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Nu Skin Q3 2019 Revenue Down 13%

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Nu Skin Enterprises, Inc. (NYSE: NUS) announced third-quarter 2019 revenue of $589.9 million, a 13 percent decline from $675.3 million in 2018.

“We delivered strong profitability, with earnings per share at the high end of our range due to our focus on operational efficiencies,” said Ritch Wood, chief executive officer. “Revenue came in slightly below expectation, primarily due to the challenging regulatory environment in Mainland China, where meeting restrictions continued throughout the quarter. Despite this, our sequential sales leader trends stabilized both in China and globally, and recent product introductions and business incentives drove year-over-year increases in customer acquisition. Our manufacturing segment also continued to perform well, with revenue growing 18 percent this quarter.”

Regionally, revenue was (in thousands):

  • Mainland China: $173,974, a 23% decline from $226,645 in 2018
  • Americas/Pacific : $83,635, an 11% decrease from $93,580 in 2018
  • South Korea: $79,435, a 12% decrease from $89,963 in 2018
  • Southeast Asia: $78,963, a 9% decrease from $86,307 in 2018
  • Japan: $67,197, a 6% increase from  $63,649 in 2018
  • Hong Kong/Taiwan: $40,449, a 10% decrease from $44,949 in 2018
  • EMEA: $35,742, a 17% decrease from $42,819 in 2018

To read the full Nu Skin Q3 2019 financial report, click here.

DSA Issues Memo on FTC vs. Neora

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The Direct Selling Association’s (DSA) Legal & Government Relations Team yesterday issued a memorandum related to last Friday’s Federal Trade Commission (FTC) action against member company Neora.

The memorandum, sent to the DSA Board and executive committees, notes three areas in which FTC criteria or guidance used in the complaint have not been used in previous cases. The introduction of these new areas—unauthorized sales, high attrition rates and independent contractor status—highlights the continuing need for clarity on the FTC’s interpretation of the law and vision of best practices for the direct selling channel.

FTC Lawsuit

On November 1, the FTC filed a lawsuit against Neora (formerly known as Nerium), its owner Jeffrey Olson, Signum Biosciences and Signum Nutralogix.

The FTC alleges that Neora and Olson have been operating a pyramid scheme using the Koscot test in which participants pay money to the company in return for which they receive (1) the right to sell products, and (2) in return for recruiting other participants into the program, the right to receive rewards which are unrelated to the sale of products to ultimate users.

The allegations and complaint of unlawful compensation structures are similar to the remarks made by Bureau of Consumer Protection Director Andrew Smith at last month’s DSA Legal & Regulatory Seminar.

Prioritization of Recruitment

The FTC claims the primary basis of earning compensation as a Neora salesperson is through recruitment rather than product sales.

The complaint alleges that minimal income can be made through product sales because there is minimal profit between the prices consumers pay the Brand Partner (BP) and the amount the BP pays to purchase products from the company. The FTC also claims that according to the company’s data, less than 1 percent of rewards are paid on the sales of products to consumers and the retail opportunity is difficult because consumers can purchase products at lower prices on Amazon or other platforms.

DSA has discussed the issue of unauthorized sales as a significant issue for direct selling companies over the past five years. It believes this is the first time the FTC has mentioned unauthorized sales in a complaint.

High Attrition Rates

The complaint alleges that according to the company’s data, Neora had a 92 percent attrition rate between 2012 and 2017. The FTC says that high attrition motivates recruits to make significant upfront purchases before the recruits leave the company or stop making purchases. The complaint states that purchases by BPs in their first three months regularly comprise one-third to one-half of all purchasing volume.

The complaint sets forth that half of BPs discontinue buying products within six months, and only one third buy products after one year. It is the FTC’s view that high attrition means that building and maintaining a downline of any desired size requires a perpetual focus on recruiting and replenishing.

It is DSA’s understanding that the FTC’s use of high attrition rates has not previously been used as evidence for an unlawful compensation structure in recent actions.

Income Representations and Fees

The complaint alleges misrepresentations about substantial income opportunities and the ability to achieve financial independence with Neora. Specifically, these include company brochures and social media posts from Mr. Olson regarding those who have attained millionaire status. The complaint also contains averments regarding the disconnect between the purported opportunity to earn income and the company’s data, which showed that less than 10 percent of BPs made more than they paid in fees and product purchases.

Additionally, since the BPs are not classified as employees, but as independent contractors, they must undertake additional expenses to remit self-employment taxes for health insurance and typical “job-related benefits.”

DSA believes this is the first time the FTC has included the obligations or independent contractor status in a lawsuit. 

