupperware Mexico, down 2 percent in dollars but up 16 percent in local currency, it is proof of concept that the fundamentals of our business can generate significant returns from our 3.1 million global salesforce,” said Rick Goings, Tupperware Chairman and CEO.

For the quarter ended June 25, the company posted a profit of $52.4 million, or $1.03 a share, versus $62 million or $1.23 a share a year ago. Excluding some items and foreign exchange impact, earnings were $1.16 a share, down from $1.89 a year earlier. Analysts had expected adjusted earnings of $1.10 a share.

Management lowered its full-year adjusted earnings guidance to $4.25 to $4.35 a share. In April, the company had upped its forecast to $4.28 to $4.38 a share, from earlier guidance of $3.81 to $3.91.

July 20, 2016

World News

Asset Purchase Brings Viridian Energy under New Leadership

Crius Energy has entered a partnership that will streamline operations at direct selling subsidiary Viridian Energy while granting Crius exclusive access to the brand’s electricity and natural gas customers, according to a Tuesday announcement.

Certain assets of the business were acquired by the newly formed Viridian International Management LLC, which will pay $2 million in cash upon completion of the deal and a $4 million promissory note due in 12 months. The agreement includes payments to Crius Energy totaling $10 million over five years. Management said the move is intended to position Viridian, billed as a socially responsible energy company, for accelerated growth and international expansion.

“When Viridian was founded in 2009, we had no idea just how far-reaching, how impactful the efforts of a dedicated, passionate group of independent Associates would be,” said company founder Michael Fallquist, who will serve on the board of Viridian International Management.

In 2015, Viridian’s solar energy and natural gas offerings generated revenue of $324 million, making it the No. 53 direct selling company in the world, as ranked on the DSN Global 100. Viridian is No. 30 among North America-based direct selling companies.

To lead the next chapter of growth, Viridian International is bringing in Paul Booth as CEO. Booth is a veteran of the direct selling channel and the founder of software firm Data Paradigm Inc.

“For years behind the scenes my team has provided the insights, marketing and technology solutions to enable multiple direct selling organizations and countless network marketers to optimize their potential and achieve unprecedented growth,” said Booth. “In Viridian, I saw the right brand, the right people and the right time to finally make my dream of leading a radically successful network marketing company a reality.”

Cami Boehme, formerly Chief Strategy Officer for Crius Energy, also will join Viridian International as Partner and Chief Operations Officer. Rounding out the new leadership team is Peter Hirsch, who will step into the role of Chief Development Officer. Hirsch is a social entrepreneur, speaker and author whose most recent book is Global Cause Marketing: Future Proof Your Brand.

“We will continue to honor the founding principles of this great company, the sustainability pillars upon which the Viridian brand was built,” said Boehme. “We will continue to reinforce and enhance the Viridian opportunity, but with nimbleness, speed and a renewed commitment to growth, diversification and international expansion.”

In its announcement, Viridian said it will continue to partner with Crius Energy on its green energy products, while also exploring strategic partnerships in other product categories.

July 19, 2016

U.S. News

Newly Established AdvoCare Foundation Awards $150,000 in Grants

Photo: AdvoCare’s CEO, Brian Connolly (left), and Executive Vice President and Foundation President, Allison Levy (right), with the Ragus family.


The first round of grant funding from the AdvoCare Foundation, amounting to $150,000, will benefit eight organizations focused on child health and safety.

Investing in long-term solutions to child welfare is the mission of the AdvoCare Foundation, established in 2015 by the nutrition, weight-management and sports performance company. The first slate of grant recipients illustrates how that mission will translate into practical application.

AdvoCare concentrated the funding in four major cities—Atlanta, Dallas, Los Angeles and Philadelphia—with two recipients selected from each area. In Dallas, home to AdvoCare headquarters, the foundation awarded $20,000 to both YMCA Metropolitan Dallas and the local America SCORES, which runs an after-school program centered on soccer, poetry and community service.

“Thanks to the generosity and commitment of the AdvoCare Foundation, we are able to start a new pilot program at Life School Oak Cliff this year,” said Crystal Schober, Executive Director of America SCORES Dallas.

While AdvoCare has a long history of giving back, the newly established charity brings a formal framework and focus to its philanthropic efforts.  The AdvoCare Foundation was initially funded by a $1.5 million gift from the company and the family of AdvoCare’s late founder, Charlie Ragus.

“We started the foundation to strengthen our 23-year legacy of giving back and focus our efforts on the next generation of champions,” said Alison Levy, AdvoCare Executive Vice President and AdvoCare Foundation President, in a reference to the company’s slogan, “We build champions.”

July 18, 2016

U.S. News

Vivi Jewelry, Formerly Cookie Lee, Files for Bankruptcy

Two years after coming under new ownership, Vivi Jewelry, formerly known as Cookie Lee, has filed for bankruptcy.

According to a July 7 filing in Northern California federal court, Vivi is pursuing a Chapter 7 bankruptcy liquidation, rather than a reorganization under Chapter 11. The Los Angeles-area company listed less than $50,000 in assets and $1 million to $10 million in debts.

Vivi sells a range of accessories—primarily costume jewelry—priced under $50. In 2007, the business recorded revenue of $125 million and more than 40,000 sales consultants.

Chief executive Debbie Millar, who purchased Vivi in April 2014, was not immediately available for comment.

Millar acquired the jewelry business from Cookie Lee, who founded her eponymous company in 1992. Millar and her husband, Ron, are founding partners of luxury residential real estate group HÔM, which reported $1.4 billion in sales for 2013. The mother of six also ran her own direct sales jewelry company, bamboopink, until she and two partners sold it for an undisclosed amount.

Since taking the helm at Cookie Lee, Millar has focused on modernizing the company, beginning with a rebranding as Vivi—short for vision, inspiration, value and independence. Millar also brought in 15-year fashion industry veteran Shawn Forbes as Director of Product Development, tasked with leading an expansion of the brand.

The company’s filing indicates that efforts to revitalize the business have stalled. Vivi is not the only direct sales jewelry company to face headwinds in recent years. In 2014, lia sophia announced that it would shut its doors after three decades in business. Silpada Designs also will cease operations at the end of this month. 

As of this writing, Vivi officials have not offered up any public statement related to the company’s financial woes, either on the Vivi Facebook page or website, which appears to be no longer active.

July 15, 2016

World News

Modere Opens for Business in Italy

Photo: A top Modere independent seller speaks at the Italy launch event.


Modere, a maker of nutrition, personal-care and home-care products, is bringing its “Live Clean” philosophy to Italy.

Operations in the European market commenced this week with a launch event in Rome, the company said in a statement. The latest expansion puts Utah-based Modere in 22 markets worldwide.

“Italy is an ideal market for the Modere brand,” said Robert Conlee, Modere Chairman and CEO. “Our Italian consumers are fashionable, high-tech and in search of healthier and safer alternatives for the products they put in their homes.”

Modere, formerly known as Neways, was founded in 1992. The company’s line of naturally derived products are free of potentially harmful ingredients—about 3,000 in all, it claims—such as PEGs, SLS, phthalates and parabens.

“Our proven formulas have been trusted for more than 25 years, and we are pleased to bring these effective health and wellness offerings to more people around the globe,” said Vic Catalfamo, Chief Marketing Officer.

July 15, 2016

World News

Amway Presents at UN Ideagen Summit on Gender Equality

Photo: Amway’s Jeff Terry, Manager of Global Corporate Social Responsibility, at Ideagen.


Amway collaborated with other private and public sector organizations during this week’s Ideagen UN Empowering Women & Girls 2030 Summit, an annual event focused on advancing gender equality.

Ideagen is intended to drive collective societal impact through strategic partnerships. Those gathered at the United Nations in New York heard from Amway’s head of corporate social responsibility, Jeff Terry, who led a session highlighting the company’s work to improve the lives of women and girls. Other presenters included representatives from the European Union, USAID, the White House, Red Cross and Microsoft, among others.

Achieving gender equality is one of the current U.N. Sustainable Development Goals, as is ending all forms of malnutrition by 2030. Amway, the largest direct selling company in the world, addresses both challenges through ongoing CSR initiatives, including the Nutrilite Power of 5 Campaign, which focuses on the critical need for proper nutrition during the first five years of life. The campaign supports funding and distribution of Nutrilite Little Bits, a micronutrient supplement developed by Amway scientists that supplies 15 essential vitamins and nutrients for children. During last year’s U.N. General Assembly, Terry expressed Amway’s commitment to nearly double the reach of the program by the end of 2019.

In addition to nutrition science, Amway is leveraging another of its core competencies, entrepreneurship, to promote the welfare of women and girls. In this vein, the company is kicking off a pilot program in India that will train women to start their own businesses. The program is a partnership with Healing Fields Foundation, a nonprofit that educates women living in poverty to become community health facilitators. Amway is developing new elements of the program that will help these women apply their knowledge as entrepreneurs, selling locally sourced health goods.

July 15, 2016

U.S. News

Herbalife Settles with FTC

Herbalife Ltd. and the Federal Trade Commission have reached a long-awaited settlement agreement resolving an investigation of the Los Angeles-based nutrition company that began more than two years ago. The deal, which requires Herbalife to make specific changes to its U.S. operations and pay $200 million, will be studied closely by the wider direct selling channel.

Herbalife also reached a settlement with the Illinois Attorney General, resulting in the company agreeing to pay $3 million to the office, separate from the FTC agreement.

Company executives and investors responded positively to the settlements, with shares in the company trading above $66 at midday, an increase of more than 10 percent.

“The settlements are an acknowledgment that our business model is sound and underscore our confidence in our ability to move forward successfully, otherwise we would not have agreed to the terms,” Herbalife Chairman and CEO Michael O. Johnson said in a statement announcing the settlement. The statement went on to say that the company believes many of the allegations made by the FTC are factually incorrect but that the settlement is in the company’s best interest in light of the financial cost and distraction of protracted litigation. Herbalife said management can now focus all of its energies on continuing to build the business.

The FTC commenced an investigation into Herbalife 26 months ago, following accusations by hedge fund manager Bill Ackman that the company is defrauding customers. Ackman launched a campaign against the supplement seller in December 2012, backing his claims with a $1 billion short position in Herbalife stock.

As part of the deal, the company will pay a $200 million judgment and has agreed to various business procedures and policy enhancements. The $200 million figure is what Herbalife had floated in its first-quarter financial report as the company’s best estimate of a settlement. The FTC said this is the largest such consumer redress settlement obtained by the FTC and that it will provide information at a later date about how it will make those funds available for consumers.

The business procedures and policy enhancements included in the settlement pertain largely to Herbalife’s compensation model and marketing claims, which the FTC criticized in its complaint against the company. The settlement stipulates that the company must distinguish between individuals looking to build an Herbalife business and those who sign up simply to purchase products at a discount—a practice Herbalife management, in fact, implemented several years ago. Discount buyers are not eligible to sell product or earn rewards. The company is also required to ensure that at least two-thirds of rewards paid out to distributors are based on verified retail sales, rather than distributors’ personal consumption. And, in order to pay compensation to distributors at current levels, at least 80 percent of Herbalife’s product sales must be comprised of sales to legitimate end-users. If that threshold is not met, rewards to distributors must be reduced.

The company also agreed to:

  • require distributors to complete their first year, as well as a business training program, before opening a Nutrition Club,
  • increase protections on income and lifestyle claims put forth by those promoting the business,
  • pay for any shipping costs of unopened product associated with returns by business opportunity participants, and
  • require specific training for business opportunity participants as they begin the business.

In a press conference following the settlement announcement, FTC Chairwoman Edith Ramirez said the FTC hopes the principles embodied in the agreement will set an example for the multi-level marketing industry and that the commission plans to provide more guidance to the industry. “I think what we achieved in this case is unprecedented,” Ramirez said. “I think the protections that we have in place here are aimed to ensure that going forward Herbalife operates legitimately, but I do think they provide important guidance to the rest of the MLM industry about what they need to focus on in order to ensure they are not engaging in unfair or deceptive practices.”

Herbalife also acknowledged the likelihood of its settlement agreement having an impact on the wider direct selling community, much like the FTC’s Amway decision in 1979. In its press release, Herbalife said it “believes that while some of the additional terms do not have significant impact on the company, these provisions will improve policies throughout the industry.”

Herbalife’s board unanimously approved the settlement and formed an Oversight Committee to ensure compliance with the terms. The board also appointed Jonathan Leibowitz, partner in the law firm of Davis, Polk and Wardell, and former Chairman of the Federal Trade Commission, as a Senior Advisor to the Board. Henry Wang, currently Deputy General Counsel and Chief Compliance Officer, was put in place to lead implementation efforts and report directly to the committee, with Pamela Jones Harbour, Senior Vice President of Global Member Practices and Compliance and former FTC Commissioner, overseeing implementation of new distributor compliance initiatives.

The company also said it has granted billionaire investor Carl Icahn, an ally in its battle against Ackman, the right to increase his stake in Herbalife to up to 34.99 percent of the company’s outstanding shares, a jump from a previous max of 25 percent. Icahn currently own 17 million shares of Herbalife’s common stock, or about 18.3 percent.

“I have always believed in Herbalife’s strong fundamentals and am pleased the Board has decided to increase my ownership limit from 25 percent to 34.99 percent of the Company’s outstanding shares. A significant part of my investment success is directly tied to our in-depth investment research and understanding of often complex and unique issues facing companies,” Icahn said in the announcement.

“I have the greatest confidence in Herbalife’s CEO, Michael Johnson, and the entire management team, who have skillfully led the company through adversity, including holding firm against a high-profile PR campaign against the company by Bill Ackman where it was alleged more than once that the company would be shut down. Obviously, we are still here.”

July 14, 2016

U.S. News

New LifeVantage App Supports Distributor Onboarding and Mentoring

LifeVantage Corp. is helping its independent salespeople streamline their business with LV Move, a new app that simplifies training and mentoring.

According to company President and CEO Darren Jensen, the app addresses the need to promptly engage and develop new Distributors, who sign up to sell LifeVantage nutrition, skincare and weight-management products. LV Move guides Distributors through the sometimes complex processes of prospecting, receiving orders, and signing on their own customers and Distributors.

“LV Move is a state-of-the-art onboarding program that functions independently and remotely, and provides the fundamental training required for people to be successful Distributors with LifeVantage,” said Jensen.

In addition to LV Move, Distributors have access to two other custom apps, LV Share for social media management and LV Pro for business management. The company also offers marketing materials through the Brandr app. LV Move is a free download for iPhone and Android, but users will incur a $15 monthly charge after the first 30 days.

July 14, 2016

U.S. News

Mary Kay Plans September Groundbreaking for New Manufacturing Plant

Caption: Mary Kay Inc. identifies Lewisville, Texas, as future home of its new global manufacturing and R&D operations.


Cosmetics and direct selling giant Mary Kay Inc. has updated its construction timeline for the massive new research and production facility it has planned for North Texas.

The company is now scheduled to break ground in September on a 26-acre site in Lewisville, where it plans a $100 million, 470,000-square-foot plant. Officials project construction will be complete in the first quarter of 2018.

The project, unveiled in late 2015, will allow Mary Kay to relocate approximately 600 employees now based at its facility in Addison, Texas. The company said at the time that this new facility will better suit its workforce and logistical needs, as the site is convenient to major roadways, public transportation and other Mary Kay facilities—including its headquarters.

“This state-of-the-art facility is being specifically designed and built to meet not only today’s, but tomorrow’s, challenges to ensure the future of Mary Kay in an ever-growing and changing global marketplace,” said Thomas Cho, Chief Supply Chain Officer for Mary Kay. “We are very excited about our innovative vision for Mary Kay’s new U.S.-based global manufacturing and research and development facility.”

July 13, 2016

World News

Nerium Opens Tokyo Brand Center ahead of Japan Launch

Photo: Nerium executives open the company’s Japan Brand Center.


Nerium’s newest Brand Center opened this week in Tokyo as the skincare and nutrition company prepares to launch operations in Japan.

A ribbon cutting held at the 4,305-square-foot facility was attended by several Nerium executives, including Peter Dale, General Manager of Japan; Mark Smith, Chief Field Officer; BJ Choi, General Manager of Korea and Eric Haynes, General Counsel. The Texas-based company will begin selling products in Japan, its second Asia-Pacific market, on July 19.

“Asia-Pacific is one of the most important regions for relationship marketing,” said Jeff Olson, Nerium Founder and CEO. “We have a large Japanese base of Brand Partners in the U.S., and we are thrilled to bring our winning combination of opportunity and unique, proprietary products into a country that we feel is a leader in the skincare industry.”

Nerium has built Brand Centers in each of its markets, providing a physical location where customers can learn more about the brand’s anti-aging products. Nerium’s independent salespeople, known as Brand Partners, also utilize the centers to receive training, tools and other materials to help grow their businesses.

July 13, 2016

U.S. News

Tupperware Donates $200K to Develop New Brownie Wise Park

Photo: A conceptual plan of Tupperware Island Conservation Area, including Brownie Wise Park. (Osceola County)


A $200,000 donation from Orlando-based Tupperware will help to establish a local park in honor of Brownie Wise, the kitchenware company’s pioneering saleswoman.

According to Osceola County officials, Brownie Wise Park will be located on the eastern shore of Lake Tohopekaliga, about four miles south of Tupperware headquarters. The site, previously known as Candella Island, and surrounding land was purchased by the county in 2014.

The donation from Tupperware will furnish the park with an information kiosk, dock area, picnic pavilion and canoe and kayak launch. The kiosk will provide information and history on Tupperware and Wise, who for a time lived in a lakeside mansion owned by the company.

Wise was a driving force behind the development of the party plan model and headed up Tupperware’s Home Party Division from 1951 to 1958, following a stint at another early direct selling company, Stanley Home Products. As her success grew, the charming and upbeat Wise became the face of Tupperware and an inspiration for women in business, even becoming the first woman to grace the cover of Businessweek.

The story of Wise and the early days of the company was chronicled in Tupperware Unsealed, a 2008 book by Bob Kealing. A film adaptation, starring Oscar winner Sandra Bullock as Wise, is currently in development.

The planned Brownie Wise Park and its surroundings will be named Tupperware Island Conservation Area. All told, the county plans to spend approximately $1.1 million on park amenities and habitat restoration. Tupperware and its employees will have exclusive use of Brownie Wise Park for four days per year for 20 years.

July 12, 2016

U.S. News

Major League Lacrosse Star Is AdvoCare’s Latest Endorser

Photo: Greg Gurenlian of the New York Lizards. (Jim McIsaac/Getty Images North America)


Nutrition and weight-loss firm AdvoCare International LP is adding Major League Lacrosse’s most valuable player to its roster of product endorsers.

The Texas company has announced that Greg Gurenlian, midfielder for the New York Lizards, has joined NFL stars Drew Brees and Jason Witten, NASCAR’s Trevor Bayne and other athletes and coaches using AdvoCare products. Gurenlian’s products of choice are AdvoCare’s Spark and Rehydrate drink mixes, as well as sports performance offerings Muscle Gain, Muscle Fuel and VO2 Prime.

“AdvoCare products partnered with my lacrosse training help me to prepare for playing the game I love,” said Gurenlian. “I am honored to be joining an organization that is passionate about health, wellness and sports.”

