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DSA Brings Together Government Officials, Industry Leaders to Discuss Vital Issues for Direct Selling

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DSA Brings Together Government Officials, Industry Leaders to Discuss Vital Issues for Direct Selling

On October 7–8, the Direct Selling Association (DSA) hosted its annual Legal and Regulatory Seminar in Washington, D.C.

The seminar brought together industry leaders to discuss legal and regulatory issues impacting the direct selling business and how companies and the Association are best positioned to respond.

The Association builds relationships with government officials and agencies who are at the forefront of these important issues and is always pleased to host them to share their opinions and updates directly.

Participants heard from Andrew Smith, director of the Bureau of Consumer Protection at the Federal Trade Commission (FTC). Mr. Smith provided an essential reaffirmation of the FTC’s support of direct selling.

“Whether the FTC has changed its position on multilevel marketing and the answer is an emphatic no: that multilevel marketing continues to be legal, that there’s nothing inherently unlawful about the direct selling model,” Smith said. “I personally think that multilevel marketing can be superior in many ways to traditional retailing in that it depends on a direct relationship between sellers and consumers and allows companies to reach consumers that they wouldn’t necessarily otherwise reach and it allows for sales to consumers and communities that might be underserved by traditional retail.”

A wide range of other government officials from departments and agencies with jurisdiction over issues important to direct selling addressed the more than 130 attendees. Sharon Lindan Mayl, senior advisor for Policy, Office of Food Policy from the Food and Drug Administration, presented the current legal status and the agency’s path forward on use and consumption of CBD; Nazak Nikahtar, assistant secretary for Industry and Analysis, United States Department of Commerce, International Trade Administration, updated attendees on trade agreements and the administration’s trade policy; and Alison Kilmartin, deputy assistant secretary for Policy, United States Department of Labor, listed the impressive accomplishments of the department on independent work and upcoming actions.

The seminar also had a discussion of independent work from founding members of the Coalition for Workforce Innovation; legal thought leaders discussed recent FTC enforcement actions; direct selling-focused attorneys discussed pressing legal issues; independent work professionals discussed updates on independent contractor status; and the Direct Selling Self-Regulatory Council (DSSRC) examined the first year of the program and next steps.  In addition to the content-rich program, industry general counsels and company compliance leads were able to participate in roundtable discussions discussing what’s keeping them up at night and how they are addressing these issues.

Joseph N. Mariano, president and chief executive officer for the DSA, commented on the state of direct selling and shared his thoughts for the industry going forward.

“What we are experiencing today are indeed interesting times, and it is clear that legal and regulatory matters are among the most important considerations that direct selling must consider as the industry envisions its course into the future,” Mariano said.

DSA will continue engaging with government officials and speaking with industry leaders throughout the year to create a clear and prosperous environment for direct selling.

Texans’ QB Deshaun Watson to be Zurvita’s National Spokesperson

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Zurvita, a premier health and wellness company, recently announced that Houston Texans quarterback Deshaun Watson will become the company’s national spokesperson.

“It’s a blessing; it’s great,” said Watson. “Everything that they believe in, everything they stand for, is the definition of how I was raised. I’m glad to be a part of the family.” Watson said.

Watson led the Clemson Tigers to back-to-back appearances in the College Football Playoff National Championship, dethroning the then-undefeated Alabama Crimson Tide in 2016 while also earning Offensive MVP honors.

In the 2017 NFL Draft, Watson was selected as the 12th overall pick. He became the Texans’ primary signal caller midway through the first game of the season, on pace to break rookie records before tearing his ACL. Returning from injury the following season, he led the Texans to an 11-5 record, winning the AFC South, while also earning his first trip to the Pro Bowl.

Watson will represent Zurvita and its new Performance Line, which consists of three specialty nutritional products—FUE1, H2O and R3PAIR—designed to enhance all “bodies in motion.” The Performance Line will be available this fall.

Shaklee Corporation Eager to Support Athletes During Games

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Shaklee Corporation, a long-standing sponsor of Olympic athletes, applauded Wednesday’s statement by the U.S. Olympic and Paralympic Committee (USOPC) granting athletes more freedom to advertise and benefit from their performances during the Games.

