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The 1 Percent Difference: Direct Sellers Continue to Make Positive Global Impact

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

IN THIS ISSUE:

• Cover Story • 10 Things to Know • The List
• Topping the Charts • Profiles • Celebration

BRAVO AWARDS:
• Leadership • Growth • Momentum

Direct Selling News, June 2013

It’s fascinating to consider the numbers: Of the 7 billion people on the planet, a little over 1 percent are direct sellers.

Just 1 percent. At first, that doesn’t sound like much. However, 1 percent actually equals over 91.5 million people worldwide who have embraced the entrepreneurial spirit by choosing to become small-business owners.

Indeed, direct selling—that microcosm of people from all walks of life and from all regions of the globe seeking new opportunities—is having a tremendous impact on the global stage.

What can 1 percent do? Collectively, it can transform millions of lives for the better, effect much-needed social change, safeguard natural resources and stand at the forefront of job creation. And it can do it all amidst challenging economic times and changing consumer attitudes.

Over 91.5 million people worldwide have embraced the entrepreneurial spirit by choosing to become small-business owners.

Impacting the Economy

Challenges always walk hand in hand with opportunities. That is the nature of any business model. And the direct selling industry has certainly faced its share of challenges.

When the global economy began its decline in 2007 there was cause for concern. How would the industry react? Would it remain stable while the economy plummeted to depths not seen since the Great Depression? When U.S. retail sales steadily declined over the four-year period from 2006 to 2009, that concern grew exponentially.

But the industry always seems to reinvent itself. It is that direct selling moxie that always prevails—that spirit and courage and boundless energy—and allows the industry to shake off the threats, pull up its bootstraps and look for new opportunities to help its people succeed.

It is the ability of established companies to embrace change, and the dogged determination of startups that contribute to the continued success of the industry.

Of the Top 10 companies on this year’s DSN Global 100 list, eight reported double-digit dollar growth over the past three years.

Of the Top 10 companies on this year’s DSN Global 100 list, eight reported double-digit dollar growth over the past three years. And if the first quarter of 2013 is any indication, the future looks promising for direct selling. Several top public companies exceeded expectations or set new records for sales growth, including Herbalife (17 percent), Nu Skin (19 percent), Tupperware (3.6 percent), Natura (5.9 percent) and USANA (9.7 percent).

Looking closely at the Global 100 list, there might be something very telling about this industry and the people who comprise it. Seventeen companies with less than 10 years in the business made their way into the DSN Global 100 list for 2012, accounting for $5.3 billion of the $72 billion the listed companies achieved in 2012. Six of those 17 companies are less than 5 years old, proving that economic uncertainty cannot keep the entrepreneurial spirit down.

And that entrepreneurial spirit is what is needed most today. An estimated 200 million people worldwide are without jobs. Last month, the International Labor Organization reported that the youth unemployment rate is expected to climb from 12.4 percent to 12.6 percent, leaving some 73 million between the ages of 15 and 24 out of work.

So where will the jobs come from? According to a recent USA Today interview with the International Monetary Fund, the global organization dedicated to fostering high employment and sustainable economic growth, unleashing creative potential and the enterprising spirit will encourage growth and lead to job creation.

And when looking for companies that show significant growth and provide business opportunities for those millions out of work, look to the direct selling industry.

Greatest Growth Percentage

Impacting Public Perception

Growth companies and not large corporations are where the action is.

When Inc. magazine released its 31st annual Inc. 500|5000 ranking of the nation’s fastest-growing private companies for 2012, it noted that, “Now, more than ever, we depend on [these] companies to spur innovation, provide jobs and drive the economy forward.” Growth companies and not large corporations, the magazine noted, are where the action is.

The Inc. ranking, which offered a comprehensive look at America’s independent entrepreneurs with substantial sales growth, included several direct selling companies: Stella & Dot (No. 57), J. Hilburn (No. 221), Scentsy (No. 516), It Works! Global (No. 662), YOR Health (No. 1220), Ambit Energy (No. 1305), Initials Inc. (No. 1555), 5LINX Enterprises (No. 2900) and Isagenix International (No. 4951).

The success of such companies is just the tip of the iceberg for an industry focused on changing public perception of the direct sales channel of distribution. The Yankee peddler image that has pervaded the consumer consciousness for more than a century is slowly giving way to a new view of direct sellers.