DSA Potential Engagement

DSA will host a webinar on November 12, updating membership on current conversations with the FTC. The DSA Executive Committee and Board of Directors will be discussing a public statement and potential engagement in the lawsuit including, but not limited to, filing an amicus brief.

DSA’s Code of Ethics Administrator has been alerted to this action and will review the FTC’s allegations regarding Neora.

To read the full DSA memorandum, click here.

Thirty-One Gifts Teams Up Again with World Vision for Giving Tuesday

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On Giving Tuesday, Thirty-One Gifts and World Vision are once again joining forces to help even more people in need.

Any gift given to World Vision on Giving Tuesday, December 3, will be matched with a donation of product up to $1 million from Thirty-One Gifts—helping communities around the world with items to support new moms, deliver medical supplies, and keep girls in school.

“We cannot address the root causes of poverty and suffering without the generous support of our corporate partners, like Thirty-One Gifts,” said Samantha King, manager of corporate partnerships for World Vision U.S. “From volunteering, product donation, financial gifts and more, their partnership enables us to provide essential supplies to under-resourced communities in the U.S. and around the world. We are grateful for the many years Thirty-One Gifts has partnered with us to help transform the lives of children, women and their families.”

“We’re honored to come alongside World Vision to help the most vulnerable communities around the world,” said Wendy Bradshaw, executive director of Community Affairs at Thirty-One Gifts. “It is so powerful to see the impact our products can have in spreading hope, whether it’s hygiene Hope Kits for survivors of a natural disaster or victims of domestic violence, diaper bags to help new moms needing support or sturdy bags to help encourage girls to stay in school. It’s our pleasure to help more individuals and families in need everywhere through our donation match on Giving Tuesday.”

Last year, thanks to Thirty-One Gift’s donations, communities in Africa, the Middle East and Latin America received towels for medical centers, thermals to help girls carry their books through tough terrain, and sturdy bags for traveling medical workers.

This is the sixth year the two organizations have partnered together on Giving Tuesday to spread generosity during the holiday season. Since this partnership first formed in 2014, Thirty-One Gifts has donated more than $42 million in products and cash to the humanitarian organization.

Giving Tuesday, the Tuesday after Thanksgiving, is a day devoted to charitable giving, volunteering and advocacy, in response to the consumer focus of Black Friday and Cyber Monday. All Thirty-One Gifts donations from Giving Tuesday this year will be used internationally to support babies, women and their families.

Isagenix Making Positive Social Impact

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Isagenix International’s inaugural social impact report shows how the global health and wellness company is making a positive impact on communities, employees and the planet.

The 2018-2019 Isagenix Social Impact Report notes the company’s efforts in nourishing children around the world to packaging products more sustainably. Highlights include:

  • In 2018, Isagenix gave $7.2 million in product and monetary donations to nonprofit organizations that align with the company’s vision to better the world.
  • In August 2018, Isagenix launched the ISA Foundation, a 501(c)(3) nonprofit organization that focuses on healthy nutrition and support for underserved children, wellness education for all, and aid for those affected by natural disasters. So far, the foundation has awarded more than $1.8 million in funding to 51 U.S.-based nonprofits, provided more than 1 million meals, and helped more than 50,000 people.
  • Each year, Isagenix offers the employee IsaBody Challenge®, a no-cost nutrition, diet, and exercise coaching program with $24,000 in cash prizes. In 2019, 202 employees completed the Challenge, losing a combined total of 1,125 pounds.
  • On Earth Day 2018, Isagenix began transitioning IsaLean® Shake and IsaPro® canisters — of which it has produced more than 6 million to date — to 100% post-consumer recycled (PCR) plastic. The company’s goal is to convert all packaging components to be made with recyclable, reusable, compostable, or recycled materials by 2028.

“At Isagenix, we’re committed to improving health, whether it’s the health of our employees, customers, independent distributors or the health of the planet and people in need around the world,” said Isagenix Chief Executive Officer Travis Ogden. “We’re grateful and honored that our company’s success has put us in a position where we can make such a significant difference not only today but for years to come.”

The company’s largest volunteer initiative, Global Give Back Day, promotes helping local communities and the environment through volunteer and donation activities around the world. This year’s activities ranged from packing food boxes and stuffing backpacks to sprucing up a local youth center and serving meals to families in need.

In Arizona, Global Give Back Day efforts included 57 Isagenix customers, employees, and employees’ family members participating in the Arizona Meal Pack for 9/11 Day on Sept. 11. During their evening shift, these volunteers helped pack 67,400 meals for food-insecure individuals, contributing to the more than 3 million meals packed at events in eight cities across the United States—500,000 more meals than expected.

