![10
Making Dollars and Sense by emma Johnson
“Mad Money” market guru Jim Cramer recently
told his CNBC viewers: “Direct selling has never
gotten its due from Wall Street. It’s time we
recognize that the direct sales model works,
and it works well.” There is little question why
financial notables like Cramer, Warren Buffett,
Ray Chambers and Suze Orman have touted
businesses based on direct selling.
J
efferies analyst Doug Lane has long been a of salespeople’s homes, and
champion of the sector, which relies on its marketing and advertising
salespeople to market the product, mostly expenditures are minimal. “It
to their local community. Lane has told turns out [direct selling] may
investors that the model—also referred be the best way to sell goods in
to as network marketing—continued to thrive the developing world, where
throughout the recession in part because it offers people listen to testimonials—
the unemployed an easy, low-risk way to be in not advertisements and retail
business for themselves, and that it also capitalizes salespeople,” Jim Cramer told
on the fact that consumers prefer to buy products his audience.
from people they know and like. Other leading investors
The direct selling business model is also proving are nabbing opportunities
to be a bonanza in developing countries. Growth to profit from network
potential is huge because as these economies marketing. Warren Buffett “After years of skepticism, the
expand, their appetites for consumer goods grow has been a proponent of the investment community is finally waking
and previously underemployed women—who model since scooping up up to the viability of direct selling as a
have historically been the foundation of many The Pampered Chef in 2002,
direct sales organizations—are prospering, thanks calling it one of the best
good investment opportunity.”
—Doug Lane
to newfound economic opportunities. The most investments he’d ever made; he
recent figures show that within the $125 billion subsequently invested in seven
global direct sales industry, a mere $28.3 billion more direct sales companies. One of the most eye-opening events for investors
came from the United States, while $49 billion Even British mogul Richard Branson launched was last year’s IPO of direct sales financial services
came from the Asia-Pacific region, and Latin a direct sales cosmetics firm—now called Vie at company Primerica. Its impressive opening-day
American sales reached $18 billion. The sector’s Home—which he sold to direct sales investor performance on April 1, 2010, left investors—who
growth leaders were also in the developing world; Helmut Spikker last year. were oversubscribed by 21 times—confident about
India joined the list of billion-dollar nations, In 2002, private equity firm Whitney & Co. Primerica’s competitive advantage in the insurance
generating $1.06 billion in revenue for 2009. China invested $700 million in supplement giant and asset-management industry. Primerica closed
saw 2009 sales increase nearly $3 billion, and Herbalife. The investment made by Sequoia at $19.65 the first day—30 percent more than its
Russia, though it experienced a somewhat modest Capital into Stella & Dot in January of this year is initial public offering price of $15—after its market
gain of $200 million, still moved up to No. 9 in the certainly an example of how investors are looking debut. Its strong performance made it one of the
DSN ranking of the top billion-dollar markets in differently at direct selling companies and their top-performing IPOs for the year.
the world, with $3.06 billion in 2009 sales. leadership. Also earlier this year, Pre-Paid Legal “After years of skepticism, the investment
One reason investors love these companies Services agreed to sell to private equity firm community is finally waking up to the viability of
is that they have low overhead. There are few MidOcean Partners for $650 million in cash; the direct selling as a good investment opportunity,”
retail expenses, since the products are sold out deal is expected to close by the time we go to press. says Lane. “They’ve become true believers.” ■](https://image.slidesharecdn.com/wallstreetjournal-13091831864601-phpapp02-110627090654-phpapp02/85/Wall-Street-Journal-10-320.jpg)
![20
continued from page 18
Direct sellers won’t be left behind in the connect to one another. It has, however,
technology race, and some companies are at the dramatically changed the scope and reach of
very forefront. those connections, using the Internet to shrink
Nu Skin, XANGO, Amway, Herbalife, vast distances and connect “friends” without
Primerica, MonaVie, lia sophia and ACN are just geographic constraint.
a few of the direct selling companies to align the Today, 50 percent of the world’s population
power of apps on smartphones and tablets with is under 30, and 96 percent of them are
the company goals of recruitment, retention and estimated to have joined a social media
sales. The investment is paying off in a big way. network. But this trend does not stop with
“Anything that supports the story [of Nu the younger generation. The fastest-growing
Skin] is a strong ROI for us,” says Nu Skin segment of Facebook users is females 55 to 65.
Vice President of Business Technology Andrea Clearly, social media represents a permanent
Hayhurst. “These kinds of tools enable this shift in the way people communicate and form
mass of communicators [independent business relationships. It has also created a permanent
owners] to tell our story much more effectively.” shift in the way companies approach their
Mannatech Primerica, a financial services company,
provides term
customers. Johnson says, “Business is
happening on
life insurance social networks.
Pioneers as one of its Direct selling is the ultimate social Social networking
of Glyconutrition with products. business model, and technology leads to social
In the past, connecting, which
45 Global Patents enrollment is redefining perceptions of what leads to social
The Creators
for a new that’s all about. sharing. Groupon,
customer LivingSocial and
of Real Food Technology® was a lengthy others are not
Solutions paper process ‘selling socially’
with a waiting they are ‘sharing
period for socially’ and that
15 Years receiving leads to revenue
of Unmatched Product acceptance or generation.”
Innovation rejection, with ViSalus Sciences, a
additional weight-management
Social Entrepreneurs waiting for direct selling
A new breed of direct seller the rep to get company, has
paid. Today, incorporated
committed to ending global a Primerica social sharing as a
malnutrition representative strategic part of their
with a tablet marketing approach.
We Just Want to can present to The company
Change the World a customer, created a laser-
apply for the focused message
policy, get with their Body
it approved, by Vi Challenge
bind it, deliver and utilized social
it and get paid the commission in minutes. networks to spread that message to reach new
Primerica’s incorporation of hardware and audiences. CEO Ryan Blair says, “We have a
software apps into the daily experience of the simple, focused, authentic story that our fans are
representative illustrates the boost of power that excited about and because of that, we add over
technology adds to personal relationships. 1,000 new customers per day to our company.”
Technology is also expanding the reach Additional advancements over the coming year
of personal relationships. All people belong are sure to further contribute to the speed, power
to social networks of some sort; most people and reach of the direct seller, creating even more
are part of several social networks. People opportunity for connecting with new customers.
connect with others for many reasons, This combination of the successful distribution
whether it is for friendship, shared activities model of direct selling with the explosive
Mannatech.com or backgrounds, common causes or belief growth in communications technology can only
systems, just to name a few. Technology continue to play to the strengths of the direct
NASDAQ: MTEX has not at all changed the fact that people selling industry. ■](https://image.slidesharecdn.com/wallstreetjournal-13091831864601-phpapp02-110627090654-phpapp02/85/Wall-Street-Journal-20-320.jpg)
Wall Street Journal
- 1. 1 A Special Supplement to The Wall Street Journal by Direct Selling News The UlTimaTe Social BuSineSS Model Why Now Is Prime Time for Direct From March 2009 to May 2011, the Selling top 7 publicly In 2010, direct selling traded direct companies generated over selling companies $125 billion in revenue in averaged a 268 150 countries through more percent increase in stock price. than 75 million men and women who are changing lives serving others. This is the story of direct selling. INSIDE: DSN Global 100 Listing of the Top Direct Selling Companies in the World
- 2. 2 Inspiration. Leadership. Motivation. Everything the Entrepreneur Needs to Succeed THE TRUSTED MAGAZINE FOR SUCCESS ENTREPRENEURS & INTRAPRENEURS INTERVIEWS success.com/dsn Audio MP3 or CD O NLY with every issue $19.99 LIMITED-TIME OFFER SUBSCRIBE NOW FOR SPECIAL PRICING:
- 3. 3 Contents COVER STORY 11 Top Publicly Held Direct TECHNOLOGY 27 The Heart of Direct Serving the Direct Selling and Network Marketing Executive Since 2004 A SUCCESS Partner Company Founder & CEO Stuart P. Johnson 4 The Ultimate Social Business Model by Katherine Ponder Sellers Achieve Record Sales and Profitability by Tim Blackwell 18 Speed, Power, Reach by Teresa Day Technological advances in mobile Selling: The Home by Barbara Seale & John Fleming What’s the ideal home-based Publisher and Editor in Chief John Fleming [email protected] Direct selling is the original social More than half of the top 12 public devices and apps, as well as business? More than 15 million Managing Editor networking business … and now companies that sell direct have in social media tools, serve to Americans think it’s direct selling. Judith emmert is prime time for direct sellers. outperformed the average stock increase the speed, power and They represent the hundreds of [email protected] return by impressive margins reach of what’s already utilized in U.S. direct selling businesses, Editors 8 Solution to a Shrinking Job since the market dipped to its low the direct selling model. creating a significant social and Jennifer l. Mills Teresa day Market in early 2009. economic impact. by J.M. Emmert INDUSTRY Creative Director 13 22 29 carl Waters World-renowned economist, Jefferies Report Megawatt Returns Direct Selling News professor and best-selling by Douglas M. Lane for Energy Providers by DSN Staff Production Manager alan dwelle author Paul Zane Pilzer offers a The direct selling model is by Jennifer L. Mills Whether providing readers with perspective on the direct selling uniquely well-positioned in the Deregulation in several states valuable information, offering a Production Artist Karla M. Garcia industry’s role in today’s economy. current investment environment. has opened up competition for forum for executives to share Copy Editor the retail portion of the energy ideas or profiling companies, Peter Tepp FINANCE INTERNATIONAL business. And that’s where direct DSN is the journalistic resource 10 14 Contributors Making Dollars A Truly Global Channel sales companies are stepping covering the direct selling way of Tim Blackwell and Sense by Katherine Ponder in—and changing the game. doing business. emma Johnson douglas lane by Emma Johnson Direct selling is a global Katherine Ponder Direct selling makes a lot of phenomenon. There are now 20 24 Of the People, by the 31 DSN Global 100 Barbara Seale sense, not only for the individuals countries that are billion-dollar People, for the People by DSN Staff Advertising Manager worldwide who make a living markets for direct selling. by Teresa Day Direct Selling News presents Jerry Reagan [email protected] selling products from their home- The business model thrives its Global 100, the only based businesses, but also for when those who participate build comprehensive list of the top Operations Steve norton savvy investors the world over. businesses and share with others 100 revenue-grossing direct how they, too, can do the same selling companies in the world Direct Selling News 200 Swisher Road • Lake Dallas, Texas 75065 thing, creating a positive social for 2010. Phone: 800-279-5249 • Fax: 940-497-9988 and economic impact on families www.directsellingnews.com and communities. © 2011 Direct Selling News. All rights reserved. Serving the Direct Selling and Network Marketing Executive As the trade publication for our vibrant industry, each month we bring you the latest news and information about the companies and the people who lead them. Learn the Industry Reach the Industry Subscribe to Direct Selling News, Through our multiple advertising platforms, we are a trade publication for industry the best way to build name and brand recognition executives and decision-makers. and to market your products and services directly to decision-makers. For more information, email [email protected] or call 940-497-9775 | www.directsellingnews.com | 800-279-5249
