Direct Selling Companies Donate Millions in Gifts to TODAY Toy Drive

This holiday season direct selling companies have donated more than $15.4 million in cash and products to the TODAY Show Holiday Toy and Gift Drive, which supplies gifts to underprivileged children across the U.S.

The partnership with TODAY has been an initiative of the Direct Selling Assocation (DSA) for more than a decade. On Dec. 22, DSA Senior Vice President Melissa Brunton will appear on the show to thank the companies that participated and acknowledge the work direct selling entrepreneurs do for their communities throughout the year.

This month a handful of company executives have visited the TODAY set to present donations on behalf of their employees and salespeople. On Dec. 1, Thirty-One Gifts President and CEO Cindy Monroe delivered an assortment of products worth $5.5 million—one of the largest donations in this year’s toy drive. To date, the seller of functional bags, home organization products and accessories has contributed more than $36.4 million in products to the program.

“We are excited and honored to be part of the DSA’s toy drive support,” Monroe said in a statement. “Our charitable mission, through our philanthropic outreach Thirty-One Gives, is to assist organizations that empower girls and women, and strengthen families. The TODAY show makes it easy for us to enable our many sales consultants across the country to be involved with the donation too by selecting local charities where they can deliver the products.”

The following direct selling companies donated cash or products in this year’s toy drive:

•    Amway
•    Arbonne
•    Good Will Publishers
•    Initials Inc.
•    Jordan Essentials
•    Living Fresh Collection
•    Lulu Avenue
•    Mary Kay
•    Origami Owl
•    PartyLite
•    Shaklee
•    SpenserNation
•    Stampin’ Up!
•    Stella & Dot
•    Thirty-One Gifts
•    USANA Health Sciences
•    Vantel Pearls

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The Future of Direct Selling in the U.S.

by Andrea Tortora

Click here to order the October 2015 issue in which this article appeared or click here to download it to your mobile device.


Direct selling in the United States is undergoing a transformation fueled by innovative approaches rooted in classic business practices. The power generators leading the way for direct selling as a channel of distribution can be found in what Direct Selling News has identified as the upper middle market: those companies with annual sales roughly between $300 million and $1 billion.

Because most direct selling companies are privately held and many decline to disclose their financial results, it is difficult to create a definitive list. Our research honed in on a group of more than 30 U.S.-based companies, most of which are experiencing significant growth. Some of them are on the cusp of reaching $300 million, and some likely have recently passed the $1 billion mark. But together they are critical to direct selling’s competitiveness and future. They tend to be among the fastest growing when it comes to revenue, and they account for a large slice of the job creation pie.

An in-depth analysis of this group reveals a high level of consistency when it comes to executing on key common strengths. The ability of these companies to focus in on products, customers, serving their salesforce and creating a culture that reinforces a sense of family put them on track to shape the future of direct selling in the U.S.

Companies emphasize each area in different ways, but in general these leaders:

  • Harness data. The upper middle market knows how to mine the data it has to gain insights that lead to more and better sales. Executives train leaders and consultants to use data to open doors that might otherwise remain closed.
  • Stay true to classic business practices. Technology and social media do not replace person-to-person interactions, they complement them. Upper mid-market firms build relationships with customers that maintain the consultant-client affiliation but also allow the customer to have a connection with the company itself.
  • Use compensation plans that span all levels of engagement. To cultivate trust and long-term relationships, comp plans are created to appeal to new customers, product enthusiasts, fierce advocates and influencers—all the way up to the entrepreneur who is all in. Payments also follow a more modern schedule.
  • Foster an entrepreneurial spirit. Consultants are allowed and encouraged to go far with personal marketing (think YouTube videos) while maintaining brand identity. Companies deliver superior and frequent training and messaging to make this happen.
  • Maintain a laser-focus on selling. The sale of a product, a group experience or an opportunity all lead to more sales, which generate positive results.

No matter the specific approach, one thing all upper middle market companies excel at is …

Click here to read the full article at Direct Selling News.

 

 

Blyth Reports Decline

Blyth Inc. (BTH—NYSE), a designer and marketer of candles and accessories as well as health, wellness and beauty products, today reported sales and earnings for the second quarter of 2015.

Net sales for the three months ended June 30, 2015, decreased approximately 16 percent to $88.0 million from $104.2 million for the comparable prior year period.

Commenting on the performance of PartyLite Worldwide, Robert B. Goergen Jr., CEO of Blyth and President, PartyLite Worldwide said, “In Europe, sales declined 15% in local currency while the Consultant base declined 6%, reflecting underperformance in many of our European markets. However, while total year-over-year Consultant count declined in our mature markets, the decline was at a lesser rate in every market when compared to 2014’s second quarter. This is the second consecutive quarter we’ve seen this positive trend.

“In addition, eCommerce sales experienced growth in the quarter. While European profits declined versus last year, the profits include one-time costs to close the Cumbria U.K. candle manufacturing plant and move all candle production to our Batavia, Illinois, Global Center of Manufacturing Excellence. Going forward we expect to show a reduction in costs and to build a platform for improving profitability worldwide.”

Read more about Blyth’s second quarter results here.

2015 DSN North America 50 List


The DSN North America 50DSN Announces the 2015 North America 50!

This marks the sixth year for the Global 100 list of top direct selling companies in the world, and we would not be Direct Selling News if we did not continually strive to raise the bar.

That is why we are pleased to share with you a new component of the project this year: The North America 50. As a subset of the Global 100, this list draws attention to the most significant players in one of the world’s largest direct selling markets.

As DSN embarks on the annual research for the Global 100, we continue to refine the process as we identify the largest companies and acknowledge their achievements while bringing attention to the magnitude of the direct selling industry as a whole. Within that context, the impact that North American companies have on the global marketplace as well as on those that buy and sell through this channel cannot be overstated.

The following contains the North America 50 ranking for the 2015 DSN Global 100 (based on 2014 revenues). Both lists will be published in the June issue of Direct Selling News.


