Click here to order the October 2013 issue in which this article appeared.

---

Photo above: Distributors celebrate at a recent NuCerity event.

---

Company Profile

• Founded: 2009
• Headquarters: Houston, Texas
• Executives: Jeff Graham, CEO & President; Lonnie McKinney, Founder & Co-Chairman; David Dillingham, Founder, Co-Chairman & Chief Operations Officer; Richard Jaenicke, Founder & Chief Technology Officer; David Bain, Chief Financial Officer & General Counsel; Melissa Chambers, Vice President of Marketing; Nancy Wendrock, Vice President of Operations; and Karen O’Quain, Director of Specialty Marketing & Public Relations
• Products: Skincerity®, Skin-Nutrition Rejuvenating Barrier™, Advanced Repair Satin Serum™, Eye Effects 3 Advanced Serum, Body Silk
• Website: www.NuCerity.com

---

Recent hire signals company is aiming higher.

NuCerity International hit the sweet spot for a direct selling startup when innovation gained traction, in part because industry experience didn’t slam on the brakes. But the recent hire of an industry insider as CEO and President shows NuCerity is ready to take the company to new heights.

NuCerity’s story starts with three visionary entrepreneurs focused on first-to-market technologies and creating brand-new consumer product categories. They first excelled in traditional markets. More than two decades later, they transitioned to direct selling and brought a unique, roll-on polymer barrier technology to the marketplace in the form of Skincerity.

In the Beginning There Was Slick50

It’s been 30 years since Lonnie McKinney, David Dillingham and Richard Jaenicke first combined their entrepreneurial spirits to create a paradigm shift within an industry. Their outsider status may have appeared as a disadvantage to industry insiders, but they liked it that way. After all, innovation often comes from not knowing what can’t be done.

Jeff Graham

Lonnie McKinney

David Dillingham

Richard Jaenicke

The trio brought forth products and methods for conducting business that industries never before imagined. They introduced portable construction engineering software and the very first lasers used in the construction industry. They owned and managed the largest multi-location dermatology practice in Texas—even though none of them held medical degrees—so doctors could focus on patients instead of billing. And then there was Slick50.

“It was a fantastic thing. We shipped product into 46 countries around the world. We really launched the whole category of engine treatments in the automotive after-market,” NuCerity Founder and Co-Chairman Lonnie McKinney says.

But in many ways Slick50 became a victim of its own success. “We were doing $50-plus million with Wal-Mart, and one day we had that kind of meeting where they said, ‘We need to have a better price or it might be hard to find your product,’ ” McKinney remembers. “Now, I’ll say this, we did have a great relationship with Wal-Mart. It is just who they are.”

NuCerity’s story started with three visionary entrepreneurs focused on first-to-market technologies and creating brand-new consumer product categories.

Retail profits were dropping because of voluntary retail price cuts, but that mattered little in the negotiations. Nose-to-nose with a big-box retail giant like Wal-Mart, Slick50 wasn’t coming out on top. So the partnership agreed to sell the company to Quaker State and chalked it up to a valuable lesson learned.

Fast-forward nearly two decades, and McKinney sits with Dillingham in the brand-new Houston offices of NuCerity International, discussing the trajectory of a very different kind of company, with products that have nothing to do with the automotive after-market and sales that are in no way connected to retail behemoths.

Still, Wal-Mart’s words ring in McKinney’s ears. “Look,” he recalls the representative telling them, “You need to understand something. That consumer is not yours. That consumer is ours.”

McKinney says, “It didn’t matter that Slick50 was running $40–$50 million a year with Wal-Mart, pioneered cable and targeted TV, or was the first million-dollar advertiser on The Weather Channel. We didn’t have the relationship with the consumer. We didn’t deal directly with the consumer.”

But with NuCerity, it’s a completely different story.

A Product That Begs to Be Demonstrated

Set up at a three-day Texas women’s conference, the plan was to broaden the reach of the company’s product Skincerity, a liquid-based, barrier polymer that rolls onto the skin and turns into a breathable, moisture-retaining film that amplifies any component under it, as well as the body’s ability to heal itself. According to the company’s website, while it seals in the body’s natural moisture to deeply hydrate skin, it both infuses antioxidants and allows oxygen to penetrate the barrier to help restore and rejuvenate skin. The result is smoother, younger-looking skin.

As owners of a large, multi-location dermatology practice, the founders checked out newly developed products at medical conferences all the time. And that’s where they discovered a breakthrough, one-of-a-kind technology.

“This product begs to be demonstrated!” —David Dillingham, Founder, Co-Chairman and Chief Operations Officer

Financed through National Institutes of Health (NIH) grant funding, the polymer film technology increased the effectiveness of topical antibiotics and antifungals. Clinical testing to meet NIH grant requirements was complete. The science behind the product was impressive, and so, too, was the firsthand experience of the product developer’s president, who suffered a broken wrist abroad.

Two surgeries and one unattractive scar later, the president sought a topical vitamin E that wouldn’t ruin her clothing. Immediately, she partnered the vitamin E and the polymer film technology. They worked together. She and her surgeon were impressed.

“We became enamored with it,” McKinney says. After negotiating worldwide and multi-channel marketing rights to the product, Skincerity was retailed through their dermatology clinics and other medical practices for several years until the fateful women’s conference opened another door.

