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DSA Announces 2019 Awards Winners

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In conjunction with its annual meeting, the U.S. Direct Selling Association (DSA), announced top honors to the industry’s standout companies at its 2019 DSA Awards gala in Austin, Texas.

In addition, the Direct Selling Education Foundation(DSEF) announced three new inductees to its prestigious Circle of Honor.

DSA Awards

DSA Awards recognize the outstanding programs DSA member companies have implemented. The 2019 DSA Awards category winners are:

DSA Highest Performing Companies

DSA also announced the 2019 highest performing member companies, recognizing those with the top net sales in the United States for 2018:

AdvoCare

Ambit Energy

Amway

Arbonne

Herbalife Nutrition

Isagenix International

Mary Kay

Medifast – OPTAVIA

Melaleuca

New Avon

Nu Skin

Pampered Chef

Scentsy

SeneGence

Stream

Team Beachbody

The Juice Plus+ Company

Thirty-One Gifts

Young Living

Younique

“Direct selling is a proven, go-to-market strategy that continues to have a significant impact on the way both entrepreneurs and corporations do business,” said Joseph N. Mariano, president of U.S. Direct Selling Association (DSA). “We applaud these companies for the products they offer consumers, the entrepreneurial opportunities they offer millions of Americans, and their dedication to ensuring the highest levels of consumer protection.”

DSEF Circle of Honor Winners

The Direct Selling Education Foundation (DSEF) also announced the recipients of its highest honors during the DSA gala. The DSEF Circle of Honor recognizes industry leaders, academics and consumer advocates who made extraordinary contributions to the Direct Selling Education Foundation through personal efforts.

The 2019 inductees into the DSEF Circle of Honor were Dr. Victoria Crittenden, Professor of Marketing and Babson Research Scholar at Babson College; Dr. Linda Ferrell, Marketing Department Chair, and Professor of Marketing at Auburn University; and Dr. Greg W. Marshall, The Charles Harwood Professor of Marketing & Strategy at Rollins College. The three professors were integral in helping exceed the Foundations’ three-year goals, reaching 70,000 college students and building the DSEF Academic Fellows to more than 200 members.

“Since 2016, each of our newest DSEF Circle of Honor inductees has brought their very unique strengths, knowledge, and networks to DSEF to advance the foundation’s efforts to engage and educate the academic community on the ways direct selling empowers individuals, supports communities and strengthens economies worldwide,” said Gary Huggins, executive director of DSEF. “Their tireless efforts have produced published research related to direct selling, inclusion of direct selling in influential textbooks and academic symposia. This group has also been instrumental in launching a new Doctoral Sales Student Grant Program and shaping the vision for the Foundation.”

DotDotSmile Names Tatiana Galeas, National Sales Director and Silva Benlian, Vice President of Sales

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DotDotSmile LLC recently welcomed Tatiana Galeas, National Sales Director and Silva Benlian, Vice President of Sales to its executive leadership team.

As National Sales Director, Galeas will lead the sales force of independent merchandisers, growing staff count, training and motivating the field. Tatiana has worked in the industry for 21 years. She has Broad experience in door-to-door, party plan and Multi-level business models. Passionate for helping others achieve their goals. Listening skills and high emotional intelligence. Proficient in leadership development, training skills, business growth, Hispanic markets, seminars, conferences and International Markets.

In her new role, Benlian will head up our sales organization, customer service and Merchandiser experience coming up with market strategies for healthy growth in sales, recruits, customers and retention.  Silva is an industry Leader with over 25 years of experience in high performance teams in Direct Sales and MLM.  She is a strategic thinker focused on the future of the business and exceptional execution. She is passionate about the industry and the opportunities it provides women everywhere.

Southwestern Family Of Companies Announced the Promotion Of Kristi Anderson To Vice President Of Marketing

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Southwestern Family of Companies recently announced the promotion of Kristi Anderson to vice president of marketing, a newly created position for the family of companies.

In addition to leading a new team to create and execute marketing strategies and campaigns, Anderson will continue her involvement with the new business development team alongside chief executive officer Dustin Hillis, chairman of the board Henry Bedford, executive vice president and treasurer Cindy Johnstone and vice president and corporate controller Beth Jackson. As part of this team, Anderson will help the company integrate and develop new businesses as they are welcomed into the Southwestern Family of Companies.

“Kristi has helped Southwestern Consulting take its marketing efforts to the next level by redesigning the CRM functionality and crafting automated marketing campaigns for prospects. Additionally, she led the rebranding efforts for the entire family of companies and launched many new and updated brands and websites – all the while managing and growing the marketing team,” said Hillis. “We are excited to have Kristi apply the skills, dedication and focus that have helped Southwestern Consulting grow over the past three years, with her at the helm of the marketing department, on a larger scale with the entire global family of companies.”

 

LifeVantage Launches in Belgium

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LifeVantage (LFVN)  opened for business in Belgium, marking the company’s third European market launch in as many months.

“Our expansion strategy in Europe has been deliberate and aggressive, particularly this calendar year,” said LifeVantage CEO Darren Jensen. “It’s indicative of the traction the LifeVantage biohacking movement continues to gain in that part of the world, and we’re thrilled to now officially count the people of Belgium among our growing biohacking community.”

Select LifeVantage products have been offered in Belgium on a not-for-resale basis for approximately a year as part of the company’s Global Customer Acquisition Program. During that time, the country demonstrated consistent growth as a customer market, paving the way for the company to now open for distributor enrollments as well. It’s a blueprint that has helped drive much of the company’s recent growth and expansion in Europe.

“As a company, this model has allowed us to build a presence and customer base throughout Europe, which, in turn, is enabling current and new distributors to really hit the ground running in these respective European countries as they open,” said LifeVantage Chief Sales Officer Justin Rose.

LifeVantage opened in Austria in September, Spain in March, and Ireland in May. With the addition of Belgium, LifeVantage now serves 15 markets in North America, Europe, Australia, and Asia.

U.S. Direct Selling Annual Retail Sales Reach $35.4 Billion for 2018

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According to the “DSA 2019 Growth & Outlook Report: U.S. Direct Selling in 2018” released today by the Direct Selling Association (DSA) at its Annual Meeting in Austin, Texas, 2018 saw growth in retail sales, as well as the number of people selling and purchasing products and service through the direct sales channel.

Growth & Outlook is DSA’s annual survey that reports on the size and scope of direct selling in the U.S. and is audited by Nathan Associates, a third-party international economic consulting firm.

The annual Direct Selling Growth & Outlook Survey provided the following data on the industry:

Retail Sales

The direct selling channel generated $35.4 billion in retail sales in 2018 – up 1.3 percent from 2017. Wellness products remained the most popular product category in the U.S. in 2018, accounting for 35.6 percent of sales, followed by Services (22.6 percent), Home & Family Care/Durables (15.8 percent), Beauty & Personal Care (15.6 percent), Clothing & Accessories (7.7 percent) and Leisure/Educational (2.7 percent).

 

Direct Selling Population

The DSA further refined the 2018 data collection to better separate direct sellers from customers. This new research shows that the number of people selling products or services using the direct selling model grew 1.6 percent, with 6.2 million U.S. entrepreneurs selling in either a part-time or full-time basis.

Demographic breakdowns for both direct sellers and discount buyers include 6 percent (under 25); 19 percent (25-34); 26 percent (35-44); 24 percent (45-54); 17 percent (55-64); and 8 percent for 65 and older.

By gender, 75 percent of direct sellers in the United States in 2018 were women and 25 percent men. The percentage of women joining the channel increased by 1.5 percentage points from 2017 to 2018, men joining the channel dropped by 1.5 percent.

