May 28, 2015

U.S. News

Forbes: Rodan and Fields among America’s Richest Self-Made Women

Two direct selling entrepreneurs are among the top women in the country blazing their own—very lucrative—trails, according to a new list by Forbes.

A feature on America’s Richest Self-Made Women, appearing in the June issue of Forbes magazine, includes Rodan + Fields Founders Dr. Katie Rodan and Dr. Kathy Fields. The dermatologist duo tied at No. 42, with respective net worths of $320 million, trailed by the likes of pop mogul Beyoncé Knowles and YouTube CEO Susan Wojcicki. Before launching their eponymous skincare brand, the business partners created acne treatment Proactiv, currently licensed to direct marketer Guthy-Renker. They have also co-authored two lifestyle books focused on skincare solutions.

Topping the list of successful, self-made women is Elizabeth Holmes, Founder and CEO of blood testing firm Theranos and the world’s youngest female billionaire, with a net worth of $4.5 billion. Twenty-two of the top 50 hail from the Technology or Fashion & Retail sectors.

An accompanying feature highlights eight businesswomen to watch, including Thirty-One Gifts Founder and CEO Cindy Monroe. Monroe’s net worth is a reported $200 million, matching that of Hollywood leading lady Sandra Bullock and genre-defying music artist Taylor Swift.

“When she was 28 and a young working mother, Monroe had an idea to help women earn extra money by hosting parties selling gifts and accessories,” the piece states. “She held the first in 2003. Since then over 300,000 consultants have held more than 4.5 million parties for her company, Thirty-One Gifts.”

 

May 27, 2015

World News

ASEA Forges ahead with New Product Certifications and Science Council

Photo: ASEA headquarters in Salt Lake City.


ASEA LLC has adopted the tagline “Cellular Health,” a minor change that signals some major developments for the young biotech company. At its May convention, ASEA unveiled new third-party certifications and scientific research, as well as a newly formed scientific advisory council.

With a technology largely unknown outside the scientific world, ASEA is pursuing a strategic research agenda to educate associates and consumers about its products. The 6-year-old company markets a liquid supplement and skincare gel containing redox signaling molecules, which signal the cells to activate antioxidants. According to ASEA, the patented technology boosts cellular function to improve overall health.

At its Velocity 2015 event in Utah, the brand revealed new validation of its products from the team at BioAgilytix Labs, a testing lab whose clients include eight of the top 10 global pharma and biotech companies. BioAgilytix tested both products, and will do so regularly, to certify that they contain the molecules. ASEA also announced that its production facility has obtained certification from global public health and safety firm NSF International.

“We operate our own production facility, and so this certification and registration was about three years in the making,” Executive Vice President Kurt Richards told DSN. “Because we run our own process from start to finish, as part of the patents and intellectual property ASEA has, we actually had to build out a new facility to make sure it met the base requirements.”

The Salt Lake City-based brand, which made its debut on the 2015 DSN Global 100 with $70 million in annual revenue, is also catching the eye of its neighbors. Online marketing firm Big Leap included ASEA in its roundup of Utah’s Best & Brightest, alongside some of the most innovative and fastest-growing businesses in the state.

Third-party support of a different kind comes from the new ASEA Science Council, whose independent experts will serve as both consultants and ambassadors for the brand’s research. The council’s founding members include nutrition expert and author Brooke Alpert, M.S., R.D., C.D.N.; Dr. Guiseppe Maffi, an independent science consultant for multinational companies; atomic and medical physicist Dr. Gary Samuelson; and Karen R. Stolman, M.D., adjunct professor in the Department of Dermatology at the University of Utah.

May 27, 2015

U.S. News

ACN Celebrity Tournament Raises Record Funds for Ronald McDonald House

Following its Ronald McDonald House Celebrity Golf Tournament last week, ACN Inc. has announced that the fifth annual competition raised record funds for the charity’s local chapter.

The telecommunications and energy provider hosted more than 140 golfers at this year’s event, held May 18 at North Carolina’s Trump National Golf Club. The lineup of celebrity captains included sports stars such as Carolina Panthers kicker Graham Gano, Charlotte Hornets player Gerald Henderson, and former NFL player Donnie Shell.

Presenting sponsor Dish Network and 75 corporate sponsors helped to raise $287,560 for Ronald McDonald House of Charlotte, located near ACN’s Concord, North Carolina, headquarters. Contributions from last year’s tournament totaled $228,000.

“We are so fortunate to have the support of ACN! We always have a blast at the events they host for us throughout the year, but the best thing about them is that they are focused on the families we serve,” said Mona Johnson-Gibson, Executive Director of the Ronald McDonald House of Charlotte.

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. Since ACN named Ronald McDonald House its global charity in 2008, the company has raised millions for the Charlotte chapter, largely by collecting contributions during ACN’s quarterly training events.

Earlier this year, the company announced a new partnership with Feeding America, called Project Feeding Kids. Feeding America supports a network of food banks and feeds more than 12 million children a year through initiatives like the BackPack Program, the School Pantry Program and the Child Hunger Corps. ACN is providing one meal every time someone signs up for an ACN service, and another meal every time a customer pays their monthly bill for those services.

May 26, 2015

U.S. News

Herbalife Announces New Additions to Corporate Affairs Team

Herbalife Ltd. is expanding its corporate affairs team with three executive appointments, the nutrition company announced Tuesday.

The Los Angeles-based brand welcomed a new Senior Vice President for Global Government Relations, Ric Hobby; Senior Vice President for Global Corporate Communications, Megan Jordan; and Vice President, Government and Industry Affairs, Randall Popelka.

The new appointments bolster the department’s regulatory expertise as Herbalife faces ongoing scrutiny from the public and regulators following accusations of fraud by hedge-fund manager Bill Ackman. Hobby formerly served as Herbalife Vice President, Worldwide Regulatory, Government and Industry Affairs. Popelka hails from Washington, D.C., where he worked with global leaders in the administration of President George W. Bush and later in the private sector.

“Herbalife is one of the world’s leading nutrition companies and has created important economic opportunities for people around the globe,” said Jordan, who most recently headed up communications for prominent utilities provider Southern California Edison. “I’m eager to join such a dynamic and passionate community and share how Herbalife is impacting the lives of millions of people.”

The restructuring also adds new responsibilities for Herbalife’s Vice President of Global Corporate Communications, Julian Cacchioli, who will now coordinate the brand’s public policy strategy and corporate social responsibility program. Another department veteran, Elaine Pacheco, has taken on the role of Strategic Project Manager in the office of EVP for Global Corporate Affairs.

May 22, 2015

U.S. News

DSEF Opens Silent Auction ahead of Industry Meeting

The Direct Selling Education Foundation (DSEF) is now accepting bids in its Experience of a Lifetime Silent Auction, an annual fundraiser held in conjunction with the Direct Selling Association’s Annual Meeting, which runs May 31 to June 2.

The silent auction—as well as a live auction that will take place during the Annual Meeting Awards Gala in San Antonio—supports the foundation’s mission to educate the public on direct selling and its impact on individuals and communities. Last year’s inaugural live auction raised $154,000 to fund DSEF efforts such as a recent self-regulation panel, the Campus Days program and National Consumer Protection Week resources.
 
Bidders can take part in the auction from home through the Handbid App available for Apple and Android. This year’s offerings include tech gadgets, weekend getaways and VIP access to sporting events. During the Awards Gala on June 2, the DSA will also announce the recipients of this year’s industry-wide ETHOS Awards.

May 22, 2015

U.S. News

Southwestern Advantage Receives BBB Award for Business Ethics

Photo: Southwestern Advantage Director of Communications Trey Campbell (left) and Greg Boucher, President of Southwestern subsidiary ThinkingAhead.


Southwestern Advantage was recently recognized for its ethical business practices by the Better Business Bureau of Middle Tennessee (BBB), where the company has operated since its founding in 1868. The Nashville-based brand was one of two large companies to receive the 2015 Torch Award for Ethical Commerce, based on a unanimous vote by a panel of judges.

“We believe in building people. We also know that we are not what is important, but what we do is important,” Southwestern Chairman and CEO Henry Bedford said in a statement. “Integrity and ethics are a very important part of our mission to help people develop the skills and character they need to reach their goals in life.”

The educational brand markets a learning system that features homework guides, interactive books, and CDs to help children build knowledge and life skills outside the classroom. The company is known for selling its products through college students enrolled in the Southwestern Advantage Sales & Leadership Program. Each summer, the company signs on nearly 2,500 students across North America and Europe as independent contractors and trains them to run their own Southwestern Advantage business. Alumni of the program include former Texas Gov. Rick Perry, author Max Lucado and Tennessee Rep. Marsha Blackburn.

Southwestern Advantage joined the BBB of Middle Tennessee in 1961 as a charter member. The company has since gained accredited member status by adhering to the ethical principles outlined in BBB’s Standards for Trust.

May 21, 2015

U.S. News

LifeVantage and Real Salt Lake Unveil World-Class Testing Lab

Now in the second year of its Real Salt Lake jersey sponsorship, LifeVantage has announced the creation of a performance testing facility in partnership with the Major League Soccer club. The LifeVantage Sport Science Lab will apply advanced science and technology to help players improve their on-field performance.

“We are very excited for our club to venture into this space, one occupied by only a handful of the biggest soccer franchises in the world,” said Dan Barlow, Director of Sports Science and Performance for Real Salt Lake. “The expansion of our performance baselines and the in-depth monitoring of our athletes would not be possible without the commitment and guidance of our LifeVantage partners.”

Barlow is heading up the joint venture, which will hone in on each player’s response to training stress. The data collected will enable the Real Salt Lake Sports Science Department to measure the cellular stress profile—including factors such as oxidation and inflammation—of each athlete and create tailored workout regimens and nutrition plans.

Salt Lake City-based LifeVantage has signed on as the club’s jersey front sponsor for the 2014-2024 seasons. The nutrition and skincare brand markets products that interact with the body at the cellular level, and the lab’s research will help LifeVantage provide the proper supplements to take each player’s game to the next level.

 

May 20, 2015

U.S. News

Morinda, Nature’s Sunshine among America’s Healthiest Companies

A new list of America’s Healthiest Companies recognizes two Utah-based direct selling brands that are not only selling a healthy lifestyle, but also buying into it through their corporate cultures.

Nutrition and skincare brand Morinda Inc. and natural supplement seller Nature’s Sunshine Products both appeared on the annual roundup by health management firm Interactive Health. America’s Healthiest Companies honors workplaces leading the way in preventive health care. This year’s list includes 158 organizations that have partnered with employees to achieve company-wide, low-risk health status, coupled with high employee participation in preventive programs.

“These winners are a perfect example of how health outcomes can be improved throughout America,” said Interactive Health President and CEO Cathy Kenworthy. “Working with our company, preventive care programs are about much more than just losing weight or quitting smoking—they are a catalyst to transform the way people look at health, well-being and their lives overall.”

Nature’s Sunshine is one of just two companies to appear on the list each year since its inception in 2008. In a statement, the company disclosed some of the steps it has taken to foster a “culture of health,” including a 12-week Fitness Challenge; an annual 5K Fun Run/Walk; gym membership reimbursements; an annual health fair; and complimentary products.

May 20, 2015

U.S. News

SimplyFun Donation Supplies Brand-New Belongings to Rescued Children

Children removed from their homes as a result of abuse or neglect often have nothing but the clothes on their back, but Washington-based SimplyFun LLC is working to change that through an ongoing partnership with the My Stuff Bags Foundation.

The educational board game developer has announced a $100,000 product donation to the My Stuff Bags program. The games will help to fill duffel bags of new belongings for children entering crisis shelters and foster care. Each year, nearly 300,000 children arrive at shelters with nothing to call their own.

“Many of our SimplyFun moms have been active in foster care programs and understand the great need that an organization like My Stuff Bags fulfills,” CEO Patty Pearcy said in the company’s release. “If a SimplyFun game can brighten a dark time in a child’s life by adding just one smile, then we all have a reason to smile.”

My Stuff Bags has delivered hundreds of thousands of bags filled with necessities and toys, seeking to address the immediate needs of rescued children. The donation marks SimplyFun’s latest effort in an eight-year partnership with the foundation.

May 18, 2015

U.S. News

Youngevity Posts Q1 Loss Cushioned by Double-Digit Sales Growth

Youngevity International Inc. continued to generate double-digit revenue growth in the first quarter, despite an earnings loss brought on by non-cash interest related to the company’s acquisition structure.

The multi-dimensional direct seller posted a loss of $369,000 on revenue of $36.8 million, up 39 percent from $26.4 million in 2014. Adjusted EBITDA was $1.3 million, compared to $1.7 million a year ago. Gross profit increased 28.1 percent to $20.3 million.

Youngevity’s portfolio of direct selling brands—including two first-quarter acquisitions, wide-ranging home and personal-care brand JD Premium and health and wellness brand Sta-Natural—accounted for 86 percent of revenue, or $31.6 million. The remaining 14 percent, or $5.2 million, came from its commercial coffee segment. Direct selling revenue reflects 31 percent growth, while the coffee business skyrocketed 128 percent compared to the prior-year period.

In 2011, When Youngevity merged its coffee division and direct selling business, total assets were $24.3 million. As of the first quarter of 2015, the company’s assets were $61.4 million. In the same period, liabilities increased from $15.3 million to $42.6 million, improving shareholder equity from $9 million to $18.8 million.

May 14, 2015

U.S. News

CVSL Issues First-Quarter Results, Misses Estimates

Dallas-based CVSL Inc. (NYSE MKT—CVSL) posted a net earnings loss in the first quarter amid efforts to revive the Longaberger business and execute an ongoing acquisition strategy.

CVSL completed the acquisition of health and household brand Kleeneze, one of the U.K.’s oldest and most prominent direct selling companies, at the end of the quarter. Taken into account, Kleeneze’s first-quarter performance significantly boosted top-line growth.

Combined quarterly revenue for Kleeneze and CVSL rose 20 percent to $32.0 million in the first three months of 2015. Reported revenue fell 27.9 percent across CVSL’s other business units.

On a pro forma basis, the direct selling group posted a net loss of $5.2 million, or 17 cents a share. On average, analysts had expected a loss of 7 cents a share. Gross margin increased to 60.6 percent from 51.3 a year ago.

The biggest factor in CVSL’s results was an ongoing turnaround at The Longaberger Co., said CVSL Vice Chairman and CFO John Rochon Jr., who took on leadership of the struggling household brand when CEO Tami Longaberger resigned earlier this month. “At Longaberger, we spent the first two years solving fundamental problems that we inherited. We had to focus on reducing bloated SG&A costs and paying off bank debt to bring Longaberger out of danger. Now, we’ve begun turning our attention to stabilizing the revenue line.”

The latest turnaround measures are aimed at reestablishing Longaberger as a premium brand by putting a halt to heavy discounting, reining in inventory and closing the brand’s outlet stores.

In the report, CVSL management also noted that Your Inspiration At Home, a maker of spices and other gourmet food items, is tracking to exceed $15.6 million in revenue this year. When CVSL acquired the Australian brand in May 2010, annual revenue was about $1.3 million.

May 12, 2015

U.S. News

Judge Halts Takeover of MonaVie Pending Hearing in Shareholder Suit

On the heels of a lawsuit filed on behalf of MonaVie employees, a federal judge has temporarily halted foreclosure proceedings that would transfer almost all the assets of MonaVie Inc. to Jeunesse Global LLC.

U.S. District Judge Bruce Jenkins issued the order on Monday at the request of Bankers Trust Co. of South Dakota, the trustee over Utah-based MonaVie’s employee stock ownership program (ESOP), according to a report by the Salt Lake Tribune.

A class action lawsuit filed on behalf of employees who participated in the ESOP alleges the South Dakota bank failed in its trustee duties by allowing MonaVie to sell its stock at a highly inflated value using a loan carrying an exorbitant interest rate. Employees purchased shares valued at $186 million through the program, but soon afterward the company’s stock value dropped nearly 100 percent.

Despite topping $800 million in revenue just four years after its founding in 2005, the health and wellness company apparently faced mounting debt leading up to its March acquisition deal with Florida-based Jeunesse Global. As part of the agreement, Jeunesse purchased MonaVie’s $182 million note, secured by virtually all of the company’s assets, from TSG-MV Financing LLC. Last week, MonaVie’s leadership told shareholders they would enter into a strict foreclosure and default on the note, meaning the company would voluntarily transfer those assets to Jeunesse.

Bankers Trust requested that the court ban any further exchange of documents between the companies as it reviews documents related to the deal, which it claims did not follow strict foreclosure procedure. Jenkins granted the request, citing a lack of clarifying information on the series of transactions. The order extends until May 29, when the court will hold a hearing on the proposed lawsuit.

May 12, 2015

U.S. News

Mannatech Reports 3.3% Growth in First Quarter

Mannatech Inc. continues to build momentum on the strength of its international business, according to the company’s quarterly earnings results released Tuesday.

The nutrition and skincare brand, which ties its business to fighting childhood malnutrition through the Mission 5 Million (M5M) program, reported total revenue of $44.4 million, up 3.3 percent from $43.0 million in the first quarter of 2014. In constant dollars, Mannatech posted 7.4 percent revenue growth. Earnings totaled 40 cents per share, versus 8 cents per share a year ago.

“We are pleased that our global teams continue making forward progress on multiple fronts,” said CEO and Chief Science Officer Dr. Robert Sinnott. “Our mandates for this year remain largely the same: to improve our global sales, keep expenses in line, and increase operational efficiency to improve profitability.”

In the first three months of 2015, Mannatech’s strongest performance came from the Asia/Pacific region, where sales increased by 19.5 percent, or $3.7 million, over the prior-year period. EMEA revenue dipped 2.7 percent to $3.6 million. In North America, revenue fell 10.8 percent to $18.1 million as the company recorded a 15.7% decline in active members.

May 12, 2015

U.S. News

Silpada Designs Announces Plans to Launch Accessories Line

Jewelry maker Silpada Designs is moving into its first new product category with a forthcoming accessories collection. The line of handbags, wallets and scarves will appear in Silpada’s fall catalog, alongside the brand’s signature sterling silver and brass jewelry.

“We’re thrilled to enter a new category and give women even more reasons to feel beautiful,” Co-CEOs Kelsey Perry and Ryane Delka said in the company’s release. “The expansion into accessories is a natural fit that will help us achieve our goals of expanding Silpada’s reach and empowering more women to build lives they deserve.”

Perry and Delka are second-generation leaders of the family-owned business. Silpada’s founders sold the business for $650 million in a July 2010 deal with Avon Products Inc., but bought it back three years later for $85 million as Avon took measures to stabilize its North America business.

The new product offerings are part of Silpada’s strategy to build a family of brands that appeals to both millennials and baby boomers. The company said it plans to expand the accessories line by the end of the year.

May 11, 2015

U.S. News

Nu Skin Looks to China, New Products to Boost Earnings

Photo: Nu Skin’s corporate headquarters in Provo, Utah.


Despite weak first-quarter earnings, Nu Skin Enterprises Inc. is confident that its expanding China business and forthcoming product launches will pay off in the second half of 2015.

Quarterly revenue landed in the middle of the company’s guidance at $543.3 million, a 20 percent drop from $671.1 million a year ago. Excluding one-time costs, earnings were 72 cents a share. Analysts had estimated that earnings would reach 73 cents a share on revenue of $546.87 million.

Nu Skin’s active associate numbers continued to decline in all regions except South Asia/Pacific, where active associates increased 4.3 percent from the prior-year period. Greater China recorded the sharpest decline, down 23 percent from the first three quarters of 2014.

In its earnings call, Nu Skin disclosed that the Securities and Exchange Commission has opened a non-public investigation into a donation the company made in China in 2013. Executives said Nu Skin is cooperating with the investigation, but provided no further details.

President and CEO Truman Hunt said Nu Skin is working to expand its footprint in China despite regulatory challenges, including a review early last year that prompted Nu Skin to halt recruiting and resulted in fines for the company. Hunt noted Chinese officials have granted Nu Skin approval to operate its direct selling business in two new cities in Guangdong province.

The anti-aging brand is counting on new ageLOC offerings to drive constant-currency revenue growth in 2015. “Enthusiasm is building for our upcoming product launches that include ageLOC Youth, our most advanced anti-aging supplement, as well as ageLOC Me, an innovative anti-aging skincare system that enables consumers to personalize a daily regimen based on individual preferences and skincare needs,” said Hunt.

In July, the company will also roll out its Epoch essential oils line across the U.S. and Canada, where Nu Skin introduced the products in April through a limited offering. It will also introduce a sister line, ageLOC Essentials, to its Chinese customers.

Nu Skin reduced its revenue guidance for the full year by about 2 percent and said it expects earnings between $3.65 and $3.75 a share, compared to the $3.94 consensus from analysts.

May 08, 2015

World News

Amway Founders Council Brings Together Top Sellers and Executives

Amway welcomed its top achieving entrepreneurs to Washington, D.C., this week for an annual meeting of minds known as the Amway Founders Council.

With a salesforce of millions spread across the globe, Amway has instituted the Founders Council to recognize leading Amway Business Owners (ABOs) and offer them a direct channel to the company’s executives. Members also help to shape the company’s future by serving as a sounding board for ideas and strategies, and communicating that vision to their own teams.

The inaugural Founders Council took place in 1998 with 17 Amway businesses represented. This year more than 200 participants from 15 countries attended the five-day meeting, held at the Mandarin Hotel in Washington, D.C. Amway also gave its global salesforce a glimpse into the event through daily highlight reels posted to the company’s YouTube page.

May 07, 2015

U.S. News

Primerica Posts Quarterly Earnings Growth, Narrowly Misses Estimates

Primerica Inc. (PRI—NYSE) reported growth across all key metrics in its first earnings results under the leadership of new CEO Glenn Williams.

Revenue rose 6 percent to $345.1 million in the first quarter, the financial services provider said Wednesday. Net income was $43.2 million, or 82 cents a share, boosted by strong sales of Primerica’s term life product.

