Description
In 2010, direct selling companies generated over $125 billion in revenue in 150 countries through more than 75 million men and women who are changing lives serving others.
1
THE ULTI MATE
SOCIAL BUSINESS MODEL
A Special Supplement to The Wall Street Journal by Direct Selling News
In 2010, direct selling
companies generated over
$125 billion in revenue in
150 countries through more
than 75 million men and
women who are changing
lives serving others. This is
the story of direct selling.
Why Now
Is Prime
Time for
Direct
Selling
From March 2009
to May 2011, the
top 7 publicly
traded direct
selling companies
averaged a 268
percent increase in
stock price.
INSIDE: DSN Global 100 Listing of the Top Direct Selling Companies in the World
2
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3
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Contents
COVER STORY
4
The Ultimate Social
Business Model
by Katherine Ponder
Direct selling is the original social
networking business … and now
is prime time for direct sellers.
8
Solution to a Shrinking Job
Market
by J.M. Emmert
World-renowned economist,
professor and best-selling
author Paul Zane Pilzer offers a
perspective on the direct selling
industry’s role in today’s economy.
FINANCE
10
Making Dollars
and Sense
by Emma Johnson
Direct selling makes a lot of
sense, not only for the individuals
worldwide who make a living
selling products from their home-
based businesses, but also for
savvy investors the world over.
11
Top Publicly Held Direct
Sellers Achieve Record
Sales and Pro?tability
by Tim Blackwell
More than half of the top 12 public
companies that sell direct have
outperformed the average stock
return by impressive margins
since the market dipped to its low
in early 2009.
13
Jefferies Report
by Douglas M. Lane
The direct selling model is
uniquely well-positioned in the
current investment environment.
INTERNATIONAL
14
A Truly Global Channel
by Katherine Ponder
Direct selling is a global
phenomenon. There are now 20
countries that are billion-dollar
markets for direct selling.
TECHNOLOGY
18
Speed, Power, Reach
by Teresa Day
Technological advances in mobile
devices and apps, as well as
in social media tools, serve to
increase the speed, power and
reach of what’s already utilized in
the direct selling model.
INDUSTRY
22
Megawatt Returns
for Energy Providers
by Jennifer L. Mills
Deregulation in several states
has opened up competition for
the retail portion of the energy
business. And that’s where direct
sales companies are stepping
in—and changing the game.
24
Of the People, by the
People, for the People
by Teresa Day
The business model thrives
when those who participate build
businesses and share with others
how they, too, can do the same
thing, creating a positive social
and economic impact on families
and communities.
27
The Heart of Direct
Selling: The Home
by Barbara Seale & John Fleming
What’s the ideal home-based
business? More than 15 million
Americans think it’s direct selling.
They represent the hundreds of
U.S. direct selling businesses,
creating a signi?cant social and
economic impact.
29
Direct Selling News
by DSN Staff
Whether providing readers with
valuable information, offering a
forum for executives to share
ideas or pro?ling companies,
DSN is the journalistic resource
covering the direct selling way of
doing business.
31
DSN Global 100
by DSN Staff
Direct Selling News presents
its Global 100, the only
comprehensive list of the top
100 revenue-grossing direct
selling companies in the world
for 2010.
As the trade publication for our vibrant industry, each month we bring you the latest news and information
about the companies and the people who lead them.
For more information, email [email protected] or call 940-497-9775 | www.directsellingnews.com | 800-279-5249
Serving the Direct Selling and Network Marketing Executive
Reach the Industry
Through our multiple advertising platforms, we are
the best way to build name and brand recognition
and to market your products and services directly
to decision-makers.
Learn the Industry
Subscribe to Direct Selling News,
a trade publication for industry
executives and decision-makers.
Founder & CEO
Stuart P. Johnson
Publisher and Editor in Chief
John Fleming
[email protected]
Managing Editor
Judith Emmert
[email protected]
Editors
Jennifer L. Mills
Teresa Day
Creative Director
Carl Waters
Production Manager
Alan Dwelle
Production Artist
Karla M. Garcia
Copy Editor
Peter Tepp
Contributors
Tim Blackwell
Emma Johnson
Douglas Lane
Katherine Ponder
Barbara Seale
Advertising Manager
Jerry Reagan
[email protected]
Operations
Steve Norton
Direct Selling News
200 Swisher Road • Lake Dallas, Texas 75065
Phone: 800-279-5249 • Fax: 940-497-9988
www.directsellingnews.com
© 2011 Direct Selling News. All rights reserved.
4
Direct selling is the original social
networking business. Long before
we even knew what a computer was,
people were getting together for fun,
socializing and shopping. Add in
technological power and globalization,
and you’ve got a winning formula.
Model Advantages
Whether a company is working
in a mature market or an emerging
one, the direct selling model
has many advantages. In mature
markets, the existing infrastructure
and high technology saturation
make interacting with customers
extremely easy. Advancements in
mobile devices and apps, as well as
in social media tools, simply increase
the reach of this socially driven
model. Far-fung friends and family
are now easily included in a tight
circle, and new friends across the
nation and world are made through
common interests.
In an emerging market such
as China, having scores of
salespeople working directly with
friends and family to make the
personal pitch just reaches back in
time. Te direct selling model is over
150 years old; it has never needed
technology to be successful. A social
network and a good product is all that
is necessary. Additionally, the social
connections put you far ahead of
the competitors who either can’t get
product on the shelves or are pushed
into obscurity. And those competitors
don’t have a constant line straight to
their customers to gauge demand
and feedback.
Products and services delivered
directly to customers through
personalized presentations that are
ofen educational, entertaining and
certainly social have enabled direct
selling to thrive for decades even
through recessions, including this
latest one. Te efect holds true no
matter what the category as direct
selling companies represent virtually
all goods and services customers
want and need. Te DSN Global
100 list of the top revenue-grossing
direct selling companies in the world
represents $66 billion in revenue for
2010, proof that this social business
model has economic power.
Te products and services sold
by these companies range across
such diverse categories as cosmetics,
fnancial planning services, home
decorating, home improvement and
solutions, energy services, personal-
care, health and wellness, apparel and
accessories, legal services and fne
wines. Each company on the list had
to have reached $80 million in 2010
revenue just to be listed.
Analysts have noticed some of
the advantages of direct selling.
Doug Lane is Managing Director
at Jeferies, a full-service securities
and investment banking frm that
was recently ranked No. 1 in U.S.
stock picking by the Financial Times
/ StarMine Research Analysis. He
thinks that direct selling companies
are successful because they have
“strong top-line growth driven by
outsized exposure to the rapidly
growing emerging markets;
relatively high gross margins to
bufer against the recent dramatic
rise in commodity cost infation;
and ownership of the distribution
channel and the tendency towards
premium priced products that enable
the direct sellers’ pricing power over
traditional retail.” Lane goes on to
explain that direct selling companies
ofen have under-leveraged balance
sheets and large free cash fows,
which “tend to put the direct selling
business model on particularly strong
fnancial footing.”
Jim Cramer, host of investment
show “Mad Money,” has caught on
as well. “Te direct selling model is
going great guns,” he said, noting it
could be the best way to sell goods in
the Tird World.
The Ultimate Social Business Model
by Katherine Ponder
continued on page 6
Cover Story
5
This is the company
that puts mascara on lashes and food on tables,
that fights wrinkles with one hand and Breast Cancer
with the other. That knows the value of a perfect lip,
but still opens its mouth and speaks out against
Domestic Violence and for women’s financial independence.
This is the company that not only brings beauty to doors,
but also opens them. The company that supports 6.5 million
Representatives in over 100 countries. This is Avon.
The company that for 125 years has stood for beauty,
innovation, optimism and above all for women.
avoncompany.com
6
Attracting Attention
and Investors
Within the DSN Global 100 list, the top 10
companies contributed $39 billion to the global
economy in 2010. Te company at the top of
this list—Avon, the 125-year old brand known
in virtually every household, which generated
$10.9 billion of that number—is publicly held,
as are fve additional companies on the top
10 list. Amway, privately held and another
household name, secured the No. 2 spot on the
list at $9.2 billion in sales. Other familiar names
on the top 10 list include Herbalife (public),
Mary Kay (private) and Tupperware (public).
Vorwerk (private) is a household name in
Europe and is the parent company of United
States company JAFRA. Te list rounds out
with additional companies Natura (public),
Orifame (public), Forever Living Products
(private) and Nu Skin (public).
Clearly, the economic impact of direct selling
companies for the United States and for the
world simply cannot be overlooked or swept
under the rug. Scott Van Winkle, CFA, is a
Research Analyst at Canaccord Genuity, known
for serving institutional and corporate clients
through investment banking, research, sales
and trading services. Van Winkle covers direct
sellers Herbalife, Nu Skin Enterprises, USANA
Health Sciences and Medifast. He says, “I think
there is fnally broad confdence in the direct
selling model in the private equity community.”
Interest overall does appear to be growing.
Financial advisors and investors both are
seeing direct selling companies with new eyes,
focusing on the efcient business model, rapid
growth, and generally low on-going capital
investment afer the initial surge. Van Winkle
says, “I don’t go a week now without getting a
phone call from a private equity frm looking
at a direct selling asset, and that was just
nonexistent 5 years ago.”
It appears that wise investors are getting
in now. Sequoia Capital investors bought
into jewelry and accessories direct seller
Prime Time for Direct Selling
continued from page 4
Te direct selling industry’s
top seven public companies,
based on Direct Selling News’
Global 100 ranking,
accounted for $23.9 billion
in revenue for 2010.
Avon Products Inc.
Country: USA
2010 Rank: 1
2010 Revenue: $10.9 billion
Avon is the founder of modern direct
selling and the acknowledged world
leader in cosmetics, fragrances and
toiletries. Avon’s well-known product
lines include Avon Color, Anew, Skin So
Soft™, Advance Techniques Hair Care,
Avon Naturals and mark™.
Markets: 100+
Distributors: 6.5 million
Employees: 42,000
Headquarters: New York, N.Y.
CEO: Andrea Jung
Year Founded: 1886
Stock Symbol: AVP—NYSE
Natura Cosmeticos SA
Country: Brazil
2010 Rank: 3
2010 Revenue: $3 billion
Natura is a cosmetics giant with
more than 900 products. The
company operates in Argentina,
Chile, Peru, Mexico, France,
Venezuela and Colombia. Corporate
social responsibility is one of its
core emphases.
Markets: 7
Distributors: 1 million
Employees: 5,000+
Headquarters: São Paulo, Brazil
CEO: Alessandro G. Carlucci
Year Founded: 1969
Stock Symbol: NATU3.SA—São Paulo
Herbalife Ltd.
Country: USA
2010 Rank: 5
2010 Revenue: $2.7 billion
Herbalife sells nutritional supplements
and weight-management and personal-
care products. Its products have been
developed by scientists, physicians
and nutrition experts, including
Nobel laureate in medicine Louis
Ignarro, Ph.D.
Markets: 75
Distributors: 2.1 million
Employees: 4,300
Headquarters: Los Angeles, Calif.
CEO: Michael O. Johnson
Year Founded: 1980
Stock Symbol: HLF—NYSE
Public
Companies:
The Big 7
7
Stella & Dot for $37 million (10 percent of
ownership) last January, certain that it had
pursued a winner. Sequoia Capital is a Silicon
Valley venture capitalization frm that is estimated
to control as much as 14 percent of the value
on NASDAQ. “Sequoia rarely sees a business
built so strong, with such little capital,” says
Sequoia partner Alfred Lin, who more recently
added: “We wanted to become business partners
with Stella & Dot because it was a great business
run by a very special founder and entrepreneur,
Jessica Herrin.”
Blyth, Inc. also found value in direct sellers
PartyLite and ViSalus. “PartyLite was doing
$7 million in sales when Blyth acquired it
in 1990, and it’s over $500 million in annual
revenue today,” recounts Robert B. Goergen Jr.,
President of Blyth. “ViSalus, a relatively young
company, is currently experiencing rapid sales
growth. We embrace a portfolio approach, with
non-competitive products and companies in
diferent stages of development across multiple
geographies.” Indeed, PartyLite sells premium
candles and home fragrance products, and
ViSalus sells weight management and health
products. Blyth’s strategy for investing in various
direct selling companies has proven very
successful for them.
Traditionally, private equity frms make
a material investment into a business and
within 5 years either take it public or sell it.
Investment in direct selling companies has brought
about a new exit strategy for some private equity
frms, according to Van Winkle. He says, “We’ve
seen direct selling companies turn around and
take out their private equity investors with cash
fow. Tat’s a whole new model for private equity—
that the asset they’ve acquired could ultimately
buy itself out.”
Van Winkle and others know the time is right.
Many of the innovative investors are reaping
rewards for acting upon their confdence in
the direct selling industry. Others are just now
seeing the value, but the opportunity is still available
to be part of this successful sales model. ?
Tupperware Brands Corp.
Country: USA
2010 Rank: 7
2010 Revenue: $2.3 billion
Tupperware is a global direct seller of
innovative premium products, including
design-centric preparation, storage and
serving solutions for the kitchen and home
through the Tupperware brand, and beauty
and personal-care products through Armand
Dupree, Avroy Shlain, BeautiControl, Fuller,
NaturCare, Nutrimetics and Nuvo.
Markets: Nearly 100
Distributors: 2.6 million
Employees: 13,500
Headquarters: Orlando, Fla.
CEO: Rick Goings
Year Founded: 1946
Stock Symbol: TUP—NYSE
Ori?ame Cosmetics S.A.
Country: Sweden
2010 Rank: 8
2010 Revenue: $2.2 billion
Ori?ame is a beauty company offering
cosmetics, fragrances and personal-care,
skin-care, hair-care and wellness products.
The company operates in 62 countries and is
the market leader in more than half. Ori?ame
has a presence in Mexico, Central America,
South America, Europe, Asia and Africa.
Markets: 62
Distributors: 3.5 million
Employees: 8,000
Headquarters: Luxembourg, Luxembourg
CEO: Magnus Brännström
Year Founded: 1967
Stock Symbol: ORI-SDB—Stockholm
Nu Skin Enterprises Inc.
Country: USA
2010 Rank: 10
2010 Revenue: $1.5 billion
Nu Skin Enterprises Inc. is a global direct
selling company operating in 48 international
markets throughout the Americas, Europe
and the Asia-Paci?c region. Going far beyond
cosmetics, toiletries and fragrances, Nu Skin
sells more than 200 products through three
distinct brands: Nu Skin, Pharmanex and
Big Planet.
Markets: 51
Distributors: 800,000
Employees: 1,200
Headquarters: Provo, Utah
CEO: Truman Hunt
Year Founded: 1984
Stock Symbol: NUS—NYSE
Primerica Inc.
Country: USA
2010 Rank: 11
2010 Revenue: $1.3 billion
Primerica provides ?nancial products and
services, including term life insurance, mutual
funds, variable annuities, loans, long-term
care insurance and legal services to 6 million
clients, primarily middle-class individuals
and families.
Markets: 5
Distributors: 100,000
Employees: 2,000
Headquarters: Duluth, Ga.
CEOs: John Addison and Rick Williams
Year Founded: 1977
Stock Symbol: PRI—NYSE
From March 2009 to May 2011, the top 7 publicly traded direct selling companies
averaged a 268 percent increase in stock price. —DSN
8
Solution to a Shrinking
Job Market
P
rofessor Paul Zane Pilzer has kept a watchful eye on the direct selling
industry for more than 30 years. In the 1990s, the renowned economist
who served in two White House administrations predicted that network
marketers would help make the then-emerging $200-billion health and wellness
channel the next trillion-dollar industry. The success of companies such as
Herbalife, Medifast, Monavie, Amway, Nu Skin, USANA and Blyth are helping to
con?rm Pilzer’s theory.
As the current economic crisis continues to take a toll on people around
the world and unemployment rates steadily rise, direct selling may be the
answer to a shrinking job market. Pilzer warns that too many people today see
unemployment as part of the economic cycle—that when the economy recovers,
employment will naturally go up.
However, unemployment is not a macro-economic problem, he says. It is a
micro-economic issue, typically related to a skill de?ciency on an individual level.
“The question lies not in economic recovery but employment recovery,” says
Pilzer, who has written nine bestsellers. “We have a massive social problem.
What are we going to do with 30 million people who are now permanently
unemployed? The No. 1 social need in the United States right now has nothing to
do with the economy.”
The real challenge is to replace lost jobs with new earnings opportunities and
provide much-needed training. The jobs that baby boomers and Gen Xers trained
for years ago have disappeared. Technology has replaced millions of workers and
demanded new skills that too many older Americans just don’t have.
“Instead of focusing on new methods of training, our politicians and news
media are looking at unemployment and the economic recovery as linked—and
they are not because most of the unemployed people today are skills-de?cient.
If they are over 50 years old, they probably don’t touch-type or e-mail, and that
doesn’t work in today’s economy.”
So what happens to those displaced workers? Direct selling may have
the answer. The direct selling business model has always had a competitive
advantage in the training that it offers, both in business and personal skills. It
allows people to be retrained while they pursue something new. It gives people
an opportunity when no one else will.
The biggest need in every sector of the economy, says Pilzer, is intellectual
distribution—the dissemination of information about products and services. “We
have a huge backlog of better products and services that people aren’t buying
because they don’t know about them. Direct selling is the most ef?cient method
for the distribution of intellectual information that will improve your life. It is the
ideal model that allows anyone to reach out.”
Direct selling offers people the skills and tools to create new income
opportunities—to venture out on their own as entrepreneurs and grow in
con?dence versus being consumed by the fear associated with a shrinking job
market. “Technology is available to everyone at home and is even better than
what you can get in a large company,” says Pilzer. “When we examine the
workplace, we often ?nd outdated computers and data management systems.
However, the best tools and support needed to run a home-based business are
now available to individuals at an affordable cost. This makes a home-based
business—and a direct selling opportunity, in particular—very appealing.” ?
by J.M. Emmert
AN INTERVIEW WITH PAUL ZANE PILZER
9
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10
J
eferies analyst Doug Lane has long been a
champion of the sector, which relies on its
salespeople to market the product, mostly
to their local community. Lane has told
investors that the model—also referred
to as network marketing—continued to thrive
throughout the recession in part because it ofers
the unemployed an easy, low-risk way to be in
business for themselves, and that it also capitalizes
on the fact that consumers prefer to buy products
from people they know and like.
Te direct selling business model is also proving
to be a bonanza in developing countries. Growth
potential is huge because as these economies
expand, their appetites for consumer goods grow
and previously underemployed women—who
have historically been the foundation of many
direct sales organizations—are prospering, thanks
to newfound economic opportunities. Te most
recent fgures show that within the $125 billion
global direct sales industry, a mere $28.3 billion
came from the United States, while $49 billion
came from the Asia-Pacifc region, and Latin
American sales reached $18 billion. Te sector’s
growth leaders were also in the developing world;
India joined the list of billion-dollar nations,
generating $1.06 billion in revenue for 2009. China
saw 2009 sales increase nearly $3 billion, and
Russia, though it experienced a somewhat modest
gain of $200 million, still moved up to No. 9 in the
DSN ranking of the top billion-dollar markets in
the world, with $3.06 billion in 2009 sales.
One reason investors love these companies
is that they have low overhead. Tere are few
retail expenses, since the products are sold out
of salespeople’s homes, and
marketing and advertising
expenditures are minimal. “It
turns out [direct selling] may
be the best way to sell goods in
the developing world, where
people listen to testimonials—
not advertisements and retail
salespeople,” Jim Cramer told
his audience.
Other leading investors
are nabbing opportunities
to proft from network
marketing. Warren Bufett
has been a proponent of the
model since scooping up
Te Pampered Chef in 2002,
calling it one of the best
investments he’d ever made; he
subsequently invested in seven
more direct sales companies.
Even British mogul Richard Branson launched
a direct sales cosmetics frm—now called Vie at
Home—which he sold to direct sales investor
Helmut Spikker last year.
In 2002, private equity frm Whitney & Co.
invested $700 million in supplement giant
Herbalife. Te investment made by Sequoia
Capital into Stella & Dot in January of this year is
certainly an example of how investors are looking
diferently at direct selling companies and their
leadership. Also earlier this year, Pre-Paid Legal
Services agreed to sell to private equity frm
MidOcean Partners for $650 million in cash; the
deal is expected to close by the time we go to press.
One of the most eye-opening events for investors
was last year’s IPO of direct sales fnancial services
company Primerica. Its impressive opening-day
performance on April 1, 2010, lef investors—who
were oversubscribed by 21 times—confdent about
Primerica’s competitive advantage in the insurance
and asset-management industry. Primerica closed
at $19.65 the frst day—30 percent more than its
initial public ofering price of $15—afer its market
debut. Its strong performance made it one of the
top-performing IPOs for the year.
“Afer years of skepticism, the investment
community is fnally waking up to the viability of
direct selling as a good investment opportunity,”
says Lane. “Tey’ve become true believers.” ?
“Mad Money” market guru Jim Cramer recently
told his CNBC viewers: “Direct selling has never
gotten its due from Wall Street. It’s time we
recognize that the direct sales model works,
and it works well.” There is little question why
fnancial notables like Cramer, Warren Buffett,
Ray Chambers and Suze Orman have touted
businesses based on direct selling.
“After years of skepticism, the
investment community is ?nally waking
up to the viability of direct selling as a
good investment opportunity.”
—Doug Lane
Making Dollars and Sense by Emma Johnson
11
S
ince the market crash on March 9,
2009, the major indices have steadily
rebounded with 95 percent growth,
but some direct selling companies are
experiencing enviable price increases on American
and foreign exchanges. Many of the top direct
selling companies have achieved record sales
and pro?tability and most appear to have
lasting ?scal momentum in an improving
economy. Stock percentage growth for
Herbalife Ltd.(HLF– NYSE), Tupperware
Brands Corp. (TUP–NYSE), Nu Skin
Enterprises (NUS–NYSE) and Medifast Inc.
(MED–NYSE) soared as high as three to
seven times the average gain of the S&P
500 and Dow Jones Industrial Average by
early May 2011.
Herbalife shares climbed 764 percent
from $12.28 to $106.15 before the
company’s board of directors approved
a two-for-one split in May. Furthermore,
the company raised its dividend by 60
percent, representing a 20-cents-per-share
post-split quarterly dividend. The global
nutritional company’s sales increased
17.3 percent from $2.3 billion in 2009 to
$2.7 billion in 2010, with net income of
$297million. Herbalife topped that with a record
?rst quarter 2011, which includes a 28.5 percent
increase in sales and $26.8 million improvement
on adjusted net income.
At the company’s ?rst-quarter conference call,
Chairman and CEO Michael O. Johnson attributed
the company’s growth to an improved distributor
retention rate of 48.9 percent, up 20.7 percent
from 2002. In an effort to broaden future earnings,
he announced the release of the company’s new
Herbalife 24 sports product line, which is designed
to meet high-end nutritional needs for athletes.
Two years ago Tupperware’s stock hovered
around $11.00 per share, but an 8 percent increase
in annual sales to $2.3 billion in 2010, plus a 15
percent improvement to the bottom line helped lift
the share price above $64—a 457 percent gain.
The global direct seller of storage and serving
solutions as well as beauty and personal-care
products experienced double-digit sales increases
in the ?rst quarter 2011 from its emerging
markets in Brazil, India, Indonesia, Malaysia/
Singapore, the Philippines, Turkey and Venezuela.
Tupperware’s adjusted diluted share earnings for
the ?rst quarter of this year were 14 cents better
than for the same period in 2010, including a
positive foreign currency impact of 4 cents.
Nu Skin’s stock has shot up 364 percent
from $8.04 per share to more than $37 after
record sales and pro?ts in 2010. The company
increased revenue 15 percent over 2009 to
$1.5 billion, culminating three consecutive
years of record-breaking revenue. The fourth
quarter was the company’s ?rst ever $400 million
revenue quarter, marking early
achievement of a ?ve-year plan that began
in 2007 to double Nu Skin’s earnings to
$2 per share of stock. The company is
now planning to double its earnings to $4
per share by 2015.
Medifast’s stock has been on its
own fast-track to the top, soaring from
$4.42 a share two years ago to $20.39
in early May. A streak of 45 consecutive
pro?table quarters has strengthened the
seller of weight and health management
consumables; the company had record
revenues of $257.6 million and improved
pro?ts by 73 percent last year. Medifast,
the parent company of Take Shape for
Life, was named No. 1 on America’s 100
Best Small Companies list by Forbes
magazine for 2010.