Ethnic and racial demographics for 2018 went unchanged from 2017. Eighty-five percent of those involved were White/Caucasian, 8 percent African American, 4 percent Asian, 1 percent American Indian or Native Alaskan, 1 percent Native Hawaiian or Pacific Islander and 1 percent other not identified.

 

Demand for Direct Selling Products

The DSA said in their press release that in 2018, there were more than 36.6 million people actively buying through the direct sales channel, with notable growth coming from an increase in preferred customers. This customer count excludes those who have not signed an agreement with a direct selling company.

“The U.S. direct selling industry is moving in a very positive direction,” said Joseph N. Mariano, DSA president and chief executive officer. “Retail sales were strong, thanks largely to the U.S. direct sales force and their ability to attract millions and millions of customers. The 2019 Growth & Outlook Survey also provided additional insights into the people involved in direct selling – particularly due to segmentation efforts – helping our member companies provide an even better experience for those who buy and sell through our channel. As we look forward and evaluate industry data, as well as national economic and retail projections, we believe the industry will continue to see modest growth during the next three years.”

For more information on DSA’s 2019 Growth & Outlook Survey: 2018 Direct Selling Data in the United States, you can also read more on this topic atwww.dsa.org/benefits/research. The DSA has also added a new interactive component when you hover the arrow or cursor over various content on the page.

A Beauty Innovation 30 Years in the Making

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One of this year’s Bravo Growth Award Winners is here to revolutionize the modern manicure.

Color Street recently received two-fold recognition for the company’s incredible growth in 2018. Direct Selling News honored Color Street for its first appearance on the Global 100 List, ranked at No. 78, and presented the company with the second Bravo Growth Award for achieving 881 percent growth in sales. While Color Street’s record growth is praiseworthy, the determination of the company’s leader is just as deserving of recognition.

The Inspiration

Color Street Founder and CEO Fa Park immigrated to the United States from South Korea in the early 1980s to pursue a career in opera. As a young music student in New York City, he would take the bus to and from his lessons and one particular day he noticed a woman polishing her nails in the back of a cab. Brush a coat on, blow to dry,
brush, blow. As he sat on his bus, stuck in traffic, watching this woman patiently polish her nails, he knew there had to be a better way.

Twenty years, sixty patents and millions of dollars in sales later, this “better way” is Color Street’s nail polish strip – a proprietary appliqué of 100 percent nail polish that includes a base coat, color coat and topcoat all in one layer. No brushing, no blowing, no waiting, and no mess.

An Education

From that fateful day in Manhattan traffic, it would take Fa nearly twenty years to develop a product he could bring to market. “It took seventeen years to realize my vision,” he shares. “I filed my first patent in 1988. My learning process was very difficult, as I had to learn nail polish chemistry.”

Melissa Soete, Color Street’s Vice President of Sales, describes the beginning of that learning process. “Fa began by purchasing bottles of nail polish from the drug store, applying them on paper and drying the polish with a hair dryer,” she says. “The New Jersey area has several nail polish manufacturers, so Fa would bring home five-gallon pails of polish that were going to be thrown out. There were years and years of trial and error.”

“We had so many new products developed but didn’t have the opportunity to introduce those to our customers through mass market retailers. So we said, ‘Let’s manage our own destiny.'”— Fa Park, Founder and CEO

Fate would step in once again, ten years into the journey. “I’m lucky that I met a retired nail polish chemist in 1999 and shared my story with him,” Fa recounts. “He was impressed and told me that he’d teach me everything he knew.”

Understanding nail polish chemistry was only part of Fa’s self-driven education. He also taught himself the engineering and metal fabrication skills he’d need to build a machine to produce his nail strips. From 1988 to 2005, Fa worked various jobs and taught music classes to support his family, while focusing the rest of his attention on creating what he was sure would change both his future and the future of the nail polish industry.

Incoco—The First Dream

The closer he got to success, the more interested nail polish companies were becoming in his work. Several industry giants – L’Oreal and Revlon to name a few – made offers for Fa’s technology, but he insisted on keeping his innovation proprietary. In 2005, he landed his first official order – 1,000,000 nail strips for Avon. The years that followed would see orders grow and new customer relationships formed, including private label orders from Sephora, Sally Hansen and OPI. However, Fa saw more for his life’s work.

He founded Incoco in 2007, which today serves as the parent company for Fa’s three brands:

  • Incoco—nail appliqués sold at Ulta Beauty locations across the country
  • Coconut Nail Art—nail appliqués sold at Walmart nationwide
  • Color Street—Incoco’s latest brand, launched via the direct sales channel in 2017

Incoco’s move into direct sales with the launch of Color Street speaks to the company’s constant focus on innovation and Fa’s larger vision for his creation.

“When I worked with mass-market retailers, I could only change designs once a year,” he explains. “We had so many new products developed but didn’t have the opportunity to introduce those to our customers through mass market retailers. So, we said, ‘Let’s manage our own destiny.’”

Today At Color Street

In June 2017, with just over 1,400 original consultants, or “Stylists,” on board, Color Street launched with 62 nail strip designs to choose from. Those first Stylists were offered the opportunity to participate in the company’s Presidential Founder Campaign where they could work towards the milestones of the program and be rewarded with
a 1 percent share of Color Street’s sales volume.

“We’ll work hard until every woman in the world is wearing Color Street.” —Fa Park, Founder and CEO

Today, there are more than 44,000 Color Street Stylists across the country. New Stylists joining the company learn everything they need to know to launch a successful business through a simple onboarding process and a sales practice called Color 10. “We keep it as simple as possible,” Melissa shares. “We encourage our Stylists to get our
nail strips on ten people each week.” Stylists share the product line through one-on-one shares, social media and in-home parties.

Collections are introduced every month and are often tied to seasons, holidays, or specific nonprofit organizations and causes Color Street supports through the company’s philanthropic efforts. This consistent stream of new products makes it easy for Stylists to share these new looks with their customers.

What’s Next

In 2018, Color Street recorded revenue of $119 million, an 881 percent increase from the prior year. Sales are on track for huge growth in 2019.

“It took seventeen years to realize my vision. I filed my first patent in 1988.” —Fa Park, Founder and CEO

Color Street’s overwhelming success is due to the product’s natural fit in the direct sales model, explains Melissa.
“There are several reasons why Color Street is great for network marketing,” she says. “Very few women are going to buy nail strips in a store and think it’s real nail polish. So, we’ve made the product very easy to sample.

Customers can test it easily and see that it works—and we’ve made those samples inexpensive for the Stylists to keep on hand. Our price point is accessible, and we have a built-in promotion of “Buy 3, Get 1” for every set we sell.”

With such rapid growth, Fa and his team are focused on refining the company’s processes, giving Stylists new and exciting designs to share with their customers and expanding Color Street’s brand presence in the market. “Our vision for the next five years is to grow ten times more,” he says. “We’ll work hard until every woman in the world is wearing Color Street.”

2019 Global 100 Celebration

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Looking for the 2021 DSN Global Celebration? The broadcast will take place:
VIRTUAL EVENT – MONDAY, APRIL 19, 2021 8:30 PM – 10:00 PM (ET)

Executives, guests join DSN to honor channel’s best at 10th anniversary Global 100 celebration.

The annual DSN Global 100 Celebration recognizes the direct selling channel’s proud history of providing individuals from all walks of life with unparalleled opportunities for entrepreneurship and personal development. The event also showcases the impact and growth potential of the $189.6 billion global direct sales channel. Worldwide, more than 116 million people are involved with direct selling, according to the World Federation of Direct Selling Associations.