Operating income was 80 cents a share, missing analysts’ estimates by 1 cent, partly due to the timing of expense recognition for annual equity awards granted to retirement eligible employees. Earnings also took a minor hit from the unfavorable Canadian exchange rate, though Canada sales were up 8 percent in local currency.

Total policies issued rose 13 percent versus a year ago, driving 8 percent revenue growth in the term life category. Revenue from investment and savings products was up 7 percent to $129.1 million. The number of new representatives joining the company rose 10 percent over the prior-year period.

“Continued success in executing our organic growth strategy, coupled with our share repurchase program, position us well to continue delivering strong stockholder returns,” said Williams, who officially stepped into his new role at the beginning of April. The Atlanta-area company generated sales of $1.34 billion in 2014, earning the No. 14 rank on the DSN Global 100.

May 07, 2015

World News

Tupperware CEO Joins Global Leaders Helming HeForShe Initiative

Photo: British actress and UN Women Goodwill Ambassador Emma Watson introduces the HeForShe campaign at United Nations headquarters in New York on September 20, 2014. (UN Women/Simon Luethi)


Tupperware Brands Corp. Chairman and CEO Rick Goings is calling on his fellow business leaders to take bold, decisive steps toward achieving gender equality throughout their organizations.

Goings addressed women’s economic empowerment in a piece for the Huffington Post, following an announcement that the Tupperware executive will take a leading role in IMPACT 10x10x10, the pilot initiative of UN Women’s HeForShe campaign. IMPACT 10x10x10 is taking a top-down approach to change by enlisting leaders—10 heads of state, 10 CEOs and 10 university presidents—committed to advancing gender equality.

“Business cannot reach its full potential if we do not advocate to unleash the power of women and strive as male leaders to open doors for women to enter into positions of power,” Goings wrote of Tupperware’s role as an IMPACT Champion. “Shackling women’s potential by allowing their talents to be unrecognized, stunted, thwarted and even beat out of them is not a way to grow a society that can thrive.”

Goings is among the first five businessmen and university presidents to join the initiative. Each company signs the Women’s Empowerment Principles and implements No. 7: to measure and publicly report on progress to achieve gender equality.

Noting that Tupperware’s entire direct selling model focuses on empowering women, who make up the majority of its salesforce, Goings said the kitchenware company will further its efforts by conducting an internal gender audit on its policies, ensuring more women are sponsored by male leaders to reach their full potential, and attaining 50/50 equality in management.

May 06, 2015

U.S. News

Herbalife Raises 2015 Forecast on Strength of Earnings Beat

Herbalife Ltd. set off a flurry of after-hours trading Tuesday evening as the Los Angeles nutrition company posted first-quarter earnings that easily beat expectations and boosted its profit forecast for the year.

Though revenue fell 12 percent to $1.1 billion, the report topped analysts’ estimates on the strength of higher sales in China. Sales in the market rose 21 percent, offsetting a 34 percent decrease in South and Central America and a 9 percent dip in North America.

Investors responded by driving the stock up 15 percent in after-hours trading to $46.21, its highest level of 2015. The stock had climbed to $48.38 by mid-day today.

In the first three months of 2015, net income rose 4.8 percent to $78.2 million, or 92 cents a share, from $74.6 million, or 74 cents. Adjusted EPS was $1.29, surpassing Herbalife’s own quarterly guidance of $1.00 to $1.10 a share and the Wall Street consensus estimate of $1.00 a share.

Analysts’ forecasts declined in the month leading up to Herbalife’s report, amid renewed accusations from activist investor Bill Ackman that the company employs deceptive marketing practices. Speaking to Bloomberg Television at the start of the week, the hedge fund manager, who has campaigned against Herbalife for two years since shorting the stock $1 billion, said he anticipated poor quarterly results and “continued deterioration of the business.”

Herbalife’s regulatory filing reflected April reports of an ongoing probe by the U.S. Department of Justice. In an earlier statement to CNBC, the supplement seller had acknowledged that it is cooperating in a “federal criminal investigation” into manipulation of Herbalife stock by Ackman.

In Herbalife’s earnings report, Chairman and CEO Michael Johnson pointed to the company’s sales leader retention—up in all markets with EMEA leading the way at 28 percent over a year ago—as a positive indicator of future sales growth.

For the full year, the company expects earnings will be as much as $4.60 a share, excluding some items. Herbalife previously told investors to expect maximum earnings of $4.50 a share.

May 05, 2015

U.S. News

Avon Launches 2015 Breast Cancer Walks under New Branding

This weekend 2,000 men and women hit the asphalt during AVON 39 The Walk to End Breast Cancer in Washington, D.C. The participants, dubbed 39ers, raised more than $4.6 million to fund research and education, as well as assistance for families battling the disease.

The walk was the second of seven that will take place in major U.S. cities this year. Formerly known as the Avon Walk for Breast Cancer, AVON 39 refers to the 39.3 miles—split into marathon and half-marathon distances—that participants walk throughout the weekend. The company is also celebrating the impact of the AVON 39 community with new theme #Powerof39.

“To me, the Power of 39 means having a strong support system. If you’ve got family, faith, love and a community like AVON 39ers who will walk tirelessly to support one another—you’ve got enough to fight cancer,” breast cancer survivor Kimberly Curtis told the crowd gathered in Washington, D.C.

This year, participants traveled from 37 states to the nation’s capital to walk for themselves or someone they love. Since the Avon Foundation for Women introduced the event in 2003, more than 207,000 individuals have taken part, raising $550 million for the cause.

Jill Surdyka, AVON 39 National Ambassador, took the stage during the closing ceremony to announce eight local organizations that would benefit from the event. The foundation directs grants to organizations that provide their services to everyone, regardless of their insurance status, demographic background or ability to pay.

May 04, 2015

U.S. News

Industry Scorecard Names LegalShield a Leader in Identity Theft Services

A new study by market research firm Javelin Strategy & Research has recognized LegalShield as an industry leader in identity protection services.

The legal services provider appeared in Javelin’s 2015 Identity Protection Services Scorecard for the direct-to-consumer market. Based on its annual study of the market, Javelin evaluated providers in the three categories of prevention, detection and resolution. The 2015 scorecard named Ada, Oklahoma-based LegalShield an Identity Protection Services Leader in the prevention and resolution of fraud.

The study shows that Americans spent more than $1.4 billion on ID protection subscriptions between late 2013 and 2014—in addition to the 23.9 million individuals who held a free subscription. More than 1.4 million members have signed up for LegalShield’s services, which include 24/7 legal counsel and identity theft protection. Altogether, its coverage extends to 3.7 million lives.

May 01, 2015

U.S. News

This Week: Avon, Herbalife, Trumaker and Stella & Dot

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

  • Ahead of Avon’s earnings report on Thursday, The Wall Street Journal dug into some of the factors hindering the brand’s comeback. The piece is a follow-up to an April 14 report by the Journal, which claimed the cosmetics maker is exploring strategic alternatives including a possible sale of the company or its struggling North American business. The author, Ellen Byron, also discussed Avon’s makeover efforts in a WSJ Video segment.
  • The Avon Lady endured plenty of scrutiny this week, including a piece on the popular style and beauty site Racked. The feature ponders how Avon can find its footing in a digital beauty world and maximize on its legacy in a field of tech-savvy competitors.
  • Forbes featured San Francisco-based startup Trumaker, a custom mens clothier that Contributor David Hochman describes as “made-to-measure apparel for the Uber generation.” Hochman explains why Trumaker is the perfect fit for on-the-go millennials and recounts his experience with one of the brand’s Outfitters.
  • The Special Olympics World Games are coming to Los Angeles this summer, and Herbalife is welcoming the athletes to its hometown as an official Games Supplier. L.A. Biz reported that the nutrition company will provide 300,000 nutrition bars to the athletes, coaches, volunteers and families at all of the sports venues. Herbalife has also offered up its Los Angeles distribution center to serve as the uniform distribution, credentialing and volunteer registration hub.
  • Earlier this year, fans of the CBS reality series Undercover Boss saw Jessica Herrin, Founder and CEO of Stella & Dot, go undercover to interact with the brand’s employees, stylists and customers. One of those stylists was Stella & Dot’s youngest Senior Director, Grace Van Cleave, who wrote a piece on three business lessons she learned from her experience on the show.

May 01, 2015

U.S. News

Direct Selling Association Announces 2015 ETHOS Award Finalists

The Direct Selling Association (DSA) has revealed this year’s ETHOS Award sub-category winners, now in the running for industry-wide recognition at the DSA’s 2015 Annual Meeting next month.

Each year, the ETHOS Awards recognize a handful of DSA member companies for implementing programs that empower their salesforce and bring greater awareness and understanding of direct selling to the general public. A panel of industry leaders and outside experts judges the entries with a focus on excellence, creativity and innovation.

The seven ETHOS Award recipients will be chosen from the following sub-category winners. The DSA will announce this year’s recipients during its upcoming Annual Meeting, which kicks off May 31 in San Antonio.

Marketing & Sales Campaigns

  • Jusuru International (Launches)
  • Mary Kay Inc. (Promotions)
  • Rodan + Fields (Social Media/Online)

Product Innovation

  • LifeWave Inc. (Wellness)
  • Princess House (Home Décor/Durables/Home Care)
  • Rodan + Fields (Personal Care)

Excellence in Salesforce Development

  • Isagenix Intl. (Incentive Programs)
  • Mary Kay Inc. (Business Training)
  • Scentsy Inc. (Business Tools)
  • Simply Said LLC (Personal Development/Motivation)
  • Team Beachbody (Recognition)

Technology Innovation

  • Isagenix Intl. (Mobile Technology)
  • Mary Kay Inc. (Customer/Sales Support)
  • Rodan + Fields (Back Office/Business Support)

Vision for Tomorrow

  • Nu Skin (Philanthropy)
  • Thirty-One Gifts (Public Awareness)

Rising Star Finalists

  • All’asta
  • Beautycounter

Partnership Finalists

  • Buy the Sea
  • Multibrain
  • Step Into Success

May 01, 2015

Company Spotlight

Team Beachbody: Fit to Grow

by Barbara Seale


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


Company Profile

Founded: 2007
Headquarters: Santa Monica, California
Executives: Chairman and CEO Carl Daikeler; President Jon Congdon
Products: In-home fitness programs, nutritional shakes and personal care


 Carl Daikeler Carl Daikeler
 Jon Congdon Jon Congdon

With its mission of transforming lives by ending the trend of obesity, it’s safe to say that Team Beachbody’s growth trajectory has also transformed its multi-sales-channel parent company.

Founders Carl Daikeler and Jonathan Congdon launched Beachbody® in 1998 and then expanded into Team Beachbody®, the company’s muscular direct selling arm, in 2007. Team Beachbody first landed in the Direct Selling News Global 100 with 2012 net sales of $218 million. In 2013 it produced a 50.5 percent increase, achieving $328 million in sales. Last year growth accelerated even more. Team Beachbody’s sales grew more than 70 percent, reaching an impressive $570 million. And for the first time, sales through Team Beachbody were the highest in the whole Beachbody organization. That includes its original direct-response organization, which sells through infomercials, and its newest business, Beachbody Live, which certifies trainers to lead classes in commercial gyms using the company’s tough fitness programs such as P90X® and Insanity®.

Jeff Hill, Team Beachbody’s Executive Vice President of Global Sales, says the company has pumped up its sales incrementally by getting better over time at the range of activities that support direct selling, which all revolve around the idea of creating real results for real people.

“Our secret sauce is sweat combined with commitment,” Hill says. “First, people know that if they follow our proven and rigorous workout programs and couple that with the right nutrition, Shakeology®, they will get real results. We know that because they both tell and show us through their before-and-after pictures. No gimmicks. They know they can rely on it. Second, we align our compensation program, our recognition and our culture of fun yet high accountability together to capture all those high notes and create something compelling for people.”

Shaking Up Compensation

Shakeology is the company’s meal replacement shake that Team Beachbody calls a “daily dose of dense nutrition.” The company says it will increase energy, reduce cravings, shrink weight, improve digestion and regularity, and transform health. As the company’s largest revenue generator, it’s also the backbone of Team Beachbody’s compensation program.

“It’s the residual compensation driver for the business,” Hill explains. “It’s the key component in our challenge packs, which bundle one of our fitness programs and Shakeology on our auto-ship equivalent, which we call Home Direct. Shakeology is our hero product.”


Last year for the first time, sales through Team Beachbody, the company’s muscular direct selling arm, were the highest in the whole Beachbody organization.


Challenge packs are the product component for a proven marketing concept in Team Beachbody’s success: challenge groups. Led by Team Beachbody distributors, which the company calls coaches, challenge groups are groups of coaches and customers who want to participate in an accountability program. Use your fitness program-of-choice for 90 days or whatever the length of the program may be to help you get fit; follow a nutrition program that includes Shakeology; and finally, use social media to share your success and get encouragement and peer support from your coach and from others participating in the challenge. Hill says customers love the interaction, and they love showing their results through before-and-after photos.

“Challenge groups are a very organic, stair-step way for people to become acquainted with our products and also the business,” he explains. “One of the powerful aspects of them is they are great environments for customers who just want to become more fit as well as those who are interested in pursuing Team Beachbody as a business.”

Team Beachbody also loves to shower recognition on participants whose commitment yields results. They can win T-shirts; daily, monthly, and quarterly cash prizes; or a $100,000 annual grand prize.

Over time, the company recognized that a 90-day or even 60-day hard-core challenge wasn’t for everyone. So they developed others: Tony Horton’s X3; Shaun T’s Focus T25 or Max 30; and the 21 Day Fix and 21 Day Fix Extreme programs. All are available as standalones or complete with challenge packs, to help people get started, see results and possibly prepare for a more vigorous program.

“It opens the door to a new demographic,” Hill says. “Maybe someone’s not ready for the Insanity program, but they want to lose 7 to 15 pounds in 21 days. With the 21 Day Fix, they can get significant results.”

Team Building

Challenge groups also provide an environment that lets participants experience success while they help coaches build their teams.

“They tend to create great loyalty,” Hill observes. “For a select few who see a business opportunity, the challenge group creates a safe environment for those types of discussions to take place. They really open the door to a natural conversation.”


In January alone, the company recruited about 25,000 new coaches and ended February with more than 35,000 new coaches—a record monthly number.


The formula clearly works. In early February Beachbody CEO Carl Daikeler reported on Facebook that Team Beachbody had shipped a record 793,468 orders in January and that more than 335,000 people had signed up for the Beachbody challenge. In January alone, the company recruited about 25,000 new coaches and ended February with more than 35,000 new coaches—a record monthly number. Hill points to the early part of each year as the company’s richest recruiting time because many people start the year with resolutions to get healthier and more fit. Big numbers in the first quarter create momentum that tends to continue throughout the year.

Team Beachbody recognizes those successes in many ways. Recognition is one of the keys to success that has muscled up over the years. Hill notes that in the early days of Team Beachbody, the company recognized success with iconic items such as pins and ribbons. But in an effort to better align its recognition with its workout culture, last year it introduced a line of recognition-driven apparel. As coaches advance, they receive apparel—shirts, tops, jackets—that recognizes their success. As at many direct selling national conferences, Team Beachbody’s Summit will be packed to the pecs with recognition. In a business based on transformation, Team Beachbody’s cover models are its coaches. The before-and-after photos of Beachbody Transformation winners play a starring role at Summit to recognize their success. Many of them started their Beachbody journey as out-of-shape people who used the Beachbody program to change their bodies. They found the experience so powerful that they wanted to help others while building a business, so they became Team Beachbody coaches.


“Every time we launch a product we look at it from the perspective of can it sell on an infomercial so that it creates brand equity, which then makes it easier for a coach to sell.”

—Jeff Hill, Executive Vice President of Global Sales


“The cool thing is that you can appreciate that the external transformation is secondary to the internal transformation that takes place,” Hill explains. “They develop a higher degree of confidence and self-discipline as they go through their transformation. It’s transgenerational, as well, because often they’re instrumental in stopping the trend of obesity or poor health in their own family. Although we celebrate the Coach of the Year for top business results, the heroes of the evening are the Beachbody Challenge winners, those who have overcome overwhelming weight challenges.”

Recognition for the Coach of the Year reflects the fun-but-focused Team Beachbody workout culture.

“We can never afford to take ourselves too seriously,” Hill notes. “While we want to honor an individual’s achievements, we also want to keep things fun and light. With that in mind, the most coveted award of all is a huge WWE championship-style belt that the company customizes for that person. For example, Hill describes the 2014 winner as a beautiful, always well-dressed young woman. Her championship belt was bedazzled with bling, courtesy of Team Beachbody.

He explains, “The celebration around the Top Coach is one that reminds us that this should be fun. We’re all human, we’re all on a journey, [and there’s the] ‘I’m not all that and a bag of chips; I’ve been fortunate to earn this’ [outlook]. It adds to the culture of getting realness. Our coaches love that.”

Last year 8,500 attendees cheered for the Top Coach. But like the rest of Team Beachbody, the Coach’s Summit is growing. This year’s sold-out Summit will have 23,000 attendees.

Conflicting Channels Create Brand Equity

As Beachbody’s direct selling arm, Team Beachbody is in a unique position among direct sellers. Its sister companies, which sell the same videos through TV infomercials or certify master trainers to lead the programs in live workouts at gyms, create a dynamic that is both conflicting and synergistic.

“Our strengths are also our challenges,” notes Jeff Hill, Team Beachbody’s Executive Vice President of Global Sales. “Channel conflict is something we continually have to message and talk to coaches about. When you can buy a program from an infomercial versus a coach, that always has to be addressed and reinforced. Though we live with that conflict, it creates tremendous brand equity. People have seen the programs, they know it, and they recognize it. That makes presenting them to a customer or potential coach very simple. No explanation is needed.”

Beachbody was born as a direct response company, and today it spends about $100 million a year in media that lets consumers purchase their products through infomercials. But the transaction is quite different than it would be at Team Beachbody. Hill explains that in the direct-response business, a consumer sees the infomercial for a fitness program such as P90X or Insanity, sometimes in the middle of the night. That consumer calls a toll-free number, orders the program, the call center agent offers other products, and the transaction is completed. A few days later the purchase is delivered and the customer has to self-motivate to use it.

The 265,000 Team Beachbody coaches benefit from the awareness those infomercials create. Whether they’re talking to a friend who hasn’t purchased or someone at the coffee shop who strikes up a conversation with them because they’re wearing their P90X T-shirt, the infomercial has opened a door—and the person behind that door often already knows about the product. The coach can then talk about Shakeology or a challenge group, or even a different product, starting a coaching relationship with minimal effort.

“As a direct-response or infomercial company, we have in our DNA a transaction mindset that has been very successful. Then you move to peer-to-peer marketing based on trusting relationships with people that are long-lasting,” Hill explains. “Our challenge is in the cohabitation of those worlds and finding the synergy between them.”

The company’s next challenge will be to create synergy among Team Beachbody, the direct-response business, and its new Beachbody Live subsidiary, which it launched in 2012. The initiative attracts and certifies master trainers to lead live classes based on Beachbody workouts in fitness centers.

The bottom line? Hill explains, “Our goal is to be the driving force in ending the trend of obesity in the world. To do that, we have to use all the tools in our toolbox and use them well. We like the challenge.”

Pumped Up Products

Fueling that growth is the company’s product lineup—not just Shakeology, but also the well-known workout programs led by trainers such as Tony Horton, Shaun T, Chalene Johnson, Autumn Calabrese and more. Most consumers know the workouts from Beachbody’s direct response television infomercials, so coaches don’t need to explain them. All trainers were well-established fitness pros before they aligned with Beachbody. Not only do they have expertise, but the trainers also have the ability to connect with and motivate home exercisers who depend on them to get a 5:30 a.m. sweat on.


On March 2 the company launched Beachbody on Demand, which lets Team Beachbody Club members stream their workouts to laptops, tablets or mobile devices anywhere and at any time.


“Part of our strategy is to provide great products that are attractive and that we know will provide real results for people,” Hill says. “Every time we launch a product we look at it from the perspective of can it sell on an infomercial so that it creates brand equity, which then makes it easier for a coach to sell. And whereas a fitness product is a one-time sell, nutritional products are what people buy every month. We’ve been very methodical about our nutritional product offerings and focus on Shakeology as our primary product. Any new nutritional products will need to complement Shakeology.” He adds, “Our criteria are always: What is best in class? What will align with premium fitness? What will provide the highest probability of real results? We haven’t rushed to add new ones, and nutritional products are exclusive to our direct selling business.”

With so much success, Team Beachbody continues to transform and expand. On March 2 it launched Beachbody on Demand, which lets Team Beachbody Club members stream their workouts to laptops, tablets or mobile devices anywhere and at any time. The digital innovation currently gives members access to hundreds of Beachbody workouts on demand. Hill says the program will be a big part of the company’s future.

Coach of the YearAll in good humor, Team Beachbody’s 2014 Coach of the Year receives a bedazzled WWE championship-style belt to recognize her business achievements.

Growth and technological expansion have demanded investments in both people and infrastructure. Success has allowed Beachbody to attract some key staff members to manage its increasingly complex business. For example, it brought on Chief Digital Officer Bill Bradford to develop and manage Beachbody on Demand. Bradford was the driving force behind the launch of Hulu. The company has also hired Co-President and COO Marc Washington, Chief Financial Officer Sue Collyns and Chief Information Officer Eduardo Frias.

They oversee a complex business that has some 720 employees, including those in call centers in multiple sites across the globe. The company is currently expanding its California headquarters to accommodate growth.

Reflecting on the executive team, Hill notes that their chemistry is as important as their competency. “They’re not just competent, but also people of character. There’s that great chemistry of people who like working together and have respect for each other,” he says. “There tends to be an absence of ego in the group. They just trust each other to do the job.”