Until now, members of the U.S. team could not market their competition results during a “blackout period” from the start through the end of the Games. International Olympic Committee (IOC) Rule 40.3 prohibited such activity to bolster the Games’ official sponsors, much to the athletes’ chagrin and loss of revenue.

The new verbiage of IOC Rule 40.3 reads, in part, “Competitors … who participate in the Olympic Games may allow their person, name, picture or sports performances to be used for advertising purposes during the Olympic Games … .”

“U.S. athletes are thrilled with this long overdue policy change,” said Eli Bremer, spokesperson for the Shaklee Pure Performance Team and member of the USOPC Athlete Advisory Council (AAC). “Athletes can now work with sponsors to benefit from the performances that make the Games so universally appealing … and profitable. The AAC helped shape this policy to support U.S. athletes, and it will have a tremendously positive impact on these athletes and their sponsors.”

The Shaklee Pure Performance Team consists of 90+ athletes from more than 25 sports.

Julie Garlikov, Shaklee’s chief marketing officer, sees the change as a win-win-win for the athletes, the sponsors and the Games. “Shaklee has supported hundreds of inspirational athletes since 1980, and so many of them need the financial and marketing boost that this new policy allows. We expect to sponsor 50 or more athletes in Tokyo, many of whom are Shaklee business owners, and all of whom deserve this in-the-moment spotlight that could be the highlight of their lives. The worldwide audience surely understands and supports these heroes in this well-deserved change.”

Bremer, who competed in the Modern Pentathlon in Beijing in 2008, foresees a more personal connection between the athletes and the public. “We hear complaints about over-commercialization of the Games, but in an ironic way, this new policy will allow athletes and their sponsors to celebrate the victories with their faithful fan base in a way that will help the athletes before, after, and now during their shining moments.,” he said.

Reading the AdvoCare FTC Ruling Tea Leaves

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As was announced on October 2, AdvoCare and its former chief executive officer agreed to pay $150 million and be banned from the multi-level marketing business to resolve Federal Trade Commission charges that the company operated an illegal pyramid scheme that deceived consumers into believing they could earn significant income as “distributors” of its health and wellness products.

Two top promoters also settled charges that they misled consumers about their income potential, agreeing to a multi-level marketing ban and a judgment of $4 million that will be suspended when they surrender substantial assets.

What is the significance of the FTC’s ruling mean to our channel going forward?

Direct Selling Companies Have Been Put on Notice

As executives, you have a responsibility to all of your stakeholders, owners, employees distributors, and customers to revisit your compensation plan to make sure it is encouraging the right behaviors and not causing harm to the consumer.

As executives, you have a responsibility to all of your stakeholders, owners, employees distributors, and customers to revisit your compensation plan to make sure it is encouraging the right behaviors and not causing harm to the consumer.

This means looking at the purchase requirements for paying out bonuses, maintaining certain ranks or commissions, along with any sponsoring fees, even hidden fees. For example, your representative signs up a person for $500 product pack, but you they are not getting paid until they get three customers. This is just a way of justifying paying someone a recruiting fee.

For years, the FTC has made their dislike of volume requirements known. Former FTC Commissioner Edith Ramirez in her keynote remarks at the DSA Business & Policy Conference in September of 2016 said the following:

Any requirements or incentives that participants purchase product for reasons other than satisfying genuine consumer demand – such as to join the business opportunity, maintain or advance their status, or qualify for compensation payments – are problematic.

If your company is skirting any number of these compensation plan requirements, be aware because you have just been put on notice. This behavior will not fly with the FTC going forward.

Yes, you can take the risk and fly under the radar for the next five years, but is it worth losing your company over?

The Ball Is in Our Channel’s Court

If you are a multi-national company, and a majority of your revenue is coming from greater Asia (which is nearly all multi-national companies) it might be worth the time to start having discussions of having two compensation plans: one domestic and one international for those countries in greater Asia—Philippines, Taiwan, Hong Kong—who are all independently regulated.