Gurenlian’s lacrosse skills have earned him multiple MLL All-Star awards, as well as the league’s 2015 Most Valuable Player award. Last year, he also was named FOAthlete of the Year by The FaceOff Academy, an honor determined by statistical success at the faceoff position. Gurenlian developed The FaceOff Academy, an elite lacrosse training organization, with fellow players Chris Mattes and Jerry Ragonese.

“Greg is a great addition to the AdvoCare family and I believe he will represent our company well,” said AdvoCare’s Vice President of Endorsements, Rob Graf. “Our ambassadors choose AdvoCare because of the positive impact the products have on their workouts, practice and overall performance.”

With the exception of Brees, who is compensated for his role as AdvoCare National Spokesperson, the company’s endorsers lend their support solely in exchange for AdvoCare products.

July 11, 2016

U.S. News

Mary Kay Awards $1.3M in Grants to Women’s Cancer Research

The Mary Kay Foundation recently announced the recipients of its annual cancer research grants, which the foundation has awarded since its inception 20 years ago.

Research of cancers affecting women is one of two causes championed by The Mary Kay Foundation, the other being prevention and awareness of domestic violence. To improve knowledge of the disease, which is the second leading cause of death in women, Mary Kay awards $100,000 grants to top medical schools and research facilities across the country.

“The Mary Kay Foundation is proud to support these promising researchers who are working on critical discoveries that will impact lives for the better,” said Michael Lunceford, Mary Kay Senior Vice President of Public Affairs and Chairman of the Mary Kay Foundation board. Lunceford also noted that, while the program focuses on cancers affecting women, the resulting research helps to fight all types of cancer.

Grant recipients are selected by the foundation’s Scientific Review Committee, a group of medical scientists and doctors chaired by Jerry Shay, Ph.D., Professor and Vice Chairman of the Department of Cell Biology for The University of Texas Southwestern Medical Center at Dallas (UTSW). This year the committee screened 58 applicants and awarded 13 grants totaling $1.3 million. To date, Mary Kay has donated $25.2 million to a wide range of cancer research.

“It’s imperative in science to push the boundaries of cancer research in a pursuit to develop early diagnostic tools and new treatments,” said Shay. “With continued support through grants like these from The Mary Kay Foundation, scientists are afforded the critical opportunity for discovery.”

Mary Kay recently honored Shay’s longtime leadership of its review process with a $250,000 gift to UTSW, establishing a Distinguished Professorship in Women’s Cancer Research. Along with his collaborator, Dr. Woodring Wright, Shay is renowned for his own research on the relationship between aging and cancer. His roles at UTSW also include Distinguished Teaching Professor and Program Director of the Cancer Biology Graduate Program.

 

July 08, 2016

World News

Mannatech Appoints Direct Sales Veteran as VP of EMEA

Like many leading supplement companies, Mannatech sees potential for big growth outside of the United States.

To help lead its global expansion efforts, the Coppell, Texas-based company has named David Ori as Vice President of EMEA, or Europe, the Middle East and Africa. Ori has more than 20 years of experience in direct sales and international marketing and was most recently Vice President of International Development for a leading cosmetics and wellness company.

Alfredo Bala, President and CEO of Mannatech, which ranked No. 71 on DSN’s 2016 Global 100 list, said that Ori is key to the company’s future performance.

“David’s experience in the direct sales industry and international markets will help us create effective strategies for rapid global expansion,” Bala said. “He will be instrumental in helping us lead and grow our operations in those regions, and his valuable work experience will enable us to better serve our associates.”

Mannatech has been building out several areas of its business as the company continues to grow, and recently promoted two finance veterans within its ranks—David Johnson to Chief Financial Officer and Diane Barton to Controller.

July 07, 2016

U.S. News

LifeVantage Brings Additional Strength to Leadership Team

LifeVantage Corp. has hired another seasoned direct selling executive to help write the next chapter of its turnaround story.

The Salt Lake City-based supplement company named Courtland Pearson as Senior Vice President of International. Pearson brings nearly 25 years of experience in global business and direct sales. The addition of Pearson is the latest move in the company’s leadership overhaul, which began after direct sales veteran Darren Jensen was named President and CEO in May 2015.

“I’m thrilled to join the talented and experienced management team at LifeVantage,” said Pearson, who will focus on the company’s overseas markets, particularly Japan. “I see potential for tremendous growth at LifeVantage thanks to its world-class products, globally scalable business opportunity and proven field leaders around the world.”

Ranked No. 69 on DSN’s 2016 Global 100 list, LifeVantage entered the direct selling space about seven years ago. While growth has been sporadic in recent years, executives say the company’s outlook has improved over the last eight months, noting that its per share price has increased from a low of $1.40 to an average of $8.00 or $9.00. And Jensen is confident that with talent like Pearson’s, the growth will continue. “I look forward to working with Courtland to enhance our growth strategies and communications . . . and moving all of our international markets forward,” he said.

July 06, 2016

U.S. News

Mary Kay Names Makeup Artist Luis Casco Global Beauty Ambassador

Photo: As Global Beauty Ambassador for Mary Kay, Luis Casco will advise Mary Kay and its independent salesforce on such topics as product development, color education, sales education and social influencer events.


Renowned makeup artist Luis Casco and one of the world’s largest direct sales companies are taking their partnership to the next level.

Mary Kay Inc. has appointed Casco as its Global Beauty Ambassador, a role it created just for him, said Chief Marketing Officer Sheryl Adkins-Green. Casco made his name on such well-known television shows as The View and Project Runway and has represented the cosmetics company in various capacities since 1996. In this new position, he will advise Mary Kay on product and color development and will work more closely with independent sales consultants on beauty trends, beauty techniques and sales education.

Adkins-Green said the synergy between Casco and Mary Kay, ranked No. 4 on Direct Selling News’ Global 100 list, has always been strong. This new position will further leverage their shared vision. “Luis has an amazing ability to make women feel very confident about wearing color and how to apply color—that’s essential to the success of a makeup brand like Mary Kay,” she continued. “Just as Mary Kay Ash said, everyone has an invisible sign around their neck that says, ‘Make me feel important.’ His value system makes everyone feel important.”

July 05, 2016

Event Production

LINKVIVA


July 01, 2016

U.S. News

Jeunesse Marketing and Communications Work Garners National Recognition

Anti-aging products maker Jeunesse, a recent winner of multiple Telly Awards for video production, also took home 10 honors in this year’s Communicator Awards.

For 22 years, the Communicator Awards have recognized big ideas in the world of marketing and communications. The judges at the Academy of Interactive and Visual Arts (AIVA)—whose membership consists of leading professionals in media, communications, advertising and marketing—highlight quality work that also makes a lasting impact on its audience.

Florida-based Jeunesse collected three Awards of Excellence—the competition’s top honor—for its Nevo energy drink packaging, “6 Amazing Years” video, and event branding at its Jeunesse EXPO Unite Singapore annual world conference. For a wide variety of other projects, the company also took home seven Awards of Distinction.

“Each of these projects represents outstanding effort and creativity,” said Scott Lewis, Chief Visionary Officer at Jeunesse. “We are fortunate to have this talent on board and congratulate our marketing and communications teams for these achievements.”

The 2016 Communicator Award winners were selected from a pool of more than 6,000 entries. The annual program recognizes excellence in marketing across audio, video, print, web and mobile platforms.

July 01, 2016

U.S. News

LegalShield Rolls Out Employee Profit Sharing Plan

LegalShield on Thursday introduced a new profit sharing plan, giving employees of the legal services provider a bigger stake in company performance.

The plan will pay out bonuses to employees twice a year, in July and December. LegalShield, named one of Direct Selling News2016 Best Places to Work, employs more than 700 at its headquarters in Ada, Oklahoma, and additional offices in Oklahoma, New York and Texas. The average tenure of company employees is eight years.

“LegalShield has a history of innovation, and it’s great news to hear how they are sharing the success of the company with employees,” said Oklahoma Gov. Mary Fallin. “CEO Jeff Bell is to be commended for continuing—and growing—the family culture that began with [founders] Harland and Shirley Stonecipher.”

As a privately held company, LegalShield does not disclose earnings, but management reports that membership growth has been healthy in recent years. Since 2014, when Jeff Bell stepped into the role of CEO, membership production is up 23 percent, and active members have increased 13 percent to more than 1.5 million families.

“We count on our employees to deliver best-in-class service to help us continue to succeed and grow and we want to reward them for their efforts,” said John Long, LegalShield’s Senior Vice President of People and Leadership Development.

July 01, 2016

U.S. News

Young Living Promotes Janay Standifird to Chief Financial Officer

At Young Living Essential Oils, the search for the company’s next CFO has circled back to Young Living’s own Janay Standifird, who steps into the role later this month.

She will succeed Kevin Pace, who plans to retire on July 15 after four years with the company. Standifird also joined Young Living four years ago, in the role of controller. Most recently, she served as Senior Vice President, Global Controller and Finance, overseeing the company’s global accounting.

“Janay stands out among the most seasoned professionals and inspires everyone, especially women in the workforce, to reach their goals,” said Mary Young, CEO of Young Living. “We thank Kevin for his diligent service to our members and the company and are pleased to have a professional of Janay’s caliber take over the company’s finances.”

Management describes Standifird as a sought-after mentor, whether working one-on-one or with a team, who brings extensive knowledge of global financial systems and internal controls, global business strategies, building teams and risk mitigation. Her nearly two-decade career has included 10 years in the direct selling channel.

Standifird is one of several recent appointments that indicate Young Living’s willingness to develop leaders within its own ranks. In March, the Utah company promoted Jared Turner to Chief Operations Officer, Walter Noot to Chief Information Officer and Senior Vice President of Operations, and Kelly Case to Chief of Staff. Then, earlier this month, a restructuring of Young Living’s global sales team resulted in the promotion of seven key managers.

July 01, 2016

U.S. News

Health Firm LifeVantage Joins Reconstituted Russell Indexes

Health and wellness company LifeVantage Corp. (LFVN—NASDAQ) recently announced its inclusion in the Russell 3000 Index, as one of the 3,000 largest U.S. stocks.

Global investment analytics and data firm FTSE Russell captures and ranks stocks by total market capitalization and style attributes. The Russell indexes are reconstituted each June and are closely watched by investors.

“Our addition to the Russell 3000 Index is a reflection of the strong growth we have achieved as we have executed our strategic initiatives and launched innovative science-based products that have been well-received by our customers,” said Darren Jensen, President and CEO of LifeVantage. “We will continue to build upon the key pillars of our business model, positioning LifeVantage for long-term, sustainable growth.”

Shares in LifeVantage are trading at $14.05, approaching the 52-week high of $14.71. The company’s P/E ratio is 50.22 and market cap is $203.2 million. As of the last earnings report, EPS was 7 cents and is estimated to be in the range of 38 cents to 43 cents for the current year with 14.01 million shares outstanding.

FTSE Russell reports that this year’s changes to its indexes reflect smaller U.S. equity markets and a more cautious outlook among participants. The total market capitalization of the Russell 3000 Index slipped from $25.3 trillion at last year’s reconstitution to $24.1 trillion this year.

June 30, 2016

DSA News

DSA Research Shows Dynamic Growth of Channel as Consumer Trends and Technology Evolve

by Ben Gamse


Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


New data from the U.S. Direct Selling Association’s 2016 Growth & Outlook Survey, which sizes the direct selling market in the United States, reports unprecedented growth in direct selling, in terms of both retail sales and the number of people involved. This growth is testament to the vibrancy of the model as an unmatched opportunity for entrepreneurship, the value customers derive from the personal touch inherent in direct selling, and the manner in which advancements in technology have facilitated the ease of commerce.

This year’s Growth & Outlook Survey provides direct selling companies with a vast amount of data and insights into current market dynamics, reasons as to why direct selling has grown and why the channel is poised for continued growth over the next several years. Additionally, DSA uses the data in support of its advocacy initiatives and to educate key external audiences, including the public, consumers, academics and the financial community, about the legitimacy and vitality of the business model.

Here is an overview of some of the new industry data and insights from the 2016 Growth & Outlook Survey:

Growth in the U.S.

Direct selling in the United States experienced growth for the sixth straight year following the Great Recession. U.S. direct sales reached $36.12 billion in estimated retail sales in 2015, a 4.8 percent increase from the previous year and a new record high. This 4.8 percent year-over-year growth rate outpaces the growth of both overall retail sales (1.6 percent) and the U.S. gross domestic product (3.5 percent) during the past year.

The number of people involved in direct selling in the United States grew from 18.2 million to a record 20.2 million in 2015, an 11 percent increase from the previous year. While direct selling continues to attract predominantly women, the business model represents every U.S. state and every generation, and is generally reflective of America’s diverse population.

Global Growth

Direct selling is also growing on a global scale. The World Federation of Direct Selling Associations (WFDSA), driven by its global research subcommittee, has unveiled figures for 2015. Last year, global retail direct sales reached U.S. $183.7 billion, an increase of 7.7 percent from 2014. Three-year compound annual growth rate (2012-2015) was 7.2 percent. In 2015, 103 million people around the world were involved in direct selling, up 4.4 percent from 2014.

Entrepreneurship

What accounts for this level of growth in direct selling, in both sales and the people involved? A significant factor is the prevalence of and favorability toward entrepreneurship. “There’s nothing more global than being an entrepreneur,” says Kevin Plank, CEO and Founder of Under Armour. At a commencement speech this year at the University of Maryland, Plank described the definition of entrepreneur: a “bearer of risk”—a person who has an idea or ideas and is ready and willing to take the risk of acting on them. As we all are faced with and take risks on a regular basis in life, Kevin posed, we are therefore all entrepreneurs. Amway’s 2015 Global Entrepreneurship Report reinforces this sentiment, finding that in the United States, “86 percent of people hold positive attitudes toward entrepreneurship.”

“We are at a time when more people want to be entrepreneurs, and direct selling provides the means to be in business for yourself but not by yourself,” says Dave Merriman, Executive Vice President of ACN. “Distributors can work the business as much or as little as they want at any time and enjoy the rewards for growing their business while receiving the support from the direct selling company.”

Product Experience

Direct selling is in prime position to capitalize on a number of macro trends in the United States, including an aging population and the obesity epidemic. As the population ages, and as consumers become increasingly health and wellness conscious, direct selling is able to leverage its inherent social qualities, personalized product demonstration and coaching potential as a key competitive advantage.

The wellness sector commands the largest share of direct retail sales. It also is the fastest growing sector. Here’s insight into why: Jeff Kaufman, Director of Customer and Field Insights at Isagenix and Chairman of the DSA Research Industry Committee, explains how when direct sellers “experience the products and show a change in their overall health and how they look, that’s an easy selling point.” Personal stories attesting to the effectiveness of products can greatly enhance the seller/buyer experience. This personal touch, especially in the sale of health and wellness products, places direct sales at an advantage over fixed-retail-outlet sales. In addition to showcasing the benefits of the products, Jeff adds, “direct sellers can act as coaches and really help people stick to their programs and experience success, rather than just buying a product off the shelf.”

The personal-care segment of the direct selling industry also is experiencing notable growth. Possible drivers of growth in this product category include increased demand for anti-aging as well as natural and organic products.

The services segment of direct selling also continues to command a sizeable share of retail sales in the United States. As U.S. energy markets become deregulated, direct selling is an increasingly attractive alternative for customers looking for more choices in cheaper, greener energy.

Technology

E-commerce, social media and mobile technologies are advancing at a rapid pace, creating opportunities for direct selling companies to broaden their reach and increase their efficiency — often complementing in-person sales, rather than replacing them.

Social media, in particular, is seen as a huge driver of growth. Monica Wood, Vice President of Consumer and Member Insights at Herbalife and also a Research Committee member, says, “The proliferation of social media and online person-to-person communications has positively impacted the businesses of many sellers and has empowered them to be true entrepreneurs.”

ACN’s Merriman adds, “The use of new technology and e-commerce has allowed direct selling companies to give their independent business owners tools to easily expand their business. Online ordering, easy-to-access training and no need for inventory has provided more opportunities than ever before for people to be successful.”

Asma Ishaq, President of Jusuru, says, “Particularly in the past decade, since the onset of social media and technology that make social interaction and information immediately accessible, consumers are constantly seeking reference groups, reviews and community when identifying with a brand. Our industry’s value proposition provides exactly that.”

Growth & Outlook Survey Methodology


In early 2016, DSA extensively surveyed direct selling companies, and received 102 survey submissions. Nathan Associates, an economic consulting firm, confidentially collected survey data, conducted secondary research, and generated industry-wide estimates for the entire market in the United States. With the assistance of Artemis Strategy Group, and with diligent guidance and oversight from the DSA Industry Research Committee, the Growth & Outlook Report was generated. Because of the nature of this exclusive, direct selling company-submitted data, these data and insights cannot be found anywhere else.

DSA’s Industry Research Committee Roster for 2016-2017:

  • Yanira Aguayo, Stemtech
  • Julie Cabinaw, Scentsy
  • Laura Chacon-Garbato, Herbalife
  • Damien Douchet, H2O at Home
  • Daniela Farmache, Amway
  • Staci Glovsky, Nature’s Sunshine Products
  • Jake Gundrum, Amway
  • Christina Harris, Mary Kay Inc.
  • Tyler Horton, Nature’s Sunshine Products
  • Omobola Imoisili, Team Beachbody
  • Judy Jones, Amway
  • Jeff Kaufman, Isagenix International
  • JJ LeBlanc, Mary Kay Inc.
  • Brian Matney, Thirty-One Gifts
  • Jeff Morris, Pampered Chef
  • Randi Neiner, Ph.D., Shaklee Corporation
  • Tiffany Novy, Lulu Avenue
  • Erich Pagel, Scentsy
  • Jesse Stamm, Take Shape for Life, Inc.-Medifast
  • Pammie Strickland, Ambit Energy
  • Emily Trainor, Lulu Avenue
  • Monica Wood, Herbalife
  • Ben Gamse, Staff Liaison, U.S. Direct Selling Association

Conclusion

Direct selling has continued to experience growth due to strong macroeconomic conditions, an increasing trend toward entrepreneurialism, and an ability to adapt to both consumer trends and advances in technology. DSA expects direct selling to continue to grow in the United States by 3-5 percent per year for the next three years.

All DSA member companies that participated by submitting a completed survey will receive the full Growth & Outlook Report. For those companies that did not participate, Growth & Outlook will be made available online for purchase at a later date. For more information, check out the DSA research infographic of 2015 statistics at www.dsa.org, the Growth & Outlook video or contact Ben Gamse, DSA Market Research Manager, at bgamse@dsa.org.


NameBen Gamse is Market Research Manager at the U.S. Direct Selling Association.

June 30, 2016

New Perspectives

Annual Meeting Focuses on Reimagining Channel

by DSN Staff



Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


The U.S. Direct Selling Association held its Annual Meeting in Phoenix, Arizona, June 5 to 7, bringing together direct selling company executives, academics, suppliers and global direct selling leaders for collaboration and conversation about the trends shaping the channel. The theme for the meeting was Reimagine, and speakers included business strategist and futurist Daniel Burrus, a panel of experts on Big Data, and Eric Wagner, Bloomberg Vice President, Content Marketing, Cross Platform.

In addition to three general sessions, the meeting included a selection of 25 workshops, four sets of more informal “poster sessions” on various topics within the exhibit hall, a boot camp for newcomers to direct selling and a special track for meeting planners.

TextIn her opening remarks, Rodan + Fields retiring President and CEO Lori Bush challenged attendees at the 2016 U.S. DSA Annual Meeting to embrace the theme “Reimagine” as they work to shape the future of direct selling. Bush served as the Chair for the Annual Meeting.

