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February 01, 2011

Publisher's Note

Letter from John Fleming, February 2011


John FlemingOur cover story this month offers an overview of an exciting product category that is a strong testament to the direct selling way of doing business: jewelry and accessories. Not only are these products being viewed as fun to sell, but they are also seen as the perfect vehicles for budding entrepreneurs, offering business opportunities ranging from lower-end fashion jewelry and accessories to the more upscale products from the likes of Silpada Designs and others.

When we put the jewelry and accessories category on our editorial calendar last year, slating it for this issue, we had no idea how perfect our timing would be. Just as we were finalizing copy for this month’s publication, news broke regarding Sequoia Capital’s $37 million investment (and 10 percent stake) in Stella & Dot. So we hustled to bring you the insightful exclusive story we garnered from our interview with Stella & Dot Founder and CEO Jessica Herrin. As you’ll see, Jessica was very gracious in answering our questions about Stella & Dot and what the new relationship with Sequoia Capital will mean.

Sequoia Capital betting $37 million on Stella & Dot is the second-biggest story related to the jewelry and accessories category in the past six months. The first was the Avon acquisition of Silpada, reported in detail in our September 2010 issue. These two stories are certainly making a statement to those watching the direct selling channel of distribution. Growth is always the objective of any business, and the significant investments being made in direct selling companies (along with the recent recognition of direct seller Ambit Energy as the Inc. 500 growth company of the year) send a message on the viability of the direct selling channel and the outlook for those opting for that channel of distribution.

At Direct Selling News, we pride ourselves on bringing you timely and relevant stories. As each story we print is important to us, we are always reluctant to mention any one company story in particular. However, I have to admit that we were excited for the opportunity to do the Amway story that appears in this issue. We felt this story would be beneficial to industry decision makers not only here in the United States but around the globe as well. Amway is now the second-largest direct selling company in the world, and its recent challenges most likely differ exponentially from those experienced when the company was much smaller. In our exclusive story, Amway executives are open and candid about the branding challenges faced in the late ’90s and the shift to a different business model that even brought forth a new name. Today, the company is focused on rebuilding the Amway brand here in the United States—where revenues were up in 2010 versus the prior year—and expanding upon the growth of the Amway brand globally. Perhaps the most interesting aspects of this story are the candid comments from Amway executives and the strategic focus on the future relative to consumers and the brands within the brand.

From a personal point of view, I also thought the message Adolfo Franco, Vice President of Global Regulatory Affairs for the Direct Selling Association, shared about the importance of ethics to direct selling companies around the world was certainly one that holds a big key to the future of the direct selling way of doing business everywhere. As we observe companies come, and sometimes go, the best of intentions can lead to a less than desired result when ethical standards are broken. The lives of those who embrace the direct selling way of distributing goods and services can be changed instantaneously by any perceived breach of ethical standards—and such a breach can easily impact or create perceptions more negative than positive for the industry. A consistent focus on ethical standards provides the foundation to a growing and favorable marketplace.

Ethics is also touched upon in this month’s New Perspectives article by Dr. Greg Marshall, Chairperson of the Education Committee for the Direct Selling Education Foundation. Dr. Marshall brings us up to date on the new DSEF academic research initiative currently under way that will focus on fundamental issues relevant to today’s direct selling industry.

As we now move through the month of February and into March, we anxiously look forward to the year-end reports that will create many of the stories for 2011. As mentioned in last month’s column, our work on the DSN Global 100 ranking is under way. Changes from last year are anticipated, adding to the excitement relative to the new rankings. Please see page 22 for information on how to submit your data through our secure website.

I close this month with a salute to Rebecca Larson, our Managing Editor for the past year, who recently accepted an offer to advance her career on a different pathway. Rebecca made many contributions to Direct Selling News and we wish her much success as she embarks upon her new endeavor.

As always, we look forward to continuing to serve all of you who make the industry possible!

Enjoy the issue!

John Fleming
Publisher and Editor in Chief