April 12, 2017 1 Comment
Join us on our Facebook page Wednesday, April 19 at 7 PM – 10 PM where we present the 8th annual DSN Global 100! We will be posting the countdown live from the ballroom at the celebration.
Direct Selling News has been serving direct selling and network marketing executives since 2004.
April 12, 2017 1 Comment
December 15, 2016 Leave a comment
The Federal Trade Commission announced Dec. 15 that it has approved a settlement agreement in its case against the Arizona-based company, bringing an end to a more than year-long, multimillion-dollar legal battle. The agreement offers a clear path forward for CEO B.K. Boreyko to continue operating Vemma as a customer-focused network marketing company, while also establishing specific rules related to distributor compensation and income claims.
The settlement covers Vemma Nutrition Co., Vemma International Holdings Inc. and Boreyko, and a separate settlement covers former Vemma distributor Tom Alkazin and Alkazin’s wife, Bethany, who had been named as a relief defendant in the original federal court action. The settlement outlines specific business practices from which the defendants are prohibited in engaging, including paying compensation to a distributor unless a majority of that individual’s revenue comes from sales to people who are not a part of the business venture, making deceptive income claims and making unsubstantiated health claims. In addition, Vemma has agreed to…
DSN will continue to update this story as additional details become available.
September 2, 2016 Leave a comment
by Andrea Tortora
Of all the misinformation about direct selling, perhaps the most often repeated—even by those who work most closely in the field—is the description of direct selling as an industry. Read more…
Celebrating success is a hallmark of direct selling, and we have two opportunities for you to recognize the great work being done by your corporate teams. Read more…
Like the pink Cadillacs it awards to top sellers, today’s Mary Kay retains a classic feel while embracing innovative thinking and design. Read more…
When husband and wife team Mark and Tracy Jarvis set out to launch their own company, they had listened to numerous suggestions for the name until “zurvita” was proposed and immediately touched and won them over. Read more…
In the year 1855, Reverend J.R. Graves started a mail order company selling books, religious tracts and Bibles. Read more…
It’s another year and you’re gearing up for your convention. Read more…
Over the past decade, rapid developments in technology have fundamentally changed how direct selling organizations operate. Read more…
The speculation started immediately. As soon as the news—Herbalife Settles with FTC—began popping up on mobile alerts and news outlets early Friday morning, July 15, observers inside and outside the direct selling channel began scrambling to understand the bigger picture. Read more…
The U.S. Direct Selling Association held its Annual Meeting in Phoenix, Arizona, June 5 to 7, bringing together direct selling company executives, academics, suppliers and global direct selling leaders for collaboration and conversation about the trends shaping the channel. Read more…
The direct selling industry is at a critical juncture in its long history. Read more…
The role of the U.S. Direct Selling Association (DSA) has never been more clear: to serve as a “listening post,” a place to collect, analyze and address the aspirations and concerns of the direct selling channel. Read more…
August 4, 2016 Leave a comment
Results exceeded Wall Street estimates for the quarter ended June 30, just weeks before Herbalife announced a settlement with the FTC. The long-awaited deal concluded a U.S. probe into the company’s business practices that had stretched on for more than two years, following accusations by hedge fund manager Bill Ackman that Herbalife rewards distributors for recruiting new members rather than sales of its shakes and supplements. Ackman has backed his claims with large bets against the company’s stock.
In its complaint, the commission did not accuse Herbalife of being a pyramid scheme, and the company is able to continue its U.S. operations, with some new restrictions. Herbalife agreed to pay a $200 million judgment and implement various policy and procedural changes, including distinguishing between those who sign up to sell products and those who only wish to purchase products at a discount.
Additionally, to compensate distributors at current levels, at least 80 percent of Herbalife’s product sales must be to legitimate end-users, rather than for the distributor’s personal consumption.
Taking into account the impact of these changes, management expects full-year adjusted earnings of $4.50 to $4.80 a share, up from May guidance of $4.40 to $4.75.
The company recorded a second-quarter loss of $22.9 million, or 28 cents a share, including a $203 million charge related to regulatory settlements. Excluding items, earnings were $1.29 a share, up 4 percent from a year ago. Analysts polled by Thomson Reuters had predicted $1.21 a share.
Overall sales rose 3 percent to $1.20 billion, in line with the $1.19 billion expected by analysts.
The company is developing new tools and apps to help distributors implement agreed-to changes within the 10 months provided by the FTC. During a call with investors, Chairman and CEO Michael Johnson said Herbalife will “likely roll out” many of the changes globally, once it has studied affects in the U.S.