While Team Beachbody has focused primarily on its U.S. market, it launched in Canada last fall and says that its Canadian business is growing nicely. The company plans to announce its first country outside North America in summer 2016, but it believes that North America still holds tremendous opportunity. And Beachbody will continue to expand Beachbody Live trainer certification, currently a small part of its business.

“Our vision is to become the most respected, recognized health-and-fitness company in the world,” Hill says. “To do that, the Beachbody umbrella requires us to be in great relationships and peer-to-peer marketing, as well as have a direct-response side and be in gyms certifying people. If we create the influence we want to have, we can’t be purely in the network marketing space. As we capture the synergies of all the business, there’s enough room for everybody. That will allow us to get better and better.”

May 01, 2015

Company Focus

Younique: Social Selling Reimagined

by Beth Douglass Silcox


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


Company Profile

Founded: 2012
Headquarters: Lehi, Utah
Executives: Derek Maxfield, CEO; Melanie Huscroft, Chief Product Officer and Chief Sales Officer
Products: cosmetics and skincare


 Derek Maxfield and Melanie Huscroft Derek Maxfield and Melanie Huscroft

Over a decade ago, Derek Maxfield reimagined direct selling through the use of technology. His company, NetSteps LLC, created innovative business applications for real-time content delivery, e-commerce, and website and compensation management for global direct selling companies. NetSteps was an industry tech solutions leader, and their success won accolades, including two listings on the Inc. 500.

Developing high-tech solutions for direct selling companies fueled Maxfield’s love of the industry and the business model, which grew exponentially with the success of the company’s clients. But for all the tools that NetSteps created, dozens more were passed over, captured only on paper or whiteboards and never pitched or built.

When Maxfield and his sister Melanie Huscroft aspired to create a brand-new, mission-first direct sales cosmetics company called Younique, the founders offered up differing, yet complementary, skill sets.

Huscroft, Chief Product Officer and Chief Sales Officer, had an education in advertising and business, a flair for fashion and beauty, and experience in purchasing, sales, marketing and art. As a homemaker, wife and mother of four, she embodied Younique’s targeted demographic and held a strong belief in the power and influence of today’s women. CEO Maxfield brought direct selling industry experience, tech savvy and the ability to revisit those brainstorm sessions from his entrepreneurial NetSteps venture.

Rediscovering that once forgotten stash of NetSteps ideas brought innovations that Younique would mesh with a corporate philosophy and mission. In just two short years, this young company has successfully proved its mettle and landed in late 2014 among the Party Plan Top 10 of two public interest and Internet popularity trackers. Younique has effectively reimagined party plan direct selling online.


Brother-sister team Derek Maxfield and Melanie Huscroft aspired to create a mission-first direct sales cosmetics company called Younique with a corporate philosophy and mission to uplift, empower and validate women.


Uplift, Empower, Validate and Build

Founded in September 2012, Younique markets and sells cosmetics and skincare products almost exclusively through the use of social media. “First and foremost, we are a beauty company,” says Brian Gill, Executive Vice President of Marketing. “But we are also a social media company and a technology company. These tools help drive our business model. We operate across an expanding list of social media platforms, which makes doing our business and purchasing our products simple, accessible and doable by everyone.”

The company launched Moodstruck 3D Fiber Lashes into the social media sales stratosphere in November 2012. “We’re the Leader in Lashes,” Gill says. “The before-and-after images of 3D Fiber Lashes became ubiquitous on Facebook and instantly helped us create a name for ourselves.” Since then, skincare and cosmetic products have rounded out a cutting-edge, healthy, clean and pure repertoire.

Younique operates its business in the space where nature, love and science converge. At that intersection, their mission is to “uplift, empower and validate, and ultimately build self-esteem in women around the world through high-quality products that encourage both inner and outer beauty and spiritual enlightenment, while also providing opportunities for personal growth and financial reward.”

That mission-first underpinning inspired Younique Foundation, created in 2014 as an avenue for the company, its network of field Presenters and customers to help sexually abused girls and women. Maxfield and Huscroft’s philanthropic intent is on track to expand this year. “It was clear to me from the very beginning that the business model that could best fund the Younique Foundation and make this miracle happen was a party plan business built on social media,” Maxfield says.

Fun, Crazy, Disruptive Ideas

“You can’t innovate on something that’s been around for a long time unless you truly know the subject matter. We know party plan. We know social selling,” says Joey Toscano, Executive Vice President of User Experience.


“It was clear to me from the very beginning that the business model that could best fund the Younique Foundation and make this miracle happen was a party plan business built on social media.”

—Derek Maxfield, Founder and CEO


When Toscano, who spent eight years working at NetSteps, began working with Maxfield to create Younique’s party system, he says, “It was our chance to revisit all the fun, crazy and disruptive ideas that were just sort of sitting around gathering dust.”

They started from scratch, including the technology on which they built the platform. Simplicity and user motivation were the only goals, which meant putting aside long-held concepts about party plans and reimagining social selling for a new world of online interaction.

Today, people communicate in 140 characters or less, in six-second videos, and with solitary photos. Toscano says, “You have a couple of seconds to get someone interested in something these days, let alone get them to commit to and understand some relatively complicated topics. You can have the greatest idea in the world, but if people don’t get it, you’re done.”

How could Younique deliver a meaningful party plan experience within those contextual constraints? By identifying and meeting the majority’s needs—no more, no less—that’s how. “Younique delivers on the core needs, and then iterates, improves and expands as needed. That’s what allows us to deliver quickly and to adapt to growth and change at a speed that meets the demands of our field,” Toscano says.


In 2014 Younique moved into its current corporate headquarters and opened a 75,000-square-foot warehousing facility, both in Lehi, Utah.

Pioneering Virtual Parties

Forget house cleaning, food prep and babysitters. Younique believed busy women wanted a more viable direct selling party plan option. So they pioneered one to better serve a demographic that already shopped on the go, spent time socializing online, and looked to blogs and magazines for cosmetic and skincare solutions.

Those once-discarded whiteboard ideas and strategically targeted customer demographics produced an innovative virtual party plan business model anchored in social media that promotes products and recruits Presenters and loyal customers willing to share. By creating this new virtual party plan model, Younique bridges aspects of direct selling’s traditional home party business model with the potential reach and impact of social media platforms.

“A Younique virtual party provides seemingly endless selling opportunities. We do not require in-person parties, nor is it restricted,” Gill says. But Younique’s virtual parties do expand guest lists infinitely, allow connections with people outside geographic boundaries, and provide wider windows of opportunity for orders and recruitment.


Younique’s virtual parties are wildly successful and have facilitated tremendous growth for company sales—5,145 percent year-over-year between October 2013 and October 2014.


On their own time, virtual party guests click on social media links to videos that explain Younique products, teach methods for mixing stylish cosmetic applications, and prompt new product orders or Presenter sign-ups. Virtual parties allow nearly limitless sharing within an online environment that customers and Presenters have already grown accustomed to.

“Younique’s systems are built to plug into where people are and what works best for them. Why force people into switching their mental model to fit within YOUR system?” Toscano says. “We build for the behaviors, goals, needs and motivations of our Presenters and their customers.”

“Our Presenters have their own connections and relationships, and we use a variety of social media and technology tools to facilitate those interactions and purchases where they would naturally take place,” says Tracey Vlahos, Executive Vice President of Sales.

First launched on Facebook because that’s where the company’s demographic hangs out, Younique’s virtual parties are wildly successful and have facilitated tremendous growth for company sales—5,145 percent year-over-year between October 2013 and October 2014.

The company also successfully leverages a corporate organized and managed “Presenters Only” Facebook Group to share news, promotions and multimedia assets directly to Presenters as Facebook notifications. Presenters easily share these messages with their own online social networks. The efficiency and simplicity of this quasi-private online community is not only an effective corporate-to-field communications tool, but also allows Presenters to get acquainted and share best practices with each other.

Today, Facebook is but one part of Younique’s overall social media sales strategy that includes diversification into other social media platforms like Twitter and Pinterest, but its stunning success cannot be understated. By Younique’s second anniversary in September 2014, their Presenter roll call totaled 100,000. Today that marker stands at over 183,000, in great part thanks to the success of virtual Facebook parties.

Presenters of the Social Media Variety

Innovative products bring many of Younique’s Presenters into the fold. Besides their enthusiasm for beauty, makeup and 3D Fiber Lashes, these women—usually between 20 and 50 years old—are intrigued with building an income and a business.

“We are a virtual party company, which allows our Presenters to cast a wide net when it comes to whom they reach and how. When someone becomes a Presenter, she is onboarded from the very first welcome email and then has access to a variety of virtual and in-person trainings,” Vlahos says.

Younique believes in validating and building leaders. “Leadership is not about managing people; it’s about coaching people,” Vlahos says. The company wants leaders who feel strong, secure and stable because when a leader’s cup is full she feels ready to take on the activities necessary to advance to the next level.

A corporate/field partnership exists and includes constant field communication, validation and input. The company teaches field leaders to practice servant leadership and to lead by example by staying in tune with their own personal businesses, holding parties and sponsoring new Presenters. Solid performers, Younique believes, best teach and help others progress in their businesses.

Simplicity, whether it’s Presenter training, an internal process or a customer-facing promotion, is key. Even Younique’s compensation plan, which pays out 42–45 percent like most other direct selling companies, is simple and generous. Instant Royalties allow Presenters to get paid within three hours of making a sale on personal websites. Younique’s compensation plan is structured to benefit the largest number of people possible and eliminates waiting. Funds deposit into a PayQuicker debit card account from which Presenters receive, transfer or spend the earnings in any way they like. The business boils down to “Share a link, have a party, get paid,” Gill says.


During a recent event, Younique demonstrates proper application of its makeup products.

Corporate Complexities and Challenges

Keeping it simple for Presenters day-in and day-out is actually a corporate complexity. Behind the scenes Toscano says, “Our motivation is to offer contextually meaningful experiences to Presenters and their customers, and to do it in the simplest way possible. Support the goal, deliver on the expectations and don’t let the technology get in the way of that. The technology itself is never at the forefront of a good experience. It’s there to support the motivations and goals of a real person on the other end. If we do it right, the underlying technology is almost invisible.”

For a company with a foundation rooted in technology, Younique’s in-house team was poised to meet tech-based challenges from the outset. But when the company was faced with accelerating growth, they stared down a major obstacle in manufacturing, supply chain and distribution.


“Our motivation is to offer contextually meaningful experiences to Presenters and their customers, and to do it in the simplest way possible. Support the goal, deliver on the expectations, and don’t let the technology get in the way of that.”

—Joey Toscano, Executive Vice President of User Experience


“We were aggressive in our predictions, but they continually proved to be not aggressive enough,” Huscroft says. With no background in these vital areas and fearing devastating backorder issues, Younique brought in supply chain expertise and headed off the pains associated with fast-track success.

“As a hyper-growth company, strategically sourcing products is something that can make or break your supply chain,” says Reggie Rappleye, CFO and COO. “We have invested in having the right people assist us in finding the best suppliers available. This has allowed us to supply products with fantastic quality, while also allowing us to scale these products to hundreds of thousands per month.”

In short order, Younique experienced its first $25 million (retail sales value) month and surpassed its $300 million, five-year expectations for the company’s cumulative sales. In 2014, they moved into their current corporate headquarters and opened a 75,000-square-foot warehousing facility, both in Lehi, Utah.

The company’s global e-commerce platform enabled it to open international markets on a very short timeline beginning with Canada in 2013 and following in 2014 with Australia, New Zealand and the United Kingdom. “Rapid and seamless international expansion is a key component of Younique’s growth strategy,” says Matt Schleiffarth, Executive Vice President of International and General Counsel.


“Share a link, have a party, get paid.”

—Brian Gill, Executive Vice President of Marketing


Presenters in these international markets already account for 20 percent of Younique’s sales and have the company on an internal record-breaking pace. Continued expansion of the company’s e-commerce platform will drive international growth in 2015, including a Spanish language website aimed at welcoming U.S.-based Latinas to the Younique Family. Later this year, special features will enable growth in the French Canadian market, as well as expansion into Mexico and Germany.

“Yes, we are unique! We originated the 3D Fiber Lashes, are pioneering the virtual party, are paying Presenters quickly, and constantly innovating with our products,” Gill says. But, at its heart, Younique is a direct selling party plan company with an amazing suite of social selling tools that help facilitate parties and sales through online social media, at home and beyond.

May 01, 2015

Industry with Heart

Princess House: Building Momentum with Growth and Giving

by Karyn Reagan

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


Princess House carries on its rich heritage of providing opportunity to those with a desire to succeed


Company Profile

Founded: 1963
Headquarters: Taunton, Massachusetts
Executives: President and CEO Connie Tang
Products: cookware, kitchenware and home décor


Connie Tang

Connie TangConnie Tang

It was 1963—Beatlemania was being birthed, Martin Luther King Jr. made his famous speech, President John F. Kennedy was assassinated, gasoline was 29 cents per gallon and the average income was $5,807. Most of that income was earned by men in a society where only 37 percent of the workforce was made up of women. Women who did work outside the home were paid, on average, 59 cents to every dollar earned by men.

To give women an opportunity to earn equal pay, entrepreneur Charles Collis started the direct selling company Princess House in January of that year. There were just a handful of companies marketing through direct selling, and Collis saw it as the best way to empower women both personally and financially in a culture that offered them few viable career options. Ironically, a much noted piece of legislation, the Equal Pay Act, passed the House and Senate and was signed into law on June 10, 1963, allowing women to earn the same pay as men doing the same jobs.

According to Princess House President and CEO Connie Tang, the first products offered through Princess House were various pieces of hand-blown, hand-cut crystalware and collectibles, which were not as readily available in retail stores as they are today. “One would have to order quality crystal products from Europe, and it was cost-prohibitive for most households,” Tang says. Women could now have access to fine products plus the freedom to earn income based on their own dreams while still managing their household responsibilities, which remained an important goal for many in the early 1960s.

Princess House Consultants soon earned the nickname Crystal Ladies, and by 1969 there were 1,000 of them sharing the opportunity with the changing world. “The company first made its mark with the Princess Heritage Collection,” Tang says. Some pieces from the collection are still available. But over a span of 50 years, the needs and desires of the culture changed, and the demand for hand-blown glass pieces took a backseat to more practical and innovative types of kitchenware.

And Princess House responded to the change.

“I like to say that we moved from breakables to durables,” Tang says. “In 2002, our company introduced a line of stainless-steel cookware that has been highly successful. There are now four cookware options—classic, nonstick and tri-ply stainless steel, plus cast iron—each accompanied by a lifetime warranty. We also offer various types of storage and bakeware, and tabletop and home décor products.”


2014 was the biggest giving year in the history of the company at over $1.5 million in corporate donations to organizations around the country, including the local United Way and Boys & Girls Club.


Giving Goes a Long Way

Woven into the Princess House culture of nurturing women to pursue financial freedom and personal dreams is an emphasis on giving to those in need. Since its founding, the company has given to various organizations, including being a corporate partner with the United Way for over 25 of those years. “Our corporate headquarters is in Taunton, Massachusetts, and we give to the local United Way as well as the Boys & Girls Club and other local organizations,” Tang says. “We have deep ties to our community, and our corporate staff is extremely committed to giving back to local charitable efforts.” Tang explains that the company has not aligned with one specific group, but in the past 10 years they have donated nearly $5 million in cash and goods plus hundreds of volunteer hours to various organizations.

2014 was the biggest giving year in the history of the company at over $1.5 million in corporate donations to organizations around the country. “It was significant because it was on three different levels. The first was the Today Show Toy Drive. We gave from the Cooking Kids line of Princess House products,” Tang says. “Consultants local to the event gave volunteer hours to help the Today Show pack the hundreds of products for the kids.” The next layer of giving involved partnering with TV Azteca’s national toy drive. Princess House donated $300,000 worth of product, which Azteca distributed to organizations nationally. “We also offered the opportunity to our Consultant leaders to nominate their favorite charitable organizations, and we ended up giving to over 70 organizations that were nominated. Employees at headquarters were invited to nominate local charities, and we gave over $200,000 in donations to various local entities,” Tang says. “In the two months before Christmas we gave over $1.5 million!”

Lucy Rivera, a Princess House Field Organizer from Texas who participated in the 2014 program, states that, “For us, Princess House is more than selling and making money. It’s helping people, without any agenda. I think it’s very important for me and for my team to work within our community and to help any way we can. Being able to nominate an organization that helps women who are victims of domestic abuse meant so much to me.”

Princess House’s contributions to the greater good have grown over the years, thanks in part to the company’s own resiliency in the marketplace. At Princess House, adapting to change throughout the years has become crucial to its survival and success.

Responding to Changing Times

Along with changes in salesforce demographics and customer needs, Princess House has experienced changes in its leadership throughout the half-century. In 1978, Colgate Palmolive purchased the company, and then in 1994 a group of private investors led by Ray Chambers acquired Princess House. The Consultant base continued to grow, and the product line became more relevant, attracting more customers.


“In our effort to ease the burden of kids in foster care, Princess House donated a semi-truck full of kids’ cooking supplies at Christmas time last year. Connie Tang presented the donation, and 14 Consultants showed up to help package the gifts.”

—Dan Shufelt, President, Arizona Helping Hands


The company’s Latino salesforce began to flourish as early as 1979, and by 2005 the Latino population among the salesforce outpaced all others. Today 75 percent of Princess House Consultants are Latino. “We have worked hard to make sure that we are aware of the needs of our Latino Consultants and customers,” Tang says. “We have embraced the diversity of our Consultant base and believe we have found our niche.”

In 2010 change included yet another switch in ownership when the Chambers family personally purchased the company. Then in 2012, history was made when Princess House hired Tang as their first-ever woman President and CEO. Her experience in the industry, earning her the prestigious honor of being named one of the industry’s Most Influential Women by DSN two years in a row, as well as a desire to take the company to the next generation, made her the perfect fit. “It is a wonderful opportunity for me to take a well-established company to a place of growth and renewal without alienating the customer base and without disrespecting the heritage that is already in place,” Tang says. “The diversity of the salesforce attracted me. I believe the face of America has been changing for quite some time, and I’m excited to direct the sales field to embrace the diversity within our rather Americana type of brand.”

Princess HousePrincess House donated nearly $58,000 to the Texas Head Start Association during the company’s Share the Joy program.

Tang assures that the company will not walk away from who they are but will refresh their image. “After taking an intense 360-degree look at all parts of the company, the transformation began with the brand, which manifested over the past couple of years in our printed materials, websites, packaging, etc.,” she says. “We have reorganized the customer service process, including adding a distribution center on the West Coast to complement the East Coast center.” New technology has also pushed the company forward, but they strive to stay sensitive to the precarious balance of how much change can be absorbed by the field before becoming overwhelming. “Change is scary sometimes, and we want to work within what people can handle,” Tang says.

A Vital Part of History

One Consultant has grown through Princess House’s rich and diverse history as she has been with the company for 49 years. She knew the founder personally and started her Princess House career when she was 50 years old. “At 98, she is still very active, participating in weekly leadership calls, attending national conferences, and sharing energy and love with her downline,” Tang says. “Some of our most active Organizers have been with us for 40 to 45 years, and we also have staff at the corporate office who have been with us for 40-plus years. It’s very important to us to embrace the established culture and tradition while bringing in new thinking and new ideas.”


Entrepreneur Charlie Collis started Princess House as a direct seller in 1963 because he saw it as the best way to empower women both personally and financially in a culture that offered them few viable career options.


An important aspect of generating such Consultant loyalty starts with training. Of course, technology has influenced many changes throughout the 53 years of the company’s life. Now each new Consultant kit includes training materials, such as a workbook that helps them plan their business, as well as informational guides, DVDs and a Consultant manual. Field training managers have been hired to train the leaders in the field, and weekly training calls are also available. The minute new Consultants sign up they receive a Consultant portal and a free Consultant website, and videos have also become a vital part of how Consultants are trained. “Videos overcome language barriers quite easily as well as help us stay consistent in the information we release,” Tang explains. “We actually have adapted some of the cooking videos we offer with our cookware to appeal to the Latino market. Some videos teach using tortillas and fajitas while the non-Hispanic market receives training with salmon and vegetables. Our market knows that we know them and think of them when we develop business tools.”


“It is a wonderful opportunity for me to take a well-established company to a place of growth and renewal without alienating the customer base and without disrespecting the heritage that is already in place.”

—Connie Tang, President and CEO


Reaching into the Local Community and Beyond

It is through the support of this loyal salesforce and the Princess House employees that the company is able to give so generously to its community. The money is raised through employee contributions, matching donations by the company, and “round-up” efforts where sales totals are rounded up to the next dollar and the difference is donated. “We also are involved in a local effort called TASC, Taunton Area School to Career Inc.,” Tang says. “Students come to our headquarters and are given valuable firsthand experience in what working at this kind of company is like.”


“Princess House is more than just an income opportunity—it’s a place where Consultants and employees can learn the value of connecting with one’s community, which is both personally and professionally rewarding.”

—Cheri-Lynn Catalan, employee


As an employee of Princess House for 25 years, Cheri-Lynn Catalan shares her appreciation for the company’s emphasis on giving and for the influence it has had on how she views generosity: “I have been with Princess House since I was in my early 20s, and the leadership has taught me that giving back and getting involved is an important aspect of our culture. Because of this valuable training, I now serve as a board member for two local agencies and participate whenever I can in a variety of community and fundraising events. Princess House is more than just an income opportunity—it’s a place where Consultants and employees can learn the value of connecting with one’s community, which is both personally and professionally rewarding.”

Princess HouseArizona Helping Hands receives a generous donation.

