Letter from John Fleming, August 2013

Click here to order the August 2013 issue in which this article appeared or click here to download it to your mobile device.

The strong 2nd quarter and July performance of many publicly held direct selling companies sends strong signals regarding the current state of direct selling and the future. After taking the brunt of a vicious short seller attack last year, Herbalife’s share price has rebounded significantly. At the beginning of 2013, its stock price was below $35.00. As this piece is being written, Herbalife is trading at $54.00. USANA stock has also risen dramatically. From a low of around $35.00 in January, USANA is trading over $80.00 as of this writing. Primerica’s share price also has been steadily rising all year. Nu Skin has been steadily performing as well. Nu Skin certainly captured the attention of the world on July 10 when the stock price jumped approximately $12.00 in one day after the company revised its guidance for the balance of 2013. Shares have been trading in the high $70.00 range since then. In fact, the stock just rose to $83+ behind announcements of more planned expansion in China as a result of more licenses being issued.

John FlemingWe here at DSN found it most exciting to observe the many good things happening for direct selling companies and the industry in support of the official announcements made at the DSA Annual Meeting, which indicated industry sales and recruiting were up, both domestically and globally. What further excites us about this good news being shared around the world is that it supports true education about the direct selling model. Last year, the industry was attacked, perhaps more viciously than observed in the last 10 to 15 years, by some who obviously do not understand the attributes of a channel of distribution based on the engagement of people who also attract others, all of whom enjoy the products and services offered. Billionaire investor Bill Ackman created major concerns among many with his attack on Herbalife; however, these attacks may have actually caused more people to learn about the business model and pursue the facts.

Interestingly, the companies mentioned in the first paragraph all focus on nutrition/wellness, personal care or services. We know that all of the categories mentioned are considered growth categories for the industry.

As we have done on other occasions when the news is extraordinary, we reached out directly to the source. In this case we were able to schedule an interview with Truman Hunt, President and CEO of Nu Skin, to ask a few questions about the confidence being expressed by shareholders and analysts in Nu Skin’s corporate strategy, and how their independent sales organization plays out the role of this strategy. As we had hoped, Mr. Hunt was very candid and open. We know you will appreciate the full interview found here.

Last month, updated industry data from the World Federation of Direct Selling Associations and the USDSA was released to the public. This month we are revisiting the importance of industry research in a very insightful article made possible by the corporate personnel that dedicate much of their time to this effort. If there is any one lesson we gained from the challenging experiences of recent attacks on the direct selling business model it is the need for as much quantifiable data as possible. We truly need the collaboration of everyone in the industry to engage in the processes of research and communication so that when we are called upon by the media or by an analyst—or by a disbelieving neighbor—we can tell the compelling story of direct selling, supported by the facts of hard data as well as the anecdotal testimony that comes from our heart and our passion for what we believe in.

Research is a powerful tool! It takes collective voices to ensure that the data is used as effectively as possible. Here are three things that we think all of us can do to ensure that we use the research available as effectively as possible.

    • Participate in any manner that you can. When called upon by researchers, don’t fall into that trap of thinking that you do not have time. Consider joining the DSA if you are not currently a member. Membership has its benefits, and participating directly in the research effort enables your company to benefit from all of the findings, not just those that are released to the public.
    • Read all of the research you can get your hands on to equip your own conversation and corporate communication with solid statistical facts. The WFDSA and the USDSA websites contain a lot of data.
  • Use the data. Your conversations and corporate messages will resonate much clearer and stronger, especially when conversing with the skeptics. When corporate messages consistently utilize data appropriately, the word spreads through the sales organization, which then passes the data to customers and educates the general public.

It all sounds simple; however, collectively we can eventually dispel many of the myths and promote the benefits of the world’s most unique channel of distribution!

Until next month… enjoy the issue!

John Fleming
Publisher and Editor in Chief


About Direct Selling News
Direct Selling News Magazine has been serving direct selling and network marketing executives since 2004. Each issue of Direct Selling News offers content on topics that shape the dynamics of our industry.

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