Today, several direct selling companies stand with the giants in the corporate world. Berkshire Hathaway, parent company of direct sellers The Pampered Chef, Kirby and World Book, ranked fifth on the Fortune 500 list of America’s largest companies. Medifast Inc. (Take Shape for Life) was ranked at No. 10 on Forbes’ list of the Best Small Companies in America.

Tupperware was ranked No. 2 in the Home Equipment category for the World’s Most Admired Companies by Fortune. And Ambit Energy and Primerica were both recognized on the 2012 InformationWeek 500 list of Top Technology Innovators, an annual listing of the nation’s most innovative users of business technology.

Global Direct Sellers

Impacting Small-Business Owners

Over a century ago, Walker Agents, Fuller Brush salesmen and Southwestern representatives were among the direct sellers aided by a new invention that made it easier to reach customers: the telephone. Today, the innovative use of social media and mobile devices by technology-savvy direct selling companies has allowed would-be entrepreneurs to reap the benefits by staying closely connected to consumers.

What remains the greatest advantage is that direct selling is an environment in which all people have an equal right to success.

But technology is just one of the advantages for those testing the entrepreneurial waters in direct selling. What remains the greatest advantage is that direct selling is an environment in which all people have an equal right to success. Age, gender, religion, education or financial resources do not limit the opportunities.

For those individuals willing to put in time and energy, direct selling truly has significant earning potential. However, people get involved in direct selling opportunities for a variety of reasons, from making a car payment or paying off a debt to making a career change or building a large business. Some become direct sellers in order to purchase products or services they love at a discount. Certainly, being one’s own best customer has advantages.

And the industry—one about people and for people—makes the transition to owning a business easier. There are fewer barriers to entry, with most initial investments less than a few hundred dollars, and ongoing support is provided by their companies.

That support includes training in business skills as well as opportunities for personal development and coaching, which are unequalled in other industries.

The industry also empowers entrepreneurs to use their businesses to make a difference in the lives of others. Many direct sellers are drawn by a company’s corporate social responsibility initiatives. Direct selling, recognized as one of most charitable industries, comprises companies that have been founded on the principle of giving back to others.

In addition, many companies are focused on conservation, helping to create a sustainable environment. São-Paolo, Brazil-based Natura, the No. 5 direct seller in the world, was recently ranked the second most sustainable company on the planet by Canadian research firm Corporate Knights. Companies such as Viridian Energy, which is committed to renewable energy, and Momentis, which instituted a green energy initiative to help consumers offset their carbon footprint, are among the direct sellers striving to save natural resources.

Impacting Consumers

Today a company is measured by its products or services as well as its behavior and respect for the community.

In today’s socially responsible culture, a commitment to others is not only a prerequisite of small-business owners, but also consumers. Today a company is measured by its products or services as well as its behavior and respect for the community.

Today’s consumers want to know the company behind the product—how it behaves and if it respects the environment. They want to feel that when they make a purchase, their money is working to help others, benefiting charities and organizations.

This change in consumer behavior—how and why people are deciding to buy—is changing consumer-supplier relationships. But what has not changed is the industry’s focus on providing quality products and services that enhance people’s lives.

Direct selling companies offer a wide variety of consumer goods, from cosmetics and wellness products to telecommunications and insurance. The most common sales method remains person-to-person, which accounts for 70 percent of sales. (The party plan method accounts for 35 percent.) According to the U.S. Direct Selling Association, 74 percent of Americans have purchased products from a direct seller.

The industry is intent on self-policing and protecting consumers by voluntarily following a strict Code of Ethics, set forth by national direct selling associations and overseen by the World Federation of Direct Selling Associations, which since 1978 has pursued the highest level of ethical conduct in the global marketplace.

If the $160 billion in global 2012 sales across the world is any indication, direct selling will continue to flourish. In fact, many companies are expanding their operations into both developed and emerging markets. Last month Amway announced plans to invest $20 million in a second manufacturing site in Vietnam. Nu Skin is expanding its operations in China, which it expects will top $1 billion in sales for 2013.

If the $160 billion in global 2012 sales across the world is any indication, direct selling will continue to flourish.

LifeVantage and Mannatech are launching in Hong Kong; Neways and Stemtech are venturing into Thailand. Jeunesse Global is opening operations in Australia and New Zealand. And Oriflame, the No. 9 direct seller, is expanding into India.

Top 10 Direct Selling Regions

A 100 Percent Difference

Whether the 91.5 million people around the globe who call themselves direct sellers have been attracted to the industry by the products or the business opportunity, one thing is clear: Direct selling empowers them to better themselves, their families and their communities.