“We simply rolled the product on women’s hands and explained to them how it worked,” says Dillingham, NuCerity’s Founder, Co-Chairman and Chief Operations Officer. In two hours, their three-day inventory vanished. “This product begs to be demonstrated!” he recalls telling his partners that day. “That was the moment we decided Skincerity was a network marketing product. Put in the hands of women, in particular, they were going to share it with their friends, and that’s exactly what has happened.”

Locking Arms with Consumers

There is, perhaps, no other industry with a tighter connection to consumers than direct selling. Consumers, distributors and companies are inextricably linked, and the importance of those relationships is an ever-present Slick50 callback for NuCerity’s founders.

It’s no accident that the partners believe they sit at the bottom of an inverted pyramid. “Our distributor partners are at the top. Our vendors are No. 2. Our staff is No. 3. We are at the bottom,” McKinney says. “It’s our job and our goal to give our distributor partners the tools and all the opportunity to be as successful as possible. We grow our business by putting our distributors first.”

Dillingham adds, “We will lock arms with you. We will have meetings in homes with you. We will be right here with you to help you grow your business. We absolutely lead by example, and I can assure you, we truly walk the talk. We don’t stay in Houston, Texas, and think for one minute that we know what’s going on in the field. The only way that you know that is to get out there and work with people. That’s what we do here, and it really does make a difference.”

McKinney agrees: “We would never sit there and say we’re the smartest people in the world, but someone would be hard-pressed to outwork us.”

“We would never sit there and say we’re the smartest people in the world, but someone would be hard-pressed to outwork us.” —Lonnie McKinney, Founder and Co-Chairman

Jeff Graham marveled at the accomplishments of NuCerity’s founders when he signed on as their new CEO and President earlier this summer. “In our industry, if you can be copied, you will,” he says. “They were very smart in that they secured the worldwide licensing for Skincerity, and they secured it not only for our industry, but for any channel.

“By all intents and purposes they had gotten through the first two years,” Graham continues. “They had certainly made some mistakes along the way, but whereas a lot of companies will start with industry experience and fail, these guys—without any industry experience—appeared to be succeeding.

“Now we have an opportunity to really communicate effectively and start to build on a brand-new category that nobody really knows about. We’ll call it breathable masque technology. That’s where Skincerity really fits,” he says.

Driving NuCerity’s early success is an incredible work ethic, trust and respect that starts with the founders and spreads across their field of predominantly female distributors. “We tell our field to recruit nice people, treat them with respect, and help each other,” Dillingham says. “When ordinary people pull the rope in the same direction with the same goals, that’s where you get extraordinary results.”

Graham, a seasoned direct selling executive, says, “The culture is one where the field and corporate are working together, which is very unique for our industry. My sense is that NuCerity distributors, in general, feel as if they are aligned with corporate. They absolutely adore the founders and when describing them they use words like trust, integrity, patience, kindness, understanding and honesty. They have this natural desire to belong to NuCerity.”

Holding Somebody’s Dreams Is Serious Business

“In a traditional business, somebody gives you money and you give them a product. In the direct selling business, they also give you their hopes and their dreams. You have a greater responsibility in direct sales than in any other thing that we’ve been involved with because you actually have somebody’s dreams in your hands. And you don’t mess that up. You just don’t do it wrong,” McKinney says.

Dillingham looks at the work NuCerity distributors do as investing in annuities toward financial security for the rest of their lives. “We say, ‘Take your time. Don’t quit your day job. Just do this if you enjoy it. You have to believe in your product. You have to believe in the company. You have to believe in the people behind the company. When you have that passion, it comes across, and distributors have the opportunity to change other people’s lives too,” Dillingham says.

“It was the first time I’d ever been involved in a business where changing someone’s life was more important than the sales report. I think that is the culture of our company.” —Lonnie McKinney

Nine months after she sold her car to meet expenses and borrowed the $59 startup fee, one NuCerity distributor partner confessed to McKinney that her original goal was to live in a place where her carpet was clean enough to lie on it and run her arms like angel wings through it. NuCerity made that happen for her, and retelling the story brings tears to McKinney’s eyes. “It was the first time I’d ever been involved in a business where changing someone’s life was more important than the sales report. I think that is the culture of our company,” he says.

Of course, it is with NuCerity’s products that these life changes begin, whether for customers purchasing them to improve their skin or distributor partners selling them to build a business. So the company diligently tests effectiveness and consumer trends. “We do things like a traditional business,” McKinney says. “So that makes it really magical when we attach products to a compensation plan. All of our distributors understand that we’re not making crazy claims. We’re out there selling something that changes skin and changes lives.”

Belief + Action + Skills = Results

“Belief + Action + Skill = Results. It is our responsibility to help distributor partners develop the skill to be business builders.” —Jeff Graham, CEO and President

It’s obvious to Graham that both NuCerity’s founders and distributor partners believe in their products and can put that belief into actions that advance their impact on other people. But in the equation, Belief + Action = Results, Graham says, “I would simply add one more thing: Belief + Action + Skill = Results. It is our responsibility to help distributor partners develop the skill to be business builders.”

The company’s goal is to build on individual strengths, shore up areas that need improvement and recognize the strengths of others. “We’re going to help you learn the skill of partnering with someone who is great at sales. You don’t necessarily have to become great at sales, but you ought to recruit someone into your business who is,” Graham says.