This years’s event, held April 24 at the Renaissance Dallas at Plano Legacy West, was the 10th anniversary Global 100 Celebration. Direct Selling News unveiled its exclusive ranking of the top revenuegenerating companies in direct selling. Hosts Todd Eliason, Publisher and Editor-in-Chief of Direct Selling News; and Lauren Lawley Head, Senior Vice President of SUCCESS magazine, welcomed executives from nearly 60 companies around the globe.

“The ranking we celebrate tonight has become a much-anticipated yearly event – not only for those in the channel, but also for researchers, educators, and investors worldwide,” Eliason said.

For the seventh consecutive year, Ada, Michiganbased Amway claimed the top spot as No. 1 direct seller in the world, with $8.8 billion in revenue in 2018. This 60-year-old global giant maintains a large portfolio of some the world’s best-selling brands, including Nutralite vitamin, mineral and dietary supplements, Artistry skincare and color cosmetics, eSpring water treatment systems, and XS Sports Nutrition and Energy Drinks. More than 3 million Amway independent business owners offer 450 unique products in 100 markets and territories throughout the
world.

London-based Avon Products once again took the No. 2 spot on the DSN Global 100 list, with $5.57 billion
in revenue in 2018.

Coming in No. 3 on the DSN Global 100 list was Herbalife Nutrition, with $4.9 billion in revenue in 2018.

2019 DSN Global 100 (Based On 2018 Revenue)

The Global 100 have plenty to celebrate this year:

One Global Family
Representatives from all over the world were in attendance at the Global 100 Celebration including DXN Marketing from Malaysia,
Immunotec from Canada,
Oriflame from Sweden, and PM International from Luxemburg, we also had two first time-attendees Jakob Spikjer from Sweden, representing Zinzino; and Yura Slinkin from Russia,
representing Faberlic.

  • 21 companies achieved more than $1 billion in net sales. That’s more than one-fifth of the ranking. Collectively, these 21 companies generated $55 billion for the year.
  • The top 10 companies were responsible for $40.8 billion in combined revenue.
  • There are 23 mid-market companies—those between $300 million and $1 billion—on this year’s ranking. Five companies are above $700 million, and another five above the half-million mark.
  • Collectively, the 100 companies in the ranking achieved $75.6 billion for 2018. Among those companies are 20 that grew by $100 million or more in the past year.
  • 18 companies are making their first appearance on the Global 100 list, including companies from Brazil, Korea, Taiwan, Germany, Malaysia, and Sweden.

The Bravo Awards

Each year, the DSN Global 100 celebration recognizes a direct selling executive whose exceptional leadership qualities have propelled his or her company to extraordinary new heights. This year’s recipient of the Bravo Leadership Award, Stella & Dot Founder Jessica Herrin, had the goal of revolutionizing entrepreneurial opportunities for women by creating a modern home-based opportunity. Naming Stella & Dot after her beloved grandmothers, Herrin envisioned a new kind of company that would allow today’s busy women to achieve unparalleled success and balance through a career they were passionate about. Thanks to irresistible products, use of innovative technology, and exceedingly personal service, a proven formula for passionate earning and personal success was born, and Herrin became a nationally recognized leader. In 2014, Herrin further broadened the company’s mission of giving every woman the means to individually style her life when she launched Stella & Dot Family Brands. Expanding beyond the flagship Stella & Dot line of accessories, the Family of Brands gives women
greater opportunity to create a flexible social selling business opportunity that more precisely fits their goals as Independent Business Owners. To date, the company has paid out more than $500 million in commissions to more than 50,000 independent business owners in six countries.

“I’m so lucky to have a team of innovators that never rest on their laurels and never just assume that what worked last year is going to work next year, or what got us here is going to get us there in this fast-paced world of change. They’re truly brave, and they make such an impact,” said Herrin, who was unable to attend the Global 100 Celebration, in a pre-recorded video message. Stella & Dot Family of Brands Chairman Mike Lohner, who accepted the Bravo Leadership Award on Herrin’s behalf, said that “If leadership is about inspiring people, to dream more, to do more, to learn more, to feel more, to love more and to become more, then Jessica Herrin is a really qualified recipient of this award. I feel extraordinarily lucky to be her partner and friend. I suspect you’ve only begun to see what the Stella & Dot Family of Brands will do and become.”

The BRAVO Lifetime Achievement Award honors an individual who has made a lifetime of extraordinary professional contributions to the direct selling community that will be felt for generations to come. Presenting the award this year was John Fleming, former publisher of DSN and the very first recipient of the Bravo Lifetime Achievement Award. This year’s honoree, Stan Fredrick, has either chaired or been a board member of both the Direct Selling Association and Direct Selling Education Foundation for more than 30 years. He personally led the Direct Selling Education Foundation’s Development committee and led the effort to raise more than $12 million for the foundation’s capital campaign. Fredrick is the major shareholder in several direct selling companies, is currently Chairman of the Board at Mannatech, and was founding shareholder of five community banks. He was first introduced to direct selling in the 1940s when his father sold cookware and his mother sold beauty products to supplement the family income. Later, he and his brother, John, put themselves through college selling cookware; in fact, Fredrick earned enough to buy a car just two weeks after starting his first direct sales business at 16, and that boundless optimism and belief in direct sales has never worn off. Fredrick has been a tireless advocate of the industry ever since.

This award “honors what we all know is the thing that drives and makes us as individuals and makes our companies go and that’s achievement,” Fredrick said. “Moving from one level to the next, like a ladder. The rung of the ladder is not to stand on but just to hold one foot while the other one moves higher, and that’s what we do in direct selling—we help people get on the rung of the ladder and not stay there but move upwards and onwards.”

Reflecting on his 64 years in the direct selling industry, Fredrick said he thought of something the late Viktor Frankl, Austrian psychiatrist and Holocaust survivor, once said: “If the why is strong enough, the how will come, and I think that’s what we found out in this business. We have a how—our how is the direct selling industry. That’s been my how for 64 years, and I can’t think of doing anything else.” “We have a great opportunity to grow this business and expand it, and I hope that as we look at the future of direct selling, we won’t forget that our true business model is about sharing the opportunity. It’s about helping people have their own business and have the freedom of starting their own business and doing their own things. I found out a long time ago that if I want something, all if have to do is sell one more set of cookware, recruit one more person, start one more downline, buy one more company…there’s always something else that can be done to make this business grow. So as you begin to think about your future, I like to think about what Confucius said. He said, ‘If you plan prosperity for a year, plant grain. If you plan prosperity for 10 years, grow trees. If you plan prosperity for 100 years, grow people.’ And that’s the beauty of our industry. If we never forget it and we keep growing, recruiting and developing people, we will continue to thrive as an industry, and we will continue to help people around the world.”

For the first time this year, DSN recognized two companies with the Bravo Growth Award. The first winner, MyDailyChoice/HempWorx, is a Las Vegas-based company that has achieved astounding growth in just two years in business. Using cloud technology to cut overhead costs and taking advantage of ever-growing consumer interest in hemp-derived products, this company saw sales increase from $10 million in 2017 to $100 million in 2018 – a growth of 900 percent. Chief Operating Officer Kathleen Earle was in attendance to accept this prestigious recognition on behalf of founders Josh and Jenna Zwagil, who were unable to attend the event due to the impending arrival of their first child. She shared the story of how the Zwagils started their company and built it from the ground up, leaning on Josh’s experience as a top direct seller and his knowledge of compensation plans, and Jenna’s strength in building relationships and mentoring others. “They’ve built a company of affiliates by affiliates. And the affiliates love them—they believe them, they follow them, and they just continue to build. We’ve had this huge growth rate, but we’re on track this year to triple our sales again.”