- 4. 4 Cover Story often educational, entertaining and certainly social have enabled direct selling to thrive for decades even The Ultimate Social Business Model through recessions, including this latest one. The effect holds true no by Katherine Ponder matter what the category as direct selling companies represent virtually all goods and services customers want and need. The DSN Global 100 list of the top revenue-grossing direct selling companies in the world represents $66 billion in revenue for 2010, proof that this social business model has economic power. The products and services sold by these companies range across such diverse categories as cosmetics, financial planning services, home decorating, home improvement and solutions, energy services, personal- care, health and wellness, apparel and accessories, legal services and fine wines. Each company on the list had to have reached $80 million in 2010 revenue just to be listed. Analysts have noticed some of the advantages of direct selling. Doug Lane is Managing Director at Jefferies, a full-service securities and investment banking firm that was recently ranked No. 1 in U.S. stock picking by the Financial Times / StarMine Research Analysis. He thinks that direct selling companies are successful because they have “strong top-line growth driven by outsized exposure to the rapidly growing emerging markets; relatively high gross margins to buffer against the recent dramatic rise in commodity cost inflation; and ownership of the distribution channel and the tendency towards Direct selling is the original social make interacting with customers time. The direct selling model is over premium priced products that enable networking business. Long before extremely easy. Advancements in 150 years old; it has never needed the direct sellers’ pricing power over we even knew what a computer was, mobile devices and apps, as well as technology to be successful. A social traditional retail.” Lane goes on to people were getting together for fun, in social media tools, simply increase network and a good product is all that explain that direct selling companies socializing and shopping. Add in the reach of this socially driven is necessary. Additionally, the social often have under-leveraged balance technological power and globalization, model. Far-flung friends and family connections put you far ahead of sheets and large free cash flows, and you’ve got a winning formula. are now easily included in a tight the competitors who either can’t get which “tend to put the direct selling circle, and new friends across the product on the shelves or are pushed business model on particularly strong Model Advantages nation and world are made through into obscurity. And those competitors financial footing.” Whether a company is working common interests. don’t have a constant line straight to Jim Cramer, host of investment in a mature market or an emerging In an emerging market such their customers to gauge demand show “Mad Money,” has caught on one, the direct selling model as China, having scores of and feedback. as well. “The direct selling model is has many advantages. In mature salespeople working directly with Products and services delivered going great guns,” he said, noting it markets, the existing infrastructure friends and family to make the directly to customers through could be the best way to sell goods in and high technology saturation personal pitch just reaches back in personalized presentations that are the Third World. continued on page 6
- 5. 5 This is the company that puts mascara on lashes and food on tables, that fights wrinkles with one hand and Breast Cancer with the other. That knows the value of a perfect lip, but still opens its mouth and speaks out against Domestic Violence and for women’s financial independence. This is the company that not only brings beauty to doors, but also opens them. The company that supports 6.5 million Representatives in over 10 0 countries. This is Avon. The company that for 125 years has stood for beauty, innovation, optimism and above all for women. avoncompany.com
- 6. 6 continued from page 4 Prime Time for Direct Selling world simply cannot be overlooked or swept Attracting Attention under the rug. Scott Van Winkle, CFA, is a and Investors Research Analyst at Canaccord Genuity, known Within the DSN Global 100 list, the top 10 for serving institutional and corporate clients companies contributed $39 billion to the global through investment banking, research, sales economy in 2010. The company at the top of and trading services. Van Winkle covers direct this list—Avon, the 125-year old brand known sellers Herbalife, Nu Skin Enterprises, USANA in virtually every household, which generated Health Sciences and Medifast. He says, “I think $10.9 billion of that number—is publicly held, there is finally broad confidence in the direct as are five additional companies on the top selling model in the private equity community.” 10 list. Amway, privately held and another Interest overall does appear to be growing. household name, secured the No. 2 spot on the Financial advisors and investors both are list at $9.2 billion in sales. Other familiar names seeing direct selling companies with new eyes, on the top 10 list include Herbalife (public), focusing on the efficient business model, rapid Mary Kay (private) and Tupperware (public). growth, and generally low on-going capital Vorwerk (private) is a household name in investment after the initial surge. Van Winkle Europe and is the parent company of United says, “I don’t go a week now without getting a States company JAFRA. The list rounds out phone call from a private equity firm looking with additional companies Natura (public), at a direct selling asset, and that was just Oriflame (public), Forever Living Products nonexistent 5 years ago.” (private) and Nu Skin (public). It appears that wise investors are getting Clearly, the economic impact of direct selling in now. Sequoia Capital investors bought companies for the United States and for the into jewelry and accessories direct seller Public Companies: The Big 7 Avon Products Inc. Country: USA 2010 Rank: 1 Natura Cosmeticos SA Country: Brazil 2010 Rank: 3 Herbalife Ltd. Country: USA 2010 Rank: 5 The direct selling industry’s 2010 Revenue: $10.9 billion 2010 Revenue: $3 billion 2010 Revenue: $2.7 billion top seven public companies, Avon is the founder of modern direct selling and the acknowledged world Natura is a cosmetics giant with more than 900 products. The Herbalife sells nutritional supplements and weight-management and personal- based on Direct Selling News’ leader in cosmetics, fragrances and toiletries. Avon’s well-known product company operates in Argentina, Chile, Peru, Mexico, France, care products. Its products have been developed by scientists, physicians Global 100 ranking, lines include Avon Color, Anew, Skin So Soft™, Advance Techniques Hair Care, Venezuela and Colombia. Corporate social responsibility is one of its and nutrition experts, including Nobel laureate in medicine Louis accounted for $23.9 billion Avon Naturals and mark™. core emphases. Ignarro, Ph.D. in revenue for 2010. Markets: 100+ Distributors: 6.5 million Markets: 7 Distributors: 1 million Markets: 75 Distributors: 2.1 million Employees: 42,000 Employees: 5,000+ Employees: 4,300 Headquarters: New York, N.Y. Headquarters: São Paulo, Brazil Headquarters: Los Angeles, Calif. CEO: Andrea Jung CEO: Alessandro G. Carlucci CEO: Michael O. Johnson Year Founded: 1886 Year Founded: 1969 Year Founded: 1980 Stock Symbol: AVP—NYSE Stock Symbol: NATU3.SA—São Paulo Stock Symbol: HLF—NYSE
- 7. 7 Stella & Dot for $37 million (10 percent of in 1990, and it’s over $500 million in annual within 5 years either take it public or sell it. ownership) last January, certain that it had revenue today,” recounts Robert B. Goergen Jr., Investment in direct selling companies has brought pursued a winner. Sequoia Capital is a Silicon President of Blyth. “ViSalus, a relatively young about a new exit strategy for some private equity Valley venture capitalization firm that is estimated company, is currently experiencing rapid sales firms, according to Van Winkle. He says, “We’ve to control as much as 14 percent of the value growth. We embrace a portfolio approach, with seen direct selling companies turn around and on NASDAQ. “Sequoia rarely sees a business non-competitive products and companies in take out their private equity investors with cash built so strong, with such little capital,” says different stages of development across multiple flow. That’s a whole new model for private equity— Sequoia partner Alfred Lin, who more recently geographies.” Indeed, PartyLite sells premium that the asset they’ve acquired could ultimately added: “We wanted to become business partners candles and home fragrance products, and buy itself out.” with Stella & Dot because it was a great business ViSalus sells weight management and health Van Winkle and others know the time is right. run by a very special founder and entrepreneur, products. Blyth’s strategy for investing in various Many of the innovative investors are reaping Jessica Herrin.” direct selling companies has proven very rewards for acting upon their confidence in Blyth, Inc. also found value in direct sellers successful for them. the direct selling industry. Others are just now PartyLite and ViSalus. “PartyLite was doing Traditionally, private equity firms make seeing the value, but the opportunity is still available $7 million in sales when Blyth acquired it a material investment into a business and to be part of this successful sales model. ■ From March 2009 to May 2011, the top 7 publicly traded direct selling companies averaged a 268 percent increase in stock price. —DSN Tupperware Brands Corp. Oriflame Cosmetics S.A. Nu Skin Enterprises Inc. Primerica Inc. Country: USA Country: Sweden Country: USA Country: USA 2010 Rank: 7 2010 Rank: 8 2010 Rank: 10 2010 Rank: 11 2010 Revenue: $2.3 billion 2010 Revenue: $2.2 billion 2010 Revenue: $1.5 billion 2010 Revenue: $1.3 billion Tupperware is a global direct seller of Oriflame is a beauty company offering Nu Skin Enterprises Inc. is a global direct Primerica provides financial products and innovative premium products, including cosmetics, fragrances and personal-care, selling company operating in 48 international services, including term life insurance, mutual design-centric preparation, storage and skin-care, hair-care and wellness products. markets throughout the Americas, Europe funds, variable annuities, loans, long-term serving solutions for the kitchen and home The company operates in 62 countries and is and the Asia-Pacific region. Going far beyond care insurance and legal services to 6 million through the Tupperware brand, and beauty the market leader in more than half. Oriflame cosmetics, toiletries and fragrances, Nu Skin clients, primarily middle-class individuals and personal-care products through Armand has a presence in Mexico, Central America, sells more than 200 products through three and families. Dupree, Avroy Shlain, BeautiControl, Fuller, South America, Europe, Asia and Africa. distinct brands: Nu Skin, Pharmanex and NaturCare, Nutrimetics and Nuvo. Big Planet. Markets: 5 Markets: 62 Distributors: 100,000 Markets: Nearly 100 Distributors: 3.5 million Markets: 51 Employees: 2,000 Distributors: 2.6 million Employees: 8,000 Distributors: 800,000 Headquarters: Duluth, Ga. Employees: 13,500 Headquarters: Luxembourg, Luxembourg Employees: 1,200 CEOs: John Addison and Rick Williams Headquarters: Orlando, Fla. CEO: Magnus Brännström Headquarters: Provo, Utah Year Founded: 1977 CEO: Rick Goings Year Founded: 1967 CEO: Truman Hunt Stock Symbol: PRI—NYSE Year Founded: 1946 Stock Symbol: ORI-SDB—Stockholm Year Founded: 1984 Stock Symbol: TUP—NYSE Stock Symbol: NUS—NYSE
- 8. 8 an inTeRvieW WiTh Paul Zane PilZeR Solution to a Shrinking Job Market by J.M. emmert P rofessor Paul Zane Pilzer has kept a watchful eye on the direct selling industry for more than 30 years. In the 1990s, the renowned economist who served in two White House administrations predicted that network marketers would help make the then-emerging $200-billion health and wellness channel the next trillion-dollar industry. The success of companies such as Herbalife, Medifast, Monavie, Amway, Nu Skin, USANA and Blyth are helping to confirm Pilzer’s theory. As the current economic crisis continues to take a toll on people around the world and unemployment rates steadily rise, direct selling may be the answer to a shrinking job market. Pilzer warns that too many people today see unemployment as part of the economic cycle—that when the economy recovers, employment will naturally go up. However, unemployment is not a macro-economic problem, he says. It is a micro-economic issue, typically related to a skill deficiency on an individual level. “The question lies not in economic recovery but employment recovery,” says Pilzer, who has written nine bestsellers. “We have a massive social problem. What are we going to do with 30 million people who are now permanently unemployed? The No. 1 social need in the United States right now has nothing to do with the economy.” The real challenge is to replace lost jobs with new earnings opportunities and provide much-needed training. The jobs that baby boomers and Gen Xers trained for years ago have disappeared. Technology has replaced millions of workers and demanded new skills that too many older Americans just don’t have. “Instead of focusing on new methods of training, our politicians and news media are looking at unemployment and the economic recovery as linked—and they are not because most of the unemployed people today are skills-deficient. If they are over 50 years old, they probably don’t touch-type or e-mail, and that doesn’t work in today’s economy.” So what happens to those displaced workers? Direct selling may have the answer. The direct selling business model has always had a competitive advantage in the training that it offers, both in business and personal skills. It allows people to be retrained while they pursue something new. It gives people an opportunity when no one else will. The biggest need in every sector of the economy, says Pilzer, is intellectual distribution—the dissemination of information about products and services. “We have a huge backlog of better products and services that people aren’t buying because they don’t know about them. Direct selling is the most efficient method for the distribution of intellectual information that will improve your life. It is the ideal model that allows anyone to reach out.” Direct selling offers people the skills and tools to create new income opportunities—to venture out on their own as entrepreneurs and grow in confidence versus being consumed by the fear associated with a shrinking job market. “Technology is available to everyone at home and is even better than what you can get in a large company,” says Pilzer. “When we examine the workplace, we often find outdated computers and data management systems. However, the best tools and support needed to run a home-based business are now available to individuals at an affordable cost. This makes a home-based business—and a direct selling opportunity, in particular—very appealing.” ■
- 9. 9 YOUR FUTURE IS WAITING FOR YOU As a proven leader in the health and beauty industry, Nu Skin’s results speak for themselves. Record-breaking results, next-generation anti-aging products and an unrivaled opportunity make Nu Skin (NYSE:NUS) a great business partner—and an even better investment in your future. DISCOVER YOUR FUTURE AT NUSKIN.COM Learn more about nu Skin, ScAN thE codE with A qR ScANNER App oN YoUR SmARtphoNE.