The sins of the past are coming back to bite everyone.

Given the FTC’s actions against AdvoCare, we wouldn’t be surprised if a few multi-national companies follow AdvoCare and Perfectly Posh’s lead by dropping the multi-level model and the volume and purchasing requirements that go along with it and announce they are going to a multi-tier affiliate or single level plan in the United States. They may feel this is a safer hedge to holding on to their billion-dollar businesses outside the United States. For companies whose domestic business represents 75 percent or more of their overall revenue won’t have the same luxury.

Take Action Now

Direct selling companies have only themselves to blame since they have traditionally organized their compensation plans to reward these top earners to coast on the work their downline does. It’s time to start rewarding activity that directly brings in new customers and representatives. This strategy not only will energize your ground-level representatives, it should motivate those veteran team members to re-engage in business building.

We must find new tactics, set new expectations and rephrase our recruiting message because times have changed. The “You, too, can have the house, the boat, and retire a millionaire in five years!” hard sell our industry has been known for has done us more harm than good. The sins of the past are coming back to bite everyone.

Are there more companies being looked under the FTC microscope? Only time will tell.

Youngevity, BeneYOU Sign Letter of Intent

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Youngevity International, Inc., and BeneYOU LLC  announced they have executed a non-binding Letter of Intent whereby Youngevity will purchase certain assets of BeneYOU.

Both Youngevity, a leading multi-channel lifestyle company, and BeneYOU, a nutritional and beauty products company, have acknowledged their plans to execute a definitive Asset Purchase Agreement in the coming weeks with an intention to close the transaction by the end of October.

“We’ve built BeneYOU on principles of integrity, hard work and progressive thinking,” said BeneYOU CEO Ryan Anderson. “Like Youngevity, we know making customers and Associates the most important factors in our decision-making process leads to their satisfaction. We are especially gratified that the consistencies between our companies are as strong as they are, and we’re hopeful that we can bring this transaction to a successful conclusion by the end of this month.”

Dave Briskie, president and CFO of Youngevity, stated, “Given the size of the integration and the amount of communication that will take place between both companies, we felt that disclosing where we are in the acquisition process was prudent. Assuming a successful close, we will share additional information regarding the transaction at that time.”

New U Life to Open New Corporate Headquarters in Lehi

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New U Life will celebrate the official opening of its new corporate headquarters on Friday, October 11 at 11:00 a.m. (MT).

The new headquarters is located in Lehi, Utah—known as Utah Valley’s Silicon Slopes and the start-up hub of Thanksgiving Point—the home to some of the nation’s leading IT, tech and direct selling brands. The new offices will house the company’s in-house legal counsel, creative, marketing and sales, customer service and product development teams as well as vice presidents and administration to support the New U Life field leaders who help bring the vision of New U Life to fruition.

“It’s exciting to bring such a unique company into a marketplace that hosts a number of direct sales companies, said Ken Burgess, vice president of Business Development who has been with the company since Utah’s satellite office originated in June 2018. “New U Life recognized Utah County’s ability to provide numerous resources that could help them grow corporately to meet the worldwide demand for what they offer.”

New U Life’s field leaders from all over the U.S. and staff from the company’s home office in Pleasant Hill, California, will be able to tour the new offices and participate in the ribbon-cutting ceremony.

“It’s an honor to be a part of this grand opening—to see where we have come and where we are going,” said Alexy Goldstein, New U Life’s founder and CEO. “Thank you to everyone who has stood alongside us. This is only the beginning!”

Kannaway, CEO Blake Schroeder Honored with Golden Bridge Awards

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Medical Marijuana Inc. subsidiary Kannaway recently earned two prestigious Golden Bridge Awards for Company of the Year and International Executive of the Year.

Kannaway earned a Silver Award for Company of the Year in the Healthcare Products and Services category for its efforts to pioneer and set safety standards for the entire cannabidiol (CBD) industry while also expanding Kannaway throughout Europe and Asia. CEO Blake Schroeder earned a Golden Bridge Award for International Executive of the Year in the Healthcare Products and Services category.