2015 Rank

Company Name

2014 Revenue

1 Amway $10.80B
2 Avon $8.9B
3 Herbalife $5.0B
4 Mary Kay $4.0B
5 Tupperware $2.60B
6 Nu Skin $2.57B
7 Ambit Energy $1.50B
8 Primerica $1.34B
9 Stream Energy $918M
10 Shaklee $844M

Click here to see the rest of the DSN North America 50 List.

PartyLite Opens for Business in Turkey, Korea

Photo above: Front middle: Elçin Birben, Hürcan Haydar (holding flag), and Luca Pozzoli at the PartyLite Turkey Opening Ceremony in Istanbul.


PartyLite is jumpstarting 2015 by introducing its candle and home décor products in two international markets. The party plan company has launched its business in Turkey and Korea, expanding its global presence to 23 total markets.

In Turkey, its 18th European market, PartyLite has inked an agreement with third-party distributor PL EV DEKORASYON ÜRÜNLERİ TANITIM VE PAZARLAMA LTD. ŞTİ. Founders Elçin Birben and Hürcan Haydar launched the young company with a vision of becoming a major player in the Turkish direct selling industry, and it will serve as the sole distributor of PartyLite products in the country.

“Elçin and Hürcan are very ambitious individuals, and we have no doubt that they are capable of growing a successful direct selling business,” said Luca Pozzoli, PartyLite Vice President of Market Development, in the company’s release. “We are thrilled that they will be the exclusive distributors of PartyLite candles, home fragrances and home decor in Turkey. Their enthusiasm for PartyLite products is remarkable, and their excitement during the entire launch has been evident.”

PartyLite Sponsors The Humane Society’s 60th Anniversary Gala

Jonathan Adler’s second collection for PartyLite

Jonathan Adler’s second collection for PartyLite will debut in December, but guests of The Humane Society of the United States will get a preview during the organization’s annual black-tie gala. As a sponsor of the HSUS 60th Anniversary Gala, PartyLite is furnishing the evening’s centerpieces with designs from Adler’s latest collection.

More than 500 guests will attend the New York City event on Nov. 21 to raise funds for the nation’s largest animal protection organization. Each table will feature PartyLite candles, candleholders and animal sculptures by Adler. Additionally, each guest will take home a pet-friendly gift, a Fresh Home by PartyLite™ Perfect Pet Odor Neutralizing 3-Wick Jar Candle.

Adler, a popular potter, designer and author, first collaborated with PartyLite earlier this year to produce a fall 2014 collection. The Gala centerpieces will feature designs from the forthcoming Jonathan Adler for PartyLite Safari Chic Collection.

Billion Dollar Markets

by Andrea Tortora

Direct selling is an industry proving its mettle as it prepares to take advantage of major growth opportunities fueled by technology, increased entrepreneurial support and the new emerging market consumer.

Global estimated retail sales topped US$178 billion in 2013, up 8.1 percent from 2012, according to the most recent data from the World Federation of Direct Selling Associations (WFDSA). The worldwide salesforce also grew, up 7.2 percent to 96 million independent contractors. Both are record numbers.

In 2013 there were 23 countries with annual retail sales above $1 billion. That group accounts for 93 percent of global sales. Of special note is the industry’s 6.8 percent three-year cumulative growth rate (CAGR). The figures reinforce direct selling’s strength and show its potential, says Alessandro Carlucci, CEO of Natura Cosméticos and Chairman of the WFDSA. “The opportunity this industry has to really be even more powerful is in taking advantage of the fact that we are living in a moment in our society when technology is reinforcing relationships and allowing us to do more and better business,” Carlucci says.

STRONG SUSTAINABLE GROWTH

This most recent data clearly illustrates direct selling’s sustainable growth—especially in times of economic recovery and improved governmental policies to support entrepreneurship. Among the direct selling associations reporting their data to the WFDSA Research Committee, about three-fourths of the markets show solid, sustained growth in the three-year compound annual growth rate.

Here’s why that is important: “If the year-over-year percent change represents the snapshot, then the three-year CAGR represents the video and shows the long-term change or the trend. The sustained growth of direct selling is shown in a positive CAGR,” says Amway’s Judy Jones, Chairman of the WFDSA Global Research Committee.

Data is reported using constant 2013 dollars, to remove currency fluctuations from the equation. As more companies participate in sharing sales data with each country’s direct selling association (DSA), the entire industry begins to gain actionable knowledge it can use to enable sellers to better serve customers.


Global estimated retail sales topped US$178 billion in 2013, up 8.1 percent from 2012, according to the most recent data from the World Federation of Direct Selling Associations (WFDSA).


The sales of the 23 billion-dollar markets in 2013 are familiar to those who follow this annual ranking. The top five countries account for 60 percent of direct selling’s global sales. All but one report a positive CAGR:

1.  United States, 4.6 percent
2.  China, 23.3 percent
3.  Japan, -4.4 percent
4.  Korea, 8.0 percent
5.  Brazil, 8.6 percent

China moved into the No. 2 spot for 2013. If the current rates of growth in the United States and China remain steady, China could become the No. 1 direct selling market in the next year or two.

Interestingly, the billion-dollar markets that make up the bottom five show tremendous cumulative growth, particularly in emerging markets:

19.  Australia, 2.3 percent
20.  Venezuela, 15.7 percent
21.  India, 20.0 percent
22.  Philippines, 17.8 percent
23.  Indonesia, 12.0 percent


This most recent data clearly illustrates direct selling’s sustainable growth—especially in times of economic recovery and improved governmental policies to support entrepreneurship.


The numbers reinforce trends seen in the past two years. Direct selling is growing rapidly in the Asia Pacific region and Africa—dubbed the “new frontier” by Carlucci. Africa posted just over 9 percent year-over-year sales change for 2013, trailing only Asia Pacific at 12.6 percent.

“Africa is a place where everyone should put a seat now, because in 15 years it will be very relevant,” Carlucci says.

Following closely is the Central and South American region, which also posted just over a 9 percent year-over-year sales change. Six Latin American countries—Brazil, Mexico, Colombia, Argentina, Peru and Venezuela—are billion-dollar markets. More multinational companies are starting to do business in Central and South America, where consumers embrace direct selling.

