The BIG HISTORY of Direct Selling

by J.M. Emmert

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

IN THIS ISSUE:

• The BIG HISTORY of Direct Selling • 10 Things to Know • The List 
• Topping the Charts • Profiles • Celebration

BRAVO AWARDS: 
• Leadership • Growth Based on Percentage • Growth Based on Revenue •Humanitarian


DSN Global 100

This past November the History Channel’s sister station H2 aired Big History, a 17-part narrative on the history of Earth. The program culminated with a look at the critical events that shaped life on this planet, from the Big Bang to the social transformations of the modern era. Like the history of the universe, the story of direct selling reveals paradigm-shifting events and thresholds that have fundamentally changed the industry and helped to shape today’s direct seller.

So we wondered: What were those moments? What would be the “Big History” of direct selling? The following are the five thresholds we identified.

Threshold No. 1—The First Direct Selling Companies

There was no Big Bang moment for direct selling, no moment when out of nothing everything began. The industry, the oldest distribution channel in history, began appearing alongside the development of civilizations. As hunter-gatherers settled down to farm and build towns, the first direct sellers began to sell their wares across Europe, Africa and Asia.

The bartering of commodities evolved into a vast network of trade, and by the 18th century the direct-to-consumer channel of distribution had reached the United States in the form of the Yankee peddler, solitary figures who roamed the countryside bringing goods to isolated areas of the population. But it would be another century before the first direct selling company was established. In 1855, Rev. James Robinson Graves developed a business model that had young men going door to door to sell products, forming the basis of the company known today as Southwestern.

Nearly 160 years later, direct selling engages more than 16 million people in the United States and nearly 100 million people around the world, with 22 billion-dollar global markets. Direct selling companies are committed to not only bringing quality products to the global audience, but also a quality of life that can, and does, change lives.

“More than 3 million Independent Beauty Consultants around the world share Mary Kay’s message of hope—‘If you can believe it, you can achieve it!’ ” says Sheryl Adkins-Green, Chief Marketing Officer of Mary Kay. “Through Pink Changing Lives®, Mary Kay has a commitment to changing the lives of women and children around the world, encouraging them to believe in themselves and pursue their dreams to transform, inspire and empower our future.”

The popularity of direct selling continues to grow. In a recent Harris Poll commissioned by Direct Selling News, nearly one-third of U.S. adults have purchased from a direct seller in the past six months, with 42 percent taking advantage of doing so online. That technology has allowed newer companies to reach more customers far quicker than the old days of walking the countryside.

“It Works! is a customer-generating machine,” says Mark Pentecost, CEO of It Works! Global. “We encourage our distributors to gather customers, and we provide a Loyal Customer Program with perks to retain customers. This opportunity forms the foundation for a business that gives everyday people hope that they can change their lives and leave a legacy for their families.”

Threshold No. 2—Women Are Welcomed

In the history of the universe, stars became the building blocks for life. And in the history of direct selling, the points of light that became the building blocks of the industry were women.

David McConnell’s decision to recruit women as sales representatives for his California Perfume Co. might have been a big, bold statement for the times. Yet it just made sense to McConnell when he saw the natural ability of women to network and market to others. Mrs. Persis Foster Eames Albee became the company’s first representative, and today more than 6 million Avon representatives are following in her footsteps, benefiting from McConnell’s belief that women could be the most important component of the direct selling channel.


“[Our Founder David H. McConnell] understood that women were natural salespeople who could easily relate to other women and passionately market beauty products.”
—Sheri McCoy, CEO, Avon Products Inc.


“In 1886, our Founder David H. McConnell recognized that women were rarely offered the opportunity to earn their own income,” says Avon CEO Sheri McCoy. “He also understood that women were natural salespeople who could easily relate to other women and passionately market beauty products. The notion that women deserve the opportunity to support themselves and their families is a cornerstone on which [Avon is] built.”

The role of women in the industry has greatly evolved from the days when the legendary Mrs. Albee traveled the Northeast by horse and buggy. Mary Kay Ash, Brownie Wise, Mary Crowley and Jan Day were strong role models whose business savvy and sincere desire to see their contemporaries succeed empowered 20th-century women and inspired a legion of today’s female leaders.