The supplier community also played an active role in the annual meeting, with 125 companies represented by booths in the exhibit hall and record contributions to the Direct Selling Education Foundation.

“A Direct Selling Association Annual Meeting represents that once-a-year opportunity where we renew our relationships and meet new friends who share a commitment to the direct selling channel of distribution,” says Direct Selling News Ambassador John Fleming. “The general sessions and workshops are carefully designed to inform and educate, however, it is always the people I interact with that remind me of the uniqueness of the direct selling business model, and the greatness of the many diverse companies, new and mature, who solely embrace direct selling as their primary method of distributing their products and services.” 

TextDaniel Burrus

POLITICAL ACTION

Advocacy for proposed federal anti-pyramid legislation also was on the agenda. The bill, H.R. 5230, was introduced by Reps. Marsha Blackburn (R-TN) and Marc Veasey (D-TX) in May and has since picked up at least 11 co-sponsors. The bill seeks to establish a federal definition of what is and is not a pyramid scheme and provides clarity on personal use, expressly allowing reasonable purchases by distributors for personal consumption to count as sales to ultimate users. Similar legislation has been adopted in a number of states across the country, but a lack of clear federal definitions has created a level of uncertainty within the channel about what is and is not permissible when it comes to designing and implementing compensation plans.

Passage of the legislation is the association’s top government relations priority for 2016. A letter-writing campaign that began in late May prompted independent direct selling representatives to send more than 5,600 letters to members of the House, and DSA is encouraging company executives as well as independent direct sellers to submit letters to their members of Congress requesting support for the legislation.

TOP HONORS

The meeting closed with the DSA Award Gala, including the announcement of two of the highest honors within the direct selling community: the Direct Selling Education Foundation’s Circle of Honor and the Direct Selling Association’s Hall of Fame.

TextU.S. DSA President Joseph Mariano, left, and Thirty-One Gifts CEO Cindy Monroe present Direct Selling News Ambassador John Fleming with the DSA Hall of Fame Award.

DSEF surprised Amway Chief Sales Officer John Parker with the Circle of Honor award. Parker, who joined the board in 2012 and served four years as its Chairman, led the organization through a leadership transition at both the staff and board levels and took the lead in developing and launching a bold three-year strategic plan to build and scale the foundation’s academic program.

Direct Selling News Ambassador John Fleming was honored with induction into the DSA Hall of Fame. Fleming, who received the DSEF Circle of Honor in 1997 and the DSN Lifetime Achievement Award earlier this year, has been a tireless advocate for direct selling for decades. While pursuing a career in architecture, he was introduced to direct selling as a means to supplement his income to support a growing family. His part-time business with Bestline Products became a full-time endeavour and, later, a path to direct selling corporate offices. After spending more than 15 years with Avon he retired in 2006 and joined DSN as Publisher and Editor in Chief.

TextAmway Chief Sales Officer John Parker, center, receives the DSEF Circle of Honor Award from DSEF Executive Director Gary Huggins, left, and DSA President Joseph Mariano.

The association also presented DSA Awards to member companies in five categories during the gala. The winners are:

  • Marketing & Sales Campaigns: 4Life Research LLC, for its branded campaign 4LifeTransform to support the company’s launch of a new protein supplement, PRO-TF.
  • Excellence in Salesforce Development: Rodan + Fields, for its Lead the Way rewards and recognition program, which recognizes Consultants who are building strong bases of loyal retail customers.
  • Product Innovation: Princess House Inc., for its Fresh + Healthy Produce Keepers, which allow users to wash and store fresh fruits and vegetables in a single, adjustable container that controls moisture and airflow.
  • Technology Innovation: Scentsy Inc., for its Continuous Delivery system infrastructure that enables the company to rapidly deploy many more software updates without downtime.
  • Vision for Tomorrow: USANA Health Sciences Inc., for its True Health Foundation, a nonprofit that provides nutrition, clothing, shelter, medical assistance and health education around the world.

Other awards presented during the ceremony included:

  • Partnership Award – Smart Office Solutions, for the company’s 14 years of partnership as a supplier to direct selling companies.
  • Rising Star Award – Damsel in Defense. Founded in 2011, Idaho-based Damsel in Defense provides personal safety products to empower women.

Education Foundation Expands Academic Program

Earlier this year, the Direct Selling Education Foundation embraced an aggressive new strategy to increase the number of college and university professors engaged with its academic program. The foundation’s goal is to recruit 200 professors to a new Fellows program and, by extension, reach 60,000 students per year by 2019 with the message of what direct selling is and how it can serve as an effective go-to-market strategy for consumer product and services companies and as a path to micro-entrepreneurship for individuals.

TextThe Direct Selling Education Foundation raised just more than $105,000 through a golf outing and silent auction held during the U.S. DSA Annual Meeting.

Thirty-eight professors have signed on to the program so far, and more than 18 Fellows and academic organizational partners attended the U.S. DSA Annual Meeting to learn more.

“The partnerships built with DSEF Fellows have already yielded valuable research and high profile public programs, both of which were on display at this year’s DSA Annual Meeting,” says DSEF Executive Director Gary Huggins. Dr. Anne Coughlan of Northwestern University presented the preliminary results of her study of how success is defined by personal consumers and career-driven sales people, which will help the industry better frame public discussions about motivations and achievement in direct selling. Dr. Liz Davis of the University of San Francisco was instrumental in bringing national experts to Phoenix to hold a forward-looking conversation about how the industry can benefit from a better use of “big data.” 

“These are just two examples of the dividends the Foundation’s academic partnerships will continue to yield as we expand our reach to influential professors and the students they teach across the country.”


Mary Kay CEO elected to second term as U.S. Direct Selling Association Chairman

The U.S. Direct Selling Association’s Board of Directors will look much the same for the 2016-2017 operating year as it did in 2015-2016.

Typically, the Vice Chairman of the Board serves as the Annual Meeting Committee Chairman and, at the conclusion of the Annual Meeting, moves into the role of Board Chairman. However, following her retirement as CEO of Rodan + Fields, Vice Chairman Lori Bush announced her plan to step down from the board, and Chairman David Holl, President and CEO of Mary Kay Inc., was elected to a second term. Most of the committee chairs also will remain in place.

Amway Chief Sales Officer John Parker will serve as the association’s Vice Chairman and Annual Meeting Committee Chairman from June 2016 through the 2017 Annual Meeting, at which time he is expected to be elected to the Chairman’s role. Dr. Traci Lynn Burton, Founder and CEO of her eponymous jewelry company, was elected second Vice Chairman, and Michael MacDonald, CEO of Take Shape for Life Inc. (Medifast), was elected Treasurer. Nu Skin Enterprises President and CEO Truman Hunt remains on the executive committee as the Immediate Past Chairman, and Scentsy Inc. CEO Orville Thompson remains as Past Chairman.

TextDavid Holl

Seven people were elected to the Board as Directors for terms expiring in 2019: Viridian Energy CEO Michael Fallquist, Primerica Inc. Executive Vice President and General Counsel Alexis Ginn, Arbonne International LLC Chief Sales Officer Ashley Good, Herbalife Senior Vice President, Legal Officer, Global Member Practices and Compliance & Privacy Pamela Jones Harbour, Rodan + Fields Chief Legal Officer and Secretary Michelle Leetham, Beautycounter Founder and CEO Gregg Renfrew, and Scentsy Inc. Chief Sales Officer Sandy Spielmaker.

Sixteen other direct selling company executives also serve on the DSA Board of Directors: Janice Capinegro of Pampered Chef, Angela Loeher Chrysler of Team National, Michael Collins of LifeWave Inc., Landen Fredrick of Mannatech Inc., Asma Ishaq of Jusuru International Inc., Jonathan Gelfand of Team Beachbody, Erik Johnson of Hy Cite Enterprises LLC, Allison Levy of AdvoCare International LP, Konrad Mayr of Sabika Inc., Dana Mehrer of Silpada Designs, David Merriman of ACN Inc., Mark Schiro of Stream, Halle Sminchak of The Kirby Company, Frank VanderSloot of Melaleuca Inc., Britney Vickery of Initials Inc., and John Wyckoff of Dove Chocolate Discoveries.

June 30, 2016

Software/Technology Solutions

Snapfulfil


June 30, 2016

Company Spotlight

USANA: Built on Science, Cultivated through Lives Touched

by Heather Martin


Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 1992
Headquarters: Salt Lake City, Utah
Executives: David Wentz, CEO
Products: health and wellness
2015 Revenue: $918 million


Dave WentzDavid Wentz
Dan MacugaDan Macuga
Doug BraunDoug Braun

To Dave Wentz, half a million is so much more than 1 billion.

Even as the company his father founded is about to hit the 10-figure revenue mark, the USANA Health Sciences co-CEO would rather focus on the 500,000 people around the world who use USANA’s nutritional and skincare products.

“$1 billion is a reason to celebrate, and that’s about it,” he says. “But we’re in half a million families. That’s the number that’s more important to me.”

Any way you look at them, all of USANA’s numbers are worth noting.

For the first quarter of 2016, net sales increased to a record $240.4 million, up 9.6 percent from $219.4 million in the prior-year period, according to the most recent quarterly report. Net earnings for the first quarter increased 13.3 percent to $22.3 million, compared with $19.7 million during the prior-year period. 

The bigger picture is just as compelling. In 2014, USANA ranked No. 24 on Direct Selling News’ Global 100 list, with annual net sales of nearly $800 million, up from $718 million in 2013. In 2015, revenue was $918 million. The Utah-based company is projecting net sales of $1.02 billion and earnings per share as high as $8.15 for 2016. Since 2009, USANA’s customer base and its revenue have roughly doubled—and the number of distributors selling USANA products has increased by 75 percent, to nearly 350,000.

Like Wentz, USANA Chief Communications Officer Dan Macuga is most excited about the growth in customers and distributors. “We don’t pay so much attention to the dollar figure as to the number of lives we’re touching,” he says.

Macuga says USANA’s financial success is merely a conduit for expanding company presence and has brought opportunities that weren’t as available when the company was smaller. USANA Chief Marketing Officer Doug Braun agrees. “It opens up a lot of doors to have co-branding and connections to other organizations,” Braun says.

textUSANA Brand Ambassador Caroline Wozniacki is a former world No. 1 in the Womens Tennis Association tour and represented Denmark in the 2008 and 2012 Olympic Games.

Last year, USANA expanded its relationship with Dr. Mehmet Oz, of The Dr. Oz Show. The popular daytime television program regularly features USANA products. Through Team USANA, the company also continues to partner with elite sports organizations such as the Women’s Tennis Association, the U.S. Ski Team and international soccer teams, as well as more than 1,000 Olympic athletes. These heavy-hitter USANA customers not only become great brand ambassadors, Macuga says, they serve as inspiration for the “weekend warriors” in USANA’s customer base who aspire to greater levels of fitness.

Another partnership of sorts that has brought clout to the organization is the addition of Richard Williams to USANA’s board of directors. Williams is the former co-CEO and now nonexecutive board Chairman of direct selling financial products giant Primerica. Williams brings with him deep knowledge of the direct selling industry, Braun says. Perhaps even more important, he knows about the kind of growth USANA is experiencing. “He has gone through what our organization is going through,” Braun says. “The timing is incredibly important.”

True Vision, “True Health”

High-profile partnerships are valuable, but they alone won’t sustain USANA, executives say. Space in this corner of the direct sales market is precious, with approximately one-third of the companies on DSN’s Global 100 list selling supplements or health-related products. Company leaders believe USANA will differentiate itself and succeed only if it stays true to the founder’s vision, maintains its focus and sticks to solid science.

textUSANA employees enjoy a special time of fun at Lagoon Day.

Founded in the early 1990s by Dr. Myron Wentz, USANA (a name that comes from the root words for “true health”) has a different heritage than many direct selling companies. “A lot of them are founded by marketing people,” says Braun, who came to USANA about five years ago and has worked in wellness product direct sales for 25 years. “We were founded by a scientist. Scientists are always looking for new things, but they’re also looking for validation, research and testing.”

Dr. Wentz began his scientific life developing tests to diagnose disease. He made his name known in the medical community when he created the first commercially available test for diagnosing infection with the Epstein-Barr virus. He shifted gears and sold his renowned Gull Laboratories in 1992 to focus on research and development of products that would help prevent disease. And USANA was born.

Since day one, the company has committed to providing financial opportunities and scientifically sound products that change people’s lives, Dave Wentz says. This clear purpose has allowed it to sidestep fads and remain focused.

“Ephedra was a big one we avoided,” he says, remembering the “miracle” weight-loss drug in the mid-1990s that was banned by the U.S. Food and Drug Administration in 2004 after some users died from side effects. Despite pressure from some distributors to jump on the ephedra bandwagon, the company kept its feet on the ground. Even before the fatal effects came fully to light, the science seemed shaky, Wentz says. “Saying no to sales is something I’m very proud of,” he continues. “You can do things wrong for a while and take the benefits early, but then it comes back to get you.”


USANA Brand Ambassadors and professional athletes.

Smart Growth

Being cautious hasn’t kept the company from innovating and entering popular product categories. In early May, USANA officially launched its first-ever food product line, the MySmart Foods protein shakes and bars. Staying true to its principles, though, the company has not loaded up its food with sugar to appeal to palates hesitant about health food. “We’re not about people who are looking to eat for pleasure,” Wentz says. These products aren’t going to give that “three-minute high you get from eating sweets.” They will appeal to the consumer who sees food and supplements as fuel for a healthy life.

The shakes and bars also align with the company’s growing “personalization” strategy, allowing customers to combine flavors and ingredients that fit their tastes and wellness goals. This kind of customization appears to be a major key to USANA’s overall growth plans.

textFive-time world champion boxer Tim Bradley has defeated 12 world champions in his career and is ranked as the world’s second best welterweight by the Transnational Boxing Rankings Board.

From an operations perspective, creating flexible processes for USANA associates has been a particular focus in the past couple of years, Braun says. This is perhaps most obvious in how the company has updated the way it uses technology. Company executives acknowledge that they had become complacent about the digital side of the business, and when they started paying attention they realized they had ground to make up. “In the early days, we were ahead of the curve on the tech side,” Braun said. “It’s hard for a company that’s been around for a long time to change—USANA probably didn’t keep up with it as much as we should have.”

But in the past several years, USANA has developed a team to focus specifically on developing leading-edge technology tools, Macuga says. Now, associates can create personalized websites for their USANA businesses. The company also provides ready-made digital marketing content for distributors to post on their social media platforms and has created an online health assessment for them to administer to current and potential customers.

The assessment offers personalized recommendations for what supplements people will benefit from, depending on specific factors such as where and how they live, Braun says. Not only does it provide immediate feedback to the consumer, it also fills an information gap for newer associates, who can rely on the assessment to deliver the science while they’re still learning about the products. And whether or not a customer ultimately buys a USANA product, he adds, that customer has received some valuable information.


Asia has accounted for the majority of the company’s expansion in recent years—China alone posted nearly 50 percent of the company’s net sales in 2015, a 62 percent increase over the past two years.


Looking to the East

Introducing new products such as MySmart Foods is certainly one way to feed the bottom line. But opening new markets around the world has been where most of the company’s growth has come from. USANA is now selling in 20 countries, from Mexico to Belgium to Thailand. Asia has accounted for the majority of the company’s expansion in recent years—China alone posted nearly 50 percent of the company’s net sales in 2015, a 62 percent increase over the past two years, according to the latest annual report.

Wentz says China is an ideal market, not only for wellness products but for recruiting direct selling associates: “It’s a very entrepreneurial society. They work harder than anyone I’ve encountered; they’ve got the hunger to change their situation in life, and I can’t think of a country that needs it more.” Wentz says China’s rampant economic growth has compromised its environment and the health of its people. “They’re burning coal like crazy; they have so many cars on the road; they’re congested; and they haven’t been thinking about green at all.”


“$1 billion is a reason to celebrate, and that’s about it. But we’re in half a million families. That’s the number that’s more important to me.”
—Dave Wentz, Co-CEO


Growth in the West, particularly in the United States, has been more sluggish. Last year, Europe and the Americas accounted for less than one-third of USANA’s overall net sales, essentially unchanged from the year before and 3 percent lower than in 2013. And the growth in the number of associates, only 2 percent from April 2015 to January 2016, is far below the 16 percent growth in Chinese associates in the same period. Wentz thinks that some of the company’s U.S. distributors may not be as eager as they once were. “They are at a level where they’re comfortable; they’re living the life they dreamed about, and they aren’t as motivated to grow,” he says. “We need to find the next group of hungry leaders who are going to come by and pass them up and take over—or push them to get back to work.”

A Matter of Trust

The rapid international growth in the past several years has required an incredible amount of time and focus for USANA’s leadership team. And about a year and a half ago, to Wentz it felt like work had taken too big of a bite out of his life. So he took some time off. A whole year, to be exact. He says the sabbatical gave him time to reconnect with his wife and their two young children and allowed him to recharge after going full-steam ahead at the company for nearly 25 years.

But Wentz is a savvy strategist, according to Macuga. So this wasn’t just any hiatus. Wentz also stepped back to find out how well his management team would operate without him. “I wanted to test how good of a leader I was…. I don’t want the company to be based on me being here.” Wentz instructed his executives to take chances while he was away. “I told them to try things I hadn’t let them try before.” And he was impressed by the results. “I came back to a new management team,” he says.


“We all look at our role in USANA in the same way. Every one of us on the management team takes it very seriously that a major part of our responsibility is to build a team of individuals beneath us who can replace us.”
—Doug Braun, Chief Communications Officer


Braun and Macuga say Wentz’s sabbatical exemplified the kind of trust that’s become engrained in USANA’s culture. “We all look at our role in USANA in the same way,” Braun says. “Every one of us on the management team takes it very seriously that a major part of our responsibility is to build a team of individuals beneath us who can replace us.” Macuga agrees. Managers are “always looking at bench strength, ensuring we have a great talent pool to pull from,” he says. But Wentz, who is only 45, has no immediate plans to pass his baton. Neither do Macuga or Braun. “All of us want to be here as long as possible,” Braun says.

This high level of engagement doesn’t exist just among USANA’s leadership. The company recently was named one of the Best Places to Work in Direct Selling, an honor given only to organizations that score very well on a rigorous assessment of employee satisfaction and engagement at all levels. Braun says he knows that as the company continues to grow, it will become even more challenging to maintain an environment where each employee feels noticed and appreciated.

textKristina Mladenovic is currently the highest-ranked French tennis player in singles, holds 16 doubles WTA titles and represented France at the 2012 London Games.

But Braun is heartened by how veteran employees naturally step up to help newcomers understand how the company works, buy in to the USANA mission and see their place in the organization. That shared ownership of keeping the company culture strong will help drive USANA’s success, he says.

It makes sense that a company that’s as much about selling entrepreneurial opportunity as it is about selling vitamins would have a workforce that takes such initiative. And that workforce is among the many reasons company leaders are so optimistic about what’s ahead for USANA. “I’m excited about our past, and records are nice,” Braun says. “But I’m more excited about the future and where we’re going.”