Dan Shufelt, President of Arizona Helping Hands, is grateful for the generosity Princess House has shown his organization. “In our effort to ease the burden of kids in foster care, Princess House donated a semi-truck full of kids’ cooking supplies at Christmas time last year,” he says. “Connie Tang presented the donation, and 14 Consultants showed up to help package the gifts. Our program, Birthday Dreams for Foster Kids, still uses some of the extra gifts leftover from the Christmas donation.” The supplies have fostered a desire in some of the children to further their cooking skills, such as one young girl who used Princess House tools to make her single mom some pancakes one morning. “She told me it was because I had worked a double shift and she wanted to give me a break,” the mother told Shufelt. So far, the large donation has touched the lives of over 19,000 kids in the foster system.

Another benefactor of the giving spirit of Princess House is La Maestra Community Health Centers. Lindy Webb, Executive Assistant and Special Projects Coordinator for the organization, explains that they have four clinics that service those in need. “We assist people in signing up for government services such as health insurance and food stamps, offer legal advocacy, and offer help with other health and social services,” Webb says. “One program we offer is Healthy Cooking Workshops. Princess House has donated over $200,000 in products in the past two years that we have been able to use in the classes.” Although the workshops take place once a month, the cooking tips are offered to people on a daily basis and the products are useful tools in the teaching.

As the saying goes, the world moves on and we must move with it. And Princess House has enthusiastically embraced the charge to move forward. With a record-breaking 25,000 Consultants in 2014, Tang explains that it is in her heart to “expand the reach we have in order to benefit and touch more lives across the country.” A worthy goal, indeed.

May 01, 2015

Working Smart

Why Different Works

by Jennifer L. Mills

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


Photo: Mary Kay global makeup artist Luis Casco prepares a model for the catwalk on Project Runway during last year’s season.


Every direct selling company knows that to grow their business and reach that all-powerful distributor and customer, it takes an army, connecting through relationships and word of mouth. Companies know this because it works. Yes, some companies do infomercials or 30-second spots sporadically on television, but the driving force is this army of your best customers telling their friends and family about their experience with your products. How do you reach them? Well, there’s a new strategy emerging in the advertising space blurring the distinction between advertising and entertainment—entertainment marketing. And Mary Kay is making it work.

In fall 2012 the company held a live Twitter party, hosted by a makeup artist and fashion stylist, to help promote its current makeover contest. Consumers became so engaged with the beauty and fashion content, that the conversation surged and started trending nationally on Twitter. That gave Mary Kay an idea. Rethinking the next year’s marketing strategy, the company really wanted to be more beauty and fashion focused in order to keep that engagement going, according to Kim Sater, Director, U.S. Consumer Marketing.

“So we asked Tamara Phillips [President and Media Director of T2 Media] to look into things we could invest in that would allow us to highlight Mary Kay in that fashion environment and connect Mary Kay with trend and with fashion to position us as a fashion-forward brand,” Sater says. “She came back to us with Lifetime’s Project Runway All Stars for the 2013 season.”

For this iconic beauty brand and Global 100 Top 10 mainstay, the project was still a little out of their comfort zone.

“It was a bit of a risk because Mary Kay is a very traditional company, and it’s a non-traditional show,” she says. “Also, Mary Kay is not a brand the show’s fans would have expected on Project Runway.”

The Show

Mary Kay went for it, and after a successful season with Project Runway All Stars in 2013, the marketing team received quite the phone call: Did they want to do the big show—the flagship program, Project Runway with Heidi Klum and Tim Gunn? It made total sense to continue with the partnership, because it allowed the brand to not only be an advertiser on the show, but to be in the show. One of their global makeup artists, Luis Casco,  was featured along with the Mary Kay Color Design Studio, including its products, providing a natural integration into every episode, every time it aired. Mary Kay branding appeared on national TV for Project Runway’s full 14-week schedule.

“It was such a great partnership between the show, the designers, Lifetime and the Mary Kay brand team,” Sater says. “The pace is so fast, and when I say one of Tim Gunn’s famous catch phrases, ‘make it work,’ there were times when we really had to make it work.”

She adds, “What really surprised me was that these people have one day to design and sew, and the next day they have their runway show,” she says. “It’s truly inspiring how hard they work to achieve their dreams. That’s another reason our brand lines up so well with the premise of the show. Mary Kay is all about people working hard to reach their goals and achieve their dreams, and that’s what you see on Project Runway.”

In addition to commercials, Mary Kay had vignettes with Casco giving makeup tutorials, as well as Project Runway’s makeup artists wearing Mary Kay branding and highlighting what color lipstick or eye shadow they would use in preparing models for the runway.

No show would be complete without a challenge, and the Mary Kay Challenge gave the company the opportunity to shine through using its slogan, Discover What You Love, which focused on inner beauty and real women. During the challenge, designers had to go out and find these “real” women such as students, tourists, and New York professionals, and design an outfit for them, send them to hair and makeup, and then down the runway like they would other models on the show. The winning designer received an ad in Marie Claire magazine, “which is huge for any designer to be featured in that magazine,” Sater says.

An experience, she says, Mary Kay probably would have not had the opportunity to do otherwise, was to be a part of New York Fashion Week, one of the world’s largest fashion weeks of the year, during Project Runway’s season finale.

Other branding opportunities connected to the show also included sponsoring the Mary Kay Fan Favorites poll, a digital program through MyLifetime.com, branded ads on the site, and videos, which Sater says were a huge part of the company’s high click-through rates from the Lifetime site to MaryKay.com.

The Salesforce

Needless to say the company’s Independent Beauty Consultants were ecstatic. Sater says that during the Mary Kay convention that year, waves of consultants were coming in excited about the company’s sponsorship of Project Runway, and eager to incorporate the show into their home parties.

The marketing team pulled all of Mary Kay’s elements from the Project Runway experience into their marketing tools to engage the field during the show, including their “Beaut-e News” newsletter that goes out to customers on behalf of their Beauty Consultant. It had all of the looks that were going to air and tune-ins for when to watch. Ads would link back to the looks or a profile about Casco, to introduce him to the public, as well as to exclusive videos and clips.

Sater says it was a great opportunity for social media interaction with a behind-the-scenes look at Casco’s quick makeup application tips videos, which received hundreds of thousands of views on social media.

“Beauty Consultants needed to know how to make it work for them, so we had a hub where they could go and download PDFs of the looks to use during their skincare and color parties,” Sater says.

The hub also was the place to find TV schedules so the salesforce could plan their parties, as well as other digital touch points, showing them products that were used so they could show their customers how to get the looks.

Heidi KlumProject Runway host and supermodel Heidi Klum welcomes attendees to New York Fashion Week during the show’s 2014 season finale.

The Results

“One thing we were trying to do was introduce new people to the brand, and we had a 21 percent increase in new visitors to MaryKay.com and personal websites during the season—that’s huge,” Sater says.

Results for mobile showed a 19 percent increase in visits for the season and a 51 percent increase in searches for consultants using the Mary Kay consultant locator tool. There was a 36 percent increase in mobile orders.

“We feel like we did a good job of bringing new people in, getting them to a consultant and hopefully converting them to lifetime customers,” Sater says.

She adds that Lifetime did its own follow-up survey with a panel of viewers, which showed improvements in the way people perceived Mary Kay.

“Not only did they become more familiar with it and improve their opinion about the brand, but they didn’t realize Mary Kay was so fashionable! So we got that message across,” Sater says.

Most importantly, viewers took action, with 69 percent citing they would likely sample or try Mary Kay products after the show and 66 percent considering purchasing products. Of those surveyed, 59 percent visited MaryKay.com and 54 percent actually purchased products.

The show was a hit with Independent Beauty Consultants, as well. “We surveyed Beauty Consultants post-season, and 75 percent said it increased their sales, and that is what we’re trying to do. It also brought a broader demographic. People who watched Project Runway probably didn’t really consider Mary Kay before, and now they are reaching out to find a Beauty Consultant.”

Because of its success with the program, Sater says Mary Kay is definitely sponsoring the show again this year, but will “space it out with fewer, bigger touch points.”

“We were very happy with how things went,” she says. “We don’t want to do the same thing, but that one was so cool. It’s hard to beat.”

She says with any major step into the unknown, a company hopes that the results will prove it was a good decision, so she was very satisfied with the experience and return on investment. The number of visitors to MaryKay.com showed a huge increase, and data is still coming in from a broad brand relationship survey.

“Consideration went up, the number of people who said they wouldn’t consider us went way down. That’s something that we can be very proud of, changing impressions. If you look at things we’ve done differently, this was something that we did differently and did well. Hopefully it will be an indicator of things to come.”

May 01, 2015

Stock Watch

Stock Watch, May 2015


May 01, 2015

New Perspectives

An Executive Approach to the Changing Role of Communications

by Bobbie Wasserman

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


Historically, the direct sales industry has flourished with a distributor “outbound” marketing approach—person-to-person selling. Under this model, it has been the independent distributors’ responsibility to promote their businesses, though this approach can produce fragmented messaging about the company and products. Often, distributors’ personal experiences influence how they represent their businesses, and occasionally they augment the company’s materials with their own. As a result, the public relations efforts are localized based on the distributors’ market and customer base. Any issues or problems that are experienced are also generally solved “under the radar” at a localized level. Even so, the model has been extremely effective, and direct sales companies have flourished.

Enter Web 2.0

While technologists argue the phrase, the generation of the World Wide Web that is used by the masses today is one that is focused on the ability of people to collaborate and share information online. For direct sellers, this adds a critical approach to the company’s success—“inbound” marketing—as distributors and even customers now have a platform for voicing their own opinions and experiences. Simply put, the Internet changed the game around the type and frequency of publicity a company receives. With inbound marketing:

  • Word of mouth is spread primarily through technology, which vastly increases its reach.
  • Distributor referrals include a critical online component.
  • The buying experience can include a period of socializing and engagement (often online).
  • AND
  • Business is able to be conducted anywhere and everywhere via the Web (which offers its own set of compliance and operations issues).

Additionally, all issues or “crises” that occur tend to happen above the radar, and that information remains online for all to see at any time.


A Minute on Messaging: The following chart illustrates some of the differences between strategic corporate messaging and product marketing messaging. Corporate messaging is a broader, more strategic function than marketing messaging, which is generally based around specific products and audiences.

 

Corporate

Marketing

The voice of the company

Shapes how products or services are perceived

Messages that represent the company as a unified entity

Positions a company’s offering in the best light

Broad audience message with more specific proof points

Multiple messages for different target audiences based on product


Building Corporate Credibility

The role of building corporate credibility through public relations and communications efforts is often housed within the marketing department, as that department has responsibility for product and (sometimes) brand reputation. Corporate communications, sometimes referred to as corporate PR, is a different function and requires a different skill set.

Corporate communications is a strategic process that builds relationships for and the credibility of the company—beyond the distributor. The function represents the voice of the company, and the stronger, more unified that voice, the more credibility a company has, which in turn, attracts more distributors and customers.

It is a function that works with numerous departments and usually oversees communication strategy, media relations, crisis communications, internal communications, reputation management and corporate responsibility. In public companies, the department might include investor relations and government affairs.

Outside the direct selling industry, multinational corporations such as IBM, Wal-Mart and Toyota have elevated the role of corporate communications over the past decade—adding the position of Chief Communications Officer, which reports directly to the CEO. These companies, as well as many others, understand the critical importance of effective communications in today’s volatile environment, where the Internet and media demonstrate that the game can change in an instant.


Corporate communications is a strategic process that represents the voice of the company, and the stronger, more unified that voice, the more credibility a company has, which in turn, attracts more distributors and customers.


An Enterprise View

While the vast majority of direct selling companies might not need a CCO, a senior-level communications professional officer or “counsel” that has a seat at the executive table can play an important role. For example, corporate communications works closely with compliance and legal. In a recent situation, a compensation plan issue in one European country was publicized via a government press release describing the issue as an “unfair business practice, i.e., pyramid sales.” And though the issue was resolved while the company continued operations in the country, that press release remained online and was picked up by a reporter halfway around the world—thanks to Google Translate—who used that press release and company’s name as a proof point in his “pyramid scheme” example.

A senior-level communications person might have worked with legal to stop the government from issuing a press release (very unlikely), or ensure that the country issue a compliance statement upon issue resolution (very likely), monitor online and social channels for comments, and have a company statement ready to be released, if needed.

In opening countries, corporate public relations can also play an important role. The online role might include seeding highly trafficked regional online and social media sites with teasers or “controlled leaks.” Issuing press statements is also key since those are now being indexed as news by Google. All these tactics can increase buzz and credibility to attract new distributors and customers—in every country of operation. The offline PR role might include arranging executive meet-and-greets with government officials, community leaders and/or other champions of the business—all opportunities for the company to build relationships, gain credibility and leverage online and social channels to record the event(s).

Impact to the Industry

In today’s climate, it can be important to have access to an experienced corporate communications expert. The issues that impact one company can bring scrutiny to others—private and public alike. And direct selling company executives know that an attack on one company is an attack on the entire industry.

Negative industry stereotypes tend to stay alive and even grow on the Internet. Negative posts, along with articles from traditional news sources with high engagement that cast companies in a bad light, tend to be clicked on and shared often, resulting in a high SEO when a particular company is searched for on Google. Additionally, potential customers cannot help but question the practices of companies when an aggressive push to distribute the products is attached to the sale, adding to negative online conversation, sharing and clicks.

Yet 82 percent of consumers’ experiences are favorable or neutral toward direct selling, according to the Direct Selling Association (DSA). Using the U.S. as the leading indicator, the number of direct sales representatives continues to grow and stood at a record 16.8 million in 2013, and industry sales continue to thrive with a compound annual growth rate over the prior three years at 4.6 percent, according to the DSA. This growth in both retail sales and people involved in direct selling serves as a testimony to the strength of the industry.


Distributors need a strong corporate presence and reputation to build their business, just as the companies need strong and committed distributors. It is a symbiotic relationship.


A Symbiotic Relationship

No other industry offers the opportunity a direct sales company does for such a minimal investment. The industry comprises global companies with innovative and premium products and a spirit of entrepreneurialism and camaraderie that other industries simply cannot match. Distributors need a strong corporate presence and reputation to build their business, just as the companies need strong and committed distributors. It is a symbiotic relationship.

That is why it is so important to support and empower distributors so that they have the communication tools and knowledge to build strong businesses. Providing tools and training as well as updating policies and procedures that allow distributors to leverage technology can be a critical gesture of parity that builds loyalty as well as sales. Distributors want to build their business the right way, within the guidelines of the company, and they tend to be receptive to the do’s and don’ts of public relations and social media best practices.

Not adapting communications practices and department structures to this new environment of heightened scrutiny and online sharing could mean difficulty for some companies. All direct selling businesses, small and large, need to work together to bolster the reputation of the industry, as each company will most likely benefit. A rising tide lifts all ships, as the saying goes.


Bobbi WassermanBobbie Wasserman is Managing Director of Wave2 Alliances, a public relations consultancy that focuses on restructuring communications departments.

May 01, 2015

DSA News

Responsible Self-Regulation

by Joseph N. Mariano


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


Protecting Our Most Important Assets

A few weeks after the Federal Trade Commission’s National Consumer Protection Week (NCPW), the Direct Selling Education Foundation (DSEF) hosted a panel discussion with top executives from three industries—advertising, distilled spirits and direct selling—to discuss the role of self-regulatory initiatives and their benefits to consumers. As one of the participants, it was fascinating to learn what other consumer-facing industries are doing on their own to protect consumers, while sharing highlights of Direct Selling Association’s (DSA’s) voluntary approach to policing our sales channel.

This event was a great reminder to me that our people—the salesforce and the consumers they serve—are direct selling’s most important assets. If customers saw no value in our personalized approach, then revenue wouldn’t continue to grow by 3 percent to 5 percent each year, as DSA’s most recent research indicates. However, continuing to gain customers and remain competitive with traditional retail will require DSA and every member company to place consumers squarely at the center of business operations. Indeed, there is a leadership role we must play, and DSA’s Code of Ethics should be at the center of an industry-wide solution.

The fact that DSA enacted and continues to refine a voluntary Code is not an achievement that should be taken for granted. It represents thousands of hours of legal and policy work, consensus-building among member companies in different retail segments, and evaluating criticisms brought against the industry. The Code promotes common-sense solutions that protect distributors and consumers without discouraging growth.

Every day, I am reminded exactly how our Code of Ethics works to protect consumers, as my colleagues on the DSA staff carefully evaluate new direct selling companies for membership and take note of how the actions of some companies outside of the association with less-than-stellar records on ethics can blatantly violate consumers’ trust.

Indeed, ours are some of the strictest membership standards of any industry association. Unlike many trade groups that throw out bad actors only after unethical or anti-consumer behavior has been identified, we vet our members on the front end. Each direct selling company applicant goes through a year or more of well-intentioned scrutiny to ensure compliance with our Code before they are invited to join. This includes understanding the nature of complaints made against applicant companies and how they were handled and ultimately resolved. Once a direct selling company becomes a member, we subject it to periodic, random reviews to ensure continued compliance, and all complaints are adjudicated by an independent Code Administrator. Importantly, the Code also holds independent direct selling consultants affiliated with DSA members to the same high ethical business standards as our member companies. For these reasons, DSA membership can be a powerful differentiator for consumers in the marketplace.

As proud as we are of our heritage of responsible self-regulation, we also recognize we cannot rest on our laurels, because the marketplace inevitably demands more from us over time. Changes to the Code of Ethics have been contemplated nearly every year since the original document was ratified by DSA’s Board of Directors in [1970]. This year is no different.  Members of our Ethics & Self-Regulation Committee are taking a critical eye to just about every aspect of the Code—including consumer protective measures on income, lifestyle and health claims, and inventory return, as well as transparency. I fully expect this evaluation to deliver substantive policy changes later this year.

Although the Code imposes consumer protection measures that already go beyond the minimum standards set by the legal and regulatory communities, I nevertheless seized the moment during last month’s DSEF self-regulatory panel to commit DSA to greater transparency around Code enforcement actions, effective this year. We will undertake new yearly public reporting of complaints received by the independent Code Administrator, as well as the corrective actions taken to address the complaints. In this meaningful way, we will ensure that DSA’s Code of Ethics remains relevant and vibrant, shedding new light on specific ways in which direct sellers are fighting on behalf of their customers.

From time to time, we reflect on our Code of Ethics because it’s the right thing to do, but that isn’t always easy. It means being willing to have an honest conversation with ourselves about where we fall short and how we might challenge, or even change, false perceptions over time with concrete actions we take that build upon our already strong heritage of ethics and consumer protection.

While every industry may have its share of bad actors that diminish it from time to time, DSA will continue to provide leadership in these important areas, setting the standard for a direct selling industry that’s worthy of consumers’ and policymakers’ trust for years to come.


Joseph N. MarianoJoseph N. Mariano is President of the U.S. Direct Selling Association.

May 01, 2015

Working Smart

The Emergence of the Digital Sidekick

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


How to Maintain Consumer and Distributor Engagement

In this Q&A, Leslie A. Koll, an Advisory Board member for H2 Wellness, a digital health solutions company, shares his perspective and insight as a consultant to the direct selling industry on ways that today’s companies can leverage new technology to maximize consumer engagement and lifetime value. He focuses on three key ideas:

  1. It is critical to improve consumer retention and lifetime value.
  2. Develop new ways to close this “engagement gap”; do not repeat the same strategies and tactics hoping for different results.
  3. Incorporate digital engagement technology into your business mix.

Question: You were at Jenny Craig in the 1990s, directing all marketing and instrumental in initiating its digital strategy as well as growing its worldwide franchises. How did you get involved with the direct selling industry?

Les Koll: It was a natural fit. The direct selling business has challenges similar to what we faced when I was with Jenny. You have to recruit new franchisees and consumers while servicing customers. Everything works beautifully as long as you can convince your audiences to “stick with it.” Unfortunately, the reality is different because it’s incredibly challenging and expensive to keep large populations of individuals engaged and motivated—notwithstanding whether they are franchisees, consumers or direct selling distributors. As a result, this generates a cycle of turnover, which leads to high acquisition costs and limits lifetime value—total expected revenue from a customer over the entire length of time of the relationship with the company.

Question: How would someone begin to break this cycle?

Koll: First, you have to buy into the idea that you can do something about it. You have to start with the idea that something else is possible instead of high turnover rates.

Once you believe this, you have to understand why the problem is happening to focus on the right solutions. As an illustration, many distributors go to events to hear upline leadership and motivational speakers, receive training and experience new products. By design, the atmosphere is electric. Distributors return home, excited and charged up, but then the motivation begins to ebb as the days and weeks go by.


Just like CRM systems, which have helped transform marketing, there’s a new breed of technology called digital engagement.


It often takes another big event to recharge everyone. This is very similar on a smaller, more intimate scale to what occurs when a distributor initiates a sale with a consumer—enthusiasm and involvement followed by an inevitable decline and reduced product usage. The key is to bridge and manage the “engagement gap” during the time between these events to keep both distributors and consumers on track and buying your products. Plus, you have to execute in a way that is meaningful and valuable to each distributor and consumer.

Question: The idea makes sense, but how exactly does a direct selling company do that across such large populations of distributors and consumers?

Koll: This is where technology comes in. Just like CRM systems, which have helped transform marketing, there’s a new breed of technology called digital engagement. And there are companies in different industries that are leveraging it to great effect. Companies like Limeade® in employee health, Wellframe® in the healthcare industry, and Life Time® Fitness in the health club industry.

With the ubiquity of mobile devices, they’re proving you can deliver significant and engaging experiences to support each individual’s unique goals, whether we’re talking about fitness, weight loss or what have you. These technologies help guide and motivate individuals to take the recommended actions through the daily course of their lives. When you can do that, you naturally see a lift in consumer health outcomes, product sales, consumer retention and lifetime value—which, in the end, are what make every distributor successful.

When you imagine a system like this—one that is extremely efficient, scalable and yet personal at the same time—it opens the door to a whole new way of engaging, supporting and retaining your distributors and consumers, no matter the size of the population. That’s powerful.

Question: Are there any barriers to using such a system?