That group includes Thirty-One Gifts’ Founder and CEO Cindy Monroe, Scentsy’s Co-Founder and President Heidi Thompson, Rodan + Fields President Lori Bush, Isagenix’s Co-Founder Kathy Coover, and The Pampered Chef’s CEO Doris Christopher, who believe that being a woman is an advantage to running a direct selling company.

In fact, if you look at the Global 100 companies, you will find that nine of the 29 U.S. companies in the Top 50—31 percent—are led by women who were either co-founders or who serve as president or CEO. And it is these women who are bringing their opportunities to other women around the globe, especially in developing countries where women are expressing sentiments similar to what Mrs. Albee wrote to David McConnell 130 years ago: “I know of no line of work so lucrative, pleasant and satisfactory as this,” she said.


DSN Global 100 DSN Global 100

Threshold No. 3—The Formation of Direct Selling Associations

In 1910, McConnell’s California Perfume Co. joined with nine other companies from New York, Massachusetts and Michigan to form the Agents Credit Association, which today is known as the U.S. Direct Selling Association. It was the first such association to focus on the needs of direct sellers.

Back then, the Association was charged with collection and credit matters; today, the DSA represents 200 member companies and works to further promote the impact of direct sellers under the guidance of President Joseph Mariano.

“One of the most important accomplishments for DSA has been the mobilization of many different types of companies by recognizing and supporting their mutual interests,” Mariano says. “DSA can act on behalf of companies and individual sellers to ensure a fair and open marketplace. Because we determine our course of action based on the merits instead of special interests, we have a virtually unblemished record of defeating legislation that would be harmful to direct sellers, and have worked constructively with many states in passing anti-pyramid legislation that helps lawmakers identify and prosecute scams while protecting legitimate companies.”


“We will continue to help policymakers, prospective sellers and others gain a fuller understanding and appreciation of direct selling.”
—Joseph Mariano, President, U.S. DSA


According to Mariano, the DSA will continue to work collaboratively with companies to maintain unity of message and purpose in all its activities. “We will continue to enhance the high standards of marketplace behavior the public should expect from direct sellers, and we will continue to help policymakers, prospective sellers and others gain a fuller understanding and appreciation of direct selling,” he says.

Today more than 60 countries have direct selling associations. Seldia—the European Direct Selling Association—represents 27 DSAs, including those from the U.K., Germany, France, Belgium and Italy, which were the first European countries to establish national associations. Since 1968, Seldia has been an authoritative voice for direct selling in European government affairs.

“New laws and regulations are now made with input from Seldia, and a growing number of policymakers have a favorable and supportive view on direct selling,” says Maurits Bruggink, Executive Director of Seldia. “With the increasing appreciation of entrepreneurship in Europe, Seldia wants to grow the importance of direct selling in the coming years and ensure that our sector is known for the opportunities it creates for individuals of every walk of life, the wealth it generates to society, and the high level of ethics in trading.”

A decade after the formation of Seldia, which at the time was known as the Fédération de la Vente et du Service à Domicile (FEVSD), the World Federation of Direct Selling Associations was established. The WFDSA is a non-governmental entity that represents national direct selling associations around the globe and works to promote the highest global standards for responsible and ethical conduct. Alessandro Carlucci, CEO of Brazil-based Natura, is the current Chairman of the WFDSA, and has diligently worked to build the reputation of the industry.

“The WFDSA was born to reinforce ethical standards and to disseminate the positive social impact of the direct selling model,” says Carlucci. “The Federation aims to promote an ethical debate in the sector considering the significant changes happening in an increasingly connected world. In other words, we seek to be every day more in sync with the aspirations of contemporary society—more connected, more active, more social. Since the energy of our people is what moves our business model, we pursue to deeply understand them and to focus on their needs. That is what makes our advocacy efforts relevant to governments and key influencers.”

Threshold No. 4—Compensation Structure

For decades, direct sellers had been compensated on a performance-based model where earnings were tied to personal sales. Then, in the mid-1900s, a revolutionary approach for compensation was developed that would allow representatives to benefit beyond their personal selling efforts. Amway was one of the first companies to adopt the new structure.

According to Amway, many people assume that the Amway business model was introduced in 1959, when Jay Van Andel and Rich DeVos founded the company. However, the company’s roots go deeper than that. Nutrilite Founder Carl Rehnborg is often credited as the father of both plant-based food supplements and the sales plan that served as the model for Amway.