Community activities in September also included participating in the Direct Selling Association Day on Capitol Hill on Sept. 18. Isagenix Chief Legal Officer Justin Powell and several Isagenix independent distributors visited 12 congressional offices in Washington, D.C., joining forces with the association and other network marketing companies to communicate the importance of protecting independent workers and how direct selling offers a pathway to entrepreneurship for millions of Americans. Isagenix representatives discussed the company’s social impact and shared personal success stories about direct selling.

Isagenix executives look forward to the company continuing to make a difference through various initiatives, including tying IsaKids® Super Smoothie sales to giving back. For each bag sold, Isagenix is providing one meal to a child in need through the ISA Foundation. So far, more than 37,000 meals have been donated, including 7,192 meals from a special “buy one, donate two” promotion during the product’s launch in August. The company is also donating 5 percent of profits from its newest product, BĒA™ Sparkling Energy Drink, to the foundation. The ready-to-drink beverage launched in October.

Youngevity Completes Acquisition of BeneYOU

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Youngevity International, Inc. announced that is has closed the acquisition of BeneYOU, LLC’s assets with an effective date of November 1, 2019.

“We are proud to welcome the customers and distributors of Jamberry, Avisae and M.Global into our organization and we look forward to showcasing all of their exciting products to Youngevity distributors and customers around the world,” said Youngevity Founder and CEO Steve Wallach. “We anticipate the strong potential for cross marketing and promotional opportunities as we expose our product portfolio to the over 3 million customers and distributors within the database of these exciting brands.”

BeneYOU’s flagship brand Jamberry has an extensive line of nail products with a core competency in social selling. Avisae focuses on the gut health and M.Global delivers hydration products.

“We’ve built BeneYOU on principles of integrity, hard work and progressive thinking,” said BeneYOU CEO Ryan Anderson. “The cultures of Youngevity and BeneYOU are completely aligned and I expect to watch our customers and associates thrive as they benefit from the significant resources of Youngevity along with their strong executive team.”

“In terms of both topline revenue and the size of the database, this is our largest business acquisition to date,” said Dave Briskie, president and CFO of Youngevity. “I have had the pleasure of meeting several of the key sales force leaders within BeneYOU, and I believe that we are a better company with this talent within our sales team. At the end of Q2 we had stated that to drive growth in the direct selling segment we intended to ramp up our acquisition model. This business combination places us firmly on that path.”

FTC Sues Neora, Alleging it Operates as an Illegal Pyramid Scheme

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Just hours after Neora posted their press release about suing the FTC for improperly changing direct selling laws, The FTC posted its own press release stating alleging that Neora, formerly Nerium International, and its Chief Executive Officer, Jeffrey Olson, operates an illegal pyramid scheme that pushes distributors or brand partners to focus on recruiting new distributors, rather than retail sales to customers. According to the FTC’s complaint, one of Neora’s top earners advised in a 2015 promotional video that there are three things brand partners should do to “explode” their business: “Number one: Recruit. Number two: Recruit. Number three: Recruit.”

According to the FTC, Neora and its CEO also have misrepresented that brand partners can earn substantial income and achieve financial independence. The complaint alleges that Neora promises “lifestyle-changing income” to its recruits, and that social media posts by Neora and its brand partners feature brand partners who were supposedly able to retire from their jobs or earn a six-figure income. In reality, the FTC alleges, Neora’s compensation plan is structured so that, at any particular time, the majority of brand partners will not make substantial income and will instead lose money.

The FTC complaint also alleges that in an effort to capitalize on growing awareness of concussion-related CTE among football players, Neora recruited former professional football players such as Sidney Rice, Steve Weatherford, and Cory Redding Jr. to pitch the products to parents and coaches concerned about children’s health.

To read the full press release, click here

Neora Files Suit Challenging FTC’s Improper Attempt to Change Direct Selling Laws

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In a statement released today, Neora, a leading skincare and wellness products direct selling company, states that the Federal Trade Commission (“FTC”) has recently targeted the direct selling industry, trying to change the way direct sales companies can operate without going through the proper legislative process or formal rulemaking. Not only has Neora rejected an offer from the FTC to settle a threatened lawsuit, it has stepped up to file suit challenging the FTC’s ability to retroactively change the law without proper authority from Congress or through formal FTC rulemaking.