The stock performances of Blyth
Inc., Natura/Brazil, USANA Health Sciences,
Avon and Nature’s Sunshine all exceeded S&P
500 and Dow Jones averages for the past
two years.
Sales increases, net income improvements
and gains for the top publicly held direct selling
companies may be an indication of promising
growth for an entire industry, especially for
those who include emerging markets in their
strategic plan. ?
Top Publicly Held Direct Sellers Achieve
Record Sales and Pro?tability
The two-year rebound in the stock market has many investors smiling again,
especially those who have put their money in direct selling companies. Many of the top
12 public companies that sell direct have outperformed the average stock return by
impressive margins since the market dipped to its low in early 2009.
by Tim Blackwell
12
COMPANY SYMBOL
PRICE
3/9/2009
PRICE
5/9/2011
PERCENT
INCREASE
Herbalife Ltd. HLF $12.28 $106.15* 764%
Tupperware Brands Corp. TUP $11.61 $64.77 457%
Nu Skin Enterprises NUS $8.04 $37.31 364%
Medifast Inc./Take Shape for Life MED $4.42 $20.39 361%
Blyth Inc. BTH $16.12 $44.48 175%
Nature’s Sunshine NATR $5.26
†
$11.59 120%
Natura Cosmeticos (Brazil) NATU3 $19.85 $43.00 116%
USANA Health Sciences Inc. USNA $19.09 $37.71 97%
Avon Products Inc. AVP $15.20 $29.15 91%
Ori?ame (Sweden) ORI-SDB $216.00 $360.00 66%
Telecom Plus PLC (UK) TEP $330.25 $475.25 43%
Primerica Inc. PRI $19.65
‡
$22.30 13%
?
Market cap above $100 million.
* Stock split on 5/18/2011 at $103.86. Price re?ected in chart is pre split.
‡
Based on 13-month period from initial public offering on April 1, 2010.
†
Percent increase re?ects start date of July 1, 2009.
Top Publicly Held Direct Selling Companies
?
Stock Performance 2009–2011
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13
“The direct selling business model is one that can
level the playing feld and close the gap between
the haves and have-nots.”
—RAY CHAMBERS, Entrepreneur, Philanthropist
and Humanitarian
“The partnership with Avon is a logical and natural
extension of everything I believe in. I am confdent
we can make a huge difference toward the goal
of empowering women and helping them achieve
their fnancial hopes and dreams.”
—SUZE ORMAN, Internationally Acclaimed Personal
Finance Expert
“Direct selling is actually one of the oldest, most
respected business models in the world and has
stood the test of time.”
—DONALD TRUMP, Billionaire Businessman
“One reason I have such strong respect for
network marketing is that it is a genuine equal-
opportunity business. Network marketing casts a
very wide net. When you look closely at the more
than 60 million people worldwide who are engaged
in the business, you’ll fnd people of every color
and creed, every age group, and every level of
background, experience and skill.”
—ROBERT T. KIYOSAKI, author of Rich Dad Poor Dad and
The Business of the 21st Century
“What is the one bright spot on the entire horizon
that would give someone an opportunity to be
retrained to learn new skills? Direct selling.”
—PAUL ZANE PILZER, World-Renowned Economist and
Best- Selling Author of The Next Millionaires
“The rapid growth dynamics both in terms of
consumers purchasing products and associates
participating as direct sellers is driving strong
interest from private equity groups and strategic
acquirers in direct selling companies.”
—LORIN DEMORDAUNT, Managing Director, McColl Partners
“Network marketing has come of age.
It’s undeniable that it has become a way to
entrepreneurship and independence for millions
of people.”
—STEPHEN COVEY, Author of The Seven Habits of Highly
Effective People
“This country was founded on entrepreneurialism
and we are returning to it. The future of
employment is self-employment. Direct selling is
one of the few business opportunities that offers
average people, with above average ambition to
achieve an above average lifestyle, peace of mind
and fnancial security.”
—DARREN HARDY, Publisher of SUCCESS Magazine
Strong top-line growth driven by
outsized exposure to the rapidly
growing emerging markets
Avon Products, Herbalife, Nu Skin
Enterprises and Tupperware Brands
all derive more than 75 percent
of their revenues from outside the
United States, with particularly strong
presences in the emerging markets
of Latin America, Eastern Europe and
Asia. We think Avon is strategically well
positioned with its iconic global brand
and by having approximately 70 percent of
its pro?ts come from the attractive emerging
markets of Latin America and Eastern
Europe, where the Cosmetics, Fragrances
and Toiletries (CFT) industry is growing
at above-average rates and direct selling
has been gaining market share. Organic
sales growth, stripping away the impact of
foreign currency translation and acquisition,
has been especially strong for Herbalife,
USANA and Nu Skin. In the ?rst quarter
2011, Herbalife was up nearly 25 percent.
USANA has grown local currency sales on
average in the low teens dating back to the
?rst quarter 2010, and Nu Skin also grew
double digits throughout 2010. Conversely,
our larger traditional packaged goods
companies have struggled to generate more
than low single-digit organic growth of late.
Relatively high gross margins to
buffer against the recent dramatic
rise in commodity cost in?ation
While input cost in?ation has been front of
mind for many investors of late, our direct
selling companies have actually been
delivering gross margin expansion. In fact,
USANA has had ?at or higher gross margins
seven quarters in a row, while Nu Skin has
six in a row and Herbalife four. Conversely,
our traditional packaged goods coverage has
averaged gross margin contraction the past
three quarters.
Ownership of the distribution
channel and the tendency toward
premium-priced products
This gives the direct sellers pricing power
that tends to be more of a struggle for most
traditional package-goods companies that
have to sell through big-box retailers.
Under-leveraged balance sheets and
large free cash ?ows
Both tend to put the direct selling business
model on particularly strong ?nancial footing.
Notably, Herbalife, Nu Skin, Tupperware and
USANA have adopted a more aggressive
approach to dividend increases and/or share
repurchases, such that their cash returned
to shareholders is on par with or better
than most of their peers in the traditional
packaged goods universe. ?
Jefferies Report
Direct Selling
Well Positioned
The key attributes that we believe uniquely
bene?t direct sellers in the current investment
environment are:
by Douglas M. Lane
Douglas M. Lane is Managing Director of Equity Research for Jeferies & Company, Inc.
14
3. Brazil—$13.5 billion
Te national DSA, Associacao
Brasileira de Empresas de Vendas
Diretas (ABEVD), remains bullish
on its members’ performance.
Te ABEVD, which has 48 direct
selling members, reported a sales
increase of 18.4 percent from 2008
to 2009. In a year of adversity for
most sectors of the economy, the
direct sales opportunity generated
income for 2.3 million people.
4. China—$10.9 billion
China continues to be a tantalizing
yet elusive market for direct
selling companies. Its sales in the
industry grew by almost $3 billion
between 2008 and 2009, proving
that companies are operating
successfully within its borders.
Many are founded in China; yet for
multinational companies, the market
remains a challenge. All eyes are on
the explosive growth in China, with
analysts taking bets on when it will
surpass the United States and Japan.
A Truly Global Channel
Te following is a special report from Direct Selling News. Te article, which is based on statistics
reported by the World Federation of Direct Selling Associations (WFDSA), interviews with local
Direct Selling Associations (DSAs) and third-party reporting, tells the story of the cumulative
impact of the direct selling way of doing business in key markets around the world.
by Katherine Ponder
1. United States—$28.3 billion
With $28.3 billion in sales for
2009, U.S. direct selling was down
almost 4.4 percent from 2008. U.S.
direct sales declined, but retailing
as a whole declined 7.3 percent over
the same period. Looking forward
to 2011, analysts expect that those
who entered the direct selling
arena as a way to make up for lost
income will remain active even as
the economy recovers. Tat trend
will likely lead to higher sales for
the year.
2. Japan—$22.4 billion
Direct selling in Japan has
literally had its ups and downs
in recent years. Between 2006
(the previous reported timeframe
from WFDSA) and 2009, it lost
approximately $400 million in
sales. When you’re the No. 2 nation
in the industry, this looks relatively
small. But Japan’s economic
recession has been every bit as bad
as that in the United States, and
economic problems began long
before 2007.
Figures are year-end results for 2009; 2010 full data not yet available.
15
5. South Korea—$7.84 billion
South Korea moved up one notch in
our international rankings by gaining
$840 million in sales in 2009, according to
WFDSA. Te industry has approximately
4 million distributors and 64 members
in the Korean DSA. Research shows that
one-sixth of the population has been
involved with direct selling at some
point in their lives. Indications for 2010
fnal sales fgures are that South Korea
will hit $9 billion. Te 2011 forecast for
the industry is to parallel the national
economy by growing 4 to 5 percent.
6. Mexico—$4.83 billion
Mexico rose one place in our annual list
by gaining approximately $430 million in
sales from 2008 to 2009. It was an increase
made even more remarkable because it
came during troubled economic times.
Te Asociacion Mexicana de Ventas
Directas estimates that the 39 member
companies account for 85 percent of
the industry’s sales in the country, with
growth of almost 6 percent from 2008
to 2009.
7. Germany—$3.76 billion
Germany is the largest direct selling
market in Europe. It has an afuent and
technologically advanced economy—a
large proportion of which is over 50
with high-disposal income—and high
unemployment. Direct sellers in Germany
are 67 percent women, and 84 percent
sell through a personal sales method.
Te Bundesverband Direktvertrieb
Deutschland e.V, the oldest direct selling
agency in Germany, estimated turnover
of member companies fell slowly by 1.3
percent; however, in general the state of
direct selling in Germany is good, and
businesses are optimistic about the future.
Germany is by far still No. 1 in Europe
and in the top 10 world markets.
It’s small, frivolous and delightfully chic. And yet, since 1967, it
has transformed the lives of millions through a unique business
concept: Make Money Today And Fulfl Your Dreams Tomorrow™.
At Orifame, fulflling dreams is our heart and soul. Our mission
is simple: empower people to realise their full potential, fulfl
their dreams and lead a richer, more meaningful life. By selling
our beauty products, our 3.6 million consultants, in more than 60
countries, have the freedom to set their own targets, income and
working hours. There are no limits.
What we offer with a single lipstick can start out as a fun hobby
and develop into something truly great. It’s your choice.
Never underestimate the power of a lipstick.
Not just a pretty face.
Market
Estimated
2009 Sales
(US$ in
billions)
2008 Sales
(US$ in
billions)
No. Salespeople
(2009)
No. Salespeople
(2008)
1. United States 28.3 29.6 16,100,000 15,100,000
2. Japan
22.4 22.8
†
2,700,000 2,700,000
3. Brazil
13.5 10.0 2,377,336 2,028,098
4. China
10.9 8.00 not available not available
5. South Korea
7.84 7.00 3,987,933 3,089,158
6. Mexico
4.83 4.40 2,000,000 1,900,000
7. Germany
3.76 9.00
‡
not available not available
8. Italy
3.36 3.36 390,955 366,000
9. Russia
3.06 2.87 4,995,508 4,413,918
10. France
2.41 2.40
‡
265,000 242,000
11. United Kingdom
2.1 3.56
‡
400,000 419,500
‡
12. Taiwan
1.7 1.64 4,442,000 4,111,000
13. Thailand
1.56 1.59 10,000,000 5,400,000
14. Canada
1.3 1.18 644,455 608,000
15. Colombia
1.26 1.50 900,000 867,000
16. Australia
1.25 .844 500,000
?
17. Argentina
1.15 1.17 731,122 714,000
18. Malaysia
1.13 1.03
†
4,000,000 4,000,000
19. Venezuela
1.12 .887
†
565,000
?
20. India
1.06 .586 2,012,940
?
NOTE: All ?gures obtained by the WFDSA.
*Not ranked in our 2010 list as having more than US$1 billion in sales. †2006 ?gures ‡2007 ?gures
Direct Selling’s Billion-Dollar Markets
16
8. Italy—$3.36 billion
Italy moved up in global rankings with an increase
of $3.36 million in sales while many nations
dropped. Te salesforce also grew, adding more
than 30,000 people to the rolls. Both increases are in
stark contrast to the national economy, which had
increasing unemployment and a 5 percent decrease
in economic growth for 2009.
9. Russia—$3.06 billion
Russia increased its sales by $190 million,
earning it an advancement of one spot in the
rankings. Te falling U.S. dollar against the Russian
ruble made this change more pronounced, but
the industry showed its muscle by increasing even
as the national economy sufered through the
economic crisis.
10. France—$2.41 billion
France’s international rankings brought it up one
level as well, from No. 11 previously. French direct
sales stayed in the same $2.4 billion range from
2007 (the last period reported through WFDSA)
to 2009, leaving it a winner for keeping up its pace
year over year.
11. United Kingdom—$2.1 billion
Our annual rankings saw the United Kingdom fall
from the No. 8 spot last year. WFDSA sales statistics
for the country show a decrease of more than half,
from $3.6 billion in 2007 (rankings last year were
based on 2007 data, as it was the last information
reported to the WFDSA) to $1.4 billion in 2009.
However, there seems to be a renewed optimism in
the United Kingdom, with people and businesses
stepping up to seize the opportunities that everyone
feels sure are coming.
12. Taiwan—$1.7 billion
Taiwan moved up one spot by gaining $60
million in sales over the course of 2009. Tis was
great news for the country, marking a 9.2 percent
increase and the end of a three-year slide in sales.
Te Taiwan ROC Direct Selling Association notes
that distributor numbers were also up, increasing
8 percent to 4.4 million.
13. Thailand—$1.56 billion
Despite having $30 million less in sales,
Tailand still moved up two spaces on our
international list. Tese fgures include sales of
both Tai Direct Selling Association members and
non-members as well. Tere are 10 million people
selling through 590 companies, of which 29 are
TDSA members. Te Tai DSA believes that the
2010 fgures will show almost 12 million distributors
and a strong increase of 15 to 20 percent in
sales numbers.
14. Canada—$1.3 billion
World economic troubles challenged Canada
as well as much of the rest of the international
community. Sales declined 3.5 percent during 2009
as the recession took its toll. Ofcial numbers from
the Direct Sellers Association of Canada put 2009
sales at $1.3 billion, and estimates for 2010 numbers
show that the direct selling industry in Canada will
decrease 6.2 percent to $1.23 billion in 2011.
15. Colombia—$1.26 billion
Colombia’s sales were down slightly from $1.5
billion in 2008, but it kept its spot on our list. Te
beauty and personal-care segments have dominated
this market. While the national economy grew only
0.8 percent in 2009, the beauty and personal-care
market grew 6 percent. Skin care registered nearly
double-digit growth, with anti-aging products
leading the way.
16. Australia—$1.25 billion
Australia is new to the list this year. Te $1.25
billion is a substantial increase over its $844 million
reported in 2008. Sales for 2010 are expected to
be strong but not huge. However, direct selling is
performing better than the rest of the retail world in
Australia. Salesforce numbers are also expected to
increase slightly, and leading categories continue to
be health care and personal goods.
17. Argentina—$1.15 billion
Te industry in Argentina decreased enough to
bring them down one notch in our annual rankings.
Sales decreased nationally by $20 million. Tis
is hardly surprising, considering that Argentina
had its own share of economic problems even
before the worldwide recession.
18. Malaysia—$1.13 billion
Te direct selling industry in Malaysia is steadily
growing, enjoying the benefts of more companies
launching within its borders. Te Direct Selling
Association of Malaysia boasts 57 members and 4
million salesforce members.
19. Venezuela—$1.12 billion
A newcomer to the $1 billion list, Venezuela is
counting its successes. From 2006 (the latest
numbers for WFDSA last year) to 2009, its collective
direct sales totals rose by more than $200 million.
20. India—$1.06 billion
New to the list this year, India’s sales nearly doubled
from 2008 to 2009. Figures for 2010 are expected to
show a 20 to 30 percent growth, according to Chavi
Hemanth, Secretary General of the Indian Direct
Selling Association. Forecasts call for the industry to
be at $1.5 million by 2012–2013. ?
A Main Street
Company
for Main Street
North America
Founded in 1977, Primerica is the
largest independent ?nancial services
marketing organization in North America.
The company, headquartered in Duluth,
GA, is a public company listed on the New
York Stock Exchange, trading under the
symbol “PRI.”
For more than 34 years, Primerica
has helped families get properly protect-
ed, debt free and ?nancially independent.
The Primerica business opportunity gives
people from all walks of life a chance to
live their dreams.
Primerica at a glance:
• More than 4.3 million lives insured
through our life companies
• More than 2 million clients maintain
investment accounts with us
• Our clients have $35 billion in assets
under management through us
• An average of $2.6 million in bene?t
claims paid every day
• Greater than $656 billion life insur-
ance in force
www.primerica.com
17
We Mean
BUSINESS.
www.USANA.com
18
S
martphones, tablets, apps and social
networking tools have no doubt changed
the way the world connects. To direct
sellers, who have always shared their goods
and services with their social network
and the new customers and friends they have met
through existing ones, the rest of the world have
fnally caught up.
Radio reached an audience of 50 million in
38 years. Television reached the same number
in only 13 years. Te Internet reached 50 million
in only four years, iPods had 50 million users in
less than three years and Facebook had them
in only two. MySpace has over 200 million
registered users; Facebook added that many
users last year alone. In 1992, there were
an estimated 1 million Internet-capable
devices in use, and today that number
exceeds 1 billion. Simply put, current
technological advances in mobile devices
and apps, as well as in social media tools,
serve to increase the speed, power and
reach of what’s already a competitive
advantage in the direct selling model.
Prior to these tech advances in connecting
people, direct sellers were limited to physical
places—literally going door-to-door, the party
at someone’s home, the meeting room at the local
hotel. Now, business can be conducted anywhere
and everywhere. Conversations about purchasing
product can be turned into a buying experience at
an accelerated level with a mobile device and an
appropriate app.
IT vendors are making quantum leaps in the
development of apps for the independent business
owner (IBOs) in direct selling for all aspects
of the business. IBOs can access their team
information and sign up new business owners on
the spot, wherever they happen to meet. Short,
interactive opportunity presentations, created
specifcally for smartphones and tablets, enable
independent business owners to “hold a meeting”
over cofee or anywhere people can engage in a
3-minute conversation.
Stuart Johnson, Founder and CEO of
VideoPlus, which specializes in the refnement
and transmission of direct selling companies’ core
messages, says, “Te fundamentals of the direct
selling model haven’t really changed in decades,
but the delivery of the message has changed
dramatically. In today’s technologically driven
world, we can provide a focused, simple,
authentic and transparent message in less
than three minutes, and in some cases, in just
60 seconds.”
All of the current technologies allow
independent business owners to meet their
customers wherever their habits take them
and to integrate into that behavior. With
individuals busier than ever and used to having
access to information, as well as the ability to
connect using their mobile devices, meeting people
“where they are” is a critical component of any
business transaction.
Direct sellers have historically held a competitive edge over traditional retailers of goods and
services because of their skills in connecting with people, their personal ethics in business
dealings and in the automatic trust and respect generated when dealing with word-of-mouth
“advertising” through networking. After all, direct selling is the ultimate social business model,
and technology is now rede?ning perceptions of what that’s all about.
Speed, Power, Reach
by Teresa Day
continued on page 20
How Direct Sellers
Are Leveraging New
Technology
19
Obesity epidemic creates epic opportunity!!
One of the fastest-growing co. in direct
selling.
A solution to the recession?!
A new social business model?!
Hey, u heard about ViSalus?
6 yr old co. w/ 50% of top producers
under 40 yrs old. 3000% growth in last
18 months!
40,000 new customers a mo. 3000 incentive bmw's
on streets.
Co is giving away over $10M/year in
free product, prizes & vacations!
40,000 a month?
Heard what?
Edits Messages
TY!!!
Get the free report…
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20
Mannatech
Pioneers
of Glyconutrition with
45 Global Patents
The Creators
of Real Food Technology®
Solutions
15 Years
of Unmatched Product
Innovation
Social Entrepreneurs
A new breed of direct seller
committed to ending global
malnutrition
We Just Want to
Change the World
Mannatech.com
NASDAQ: MTEX
Direct sellers won’t be lef behind in the
technology race, and some companies are at the
very forefront.
Nu Skin, XANGO, Amway, Herbalife,
Primerica, MonaVie, lia sophia and ACN are just
a few of the direct selling companies to align the
power of apps on smartphones and tablets with
the company goals of recruitment, retention and
sales. Te investment is paying of in a big way.
“Anything that supports the story [of Nu
Skin] is a strong ROI for us,” says Nu Skin
Vice President of Business Technology Andrea
Hayhurst. “Tese kinds of tools enable this
mass of communicators [independent business
owners] to tell our story much more efectively.”
Primerica, a fnancial services company,
provides term
life insurance
as one of its
products.
In the past,
enrollment
for a new
customer
was a lengthy
paper process
with a waiting
period for
receiving
acceptance or
rejection, with
additional
waiting for
the rep to get
paid. Today,
a Primerica
representative
with a tablet
can present to
a customer,
apply for the
policy, get
it approved,
bind it, deliver
it and get paid the commission in minutes.
Primerica’s incorporation of hardware and
sofware apps into the daily experience of the
representative illustrates the boost of power that
technology adds to personal relationships.
Technology is also expanding the reach
of personal relationships. All people belong
to social networks of some sort; most people
are part of several social networks. People
connect with others for many reasons,
whether it is for friendship, shared activities
or backgrounds, common causes or belief
systems, just to name a few. Technology
has not at all changed the fact that people
connect to one another. It has, however,
dramatically changed the scope and reach of
those connections, using the Internet to shrink
vast distances and connect “friends” without
geographic constraint.
Today, 50 percent of the world’s population
is under 30, and 96 percent of them are
estimated to have joined a social media
network. But this trend does not stop with
the younger generation. Te fastest-growing
segment of Facebook users is females 55 to 65.
Clearly, social media represents a permanent
shif in the way people communicate and form
relationships. It has also created a permanent
shif in the way companies approach their
customers. Johnson says, “Business is
happening on
social networks.
Social networking
leads to social
connecting, which
leads to social
sharing. Groupon,
LivingSocial and
others are not
‘selling socially’
they are ‘sharing
socially’ and that
leads to revenue
generation.”
ViSalus Sciences, a
weight-management
direct selling
company, has
incorporated
social sharing as a
strategic part of their
marketing approach.
Te company
created a laser-
focused message
with their Body
by Vi Challenge
and utilized social
networks to spread that message to reach new
audiences. CEO Ryan Blair says, “We have a
simple, focused, authentic story that our fans are
excited about and because of that, we add over
1,000 new customers per day to our company.”
Additional advancements over the coming year
are sure to further contribute to the speed, power
and reach of the direct seller, creating even more
opportunity for connecting with new customers.
Tis combination of the successful distribution
model of direct selling with the explosive
growth in communications technology can only
continue to play to the strengths of the direct
selling industry. ?
Direct selling is the ultimate social
business model, and technology
is redefining perceptions of what
that’s all about.
continued from page 18
21
Source: Direct Selling News Global 100
FOR ADDI TI ONAL I NFORMATI ON PLEASE CONTACT YOUR LOCAL I GNI TE I NDEPENDENT ASSOCI ATE
SM
Turning Energy Into Income
22
HELP US
sustain the continuing
provision of the life-changing
SUCCESS for Teens program to
our youth.
www.SUCCESSFoundation.org.
Eight great life skills and
character-development
principles are reaching
thousands of our nation’s
teens through dedicated,
passionate educators and
youth mentors.
The SUCCESS Foundation
®
recognizes the spirit of community and generosity of direct selling companies
supporting the distribution of 2 million SUCCESS for Teens
®
programs through
schools and youth organizations.
? ACN
? CieAura
? Oxyfresh
? MonaVie
? Numis Network
? Symmetry
? Southwestern
? Pre-Paid Legal
? Vemma
? ViSalus
? Team National
Little Things Matter
Attitude Is Everything
Use the Moment
Habits Are Powerful
You’re Always
Learning
There’s No Such
Thing As Failure
Everything Starts
with Small Steps
You Can Make Your
Dreams Come True
Megawatt Returns for Energy Providers
E
nergy deregulation could lead companies to take
any route when selling the essential services of gas
and electricity, but by using the direct selling channel
of distribution there is already a natural ?t. Independent
business owners (IBOs) are actually customers themselves.