June 30, 2016

Company Focus

Xyngular: Giving Members Life-Changing Experiences

by Angela E. Soper


Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 2009
Headquarters: Lehi, Utah
Executives: Marc Walker, President; Russ Fletcher, CEO
Products: health and wellness
2015 Revenue: $49.7 million


NameMarc Walker
NameRuss Fletcher

Xyngular, a health and wellness company with 82 employees based in Lehi, Utah, began as a kernel of an idea by a privately held ownership group. They had new ideas for both a product and a compensation plan, and as they began to search for the right people to put these ideas into action they found direct selling veteran Marc Walker. Trouble is, the first two times they contacted Walker he politely told them, “Thanks, but no thanks,” since he was working on another venture and didn’t want to get involved with something new.

But the group had a vision for the company that included Walker’s expertise, so they persevered and went back to him a third time. This time Walker agreed to fly to California to hear their plan. He listened, and that kernel of an idea began to sprout with possibilities. But he had some questions, since he had strong feelings about particular issues related to direct selling. “I grilled them,” he says. “And they just kept coming back to their focus on the distributor and building a company that’s going to last and be a good company.”

Gathering All of the Good within the Channel

Walker became more interested, talked it over with his wife, and decided he should join the group in co-founding the company and leading as President. Walker had two important issues to be addressed from the beginning. “One, we had to have products that worked,” he explains. “You can build a short-term company on hype, but if your products don’t work you’ve got nothing to drive it.” With Walker on board, the founders went back to the drawing board and made some changes to the introductory product, Global Blend, to make it more powerful—it’s one of Xyngular’s best sellers even today.


“Your health is a journey, not an event.”
—Russ Fletcher, CEO



The second critical issue for Walker was the need for a strong and unique compensation plan, which prompted the owners to fine-tune the existing one. “We have to build a compensation plan that’s going to pay people who don’t know what the heck they’re doing as they get started,” Walker told them. “We’ve got to pay the mid-level leaders as they’re starting to build their organization, and we’ve got to pay leaders who have built a great organization, but provide incentives in there for everybody to do the things that are going to maximize what they can earn from us.”

One of the things Walker insisted he would not do is create a compensation plan that enables top leaders to make a lot of money, and then change the plan mid-growth. “I just don’t agree with that at all,” Walker says. For him, if he was going to be involved in helping to build a new company, he wanted to be sure they focused on the positive. “We are in a great industry; we help people, we give people opportunity,” he says. “It’s such a cool thing that we get to do, and I wanted to make sure we gathered up all of the good that’s in the industry.”


“You can build a short-term company on hype, but if your products don’t work you’ve got nothing to drive it.”
—Marc Walker, President



Walker says he feels Xyngular’s compensation plan lives up to his initial goal, since its unilevel structure enables the company’s salesforce to earn commissions, bonuses and incentive trips based solely on volume. In addition to receiving rewards for building volume in their individual organizations, Distributors also earn bonuses on the overall growth of the company through Xyngular’s 12% Corporate Sales Pools. “We put 1 percent of our monthly volume in each of these 12 pools for 12 percent total,” he explains. “They can start qualifying with only 2,000 in group volume.” The one requirement is that only 60 percent of the qualifying volume can be generated from one leg of the Distributor’s organization.

Walker believes the Corporate Sales Pools help to foster company-wide teamwork among its leaders in the field. “It’s created this great sense of unity where we have leaders flying across the United States or up to Canada to help each other grow,” explains Walker. That’s because if the company’s income increases—no matter which region or leaders’ organizations may be growing—all Distributors with at least 2,000 in volume benefit.


Xyngular’s recent Park City Director Invitational in Utah.

100,000 Lives Changed

Steve Elder, Chief Operating Officer, has seen how the company’s compensation plan resonates with people building a business—especially those new to the channel. “People are very complimentary about the payout from our plan,” says Elder. “It’s very beneficial to the entrepreneur, and we work very hard to keep our operation streamlined so we can provide as much benefit to them in return on their work and effort.”

Xyngular CEO Russ Fletcher says this model not only allows its Distributors to capitalize on the company’s day-to-day growth, it helps Xyngular build revenue. “We had a very concrete revenue goal for 2015,” says Fletcher. “It was $50 million, ‘50 in 15’… that’s what we were shooting for, it became a mantra of sorts, and we came within a whisper’s breath of hitting that at the end of the year… we were just shy at $49.7 million.”

Fletcher adds that the “50 in 15” mantra really motivated the field, and it also was motivational for company employees. This year the goal has changed its focus somewhat—for 2016 the company is pledging: “100,000 Lives Changed.” Fletcher explains: “The metric is 100,000 unique people who have bought and used our products during the course of 2016.” And, he adds, they are just about on track to hit that target.

Boosting the company’s compensation plan is its incentive program. Its reward trips sound like excursions you would find in a luxury travel brochure: Dubai, Bora Bora, Costa Rica, a seven-day Caribbean cruise, a 10-day Mediterranean cruise, and retreats at the Sundance Resort and in Park City, Utah. The company’s Passport Program enables Distributors to qualify for trips starting with just 10,000 in qualifying volume. Its President’s Club is a program that uses a point-based system to reward its Distributors for business-building activities.


Founded in December 2009, Xyngular now has close to 33,000 Distributors and customers, with a ratio of 82 percent customers to 18 percent active Distributors.


To keep them up to date on new products and programs and to celebrate their accomplishments, Xyngular holds an annual convention, called Xyngfest, every fall—the next one will be held Oct. 13-15 in Dallas—and a spring event called Xyngfling that focuses on training. In July it will hold its annual Leadership Conference in Washington, D.C., an event designed for upper-level leaders, according to Curtis Call, Executive Vice President of Sales. The company also holds corporate city meetings around the country and in Canada to help new Distributors learn more about the opportunity from Member leaders and the corporate team. The company does not have a car program; it focuses on giving its Distributors “once-in-a-lifetime experiences” as they build their businesses.

Expanding with a Position of Strength

Founded in December 2009, Xyngular now has close to 33,000 Distributors and customers, with a ratio of 82 percent customers to 18 percent active Distributors. 

Although Xyngular contracts with an outside vendor to handle its back office system, the company has a strong internal IT department, which consists of both a development team that creates and improves in-house tools and reports as well as a business intelligence team whose function is data analysis and coming up with unique ways of looking at data patterns and trends. “We are a data-driven company; we like to see what the data tells us instead of going by our gut and our feel all the time,” says Call. “We feel like the data can reveal to us true patterns and trends of behavior.” And by understanding this data, Call believes they can better guide their Distributors to the activities that are most productive.

The company’s Distributors stretch from throughout the United States, Puerto Rico and Canada, with a heavy concentration of growth in the Midwest and in the Canadian provinces of Alberta, British Colombia and Saskatchewan. The company also has a small number of Distributors in Europe. Elder says international expansion is “always in discussion,” but when it comes to opening new markets the company will “go where the field takes us.”


“We are a data-driven company…. We feel like the data can reveal to us true patterns and trends of behavior.”
—Curtis Call, Executive Vice President of Sales


Fletcher supports this philosophy. He says Xyngular does not want to spread itself too thin and make it hard to maintain profitability and manage growth. The company intends to be international on a wider scale at some point, but, he adds, “when we are ready to go, we will go in a position of strength, not from a position of desperation.”

From 2014 to 2015, Xyngular experienced 46 percent growth, and Elder says the company is currently a little ahead of this figure for 2016. Call adds that March and April were the company’s two biggest months, and it is on track to continue this growth. Xyngular now offers 21 individual products, all in the health and wellness category, plus 20 different kits or bundles. Its newest products, Prime for men and Shine for women, designed to optimize hormone levels, have undergone independent doctor-run studies, and the company plans to publish third-party, peer-reviewed studies later this year. Spearheading product development at corporate headquarters is formulator Peter Griscom, Senior Director of Products. The products are manufactured at facilities in Texas, New Jersey and California, and the company offers a 30-day, money-back guarantee. Not often exercised, Walker says the return rate has held steady for six years.


“It’s such a cool thing that we get to do, and I wanted to make sure we gathered the good that’s in the industry and kept the stuff out that I felt harms people.”
—Marc Walker


Elder believes the products’ strength lies in their simplicity. “The combination of the products and plans we’ve put in place get great results, and they’re very simple, very easy to use,” he says. “We try to provide very straightforward instructions, very simple plans and great support to [our Distributors] to help people to really take root in the changes they want to make in their lives from a health standpoint.”

Although the company’s first successful products tended to support weight loss, Fletcher believes interest in the products has now shifted to a more overall sense of well-being. “Your health is a journey, not an event,” he says, and feels that even though people may start out using the products to lose weight, they soon experience other benefits.


Distributors and guests take a helicopter ride through the Grand Canyon, Arizona, as part of a Xyngfest 2015 reward trip.

Changing Lives with an Extra $300 to $400

For Fletcher, an MIT graduate who has had a successful career working as an efficiency trainer—with an impressive client roster that included the White House—Xyngular provides new satisfaction and purpose to his life. Initially associated with the company as a member of the board of directors in 2011, he became CEO in 2014. He has been involved in the direct selling channel in various capacities for 20 years, and found himself drawn back to it with Xyngular, a company that he believes is changing people’s lives in both their health and their financial status.


“When we are ready to go [international], we will go in a position of strength, not from a position of desperation.”
—Russ Fletcher


“One of the things that I say all the time is, ‘How much good could you do in the world if you could put $300 or $400 in as many people’s pockets every month as possible?’ ” he says. Fletcher realizes some people will make far more than that, but it’s that small increase in many people’s monthly incomes that he hopes to encourage. “The real goal is to see how many people we can get into that $300-$400 range, because that’s life-changing,” he adds. “It’s the car payment you didn’t get to make, it’s part of the house payment you were behind on, or a lesson, or a sports team your son or daughter gets to play in.… It’s truly eye-opening to some people, and they go, ‘Wow, this is amazing, and I have changed my life with just that little bit of money.’ ”

June 30, 2016

Industry with Heart

Southwestern Advantage: Givers Are the Winners

by Karyn Reagan

Photo: Southwestern Advantage representatives and local children have fun face painting while work is being done to build a community center in Cancun, Mexico.


Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


Solid principles embedded in the foundation of Southwestern Advantage have kept the company strong through cultural changes for more than 160 years.


Company Profile

Founded: 1855
Headquarters: Nashville, Tennessee
Executives: Henry Bedford, Chairman and CEO
Products: Educational reference books and software
2015 Revenue: $225 million


Henry BedfordHenry Bedford

In the year 1855, Reverend J.R. Graves started a mail order company selling books, religious tracts and Bibles. Several years later he was run out of his town of Nashville by Union troops for giving Bibles to the Confederates during the Civil War. He relocated to Memphis, although he also smuggled printing plates from the North into the South in order to continue printing Bibles for Confederate soldiers. When Rev. Graves later returned to Nashville, he realized that young people were finding it difficult in the postwar era to afford a college education.

In response to this need, he restructured his mail order company to a direct selling model focusing on college students as contracted sales representatives, allowing them an opportunity to earn income for their college expenses as small-business owners. Southwestern Advantage is the oldest direct selling company in the United States, and although additional products and the introduction of technology have changed logistical aspects of the business, the structure of the business training and sales program is the same as it was in the late 1800s.

According to Sales and Recruiting Resource Manager Tabitha Taylor, the purpose of Southwestern Advantage is not just to sell books. “The real purpose is to benefit the college students by helping them become the best version of themselves,” she says. “The training they receive and work they do throughout the summer is very rigorous and difficult, but the rewards for their hard work and learning are immeasurable.”

An Incentive Trip with a Mission

At the top of the list of principles the students are taught is giving. Through the years, Southwestern has donated millions of dollars to various organizations, including a drive for the U.S. Marines’ charity Toys for Tots conducted through the U.S. Direct Selling Association at Christmastime. In 2011, Share the Advantage made its debut as a focused charitable program that included a way for the student sales representatives, known as Dealers, to be involved directly. Director of Communications Trey Campbell says, “As part of the program we added a service project to the Sizzler Trips—incentive trips for the students who reached certain goals during the summer.”

The service project is generally one day of a five-day trip and involves the Dealers leaving the luxury resort where they are staying to go into the local area to help people in need. “All of the funds used to help the locals in need on the service day are raised by the Dealers,” says Campbell.

Due to the culture of giving introduced in their training and the generous hearts of the young people involved in the program, Share the Advantage day on the Sizzler trip has become the most eagerly anticipated day of the year, according to Campbell. “At the beginning of their week of training, Dealers are given an opportunity to opt in to the charitable project that will take place during the Sizzler trip,” he explains. “After a five-day training, their 10-12 week summer work begins. Week 8 is designated as service week.”


“There is such a buzz among the young people about Share the Advantage that everyone wants to be involved. They have huge hearts.”
—Trey Campbell, Director of Communications


What that means is the Dealers can choose to give of their earnings from Week 8 in several ways: Donate a percentage of gross profits, make a one-time donation, or donate a set dollar amount for each family that becomes a customer that week. “Of course, they may choose not to participate, but there is such a buzz among the young people about Share the Advantage that everyone wants to be involved,” says Campbell. “They have huge hearts.”

Another way Dealers can participate in the Share the Advantage program is woven into the sales model. “Every time a Dealer sells a monthly website subscription (one of the educational products sold by Dealers) we invite them to give a free subscription to someone who cannot afford it,” says Campbell. “By empowering them to give, they are trained to notice families in need and are motivated to sell in order to be able to enrich someone’s life with their quality products.”

TEXTA student representative spends some one-on-one time with a child in an orphanage in Cabo San Lucas, Mexico, reading a Southwestern Advantage published book.

Since many of the Sizzler trips are in a tourist town in Mexico or the Dominican Republic, one of the challenges is deciding on one service project out of the many needs in the area. According to Chairman and CEO Henry Bedford, staying open to opportunities of all kinds is the key to choosing—listen for them, he says. “We listen to the Dealers as well as talk amongst our leadership team, and each project seems to clearly present itself and take on a life of its own.”

For instance, in 2011, Bedford accompanied the Dealers on their Sizzler trip and met a young girl named Ana in the local town. “Once you wander outside of the resort area, the neighborhoods quickly start to reflect the poverty of the country we are in. That year we were in Puerto Vallarta, Mexico,” Bedford says. “There were six children in Ana’s family and their parents had been killed in a car accident.” Ana’s older sister was doing her best to raise the family of siblings, but they lived in the poorest house in the already impoverished neighborhood. The structure consisted of a tarp and the neighboring wall of the house next door.

Giving Life to a Miracle

“Fast forward three years and we were returning to Puerto Vallarta, so with the help of a local contact I actually located Ana and her siblings,” says Bedford. “The Dealers pooled their funds and raised nearly $70,000 to build this family a new home that is now one of the nicest in the neighborhood.” The day of the Dealers’ service project during their Sizzler trip just happened to be the day the appliances and furniture arrived at the house, giving the student Dealers the opportunity to help set it all up and see the fruits of their giving. And although Americans are not always trusted by the Mexican citizens to follow through with promises made, that community saw a family helped where they needed it the most.


“We listen to the Dealers as well as talk amongst our leadership team, and each project seems to clearly present itself and take on a life of its own.”
—Henry Bedford, Chairman and CEO


The logistics of completing such a project while not on site can present some challenges, such as finding a trustworthy architect, sourcing supplies and keeping the project moving. “When we decide to do a project in an area, we work to develop some local contacts we can trust,” says Bedford. “And it’s important to understand the culture you are working in. For instance, in Mexico, the architect also serves as the general contractor. If you find an architect you can work with, which can be done through word-of-mouth and viewing past projects, much like in the U.S., then the project will most likely turn out as you desire.” Bedford and his team have learned that in some countries it’s not that easy. For instance, in Guatemala, buildings are built one brick at a time by whoever is available to work. The risk factor is far greater and the project will require closer supervision.

TEXTA local child joins Southwestern Advantage representatives in making their mark on a wall of handprints in Cancun. This signifies a promise to improve the community on a long-term basis.

But Bedford doesn’t worry about the risk factor too much when compelled to help someone in need. “What we do for others is faith-based, and if we do lose some money, we understand that it is part of the risk we take to help those less advantaged than us.” His philosophy is that things can go wrong in life but it shouldn’t stop people from giving. “If I could share a message with other companies regarding charitable projects it would be this: The rewards for giving to another culture are worth the risks, and we must have faith that doing things out of a good heart causes good things to happen.”

One project that presented some unforeseen challenges involved a school in Cancun. Campbell relates that La Escualita de Sonia (Sonia’s Little School) seemed like the perfect recipient of the Dealers’ hard-earned funds. Her story was that she lived in a rough area and noticed that there was a young man wandering the streets during school times. When she asked him why, he told her that because he was on crutches due to polio the other kids made fun of him, calling him Pedro Crutches, causing him grief. He got into some fights and was kicked out of school. “In Mexico, once a child is expelled they can never return to school,” says Campbell. When Sonia heard this she told him to come to her house the next day. She would teach him. Pedro was excited and asked if he could bring some friends who were not attending school. The next day seven children showed up to receive an education. The word spread and soon there were 20 kids, then more and more until some days more than 100 children were crammed into the school in the little house.

When Southwestern Advantage showed up a year after first hearing about Sonia, they wanted to incorporate into their service project day a visit to see her students. “We simply could not take all 200 Dealers to her tiny home to provide encouragement to the students as they often did for children in orphanages and various schools in the area. It wasn’t practical,” says Campbell. “But Bedford had a better idea—to build a school building for Sonia and her pupils.” Her efforts had attracted the attention of some kindhearted people in the area, and they were working with Sonia to provide whatever assistance and advice they could. The group had already discussed purchasing land for a building but were a little short on funds. “We stepped in and provided the shortfall and were excited to start on the building,” says Campbell.

TEXTA student representative demonstrates educational materials for a family interested in Southwestern’s products.

But as sometimes happens in life, things didn’t work out exactly as expected logistically. The team is currently back at the drawing board, figuring out a way to achieve similar results to serve the children using a different plan. Providing for the community’s needs remains the central goal. “The project involves many people who have the best interest of the kids at heart,” says Campbell. “That is why we know it will all work out for their benefit in the end.”

Remaining Flexible and Forward Moving

Bedford and his team share this story to reiterate that life doesn’t follow a perfect path. When undertaking a project, to best prepare for a number of eventualities he recommends the following:

  • When planning a project, establish relationships ahead of time—allow time to elapse before plunging in.
  • Document everything.
  • When plans change, give people time and don’t be anxious.

According to Bedford, focusing on the needs of others in every project allows people to forge ahead without being sidetracked by confusion. The day of service acts as an opportunity for learning the many facets of generosity, including the unforeseen circumstances. “And it has added focused purpose to every Sizzler trip, just as the theme of giving, woven through every aspect of our company, allows us to stay focused on why we do what we do,” says Bedford. “We’ve learned that it’s the givers who are the winners.”


“The rewards for giving to another culture are worth the risks, and we must have faith that doing things out of a good heart causes good things to happen.”
—Henry Bedford


Back at headquarters in Nashville, Executive Chairman of the Board Spencer Hays wanted to bring the giving a little closer to home. “He started the Mary Moore Fund at our corporate office to assist employees who find themselves in a rough financial spot due to no fault of their own,” says Bedford. Hays was raised by his grandmother who taught him to always have a little extra money on hand to help those in immediate need. The legacy of giving she left for him has inspired him to share his training to benefit his fellow employees.

“Giving is everywhere in our company,” Bedford says. From the employees at headquarters to the Dealers in the U.S. and in Europe, giving is taught, promoted and never forgotten. Bedford’s vision for the future of Southwestern Advantage is for every entity within its large infrastructure to have a strong practice of giving and to act as an example of generosity to others. “We teach the Dealers throughout their time with us that if they will focus on a life of service, they will get more out of life than they give,” Bedford says. “And those benefits will be of far greater value than anything money can ever buy.”