POWERFUL NEW MARKETS

The desire to improve one’s socioeconomic standing remains strong in emerging markets, which translates to excellent growth potential for direct selling. In fact, seven of the billion-dollar markets with double-digit cumulative growth rates are emerging markets, according to the WFDSA data:

  • Argentina, 28.1 percent
  • China, 23.3 percent
  • India, 20.0 percent
  • Philippines, 17.8 percent
  • Venezuela, 15.7 percent
  • Indonesia, 12.0 percent
  • Colombia, 11.6 percent

Direct selling is a very relevant marketing and sales model for emerging markets, says Derrick Irwin, Portfolio Manager for the Wells Fargo Advantage Emerging Markets Equity Fund. In many of these countries, the retail industry is not fully developed and companies cannot put products on a Wal-Mart shelf. “There is also skepticism among consumers about counterfeiting and quality products,” Irwin says. “If items are being sold by someone they trust, it is powerful. The opportunities are very, very good.”

Companies like Avon know how important international markets are for growth. The global beauty direct seller derives 85 percent of its business outside the U.S., and 75 percent of revenues come from emerging markets, says CEO Sheri McCoy. Avon’s priority? Growing its top markets, which include: Brazil, United States, Mexico, Russia, Central Europe, Venezuela, Argentina, Colombia, United Kingdom, Philippines, Turkey and South Africa.

China is also a huge market with infinite business opportunities. Leo Zhou, Deputy Director of Media Affairs at Mary Kay China, believes direct selling is a perfect match for China’s huge population, and that the interpersonal interaction at the industry’s core is quite effective in low-tier cities. He says, “It ensures that the direct selling industry could get into contact with female consumers in a faster and more precise way, thus promoting sales growth.”

Despite being a more mature market for the industry, Latin America is still a developing region with an entrepreneurial middle class that is seeking ways to maximize individual and household incomes, as demonstrated by the number of countries represented on the list, and growing activities in even more. Miguel Francisco Arismendi, Amway’s Director General for the Andean area, based in Bogota, Colombia, says, “There is no doubt that direct selling provides opportunity.”


“Africa is a place where everyone should put a seat now, because in 15 years it will be very relevant.”
—Alessandro Carlucci, CEO of Natura Cosméticos and Chairman of the WFDSA


EMERGING MARKET CONSUMERS

The world’s new consumers are a diverse group. Some are affluent and ready to spend their newly robust income on fulfilling their dreams and ensuring a better life for their children. Others are just beginning to realize their buying potential as they are exposed to the wealth of available products. The new middle class in Indonesia, India, Nigeria, Ghana and Kenya are confident consumers who plan to buy more, save more and invest in education, according to research from Standard Chartered, a London-based international bank.

These emerging consumers have a wide range of incomes and a wide range of desires to follow, including such things as an appetite to travel and willingness to invest in a new car, and some can even consider buying luxury goods. In less developed markets, currency fluctuations and commodity prices impact the consumer spend. Wells Fargo’s Irwin says, “The problem in core countries is that so much of the family budget goes to food, so if those prices fluctuate that squeezes the budget for other things.”

Whereas an American will generally buy shampoo no matter what, in countries like India it may not be a regular purchase. To get around this hard economic truth, companies like Hindustan Unilever Limited offer single-use package sizes for the price of a rupee or two (2-4 US cents). “It takes creative marketing and strategies to really access these markets,” Irwin says.

Another example: In China, direct selling successfully advances the development of consumers’ personal-care habits in low-tier cities and stimulates their willingness to spend more on premium products. Consumers in fourth-tier cities spend an average of 220 yuan (about US$38) each year per capita at cosmetics stores, whereas in the direct selling channel, consumers spend 540 yuan (about US$88) each year. Mary Kay’s Zhou says, “This fully demonstrates the consumption potential of third-tier and below cities.”


The new middle class in Indonesia, India, Nigeria, Ghana and Kenya are confident consumers who plan to buy more, save more and invest in education, according to research from Standard Chartered.


As emerging market consumers flex their collective spending muscles, a preference for local or domestically based brands is becoming evident. In the past 20 years, multinational brands dominated consumer brand preferences. As locally based companies achieve scale and develop their own brand strength, they are beginning to compete with multinationals. Irwin says, “Consumers are more open to buying local brands to support local businesses and show their pride in the local market.”

In China, where consumers have long aspired to acquire products with names like Gucci, Nike and other big Western brands, local brands are gaining market share as they fill a niche in the middle ground between the luxury and inexpensive brands. China-based Belle International is one of them. The company makes mid-range women’s shoes and is like the Nine West of China, according to Irwin.

In India, the domestic Godrej Consumer Products now claims more than $1 billion in revenue, taking a stab at the more established Hindustan Unilever. “They are getting to scale, and they are creating disruptions,” says Irwin. This bodes well for direct sellers, who build their business on micro-local enterprises and interpersonal connections.

EMPOWERING ENTREPRENEURS

At the heart of direct selling is the ability to offer people the chance to feel empowered, to take control of their lives and to add value to society. This fuels entrepreneurship, self-employment and microenterprises. Research shows that such ventures strengthen a country’s economy.

Alan Finkelstein Shapiro, a researcher at the Universidad de los Andes in Colombia, finds that “economies with larger self- employment shares exhibit faster recoveries following a negative economy-wide productivity shock.”

The entrepreneurial aspects of direct selling empower women and can be attractive to those under age 35 who more often want to be their own boss while also helping others. Sandra Whittle, Managing Director for Partylite U.K. & Ireland, says a favorite quote she shares with those new to direct selling is, “If at first you do succeed—try to cover your amazement.”

Whittle says consultants must be willing to put in the work because experience cannot be bought, and it is particularly important to earn the respect of colleagues and of the field.

Just as important is harnessing the excitement of those who want to be sales leaders, says Andrea Slater, with Avon U.K. “We need to ensure that we capture that enthusiasm within a specific timeframe,” she says. “Then, we need to fan the flames and keep them motivated, engaged and rewarded.”