They also have a built-in market for services and products
because everyone uses energy. The opportunity to possibly
save money as a customer and earn money by educating
others on their energy options is unique.
by Jennifer L. Mills
With companies such as Ignite, ACN, Ambit
and Telecom Plus as industry standouts, energy
may be going the same successful route that the
telecommunications industry did in the 1980s when
the AT&T monopoly was split and competition
entered the industry. Advocates of deregulation also
say advances in technology and price competition
would bring the value directly to consumers with
lower prices.
Ignite, the wholly owned subsidiary of Stream
Energy, is the recognized market leader in the
industry, but a company that almost didn’t happen.
“We were two years into the deregulation of the
industry and I was only hearing it for the frst time,”
says Rob Snyder, Co-Founder and Chairman of
Stream Energy. “I had no idea Texas had deregulated
its electricity market.” Trough his research on the
topic he found out that a number of companies were
ofering electricity at 20 percent less than what he was
paying for the service. With that seed of opportunity
planted, he was spurred to launch Stream/Ignite.
Many other founders of these retail energy
providers similarly had no direct sales and network
marketing knowledge, so they brought in experts.
Tis made good business sense as a model when
looking at the education needed to sell the service
as well as the relationship necessary to gain trust
from customers.
Chris Chambless, Co-Founder and Chief
Marketing Ofcer of Ambit Energy—a retail energy
company that drew attention when it was named Inc.
500’s fastest-growing company last year—saw the
signifcance of following such a business model.
“I think there is some degree of education
needed, especially in some of these markets
where deregulation is a fairly new phenomenon,”
Chambless says. “A lot of people have just been
conditioned not to have a choice. You have an
opportunity in a direct sales model to go out
and educate people.”
23
Te x a s Ut a h Uni t e d Ki ng d om Po l a nd
800-752-2030
www.videoplus.com
Partnering with many of the most successful companies
25 years as the world leader in business and
communication tools for the direct selling industry
Doug Witt, Managing Director
of Marketing for Ignite, says the major
growth in retail energy is also due to
it being an appealing product that
ofers independent distributors a
recognizable opportunity. Since it is
not only a service, but an essential
service, it then becomes more
about education and less about selling.
“With energy, they instantly see an
opportunity,” Witt says. “We fnd we
attract a lot of people who have never
been in network marketing.”
In 2005, Ignite’s frst year, the
company announced $70 million in
gross revenue delivering service in its
home state of Texas. In 2010 revenue
had exceeded $900 million. By the end
of this year Ignite anticipates meeting
the billion-dollar mark, with services
already in Georgia, Pennsylvania
and Maryland.
Ambit, which launched in 2006 and
provides service to Texas, New York,
Illinois, Maryland and Pennsylvania,
saw revenue increase from $325
million in 2009 to $415 million in
2010. “We added more customers than
in the previous two years combined,”
Chambless says of 2010. He adds
that he expects the company to post
revenue “in the neighborhood of $700
million in 2011, and we are fairly
confdent that we will go over a billion
in 2012.”
ACN was the frst direct sales
company to step into the energy sales
arena 10 years ago when California
attempted energy deregulation, but
exited when the state’s process failed,
according to Robert Stevanovski, Co-
Founder and Chairman of ACN. Te
company has since focused on mobile
and video phones, satellite TV and
home security, providing service in 23
markets with revenue of $553 million
in 2010.
But ACN is now back in energy sales,
having launched energy services in
Canada in 2010 and re-launched in the
U.S. market this spring with services
in New York, Pennsylvania and
Maryland. It plans to open 11 other
markets later this year.
Overseas, Telecom Plus PLC, which
operates the Utility Warehouse Discount
Club in the United Kingdom, has
also enjoyed recognizable growth
since it was founded in 1997. With
2010 revenues of $600 million,
Telecom Plus provides more than
350,000 customers throughout the
United Kingdom with landline phone,
broadband, mobile phone, and gas and
electricity services and products.
Not all U.S. states are open to
deregulating energy and allowing
competition for sales, but for those
which are, the direct selling model of
business provides a three-way win for
customers, independent business
owners and energy providers. ?
“We ?nd we attract a
lot of people who have
never been in network
marketing.”
—Doug Witt, Managing Director
of Marketing, Ignite
24
Of the People, by the People, for the People
Of the People
Te Economic Policy Institute estimates 4.4
unemployed workers are available for every job
opening. Tis number does not take into account the
estimated 2.3 million “sidelined” workers—people
who have lost jobs recently but are not yet trying to
re-enter the workforce—making the ratio between
job openings and available workers even higher.
In the midst of multiple opinions about causes
and cures for our current economic state, the
activity surrounding small-business ownership
appears to be increasing. Direct selling companies
such as Scentsy, Herbalife and ViSalus Sciences have
processed more applications to start businesses than
ever. In fact, just among the top 20 revenue-grossing
companies—there are an estimated 2,000 U.S.
companies using the direct selling business model—
more than 500,000 new applications are processed
in any given month.
Yet the numbers of individuals starting their
own direct selling businesses are not counted in
the Department of Labor’s statistics, nor are they
recognized by most economists as signifcant
indicators for the economy. With collective
gross revenues of U.S. direct selling companies
topping $28 billion annually, it might be a
statistic worth considering.
By the People
In direct selling, individuals market and sell
products and services directly to the consumer,
either through individual contact or group selling,
such as the in-home party. Individuals own their
own businesses but still have the support of a parent
company. Te direct selling model has similarities
to the franchising model, another type of popular
business ownership. Unlike the franchisee, however,
the direct seller is an independent contractor with
complete control over building and conducting
the business. Most direct selling companies
advocate a robust ethical code and encourage
adherence to ensure optimal relationships among
fellow contractors (business owners) and consumers.
Te direct selling industry is very democratic,
inviting all segments of the population to participate
in business ownership, regardless of income,
education or assets. Te age range of direct sellers
mirrors the age range of adults: 18 to 65+, with some
surveys indicating up to 22 percent of direct sellers
are over 55 years old. Te product categories are just
as diverse, including nearly every product or service
imaginable, from energy to fnancial planning,
from health and wellness to beauty, from home
improvement to self-improvement.
For the People
Direct selling is also an extraordinarily philanthropic
industry, with nearly every company, regardless of
size, participating in some kind of charitable endeavor,
whether it is setting up its own foundation, partnering
with humanitarian organizations, or regularly
supporting existing charities. Companies such as
Amway, Nu Skin, Herbalife, Shaklee, Te Pampered
Chef, Tahitian Noni and XANGO also are among
frst responders to help when disaster strikes, here
in the United States and across the world, ofering
millions of dollars in reconstruction eforts, products,
and even basics such as food and blankets to afected
people. Amway’s generosity is rooted in the belief of
its founders and owners that “we need to share our
resources with the communities where we do business,”
says the company’s president, Doug DeVos.
Participating in the generosity of the industry
provides another compelling reason that people want
to sign on with direct selling companies. According
to USANA’s Chief Marketing Ofcer Kevin Guest, the
industry attracts people who want to make the world
a better place. “Our entire business is about helping
others,” he says. “It seems only natural to me that
altruism would spill over into other aspects of their
lives as well.” USANA partners with Te Children’s
Fund, delivering food and vitamins to children across
the globe, and even making it possible for employees
and associates to volunteer in other countries.
Direct selling company CEOs are also known for
their personal philanthropy in support of many causes
around the world. A recent example of this giving spirit
can be found in Andrea Jung, CEO of Avon, who gifed
her entire long-term bonus of $5,362,500 to the Avon
Foundation for Women, which has raised more than
$800 million to support women’s issues such as breast
cancer awareness and ending domestic violence.
Direct selling: of the people, by the people, and
most defnitely, for the people. ?
by Teresa Day
More than 12 million jobs have been eliminated from the U.S. economy since December 2007,
and according to the Brookings Institute, it could take 12 years to re-create what’s been lost.
Many individuals are looking to the direct selling model for a different answer.
25
The age range
of direct sellers
mirrors the age
range of adults: 18
to 65+, with some
surveys indicating
up to 22 percent
of direct sellers are
over 55 years old.
26
success.com/symposium
NOVEMBER 5-6
TH
, 2011
Long Beach Convention Center
Long Beach, California
Get the Competitive Advantage
in Business and in Life
Tickets open to independent business
owners, entrepreneurial enthusiasts
and leaders worldwide soon.
HOSTED BY
DARREN HARDY
Publisher, SUCCESS Magazine
Scentsy, Inc.
Founded in 2004 in an ocean shipping container on
a sheep farm, this Idaho-based company was named
the fastest-growing, privately-held consumer products
company in the United States in 2010 by Inc. Magazine.
With only $60,000 in paid-in capital, Scentsy’s business
success has defied the worst economic downturn
since the Great Depression.
Since 2008:
• 750 new employees
• 113,000 new small business owners
• $6 million in charitable contributions
• 6 million new customers
• $80 million paid in taxes
• $352 million paid to families across
North America†
Follow Scentsy at scentsy.com or on Facebook.
† Includes Scentsy payroll, bene?ts, commissions, royalties, and shareholder distributions.
Entrepreneurship
is the answer.
Direct Selling works.
27
W
hat’s the ideal home-based
business? More than 16
million Americans think it’s
direct selling.
Tey represent one of the hundreds of U.S.
direct selling businesses, and together they
generated $28.3 billion in annual sales last year.
While a few direct sellers work at their businesses
full time, about 90 percent work part time to
supplement their income. Some 80 percent of
direct sellers are women, and almost all say they
appreciate the schedule fexibility and low cost of
starting their business. Customized technology
lets them make their business portable and
convenient. Tey can show high-quality products
or share their business opportunity at a home
party, but it’s just as easy to do at a cofee shop
or restaurant.
Direct selling companies, sometimes referred
to as network marketing companies, are gaining
the attention of some of the world’s foremost
fnancial experts, including Suze Orman, noted
author, television personality and consultant to
Avon Products Inc.; Robert Kiyosaki, best-selling
author of the Rich Dad Poor Dad series, who has
sold more books on fnancial guidance than any
author in history; and David Bach, New York
Times best-selling author, to name just a few. All
have responded positively to the signifcance of
the direct selling business model.
“Te beauty of the direct selling business
opportunity is that it’s all done for you,” Bach says.
“Tere isn’t any real startup time. You don’t have
to create a business plan. You don’t have to create
a product. Te only thing you need to do is fnd a
reputable company—one that you can trust—that
ofers a product or service that you believe in and
can get passionate about.”
A Growing Trend
What is most appealing about becoming a
direct seller is that anyone can do it. Today’s
technology ofers many viable options for
working from home, not to mention the comfort
and enjoyment of not having to go to a place
of employment at a certain time each day. Te
essential activities related to building the business
are usually conducted in the home. Te party
plan approach to selling is found to be very easy
to learn—and to enjoy. Meeting prospective
customers and potential direct sellers at a cofee
shop is far more relaxing than the traditional
business conference room.
As the ultimate equal-opportunity solution,
a direct selling home-based business may
represent the purest form of equality through free
enterprise. Tat’s one of the most striking aspects
of direct selling as a business model: It involves
men and women from all walks of life, all ages,
and all racial, ethnic and socioeconomic groups.
According to the Direct Selling Association,
the industry’s trade organization, 24 percent
of direct sellers have a high school diploma or
less education; however, 35 percent are college
graduates and 1 in 12 has a postgraduate degree.
Tese statistics are expected to possibly change
dramatically as technology redefnes the way
direct sellers conduct their businesses and
more and more Americans look for easier ways
to attempt entrepreneurship by starting their
own business.
The Primary Bene?t:
Work–Life Balance
A home-based business is a valuable asset
when it is developed successfully. Since there
is no commute to work, one’s business can be
managed to accommodate one’s working hours,
family life and personal interests. Tis is one of the
primary benefts that have historically attracted
women to the business model. Today, there are
millions of men and women who seek a business
opportunity that ofers the ultimate work–life
balancing potential.
Around the world, millions of families use
earnings from their direct selling businesses to
make their monthly car or mortgage payments,
take family vacations, send their children to
private schools or purchase a few luxuries. For
these individuals, the money earned each month,
regardless of the amount, makes a big diference.
And the big beneft? It’s that they are doing it on
their terms and in accordance to the time they are
willing to invest.
The Bene?t of Owning Your
Own Business
Some direct sellers and network marketers (all
are independent business owners) choose to view
their business as an opportunity with unlimited
earning potential. Tey realize they can increase
their chances of achieving fnancial freedom by
building a strong business. Tis requires time and
energy to attract customers, sell their products
and build a sales organization of others who
by Barbara Seale
& John Fleming
The Heart of Direct Selling: The Home
28
are recruited, coached and supported in their eforts to also build
successful businesses. By treating the opportunity as a true business,
these direct sellers have the potential to earn signifcant profts from
their investment of time.
The Bene?t of Personal Development
Personal development is a phrase ofen used when direct selling
companies describe the benefts associated with the training they ofer.
Direct sellers tend to rave about the support they receive regardless of
whether they are in the business for a new lifetime career or just a few
months to earn some needed extra income. Some have been known
to report that as a result of the training ofered by the direct selling
company they chose—usually ofered free or at minimal cost—they
were able to step out of their comfort zones, engage in conversations
more efectively, speak in front of groups of people, manage time and
money more efectively and, ultimately, enrich their lives through
the experience.
The Ideal Business
While every company has its unique traits, the entire direct selling
way of doing business shares common threads of empowering men
and women to dream, to reach beyond what they thought to be
possible, and to be supported in a very strong manner. Direct selling
is a great example of how the free enterprise system can be engaged
without the traditional risks associated with a brick-and-mortar
business model. ?
Top 5 Reasons for Considering
a Direct Selling Business
Be Your Own Boss—You are in complete control of how you invest your time
and how you go about building your business.
Save Time and Money—As an independent business owner, you purchase
the products you love at discounts and you operate all activities from your home.
Expand Your Circle of Friends—Direct selling business opportunities
are based on building relationships. When building a direct selling business,
customers and other team members appear to quickly become important and
rewarding aspects to one’s life.
Be Recognized and Rewarded for Achievement—It’s not every day
that an adult receives praise for an effort well done, but direct selling companies
recognize and reward their independent business owners through bonuses, trips
and prizes. This is an essential component to the business model.
Build Income—The direct selling compensation model offered by most
companies allows the building of organizations that have the potential to create
incomes beyond those earned from the personal selling/servicing efforts of the
direct seller.
www.partylite.com
The number one
direct seller of
premium candles
and home-fragrance
products in the world.
United States | Australia | Austria | Canada | Czech Republic | Denmark | Finland | France | Germany | Italy | Mexico | Norway | Poland | Slovakia | Switzerland | United Kingdom
29
D
irect Selling News, the
trade publication for the
direct selling and network
marketing executive, is the
only publication of its kind
dedicated to reporting the
news as it happens in the direct selling industry.
Each month, DSN demonstrates its partnership
with direct selling companies by telling their
remarkable stories and examining the issues
important to the industry at large.
From providing its readers with the
latest industry news to profling mature
companies and startups,
DSN seeks to educate,
inform and inspire.
Straightforward
and Authentic
Whether providing
readers with valuable
information about
compensation plans
and growth strategies,
ofering a forum
for direct selling
executives and suppliers to share
their ideas or profling direct selling
startups in Young Company Focus, DSN
strives to deliver information that can help direct
sellers be more successful. “Direct Selling News
has proven to be a great partner for SwissJust,”
says Jacques Mizrahi, CEO of SwissJust. “Tey
are a true partner because we have helped
them with their stories, and they have helped
us enormously in our path from a startup to
continuous growth.”
Companies also frequently use DSN articles
to support their strategies and growth. From
posting articles on their websites to sending
e-mail blasts to their salesforce, to including
article reprints in their starter kits, the
companies DSN covers say the editorial staf’s
reporting helps them generate excitement among
the public, their customers and their sales
organizations and, in some cases, helps increase
recruiting eforts.
Relevance and Education
DSN provides its readers with much more
than industry news and company profles. Te
publication’s Working Smart section covers the
tactics and strategies that enable companies to
meet industry challenges, improve efciencies
and achieve business objectives. Tis section
not only gives direct selling company executives
and suppliers the opportunity to share their
knowledge with others in the industry by
contributing articles, but it also provides direct
selling companies with information and insight
that can directly afect their businesses.
USANA President Dave Wentz says he and
his company learn much about the day-to-day
issues faced by companies from Working Smart
articles. “I have been consistently impressed by
the management strategies and marketing tactics
shared in these regular sections, and I have
frequently used them to promote discussion
and strategic planning in my staf
meetings,” he says.
Insightful and
Perceptive
DSN’s New
Perspectives section
ofers commentary
on contemporary
issues from
respected direct
selling executives,
business professors
and industry
consultants. Its
monthly Top Desk
essay is contributed by a direct selling CEO
or president and addresses such important topics
as leadership and ethics. “Personally, I’ve had the
opportunity to share my thoughts in such areas
as ethics and integrity with our entire industry,”
says Herbalife Chairman and CEO Michael O.
Johnson. “It’s gratifying to know that such a
venue exists, where matters that are especially
important to all of us are given an open forum
for discussion.”
Direct Selling News is read not only by
direct selling executives and suppliers but
also by members of the academic community,
who use the publication to educate their
students and the community at large about
this industry. “What makes direct selling
Direct Selling News
Serving the Direct Selling and Network Marketing Executive
by DSN Staff
From providing its
readers with the latest
industry news to profiling
mature companies and
startups, DSN seeks
to educate, inform
and inspire.
30
fun to teach is that when someone enrolls in a
direct selling opportunity, they are buying into
a proven business model, with a proven frm,
with proven products and identifed markets,”
says Larry Chonko, Ph.D., Tomas McMahon
Professor of Business Ethics at the University
of Texas at Arlington. “Te entrepreneur,
instead of having to start a business from
the ground foor, must engage in a serious
evaluation of the strategies and tactics of the
direct selling company and his/her prospective
ft with that company. Most students will be
employed by companies with existing plans and
structures. Te evaluative process of choosing
a direct selling company is one that provides
a transferrable learning foundation for what
students are most likely to experience as an
employee or future business owner.”
Global in Scope
DSN also aims to provide its U.S. readers with
comprehensive information about direct selling
in other parts of the world.
“Direct selling executives in Europe are so
interested to hear what’s happening across
their region,” says Kathy Slater, a DSN editor.
“Tey tell me that DSN provides them with
valuable, accurate information about diferent
companies, cultures and business legislation.
Readers have also said that DSN is at the heart
of bringing together direct selling companies
and associations within the industry, by
ensuring they all have a voice and a recognizable
face, brought to life within one reputable
independent source.”
A Journalistic Resource
Direct Selling News is committed to
keeping direct selling company executives
abreast of the latest news and trends around
the world; profling individual member
companies, their accomplishments and their
eforts to give back; providing a forum for
sharing ideas and industry best practices;
and acting as an advocate for industry
ethics and integrity. Te monthly print
publication is for direct selling executives
and decision-makers. ?
›› The DSN Global 100—An Industry Event
D
irect Selling News celebrated its second annual
DSN Global 100 list with an awards banquet on
April 27. The event, which recognized the top 100
revenue-grossing direct selling companies in the world for
2010, was attended by nearly 300 members of the direct
selling industry, representing more than 140 companies.
Brian Connolly, former President of Avon North America
and Executive Vice President of Avon Products Inc.,
emceed the event. John Fleming, Publisher and Editor in
Chief of Direct Selling News, presented the awards to the
top 10 companies.
The evening opened with the presentation of the
DSN Bravo Awards for outstanding achievement—
Turnaround, Growth and Leadership. The ?rst award
went to the company that experienced the best
turnaround over the previous 12 months, which was
ViSalus Sciences. The health transformation company
focused its 2010 efforts on marketing its Body by Vi™
Challenge and grew to an estimated $10 million in
monthly sales.
Co-founders Ryan Blair, Nick Sarnicola and
Blake Mallen accepted the award, along with Todd
Goergen, whose family owns Blyth, the parent
company of ViSalus.
“Starting a company is about the ups, the downs
and celebrating successes along the way,” Blair says.
“Winning the Turnaround Award during the worst
economic time of recent history was a testament to
the hard work of our distributors, the power of our Body
by Vi messaging, our products and our comp plan.”
The second Bravo Award went to the company with
the highest growth rate over the prior year. The winner
was Stella & Dot, which saw sales of $33 million in 2009
increase to $104 million in 2010, a growth of 215 percent.
The jewelry company made news in February when the
in?uential venture-capital ?rm Sequoia Capital invested
$37 million for 10 percent of the ownership.
The award, presented by 2009 winners Orville
and Heidi Thompson of Scentsy, was accepted
by Mike Lohner, Chairman of Stella & Dot. “Coco
Chanel said that girls should be two things: classy and
fabulous. I think we’re doing our part to help that be a
truism,” says Lohner.
The ?nal Bravo Award went to the leadership team
of ACN: Greg Provenzano, Robert Stevanovski, Mike
Cupisz and Tony Cupisz. Provenzano accepted the
Leadership Award, which was presented by 2009
winner John Addison, Co-CEO of Primerica.
“Given the high caliber of people who are here tonight,
it’s a surprise and an honor to be able to accept this
award on behalf of all of ACN,” Provenzano says. “We
appreciate being in business with you. It’s a great industry.
Let’s continue to do great things together.”
After the presentation of the Bravo Awards, DSN
unveiled its Global 100 for 2010. Tom Kelly, Senior Vice
President of Global Direct Selling for Avon, accepted the
award for No. 1 direct selling company in the world. “We
strive to be the best. Tonight, to be recognized as the best
of the best in your eyes is a big honor and means a lot to
us,” says Kelly.
Tom Kelly, Senior Vice President for Global
Direct Selling for Avon, accepts the award for
No. 1 direct seller in the world.
ViSalus Sciences Co-Founders Ryan Blair, Nick
Sarnicola and Blake Mallen and team accept
the Bravo Turnaround Award.
ACN Co-Founder Greg Provenzano accepts
the Bravo Leadership Award from 2009 winner
John Addison of Primerica.
Mike Lohner, Chairman of Stella & Dot accepts
the Bravo Growth Award from 2009 winners
Heidi and Orville Thompson of Scentsy.
31
When we published the DSN Global
100 ranking last year, it was the first
time in the history of the industry that
a comprehensive list of the top 100
direct selling companies (by revenue)
was researched and presented.
1 Avon Products, Inc.
2010 Revenue: $10.9 billion
Country: USA
Avon is the founder of modern direct selling and
the acknowledged world leader in cosmetics,
fragrances and toiletries. Avon’s well-known
product lines include Avon Color, Anew, Skin
So Soft
™
, Advance Techniques Hair Care, Avon
Naturals and mark
™
.
2009 Rank: 1
2009 Revenue: $10.3 billion
Marketing Style: Person-to-person
Compensation Plan: Single-level and multi-level
Products: Beauty, fashion jewelry and apparel
Markets: 100+
Distributors: 6.5 million
Employees: 42,000
Headquarters: New York, N.Y.
Executive: Andrea Jung
Year Founded: 1886
Stock Symbol: AVP—NYSE
2 Amway
2010 Revenue: $9.2 billion
Country: USA
Amway, under parent company Alticor, offers
Artistry cosmetics and skin-care products,
Nutrilite nutritional products and loyalty-inducing
household products.
2009 Rank: 2
2009 Revenue: $8.4 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Nutrition, beauty, personal-care and
home-care products
Markets: 80+
Distributors: 3 million
Employees: 14,000+
Headquarters: Ada, Mich.
Executives: Steve Van Andel
and Doug DeVos
Year Founded: 1959
3 Natura Cosmeticos SA
2010 Revenue: $3 billion
Country: Brazil
Natura is a cosmetics giant with more than 900
products. The company operates in Argentina,
Chile, Peru, Mexico, France, Venezuela and
Colombia. Corporate social responsibility is one
of its core emphases.
2009 Rank: 5
2009 Revenue: $2.4 billion
Marketing Style: Person-to-person and retail
Compensation Plan: Bi-level
Products: Personal-care products and fragrances
Markets: 7
Distributors: 1 million
Employees: 5,000+
Headquarters: São Paulo, Brazil
Executive: Alessandro G. Carlucci
Year Founded: 1969
Stock Symbol: NATU3.SA—São Paulo
4 Vorwerk & Co. KG
2010 Revenue: $2.9 billion
Country: Germany
Vorwerk is a family-owned company that has been
focusing on the direct selling channel since 1930.
Products include household appliances and high-
quality cosmetics. Vorwerk is a global group that
includes JAFRA Cosmetics, which reported sales
volume of more than $600 million in 2010.