Koll: Yes. Until recently, the adoption barrier was twofold: Either the available system wasn’t customizable or it took a considerable investment in time and capital to build a company-specific solution to spec. What’s more, some direct selling companies have limited internal IT infrastructure to build and maintain these behavior modification systems over the long term. Fortunately, as digital engagement technology has evolved, it is now becoming accessible to companies of any size and complexity.


The key to maintaining a connection with your audience is to bridge and manage the “engagement gap” during the time between events to keep both distributors and consumers on track and buying your products.


Question: Please elaborate. How is digital engagement technology now becoming more accessible?

Koll: There are digital engagement companies pioneering a different approach. Rather than giving you a one-size-fits-all platform or building a custom solution from scratch, it’s now possible to build your own branded digital engagement platform at a fraction of the time and development cost. This change required the following revisions.

  1. A single digital platform that doesn’t have to be rebuilt over and over again. And it has to be ready to work across any type of computer or mobile device.
  2. A library of “ready-to-go” modules that can be configured, in any combination, to address the needs of different direct selling companies.

For example, a direct selling company may have an integrated program that includes nutrition, fitness and weight-loss products. So they will need the specific tools that allow users to plan the right meals, create an exercise program and understand what products are appropriate for them. They may also need tracking tools to analyze the consumer’s behavior and daily progress, such as caloric intake, macro/micro nutrients, weight, activity, etc. And with all the different wearable devices available today, there may be a desire to have the platform integrate into FitBit® or Jawbone® or some other external activity tracking device.

Because human understanding and motivation are always the biggest points of failure, what’s most important are the specific tools designed to deliver targeted education, engagement and support. This can include digital coaching, social media, challenges and rewards, or the ability to have secure messaging between a live distributor and a consumer.

  1. The possibilities are many, and so are the configurations. This needs to work in a way that is fast, efficient, and reflects the specific needs of each direct selling company.
  2. The platform obviously has to be privately branded. From a company’s logos and colors to showcasing a company’s own products, programs and content, this has to be easy to integrate into a digital engagement platform.
  3. Finally, the system has to be easy to implement and maintain. Fortunately, with the widespread growth of the SaaS (software-as-a-service) model, these days you shouldn’t have to install software on individual computers or hire IT staff to maintain these systems.

Question: So, if you were advising a direct selling client on implementing a digital engagement system, are these the best practices you would recommend?


Through these technologies you can deliver significant and engaging experiences to support each individual’s unique goals—those that help guide and motivate them to take the recommended actions through the daily course of their lives.


Koll: Yes. They are what I call the backbone requirements. Clients may have other needs and requirements to consider, such as systems integration, data analysis and reporting. But at the core, you start with the idea you want to avoid the unnecessary cost and risk of building and maintaining software. And you should never compromise your needs with a system that’s inflexible.

Question: Any closing thoughts?

Koll: It’s important to remember that like any technology, digital engagement is not a panacea. It has to work within a broader enterprise strategy and tactical plan that addresses the specific needs of a direct selling company. If you’re willing to do the planning, and allocate the necessary resources to execute, digital engagement can be an absolute game-changer, creating a powerful competitive advantage.


Leslie KollLeslie A. Koll is an Advisory Board member for H2 Wellness, a digital health solutions company, and a consultant to direct selling companies with Pelletier, Koll & Weill Inc. He is former Chief Marketing Officer and Executive Vice President, Franchising for Jenny Craig Worldwide.

May 01, 2015

Executive Announcements

Executive Announcements, May 2015


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


Dan Stammen to Lead WorldVentures as CEO

Dan StammenDan Stammen

Dan Stammen, WorldVentures’ first CEO, will return to the position to lead WorldVentures Holdings, an international direct seller of vacation club memberships.

Stammen is recognized in the direct sales industry for creating high-profile corporate sponsorships and served as WorldVentures’ CEO for the first three years, starting in 2005. He recently held the position of Field Liaison, Special Projects and Board Member.

Co-Founder Mike Azcue will transition from his daily responsibilities as CEO to focus on the board level of the company alongside Co-Founder and Chief Visionary Officer Wayne Nugent.

For almost 10 years, Azcue has partnered with Nugent to fulfill the vision of WorldVentures, build a globally recognized brand and help change people’s lives through the company’s business opportunity.

Azcue will continue his partnership with WorldVentures, and Stammen will step into the day-to-day business to assist in building WorldVentures’ future as the company moves into another year of record growth.


JAFRA Cosmetics Hires a New President of Brazil and South America

Lasaro do Carmo Jr. has joined JAFRA Cosmetics International as President of JAFRA Brazil and South America. He will lead JAFRA Brazil’s growth as well as help JAFRA expand further within South America. He will report to Mauro Schnaidman, President and CEO of JAFRA Worldwide.

Do Carmo brings with him a wealth of experience in both the cosmetics and the direct selling arenas. His career began in the French pharmaceutical company Sanofi-Aventis. In his most recent role as acting CEO of a Brazil-based direct seller, his leadership and strategic management led the company towards significant growth in sales and revenue. In various senior positions at another direct seller in Brazil and Argentina, do Carmo also played a major role in areas such as commercial sales, marketing, operations and training.

His experience, coupled with strategic planned investments in marketing, consumer experience and infrastructure, will optimally position JAFRA Brazil for further growth and success.

“I am thrilled to have Lasaro join our team,” says Schnaidman. “His passion, dedication and expertise will be essential to realizing our strategic roadmap in Brazil and our expansion into South America.”


MonaVie Promotes Katy Holt-Larsen to President of mynt Markets

Katy Holt-LarsenKaty Holt-Larsen
Sandra CavaqueiraSandra Cavaqueira

Previously MonaVie’s Vice President of North America, Katy Holt-Larsen has been promoted to President of mynt Markets. Holt-Larsen has played a key role in the launch of the MonaVie-backed mynt™ in North America, which included a new vision, business plan, branding, and product line for the mission-driven health and fitness company. With 20-plus years of experience in organization and leadership development, she provided strategic direction to mynt’s creation and launch. 

In her newly appointed role as President of mynt Markets, Holt-Larsen will work with international corporate and field leadership to launch mynt in several markets, with the exception of China and Southeast Asia. Mynt launched in Japan in April and will launch in Europe this summer/fall. She will also continue to drive strategy and sales for the Americas.

“We are creating a strong community atmosphere with mynt—both corporately and out in the field—one in which we help each other, give back, and can be ourselves,” says Holt-Larsen. “Mynt is just getting started and I’m humbled at the chance to bring this new opportunity to our markets across the globe.”

Holt-Larsen joined MonaVie in 2008 as Executive Director of the MORE Project, the company’s non-profit organization that helps thousands of families living in poverty in Brazil. In 2012, she served as the company’s Chief of Staff.

In other company news, Sandra Cavaqueira was named Director of MonaVie Europe Events and Marketing. With recent growth in MonaVie Europe, Cavaqueira will focus on maximizing new market initiatives and leading event coordination.

Previously MonaVie Portugal’s General Manager, her passion for the distributors coupled with her strong marketing background helped to build MonaVie Portugal, establishing a strong and thriving market.

Cavaqueira brings a background in health and wellness to the position, having obtained a bachelor’s degree in chemistry and a master’s degree in business and industrial strategy. She also speaks five languages (Portuguese, English, French, Spanish, and Italian), which will help her to navigate the complexities of serving a multicultural region.


Organo Gold Appoints RVP for Southeast Asia

Dave AlmarinezDave Almarinez

Global gourmet coffee company Organo Gold announced that Dave Almarinez has joined the company as Regional Vice President for Organo Gold Asia.

Almarinez will oversee all facets of OG’s Asian business, which currently includes Malaysia, Philippines, Singapore, Japan, Thailand and Hong Kong.

“Dave is an important addition to the Organo Gold team,” says Bernardo Chua, Founder and CEO of Organo Gold. “His network marketing experience in Asia and political acumen will be critical as we continue to build our regional presence.”

Almarinez has over 18 years of experience in the direct selling industry, and has held a number of leadership positions, most recently serving as Managing Director for one direct seller’s Pacific Region.

He authored the personal development business book The Blind Spot and is active in civic affairs in his home province of Laguna, Philippines, where he was a publicly elected board member of the Provincial Government.


Learning Enterprises Organization Appoints New COO

Geraldine AquinoGeraldine Aquino

Geraldine Aquino has joined U.K.-based Learning Enterprises Organization (LEO), a direct seller of entrepreneurship training and professional development products, as Chief Operating Officer and was elected to its board of directors.

“Geraldine is a strong Chief Operating Officer and marketer, and we look forward to benefiting from her insights and experience. Her appointment speaks to her undisputed ability to develop our business around the world,” says Dan Andersson, LEO’s Co-Founder, President and CEO.

At LEO, Aquino is responsible for developing and executing all of the company’s long-term growth strategies, launching new brand initiatives, and developing earnings opportunities for Members worldwide.

She brings more than 20 years of experience in all areas of direct sales, from field representative to corporate executive. Aquino was hired as Chief Operating Officer of LEO North America in June 2014. Previously, she held executive positions at other direct sellers in Canada. She has also directed nonprofit organizations dedicated to the education and training of women and youth, and has owned and operated her own businesses in telecommunications, training and education. 

LEO is a global training company focused on developing entrepreneurs. The company markets to people in more than 100 countries through 100,000 independent LEO sales consultants. LEO’s product line includes professional development training in the form of e-learning, e-tutoring, live seminars and technology products.


XANGO Names Next VP of U.S. and Canada Markets

Ryan AndersonRyan Anderson

XANGO, a global health and wellness company, has appointed Ryan Anderson as its new Vice President of U.S. and Canada Markets. Anderson returns to XANGO after serving in executive positions elsewhere in the industry over the past four years. Previously Anderson had spent seven years with XANGO.

“We’re extremely excited to welcome Ryan back to the XANGO family,” says XANGO Chairman and CEO Aaron Garrity. “Our distributor leaders worked closely with Ryan for many years and grew to appreciate his leadership and unparalleled devotion to their success. Ryan has a unique ability to relate to others, as well as a comprehensive understanding about how distributors can grow their businesses.”

As Vice President of the U.S. and Canada, Anderson will be responsible for market profitability, overseeing all activities such as leadership development, sales, events and every other business function within these markets. During his first stint at XANGO from 2004 to 2011, Anderson held several positions, including serving at different times as General Manager of Asia Pacific and Director of Sales of the U.S. and Canada, overseeing country operations and market openings for several key markets. Anderson also played a pivotal role in opening several European markets.


Medifast General Counsel Recognized as a Top Baltimore Executive

Jason GrovesJason Groves

Jason L. Groves, Esq., Executive Vice President and General Counsel of health and weight-loss company Medifast, has received SmartCEO’s Executive Management Award.

SmartCEO’s Executive Management Awards honor Baltimore area executives who have a proven record of working creatively and collaboratively to support their organization’s mission. Groves was one of just three general counsel executives named to the list. 

“Jason’s leadership skills have been critical to our company’s success,” says Michael MacDonald, Chairman and CEO of Medifast. “His ability to navigate complex legal and strategic issues has helped position Medifast effectively and enables us to capitalize on opportunities while also addressing any potential challenges before they arise. We congratulate him on this well-deserved recognition.”

The 2015 Baltimore Executive Management Award winners collectively generate $11.3 billion in annual revenue and employ more than 50,000 individuals in Greater Baltimore.


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

May 01, 2015

News in Brief

News in Brief, May 2015


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


SUCCESS Partners University Attracts over 500 Executives

CEO PanelDarren Hardy leads CEO panel discussion.

Success Partners held its 16th annual learning opportunity for direct selling executives at the Dallas InterContinental Hotel April 8-9. This year’s event was the first under the new name Success Partners University (SPU), following the rebranding of long-time DSA supplier company VideoPlus.

Stuart Johnson, Success Partners Founder and CEO, again provided a stage from which C-level executives from across the industry shared their insights and wisdom on topics such as branding and messaging, developing culture, the importance of personal development, leading through difficulty and more. The University theme “Let’s Grow Together” is also the new branded tagline for Success Partners. More than 500 people attended   SPU this year, flying to Dallas from all over the country as well   as the world.

SUCCESS magazine Publisher Darren Hardy and Primerica Distribution Chairman John Addison kicked off the event with a Tuesday night “Double Feature.” Hardy delivered his newest keynote, “The Entrepreneurial Roller Coaster,” which focuses on equipping the entrepreneur to avoid jumping off the ride, and to stay the course. Addison followed, launching the beginning of his speaking career with limited engagements. His speech focused on the critical nature of personal development.

John AddisonJohn Addison delivers a keynote speech at the SPU opening reception.

Wednesday and Thursday were packed with presentations, each day led by Darren Hardy as master of ceremonies. Three panel discussions were held over two days—the first was a CEO panel moderated by Hardy and included Greg Provenzano, Co-Founder and President of ACN; Scott Schwerdt, President of the Americas, Europe and Pacific Region for Nu Skin; Dave Wentz, CEO of USANA; and Mark Pentecost, Founder and CEO of It Works! Global.

The second panel, also moderated by Hardy, tackled the subject of leading through change and included Tarl Robinson, CEO of Plexus Worldwide; BK Boreyko, Founder and CEO of Vemma; and Mark Jarvis, President and CEO of Zurvita.

The final panel was moderated by Direct Selling News Publisher and Editor in Chief John Fleming, discussing the future of party plan in direct selling. Panel guests included Orville Thompson, Co-Owner and CEO of Scentsy; Mike Lohner, Chairman of Stella & Dot; and Connie Tang, President and CEO of Princess House.

Additional speakers at the event on Wednesday included Jeff Olson, Founder and CEO of Nerium, which is on its way to surpassing $1 billion in cumulative revenue during its first four years of operation; Angela Loehr Chrysler, President and CEO of Team National; Matt Schleiffarth, EVP and General Counsel of Younique; Jared Turner, Chief Global Sales Officer of Young Living; Mac Larsen, VP of Sales North America of Isagenix; and speaker and trainer Gloria Mayfield Banks, also an independent beauty consultant at Mary Kay Corp.

In addition to the Party Plan Panel, Thursday’s speakers included Lori Bush, President and CEO of Rodan+Fields; Reputation.com’s Chief Strategy Officer Anthony Johndrow; and Cindy Monroe, Founder, President and CEO of Thirty-One, along with executives from SUCCESS Partners and DSN’s General Manager, Lauren Lawley Head.


Nerium Advances Its Mission to Combat the Signs of Aging

Company Obtains Exclusive Rights to Patented Brain Booster

TEXTThe SIG-1273 molecule is a key ingredient in Nerium’s EHT supplement.

Nerium International has been on a mission to provide cutting-edge, proprietary products since its founding in 2011. In April, it took a significant step toward expanding its product line with the introduction of a dietary supplement designed to promote brain function.

The fast-growing company’s philosophy of business and Founder Jeff Olson’s passion is to find exceptional products and obtain exclusive rights to offer them to customers. Through a nurtured relationship with Dr. Jeffry Stock of Princeton University Labs—home of one of the top neuroscience programs in the world—Nerium recently obtained exclusive global rights to the patented EHT® molecule, isolated from coffee, which protects against mental decline and enhances overall brain function.

Stock discovered this bioactive molecule, which works by helping strengthen the brain and by maintaining robust and healthy neuron connections, thus enabling the vital function of information transmission. This natural extract is the key ingredient in Nerium’s newest product: EHT®, an Age-Defying Supplement, Mind Enhancement® Formula.

“My team and I identified EHT, a component of coffee, as a natural molecule that works to protect against mental decline and boost overall brain health and resiliency,” Stock says. “Using EHT Age-Defying Supplement as part of a daily routine can help strengthen the brain to minimize the effects of aging as well as protect it against injuries and oxidative stress.”

Obtaining the exclusive rights to license EHT comes as Nerium continues to expand rapidly. The company earned the No. 40 spot on this year’s DSN Global 100, with $403 million in revenue, the youngest company to ever break into the Top 50 on the list.

“We are incredibly proud to be ranked among many established, international brands,” says Amber Olson Rourke, Chief Marketing Officer for Nerium. “Our rapid growth is a result of a portfolio of products that produce real results, backed by real science.”

In its first year, Nerium achieved more than $100 million in sales, becoming the only direct sales company on record to achieve this in its first full year of operation. To date, the company has increased its revenue to more than $700 million ince 2011, expanded its product portfolio, and launched beyond the U.S. to Canada and Mexico.

“We are honored to be recognized for a third year for our continued growth, success and commitment to expanding our company and products,” says Jeff Olson, Founder and CEO. “We are proud of all we have been able to accomplish, which we owe to our outstanding employees and Independent Brand Partners.”


Jeunesse Global Announces Acquisition of MonaVie and mynt

JeunesseJeunesse Global founders Randy Ray and Wendy Lewis welcome their distributors at a company event.

Two prominent health and wellness brands are joining forces in a recently announced strategic acquisition. Skincare and supplement manufacturer Jeunesse Global has acquired MonaVie LLC, a nutrition company that markets juice blends, energy drinks and shake mixes. The agreement includes the MonaVie-backed mynt brand, which launched in 2014 as a platform to attract a younger generation of tech-savvy, community-minded entrepreneurs.

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

Salt Lake City-based MonaVie launched in 2005 and soon experienced exponential growth. After posting three-year revenue growth of 5,883 percent, the company appeared on the 2009 Inc. 500, an annual list of the fastest-growing companies in the U.S. MonaVie ranked No. 18, with $854.9 million in 2008 revenue. In the following years, MonaVie experienced growing pains and incurred considerable debt, which Jeunesse has cleared as part of the acquisition agreement. The company has not disclosed further details of the transaction.

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


Solavei to Carry on Mobile Services with Merger Plan

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

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

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

Solavei’s bankruptcy filings point to an unsustainable commission model as the source of its woes. The original commission structure stressed the company’s working capital and liquidity, ultimately prompting Solavei to restructure.


DSEF Hosts Multi-Industry Panel on Consumer Protection

DSEFThe Direct Selling Education Foundation (DSEF) tapped leaders from various industries to participate in a recent panel on consumer protection. The public discussion, held April 7 at the National Press Club in Washington, D.C., marked the first of many such events the DSEF is coordinating to advance understanding of direct selling and promote the industry’s commitment to ethics, consumer protection and self-regulation.

Panel participants included moderator Howard Beales, George Washington University Professor and former director of the Federal Trade Commission (FTC) Bureau of Consumer Protection; Lynne Omlie, Senior Vice President, Secretary & General Counsel, Distilled Spirits Council of the United States; C. Lee Peeler, CEO of the Advertising Self-Regulatory Council and Executive Vice President of National Advertising, Council of Better Business Bureaus; and Joseph Mariano, President of the Direct Selling Association (DSA). Commissioner Maureen K. Ohlhausen of the FTC provided opening remarks, praising the industry for its self-regulation efforts while calling for increased regulation and education.

In the DSEF’s statement, Mariano noted one consumer protection that will come under the DSA’s spotlight later this year. The Association plans to strengthen protections against false earnings claims and the enforcement of those protections among its member companies.


Industry Businesswomen Pay It Forward with New Initiative

A group of businesswomen within the direct selling industry is coming together to bring entrepreneurial opportunities to women in developing countries. Women United for Change is made up of independent business owners looking to leverage their own success to empower women worldwide. In its flagship effort, the group is partnering with Project Concern International (PCI), a nonprofit working in some of the poorest communities in Asia, Africa and the Americas.

Women United for Change is backing the organization’s global Women Empowered (WE) initiative, which invests in women as agents of economic and social change. WE works within communities by forming self-managed and self-sustaining savings groups, which receive up to 18 months of in-depth training. As the women develop confidence and leadership skills, the training also supports them in starting and growing a micro-business. Prior to launching the initiative in March, the leaders of Women United for Change had already raised more than $100,000 in support of WE.


Youngevity Closes out 2014 with Record Revenue

YoungevityYoungevity International (YGYI—OTCQX) continued its double-digit growth streak in 2014 by more than doubling revenue, the company announced in March. The San Diego-area firm is setting its sights on international markets as it continues to expand its portfolio of nutrition and lifestyle products.

Youngevity reported 2014 revenue of $134.0 million, a 56.5 percent increase versus 2013. Revenue derived from acquisitions was $14.5 million. Net income increased to $5.4 million, up from $2.7 million in the prior year, largely due to a $4.7 million tax benefit from adjustments to deferred taxes.

An ongoing acquisition strategy has positioned Youngevity across the Health and Wellness, Beauty and Care, Food and Beverage, and Home and Family categories. This year the brand added energy services, including renewable energy options, through a partnership with Energy Professionals. In addition to its direct sales segment, Youngevity operates CLR Roasters, a vertically integrated gourmet coffee business.

Direct selling revenue grew 51 percent for the year, totaling $116.3 million, while the commercial coffee business grew 101 percent to $17.7 million. At year-end, total assets were $55.7 million, compared to $34.9 million at the close of 2013.

Leadership said that in 2015 and beyond it will focus on establishing the brand across international markets, which accounted for just 8 percent of 2014 sales. Recent expansions include Russia, where Youngevity has opened a Moscow office, and Singapore, where it hopes to build distribution within the Asian marketplace. Youngevity is also building a presence in Mexico with an eye toward additional Latin American countries.


Origami Owl Takes First Step into International Markets

Origami Owl is bringing its popular jewelry to the Canadian market with its first international expansion, the Phoenix-area company recently announced. As a result, Origami Owl’s 60,000+ U.S. distributors, called Independent Designers, will be able to sell the brand’s customizable jewelry to Canadian consumers, and vice versa. Origami Owl has brought on Marcia Cota, National Sales Director for Canada, to head up its new market.

Founded in 2010 by then 14-year-old Bella Weems, Origami Owl adopted a direct selling model two years later. The brand debuted at No. 50 on the 2014 DSN Global 100, an annual ranking of the industry’s top revenue-generating companies. Origami Owl also earned DSN’s Bravo Growth Award for industry-leading growth of 870 percent in 2013.