Mary Kay’s Zhou says that in countries like China, business startups and entrepreneurship are becoming easier to navigate on the policy front, as well as becoming more accepted forms of livelihood for the younger generation. He continues, “Direct selling can help them to fulfill their dream of initiating businesses, and to gain earning opportunities and freedom with the thinking approach and behavioral model of their own characteristics, which constitutes a career development mode catering to the ideal of modern youths.”

For women, in particular, direct selling is an opportunity to contribute money to the household and develop a degree of independence. This is especially true in rural areas and farming communities. Irwin cites Hindustan Unilever Limited as an example. The Mumbai, India-based consumer goods firm employs 65,000 women through its Shakti direct selling initiative. These women sell products in their villages, giving Hindustan Unilever and the women themselves a huge economic opportunity they wouldn’t have otherwise.


Alan Finkelstein Shapiro, a researcher at the Universidad de los Andes in Colombia, finds that “economies with larger self-employment shares exhibit faster recoveries following a negative economy-wide productivity shock.”


THE YOUNGER GENERATION

As an industry, direct selling companies recognize the importance of recruiting young people under age 35 to become consultants as well as consumers of its products. Doing this means using a technology-rich approach and being socially responsible, says Amway’s Arismendi.

In Latin America, direct selling is equipping consultants with social media tools that enhance day-to-day communications. Amway is aggressive in studying tools that promote the use of technology in the field. “This will not replace the personal touch, but it will complement it,” Arismendi says. “Direct communication and social networking can be much more effective than conventional sales and retail.”

SPOTLIGHT ON REGIONAL MARKETS

UNITED STATES

The No. 1 market for direct selling saw 2013 retail sales of $32.7 billion, up 3.3 percent from 2012. Between 2010 and 2013, the compound annual growth rate was 4.6 percent in the country. The U.S. accounts for 18 percent of worldwide direct selling sales, generating about $1 for every $6 retail dollars globally.

The U.S. salesforce also grew 5.7 percent, to 16.8 million people, which is a record high. The most prevalent sales method is face-to-face, with 70 percent of consultants using this avenue, according to the U.S. DSA.

The product groups with the strongest percent of market share are wellness and services, making up 28.5 percent and 22.9 percent of sales, respectively. New segments are also using direct selling, such as energy, says U.S. DSA President Joseph Mariano. “Direct selling is a smart, go-to-market strategy for many products, especially those that benefit from explanation or demonstration. In the case of utilities, most Americans aren’t used to having a choice in their provider, so they benefit from guidance to make an informed decision.”


“Direct selling is a smart, go-to-market strategy for many products, especially those that benefit from explanation or demonstration.”
—Joseph Mariano, President, U.S. DSA


CHINA

Given current rates of growth, China will most likely surpass the U.S. in market size for direct selling, becoming the industry’s No. 1 market. Its 2013 retail sales were $27.3 billion, up an astounding 41 percent from 2012. China also enjoys the industry’s highest cumulative growth rate at 23.3 percent.

“With the acceleration of the global economic integration progress, China promises tremendous market potential as the second largest economy worldwide today,” says Mary Kay’s Zhou. U.S. direct selling giants Amway, Mary Kay and Nu Skin are among the largest companies operating in China. Several domestic Chinese direct selling enterprises also are a noticeable force. Competition across the country is moderate, with 44 licensed enterprises.

Cosmetics consumption keeps growing at an average annual growth rate of 15 percent, despite an overall economic slowdown. China trailed only the U.S. and Japan in consumer cosmetics spending in 2012. Women play a key role in those numbers and are increasingly active in economic consumerism. “As the number of employed women increases and their status in social and economic development rises steadily, their role in consumption is also becoming more prominent,” Zhou says.

Chinese women now control 60 percent of domestic consumption and make 77.5 percent of household purchase decisions. This far exceeds the purchasing power of men and children.

As China grows and becomes a more relevant market, the WFDSA’s Carlucci believes that the industry must put more energy into “understanding how we communicate and maintain the fundamentals of the industry” in a way that can be understood regardless of the country.


“…The recent statement from Esther McVey, Minister for Employment, saying, ‘Being your own boss is as impressive as a degree,’ appears to give more credibility to self-employment than ever before.”
—Lynda Mills, Director General, U.K. DSA


EUROPE

Direct selling continues to grow at a steady pace in Europe. Retail sales topped $31.6 billion in 2013, and 12.7 million people work as independent consultants across Western, Central and Eastern Europe. “Europeans have embraced the entrepreneurial spirit and increasingly recognize direct selling as an appealing (and sometimes preferable) alternative to a traditional job,” says Marinda Chaplin, Vice President at SUCCESS Partners Europe.

As recovery continues from the economic recession, the U.K. is seeing more encouraging trends, especially in the area of self-employment. Lynda Mills, Director General of the U.K. DSA, shares that recent information from the Office for National Statistics reveals self-employment is at its highest level in 40 years with 4.5 million people. “This, coupled with the recent statement from Esther McVey, Minister for Employment, saying, ‘Being your own boss is as impressive as a degree,’ appears to give more credibility to self-employment than ever before,” Mills says.

Mills reports that during the recent recessionary years, direct selling in the U.K. has seen year-on-year growth in a variety of demographics, and some direct sales companies are enjoying double-digit growth. With young people being notoriously risk adverse, direct selling is an ideal option for people in many age ranges and from varied backgrounds.

“We have seen more young people between 18 and 25 working in direct selling with 29 percent (75,000) of U.K. direct sellers under age 25,” Mills says. On average, 38 percent of direct sellers are over age 50, representing a rise of more than 32,000 people since 2011.

Direct selling is also increasingly appealing to a multi-cultural audience. In a recent survey of its members, the U.K. DSA discovered that 30 percent of direct sellers (120,000 people) in the U.K. are non-British. DSA member companies attribute this to a rise in interest of people from places like Asia and Eastern Europe, according to Mills.

People in the U.K. are turning to direct selling as a real alternative to traditional employment, with 68,000 direct sellers (17 percent) working full-time hours (more than 30 hours a week). This is up 20,000 from 12 percent in 2011. “Direct selling here in the U.K. really has entered the mainstream,” Mills says.