2009 Rank: 3
2009 Revenue: $3.5 billion
Marketing Style: Person-to-person and
party plan
Compensation Plan: Multi-level
(JAFRA Cosmetics)
Products: Cosmetics and home appliances
Markets: 61
Distributors: 600,000
Employees: 23,000
Headquarters: Wuppertal, Germany
Executives: Walter Muyres and Reiner Strecker
Year Founded: 1883
DSN Global 100
by DSN Staff
32
5 Herbalife Ltd.
2010 Revenue: $2.7 billion
Country: USA
Herbalife sells nutritional supplements and
weight-management and personal-care products.
Its products have been developed by scientists,
physicians and nutrition experts, including Nobel
laureate in medicine Louis Ignarro, Ph.D.
2009 Rank: 6
2009 Revenue: $2.3 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Nutritional supplements; health/fitness,
wellness, skin- and hair-care; and weight-
management products
Markets: 75
Distributors: 2.1 million
Employees: 4,300
Headquarters: Los Angeles, Calif.
Executive: Michael O. Johnson
Year Founded: 1980
Stock Symbol: HLF—NYSE
6 Mary Kay Inc.
2010 Revenue: $2.5 billion
Country: USA
Mary Kay was founded by Mary Kay Ash with the
goal of helping women achieve personal growth and
financial success. The company’s skin-care and
color cosmetics products are sold in more than 35
countries around the world.
2009 Rank: 4
2009 Revenue: $2.5 billion
Marketing Style: Person-to-person and party plan
Compensation Plan: Single-level and multi-level
Products: Skin-care products and
color cosmetics
Markets: 35+
Distributors: 2 million
Employees: 5,000
Headquarters: Addison, Texas
Executive: David Holl
Year Founded: 1963
7 Tupperware Brands Corp.
2010 Revenue: $2.3 billion
Country: USA
Tupperware is a global direct seller of innovative,
premium products through an independent
salesforce. Product brands and categories include
design-centric preparation, storage and serving
solutions for the kitchen and home, and beauty-
and personal-care products.
2009 Rank: 8
2009 Revenue: $2.1 billion
Marketing Style: Person-to-person and party plan
Compensation Plan: Single-level and multi-level
Products: Storage and serving products; beauty-
and personal-care products
Markets: Nearly 100
Distributors: 2.6 million
Employees: 13,500
Headquarters: Orlando, Fla.
Executive: Rick Goings
Year Founded: 1946
Stock Symbol: TUP—NYSE
8 Ori?ame Cosmetics S.A.
2010 Revenue: $2.2 billion
Country: Sweden
Oriflame is one of the fastest-growing beauty
companies in the world. The company operates in
62 countries and is the market leader in more than
half. Although it has no U.S. presence, Oriflame
has a presence in Mexico, Central America, South
America, Europe, Asia and Africa.
2009 Rank: 9
2009 Revenue: $1.8 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Beauty products
Markets: 62
Distributors: 3.5 million
Employees: 8,000
Headquarters: Luxembourg, Luxembourg
Executive: Magnus Brännström
Year Founded: 1967
Stock Symbol: ORI-SDB—Stockholm
13 Miki Corporation
2010 Revenue: $927 million
Country: Japan
Miki Corporation began as a textile importer and
seller. Today, it is a multimillion-dollar seller of
supplements made from prune extracts as well as
household cleaners, personal-care items and much
more. The company has sales agents in Japan,
Taiwan and Malaysia.
2009 Rank: 14
2009 Revenue: $969 million
Marketing Style: Not available
Compensation Plan: Not available
Products: Foods, cosmetics and
household products
Markets: 3
Distributors: Not available
Employees: 270
Headquarters: Osaka, Japan
Executive: Toshikazu Kadota
Year Founded: 1964
14 Ignite Inc.
2010 Revenue: $902 million
Country: USA
Ignite Inc. was founded in 2004 by parent company
Stream Energy to meet the changing needs of
consumers. With energy service deregulation, more
choices exist for consumers and entrepreneurs, and
Ignite seeks to meet the needs of both.
2009 Rank: 16
2009 Revenue: $845 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Electricity and natural gas
Markets: 1
Distributors: 195,199
Employees: 262
Headquarters: Dallas, Texas
Executive: Rob Snyder
Year Founded: 2004
15 Melaleuca Inc.
2010 Revenue: $750 million
Country: USA
Melaleuca sells more than 350 products, including
personal-care items, cosmetics, household cleaning
supplies and vitamins to consumers through
a network of sales representatives, catalogs
and websites.
2009 Rank: 15
2009 Revenue: $879 million
Marketing Style: Person-to-person
Compensation Plan: Single-level
Products: Personal-care products, cosmetics,
cleaning supplies and vitamins
Markets: 18
Distributors: Not available
Employees: 1,200
Headquarters: Idaho Falls, Idaho
Executive: Frank Vandersloot
Year Founded: 1985
15 Omnilife
2010 Revenue: $750 million
Country: Mexico
Founded by Jorge Vegara Madrigal, Omnilife
Manufactura S.A. de C.V. is owned by ultimate parent
company Grupo Omnilife S.A. de C.V. The company
has independent consultants in 23 markets in South
America, North America, Central America, Asia
and Europe.
2009 Rank: 18
2009 Revenue: $750 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Nutritional supplements, weight-
management and beauty products, beverages,
cosmetics and fragrances
Markets: 23
Distributors: 5 million
Employees: 3,500
Headquarters: Zapopan, Mexico
Executive: Jorge V. Madrigal
Year Founded: 1992
33
9 Forever Living Products
2010 Revenue: $1.7 billion
Country: USA
Forever Living is the world’s largest grower,
manufacturer and distributor of aloe vera, and this
inspires them to make environmental responsibility
a priority. The company offers a complete line
of aloe vera drinks, skin-care products and
cosmetics, as well as a full line of nutritional
supplements and products from beehives.
2009 Rank: 10
2009 Revenue: $1.7 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Aloe vera drinks, skin-care products
and cosmetics, nutritional supplements
Markets: 142
Distributors: Not available
Employees: 9.3 million
Headquarters: Scottsdale, Ariz.
Executive: Rex Maughan
Year Founded: 1978
10 Nu Skin Enterprises, Inc.
2010 Revenue: $1.5 billion
Country: USA
Nu Skin Enterprises Inc. is a global direct
selling company operating in 48 international
markets throughout the Americas, Europe
and the Asia-Pacific region. Going far beyond
cosmetics, toiletries and fragrances, Nu Skin sells
more than 200 products through three distinct
brands: Nu Skin, Pharmanex and Big Planet.
2009 Rank: 11
2009 Revenue: $1.3 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Personal-care and
nutritional products
Markets: 51
Distributors: 800,000
Employees: 1,200
Headquarters: Provo, Utah
Executive: Truman Hunt
Year Founded: 1984
Stock Symbol: NUS—NYSE
11 Belcorp/L’Bel Paris
2010 Revenue: $1.3 billion
Country: Peru
Belcorp focuses on women, not only through its
business model but also through its products. Over
840,000 independent beauty consultants offer
the L’Bel, Ésika and Cyzone beauty and lifestyle
brands. As of 2011, Belcorp has a presence in 15
countries and 18 Latin American specialty stores.
2009 Rank: 13
2009 Revenue: $1 billion
Marketing Style: Person-to-person and
party plan
Compensation Plan: Single-level and multi-level
Products: Skin-care, fragrance, makeup, body-
care, hair-care
Markets: 15
Distributors: 840,000
Employees: 8,000+
Headquarters: Lima, Peru
Executive: Eduardo Belmont
Year Founded: 1967
11 Primerica Inc.
2010 Revenue: $1.3 billion
Country: USA
Primerica provides financial products and services,
including term life insurance, mutual funds,
variable annuities, loans, long-term care insurance
and legal services to 6 million clients, primarily
middle-class individuals and families.
2009 Rank: 7
2009 Revenue: $2.2 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Financial services
Markets: 5
Distributors: 100,000
Employees: 2,000
Headquarters: Duluth, Ga.
Executives: John Addison and Rick Williams
Year Founded: 1977
Stock Symbol: PRI—NYSE
17 MonaVie LLC
2010 Revenue: $600 million
Country: USA
MonaVie’s nutritional beverages with
corresponding gel formulations feature a blend
of açai berry and other nutrient-dense fruits. The
company’s philanthropic aim is to improve the lives
of people living in poverty in Brazil.
2009 Rank: 17
2009 Revenue: $785 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Foods and nutritional products
Markets: 12
Distributors: 1 million
Employees: 450
Headquarters: South Jordan, Utah
Executives: Dallin A. Larsen and Henry Marsh
Year Founded: 2005
17 Telecom Plus
2010 Revenue: $600 million
Country: United Kingdom
Operating as the Utility Warehouse Discount
Club, Telecom Plus provides landline phone,
broadband, mobile phone, gas and electricity
products and services to over 350,000 customers
across the UK, as well as offering club members
a range of opportunities to save money on
household expenses.
2009 Rank: 33
2009 Revenue: $590 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Landline phones, broadband, mobile
phones, gas, electricity
Markets: 1
Distributors: 30,000
Employees: 500
Headquarters: London, UK
Executive: Andrew Lindsay
Year Founded: 1998
Stock Symbol: TEP—LONDON
17 Yanbal International/Unique
2010 Revenue: $600 million
Country: Peru
Yanbal International was founded in Peru and sells
skin-care, cosmetics, personal-care products,
fragrances and jewelry through its catalogs and
beauty consultants.
2009 Rank: 26
2009 Revenue: $490 million
Marketing Style: Party plan
Compensation Plan: Multi-level
Products: Skin-care products, personal-care
products, cosmetics, jewelry and fragrances
Markets: 8
Distributors: 350,000
Employees: 4,800
Headquarters: Lima, Peru
Executive: Janine Belmont
Year Founded: 1967
20 ACN
2010 Revenue: $553 million
Country: USA
ACN is the largest direct seller of home and
telecommunications services in the world,
offering local and long distance phone service,
digital phone service with video phones, Internet,
wireless, satellite TV, home security, computer
support and energy services.
2009 Rank: 21
2009 Revenue: $553 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Telecommunications, home services
and business services
Markets: 23
Distributors: Not available
Employees: 1,300
Headquarters: Concord, N.C.
Executives: Robert Stevanovski, Greg
Provenzano, Tony Cupisz and Mike Cupisz
Year Founded: 1993
34
21 PartyLite (Blyth)
2010 Revenue: $545 million
Country: USA
Started by entrepreneur Mabel Baker with her single line of bayberry
candles, PartyLite is now the world’s largest direct seller of candles
and home fragrance products. The company was acquired by Blyth,
Inc. in 1990.
2009 Rank: 19
2009 Revenue: $621.6 million
Marketing Style: Party plan
Compensation Plan: Multi-level
Products: Candles, candle warmers, flameless fragrance, home
accents, personal-care products and food products
Markets: 18
Distributors: 63,556
Employees: 1,249
Headquarters: Plymouth, Mass.
Executive: Anne Butler
Year Founded: 1973
Stock Symbol: BTH—NYSE
22 Amore Paci?c
2010 Revenue: $539 million
Country: South Korea
Amore Pacific is an old favorite in South Korea, and its products
can now be found on Sephora shelves in the United States. The
company’s products use Asian botanicals and nanotechnology to
deliver skin-care and personal-care items.
2009 Rank: 27
2009 Revenue: $475 million
Marketing Style: Direct selling/retail stores
Compensation Plan: Not available
Products: Cosmetics, personal-care, health products and tea
products
Markets: 3
Distributors: Not available
Employees: Not available
Headquarters: Seoul, South Korea
Executive: Kyung-Bae Suh
Year Founded: 1945
Stock Symbol: 090430 (Korea Stock Exchange)
23 LG Household & Health Care
2010 Revenue: $532 million
Country: South Korea
LG Household & Health Care is an established leader in the Korean
household goods and cosmetics industries. Its household goods
include oral care products, skin-care and hair-care products, laundry
products and paper products.
2009 Rank: 23
2009 Revenue: $461 million
Marketing Style: Not available
Compensation Plan: Not available
Products: Cosmetics and household products
Markets: 5
Distributors: Not available
Employees: 2,745
Headquarters: Seoul, South Korea
Executive: Suk Cha
Year Founded: 1947
Stock Symbol: 051900—SEO
24 USANA Health Sciences Inc.
2010 Revenue: $517 million
Country: USA
USANA Health Sciences develops and
manufactures high-quality nutritional supplements,
healthy weight-management products and
personal-care products, which are marketed by
independent associates in 15 international markets.
2009 Rank: 31
2009 Revenue: $436.9 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Nutritional supplements, personal-
care, energy and weight-management products
Markets: 15
Distributors: 228,000
Employees: 1,240
Headquarters: Salt Lake City, Utah
Executive: David Wentz
Year Founded: 1992
Stock Symbol: USNA—NASDAQ
25 Shaklee Corp.
2010 Revenue: $500 million
Country: USA
Founded in 1956, Shaklee manufactures products
and distributes them through its website and more
than 750,000 representatives in North America
and Asia. The company is known for its green
products and social responsibility efforts.
2009 Rank: 24
2009 Revenue: $500 million
Marketing Style: Person-to-person
(also retail in Singapore)
Compensation Plan: Multi-level
Products: Nutritional supplements, skin-care,
weight management, green cleaners
Markets: 8
Distributors: 1.25 million
Employees: 750
Headquarters: Pleasanton, Calif.
Executive: Roger Barnett
Year Founded: 1956
25 The Pampered Chef Ltd.
2010 Revenue: $500 million
Country: USA
The Pampered Chef sells more than 300
gourmet kitchen tools, cookware, cookbooks and
foodstuffs. Founded in 1980, Pampered Chef was
acquired by Berkshire Hathaway, the conglomerate
controlled by billionaire Warren Buffett, in 2002.
2009 Rank: 24
2009 Revenue: $500 million
Marketing Style: Party plan
Compensation Plan: Multi-level
Products: High-end tools for cooking
and entertaining
Markets: 5
Distributors: 60,000
Employees: 800
Headquarters: Addison, Ill.
Executive: Marla Gottschalk
Year Founded: 1980
Stock Symbol: BRK-A—NYSE
25 Tiens/Tianshi
2010 Revenue: $500 million
Country: China
In China, Tiens sells its products through
some 100 branch offices and chain stores of
affiliate Tianshi Engineering. Outside of China,
it sells products through independent distributors
through subsidiary Tianshi International and
majority-owned Tiens Biotech Group USA Inc.
2009 Rank: 47
2009 Revenue: $275 million
Marketing Style: Person-to-person and retail
Compensation Plan: Uni-level and breakaway
Products: Wellness products,
dietary supplements
Markets: 110
Distributors: Not available
Employees: 2,827
Headquarters: Tianjin, China
Executive: Li Jinyuan
Year Founded: 1990
Stock Symbol: TBV—AMEX
35
Clinically proven Medifast Meals
Lose up to 2 to 5 lbs a week, quickly and safely
Recommended by over 20,000 doctors since 1980
Achieving Optimal Health is Now Possible
Optimal Health is a whole new approach to well-being that is based on creating health
with the Take Shape For Life Program.
Who We Are…
Take Shape For Life is the direct sales, and largest, division
of Medifast, Inc. (NYSE: MED), a solid 30 year old company
recently named “#1 Small Company in America” by
Forbes Magazine. Recognized in the top 100 direct sales
companies in the world
†
, Take Shape For Life is a physician-
led business model based around Health Coaches who are
trained and educated to support Clients on the Medifast 5
& 1 Plan with encouragement, education and mentoring.
What makes Take Shape For Life so di?erent is that Health
Coaches don’t sell products or services, they simply share
the program and then help guide their Clients.
A Great Opportunity…
With obesity in the United States
reaching epidemic proportions, Take
Shape For Life o?ers an amazing
business opportunity to become a
Health Coach and join like-minded
individuals with the common goal of
“paying it forward” and getting America
healthy. We are a health network of
coaches who live and teach the Trilogy
of Optimal Health: Healthy Body,
Healthy Mind, and Healthy Finances.
If you could choose
Optimal Health,would you?
Three unique components (a Health Coach, the Medifast 5 & 1 Plan®, and the Habits of Health
System) create the foundation of long-term support that guides Clients along their journey. As a
Client you’ll learn to make the choices that can help you take charge of your health for the long
term. Reaching a healthy weight is just the beginning – Take Shape For Life o?ers much more.
*Results not typical. Typical weight loss on the Medifast 5 & 1 Plan is up to 2 to 5 lbs per week.
†
Take Shape For Life (Medifast) is ranked No. 69 on the 2010 Direct Selling News Global 100 list. This list identifes the Top 100 Direct Selling Companies in the World.
Discover more about Take Shape For Life
at www.TSFL.com.
Te company would like to thank all of our Health Coaches
for everything they do to get America healthy!
Before
Client and Health Coach
Nancy lost 135 lbs
*
and
has kept it of for 8 years!
Most people say they get their
life back, but now I have a life
I’ve never experienced before.
36
28
Pre-Paid Legal Services, Inc.
2010 Revenue: $454 million
Country: USA
29
Tahitian Noni International, Inc.
2010 Revenue: $420 million
Country: USA
30
Market America Inc.
2010 Revenue: $416 million
Country: USA
31
Ambit Energy, L.P.
2010 Revenue: $415 million
Country: USA
32
WIV Wein Int’l AG
2010 Revenue: $385 million
Country: Germany
33
Scentsy
2010 Revenue: $382 million
Country: USA
34
Pola Inc.
2010 Revenue: $361 million
Country: Japan
35
Arbonne International Inc.
2010 Revenue: $357 million
Country: USA
36
FORDAYS Co. Ltd.
2010 Revenue: $350 million
Country: Japan
37
Nature’s Sunshine Products Inc.
2010 Revenue: $349 million
Country: USA
38
NOEVIR Co., Ltd.
2010 Revenue: $345 million
Country: Japan
39
Southwestern
2010 Revenue: $337 million
Country: USA
40
KK ASSURAN
2010 Revenue: $333 million
Country: Japan
41
LR Health & Beauty Systems
2010 Revenue: $307 million
Country: Germany
42
Aerus Holdings Inc. LLC
2010 Revenue: $300 million
Country: USA
42
Sunrider
2010 Revenue: $300 million
Country: USA
44
Cosway
2010 Revenue: $298 million
Country: Malaysia
45
Eureka Forbes Ltd.
2010 Revenue: $272 million
Country: India
46
Isagenix International
2010 Revenue: $256 million
Country: USA
47
Neways, Inc.
2010 Revenue: $250 million
Country: USA
47
XANGO, LLC
2010 Revenue: $250 million
Country: USA
49
Vivint, Inc.
2010 Revenue: $245 million
Country: USA/Canada
50
Charle Corp. Ltd.
2010 Revenue: $240 million
Country: Japan
50
KOYO-SHA
2010 Revenue: $240 million
Country: Japan
50
Naturally Plus Co. Ltd.
2010 Revenue: $240 million
Country: Japan
53
Faberlic
2010 Revenue: $236 million
Country: Russia
54
Lux International
2010 Revenue: $234 million
Country: Switzerland
55
Mannatech, Inc.
2010 Revenue: $228 million
Country: USA
56
Four Leaf Japan Co./Forifu Japan
2010 Revenue: $226 million
Country: Japan
57
PM-International AG
2010 Revenue: $217 million
Country: Germany
58
ERINA Co., Inc.
2010 Revenue: $216 million
Country: Japan
59
Nikken Global Inc.
2010 Revenue: $210 million
Country: USA
59
Team National
2010 Revenue: $210 million
Country: USA
61
Diana Co. Ltd.
2010 Revenue: $204 million
Country: Japan
62
CUTCO Corp./Vector Marketing
2010 Revenue: $200 million
Country: USA
62
Longaberger Co.
2010 Revenue: $200 million
Country: USA
62
Stampin’ Up!
2010 Revenue: $200 million
Country: USA
62
4Life Research L.C.
2010 Revenue: $200 million
Country: USA
66
GNLD
2010 Revenue: $175 million
Country: USA
67
Family Heritage Life
2010 Revenue: $166 million
Country: USA
68
Univera
2010 Revenue: $164 million
Country: USA
69
BearCere’Ju Co. Ltd.
2010 Revenue: $160 million
Country: Japan
69
Take Shape for Life (Medifast)
2010 Revenue: $160 million
Country: USA
71
Jewels by Park Lane Inc.
2010 Revenue: $150 million
Country: USA
72
Sportron
2010 Revenue: $148 million
Country: USA
73
Japanlife Co. Ltd.
2010 Revenue: $144 million
Country: Japan
74
Chandeal Co. Ltd.
2010 Revenue: $138 million
Country: Japan
75
Deesse
2010 Revenue: $130 million
Country: Switzerland
76
Enagic USA, Inc.
2010 Revenue: $129 million
Country: USA
77
Tastefully Simple Inc.
2010 Revenue: $125 million
Country: USA
78
Keller Williams Realty Inc.
2010 Revenue: $120 million
Country: USA
79
Creative Memories
2010 Revenue: $113 million
Country: USA
continued on page 38
37
®
on
23 countries…4 continents…and growing | acninc.com | 866-244-5936
IF IT’S ON, YOU GET PAID
It’s happening right now in millions of homes around the world…
Just imagine if you got paid because someone did any of those things. That’s ACN – the
world’s largest direct seller of telecommunications and essential home services!
Start your own home-based business with ACN, marketing the services people
simply can’t live without!
Someone is
MAKING a phone call...
TURNING on a light…
SENDING a text message…
SURFING the internet…
WATCHING TV…
COOKING breakfast.
38
80
ARSOA HONSHA Corp.
2010 Revenue: $111 million
Country: Japan
81
Stella & Dot
2010 Revenue: $104 million
Country: USA
82
Kleeneze
2010 Revenue: $102 million
Country: United Kingdom
83
Kirby Company
2010 Revenue: $100 million
Country: USA
83
lia sophia
2010 Revenue: $100 million
Country: USA
83
Premier Designs
2010 Revenue: $100 million
Country: USA
83
Thirty-One Gifts
2010 Revenue: $100 million
Country: USA
83
Unicity Networks International
2010 Revenue: $100 million
Country: USA
88
The Maira Co. Ltd.
2010 Revenue: $96 million
Country: Japan
89
Vemma Nutrition Co.
2010 Revenue: $92 million
Country: USA
90
WorldVentures
2010 Revenue: $90 million
Country: USA
91
AdvoCare
2010 Revenue: $89 million
Country: USA
92
Agel Enterprises
2010 Revenue: $80 million
Country: USA
92
Fortune Hi-Tech Marketing
2010 Revenue: $80 million
Country: USA
92
FreeLife International
2010 Revenue: $80 million
Country: USA
92
Passion Parties
2010 Revenue: $80 million
Country: USA
92
Pure Romance
2010 Revenue: $80 million
Country: USA
92
Regal Ware
2010 Revenue: $80 million
Country: USA
92
Relìv International Inc.
2010 Revenue: $80 million
Country: USA
92
TriVita
2010 Revenue: $80 million
Country: USA
92
World Financial Group
2010 Revenue: $80 million
Country: USA
Direct Selling News is now
available as an iPad application.
You can download this FREE app
at http://bit.ly/dsnipad.
continued from page 36
39
Title:
Space/Color:
Bleed:
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Media:
Creative Director:
Art Director:
Copywriter:
Print Producer:
Project Manager:
Acct. Mgr.:
Keyliner:
Billing #: ALTQUX P06986 Supplier#:
Element79 200 E. Randolph 33rd Floor Chicago, ÌL 60601 · www.element79.com
"What difference does it make?¨
FP 4/C bleed
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9.75"w X 9.875"h
Direct Selling News
D. Straus
D. Straus
J. Frosolone
J. Niccum
D. Tropp
S. Dunn
L. Ruedger_3/8/11_5
ALTQUX11022
Amway
Job#: IN12439_11022.indd
Client: element79
Desc: Amway Nutrilite
Live:
Trim: 9.75" x 9.875"
Bleed:
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CSR: Tom Clyne
Operator: LT
Prev Op:
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Prev Mac:
Date: 05/25/2011_08:42 PM
what
difference
does it
make?
©2011 Amway
When it comes to health supplements, it’s a fair question. And it deserves answers.
Amway makes Nutrilite® vitamins with healthy plant nutrients from our
own organic farms. And that makes a very positive difference.
To learn more or ?nd an Amway Independent Business Owner, call 800-950-7732
or visit Amway.com/positive.