The second Bravo Growth Award honoree, New York based Color Street, offers a vast array of colors and nail art design and grew an incredible 881 percent over the last year, from $12 million in 2017 to $119 million in 2018. Founder and CEO Fa Park and his team accepted the award. From the stage, Park reflected on his company’s beginnings. “It started with a very simple idea to make a nail polish film,” he said. In 1984 while stuck in a traffic jam in New York City, Park spotted a woman in a nearby cab trying to polish her nails. In that fleeting moment, Park wondered if there was an easier way to apply nail color. There wasn’t any chemistry to produce that product, nor was there necessarily a market, but Park wasn’t deterred.

Despite having no background in engineering, chemistry, research and development, or direct sales, Park, an aspiring opera singer, gave up a promising career in music and spent the next 17 years studying, researching and developing how to create a 100 percent nail polish film unlike anything the industry had seen before. He was approached by several big names who wanted to buy his technology or his company outright. “After 10, 12, 15 years of my effort, and my millions of teardrops, I was poor,” Park recalled. “Some offers were very attractive, but my vision wasn’t money. My vision was, how can I deliver this product to the world?” In 2016 he made the critical decision to start a direct sales company. Following last year’s phenomenal growth, he said, Color Street is expected to reach more than $200 million in revenue by the end of 2019.

Heart Driven Leadership

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Jessica Herrin cares about giving women the confidence to earn and learn in a modern way.

Jessica Herrin, founder and CEO of San Francisco-based Stella & Dot Family Brands, knows a few things about creating successful business ventures—she’s done it twice and both times has captured the attention of savvy media reporters from publications like Fortune and The New York Times to major television networks.

As this year’s recipient of DSN’s Bravo Leadership Award, Herrin has demonstrated an impressive ability to lead a company to strong growth while tapping into the hearts and souls of the thousands of women representing the company’s three brands. That comes from Herrin’s unwavering resolve to make Stella & Dot a heart-driven venture. Why? Because she understands that ambition and entrepreneurship must be combined with flexibility when people—especially women—are juggling both a business and demands of family. “I wasn’t going to apologize or feel like a bad mom if I had my own ambitions,” she states.

“Her ability to connect with people one-on-one is incredible. —Ani Hadjinian, President, Family Brands

To appreciate Herrin’s strength as a successful entrepreneur, it’s helpful to understand the trajectory of her life. Raised by a single dad who had the “ultimate spirit of an entrepreneur,” she always saw the world as how she wanted things to be instead of the way they were. She packed integrity into her work experience the day she left her job at an ice cream store when her first boss told her if she didn’t go on a date with him, she’d do nothing but mop floors. At age 24, she dropped out of business school—against the advice of others—and with a partner created an online business that became weddingchannel.com. They eventually sold the business for many millions of dollars.

Fast forward to life as a wife and new mother in Texas, where she was working as a technology manager for Dell. The siren song of entrepreneurship was still calling to her, and she began exploring ideas. She hit on jewelry and began taking night classes to learn how to make it. Her goal was to create a successful business—for herself and other women—that allowed them to choose the hours they worked. This ideal work experience really hit home the day her boss called a 7 a.m. meeting. “I’m happy to work 10 hours, just not those hours!” she remembers thinking. “That’s
when I realized how passionate I was about reinventing work for the modern woman who wants to have the ‘and’ mentality—what if I want to have family and ambition,” she explains.

In fact, she has her own description for this goal: democratize entrepreneurship. It is this entrepreneurship that has enabled the company to pay out more than $500 million in commissions to date to its field.

Offering A Turnkey Platform

Eventually, Herrin left the corporate world and put all her effort into her nascent jewelry business, initially called Luxe Jewels. She held trunk shows in her living room and shared the merchandise with friends. In 2007, Blythe Harris joined the venture and became cofounder and chief creative officer. Chief Inspiration Officer Danielle Redner and Michael Lohner, chairman of the board of managers, also joined the team at this time. The company was also rebranded Stella & Dot, named after Herrin’s and Harris’ grandmothers.

For about 40,000 Stylists, Designers and Specialists throughout the United States and Canada representing the company’s three distinct brands— Stella & Dot, KEEP Collective and EVER—this is more than cool products and a great business. For many, it is life changing.

“Her ability to connect with people one-on-one is incredible,” says Ani Hadjinian, president of Family Brands. “One of my favorite moments is watching the field connect with her. She has singlehandedly, in a lot of the cases, changed the trajectory of their lives.”

Although Herrin did not design Stella & Dot on “direct sales of the past,” she knew the business had to offer an easy way for women to get involved. “I think of us as a new kind of company which is really a turnkey platform for women and a few good men who want to push the easy button,” she says. “In other words—if you could take away the risk, could we elevate the number of people that would take that chance? That was always my focus.”

Members of Herrin’s corporate team also benefit from her leadership. “What’s remarkable about Jessica is her ability to make those around her better,” says Jeremy Soine, executive vice president and general manager of EVER. “She regularly tells me, ‘My opinion is only one data point. You go lead the business based on what you think needs to happen.’ Her humility and self-awareness put me at ease, is empowering and makes me feel appreciated.”

An Unwavering Vision

One hallmark of an exceptional leader is attracting top-flight people to help move the company forward. Hadjinian joined the company after holding top executive positions for Estee Lauder Companies; she was general manager, North America of Bobbi Brown Cosmetics when she initially joined Stella & Dot Family Brands to serve as general manager of EVER. “The creative element really speaks to me from a branding perspective, and authenticity of that
branding, also the quality of products,” says Hadjinian. It didn’t take her long to see the power behind Herrin’s vision and product innovation. “That’s what sets Stella & Dot apart … It was never unwavering to her, and she wanted to bring something to the direct sales world that had the same level of aspiration of quality products.”

Soine had experience in another large direct sales company and in the food and beverage industry before joining Stella & Dot Family Brands in 2018. In addition to appreciating EVER’s line of clean beauty, science-driven products, Soine is impressed with the way Herrin continues to fuel her passion for helping others. “Every week she spends hours and hours making phone calls and posting special notes on social media to recognize those people who are doing extraordinary things,” he says. “She doesn’t do this because she feels obligated—she genuinely cares and wants those people to feel special.”

Recognizing extraordinary efforts comes naturally to Herrin, as is evident from her book, Find Your Extraordinary: Dream Bigger, Live Happier and Achieve Success on Your Own Terms. She also created the Stella & Dot Foundation in 2010 which has donated more than $3 million to worldwide causes including its year-round global charity partner, Every Mother Counts.

As for the company’s future: “Our focus is on growth in North America for all of our brands,” says Herrin. “We would like to at least double Stella & Dot.” When reflecting on the Bravo Leadership Award and what it means to her and the company, Herrin is quick to take a backseat. “The reality is the leadership of Stella & Dot is done by a team, not me. It’s my team that makes this company and makes me a better leader,” she emphasizes. “Everyone at Stella & Dot is very heart driven—we care about giving women the confidence where they can learn and earn in a modern way. It’s a shared award.”

Always Keeping A Startup Mentality

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Jeff Bezos has written a letter to his shareholders each year since the company’s inception. These letters outline Amazon’s long-term mission, culture and values. His 2017 letter, however, stood out more than the others for me. Bezos defined what he calls a Day 1 company vs a Day 2 company.