Deborah Heisz, Co-CEO of Neora, noted in the release that the FTC’s acts are in violation of efforts to rein in unelected federal bureaucracies and are a threat to the direct selling industry as a whole. “This is precisely the behavior that the President sought to prohibit in his October 9, 2019 Executive Orders, exhibit 1 and exhibit 2, as well as the Department of Justice in its November 16, 2017 Memorandum prohibiting all federal government agencies from utilizing ‘Guidance’ and other ‘off the book’ regulations to change the law,” says Heisz. “Neora has complied with all laws and the FTC’s most recent 2018 business guidance regarding direct sales business models.”

Founder and CEO Jeff Olson also went on the record about why they are taking the action against the FTC.  “Eight years ago, Neora began as a family-owned business seeking to change lives through our products and opportunities. We are the real deal; in the business of making people better, whether it is a hardworking parent or the budding entrepreneur looking to represent the industry’s leading products. Our Brand Partners work hard, and now it is our job to stand for them and protect the businesses they worked so diligently to develop.”

In the release, it states Neora retained renowned Ankura Senior Managing Director, Dr. Walter Vandaele, to conduct a thorough analysis of its data. Dr. Vandaele is a University of Chicago-trained econometrician who previously served as the Assistant Director for Regulatory Evaluation and Economic Advisor at the FTC’s Bureau of Competition. Neora states that this analysis establishes that 77 percent of commissions paid by Neora in the 2012 to 2017 time period (with approximately 82 percent in 2017) are for sales of product to ultimate end users. This greatly exceeds the law’s “primarily” standard, says Neora.

The company gave further evidence of the demand for Neora’s products. In 2016 and 2017, about 60 percent of Neora’s total sales were to non-business participants called “Preferred Customers”; which is considered high for the industry. The FTC has admitted that it has no material issues or concerns with the calculations or methodologies used by Dr. Vandaele.

“The reality is the lawsuit that we filed doesn’t just protect your business; it’s to protect the businesses of the 20 million Americans that are engaged in direct selling.”
– Deb Heisz, Neora Co-CEO

Nevertheless, despite repeated requests, the FTC has refused to provide Neora with its own alleged analysis. Instead, the FTC, according to Neora, is attempting to announce a new retroactive interpretation of how direct selling companies can operate without considering the actual data.

Olson believes no direct sales company is safe under the FTC’s new arbitrary retroactive standards. “We are an American small business and will take this David and Goliath-like issue and fight for the rights of the men and women who deserve a place in our American economy, and will not be bullied into settling for anything less,” says Olson.

Neora Field Leadership

Both Olson and Heisz addressed their field leaders this morning to discuss today’s developments before the announcement was made. Heisz said the suit was filed because first and foremost they wanted to protect their brand partners’ businesses. “In talking with the FTC they wanted to limit commissions in our businesses to only the person making the sale and the person who recruited the person making sale,” says Heisz. “We’re not willing to make that change, and disrupt the businesses that our brand partners have worked so hard to create. The reality is the lawsuit that we filed doesn’t just protect our business, it is to protect the businesses of the 20 million Americans that are engaged in direct selling.”

Founder and CEO Jeff Olson stated that he was ready for the challenge ahead. “We live in a land of laws, and there’s nobody above the law, even an agency within the government.” Olson also reiterated that he and his team have met with members of congress and feels support for their cause will only grow as a result of the action they are taking against the FTC. “We have the industry behind us, and I believe you’re going to see a lot more support for our cause in the next couple of weeks. This is not only about us, it’s for our industry and it’s the right thing to do.”

You can read Neora’s lawsuit against the FTC here

This story will be updated.

Dr. Todd Miller Joins Modere Scientific Advisory Board

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Modere recently welcomed exercise and nutrition sciences expert Dr. Todd Miller to its Scientific Advisory Board.

Dr. Miller is an associate professor in the Department of Exercise and Nutrition Sciences at George Washington University (GWU) in Washington D.C., where his research has led him to develop conditioning and nutritional interventions that prevent and manage obesity by focusing on healthy body composition rather than weight alone.

“Muscle is the engine that burns calories, so for best results when working towards a lean, sculpted body, we want to focus specifically on preserving, or even increasing muscle mass while simultaneously losing fat,” explained Dr. Miller. “The end result is not just a lighter body weight but improved body composition, a healthy proportion of muscle, fast metabolism and a greater chance to achieve long-term, successful weight management. Modere approaches weight management with the same mentality, so I am excited to be aligned with them as part of their Scientific Advisory Board.”