- 10. 10 Making Dollars and Sense by emma Johnson “Mad Money” market guru Jim Cramer recently told his CNBC viewers: “Direct selling has never gotten its due from Wall Street. It’s time we recognize that the direct sales model works, and it works well.” There is little question why financial notables like Cramer, Warren Buffett, Ray Chambers and Suze Orman have touted businesses based on direct selling. J efferies analyst Doug Lane has long been a of salespeople’s homes, and champion of the sector, which relies on its marketing and advertising salespeople to market the product, mostly expenditures are minimal. “It to their local community. Lane has told turns out [direct selling] may investors that the model—also referred be the best way to sell goods in to as network marketing—continued to thrive the developing world, where throughout the recession in part because it offers people listen to testimonials— the unemployed an easy, low-risk way to be in not advertisements and retail business for themselves, and that it also capitalizes salespeople,” Jim Cramer told on the fact that consumers prefer to buy products his audience. from people they know and like. Other leading investors The direct selling business model is also proving are nabbing opportunities to be a bonanza in developing countries. Growth to profit from network potential is huge because as these economies marketing. Warren Buffett “After years of skepticism, the expand, their appetites for consumer goods grow has been a proponent of the investment community is finally waking and previously underemployed women—who model since scooping up up to the viability of direct selling as a have historically been the foundation of many The Pampered Chef in 2002, direct sales organizations—are prospering, thanks calling it one of the best good investment opportunity.” —Doug Lane to newfound economic opportunities. The most investments he’d ever made; he recent figures show that within the $125 billion subsequently invested in seven global direct sales industry, a mere $28.3 billion more direct sales companies. One of the most eye-opening events for investors came from the United States, while $49 billion Even British mogul Richard Branson launched was last year’s IPO of direct sales financial services came from the Asia-Pacific region, and Latin a direct sales cosmetics firm—now called Vie at company Primerica. Its impressive opening-day American sales reached $18 billion. The sector’s Home—which he sold to direct sales investor performance on April 1, 2010, left investors—who growth leaders were also in the developing world; Helmut Spikker last year. were oversubscribed by 21 times—confident about India joined the list of billion-dollar nations, In 2002, private equity firm Whitney & Co. Primerica’s competitive advantage in the insurance generating $1.06 billion in revenue for 2009. China invested $700 million in supplement giant and asset-management industry. Primerica closed saw 2009 sales increase nearly $3 billion, and Herbalife. The investment made by Sequoia at $19.65 the first day—30 percent more than its Russia, though it experienced a somewhat modest Capital into Stella & Dot in January of this year is initial public offering price of $15—after its market gain of $200 million, still moved up to No. 9 in the certainly an example of how investors are looking debut. Its strong performance made it one of the DSN ranking of the top billion-dollar markets in differently at direct selling companies and their top-performing IPOs for the year. the world, with $3.06 billion in 2009 sales. leadership. Also earlier this year, Pre-Paid Legal “After years of skepticism, the investment One reason investors love these companies Services agreed to sell to private equity firm community is finally waking up to the viability of is that they have low overhead. There are few MidOcean Partners for $650 million in cash; the direct selling as a good investment opportunity,” retail expenses, since the products are sold out deal is expected to close by the time we go to press. says Lane. “They’ve become true believers.” ■
- 11. 11 Top Publicly Held Direct Sellers Achieve Record Sales and Profitability by Tim Blackwell The two-year rebound in the stock market has many investors smiling again, especially those who have put their money in direct selling companies. Many of the top 12 public companies that sell direct have outperformed the average stock return by impressive margins since the market dipped to its low in early 2009. S ince the market crash on March 9, Herbalife 24 sports product line, which is designed Nu Skin’s stock has shot up 364 percent 2009, the major indices have steadily to meet high-end nutritional needs for athletes. from $8.04 per share to more than $37 after rebounded with 95 percent growth, Two years ago Tupperware’s stock hovered record sales and profits in 2010. The company but some direct selling companies are around $11.00 per share, but an 8 percent increase increased revenue 15 percent over 2009 to experiencing enviable price increases on American in annual sales to $2.3 billion in 2010, plus a 15 $1.5 billion, culminating three consecutive and foreign exchanges. Many of the top direct percent improvement to the bottom line helped lift years of record-breaking revenue. The fourth selling companies have achieved record sales the share price above $64—a 457 percent gain. quarter was the company’s first ever $400 million and profitability and most appear to have revenue quarter, marking early lasting fiscal momentum in an improving achievement of a five-year plan that began economy. Stock percentage growth for in 2007 to double Nu Skin’s earnings to Herbalife Ltd.(HLF– NYSE), Tupperware $2 per share of stock. The company is Brands Corp. (TUP–NYSE), Nu Skin now planning to double its earnings to $4 Enterprises (NUS–NYSE) and Medifast Inc. per share by 2015. (MED–NYSE) soared as high as three to Medifast’s stock has been on its seven times the average gain of the S&P own fast-track to the top, soaring from 500 and Dow Jones Industrial Average by $4.42 a share two years ago to $20.39 early May 2011. in early May. A streak of 45 consecutive Herbalife shares climbed 764 percent profitable quarters has strengthened the from $12.28 to $106.15 before the seller of weight and health management company’s board of directors approved consumables; the company had record a two-for-one split in May. Furthermore, revenues of $257.6 million and improved the company raised its dividend by 60 profits by 73 percent last year. Medifast, percent, representing a 20-cents-per-share the parent company of Take Shape for post-split quarterly dividend. The global Life, was named No. 1 on America’s 100 nutritional company’s sales increased Best Small Companies list by Forbes 17.3 percent from $2.3 billion in 2009 to magazine for 2010. $2.7 billion in 2010, with net income of The stock performances of Blyth $297million. Herbalife topped that with a record The global direct seller of storage and serving Inc., Natura/Brazil, USANA Health Sciences, first quarter 2011, which includes a 28.5 percent solutions as well as beauty and personal-care Avon and Nature’s Sunshine all exceeded S&P increase in sales and $26.8 million improvement products experienced double-digit sales increases 500 and Dow Jones averages for the past on adjusted net income. in the first quarter 2011 from its emerging two years. At the company’s first-quarter conference call, markets in Brazil, India, Indonesia, Malaysia/ Sales increases, net income improvements Chairman and CEO Michael O. Johnson attributed Singapore, the Philippines, Turkey and Venezuela. and gains for the top publicly held direct selling the company’s growth to an improved distributor Tupperware’s adjusted diluted share earnings for companies may be an indication of promising retention rate of 48.9 percent, up 20.7 percent the first quarter of this year were 14 cents better growth for an entire industry, especially for from 2002. In an effort to broaden future earnings, than for the same period in 2010, including a those who include emerging markets in their he announced the release of the company’s new positive foreign currency impact of 4 cents. strategic plan. ■
- 12. 12 Top Publicly held direct Selling companies◊ Learn om THE BEST IN LIFE AND BUSINESS Stock Performance 2009–2011 PRice PRice PeRcenT coMPany SyMBol 3/9/2009 5/9/2011 incReaSe herbalife ltd. HLF $12.28 $106.15* 764% Tupperware Brands corp. TUP $11.61 $64.77 457% nu Skin enterprises NUS $8.04 $37.31 364% Medifast inc./Take Shape for life MED $4.42 $20.39 361% Blyth inc. BTH $16.12 $44.48 175% nature’s Sunshine NATR $5.26† $11.59 120% THE TRUSTED natura cosmeticos (Brazil) NATU3 $19.85 $43.00 116% MAGAZINE FOR ENTREPRENEURS uSana health Sciences inc. USNA $19.09 $37.71 97% & INTRAPRENEURS avon Products inc. AVP $15.20 $29.15 91% SUBSCRIBE NOW oriflame (Sweden) ORI-SDB $216.00 $360.00 66% success.com Telecom Plus Plc (uK) TEP $330.25 $475.25 43% Primerica inc. PRI $19.65‡ $22.30 13% $34.95 ◊ Market cap above $100 million. * Stock split on 5/18/2011 at $103.86. Price reflected in chart is pre split. ANNUAL SUBSCRIPTION ‡ Based on 13-month period from initial public offering on April 1, 2010. † Percent increase reflects start date of July 1, 2009.
- 13. 13 “The direct selling business model is one that can level the playing field and close the gap between the haves and have-nots.” —Ray chaMBeRS, Entrepreneur, Philanthropist Jefferies Report and Humanitarian Direct Selling “The partnership with Avon is a logical and natural extension of everything I believe in. I am confident we can make a huge difference toward the goal Well Positioned of empowering women and helping them achieve their financial hopes and dreams.” by douglas M. lane —SuZe oRMan, Internationally Acclaimed Personal Finance Expert “Direct selling is actually one of the oldest, most respected business models in the world and has The key attributes that we believe uniquely stood the test of time.” benefit direct sellers in the current investment —donald TRuMP, Billionaire Businessman “One reason I have such strong respect for environment are: network marketing is that it is a genuine equal- opportunity business. Network marketing casts a very wide net. When you look closely at the more Strong top-line growth driven by Relatively high gross margins to than 60 million people worldwide who are engaged outsized exposure to the rapidly buffer against the recent dramatic in the business, you’ll find people of every color growing emerging markets rise in commodity cost inflation and creed, every age group, and every level of Avon Products, Herbalife, Nu Skin While input cost inflation has been front of background, experience and skill.” Enterprises and Tupperware Brands mind for many investors of late, our direct —RoBeRT T. KiyoSaKi, author of Rich Dad Poor Dad and all derive more than 75 percent selling companies have actually been The Business of the 21st Century of their revenues from outside the delivering gross margin expansion. In fact, United States, with particularly strong USANA has had flat or higher gross margins “What is the one bright spot on the entire horizon presences in the emerging markets seven quarters in a row, while Nu Skin has that would give someone an opportunity to be retrained to learn new skills? Direct selling.” of Latin America, Eastern Europe and six in a row and Herbalife four. Conversely, —Paul Zane PilZeR, World-Renowned Economist and Asia. We think Avon is strategically well our traditional packaged goods coverage has Best-Selling Author of The Next Millionaires positioned with its iconic global brand averaged gross margin contraction the past and by having approximately 70 percent of three quarters. its profits come from the attractive emerging ownership of the distribution “The rapid growth dynamics both in terms of markets of Latin America and Eastern channel and the tendency toward consumers purchasing products and associates Europe, where the Cosmetics, Fragrances premium-priced products participating as direct sellers is driving strong and Toiletries (CFT) industry is growing This gives the direct sellers pricing power interest from private equity groups and strategic at above-average rates and direct selling that tends to be more of a struggle for most acquirers in direct selling companies.” —loRin deMoRdaunT, Managing Director, McColl Partners has been gaining market share. Organic traditional package-goods companies that sales growth, stripping away the impact of have to sell through big-box retailers. “Network marketing has come of age. foreign currency translation and acquisition, under-leveraged balance sheets and It’s undeniable that it has become a way to has been especially strong for Herbalife, large free cash flows entrepreneurship and independence for millions USANA and Nu Skin. In the first quarter Both tend to put the direct selling business of people.” 2011, Herbalife was up nearly 25 percent. model on particularly strong financial footing. —STePhen covey, Author of The Seven Habits of Highly USANA has grown local currency sales on Notably, Herbalife, Nu Skin, Tupperware and Effective People average in the low teens dating back to the USANA have adopted a more aggressive first quarter 2010, and Nu Skin also grew approach to dividend increases and/or share “This country was founded on entrepreneurialism and we are returning to it. The future of double digits throughout 2010. Conversely, repurchases, such that their cash returned employment is self-employment. Direct selling is our larger traditional packaged goods to shareholders is on par with or better one of the few business opportunities that offers companies have struggled to generate more than most of their peers in the traditional average people, with above average ambition to than low single-digit organic growth of late. packaged goods universe. ■ achieve an above average lifestyle, peace of mind and financial security.” —daRRen haRdy, Publisher of SUCCESS Magazine Douglas M. Lane is Managing Director of Equity Research for Jefferies & Company, Inc.
- 14. 14 A Truly Global Channel by Katherine Ponder The following is a special report from Direct Selling News. The article, which is based on statistics reported by the World Federation of Direct Selling Associations (WFDSA), interviews with local Direct Selling Associations (DSAs) and third-party reporting, tells the story of the cumulative impact of the direct selling way of doing business in key markets around the world. Figures are year-end results for 2009; 2010 full data not yet available. 1. United States—$28.3 billion 2. Japan—$22.4 billion 3. Brazil—$13.5 billion 4. China—$10.9 billion With $28.3 billion in sales for Direct selling in Japan has The national DSA, Associacao China continues to be a tantalizing 2009, U.S. direct selling was down literally had its ups and downs Brasileira de Empresas de Vendas yet elusive market for direct almost 4.4 percent from 2008. U.S. in recent years. Between 2006 Diretas (ABEVD), remains bullish selling companies. Its sales in the direct sales declined, but retailing (the previous reported timeframe on its members’ performance. industry grew by almost $3 billion as a whole declined 7.3 percent over from WFDSA) and 2009, it lost The ABEVD, which has 48 direct between 2008 and 2009, proving the same period. Looking forward approximately $400 million in selling members, reported a sales that companies are operating to 2011, analysts expect that those sales. When you’re the No. 2 nation increase of 18.4 percent from 2008 successfully within its borders. who entered the direct selling in the industry, this looks relatively to 2009. In a year of adversity for Many are founded in China; yet for arena as a way to make up for lost small. But Japan’s economic most sectors of the economy, the multinational companies, the market income will remain active even as recession has been every bit as bad direct sales opportunity generated remains a challenge. All eyes are on the economy recovers. That trend as that in the United States, and income for 2.3 million people. the explosive growth in China, with will likely lead to higher sales for economic problems began long analysts taking bets on when it will the year. before 2007. surpass the United States and Japan.