NuCerity distributor partners sell products in the United States and 14 international markets, including Southeast Asian countries such as Thailand, Indonesia, Singapore and Malaysia. “We have a strong, strong core in Canada as well,” Graham says. “I look at the revenue that we’re doing out of Canada, and even in a couple of years I would put us in the top 15, maybe the top 10.” He’s focused on domestic growth this year, so any international expansion will be very strategic. Instead, the goal is profitability in existing markets.

Globally, there are between 27,000 and 32,000 active NuCerity distributors. Some 75,000 distributors and customers combined have placed orders. Enrollment of distributors and customers continues to increase steadily. The company has experienced month-over-month growth since January, with less than .05 percent product returns.

Graham’s plans to expand distributor skills training reflect the needs of an international community. Areas of focus will be personal development, sales skills activities, videos, smartphone apps and improved social media that better connect distributors to the company’s story about such things as philanthropic partner Moms Against Hunger.

Moms Against Hunger delivers prepared, freeze-dried, vacuum-sealed meals and bulk food to some of the world’s neediest children. “We need to better communicate through social media, for example, our involvement, where these meals go, how many kids we’re feeding and in what countries,” Graham says.

Moms Against Hunger delivers prepared, freeze-dried, vacuum-sealed meals and bulk food to some of the world’s neediest children.

Dillingham traveled with the Moms Against Hunger group to inner Fiji after flooding ruined a life-sustaining sugar cane crop. “We took bags of fortified rice and gave it to mothers and children. To see how they were living was just unbelievable. I mean, it was life-changing to be part of that,” he says. To date, NuCerity has shipped 250,000 meals to Fiji, and a few distributor partners volunteered hands-on during the floods in Alberta, Canada, and in the aftermath of a devastating tornado in Moore, Okla.

But, Dillingham says, “Going into these disaster areas is no picnic. Not everybody can get behind those ropes, if you will, to help. So Moms Against Hunger is our vehicle, and we are very, very blessed to partner with them.”

With uncertainty the norm in today’s world, whether it is natural disaster or the realities of every day, McKinney hopes NuCerity is “giving people an opportunity to have control of their lives.”

Dillingham knows they are on the right track when a NuCerity Diamond distributor, who is so fearful of public speaking, wowed a crowd recently despite her fear. How did she get past it? She was more fearful of returning to her life before NuCerity, she told Dillingham, than she was of public speaking. “Now that,” he says, “will touch your soul.”

Click here to order the October 2013 issue in which this article appeared.

---

It has been slightly over two years since I retired after 40 years with the Direct Selling Association (DSA), first as a staff attorney and lobbyist and eventually as President and CEO. In addition, I was there at the creation of the Direct Selling Education Foundation (DSEF) and the World Federation of Direct Selling Associations (WFDSA), serving as Vice Chairman and Secretary General, respectively, of those two organizations. I have spent some 42 years in our industry—the reality is that it’s a method of distribution more than an industry per se—representing it, protecting it, promoting it and policing it. To say the least, I have seen much change, much adaptation, and much growth and innovation during that period. At the same time, I have seen the industry’s core values remain focused on empowering people one individual at a time, seen it being led by women and men of integrity and high moral character, and seen a continuing commitment to and passion for our distributors by corporate management.

I have also witnessed a spirit of service by our industry and its companies, their personnel and their representatives in the field in the various communities in which they operate. Given all of the good that our industry represents, it is disappointing to see the negative attacks on it. At this juncture in the road, the direct selling industry faces the question: Do we let our critics define us or do we take steps to make sure we better control our own reputation?

To explain what I mean, I will be focusing on four areas. One disclaimer that I need to make at the outset is that I am speaking for myself and only myself. I am not representing the DSA, the WFDSA or any other entity.

The four areas I will discuss are the industry’s attributes, the negative myths and canards leveled against it, the actions that can harm the reputation of the industry, and finally, what I see as possible solutions and courses of action that will continue to protect, promote and enhance the reputation of the direct selling industry. I use the terms sales persons, consultants, distributors and representatives interchangeably throughout the article.

---

Do we let our critics define us or do we take steps to make sure we better control our own reputation?

---

Direct Selling Attributes: What Are They?

Neil H. Offen served as President and CEO of the 100-year-old Direct Selling Association from 1978 to 2011. He also served as Secretary General of the 63-nation World Federation of Direct Selling Associations and as Vice Chairman of the Direct Selling Education Foundation. In 1994, Offen was appointed by President Bill Clinton and confirmed by the United States Senate as Vice Chairman of the board of directors of the Inter-American Foundation (IAF), a U.S. government foreign-aid agency working in Latin America and the Caribbean, through which he held senior U.S. government diplomatic status. IAF has distributed approximately $1 billion to non-governmental organizations exclusively for micro-entrepreneurial endeavors. Offen has also served on the boards of numerous organizations and councils. In addition to being inducted into the Direct Selling Hall of Fame and the DSEF’s Circle of Honor, he is also the recipient of the WFDSA’s Lifetime Achievement Award. Offen received his Juris Doctor degree from George Washington University and his Bachelor of Arts degree from Queens College where he was a New York State Regents Scholar. He resides with his wife, Carolyn Jennings, in Chevy Chase, Md. He has a daughter, Meredith, and a son, Michael; a daughter-in-law, Dana; and two poodles, Jasmin and Phineas Biscuit, better known as PB and J.