Dr. Miller developed GWU’s master’s degree program in strength and conditioning and is director of the Weight Management and Human Performance Lab at GWU’s Virginia Science and Technology Center in Ashburn, Virginia. He holds degrees in Exercise Physiology from Penn State and Texas A&M and has won George Washington University’s Excellence in Teaching Award five times.

“Targeting optimal body composition for successful weight management is a key element of the healthy, clean lifestyle that Modere advocates,” said Asma Ishaq, CEO of Modere. “Dr. Miller’s extensive knowledge in that area will be valuable as we continue to develop cutting-edge products to support our consumers in their quest for better health.”

LuLaRoe Cutting 167 Jobs, Closing Corona Warehouse

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The Press-Enterprise, which serves the Inland Empire in Southern California, is reporting that LuLaRoe will permanently lay off 167 workers at its Corona, California distribution center.

The layoffs were listed as a permanent closure of the facility in a notification received Wednesday, Oct. 23, by the state’s Employment Development Department. The state of California requires employers to report pending layoffs at least 60 days in advance or else they must pay the workers for that period.

According to the report, all the positions described in the notification were warehouse jobs. LuLaRoe’s distribution center is at 1375 Sampson Ave.; its corporate headquarters is on Temescal Canyon Road.

Tonya Llamas, Vice President, Corporate Communications at LuLaRoe gave DSN the following statement:

On Monday, October 21st and Tuesday, October 22nd, we announced the closing of one of our distribution centers, in Corona, CA—where currently 167 employees are assigned. Understanding the significant impact this decision would have in the lives of so many families and the local community—this decision was not made lightly; and was a sole effort to meet the immediate and long term business and operational demands needed to continue pioneering the social retail industry.
We value every single team member here at LuLaRoe and have ensured all 167 employees connect with staffing agencies. We also plan to provide recommendation letters and resume assistance will be available. Our hope is for their bright future, knowing they will continue to succeed and shine on the road ahead.
Our goal as a company is to create even more cohesion, while streamlining day-to-day operations—in order to continue serving the lives of the LuLaRoe community.
While we will be moving shipping operations to our East Coast distribution center in South Carolina, LuLaRoe will remain headquartered in Corona, CA, where we serve a network of Independent Fashion Retailers all across the United States.

 

 

Swinging for the Fences

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VALENTUS
Founded: 2014
Headquarters: Sioux Falls, SD
Top Executives: Dave Jordan, Founder and CEO
Products: Health and Wellness Beverages

When Dave Jordan couldn’t find what he was looking for in direct sales, he started his own company, applying the lessons he’d learned in sports and small business to create a $50 million success story.

In an industry based on level playing fields, big dreams and the achievement of the seemingly impossible, there may be no better representative than Dave Jordan. His path to the helm of a $50 million direct sales company began rather unconventionally. The tenth of 14 children, Jordan dropped out of school after the 8th grade. “I was frustrated all the time. I was dyslexic, and I couldn’t read or write. I never cared about school, and I didn’t like people telling me what to do. I wanted to be my own boss,” he says. “All I’d ever do was think about how I was going to build my own company and become a millionaire.”

He also had a love of sports, especially baseball and boxing, and after leaving school he started his own small business in sports memorabilia. With a lot of determination and a strong entrepreneurial spirit, Jordan turned that small business into a large sports memorabilia company with multiple store locations.

After Three Strikes, A New Ball Game

In 1994, a customer walked into one of Jordan’s stores and told him about a network marketing opportunity. Jordan signed up as a distributor and would remain in the industry, starting three direct selling businesses over the next several years. He became disillusioned with some of the business practices he witnessed during that period, however—specifically with regard to how distributors were treated. In 2014, Jordan decided to start his own health and wellness direct sales company, Valentus, which means “prevail” in Latin. His objective was simple: “We wanted to be the gold standard of integrity.”

The word “prevail” is significant for several reasons related not just to Valentus, but to Jordan’s background. Despite a few negative experiences in his earlier years in direct sales, Jordan could see the potential of the industry. “I learned from small business how to treat people,” but with direct selling, “it was the leverage that intrigued me,” he said. “I could spend 90 hours a week in my sports business, or I could build a direct sales team under me that literally worked 90 hours in an hour.”

A Strong Culture, Right Off The Bat

Putting the wisdom of his hard-learned experiences to work, Jordan set out to create a culture that put distributors at the forefront of every decision. His core philosophy: “Treat others how I always wanted to be treated. We’re a company built by distributors for distributors. They can come in like me—a normal, average guy with an 8th grade education—and have the same opportunity as anyone else. I enrolled many of the top leaders in the company personally, and I’ve got the satisfaction of knowing I’ve had a helping hand in the supersonic growth the company has had.” Jordan’s wife, Joyce, also has played a role in Valentus’ success story, handling backend operational activities ranging from events coordination to administrative duties.