June 30, 2016

Stock Watch

Stock Watch, July 2016


June 30, 2016

News in Brief

News in Brief, July 2016


PartyLite and Candle-lite Co. to Combine under Luminex Umbrella

The Carlyle Group is looking to grow its PartyLite candle business by joining forces with another New York asset manager, Centre Lane Partners LLC, to create Luminex Home Décor & Fragrance Holding Corp.

Carlyle acquired PartyLite parent Blyth Inc. in October 2015, at the same time appointing Harry Slatkin, a leading name in home fragrance, as CEO of the direct-to-consumer company. After more than 40 years in business, PartyLite sells its home décor and fragrance products through a network of 45,000 consultants in 24 markets.

The new holding company combines PartyLite and Centre Lane-backed Candle-lite Co., which will operate as wholly owned subsidiaries of Luminex Home Décor & Fragrance. Candle-lite is a designer, manufacturer and wholesaler of candles and home fragrance products for mass merchant, food and drug retail outlets in the U.S.

Text

The new, omni-channel operation is intended to leverage research and product development efforts and broaden consumer reach for both companies. Candle-lite CEO Calvin Johnston will head up Luminex and serve on the board of directors, along with representatives from Carlyle and Centre Lane.

“Our teams are excited by the opportunities and growth potential the combination of these two great companies offers,” said Johnston. “This structure will enable us to leverage the strengths and capabilities of both businesses, allow us to serve our existing customers and consultants better, and provide a platform for growth by entering new product categories and markets over the coming years.”


Beautycounter Hits Target This Fall through Special Partnership

Safe beauty brand Beautycounter is hitting Target shelves this fall, in a limited-edition partnership that marks a first for both companies.

Up to now, the cosmetics and skincare line has been sold through Beautycounter consultants, the company’s e-commerce website, and collaborations with the likes of J.Crew and Goop. The Target deal is Beautycounter’s first foray into mass-market retail and Target’s first limited-edition partnership with a beauty brand since it introduced designer collaborations seven years ago.

TextBeautycounter’s limited-edition collection for Target.

California-based Beautycounter came on the scene in 2013 with a mission to clean up the beauty industry. Gregg Renfrew, CEO, founded the company to offer safe beauty alternatives and promote greater oversight of the industry. Taking a proactive approach, Beautycounter has compiled a never list of more than 1,500 ingredients—including known and suspected toxins—banned from its products.

“We know our guests are on the lookout for high-quality products that contain safer, cleaner ingredients, and Beautycounter is an up-and-coming brand that’s made a big splash in this area,” said Dawn Block, Target’s Senior Vice President, Beauty and Essentials.

From Sept. 12 to Nov. 5, 1,500 Target stores will carry a collection of Beautycounter’s top sellers, hand-picked to provide a well-rounded introduction to the brand. The lineup of 17 products, including five kits, will come in smaller sizes than Beautycounter’s standard offerings, keeping pricing at a moderate $12-$39.


Viridian Initiative Lights Streets of Albania

On a mission to impact 7 Continents in 7 Years, green energy supplier Viridian Energy recently brought 37 employees and Associates to Albania, where they lit up the streets of a poverty-stricken community.

The trip to Europe marked phase six of 7 Continents in 7 Years, an extension of Viridian’s mission “to create a path to a more sustainable world.” The annual trip is a reward for top-performing salespeople who qualify and includes projects that have focused on reforestation and electrification, while occasionally extending to needs like water and education.

TextViridian helps bring light to an Albanian village.

Setting its sights on Albania, Viridian undertook what Cami Boehme, Chief Strategy Officer, describes as a “built-from-scratch project.” The company teamed up with a nonprofit, Experiment Albania, as well as the Albanian minister of social welfare, to take part in a broader government project to socialize and educate the traditionally nomadic Roma people.

In impoverished Roma communities, the government had begun building soccer fields and other areas for people to gather, but in the village of Tufine, the experiment was inhibited by a lack of outdoor lighting to secure the area after dark. That is where Viridian came in. Partnering with a local solar energy supplier, ELAL COM, the 7 Continents in 7 Years team wired and installed 33 solar street lights across the village.

“Here was a community of mostly homeless families living in a government-assisted facility, most jobless with very little education, and to add to that their community was very unsafe—very dark at night,” Boehme told DSN. “This was a new spin on what power can do for a community, and seeing it come full circle from bringing so many rich additives to our lives, to now affecting safety and security in a very real way, was really fun for all of us.”


ACN Tees Up for Ronald McDonald House

ACN Global Reach Charities recently hosted its largest annual event, the Ronald McDonald House of Charlotte Celebrity Golf Tournament. This year, presenting sponsor Dish Network and 75 corporate sponsors helped to raise a record $261,500 for local families.

All proceeds from the tournament go to the Charlotte, North Carolina, chapter of Ronald McDonald House Charities, the organization ACN selected as its global charity partner in 2008. The houses are a home-away-from-home for families of seriously ill or injured children, providing home-cooked meals and a place to stay as they focus on their child’s health.

More than 30 foursomes, each led by a celebrity captain, took part in the sixth annual fundraiser at Trump National Golf Course in Mooresville, North Carolina.


Silpada Designs Confirms Plans to Close at End of July

Company officials recently confirmed that jewelry and accessories maker Silpada Designs will close its doors at the end of July.

The team at Lenexa, Kansas-based Silpada has sought to breathe new life into the brand since it parted ways with Avon Products nearly three years ago. The beauty company bought Silpada in 2010, looking to grow its North American sales, paying $650 million for the family-owned business and keeping the founders and management team in place.

In July 2013, amid heavy cost cuts at Avon, Silpada co-founders Jerry and Bonnie Kelly and Tom and Teresa Walsh, along with their respective daughters, Ryane Delka and Kelsey Perry, formed Rhinestone Holdings Inc. to buy back Silpada for $85 million. Delka and Perry were then appointed Co-Presidents, and later became Co-CEOs of the company.

According to Vice President of Marketing and Product Development, Andrea Carroll, Silpada has seen declines in sales and recruiting since 2010, when it joined forces with Avon. At the time, revenue had grown to $230 million annually.

Under the leadership of Delka and Perry, Silpada has ventured beyond its trademark collection of sterling silver jewelry. In 2014, it introduced an updated jewelry line featuring brass, leather and Swarovski crystals. Then, last year, an accessories line was launched.

However, fresh offerings and additional investments in the company were not enough to reverse negative trends, management said.

“One of the things we’ve seen since reacquiring the company is how different the party environment is from when Silpada started in 1997, particularly in two areas that drive sustained growth at a direct selling company,” Carroll told DSN. “We’re not seeing as many recruits come in as we have in past years, and women aren’t hosting traditional parties as much.”

Business will continue as usual through July 31, the last day Representatives will be able to submit orders and receive commissions. At that point, Silpada will begin liquidating inventory and shutting down operations, with the goal of completing the process by Dec. 30.


Direct Selling Expansions in the Second Quarter

New Markets

  • Arbonne, New Zealand
  • doTERRA, Canada
  • Jamberry, United Kingdom
  • Jeunesse, Brazil
  • LifeVantage, The Netherlands
  • QNET, Guinea
  • QNET, Niger
  • Total Life Changes, Nigeria
  • Viridian Energy, Australia
  • Yanbal, USA
  • Young Living, Finland
  • Younique, Spain

New Facilities

  • doTERRA, Australia Office
  • 4Life, Colombia Office
  • 4Life, Hong Kong Office
  • Natura Store, São Paulo, Brazil
  • OneCoin Headquarters, Sofia, Bulgaria
  • Senegence International Headquarters, California, USA
  • Total Life Changes Headquarters, Michigan, USA

 

June 30, 2016

Exclusive Interviews

Team Stream: New President and CEO Shares Vision for the Future

by Emily Reagan


Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


Among the sports paraphernalia displayed in Larry Mondry’s office is a blue-and-maize banner touting the University of Michigan. Stream’s new president and CEO, who hails from the Great Lakes State, tells me about a practice he’s borrowed from one of the school’s legendary football coaches, Bo Schembechler. Every time Mondry attends a salesforce gathering, he closes with the chant, “Stream, who are we?”—to which they respond, “The team!” This goes three rounds, concluding with, “The team! The team! The team!” A team mindset and culture are key, Mondry says, to taking the business to the next level, which is what he set out to do when he joined Stream in February. DSN spoke to the former CompUSA head about his transition to direct sales and Stream’s transition from energy to a range of lifestyle services.

DSN: Being new to the direct sales channel, what have you found particularly applicable from your past experiences?

LM: I think it’s understanding the motivations of people—understanding it at a simple level. I started as a salesperson, and that’s primarily what I still consider myself to be. When my kids ask, “What am I going to do? What am I going to be good at?”—I always tell them they need to follow their passions. If you follow your passions, do it well, put your heart and soul into it, the money and all the other things will probably follow. To me, direct sales epitomizes that. Historically, my strengths have been about motivating people, about seeing and appreciating the sense of satisfaction and joy that someone has when they’re successful, and I think this is it in one of its purest forms.

DSN: What drew you to direct sales from a traditional retail model?

LM: Initially, I had no interest whatsoever. I had no interest for two reasons: It’s primarily an energy business, and I had no background in energy. The second was that it’s direct sales, and I had never done that before, and had spent very little time understanding it; therefore, many of the views people traditionally have of the industry resonated with me. ... However, the more I looked at the company and the industry, I became very comfortable with the idea that selling the product was no different than selling all the other things I’d sold in my life, whether technology, consumer electronics or auto parts. I didn’t know anything about auto parts; I still don’t know that much about auto parts, but it doesn’t matter. It’s about understanding people and how to motivate them, coming up with good strategies and objectives, following up, and creating a winning, fun culture.

A few years ago, I did some consulting for a rent-to-own business. I had all these preconceived notions about rent-to-own. They take advantage of customers, they charge too much. … At first I felt that way and was very sheepish about it, but as I spent time with our folks in stores, I realized I wasn’t seeing it. I had customers literally come up to me and hug me, because it was the first time the family had a washing machine or a computer for their kids, or whatever it might have been, and I recognized it wasn’t so much that anyone was taking advantage of anybody. They were providing things that, in the current system, people hadn’t been able to get. That understanding helped me have a more open mind to many things and take the time to understand what a businesses is really about. In the case of Stream, the culture is terrific. It’s definitely a servant culture, with the employees serving the Associates, and the Associates serving the customers. That’s exactly what I like.

DSN: What objectives are top of mind as you take on the role of president and CEO?

LM: At 100,000 feet, I was not brought in to maintain anything. … I came here to grow this place and be part of putting together strategies, systems and people that are capable of growing this in a meaningful way. ... One thing I talk about a lot is the three-legged stool. For a retail business of any kind, you need all three legs to be healthy and support what’s above them. First, everything has to be good for the customer, and then for whoever interfaces with the customer—the Associate, in our case—and finally, everything has to be good for the company. ... Once you get all those strategies and people in place, it’s about blocking and tackling every day. It’s teaching. I spend a lot of my time wandering around, sitting in someone’s office, leaning over someone’s cube, spending time with them. Sometimes it’s just asking how their day is going—and if you ask, invariably people will tell you. But a lot of people don’t ask. Engaging helps people understand that I see them as a human being.

DSN: Stream now offers energy, protective, mobile and home services. What’s next in terms of product evolution?

LM: I’m looking at two general approaches to that. One is line extensions within those existing areas. Then, there are things that go beyond that, which don’t necessarily fit neatly into one of those four boxes. We’re engaging feedback from customers and so on. ... We’re going to look at anything that is good for our customers, good for our Associates, and good for our company.

DSN: What factors have eased the transition from Stream Energy to Stream, a provider of essential home services?

LM: First, I’m thankful I wasn’t the one to start that. That’s difficult. There’s no question some Associates just think of the company as Stream Energy. It’s something that needs to be overcome, but I think there are some folks who will always feel that way. The majority are getting the fact that there’s great opportunity, in terms of providing good products and services, to go beyond energy. It’s our responsibility to help raise awareness, and so far so good.

DSN: You recently experienced your first annual salesforce meeting, Ignition 2016. What was your takeaway from the event?

LM: I didn’t know what to expect and frankly, I thought, it’s a sales meeting. I’ve done hundreds of the things. It’s not that big of a deal. ... Partly I got it, and partly I didn’t. The idea of the big extravaganza—I’ve been there before. How our Associates viewed it and their attitudes, was different. These people were loving it. They were seeing their old friends. They were drinking it up in a way I’ve never seen with anything else I’ve done, in similar or even larger groups. It’s a family, and they believe in that and exhibit that warmth and spirit you only find in a family. ... They made it easy for me.

One thing I tried to do was tell them a bit about me, my family, and what makes me tick. Then I talked about their why… it might be one of many things, but at the end of the day, one thing we all have in common is that we do certain things for our families. We do them because they count inside. So I arranged for 40 or 50 kids of Stream Associates to be on stage, and that turned out to be a very popular thing. I think the people started to understand that for me it wasn’t just about words. It’s actually how I live and what I believe, and maybe, even though I’m the new CEO, I’m more like them than they think.

DSN: Stream has a history of giving back, but you recently rolled out a formal philanthropic program. What is the vision for Stream Cares?

LM: I think it’s the responsibility of any company, first of all, to treat their customers and employees right, but we live in a society today where you have to go beyond that and treat your community right—that means all parts, not just the ones that can help you pay your bills. That’s a general moral obligation we all have in society, not just as individuals but as companies. I like the fact that Stream has begun to formalize its philanthropic process, but I think we still have work to do. This is the beginnings of doing that better, and it’s my hope we’ll be able to participate in our communities in a bigger and better way as we go forward.

June 30, 2016

Publisher's Note

Setting the Stage for the Leaders of Tomorrow

by Lauren Lawley Head



Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


According to the most recent research released by the Direct Selling Association (DSA), the number of U.S. direct sellers is at an all-time high, with 20.2 million people participating in the channel in 2015. Retail sales from direct selling also hit a new record at $36.12 billion. At the same time, participation in the YouEconomy as a whole is reaching one in three U.S. adults. You can explore the data behind these numbers in more detail on pages 14 and 96, but the key takeaway is this: Direct selling is in a transformative period of its history, with companies working to carve a path in this new economy that draws from its rich history but results in a unique, contemporary channel for distributing high-quality products and services and offers a low-risk opportunity for individuals to pursue entrepreneurship.

As part of our ongoing effort to celebrate this exciting time, the Direct Selling News team is launching a new award program to recognize the up-and-coming leaders in our corporate offices who are shaping the future of our channel. The Direct Selling News 40 Under 40 program is open to those employed in a full-time position with an active direct selling company who will turn 40 years of age on or after Jan. 1, 2017. Nominees for the award should represent the most outstanding young professionals working in active direct selling companies today. We are seeking representation from all aspects and departments of the business—technology, marketing, finance, field engagement, etc.—with the goal of recognizing the leaders of tomorrow. To nominate yourself or an outstanding member of your corporate team, visit www.40Under40.directsellingnews.com.

Each member of the Direct Selling News 40 Under 40 Class of 2016 will be featured in a special publication distributed in our December 2016 issue. DSN will select a panel of advisors representing expertise from a wide range of business disciplines to help select the honorees. Our company founders and senior executives are often, and deservedly, in the spotlight. You’ll see them on stage at company events, in leadership roles representing the channel and throughout the pages of this magazine. But we know that behind the scenes is a team of enthusiastic, innovative leaders, including many who are just getting started in their careers, who are making a lasting impact on the business. It is our hope that through this process, we can lift up the trailblazers in this group and celebrate the next generation of direct selling executive leadership. We look forward to your nominations!

In this issue, we also bring you up to date on USANA’s six years of sustained growth, take a peek at Southwestern’s philanthropic efforts in Mexico and get to know Xyngular, a 7-year-old health and wellness company. We also have great coverage of the DSA Annual Meeting held in Phoenix last month and a Q&A with the former co-CEOs of Primerica, John Addison and Rick Williams. We hope you are enjoying your summer.

All the best,
Lauren Lawley Head
Publisher and Editor in Chief

June 30, 2016

New Perspectives

New Research on the YouEconomy

by DSN Staff



Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


The cover story in the May 2016 edition of Direct Selling News explored the emergence of the YouEconomy — a seismic shift in the American economy that is expanding opportunities for individuals to carve their own paths toward entrepreneurship. In order to better understand the size and scope of the YouEconomy today, SUCCESS Partners Holding Co., the parent company of SUCCESS magazine and Direct Selling News, commissioned Harris Poll to conduct an online survey May 17-19, 2016 among 2,026 U.S. adults ages 18 and older. The findings are striking. Already, one-third of U.S. adults say they’re earning income in the YouEconomy, and economist and best-selling author Paul Zane Pilzer predicts that number will grow to half of all U.S. adults by 2020.

Here are some of additional highlights from the survey:

The YouEconomy appeals to a broad range of demographic profiles and, at least for now, typically represents a supplemental source of income for participants.

Demographics of the YouEconomy Workers

  • Men are more likely than women to have earned income in the past 12 months in the YouEconomy (40% male vs. 27% female).
  • Not surprisingly, the youngest adult segment (ages 18- 34) tends to be more likely to earn income through the YouEconomy as compared to the oldest adult segments (ages 45+) (42% 18-34, 40% 35-44 vs. 32% 45-54, 27% 55-64, 22% 65+).
  • Adults with children in the household also are more likely to earn income through the YouEconomy than those adults with no children in the household (41% with children in household vs. 29% without children in household).
  • Among those who have earned income through any of the previously mentioned ways, for most – about 7 in 10 adults (71%) – this income is a secondary source of income. Conversely, only about 3 in 10 (29%) rely on their YouEconomy earnings as a primary source of income.
  • Men are more likely to say their income earned through the YouEconomy is a primary source of income compared to women (37% men vs. 18% women).
  • Slightly more than half of adults (53%) report the income they earn from any and all of their YouEconomy work contributes to less than 20% of their total income. Only 17% of adults report their YouEconomy earnings contribute to 80% or more of their income.

Note: This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighted variables, please contact Charlee Russell at crussell@success.com.

June 30, 2016

Executive Announcements

Executive Announcements, July 2016



Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


New Avon Establishes Role of Chief Innovation Officer

avon

New Avon LLC is bringing in Helene Rutledge to serve as Chief Innovation Officer, a newly created role that will oversee new product development at the beauty company.

The latest addition to Avon’s leadership team hails from health supplement maker Nature’s Bounty Inc., where Rutledge served as Vice President of Research and Development. She also runs her own New York City-based consultancy, Caliper Innovation, a full-service firm offering product and innovation solutions.

Rutledge’s previous roles include Head of Global Open Innovation at GlaxoSmithKline Consumer Healthcare, and Senior Vice President of Technology at AeroDesigns.

“Helene brings nearly three decades of operational and innovation experience to New Avon,” said Scott White, CEO. “She has strong experience running product innovation for world-class consumer and pharmaceutical companies—expertise which will be invaluable to our product innovation efforts at New Avon.”

The beauty brand also has tapped former Coca-Cola and Revlon executive Jack Stahl to chair its board of managers. Scott White, New Avon’s CEO, also has joined the board.