Day 1 companies are:

  • Agile
  • Customer obsessed
  • Embrace trends
  • Make high velocity decisions

My translation for being a Day 1 company means always thinking like a startup, never being comfortable and content with anything you have at the moment. It means always looking ahead, never resting on what you have done in the past.

So, what does Day 2 look like? During an Amazon all-hands meeting in March 2017, he was asked this same question. His answer was “Day 2 is stasis, followed by irrelevance, followed by excruciating, painful decline, followed by death. And that’s why it’s always Day 1.”

Sounds pretty grim, right? He also notes that many larger companies can be Day 2 for a long time and not even know it until it’s too late. Decline isn’t always obvious—it can be subtle and stealthy for sure.

Yes, Amazon has 600,000 employees, and some may say it’s too hard to stay agile and nimble at that size of the company, hence Day 2 isn’t the end-all for them. But I disagree. It’s even more amazing that Bezos constantly drills this into his employees and culture.

So, the question is—where is our channel in this discussion? Are we Day 1 or Day 2?

“It’s always Day 1” is Amazon’s mantra, and that needs to be the direct selling channel as well. We need to resist complacency by continuing the vitality, curiosity and focus of a startup. I think we can all agree that Amazon is anything but complacent. They are at the forefront of almost every e-commerce and retail innovation and are never caught leading from behind.

So how do we as a channel keep the vitality of day 1 and fend off day 2?  In his 2017 letter, Bezos gives his Starter Pack of Day 1 Defense.

  1. Stay agile by resisting proxies

A 2018 article from McKinsey & Company, The Five Trademarks of Agile Companies, says we are moving from an “organization as machine” model to a new business paradigm of “organization as organism.” The agile company is dawning as the new dominant organizational paradigm. Rather than the organization as machine, the agile organization is a living organism.

A machine is inflexible, unmoving, bureaucratic. A living organism is nimble and quick on its feet. It adapts to the environment quickly. If companies want to stay successful, they must act with agility and resist proxies.

Bezos says a common example is process as proxy. “Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing,” he says.  “This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right.”

  1. Stay Customer Obsessed
  • Customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great.
  • Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.
  • Double down when you see customer delight.

Are You Listening to Your Customers?

There is a goldmine of information on your own social media channels. Customers are telling you what they want and what they like and don’t like.

You may have your own brand fanatics: Super fans who know you inside out, love what you do, and even invest elements of their personal identity in your brand. Direct selling companies do a great job in recognizing our salesforce, but what can you do to delight, empower and learn from your customer super fans?

  1. Embrace External Trends
  • The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly.
  • Embrace them and you have a tailwind.
  • Fight them and you’re fighting your future

As we have talked about over the past few months, the Gig economy has put a lot of pressure on our channel by making it easy to earn income.

Are We Making Direct Selling Harder Than It Should Be?

Have you looked at your back offices or compensation plans lately? We are a very complicated industry. We teach that it’s easy to earn—you purchase, you share, and make money. What if left out is the calculus needed for new distributors to figure out complicated compensation plans?

If I’m an Uber driver, I know exactly how much money I’m going to make. Plus, the company is going to feed me passenger leads until I call it quits for my shift.  The model provides a high level of predictability and a clear path to the next dollar. At last year’s Fall DSA Conference, Darren Jensen, President & CEO of LifeVantage said his company is making tactical changes for customers and distributors and are focused on simplicity. “Business should be as easy as calling an UBER.” he said.

  1. Make High-Velocity Decisions
  • Never use a one-size-fits-all decision-making process. Many decisions are reversible, two-way doors.
  • Most decisions should be made with 70 percent of the information, if you wait for 90 percent you’re being slow
  • If you don’t have consensus, disagree and commit to the decision

In Super Bowl XLIX, Seahawks coach Pete Carroll made one of the most controversial calls in football history. With 26 seconds remaining, and trailing by four at the Patriots’ one-yard line, he called for a pass instead of a hand off to his star running back Marshawn Lynch.

The pass was intercepted and the Seahawks lost. Critics called it the dumbest play in history. But was the call really that bad? Or did Carroll actually make a great move that was ruined by bad luck?

Pete Carroll was a victim of our tendency to equate the quality of a decision with the quality of its outcome, what poker players call “Resulting.” Even the best decision doesn’t yield the best outcome every time.

As executives you face difficult decisions that have to be made quickly. Go with the best intel you have at the time. Staying in Day 1 requires you to experiment patiently, and accept and learn from failures as they come and course correct as needed.

Direct Selling News is committed to helping you fend off Day 2 by talking about the topics needed to help your company keep the vitality of a Day 1 startup.

A Lifetime Of Change In One Decade

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Changes in the global environment for direct selling companies are happening rapidly on all fronts. Shifting consumer expectations, tighter regulations, increasing digital demands and new competitors are forcing us to examine ourselves inside and out—question who we are, what we’re about and how we want to move forward.

We can shrink from these challenges, or we can evolve. We can be resilient, innovative and bold. This will require new thinking and tough decisions, but it will position us to be even stronger. As the 2019 Global 100 list celebrates its tenth birthday, Direct Selling News examines how the industry has changed and what the landscape looks like as we head into the third decade of the 21st century as independent distributors.

First, the numbers

Collectively, the companies in the DSN Global 100 achieved $75.6 billion for 2018. Aggregate sales for the top 10 global companies on DSN’s Global 100 list were $40.8 billion in 2018. Twenty of the Global 100 grew by $100 million or more in the past year—including list toppers Infinitus, Natura, Herbalife Nutrition, Coway and Nu Skin. Newcomers O’Boticario and Atomy debuted at $1.22 billion and $1.5 billion, respectively. There are 23 mid-market companies—those between $300 million and $1 billion on this year’s ranking. Five companies are above $700 million, and another five above the half-billion-dollar mark.

“There are 23 mid-market companies—those between $300 million and $1 billion on this year’s ranking. Five companies are above $700 million, and another five above the half-billion-dollar mark.”

Eighteen companies are making their first appearance on the Global 100 list, including companies from Brazil, Korea, Taiwan, Germany, Malaysia, Japan and Sweden. The biggest gaps on the 2019 list, though, come from the absence of 25 of the 26 China-based companies that made the list last year and some U.S.-based companies—such as Mary Kay, Isagenix, AdvoCare and Juice Plus—that chose not to report their financials.

In response to some unsubstantiated product claims, the Chinese government in January launched a 100-day review of all health and wellness direct selling companies operating in China, the industry’s second-largest market. Because of the increased scrutiny, most Chinese companies were unwilling to disclose their financial information to the magazine. This left room for 18 newcomers to the list and seven companies returning to the list after an absence.

“Direct selling companies are spending millions to improve their online shopping portals, partly in response to the Amazon effect and partly because of regulatory pressure to distinguish more clearly between customers and distributors.”

The economic and regulatory conditions in a global marketplace always fluctuate, and sometimes companies will decide to keep a lower profile, which is why it’s noteworthy that this year’s list includes 13 private companies that have reported their numbers to the Global 100 every year since it began in 2009. Public companies don’t have a choice about whether to share financials, but closely held companies do, and their transparency allows the Global 100 to present as clear a picture of the industry as possible.

Times, they are a changin’

The direct selling business and consumer habits have changed significantly over the last decade.

From a broad, cultural perspective, people now consider their involvement in a direct selling company in much the same way they consider any job. “The direct selling space is evolving from the days when it was sort of a niche way to do business,” says securities analyst Doug Lane. “Given advancements in technology and social selling, direct selling  is becoming more mainstream.”