This new compensation plan was actually the invention of William Casselberry, whom Rehnborg had met in a Dale Carnegie course, and Casselberry’s friend Lee Mytinger. In 1949, Jay and Rich became two of the top Nutrilite distributors and were introduced to that compensation plan, which allowed them to earn based on their own efforts and those of others they trained as Nutrilite sales reps. Without Rehnborg, Mytinger and Casselberry, Amway might not have been guided by the business plan that has served it well for 55 years.

Today, nearly 90 percent of the 2013 DSN Global 100 companies utilize this compensation structure.

DSN Global 100

Consumer Goods and Services Offered through Direct Selling

PRODUCTS

  • Arts & Crafts
  • Beauty
  • Fashion & Accessories
  • Cosmetics
  • Educational
  • Food & Beverage
  • Food Storage
  • Home Care
  • Home Décor & Fragrances
  • Jewelry
  • Kitchenware & Cookware
  • Nutritional Supplements
  • Personal Care
  • Relationship Enhancements
  • Travel
  • Weight Management
  • Wellness

SERVICES

  • Energy
  • Financial Planning & Investing
  • Health Insurance
  • Home Security
  • Legal Representation
  • Life Insurance
  • Natural Gas
  • Telecommunications

 

Threshold No. 5—Evolution of the Sales Method

The direct selling model has evolved because the world has evolved. The industry has adapted to changes because it can, as life itself can, store information, reproduce itself, pass information along and multiply.

One of the greatest changes in the industry was the party plan model, believed to have been created by Brownie Wise when she was with Tupperware. But perhaps no event in the history of direct selling has caused more of a paradigm shift than the emergence of technology. And here’s why. As Big History explained, during the era of the steam engine, it took 150 years for man’s collective knowledge to double. Today, it takes two years. By 2020, it will take 72 hours.

“We not only embrace, but innovate with the tools and technology now so abundantly available,” says Rick Stambaugh, Chief Information Officer of USANA. “The world is shifting. Mobility will prove to be the game changer, especially when it comes to prospecting. Everyone has a smartphone, which gives us a much broader reach. Apps will become a preferred means of engagement, and we are actively updating and developing several to stay ahead of the curve. In fact, for over 20 years, our focus has been on personalization. Some may say technology is contradictory to that, but it’s not. Being able to profile yourself and get answers specific to you is not only cool, but is the wave of the future.”

Stambaugh adds that as for transaction technology, the method of spending is rapidly shifting from a storefront platform to a greater web-based structure, as e-commerce becomes widely accepted and trusted. “It has certainly moved the needle on our ROI,” he says. “Then there is social media, which is less than 10 years old, but look what it has done already in the realm of awareness. These days you can’t run a successful business without being social media savvy. Even social commerce is catching on, although still in its infancy. And though the direct sales industry is becoming more high-tech, it’s still important to remain ‘high-touch’ in keeping customers satisfied and the salesforce motivated. You have to stay connected to those you serve and develop an interpersonal presence in a high-tech world.”


“Though the direct sales industry is becoming more high-tech, it’s still important to remain ‘high-touch’ in keeping customers satisfied and the salesforce motivated.”
—Rick Stambaugh, Chief Information Officer, USANA


Avon’s McCoy agrees to a certain degree. “While the biggest game changer is technology and how we use it, the backbone of our business hasn’t changed,” she says. “Our representatives continue to build relationships and have a passion for products, and our business is still high-touch, even though it’s now high-tech too. Customers can connect with their representatives in person, over the phone, via email or through social media. While the world is a different place today than when Avon started, it is the personal touch that connects our customers to our representatives.”

Adds Douglas Franco, General Manager for Belcorp USA, “I believe technology just changes the way our relationships work, but does not change their nature. It’s a trust-based purchase, which only becomes more transparent and democratic with technology.”


“I believe technology just changes the way our relationships work, but does not change their nature. It’s a trust-based purchase, which only becomes more transparent and democratic with technology.”
—Douglas Franco, General Manager, Belcorp USA


The Future

History teaches us that we have the ability to seize our evolution, and that the triumph of our collective learning is the ability to adapt. We learn to survive in the most challenging conditions. We seize the opportunities to continually move forward.

What will be the next threshold for direct selling? That remains to be seen. In the next century this industry may not even be known as “direct selling.” As new technologies and forms of communication are developed, a new term may come to apply to what it is direct sellers do, just as the term “social selling” is gaining traction today.