This small minority is helping people enjoy the benefits of world-class products and services, live free from debt, join in the efforts to save the environment and reach out to those in need.

It’s clear that just 1 percent can make a 100 percent difference.

Participation in the DSN Global 100 Ranking

Direct Selling News will again host the DSN Global 100 Celebration in April 2014, based on each company’s 2013 performance. If you believe your company would qualify for the Global 100 ranking and you would like to be notified when research begins this December, please send an email with your complete contact information (name, title, company name and phone number) to editor@directsellingnews.com.

Leadership Award: Worldwide Leadership from the Heart

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Alessandro Carlucci, (left) CEO of Natura and Chairman of WFDSA, accepts the Bravo Leadership Award from DSN Publisher and Editor in Chief John Fleming at the DSN Global 100 Celebration held in April.

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

IN THIS ISSUE:

• Cover Story • 10 Things to Know • The List
• Topping the Charts • Profiles • Celebration

BRAVO AWARDS:
• Leadership • Growth • Momentum

Natura

True worldwide influence is rare for a direct selling executive. Even the CEOs of multinational companies can usually shape only their own organizations. Not so with Alessandro Carlucci. He leads the world’s fifth-largest direct selling company, Natura. And as Chairman of the World Federation of Direct Selling Associations (WFDSA), he also sways public opinion and the actions of industry companies around the globe.

For those exceptional achievements, Carlucci accepted the Direct Selling News Bravo Leadership Award. The prestigious prize is presented to an individual who personifies leadership, who guides and directs, and who leads those around him toward greater good, progress and achievement, all while earning the respect and admiration of those he leads.

Carlucci could have been considered for the award based on his impact on Natura alone. The cosmetics, fragrances and personal-care company has long been one of the industry’s stars, admired for its consistent growth and strong management, but also for its dedication to social progress and environmental sustainability. Headquartered in Greater São Paulo, Brazil, and with operations in Argentina, Mexico, Chile, Peru, Colombia and France, the $3.2 billion company has a 1.5 million member salesforce. In 2011 Forbes magazine named it one of the 10 most innovative companies in the world.

The Bravo Leadership Award is presented to an individual who personifies leadership, who guides and directs, and who leads those around him toward greater good, progress and achievement.

Carlucci’s WFDSA leadership elevates his considerable accomplishments to the next level. The organization’s key long-range objectives include promoting ethics and bolstering the industry’s image—both Natura strengths. Carlucci believes that the industry is succeeding in both areas. He says that building a strong industry reputation is the WFDSA’s most important project.

“Around the world, the direct selling industry’s image is totally correlated with results,” he notes. “When you have good results, you have a good image. Even when the industry is under attack, it’s because of a financial issue. It isn’t customers complaining. The reputation of our industry with customers is a good one. But the financial community doesn’t know us well.”

Do the Right Thing

2013 Bravo Leadership Award: Alessandro Carlucci, Natura 2013 Bravo Leadership Award:
Alessandro Carlucci, Natura

Carlucci points out that 90 million people around the world are connected with direct selling, either as customers or entrepreneurs. When they have good experiences, he says, they tell their friends, and that builds reputation.

“To me the most powerful way to build the industry’s reputation is with public relations,” Carlucci says. “The press doesn’t usually know us very well, but they’re interested to learn more. Each company has a good opportunity to have a PR program. It typically doesn’t cost much, and it brings a lot of good results.”

Achieving a good reputation is like an ongoing journey. At no point will the industry reach a destination, Carlucci observes. Instead, opportunities always exist to enhance and improve the image of the industry and the individual companies within it.

“All the companies need to do things right, behave right, be very transparent and open with their salespeople and customers,” he says. “That’s the beginning of the story. Do that and people will say nice things about the company and its products. It’s the best advertising ever.”

Carlucci also believes that direct selling can play a role in boosting the global economy, especially as people live longer and companies shrink. As always, he views the opportunity from both economic and social perspectives.

Part of the Solution

As life expectancies increase, people need to earn money for longer periods, he says. At the same time, recent college graduates are having difficulties finding traditional jobs. Direct selling offers opportunities for careers and earning prospects to millions of people around the world. Those people encompass every age range and, from a larger perspective, entire economies that are either thriving or in crisis.

In addition, the training that direct sellers offer elevates the industry’s reputation, as it creates more competent, successful distributors.

Especially in countries such as Brazil, Carlucci points out that becoming a direct selling distributor offers educational opportunities that citizens may not have in their day-to-day lives. To sell their company’s high-quality products and services and to present the opportunity in a transparent way, they must learn new skills. The process even creates higher self-esteem, as it improves economic results—for society as well as for individuals.