“Since new management took control in March 2016, the company’s management team has been committed to product innovation and industry advancement,” said Medical Marijuana, Inc. CEO Dr. Stuart Titus. “Blake has been a key player in growing Kannaway and the entire portfolio of companies into a well-respected international industry leader.”

The Golden Bridge Awards is an annual peer and industry recognition program that honors achievements of start-ups to large corporations in nearly every industry around the world. More than 160 judges covering a broad spectrum of voices from around the world determined the 2019 Golden Bridge Awards finalists and winners.

“I am honored to receive this international executive award on behalf of Kannaway and am thankful to see the team’s hard work recognized as well,” said Schroeder. “Though we have accomplished tremendous revenue and operational growth within the past year, we are confident that the future holds many more exciting, record-breaking accomplishments and that we will continue to excel at producing the highest-quality hemp products on the market. With a leadership team equipped with decades of direct selling expertise and a wide breadth of cannabis knowledge, the future looks bright for Kannaway.”

Natura Launches in Malaysia

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Natura officially established its Asian market presence with the launch of its business in Malaysia through the opening of a pop-up store in Sunway Pyramid, Petaling Jaya.

Natura’s decision to enter the Asian beauty market was driven by the company’s core commitment to delivering positive impact across the globe, and the demand for sustainable, high-quality products that consumers across the region are demanding.

In Malaysia, Natura products will be available to customers through their established omnichannel strategy which comprises e-commerce, relationship selling and physical stores. Around 300 items from the Natura portfolio will be offered under the brands Ekos, Chronos, Lumina, Mamãe e Bebê and Natura Homem as well as fragrances from the Brazilian Perfumery House. All products are 100 ppercent vegan.

“We see great opportunity for Natura in Malaysia, with its millions of diverse consumers which have for decades been purchasing through many different channels,” said Daniel Silveira, head of Natura International. “We are confident that our omnichannel strategy will be well-received in Malaysia, bringing a wide variety of products to customers as well providing a great platform for growth for our business across the region. More importantly, we are excited about working with local partners across Asia as a force for change to build a more sustainable future. This is a significant moment for us as a business, and we are looking forward to building our business across Asia.””

Datin Mina Cheah-Foong, Managing Director of InNature Berhad, which through its’ subsidiary, Ola Beleza Sdn. Bhd. operates the Natura brand in Malaysia, said: “We are proud to have been selected as Natura’s business partner to launch the brand for the first time in Asia.”

Nu Skin Achieves Advancements in Science, Technology & Sourcing

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Nu Skin‘s 35 years of expertise in beauty and wellness is propelled into the future with a strong emphasis in science, technology and sourcing.

Through its published research on gene expression science, award-winning beauty device technology and a 6S quality process to ensure the use of safe, efficacious ingredients, Nu Skin has cemented its leadership in these three critical categories. Now, the brand is furthering its leadership by adding a controlled environment agriculture (CEA) initiative to its product R&D while advancing its patented ageLOC® and Pharmanex® product portfolios.

“Nu Skin is not following trends; we are creating them,” said Kevin Fuller, senior vice president of global product and brand. “By combining the best approaches from our three disciplines—science, technology and sourcing—we will meet consumer demand for new types of products that deliver unmatched performance with greater sustainability.”

The company is introducing a new user interface and complementary products to the ageLOC Galvanic Spa®. Nu Skin’s at-home beauty device is designed to help deliver charged treatment products that visibly improve skin, now with a new modern aesthetic and improved user experience. The new ageLOC Nutriol®Scalp & Hair System is clinically proven to increase hair volume, softness, thickness and shine while building scalp health and stronger hair down to the roots. ageLOC Galvanic Spa PowerMask revitalizes skin by boosting hydration for a more youthful appearance. All backed by Nu Skin’s proprietary ageLOC blend, the power of science and technology targets the sources of aging for results to see and feel.

To deliver the highest quality products, Nu Skin is mindfully sourcing ingredients and technologies to improve performance and sustainability in new and existing products.