40
doc_279263446.pdf
In 2010, direct selling companies generated over $125 billion in revenue in 150 countries through more than 75 million men and women who are changing lives serving others.
1
THE ULTI MATE
SOCIAL BUSINESS MODEL
A Special Supplement to The Wall Street Journal by Direct Selling News
In 2010, direct selling
companies generated over
$125 billion in revenue in
150 countries through more
than 75 million men and
women who are changing
lives serving others. This is
the story of direct selling.
Why Now
Is Prime
Time for
Direct
Selling
From March 2009
to May 2011, the
top 7 publicly
traded direct
selling companies
averaged a 268
percent increase in
stock price.
INSIDE: DSN Global 100 Listing of the Top Direct Selling Companies in the World
2
THE TRUSTED MAGAZINE FOR
ENTREPRENEURS & INTRAPRENEURS
SUCCESS
INTERVIEWS
Audio MP3 or CD
with every issue
ONLY
$19.99
LIMITED-TIME OFFER
SUBSCRIBE NOW FOR SPECIAL PRICING:
Everything the Entrepreneur Needs to Succeed
success.com/dsn
Inspiration. Leadership. Motivation.
3
Serving the Direct Selling and Network Marketing Executive Since 2004
A SUCCESS Partner Company
Contents
COVER STORY
4
The Ultimate Social
Business Model
by Katherine Ponder
Direct selling is the original social
networking business … and now
is prime time for direct sellers.
8
Solution to a Shrinking Job
Market
by J.M. Emmert
World-renowned economist,
professor and best-selling
author Paul Zane Pilzer offers a
perspective on the direct selling
industry’s role in today’s economy.
FINANCE
10
Making Dollars
and Sense
by Emma Johnson
Direct selling makes a lot of
sense, not only for the individuals
worldwide who make a living
selling products from their home-
based businesses, but also for
savvy investors the world over.
11
Top Publicly Held Direct
Sellers Achieve Record
Sales and Pro?tability
by Tim Blackwell
More than half of the top 12 public
companies that sell direct have
outperformed the average stock
return by impressive margins
since the market dipped to its low
in early 2009.
13
Jefferies Report
by Douglas M. Lane
The direct selling model is
uniquely well-positioned in the
current investment environment.
INTERNATIONAL
14
A Truly Global Channel
by Katherine Ponder
Direct selling is a global
phenomenon. There are now 20
countries that are billion-dollar
markets for direct selling.
TECHNOLOGY
18
Speed, Power, Reach
by Teresa Day
Technological advances in mobile
devices and apps, as well as
in social media tools, serve to
increase the speed, power and
reach of what’s already utilized in
the direct selling model.
INDUSTRY
22
Megawatt Returns
for Energy Providers
by Jennifer L. Mills
Deregulation in several states
has opened up competition for
the retail portion of the energy
business. And that’s where direct
sales companies are stepping
in—and changing the game.
24
Of the People, by the
People, for the People
by Teresa Day
The business model thrives
when those who participate build
businesses and share with others
how they, too, can do the same
thing, creating a positive social
and economic impact on families
and communities.
27
The Heart of Direct
Selling: The Home
by Barbara Seale & John Fleming
What’s the ideal home-based
business? More than 15 million
Americans think it’s direct selling.
They represent the hundreds of
U.S. direct selling businesses,
creating a signi?cant social and
economic impact.
29
Direct Selling News
by DSN Staff
Whether providing readers with
valuable information, offering a
forum for executives to share
ideas or pro?ling companies,
DSN is the journalistic resource
covering the direct selling way of
doing business.
31
DSN Global 100
by DSN Staff
Direct Selling News presents
its Global 100, the only
comprehensive list of the top
100 revenue-grossing direct
selling companies in the world
for 2010.
As the trade publication for our vibrant industry, each month we bring you the latest news and information
about the companies and the people who lead them.
For more information, email [email protected] or call 940-497-9775 | www.directsellingnews.com | 800-279-5249
Serving the Direct Selling and Network Marketing Executive
Reach the Industry
Through our multiple advertising platforms, we are
the best way to build name and brand recognition
and to market your products and services directly
to decision-makers.
Learn the Industry
Subscribe to Direct Selling News,
a trade publication for industry
executives and decision-makers.
Founder & CEO
Stuart P. Johnson
Publisher and Editor in Chief
John Fleming
[email protected]
Managing Editor
Judith Emmert
[email protected]
Editors
Jennifer L. Mills
Teresa Day
Creative Director
Carl Waters
Production Manager
Alan Dwelle
Production Artist
Karla M. Garcia
Copy Editor
Peter Tepp
Contributors
Tim Blackwell
Emma Johnson
Douglas Lane
Katherine Ponder
Barbara Seale
Advertising Manager
Jerry Reagan
[email protected]
Operations
Steve Norton
Direct Selling News
200 Swisher Road • Lake Dallas, Texas 75065
Phone: 800-279-5249 • Fax: 940-497-9988
www.directsellingnews.com
© 2011 Direct Selling News. All rights reserved.
4
Direct selling is the original social
networking business. Long before
we even knew what a computer was,
people were getting together for fun,
socializing and shopping. Add in
technological power and globalization,
and you’ve got a winning formula.
Model Advantages
Whether a company is working
in a mature market or an emerging
one, the direct selling model
has many advantages. In mature
markets, the existing infrastructure
and high technology saturation
make interacting with customers
extremely easy. Advancements in
mobile devices and apps, as well as
in social media tools, simply increase
the reach of this socially driven
model. Far-fung friends and family
are now easily included in a tight
circle, and new friends across the
nation and world are made through
common interests.
In an emerging market such
as China, having scores of
salespeople working directly with
friends and family to make the
personal pitch just reaches back in
time. Te direct selling model is over
150 years old; it has never needed
technology to be successful. A social
network and a good product is all that
is necessary. Additionally, the social
connections put you far ahead of
the competitors who either can’t get
product on the shelves or are pushed
into obscurity. And those competitors
don’t have a constant line straight to
their customers to gauge demand
and feedback.
Products and services delivered
directly to customers through
personalized presentations that are
ofen educational, entertaining and
certainly social have enabled direct
selling to thrive for decades even
through recessions, including this
latest one. Te efect holds true no
matter what the category as direct
selling companies represent virtually
all goods and services customers
want and need. Te DSN Global
100 list of the top revenue-grossing
direct selling companies in the world
represents $66 billion in revenue for
2010, proof that this social business
model has economic power.
Te products and services sold
by these companies range across
such diverse categories as cosmetics,
fnancial planning services, home
decorating, home improvement and
solutions, energy services, personal-
care, health and wellness, apparel and
accessories, legal services and fne
wines. Each company on the list had
to have reached $80 million in 2010
revenue just to be listed.
Analysts have noticed some of
the advantages of direct selling.
Doug Lane is Managing Director
at Jeferies, a full-service securities
and investment banking frm that
was recently ranked No. 1 in U.S.
stock picking by the Financial Times
/ StarMine Research Analysis. He
thinks that direct selling companies
are successful because they have
“strong top-line growth driven by
outsized exposure to the rapidly
growing emerging markets;
relatively high gross margins to
bufer against the recent dramatic
rise in commodity cost infation;
and ownership of the distribution
channel and the tendency towards
premium priced products that enable
the direct sellers’ pricing power over
traditional retail.” Lane goes on to
explain that direct selling companies
ofen have under-leveraged balance
sheets and large free cash fows,
which “tend to put the direct selling
business model on particularly strong
fnancial footing.”
Jim Cramer, host of investment
show “Mad Money,” has caught on
as well. “Te direct selling model is
going great guns,” he said, noting it
could be the best way to sell goods in
the Tird World.
The Ultimate Social Business Model
by Katherine Ponder
continued on page 6
Cover Story
5
This is the company
that puts mascara on lashes and food on tables,
that fights wrinkles with one hand and Breast Cancer
with the other. That knows the value of a perfect lip,
but still opens its mouth and speaks out against
Domestic Violence and for women’s financial independence.
This is the company that not only brings beauty to doors,
but also opens them. The company that supports 6.5 million
Representatives in over 100 countries. This is Avon.
The company that for 125 years has stood for beauty,
innovation, optimism and above all for women.
avoncompany.com
6
Attracting Attention
and Investors
Within the DSN Global 100 list, the top 10
companies contributed $39 billion to the global
economy in 2010. Te company at the top of
this list—Avon, the 125-year old brand known
in virtually every household, which generated
$10.9 billion of that number—is publicly held,
as are fve additional companies on the top
10 list. Amway, privately held and another
household name, secured the No. 2 spot on the
list at $9.2 billion in sales. Other familiar names
on the top 10 list include Herbalife (public),
Mary Kay (private) and Tupperware (public).
Vorwerk (private) is a household name in
Europe and is the parent company of United
States company JAFRA. Te list rounds out
with additional companies Natura (public),
Orifame (public), Forever Living Products
(private) and Nu Skin (public).
Clearly, the economic impact of direct selling
companies for the United States and for the
world simply cannot be overlooked or swept
under the rug. Scott Van Winkle, CFA, is a
Research Analyst at Canaccord Genuity, known
for serving institutional and corporate clients
through investment banking, research, sales
and trading services. Van Winkle covers direct
sellers Herbalife, Nu Skin Enterprises, USANA
Health Sciences and Medifast. He says, “I think
there is fnally broad confdence in the direct
selling model in the private equity community.”
Interest overall does appear to be growing.
Financial advisors and investors both are
seeing direct selling companies with new eyes,
focusing on the efcient business model, rapid
growth, and generally low on-going capital
investment afer the initial surge. Van Winkle
says, “I don’t go a week now without getting a
phone call from a private equity frm looking
at a direct selling asset, and that was just
nonexistent 5 years ago.”
It appears that wise investors are getting
in now. Sequoia Capital investors bought
into jewelry and accessories direct seller
Prime Time for Direct Selling
continued from page 4
Te direct selling industry’s
top seven public companies,
based on Direct Selling News’
Global 100 ranking,
accounted for $23.9 billion
in revenue for 2010.
Avon Products Inc.
Country: USA
2010 Rank: 1
2010 Revenue: $10.9 billion
Avon is the founder of modern direct
selling and the acknowledged world
leader in cosmetics, fragrances and
toiletries. Avon’s well-known product
lines include Avon Color, Anew, Skin So
Soft™, Advance Techniques Hair Care,
Avon Naturals and mark™.
Markets: 100+
Distributors: 6.5 million
Employees: 42,000
Headquarters: New York, N.Y.
CEO: Andrea Jung
Year Founded: 1886
Stock Symbol: AVP—NYSE
Natura Cosmeticos SA
Country: Brazil
2010 Rank: 3
2010 Revenue: $3 billion
Natura is a cosmetics giant with
more than 900 products. The
company operates in Argentina,
Chile, Peru, Mexico, France,
Venezuela and Colombia. Corporate
social responsibility is one of its
core emphases.
Markets: 7
Distributors: 1 million
Employees: 5,000+
Headquarters: São Paulo, Brazil
CEO: Alessandro G. Carlucci
Year Founded: 1969
Stock Symbol: NATU3.SA—São Paulo
Herbalife Ltd.
Country: USA
2010 Rank: 5
2010 Revenue: $2.7 billion
Herbalife sells nutritional supplements
and weight-management and personal-
care products. Its products have been
developed by scientists, physicians
and nutrition experts, including
Nobel laureate in medicine Louis
Ignarro, Ph.D.
Markets: 75
Distributors: 2.1 million
Employees: 4,300
Headquarters: Los Angeles, Calif.
CEO: Michael O. Johnson
Year Founded: 1980
Stock Symbol: HLF—NYSE
Public
Companies:
The Big 7
7
Stella & Dot for $37 million (10 percent of
ownership) last January, certain that it had
pursued a winner. Sequoia Capital is a Silicon
Valley venture capitalization frm that is estimated
to control as much as 14 percent of the value
on NASDAQ. “Sequoia rarely sees a business
built so strong, with such little capital,” says
Sequoia partner Alfred Lin, who more recently
added: “We wanted to become business partners
with Stella & Dot because it was a great business
run by a very special founder and entrepreneur,
Jessica Herrin.”
Blyth, Inc. also found value in direct sellers
PartyLite and ViSalus. “PartyLite was doing
$7 million in sales when Blyth acquired it
in 1990, and it’s over $500 million in annual
revenue today,” recounts Robert B. Goergen Jr.,
President of Blyth. “ViSalus, a relatively young
company, is currently experiencing rapid sales
growth. We embrace a portfolio approach, with
non-competitive products and companies in
diferent stages of development across multiple
geographies.” Indeed, PartyLite sells premium
candles and home fragrance products, and
ViSalus sells weight management and health
products. Blyth’s strategy for investing in various
direct selling companies has proven very
successful for them.
Traditionally, private equity frms make
a material investment into a business and
within 5 years either take it public or sell it.
Investment in direct selling companies has brought
about a new exit strategy for some private equity
frms, according to Van Winkle. He says, “We’ve
seen direct selling companies turn around and
take out their private equity investors with cash
fow. Tat’s a whole new model for private equity—
that the asset they’ve acquired could ultimately
buy itself out.”
Van Winkle and others know the time is right.
Many of the innovative investors are reaping
rewards for acting upon their confdence in
the direct selling industry. Others are just now
seeing the value, but the opportunity is still available
to be part of this successful sales model. ?
Tupperware Brands Corp.
Country: USA
2010 Rank: 7
2010 Revenue: $2.3 billion
Tupperware is a global direct seller of
innovative premium products, including
design-centric preparation, storage and
serving solutions for the kitchen and home
through the Tupperware brand, and beauty
and personal-care products through Armand
Dupree, Avroy Shlain, BeautiControl, Fuller,
NaturCare, Nutrimetics and Nuvo.
Markets: Nearly 100
Distributors: 2.6 million
Employees: 13,500
Headquarters: Orlando, Fla.
CEO: Rick Goings
Year Founded: 1946
Stock Symbol: TUP—NYSE
Ori?ame Cosmetics S.A.
Country: Sweden
2010 Rank: 8
2010 Revenue: $2.2 billion
Ori?ame is a beauty company offering
cosmetics, fragrances and personal-care,
skin-care, hair-care and wellness products.
The company operates in 62 countries and is
the market leader in more than half. Ori?ame
has a presence in Mexico, Central America,
South America, Europe, Asia and Africa.
Markets: 62
Distributors: 3.5 million
Employees: 8,000
Headquarters: Luxembourg, Luxembourg
CEO: Magnus Brännström
Year Founded: 1967
Stock Symbol: ORI-SDB—Stockholm
Nu Skin Enterprises Inc.
Country: USA
2010 Rank: 10
2010 Revenue: $1.5 billion
Nu Skin Enterprises Inc. is a global direct
selling company operating in 48 international
markets throughout the Americas, Europe
and the Asia-Paci?c region. Going far beyond
cosmetics, toiletries and fragrances, Nu Skin
sells more than 200 products through three
distinct brands: Nu Skin, Pharmanex and
Big Planet.
Markets: 51
Distributors: 800,000
Employees: 1,200
Headquarters: Provo, Utah
CEO: Truman Hunt
Year Founded: 1984
Stock Symbol: NUS—NYSE
Primerica Inc.
Country: USA
2010 Rank: 11
2010 Revenue: $1.3 billion
Primerica provides ?nancial products and
services, including term life insurance, mutual
funds, variable annuities, loans, long-term
care insurance and legal services to 6 million
clients, primarily middle-class individuals
and families.
Markets: 5
Distributors: 100,000
Employees: 2,000
Headquarters: Duluth, Ga.
CEOs: John Addison and Rick Williams
Year Founded: 1977
Stock Symbol: PRI—NYSE
From March 2009 to May 2011, the top 7 publicly traded direct selling companies
averaged a 268 percent increase in stock price. —DSN
8
Solution to a Shrinking
Job Market
P
rofessor Paul Zane Pilzer has kept a watchful eye on the direct selling
industry for more than 30 years. In the 1990s, the renowned economist
who served in two White House administrations predicted that network
marketers would help make the then-emerging $200-billion health and wellness
channel the next trillion-dollar industry. The success of companies such as
Herbalife, Medifast, Monavie, Amway, Nu Skin, USANA and Blyth are helping to
con?rm Pilzer’s theory.
As the current economic crisis continues to take a toll on people around
the world and unemployment rates steadily rise, direct selling may be the
answer to a shrinking job market. Pilzer warns that too many people today see
unemployment as part of the economic cycle—that when the economy recovers,
employment will naturally go up.
However, unemployment is not a macro-economic problem, he says. It is a
micro-economic issue, typically related to a skill de?ciency on an individual level.
“The question lies not in economic recovery but employment recovery,” says
Pilzer, who has written nine bestsellers. “We have a massive social problem.
What are we going to do with 30 million people who are now permanently
unemployed? The No. 1 social need in the United States right now has nothing to
do with the economy.”
The real challenge is to replace lost jobs with new earnings opportunities and
provide much-needed training. The jobs that baby boomers and Gen Xers trained
for years ago have disappeared. Technology has replaced millions of workers and
demanded new skills that too many older Americans just don’t have.
“Instead of focusing on new methods of training, our politicians and news
media are looking at unemployment and the economic recovery as linked—and
they are not because most of the unemployed people today are skills-de?cient.
If they are over 50 years old, they probably don’t touch-type or e-mail, and that
doesn’t work in today’s economy.”
So what happens to those displaced workers? Direct selling may have
the answer. The direct selling business model has always had a competitive
advantage in the training that it offers, both in business and personal skills. It
allows people to be retrained while they pursue something new. It gives people
an opportunity when no one else will.
The biggest need in every sector of the economy, says Pilzer, is intellectual
distribution—the dissemination of information about products and services. “We
have a huge backlog of better products and services that people aren’t buying
because they don’t know about them. Direct selling is the most ef?cient method
for the distribution of intellectual information that will improve your life. It is the
ideal model that allows anyone to reach out.”
Direct selling offers people the skills and tools to create new income
opportunities—to venture out on their own as entrepreneurs and grow in
con?dence versus being consumed by the fear associated with a shrinking job
market. “Technology is available to everyone at home and is even better than
what you can get in a large company,” says Pilzer. “When we examine the
workplace, we often ?nd outdated computers and data management systems.
However, the best tools and support needed to run a home-based business are
now available to individuals at an affordable cost. This makes a home-based
business—and a direct selling opportunity, in particular—very appealing.” ?
by J.M. Emmert
AN INTERVIEW WITH PAUL ZANE PILZER
9
YOUR
FUTURE
IS WAITING
FOR YOU
As a proven leader in the health and beauty industry, Nu Skin’s results speak for themselves.
Record-breaking results, next-generation anti-aging products and an unrivaled opportunity make
Nu Skin (NYSE:NUS) a great business partner—and an even better investment in your future.
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10
J
eferies analyst Doug Lane has long been a
champion of the sector, which relies on its
salespeople to market the product, mostly
to their local community. Lane has told
investors that the model—also referred
to as network marketing—continued to thrive
throughout the recession in part because it ofers
the unemployed an easy, low-risk way to be in
business for themselves, and that it also capitalizes
on the fact that consumers prefer to buy products
from people they know and like.
Te direct selling business model is also proving
to be a bonanza in developing countries. Growth
potential is huge because as these economies
expand, their appetites for consumer goods grow
and previously underemployed women—who
have historically been the foundation of many
direct sales organizations—are prospering, thanks
to newfound economic opportunities. Te most
recent fgures show that within the $125 billion
global direct sales industry, a mere $28.3 billion
came from the United States, while $49 billion
came from the Asia-Pacifc region, and Latin
American sales reached $18 billion. Te sector’s
growth leaders were also in the developing world;
India joined the list of billion-dollar nations,
generating $1.06 billion in revenue for 2009. China
saw 2009 sales increase nearly $3 billion, and
Russia, though it experienced a somewhat modest
gain of $200 million, still moved up to No. 9 in the
DSN ranking of the top billion-dollar markets in
the world, with $3.06 billion in 2009 sales.
One reason investors love these companies
is that they have low overhead. Tere are few
retail expenses, since the products are sold out
of salespeople’s homes, and
marketing and advertising
expenditures are minimal. “It
turns out [direct selling] may
be the best way to sell goods in
the developing world, where
people listen to testimonials—
not advertisements and retail
salespeople,” Jim Cramer told
his audience.
Other leading investors
are nabbing opportunities
to proft from network
marketing. Warren Bufett
has been a proponent of the
model since scooping up
Te Pampered Chef in 2002,
calling it one of the best
investments he’d ever made; he
subsequently invested in seven
more direct sales companies.
Even British mogul Richard Branson launched
a direct sales cosmetics frm—now called Vie at
Home—which he sold to direct sales investor
Helmut Spikker last year.
In 2002, private equity frm Whitney & Co.
invested $700 million in supplement giant
Herbalife. Te investment made by Sequoia
Capital into Stella & Dot in January of this year is
certainly an example of how investors are looking
diferently at direct selling companies and their
leadership. Also earlier this year, Pre-Paid Legal
Services agreed to sell to private equity frm
MidOcean Partners for $650 million in cash; the
deal is expected to close by the time we go to press.
One of the most eye-opening events for investors
was last year’s IPO of direct sales fnancial services
company Primerica. Its impressive opening-day
performance on April 1, 2010, lef investors—who
were oversubscribed by 21 times—confdent about
Primerica’s competitive advantage in the insurance
and asset-management industry. Primerica closed
at $19.65 the frst day—30 percent more than its
initial public ofering price of $15—afer its market
debut. Its strong performance made it one of the
top-performing IPOs for the year.
“Afer years of skepticism, the investment
community is fnally waking up to the viability of
direct selling as a good investment opportunity,”
says Lane. “Tey’ve become true believers.” ?
“Mad Money” market guru Jim Cramer recently
told his CNBC viewers: “Direct selling has never
gotten its due from Wall Street. It’s time we
recognize that the direct sales model works,
and it works well.” There is little question why
fnancial notables like Cramer, Warren Buffett,
Ray Chambers and Suze Orman have touted
businesses based on direct selling.
“After years of skepticism, the
investment community is ?nally waking
up to the viability of direct selling as a
good investment opportunity.”
—Doug Lane
Making Dollars and Sense by Emma Johnson
11
S
ince the market crash on March 9,
2009, the major indices have steadily
rebounded with 95 percent growth,
but some direct selling companies are
experiencing enviable price increases on American
and foreign exchanges. Many of the top direct
selling companies have achieved record sales
and pro?tability and most appear to have
lasting ?scal momentum in an improving
economy. Stock percentage growth for
Herbalife Ltd.(HLF– NYSE), Tupperware
Brands Corp. (TUP–NYSE), Nu Skin
Enterprises (NUS–NYSE) and Medifast Inc.
(MED–NYSE) soared as high as three to
seven times the average gain of the S&P
500 and Dow Jones Industrial Average by
early May 2011.
Herbalife shares climbed 764 percent
from $12.28 to $106.15 before the
company’s board of directors approved
a two-for-one split in May. Furthermore,
the company raised its dividend by 60
percent, representing a 20-cents-per-share
post-split quarterly dividend. The global
nutritional company’s sales increased
17.3 percent from $2.3 billion in 2009 to
$2.7 billion in 2010, with net income of
$297million. Herbalife topped that with a record
?rst quarter 2011, which includes a 28.5 percent
increase in sales and $26.8 million improvement
on adjusted net income.
At the company’s ?rst-quarter conference call,
Chairman and CEO Michael O. Johnson attributed
the company’s growth to an improved distributor
retention rate of 48.9 percent, up 20.7 percent
from 2002. In an effort to broaden future earnings,
he announced the release of the company’s new
Herbalife 24 sports product line, which is designed
to meet high-end nutritional needs for athletes.
Two years ago Tupperware’s stock hovered
around $11.00 per share, but an 8 percent increase
in annual sales to $2.3 billion in 2010, plus a 15
percent improvement to the bottom line helped lift
the share price above $64—a 457 percent gain.
The global direct seller of storage and serving
solutions as well as beauty and personal-care
products experienced double-digit sales increases
in the ?rst quarter 2011 from its emerging
markets in Brazil, India, Indonesia, Malaysia/
Singapore, the Philippines, Turkey and Venezuela.
Tupperware’s adjusted diluted share earnings for
the ?rst quarter of this year were 14 cents better
than for the same period in 2010, including a
positive foreign currency impact of 4 cents.