This year, the DSN Global 100 list revealed that 18 companies increased their 2013 revenue by more than $100 million, clear evidence that the business model can thrive in a time of economic uncertainty.

Additionally, new companies such as Origami Owl, Nerium International, Plexus Worldwide and Solavei, along with a host of others, continue to bring fresh ideas and methodologies to the marketplace. These new ideas, combined with advanced technology, placed alongside a highly successful and long-standing business model, will open up possibilities that we can only guess at today. The future is promising!

A Personal Approach in a Social World

As any reader of Direct Selling News can attest, many direct selling companies have explored the brave new world of social media. Take for example our January feature on how Chloe + Isabel has built its brand through social media. In February, we shared how Solavei is redefining commerce for the social age. Then there’s our May article on social media “wonder kid” Zurvita.

Many companies have found a niche that serves them well in the digital world, but the extent of social media’s business development power remains to be seen. In the meantime, how should entrepreneurs and businesses weigh the advantages of a hefty social media push? One New York marketing firm is promoting an alternative communication channel: direct sales. New York Client Solutions highlights a couple ways direct selling delivers more concrete ROI than social media marketing. The person-to-person approach places the transaction on a human level, circumventing the saturated sphere of email and social media solicitations. Direct selling offers the added benefit of quantifiable impact. In-person interactions provide a measurable means of identifying and engaging prospects. As companies continue to evaluate the ROI of social media marketing, results will undoubtedly vary. Businesses are still figuring out how to customize digital tools to fit their needs. Regardless of what tools direct sellers use to engage their audiences, a personal approach will remain one of the most valuable. After all, people advance a brand, and who knows people better than other people?

VideoPlus University: Raise the Bar!

by Emily Reagan

Stuart Johnson, Founder and CEO of VideoPlus, hosts industry executives for the 12th year of VideoPlus University.


Click here to order the Direct Selling News issue in which this article appeared.


VPU

On April 3-4, more than 500 direct selling executives from around the world gathered at the Gaylord Texan Resort & Convention Center in Grapevine, Texas, for what has become one of the industry’s most unique events. Now in its 12th year, VideoPlus University (VPU) provides a forum for the sharing of ideas, challenges and best practices among industry executives.

This year the format once again mirrored the popular TED Talks—short and concise messages from many speakers—avoiding the more common practice of long presentations by just a few. The overall effect is a sort of “group huddle” for the entire industry that lifts and benefits all involved with the plentiful flow and interchange of ideas.

Throughout the two-day period, a remarkable total of 24 speakers gave their 18-minute “power talks” centered on the event’s challenge to “Raise the Bar.” Darren Hardy, Publisher and Founding Editor of SUCCESS magazine, served as master of ceremonies for the event.

Host Stuart Johnson welcomed the record crowd by voicing his commitment to continuing to provide a forum for discussion and exploration of best practices for direct sellers. Having served as Founder and CEO of VideoPlus for more than 25 years, Johnson has cultivated a unique and comprehensive understanding of the direct selling industry. He observed that “the most successful companies in the marketplace today are companies who are clearly more customer and product focused, whose products and services are unique and effective, and who have simple messages that cut through the clutter in the marketplace.”

It is Johnson’s desire that VPU continue to offer industry leaders the knowledge and tools to cut through that clutter and engage in what he terms “disruptive thinking” in order to move their businesses forward.

Among those who shared a wealth of industry experience, best practices, and challenges were several female executives, including Amway Vice President of Sales Sandy Spielmaker; Princess House President and CEO Connie Tang; Miche Executive Vice President Jayma Woods; Tastefully Simple Founder and CEO Jill Blashack Strahan; Primerica Chief Marketing Officer Julie Seman; and Viridian Senior Vice President Meredith Berkich.

Always favorites among audiences interested in personal development, best-selling author and leadership expert John C. Maxwell and Primerica Co-CEO John Addison also made appearances.


Darren Hardy, Publisher and Founding Editor of SUCCESS magazine, serves as master of ceremonies.Darren Hardy, Publisher and Founding Editor of SUCCESS magazine, serves as master of ceremonies. VideoPlus University: Raise the BarVideoPlus University: Raise the Bar. VideoPlus University draws a record crowd.VideoPlus University draws a record crowd.

The power-packed event embodied the spirit of “leadership completing each other, not competing with each other”—a principle Mark Pentecost, CEO and President of It Works! Global, emphasized during his talk.