One factor in the sustainability of the industry is the increasingly digital nature of the world economy. Technology enhances the core aspect of direct selling. Embracing the digital age can ignite new growth in mature markets like the United Kingdom, which enjoys a 10.4 percent three-year compound annual growth rate and reported $3.3 billion in 2013 retail sales.

Germany posted a three-year CAGR of 5.8 percent. The direct selling model enjoys a positive image in the country, says Guido Amendt, Mary Kay Germany’s Director of Marketing. He adds that a sustainable increase in purchasing power per capita offers opportunities for consumers to buy high-quality products through direct selling.

In France, direct selling continues to grow regardless of the economic climate. When it comes to increasingly competitive markets such as cosmetics and jewelry, direct selling leverages innovation as a growth solution, says Jean-Laurent Rodriguez, Director of Communication and Training for the Federation de la Vente Directe, France’s DSA. In 2013, France recorded sales of $5.3 billion. The country’s cumulative annual growth rate between 2010 and 2013 was 3.4 percent.

Continued expansion in the industry is driven by several factors. France is enjoying a growing number of new companies with new brands and new products, such as textiles, shoes, home decoration, gastronomy and health care, Rodriguez says. These companies are international and national industrial groups, medium-sized companies and startup firms. Agreements between the Federation de la Vente Directe and government ministries (higher education, national defense and public institutions) ensure that direct selling is a viable option.

AFRICA

The WFDSA’s Carlucci sees Africa as an interesting continent right now for direct selling although, currently, the only DSA exists in South Africa. South Africa’s 2013 retail sales were $720 million, and its three-year cumulative growth rate is 6.8 percent. “Direct selling is very relevant here because it is a way to be an entrepreneur, and other retail channels are not developed,” Carlucci says.

Multinational companies are taking interest in the continent, says Wells Fargo’s Irwin. That’s because it is a huge market. Irwin cites Nigeria as an example. The country is home to 180 million people and just 10 supermarkets. “The rest are local markets and product distribution via trusted networks,” Irwin says.

LATIN AMERICA

Central and South America are comprised of fast-growing countries known for their entrepreneurship culture. Ernst & Young, in its G20 Entrepreneurship Barometer 2013, ranks Argentina, Brazil and Mexico as some of the best world economies for entrepreneurs. The same can be said for the region’s direct selling prospects. The industry is well established in Latin America, where customers like to buy from people they know. Additionally, it is a market with potential because retail is not well developed in many regions.

Latin America’s direct selling billion-dollar markets are:

  • Brazil, $14.2 billion
  • Mexico, $8.1 billion
  • Colombia, $3.3 billion
  • Argentina, $1.9 billion
  • Peru, $1.9 billion
  • Venezuela, $1.4 billion

In Latin America, the “family factor” is very important and makes direct selling attractive as a self-employment option. Unlike in the U.S., children look to go to college close to home and remain with their families. Many career decisions center on one’s family, which makes direct selling attractive as a source of income in addition to traditional employment.


“Direct selling is an opportunity to work but remain close to the family and to have additional income for the needs of the family. So this makes a difference. There is flexibility and management of their own time.”
— Miguel Francisco Arismendi, Director General for the Andean area (of South America), Amway


“Direct selling is an opportunity to work but remain close to the family and to have additional income for the needs of the family,” Arismendi says. “So this makes a difference. There is flexibility and management of their own time.”

Direct selling is also becoming a full-time work option, says Pio del Castillo, Mary Kay’s Manager of Corporate Communications. Brazil ranks No. 5 among the industry’s billion-dollar markets. Direct selling retail growth in the country is related to the economic recuperation of international markets, del Castillo says. The country posted year-over-year retail sales growth of 7.2 percent, making for a three-year CAGR of 8.6 percent. The number of sellers grew as well, reaching 1.3 percent, to 4.5 million.

Brazil also boasts a diverse market with access to information. One important factor boosting direct selling in the region includes traditional retailers such as O Boticario adding direct selling to their marketing efforts. Del Castillo says, “The Brazilian economy grew only 2.3 percent in 2012, but Brazil still remains one of the most important players in the direct sales market.”

 

TECHNOLOGY, DATA WILL FUEL FUTURE GROWTH

Technology in all its forms is an essential ingredient to the future growth of direct selling, according to industry executives and economists. “The Internet and digital technologies, mobile devices, social media and access to more robust data will allow direct selling companies to dramatically increase the level of service they offer to their salesforce and customer base,” says Alessandro Carlucci, CEO of Natura Cosméticos and Chairman of the WFDSA.

“We will be able to (and some companies now can) know who the final customer is, what their preference is, who the distributors are and how can we help them with good CRM systems and analytics,” Carlucci says.

Better information lets consultants individualize their service and marketing approach for each customer. Instead of a mass-appeal catalog, direct sellers could offer targeted online videos in an effort to deliver the right thing for the right customer. “We can skip the segmentation phase and leap frog from a mass approach to an individual approach, thanks to technology,” Carlucci says. “To me this is a revolution.”

The ability to harness technology’s benefits leverages relationships, according to Carlucci, who adds, “These efforts should also boost direct sales in mature markets because it will present newly available services.” The consumer’s direct selling buying experience could be even better than the Internet because of the product and experience support the personal connection offers.
 
The importance of the Internet, data and mobile Internet to emerging markets cannot be overstated, according to Derrick Irwin, Portfolio Manager for the Wells Fargo Advantage Emerging Markets Equity Fund. He says, “In many places it provides the only access to media and outside data that many people have.”

Consumer company models being developed in India, China and Brazil show a massive portion of advertising spend being allocated for mobile campaigns. And the marketing method is about to explode. Smart phones and 3G networks are established in China and are just beginning to take off in Brazil and India. In Africa, says Irwin, “there is no other way to talk to people. You can go to these countries where there are the poorest of the poor, and they are using mobile phones in ways that are so creative.”