All of us working in direct selling believe in its positive attributes. I’ve listed here those truths about the direct selling opportunity that I believe are most powerful:

1. It empowers people. Its diversity is without bounds. It offers opportunities for people to set their own objectives, great or small, through full- or part-time efforts, for career opportunities or merely for supplemental income. It is an industry that directly ties reward to effort. It does not discriminate based on race, gender, national origin, religion, age, physical condition, educational background, political beliefs or financial resources;
2. It provides unlimited flexibility for the individual to achieve her or his own goals and control the time spent in the business as well as how that time is spent;
3. It drives micro-enterprise development wherever it operates—in a world seeking and needing such enterprises—and is a robust, grassroots source of business skills education, guidance and training;
4. It motivates people through providing recognition, quality products and services, technical resources and an overall nurturing environment with ongoing symbiotic support;
5. It provides opportunities with minimal capital investment or risk of loss;
6. It provides consumers with outstanding product warranties and guarantees in each marketplace in which it operates;
7. Its rules and standards, through company policies and through the independently administered direct selling associations’ codes of ethics, protect both salespeople and their consumers from abuse;
8. It is a simple business, though not necessarily an easy one, and due to the independent contractor status of each salesperson, it allows great ease of entry and egress;
9. It is global in nature and borderless in promotion of common core values and ethical standards;
10. It is innovative, adaptive and technologically friendly;
11. It has a strong public service and corporate social responsibility orientation at both the corporate management and the individual distributor levels;
12. It offers social contacts in a world where more and more people are becoming isolated from one another;
13. It is cause-oriented where its distributors believe in the product or service or opportunity and that they are helping to fill a valuable need of friends, family, neighbors and the public at large; and
14. It is a source of social and economic stability and opportunity within all its markets.

---

Direct selling motivates people through providing recognition, quality products and services, technical resources and an overall nurturing environment with ongoing symbiotic support.

---

Myths and Canards

Several untrue assertions regarding our industry permeate the Internet and mainstream news media. The following are some of the misstatements or outright lies often attributed to our business model.

Myth No. 1: All—or almost all—people who participate in direct selling lose money.

DSA research shows that over 80 percent of business-oriented recruits have very modest goals when joining a company and the vast majority … have their expectations met or exceeded.

In my experience, the reality is that an overwhelming majority of people who join a direct selling company to sell products and build a business do profit from it. DSA research shows that over 80 percent of business-oriented recruits have very modest goals when joining a company and the vast majority, whether still with the firm or no longer in the industry, have their expectations met or exceeded. The distributors earning the highest level of income are the business builders who typically spend significant time on the business selling, recruiting, motivating and training distributors and consumers in their organizations. They generally constitute between 10 percent and 20 percent of the salesforce. There is nothing wrong or unethical about this model, and this is similar to most non-direct selling retail sales organizations.

In addition, the industry has implemented safeguards against financial loss. The biggest protection against financial loss for all participating in our business is the unconditional product money-back guarantees for consumers and, for sales people, our minimum 90 percent inventory buy-back. All DSAs require their member companies to offer buy-back protection to all their distributors. Membership in a DSA is an added protection from abuse for sales people, potential sales people and consumers.

Myth No. 2: Self-consumption by sales persons is a problematic practice.

In fact, there is no binding precedent that establishes that a set amount of sales must be sold to persons outside the sales organization. The seminal FTC/Amway case in 1979 created a “70% rule,” but that rule only applied to the requirement that the distributors certify that they had sold at least 70 percent of their inventory in the prior month before they could be permitted to buy additional inventory. (Note: This case was long before the industry adopted the 90 percent inventory buy-back standard as part of the DSA Code of Ethics, which occurred in the mid-1990s.) 

Our industry’s standard of the buy-back removes the possibility of inventory loading if the firm is bound by the buy-back and it is properly administered. A distributor who purchases a product to personally consume it is a “consumer,” and there is nothing inherently wrong with paying compensation on these product sales.

Myth No. 3: Multilevel direct sales firms will fail due to geometric progression and turnover rates.

This simply may seem logical mathematically, but only if you start with the assumption that everyone is purchasing products solely to qualify to earn large amounts of compensation by creating a network and earning compensation on similar downline purchases. It does not occur in the real world because the assumption is faulty. Most persons signing up as salespeople in our industry are either seeking to buy product at a discount or for supplemental income, putting in less than 11 hours per week, and not that much in every week.

The FTC tried to make the geometric progression argument to the Second Circuit Court of Appeals in the Ger-Ro-Mar Inc.  vs. FTC case back in 1975. Ger-Ro-Mar sold bras and lingerie. In the words of the Second Circuit Court of Appeals:

“We find no flaw in the mathematics or the extrapolation [presented by the FTC] and agree that the prospect of a quarter of a billion brassiere and girdle hawkers is not only impossible but frightening to contemplate, particularly since it is in excess of the present population of the Nation, only about half of whom hopefully are prospective lingerie consumers. However, we live in a real world and not fantasyland (emphasis added).”

As stated above, the reality is that a majority join a direct sales firm either after having been a customer or wishing to buy its products at a discounted price. Most sales people and most direct sales firms market low-ticket, consumable products, and my educated guess is that over 50 percent of such sales people are sales people in name only. They buy the firms’ products at a discounted price for personal consumption and do not sell products or recruit other distributors. This percentage of “discount buyers” may approach over 90 percent of the salesforce of some firms and account for over 90 percent of product sales. 