“We have two sides of the same equation,” Carlucci says. “The opportunities in our industry are part of the solution for the society. With new technology available and most direct selling companies using these technologies to engage the millennials, we have a huge way to modernize our industry and be totally connected with the needs and behavior of new generations and new customers that are emerging.”

He notes that millennials are both an opportunity and a challenge for the industry. Carlucci says that direct sellers must speak the language of this new generation—a demographic that expects to have full access to information and maintains relationships through social networks, the Internet, mobile phones and tablets. Every industry already leans more heavily on technology to transform their sales and customer-acquisition processes. Direct selling, which Carlucci calls the original social network, has to do the same.

“We have two sides of the same equation. The opportunities in our industry are part of the solution for the society.”
—Alessandro Carlucci, CEO of Natura and Chairman of WFDSA

“Today we know that customers rely more on product recommendations from friends or the number of stars a product or service has on the Internet than on advertising on TV,” he notes. “One of the main principles of our industry is recommendation. There is nothing more contemporary than what direct selling does. If we can leverage this recommendation—the trust between direct seller and customer—then we are in a very good position compared with other channels. Retail or Internet sellers don’t have the opportunity to do that.”

Walk the Talk

All of Carlucci’s comments are more than philosophies. They’re also action items at Natura, the company he has embraced since he finished business school in 1989. He became its CEO in 2005—the company’s first top executive from outside its three controlling stockholders. At that time, the company’s founder, Luiz Seabra, along with Guilherme Peirao Leal and Pedro Luiz Passos, moved out of day-to-day operations but remained co-chairmen of the board of directors. After running the company for 30 years, and just a year after the company went public, they signaled their trust in Carlucci by passing the torch to him—a man whose name has become virtually synonymous with Natura. When he accepted the Bravo Leadership Award in April during a special ceremony, a unique mini-movie introduced him and his company. When he spoke recently with Direct Selling News, his descriptions of the video and of Natura were clearly heartfelt.

Carlucci (center) and other team members are presented with an award in honor of Natura’s ranking at No. 5 on the DSN Global 100.Carlucci (center) and other team members are presented with an award in honor of Natura’s ranking at No. 5 on the DSN Global 100.

“It’s about the pleasure, honor and responsibility of taking care of ourselves, of others and of the planet,” Carlucci says. “The belief that all of us have a unique and irreplaceable role in this world drives Natura and its value proposition to find innovative ways of doing business. We want to be a profitable enterprise that generates positive impact in people’s lives and in the environment. And we want to do that with joy, always seeking beauty and sharing the dream of a better world. What can be more universal than those themes?”

Those themes are captured in Natura’s motto: well-being/being well. The company describes well-being as the harmonious and pleasant relationship of a person with one’s body. Being well is the empathetic, successful and gratifying relationship of a person with others, with nature and with the whole.

Those beliefs are thoroughly integrated into Natura’s business practices. For example, six years ago Natura committed to reduce CO2 (carbon dioxide) emissions by 33 percent by 2013. It has made consistent progress, and last year the company was able to decrease its emissions by 4 percent over 2011 levels. Since 2006, it has reduced CO2 levels by 28.4 percent. By the end of 2013 it will have reached its goal of a 33 percent reduction by investing in reforestation, energy efficiency and fossil-fuel-substitution programs. It fights for efficiency in its distribution network, and it also selects its suppliers based on social and environmental criteria, as well as technical and economic criteria. In 2012, Natura reached a reduction of 7.4 percent of absolute greenhouse gases, compared to the amount in 2008. Carlucci emphasizes that its environmental results are as important as economic results to Natura.

“We want to be a profitable enterprise that generates positive impact in people’s lives and in the environment. And we want to do that with joy, always seeking beauty and sharing the dream of a better world.”
—Alessandro Carlucci

High Tech, High Touch

That distribution network is not only environmentally efficient, but it also delivers continuously improving service to Natura’s consultants. Carlucci says that the logistic footprint is designed to deliver any order in Brazil—the company’s largest market—within 48 hours, 93 percent of the time. And in keeping with the company’s emphasis on transparency, he acknowledges that, as good as it is, the system isn’t quite meeting its goals yet because costs are still a little too high. But the system has reduced out-of-stock products while it provides better information to the company’s consultants. That translates to better service to customers.