Plexus Worldwide Breaks Ground on New HQ

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


ForeverGreen Worldwide Revenue Soars in 2014

Driven by popular new products and minimized product and shipping costs, revenue at ForeverGreen Worldwide Corp. (FVRG—OTCBB) rose steeply in 2014. The health and wellness brand reported annual revenue of $58.3 million, a 229 percent jump over 2013. Gross profit margins were 78.6 percent, with operating income of $1.7 million, a 339 percent increase over the prior year. Net income was up 780 percent to $1.0 million, or 5 cents per share, from 1 cent per share last year.


Nu Skin China to Open Additional City

Nu Skin Enterprises Inc. has received authorization to expand its direct selling activities into an additional city in China, the largest of Nu Skin’s 53 markets. The personal-care and nutrition company recently obtained a license from China’s Ministry of Commerce to operate in Shaoxing City in Zhejiang Province.


Viridian Energy Brings Sustainable Power to Nicaraguan Community

ViridianViridian associates and employees install solar panels in Nicaragua.

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

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

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

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


Natural Health Trends Reports Triple-Digit Annual Growth

Natural Health Trends Corp. capped off 2014 with a strong fourth quarter and reported triple-digit annual sales growth. Fourth quarter sales were up 85 percent over the same period in 2013, contributing to annual revenue of $124.6 million, a 137 percent jump from last year’s $52.5 million. Net income increased more than fourfold to $20.4 million, or $1.61 per diluted share, compared to $4.1 million, or 36 cents per diluted share in 2013. In the company’s statement, President Chris Sharng said Natural Health Trends is looking to build its product line and infrastructure, while enhancing leadership development, training and incentives for the company’s distributors.

May 01, 2015

Publisher's Note

6th Annual Global 100 Celebration Was a Smashing Success!

by Lauren Lawley Head

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


On April 8, we unveiled the 2015 Direct Selling News Global 100 list. We were privileged to have several hundred of you in attendance to celebrate with us at the Global 100 banquet in Dallas, and many thousands more followed along online or on social media.

Lauren Lawley Head

This year marks the sixth year for the Global 100 project, and each year it has gotten bigger and better. As we embark on the research, we strive to identify the largest companies embracing direct sales as an incredible channel of distribution that effectively brings unique, high-quality products and services to the marketplace while also giving people from all walks of life access to a path to entrepreneurship. The list has become a benchmark for the direct selling community and inclusion on it a point of much-deserved pride.

As you know, many of the key players in our community are privately held, and we poke, prod and cajole their executives into sharing financial details about their companies in an effort to bring more transparency about the success of direct selling to the world. Thanks in part to their shared vision, we are able to say with confidence that the 100 largest direct selling companies had combined sales of nearly $82 billion in 2014 doing business in more than 100 countries.

Our June issue will be dedicated to coverage of the list, with profiles of each company and in-depth analysis of the results. Expect to see a number of dramatic growth stories, including a $400 million increase in net sales by our Bravo Growth Award winner Mary Kay. You’ll also learn more about our Bravo Leadership Award honoree, Ambit Energy CEO Jere Thompson Jr., who has led that company to the No. 12 spot on the Global 100 with $1.5 billion in net sales in 2014, up $300 million from 2013, in just a few years. In all, 13 companies joined the $100 million growth club in 2014, each one an impressive achievement.

This year, we are excited to introduce a new component to the project: The North America 50. As its name implies, the North America 50 is a subset of the Global 100, and our June issue will feature both lists. The companies on the North America 50 are the most significant players in one of the world’s largest direct selling markets, and we were honored to have more than two-thirds of them attend the banquet. The North America 50 ranking is based on the global revenue of North American-based companies.

Jere Thompson Jr.Global 100 Keynote Speaker Jere Thompson Jr., Co-Founder and CEO of Ambit Energy

As always, we owe a great deal of thanks to our Global 100 sponsors, whose generous financial support makes the annual banquet possible: platinum table sponsors ACN, Amway and Mannatech; gold table sponsors Ambit Energy, Isagenix, It Works!, Nerium, Nu Skin, Rodan + Fields and Stream Energy; and silver table sponsors Immunotec, Mary Kay, PartyLite, Plexus Worldwide, Scentsy, WorldVentures and Zurvita. If you would like information about how your company can become involved in the Global 100 project, please let me know. We would love to include your information in our research outreach for next year’s list, and executives from every direct selling company are invited to attend the banquet.

Even as they were gearing up for the Global 100 festivities, the Direct Selling News staff was hard at work crafting the material for this edition of the magazine. Inside, you’ll find great insights on how companies and their independent consultants are bringing a contemporary approach to traditional selling parties, how Team Beachbody has surpassed its direct response sibling, what Princess House is doing to make the world a better place and who is behind the social media magic that’s driving growth at Younique. Each story includes specific lessons that can be applied to any direct selling company. I especially like this gem from Princess House President and CEO Connie Tang: “Any changes we make—whether it’s to the compensation plan, the products, anything—still need to carry our values. Those can be shared cross-generationally. Millennials may express themselves different, but the values are the same.” Great advice for any company looking to join the Global 100 or move up the ranks.

It’s been a little more than a year since I joined the DSN team, and I continue to enjoy learning more about the wide variety of companies choosing direct selling. The innovation and success happening throughout the channel is exciting, and we appreciate the opportunity to share those stories. I hope to see many of you later this month in San Antonio at the Direct Selling Association’s annual meeting. Be sure to stop by our booth and say hello. It’s also a great time to make sure that everyone on your team who could benefit from a subscription to Direct Selling News is receiving one. Our team will take good care of you, and I look forward to the opportunity to connect in person!

All the best,
Lauren Lawley Head
General Manager

May 01, 2015

Cover Story

The Pulse of Today’s Party

by Courtney Roush

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


Back in the early days of direct selling, legends like David McConnell, Mary Kay Ash, Mary Crowley, Charlie Collis and others ushered in a new business model and created a seismic shift in seller demographics. The concept of home parties was an immediate hit with women, and it would show the old model of door-to-door sales… well, the door.

Home parties gave women the flexibility to build a business on their schedules and on their own terms. The atmosphere of a party made it more comfortable for women to sell products, grow their businesses and realize their potential for success. It was within the home that lifelong relationships with customers—some of whom would become team members—were born. Unhurried, face-to-face interaction was everything; and for consumers, being invited into someone’s home showed an implied trust that greased the wheels for an easygoing and loyal friendship with their consultants. That rich history is why parties have always been a powerful way to introduce prospective customers and future team members to the wealth of products and boundless opportunities this industry brings.

Changing times, expansive technology and shifting consumer behaviors have all affected the traditional definition of the home party. Some companies have removed themselves from the realm of party plan altogether by referring to their offerings as “social selling opportunities.” Some have sounded the death knell of the party, believing it to be outdated and stale. Yet still other companies such as Zurvita and Nerium, not traditionalists in the party plan legacy, are looking for success in adapting the traditional model and training their field to leverage the group-selling dynamics.


Changing times, expansive technology and shifting consumer behaviors have all affected the traditional definition of the home party.


Lately, the increased use of technology also adds interesting layers to questions about what actually constitutes a “party.” Technology often plays a key role in the before-, during- and after-party interactions. Sometimes technology is the only interaction, with posts on a Facebook page, a Twitter feed or a link to a promotional video creating virtual parties.

A ‘Party Plan Panel’ Weighs In

These questions and new approaches to the traditional party plan model inspired Direct Selling News Publisher and Editor-in-Chief John Fleming to lead a panel discussion during SUCCESS Partners University held April 8–9 in Dallas. Panelists included Orville Thompson, Co-Owner and CEO of Scentsy; Connie Tang, President and CEO of Princess House; and Mike Lohner, Chairman of the Board of Stella & Dot. Each agreed that the party isn’t over yet, although its definition now is broader than it has ever been.

During the session, the panelists discussed three major challenges faced by the direct selling industry, articulated by Thompson: brand fatigue, commoditization and generational adaptation.


Panelists [at SUCCESS Partners University] discussed three major challenges faced by the direct selling industry: brand fatigue, commoditization and generational adaptation.


Brand fatigue refers to a market becoming saturated with a large group of consultants, and people in similar circles are invited and reinvited to similar parties. Brand fatigue can also affect recruiting for the same reasons, becoming a barrier for a new consultant to be excited about a specific opportunity. It can also affect the willingness of hosts to muster the energy to hold a party.

With brand fatigue, consultants find that their success has anchored them firmly in the sand. The companies they represent are household names, and the novelty has worn off. Parties may become less successful and less energized as consultants have trouble finding those willing to host a party multiple times. Regional brand fatigue can be a common stumbling block too, for example, if a ZIP code is flooded with consultants tapping the same groups of people at school and at work to be a host.

Tang explained an interesting twist on this idea, calling it, in the case of longtime Princess House customers, “misplaced brand fatigue.” She said this happens when consumers who purchased your products ages ago are under the mistaken impression that you’re the same company decades later with the same product offerings. Tang says, “People will tell us they have our crystal up in the attic years later. How do we dispel the notion that we’re still just a crystal company? Those who bought our crystal don’t know that we now have cookware. This is our challenge.”

And brand fatigue isn’t just a consumer problem. “It affects consultants, too,” Lohner says. “As direct selling companies, we have to keep our brands vibrant. People buy products based on how they make them feel, and we have to think about this every single day. We also have to help consultants overcome their own brand fatigue. Then churn rates go down, and business really booms.”


The whole of direct selling was built on two concepts that never go out of style: exceptional customer service and social fun.


Commoditization refers to the growth of additional competition in the marketplace for similar products, especially those produced on a large scale. For example, some product lines such as affordable home décor or even scented wax warmers for a time were only available through the independent consultant holding home parties. As those product lines succeeded, new companies emerged and giant retailers such as Wal-Mart and Target began offering similar items on their shelves. The scale of the competition adversely affects the ability of a smaller direct selling company to remain competitive.

Both brand fatigue and commoditization have inspired many companies to launch additional brands in an effort to keep product offerings exciting and relevant—and capture and retain more consultants and customers. Scentsy is one example. Its status as the first flameless candle was intruded upon by competing brands entering the retail space, as noted above. Scentsy ultimately launched three additional brands, only to shut one down later. Trial and error, Thompson says, comes with the territory of building brands.

Generational adaptation refers to the lag time that exists as each generation, with its own demographically driven “personality,” turns the reins over to the next, and the adjustments a company must make in messaging, training, product presentation and even product development in order to remain relevant to that new generation. For example, Gen X—characterized by many for pragmatism—must make way for millennials, known more for their idealism.

Tang says her company turns to its core consultants for input before initiating big changes. “We need to ask those consultants, ‘Does this shift fit?’ ” she says. At Princess House, “we dove into what made our longtime consultants successful. We asked ourselves, ‘What do they know that we can learn?’ ”

While it may seem counterproductive to reach into the past to find out how to be successful in the present, it’s not, Tang emphasizes. “Any changes we make—whether it’s to the compensation plan, the products, anything—still need to carry our values. Those can be shared cross-generationally. Millennials may express themselves differently, but the values are the same.”

In truth, every product company, including large-scale retailers, faces those challenges in various forms. Still, all three of those market realities make it imperative for direct sellers to ask themselves—and often—how to keep their longtime consultants moving up while they reach out to newcomers. The home party continues to evolve against that backdrop.

Customer Service, Fun and the Role of Technology

So why does the home party continue to work for some companies? Perhaps it’s because the whole of direct selling was built on two concepts that never go out of style: exceptional customer service and social fun. Customer service remains important to customers. In fact, in the world of commoditization, excellent customer service may be the only true differentiator for maintaining a viable competitive advantage. While technology can certainly support customer service, it can never replace it. The most successful independent consultants are those who use technology as an enhancement, not a replacement, for real-life gatherings and personal interactions.

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In an effort to keep current with trends, Zurvita put a strong emphasis on technology in the beginning, only to discover that “old-school service still works best,” says Mark Jarvis, Founder, Co-CEO and President. “We’ve really made a push in the last year to get back to the basics of relationships, and it’s been the best thing we’ve done. We’ve seen recruiting go up, and with those new recruits, more activity within the first 30 days.”

That isn’t to imply that Zurvita reps’ mobile devices and PCs are gathering dust. “Obviously, we still use technology; it gets people to parties. Teaser videos, texting, social media posts—all of that helps. But I think people have started relying too much on technology. With this shift we’ve made back to basics, they’re having fun again.”

Which leads us to the second bedrock of direct selling: fun! The chance to socialize with others and meet new friends while shopping for great products is the exclusive domain of the home party. Humanity’s need to socialize, coupled with a good host program and great products, will keep the home party going strong for some companies.


“We’ve really made a push in the last year to get back to the basics of relationships, and it’s been the best thing we’ve done.”

—Mark Jarvis, Founder, Co-CEO and President, Zurvita


Nerium International encourages its consultants to build their own parties and get creative. “We’ve seen guests come back to parties repeatedly just to have fun,” says Mark Smith, Chief Field Officer. “It’s such a relaxed setting that they want to be part of it—and eventually, they’ll buy something.”

Party settings for various products could be at a coffee shop, a restaurant or wherever people put their feet up at the end of a long day, but it appears the majority of parties continue to happen in the home. And using the word “party” is up to the consultant. Some may call it a “gathering,” “get-together” or other term; the creative license is all theirs.

At Ava Anderson Non Toxic, the term “party” has been replaced with the moniker “avaHOURS” to emphasize their 60-minute duration, which busy customers find appealing. Consultants devote 20 minutes to education, 20 minutes to product sampling and 20 minutes to closing. “Successful consultants are able to read the room, gauge their guests’ engagement and the questions they’re asking, and determine if they want to tailor their approach or shorten or lengthen the presentation,” CEO Ava Anderson says.

Flexibility is also a form of customer service, meeting customers where it’s convenient for them. Sales consultants for Thirty-One Gifts can hold parties anywhere they can access Wi-Fi, so they hold them not only in the home, but at restaurants, libraries and other public places, according to Leesa Martin, Director of Market Research. Many of the consultants who host fundraisers will often host the party at a nonprofit—the Humane Society, schools, hospitals and more.

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“We’re also seeing a trend toward augmenting live parties with virtual online parties,” Martin continues. “Our consultants often use Facebook to reach people who couldn’t come to an in-home party and to actually host a party. They can reach people at their convenience and can host a party for people who live long distances away.”

Some might argue that a customer’s experience—and a consultant’s bottom line—both are enhanced by the opportunity to hold products, sample them on the spot and discuss complementary products.

“Consumers are asking more questions now. They’re informed, and they want to know about product ingredients,” says Mark Smith. “So that means we have to be prepared to answer customers’ questions. We have to be the one-stop shop.”

In our overscheduled world, a direct selling party offers consumers a chance to pause—and that’s another significant factor behind the popularity of this business model. “People are so busy every day that a party really needs to be a fun escape from commitment instead of an additional one,” says Sara Friedman, Vice President of U.S. Marketing for Mary Kay. “Parties have become less formal and often are come-and-go social events versus having to be at the party for the entire time.”

Thirty-One’s Martin agrees. “For a company that’s had more than 1 million parties in the past 11 years, we’ll always have them because parties give women an opportunity to connect with family and friends in today’s busy world,” she says. “Parties enable stay-at-home moms to get out of the house for a little while and connect with girlfriends, and working women get to relax and be with friends whom they may not have time to connect with in person otherwise. It’s something women enjoy.”

Tammy Smith, a Chief Field Officer with Nerium and wife of Mark Smith, adds, “We want this business to be built around people’s lifestyles. Parties are designed based on what people like to do in their downtime—how they relax.” And that means everything from a wine and cheese gathering to a dessert party, a Mardi Gras-themed bash, or pizza and beer with the guys. “Nobody wants to leave work, come home, change clothes and then go to a business meeting. They want to go from their jobs to a relaxed setting,” she says.

Technology Raises the Bar on Service

In keeping with the industry’s “people-first” principles, direct sellers increasingly are leveraging technology to help independent consultants retain loyal customers. Technology enhances Thirty-One’s customer experience, allowing them to preview embroidery on products and experiment with thread color, font, size and more. “Our new technology also facilitates bulk personalization,” Martin says, “making it much easier for consultants to submit large orders of products with the same personalization—a Little League team, for example.”


“People are so busy every day that a party really needs to be a fun escape from commitment instead of an additional one.”

—Sara Friedman, Vice President of U.S. Marketing, Mary Kay


In recent years, Mary Kay has rolled out a series of mobile and online tools designed to help consultants market their products in an interactive and fun way, enhance the “try before you buy” experience for customers, and capture the attention of more millennials. Apps—among them the Mary Kay Virtual Makeover, Show and Sell, and a Regimen Advisor—may be used during parties to show videos, share product benefits and discuss the business opportunity; while follow-up tools like automatic reorder reminders and e-catalogs can help sales continue long after the party has ended.

All consultants can use technology to “warm the market,” so to speak. Initial contacts are generally people closest to them—neighbors, friends and family—who may be more readily receptive to a home party. Once a consultant steps outside that familiar circle, they’re more likely to use technology as a means of introduction, a way of getting acquainted with potential new customers and even recruits.

Company executives agree that no matter how materials are provided to the salesforce, what will never change is the importance of their direct relationships with their customers. Technology, especially social media and communication tools, simply makes managing those relationships quite a bit easier.

People First—Always

In the next three to five years, what can we expect to see? Varying degrees of technological bells and whistles, a continued emphasis on understanding consumer expectations across demographics, and above all, maintenance of that gold-standard personalized service for which direct selling is revered.

“Homes will remain the primary party location, as they’re warm, welcoming and inviting,” Friedman says. “I think presentations will continue to become shorter, with more testimonial-style sharing among friends, as that fits a come-and-go party. Perhaps a YouTube video that any guest can pull up will give additional depth to what the Consultant, hostess or other guests have shared about a product. Orders will continue to be placed with the assistance of technology so that receipts will be texted or emailed, and inventory can be replenished with the push of a button. While technology is a big part of the ordering process today, it will be even more streamlined in a few years.”

Mark Smith at Nerium anticipates the future for their parties will include tying several together with a Skype presentation given by one of the leaders. “In the years ahead,” he says, “relationship marketing will become a more digital arena.”

Thirty-One’s Martin adds that while she anticipates technology continuing to make it easier, faster and more efficient to have a party, “personal relationships and fun” will remain at the center.


“We understand the power of selling what we love to people we love, so we can help make their world a better place.”

—Mike Lohner, Chairman, Stella & Dot


Mark Smith adds, “Relationships are the ‘super glue’ that holds the industry together. We have to balance high-tech versus high-touch. We can’t take people out of the people business.” Indeed, many direct sellers can share stories of lasting friendships made between consultants and their customers.

Perhaps part of the reason why the party is still going strong is that in this sea of technology in which we’re all wading, personal contact stands out as an anomaly. When it comes to the art of conversation, direct selling has the market cornered. Superior customer service and long-lasting relationships remain timeless trends, but make no mistake: The industry is solely focused on the future.

And as for the challenges facing the industry today? Stella & Dot’s Lohner sums up the optimism that pervades an industry that offers opportunity to people from all walks of life: “The emotion, passion and joy that can come from this business make up our secret sauce. We understand the power of selling what we love to people we love, so we can help make their world a better place. Keeping this in mind can help us overcome these challenges, which every business faces. We can build something not just world-class, but world-changing.”

April 30, 2015

U.S. News

Avon Posts Earnings Miss on Weakening Domestic Sales

Avon Products Inc. (AVP—NYSE) posted first quarter results on Thursday amid reports the company is considering a sale of its North American business. Earnings fell below Wall Street estimates as domestic revenue continued to decline and the strong dollar overshadowed growth in foreign markets.

Quarterly revenue dropped 18 percent to $1.8 billion, a 1 percent increase in constant dollars. North America revenue was also down 18 percent, hurt by the market’s 17 percent decrease in active representatives. Overall, the company’s representative count was down 1 percent from 2014, though up on a sequential basis.

Earlier this month, The Wall Street Journal reported that Avon is exploring options to hasten a turnaround, including a possible sale of its deteriorating North American business. CEO Sheri McCoy addressed the media attention at the beginning of Avon’s earnings call on Thursday. She said the company aims to provide sustainable, profitable growth while creating value for its shareholders and opportunity for its representatives, and declined to comment further.

Excluding some items, earnings came in at 4 cents a share, a 67 percent decline from last year. Analysts had predicted earnings of 7 cents a share in the period. Diluted losses were 33 cents a share versus 38 cents a year ago. The results reflect a higher adjusted tax rate of 67.9 percent, compared to 46.3 percent in the first quarter of 2014.

The cosmetics maker reported constant dollar growth in all foreign markets, with EMEA leading the way at 9 percent over the prior year. Management said currency pressures were higher than anticipated in the quarter.

April 30, 2015

U.S. News

Shaklee Unveils Global Innovation Center

Photo: Shaklee Chairman and CEO Roger Barnett (second from left) leads a ribbon-cutting ceremony at the Dr. Forest C. Shaklee Global Innovation Center.


Health and wellness brand Shaklee Corp. has announced the official opening of its new Dr. Forest C. Shaklee Global Innovation Center, located near the company’s headquarters in Pleasanton, California.

The state-of-the-art facility will house Shaklee’s entire R&D department, including more than 50 scientists. The center’s namesake, Dr. Shaklee, is the founder of the company and a pioneer in the development of the multivitamin—a foundational product for Shaklee since its creation in 1956. As its name implies, the Global Innovation Center will focus on product innovations, as well as testing and quality control.

“The new Global Innovation Center will allow for collaboration and promote the use of technology and research to help improve the health span of people all over the world,” said Dr. Elizabeth Blackburn, Nobel Prize Laureate and Shaklee Corp. Scientific Adviser, on hand during the center’s ribbon-cutting ceremony.