The percentage of “discount buyers” may approach over 90 percent of the salesforce of some firms and account for over 90 percent of product sales.

As with any sales organization, the industry experiences a high rate of turnover in its salesforce, but people join and leave a salesforce for a variety of reasons. For example, if a woman was working only one month before Christmas to earn Christmas present money, she would contribute to the high turnover rate even though she might return year after year for decades during the Christmas season. In addition, based on data that I have seen over the years, many sales people sell for more than one direct sales firm during the year, either simultaneously or at different times. I believe that between 10 percent and 20 percent of the sales organization falls into this category, thereby overstating turnover rates. 

One final point on the geometric progression canard: I believe that the turnover rate of retail store personnel and franchise employees is very high. Strange that we don’t hear more about that and the fact that some work in retail stores because they are given employee discounts as part of their compensation plan. According to recent data, retail store employee discounts are often extended to the employee’s family and even sometimes to friends.

Actions That Can Harm the Reputation of the Industry

The reputation of our industry can be negatively impacted by a number of factors including the following:

1. Misconduct by a Member of a Salesforce

As sales people in any industry, most participants in direct selling conduct business in an ethical and consumer- and recruit-friendly manner. It is unfortunate but true that the reputation of the industry is negatively impacted if a participant inappropriately markets products or the income opportunity in a misleading way. Given the millions of participants in the direct selling industry, even the acts of a small percentage of participants can create significant reputational harm. Examples of acts that can damage the industry’s reputation include:

• Exaggerated earnings claims made to prospective recruits;
• Exaggerated or false product claims;
• High-pressure recruiting and sales tactics; and
• Excessive non-corporate training/motivational expenses.

2. Business Practices

It is important that companies properly evaluate business initiatives and compensation incentives before they are implemented to make sure they do not motivate or incentivize problematic behavior.

It is also important that companies properly evaluate business initiatives and compensation incentives before they are implemented to make sure they do not motivate or incentivize problematic behavior.  For example, I believe that compensating the salesforce for sign-up fees—which is one strong indicator of a possible pyramid scheme—as well as sales kits and aids, samples, and training fees and materials can create an incentive that increases the cost of the investment to join the business and the associated potential risk of loss to a new participant.

3. Enforcement of Distributor Policies and Codes of Ethics

If a company fails to diligently monitor the activities of its salesforce and enforce its ethical standards, regulations and policies, it will ultimately contribute to inappropriate actions that damage not only the reputation of the company but also the industry. A large number of participants join our industry each month, which makes it an imperative that companies adequately train the salesforce on marketing claims, legal requirements and the industry’s code of ethics. Companies cannot be passive in this effort.

My Vision

Having touched upon some of the attributes, myths and problematic practices, let me now turn to a view of the future that maximizes our positive attributes and potentially helps quash some of the negative stereotypes and myths that presently afflict us. Here are my high-level recommendations for the industry that I believe will further strengthen the industry and its reputation.

1. Continue to Enhance Consumer Protective Measures

I believe our industry has done a remarkable job developing consumer and distributor protective policies and codes of ethics. The industry standard of a 12-month return policy plays a critical role in protecting distributors from inventory loading risks. Unconditional 100 percent consumer product money-back guarantees should continue to be encouraged.

The DSA Code of Ethics establishes a baseline of important ethical practices for companies to follow. It is important that we continue to evaluate whether there are additional measures that can be adopted to further enhance the protection of consumers and distributors. The following are areas where I think additional protections may be beneficial to consumers, distributors and the industry:

I believe the industry should adopt and implement an industry-wide standard of transparency and disclosure regarding various relevant aspects of compensation earned by its salesforce members.

Compensation Summary: I believe the industry should adopt and implement an industry-wide standard of transparency and disclosure regarding various relevant aspects of compensation earned by its salesforce members. Many of our companies already make such disclosures, which provide prospective recruits with protection from misleading claims that could be made by a participant in the salesforce. No one can criticize us if we provide full disclosure of earnings. Presenting prospective recruits with detailed distributor earnings data during the recruiting process as well as on our websites and in our literature will eliminate most of the risk of the salesforce exaggerating the opportunities we are offering.

It is important that such disclosure be complete and provide sufficient information to furnish a fair overview of the earnings potential. Creating an industry standard will assist other companies and provide a norm they can follow. Once in place, all companies taking this transparency approach would be free from any charges of financially misleading members and prospective members of the salesforce. 

Minimizing Risk of Loss: A critical component of the industry’s code of ethics is its 12-month inventory return policy, which was adopted to reduce the risk of loss for new participants. Salespeople utilizing the return policies should be able to do so easily and expeditiously. The industry also needs to remain diligent in monitoring and evaluating trends and developments in business practices and activities of direct sellers to identify additional measures that should be adopted to ensure the industry always has comprehensive measures to protect consumers and distributors.

For example, I recommend that it should be made more clear that the current buy-back policy includes other purchases by new participants in the business such as sales aids, training costs and starter kits. I believe that DSAs should promulgate code provisions to codify some of the best practices in the industry, including restricting payments on certain types of compensation.