- 15. 15 Direct Selling’s Billion-Dollar Markets estimated 2008 Sales no. Salespeople no. Salespeople 2009 Sales (uS$ in (2009) (2008) Market (uS$ in billions) billions) 1. united States 28.3 29.6 16,100,000 15,100,000 2. Japan 22.4 22.8† 2,700,000 2,700,000 3. Brazil 13.5 10.0 2,377,336 2,028,098 4. china 10.9 8.00 not available not available 5. South Korea 7.84 7.00 3,987,933 3,089,158 6. Mexico 4.83 4.40 2,000,000 1,900,000 7. Germany 3.76 9.00‡ not available not available 8. italy 3.36 3.36 390,955 366,000 9. Russia 3.06 2.87 4,995,508 4,413,918 10. France 2.41 2.40‡ 265,000 242,000 11. united Kingdom 2.1 3.56‡ 400,000 419,500‡ 12. Taiwan 1.7 1.64 4,442,000 4,111,000 13. Thailand 1.56 1.59 10,000,000 5,400,000 14. canada 1.3 1.18 644,455 608,000 15. colombia 1.26 1.50 900,000 867,000 16. australia 1.25 .844 500,000 ✱ 17. argentina 1.15 1.17 731,122 714,000 18. Malaysia 1.13 1.03† 4,000,000 4,000,000 19. venezuela 1.12 .887† 565,000 ✱ 20. india 1.06 .586 2,012,940 ✱ NOTE: All figures obtained by the WFDSA. *Not ranked in our 2010 list as having more than US$1 billion in sales. †2006 figures ‡2007 figures 5. South Korea—$7.84 billion companies account for 85 percent of South Korea moved up one notch in the industry’s sales in the country, with our international rankings by gaining growth of almost 6 percent from 2008 $840 million in sales in 2009, according to to 2009. Not just a pretty face. WFDSA. The industry has approximately 4 million distributors and 64 members 7. Germany—$3.76 billion It’s small, frivolous and delightfully chic. And yet, since 1967, it in the Korean DSA. Research shows that Germany is the largest direct selling has transformed the lives of millions through a unique business one-sixth of the population has been market in Europe. It has an affluent and concept: Make Money Today And Fulfil Your Dreams Tomorrow™. involved with direct selling at some technologically advanced economy—a point in their lives. Indications for 2010 large proportion of which is over 50 At Oriflame, fulfilling dreams is our heart and soul. Our mission final sales figures are that South Korea with high-disposal income—and high is simple: empower people to realise their full potential, fulfil will hit $9 billion. The 2011 forecast for unemployment. Direct sellers in Germany their dreams and lead a richer, more meaningful life. By selling the industry is to parallel the national are 67 percent women, and 84 percent our beauty products, our 3.6 million consultants, in more than 60 economy by growing 4 to 5 percent. sell through a personal sales method. countries, have the freedom to set their own targets, income and The Bundesverband Direktvertrieb working hours. There are no limits. 6. Mexico—$4.83 billion Deutschland e.V, the oldest direct selling Mexico rose one place in our annual list agency in Germany, estimated turnover What we offer with a single lipstick can start out as a fun hobby by gaining approximately $430 million in of member companies fell slowly by 1.3 and develop into something truly great. It’s your choice. sales from 2008 to 2009. It was an increase percent; however, in general the state of made even more remarkable because it direct selling in Germany is good, and Never underestimate the power of a lipstick. came during troubled economic times. businesses are optimistic about the future. The Asociacion Mexicana de Ventas Germany is by far still No. 1 in Europe Directas estimates that the 39 member and in the top 10 world markets.
- 16. 16 8. Italy—$3.36 billion 14. Canada—$1.3 billion Italy moved up in global rankings with an increase World economic troubles challenged Canada of $3.36 million in sales while many nations as well as much of the rest of the international dropped. The salesforce also grew, adding more community. Sales declined 3.5 percent during 2009 than 30,000 people to the rolls. Both increases are in as the recession took its toll. Official numbers from stark contrast to the national economy, which had the Direct Sellers Association of Canada put 2009 increasing unemployment and a 5 percent decrease sales at $1.3 billion, and estimates for 2010 numbers in economic growth for 2009. show that the direct selling industry in Canada will decrease 6.2 percent to $1.23 billion in 2011. 9. Russia—$3.06 billion Russia increased its sales by $190 million, 15. Colombia—$1.26 billion earning it an advancement of one spot in the Colombia’s sales were down slightly from $1.5 rankings. The falling U.S. dollar against the Russian billion in 2008, but it kept its spot on our list. The ruble made this change more pronounced, but beauty and personal-care segments have dominated the industry showed its muscle by increasing even this market. While the national economy grew only as the national economy suffered through the 0.8 percent in 2009, the beauty and personal-care A Main Street economic crisis. market grew 6 percent. Skin care registered nearly double-digit growth, with anti-aging products 10. France—$2.41 billion Company France’s international rankings brought it up one leading the way. 16. Australia—$1.25 billion level as well, from No. 11 previously. French direct for Main Street sales stayed in the same $2.4 billion range from Australia is new to the list this year. The $1.25 2007 (the last period reported through WFDSA) billion is a substantial increase over its $844 million North America to 2009, leaving it a winner for keeping up its pace year over year. reported in 2008. Sales for 2010 are expected to be strong but not huge. However, direct selling is Founded in 1977, Primerica is the performing better than the rest of the retail world in 11. United Kingdom—$2.1 billion Australia. Salesforce numbers are also expected to largest independent financial services marketing organization in North America. Our annual rankings saw the United Kingdom fall increase slightly, and leading categories continue to from the No. 8 spot last year. WFDSA sales statistics be health care and personal goods. The company, headquartered in Duluth, for the country show a decrease of more than half, GA, is a public company listed on the New from $3.6 billion in 2007 (rankings last year were 17. Argentina—$1.15 billion York Stock Exchange, trading under the based on 2007 data, as it was the last information The industry in Argentina decreased enough to symbol “PRI.” reported to the WFDSA) to $1.4 billion in 2009. bring them down one notch in our annual rankings. For more than 34 years, Primerica However, there seems to be a renewed optimism in Sales decreased nationally by $20 million. This has helped families get properly protect- the United Kingdom, with people and businesses is hardly surprising, considering that Argentina ed, debt free and financially independent. stepping up to seize the opportunities that everyone had its own share of economic problems even The Primerica business opportunity gives feels sure are coming. before the worldwide recession. people from all walks of life a chance to 12. Taiwan—$1.7 billion 18. Malaysia—$1.13 billion live their dreams. Taiwan moved up one spot by gaining $60 The direct selling industry in Malaysia is steadily Primerica at a glance: million in sales over the course of 2009. This was growing, enjoying the benefits of more companies great news for the country, marking a 9.2 percent launching within its borders. The Direct Selling • More than 4.3 million lives insured increase and the end of a three-year slide in sales. Association of Malaysia boasts 57 members and 4 through our life companies The Taiwan ROC Direct Selling Association notes million salesforce members. • More than 2 million clients maintain that distributor numbers were also up, increasing investment accounts with us 8 percent to 4.4 million. 19. Venezuela—$1.12 billion • Our clients have $35 billion in assets A newcomer to the $1 billion list, Venezuela is under management through us 13. Thailand—$1.56 billion counting its successes. From 2006 (the latest • An average of $2.6 million in benefit Despite having $30 million less in sales, numbers for WFDSA last year) to 2009, its collective claims paid every day Thailand still moved up two spaces on our direct sales totals rose by more than $200 million. • Greater than $656 billion life insur- international list. These figures include sales of both Thai Direct Selling Association members and 20. India—$1.06 billion ance in force non-members as well. There are 10 million people New to the list this year, India’s sales nearly doubled selling through 590 companies, of which 29 are from 2008 to 2009. Figures for 2010 are expected to TDSA members. The Thai DSA believes that the show a 20 to 30 percent growth, according to Chavi 2010 figures will show almost 12 million distributors Hemanth, Secretary General of the Indian Direct www.primerica.com and a strong increase of 15 to 20 percent in Selling Association. Forecasts call for the industry to sales numbers. be at $1.5 million by 2012–2013. ■
- 17. 17 We Mean BUSINESS. ( ) www.USANA.com
- 18. 18 Speed, Power, Reach How Direct Sellers Are Leveraging New Technology by Teresa day Direct sellers have historically held a competitive edge over traditional retailers of goods and services because of their skills in connecting with people, their personal ethics in business dealings and in the automatic trust and respect generated when dealing with word-of-mouth “advertising” through networking. After all, direct selling is the ultimate social business model, and technology is now redefining perceptions of what that’s all about. S martphones, tablets, apps and social and everywhere. Conversations about purchasing owner (IBOs) in direct selling for all aspects networking tools have no doubt changed product can be turned into a buying experience at of the business. IBOs can access their team the way the world connects. To direct an accelerated level with a mobile device and an information and sign up new business owners on sellers, who have always shared their goods appropriate app. the spot, wherever they happen to meet. Short, and services with their social network IT vendors are making quantum leaps in the interactive opportunity presentations, created and the new customers and friends they have met development of apps for the independent business specifically for smartphones and tablets, enable through existing ones, the rest of the world have independent business owners to “hold a meeting” finally caught up. over coffee or anywhere people can engage in a Radio reached an audience of 50 million in 3-minute conversation. 38 years. Television reached the same number Stuart Johnson, Founder and CEO of in only 13 years. The Internet reached 50 million VideoPlus, which specializes in the refinement in only four years, iPods had 50 million users in and transmission of direct selling companies’ core less than three years and Facebook had them messages, says, “The fundamentals of the direct in only two. MySpace has over 200 million selling model haven’t really changed in decades, registered users; Facebook added that many but the delivery of the message has changed users last year alone. In 1992, there were dramatically. In today’s technologically driven an estimated 1 million Internet-capable world, we can provide a focused, simple, devices in use, and today that number authentic and transparent message in less exceeds 1 billion. Simply put, current than three minutes, and in some cases, in just technological advances in mobile devices 60 seconds.” and apps, as well as in social media tools, All of the current technologies allow serve to increase the speed, power and independent business owners to meet their reach of what’s already a competitive customers wherever their habits take them advantage in the direct selling model. and to integrate into that behavior. With Prior to these tech advances in connecting individuals busier than ever and used to having people, direct sellers were limited to physical access to information, as well as the ability to places—literally going door-to-door, the party connect using their mobile devices, meeting people at someone’s home, the meeting room at the local “where they are” is a critical component of any hotel. Now, business can be conducted anywhere business transaction. continued on page 20
- 19. 19 Messages Edits Hey, u heard about ViSalus? Heard what? 6 yr old co. w/ 50% of top producers under 40 yrs old. 3000% growth in last 18 months! 40,000 new customers a mo. 3000 incentive bmw's on streets. 40,000 a month? Co is giving away over $10M/year in free product, prizes & vacations! Obesity epidemic creates epic opportunity!! One of the fastest-growing co. in direct selling. A solution to the recession?! A new social business model?! Get the free report… [email protected] TY!!!