The salesforce and its customers are major focuses at Natura, and the company is investing in a project it calls the Natura Network to better understand its customers. Natura has launched a pilot project in the city of Campinas near São Paulo. In the city of almost 2 million people, Natura is using analytics to better understand the buying behavior of customers. The goal: to promote a significant evolution in the purchase experience of consumers, while increasing the capacity for consultants to generate business.

“Using analytics, we can give our consultants very good information about customers, which lets them offer very good service to customers,” Carlucci explains. “They will be able to offer customers what they really need and want without bothering them with offers they don’t want. We will be able to understand individual preferences and help our distributors offer the right thing to the right customer.”

Since in Carlucci’s view Natura is already a social network, analytics help the company and its consultants leverage those relationships, creating a winning scenario for everyone. Information gained in the Campinas pilot project will enable Natura to refine tools it can roll out soon to the rest of its salesforce. Carlucci notes that the consultants are partners in the project.

Understanding Culture

Other big plans include greater international expansion. Most of Natura’s business is in Latin America, especially Brazil. But with its universal principles, high-quality product line and appealing opportunity, Carlucci believes Natura would be well received in other parts of the world, including in the United States—the world’s largest market for direct selling and for cosmetics. But Natura executives believe that understanding culture in new markets is key, so they take a methodical approach and consider a variety of options for expansion.

“When you learn about different cultures, you don’t learn it from a book. You need to live it to understand it,” Carlucci says. “The best way to export good initiatives from one country to another is to do business in that place and really try to understand the local culture. Otherwise, you will have stereotypes that don’t explain how people behave and why people buy.”

He believes the key is hiring experienced people who already live in the new markets. For example, he points out that the companies that are being successful in China are doing well because they understand the way of life there. He compares Chinese culture to Latin American culture.

“China is a big country. What’s happening in one part of the country is different than in another,” he explains. “In Natura, Argentina and Chile are geographically close, but very different in values. It’s important for companies to have local people. Distributors can accelerate the international growth process, but it’s very important to be connected locally.”

Natura has been looking for new opportunities or even partnerships with other companies outside Latin America.

With all that in mind, Natura hopes to accelerate the expansion process. It has been looking for new opportunities or even partnerships with other companies outside Latin America.

“We believe our brand and value proposition would be well accepted in the United States, but only by knowing the culture can we do good business,” he says. “We want to expand with some kind of partnership with someone who already knows how to do business there. If we try to do it alone, it will take a long time.”

Natura’s use of technology, its cultural and environmental sensitivity, as well as its creative expansion methods predict continued growth for the company. Carlucci reflects proudly on the opportunities his company has already created and looks forward to the future.

“We have a sales network of 1.5 million people in Latin America,” he observes. “We’ve been growing a lot, especially in new markets in Latin America. That’s an important sign that our value proposition is accepted. I believe we can still grow more, but this is a landmark for us. Direct selling is an amazing way to offer an opportunity for people to sell products and services.”

A Common Thread, a Common Cause

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

One of the characteristics that sets direct selling apart from other business models is the fact that, within the sales channel, companies that might otherwise strictly be competitors so often collaborate to further the practice and professionalism of the direct selling model—creating a community more than just another industry.

This interconnectedness is instrumental to the long-term growth and vitality of direct selling. It is what furthers the free flow of ideas, innovative thought and transparency both within direct sales and in outreach to the general public. It allows us to educate and attract the general public to our business opportunity and products, and it helps us to mobilize millions across the world in support of a wide variety of causes and philanthropic initiatives.

This camaraderie amongst direct sellers has proven invaluable over the decades, and it has become equally important for today’s direct selling leaders to realize the extent to which we are all connected.

In the past few months, the direct selling business model has encountered a significant, sustained attack by biased journalists, a prominent hedge fund manager and others. At the heart of these attacks are questions about the legitimacy of the direct selling business model, including the propriety of product purchases made and personally consumed by consultants themselves. Although the genesis of this attack targeted a particular company with the intent of driving down its stock prices for financial gain, the repercussions of this attack reach deep into the heart and soul of direct selling, questioning whether those who make little money but gain huge satisfaction from their product purchases are as legitimate as those who make a six-figure income. 

Suddenly, companies of all shapes and sizes across the country must be prepared to defend their compensation model. Despite having upheld only the highest standards of business ethics for years—and, in many cases, decades—so many of today’s most innovative and transformative direct selling companies find that fundamental aspects of their business are being questioned and debated.