But nothing has changed in our industry more than the prevalence of technology. In the last 10 years ecommerce and social media—mainly Amazon and Facebook—have transformed the way people learn about and purchase products.

In 2009, there were 360 million active Facebook users worldwide. Now there are 2.38 billion—and a huge number of them turn to social media for brand guidance. And Forbes reports that 70 percent of Americans with annual incomes of $150,000 or more have Amazon Prime memberships, which give people unlimited free shipping (now in one day) of more than 100 million items.

Overall e-commerce sales in the United States reached $517 billion last year, 14 percent of all U.S. retail sales, according to analysis of U.S. Commerce Department data. Amazon sales alone were $141 billion of that total—accounting for nearly one-third of ecommerce revenue.

Direct selling companies are spending millions to improve their online shopping portals, partly in response to the Amazon effect and partly because of regulatory pressure to distinguish more clearly between customers and distributors. Direct sellers have to offer customers a way to buy product without signing up to become a distributor, and creating direct online ordering systems is the easiest way to do that. Such changes come more quickly for smaller, newer companies, Lane says. But the larger the business, the more legacy systems and mindsets there are to move. “That makes it a big challenge,” he says. “But that’s what leadership has to do.”

Some direct selling companies are meeting this challenge head-on, responding with complete digital transformations of customer and distributor experiences, says Bob Bass, Lead Strategic Insights Analyst for Amway, which tops the Global 100 list for the seventh consecutive year, with $8.8 billion in revenue. “Changes I’m seeing are monumental, from the way companies support distributors to the emerging use of augmented reality.”

Augmented reality is fueling a trend called “experiential retail,” which is, ironically, drawing customers back to brick-and-mortar stores. For example, Pottery Barn allows in-store customers to place virtual furniture in digital versions of their homes. Nordstrom shoppers can select clothing via a mobile app and the store will have the items waiting for them in a dressing room when they arrive. French beauty products retailer L’Occitane lets customers take a cyber hot air balloon ride through the French countryside while they get a hand massage with real hand cream.

“Customers and distributors want to be reached in ways that are most meaningful to them. Everything from attracting, developing and retaining more young leaders to honing in on what is marketed to different segments, so that your approaches are much more personal and relevant.” – Bob Bass, Lead Strategic Insights Analyst for Amway

If some of these experiences feel familiar, they should—they’re a next-gen version of what network marketing has been doing through the party plan model for decades: letting people try and build a connection with a brand before they buy. This trend reinforces the core of our model while showing us how to enhance that model at the same time.

Beauty and wellness products are prime for augmented reality, says a recent market study—so as the direct selling channel’s largest category, these products give the industry an opportunity to use the tool on a broad scale. Amway’s already on board. Last spring, it partnered with a Silicon Valley company to implement the YouCam Makeup app, which makes personalized skin care commendations and lets customers put virtual Artistry brand makeup on their selfies.

With YouCam, Amway seems to be proving that even massive companies can be technologically agile, if they’re committed. Amway Chief Sales Officer John Parker says it’s all about a forward-thinking mindset. “We encourage our employees to stay hungry and focused on what is still possible rather than what we have already achieved,” he says. “As an industry we embrace what’s great about our channel—the combination of digital and social relationships with the delivery of live interactions and experiences distributors and customers will never forget.”

Getting personal

As consumers become more sophisticated about how and where they buy, they’ve also become more particular about how they want companies to market to them. “Customers and distributors want to be reached in ways that are most meaningful to them,” Bass says. “This means everything from attracting, developing and retaining more young leaders to honing in on what is marketed to different segments, so that your approaches are much more personal and relevant.”

Noah Westerlund, Senior Vice President of Business Development for SUCCESS Partners, says this personal approach starts with making sure the audience you want and the audience you have are the same. “Be realistic about what your company provides, and do some audience research to find out if it’s what your intended targets really want,” he says. “Maybe you have a product that has always appealed to Baby Boomers but you keep pushing your teams to recruit and sell to Millennials.” If you’re losing or can’t gain momentum, a misalignment between your message and target customers may be partly why.

Parker says Amway’s strategy for keeping its momentum for so many years is to keep its ear close to the field. “We continually focus on listening to our Amway Business Owners, who are out there every day working with customers and new people in the business,” he says. “Like them, we know the importance of hard work, trying new approaches, studying others’ successes and failures and planning our next move, even when business is at its strongest.”

New frontiers

One ingredient and one concept that have burst into the marketplace in the last few years are putting our industry in an interesting juxtaposition: One is opening doors to astronomical sales, while the other is reminding us not to take our position for granted.

Let’s talk about hemp first. Products with cannabidiol (CBD)—a non-THC product derived from the cannabis plant—are becoming wildly popular for direct selling. DSN estimates that direct selling’s CBD revenue reached $300 million in 2018, will hit $600 million this year and will generate $1 billion next year.

At least 40 companies on this year’s Global 100 list sell products with CBD, and they’re seeing huge numbers. Four of them alone—including Las Vegas-base My Daily Choice/Hempworx and San Diego-based Kannaway accounted for $400 million of overall CBD sales last year. Sales at My Daily Choice/Hempworx increased from $10 million in 2017 to $100 million in 2018, a 900 percent growth rate.

While CBD has become the hot new category inside the industry, income opportunities with ride-share providers, on-demand errand services and private home rental companies are changing the game outside our industry, which used to have a lock on the “gig” idea.

According to a recent McKinsey Global report, more than 160 million people in Europe and the United States are earning money using cars, houses and time they already own. This is more than three times the 18.6 million U.S. direct sellers—4.1 million of whom are discount buyers or have no plans to sell the products and nine million of whom have gone inactive.

The lure of gigs is strong because they usually require little capital or training. You don’t need sales skills to be an Uber driver. You wake up, turn on your phone and customers fall out of the sky.

“If you’re losing or can’t gain momentum, a misalignment between your message and target customers may be partly why.” – Noah Westerlund, Senior Vice President of Business Development for SUCCESS Partners

Direct selling experts say that the industry can be competitive by appealing to people’s desire to work for more than just a paycheck. People want to be part of something with a greater purpose—they also will gravitate toward opportunities that provide support and ongoing training so that they can improve personally and professionally.

But we can’t keep doing everything the way we’ve always done it. For example, gig work pays on the spot and that’s a huge deal to its workforce. Direct sellers have to find ways of paying more quickly.

NuSkin, number seven on this year’s list with $2.68 billion in sales, introduced a new compensation strategy in late 2017 to allow for quicker payouts. Through NuSkin’s “Velocity” pay plan distributors can earn retail sharing bonuses daily when someone buys a product via their mobile app. “We found there was a fairly large group of people building a Nu Skin business because they needed income today, not six weeks, or even a week from now,” NuSkin President Ryan Napierski said at the 2019 Companies in Focus.

And about those customers “falling out of the sky?” Direct selling also needs to refine its process of distributing leads to field teams, Westerlund says. “That’s how we become an end-to-end solution that’s competitive with gig economy opportunities.”

Being better

How do we maintain traction where we have it and regain it where we might have slipped?

We always need to recognize and build on what makes us unique—our high-quality research-based products, the opportunity we give people to change their lives in small and big ways and our deep commitment to the communities in which we do business.

It’s also critical for companies to acknowledge and correct for their blind spots and missteps, and that means doing a better job on compliance, income claims and product claims. Bass agrees. Transparency is everything in this industry, he says.