In the development of its nutrition, household, and personal-care products, Shaklee has published more than 90 peer-reviewed studies in scientific journals. The company also fosters open innovation by partnering with leading scientists and university programs to discover nutritional trends and technologies.

April 29, 2015

U.S. News

LifeVantage Names Darren Jensen as CEO

The search for LifeVantage’s new President and CEO has ended with the appointment of industry veteran Darren Jensen, effective May 18. Salt Lake City-based LifeVantage announced Wednesday that Jensen will succeed Douglas Robinson, who resigned in February after a four-year tenure with the company.

“The Board quickly recognized that Darren’s unparalleled track record of success with leading the development and execution of business expansion and sales growth strategies makes him the right leader for LifeVantage,” said Garry Mauro, Chairman of the Board of Directors for LifeVantage, calling Jensen a “respected visionary leader” within the industry.

Jensen’s 25 years of direct selling experience has included senior roles at several DSN Global 100 companies. He has led development and execution of global sales, product development and service expansion strategies, most recently as President of the Americas and Chief Sales Officer at a fast-growing personal-care and nutrition brand.

LifeVantage, the No. 34 direct selling company in North America with $214 million in 2014 revenue, reported lagging sales in its second quarter ended Dec. 31, 2014. Revenue dropped from $52 million in the prior year to $48 million, impacted by lower sales in Japan. Outside the Japanese market, revenue increased 1.6 percent compared to the second quarter of 2014. LifeVantage will report its third quarter results on May 6.

April 28, 2015

U.S. News

New Market Research Focuses on Hispanic Millennials

Hispanic millennials in the U.S. are the subject of an ongoing research study developed by cross-cultural advertising agency Sensis and market research firm ThinkNow Research. The Hispanic Millennial Project is unveiling its fourth wave of research, focused on the retail and shopping behavior of this key demographic, which represents 21 percent of all millennials in the U.S market.

The project studies Hispanics’ attitudes toward health and nutrition, financial services and—in its forthcoming report—retail behaviors in the food and beverage category. The first wave of research introduced Hispanic millennials and provided context for this influential group at the intersection of two prominent demographics.

Hispanics already represent the majority of millennials in key metropolitan areas such as Los Angeles, Miami and San Antonio; however, the research indicates that in the five years from 2013 to 2018, non-traditional markets such as Indianapolis, Atlanta and Nashville will experience the fastest growth among this demographic.

Hispanic millennials do not merely represent future buying power; those who live with their parents are currently contributing more to household expenses than their non-Hispanic counterparts. Thirty percent reported that they contribute either half or the majority of their finances to their household, compared to only 9 percent of non-Hispanic millennials. In contrast, 30 percent of non-Hispanic millennials reported that they do not contribute at all financially to household expenses.

ThinkNow Research surveyed 900 individuals, representing equal segments of Hispanic millennials, Hispanics 35+ and non-Hispanic white millennials. In addition to the online survey data, the report takes into account third party studies and syndicated research from outlets such as the U.S. Census Bureau.

April 24, 2015

World News

Eco-Friendly Direct Selling Brands Make Major Strides in Sustainability

In the spirit of Earth Day and Arbor Day—both occurring this week—DSN is spotlighting some of the ways direct selling companies are taking a sustainable approach to business. Click through to learn more about the eco-friendly initiatives happening daily across the industry.

  • The Arbor Day Foundation has named Mary Kay Inc. the recipient of its 2015 Promise to the Earth Award for its tree planting and conservation efforts. The cosmetics brand is a corporate partner of the foundation, alongside organizations such as Disney, FedEx and Toyota. Through its Pink Doing Green campaign, Mary Kay has committed to planting 1 million trees around the world, achieved zero landfill status at eight of its facilities, powered its Dallas-area facilities with renewable energy, and saved millions of gallons of water.
  • Avon Products Inc. announced Wednesday that its Healthy Forests, Beautiful World fundraising program has topped $7.5 million in donations for global reforestation efforts. The New York-based company partners with The Nature Conservancy and World Wildlife Fund to support the critically endangered rainforests in Brazil and Indonesia. In its announcement, Avon also introduced an Earth Day tote bag available to U.S. customers. For each bag sold, Avon will donate $2 to Healthy Forests, Beautiful World.
  • Sustainability is the mission of Viridian Energy, a renewable energy provider based in Connecticut. This week the company released its annual Sustainability Report, reviewed by Ernst & Young, on the environmental benefit of its products. For example: Since Viridian’s founding in 2009, it has helped customers avoid 5 billion pounds of CO2 emissions, the equivalent of recycling more than 35 billion plastic bottles. The company has also organized dozens of local cleanup and planting projects across the country through its Earth Month campaign.
  • On Thursday USANA Health Sciences Inc. announced its new Climate Registered status, meaning the company has measured its carbon footprint, with third-party verification, and reported the data through The Climate Registry. The reporting enables USANA to gauge its environmental impact, identify inefficiencies and anticipate future regulation. Through its ongoing USANA Green initiative, the Salt Lake City-based company is also saving 2.67 million gallons of water a year, cutting a third of its greenhouse gas emissions, recycling 50 percent of its waste and more.

April 23, 2015

U.S. News

ViSalus Expands On-the-Go Offerings with NEON Energy Drink

ViSalus is adding to its portfolio of nutritious, on-the-go snacks with another strategic acquisition, this time in the booming energy drink category.

At its National Success Training event in Florida earlier this month, the healthy lifestyle brand introduced independent Promoters to its latest offering, NEON Energy Drink, acquired in a January deal with Altairia Corp. NEON is the creation of Altairia President and CEO Dakota Rea, who has since become a ViSalus Promoter.

The company’s national event also featured a birthday bash celebrating 10 years in business. The past year has been an eventful one for ViSalus. In September, co-founders Ryan Blair, Blake Mallen and Nick Sarnicola led a management buyout to regain ownership of the company from Blyth Inc., which now holds just 10 percent of ViSalus common stock.

Discussing the deal with DSN, Mallen said the brand will maintain its original product strategy of becoming the “largest healthy fast food provider in the world.” With that aim ViSalus has expanded its product portfolio of nutritious shakes and cereals with the acquisition of Go Bites, tweaked and launched in September as the Vi Bites line, as well as NEON Energy Drink.
 
Energy drinks are a hot commodity, with industry sales of $27.5 billion in 2013, according to market research firm Euromonitor. Global sales skyrocketed 620 percent from 1999 to 2013, and sales of energy drinks are rapidly approaching the level of coffee sales in the U.S.
 
With the launch of a decidedly global product, ViSalus sees an opportunity to build its international markets. NEON has at least one factor setting it apart from the competition: the drink earned its name from the glow it emits under black light, due to an element found in the South American Cinchona tree.

April 22, 2015

U.S. News

Tupperware Posts Healthy Q1 Earnings, Weak Outlook

Tupperware Brands Corp. continued to feel the effects of a strong dollar while beating analysts’ estimates with a 12 percent drop in first quarter sales, according to the company’s earnings results posted Wednesday.

Revenue totaled $582 million, landing in the middle of Tupperware’s guidance for the quarter. In emerging markets, which account for two-thirds of its sales, the kitchenware company posted an 8 percent increase in local currency versus 2013.

Earnings fell from $52.2 million a year ago to $29.5 million, or 59 cents per share. Minus one-time costs, earnings came to $1.02 per share, exceeding the Zacks Investment Research concensus estimate of 98 cents a share.

Chairman and CEO Rick Goings pointed to Tupperware’s Argentina, Brazil, China, U.S. and Canada, and South Africa businesses as significant drivers of sales growth. The highest sales spike came from the South America region, where revenue was up 37 percent in local currency and dipped 21 percent in dollars, partly due to currency issues in Venezuela.

Tupperware North America reported modest growth, with U.S. and Canada sales up 7 percent and the salesforce expanding by 8 percent over the prior year.

For the second quarter, the company projects modest profit of $1.14 to $1.19 a share, below analysts’ estimates of $1.23 a share. Tupperware also expects sales to be down 11 percent to 13 percent.

April 21, 2015

U.S. News

Reliv Brings LunaRich X Production In-House

Reliv International Inc. is taking over the production of its award-winning LunaRich X supplement with the installation of an in-house encapsulation line.

The addition to Reliv’s St. Louis-area headquarters will enable the nutrition brand to meet increasing demand and ensure quality control, said Chief Operating Officer Brett Hastings. “We can now manufacture more than 48,000 capsules per hour to support the growing businesses of Reliv distributors around the world,” Hastings shared in the company’s release. “The line will also keep costs low and pave the way for future encapsulated product offerings.”

LunaRich X is the company’s powerhouse lunasin supplement. Lunasin, a naturally occurring soy peptide, has been the subject of more than 80 published papers from dozens of research institutions. A University of Missouri study showed that Reliv’s LunaRich X supplement aids in promoting metabolic health. The product was named 2013 People’s Choice for Favorite New Consumer Product by the American Business Awards.

Reliv generated revenue of $57.3 million in 2014, down 20 percent from 2013. Following losses in the first half of the year, the company posted profit in the third and fourth quarters as changes to its compensation plan and a cost containment initiative took effect. Net income was $725,000 versus $777,000 in 2013, with earnings remaining steady at 6 cents per share.

April 20, 2015

U.S. News

Mary Kay Goes Country as Official Beauty Sponsor of the ACM Awards

Photo: Darrell Overcash, President of Mary Kay US, reveals Mary Kay as the Official Beauty Sponsor of the 50th Academy of Country Music Awards. (Mary Kay)


Mary Kay got back to its Southern roots on Sunday as the Official Beauty Sponsor of the 50th Academy of Country Music (ACM) Awards.

The Dallas-based brand showcased its beauty products in six commercials that aired nationwide during the awards show, dubbed country music’s party of the year. Mary Kay also hosted a booth at the two-day ACM Party for a Cause festival leading up to the event.

The 50th anniversary show drew a record-setting crowd to North Texas, where the live broadcast took place for the first time. The Academy reported that all 65,000 tickets to this year’s event sold in just 18 minutes.

“The 50th ACM Awards is a landmark event, and we’re thrilled to be part of a historic country music experience at one of the biggest venues in the country in our own backyard,” Sara Friedman, Mary Kay’s Vice President of U.S. Marketing, said in the company’s release.

The cosmetics brand generated buzz among its customers and consultants with—what else?—a makeover contest. Mary Kay jetted the winner to Texas for an exclusive fan experience at the show, where country icons such as George Strait performed, Luke Bryan took home the fan-picked Entertainer of the Year award, and Taylor Swift accepted one of the evening’s Milestone awards.

As part of its “Beauty Loves Country” campaign surrounding the ACMs, Mary Kay also produced tutorial videos featuring some of country music’s young talent. The segments show Mary Kay makeup artists creating red carpet looks for a handful of the industry’s rising stars.

April 17, 2015

World News

Nerium Sets Sights on Asia Pacific with Upcoming Expansion

Nerium International is targeting an up-and-coming anti-aging market for its next international expansion. The fast-growing skincare company has announced plans to launch its business in South Korea this June.

The 4-year-old brand first ventured beyond the U.S. last year with expansions into Canada and Mexico. In the same year, revenue increased 80 percent to $403 million, making Nerium the No. 40 direct selling company in the world and the No. 21 company in North America.

With its South Korea launch Nerium will introduce a patented new ingredient into its Optimera skincare line, which consists of just three anti-aging products.

“While every international expansion is significant, this launch is especially unique as we are introducing Optimera with the new SIG-1273 ingredient, offering advanced scientifically based products to our South Korean customers,” Nerium Founder and CEO Jeff Olson said of the company’s revamped formula. The patented SIG-1273 molecule, an antioxidant that mimics the skin’s natural age-fighting mechanism, is the product of 20 years of research by Princeton University biochemist Dr. Jeffry Stock.

Nerium President Roy Truett said that a receptive culture and high demand for anti-aging products influenced the company’s decision to enter South Korea. According to a recent report by Transparency Market Research, the global anti-aging market is poised to grow at a compound annual rate of 7.8 percent through 2019. The report indicates that South Korea and a handful of other markets in the Asia Pacific region will soon lead the world in sales of anti-aging products and devices.

Industry veteran BJ Choi will head up Nerium’s key new market as Country Manager of South Korea. Choi has accumulated more than 20 years of experience with various direct selling companies in the region.

April 16, 2015

U.S. News

Amway Recognized for Halal-Certified Nutrilite Products

Amway’s Nutrilite brand of vitamins and minerals has earned recognition from the Islamic Food and Nutrition Council of America (IFANCA), a global leader in halal certification and education. IFANCA has named Amway Company of the Year for excellence in compliance and execution of its halal-certified Nutrilite supplements.

The announcement took place during the 2015 International Halal Food Conference, held this week in Schaumburg, Illinois. According to IFANCA, an estimated 1.6 billion Muslims worldwide comply with halal, the religion’s dietary standard.

Nutrilite is the top-selling supplement brand in the world, and the only global vitamin and mineral brand to grow, harvest and process plants on its own certified organic farms. The products are halal-certified in 11 markets: Australia, Canada, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Africa, Thailand, Turkey and U.S.

April 14, 2015

Exclusive Interviews

Executive Connection with Andrew Lindsay, MBE – CEO, Telecom Plus


In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with Andrew Lindsay, MBE, CEO of Telecom Plus, about leading his company with trust, appreciation of self-starters, and simplicity in a complex business. 

DSN: What is the one thing you enjoy most about being the top executive at Telecom Plus/Utility Warehouse?

AL: What I enjoy particularly—and didn’t think I would when I joined—is the people. You have a self-selecting group of self-starters who join for an opportunity to change their lives. For those who do, they’ve come in with eyes wide open. They’re all fantastic people. When one looks at society today, there are a lot of people who aren’t determined to make their way in life. They’re happy to trudge along. Our distributors are not happy with that. I truly enjoy spending time with them.

Andrew Lindsay

DSN: What has been your greatest challenge?

AL: We run five businesses under one roof. Our job is to create simplicity out of chaos. That’s something of a brand pillar. But our business is bloody complicated! We have a lot of relationships in multiple corporate worlds that we have to translate into a singe bill for our members. Managing those five different businesses under one roof, if I change pricing on a home phone tariff, it will influence the number of gas customers we sign up. It’s a juggling act. It’s hugely challenging, but rewarding. Also, from a distributor perspective, I’m not someone who naturally wants to stand up and make speeches to 5,000 or 6,000 people. At least initially, my biggest hurdle was public speaking. Now I enjoy speaking to them.

DSN: You were an Olympic gold medal-winning rower. What did you learn from your athletic endeavors that helped prepare you to be the CEO of Telecom Plus?

AL: An achievement like that, which I was lucky to have at an early age, gives you lots of confidence. I’m not the kind of crazy entrepreneur who comes up with Google or Facebook, but I’m not daunted by things. My attitude is: Let’s face this problem. Running a business this size, there are endless challenges. Effectively, you’re a giant fire fighter. That’s something both Charles [Wigoder, Telecom Plus Founder] and I are blessed with—we’re cool under fire. You get the challenge; you don’t panic; you just see your way through it. With the carryovers from the psychology of sports to the psychology of being a distributor, I learned a lot about self motivation. What got me going and the reasons I was willing to make the sacrifices that let me be a successful athlete do transfer to what our distributors go through to be successful.

DSN: How would you describe the ideal Utility Warehouse Business Partner?

AL: He or she—genders are evenly split for us—is a brand ambassador for us. The way they behave reflects the values we aspire to. They need to be open, honest, transparent, and ethical. I don’t want some sharp-talking used-car salesman being our distributor. I want them to describe honestly what we do and how we do it. They’re totally aware of why they’re joining, and they understand what we’re trying to achieve. The ideal distributor doesn’t really exist. He or she comes in all shapes and sizes. But the best are self-starters who are trustworthy, ethical, and have a sense of humor. Life’s too short not to have fun.

DSN: What is your vision for Telecom Plus?

AL: Our vision is our mission: To be the nation’s most trusted utility provider. The words that come to mind are trustworthy, reliable, fair. Our brand reputation must clearly be synonymous with them. If we get those values and principles right, commercial success will follow.

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

AL: You have to behave in a certain way to earn trust. The outcome is trust, but there isn’t a single way in which one builds that trust. I know that I’m making our principles clear as a leader when everyone understands what our objective is and pulls together toward that objective.

DSN: What do you tell Telecom Plus Business Partners to lead and inspire them?

AL: There is a vast opportunity that Charles and I see ahead for everyone enrolled as a partner. There are many opportunities in life, but few that are as meritocratic as this one. I try to make it crystal clear that this isn’t a walk in the park; it’s hard work. But you get the results when you put the work in. Our top distributor is an ex-brick layer. Our company is filled with real people who have changed their lives through the business. I lean on them and look at them as role models that allow others to aspire to do what they’ve done.

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

AL: I’m not sure whether it’s advice or learning. There are very few challenges and problems that are insurmountable. You just have to sit in front of it and think about it. Take time out, shut the door, sit there, and just confront the challenge that’s ahead of you. Normally, you can work it out.

DSN: What do you see as our industry’s greatest challenge in the U.K.?

AL: Acceptance. It’s less challenging than it used to be. There have been too many failed network marketing businesses which undermined the belief in the industry. But inherently because we are a service-based business, we don’t view ourselves in that category. It’s also becoming less of a challenge because we’re now 17 years old. That helps us address the skepticism pretty well.

DSN: What do you like to do for fun?

AL: Get away from the office, turn off the phone, and play with my four sons and wife. We have four boys, ages 6, 5, 3 and 1. They keep me pretty busy. Scotland is also a passion. I love to take the boys to the west coast where we’re without a mobile phone signal.

April 14, 2015

U.S. News

J.Hilburn Builds Leadership Team to Support Strategic Growth

Custom menswear brand J.Hilburn is laying the groundwork for future growth with three recent leadership appointments within the company.

The Dallas-based brand has appointed apparel industry executive Andy Janowski, former CEO of British luxury retailer Smythson, to its board of directors. Janowski’s strategic and operational experience also includes executive roles at Burberry and Gap, where he served for 16 years.

“I am very excited to join the Board of Directors of such a strong brand,” Janowski said in the company’s release. “Very few brands today have the unique positioning and compelling proposition that J.Hilburn offers. I look forward to working with Veeral [Rathod, CEO] and his team to continue to strengthen and rapidly grow J.Hilburn.”

The company has also bolstered its sales and marketing team with two recent appointments. In December, J.Hilburn brought on Kristen Celko as Executive Vice President and Chief Marketing Officer. Celko’s background in the apparel industry includes marketing and e-commerce roles at Neiman Marcus, Under Armour and David’s Bridal. Melissa Bribois, a beauty and fashion executive with a direct selling background, joined the J.Hilburn team in June as Executive Vice President of Sales.

The appointments come amid steady growth at J.Hilburn, which has achieved more than $50 million in annual sales, up from $3.25 million in 2009. The company sells its made-to-measure and ready-to-wear offerings through a network of 2,500 personal Stylists in more than 40 states.

April 13, 2015

U.S. News

DSN Introduces First Ever North America 50 Ranking

Direct Selling News is providing a closer look at one of the world’s largest direct selling markets with the North America 50, a newly introduced subset of the DSN Global 100.

Since 2010, DSN has conducted research to identify the Global 100, an annual ranking of the top revenue-generating companies participating in direct sales as a channel of distribution. The North America 50, featured alongside the Global 100 in the June issue of Direct Selling News, ranks the top publicly and privately held direct selling companies in North America.

The region is home to the top four companies in the world—Amway, Avon, Herbalife and Mary Kay—and six of the top 10. Ada, Michigan-based Amway leads both rankings, with net sales of $10.80 billion. The North America 50 represents aggregate revenue of more than $51 billion.

View the complete North America 50!

April 13, 2015

U.S. News

2015 DSN North America 50 List

2015 DSN North America 50 List

DSN Announces the 2015 North America 50!

This marks the sixth year for the Global 100 list of top direct selling companies in the world, and we would not be Direct Selling News if we did not continually strive to raise the bar.

That is why we are pleased to share with you a new component of the project this year: The North America 50. As a subset of the Global 100, this list draws attention to the most significant players in one of the world’s largest direct selling markets.

As DSN embarks on the annual research for the Global 100, we continue to refine the process as we identify the largest companies and acknowledge their achievements while bringing attention to the magnitude of the direct selling industry as a whole. Within that context, the impact that North American companies have on the global marketplace as well as on those that buy and sell through this channel cannot be overstated.

The following contains the North America 50 ranking for the 2015 DSN Global 100 (based on 2014 revenues). Both lists will be published in the June issue of Direct Selling News.

 


2015 Rank

Company Name

2014 Revenue

1Amway$10.80B
2Avon$8.9B
3Herbalife$5.0B
4Mary Kay$4.0B
5Tupperware$2.60B
6Nu Skin$2.57B
7Ambit Energy$1.50B
8Primerica$1.34B
9Stream Energy$918M
10Shaklee$844M
11ACN $827M
12USANA$790M
13Isagenix$725M
14Thirty-One Gifts$643M
15Market America$626M*
15It Works!$538M
16Team Beachbody$518M
17AdvoCare$494M
18Arbonne$486M
19Jeunesse$419M
19Scentsy$419M
21Nerium$403M
22Team National$399M
24Nature's Sunshine$366M
25WorldVentures$352M
26PartyLite$347M
274Life Research$332M
28Rodan + Fields$330M
29Viridian $328M
30Plexus Worldwide$310M
31Origami Owl$250M
32Family Heritage Life$237M
33Southwestern$235M
34LifeVantage$214M
34Organo Gold$214M
36Take Shape For Life$206M
37Vemma$201M
38Mannatech$190M
39Hy Cite$178M
40CUTCO$165M
41Princess House$161M
42SEACRET$145M
43Youngevity$134M
44Natural Health Trends$125M
455LINX$109M
45CVSL$109M
47ARIIX$73M
48Immunotec$72M
49ASEA$70M
50Zurvita$69M

*An earlier version of the 2014 North America 50 list contained an incorrect revenue figure for Market America. The company has certified that its net sales were $626 million, ranking it No. 15 on the North America 50.