July 21, 2016 Leave a comment
That was one of many achievements celebrated at LegalShield’s annual convention this week in Oklahoma City, where it hosted 10,000 independent Associates from across North America. During the event, the legal services provider also recognized 13 new lifetime million-dollar income earners, introduced a new ring recognition program and awarded nearly $1.5 million in bonuses. DSN recently spoke to Bell, a sales and marketing veteran whose career has included stints at Microsoft and Chrysler, about LegalShield’s recent growth and the slate of new tools and services coming in 2016.
DSN: LegalShield is rolling out several new technology-based products and plans this year. Entering 2017, will this look like a different kind of company?
JB: I think the answer is yes, and I want to take a step back because in one way we’re unique in the direct selling and network marketing arena. I learned just this year that for the longest time the model was summarized by the slogan, “Wear the button, share the sample, show the plan.” I think one of the reasons we struggled to fit in is because we didn’t have a sample. … If you think about, for instance, skincare or food supplements like nutrition bars or powders, those things can be handed out. … What we’ve created is almost an ethereal concept. We tell people, “Hey, don’t pay a lawyer by the hour. Join our community, and with a monthly membership you can talk to a lawyer on any issue, and the meter’s not running. You’re not paying by the hour.” People find it interesting, but still kind of theoretical.
Now, we have the LegalShield App. Our Associates can pull out their phone, tap the app, and there it is—a press of the button will call your law firm. It knows who you are. This last week we added the Snap by LegalShield feature, which handles parking tickets by automatically sending a photo on to the law firm for processing. So now we suddenly have our sample. That’s a huge breakthrough. … That’s probably been the biggest change for us, but in many ways it’s back to the future—we’re becoming more like the direct selling and network marketing industry.
DSN: This evolution dates back at least to LegalShield’s acquisition of tech startup Shake Inc. in April 2015. What was the strategy there, and how has it enhanced the business thus far?
JB: Our first LegalShield App came out in fall 2014, and it was very simple. It made a phone call. It knew who you were as a member and it knew your law firm. Start simple, start small. With the acquisition of Shake Law, we added a really powerful functionality, which is the ability to create forms on your mobile phone or on the web, for free. We have added one significant benefit to what they originally envisioned, in that all the forms are prepared by the law firms in each of our U.S. states or Canadian provinces. Shake by LegalShield first asks you what state or province you’re in, and then the forms presented are specific to those jurisdictions. Additionally, we understand a do-it-yourself approach is taken by many because they think they can’t afford to pay a lawyer by the hour. We let them know the benefit of consulting a lawyer in preparing that form and some of the downside risks of going it alone, and then introduce the concept that they can join our community for as little as $17.95. …
The other thing the Shake team—located in Manhattan’s Little Italy—has done for us is launch an all-new app called Ask by LegalShield, which provides answers to more than 1,500 common legal questions. That app has already generated a lot of memberships for us. … Both Shake and Ask are prospecting tools for our Associates. Whenever they send an invitation to download those apps, they are deep linked. If someone decides to become a member after trying the app, that commission is attributed back to the referring Associate. We feel really good about the potential for these tools to raise awareness and close membership sales. We’ve had more than 200,000 downloads of the app, which in the app business is an awful lot.
Read more from our conversation with Bell in the August issue of DSN.
July 15, 2016 Leave a comment
Herbalife also reached a settlement with the Illinois Attorney General, resulting in the company agreeing to pay $3 million to the office, separate from the FTC agreement.
Company executives and investors responded positively to the settlements, with shares in the company trading above $66 at midday, an increase of more than 10 percent.
“The settlements are an acknowledgment that our business model is sound and underscore our confidence in our ability to move forward successfully, otherwise we would not have agreed to the terms,” Herbalife Chairman and CEO Michael O. Johnson said in a statement announcing the settlement. The statement went on to say that the company believes many of the allegations made by the FTC are factually incorrect but that the settlement is in the company’s best interest in light of the financial cost and distraction of protracted litigation. Herbalife said management can now focus all of its energies on continuing to build the business.
The FTC commenced an investigation into Herbalife 26 months ago, following accusations by hedge fund manager Bill Ackman that the company is defrauding customers. Ackman launched a campaign against the supplement seller in December 2012, backing his claims with a $1 billion short position in Herbalife stock.
As part of the deal, the company will pay a $200 million judgment and has agreed to various business procedures and policy enhancements. The $200 million figure is what Herbalife had floated in its first-quarter financial report as the company’s best estimate of a settlement. The FTC said this is the largest such consumer redress settlement obtained by the FTC and that it will provide information at a later date about how it will make those funds available for consumers.