2. Educate Our Constituencies

• Members in the DSAs should take the opportunity to participate in industry research and surveys done by outside third-party firms retained by DSAs so that the industry will have accurate and credible data for use with the press, governmental entities, academia and other constituencies.
• Member companies can further increase their focus on educating their salesforce and customers regarding compliance policies and codes of ethics. Having a salesforce that is knowledgeable about the code of ethics—and their responsibilities under such code—is important to the long-term success of our industry. Member companies should have the necessary compliance staff and provide the training to accomplish this. I believe the head of this function should report to the CEO or general counsel. Companies should also have a whistle-blower system in place.
• Member companies should work to further improve their customer relations departments with a philosophy of total consumer and distributor satisfaction and excellent service. This is not just good business, it’s also smart business.
• There should be ongoing and significant public education efforts portraying the industry as it truly is, through public relations efforts based on solid data and useful information, public service activities, promotion of quality research, excellent use of social media channels and targeted projects to educate key influencers in society (e.g., legislators, regulators, the financial press, the “style” and general news media, academia, think tanks and consumer protection organizations). We have an opportunity to tell “our story,” much more effectively. This will require substantially increased financial commitments by the companies to those efforts.
• Annually, the WFDSA global “best practices” exchanges will ensure our industry is operating in all our markets on a consistent basis, at the highest ethical levels, and with the most effective ways to protect our corporate interests through taking the high road in building and sustaining our reputation, image and brand. Strengthening DSAs across the globe strengthens our industry. All industry firms should belong to the national DSA in the countries in which they operate.

Conclusion

Now is not the time to relax in our efforts to be a consumer-friendly, consumer-protective industry.

Now is not the time to relax in our efforts to be a consumer-friendly, consumer-protective industry. This is critical to our long-term success and the success of the people who rely on this industry for income opportunities and life-enhancing products. We must constantly evaluate our business trends and practices and be willing to take additional steps to protect our industry and its participants.

Having worked in 50 countries throughout my career, I have seen that the DSAs that are most successful are those with the support of the majority of companies in the country. I believe strong DSAs are critical to success, and I can’t emphasize enough that all industry companies should be members of the association in the countries in which they do business to most effectively do the job necessary on behalf of the industry.

Our business model not only works, but it is also a good thing for free enterprise, society and individual freedom. Its success is built on maintaining existing and establishing new personal relationships based on truth and trust. We and our sales people want happy customers and satisfied recruits. We and our sales people want to be good corporate citizens and contribute to society. In other words, we and our sales people want to do well while doing good.

Click here to order the October 2013 issue in which this article appeared.

---

We invite the industry to join us on Nov. 20, Amway Universal Children’s Day, to embrace a children’s cause in their communities.

---

If you’ve ever heard Amway Chairman Steve Van Andel or President Doug DeVos speak, you know they believe wholeheartedly in the power of entrepreneurism to make the world a better place. But it isn’t just the power of a business opportunity that can make a difference in the communities in which we live, work and play. It’s also the tremendous potential of our ability to mobilize people to help others.

Ten years ago Amway chose to focus its corporate philanthropy on children’s causes worldwide through the Amway One by One Campaign for Children and programs that improve the health, education and well-being of children. We believe in helping people achieve their potential and are committed to helping children get the support they need to thrive.

Our employees and Amway Independent Business Owners around the world enthusiastically joined us, identifying needs and organizations in their own communities and finding ways to help children live, learn, achieve and play.

Over the past decade, they have embraced causes in their cities and villages, making a positive impact in the lives of more than 10 million children. They have volunteered nearly 2.7 million hours to children’s causes and raised more than $190 million.

Their example is inspiring, and they are making a difference. Let me share a few examples of how our business owners have impacted children around the world:

• In rural China, Amway built nutrition kitchens through the “Spring Sprout Project” to help children and their families learn to prepare nutritious meals.
• Our business owners in South Africa provided lap desks when they learned Johannesburg students didn’t have desks in their classrooms.
• In Thailand, a “Flying Book” program helped support literacy efforts by bringing books to Thai children who typically only read two books per year.
• Business owners in Brazil and Guatemala built homes through Habitat for Humanity, giving children safe places to live.
• In the United States, Amway built 15 KaBoom! playgrounds to support the organization’s goal of giving every child a safe place to play within walking distance of their home.
• We have leveraged our scientific expertise in nutrition to create Nutrilite Little Bits, a micronutrient powder to fight chronic malnutrition in children.
• And to help with the healing of the children and families most affected by the devastation of the March 11, 2011, earthquake and tsunami in Japan, Amway recently opened the first “Amway Community House” in Tokohu. Working in partnership with local governments and nonprofit organizations, Amway Japan aims to build a dozen houses to give families and children a place to connect, rebuild and heal.

These are amazing examples of compassion and caring led by tireless volunteers and generous givers who help fulfill the Amway vision of helping people live better lives.

As we commemorate the 10th anniversary of the Amway One by One Campaign for Children, we hope to galvanize support and mobilize the collective power and strength of our global network in a single day of giving and volunteering.

On the Amway Universal Children’s Day on Nov. 20, we are inviting our employees, business owners and friends to “Commit to Serve” by identifying a children’s cause and giving their time that day to make a difference in a child’s life. We’ve launched a new Amway One by One Campaign for Children website at www.amwayonebyone.com to inspire people to give their time to help children achieve their potential.