In China, mobile technology is opening new markets and acting as a catalyst for the development of logistics networks into the far corners of the country’s low-tier cities, according to Leo Zhou, Deputy Director of Media Affairs at Mary Kay China. He says, “Consumers are becoming increasingly smart and are unprecedentedly connected with multiple media, being surrounded by a diversified web of information.”

The proliferation of information across the Internet, as well as easy access to it, makes it simple for any consumer to get the information and products they need and want. The rapid expansion of China’s e-commerce network into low-tier cities caught the attention of logistics companies, who brought their services to the same areas. According to Zhou, this increases product delivery speed and lowers operational costs.

All of these technology changes amount to a modernizing of the direct selling industry in the digital age. Companies should be looking at how much they are investing now to leverage the relationships they have and how they understand consumer behavior. “There are a lot of good questions we should be able to answer, and this is the time,” Carlucci says. “In 10 to 15 years we will live in a very different world. We need to take advantage of the technological opportunities now.”

90 Days of Direct Selling – Day 15

DSN_90Days_Email_Signature

Blyth Direct Sales Group

2013 Net Sales: $750 million

Country: USA

Blyth Inc. is a direct-to-consumer business focused on the direct selling and direct marketing channels through its PartyLite and ViSalus brands. It designs and markets candles and accessories for the home as well as health and wellness products, utilizing both the home party plan and the network marketing methods.

 

2012 Rank: N/A
2012 Net Sales: N/A
Sales Method: Party plan and group sales
Compensation Structure: Multi-level
Products: Cosmetics, personal care, home décor, kitchenware and appliances, home care, wellness
Markets: 21
Salespeople: 90,000
Employees: 1,250
Headquarters: Greenwich, Connecticut
Executive: Robert B. Goergen Jr.
Year Founded: 1973
Website: http://www.blyth.com

Blyth Appoints KWG Chief to Board of Directors

Blyth, parent company of direct selling brands PartyLite and ViSalus, recently made some changes to its board of directors. The Greenwich, Connecticut-based company announced the retirement of Neal I. Goldman and welcomed Jim Williams as its newest board member.

Goldman, President of investment advisory firm Goldman Capital Management, served as a Blyth director for 23 years. Williams is President, CEO and Managing Partner of Karlen Williams Graybill Advertising (KWG), whose clients include a number of Fortune 500 companies and some of the nation’s fastest growing business startups. He also owns a controlling interest in I.M. Productions and the communications business Better Brand Initiatives, licensor of the televised mini-show FYI Before You Buy.

“Jim brings leadership, strategy and a strong knowledge of marketing, social media and global consumer insight,” Blyth CEO Robert B. Goergen said in a statement. “I look forward to the new perspective that Jim brings to the company.”

Blyth operates in 21 countries through PartyLite, a designer and marketer of candles and accessories for the home, health and wellness brand ViSalus, and a handful of brands sold through the catalog/Internet channel. The company reported a rocky second quarter as sales continued to wilt, decreasing approximately 25 percent from the prior year period to $157.8 million. The weak performance was largely a result of declining salesforce numbers at ViSalus North America, said Goergen.

“ViSalus management is focusing on rebuilding the North American market through leadership development programs while right-sizing the cost structure in North America to regain profitability, as well as building their international business,” Goergen shared in the company’s financial release. “In the second quarter, ViSalus continued its geographic expansion initiatives, opening in Ireland, with two additional markets planned to open this year and an additional seven markets in 2015.”

Start Me Up: How Starter Kits Write the Recipe for Success

by Barbara Seale

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

Take a cup of confidence, a big scoop of knowledge and a healthy dash of enthusiasm. Mix them together with care. That’s all part of the recipe for creating a consultant who gets off to a strong start and then sticks around, building an ever-expanding business over many years.

Direct Selling NewsNo matter what type of company you run or product or service you offer, that’s what you want for your consultants. One of the first key ingredients that delivers knowledge, helps create confidence and stokes that enthusiasm is a great starter kit.

In addition to what’s included, a starter kit serves several basic functions: It reinforces the rookie’s decision; it provides basic information on products or services; and it spells out the specific steps the new recruit must take to begin to make sales and build a team.

While a few companies are testing an exclusively online kit, most put a physical kit in their new recruit’s hands and then supplement it with online elements. It reinforces the company’s brand, and it also does something else important. It helps that newbie convince her spouse and family that her decision was smart and legitimate.

One of the industry’s top starter-kit experts is Paul Adams, Senior Vice President of Strategic Marketing for SUCCESS Partners. Adams has analyzed hundreds of kits in order to help clients develop the right one for their needs, and he has developed strong, clear opinions about them.

“My philosophy on this is pretty simple,” he says. “First, the kit has to resell and validate the person’s decision to join the company. Second, it has to allow the person to make the spouse or significant other feel good about it. And third, it has to create action and belief.”

Adams emphasizes that starter kits should not provide intense training that the new person won’t need for months into the business. He says, “Start with Day One. Help the new person get some ‘check marks’ to show that he or she can do the business. Then create repeatable behaviors.” Adams advises that a starter kit should be just that—a start—taking the new person into their business about 30 days. Additional training material can be added after that.


“First, the kit has to resell and validate the person’s decision to join the company. Second, it has to allow the person to make the spouse or significant other feel good about it. And third, it has to create action and belief.”
—Paul Adams, Senior Vice President of Strategic Marketing, SUCCESS Partners


From ‘I Don’t Know’ to ‘I Got This’

“Univera grew double digits last year, and I attribute a lot of it to the starter kit.”  —Randy Bancino, President and CEO, Univera

“Univera grew double digits last year, and I attribute a lot of it to the starter kit.”
—Randy Bancino, President and CEO, Univera


A starter kit is really a lifeline for the new consultant. It provides a glimpse into the culture of the company and makes the new recruit feel included in it. It also transforms the momentum and interest that caused the newbie to join the company in the first place into action that launches a successful business.

New recruits are often excited, but also scared when they begin their businesses, simply because owning a very real business is both exciting and scary. A good starter kit can extend the excitement while also reducing the fear, supplying the new recruit with more room to succeed at the beginning basics. A starter kit is also a company’s initial opportunity to create and control the messaging and systems that are provided to the new consultant, outlining and modeling their best practices.