In January, the U.S. Direct Selling Association launched the Direct Selling Self-Regulatory Council to hold the industry even more accountable to ethical business practices. Administered by the Council of Better Business Bureaus, the SRC will monitor the marketplace for questionable activity, investigate consumer complaints and report potentially noncompliant companies to the appropriate government agencies.

“We know that direct selling has sometimes suffered from perceived problems, occasional bad actors and others who pretend to be legitimate,” said DSA President and CEO Joseph Mariano. “We have decided to address these issues directly, by holding companies to the highest standards with an effective third-party regimen.”

Says Bass, “It’s in our collective interest to call each other out and hold each other accountable for deceptive and dishonest speech.”

In addition to staying mindful of industry-specific changes, it’s important to note that the economy is likely nearing the end of a decades-long expansion cycle. It’s too soon to know how much of a slowdown we’ll experience, but slowdowns are inevitable. And maybe a more moderate pace is exactly what everyone needs to catch their breath and make plans for the next race.

$100 million+ non-reporting companies

In addition to the Chinese companies not reporting this year, several $100 million plus companies previously represented on our Global 100 list chose not to report their 2018 data.

·       ACN ·       It Works! ·       Melaleuca ·       Premier Designs
·       AdvoCare ·       Juice Plus ·       Neora (Nerium) ·       SeneGence
·       Beachbody ·       Kyani ·       New Avon ·       Skaklee
·       Cabi ·       LegalShield ·       Norwex ·       Stella & Dot
·       doTERRA ·       Le-Vel ·       Omnilife ·       Sunrider
·       Forever Living ·       LuLaRoe ·       Pampered Chef ·       Thirty-One Gifts
·       Isagenix ·       Mary Kay ·       Paparazzi

 

A Lifetime Of Lessons

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J. Stanley Fredrick says his secret to his success was being lucky enough to find the direct selling industry.

“As a boy from a poor family, to get where I am today is almost unbelievable,” J. Stanley (Stan) Fredrick says. His secret? “I was lucky enough to find this industry.” The direct selling industry counts itself lucky as well, for Stan’s commitment and advocating spirit to a business model that he discovered quite by accident as a young boy. So fortunate in fact, that Direct Selling News recently honored Stan Fredrick with the Bravo Lifetime Achievement Award.

Active in direct selling for over four decades and with roughly six companies, Stan Fredrick has stood out in sales, as a founding partner, CEO, investor, corporate governing board member for private and publicly traded companies, and as a 30-year advocate for the direct selling industry.

However, this was not his original intent. As a younger man, Stan planned to teach and preach. Life enlightened an alternative career path—direct selling—whereby, he felt he could do more good and help more people.

His Younger Days

He started young, selling homemade potholders door-to-door and throwing the Dallas Morning News before his legs were strong enough to hold his loaded bicycle without his brother’s help. He and brother, John, pitched in on family finances, and remained business partners all their life.

“We learned a lot about discipline (getting up at 3 a.m.), courage (knocking on strangers’ doors to get new customers), and finance (collecting money and payment for the paper bill),” Stan wrote in 1995 in the Direct Selling Education Foundation’s Direct Selling In the United States: A Commentary and Oral History. Life was lean for the Fredrick family in 1947, and Stan’s parents looked to direct selling to bridge the financial gap.

“Our father experienced the benefits of direct selling as a young boy in the 1940s, when his father sold cookware and mother sold beauty products to help the family with part-time income. He found the same kind of opportunities with his brother when they put themselves through college by selling cookware,” Landen Fredrick, Stan’s son and Mannatech’s chief global sales officer and president, North America, says.

“I started selling pots and pans when I was 16 years old. I learned how to sell and then learned how to build a team, then how to build a business,” says Stan.

Stan co-founded the private label cookware company, Colony House, and then Cameo/Colesce Couture, a distributor of intimate apparel. Both companies operated through direct selling channels. He’s now the largest shareholder of Mannatech, and majority shareholder of Wine Shop at Home, and Custom Fit Bra Company, as well as founder and partner of Blue Ostrich Winery and Vineyard.

Three Careers In Direct Selling

“I have been fortunate enough to have three distinct careers in direct selling: twenty years in the cookware business, 25 years in the bra/lingerie party plan business, and almost 20 in the nutrition/network marketing business. All three were very important to my growth as a businessman and as an individual,” Stan says, crediting the multiple coaches and mentors who helped him along the way.

“Dad has always had a gift for leadership. He believes in the power of words and prose to convey thoughts. Through his teachings and speeches, Dad can often—on recall—quote authors, leadership experts, poets and the Bible,” Landen says.

Stan also understands the power of knowing the numbers and believing what they can tell you and how they should be used to make the right decisions. In 2001, Stan became the second largest beneficial shareholder and a board member in Mannatech, a publicly traded, nutritional, skincare and weight management direct selling company. Sales grew steadily, and the company ranked No. 5 on Forbes’ list of the 200 Best Small Companies in 2006. A year later,
BusinessWeek ranked it No. 12 on its list of 100 Best Small Companies to Watch.

Weathering The Storm

But tumultuous years were ahead. Compliance litigation proceedings and the subsequent settlement drew national media attention and tarnished Mannatech’s reputation. Active associates and members declined, and so did net sales. “The numbers were a real wakeup call,” Stan told Direct Selling News in 2015.

By 2009, with Stan newly seated as Chairman of the Board, the Mannatech team made difficult decisions. They adjusted staffing, reduced costs and increased efficiencies. They aggressively focused on adherence to a code of ethics, even installing anonymous reporting systems for violations. By 2013, Mannatech had regained its reputation and profitability.

“I started selling pots and pans when I was 16 years old. I learned how to sell and then learned how to build a team, then how to build a business.” —J . Stanley Fredrick

Celebrating its 25th anniversary this year, Mannatech reported overall net sales of $173 million in 2018 and 200,000 independent associates and preferred customers. Stan remains the company’s largest, single shareholder and sits as Chairman of the Board.

“Because of his very personal experiences and success with direct selling, Dad made direct selling his passion. He was always working to make it better and help those outside of the industry understand its benefits,” Landen says.

Three Decades Of Service

Stan’s advocacy for the direct selling industry led him to three decades (1978-2008) and various positions with the Direct Selling Association’s Board of Directors, serving as Chairman from 1987-1988 and his induction into the Hall of Fame in 1988. As Chairman of the Board for the Direct Selling Education Foundation from 1988 to 1990, Stan worked to support their mission to engage and educate the public on the ways direct selling empowers individuals, supports communities and strengthens economies worldwide. He became part of DSEF’s Circle of Honor in 1994.

“Because of his very personal experiences and success with direct selling, Dad made direct selling his passion. He was always working to make it better and help those outside of the industry understand its benefits.” —Landen Fredrcik

“Dad believes in the power of the model and the opportunity it creates for anyone to own and run their own business. He believes that an individual with focus, application and consistency could achieve anything,” Landen says.

“This industry has given me much more than I have been able to give back. It was a blessing and very rewarding to have spent time on the Board of Directors and various committees of the Direct Selling Association. It was especially rewarding to serve on the Board of Directors of the Direct Selling Education Foundation and chair the Development
Committee. It was especially gratifying to chair the Capital Campaign and help to raise over $12 million,” Stan says.

Teaching The Next Generations

Over his illustrious career, Stan has touched the lives— directly or indirectly—of thousands upon thousands of people. That, he says, has “blessed me and my family spiritually, physically, and financially.”