The incoming chairman is a beauty and consumer products veteran whose former roles include President and COO of Coca-Cola Co. and CEO and President of Revlon. Stahl also has sat on the board of beauty products manufacturer Coty Inc. and high-end retailer Saks Inc., among others.

“Jack is a proven leader whose extensive board management experience and expertise leading iconic brands will be instrumental in positioning New Avon’s business for long-term success,” said Chan Galbato, chairman of the board.


Mannatech Promotes Finance Veterans as Company Grows

nameDavid Johnson and Diane Barton

Global health and wellness company Mannatech Inc. has promoted David Johnson, Chief Accounting Officer, to Chief Financial Officer as it continues to build its executive team.

In his new role, Johnson will lead the accounting, finance and treasury teams.

“David has demonstrated his commitment to ensuring Mannatech’s finance department is keeping pace with our global transformation of new products, new technology and international expansion,” said Mannatech CEO and President Al Bala.

Johnson joined Mannatech in July 2013 and brings more than 22 years of experience to the company, having held several financial management positions in his career.

At the same time, Mannatech also has promoted Diane Barton, Assistant Controller, to Controller. Through her promotion, Barton will have an expanded role in SEC reporting, accounting policy development, risk management and international accounting functions.

Barton has more than 30 years of accounting experience with public and private companies and joined Mannatech
in 2006 as Accounting Systems Liaison.


Young Living Restructures Global Sales Leadership Team

Eddie SilcockEddie Silcock

Keeping pace with rapid growth, Young Living Essential Oils has expanded its corporate sales team with a number of promotions and new hires.

The Utah company recently announced the promotion of seven key sales managers, including Eddie Silcock, who will head up the team as Senior Vice President of Global Sales. In his previous role as Vice President of North America, where Young Living derives the bulk of its sales, Silcock helped propel the company to record revenue of $1 billion in 2015.

Three additional promotions focused on Young Living’s business in Asia. After a decade with the company, Will Halterman is stepping into the role of Vice President of Southeast Asia. Tyler Williams, with the company since 2009, has been named General Manager of Greater China, where he has been instrumental to opening and growing new markets in the region. Additionally, Yu Oki will now serve as Country Manager of Japan.

Rounding out the company’s new leadership structure is Joey Nanto, Vice President of United Kingdom, who previously served as Vice President of International. Gabriel Sanchez, who joined Young Living in 2015, has been named General Manager of the Latin American region, while Mildred Muniz will seek to grow the company’s Latino customer base in the U.S. as Director, Latino Market.

“Young Living has experienced exponential growth on a global scale for the past few years, which can be attributed in large part to these key individuals,” said Jared Turner, COO. “Alongside our wonderful members, these leaders have contributed to our growth and are deserving of their new roles.”


Plexus Appoints McCormick Scientist to Head Up R&D

Alan JiangAlan Jiang

Plexus Worldwide has tapped Alan Jiang, M.D., Ph.D., to serve as Vice President of Research and Development. The role provides oversight of product development, medical affairs, claims substantiation and science education at the health and wellness company.

Since earning his M.D. from the College of Medicine at China’s Zhejiang University, one of the top schools in Asia,
Jiang has held research and management roles in both academia and the dietary supplement and food industries.
His articles have appeared in outlets such as the American Journal of Clinical Nutrition and the Journal of Medicinal Food, among others.

“A graduate with honors from one of the most prestigious medical universities in the world, and with numerous published studies, Dr. Jiang brings Plexus a 20-year track record of success…,” said Cindy Latham, Chief Marketing Officer at Plexus.

Most recently a senior scientist with herbs and spices brand McCormick & Co., Jiang previously was Director of Scientific Affairs for a top direct selling nutrition company. Before transitioning to the health and nutrition industry, he was appointed as a faculty member and Laboratory Director of the Center for Human Nutrition, the world-class research center at Johns Hopkins University.


Agel Founder Glen Jensen Returns to Company as Group CEO

nameGlen Jensen
nameGary Hasson

JRJR Networks recently announced that Glen Jensen is joining its operation as Group CEO of Agel Enterprises, the company he founded in 2005.

Agel made a name for itself in the nutrition industry by introducing supplements in suspension gel form, in lieu of conventional pills and juices. Jensen led the company for six years before exiting in 2011. Two years after his departure, Agel joined the JRJR Networks family of companies. Formerly known as CVSL, JRJR Networks is a holding company for a growing group of direct-to-consumer brands.

“Glen Jensen was the heart and soul of Agel in the days when he established it as a successful business and led its growth across the globe,” said John Rochon Jr., Founder of JRJR Networks and Chairman of Agel. “Glen’s return to Agel after a five-and-a-half-year absence sends the bold message that Agel is back and has found its voice again.”

Jensen spent the past two years heading up another direct seller of skincare and nutrition products, this one primarily operating in Asia. Before launching Agel, he had founded another direct selling company and held executive roles with several others.

Also joining Agel is Gary Hasson, who was named the company’s new Vice President of International. 

“Gary’s return to Agel is deeply gratifying and represents another huge step forward for our company,” said Jensen. “[He] played an important role in the launching of Agel. Now, like me, he has come back to the Agel family to help guide it in a new era of growth.”

Hasson has 20 years’ experience in direct selling, having spent the past six years on the corporate side, in senior management positions, most recently as President of a global nutritional direct-to-consumer company.


New Member Joins 4Life Advisory Board during Annual Symposium

nameTy Hopkins

4Life Research is expanding its Health Sciences Advisory Board with the addition of Ty Hopkins, Ph.D., who also is a Team 4Life mountain biker, road racer and triathlete.

Hopkins, a research professor at Brigham Young University (BYU), officially joined the board during its recent annual symposium at 4Life Global Headquarters in Sandy, Utah. The group of third-party experts is tasked with keeping the 4Life R&D team abreast of new research and methods in the area of protein supplementation. The company’s Chief Scientific Officer, David Vollmer, Ph.D., heads up the board as Chairman.

The board’s latest addition earned his M.A. and Ph.D. in life sciences, with an emphasis in sports medicine, from Indiana State University. In addition to teaching at BYU, Hopkins coordinates the university’s graduate programs for athletic training and physical medicine and rehabilitation. A competitive athlete himself, Hopkins has represented Team 4Life since 2013, when he joined the group of world-class athletes who incorporate 4Life products into their training regimens.


Immunotec Nominates Mario Paradis to its Board of Directors

nameMario Paradis

Canadian nutrition company Immunotec Inc. elected a new director, Mario Paradis, to serve on its board during its recent Annual General Meeting of Shareholders.

Mario Paradis is Vice-President and Chief Financial Officer of Neptune Technologies and Bioressources Inc. and of Acasti Pharma Inc. since 2015. Between 2008 and 2015, Paradis was Vice President and CFO at Atrium Innovations Inc. Prior to this, he held roles of increasing authority at Aeterna Zentaris, most notably as Vice President Finance and Administration and Corporate Secretary. Paradis is a member of the Canadian Chartered Professional Accountants and holds a bachelor’s degree in business, with a specialty in accounting, from Université du Québec at Trois-Rivières.

“We are pleased to welcome Mario,” said Rod Budd, Chairman of the Board of Directors. “His experience in the natural health products industry combined with his background as a seasoned accounting and finance executive will be of great value to our company.”

June 30, 2016

Working Smart

Fulfillment for Direct Selling Companies

by Vin Gulisano


Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


5 Core Capabilities to Look For in a Warehousing and Fulfillment Partner

It’s a month after your annual conference and you’re on a high. Your company introduced two new products during the conference and your independent contractors across the country left excited and ready to sell. In fact, new orders are pouring in.

But an email from your warehouse fulfillment company stops you dead in your tracks. New orders are severely backlogged and they are looking for approval on a $25,000 overtime bill to cut into the logjam.

You’ve got no choice but to approve, but shouldn’t they have anticipated the increased volume?

Fulfillment companies unfamiliar with direct selling businesses may struggle with some of the unique requirements to serve this market, including order surges that often occurs after a successful conference. Following are five keys to success in fulfillment operations for direct sellers that help identify what to look for in a fulfillment partner. 

1. Scalable Infrastructure

As a direct seller, you could be one good Instagram post from a big demand spike or one product launch from exponential growth. Look for the following capabilities in your partner to determine if they can scale with your demand:

  • Nationwide locations. As you build traction in the market, you’ll want the ability to add locations to reduce transportation costs and delivery times.
  • Engineering and design expertise. Your warehouse layout, processes and automation must adapt to changing order profiles and increasing volumes. Choose a provider that can deploy systems and automation in a modular fashion, as your volume dictates.
  • Full-featured warehouse management system (WMS). Base WMS systems can handle basic operations. But what happens if you need your system to scale from 100,000 orders a month to 500,000? Will that require a major, unplanned capital investment? A full-featured WMS can handle the jump.
  • Real-world experience. It’s one thing to say, “We can handle it,” but it’s another to see proof of your provider’s ability to rapidly scale operations in response to a customer’s growth. Ask for customer recommendations to back up their claims.
  • 2. Flexibility to Handle Unpredictable Volumes

    In direct selling, there can be great variability in order volumes, day to day. BOGOs and other month-end promotions can potentially double volumes. That requires a fulfillment partner that can effortlessly flex its operations to absorb this added volume and then quickly ratchet down space and labor. In this way, fulfillment costs parallel your revenue stream.

    Key requirements include:

    • A multi-client warehouse where staff are cross-trained on the requirements of multiple accounts
    • Flexible contracts where you pay only for the space and labor you use in a given month
    • A knowledgeable management team that can collaboratively forecast based on a promotion schedule, history and experience with similar organizations.

    3. Flexible Systems with Real-Time Visibility throughout the Order Process

    Systems that can’t adapt to your requirements can bring your business to its knees. Proper vetting of providers in this area is critical.

    First, you’ll want a high level of confidence that orders will flow seamlessly between your direct selling platform and your fulfillment partner’s WMS. Look for partners that serve companies using top commerce platforms. You don’t want to be the guinea pig. Many fulfillment companies talk about data integration like it’s no big deal, but lack the systems expertise to build the required application program interfaces (APIs).

    It’s vital, too, that your partner’s system can meet some of the unique order processing requirements of direct sellers. For instance, many individual orders may go through party planners, who then arrange the final delivery. This requires a system that receives orders using a “parent-child” protocol, where the party planner is the parent. The system creates a pack slip for each individual order and these are added to a master case to ship to the planner.

    4. Packaging Excellence for Brand Consistency

    Customers of direct selling companies are not buying a commodity from the lowest cost supplier. They are making a lifestyle choice. As such, the relationship with the brand
    is critical.

    That’s why direct sellers want a high-quality presentation at delivery with a package that has their logo (not Amazon’s). They want the paper inside to be folded just so, and the product to be positioned a certain way in a box that may contain a personal note to the buyer. Basically, they want the package to arrive looking like a Christmas present.

    Your fulfillment partner must be capable of delivering this level of packaging customization, and they must do it as part of a high-volume, rapid-turn warehouse operation.

    5. Experience in the Direct Selling Channel

    Direct selling is a channel full of companies founded by entrepreneurs. For these companies, it’s not about beating the competition as much as achieving personal success. So there is liberal sharing of information among companies—on software systems, on sales strategies and, yes, even on fulfillment operations.

    Direct selling companies benefit from working with fulfillment partners that have experience with multiple direct sellers and can bring best practices to the table.

    Play an Active Role in Outsourced Fulfillment Partnerships

    In addition to the five core capabilities mentioned above, finding the right fulfillment provider for your direct selling company is just a first step. You’ll want to actively manage the relationship. Here are three suggestions for getting the most value from your fulfillment partner.

    Cultivate a true partnership.

    I know, that sounds trite. But isn’t it the goal? Don’t you want your fulfillment partner to think and act like an extension of your own team? Think about it; your fulfillment company’s associates are the last people to touch your product before it’s delivered. Everything can go right to that point, but if the order is wrong, or the presentation is shoddy, your brand’s reputation suffers. You want your fulfillment team to have a sense of ownership of the brand experience and an understanding of the key role they play.

    Achieving that goal takes time. While some direct selling companies may see fulfillment companies as replaceable vendors providing a service, there is greater potential for mutual success if they are treated instead as collaborative partners. Your best result won’t come from micro-management and constant price pressure; it will come from establishing, with your fulfillment partners, a joint culture of excellence, with the shared goal of delighting customers.

    Support KPI management.

    Key performance indicators (KPIs) are operational success measures. Typical fulfillment metrics look at order accuracy, on-time performance, and labor and space efficiency. KPIs should not be something you look at once a week when the report arrives from your fulfillment provider. Direct selling companies need to be actively involved in setting, measuring and evaluating KPIs, working hand in hand with your provider. One of your key roles is to report errors. Your provider will examine these errors over time and look for patterns. For example, let’s say mis-ships occur regularly for SKUs that are almost identical. A root cause analysis could indicate that the two products are too close together on the pick line and workers have mistakenly grabbed the wrong one. For the time you invest in KPI reporting, you should expect a corrective action plan on persistent issues. Regular communication is critical to the success of outsourced fulfillment operations, but too often communication happens when it happens. There is no established schedule to calibrate and coordinate with fulfillment providers. This offhand approach leads to surprises, and not the good kind. Let’s face it, direct selling is anything but predictable. Volumes rise and fall with promotions, seasons, new product introductions, sales meetings and other triggers. The more your partners know about volume dips and spikes, the better they can prepare by having just the right labor on hand to get the job done and control costs.  Your meeting schedule should not be limited to day-to-day tactical management. Quarterly Business Reviews (QBRs) are a great forum to examine performance trends, over time, and determine appropriate strategies to continuously improve. QBRs also should include a discussion of the future. For instance, if sales projections call for 30 percent growth in the next year, plans can be initiated to introduce labor saving automation to speed processing.

    Experience Is the Key

    Warehousing and fulfillment services are not all the same. For direct selling companies, complex inventory management, unexpected volume spikes, and custom packaging requirements are business-as-usual challenges that must be managed. Does your fulfillment provider have what it takes?  Once you find the right provider, the last thing you want is a hands-off approach. Work hard to create a close, collaborative partnership. That investment of time will pay off in better performance, lower costs and, most importantly, happy customers.
    Vin GulisanoVin Gulisano is CEO of Amware Logistics, a fulfillment company that helps e-tailers and direct sellers scale fulfillment operations through every stage of their growth cycle.

June 30, 2016

Top Desk

Thriving in the New Paradigm

by Darren Jensen


Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


The direct selling industry is at a critical juncture in its long history. The global economy and world of direct selling have reached a strategic inflection point that is being driven by many factors, which include technological innovation, a hyper-connected world, the gig economy, instant gratification, customization, simplicity, and the rise of entrepreneurialism, to name a few.

All of these factors have significantly influenced consumer behaviors and expectations, and have forever changed how direct selling will be conducted and viewed. Companies are struggling to find a place within the new paradigms taking shape in our industry. The most critical areas where I see direct selling companies lagging is in training and the adoption of new technology.

When we looked within our own company we realized that, in order for LifeVantage to thrive in this new paradigm, we had to reinvent ourselves or run the risk of becoming obsolete. It is critically important for us to continue to evolve our field training and our technology, specifically in the areas of communications, recruiting, the onboarding of new Distributors, and our go-to-market strategies.

Communication today is greatly affected by the Internet and the rise of social sharing. Social media instantly takes communication to the international community. Anyone with a smartphone, tablet or laptop has the ability to send and receive information from anywhere in the world. Companies must embrace the Internet and social media as viable tactics for real-time, global communication, and incorporate this new standard into their existing communication strategies to cope with the rise of social selling.

By embracing technology we have positioned LifeVantage as an important income stream within the gig economy or, as it was described in Direct Selling News’ May 2016 cover story, the “YouEconomy.” The classical definition of a gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. This new YouEconomy is focused on the needs of the individual versus those of the corporation, and touts selecting jobs based upon personal interest regardless of location, working from home, being your own boss and better work-life balance. By providing state-of-the-art training, applications and technology platforms, we are positioning LifeVantage to offer greater financial stability, higher earning power, both residual and passive income, low cost of entry and low risk.

Knowing all of this, I would like to quickly present several major initiatives where LifeVantage has focused its efforts in order to thrive in this evolving business environment—the implementation of new technologies, training, and leveraging technology to execute faster go-to-market initiatives.


When we looked within our own company we realized that, in order for LifeVantage to thrive in this new paradigm, we had to reinvent ourselves or run the risk of becoming obsolete.


As I previously stated, companies need to adapt to the new standards taking shape within our industry. We have deployed resources in this regard at LifeVantage, utilizing technology in a variety of applications that have streamlined our enrollment platform, enhanced business management tools for our Distributors, and further driven customer engagement. We have leveraged new technologies to better facilitate the subtle nuances of our particular industry, including enrollment, business management and customer retention through the use of multiple, business-specific Distributor apps that create a closed-loop system that allows our Distributors to increase their social currency. We have implemented an aggressive content generation and publishing platform that allows our Distributors to share information about our company, our products, and our industry, and position themselves and our company as thought leaders within our space. We also have introduced new e-tools designed to simplify the introduction of our company and our products, and shorten the time required to complete a transaction.

In addition, we have integrated social media into our direct communication strategy with our field. By leveraging Instagram, Twitter, Facebook, Facebook Live and Periscope, we can engage our people where they are, and speak to a broader audience in real time. With me being a relatively new CEO at LifeVantage, people want the opportunity to connect with me on a more personal level. Periscope allows me to interact with our more than 20,000 followers and make a personal connection with them, show my personality and share personal experiences with them that they otherwise would not get to see. The response from our field has been overwhelmingly positive, and I am able to build relationships with people who I otherwise might not get to meet.

Now we are implementing a state-of-the-art onboarding program that functions independently and remotely from sponsors, and that mentors and engages new Distributors upon enrollment and helps them launch their new business, duplicate their efforts and create trust networks. It is designed to walk Distributors through the process to successfully manage the recruiting and onboarding process of new Distributors and customers alike, and it demonstrate what “good” looks like from a LifeVantage perspective.

Within the Distributor field, we have revised the format of our events to include more training segments to ensure that we provide Distributors with the opportunity to develop on both the professional and personal level. In order to accommodate the additional training segments we have added a full day to the event and introduced a business-building seminar hosted by network marketing strategist and trainer Eric Worre that is intended to help Distributors further develop their network marketing careers by teaching them the skills necessary to succeed in our industry. We have also introduced an expanded science seminar to provide more detailed training regarding our products and the science behind them. Additionally, we have added a personal development training segment to the agenda. Our objective is that our Distributors leave our events feeling enlightened and energized to go out and build strong Trust Networks that will become the foundations of their respective businesses, and for LifeVantage, for years to come.


Our objective is that our Distributors leave our events feeling enlightened and energized to go out and build strong Trust Networks that will become the foundations of their respective businesses, and for LifeVantage, for years to come.


As our company has evolved, so too has our go-to-market approach for launching new products, as well as other business-building initiatives, by leveraging the worldwide web. The use of cyber launches is a new strategy that we have executed with great success to launch new products. Cyber launches provide multiple additional engagement touchpoints to create excitement amongst our Distributors and customers, and allows us to reach a much larger audience live and in real time.

Our multipronged approach to successfully execute these cyber events begins with announcing our intention to launch the product several months prior to the cyber event. This allows Distributors the ability to promote the coming product and host larger groups of active and potential customers and distributors to watch the event together. This facilitates a face-to-face cultural event that engages people who otherwise may not get together.