From Solavei—a newcomer to the cell phone services market working with provider T-Mobile—CEO Ryan Wuerch presented four themes that recurred often throughout the event: the economy, social media, mobile and social selling. In economic conditions that drive people to new business opportunities, direct selling offers independence and encourages innovation. Today’s direct sellers can also reap the considerable benefits of a consumer base attuned to all things social.

The social connection inherent to direct selling facilitates what Tastefully Simple’s Blashack Strahan referred to as connecting through stories. “Creating deep human connection is the key to building trust,” she said. One company actively developing a social culture from the top down is ViSalus. Co-Founder and CMO Blake Mallen, who interacts regularly with his 70,000+ Facebook fans, shared insights into how companies can foster social interaction. Mallen emphasized the importance of including everyone, rather than appealing solely to distributors, consumers or any other sector of the business. Using social platforms as a means of starting conversations requires, in Mallen’s terms, “a simple, social selling message.”

Other speakers echoed Mallen’s call for simplicity in building brands and products or services. According to Pentecost, who led his team at It Works! Global to over 400 percent revenue growth in 2012, “Anyone can complicate this business. The real genius is making it simple.”

That is precisely what Co-Founder and CMO Chris Chambless and his team have successfully accomplished at Ambit Energy. Chambless shared his tips for creating momentum through a simple, focused message and product, and most importantly, delivering on what’s promised. “I love this industry and the opportunities it offers,” Chambless said. “I think it’s the best hope in entrepreneurship.”

In conjunction with VPU, participants had the opportunity to attend the DSN Global 100 Celebration. The event unveiled the results of research and ranking conducted to identify the top 100 companies in the industry globally. The DSN Global 100 list, which will appear in the June 2013 issue of Direct Selling News, profiles these companies and their impact on lives around the world. In addition to revealing this year’s rankings, the event celebrated the recipients of three Bravo Awards for outstanding achievements in 2012.

VideoPlus University is already scheduled for 2014. Again to be held at the Gaylord Texan Resort in Grapevine, Texas, the event will take place April 23-24. Registration opens Nov. 1, 2013. Find out more at www.videoplusuniversity.com.

Solavei: Redefining Commerce for the Social Age

by Jeremy Gregg

Click here to order the Direct Selling News issue in which this article appeared.


Solavei

Company Profile:

  • Founded: Sept. 21, 2012
  • Headquarters: Bellevue, Wash.
  • Founder: CEO Ryan Wuerch
  • Products: Mobile phone service

Ryan Wuerch wants to make life better for millions of people.

“I am not looking to turn a few people into millionaires. I want to empower millions of people to become thousandaires,” he says. “And I believe that the way to do so is by making commerce less expensive and even profitable for everyone involved.”

Ryan Wuerch

Ryan Wuerch

Wuerch is Founder and CEO of Solavei, a company that is pioneering what he calls “social commerce.” In many ways, the concept is at the heart of the direct selling model—avoid spending billions of dollars on traditional advertising, and instead move it into the hands of the people who use the products.

“The growth of direct selling is one of the most significant trends hitting the global economy. I see one of the main challenges in the industry to be the reliance on products that could be seen as unnecessary or as a luxury. That can make repeat sales a challenge in some cases,” Wuerch says. To differentiate itself, Solavei is focusing on a service that customers are already using to connect themselves every day—mobile phones.

Mobilizing a Movement

“A recent study reported that most people would prefer to leave home without their wallet than without their cellphone. These devices have become a part of our DNA, an expression of who we are,” Wuerch says. He adds that there are more than 300 million cellphones in the United States today, and he projects that there will be more than 6 billion cellphones around the world very soon.

Of course, the telecom industry is also one of the most capital-intensive and hotly contested markets in the world. This can be a very tough environment for a startup to survive, particularly when the industry is dominated by a handful of extremely well-capitalized corporate giants.

For example, the top two wireless service providers—AT&T and Verizon—have a combined advertising budget of more than $5 billion per year. While that would intimidate many less experienced entrepreneurs, Wuerch believes this actually provides a tremendous advantage for his new company. He sees those advertising budgets as a billion dollars he doesn’t have to spend, since Solavei wants to invest its resources in what he calls the “best form of advertising—satisfied customers.”

“At Solavei, we empower our customers with low-cost alternatives for the services that they are already using and make it easy for them to share Solavei with others,” Wuerch says.