While this is not new, it is at a time like this when it is most critical to remember and value the interconnectedness that is a hallmark of our industry. The tendency may be to try to distance one’s company from the conversation, but once the many layers are stripped away, any company that uses an independent salesforce to sell or recommend its products is vulnerable to the attacks we see today. It is critical to unite with a consistent message to combat inaccuracies and educate the general public about what makes this a phenomenal industry.

This common thread woven between direct selling companies of all shapes and sizes is what also makes our relationships with local-level, state and federal lawmakers so invaluable to our continued success. In early May, the state of Montana expanded its registration requirement for all multilevel distribution companies—with one important exception. Companies subject to the self-regulatory requirements of the DSA Code of Ethics by virtue of membership in the Association are exempt from the registration requirement.

The bill’s sponsor, Sen. Larry Jent (D-Montana), worked closely with the Montana Securities Commissioner’s Office and DSA to ensure consumers are protected from illegal pyramid schemes, and that legitimate direct sellers were not affected.

Given that DSA’s membership review process and requirements under the DSA Code of Ethics is more rigorous than the review process implemented with the Montana registration requirement, the Commissioner’s office supported the exemption of DSA member companies.

Importantly, the implications of the Montana law will extend far beyond that state’s borders. This enactment is a landmark for direct sellers—a well-defined action by a state legislature to make clear the acceptable standards that differentiate illegal schemes from those who uphold a commitment to a high standard of ethics. With the enactment of the Montana law, DSA members can point to Montana’s legislation as a new precedent for which other state legislators can follow.

We represent a truly interconnected industry, therefore, now—more than ever before—we must recognize that no single challenge or legislative victory stands as simply that. Each represents an opportunity for the industry, as a whole, to unite together as one force around a common cause—and that’s something that truly sets us apart.

Amy M. RobinsonAmy M. Robinson is Chief Marketing Officer of the U.S. Direct Selling Association, and Alyssa A. Wolice is Marketing Communications Specialist.

Letter from John Fleming, June 2013

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John FlemingWe are always proud to bring you the DSN Global 100 ranking, which is, as always, the result of many hours of collaboration. Those companies that participate reveal not only a level of performance but also a very transparent look at who they are and what they do. The ranking allows for a compilation of stats, facts and profiles that serve to identify the economic impact 100 companies have on the global direct selling industry. We also know that the ranking is often used by companies and observers as somewhat of a benchmark. We are all competitive by nature, and if the comparative feature is of positive benefit we are pleased.

From our point of view, we are just as excited about the company that landed in slot 100 as we are about any other slot. Every company in every slot participated by sharing their basic information for the greater benefit of showing the impact the direct selling channel of distribution has on the lives of people throughout the world. Behind the numbers are the many stories of people from all walks of life who are benefiting from the products and services sold by independent business owners. There are many stories to tell! In this issue we will tell a few about the companies and individuals who were recognized for special achievement due to performance and their individual works.

I’ll start by saying congratulations to Amway on their No. 1 ranking for 2012, and to every company in the DSN Global 100 ranking as well as every other company that utilizes the people-focused business model this industry is so proud of. The world benefits from your leadership and your contribution!

On April 3rd, at our annual banquet, we presented the 2013 Bravo Awards in three categories: Momentum, Growth and Leadership. We think you will enjoy reading the highlights of the event in this issue as well as more about the honorees who received those awards. Most importantly, we extend our appreciation and gratitude to all who joined us on the evening of April 3rd and all of the companies who shared their information and participated in the DSN Global 100 ranking. We know there are companies that we still have not identified or been able to contact. As much as we try to reach every company that would be a candidate for our ranking, we are often unable to connect with a proper contact. If we missed you this year, for whatever reason, we look forward to connecting with you next year and profiling what you provide to people who have the freedom of choice in how they purchase goods and services and how they work.

The total revenues reported by the DSN Global 100 companies for calendar year 2012 were $72 billion. Within this month’s cover story you will find several data points to be very interesting. One that caught our attention was that 17 companies ranking in the DSN Global 100 were less than 10 years old and six of the 17 were less than 5 years old. There may be a correlation developing that links the use of technology, data mining, analytics and social media to increased effectiveness throughout the direct selling channel. Are companies growing at a faster rate? Many of the newer companies certainly appear to be growing at a faster rate than what was observed in prior years. The basics appear to be the same, but tech in its many different formats is a new fuel when layered in with solid basics. Like many others, we have joined the parade of those who continue to share what we are learning from the industry about the use of technology and its impact on businesses. 