Many companies also use this opportunity to include personal development ideas and materials in the kit that can help with the mental and psychological challenges a new person faces when launching a new business. Belief in oneself and one’s ability to actually succeed has proven to be as critical a factor as knowing what to do.

Companies that emphasize personal development as a part of their overall consultant training program report that it leads to increased motivation, decreased attrition and often higher profitability.

Many direct selling companies follow those general guidelines, customizing their kits to fit their culture and their needs. Four of them shared their starter kit experiences and philosophies with Direct Selling News for this feature.

Expert Advice

There’s no substitute for experience, so when direct sellers want to upgrade their starter kit, they turn to the people who use it every day and know what works: consultants. At every company that spoke with Direct Selling News, initial development of new starter kits, plus any subsequent revisions, was done in collaboration with consultants.

Team National craftily used sales leader volunteers to help develop its new kit.

“If they volunteer, then they’re passionate about whatever committee we’re putting together,” explains Angela Loehr Chrysler, President and CEO of Team National. “We got a mix of leaders who were new to the highest level, but are still in the trenches and still helping their new team members when they get welcome kits. They are still hands-on. Then we also got a couple of seasoned leaders who wanted to be in on it. They answered the question, ‘What are the top five things I would want in a kit.’ ”

She added that the process wasn’t time-consuming. Five field leaders were involved, along with corporate staff. Most of the planning was accomplished in three conference calls.

While PartyLite has never completely overhauled its kit, it does update it twice a year when it introduces new products and catalogs. It routinely consults with a Field Advisory Team to make sure that the changes it makes to the kit over time are meeting their needs. PartyLite’s goal in the kit is to direct the new consultant toward the actions that will build a business—booking parties immediately, accumulating customers and growing a team.

“We are directing her to the fundamentals that are key, and if repeated, build a long-term sustainable business and income for the consultant,” says Karen Conkey, Vice President of Sales at PartyLite.

Univera also relied on its Field Advisory Board as it developed its highly successful new starter kit. Univera President and CEO Randy Bancino notes that because those board members work face to face with new recruits and customers daily, Univera relies on their feedback. It was key when the company revised its presentation brochure, for example.

“We made changes in the presentation brochure due to Associate feedback,” he says. “It’s one of the most effective tools they use as they introduce others to Univera.”

Univera’s Field Advisory Board reviews its starter kit quarterly, and the company typically changes it around once a year to keep the contents current and reflect new products. New incentives are often reflected in the kit, too.

USANA routinely talks with key leaders in each market to find out whether improvements need to be made in the kits and to determine what is working well to help new distributors get off to a positive start. Doug Braun, Chief Marketing Officer at USANA, says that the company empowers sponsors to work closely with their new recruits as they learn and to communicate any needs that aren’t being adequately met. Changes to the kit typically are introduced yearly at the international convention.

Fuel for Growth

At wellness company Univera, executives developed a new starter kit about two years ago as part of an overall rebranding effort. President and CEO Randy Bancino is proud of the kit and its effectiveness. He says he hears lots of wows about the result.

“It’s impressive, simple, elegant, and it does a nice job of reflecting our theme of vitality and energy,” he says. “Univera grew double digits last year, and I attribute a lot of it to the starter kit.”

Univera intentionally keeps the kit simple, carefully providing enough information and tools to equip new consultants, which the company calls associates, but not overwhelm them. He describes the approach as “the beginning of the conversation—not the whole thing.” It walks new associates through their first 30 days with Univera, providing specific action steps they need to take to get off to a strong, successful start.

The $40 kit contains a welcome letter from Bancino; a Power Up Your Life brochure, which summarizes the Univera story; a getting-started guide that describes specific actions the new recruit should take during the first 48 hours and then the first 30 days; a product catalog; and five opportunity DVDs and brochures the new associate can use to prospect. Also included are forms, such as the associate agreement, price list and customer order forms. Many components are also available online, such as the videos and forms, but Bancino emphasizes the value of having a hard copy to make that all-important first impression. The kit doesn’t contain product samples, but about 80 percent of new associates purchase a starter pack of mini-products and samples. The starter packs are available in several sizes with varying combinations of products and quantities.

While Univera typically ships the kit to the new recruit when they sign up, Bancino notes that experienced associates often keep kits with them to immediately place in the hands of a new recruit, helping them to get started on their new business right away.

Don’t Mess with Success

While Univera launched an entirely new kit in conjunction with a company rebranding effort, PartyLite has used its basic kit since the company was born in 1973. Don’t think that the kit’s longevity ages it, though. The company reviews and revises the kit every six months as it produces new product catalogs and spotlights new products.

PartyLite’s $99 kit prepares the new consultant for her first 90 days in business, focusing even more tightly on the first 30. Leaders sometimes keep kits on hand to give to new recruits. If not, the kit arrives in four or five days. It includes the key categories of the product line of candles and accessories, as well as items such as hurricanes, flameless ScentGlow® warmers, candles and products that are exclusive to PartyLite. Along with the assortment of products, new consultants also get support tools—a guide that introduces them to the product line, a booklet on the key aspects of the business, order forms, catalogs, reminder cards and other literature. Items in the kit are all intended to be used as business tools, rather than products to sell.

“The kit contains enough materials for more than their first party,” explains PartyLite Vice President of Sales Karen Conkey. “They may need more catalogs and candles during the first 90 days, but we have incentives that feed them tools and products. As they do business during that first 90 days, they can re-stock for low or even no cost.”

While the kit contains ample materials to take the new consultant through her first 30 days—what PartyLite calls the Brite Start Period—online training and clear communication equip her with knowledge that builds confidence. Profit from the consultant’s first party typically pays for her first party, and PartyLite’s online learning system helps that party be successful. Conkey says she is proud that the company clearly communicates the three exact, simple steps that are essential for success. And they work hard on the KISS imperative—Keep It Simple, Sweetie.