- 20. 20 continued from page 18 Direct sellers won’t be left behind in the connect to one another. It has, however, technology race, and some companies are at the dramatically changed the scope and reach of very forefront. those connections, using the Internet to shrink Nu Skin, XANGO, Amway, Herbalife, vast distances and connect “friends” without Primerica, MonaVie, lia sophia and ACN are just geographic constraint. a few of the direct selling companies to align the Today, 50 percent of the world’s population power of apps on smartphones and tablets with is under 30, and 96 percent of them are the company goals of recruitment, retention and estimated to have joined a social media sales. The investment is paying off in a big way. network. But this trend does not stop with “Anything that supports the story [of Nu the younger generation. The fastest-growing Skin] is a strong ROI for us,” says Nu Skin segment of Facebook users is females 55 to 65. Vice President of Business Technology Andrea Clearly, social media represents a permanent Hayhurst. “These kinds of tools enable this shift in the way people communicate and form mass of communicators [independent business relationships. It has also created a permanent owners] to tell our story much more effectively.” shift in the way companies approach their Mannatech Primerica, a financial services company, provides term customers. Johnson says, “Business is happening on life insurance social networks. Pioneers as one of its Direct selling is the ultimate social Social networking of Glyconutrition with products. business model, and technology leads to social In the past, connecting, which 45 Global Patents enrollment is redefining perceptions of what leads to social The Creators for a new that’s all about. sharing. Groupon, customer LivingSocial and of Real Food Technology® was a lengthy others are not Solutions paper process ‘selling socially’ with a waiting they are ‘sharing period for socially’ and that 15 Years receiving leads to revenue of Unmatched Product acceptance or generation.” Innovation rejection, with ViSalus Sciences, a additional weight-management Social Entrepreneurs waiting for direct selling A new breed of direct seller the rep to get company, has paid. Today, incorporated committed to ending global a Primerica social sharing as a malnutrition representative strategic part of their with a tablet marketing approach. We Just Want to can present to The company Change the World a customer, created a laser- apply for the focused message policy, get with their Body it approved, by Vi Challenge bind it, deliver and utilized social it and get paid the commission in minutes. networks to spread that message to reach new Primerica’s incorporation of hardware and audiences. CEO Ryan Blair says, “We have a software apps into the daily experience of the simple, focused, authentic story that our fans are representative illustrates the boost of power that excited about and because of that, we add over technology adds to personal relationships. 1,000 new customers per day to our company.” Technology is also expanding the reach Additional advancements over the coming year of personal relationships. All people belong are sure to further contribute to the speed, power to social networks of some sort; most people and reach of the direct seller, creating even more are part of several social networks. People opportunity for connecting with new customers. connect with others for many reasons, This combination of the successful distribution whether it is for friendship, shared activities model of direct selling with the explosive Mannatech.com or backgrounds, common causes or belief growth in communications technology can only systems, just to name a few. Technology continue to play to the strengths of the direct NASDAQ: MTEX has not at all changed the fact that people selling industry. ■
- 21. 21 THE LARGEST DIRECT SELLING ENERGY COMPANY IN THE WORLD Source: Direct Selling News Global 100 Turning Energy Into Income SM FO R A D D I T I O N A L I N FO R M AT I O N P L E A S E C O N TA C T Y O U R L O C A L I G N I T E I N D E P E N D E N T A SS O C I AT E
- 22. 22 Megawatt Returns for Energy Providers by Jennifer l. Mills e nergy deregulation could lead companies to take any route when selling the essential services of gas and electricity, but by using the direct selling channel of distribution there is already a natural fit. independent business owners (iBos) are actually customers themselves. They also have a built-in market for services and products because everyone uses energy. The opportunity to possibly save money as a customer and earn money by educating others on their energy options is unique. With companies such as Ignite, ACN, Ambit says Rob Snyder, Co-Founder and Chairman of and Telecom Plus as industry standouts, energy Stream Energy. “I had no idea Texas had deregulated may be going the same successful route that the its electricity market.” Through his research on the Chris Chambless, Co-Founder and Chief telecommunications industry did in the 1980s when topic he found out that a number of companies were Marketing Officer of Ambit Energy—a retail energy the AT&T monopoly was split and competition offering electricity at 20 percent less than what he was company that drew attention when it was named Inc. entered the industry. Advocates of deregulation also paying for the service. With that seed of opportunity 500’s fastest-growing company last year—saw the say advances in technology and price competition planted, he was spurred to launch Stream/Ignite. significance of following such a business model. would bring the value directly to consumers with Many other founders of these retail energy “I think there is some degree of education lower prices. providers similarly had no direct sales and network needed, especially in some of these markets Ignite, the wholly owned subsidiary of Stream marketing knowledge, so they brought in experts. where deregulation is a fairly new phenomenon,” Energy, is the recognized market leader in the This made good business sense as a model when Chambless says. “A lot of people have just been industry, but a company that almost didn’t happen. looking at the education needed to sell the service conditioned not to have a choice. You have an “We were two years into the deregulation of the as well as the relationship necessary to gain trust opportunity in a direct sales model to go out industry and I was only hearing it for the first time,” from customers. and educate people.” The SUCCESS Foundation Little Things Matter ® ng Attitude Is Everythi recognizes the spirit of community and generosity of direct selling companies Everything Starts with Small Steps supporting the distribution of 2 million SUCCESS for Teens® programs through schools and youth organizations. There’s No Such Thing As Failure Use the Moment ACN Southwestern Eight great life skills and CieAura Pre-Paid Legal character-development HELP US principles are reaching You’re Always Learning sustain the continuing Oxyfresh Vemma thousands of our nation’s provision of the life-changing You Can Make Yo MonaVie ViSalus teens through dedicated, Dreams Come Truur SUCCESS for Teens program to e passionate educators and our youth. Numis Network Team National youth mentors. Habits Are Powerfu l www.SUCCESSFoundation.org. Symmetry
- 23. 23 Doug Witt, Managing Director 2010. “We added more customers than of Marketing for Ignite, says the major in the previous two years combined,” “We find we attract a growth in retail energy is also due to Chambless says of 2010. He adds it being an appealing product that that he expects the company to post lot of people who have offers independent distributors a revenue “in the neighborhood of $700 recognizable opportunity. Since it is million in 2011, and we are fairly never been in network not only a service, but an essential confident that we will go over a billion service, it then becomes more in 2012.” marketing.” about education and less about selling. ACN was the first direct sales “With energy, they instantly see an company to step into the energy sales —Doug Witt, Managing Director opportunity,” Witt says. “We find we arena 10 years ago when California attract a lot of people who have never attempted energy deregulation, but of Marketing, Ignite been in network marketing.” exited when the state’s process failed, In 2005, Ignite’s first year, the according to Robert Stevanovski, Co- company announced $70 million in Founder and Chairman of ACN. The gross revenue delivering service in its company has since focused on mobile home state of Texas. In 2010 revenue and video phones, satellite TV and had exceeded $900 million. By the end home security, providing service in 23 of this year Ignite anticipates meeting markets with revenue of $553 million Overseas, Telecom Plus PLC, which broadband, mobile phone, and gas and the billion-dollar mark, with services in 2010. operates the Utility Warehouse Discount electricity services and products. already in Georgia, Pennsylvania But ACN is now back in energy sales, Club in the United Kingdom, has Not all U.S. states are open to and Maryland. having launched energy services in also enjoyed recognizable growth deregulating energy and allowing Ambit, which launched in 2006 and Canada in 2010 and re-launched in the since it was founded in 1997. With competition for sales, but for those provides service to Texas, New York, U.S. market this spring with services 2010 revenues of $600 million, which are, the direct selling model of Illinois, Maryland and Pennsylvania, in New York, Pennsylvania and Telecom Plus provides more than business provides a three-way win for saw revenue increase from $325 Maryland. It plans to open 11 other 350,000 customers throughout the customers, independent business million in 2009 to $415 million in markets later this year. United Kingdom with landline phone, owners and energy providers. ■ 25 years as the world leader in business and communication tools for the direct selling industry Partnering with many of the most successful companies 800-752-2030 www.videoplus.com Te x a s Ut a h Un it e d K i ngd om Poland
- 24. 24 Of the People, by the People, for the People by Teresa day More than 12 million jobs have been eliminated from the U.S. economy since December 2007, and according to the Brookings Institute, it could take 12 years to re-create what’s been lost. Many individuals are looking to the direct selling model for a different answer. Of the People mirrors the age range of adults: 18 to 65+, with some The Economic Policy Institute estimates 4.4 surveys indicating up to 22 percent of direct sellers unemployed workers are available for every job are over 55 years old. The product categories are just opening. This number does not take into account the as diverse, including nearly every product or service estimated 2.3 million “sidelined” workers—people imaginable, from energy to financial planning, who have lost jobs recently but are not yet trying to from health and wellness to beauty, from home re-enter the workforce—making the ratio between improvement to self-improvement. job openings and available workers even higher. In the midst of multiple opinions about causes For the People and cures for our current economic state, the Direct selling is also an extraordinarily philanthropic activity surrounding small-business ownership industry, with nearly every company, regardless of appears to be increasing. Direct selling companies size, participating in some kind of charitable endeavor, such as Scentsy, Herbalife and ViSalus Sciences have whether it is setting up its own foundation, partnering processed more applications to start businesses than with humanitarian organizations, or regularly ever. In fact, just among the top 20 revenue-grossing supporting existing charities. Companies such as companies—there are an estimated 2,000 U.S. Amway, Nu Skin, Herbalife, Shaklee, The Pampered companies using the direct selling business model— Chef, Tahitian Noni and XANGO also are among more than 500,000 new applications are processed first responders to help when disaster strikes, here in any given month. in the United States and across the world, offering Yet the numbers of individuals starting their millions of dollars in reconstruction efforts, products, own direct selling businesses are not counted in and even basics such as food and blankets to affected the Department of Labor’s statistics, nor are they people. Amway’s generosity is rooted in the belief of recognized by most economists as significant its founders and owners that “we need to share our indicators for the economy. With collective resources with the communities where we do business,” gross revenues of U.S. direct selling companies says the company’s president, Doug DeVos. topping $28 billion annually, it might be a Participating in the generosity of the industry statistic worth considering. provides another compelling reason that people want to sign on with direct selling companies. According By the People to USANA’s Chief Marketing Officer Kevin Guest, the In direct selling, individuals market and sell industry attracts people who want to make the world products and services directly to the consumer, a better place. “Our entire business is about helping either through individual contact or group selling, others,” he says. “It seems only natural to me that such as the in-home party. Individuals own their altruism would spill over into other aspects of their own businesses but still have the support of a parent lives as well.” USANA partners with The Children’s company. The direct selling model has similarities Fund, delivering food and vitamins to children across to the franchising model, another type of popular the globe, and even making it possible for employees business ownership. Unlike the franchisee, however, and associates to volunteer in other countries. the direct seller is an independent contractor with Direct selling company CEOs are also known for complete control over building and conducting their personal philanthropy in support of many causes the business. Most direct selling companies around the world. A recent example of this giving spirit advocate a robust ethical code and encourage can be found in Andrea Jung, CEO of Avon, who gifted adherence to ensure optimal relationships among her entire long-term bonus of $5,362,500 to the Avon fellow contractors (business owners) and consumers. Foundation for Women, which has raised more than The direct selling industry is very democratic, $800 million to support women’s issues such as breast inviting all segments of the population to participate cancer awareness and ending domestic violence. in business ownership, regardless of income, Direct selling: of the people, by the people, and education or assets. The age range of direct sellers most definitely, for the people. ■
- 25. 25 The age range of direct sellers mirrors the age range of adults: 18 to 65+, with some surveys indicating up to 22 percent of direct sellers are over 55 years old.
- 26. 26 Get the Competitive Advantage in Business and in Life HOSTED BY DARREN HARDY Publisher, SUCCESS Magazine Scentsy, Inc. Founded in 2004 in an ocean shipping container on a sheep farm, this Idaho-based company was named the fastest-growing, privately-held consumer products company in the United States in 2010 by Inc. Magazine. With only $60,000 in paid-in capital, Scentsy’s business success has defied the worst economic downturn since the Great Depression. Since 2008: • 750 new employees • 113,000 new small business owners • $6 million in charitable contributions • 6 million new customers • $80 million paid in taxes • $352 million paid to families across NOVEMBER 5-6TH, 2011 North America† Long Beach Convention Center Long Beach, California Entrepreneurship Tickets open to independent business is the answer. owners, entrepreneurial enthusiasts and leaders worldwide soon. Direct Selling works. Follow Scentsy at scentsy.com or on Facebook. success.com/symposium † Includes Scentsy payroll, benefits, commissions, royalties, and shareholder distributions.