From this perspective, the industry appears to be vibrant and well positioned for the times. The use of “social” in the direct selling business process continues to grow and the learning being applied is probably still in its infancy. People are being attracted to the business model for many reasons, but it is obvious that technology, coupled with innovation and excellence in products and services, is actually making it easier for customers to benefit and business builders to build.

As this publication goes to press, we always reflect on the headlines in the media that go along with the good news shared in our June issue about some remarkable companies and leaders who are impacting humanity in such a positive manner. As was the case at this time last year, some of the good news in national media was related to the up-tick in the U.S. jobs report. The report of 165,000 new jobs created during the month of April served as good news for the public against a lower number achieved the month before. This gives the direct selling industry the opportunity to reflect with pride on the fact that, overall, direct selling companies continue to provide over 50,000 people a week, in the U.S. alone, with something that is also unique—it is called “opportunity.”

Until next month… enjoy the issue!

John Fleming
Publisher and Editor in Chief

DSN Celebrates the Global 100 Companies

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Amway was recognized as this year’s new No. 1 direct selling company in the DSN Global 100 ranking.

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

IN THIS ISSUE:

• Cover Story • 10 Things to Know • The List
• Topping the Charts • Profiles • Celebration

BRAVO AWARDS:
• Leadership • Growth • Momentum

Direct Selling News celebrated the DSN Global 100 ranking on April 3 at the Gaylord Texan Resort in Grapevine, Texas, with a dinner and awards ceremony. The event marked the fourth consecutive year that DSN has recognized the achievements of the global direct selling leaders.

The event was hosted by DSN Publisher and Editor in Chief John Fleming. Brian Connolly, Chairman of the Board of Miche Bag and former Executive Vice President of Avon Products Inc., served as master of ceremonies.

More than 300 direct selling executives attended the event, including Cindy Monroe, CEO of Thirty-One Gifts; Jim and Kathy Coover, Co-Founders of Isagenix; Wayne Coupland, Network Director of Telecom Plus; Jerry Brassfield, Executive Chairman of GNLD; John Addison, Co-CEO of Primerica; Rob Snyder, Chairman of Stream Energy (Ignite); Connie Tang, CEO of Princess House; Chris Chambliss, a Co-Founder of Ambit Energy; Dave Wentz, CEO of USANA; Robert Goergen Jr., President of PartyLite; Keith Harding, CEO of Sportron; Robert Sinnott, CEO of Mannatech; Ryan Blair, CEO of ViSalus; Jill Blashack Strahan, CEO of Tastefully Simple; Mike Azcue, CEO of WorldVentures; and Orville and Heidi Thompson, Co-Owners of Scentsy.

Special guests included Joseph Mariano, President of the U.S. Direct Selling Association; Charlie Orr, Executive Director of the Direct Selling Education Foundation (DSEF); and two DSEF Circle of Honor winners: J. Stanley Fredrick, Chairman of Mannatech; and Michael Lunceford, Senior Vice President of Mary Kay. Malou Caluza, Chief Marketing Officer of QNET, traveled from Hong Kong to attend the event.

The Bravo Awards

The evening began with the presentation of two DSN Bravo Awards for excellence.

Momentum Award

It Works! Global was honored with the Bravo Momentum Award, which was created for this year’s celebration to recognize a previously unranked company that had demonstrated not only significant growth in 2012, but also the most significant first-time ranking on the DSN Global 100 list.

“It just shows any company in here that if you really focus and persevere you can do this—you can be a 10-year overnight success.”
—Mark Pentecost, Founder and CEO, It Works! Global

Founder and CEO Mark Pentecost had attended last year’s event and decided then that he wanted It Works! to be a Global 100 company. He and his team put together a strategic and operational plan to achieve that goal. In 2011, It Works! had revenue of $45 million; in 2012, revenue jumped to $200 million, placing the company in the 56th position in the 2012 ranking.

“We started from the bottom, and now we’re here,” said Pentecost. “It just shows any company in here that if you really focus and persevere you can do this—you can be a 10-year overnight success.”

Growth Award

Nerium International won the Bravo Growth Award, which is presented to the company achieving the highest percentage of growth over the prior year.

Last year’s winner, ViSalus, won the award for its 600 percent growth, going from $34 million in 2010 to $231 million in 2011. Nerium achieved an astounding 3,900 percent growth, going from $2.5 million in revenue in 2011 to $100 million in 2012. The company, which was founded in the fall of 2011 with only one product in the anti-aging category, placed 86th in the ranking.