Nu Skin’s stock has shot up 364 percent
from $8.04 per share to more than $37 after
record sales and pro?ts in 2010. The company
increased revenue 15 percent over 2009 to
$1.5 billion, culminating three consecutive
years of record-breaking revenue. The fourth
quarter was the company’s ?rst ever $400 million
revenue quarter, marking early
achievement of a ?ve-year plan that began
in 2007 to double Nu Skin’s earnings to
$2 per share of stock. The company is
now planning to double its earnings to $4
per share by 2015.
Medifast’s stock has been on its
own fast-track to the top, soaring from
$4.42 a share two years ago to $20.39
in early May. A streak of 45 consecutive
pro?table quarters has strengthened the
seller of weight and health management
consumables; the company had record
revenues of $257.6 million and improved
pro?ts by 73 percent last year. Medifast,
the parent company of Take Shape for
Life, was named No. 1 on America’s 100
Best Small Companies list by Forbes
magazine for 2010.
The stock performances of Blyth
Inc., Natura/Brazil, USANA Health Sciences,
Avon and Nature’s Sunshine all exceeded S&P
500 and Dow Jones averages for the past
two years.
Sales increases, net income improvements
and gains for the top publicly held direct selling
companies may be an indication of promising
growth for an entire industry, especially for
those who include emerging markets in their
strategic plan. ?
Top Publicly Held Direct Sellers Achieve
Record Sales and Pro?tability
The two-year rebound in the stock market has many investors smiling again,
especially those who have put their money in direct selling companies. Many of the top
12 public companies that sell direct have outperformed the average stock return by
impressive margins since the market dipped to its low in early 2009.
by Tim Blackwell
12
COMPANY SYMBOL
PRICE
3/9/2009
PRICE
5/9/2011
PERCENT
INCREASE
Herbalife Ltd. HLF $12.28 $106.15* 764%
Tupperware Brands Corp. TUP $11.61 $64.77 457%
Nu Skin Enterprises NUS $8.04 $37.31 364%
Medifast Inc./Take Shape for Life MED $4.42 $20.39 361%
Blyth Inc. BTH $16.12 $44.48 175%
Nature’s Sunshine NATR $5.26
†
$11.59 120%
Natura Cosmeticos (Brazil) NATU3 $19.85 $43.00 116%
USANA Health Sciences Inc. USNA $19.09 $37.71 97%
Avon Products Inc. AVP $15.20 $29.15 91%
Ori?ame (Sweden) ORI-SDB $216.00 $360.00 66%
Telecom Plus PLC (UK) TEP $330.25 $475.25 43%
Primerica Inc. PRI $19.65
‡
$22.30 13%
?
Market cap above $100 million.
* Stock split on 5/18/2011 at $103.86. Price re?ected in chart is pre split.
‡
Based on 13-month period from initial public offering on April 1, 2010.
†
Percent increase re?ects start date of July 1, 2009.
Top Publicly Held Direct Selling Companies
?
Stock Performance 2009–2011
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13
“The direct selling business model is one that can
level the playing feld and close the gap between
the haves and have-nots.”
—RAY CHAMBERS, Entrepreneur, Philanthropist
and Humanitarian
“The partnership with Avon is a logical and natural
extension of everything I believe in. I am confdent
we can make a huge difference toward the goal
of empowering women and helping them achieve
their fnancial hopes and dreams.”
—SUZE ORMAN, Internationally Acclaimed Personal
Finance Expert
“Direct selling is actually one of the oldest, most
respected business models in the world and has
stood the test of time.”
—DONALD TRUMP, Billionaire Businessman
“One reason I have such strong respect for
network marketing is that it is a genuine equal-
opportunity business. Network marketing casts a
very wide net. When you look closely at the more
than 60 million people worldwide who are engaged
in the business, you’ll fnd people of every color
and creed, every age group, and every level of
background, experience and skill.”
—ROBERT T. KIYOSAKI, author of Rich Dad Poor Dad and
The Business of the 21st Century
“What is the one bright spot on the entire horizon
that would give someone an opportunity to be
retrained to learn new skills? Direct selling.”
—PAUL ZANE PILZER, World-Renowned Economist and
Best- Selling Author of The Next Millionaires
“The rapid growth dynamics both in terms of
consumers purchasing products and associates
participating as direct sellers is driving strong
interest from private equity groups and strategic
acquirers in direct selling companies.”
—LORIN DEMORDAUNT, Managing Director, McColl Partners
“Network marketing has come of age.
It’s undeniable that it has become a way to
entrepreneurship and independence for millions
of people.”
—STEPHEN COVEY, Author of The Seven Habits of Highly
Effective People
“This country was founded on entrepreneurialism
and we are returning to it. The future of
employment is self-employment. Direct selling is
one of the few business opportunities that offers
average people, with above average ambition to
achieve an above average lifestyle, peace of mind
and fnancial security.”
—DARREN HARDY, Publisher of SUCCESS Magazine
Strong top-line growth driven by
outsized exposure to the rapidly
growing emerging markets
Avon Products, Herbalife, Nu Skin
Enterprises and Tupperware Brands
all derive more than 75 percent
of their revenues from outside the
United States, with particularly strong
presences in the emerging markets
of Latin America, Eastern Europe and
Asia. We think Avon is strategically well
positioned with its iconic global brand
and by having approximately 70 percent of
its pro?ts come from the attractive emerging
markets of Latin America and Eastern
Europe, where the Cosmetics, Fragrances
and Toiletries (CFT) industry is growing
at above-average rates and direct selling
has been gaining market share. Organic
sales growth, stripping away the impact of
foreign currency translation and acquisition,
has been especially strong for Herbalife,
USANA and Nu Skin. In the ?rst quarter
2011, Herbalife was up nearly 25 percent.
USANA has grown local currency sales on
average in the low teens dating back to the
?rst quarter 2010, and Nu Skin also grew
double digits throughout 2010. Conversely,
our larger traditional packaged goods
companies have struggled to generate more
than low single-digit organic growth of late.
Relatively high gross margins to
buffer against the recent dramatic
rise in commodity cost in?ation
While input cost in?ation has been front of
mind for many investors of late, our direct
selling companies have actually been
delivering gross margin expansion. In fact,
USANA has had ?at or higher gross margins
seven quarters in a row, while Nu Skin has
six in a row and Herbalife four. Conversely,
our traditional packaged goods coverage has
averaged gross margin contraction the past
three quarters.
Ownership of the distribution
channel and the tendency toward
premium-priced products
This gives the direct sellers pricing power
that tends to be more of a struggle for most
traditional package-goods companies that
have to sell through big-box retailers.
Under-leveraged balance sheets and
large free cash ?ows
Both tend to put the direct selling business
model on particularly strong ?nancial footing.
Notably, Herbalife, Nu Skin, Tupperware and
USANA have adopted a more aggressive
approach to dividend increases and/or share
repurchases, such that their cash returned
to shareholders is on par with or better
than most of their peers in the traditional
packaged goods universe. ?
Jefferies Report
Direct Selling
Well Positioned
The key attributes that we believe uniquely
bene?t direct sellers in the current investment
environment are:
by Douglas M. Lane
Douglas M. Lane is Managing Director of Equity Research for Jeferies & Company, Inc.
14
3. Brazil—$13.5 billion
Te national DSA, Associacao
Brasileira de Empresas de Vendas
Diretas (ABEVD), remains bullish
on its members’ performance.
Te ABEVD, which has 48 direct
selling members, reported a sales
increase of 18.4 percent from 2008
to 2009. In a year of adversity for
most sectors of the economy, the
direct sales opportunity generated
income for 2.3 million people.
4. China—$10.9 billion
China continues to be a tantalizing
yet elusive market for direct
selling companies. Its sales in the
industry grew by almost $3 billion
between 2008 and 2009, proving
that companies are operating
successfully within its borders.
Many are founded in China; yet for
multinational companies, the market
remains a challenge. All eyes are on
the explosive growth in China, with
analysts taking bets on when it will
surpass the United States and Japan.
A Truly Global Channel
Te following is a special report from Direct Selling News. Te article, which is based on statistics
reported by the World Federation of Direct Selling Associations (WFDSA), interviews with local
Direct Selling Associations (DSAs) and third-party reporting, tells the story of the cumulative
impact of the direct selling way of doing business in key markets around the world.
by Katherine Ponder
1. United States—$28.3 billion
With $28.3 billion in sales for
2009, U.S. direct selling was down
almost 4.4 percent from 2008. U.S.
direct sales declined, but retailing
as a whole declined 7.3 percent over
the same period. Looking forward
to 2011, analysts expect that those
who entered the direct selling
arena as a way to make up for lost
income will remain active even as
the economy recovers. Tat trend
will likely lead to higher sales for
the year.
2. Japan—$22.4 billion
Direct selling in Japan has
literally had its ups and downs
in recent years. Between 2006
(the previous reported timeframe
from WFDSA) and 2009, it lost
approximately $400 million in
sales. When you’re the No. 2 nation
in the industry, this looks relatively
small. But Japan’s economic
recession has been every bit as bad
as that in the United States, and
economic problems began long
before 2007.
Figures are year-end results for 2009; 2010 full data not yet available.
15
5. South Korea—$7.84 billion
South Korea moved up one notch in
our international rankings by gaining
$840 million in sales in 2009, according to
WFDSA. Te industry has approximately
4 million distributors and 64 members
in the Korean DSA. Research shows that
one-sixth of the population has been
involved with direct selling at some
point in their lives. Indications for 2010
fnal sales fgures are that South Korea
will hit $9 billion. Te 2011 forecast for
the industry is to parallel the national
economy by growing 4 to 5 percent.
6. Mexico—$4.83 billion
Mexico rose one place in our annual list
by gaining approximately $430 million in
sales from 2008 to 2009. It was an increase
made even more remarkable because it
came during troubled economic times.
Te Asociacion Mexicana de Ventas
Directas estimates that the 39 member
companies account for 85 percent of
the industry’s sales in the country, with
growth of almost 6 percent from 2008
to 2009.
7. Germany—$3.76 billion
Germany is the largest direct selling
market in Europe. It has an afuent and
technologically advanced economy—a
large proportion of which is over 50
with high-disposal income—and high
unemployment. Direct sellers in Germany
are 67 percent women, and 84 percent
sell through a personal sales method.
Te Bundesverband Direktvertrieb
Deutschland e.V, the oldest direct selling
agency in Germany, estimated turnover
of member companies fell slowly by 1.3
percent; however, in general the state of
direct selling in Germany is good, and
businesses are optimistic about the future.
Germany is by far still No. 1 in Europe
and in the top 10 world markets.
It’s small, frivolous and delightfully chic. And yet, since 1967, it
has transformed the lives of millions through a unique business
concept: Make Money Today And Fulfl Your Dreams Tomorrow™.
At Orifame, fulflling dreams is our heart and soul. Our mission
is simple: empower people to realise their full potential, fulfl
their dreams and lead a richer, more meaningful life. By selling
our beauty products, our 3.6 million consultants, in more than 60
countries, have the freedom to set their own targets, income and
working hours. There are no limits.
What we offer with a single lipstick can start out as a fun hobby
and develop into something truly great. It’s your choice.
Never underestimate the power of a lipstick.
Not just a pretty face.
Market
Estimated
2009 Sales
(US$ in
billions)
2008 Sales
(US$ in
billions)
No. Salespeople
(2009)
No. Salespeople
(2008)
1. United States 28.3 29.6 16,100,000 15,100,000
2. Japan
22.4 22.8
†
2,700,000 2,700,000
3. Brazil
13.5 10.0 2,377,336 2,028,098
4. China
10.9 8.00 not available not available
5. South Korea
7.84 7.00 3,987,933 3,089,158
6. Mexico
4.83 4.40 2,000,000 1,900,000
7. Germany
3.76 9.00
‡
not available not available
8. Italy
3.36 3.36 390,955 366,000
9. Russia
3.06 2.87 4,995,508 4,413,918
10. France
2.41 2.40
‡
265,000 242,000
11. United Kingdom
2.1 3.56
‡
400,000 419,500
‡
12. Taiwan
1.7 1.64 4,442,000 4,111,000
13. Thailand
1.56 1.59 10,000,000 5,400,000
14. Canada
1.3 1.18 644,455 608,000
15. Colombia
1.26 1.50 900,000 867,000
16. Australia
1.25 .844 500,000
?
17. Argentina
1.15 1.17 731,122 714,000
18. Malaysia
1.13 1.03
†
4,000,000 4,000,000
19. Venezuela
1.12 .887
†
565,000
?
20. India
1.06 .586 2,012,940
?
NOTE: All ?gures obtained by the WFDSA.
*Not ranked in our 2010 list as having more than US$1 billion in sales. †2006 ?gures ‡2007 ?gures
Direct Selling’s Billion-Dollar Markets
16
8. Italy—$3.36 billion
Italy moved up in global rankings with an increase
of $3.36 million in sales while many nations
dropped. Te salesforce also grew, adding more
than 30,000 people to the rolls. Both increases are in
stark contrast to the national economy, which had
increasing unemployment and a 5 percent decrease
in economic growth for 2009.
9. Russia—$3.06 billion
Russia increased its sales by $190 million,
earning it an advancement of one spot in the
rankings. Te falling U.S. dollar against the Russian
ruble made this change more pronounced, but
the industry showed its muscle by increasing even
as the national economy sufered through the
economic crisis.
10. France—$2.41 billion
France’s international rankings brought it up one
level as well, from No. 11 previously. French direct
sales stayed in the same $2.4 billion range from
2007 (the last period reported through WFDSA)
to 2009, leaving it a winner for keeping up its pace
year over year.
11. United Kingdom—$2.1 billion
Our annual rankings saw the United Kingdom fall
from the No. 8 spot last year. WFDSA sales statistics
for the country show a decrease of more than half,
from $3.6 billion in 2007 (rankings last year were
based on 2007 data, as it was the last information
reported to the WFDSA) to $1.4 billion in 2009.
However, there seems to be a renewed optimism in
the United Kingdom, with people and businesses
stepping up to seize the opportunities that everyone
feels sure are coming.
12. Taiwan—$1.7 billion
Taiwan moved up one spot by gaining $60
million in sales over the course of 2009. Tis was
great news for the country, marking a 9.2 percent
increase and the end of a three-year slide in sales.
Te Taiwan ROC Direct Selling Association notes
that distributor numbers were also up, increasing
8 percent to 4.4 million.
13. Thailand—$1.56 billion
Despite having $30 million less in sales,
Tailand still moved up two spaces on our
international list. Tese fgures include sales of
both Tai Direct Selling Association members and
non-members as well. Tere are 10 million people
selling through 590 companies, of which 29 are
TDSA members. Te Tai DSA believes that the
2010 fgures will show almost 12 million distributors
and a strong increase of 15 to 20 percent in
sales numbers.
14. Canada—$1.3 billion
World economic troubles challenged Canada
as well as much of the rest of the international
community. Sales declined 3.5 percent during 2009
as the recession took its toll. Ofcial numbers from
the Direct Sellers Association of Canada put 2009
sales at $1.3 billion, and estimates for 2010 numbers
show that the direct selling industry in Canada will
decrease 6.2 percent to $1.23 billion in 2011.
15. Colombia—$1.26 billion
Colombia’s sales were down slightly from $1.5
billion in 2008, but it kept its spot on our list. Te
beauty and personal-care segments have dominated
this market. While the national economy grew only
0.8 percent in 2009, the beauty and personal-care
market grew 6 percent. Skin care registered nearly
double-digit growth, with anti-aging products
leading the way.
16. Australia—$1.25 billion
Australia is new to the list this year. Te $1.25
billion is a substantial increase over its $844 million
reported in 2008. Sales for 2010 are expected to
be strong but not huge. However, direct selling is
performing better than the rest of the retail world in
Australia. Salesforce numbers are also expected to
increase slightly, and leading categories continue to
be health care and personal goods.
17. Argentina—$1.15 billion
Te industry in Argentina decreased enough to
bring them down one notch in our annual rankings.
Sales decreased nationally by $20 million. Tis
is hardly surprising, considering that Argentina
had its own share of economic problems even
before the worldwide recession.
18. Malaysia—$1.13 billion
Te direct selling industry in Malaysia is steadily
growing, enjoying the benefts of more companies
launching within its borders. Te Direct Selling
Association of Malaysia boasts 57 members and 4
million salesforce members.
19. Venezuela—$1.12 billion
A newcomer to the $1 billion list, Venezuela is
counting its successes. From 2006 (the latest
numbers for WFDSA last year) to 2009, its collective
direct sales totals rose by more than $200 million.
20. India—$1.06 billion
New to the list this year, India’s sales nearly doubled
from 2008 to 2009. Figures for 2010 are expected to
show a 20 to 30 percent growth, according to Chavi
Hemanth, Secretary General of the Indian Direct
Selling Association. Forecasts call for the industry to
be at $1.5 million by 2012–2013. ?
A Main Street
Company
for Main Street
North America
Founded in 1977, Primerica is the
largest independent ?nancial services
marketing organization in North America.
The company, headquartered in Duluth,
GA, is a public company listed on the New
York Stock Exchange, trading under the
symbol “PRI.”
For more than 34 years, Primerica
has helped families get properly protect-
ed, debt free and ?nancially independent.
The Primerica business opportunity gives
people from all walks of life a chance to
live their dreams.
Primerica at a glance:
• More than 4.3 million lives insured
through our life companies
• More than 2 million clients maintain
investment accounts with us
• Our clients have $35 billion in assets
under management through us
• An average of $2.6 million in bene?t
claims paid every day
• Greater than $656 billion life insur-
ance in force
www.primerica.com
17
We Mean
BUSINESS.
www.USANA.com
18
S
martphones, tablets, apps and social
networking tools have no doubt changed
the way the world connects. To direct
sellers, who have always shared their goods
and services with their social network
and the new customers and friends they have met
through existing ones, the rest of the world have
fnally caught up.
Radio reached an audience of 50 million in
38 years. Television reached the same number
in only 13 years. Te Internet reached 50 million
in only four years, iPods had 50 million users in
less than three years and Facebook had them
in only two. MySpace has over 200 million
registered users; Facebook added that many
users last year alone. In 1992, there were
an estimated 1 million Internet-capable
devices in use, and today that number
exceeds 1 billion. Simply put, current
technological advances in mobile devices
and apps, as well as in social media tools,
serve to increase the speed, power and
reach of what’s already a competitive
advantage in the direct selling model.
Prior to these tech advances in connecting
people, direct sellers were limited to physical
places—literally going door-to-door, the party
at someone’s home, the meeting room at the local
hotel. Now, business can be conducted anywhere
and everywhere. Conversations about purchasing
product can be turned into a buying experience at
an accelerated level with a mobile device and an
appropriate app.
IT vendors are making quantum leaps in the
development of apps for the independent business
owner (IBOs) in direct selling for all aspects
of the business. IBOs can access their team
information and sign up new business owners on
the spot, wherever they happen to meet. Short,
interactive opportunity presentations, created
specifcally for smartphones and tablets, enable
independent business owners to “hold a meeting”
over cofee or anywhere people can engage in a
3-minute conversation.
Stuart Johnson, Founder and CEO of
VideoPlus, which specializes in the refnement
and transmission of direct selling companies’ core
messages, says, “Te fundamentals of the direct
selling model haven’t really changed in decades,
but the delivery of the message has changed
dramatically. In today’s technologically driven
world, we can provide a focused, simple,
authentic and transparent message in less
than three minutes, and in some cases, in just
60 seconds.”
All of the current technologies allow
independent business owners to meet their
customers wherever their habits take them
and to integrate into that behavior. With
individuals busier than ever and used to having
access to information, as well as the ability to
connect using their mobile devices, meeting people
“where they are” is a critical component of any
business transaction.
Direct sellers have historically held a competitive edge over traditional retailers of goods and
services because of their skills in connecting with people, their personal ethics in business
dealings and in the automatic trust and respect generated when dealing with word-of-mouth
“advertising” through networking. After all, direct selling is the ultimate social business model,
and technology is now rede?ning perceptions of what that’s all about.
Speed, Power, Reach
by Teresa Day
continued on page 20
How Direct Sellers
Are Leveraging New
Technology
19
Obesity epidemic creates epic opportunity!!
One of the fastest-growing co. in direct
selling.
A solution to the recession?!
A new social business model?!
Hey, u heard about ViSalus?
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under 40 yrs old. 3000% growth in last
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40,000 new customers a mo. 3000 incentive bmw's
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Co is giving away over $10M/year in
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40,000 a month?
Heard what?
Edits Messages
TY!!!
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20
Mannatech
Pioneers
of Glyconutrition with
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The Creators
of Real Food Technology®
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15 Years
of Unmatched Product
Innovation
Social Entrepreneurs
A new breed of direct seller
committed to ending global
malnutrition
We Just Want to
Change the World
Mannatech.com
NASDAQ: MTEX
Direct sellers won’t be lef behind in the
technology race, and some companies are at the
very forefront.
Nu Skin, XANGO, Amway, Herbalife,
Primerica, MonaVie, lia sophia and ACN are just
a few of the direct selling companies to align the
power of apps on smartphones and tablets with
the company goals of recruitment, retention and
sales. Te investment is paying of in a big way.
“Anything that supports the story [of Nu
Skin] is a strong ROI for us,” says Nu Skin
Vice President of Business Technology Andrea
Hayhurst. “Tese kinds of tools enable this
mass of communicators [independent business
owners] to tell our story much more efectively.”
Primerica, a fnancial services company,
provides term
life insurance
as one of its
products.
In the past,
enrollment
for a new
customer
was a lengthy
paper process
with a waiting
period for
receiving
acceptance or
rejection, with
additional
waiting for
the rep to get
paid. Today,
a Primerica
representative
with a tablet
can present to
a customer,
apply for the
policy, get
it approved,
bind it, deliver
it and get paid the commission in minutes.
Primerica’s incorporation of hardware and
sofware apps into the daily experience of the
representative illustrates the boost of power that
technology adds to personal relationships.
Technology is also expanding the reach
of personal relationships. All people belong
to social networks of some sort; most people
are part of several social networks. People
connect with others for many reasons,
whether it is for friendship, shared activities
or backgrounds, common causes or belief
systems, just to name a few. Technology
has not at all changed the fact that people
connect to one another. It has, however,
dramatically changed the scope and reach of
those connections, using the Internet to shrink
vast distances and connect “friends” without
geographic constraint.
Today, 50 percent of the world’s population
is under 30, and 96 percent of them are
estimated to have joined a social media
network. But this trend does not stop with
the younger generation. Te fastest-growing
segment of Facebook users is females 55 to 65.
Clearly, social media represents a permanent
shif in the way people communicate and form
relationships. It has also created a permanent
shif in the way companies approach their
customers. Johnson says, “Business is
happening on
social networks.
Social networking
leads to social
connecting, which
leads to social
sharing. Groupon,
LivingSocial and
others are not
‘selling socially’
they are ‘sharing
socially’ and that
leads to revenue
generation.”
ViSalus Sciences, a
weight-management
direct selling
company, has
incorporated
social sharing as a
strategic part of their
marketing approach.
Te company
created a laser-
focused message
with their Body
by Vi Challenge
and utilized social
networks to spread that message to reach new
audiences. CEO Ryan Blair says, “We have a
simple, focused, authentic story that our fans are
excited about and because of that, we add over
1,000 new customers per day to our company.”
Additional advancements over the coming year
are sure to further contribute to the speed, power
and reach of the direct seller, creating even more
opportunity for connecting with new customers.
Tis combination of the successful distribution
model of direct selling with the explosive
growth in communications technology can only
continue to play to the strengths of the direct
selling industry. ?
Direct selling is the ultimate social
business model, and technology
is redefining perceptions of what
that’s all about.
continued from page 18
21
Source: Direct Selling News Global 100
FOR ADDI TI ONAL I NFORMATI ON PLEASE CONTACT YOUR LOCAL I GNI TE I NDEPENDENT ASSOCI ATE
SM
Turning Energy Into Income
22
HELP US
sustain the continuing
provision of the life-changing
SUCCESS for Teens program to
our youth.
www.SUCCESSFoundation.org.
Eight great life skills and
character-development
principles are reaching
thousands of our nation’s
teens through dedicated,
passionate educators and
youth mentors.
The SUCCESS Foundation
®
recognizes the spirit of community and generosity of direct selling companies
supporting the distribution of 2 million SUCCESS for Teens
®
programs through
schools and youth organizations.