- 27. 27 The Heart of Direct Selling: The Home by Barbara Seale & John Fleming W hat’s the ideal home-based business? More than 16 million Americans think it’s direct selling. They represent one of the hundreds of U.S. direct selling businesses, and together they generated $28.3 billion in annual sales last year. While a few direct sellers work at their businesses full time, about 90 percent work part time to supplement their income. Some 80 percent of direct sellers are women, and almost all say they appreciate the schedule flexibility and low cost of starting their business. Customized technology lets them make their business portable and convenient. They can show high-quality products or share their business opportunity at a home party, but it’s just as easy to do at a coffee shop or restaurant. Direct selling companies, sometimes referred to as network marketing companies, are gaining the attention of some of the world’s foremost financial experts, including Suze Orman, noted author, television personality and consultant to Avon Products Inc.; Robert Kiyosaki, best-selling author of the Rich Dad Poor Dad series, who has sold more books on financial guidance than any author in history; and David Bach, New York As the ultimate equal-opportunity solution, primary benefits that have historically attracted Times best-selling author, to name just a few. All a direct selling home-based business may women to the business model. Today, there are have responded positively to the significance of represent the purest form of equality through free millions of men and women who seek a business the direct selling business model. enterprise. That’s one of the most striking aspects opportunity that offers the ultimate work–life “The beauty of the direct selling business of direct selling as a business model: It involves balancing potential. opportunity is that it’s all done for you,” Bach says. men and women from all walks of life, all ages, Around the world, millions of families use “There isn’t any real startup time. You don’t have and all racial, ethnic and socioeconomic groups. earnings from their direct selling businesses to to create a business plan. You don’t have to create According to the Direct Selling Association, make their monthly car or mortgage payments, a product. The only thing you need to do is find a the industry’s trade organization, 24 percent take family vacations, send their children to reputable company—one that you can trust—that of direct sellers have a high school diploma or private schools or purchase a few luxuries. For offers a product or service that you believe in and less education; however, 35 percent are college these individuals, the money earned each month, can get passionate about.” graduates and 1 in 12 has a postgraduate degree. regardless of the amount, makes a big difference. These statistics are expected to possibly change And the big benefit? It’s that they are doing it on A Growing Trend dramatically as technology redefines the way their terms and in accordance to the time they are What is most appealing about becoming a direct sellers conduct their businesses and willing to invest. direct seller is that anyone can do it. Today’s more and more Americans look for easier ways technology offers many viable options for to attempt entrepreneurship by starting their The Benefit of Owning Your working from home, not to mention the comfort own business. and enjoyment of not having to go to a place Own Business of employment at a certain time each day. The The Primary Benefit: Some direct sellers and network marketers (all essential activities related to building the business are independent business owners) choose to view are usually conducted in the home. The party Work–Life Balance their business as an opportunity with unlimited plan approach to selling is found to be very easy A home-based business is a valuable asset earning potential. They realize they can increase to learn—and to enjoy. Meeting prospective when it is developed successfully. Since there their chances of achieving financial freedom by customers and potential direct sellers at a coffee is no commute to work, one’s business can be building a strong business. This requires time and shop is far more relaxing than the traditional managed to accommodate one’s working hours, energy to attract customers, sell their products business conference room. family life and personal interests. This is one of the and build a sales organization of others who
- 28. 28 are recruited, coached and supported in their efforts to also build successful businesses. By treating the opportunity as a true business, Top 5 Reasons for Considering these direct sellers have the potential to earn significant profits from their investment of time. a Direct Selling Business The Benefit of Personal Development Be Your Own Boss—You are in complete control of how you invest your time Personal development is a phrase often used when direct selling and how you go about building your business. companies describe the benefits associated with the training they offer. Direct sellers tend to rave about the support they receive regardless of Save Time and Money—As an independent business owner, you purchase whether they are in the business for a new lifetime career or just a few the products you love at discounts and you operate all activities from your home. months to earn some needed extra income. Some have been known to report that as a result of the training offered by the direct selling Expand Your Circle of Friends—Direct selling business opportunities company they chose—usually offered free or at minimal cost—they are based on building relationships. When building a direct selling business, were able to step out of their comfort zones, engage in conversations customers and other team members appear to quickly become important and more effectively, speak in front of groups of people, manage time and rewarding aspects to one’s life. money more effectively and, ultimately, enrich their lives through the experience. Be Recognized and Rewarded for Achievement—It’s not every day that an adult receives praise for an effort well done, but direct selling companies The Ideal Business recognize and reward their independent business owners through bonuses, trips While every company has its unique traits, the entire direct selling and prizes. This is an essential component to the business model. way of doing business shares common threads of empowering men and women to dream, to reach beyond what they thought to be Build Income—The direct selling compensation model offered by most possible, and to be supported in a very strong manner. Direct selling companies allows the building of organizations that have the potential to create is a great example of how the free enterprise system can be engaged incomes beyond those earned from the personal selling/servicing efforts of the without the traditional risks associated with a brick-and-mortar direct seller. business model. ■ The number one direct seller of premium candles and home-fragrance products in the world. United States | Australia | Austria | Canada | Czech Republic | Denmark | Finland | France | Germany | Italy | Mexico | Norway | Poland | Slovakia | Switzerland | United Kingdom www.partylite.com
- 29. 29 Direct Selling News by DSN Staff Serving the Direct Selling and Network Marketing Executive D irect Selling News, the From providing its knowledge with others in the industry by trade publication for the readers with the latest contributing articles, but it also provides direct direct selling and network selling companies with information and insight marketing executive, is the industry news to profiling that can directly affect their businesses. only publication of its kind USANA President Dave Wentz says he and dedicated to reporting the mature companies and his company learn much about the day-to-day news as it happens in the direct selling industry. issues faced by companies from Working Smart Each month, DSN demonstrates its partnership startups, DSN seeks articles. “I have been consistently impressed by with direct selling companies by telling their the management strategies and marketing tactics remarkable stories and examining the issues to educate, inform shared in these regular sections, and I have important to the industry at large. and inspire. frequently used them to promote discussion From providing its readers with the and strategic planning in my staff latest industry news to profiling mature meetings,” he says. companies and startups, DSN seeks to educate, Insightful and inform and inspire. Perceptive Straightforward DSN’s New Perspectives section and Authentic offers commentary Whether providing on contemporary readers with valuable issues from information about respected direct compensation plans selling executives, and growth strategies, business professors offering a forum and industry for direct selling consultants. Its executives and suppliers to share monthly Top Desk their ideas or profiling direct selling essay is contributed by a direct selling CEO startups in Young Company Focus, DSN or president and addresses such important topics strives to deliver information that can help direct reporting helps them generate excitement among as leadership and ethics. “Personally, I’ve had the sellers be more successful. “Direct Selling News the public, their customers and their sales opportunity to share my thoughts in such areas has proven to be a great partner for SwissJust,” organizations and, in some cases, helps increase as ethics and integrity with our entire industry,” says Jacques Mizrahi, CEO of SwissJust. “They recruiting efforts. says Herbalife Chairman and CEO Michael O. are a true partner because we have helped Johnson. “It’s gratifying to know that such a them with their stories, and they have helped Relevance and Education venue exists, where matters that are especially us enormously in our path from a startup to DSN provides its readers with much more important to all of us are given an open forum continuous growth.” than industry news and company profiles. The for discussion.” Companies also frequently use DSN articles publication’s Working Smart section covers the Direct Selling News is read not only by to support their strategies and growth. From tactics and strategies that enable companies to direct selling executives and suppliers but posting articles on their websites to sending meet industry challenges, improve efficiencies also by members of the academic community, e-mail blasts to their salesforce, to including and achieve business objectives. This section who use the publication to educate their article reprints in their starter kits, the not only gives direct selling company executives students and the community at large about companies DSN covers say the editorial staff ’s and suppliers the opportunity to share their this industry. “What makes direct selling
- 30. 30 ›› The DSN Global 100—An Industry Event Tom Kelly, Senior Vice President for Global Mike Lohner, Chairman of Stella & Dot accepts ACN Co-Founder Greg Provenzano accepts ViSalus Sciences Co-Founders Ryan Blair, Nick Direct Selling for Avon, accepts the award for the Bravo Growth Award from 2009 winners the Bravo Leadership Award from 2009 winner Sarnicola and Blake Mallen and team accept No. 1 direct seller in the world. Heidi and Orville Thompson of Scentsy. John Addison of Primerica. the Bravo Turnaround Award. D irect Selling News celebrated its second annual Co-founders Ryan Blair, Nick Sarnicola and Chanel said that girls should be two things: classy and DSN Global 100 list with an awards banquet on Blake Mallen accepted the award, along with Todd fabulous. I think we’re doing our part to help that be a April 27. The event, which recognized the top 100 Goergen, whose family owns Blyth, the parent truism,” says Lohner. revenue-grossing direct selling companies in the world for company of ViSalus. The final Bravo Award went to the leadership team 2010, was attended by nearly 300 members of the direct “Starting a company is about the ups, the downs of ACN: Greg Provenzano, Robert Stevanovski, Mike selling industry, representing more than 140 companies. and celebrating successes along the way,” Blair says. Cupisz and Tony Cupisz. Provenzano accepted the Brian Connolly, former President of Avon North America “Winning the Turnaround Award during the worst Leadership Award, which was presented by 2009 and Executive Vice President of Avon Products Inc., economic time of recent history was a testament to winner John Addison, Co-CEO of Primerica. emceed the event. John Fleming, Publisher and Editor in the hard work of our distributors, the power of our Body “Given the high caliber of people who are here tonight, Chief of Direct Selling News, presented the awards to the by Vi messaging, our products and our comp plan.” it’s a surprise and an honor to be able to accept this top 10 companies. The second Bravo Award went to the company with award on behalf of all of ACN,” Provenzano says. “We The evening opened with the presentation of the the highest growth rate over the prior year. The winner appreciate being in business with you. It’s a great industry. DSN Bravo Awards for outstanding achievement— was Stella & Dot, which saw sales of $33 million in 2009 Let’s continue to do great things together.” Turnaround, Growth and Leadership. The first award increase to $104 million in 2010, a growth of 215 percent. After the presentation of the Bravo Awards, DSN went to the company that experienced the best The jewelry company made news in February when the unveiled its Global 100 for 2010. Tom Kelly, Senior Vice turnaround over the previous 12 months, which was influential venture-capital firm Sequoia Capital invested President of Global Direct Selling for Avon, accepted