Then we execute the actual live cyber launch, which we broadcast live worldwide through our corporate website. More than 50,000 people in 21 countries have viewed each of our previous cyber launch events, which is exponentially larger than any company-hosted on-site training event. The cyber launch provides us with another major event without having to book a location, coordinate travel, and take our Distributors out of the field. Additionally, we can schedule in real time, and host them during typically slow months to provide excitement and greater focus on the business. Further leveraging technology, we then host a product-specific webinar, which we broadcast live worldwide through our corporate website the week following the cyber launch event to present more in-depth details on the science behind the product or products. Finally, we leverage our next major on-site event to conduct additional product training for the newly launched products, and generate additional excitement around them.

We already have seen a positive impact on our company by taking such a deliberate approach to enhancing our training and embracing technology. We have experienced double-digit growth in revenue quarter over quarter, a double-digit increase in recruitment of Distributors and customers, and a nearly 100 percent increase in productivity in Distributors’ first 30 days with the company. And our most recent product launches, which were both cyber launches, have both either met or exceeded our projected forecast.

It is safe to say that the direct selling companies that can quickly and properly embrace these new paradigms will become the legacy companies of tomorrow.


Author NameDarren Jensen is President and CEO of LifeVantage.

June 30, 2016

New Perspectives

A Common Vision and Common Purpose Move Mountains

by DSN Staff


Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


John Addison and Richard Williams served for 15 years as co-CEOs of Primerica Inc., a Georgia-based financial services company that today ranks as the 12th largest direct selling company in the world, with 2015 net sales of $1.41 billion. They led the company through a transformative period that culminated in an initial public offering in 2010. Today, Addison serves as President and CEO of Addison Leadership Group, Leadership Editor for SUCCESS magazine and serves on the board of directors for both Primerica and LegalShield. Williams is the non-executive board Chairman of Primerica as well as a member of USANA’s Board of Directors. DSN Publisher and Editor-in-Chief Lauren Lawley Head sat down with the men to discuss the power of partnerships on a company’s executive team.

DSN: You two had a partnership at Primerica that really benefited that business. Where did the idea originate to have a co-CEO setup?

RW: I think we had proven ourselves over the prior couple of years—prior decade frankly—that we could work really well together and that we both were extremely confident in our spheres—John in the marketing and inspiration and me in the operational and financial, and after so many years of us being the go-to people, no other choice was even considered. I think it was a very natural progression.

DSN: Let’s discuss what partnership means at the executive level—what does that look like for you?

RW: At any management level, it’s critical that the team acts as partners and has respect for one another no matter what the reporting relationship is. In the partnership that John and I shared we both really cared about the organization, and we were both willing to put the organization above our own individual feelings and accomplishments. There was a tremendous respect for each other. We have very different skill sets, which in some respects made it a lot easier. John did what he did and I did what I did, but we didn’t do it in silos. We worked together. There’s not a single decision that John made that we didn’t chat about or that I made that we didn’t chat about. We had a common vision for the company.

JA: It’s critical that if you want an effective partnership you have to have a common vision, a common purpose and control of your personal ego. I believe either one of us would have been fine as a CEO, but together we were better than we would have been individually because we had very complementary skill sets and a shared vision, and we controlled our egos. Within that context, we accomplished our professional and personal goals.

RW: I agree. Checking an ego means being able to read the other person and understand what’s important, what’s not important and being able to do that naturally. John and I are very different people in many respects at the end of the day, but we do like each other; we like talking and working together, and that friendship allows you to read the other person and therefore know when you need to check your ego.

DSN: I appreciate you sharing that because checking your ego is much easier to say than to do. Do you have advice about how to do that?

RW: Yes, we had a process. The process was we talked all the time. When we were out of the office we talked on the phone. Otherwise, we were in each other’s offices all the time. We had a continuous communication about what was important, what the dynamics were, and through that continuing conversation we evolved to a decision.

It isn’t that you sit down across the desk from each other and think “who’s going to win this time.” You humble your argument and adjust your positions, because you have that give and take with each other, communicating all the time. If you are doing that, you jointly arrive at a decision place from conversation and discussion.

JA: If I was advising somebody today on whether they should we have co-CEOs the first question I would ask is what is their relationship now, because our relationship evolved through a decade of working incredibly close together when we had a lot of different CEOs to deal with. Rick and I had a way of working together that was very natural. It wasn’t like “now we’re in this role, how is it going to work?”

So if you have two people, and they’ve never really worked together before and they don’t have a deep relationship, that’s not going to work. It has to be a relationship where you understand each other and you know each other’s personality—you know what’s important to each other and that sort of thing.

DSN: Do you feel that having that co-CEO role slowed down decision making?

RW: It would not delay longer than what was needed, but we had very different styles. John makes quick, intuitive decisions, and I make long analytical decisions; I’d never come to a conclusion and John would jump to a conclusion. Our styles, because they were different, forced John to slow down and forced me to speed up. So I think we came to a decision at the right time.

JA: We made better decisions because of each other. If it had been just me as CEO, we’d be constantly cleaning things up, I would imagine. I mean, I’m very intuitive and I will make a decision. Rick will study and know every detail of something, so I made him go faster and he made me go slower, but I think as a result of that we made much better decisions and we had a pretty good batting percentage of getting things right.

DSN: One of things you mentioned earlier was how more than 10 years of working together really helped drive the success that you had as co-CEOs. How can executives foster that spirit of partnership throughout their executive teams, even if they are not having formalized co-positions?

JA: One of the most important things I would say, if you want that to develop, is to try. It’s very important to create an environment where executives have a relationship and like each other. Where they can be candid with one another. Usually the person who runs marketing just thinks the finance people say no, and the person that runs financial thinks the marketing people just blow money. When you create an atmosphere where the two of them are collaborative and try to work together and do things together you are much more effective than just having one person saying, “I want to advertise on the Super Bowl for $50 million,” and the other person saying, “you idiot.”

RW: I very much agree. It has to be clear that the objective of the organization is not functional; the objective of the organization is project-wide. Therefore having one function win over another doesn’t move anything forward; what has to happen is the project has to get done and get done successfully. And instill that in your teammates that you’re not an arbiter of functions, you are making a decision based upon accomplishing the objective.

DSN: If you could share a piece of advice for the younger executives interested in pursuing those higher levels of executive leadership, what advice would you have for those folks?

RW: I think they need to always do their best, no matter where you are in the organization. If you’re not doing your best at that point in time, even if you think it is not very meaningful, people will see you in that vein. So you’ve always got to do your best, no matter what you are doing. You’ve got to be willing to take on responsibility and speak up. Not inappropriately, but you’ve got to let people know you’ve got a view. You should consider that view before you enunciate it, but you should let people know you can add value. You should also build relationships with other people. With those relationships, you’ll get more done, they’ll get more done, and you’ll move up the ladder.

JA: I would add that in the world we’re in today with all the social media and stuff, we’re becoming more and more narcissistic as a society. No. 1, you need to realize you have to work like crazy on controlling your ego and realize that none of us are that big of a deal, whether you’re the CEO or you’re in the mail room, so work hard on improving yourself, on being able to get along with people. In life, learn when something is a big deal and when it’s not a big deal, and if it’s not, let it go. Don’t build grudges and victim mentalities. Realize you are a part of the solution or you are part of the problem. I believe long-term improvement is incremental, getting better each day and trying to be a part of the solution. I think if you show up and you are positive and honest, you’ve beat most people just by doing that. And if you work really hard, ultimately, I believe that is going to pay dividends to you.

June 30, 2016

Cover Story

Executive Hiring: Where, When and How to Find Talent in a Changing Climate

by Courtney Roush


Click here to order the July 2016 issue in which this article appeared or click here to download it to your mobile device.


In the not-so-distant past, when a CEO or fellow member of the C-suite at any major corporation announced retirement or resignation to pursue a new opportunity, it was a foregone conclusion that the company would be promoting from within to fill those shoes. Looking outside the confines of the organization was something a company did as a last resort. It was assumed that the right insider could hit the ground running with a keen understanding of the company’s operations, its objectives and its values. In perhaps no other industry was that way of thinking more pervasive than in direct selling, where culture is everything. Understanding what can be a complex business model is a challenge for any newcomer to direct sales, but even more critical is something you just can’t quantify.

You may have heard the buzz term “culture fit,” and that criterion ranks very high during any talent search in our channel. The perceived value of that direct selling experience, along with the sheer quantity of direct selling companies we have today, has contributed to what some consider a problem: leaders who often move from one direct selling company to another. Is that good for our companies? There’s no definitive answer to that question. While sometimes an “insider” is able to move to another direct selling company, apply objectivity and a set of fresh eyes, others may come in with preconceived notions, which can make it problematic to assume that what worked at company No. 1 will work at company No. 2.

That’s not to imply that outsiders are the only way to go. There’s a learning curve in this channel to be sure. It’s vital that candidates come into direct selling with transferrable skills, an open mind and a willingness to immerse themselves in a distinct culture the likes of which they’ve probably never before experienced.

At the same time, however, within this global economy where we now find ourselves, if you hire only from within, you’re significantly reducing your pool of potential candidates. “Overall, it’s really a question of whether you want to build a sustainable business for the long haul,” says Pat O’Hara, Chief Human Resources Officer for Nature’s Sunshine. “If you’re looking for top talent, you’ll have to look both inside and outside the channel.”


“Exceptional talent is, in my opinion, the single most important element to a successful direct selling organization.”
—Stuart MacMillan, President of MONAT Global


In July 2015, Direct Selling News examined the topic of talent acquisition, including the imminent need for succession planning. In the 12 months that have followed, we’ve noted the incredible hyper-growth occurring at a number of direct selling companies, many of whom are relatively new on the scene. Those fast-growing companies need skilled leaders who can hit the ground running. Within this climate, we’re often seeing executives move from one direct selling company to another. “Insider experience” appears to be a hot commodity. Combine this executive shuffling with baby boomer retirement, and it’s clear that direct selling offers significant opportunity. But do we have enough internal talent to fill these available positions? Some direct selling recruiters and human resources executives believe we’re facing a talent gap, while others don’t. Regardless of which side of the argument you choose, our current climate raises some interesting questions about just how critical industry experience is for these high-level positions, how we can set outsiders up for success through in-depth onboarding, and whether we’re doing enough to groom high-potential employees within our own companies.

Talent Gap?

In 2015, ManpowerGroup released its first Talent Shortage Survey in 10 years. More than 41,000 hiring managers in 42 countries were surveyed for the study, which found that the most dramatic change occurring during the decade prior was “the emergence of the Human Age, where talent is the new differentiator,” says ManpowerGroup CEO Jonas Prising. The number of global employers reporting talent shortages in the 2015 study reached a seven-year high of 38 percent. What was most revealing, however, was how these talent shortages were expected to impact affected organizations. Among the employers who believed that talent shortages were impacting their ability to meet client needs, the most common ramifications were expected to be a reduction in ability to serve clients (42 percent) and reduced competitiveness/productivity (42 percent). Thirty percent expected an increase in employee turnover, and 26 percent anticipated lower employee engagement and morale. Twenty-five percent expected reduced innovation and creativity in their respective organizations, and 25 percent stated that talent shortages could lead to higher compensation costs.

Are we facing a talent gap in our industry? That depends upon who you ask. Three things are clear: 1) Ours is a niche industry; 2) We’re in a global market in which competition for talent is enormous; 3) The majority of HR executives in our industry will tell you that recruiting from both inside and outside direct selling is a good strategy for a well-rounded organization. While some functions do favor prior industry experience, in most cases, talent, not experience, leads the day. “Exceptional talent is, in my opinion, the single most important element to a successful direct selling organization,” says Stuart MacMillan, President of MONAT Global, a direct selling haircare products company that launched in 2014. “I place talent above product, above geography, above pricing, above any other single success element. If we believe this to be true, is it now time for us to begin to cultivate and groom new talent to infuse our companies with fresh new ideas?”

Michael Neimand, Division President of Network Marketing at Beachbody, also believes talent should be the first priority. Neimand says, “I think the best approach is to hire the right person, who brings the necessary skill, experience and vision to be effective, whether they come from inside or outside the industry.”


“Insider experience” appears to be a hot commodity. Combine executive shuffling with baby boomer retirement, and it’s clear that direct selling offers significant opportunity. But do we have enough internal talent to fill these available positions?


What does the term “talent gap” mean, anyway? In a January 2015 article, “The Truth About the Talent Shortage,” Forbes contributor Liz Ryan defined the concept: “There’s a talent shortage whenever employers complain that they can’t find people with just the skills and the background they want, at exactly the price they’d like to pay.” Ryan isn’t speaking about the direct selling industry specifically, but she raises an interesting point. Could it be that this so-called gap isn’t really a gap at all, but rather a signal that we’re not looking at the actual talent pool we have in front of us, instead creating a mythical candidate who doesn’t exist? Could it mean that we can do a better job of developing leaders within our own companies, or perhaps that we should cast our net wider and consider more outside candidates? These are all good questions for discussion.

Whether companies fill that real or perceived “gap” from within or step beyond industry borders for a bit of outside perspective depends upon a variety of company-specific dynamics. And—whether or not they hire from the inside—all of this industry movement calls attention to the need for companies to ensure they’re identifying, motivating and rewarding high-potential employees. Routinely filling your talent pipeline simply makes good business sense; it’s an insurance policy for employee retention and company success.

Our national economy is by no means out of the woods, and many organizations that flattened in response to the recession are continuing to operate under that structure. Middle management continues to do much more with much less. Heavy workloads and reduced training budgets have resulted in fewer opportunities for leadership development, skill acquisition and, ultimately, advancement for managers. When it comes time to fill executive vacancies, if a company hasn’t been actively grooming its next-generation leaders, a talent gap could very well be the result.

“De-layering has pushed the focus of talent searches to the C-suite only,” says Judy Stubbs, Vice President of Pearson Partners, a direct selling recruitment firm based in Dallas. Stubbs calls Gen Xers “the sweet spot of talent,” but within flattened organizations, their leadership development is often due to their individual efforts versus any formal programs. “We’re living in such different times today. People aren’t hired out of school and put into management training programs anymore,” she says. “We’re not invested in grooming young talent.”

Whether a company offers leadership development opportunities to groom high-potential employees largely depends upon its bottom line. “When you’re growing, you’re creating opportunities for people, and when you’re not, it’s considerably more complicated,” O’Hara says. “It’s a challenge to develop people in a non-growth business.” And yet, “a company’s survival depends on people who can step up and the ability to hold on to good people when times get tough.”


According to ManpowerGroup CEO Jonas Prising, the most dramatic change in employment occurring during the past 10 years was “the emergence of the Human Age, where talent is the new differentiator.”


At Utah-based Stampin’ Up!, Human Resources Vice President Julie Gandy has been focused on finding leadership candidates from within the company in recent months, for a few reasons: 1) They understand the business model and find it easier to acclimate to the company’s culture; 2) It has saved the company money; and 3) Stampin’ Up! offers internal development opportunities to its employees through core project teams. Through these cross-functional teams, high-potential employees are able to stretch far beyond their typical roles, interact with company leadership and assume responsibility for high-level projects that support the company’s goals. These kinds of internal development opportunities, along with mentorships, are highly effective methods of building future leaders.

Gandy mentions the distinction between larger and smaller direct selling companies. As a mid-sized company, Stampin’ Up maintains a staff accustomed to filling many roles. “The more hats you expect people to wear, the more likely you are to stay inside your own company or within the channel,” she adds. “If you’re looking for a specific skill set, you’re more likely to go outside.”

Debbie Squier, Founder of IMPACT This Day, a direct selling executive search firm based in Clearwater, Florida, believes the channel already has a great deal of talent. However, “When the same people fill the available executive roles, you can suffer from a lack of new ideas. You could be in danger of restricting creativity and innovation.”

This is exactly the approach taken by Jere Thompson and Chris Chambless, Co-Founders at Ambit Energy. Since its founding in 2006, the company has not hired anyone from either the direct selling channel or the energy industry. Chambless says, “We wanted people that didn’t have a preconceived idea of how things were supposed to be done; we wanted people that would look at the opportunity in front of us with new eyes.”

How far a company should cast its net really depends on its stage of growth at the time. When looking beyond direct selling, though, “companies have to be very careful in their screening process. Aptitude is one thing, but does the candidate embrace the channel?” A recruiter can determine a candidate’s openness relatively quickly during the screening process. She recalls a candidate who, during the interview process, proposed a retail business model for the direct sales company for which he was being considered. “You should have great ideas about how to improve our channel, not about altering its foundation,” Squier adds.


“I do meet candidates who think, ‘I’ve been in direct selling forever—of course you should hire me.’ I ask them, ‘How have you continued to develop yourself?’ I think sometimes there’s a tendency to get too comfortable.”
—Angie Wolthuis, Talent Manager, Scentsy


The need for high-level candidates to have prior direct selling experience has grown as the industry continues to evolve and become more complex, says Zachary Wilt, Director of Recruiting and Retention at Take Shape For Life, a meal-replacement and health coaching company based in Owings Mills, Maryland. Wilt says, “If you limit yourself to executives with only directly selling experience, the talent pool can be somewhat constrained. Fortunately, at Take Shape For Life, we’ve been able to attract a team of executives that includes folks with both deep industry knowledge and diverse corporate experience.”

The fact that Meridian, Idaho-based Scentsy has hired so many industry newcomers in recent months wasn’t premeditated, says Talent Manager Angie Wolthuis. Instead, she says, the scented wax company simply cast its net wide to find the largest possible pool of available talent, adding that she doesn’t consider the direct selling channel to have a talent shortage per se. “We’re just at a point where we want to take our company to the next level, and we’re looking for depth and breadth of experience.”


“It’s a challenge to develop people in a non-growth business. [And yet] a company’s survival depends on people who can step up and the ability to hold on to good people when times get tough.”
—Pat O’Hara, Chief Human Resources Officer, Nature’s Sunshine


For insiders, merely having direct selling experience isn’t enough. Our channel is continuing to evolve—quickly. Those insiders who want to stand out from the rest must challenge themselves to keep learning, continually raising the bar on their business acumen across the organization. “I do meet candidates who think, ‘I’ve been in direct selling forever—of course you should hire me.’ I ask them, ‘How have you continued to develop yourself?’ I think sometimes there’s a tendency to get too comfortable,” Wolthuis says.

Should You Stay Inside… or Go Outside?

For any position, the decision about whether or not to hire from within really depends upon the function, the degree of specialty required and the company’s culture. HR executives and recruiters offer a few suggestions of their own below:

Sales

Scentsy’s Chief Human Resources Officer Richard Steel leads a team that hired several executives within the past 18 months. All but one of them—the company’s Chief Sales Officer—came from outside the direct selling channel. Direct sales is indeed a different animal that requires a specific mindset. Within sales, “you have to understand the mind of an entrepreneur,” Squier says. “You’re dealing with independent businesspeople. You’re not just managing; you’re also influencing.”

Field Development/Field Communication

“Field development requires leaders to drive strategy, and build strong relationships with their networks. Even leaders who have guided internal sales organizations at non-direct selling companies find there are some different elements and unique skill sets needed to be successful in this environment,” Wilt says.

Gandy adds, “For those employees who work directly with the field, inside knowledge is important.” Every direct selling company has an independent salesforce with its own unique dynamics. At Stampin’ Up, for example, the company’s salesforce of 45,000 independent Demonstrators, as they’re called, “aren’t as focused on compensation. We have more hobbyists; they’re interested in crafting, social bonding, connection with others. There are nuances with our salesforce.”