Plexus Worldwide Names Ulli Lindauer Chief Marketing Officer

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Plexus Worldwide announced that Ulli Lindauer has joined the company as chief marketing officer.

In her role, Lindauer will oversee all marketing strategies and initiatives with a primary responsibility to drive company growth by leveraging product management, digital marketing, communications, creative services and customer analytics.

“Ulli’s experience leading marketing for major consumer goods and luxury brands will greatly benefit Plexus as we continue to grow our brand and add new products,” said Janice Jackson, president of Sales and Marketing for Plexus. “She has an excellent reputation leading creative and effective marketing departments with major retail brands, e-commerce, and within the direct selling industry. We’re confident Ulli will be able to contribute to our teams and Ambassadors immediately.”

Lindauer has more than two decades of experience in consumer goods and luxury categories, including executive brand and marketing roles at Fossil Group – Armani Watch & Jewelry, Bond No. 9, Chanel and L’Oreal.

“Plexus has quickly grown into a direct selling industry leader thanks to its excellent products and well-regarded leadership team,” said Lindauer. “I’m excited to join this talented team and to contribute to its ongoing growth.”

Touchstone Essentials Teams Up with The Keep A Breast Foundation™

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Touchstone Essentials has joined the annual Fit 4 Prevention campaign in support of The Keep A Breast Foundation™ (KAB) this October.

The Raleigh, North Carolina-based global direct sales nutrition company will support breast cancer prevention through fitness and wellness. Research shows that one of the best ways to reduce the risk for breast cancer is with exercise. According to Fit 4 Prevention, just 30 minutes of exercise 3–4 times a week can lower the risk of developing breast cancer by 30–50 percent.

Throughout October, the KAB #Fit4Prevention campaign will work with hundreds of studios, gyms and individuals to raise funds through donation-based workout classes across the nation. This year, Touchstone Essentials is matching each fundraising class hosted by their Visionary Business Owners (VBOs) for up to $100 per class, for a total match of $5,000.

KAB’s mission is to empower young people around the world with breast health education and support. It’s a philosophy that aligns perfectly with Touchstone Essentials’ commitment to clean ingredients, organic practices and superfood goodness, according to CEO and Founder Eddie Stone.

“We know that even small changes to diet and lifestyle can make a big difference in health outcomes. We’re proud to support the efforts of our VBOs who are raising awareness and funds for breast cancer prevention,” said Stone.

To further support early detection awareness and breast health education, Touchstone Essentials is also including a Keep A Breast guide to self-check inside all orders in October. Stone explained, “Since an estimated 40 percent of breast cancers are self-detected, a monthly self-check is a must. We’re sharing this vital reminder to encourage women to check themselves. Doing so can save lives.”

Medifast Names Claudia Greninger New Human Resources Executive

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Medifast today announced it has named Claudia Greninger as executive vice president of Human Resources.

Greninger is tasked with developing the company’s global talent management strategy, which encompasses recruitment, succession planning and employee development and retention. She will use Medifast’s core values of accountability, integrity, courage, teaming, empowerment, partnership and diversity to drive her efforts.

“We are thrilled to welcome Claudia to Medifast’s executive team,” said Dan Chard, Medifast’s chief executive officer. “Claudia joins us at a critical time, as the company continues to grow and expand into new markets. I am confident her passion, expertise and experience will be instrumental in supporting our employees across the globe.”

 

Greninger brings more than 20 years of experience across several different industries including education, consumer packaged goods and financial services. She has held positions at Fortune 500 companies including Johnson & Johnson, Inc. and Citigroup, Inc. Most recently, Greninger served as vice president, Corporate HR for Laureate Education, Inc. where she was responsible for talent management, employee development and employee engagement for 5,000 employees globally.

“I am proud to join an organization with a culture that reflects its mission to help people transform their lives,” said Greninger. “I’m eager to partner with the company’s talented employees and energized Coach Community to drive that mission of Lifelong Transformation, One Healthy Habit at a Time forward.”