The business procedures and policy enhancements included in the settlement pertain largely to Herbalife’s compensation model and marketing claims, which the FTC criticized in its complaint against the company. The settlement stipulates that the company must distinguish between individuals looking to build an Herbalife business and those who sign up simply to purchase products at a discount—a practice Herbalife management, in fact, implemented several years ago. Discount buyers are not eligible to sell product or earn rewards. The company is also required to ensure that at least two-thirds of rewards paid out to distributors are based on verified retail sales, rather than distributors’ personal consumption. And, in order to pay compensation to distributors at current levels, at least 80 percent of Herbalife’s product sales must be comprised of sales to legitimate end-users. If that threshold is not met, rewards to distributors must be reduced.
The company also agreed to:
June 16, 2016 Leave a comment
Essential oils, which are valued for their health benefits, particularly in the practice of aromatherapy, are a multibillion-dollar business in the direct selling channel. Top companies such as Young Living and doTERRA focus primarily on essential oil products, while a number of other companies have supplemented existing product lines with essential oil offerings.
To put its own spin on the popular oils, Utah-based Morinda looked to one of its signature ingredients, the tropical noni fruit. Tahitian Noni Juice is Morinda’s flagship product, and the company also has patented the process of extracting oil from noni seeds, a product it brought to market 19 years ago. Now, Morinda plans to introduce six targeted Tahitian Noni Essential Oil blends, labeled Relax, Breathe, Relief, Energize, Fortify and Recover.
“Noni seed oil is historically known to provide soothing and therapeutic benefits while naturally enhancing other treatments,” said Cecilia Salvesen, Morinda’s expert third-party therapeutic healthcare advisor. “The Tahitian Noni Essential Oils are the only oils that have been formulated to incorporate the powerful and valuable properties of the noni seed.”
The company will launch the new collection as its second-ever Limited-Time Offer or “LTO” product, meaning the blends will be available for a short time to Morinda Independent Product Consultants (IPCs) who qualify to participate in the LTO. Following the promotion, those IPCs will be the exclusive distributors of Tahition Noni Essential Oils for six months, and then the products will be available through all Morinda sales channels.
June 15, 2016 Leave a comment
Photo: Nerium South Korea independent sellers, known as Brand Partners
In attendance were representatives from biotechnology companies, universities and R&D teams, who work with Nerium to develop its skincare and nutrition products. The two-day summit was held at COSMAX, a South Korea-based cosmetics manufacturer and R&D lab that works with Nerium and a number of other luxury skincare brands.
“I believe Nerium to be the best company in the world, and COSMAX will support it with all of our best resources for a great cause, combining Western technologies with Eastern know-how,” said Kyung-Soo Lee, COSMAX Founder and CEO.
Nerium aims to build its core product line while adhering to its strict formulation philosophy and criteria, said Founder and Co-CEO Jeff Olson. Since launching with a single skincare product in 2011, the company has introduced just two additional anti-aging creams, an eye serum, and a supplement intended to boost brain health.
“Looking into the future, we plan to continue this pattern of expanding our product line by watching innovative and global trends in retail and science and creating superior anti-aging products for the face, body and mind,” said Olson.
The company also has plans to expand geographically, with openings in Japan and Hong Kong scheduled for later this year. To serve consumers in the region, Nerium plans to develop Asia-specific offerings that potentially will include anti-aging supplements and luxury beauty oils.
June 3, 2016 Leave a comment
by Andrea Tortora
IN THIS ISSUE:
A deeper dive into the list unveils a dynamic channel. Direct selling company home offices, in partnership with their salesforces, are generating economic opportunities that have lasting social impact. They are accomplishing this in virtually every consumer product segment and in nearly every market around the world.
One of the insights gained from the 2016 Global 100 list is that growth within direct selling today can be as varied as the companies themselves. The list points out some common characteristics of growing companies: a focus on products, customers, serving their salesforce and creating a culture that reinforces a sense of family. It also reveals the power direct selling has to help a company grow rapidly, with more companies surpassing the $1 billion revenue mark than ever before. And, while direct selling continues to expand internationally, this year’s list also shows that there are plenty of growth opportunities to be had in the U.S.
Growth is happening, and it’s happening quickly. The time it takes direct selling’s top companies to surge to the upper levels of prosperity—and grow beyond $500 million and even to hit the $1 billion mark—is shrinking. How do upper middle market firms continue to prosper? They have a laser focus on …