Headed To The Majors

Valentus closed out 2015 with $3 million in revenue, followed by $32 million in 2016 and $50 million in 2017 and 2018 combined. Jordan has every confidence that 2019 will be another record year, and 2020 could surpass the company’s first five years combined. Based in Sioux Falls, South Dakota, 30 employees support approximately 80,000 Valentus distributors worldwide. The company ships to more than 90 countries, and the U.S. is its largest market. “The last 8 months have been absolutely incredible, “ says Jordan. “Every month is a record setting month breaking the record of the prior month. We are on track to a projected $100mm this year.”

A trio of products—Prevail Trim, Prevail Energy, and Immune Boost—comprised the company’s initial offering. All three were based on the philosophy that simplicity is key to a consumer’s ability to make permanent changes in health. “Our motto is ‘Just add water,’” Jordan says. A series of additional product launches soon followed, including SlimROAST® Coffee, Prevail KETO Creamer, Prevail 24/7 Carb Burner, and other products designed to detoxify, cleanse, and support the body’s nutritional needs. The company’s product marketing focuses largely on the integrity of its ingredients and formulas. Jordan speaks about the efficacy of his products from personal experience; he lost 80 pounds on the regimen.

“I always tell people that my sports memorabilia company is my retirement, but Valentus is my legacy.” —Dave Jordan, Founder and CEO

Jordan credits the simplicity and duplicatable nature of the products for his distributors’ success. The 6-Day Experience has been a particularly effective sales strategy for distributors: They introduce five one-serving packets of SlimROAST coffee to a customer and, after the customers experience results, show them how to sell it themselves through a straightforward, duplicatable system.

“I think the best thing we’ve done as a company is that our distributors know they have a home here,” Jordan says. “They know we’re a family and we care about every single one of them. It’s a home where they can have refuge.” If he could have changed anything about the last five years, “I would have saved three years and gotten around the mistakes in the beginning, but you have to go through that adversity to make it to the top.” Looking forward to 2020 and beyond, “I’m hoping to improve our product line, our shipping times, our corporate office, our corporate support … everything. We’re improving every day. Are we perfect? No. Are we going to be? Yes, that’s my intention. People are going to know who we are in the next two to three years.”

The Future Lineup

The last 8 months have seen explosive growth for Valentus with projected sales tracking near $100mm. “We are growing like a weed and staging the growth is part of the deal. We are moving into larger facilities and hiring 3 new employees for every million dollars in business growth.” states Jordan. “It is a busy and strategic time for us.”

An active philanthropic presence is among the company’s plans for the near future. Valentus currently is working on the development of a philanthropic foundation, and while it’s too early to divulge many details, Jordan says it will be centered on children’s causes.

Jordan is also currently writing a book about his life and the lessons he’s learned along the way. Readers “will understand how someone with an 8th grade education who couldn’t read became a self-made millionaire on my own. I never inherited anything. I just basically went after life.

“I always tell people that my sports memorabilia company is my retirement, but Valentus is my legacy,” he continues. “My dad’s work ethic is what I inherited … he worked two jobs most of the time to raise us as kids. He was a police officer, worked extra jobs at the gas station, this and that. He just worked hard, and he enjoyed life.” It’s clear that Jordan’s inspiration comes not only from his dad but from the industry he proudly represents today. The secret behind his company’s exponential growth comes down to a humble mandate: “Caring about people and working hard. You can’t sell anyone unless you love everyone.”

A Customized Approach

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IDLIFE
Founded: 2013
Headquarters: Frisco, Texas
Top Executives: Logan Stout, CEO, Laura Brandt, President, and Mark Bennet, COO & General Counsel
Products: Customized health and wellness products

IDLife’s focus on the individual extends far beyond personalized nutrition. It applies to the company’s focus on impeccable customer service, a thriving internal culture and strong partnership with the sales team in the field.

An industry veteran before AGE 35, IDLife CEO Logan Stout had already seen tremendous success in the field at not one, but two different network marketing companies when inspiration came calling. Retired from the field, Stout was spending his day coaching youth baseball, playing golf and promoting his first book, Stout Advice. But something was missing. “I missed the interaction with people,” he shares. “I missed getting to help people.”

Following an interview on Fox Business, Stout was approached with an opportunity to help bring a new vitamin product to market. He was familiar with the health and wellness space from one of his past direct sales careers, but this product was different. The team behind it had spent seventeen years developing a customized supplement program designed to deliver personalized nutrition to every customer. “I was blown away by it,” he recounts. “It was raw, unique, different—I fell in love with the product.”