? ACN
? CieAura
? Oxyfresh
? MonaVie
? Numis Network
? Symmetry
? Southwestern
? Pre-Paid Legal
? Vemma
? ViSalus
? Team National
Little Things Matter
Attitude Is Everything
Use the Moment
Habits Are Powerful
You’re Always
Learning
There’s No Such
Thing As Failure
Everything Starts
with Small Steps
You Can Make Your
Dreams Come True
Megawatt Returns for Energy Providers
E
nergy deregulation could lead companies to take
any route when selling the essential services of gas
and electricity, but by using the direct selling channel
of distribution there is already a natural ?t. Independent
business owners (IBOs) are actually customers themselves.
They also have a built-in market for services and products
because everyone uses energy. The opportunity to possibly
save money as a customer and earn money by educating
others on their energy options is unique.
by Jennifer L. Mills
With companies such as Ignite, ACN, Ambit
and Telecom Plus as industry standouts, energy
may be going the same successful route that the
telecommunications industry did in the 1980s when
the AT&T monopoly was split and competition
entered the industry. Advocates of deregulation also
say advances in technology and price competition
would bring the value directly to consumers with
lower prices.
Ignite, the wholly owned subsidiary of Stream
Energy, is the recognized market leader in the
industry, but a company that almost didn’t happen.
“We were two years into the deregulation of the
industry and I was only hearing it for the frst time,”
says Rob Snyder, Co-Founder and Chairman of
Stream Energy. “I had no idea Texas had deregulated
its electricity market.” Trough his research on the
topic he found out that a number of companies were
ofering electricity at 20 percent less than what he was
paying for the service. With that seed of opportunity
planted, he was spurred to launch Stream/Ignite.
Many other founders of these retail energy
providers similarly had no direct sales and network
marketing knowledge, so they brought in experts.
Tis made good business sense as a model when
looking at the education needed to sell the service
as well as the relationship necessary to gain trust
from customers.
Chris Chambless, Co-Founder and Chief
Marketing Ofcer of Ambit Energy—a retail energy
company that drew attention when it was named Inc.
500’s fastest-growing company last year—saw the
signifcance of following such a business model.
“I think there is some degree of education
needed, especially in some of these markets
where deregulation is a fairly new phenomenon,”
Chambless says. “A lot of people have just been
conditioned not to have a choice. You have an
opportunity in a direct sales model to go out
and educate people.”
23
Te x a s Ut a h Uni t e d Ki ng d om Po l a nd
800-752-2030
www.videoplus.com
Partnering with many of the most successful companies
25 years as the world leader in business and
communication tools for the direct selling industry
Doug Witt, Managing Director
of Marketing for Ignite, says the major
growth in retail energy is also due to
it being an appealing product that
ofers independent distributors a
recognizable opportunity. Since it is
not only a service, but an essential
service, it then becomes more
about education and less about selling.
“With energy, they instantly see an
opportunity,” Witt says. “We fnd we
attract a lot of people who have never
been in network marketing.”
In 2005, Ignite’s frst year, the
company announced $70 million in
gross revenue delivering service in its
home state of Texas. In 2010 revenue
had exceeded $900 million. By the end
of this year Ignite anticipates meeting
the billion-dollar mark, with services
already in Georgia, Pennsylvania
and Maryland.
Ambit, which launched in 2006 and
provides service to Texas, New York,
Illinois, Maryland and Pennsylvania,
saw revenue increase from $325
million in 2009 to $415 million in
2010. “We added more customers than
in the previous two years combined,”
Chambless says of 2010. He adds
that he expects the company to post
revenue “in the neighborhood of $700
million in 2011, and we are fairly
confdent that we will go over a billion
in 2012.”
ACN was the frst direct sales
company to step into the energy sales
arena 10 years ago when California
attempted energy deregulation, but
exited when the state’s process failed,
according to Robert Stevanovski, Co-
Founder and Chairman of ACN. Te
company has since focused on mobile
and video phones, satellite TV and
home security, providing service in 23
markets with revenue of $553 million
in 2010.
But ACN is now back in energy sales,
having launched energy services in
Canada in 2010 and re-launched in the
U.S. market this spring with services
in New York, Pennsylvania and
Maryland. It plans to open 11 other
markets later this year.
Overseas, Telecom Plus PLC, which
operates the Utility Warehouse Discount
Club in the United Kingdom, has
also enjoyed recognizable growth
since it was founded in 1997. With
2010 revenues of $600 million,
Telecom Plus provides more than
350,000 customers throughout the
United Kingdom with landline phone,
broadband, mobile phone, and gas and
electricity services and products.
Not all U.S. states are open to
deregulating energy and allowing
competition for sales, but for those
which are, the direct selling model of
business provides a three-way win for
customers, independent business
owners and energy providers. ?
“We ?nd we attract a
lot of people who have
never been in network
marketing.”
—Doug Witt, Managing Director
of Marketing, Ignite
24
Of the People, by the People, for the People
Of the People
Te Economic Policy Institute estimates 4.4
unemployed workers are available for every job
opening. Tis number does not take into account the
estimated 2.3 million “sidelined” workers—people
who have lost jobs recently but are not yet trying to
re-enter the workforce—making the ratio between
job openings and available workers even higher.
In the midst of multiple opinions about causes
and cures for our current economic state, the
activity surrounding small-business ownership
appears to be increasing. Direct selling companies
such as Scentsy, Herbalife and ViSalus Sciences have
processed more applications to start businesses than
ever. In fact, just among the top 20 revenue-grossing
companies—there are an estimated 2,000 U.S.
companies using the direct selling business model—
more than 500,000 new applications are processed
in any given month.
Yet the numbers of individuals starting their
own direct selling businesses are not counted in
the Department of Labor’s statistics, nor are they
recognized by most economists as signifcant
indicators for the economy. With collective
gross revenues of U.S. direct selling companies
topping $28 billion annually, it might be a
statistic worth considering.
By the People
In direct selling, individuals market and sell
products and services directly to the consumer,
either through individual contact or group selling,
such as the in-home party. Individuals own their
own businesses but still have the support of a parent
company. Te direct selling model has similarities
to the franchising model, another type of popular
business ownership. Unlike the franchisee, however,
the direct seller is an independent contractor with
complete control over building and conducting
the business. Most direct selling companies
advocate a robust ethical code and encourage
adherence to ensure optimal relationships among
fellow contractors (business owners) and consumers.
Te direct selling industry is very democratic,
inviting all segments of the population to participate
in business ownership, regardless of income,
education or assets. Te age range of direct sellers
mirrors the age range of adults: 18 to 65+, with some
surveys indicating up to 22 percent of direct sellers
are over 55 years old. Te product categories are just
as diverse, including nearly every product or service
imaginable, from energy to fnancial planning,
from health and wellness to beauty, from home
improvement to self-improvement.
For the People
Direct selling is also an extraordinarily philanthropic
industry, with nearly every company, regardless of
size, participating in some kind of charitable endeavor,
whether it is setting up its own foundation, partnering
with humanitarian organizations, or regularly
supporting existing charities. Companies such as
Amway, Nu Skin, Herbalife, Shaklee, Te Pampered
Chef, Tahitian Noni and XANGO also are among
frst responders to help when disaster strikes, here
in the United States and across the world, ofering
millions of dollars in reconstruction eforts, products,
and even basics such as food and blankets to afected
people. Amway’s generosity is rooted in the belief of
its founders and owners that “we need to share our
resources with the communities where we do business,”
says the company’s president, Doug DeVos.
Participating in the generosity of the industry
provides another compelling reason that people want
to sign on with direct selling companies. According
to USANA’s Chief Marketing Ofcer Kevin Guest, the
industry attracts people who want to make the world
a better place. “Our entire business is about helping
others,” he says. “It seems only natural to me that
altruism would spill over into other aspects of their
lives as well.” USANA partners with Te Children’s
Fund, delivering food and vitamins to children across
the globe, and even making it possible for employees
and associates to volunteer in other countries.
Direct selling company CEOs are also known for
their personal philanthropy in support of many causes
around the world. A recent example of this giving spirit
can be found in Andrea Jung, CEO of Avon, who gifed
her entire long-term bonus of $5,362,500 to the Avon
Foundation for Women, which has raised more than
$800 million to support women’s issues such as breast
cancer awareness and ending domestic violence.
Direct selling: of the people, by the people, and
most defnitely, for the people. ?
by Teresa Day
More than 12 million jobs have been eliminated from the U.S. economy since December 2007,
and according to the Brookings Institute, it could take 12 years to re-create what’s been lost.
Many individuals are looking to the direct selling model for a different answer.
25
The age range
of direct sellers
mirrors the age
range of adults: 18
to 65+, with some
surveys indicating
up to 22 percent
of direct sellers are
over 55 years old.
26
success.com/symposium
NOVEMBER 5-6
TH
, 2011
Long Beach Convention Center
Long Beach, California
Get the Competitive Advantage
in Business and in Life
Tickets open to independent business
owners, entrepreneurial enthusiasts
and leaders worldwide soon.
HOSTED BY
DARREN HARDY
Publisher, SUCCESS Magazine
Scentsy, Inc.
Founded in 2004 in an ocean shipping container on
a sheep farm, this Idaho-based company was named
the fastest-growing, privately-held consumer products
company in the United States in 2010 by Inc. Magazine.
With only $60,000 in paid-in capital, Scentsy’s business
success has defied the worst economic downturn
since the Great Depression.
Since 2008:
• 750 new employees
• 113,000 new small business owners
• $6 million in charitable contributions
• 6 million new customers
• $80 million paid in taxes
• $352 million paid to families across
North America†
Follow Scentsy at scentsy.com or on Facebook.
† Includes Scentsy payroll, bene?ts, commissions, royalties, and shareholder distributions.
Entrepreneurship
is the answer.
Direct Selling works.
27
W
hat’s the ideal home-based
business? More than 16
million Americans think it’s
direct selling.
Tey represent one of the hundreds of U.S.
direct selling businesses, and together they
generated $28.3 billion in annual sales last year.
While a few direct sellers work at their businesses
full time, about 90 percent work part time to
supplement their income. Some 80 percent of
direct sellers are women, and almost all say they
appreciate the schedule fexibility and low cost of
starting their business. Customized technology
lets them make their business portable and
convenient. Tey can show high-quality products
or share their business opportunity at a home
party, but it’s just as easy to do at a cofee shop
or restaurant.
Direct selling companies, sometimes referred
to as network marketing companies, are gaining
the attention of some of the world’s foremost
fnancial experts, including Suze Orman, noted
author, television personality and consultant to
Avon Products Inc.; Robert Kiyosaki, best-selling
author of the Rich Dad Poor Dad series, who has
sold more books on fnancial guidance than any
author in history; and David Bach, New York
Times best-selling author, to name just a few. All
have responded positively to the signifcance of
the direct selling business model.
“Te beauty of the direct selling business
opportunity is that it’s all done for you,” Bach says.
“Tere isn’t any real startup time. You don’t have
to create a business plan. You don’t have to create
a product. Te only thing you need to do is fnd a
reputable company—one that you can trust—that
ofers a product or service that you believe in and
can get passionate about.”
A Growing Trend
What is most appealing about becoming a
direct seller is that anyone can do it. Today’s
technology ofers many viable options for
working from home, not to mention the comfort
and enjoyment of not having to go to a place
of employment at a certain time each day. Te
essential activities related to building the business
are usually conducted in the home. Te party
plan approach to selling is found to be very easy
to learn—and to enjoy. Meeting prospective
customers and potential direct sellers at a cofee
shop is far more relaxing than the traditional
business conference room.
As the ultimate equal-opportunity solution,
a direct selling home-based business may
represent the purest form of equality through free
enterprise. Tat’s one of the most striking aspects
of direct selling as a business model: It involves
men and women from all walks of life, all ages,
and all racial, ethnic and socioeconomic groups.
According to the Direct Selling Association,
the industry’s trade organization, 24 percent
of direct sellers have a high school diploma or
less education; however, 35 percent are college
graduates and 1 in 12 has a postgraduate degree.
Tese statistics are expected to possibly change
dramatically as technology redefnes the way
direct sellers conduct their businesses and
more and more Americans look for easier ways
to attempt entrepreneurship by starting their
own business.
The Primary Bene?t:
Work–Life Balance
A home-based business is a valuable asset
when it is developed successfully. Since there
is no commute to work, one’s business can be
managed to accommodate one’s working hours,
family life and personal interests. Tis is one of the
primary benefts that have historically attracted
women to the business model. Today, there are
millions of men and women who seek a business
opportunity that ofers the ultimate work–life
balancing potential.
Around the world, millions of families use
earnings from their direct selling businesses to
make their monthly car or mortgage payments,
take family vacations, send their children to
private schools or purchase a few luxuries. For
these individuals, the money earned each month,
regardless of the amount, makes a big diference.
And the big beneft? It’s that they are doing it on
their terms and in accordance to the time they are
willing to invest.
The Bene?t of Owning Your
Own Business
Some direct sellers and network marketers (all
are independent business owners) choose to view
their business as an opportunity with unlimited
earning potential. Tey realize they can increase
their chances of achieving fnancial freedom by
building a strong business. Tis requires time and
energy to attract customers, sell their products
and build a sales organization of others who
by Barbara Seale
& John Fleming
The Heart of Direct Selling: The Home
28
are recruited, coached and supported in their eforts to also build
successful businesses. By treating the opportunity as a true business,
these direct sellers have the potential to earn signifcant profts from
their investment of time.
The Bene?t of Personal Development
Personal development is a phrase ofen used when direct selling
companies describe the benefts associated with the training they ofer.
Direct sellers tend to rave about the support they receive regardless of
whether they are in the business for a new lifetime career or just a few
months to earn some needed extra income. Some have been known
to report that as a result of the training ofered by the direct selling
company they chose—usually ofered free or at minimal cost—they
were able to step out of their comfort zones, engage in conversations
more efectively, speak in front of groups of people, manage time and
money more efectively and, ultimately, enrich their lives through
the experience.
The Ideal Business
While every company has its unique traits, the entire direct selling
way of doing business shares common threads of empowering men
and women to dream, to reach beyond what they thought to be
possible, and to be supported in a very strong manner. Direct selling
is a great example of how the free enterprise system can be engaged
without the traditional risks associated with a brick-and-mortar
business model. ?
Top 5 Reasons for Considering
a Direct Selling Business
Be Your Own Boss—You are in complete control of how you invest your time
and how you go about building your business.
Save Time and Money—As an independent business owner, you purchase
the products you love at discounts and you operate all activities from your home.
Expand Your Circle of Friends—Direct selling business opportunities
are based on building relationships. When building a direct selling business,
customers and other team members appear to quickly become important and
rewarding aspects to one’s life.
Be Recognized and Rewarded for Achievement—It’s not every day
that an adult receives praise for an effort well done, but direct selling companies
recognize and reward their independent business owners through bonuses, trips
and prizes. This is an essential component to the business model.
Build Income—The direct selling compensation model offered by most
companies allows the building of organizations that have the potential to create
incomes beyond those earned from the personal selling/servicing efforts of the
direct seller.
www.partylite.com
The number one
direct seller of
premium candles
and home-fragrance
products in the world.
United States | Australia | Austria | Canada | Czech Republic | Denmark | Finland | France | Germany | Italy | Mexico | Norway | Poland | Slovakia | Switzerland | United Kingdom
29
D
irect Selling News, the
trade publication for the
direct selling and network
marketing executive, is the
only publication of its kind
dedicated to reporting the
news as it happens in the direct selling industry.
Each month, DSN demonstrates its partnership
with direct selling companies by telling their
remarkable stories and examining the issues
important to the industry at large.
From providing its readers with the
latest industry news to profling mature
companies and startups,
DSN seeks to educate,
inform and inspire.
Straightforward
and Authentic
Whether providing
readers with valuable
information about
compensation plans
and growth strategies,
ofering a forum
for direct selling
executives and suppliers to share
their ideas or profling direct selling
startups in Young Company Focus, DSN
strives to deliver information that can help direct
sellers be more successful. “Direct Selling News
has proven to be a great partner for SwissJust,”
says Jacques Mizrahi, CEO of SwissJust. “Tey
are a true partner because we have helped
them with their stories, and they have helped
us enormously in our path from a startup to
continuous growth.”
Companies also frequently use DSN articles
to support their strategies and growth. From
posting articles on their websites to sending
e-mail blasts to their salesforce, to including
article reprints in their starter kits, the
companies DSN covers say the editorial staf’s
reporting helps them generate excitement among
the public, their customers and their sales
organizations and, in some cases, helps increase
recruiting eforts.
Relevance and Education
DSN provides its readers with much more
than industry news and company profles. Te
publication’s Working Smart section covers the
tactics and strategies that enable companies to
meet industry challenges, improve efciencies
and achieve business objectives. Tis section
not only gives direct selling company executives
and suppliers the opportunity to share their
knowledge with others in the industry by
contributing articles, but it also provides direct
selling companies with information and insight
that can directly afect their businesses.
USANA President Dave Wentz says he and
his company learn much about the day-to-day
issues faced by companies from Working Smart
articles. “I have been consistently impressed by
the management strategies and marketing tactics
shared in these regular sections, and I have
frequently used them to promote discussion
and strategic planning in my staf
meetings,” he says.
Insightful and
Perceptive
DSN’s New
Perspectives section
ofers commentary
on contemporary
issues from
respected direct
selling executives,
business professors
and industry
consultants. Its
monthly Top Desk
essay is contributed by a direct selling CEO
or president and addresses such important topics
as leadership and ethics. “Personally, I’ve had the
opportunity to share my thoughts in such areas
as ethics and integrity with our entire industry,”
says Herbalife Chairman and CEO Michael O.
Johnson. “It’s gratifying to know that such a
venue exists, where matters that are especially
important to all of us are given an open forum
for discussion.”
Direct Selling News is read not only by
direct selling executives and suppliers but
also by members of the academic community,
who use the publication to educate their
students and the community at large about
this industry. “What makes direct selling
Direct Selling News
Serving the Direct Selling and Network Marketing Executive
by DSN Staff
From providing its
readers with the latest
industry news to profiling
mature companies and
startups, DSN seeks
to educate, inform
and inspire.
30
fun to teach is that when someone enrolls in a
direct selling opportunity, they are buying into
a proven business model, with a proven frm,
with proven products and identifed markets,”
says Larry Chonko, Ph.D., Tomas McMahon
Professor of Business Ethics at the University
of Texas at Arlington. “Te entrepreneur,
instead of having to start a business from
the ground foor, must engage in a serious
evaluation of the strategies and tactics of the
direct selling company and his/her prospective
ft with that company. Most students will be
employed by companies with existing plans and
structures. Te evaluative process of choosing
a direct selling company is one that provides
a transferrable learning foundation for what
students are most likely to experience as an
employee or future business owner.”
Global in Scope
DSN also aims to provide its U.S. readers with
comprehensive information about direct selling
in other parts of the world.
“Direct selling executives in Europe are so
interested to hear what’s happening across
their region,” says Kathy Slater, a DSN editor.
“Tey tell me that DSN provides them with
valuable, accurate information about diferent
companies, cultures and business legislation.
Readers have also said that DSN is at the heart
of bringing together direct selling companies
and associations within the industry, by
ensuring they all have a voice and a recognizable
face, brought to life within one reputable
independent source.”
A Journalistic Resource
Direct Selling News is committed to
keeping direct selling company executives
abreast of the latest news and trends around
the world; profling individual member
companies, their accomplishments and their
eforts to give back; providing a forum for
sharing ideas and industry best practices;
and acting as an advocate for industry
ethics and integrity. Te monthly print
publication is for direct selling executives
and decision-makers. ?
›› The DSN Global 100—An Industry Event
D
irect Selling News celebrated its second annual
DSN Global 100 list with an awards banquet on
April 27. The event, which recognized the top 100
revenue-grossing direct selling companies in the world for
2010, was attended by nearly 300 members of the direct
selling industry, representing more than 140 companies.
Brian Connolly, former President of Avon North America
and Executive Vice President of Avon Products Inc.,
emceed the event. John Fleming, Publisher and Editor in
Chief of Direct Selling News, presented the awards to the
top 10 companies.
The evening opened with the presentation of the
DSN Bravo Awards for outstanding achievement—
Turnaround, Growth and Leadership. The ?rst award
went to the company that experienced the best
turnaround over the previous 12 months, which was
ViSalus Sciences. The health transformation company
focused its 2010 efforts on marketing its Body by Vi™
Challenge and grew to an estimated $10 million in
monthly sales.
Co-founders Ryan Blair, Nick Sarnicola and
Blake Mallen accepted the award, along with Todd
Goergen, whose family owns Blyth, the parent
company of ViSalus.
“Starting a company is about the ups, the downs
and celebrating successes along the way,” Blair says.
“Winning the Turnaround Award during the worst
economic time of recent history was a testament to
the hard work of our distributors, the power of our Body
by Vi messaging, our products and our comp plan.”
The second Bravo Award went to the company with
the highest growth rate over the prior year. The winner
was Stella & Dot, which saw sales of $33 million in 2009
increase to $104 million in 2010, a growth of 215 percent.
The jewelry company made news in February when the
in?uential venture-capital ?rm Sequoia Capital invested
$37 million for 10 percent of the ownership.
The award, presented by 2009 winners Orville
and Heidi Thompson of Scentsy, was accepted
by Mike Lohner, Chairman of Stella & Dot. “Coco
Chanel said that girls should be two things: classy and
fabulous. I think we’re doing our part to help that be a
truism,” says Lohner.
The ?nal Bravo Award went to the leadership team
of ACN: Greg Provenzano, Robert Stevanovski, Mike
Cupisz and Tony Cupisz. Provenzano accepted the
Leadership Award, which was presented by 2009
winner John Addison, Co-CEO of Primerica.
“Given the high caliber of people who are here tonight,
it’s a surprise and an honor to be able to accept this
award on behalf of all of ACN,” Provenzano says. “We
appreciate being in business with you. It’s a great industry.
Let’s continue to do great things together.”
After the presentation of the Bravo Awards, DSN
unveiled its Global 100 for 2010. Tom Kelly, Senior Vice
President of Global Direct Selling for Avon, accepted the
award for No. 1 direct selling company in the world. “We
strive to be the best. Tonight, to be recognized as the best
of the best in your eyes is a big honor and means a lot to
us,” says Kelly.
Tom Kelly, Senior Vice President for Global
Direct Selling for Avon, accepts the award for
No. 1 direct seller in the world.
ViSalus Sciences Co-Founders Ryan Blair, Nick
Sarnicola and Blake Mallen and team accept
the Bravo Turnaround Award.
ACN Co-Founder Greg Provenzano accepts
the Bravo Leadership Award from 2009 winner
John Addison of Primerica.
Mike Lohner, Chairman of Stella & Dot accepts
the Bravo Growth Award from 2009 winners
Heidi and Orville Thompson of Scentsy.
31
When we published the DSN Global
100 ranking last year, it was the first
time in the history of the industry that
a comprehensive list of the top 100
direct selling companies (by revenue)
was researched and presented.
1 Avon Products, Inc.
2010 Revenue: $10.9 billion
Country: USA
Avon is the founder of modern direct selling and
the acknowledged world leader in cosmetics,
fragrances and toiletries. Avon’s well-known
product lines include Avon Color, Anew, Skin
So Soft
™
, Advance Techniques Hair Care, Avon
Naturals and mark
™
.
2009 Rank: 1
2009 Revenue: $10.3 billion
Marketing Style: Person-to-person
Compensation Plan: Single-level and multi-level
Products: Beauty, fashion jewelry and apparel
Markets: 100+
Distributors: 6.5 million
Employees: 42,000
Headquarters: New York, N.Y.
Executive: Andrea Jung
Year Founded: 1886
Stock Symbol: AVP—NYSE
2 Amway
2010 Revenue: $9.2 billion
Country: USA
Amway, under parent company Alticor, offers
Artistry cosmetics and skin-care products,
Nutrilite nutritional products and loyalty-inducing
household products.
2009 Rank: 2
2009 Revenue: $8.4 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Nutrition, beauty, personal-care and
home-care products
Markets: 80+
Distributors: 3 million
Employees: 14,000+
Headquarters: Ada, Mich.
Executives: Steve Van Andel
and Doug DeVos
Year Founded: 1959
3 Natura Cosmeticos SA
2010 Revenue: $3 billion
Country: Brazil
Natura is a cosmetics giant with more than 900
products. The company operates in Argentina,
Chile, Peru, Mexico, France, Venezuela and
Colombia. Corporate social responsibility is one
of its core emphases.