the ViSalus Sciences. The health transformation company $37 million for 10 percent of the ownership. award for No. 1 direct selling company in the world. “We focused its 2010 efforts on marketing its Body by Vi™ The award, presented by 2009 winners Orville strive to be the best. Tonight, to be recognized as the best Challenge and grew to an estimated $10 million in and Heidi Thompson of Scentsy, was accepted of the best in your eyes is a big honor and means a lot to monthly sales. by Mike Lohner, Chairman of Stella & Dot. “Coco us,” says Kelly. fun to teach is that when someone enrolls in a students are most likely to experience as an ensuring they all have a voice and a recognizable direct selling opportunity, they are buying into employee or future business owner.” face, brought to life within one reputable a proven business model, with a proven firm, independent source.” with proven products and identified markets,” Global in Scope says Larry Chonko, Ph.D., Thomas McMahon DSN also aims to provide its U.S. readers with A Journalistic Resource Professor of Business Ethics at the University comprehensive information about direct selling Direct Selling News is committed to of Texas at Arlington. “The entrepreneur, in other parts of the world. keeping direct selling company executives instead of having to start a business from “Direct selling executives in Europe are so abreast of the latest news and trends around the ground floor, must engage in a serious interested to hear what’s happening across the world; profiling individual member evaluation of the strategies and tactics of the their region,” says Kathy Slater, a DSN editor. companies, their accomplishments and their direct selling company and his/her prospective “They tell me that DSN provides them with efforts to give back; providing a forum for fit with that company. Most students will be valuable, accurate information about different sharing ideas and industry best practices; employed by companies with existing plans and companies, cultures and business legislation. and acting as an advocate for industry structures. The evaluative process of choosing Readers have also said that DSN is at the heart ethics and integrity. The monthly print a direct selling company is one that provides of bringing together direct selling companies publication is for direct selling executives a transferrable learning foundation for what and associations within the industry, by and decision-makers. ■
- 31. 31 DSN Global 100 When we published the DSN Global 100 ranking last year, it was the first time in the history of the industry that a comprehensive list of the top 100 direct selling companies (by revenue) was researched and presented. by DSN Staff 1 Avon Products, Inc. 2 Amway 3 Natura Cosmeticos SA 4 Vorwerk & Co. KG 2010 Revenue: $10.9 billion 2010 Revenue: $9.2 billion 2010 Revenue: $3 billion 2010 Revenue: $2.9 billion Country: USA Country: USA Country: Brazil Country: Germany Avon is the founder of modern direct selling and Amway, under parent company Alticor, offers Natura is a cosmetics giant with more than 900 Vorwerk is a family-owned company that has been the acknowledged world leader in cosmetics, Artistry cosmetics and skin-care products, products. The company operates in Argentina, focusing on the direct selling channel since 1930. fragrances and toiletries. Avon’s well-known Nutrilite nutritional products and loyalty-inducing Chile, Peru, Mexico, France, Venezuela and Products include household appliances and high- product lines include Avon Color, Anew, Skin household products. Colombia. Corporate social responsibility is one quality cosmetics. Vorwerk is a global group that So Soft™, Advance Techniques Hair Care, Avon of its core emphases. includes JAFRA Cosmetics, which reported sales Naturals and mark™. 2009 Rank: 2 volume of more than $600 million in 2010. 2009 Revenue: $8.4 billion 2009 Rank: 5 2009 Rank: 1 Marketing Style: Person-to-person 2009 Revenue: $2.4 billion 2009 Rank: 3 2009 Revenue: $10.3 billion Compensation Plan: Multi-level Marketing Style: Person-to-person and retail 2009 Revenue: $3.5 billion Marketing Style: Person-to-person Products: Nutrition, beauty, personal-care and Compensation Plan: Bi-level Marketing Style: Person-to-person and Compensation Plan: Single-level and multi-level home-care products Products: Personal-care products and fragrances party plan Products: Beauty, fashion jewelry and apparel Markets: 80+ Markets: 7 Compensation Plan: Multi-level Markets: 100+ Distributors: 3 million Distributors: 1 million (JAFRA Cosmetics) Distributors: 6.5 million Employees: 14,000+ Employees: 5,000+ Products: Cosmetics and home appliances Employees: 42,000 Headquarters: Ada, Mich. Headquarters: São Paulo, Brazil Markets: 61 Headquarters: New York, N.Y. Executives: Steve Van Andel Executive: Alessandro G. Carlucci Distributors: 600,000 Executive: Andrea Jung and Doug DeVos Year Founded: 1969 Employees: 23,000 Year Founded: 1886 Year Founded: 1959 Stock Symbol: NATU3.SA—São Paulo Headquarters: Wuppertal, Germany Stock Symbol: AVP—NYSE Executives: Walter Muyres and Reiner Strecker Year Founded: 1883
- 32. 32 5 Herbalife Ltd. 6 Mary Kay Inc. 7 Tupperware Brands Corp. 8 Oriflame Cosmetics S.A. 2010 Revenue: $2.7 billion 2010 Revenue: $2.5 billion 2010 Revenue: $2.3 billion 2010 Revenue: $2.2 billion Country: USA Country: USA Country: USA Country: Sweden Herbalife sells nutritional supplements and Mary Kay was founded by Mary Kay Ash with the Tupperware is a global direct seller of innovative, Oriflame is one of the fastest-growing beauty weight-management and personal-care products. goal of helping women achieve personal growth and premium products through an independent companies in the world. The company operates in Its products have been developed by scientists, financial success. The company’s skin-care and salesforce. Product brands and categories include 62 countries and is the market leader in more than physicians and nutrition experts, including Nobel color cosmetics products are sold in more than 35 design-centric preparation, storage and serving half. Although it has no U.S. presence, Oriflame laureate in medicine Louis Ignarro, Ph.D. countries around the world. solutions for the kitchen and home, and beauty- has a presence in Mexico, Central America, South and personal-care products. America, Europe, Asia and Africa. 2009 Rank: 6 2009 Rank: 4 2009 Revenue: $2.3 billion 2009 Revenue: $2.5 billion 2009 Rank: 8 2009 Rank: 9 Marketing Style: Person-to-person Marketing Style: Person-to-person and party plan 2009 Revenue: $2.1 billion 2009 Revenue: $1.8 billion Compensation Plan: Multi-level Compensation Plan: Single-level and multi-level Marketing Style: Person-to-person and party plan Marketing Style: Person-to-person Products: Nutritional supplements; health/fitness, Products: Skin-care products and Compensation Plan: Single-level and multi-level Compensation Plan: Multi-level wellness, skin- and hair-care; and weight- color cosmetics Products: Storage and serving products; beauty- Products: Beauty products management products Markets: 35+ and personal-care products Markets: 62 Markets: 75 Distributors: 2 million Markets: Nearly 100 Distributors: 3.5 million Distributors: 2.1 million Employees: 5,000 Distributors: 2.6 million Employees: 8,000 Employees: 4,300 Headquarters: Addison, Texas Employees: 13,500 Headquarters: Luxembourg, Luxembourg Headquarters: Los Angeles, Calif. Executive: David Holl Headquarters: Orlando, Fla. Executive: Magnus Brännström Executive: Michael O. Johnson Year Founded: 1963 Executive: Rick Goings Year Founded: 1967 Year Founded: 1980 Year Founded: 1946 Stock Symbol: ORI-SDB—Stockholm Stock Symbol: HLF—NYSE Stock Symbol: TUP—NYSE 13 Miki Corporation 14 Ignite Inc. 15 Melaleuca Inc. 15 Omnilife 2010 Revenue: $927 million 2010 Revenue: $902 million 2010 Revenue: $750 million 2010 Revenue: $750 million Country: Japan Country: USA Country: USA Country: Mexico Miki Corporation began as a textile importer and Ignite Inc. was founded in 2004 by parent company Melaleuca sells more than 350 products, including Founded by Jorge Vegara Madrigal, Omnilife seller. Today, it is a multimillion-dollar seller of Stream Energy to meet the changing needs of personal-care items, cosmetics, household cleaning Manufactura S.A. de C.V. is owned by ultimate parent supplements made from prune extracts as well as consumers. With energy service deregulation, more supplies and vitamins to consumers through company Grupo Omnilife S.A. de C.V. The company household cleaners, personal-care items and much choices exist for consumers and entrepreneurs, and a network of sales representatives, catalogs has independent consultants in 23 markets in South more. The company has sales agents in Japan, Ignite seeks to meet the needs of both. and websites. America, North America, Central America, Asia Taiwan and Malaysia. and Europe. 2009 Rank: 16 2009 Rank: 15 2009 Rank: 14 2009 Revenue: $845 million 2009 Revenue: $879 million 2009 Rank: 18 2009 Revenue: $969 million Marketing Style: Person-to-person Marketing Style: Person-to-person 2009 Revenue: $750 million Marketing Style: Not available Compensation Plan: Multi-level Compensation Plan: Single-level Marketing Style: Person-to-person Compensation Plan: Not available Products: Electricity and natural gas Products: Personal-care products, cosmetics, Compensation Plan: Multi-level Products: Foods, cosmetics and Markets: 1 cleaning supplies and vitamins Products: Nutritional supplements, weight- household products Distributors: 195,199 Markets: 18 management and beauty products, beverages, Markets: 3 Employees: 262 Distributors: Not available cosmetics and fragrances Distributors: Not available Headquarters: Dallas, Texas Employees: 1,200 Markets: 23 Employees: 270 Executive: Rob Snyder Headquarters: Idaho Falls, Idaho Distributors: 5 million Headquarters: Osaka, Japan Year Founded: 2004 Executive: Frank Vandersloot Employees: 3,500 Executive: Toshikazu Kadota Year Founded: 1985 Headquarters: Zapopan, Mexico Year Founded: 1964 Executive: Jorge V. Madrigal Year Founded: 1992
- 33. 33 9 Forever Living Products 10 Nu Skin Enterprises, Inc. 11 Belcorp/L’Bel Paris 11 Primerica Inc. 2010 Revenue: $1.7 billion 2010 Revenue: $1.5 billion 2010 Revenue: $1.3 billion 2010 Revenue: $1.3 billion Country: USA Country: USA Country: Peru Country: USA Forever Living is the world’s largest grower, Nu Skin Enterprises Inc. is a global direct Belcorp focuses on women, not only through its Primerica provides financial products and services, manufacturer and distributor of aloe vera, and this selling company operating in 48 international business model but also through its products. Over including term life insurance, mutual funds, inspires them to make environmental responsibility markets throughout the Americas, Europe 840,000 independent beauty consultants offer variable annuities, loans, long-term care insurance a priority. The company offers a complete line and the Asia-Pacific region. Going far beyond the L’Bel, Ésika and Cyzone beauty and lifestyle and legal services to 6 million clients, primarily of aloe vera drinks, skin-care products and cosmetics, toiletries and fragrances, Nu Skin sells brands. As of 2011, Belcorp has a presence in 15 middle-class individuals and families. cosmetics, as well as a full line of nutritional more than 200 products through three distinct countries and 18 Latin American specialty stores. supplements and products from beehives. brands: Nu Skin, Pharmanex and Big Planet. 2009 Rank: 7 2009 Rank: 13 2009 Revenue: $2.2 billion 2009 Rank: 10 2009 Rank: 11 2009 Revenue: $1 billion Marketing Style: Person-to-person 2009 Revenue: $1.7 billion 2009 Revenue: $1.3 billion Marketing Style: Person-to-person and Compensation Plan: Multi-level Marketing Style: Person-to-person Marketing Style: Person-to-person party plan Products: Financial services Compensation Plan: Multi-level Compensation Plan: Multi-level Compensation Plan: Single-level and multi-level Markets: 5 Products: Aloe vera drinks, skin-care products Products: Personal-care and Products: Skin-care, fragrance, makeup, body- Distributors: 100,000 and cosmetics, nutritional supplements nutritional products care, hair-care Employees: 2,000 Markets: 142 Markets: 51 Markets: 15 Headquarters: Duluth, Ga. Distributors: Not available Distributors: 800,000 Distributors: 840,000 Executives: John Addison and Rick Williams Employees: 9.3 million Employees: 1,200 Employees: 8,000+ Year Founded: 1977 Headquarters: Scottsdale, Ariz. Headquarters: Provo, Utah Headquarters: Lima, Peru Stock Symbol: PRI—NYSE Executive: Rex Maughan Executive: Truman Hunt Executive: Eduardo Belmont Year Founded: 1978 Year Founded: 1984 Year Founded: 1967 Stock Symbol: NUS—NYSE 17 MonaVie LLC 17 Telecom Plus 17 Yanbal International/Unique 20 ACN 2010 Revenue: $600 million 2010 Revenue: $600 million 2010 Revenue: $600 million 2010 Revenue: $553 million Country: USA Country: United Kingdom Country: Peru Country: USA MonaVie’s nutritional beverages with Operating as the Utility Warehouse Discount Yanbal International was founded in Peru and sells ACN is the largest direct seller of home and corresponding gel formulations feature a blend Club, Telecom Plus provides landline phone, skin-care, cosmetics, personal-care products, telecommunications services in the world, of açai berry and other nutrient-dense fruits. The broadband, mobile phone, gas and electricity fragrances and jewelry through its catalogs and offering local and long distance phone service, company’s philanthropic aim is to improve the lives products and services to over 350,000 customers beauty consultants. digital phone service with video phones, Internet, of people living in poverty in Brazil. across the UK, as well as offering club members wireless, satellite TV, home security, computer a range of opportunities to save money on 2009 Rank: 26 support and energy services. 2009 Rank: 17 household expenses. 2009 Revenue: $490 million 2009 Revenue: $785 million Marketing Style: Party plan 2009 Rank: 21 Marketing Style: Person-to-person 2009 Rank: 33 Compensation Plan: Multi-level 2009 Revenue: $553 million Compensation Plan: Multi-level 2009 Revenue: $590 million Products: Skin-care products, personal-care Marketing Style: Person-to-person Products: Foods and nutritional products Marketing Style: Person-to-person products, cosmetics, jewelry and fragrances Compensation Plan: Multi-level Markets: 12 Compensation Plan: Multi-level Markets: 8 Products: Telecommunications, home services Distributors: 1 million Products: Landline phones, broadband, mobile Distributors: 350,000 and business services Employees: 450 phones, gas, electricity Employees: 4,800 Markets: 23 Headquarters: South Jordan, Utah Markets: 1 Headquarters: Lima, Peru Distributors: Not available Executives: Dallin A. Larsen and Henry Marsh Distributors: 30,000 Executive: Janine Belmont Employees: 1,300 Year Founded: 2005 Employees: 500 Year Founded: 1967 Headquarters: Concord, N.C. Headquarters: London, UK Executives: Robert Stevanovski, Greg Executive: Andrew Lindsay Provenzano, Tony Cupisz and Mike Cupisz Year Founded: 1998 Year Founded: 1993 Stock Symbol: TEP—LONDON