What children’s cause inspires you? I’m passionate about two organizations dedicated to improving the lives of children: Figure Skating in Harlem and the Boys & Girls Clubs. Figure Skating in Harlem is a pioneering organization that provides New York girls from elementary through high school with educational and skating opportunities to help them learn perseverance, responsibility, teamwork and leadership on and off the ice.

Closer to home, my family has hosted fundraisers to bring new programs to Boys & Girls Clubs in Amway’s backyard in West Michigan. Amway has been a supporter of the Boys & Girls Clubs nationally, and our corporate involvement dates back to before Amway was established in 1959: Nutrilite Founder Carl Rehnborg helped create the first Boys & Girls Club in Buena Park, Calif., in 1948.

I’m spending Nov. 20 in our headquarters community of West Michigan, volunteering my time with several local organizations. I’ll be joined by tens of thousands of people around the world who will give of their time and talent to help children.

We at Amway hope it’s only the beginning of renewed commitments to pledge time and money to help improve the lives of children in the big cities and tiny villages where we operate. In the next 10 years we hope to double our giving and impact.

So many of our peers in the direct selling industry embrace causes to better humankind. We are inspired by their efforts and encourage them to keep giving.

We also invite the industry to join us on Nov. 20 and embrace a children’s cause in their communities. Together we could impact millions of children around the world in a single day.

---

For information on the Amway Universal Children’s Day or to learn more about helping children in your community, visit www.amwayonebyone.com.

---

Candace Matthews, Global Chief Marketing Officer of Amway

Click here to order the October 2013 issue in which this article appeared.

---

Ross Creber, direct selling warrior and servant leader for over 30 years, recently announced his plans to retire as the President and Secretary of the Direct Sellers Association of Canada. Prior to working in support of direct selling and becoming an industry advocate, Creber’s experience included that of both entrepreneur and corporate executive, having worked with prominent Canadian firms in diverse sales and marketing roles. While at the helm of the DSA in Canada, his skills, talents and experience enabled many key initiatives. In the late 1990s, Creber, as Executive Director of the World Federation of Direct Selling Associations, managed the first Socio-Economic Impact Study ever conducted on the impact of direct selling on global economies.

In tribute to his many accomplishments and his many years of outstanding leadership, DSN brings you a personal interview with Ross Creber.

KH: What attracted you to the direct selling industry to begin with?

Ross Creber

RC: I got attracted to direct selling because of my wife, Bobbie. At the time, we had two young children, and she was a registered nurse running an orthopedic center. Bobbie didn’t want to go back to that after having the kids, yet she was looking for something outside of the home that offered more flexibility. She went to a Tupperware party and connected with the gal doing the show, and one thing led to another. Bobbie ended up selling Tupperware and in a period of three years became one of the top managers in Canada. We were given an opportunity to start a new Tupperware distributorship in Calgary. After eight years of being one of the top Tupperware distributors, I went on staff as Vice President Marketing for Tupperware in Canada.

Our careers in direct selling include my work as a business consultant for other direct selling companies and Bobbie having been President of the Canadian DSA for five years. Following this, she was hired to open PartyLite Gifts in Canada. I joined the DSA as President, and five years later we moved to London, England, so that Bobbie could open new markets in Europe for PartyLite. I took a position with the WFDSA as an Executive Director working closely with FEDSA (now SELDIA).

We told our kids we would come back to Canada when we had grandchildren. We were thrilled to return to Canada years ago and to be closer to our children and grandchildren. I was recruited to continue my work as the President of the DSA, and Bobbie continued her work in the industry, which ultimately led to her launching another direct selling company in Canada, lia sophia, where she is currently Managing Director. So direct selling has truly been a family affair.

KH: What drew you to the role as the DSA President in Canada?

I have such a passion for direct selling and the ability to work with government officials, to be able to make legislative changes and impact people’s lives in such a positive way.

RC: I have truly enjoyed my entire career in direct selling. I have such a passion for direct selling and the ability to work with government officials, to be able to make legislative changes and impact people’s lives in such a positive way. I have so enjoyed the friendships over the years with people in business and government working to make sure we do all we can to maintain an open marketplace for direct sellers and companies. In fact, this is still what drives me today.

KH: Over your career as President of the Canadian DSA and also as Executive Director of the World Federation of Direct Selling Associations, what is it about direct selling that has made the deepest impression upon you?

RC: My deepest impression goes back to the impact you make on people’s lives. This industry is open to all people of all races and educational backgrounds. This is the thread that ties us all together. The method of how we do business based upon cultural or regulatory differences is secondary. In the end, it’s all about building relationships and meeting people where they are by providing quality services and quality products.

I also love the entrepreneurial nature of this business. We equip people with products, business savvy and tremendous earning power. We truly transform their being and their confidence. This industry is open to anyone with no barriers. People just need to have a willingness to engage and work hard. Another huge impression on me is the way the direct selling industry comes together to resolve issues, because at the end of the day we all want our direct sellers to be successful.

Ross Creber with Canadian Prime Minister Stephen Harper. In the end, it’s all about building relationships and meeting people where they are by providing quality services and quality products.

KH: What have you seen change the most?

RC: Probably what I have seen change the most over the years is the method and the speed of communication, with Twitter, personal websites and the expectations of consumers. All of these have impacted the dynamics of the business.