From a young age, Stan taught his children the benefits of direct selling and earning their own way. He instilled in them the premise that no other occupation represents the values of servant leadership and entrepreneurism like a direct selling career. All five of Stan’s children have worked in direct selling, with three currently holding ownership and leadership positions within the direct selling industry.

But, perhaps, more importantly, Landen says, “Dad taught us how to be good parents and spouses through his love and devotion to his wonderful wife, Judy.

“I was lucky enough to find this industry.” —J . Stanley Fredrick

He believed in us, his children, and has built a family legacy rich with traditions we now pass on to the next generations.”

As for Stan, his future plans include more of the same—spending time with Judy and his kids, 12 grandchildren and seven great-grandchildren, working cattle on their ranch, relaxing on the beach in Hawaii, sailing in the Virgin Islands, hunting in the mountains of Colorado, or working in the vineyard at the family winery in the Red River Valley. Of course, he will keep working with the companies where his family has interests and continue his families’ strong support for their favorite charities: America’s Mighty Warriors and the M5M Foundation.

“I will continue to help the industry stay focused on our business model and help our customers be able to develop and grow their own businesses,” Stan says.

The Experience Advantage

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What form of non-cash incentive is compelling to your workforce? Consider an experience.

For many direct sales companies, the challenge of how to attract and retain the best possible people remains a head-scratcher. In the March issue of Direct Selling News, Courtney Roush dove into the world of compensation plans and examined how companies are rewarding consultants, versus how much to reward them.

So what does research say motivates people better? The Incentive Research Foundation (IRF) states that non-cash
rewards are up to three times more effective than cash. Why is this? Practical thinking would assume that cash is a one-sizefits- all reward, but that’s not always proven to be the case. For one, non-cash rewards are often something that an individual wouldn’t purchase for themselves. Sure, the utility of cash is nice, but most often it is spent on household items like home repairs, auto repairs or childcare needs and forgotten as soon as it is spent. Seldom do the recipients actually reward themselves.

Receiving a non-cash reward is guilt-free and creates a true vehicle for the celebration of a job well done, whereas cash is firmly viewed as transactional and compensational. Noncash rewards also offer increased social utility. The IRF also reports that being recognized in front of your peers is a proven form of motivation, but it can be embarrassing or inappropriate to discuss cash rewards in public. Non-cash rewards are far more acceptable to talk about with colleagues, old friends and family, or even posted on social media, generating enthusiasm, motivation and a shared sense of pride.

Motivational Forces Have Changed

The frequency in the use of non-cash rewards in the U.S. has exploded. Today’s estimate is that over 80 percent of U.S. companies use some form of non-cash rewards. This is up from only 25 percent in the 90’s, according to the Incentive Research Foundation. Why the shift in proliferation? As the U.S. workforce has changed, so have their motivational drivers. The IRF reports that cash no longer fulfills an employee’s organizational commitment, meaning, they don’t necessarily feel valued by their organization when handed a cash bonus that is seen as part of
compensation. However, they do when given a non-cash incentive that is considered in addition to compensation.

So, what form of non-cash incentive is compelling to your workforce? Consider an experience. According to a 20-year research study completed by Thomas Gilovich, a psychology professor at Cornell University, people consistently experience more long-term satisfaction from experiences than by acquiring more things. Gilovich states “People often think spending money on an experience is not as wise of an investment, but in reality, we remember experiences long after we forget our possessions.” Gilovich finds that adaptation and flashy consumer marketing is what causes material possessions to lose their luster more quickly. According to his research, we adapt rather quickly to new material possessions, raises or cash bonuses, where the thrill wears off fast, and marketers are very good and making the next version seem more appealing.

In contrast, we actually tend to upgrade memories of our shared experiences over time, emphasizing the positive moments and downplaying the bad. Gilovich’s research is reinforced by an additional study by the Incentive Research Foundation which reported that fewer people expressed regret over not buying a “thing.” However, many people can describe the regret they feel when passing up an experience, even years after the event has passed. Think about those passed up tickets to a sporting event, group vacation or concert that you wish you had attended at some point in your life.

Experiences Live On, Possessions Fade Away

The lingering desire for experiences proves that the gift of an experience, especially travel, can serve as an excellent motivator and recruitment tool for direct selling companies. According to a research study from the travel news website Skift, American Express surveyed their cardholders to find that 72 percent of respondents would rather spend money on experiences than things and 88 percent of respondents reported that travel topped their bucket lists. “Psychologically, experiences live on, and possession fades away,” says the Incentive Research Foundation. Travel is an extremely desirable motivator, especially to the millennial generation, which currently makes up approximately 37 percent of the direct sales population. But travel isn’t only desirable to millennials—it’s a common desire across all generations. The Skift study also included statistics from Tourism New Zealand, who surveyed over 20 million Americans between the ages of 22 to 65 and found that the desire for experience-based travel was virtually the same, regardless of age.

“People often think spending money on an experience is not as wise of an investment, but in reality, we remember experiences long after we forget our possessions.” —Thomas Gilovich, Psychology Professor at Cornell University

Beyond pleasant memories, travel experiences also build powerful relationships. Companies that travel together are more successful at building a connected culture and business owners that travel find themselves more refreshed when returning to their work. Travel also provides an opportunity to experience diverse perspectives and provides new inspiration or approaches to old problems, something that’s not possible within the confines of a home office or traditional workplace.

Impact Of Technology On Experiences

Technology is another reason for the shift in desire for experiences over possessions. In our increasingly social-media driven world, travel experiences are easier than ever to share and more motivating than ever before. In an interview with Joe Diaz, co-founder of AFAR magazine, Skift discusses how social media motivates others to travel. “When people see through the beautiful lens of Instagram these incredible things their friends are doing, they find that extremely inspiring, and they only have to click a button or two to find out what their friends did and how to do it too,” says Diaz. Direct selling companies that reward through travel experiences should promote social media before, during and after the trip. Diaz and Skift go on to emphasize the positive effect of social media in motivation, by encouraging companies to approach the use of social media and along with travel as a form of a reward and incentive. This creates a conversation much more powerful than a traditional marketing tool. It becomes a centralized part of the culture, and the experience creates limitless opportunities to engage new consumers, distributors and fans by posting genuine, authentic moments from the experience.

As direct selling companies continue to navigate the best methods to attract and retain the best possible salesforce, these organizations must remember that simply expressing appreciation for the work people do is no longer enough. It’s crucial to create an incentive program that rewards people effectively and aligns with your organization’s culture, goals and values. Next time, consider the power of transformative experiences and group travel as a new take on rewarding, motivating and celebrating your top performers.

Key Takeaways For Creating A Winning Incentive Travel Experience

  • Try to stay away from contrived, pre-packaged tourism and look for more personal, immersive experiences with human connection. A travel expert can help you identify authentic, “non-Google-able” experiences and create an itinerary that feels natural, relaxed and veritable.
  • Maximize Relationship-building opportunities by incorporating group activities and team dining experiences.
  • Encourage social experience by selecting resorts with informal gathering places like fire pits, walking paths and other informal gathering places.
  • Do your research or engage a travel expert that can do it for you. You want to make sure you select a destination that is attractive and motivating to your participants, plus offer one-of-a-kind experiences.
  • If you do present gifts on your trip, try to keep them experimental. An example of this is selecting a travel camera or athletic gear.
  • Get more bang for your buck! Encourage your participants to post their experiences on social media. Not only will this promote your brand, but this will also promote their own business and allow them to brag on themselves for their own achievements.
  • Increase the communication window. Travel does not only take place on the trip. Connect with your attendees before and after the trip to build anticipation and encourage them for next year. The anticipation of the trip can often be the most exciting part!