The approach seems to be working. Solavei launched on Sept. 21, 2012; within 90 days the company had more than 110,000 members in the United States sign up for $49 per month for unlimited voice, text and data mobile service.

“This year we will begin to expand globally. We will also expand our platform to carry multiple products and services in addition to mobile phones. We anticipate millions of new members joining.”


Solavei Solavei

Aligning the Trends

Before launching Solavei, Wuerch had spent nearly two decades in the telecom and technology industries. After several successful exits from earlier ventures, he founded and built his last company, Motricity, into a firm with more than a billion-dollar market cap before he parted in 2011.

When he left Motricity, he told his wife Shawntel—the former 1996 Miss America winner who is now Solavei’s Head of Community Affairs—that he wanted to do something different with his next venture. He wanted to find a way to make a difference.

Wuerch went away for a few weeks to study the major trends that he saw shaping the future, and he landed on four that he saw as underpinning economic growth around the world.

    1. The worst economic conditions since the Great Depression, which was driving people to focus more and more on saving money. This also was leading to the creation of entirely new companies, such as Groupon, to capitalize on this drive.
    2. The rising dominance of social media within so many people’s lives, which was creating an explosion in the number of active relationships between people.
    3. The surge of mobile device usage, driving an incredible number of innovations in not only communication but commerce, banking and more.
    4. The continued growth of the direct selling industry despite the economic downturn. In particular, he was struck by the rapid rise of outside investments in new direct selling companies like Stella & Dot, Ambit and Ignite.

While studying these trends, he also perceived tremendous waste in the “shotgun approach” represented by the $500 billion spent each year on traditional advertising.


Solavei is a company leveraging the power of social media and direct selling to help people save money on their mobile service while avoiding the heavy advertising costs typical within the mobile industry.


T-Mobile

As he studied these trends, he saw an opportunity to align them within a single company, leveraging the power of social media and direct selling to help people save money on their mobile service while avoiding the heavy advertising costs typical within the mobile industry.

“Solavei is positioned to positively impact people without changing their behavior or their environment,” Wuerch says. He explains that the company’s name is a combination of words meaning “sun in your veins,” a metaphor for the powerful opportunity that Solavei seeks to provide to its members.

Investors have put more than $20 million into Solavei so far, allowing it to attract a top-tier management team with experience at major corporations across the country, as well as a former U.S. congressman. Key positions are now held by former executives from T-Mobile as well as Wuerch’s last mobile services company, Motricity.

A New Approach to Compensation

Solavei’s initial service is a $49/month mobile plan that includes unlimited voice, data and text messages. The service is built on the backbone of T-Mobile’s infrastructure, providing customers with leading 4G services at a fraction of the cost of other providers.

Even if they are only interested in purchasing the cellphone service and have no intention to recruit others, all customers are eligible to become independent distributors (whom the company calls “members”). They receive a personalized URL on the Solavei.com website that they can easily share on their social networks, or they can even adapt a Solavei-themed WordPress template for their own Custom URL.

The goal is to make the Solavei service one of the easiest sales to make in the direct selling industry, explains Wuerch. He says that the average time for a new member to transfer their phone service, enroll in their social community and establish their banking relationship using the Solavei enrollment process is less than 6 minutes and 26 seconds.

In addition to removing as many barriers as possible for their members to close a deal, Solavei has developed a patented compensation plan based on social graph theory—primarily, by focusing on points of three within each person’s massive and growing network of social relationships. These focal points, or “trios,” serve as the essential building blocks for the Solavei direct sales program.

“We do not consider ourselves a multi-level marketing company,” says Jason Genthner, Head of Corporate Communications. “Our members are not paid on multi-levels as traditional MLM companies operate. We pay on who they bring in, who those people then bring in, and then on the entire network that they build.”

The primary way that members earn money is in $20/month increments for every trio that they successfully bring into the system. This allows them to essentially have free cellphone service with only a handful of successful recruits, explains Genthner.

Members can also earn “Fast Action Bonuses” for new recruits added within the first 60 days. These one-time bonuses are $50 for the first four trios (enough to pay the full cost of a brand-new smartphone). Additional payment structures include “Path Pay,” a monthly payment for those who have recruited at least four other trios (ranging from $50 up to $20,000 per month); members also earn a one-time payment of these same amounts when they enter a new Path, called a Path Bonus. The compensation plan is based on each phone in the plan, therefore, many members are building more than one business.