We are also seeing more ethnic diversity, which works well for people coming into our country, because they can start to work within their ethnic communities until they are more comfortable with the language and culture in other communities. Of course, we want them to eventually move outside their comfort zone and expand their horizons.

KH: What still needs to change? Or be improved?

RC: We need to change the perceptions of people outside the industry and show that we indeed provide a legitimate and powerful business opportunity. The direct selling channel is so unique that it is difficult for people outside of the business to understand how you continue to motivate an independent salesforce as opposed to a salesforce of employees.

We are seeing increased interest from the younger generation entering the channel, with some of this being driven by exposure to university programs on entrepreneurship. These are the people who get into direct selling because they are not sure what they want to do. And in the process they discover a lifelong career.

The strongest asset that we have as associations and as an industry is our Code of Ethics and Business Practices. Unlike many other industry associations, you don’t just write a check and gain membership in the more than 60 DSAs around the world. The rigorous review that is undertaken prior to granting membership, including the commitment to and compliance with the Codes by our respective member companies, provides assurance to direct sellers and consumers that they can purchase products and invest in the business opportunity of our members with confidence, knowing that they are backed by organizations that require a strong adherence to ethical conduct in the marketplace.

I believe that we are doing a good job of communicating this message to regulators, but we need to do a better job of communicating the message to consumers, and the WFDSA and local DSA Communications Initiative will go a long way to creating a greater awareness among direct sellers and consumers. This is a great marketing tool for direct sellers to use during presentations to customers or prospective recruits.

KH: What have you witnessed in your tenure about the growth of the direct selling channel of distribution among people?

RC: We continue to see an increase in the 55+ age group. These are people looking for second careers and supplemental income. And of course, one of our biggest drivers remains young moms looking for an outlet, a flexible new career that allows them to combine home and work environments.

KH: Please share your thoughts on the future of our industry, in Canada and across the world.

RC: Direct selling transforms lives. Back in the early days when I was a distributor for Tupperware, I witnessed people’s lives and confidence change. It’s not always about money. Money is certainly a factor, but it’s the improved skills and the increased self-confidence that evolves over time. People treat direct selling as a business and lifelong career—not a hobby. This trend will continue to grow nationwide and globally.

KH: As you prepare to step down as Canadian DSA President, what are you most proud of?

RC: We have developed a very strong relationship over the years with government agencies and the Canadian DSA. We had a lot of legislative wins during my time and Bobbie’s time at DSA. We have been able as an association to work with the federal government and develop amendments to the Competition Act, which deals with multi-level marketing and pyramid schemes of selling. This legislation really is a model for the industry.

Back in 1991 we identified that the Goods and Services Tax (GST) would create a real challenge for direct sellers, so the association with support of legal counsel worked with the Department of Finance and Canadian Revenue Agency to put in an alternative collection mechanism for direct sellers. The precollection mechanism allowed direct selling companies to collect tax at the time of sale and remit to the government on a regular basis. This was a win-win for the industry, direct sellers and government. It’s a classic example of how government and industry work together. In fact, we are the only industry that was given a special arrangement when GST first came in. Through legislative work we have been able to harmonize direct selling processes across provinces and simplify the process for companies and the direct seller who sells across borders. The greatest acknowledgement came when the Prime Minister’s office identified the DSA as a significant contributor to the economy.

I have been blessed over the years to receive the following honors:

• Recipient of the DSA’s Ivan P. Phelan Award (1997)
• Recipient of the DSEF Circle of Distinction Award (2010)
• Recipient of The Queen Elizabeth II Diamond Jubilee Medal (in celebration of Her Majesty the Queen’s Diamond Jubilee of her ascension to the Throne) (2012)

I want to acknowledge a number of mentors throughout my career, including Bobbie,  Jud Whiteside, Jack Miller, Ray Patrick, Joe Mariano and Neil Offen, just to name a few.

I am looking forward to spending more time with my wife; our family, including our five grandchildren; golf and some travel.

In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with John Addison, Chairman of Primerica Distribution, Co-CEO and Director, about leadership, dominating the financial services industry and living every day to the fullest.

DSN: You’ve been with Primerica for more than 30 years. What’s your personal goal for Primerica?

JA: To position this great company for the next 30 years. To make sure our cause and our business continue to dominate the financial services industry in the future.

DSN: If you could relive a period of time at Primerica, when would it be?

JA: Our battle for the IPO to get out of Citigroup. It was the most challenging time of my career, but because I knew the stakes it was when I felt the most “alive.”

DSN: What other direct selling company or leader do you admire most, and why?

John Addison

JA: I read Mary Kay Ash’s book and always admired her tenacity and what she overcame to build a great company.

DSN: Aside from Art Williams, who has had the most influence on your career, and how?

JA: My mother. She taught me how to deal with people from all walks of life. My mom could always make people feel great and inspire them. She was truly a special person, and I miss her every day of my life.

DSN: What’s on your bucket list?

JA: To get up every day and have fun. To live every day like it’s my last… because one day I will be correct.

DSN: In your presentation at VideoPlus University earlier this year, you advised attendees to “be a steward of your own life.” How do you do that in your life?

JA: I say always look for the positive. Life is very short. We all spend too much time worried about things that really don’t matter. Always remember life is a journey and an adventure. Enjoy the trip.