Online Reinforcement

“Consultants can connect to our online Learning Center easily to learn how to support those three steps,” Conkey says. “Simplicity isn’t an innovation, but when you force yourself to simplify the business, it’s easy for a consultant to understand. And the farther geographically a new consultant lives from their leader, the more important it is to be very simple. It’s an ongoing quest for our business—always simplifying things to make it easy to understand the business and earn income as early as possible.”

Consultants who need additional materials quickly will find them online, where they also can place orders and send email party invitations linked to their personal replicated website. Customers can also place orders through the consultant’s website.

At membership services company Team National, a new starter kit recently replaced one they had used for eight years. Team National had tweaked the welcome kit from time to time but had stuck with the basic kit. It was time for an overhaul.


“Our update recognized that people are looking for information differently today than they were when the kit was initially developed.” —Angela Loehr Chrysler, President and CEO, Team National


“The update recognized that people are looking for information differently today than they were when the kit was initially developed,” notes President and CEO Angela Loehr Chrysler. “And the new design on the outside of the box makes it look fresh, more contemporary.”

Team National doesn’t sell products. Instead, it sells memberships that let members save money on products and services from more than 20 industries. The key element of the kit, the Get Started flyer, spells out in four steps exactly what the new recruit must first do to save money. Then six additional bullets explain what they do to earn money. A 28-page Game Plan book provides more in-depth analysis for those who want more detail. The kit also includes audio training, recruiting CDs and DVDs to hand out or show, and a special insert on accessing and using Team National’s social media and apps. Chrysler points out that the special insert is a different size than other pieces so that it stands out and new recruits review it first, giving them quick access to online business tools.

Quick Welcome

“We have a target for our costs in terms of product, literature and tools, but we balance that with what the new consultant needs to do to earn income.”  —Karen Conkey, Vice President of Sales, PartyLite

“We have a target for our costs in terms of product, literature and tools, but we balance that with what the new consultant needs to do to earn income.”
—Karen Conkey, Vice President of Sales, PartyLite


Within 24 hours—often within an hour—of the time a new Independent Representative joins Team National, he or she receives an email welcome that includes an I.D. number that provides access to the content of some materials, such as the Get Started flyer. The email describes what will be in the physical welcome kit and how to get started even before it arrives, which is typically in three to 10 days, depending on where the consultant lives in the country.

Chrysler notes that the Get Started information had previously been only online. “The reality is, they wanted something in their hands, and we decided that the expense was worth it,” she concludes. “The irony of the new Get Started flyer that’s in there now is that our leaders suggested it four years ago, and we had never taken time to create it.”

Nutrition company USANA launched its current starter kit in August 2012 at its international convention. The kit was part of the company’s 20th anniversary corporate rebranding initiative. It was a giant leap, design-wise. The company transformed the kit from a plain, brown packing box to a highly designed, strongly branded box.

“We believe this change makes a strong impression with our new associates when they receive it,” explains USANA Chief Marketing Officer Doug Braun. “A goal of the starter kit was that it worked hard to connect the new associate with the brand.”

In addition to its five-step Getting Started checklist, product information, a welcome letter and several forms, USANA also includes personal development materials on audio and DVD, and a wealth of prospecting materials, including a sheet of business cards and a window decal that signal the new associate’s pride in being part of the company. While USANA’s kit details the important steps a newbie needs to take to get off to a successful start, the kit isn’t intended to be used during a specific timeframe. Instead, it provides the initial tools he or she will need, reinforces their decision, and sets the stage for retention.

“The starter kit is generally a company’s first physical contact with a new associate, so it was important to us that our starter kit was an accurate reflection of the brand the new associate just joined,” Braun notes. “From a content point of view, it was important that a new associate had tools and information to get started immediately. We wanted the kit to be welcoming and helpful and to provide guidance and tools to truly get their business started. By adding personal development pieces, we filled a gap from our previous kit. As we know, personal development is a key to understanding how to succeed in direct selling and to keep yourself, as a new distributor, motivated and focused on staying with it.”

The company doesn’t include any routine paperwork in the kit. Instead, it puts forms and easily printable materials at the Associate’s fingertips online.

Does it Work?

But no matter how beautifully a kit displays the brand and how many wows management hears about it, the key question is still this: How effective is the starter kit? How does a company know whether the kit is doing its job?


“The starter kit is generally a company’s first physical contact with a new associate, so it was important to us that our starter kit was an accurate reflection of the brand the new associate just joined.”
—Doug Braun, Chief Marketing Officer, USANA


Most companies informally ask field leaders to appraise their starter kit’s effectiveness. Univera and PartyLite do that, too, but they also have more formal assessments.

Univera annually surveys its field on a variety of topics, including the effectiveness of its starter kit, and they do a quarterly qualitative analysis. They also track the sales of starter packs of products, which are heavily used by new recruits.

PartyLite collects qualitative comments from its Field Advisory Team, and it tracks the results of new consultants, too. They keep an eye on the number of parties new consultants have held, as well as the average sales at those parties. Then they follow up with surveys and focus groups.

“By talking to new consultants through surveys we gain information and data points that point us in the right direction,” Conkey says. “Then we hold focus groups with new consultants when we’re in the field to get feedback and more qualitative information.”

PartyLite’s philosophy about the cost of a starter kit—as well as the training a new consultant needs to get started—were representative of each company that spoke with Direct Selling News, no matter the company’s product line. In every case, they strive to provide the tools the new recruit needs to get started, but the fee for the kit covers its cost.

Conkey explains: “We have a target for our costs in terms of product, literature and tools, but we balance that with what the new consultant needs to do to earn income. It’s about what the products should be for them in order to have good parties and to be able to book future parties. We go through a very detailed process to get to the kit every time we create a new one. In the business we’re in, the visual appeal of products is extremely important—how they look together, how they photograph together, how a consultant shows them in the best light.”

The cost of a starter kit covers a wide range—beginning as low as $10 and climbing to a few hundred—though most seem to come in around $99. Regardless, the kit is a living, breathing piece of the business, a starting point that should change and be refreshed based on the reaction in the field. The best kits provide clarity, build action and provide materials that support that action.