Rather than sending members checks, Solavei pays its members through a Solavei card that was developed in partnership with Bank of America to work like a Visa debit card.


“We think a person’s voice is the most powerful form of marketing, so that’s what we want to invest in. While other companies spend billions on traditional marketing, we reward our members for sharing Solavei with their connections,” Genthner says.

But one of the most revolutionary aspects of Solavei has nothing to do with its mobile service offering or its compensation plan. Rather, it is with the method of its biweekly payments to members. Rather than sending them checks, Solavei pays its members through a Solavei card that was developed in partnership with Bank of America to work like a Visa debit card.

“Our vision is to create our own economy,” Wuerch says.

Social Commerce

SolaveiWhat makes this concept so revolutionary is that it allows Solavei to essentially control a significant portion of their members’ “mobile wallets.” Through incentives offered to members, these funds can then be directed toward purchases within the Solavei marketplace—allowing the company to pay its members for the everyday purchases of goods and services.

This is all in line with Wuerch’s goal to make commerce less expensive for consumers as well as more profitable for companies. This platform provides Solavei with an opportunity to harness the collective purchasing power of their members to attract deals from other vendors in a similar fashion to Costco. For example, Solavei members could receive a payment of the percentage of the money spent by members at a retailer such as Target.

“You make money through Solavei, you then save money through purchases in the Solavei marketplace and those purchases then also help you to make even more money,” explains Wuerch.

He also notes that many of these purchases are being made using a Solavei mobile phone and are then being shared using the company’s social technology. The end result is that Solavei becomes deeply embedded within its members’ social and economic lives, making it even easier for them to share the Solavei opportunity with others.

More Than Mobile Phones: The Future of Solavei

Mobile phones are merely the starting place for Solavei, Wuerch says.

“Mobile is the first of many, because it provides an immediate economic and communication conduit to our members. We anticipate that we will soon broaden Solavei from just mobile services to include energy, insurance, financial services… essentially, any of the primary items that you already have as a share of your wallet today.”

In other words, Wuerch never intends for Solavei to sell you anything. Rather, it will provide you with a better deal on the things that you are already buying consistently—and also provide you an opportunity to generate income.

“We will only consider goods and services that everyone uses and that Solavei can offer for less, generally by eliminating the costs of advertising. We started with mobile and created the social commerce system that would work with all goods and services. This is similar to Amazon starting out with books, but ultimately creating an online distribution system to offer many products. Future Solavei offerings must be the kind of services/products that can be easily shared in a social environment and must have an opportunity to create income for the members.”

In its first few months of operations, the company has already received endorsements from celebrities such as Stephen Baldwin—whose video testimonials about the product are already gaining significant exposure for the company on Facebook and other social media sites. Wuerch says that Solavei has never paid for such endorsements, which are being offered because of what these high-profile figures believe that Solavei can do for everyone.

When asked about the future of his company, Wuerch is optimistic: “We are building what we anticipate to be a multi-billion-dollar company. We have spent millions on branding to give people confidence in our brand, and we have built a strong patent-protected technology into a social commerce platform that is irrespective of geography and currency. Solavei is built for global scale.”

Solavei Launches Mobile Phone Service

Solavei

Launched on Sept. 21, Solavei members are taking advantage of the only mobile phone service offering a $49 per month unlimited voice, text and data plan, along with the ability to earn recurring monthly income by signing up other members.

Rather than spending millions of dollars advertising to get its message out and using retail stores to distribute its services, Solavei, in strategic partnership with T-Mobile, relies on its members to share the service with their friends and family and directly compensates them for their efforts. The more than 65,000 members using Solavei’s contract-free mobile service are essentially serving as moving points of distribution, adding new customers by sharing through word-of-mouth and personal social media connections. “We created Solavei and our social commerce platform to give people the opportunity to earn income by sharing a service they are already using every day,” said Ryan Wuerch, Founder and CEO of Solavei. “With more than 300 million mobile phone subscribers in the U.S., it’s time to shift the billions of dollars the large wireless carriers spend on advertising to the greatest advertiser in the world—people.”

Members who choose to share the Solavei Mobile Service with others through its social commerce platform can use the money to offset their monthly bill and even have the opportunity to generate recurring monthly income. Solavei offers a highly efficient and scalable means to both consume and distribute mobile service.

For more information, go to www.Solavei.com.

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