2009 Rank: 5
2009 Revenue: $2.4 billion
Marketing Style: Person-to-person and retail
Compensation Plan: Bi-level
Products: Personal-care products and fragrances
Markets: 7
Distributors: 1 million
Employees: 5,000+
Headquarters: São Paulo, Brazil
Executive: Alessandro G. Carlucci
Year Founded: 1969
Stock Symbol: NATU3.SA—São Paulo
4 Vorwerk & Co. KG
2010 Revenue: $2.9 billion
Country: Germany
Vorwerk is a family-owned company that has been
focusing on the direct selling channel since 1930.
Products include household appliances and high-
quality cosmetics. Vorwerk is a global group that
includes JAFRA Cosmetics, which reported sales
volume of more than $600 million in 2010.
2009 Rank: 3
2009 Revenue: $3.5 billion
Marketing Style: Person-to-person and
party plan
Compensation Plan: Multi-level
(JAFRA Cosmetics)
Products: Cosmetics and home appliances
Markets: 61
Distributors: 600,000
Employees: 23,000
Headquarters: Wuppertal, Germany
Executives: Walter Muyres and Reiner Strecker
Year Founded: 1883
DSN Global 100
by DSN Staff
32
5 Herbalife Ltd.
2010 Revenue: $2.7 billion
Country: USA
Herbalife sells nutritional supplements and
weight-management and personal-care products.
Its products have been developed by scientists,
physicians and nutrition experts, including Nobel
laureate in medicine Louis Ignarro, Ph.D.
2009 Rank: 6
2009 Revenue: $2.3 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Nutritional supplements; health/fitness,
wellness, skin- and hair-care; and weight-
management products
Markets: 75
Distributors: 2.1 million
Employees: 4,300
Headquarters: Los Angeles, Calif.
Executive: Michael O. Johnson
Year Founded: 1980
Stock Symbol: HLF—NYSE
6 Mary Kay Inc.
2010 Revenue: $2.5 billion
Country: USA
Mary Kay was founded by Mary Kay Ash with the
goal of helping women achieve personal growth and
financial success. The company’s skin-care and
color cosmetics products are sold in more than 35
countries around the world.
2009 Rank: 4
2009 Revenue: $2.5 billion
Marketing Style: Person-to-person and party plan
Compensation Plan: Single-level and multi-level
Products: Skin-care products and
color cosmetics
Markets: 35+
Distributors: 2 million
Employees: 5,000
Headquarters: Addison, Texas
Executive: David Holl
Year Founded: 1963
7 Tupperware Brands Corp.
2010 Revenue: $2.3 billion
Country: USA
Tupperware is a global direct seller of innovative,
premium products through an independent
salesforce. Product brands and categories include
design-centric preparation, storage and serving
solutions for the kitchen and home, and beauty-
and personal-care products.
2009 Rank: 8
2009 Revenue: $2.1 billion
Marketing Style: Person-to-person and party plan
Compensation Plan: Single-level and multi-level
Products: Storage and serving products; beauty-
and personal-care products
Markets: Nearly 100
Distributors: 2.6 million
Employees: 13,500
Headquarters: Orlando, Fla.
Executive: Rick Goings
Year Founded: 1946
Stock Symbol: TUP—NYSE
8 Ori?ame Cosmetics S.A.
2010 Revenue: $2.2 billion
Country: Sweden
Oriflame is one of the fastest-growing beauty
companies in the world. The company operates in
62 countries and is the market leader in more than
half. Although it has no U.S. presence, Oriflame
has a presence in Mexico, Central America, South
America, Europe, Asia and Africa.
2009 Rank: 9
2009 Revenue: $1.8 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Beauty products
Markets: 62
Distributors: 3.5 million
Employees: 8,000
Headquarters: Luxembourg, Luxembourg
Executive: Magnus Brännström
Year Founded: 1967
Stock Symbol: ORI-SDB—Stockholm
13 Miki Corporation
2010 Revenue: $927 million
Country: Japan
Miki Corporation began as a textile importer and
seller. Today, it is a multimillion-dollar seller of
supplements made from prune extracts as well as
household cleaners, personal-care items and much
more. The company has sales agents in Japan,
Taiwan and Malaysia.
2009 Rank: 14
2009 Revenue: $969 million
Marketing Style: Not available
Compensation Plan: Not available
Products: Foods, cosmetics and
household products
Markets: 3
Distributors: Not available
Employees: 270
Headquarters: Osaka, Japan
Executive: Toshikazu Kadota
Year Founded: 1964
14 Ignite Inc.
2010 Revenue: $902 million
Country: USA
Ignite Inc. was founded in 2004 by parent company
Stream Energy to meet the changing needs of
consumers. With energy service deregulation, more
choices exist for consumers and entrepreneurs, and
Ignite seeks to meet the needs of both.
2009 Rank: 16
2009 Revenue: $845 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Electricity and natural gas
Markets: 1
Distributors: 195,199
Employees: 262
Headquarters: Dallas, Texas
Executive: Rob Snyder
Year Founded: 2004
15 Melaleuca Inc.
2010 Revenue: $750 million
Country: USA
Melaleuca sells more than 350 products, including
personal-care items, cosmetics, household cleaning
supplies and vitamins to consumers through
a network of sales representatives, catalogs
and websites.
2009 Rank: 15
2009 Revenue: $879 million
Marketing Style: Person-to-person
Compensation Plan: Single-level
Products: Personal-care products, cosmetics,
cleaning supplies and vitamins
Markets: 18
Distributors: Not available
Employees: 1,200
Headquarters: Idaho Falls, Idaho
Executive: Frank Vandersloot
Year Founded: 1985
15 Omnilife
2010 Revenue: $750 million
Country: Mexico
Founded by Jorge Vegara Madrigal, Omnilife
Manufactura S.A. de C.V. is owned by ultimate parent
company Grupo Omnilife S.A. de C.V. The company
has independent consultants in 23 markets in South
America, North America, Central America, Asia
and Europe.
2009 Rank: 18
2009 Revenue: $750 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Nutritional supplements, weight-
management and beauty products, beverages,
cosmetics and fragrances
Markets: 23
Distributors: 5 million
Employees: 3,500
Headquarters: Zapopan, Mexico
Executive: Jorge V. Madrigal
Year Founded: 1992
33
9 Forever Living Products
2010 Revenue: $1.7 billion
Country: USA
Forever Living is the world’s largest grower,
manufacturer and distributor of aloe vera, and this
inspires them to make environmental responsibility
a priority. The company offers a complete line
of aloe vera drinks, skin-care products and
cosmetics, as well as a full line of nutritional
supplements and products from beehives.
2009 Rank: 10
2009 Revenue: $1.7 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Aloe vera drinks, skin-care products
and cosmetics, nutritional supplements
Markets: 142
Distributors: Not available
Employees: 9.3 million
Headquarters: Scottsdale, Ariz.
Executive: Rex Maughan
Year Founded: 1978
10 Nu Skin Enterprises, Inc.
2010 Revenue: $1.5 billion
Country: USA
Nu Skin Enterprises Inc. is a global direct
selling company operating in 48 international
markets throughout the Americas, Europe
and the Asia-Pacific region. Going far beyond
cosmetics, toiletries and fragrances, Nu Skin sells
more than 200 products through three distinct
brands: Nu Skin, Pharmanex and Big Planet.
2009 Rank: 11
2009 Revenue: $1.3 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Personal-care and
nutritional products
Markets: 51
Distributors: 800,000
Employees: 1,200
Headquarters: Provo, Utah
Executive: Truman Hunt
Year Founded: 1984
Stock Symbol: NUS—NYSE
11 Belcorp/L’Bel Paris
2010 Revenue: $1.3 billion
Country: Peru
Belcorp focuses on women, not only through its
business model but also through its products. Over
840,000 independent beauty consultants offer
the L’Bel, Ésika and Cyzone beauty and lifestyle
brands. As of 2011, Belcorp has a presence in 15
countries and 18 Latin American specialty stores.
2009 Rank: 13
2009 Revenue: $1 billion
Marketing Style: Person-to-person and
party plan
Compensation Plan: Single-level and multi-level
Products: Skin-care, fragrance, makeup, body-
care, hair-care
Markets: 15
Distributors: 840,000
Employees: 8,000+
Headquarters: Lima, Peru
Executive: Eduardo Belmont
Year Founded: 1967
11 Primerica Inc.
2010 Revenue: $1.3 billion
Country: USA
Primerica provides financial products and services,
including term life insurance, mutual funds,
variable annuities, loans, long-term care insurance
and legal services to 6 million clients, primarily
middle-class individuals and families.
2009 Rank: 7
2009 Revenue: $2.2 billion
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Financial services
Markets: 5
Distributors: 100,000
Employees: 2,000
Headquarters: Duluth, Ga.
Executives: John Addison and Rick Williams
Year Founded: 1977
Stock Symbol: PRI—NYSE
17 MonaVie LLC
2010 Revenue: $600 million
Country: USA
MonaVie’s nutritional beverages with
corresponding gel formulations feature a blend
of açai berry and other nutrient-dense fruits. The
company’s philanthropic aim is to improve the lives
of people living in poverty in Brazil.
2009 Rank: 17
2009 Revenue: $785 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Foods and nutritional products
Markets: 12
Distributors: 1 million
Employees: 450
Headquarters: South Jordan, Utah
Executives: Dallin A. Larsen and Henry Marsh
Year Founded: 2005
17 Telecom Plus
2010 Revenue: $600 million
Country: United Kingdom
Operating as the Utility Warehouse Discount
Club, Telecom Plus provides landline phone,
broadband, mobile phone, gas and electricity
products and services to over 350,000 customers
across the UK, as well as offering club members
a range of opportunities to save money on
household expenses.
2009 Rank: 33
2009 Revenue: $590 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Landline phones, broadband, mobile
phones, gas, electricity
Markets: 1
Distributors: 30,000
Employees: 500
Headquarters: London, UK
Executive: Andrew Lindsay
Year Founded: 1998
Stock Symbol: TEP—LONDON
17 Yanbal International/Unique
2010 Revenue: $600 million
Country: Peru
Yanbal International was founded in Peru and sells
skin-care, cosmetics, personal-care products,
fragrances and jewelry through its catalogs and
beauty consultants.
2009 Rank: 26
2009 Revenue: $490 million
Marketing Style: Party plan
Compensation Plan: Multi-level
Products: Skin-care products, personal-care
products, cosmetics, jewelry and fragrances
Markets: 8
Distributors: 350,000
Employees: 4,800
Headquarters: Lima, Peru
Executive: Janine Belmont
Year Founded: 1967
20 ACN
2010 Revenue: $553 million
Country: USA
ACN is the largest direct seller of home and
telecommunications services in the world,
offering local and long distance phone service,
digital phone service with video phones, Internet,
wireless, satellite TV, home security, computer
support and energy services.
2009 Rank: 21
2009 Revenue: $553 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Telecommunications, home services
and business services
Markets: 23
Distributors: Not available
Employees: 1,300
Headquarters: Concord, N.C.
Executives: Robert Stevanovski, Greg
Provenzano, Tony Cupisz and Mike Cupisz
Year Founded: 1993
34
21 PartyLite (Blyth)
2010 Revenue: $545 million
Country: USA
Started by entrepreneur Mabel Baker with her single line of bayberry
candles, PartyLite is now the world’s largest direct seller of candles
and home fragrance products. The company was acquired by Blyth,
Inc. in 1990.
2009 Rank: 19
2009 Revenue: $621.6 million
Marketing Style: Party plan
Compensation Plan: Multi-level
Products: Candles, candle warmers, flameless fragrance, home
accents, personal-care products and food products
Markets: 18
Distributors: 63,556
Employees: 1,249
Headquarters: Plymouth, Mass.
Executive: Anne Butler
Year Founded: 1973
Stock Symbol: BTH—NYSE
22 Amore Paci?c
2010 Revenue: $539 million
Country: South Korea
Amore Pacific is an old favorite in South Korea, and its products
can now be found on Sephora shelves in the United States. The
company’s products use Asian botanicals and nanotechnology to
deliver skin-care and personal-care items.
2009 Rank: 27
2009 Revenue: $475 million
Marketing Style: Direct selling/retail stores
Compensation Plan: Not available
Products: Cosmetics, personal-care, health products and tea
products
Markets: 3
Distributors: Not available
Employees: Not available
Headquarters: Seoul, South Korea
Executive: Kyung-Bae Suh
Year Founded: 1945
Stock Symbol: 090430 (Korea Stock Exchange)
23 LG Household & Health Care
2010 Revenue: $532 million
Country: South Korea
LG Household & Health Care is an established leader in the Korean
household goods and cosmetics industries. Its household goods
include oral care products, skin-care and hair-care products, laundry
products and paper products.
2009 Rank: 23
2009 Revenue: $461 million
Marketing Style: Not available
Compensation Plan: Not available
Products: Cosmetics and household products
Markets: 5
Distributors: Not available
Employees: 2,745
Headquarters: Seoul, South Korea
Executive: Suk Cha
Year Founded: 1947
Stock Symbol: 051900—SEO
24 USANA Health Sciences Inc.
2010 Revenue: $517 million
Country: USA
USANA Health Sciences develops and
manufactures high-quality nutritional supplements,
healthy weight-management products and
personal-care products, which are marketed by
independent associates in 15 international markets.
2009 Rank: 31
2009 Revenue: $436.9 million
Marketing Style: Person-to-person
Compensation Plan: Multi-level
Products: Nutritional supplements, personal-
care, energy and weight-management products
Markets: 15
Distributors: 228,000
Employees: 1,240
Headquarters: Salt Lake City, Utah
Executive: David Wentz
Year Founded: 1992
Stock Symbol: USNA—NASDAQ
25 Shaklee Corp.
2010 Revenue: $500 million
Country: USA
Founded in 1956, Shaklee manufactures products
and distributes them through its website and more
than 750,000 representatives in North America
and Asia. The company is known for its green
products and social responsibility efforts.
2009 Rank: 24
2009 Revenue: $500 million
Marketing Style: Person-to-person
(also retail in Singapore)
Compensation Plan: Multi-level
Products: Nutritional supplements, skin-care,
weight management, green cleaners
Markets: 8
Distributors: 1.25 million
Employees: 750
Headquarters: Pleasanton, Calif.
Executive: Roger Barnett
Year Founded: 1956
25 The Pampered Chef Ltd.
2010 Revenue: $500 million
Country: USA
The Pampered Chef sells more than 300
gourmet kitchen tools, cookware, cookbooks and
foodstuffs. Founded in 1980, Pampered Chef was
acquired by Berkshire Hathaway, the conglomerate
controlled by billionaire Warren Buffett, in 2002.
2009 Rank: 24
2009 Revenue: $500 million
Marketing Style: Party plan
Compensation Plan: Multi-level
Products: High-end tools for cooking
and entertaining
Markets: 5
Distributors: 60,000
Employees: 800
Headquarters: Addison, Ill.
Executive: Marla Gottschalk
Year Founded: 1980
Stock Symbol: BRK-A—NYSE
25 Tiens/Tianshi
2010 Revenue: $500 million
Country: China
In China, Tiens sells its products through
some 100 branch offices and chain stores of
affiliate Tianshi Engineering. Outside of China,
it sells products through independent distributors
through subsidiary Tianshi International and
majority-owned Tiens Biotech Group USA Inc.
2009 Rank: 47
2009 Revenue: $275 million
Marketing Style: Person-to-person and retail
Compensation Plan: Uni-level and breakaway
Products: Wellness products,
dietary supplements
Markets: 110
Distributors: Not available
Employees: 2,827
Headquarters: Tianjin, China
Executive: Li Jinyuan
Year Founded: 1990
Stock Symbol: TBV—AMEX
35
Clinically proven Medifast Meals
Lose up to 2 to 5 lbs a week, quickly and safely
Recommended by over 20,000 doctors since 1980
Achieving Optimal Health is Now Possible
Optimal Health is a whole new approach to well-being that is based on creating health
with the Take Shape For Life Program.
Who We Are…
Take Shape For Life is the direct sales, and largest, division
of Medifast, Inc. (NYSE: MED), a solid 30 year old company
recently named “#1 Small Company in America” by
Forbes Magazine. Recognized in the top 100 direct sales
companies in the world
†
, Take Shape For Life is a physician-
led business model based around Health Coaches who are
trained and educated to support Clients on the Medifast 5
& 1 Plan with encouragement, education and mentoring.
What makes Take Shape For Life so di?erent is that Health
Coaches don’t sell products or services, they simply share
the program and then help guide their Clients.
A Great Opportunity…
With obesity in the United States
reaching epidemic proportions, Take
Shape For Life o?ers an amazing
business opportunity to become a
Health Coach and join like-minded
individuals with the common goal of
“paying it forward” and getting America
healthy. We are a health network of
coaches who live and teach the Trilogy
of Optimal Health: Healthy Body,
Healthy Mind, and Healthy Finances.
If you could choose
Optimal Health,would you?
Three unique components (a Health Coach, the Medifast 5 & 1 Plan®, and the Habits of Health
System) create the foundation of long-term support that guides Clients along their journey. As a
Client you’ll learn to make the choices that can help you take charge of your health for the long
term. Reaching a healthy weight is just the beginning – Take Shape For Life o?ers much more.
*Results not typical. Typical weight loss on the Medifast 5 & 1 Plan is up to 2 to 5 lbs per week.
†
Take Shape For Life (Medifast) is ranked No. 69 on the 2010 Direct Selling News Global 100 list. This list identifes the Top 100 Direct Selling Companies in the World.
Discover more about Take Shape For Life
at www.TSFL.com.
Te company would like to thank all of our Health Coaches
for everything they do to get America healthy!
Before
Client and Health Coach
Nancy lost 135 lbs
*
and
has kept it of for 8 years!
Most people say they get their
life back, but now I have a life
I’ve never experienced before.
36
28
Pre-Paid Legal Services, Inc.
2010 Revenue: $454 million
Country: USA
29
Tahitian Noni International, Inc.
2010 Revenue: $420 million
Country: USA
30
Market America Inc.
2010 Revenue: $416 million
Country: USA
31
Ambit Energy, L.P.
2010 Revenue: $415 million
Country: USA
32
WIV Wein Int’l AG
2010 Revenue: $385 million
Country: Germany
33
Scentsy
2010 Revenue: $382 million
Country: USA
34
Pola Inc.
2010 Revenue: $361 million
Country: Japan
35
Arbonne International Inc.
2010 Revenue: $357 million
Country: USA
36
FORDAYS Co. Ltd.
2010 Revenue: $350 million
Country: Japan
37
Nature’s Sunshine Products Inc.
2010 Revenue: $349 million
Country: USA
38
NOEVIR Co., Ltd.
2010 Revenue: $345 million
Country: Japan
39
Southwestern
2010 Revenue: $337 million
Country: USA
40
KK ASSURAN
2010 Revenue: $333 million
Country: Japan
41
LR Health & Beauty Systems
2010 Revenue: $307 million
Country: Germany
42
Aerus Holdings Inc. LLC
2010 Revenue: $300 million
Country: USA
42
Sunrider
2010 Revenue: $300 million
Country: USA
44
Cosway
2010 Revenue: $298 million
Country: Malaysia
45
Eureka Forbes Ltd.
2010 Revenue: $272 million
Country: India
46
Isagenix International
2010 Revenue: $256 million
Country: USA
47
Neways, Inc.
2010 Revenue: $250 million
Country: USA
47
XANGO, LLC
2010 Revenue: $250 million
Country: USA
49
Vivint, Inc.
2010 Revenue: $245 million
Country: USA/Canada
50
Charle Corp. Ltd.
2010 Revenue: $240 million
Country: Japan
50
KOYO-SHA
2010 Revenue: $240 million
Country: Japan
50
Naturally Plus Co. Ltd.
2010 Revenue: $240 million
Country: Japan
53
Faberlic
2010 Revenue: $236 million
Country: Russia
54
Lux International
2010 Revenue: $234 million
Country: Switzerland
55
Mannatech, Inc.
2010 Revenue: $228 million
Country: USA
56
Four Leaf Japan Co./Forifu Japan
2010 Revenue: $226 million
Country: Japan
57
PM-International AG
2010 Revenue: $217 million
Country: Germany
58
ERINA Co., Inc.
2010 Revenue: $216 million
Country: Japan
59
Nikken Global Inc.
2010 Revenue: $210 million
Country: USA
59
Team National
2010 Revenue: $210 million
Country: USA
61
Diana Co. Ltd.
2010 Revenue: $204 million
Country: Japan
62
CUTCO Corp./Vector Marketing
2010 Revenue: $200 million
Country: USA
62
Longaberger Co.
2010 Revenue: $200 million
Country: USA
62
Stampin’ Up!
2010 Revenue: $200 million
Country: USA
62
4Life Research L.C.
2010 Revenue: $200 million
Country: USA
66
GNLD
2010 Revenue: $175 million
Country: USA
67
Family Heritage Life
2010 Revenue: $166 million
Country: USA
68
Univera
2010 Revenue: $164 million
Country: USA
69
BearCere’Ju Co. Ltd.
2010 Revenue: $160 million
Country: Japan
69
Take Shape for Life (Medifast)
2010 Revenue: $160 million
Country: USA
71
Jewels by Park Lane Inc.
2010 Revenue: $150 million
Country: USA
72
Sportron
2010 Revenue: $148 million
Country: USA
73
Japanlife Co. Ltd.
2010 Revenue: $144 million
Country: Japan
74
Chandeal Co. Ltd.
2010 Revenue: $138 million
Country: Japan
75
Deesse
2010 Revenue: $130 million
Country: Switzerland
76
Enagic USA, Inc.
2010 Revenue: $129 million
Country: USA
77
Tastefully Simple Inc.
2010 Revenue: $125 million
Country: USA
78
Keller Williams Realty Inc.
2010 Revenue: $120 million
Country: USA
79
Creative Memories
2010 Revenue: $113 million
Country: USA
continued on page 38
37
®
on
23 countries…4 continents…and growing | acninc.com | 866-244-5936
IF IT’S ON, YOU GET PAID
It’s happening right now in millions of homes around the world…
Just imagine if you got paid because someone did any of those things. That’s ACN – the
world’s largest direct seller of telecommunications and essential home services!
Start your own home-based business with ACN, marketing the services people
simply can’t live without!
Someone is
MAKING a phone call...
TURNING on a light…
SENDING a text message…
SURFING the internet…
WATCHING TV…
COOKING breakfast.
38
80
ARSOA HONSHA Corp.
2010 Revenue: $111 million
Country: Japan
81
Stella & Dot
2010 Revenue: $104 million
Country: USA
82
Kleeneze
2010 Revenue: $102 million
Country: United Kingdom
83
Kirby Company
2010 Revenue: $100 million
Country: USA
83
lia sophia
2010 Revenue: $100 million
Country: USA
83
Premier Designs
2010 Revenue: $100 million
Country: USA
83
Thirty-One Gifts
2010 Revenue: $100 million
Country: USA
83
Unicity Networks International
2010 Revenue: $100 million
Country: USA
88
The Maira Co. Ltd.
2010 Revenue: $96 million
Country: Japan
89
Vemma Nutrition Co.
2010 Revenue: $92 million
Country: USA
90
WorldVentures
2010 Revenue: $90 million
Country: USA
91
AdvoCare
2010 Revenue: $89 million
Country: USA
92
Agel Enterprises
2010 Revenue: $80 million
Country: USA
92
Fortune Hi-Tech Marketing
2010 Revenue: $80 million
Country: USA
92
FreeLife International
2010 Revenue: $80 million
Country: USA
92
Passion Parties
2010 Revenue: $80 million
Country: USA
92
Pure Romance
2010 Revenue: $80 million
Country: USA
92
Regal Ware
2010 Revenue: $80 million
Country: USA
92
Relìv International Inc.
2010 Revenue: $80 million
Country: USA
92
TriVita
2010 Revenue: $80 million
Country: USA
92
World Financial Group
2010 Revenue: $80 million
Country: USA
Direct Selling News is now
available as an iPad application.
You can download this FREE app
at http://bit.ly/dsnipad.
continued from page 36
39
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Billing #: ALTQUX P06986 Supplier#:
Element79 200 E. Randolph 33rd Floor Chicago, ÌL 60601 · www.element79.com
"What difference does it make?¨
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ALTQUX11022
Amway
Job#: IN12439_11022.indd
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what
difference
does it
make?
©2011 Amway
When it comes to health supplements, it’s a fair question. And it deserves answers.
Amway makes Nutrilite® vitamins with healthy plant nutrients from our
own organic farms. And that makes a very positive difference.
To learn more or ?nd an Amway Independent Business Owner, call 800-950-7732
or visit Amway.com/positive.
40
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