Stout and his team launched IDLife in 2013 and have had great success along the way, expecting a 100% growth rate for 2019.

“We’re the world’s only truly personalized vitamin platform. Other companies may have a questionnaire, but there’s no science or engine to it.” —Logan Stout, CEO

Nutrition That’s Personal

Through a comprehensive health questionnaire called IDAssessment, the company collects information regarding diet, lifestyle, body type, physical condition, health issues and medications. Those answers are then cross-correlated with an amassed database of thousands of third-party peer-reviewed studies that are updated regularly, and then they recommend a personalized supplement program—providing the nutrients the customer needs while excluding any that may be harmful based on that customer’s assessment. The company says these recommendations are the result of thousands of algorithms yielding more than 2.7 million possibilities, with each recommendation accompanied by a “why ?” button that explains to the consumer why each supplement is being recommended to them.

IDLIFEIDLife’s personalized vitamins are known as IDNutrition and include both an AM packet and PM packet with the customer’s name printed right on the package.

This customized approach allows IDLife to stand alone in a crowded health and wellness space. “We’re the world’s only truly personalized vitamin platform,” says Stout. “Other companies may have a questionnaire, but there’s no science or engine to it.”

Today, these customized recommendations can be even more personalized with the addition of IDLife’s Nutrition and Fitness DNA Test. Through a DNA collection kit, a customer can submit a sample and then receive a genetics report that serves as an “owner’s manual” to learn more about the diet and nutrition choices best suited to his or her genetic makeup.

“Anyone who’s taking vitamins that aren’t personalized doesn’t even know what they’re taking.” —Logan Stout, CEO

“Anyone who’s taking vitamins that aren’t personalized doesn’t even know what they’re taking,” says Stout.

Beyond its personalized vitamins and DNA test, IDLife has expanded its product line to include protein shakes, workout recovery drinks, weight management products, children’s vitamins, sleep enhancers, skin care and hydration, energy and men’s vitality-focused products—all free of soy, gluten and GMOs.

“We want products that work but are good for people long term,” says Stout. “The body rejects artificial ingredients, and they cause long term harm.”

Honor The Individual

IDLife’s focus on the individual extends far beyond personalized nutrition. It applies to the company’s focus on impeccable customer service, a thriving internal culture and strong partnership with the sales team in the field.

IDLIFE

President Laura Brandt explains further, “At IDLife we honor the individual. It’s important to understand what IDLife stands for: Individually Designed Life.”

For customers, this means not only customized vitamins but also personalized service provided by a team of “customer advocates” that handle all customer service issues. “It’s our job to put ourselves in their shoes—for both our customers and our associates,” says Brandt. “If something is wrong, we take the customer’s word for it instantly, no questions asked.”

In the home office, Individually Designed Life looks like flexible schedules and attire, as well as a genuine appreciation for each employee. “We honor who they are and what they bring to the table,” continues Brandt. “We don’t put boxes around our employees. We allow them to grow in the areas they’re passionate about. They drive their direction and take ownership of their next role.”

Honoring the individual especially applies to IDLife’s field team, as both Stout and Brandt have decades of field experience themselves and understand how powerful a valued field team can be. “We’re committed to doing right by our associates and putting them first in every decision,” she says. “It’s easy to create an ‘Us vs. Them’ environment when you’re not in the field, unless the foundation of your culture is people first, inside and out.”

“Every great idea we’ve had, the field gave it to us,” adds Stout. “I was in the field, so I know what it’s like to not be heard. I tell our team that I’m not in the flow anymore, so come tell us what you need. They tell us what they want, and we roll with it.”

Someone can join IDLife for free, but the most common is through the two associate kits available, priced at $199 or $299. Both kits include a Success Toolkit that includes everything a new associate needs to get started. Initial and ongoing training is available through the associate back office and via virtual training resources on Zoom and Facebook. Additionally, the IDLife team is in the process of developing a new mobile application that will allow associates to access training and manage their businesses all in one system.

“As an industry, we have to make our technology better and make it easier to buy from us… We have to do the same thing, to find a way to offer great products that people want and meet consumers where they are today.” —Laura Brandt, President

“Our goal is to make it easier for associates,” says Brandt. “This new application will be available later in the fourth quarter and will include prefilled emails, text messages and marketing materials to make it easier for associates to share.”