 

April 09, 2015

World News

Sixth Annual DSN Global 100 Ranks Industry’s Top Companies

Direct Selling News unveiled on Wednesday the sixth annual DSN Global 100, an exclusive ranking of the top revenue-generating companies in direct selling.

The DSN Global 100 is a collective effort to show the impact and potential of the $178.5 billion direct selling industry. The 2015 list, featured in the June issue of Direct Selling News magazine, represents aggregate revenue of more than $82 billion from companies based in 14 countries.

“The DSN Global 100 ranking is more than a list of who’s who and what was accomplished in terms of revenue for the prior year,” said John Fleming, Publisher and Editor in Chief of Direct Selling News. “By doing the research and publishing such a list, we spotlight the contributions that the top direct selling companies are making in communities and economies around the world.”

For the third consecutive year, Ada, Michigan-based Amway claimed the No. 1 rank, with $10.8 billion in revenue. Avon, Herbalife, Mary Kay and Vorwerk rounded out the top five on this year’s list.

For 2015, DSN introduced a new subset of the Global 100: the North America 50. As its name implies, the North America 50 ranks the most significant players in one of the world’s largest direct selling markets.

The annual event honoring the Global 100 companies took place Wednesday in Dallas. During the dinner and awards ceremony, DSN also presented its Bravo Awards for excellence. Cosmetics brand Mary Kay Inc. was honored with the Bravo Growth Award for its extraordinary $400 million growth in 2014. Jere Thompson Jr., Co-Founder and CEO of Ambit Energy and keynote speaker for the evening, received the Bravo Leadership Award for leading his employees, consultants and stakeholders to more than $1 billion in revenue in only seven years.

View the complete 2015 DSN Global 100!

April 08, 2015

World News

2015 DSN Global 100 List

DSN 100


DSN Announces the 2015 Global 100!

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

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

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

The following contains the ranking for the 2015 DSN Global 100 (based on 2014 revenues), our annual list of the top revenue-generating direct selling companies in the world. The list is published in the June issue of Direct Selling News.


2015 Rank

Company Name

2014 Revenue

1Amway$10.80B
2Avon$8.90B
3Herbalife$5.00B
4Mary Kay$4.00B
5Vorwerk$3.90B
6Natura $3.20B
7Infinitus$2.64B
8Tupperware$2.60B
9Nu Skin$2.57B
10JoyMain$2.00B
11Oriflame$1.68B
12Ambit Energy$1.50B
13Belcorp$1.40B
14Primerica$1.34B
15Tiens$1.16B
16Telecom Plus$1.10B
17New Era$928M
18Stream Energy$918M
19Miki$868M
20Yanbal$856M
21Shaklee$844M
22ACN $827M
23Pola$800M
24USANA$790M
25DXN$780M
26Cosway$749M
27Isagenix$725M
28Thirty-One Gifts$643M
29Market America$626M*
29Noevir$582M
30For You$560M
31It Works!$538M
32Team Beachbody$518M
33Rolmex$512M
34Forbes Lux$501M
35AdvoCare$494M
36Arbonne$486M
37Apollo$448M
38Jeunesse$419M
38Scentsy$419M
40Nerium$403M
41Yofoto$400M
42Team National$399M
44Nature's Sunshine$366M
45KK Assuran$362M
46For Days$360M
47WorldVentures$352M
48PartyLite$347M
494Life Research$332M
50Rodan + Fields$330M
51Viridian$328M
52LG Household & Healthcare$321M
53PM-International$313M
53Naturally Plus$313M
53Menard Cosmetics$313M
56Plexus Worldwide$310M
57LR Health & Beauty$303M
58Sunhope$288M
59Naris Cosmetics$282M
60Origami Owl$250M
60Charle$250M
62Family Heritage Life$237M
63Southwestern$235M
64Japan Life$229M
65Longrich$224M
66Pro-Health$221M
67LifeVantage$214M
67Organo Gold$214M
69Take Shape For Life$206M
70Maruko$205M
71Diana$204M
72Vemma$201M
73Mannatech$190M
74BearCere'Ju$185M
75Hy Cite$178M
76CUTCO$165M
77Princess House$161M
78AnRan$160M
79SEACRET$145M
79Koyo-sha$145M
81Youngevity$134M
82Natural Health Trends$125M
83Arsoa Honsha$118M
845LINX$109M
84CVSL$109M
86Kelti$102M
86Akasuka$102M
88Chandeal$89M
89Ion Cosmetics$88M
90Golden Sun$83M
91Ten Fu Tenmax$80M
92Vision Int'l People Group$79M
93Nefful International$75M
93Kasly Ju$75M
95ARIIX$73M
95Nature Care$73M
97Immunotec$72M
98ASEA$70M
99Zurvita$69M
100Kleeneze$63M

*An earlier version of the 2014 Global 100 list contained an incorrect revenue figure for Market America. The company has certified that its net sales were $626 million, ranking it No. 29 on the Global 100.

 

April 08, 2015

World News

Origami Owl Takes First Step into International Markets

Origami Owl is bringing its popular jewelry to the Canadian market with its first international expansion, the Phoenix-area company announced on Tuesday.

As a result of the expansion, Origami Owl’s 60,000+ U.S. distributors, called Independent Designers, will be able to sell the brand’s customizable jewelry to Canadian consumers, and vice versa. Origami Owl has brought on Marcia Cota, National Sales Director for Canada, to head up its new market.

“Like our Designers here in the U.S., our Canadian teams are sophisticated and hard-working. I have no doubt that with the combination of Origami Owl’s mission and this new opportunity, lives will be changed for the better,” Founder & Co-President Chrissy Weems said in the company’s release. “This is simply the next step in fulfilling our mission of being a global force for good.”

Founded in 2010 by then 14-year-old Bella Weems, Origami Owl adopted a direct selling model two years later. The brand debuted at No. 50 on the 2014 DSN Global 100, an annual ranking of the industry’s top revenue-generating companies. Origami Owl also earned DSN’s Bravo Growth Award for industry-leading growth of 870 percent in 2013.

April 06, 2015

U.S. News

DSEF to Host Multi-Industry Panel on Consumer Protection

The Direct Selling Education Foundation (DSEF) has tapped leaders from various industries to participate in a panel on consumer protection this week. The public event will take place Tuesday at the National Press Club in Washington, D.C.

Panel participants include moderator Howard Beales, Professor of Strategic Management & Public Policy, Regulatory Studies Center, George Washington University; Lynne Omlie, Senior Vice President, Secretary & General Counsel, Distilled Spirits Council of the United States; C. Lee Peeler, CEO of the Advertising Self-Regulatory Council and Executive Vice President of National Advertising, Council of Better Business Bureaus; and Joseph Mariano, President of the Direct Selling Association.

“This important public forum illustrates how different industries institute self-regulation frameworks that ensure a commitment to high ethical standards and consumer protection,” DSEF Executive Director Gary Huggins said in a statement.

As a part of the DSEF’s mission to promote ethical direct selling business practices and corporate social responsibility, the discussion will focus on the role of self-regulatory initiatives and their benefit to consumers. Commissioner Maureen K. Ohlhausen of the Federal Trade Commission will provide opening remarks.

April 02, 2015

U.S. News

Youngevity Closes out 2014 with Record Revenue

Photo: Youngevity distributors kick off the year with an incentive cruise.


Youngevity International (OTCQX: YGYI) continued its double-digit growth streak in 2014 by more than doubling revenue, the company reported this week. The San Diego-area firm is setting its sights on international markets as it continues to expand its portfolio of nutrition and lifestyle products.

Youngevity reported 2014 revenue of $134.0 million, a 56.5 percent increase versus 2013. Revenue derived from acquisitions was $14.5 million. Net income increased to $5.4 million, up from $2.7 million in the prior year, largely due to a $4.7 million tax benefit from adjustments to deferred taxes.

“If I had to put a label on 2014, I would call it the year of refinement because we successfully refined nearly every key component of the company,” President Bill Andreoli told investors during the company’s earnings call. Throughout the year, Youngevity made improvements to its product warehousing and logistics system, website and online shopping experience, field training and recognition systems, and both its acquisition and organic growth strategies.

The company’s ongoing acquisition strategy has positioned it across the Health and Wellness, Beauty and Care, Food and Beverage, and Home and Family categories. This year Youngevity added energy services, including renewable energy options, through a partnership with Energy Professionals. In addition to its direct sales segment, Youngevity operates CLR Roasters, a vertically integrated gourmet coffee business.

Youngevity’s direct selling revenue grew 51 percent for the year, totaling $116.3 million, while the commercial coffee business grew 101 percent to $17.7 million. At year-end, total assets were $55.7 million, compared to $34.9 million at the close of 2013.

The company’s leadership says that in 2015 and beyond it will focus on establishing the brand across international markets, which accounted for just 8 percent of 2014 sales. Youngevity reports significant growth in Canada, its largest international market, as well as Australia and New Zealand, where it recently obtained a facility three times the size of the existing one to support demand in the region.

Recent expansions include Russia, where Youngevity has opened a Moscow office, and Singapore, where it hopes to build distribution within the Asian marketplace. Youngevity is also building a presence in Mexico with an eye toward additional Latin American countries.

April 01, 2015

U.S. News

Don’t Miss our Global 100 Celebration in April!

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

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

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

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

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

April 01, 2015

Company Spotlight

Utility Warehouse: Bundles of Growth

by Barbara Seale

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


Company Profile

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

Andrew LindsayAndrew Lindsay

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

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

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

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

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

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

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

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

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

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

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

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

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

Reserved Approach

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

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


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


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

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

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

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

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

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


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

—Andrew Lindsay, CEO, Telecom Plus PLC


Tech/Marketing Partnership

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

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

Incentive tripPartners enjoy the view during a recent incentive trip.

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

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

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

Ample Accolades

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

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

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

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

April 01, 2015

Company Focus

Youngevity: Acquisition Is the Name of the Game

by Andrea Tortora

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


Company Profile

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


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

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

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

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

Energy Service Powering Growth

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

Youngevity headquarters in Chula Vista, California

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

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

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

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

Healthy Start Pak

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


Acquisitions: More to Come

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

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

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

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

Today Youngevity International manages two wholly owned subsidiaries:

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

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


International Expansion

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

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

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


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

—Brandon Primack, analyst, SeeThru Equity


Technology as a Differentiator

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

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

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


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

—Steve Wallach, CEO


Building the Ranks

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

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

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

What’s in Store from Youngevity

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

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

Health and Wellness

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

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

Memory-Keeping

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

Beauty and Care

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

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

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

Food and Beverage

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

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

Home and Family

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

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

April 01, 2015

Company Focus

Ava Anderson Non Toxic: Youthful Passion Drives Legacy Forward

by Courtney Roush

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


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


Company Profile

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

Ava Anderson Logo


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

Ava AndersonAva Anderson

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


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


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

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

A Direct Selling Legacy

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

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


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


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

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

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

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


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

—Ava Anderson, CEO


Sharing Her Passion, Leaving Her Mark

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

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

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

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



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


‘If Consultants Are Happy, Everyone’s Happy’

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

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

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

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

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

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


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


Parties Are the Foundation

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

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

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


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

—Kim Anderson, President


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

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

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

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


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

—Ava Anderson


Next Milestone: Graduation

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

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

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

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

April 01, 2015

Stock Watch

Stock Watch, April 2015


April 01, 2015

Publisher's Note

Every Experience Has Something to Teach Us

by Lauren Lawley Head


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


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

Lauren Lawley Headl

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

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

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

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

All the best,

Lauren Lawley Head
General Manager

April 01, 2015

News in Brief

News in Brief, April 2015


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


Herbalife’s Overhaul of Sales Plan Shows Promise

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

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

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

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

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

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

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


Foreign Markets Drive 7% Growth at Mannatech

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

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

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

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

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


Fortune Ranks Tupperware among World’s Most Admired Companies

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

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

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

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


Oriflame Consolidates Russia Operations in New Production Plant

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

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


Wellness International Network Unveils New Name and Product Offerings

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

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

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

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

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

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

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

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


China Gives Morinda the Green Light on Direct Selling

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

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

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

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


Mary Kay Renews Sponsorship of Dating Abuse Helpline

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

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

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

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


Nu Skin to Launch Essential Oils Line

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

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

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

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


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

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

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

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

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

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


CAbi Expands Partnership with Opportunity International

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

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

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

April 01, 2015

Cover Story

Don’t Forget The Basics: A Cautionary Tale

by Andrea Tortora

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


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


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

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


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

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

People First

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

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

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

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

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

A Closer Look

lia sophia

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

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

North American Power

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

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

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

Independence Energy Alliance

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

Lindt Chocolate RSVP

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

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

Gigi Hill

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

Jockey Person to Person

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

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

Jamie Oliver At Home

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

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

Solavei

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

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

The Antioch Cos. (former parent of Creative Memories)

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

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

Essentials to Success

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

From the corporate viewpoint:

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

From the field perspective:

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

Plan for Success

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

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

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

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

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


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


When Closure Is a Must

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

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

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

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

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


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

—Tim Brown, Founder, Jamie Oliver At Home


Operating Pressures

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

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

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


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


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

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

Attitude Is Everything

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

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

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

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


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


Research Advice

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

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

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

April 01, 2015

Executive Announcements

Executive Announcements, April 2015


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


Nature’s Sunshine Executive Takes on New Role

Wynne RobertsWynne Roberts

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

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

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

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


Nikken Chief Operating Officer Succeeds Leader of the Company

Ben WoodwardBen Woodward
Kurt FulleKurt Fulle

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

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

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


SimplyFun Taps Play Experts for Newly Formed Advisory Council

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

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

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

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

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

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

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

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


Tupperware Welcomes Its Next Managing Director in Germany

Christian DornerChristian Dorner

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

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

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

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


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

Dubli

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

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

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

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


Youngevity Adds to Its International Team

Ben HoBen Ho

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

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

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

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

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


NHTC Expands Its Board of Directors

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

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

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

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


TLC Names Vice President of North American Sales

Kenny LloydKenny Lloyd

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

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

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

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


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

April 01, 2015

Working Smart

Facebook: A New Era in Building Relationships

by Jim Lupkin and Brian Carter

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


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

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

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

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

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

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

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

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

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

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

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

2. Facebook Group Takes Distributor Culture Online

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

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

Here’s how a Facebook Group works:

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

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

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

Here are some tips to share with your independent distributors:

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

Takeaway: Facebook Group creates support for every distributor.

3. Your Facebook Profile Is Who You Are Online

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

Here’s how a Facebook Profile works:

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


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


Here are some tips to share with your distributors:

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

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

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

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

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

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


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


Here’s how that works:

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

Tips to share with your distributors:

There are two ways of staying in touch on Facebook:

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

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

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

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

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

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

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


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

April 01, 2015

DSA News

On Reputation, Audience is Key

by Paul Skowronek


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


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

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

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

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

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

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

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

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

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

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


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

March 30, 2015

U.S. News

Room for Growth: Plexus Worldwide Breaks Ground on New HQ

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


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

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

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

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

March 27, 2015

U.S. News

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

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

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

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

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

March 26, 2015

World News

Viridian Energy Brings Sustainable Power to Nicaraguan Community

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


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

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

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

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

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

March 25, 2015

U.S. News

Happy Employees Vote Primerica One of Georgia’s Top Workplaces

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


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

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

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

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

March 24, 2015

U.S. News

Fox Business: Herbalife to Launch Million Dollar Ad Campaign

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

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

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

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

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

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

March 23, 2015

World News

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

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

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

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

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

March 20, 2015

U.S. News

Jeunesse Announces Acquisition of MonaVie and mynt

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

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

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

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

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

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

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

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

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

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

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

March 19, 2015

U.S. News

Direct Selling Businesswomen Launch Initiative to Support Women Entrepreneurs

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

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

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

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

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

March 19, 2015

U.S. News

Wellness International Network Unveils New Name and Product Offerings

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

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

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

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

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

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

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

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

March 18, 2015

U.S. News

Solavei to Carry on Mobile Services with Merger Plan

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

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

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

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

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

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

March 16, 2015

U.S. News

Avon Drops off S&P 500 after 50 Years

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

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

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

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

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

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

March 13, 2015

U.S. News

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

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

March 12, 2015

World News

Herbalife Sets Guinness World Record with Global Workout

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

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

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

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

March 09, 2015

U.S. News

Nu Skin to Launch Essential Oils Line

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

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

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

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

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

March 06, 2015

U.S. News

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

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

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

March 05, 2015

U.S. News

Growth in Foreign Markets Boosts Earnings at Mannatech

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

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

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

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

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

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

March 04, 2015

World News

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

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

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

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

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

March 03, 2015

U.S. News

CAbi Expands Partnership with Opportunity International

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

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

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

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

March 03, 2015

U.S. News

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

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


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

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

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

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

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

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

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

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

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March 02, 2015

U.S. News

Herbalife Tops Expectations but Lowers 2015 Guidance

Photo: REUTERS/Lucy Nicholson


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

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

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

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

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

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

March 02, 2015

U.S. News

Creative Memories Finds a New Home and New Backing

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

March 02, 2015

Company Spotlight

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

by Beth Douglass Silcox

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


Company Profile

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


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

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

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

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

One Car Accident Away

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

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

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


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

—Jeff Bell, CEO


Competitive Advantage

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

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


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

—Kathy Pinson, Chief Operating Officer


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

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

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

LegalSheild

A Mission for All

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

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

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

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


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


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

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

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


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

—Jeff Bell


Changing of the Guard

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

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

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

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

Adaptable Sales Opportunity

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

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

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

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

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

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

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

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


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

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


The Way Forward

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

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

March 02, 2015

Company Focus

Guts Lead to Glory at Usborne Books & More

by Barbara Seale

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


Company Profile

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



 Randall White and Heather Cobb Randall White and Heather Cobb

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

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

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

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

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


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


Growth Genesis

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

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

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

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

From Lukewarm to Life-Changing

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

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

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

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

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

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

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

Luggage Love


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

—Heather Cobb, Vice President, Usborne Books & More


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

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

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

Return Customers

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

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

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

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

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

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

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

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


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

—Randall White, EDC CEO and UBAM Founder


Sales that Lead to Savings

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

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


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


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

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

High Touch and Tiaras

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

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

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

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

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

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

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

March 02, 2015

Industry with Heart

Rodan + Fields: A Prescription for Change

by Karyn Reagan

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

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


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


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


Company Profile

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


Amnon Rodan Amnon Rodan
Lori BushLori Bush

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

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

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



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


A Better Way

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

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

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

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

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

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


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


Offering a Hand Up

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

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

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

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

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


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

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


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

Fundraising in Action

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

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

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


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


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

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

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

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

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


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

—Kari Hayden Pendoley, Senior Manager, Prescription for Change


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

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

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

March 02, 2015

Working Smart

It’s That Time of Year

by William W. Olsen

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


Do New IBOs Know What to Do with Their 1099?

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

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

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

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


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


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

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

Start Date

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

Automobile Expenses

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

Business Use of Home (or Home Office)

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

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

Cell Phone

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

Meals and Entertainment

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

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

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


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


Travel

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

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

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


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


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

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

This is where true retention begins. 

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


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

March 01, 2015

Stock Watch

Stock Watch, March 2015


March 01, 2015

DSA News

Sharpening Our Focus; Securing Your Future

by Gary Huggins


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


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

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

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

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

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

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

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

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

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


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

March 01, 2015

Publisher's Note

On the Move

by Lauren Lawley Head

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


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

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

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

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

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

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

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

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

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

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

May your future be filled with success,

Lauren Lawley Head
General Manager

March 01, 2015

News in Brief

News in Brief, March 2015

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


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

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

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

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

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

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

Caleb HayhoeCaleb Hayhoe

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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


Amway Boosts Business with XS Energy Acquisition

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

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

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


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

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

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

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


USANA Sees Sales Surge in Fourth Quarter

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

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

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


North American Power Terminates Direct Selling Enterprise

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

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

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


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

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

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

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


Nu Skin Reports 2014 Financial Results

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

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

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


Team 4Life Welcomes Olympic Gold Medalist

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

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

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


Avon Losses Widen as Quarterly Earnings Drop

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

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

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


Stella & Dot CEO Addresses Inaugural Silicon Valley Conference

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

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

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


Tupperware Closes FY 2014 Beating Q4 Consensus

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

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


Rodan + Fields Begins Global Expansion with Canada Launch

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


AdvoCare Partners with MLS in Largest Sponsorship Yet

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

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

March 01, 2015

Executive Announcements

Executive Announcements, March 2015


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


Amway Plucks Asia Pacific CMO to Head up Global Marketing

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

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

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

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

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

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


LifeVantage Establishes Office of the President

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

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

Dave ManovichDave Manovich

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

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

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

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


Avon Taps Seasoned Leader as New CFO

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

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

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

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

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


LuLu Avenue Parent Elects Goldman as Board Chairman


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

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


Nature’s Sunshine Adds New Board Members

Rebecca Lee SteinfortRebecca Lee Steinfort
Hani Charles SoudahHani Charles Soudah

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

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

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

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

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


Herbalife Creates Local Government Affairs Role


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

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

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

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


Medifast Board Member Becomes an NACD Fellow

Barry B. BondroffBarry B. Bondroff

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

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

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

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


Mary Ann Luciano Joins Plexus Worldwide

Mary Ann LucianoMary Ann Luciano

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

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

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

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


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March 01, 2015

New Perspectives

The Rise of the Mission-Driven Marketplace

by Brian Knapp

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


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

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

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

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

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

The Evolution of the Mission-driven Marketplace

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

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

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


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


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

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

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


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


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

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

Preserving Memories for a New Generation

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

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

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


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