Business Analysts/Compensation

Direct selling experience is helpful in order to understand the compensation plan and appreciate the value of individual distributors, Squier says. “That individual is so much more than one person; they’re bringing their customers and other distributors into the system.”

Finance

In finance, Squier adds, “you also have to have an appreciation for independent business owners—they’re the backbone of our business—and an understanding of human behavior.”

Information Technology

For some companies, the infrastructure hasn’t kept up with the continually evolving needs of the business, and yet that very infrastructure is key to maintaining competitive advantage. An objective outsider may be able to offer some valuable experience and suggest an alternative approach.

Customer Acquisition

We’re all looking for ways to help independent distributors find new customers, then turn them into lifetime customers with such perks as VIP programs, autoship and other rewards designed to promote loyalty. This is an area where outsiders could potentially bring in fresh ideas, says Squier.

Marketing/Social Media

Social is a huge component of any direct selling company’s marketing strategy today. Given that social media and technology in general continue to evolve at breakneck speed, direct selling companies might be well-served by an outsider who could bring some innovative strategies to the table, says Stubbs. Additionally, an outsider could suggest new ways of engaging with your independent salesforce that you’ve never before considered.

Regional Management

For international expansion, Stubbs recommends using fewer expatriates and choosing more in-country talent for two reasons: It’s cheaper, and candidates who already are on the ground understand the local and regional nuances, so the onboarding process isn’t as extensive. 


“It is important to look for talent that does not overlap with your existing skill sets…. However, if strategically managed, adding complementary skills and experiences will allow your team to take on new challenges and achieve greater velocity.”
—Harris Goodman, contributor, Forbes magazine


Onboarding Is Everything

Speaking of onboarding, it’s critical, particularly for channel newcomers. Acclimating to a new channel is a challenge for any executive, but direct selling presents a unique learning curve. We’ve been working tirelessly to clear up myths about the direct selling channel for decades, so it’s important for any newcomer to understand where these misconceptions come from, and learn to separate the facts from the falsehoods.

“When onboarding isn’t sufficient, people are likely to apply their own preconceived notions, and that’s a dangerous thing in the direct selling world,” O’Hara says. Outsiders require an in-depth view of the company, the culture and the larger picture of direct selling. They need broad exposure to all elements of the business, including the opportunity to meet and spend time with company founders in order to understand the organization’s heritage, and time in the field to understand representatives’ pain points and motivations.

Neimand believes that “the best on-boarding practices are to clearly articulate the objectives of the company and the specific role, the culture of the company, and parameters for how the candidate will be successful.”

Ideally, the onboarding process should include attendance at a company event. What better way to become fully immersed? If the timing is right, a channel-wide event, too, is invaluable for introducing outsiders to the key players and issues surrounding direct selling.

Here’s a point worth mentioning: In a 2013 article, titled “How to Hire Your First Outsider and Make Them an Insider,” Forbes contributor Harris Goodman said, “It is important to look for talent that does not overlap with your existing skill sets. Overlap can have serious consequences with workflow and personal territory. However, if strategically managed, adding complementary skills and experiences will allow your team to take on new challenges and achieve greater velocity.”

Succession Planning

Regardless of their insider-to-outsider ratios, direct selling companies that want a competitive advantage in our increasingly crowded marketplace would be wise to make sure they not only have a succession plan in place, but that they revisit it every two to three years.

In a webinar, titled “Your Succession Planning Sucks (And What You Can Do About It),” Phil Haussler and Joan Carter from Quantum Workplace, the HR technology company that conducts the research process for DSN’s Best Places to Work in Direct Selling program, presented the consequences associated with lack of planning: alienating backups, overlooking internal candidates and overpaying for talent. Waiting until the last two years of a CEO’s term, they say, is too late.

Generally, potential leaders shouldn’t be told they’re being considered for succession planning, Haussler and Carter say, because a “horse race doesn’t always lead to the best behavior.” However, there are occasions during which prior knowledge is beneficial. Take Steve Jobs, who introduced his successor, Tim Cook, at Apple long before his untimely passing. The move was deliberate and intended to provide employees time to adjust, and for Cook to transition effectively.

Haussler and Carter recommend that succession teams—or, in the case of a CEO, the board—create a CEO success profile, identifying the knowledge, skills, behaviors and values critical for the role. The board should answer such questions as “Who has failed in this role, and why?” “What will the future demand?” and “What kind of aspirations are needed for success in this role?”

Companies also should create an emergency succession scenario, an exercise that helps identify gaps before they become crises. The plan should be reviewed annually and should include key contact information, employee and field communication messaging, and communication strategy.

The Future

Direct selling is a channel with a rich heritage and longstanding reputation for giving people the right tools to reach their potential. We’re also a channel with enviable tenure; our employees possess an invaluable wealth of knowledge, including how to engage, motivate and inspire thousands with the products and the business opportunities we offer. We have much to teach others, and, as we continue to evolve and modernize, they, too, have much to teach us. At the same time, one of the greatest investments we can make is to challenge, motivate and inspire our own employees. Whether they’re newcomers or veterans, executives today or tomorrow, they’re on the front lines of direct selling’s future.

June 30, 2016

U.S. News

JRJR Networks Reports Positive Trends in 2015 Earnings Release

Photo: JRJR Networks is seeking a buyer for Longaberger’s Newark, Ohio, headquarters building.


JRJR Networks, the direct-to-consumer outfit formerly known as CVSL, on Wednesday reported financial results for 2015.

The release was delayed by a longer-than-anticipated audit of its 10 portfolio companies, whose operations span 50 countries, company officials said.

Annual revenue was $138.4 million, up 27 percent from $108.8 million in 2014. Last year, JRJR Networks approximately doubled the size of its business with the acquisitions of two United Kingdom-based brands, Kleeneze and Betterware.

Gross profit totaled $71.8 million, versus the prior year’s $53.3 million.

The company narrowed its loss to $18.8 million from $23.7 million a year ago. The results include a $1.7 million after-tax write-down on inventory at basket maker The Longaberger Company.

“Excluding inventory impairments, in 2015, we cut our operating loss by more than half,” said Chris Brooks, CFO of JRJR Networks. “We also reduced the earnings per share loss by half. We expect continued good progress on that front. We also expect to see EPS turn positive this year.”

Three years ago, JRJR Networks launched a strategy to acquire a diversified portfolio of direct-to-consumer companies, maintaining the brand and identity of each while cutting overlapping costs. In 2016, the company aims to boost the profitability of its portfolio and pursue larger acquisitions.

“As we look ahead to the latter part of this year, it’s our expectation that by Q4, before subtracting M&A expenses, JRJR Networks will be generating cash operating EBITDA of 10 to 12 percent, which is within our target range,” said John Rochon Jr., Founder and Vice-Chairman.

Management’s ongoing efforts to consolidate and streamline operations include the sale of the iconic Longaberger basket building in Newark, Ohio. Once a buyer is found, on-site office staff will relocate to the company’s Frazeysburg, Ohio, facility.

June 29, 2016

U.S. News

LegalShield Adds Two to Board of Directors

LegalShield on Tuesday announced two board appointments, including company CEO Jeff Bell and Pete Jarvis, Vice President of technology solutions firm TidalScale.

The new additions to the board will replace outgoing directors Gil Anderson, CEO of Allant, and Frank Sowinski of LegalShield investor MidOcean Partners.

Prior to joining the legal services provider in 2014, Bell was a partner at venture capital firm NCT Ventures. He also has extensive experience in marketing and corporate leadership, having served—and earned numerous accolades—as Vice President of Global Marketing at Microsoft’s Interactive Entertainment Business (maker of Xbox) and Vice President of the Chrysler and Jeep brands.

Since Bell stepped into the role of CEO, LegalShield has seen production increase 28 percent and active members increase 10 percent to more than 1.5 million.

Jarvis brings to the board a history of technology innovation and management, particularly in the realm of emerging knowledge and intellectual property. Like Bell’s, his career has included a stint at Microsoft, as well as Intellectual Ventures, Bell Northern Research and 3Com. Jarvis is one of the IAM Strategy 300, a list of the world’s top intellectual property strategists published by IAM magazine.

“Jeff’s success as CEO and Pete’s pioneering work with enterprise software make them extremely valuable additions,” said Rip Mason, Chairman of the Board. “We also want to thank Gil and Frank for the significant contributions they made in their tenure on the LegalShield board of directors.”

Earlier this month, LegalShield announced four new additions to its Office of the Chief Executive, further strengthening its leadership team amid an ongoing rollout of new tech-based products and services.

June 29, 2016

U.S. News

Herbalife Executive Receives 2016 Manufacturing Leadership Award

Photo: Herbalife Innovation and Manufacturing Facility in Winston-Salem, North Carolina. (Business Wire)


The man heading up Herbalife’s transition to self-manufacturing was recently honored with a 2016 Manufacturing Leadership Award.

For the past 12 years, the Manufacturing Leadership Awards have recognized companies and individuals shaping the future of global manufacturing. Herbalife’s Senior Vice President of Worldwide Manufacturing and Engineering, Joseph Plunkett, P.E., received a “Visionary Leadership Award” during the program’s Manufacturing Leadership Summit earlier this month in Carlsbad, California.

Plunkett has been with Herbalife since 1998, but more recently he has overseen the company’s $250 million push to bring the majority of its manufacturing in house. Six years ago, Los Angeles-based Herbalife was manufacturing about 4 percent of its health supplements and shakes. Today, the company manufactures nearly 70 percent of its products.

“I am honored, on behalf of the Herbalife manufacturing and engineering team, to receive this prestigious industry award,” said Plunkett. “At Herbalife, we pride ourselves in making the necessary investments to create a competitive advantage in the manufacturing of regulated nutrition products such as dietary supplements, foods and acidified foods.”

Among the company’s recent manufacturing investments is an 800,000-square-foot Herbalife Innovation and Manufacturing (HIM) facility, complete with research and development lab, in Winston-Salem, North Carolina. The facility came online in 2015. Herbalife also operates a 133,000-square-foot HIM in Lake Forest, California. Both are certified by NSF International, a globally recognized independent product testing firm, and comply with current Good Manufacturing Practices.

June 28, 2016

U.S. News

Mary Kay Foundation Establishes Professorship in Women’s Cancer Research

Photo: The Mary Kay Foundation honors Dr. Jerry Shay (left).


The Mary Kay Foundation is honoring Dr. Jerry Shay, Chair of its Research Review Committee, with a $250,000 gift to the University of Texas Southwestern Medical Center to further women’s cancer research.

The gift will establish a Distinguished Professorship in Women’s Cancer Research at UTSW. Mary Kay focuses its considerable philanthropic efforts on funding research of cancers affecting women and helping prevent domestic violence. Each year, the Mary Kay Foundation awards grants of $100,000—totaling $23.5 million to date—to medical institutions at the forefront of cancer research and practice. Shay, Professor and Vice Chairman of the Department of Cell Biology at UTSW, has headed up the grant review process for the past two decades.

“The support of grant funding is critical at every stage of research, and it has been very rewarding to partner with The Mary Kay Foundation to help guide their grant portfolio in an effort to fund the most promising ideas in women’s cancer research,” said Shay, who professed himself “deeply moved and humbled” by the endowment in his name.

Shay and his collaborator, Dr. Woodring Wright, are renowned for their own research, particularly on the relationship of telomeres and telomerase to aging and cancer. At UTSW, Shay also holds the title of Distinguished Teaching Professor, and is Program Director of the Cancer Biology Graduate Program. According to Thomson Reuters ScienceWatch, which has named him one of its “Doctors of the Decade,” Shay is one of the most cited authors in the area of General Biomedicine.

“By establishing this distinguished professorship, the Mary Kay Foundation hopes to show our sincere appreciation to Dr. Shay and the UTSW community for his help in shaping the foundation’s research portfolio, which has worked to improve lives around the world,” said Michael Lunceford, Mary Kay Senior Vice President of Public Affairs and President of the Mary Kay Foundation.

June 28, 2016

World News

Beautycounter’s First Acquisition Brings Backing of Bono and Ali Hewson

Photo: Ali Hewson (left), Co-Founder of NUDE, with Gregg Renfrew, Founder and CEO of Beautycounter.


Nontoxic beauty brand Beautycounter on Monday announced the acquisition of NUDE, the natural skincare line co-founded by Ali Hewson, who shares a passion for social activism with her husband, musician Bono.

Hewson and Bryan Meehan, another ethical entrepreneur, founded the high-end skincare brand in 2007. NUDE’s mission to supply healthy and natural—yet high-performance—beauty products will sound familiar to fans of Beautycounter, which touts a Never List of known or suspected toxins banned from its products.

“Consumers have a right to know what is in the products they put on their skin, and they shouldn’t be faced with a false choice between safety and effectiveness,” said Hewson. “Beautycounter is leading the movement for better beauty and I’m excited to be joining forces with them.”

In 2011, luxury goods conglomerate LVMH bought NUDE and Edun, the sustainable fashion line founded by Hewson to promote local business in Africa. As part of LVMH, NUDE developed a global presence that could help to accelerate expansion at Beautycounter, which currently operates in the U.S. and Canada.

As NUDE transitions from its San Francisco office to Beautycounter headquarters in Santa Monica, California, Hewson will join the Board of Directors of Counter Brands LLC, the parent company of Beautycounter. Bono, Hewson’s co-founder Meehan, and global investor Paddy McKillen also will join the company as investors.

“In reaching more consumers with both Beautycounter and NUDE, we can advance support for our movement in Washington,” said Gregg Renfrew, who has used her platform as founder and CEO of Beautycounter to advocate for greater oversight of the beauty industry. “Ali and her team at NUDE share the same unwavering commitment to education, safer products, and better laws that will move the beauty industry forward worldwide.”

The news follows another major Beautycounter announcement in May, when the company unveiled a limited-edition partnership that will put its beauty products in Target stores this fall. In the past, Beautycounter also has collaborated with J.Crew and Gwyneth Paltrow’s Goop.

NUDE is the first acquisition for Beautycounter since its launch in 2013. As the brands join forces, management said both will carry on business as usual for the foreseeable future.

June 27, 2016

U.S. News

LifeVantage, Usborne Books Parent Are Best in State for Annual Returns

Two direct selling companies appear in a new ranking by Forbes that identifies the top-performing public companies in every state.

In the past year, Oklahoma’s Educational Development Corp. (EDUC—NASDAQ) and Utah’s LifeVantage Corp. (LFVN—NASDAQ) produced the highest return on investment in their respective states. Forbes used data from FactSet, a financial research and analytics firm, to track the total return of every U.S.-based public company from June 2015 to June 2016.

Educational Development Corp. (EDC) operates EDC Publishing and the larger Usborne Books & More direct selling division. Peter Usborne founded the company to create educational children’s books that provide a fun reading and learning experience.

After more than four decades in business, EDC is in the midst of three years of growth, following a nine-year stretch of declining sales. In the first quarter of 2016, the company logged record revenue of $22.9 million versus $9.6 million a year earlier. The stock yielded an annual return of 139.4 percent, according to Forbes.

LifeVantage led Utah-based corporations with an annual return of 253.6 percent, which puts it in the top five companies overall. In the past year, the maker of health and wellness products has made several key appointment to its executive team, under the leadership of Darren Jensen, who joined LifeVantage as President and CEO in April 2015. This year also brought an expansion into Europe, including launches in the United Kingdom and the Netherlands.

June 24, 2016

World News

Nerium Targets Fourth Quarter for Entry into Australia

Photo: Sydney Harbour, Australia.


Nerium International has added Australia to the growing roster of markets the skincare company plans to open in 2016.

The news comes as Nerium prepares to launch next month in Japan, where the company is putting fully integrated operations in place. From day one, Japanese Brand Partners and customers will be supported by a regional office—including an in-house customer support call center—and a Nerium Brand Center set to open in Tokyo.

To date, the Dallas area company has expanded internationally into Canada, Mexico and South Korea. In addition to Australia, slated to open in the fourth quarter, management has disclosed plans to enter Colombia and another Asia Pacific market, Hong Kong, by year end. According to research from the World Federation of Direct Selling Associations, the Asia Pacific region accounts for 45 percent of global direct sales.

“Australia is a thriving market for both the global anti-aging skincare segment and direct sales industry,” Jeff Olson, Founder and CEO, told DSN. “Nerium’s leadership team looks forward to bringing our unique business model and revolutionary products to Australia as we continue to expand Nerium International into the Asia-Pacific market.”

Operating in four markets, Nerium closed out 2015 with annual sales of $516 million, earning the No. 38 spot on the 2016 DSN Global 100, a list of the top direct selling companies in the world. Nerium ranks No. 23 among North America-based direct selling companies.

June 24, 2016

U.S. News

Nature’s Sunshine Products Named One of America’s Healthiest Companies

Nature’s Sunshine Products is once again among the Healthiest Companies in America, according to research by wellness solutions firm Interactive Health.

To compile its annual list, Chicago-based Interactive Health evaluates approximately 2,000 companies each year. Honorees must achieve wellness program participation rates in excess of 70 percent, and a low-risk health score for their total population, based on clinical health evaluations. In 2015, just 154 companies made the cut. NSP is the only company to earn the award for nine consecutive years.

“The tremendous executive support of our wellness program and its many options is what makes such an award possible,” said Christine Frazier, Manager of Insurance Benefits and Wellness at NSP. “Their support, combined with the efforts and dedication of our employees, have made our company a happier, healthier place to work.”

The Utah-based company, which sells a range of natural health and wellness products, has sought to promote a “culture of health” at its corporate office. Employees receive complimentary NSP products and are rewarded for participating in various health initiatives, such as a 12-Week Fitness Challenge, an annual 5K Fun Run and gym membership reimbursements.

“The Healthiest Companies in America award recipients prove that employers can both engage their employees and improve their health outcomes,” said Cathy Kenworthy, President and CEO of Interactive Health.

June 23, 2016

U.S. News

Youngevity Hires on Loren Castronovo as Chief Marketing Officer

Youngevity International on Thursday announced that Loren Castronovo, a marketing and brand management veteran, is joining the company as Chief Marketing Officer.

Castronovo’s 30-plus years of experience has been gleaned at top beauty and fashion brands such as Chanel, Estée Lauder and Revlon, as well as companies within the direct selling channel. Throughout her career Castronovo has held the roles of Chief Marketing Officer, Executive Vice President of Sales and Vice President of Product Development, among others.

“Since 2010, Ms. Castronovo and her teams have won 21 Addy Awards; [Direct Selling Association] Ethos Awards in Education/Leisure, Product Innovation, and Sales and Marketing; the prestigious 2011 Rebrand Award and the 2011 Minnesota Best Brand,” said Steve Wallach, Youngevity Chairman and CEO. “We are excited to have such a winner join our winning company.”

According to Dave Briskie, Youngevity President and CFO, Castronovo stood out from other candidates for her considerable experience and ability to blend traditional marketing with direct selling. “Loren will certainly bring fresh vision to Youngevity, and all our distibutors and customers will gain from her work,” said Briskie.

That fresh vision will serve Youngevity well in light of a May announcement that the company is pursuing a strategic growth plan, including a capital raise and possible stock uplisting. Youngevity sells a wide range of nutrition and lifestyle products through the direct sales channel, and is a vertically integrated producer of gourmet coffees sold through commercial, retail and direct sales channels.