High Tech + Low Tech

Stout and his team are proud of the personalized approach to health and wellness they’ve created with IDLife, but see their technology as an asset, not a core value. “Technology brings our products to life and enhances the experience for our customers,” he says. “But the fundamentals of getting a customer aren’t that different. It’s those associates who are willing to pick up the phone and have personal contact with people—that’s how you start relationships and get customers.”

Pairing a tried and true approach to leadership, team building and customer service with evolving technology seem to be IDLife’s secret sauce. That combination is timely and critical according to Brandt.

“As an industry, we have to make our technology better and make it easier to buy from us,” she says. “We love this industry and respect the companies out there doing it right. We have to do the same thing, to find a way to offer great products that people want and meet consumers where they are today.”

A Discussion of the FTC Announcement

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As President of DSA, it is my job to evaluate and report on cases like the recent Federal Trade Commission announcement regarding AdvoCare dispassionately and to analyze the impact on the direct selling channel and assist our members in charting a course forward. Nonetheless, it is difficult for me to believe the investigators got all of the facts right in this case.

Some of the executives involved have been strong and public proponents of the decades-long efforts of the Association to ensure that our customers and salespeople are treated ethically and fairly. However, there were significant allegations of impropriety made by the FTC. While the company agreed to effectively settle the matter and pay a significant monetary amount in settlement, it did not admit to the FTC allegations.

I remain concerned about possible inconsistent application of the law by the government, confusing public statements, or errant prosecutions based on inaccurate allegations, faulty economic analyses, or hidden hostility to our model based on old biases or lack of knowledge. These are matters we simply cannot accept. To be sure, since AdvoCare’s announcement earlier this summer, there has been much speculation about the FTC’s position vis-a-vis multilevel companies. In response, DSA executives have met repeatedly with FTC officials to express our concerns about possible misinterpretation and misapplication of the law, as well as about potential government and investigator overreach in pyramid and related actions.

“Notwithstanding my ongoing concerns about some of the FTC’s positions related to anti-pyramid enforcement, we share the FTC’s stated goal of protecting consumers and salespeople from shady operators that pretend to be legitimate direct selling companies.”

In all of DSA’s private and public conversations with FTC representatives, at the October 2nd AdvoCare press conference, and in comments by FTC Consumer Protection Director Andrew Smith at DSA’s Legal and Regulatory Conference (after the FTC press conference), the FTC has acknowledged that multilevel companies can be and frequently are operated legitimately. And in our private meetings, they have unequivocally rejected the idea that there is any coordinated campaign to target or eliminate direct selling or multilevel companies, or that they have retreated from their earlier guidance.

The key issues identified by the FTC in the AdvoCare matter are ones about which DSA has issued repeated guidance and information, and are matters addressed with specificity in DSA’s own Code of Ethics:

  • Compensation must be based on product sales and not on recruitment;
  • Required inventory purchases are suspect and evidence of recruitment-based compensation, rather than compensation based on use by real consumers, and are indicative of a pyramid scheme; and,
  • Earnings claims touting large potential earnings are inconsistent with relatively low average distributor earnings, and thus are misrepresentative.

Notwithstanding my ongoing concerns about some of the FTC’s positions related to anti-pyramid enforcement, we share the FTC’s stated goal of protecting consumers and salespeople from shady operators that pretend to be legitimate direct selling companies. We are also committed to addressing real and perceived problems even among otherwise legitimate companies. That’s why we followed the counsel of the FTC in establishing the Direct Selling Self-Regulatory Council (DSSRC), a program that Mr. Smith himself recently publicly lauded.

I make this pledge to all DSA members, our salesforces, member of the public, and all interested observers, including policymakers and regulators, as DSA works to protect salespeople and customers and ensure there is no inappropriate government regulation or overreach regarding legitimate direct selling:

  • We will vigorously defend the direct selling model;
  • We will work with government officials to improve their understanding of the direct selling business model so that their actions support and do not hinder the effective functioning of legitimate direct selling companies;
  • We will vigorously establish, promote, and enforce standards of marketplace behavior that protect our customers and salespeople;
  • We will support enforcement of the law against true pyramid schemes;
  • We will work to address real and perceived problems among otherwise legitimate direct selling companies;
  • We will hold DSA member companies accountable for inappropriate marketplace behavior;
  • We will support the enactment of strong consumer protection laws; and,
  • DSA will continue to monitor and inform DSA membership about these and other upcoming regulatory actions.

In the meantime, I trust the FTC’s announcement will serve as a clear signal to direct selling companies about the importance of adhering to and enforcing the standards set out in the DSA Code of Ethics, their own company policies, and of course, the law.