- 34. 34 21 PartyLite (Blyth) 22 Amore Pacific 23 LG Household & Health Care 2010 Revenue: $545 million 2010 Revenue: $539 million 2010 Revenue: $532 million Country: USA Country: South Korea Country: South Korea Started by entrepreneur Mabel Baker with her single line of bayberry Amore Pacific is an old favorite in South Korea, and its products LG Household & Health Care is an established leader in the Korean candles, PartyLite is now the world’s largest direct seller of candles can now be found on Sephora shelves in the United States. The household goods and cosmetics industries. Its household goods and home fragrance products. The company was acquired by Blyth, company’s products use Asian botanicals and nanotechnology to include oral care products, skin-care and hair-care products, laundry Inc. in 1990. deliver skin-care and personal-care items. products and paper products. 2009 Rank: 19 2009 Rank: 27 2009 Rank: 23 2009 Revenue: $621.6 million 2009 Revenue: $475 million 2009 Revenue: $461 million Marketing Style: Party plan Marketing Style: Direct selling/retail stores Marketing Style: Not available Compensation Plan: Multi-level Compensation Plan: Not available Compensation Plan: Not available Products: Candles, candle warmers, flameless fragrance, home Products: Cosmetics, personal-care, health products and tea Products: Cosmetics and household products accents, personal-care products and food products products Markets: 5 Markets: 18 Markets: 3 Distributors: Not available Distributors: 63,556 Distributors: Not available Employees: 2,745 Employees: 1,249 Employees: Not available Headquarters: Seoul, South Korea Headquarters: Plymouth, Mass. Headquarters: Seoul, South Korea Executive: Suk Cha Executive: Anne Butler Executive: Kyung-Bae Suh Year Founded: 1947 Year Founded: 1973 Year Founded: 1945 Stock Symbol: 051900—SEO Stock Symbol: BTH—NYSE Stock Symbol: 090430 (Korea Stock Exchange) 24 USANA Health Sciences Inc. 25 Shaklee Corp. 25 The Pampered Chef Ltd. 25 Tiens/Tianshi 2010 Revenue: $517 million 2010 Revenue: $500 million 2010 Revenue: $500 million 2010 Revenue: $500 million Country: USA Country: USA Country: USA Country: China USANA Health Sciences develops and Founded in 1956, Shaklee manufactures products The Pampered Chef sells more than 300 In China, Tiens sells its products through manufactures high-quality nutritional supplements, and distributes them through its website and more gourmet kitchen tools, cookware, cookbooks and some 100 branch offices and chain stores of healthy weight-management products and than 750,000 representatives in North America foodstuffs. Founded in 1980, Pampered Chef was affiliate Tianshi Engineering. Outside of China, personal-care products, which are marketed by and Asia. The company is known for its green acquired by Berkshire Hathaway, the conglomerate it sells products through independent distributors independent associates in 15 international markets. products and social responsibility efforts. controlled by billionaire Warren Buffett, in 2002. through subsidiary Tianshi International and majority-owned Tiens Biotech Group USA Inc. 2009 Rank: 31 2009 Rank: 24 2009 Rank: 24 2009 Revenue: $436.9 million 2009 Revenue: $500 million 2009 Revenue: $500 million 2009 Rank: 47 Marketing Style: Person-to-person Marketing Style: Person-to-person Marketing Style: Party plan 2009 Revenue: $275 million Compensation Plan: Multi-level (also retail in Singapore) Compensation Plan: Multi-level Marketing Style: Person-to-person and retail Products: Nutritional supplements, personal- Compensation Plan: Multi-level Products: High-end tools for cooking Compensation Plan: Uni-level and breakaway care, energy and weight-management products Products: Nutritional supplements, skin-care, and entertaining Products: Wellness products, Markets: 15 weight management, green cleaners Markets: 5 dietary supplements Distributors: 228,000 Markets: 8 Distributors: 60,000 Markets: 110 Employees: 1,240 Distributors: 1.25 million Employees: 800 Distributors: Not available Headquarters: Salt Lake City, Utah Employees: 750 Headquarters: Addison, Ill. Employees: 2,827 Executive: David Wentz Headquarters: Pleasanton, Calif. Executive: Marla Gottschalk Headquarters: Tianjin, China Year Founded: 1992 Executive: Roger Barnett Year Founded: 1980 Executive: Li Jinyuan Stock Symbol: USNA—NASDAQ Year Founded: 1956 Stock Symbol: BRK-A—NYSE Year Founded: 1990 Stock Symbol: TBV—AMEX
- 35. 35 Clinically proven Medifast Meals Lose up to 2 to 5 lbs a week, quickly and safely If you could choose Recommended by over 20,000 doctors since 1980 Optimal Health,would you? Achieving Optimal Health is Now Possible Client and Health Coach Optimal Health is a whole new approach to well-being that is based on creating health with the Take Shape For Life Program. Nancy lost 135 lbs* and Three unique components (a Health Coach, the Medifast 5 & 1 Plan®, and the Habits of Health has kept it off for 8 years! System) create the foundation of long-term support that guides Clients along their journey. As a Client you’ll learn to make the choices that can help you take charge of your health for the long term. Reaching a healthy weight is just the beginning – Take Shape For Life offers much more. Who We Are… A Great Opportunity… Take Shape For Life is the direct sales, and largest, division With obesity in the United States of Medifast, Inc. (NYSE: MED), a solid 30 year old company reaching epidemic proportions, Take recently named “#1 Small Company in America” by Shape For Life offers an amazing Forbes Magazine. Recognized in the top 100 direct sales business opportunity to become a companies in the world†, Take Shape For Life is a physician- Health Coach and join like-minded led business model based around Health Coaches who are individuals with the common goal of trained and educated to support Clients on the Medifast 5 “paying it forward” and getting America & 1 Plan with encouragement, education and mentoring. healthy. We are a health network of Before What makes Take Shape For Life so different is that Health coaches who live and teach the Trilogy Coaches don’t sell products or services, they simply share of Optimal Health: Healthy Body, the program and then help guide their Clients. Healthy Mind, and Healthy Finances. The company would like to thank all of our Health Coaches for everything they do to get America healthy! Discover more about Take Shape For Life at www.TSFL.com. Most people say they get their life back, but now I have a life I’ve never experienced before. *Results not typical. Typical weight loss on the Medifast 5 & 1 Plan is up to 2 to 5 lbs per week. † Take Shape For Life (Medifast) is ranked No. 69 on the 2010 Direct Selling News Global 100 list. This list identifies the Top 100 Direct Selling Companies in the World.
- 36. 36 28 Pre-Paid Legal Services, Inc. 41 LR Health & Beauty Systems 54 Lux International 67 Family Heritage Life 2010 Revenue: $454 million 2010 Revenue: $307 million 2010 Revenue: $234 million 2010 Revenue: $166 million Country: USA Country: Germany Country: Switzerland Country: USA 29 Tahitian Noni International, Inc. 42 Aerus Holdings Inc. LLC 55 Mannatech, Inc. 68 Univera 2010 Revenue: $420 million 2010 Revenue: $300 million 2010 Revenue: $228 million 2010 Revenue: $164 million Country: USA Country: USA Country: USA Country: USA 30 Market America Inc. 42 Sunrider 56 Four Leaf Japan Co./Forifu Japan 69 BearCere’Ju Co. Ltd. 2010 Revenue: $416 million 2010 Revenue: $300 million 2010 Revenue: $226 million 2010 Revenue: $160 million Country: USA Country: USA Country: Japan Country: Japan 31 Ambit Energy, L.P. 44 Cosway 57 PM-International AG 69 Take Shape for Life (Medifast) 2010 Revenue: $415 million 2010 Revenue: $298 million 2010 Revenue: $217 million 2010 Revenue: $160 million Country: USA Country: Malaysia Country: Germany Country: USA 32 WIV Wein Int’l AG 45 Eureka Forbes Ltd. 58 ERINA Co., Inc. 71 Jewels by Park Lane Inc. 2010 Revenue: $385 million 2010 Revenue: $272 million 2010 Revenue: $216 million 2010 Revenue: $150 million Country: Germany Country: India Country: Japan Country: USA 33 Scentsy 46 Isagenix International 59 Nikken Global Inc. 72 Sportron 2010 Revenue: $382 million 2010 Revenue: $256 million 2010 Revenue: $210 million 2010 Revenue: $148 million Country: USA Country: USA Country: USA Country: USA 34 Pola Inc. 47 Neways, Inc. 59 Team National 73 Japanlife Co. Ltd. 2010 Revenue: $361 million 2010 Revenue: $250 million 2010 Revenue: $210 million 2010 Revenue: $144 million Country: Japan Country: USA Country: USA Country: Japan 35 Arbonne International Inc. 47 XANGO, LLC 61 Diana Co. Ltd. 74 Chandeal Co. Ltd. 2010 Revenue: $357 million 2010 Revenue: $250 million 2010 Revenue: $204 million 2010 Revenue: $138 million Country: USA Country: USA Country: Japan Country: Japan 36 FORDAYS Co. Ltd. 49 Vivint, Inc. 62 CUTCO Corp./Vector Marketing 75 Deesse 2010 Revenue: $350 million 2010 Revenue: $245 million 2010 Revenue: $200 million 2010 Revenue: $130 million Country: Japan Country: USA/Canada Country: USA Country: Switzerland 37 Nature’s Sunshine Products Inc. 50 Charle Corp. Ltd. 62 Longaberger Co. 76 Enagic USA, Inc. 2010 Revenue: $349 million 2010 Revenue: $240 million 2010 Revenue: $200 million 2010 Revenue: $129 million Country: USA Country: Japan Country: USA Country: USA 38 NOEVIR Co., Ltd. 50 KOYO-SHA 62 Stampin’ Up! 77 Tastefully Simple Inc. 2010 Revenue: $345 million 2010 Revenue: $240 million 2010 Revenue: $200 million 2010 Revenue: $125 million Country: Japan Country: Japan Country: USA Country: USA 39 Southwestern 50 Naturally Plus Co. Ltd. 62 4Life Research L.C. 78 Keller Williams Realty Inc. 2010 Revenue: $337 million 2010 Revenue: $240 million 2010 Revenue: $200 million 2010 Revenue: $120 million Country: USA Country: Japan Country: USA Country: USA 40 KK ASSURAN 53 Faberlic 66 GNLD 79 Creative Memories 2010 Revenue: $333 million 2010 Revenue: $236 million 2010 Revenue: $175 million 2010 Revenue: $113 million Country: Japan Country: Russia Country: USA Country: USA continued on page 38
- 37. 37 It’s happening right now in millions of homes around the world… Someone is MAKING a phone call... TURNING on a light… SENDING a text message… SURFING the internet… WATCHING TV… COOKING breakfast. Just imagine if you got paid because someone did any of those things. That’s ACN – the world’s largest direct seller of telecommunications and essential home services! Start your own home-based business with ACN, marketing the services people simply can’t live without! IF IT’S ON, YOU GET PAID ® on 23 countries…4 continents…and growing | acninc.com | 866-244-5936
- 38. 38 continued from page 36 80 ARSOA HONSHA Corp. 83 Thirty-One Gifts 92 Agel Enterprises 92 Relìv International Inc. 2010 Revenue: $111 million 2010 Revenue: $100 million 2010 Revenue: $80 million 2010 Revenue: $80 million Country: Japan Country: USA Country: USA Country: USA 81 Stella & Dot 83 Unicity Networks International 92 Fortune Hi-Tech Marketing 92 TriVita 2010 Revenue: $104 million 2010 Revenue: $100 million 2010 Revenue: $80 million 2010 Revenue: $80 million Country: USA Country: USA Country: USA Country: USA 82 Kleeneze 88 The Maira Co. Ltd. 92 FreeLife International 92 World Financial Group 2010 Revenue: $102 million 2010 Revenue: $96 million 2010 Revenue: $80 million 2010 Revenue: $80 million Country: United Kingdom Country: Japan Country: USA Country: USA 83 Kirby Company 89 Vemma Nutrition Co. 92 Passion Parties 2010 Revenue: $100 million 2010 Revenue: $92 million 2010 Revenue: $80 million Country: USA Country: USA Country: USA 83 lia sophia 90 WorldVentures 92 Pure Romance 2010 Revenue: $100 million 2010 Revenue: $90 million 2010 Revenue: $80 million Country: USA Country: USA Country: USA Direct Selling News is now 83 Premier Designs 91 AdvoCare 92 Regal Ware available as an iPad application. 2010 Revenue: $100 million 2010 Revenue: $89 million 2010 Revenue: $80 million You can download this FREE app Country: USA Country: USA Country: USA at http://bit.ly/dsnipad.
- 39. 39 what difference does it make? When it comes to health supplements, it’s a fair question. And it deserves answers. Amway makes Nutrilite® vitamins with healthy plant nutrients from our own organic farms. And that makes a very positive difference. To learn more or find an Amway Independent Business Owner, call 800-950-7732 or visit Amway.com/positive.
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