Nerium’s founders—CEO Jeff Olson, President Dennis Windsor, Corporate Liaison Renee Olson and Vice President of Marketing and Culture Amber Olson—accepted the award.

“It’s been a fun year,” said Jeff Olson. “We’ve really enjoyed the growth and look forward to a great year coming up.”

Leadership Award

The third award in this category, presented later in the evening, was the Bravo Leadership Award, which was given to Alessandro Carlucci, CEO of São Paolo, Brazil-based Natura and Chairman of the World Federation of Direct Selling Associations.

The Leadership Award is presented to an individual who personifies leadership, guiding those around him toward greater good, progress and achievement all while earning the respect and admiration of those he leads. Previous winners in this category include John Addison of Primerica (2009); Greg Provenzano, Robert Stevanovski, Mike Cupisz and Tony Cupisz of ACN (2010); and Doug DeVos of Amway (2011).

Carlucci was recognized for embodying those traits. He joined his company in 1989 as a member of the sales and marketing team. In 2005, he was named CEO, becoming the company’s first top executive from outside its controlling stockholders. Under his guidance, Natura has grown to be the largest cosmetics company in Brazil.

In October 2011, Carlucci assumed the Chair of the World Federation of Direct Selling Associations, where he now helps guide the industry on a global scale. He believes his responsibility as a leader is to “show to the world our transformation and entrepreneurship capacity,” which will increase business opportunities and the positive impact direct selling has on the lives of millions of people.

“I am very deeply honored to receive this,” said Carlucci upon receiving the Leadership Award. “I am happy to be here because every time I can be together with friends in direct selling, it makes me feel better about the decision I made many years ago to join this industry. It’s a moment to see good friends and the opportunity to make new good friends. This is one of the most important characteristics of our industry—we make friends for life. It is an amazing industry.”

Brian Connolly, Chairman of the Board of Miche Bag, served as master of ceremonies.Brian Connolly, Chairman of the Board of Miche Bag, served as master of ceremonies. Over 300 industry executives attended the Global 100 Celebration.Over 300 industry executives attended the Global 100 Celebration. Alessandro Carlucci, CEO of Natura and Chairman of the WFDSA, gave the keynote address.Alessandro Carlucci, CEO of Natura and Chairman of the WFDSA, gave the keynote address.

Keynote Address

Carlucci was also the keynote speaker for the evening. He spoke of the interconnectedness of direct selling companies, distributors and consumers, and the impact the industry has on the world at large.

“Relationships are the foundation of our company and our business. In the end, relationships move the world; relationships move the business; relationships move people,” he said.

“There is nothing more contemporary than direct selling, and the world is calling for us to help people, to be better leaders, to do the right thing, to transform lives, to generate economic health.”
—Alessandro Carlucci, CEO of Natura and Chairman of the WFDSA

“We see people trying to really produce positive impact,” Carlucci continued. “At the same time we see a huge change in consumer behavior. And when we see all these things together, and we look for the fundamentals of our industry, there is a call for us—a call for our industry because we transform people’s lives, we affect their social aspects, we can do good things for the environment and, economically, we can offer opportunities for people. There is nothing more contemporary than direct selling, and the world is calling for us to help people, to be better leaders, to do the right thing, to transform lives, to generate economic health.”

As Chairman of the World Federation, Carlucci re-emphasized the relevance and importance for direct selling companies to be examples of trust, transparency and good business—“Business that can really change the quality of life on this planet,” he said.

The DSN Global 100

The most anticipated segment of the evening was the announcement of the DSN Global 100.

Before announcing the list in reverse order, Emcee Connolly shared some statistics about the 2012 ranking. A total of 16 countries were represented—including Brazil, Canada, Germany, India, Luxembourg, Peru, Russia, South Korea and Switzerland—with 24 newcomers to the list, hailing from Japan, Malaysia, France, the United Kingdom, the United States, China and Cyprus.

By region, there were 57 companies from North America, four from South America, 14 from Europe/Africa and 24 from the Asia-Pacific arena.

In all, the DSN Global 100 companies achieved over $72 billion in net sales in 2012, up from $63 billion one year ago. The Top 10 companies, which collectively represented 625 years of direct selling business across the globe, achieved $44 billion in revenue.

Representatives from nine of the Top 10 companies were present at the event.

“We want to dedicate this distinction to our amazing independent beauty advisors because without their passion, their commitment and their hard work on a daily basis… this would never have been possible.”
—Mona Ameli, General Manager, Belcorp USA

Mona Ameli, General Manager of Belcorp USA, accepted for Peru-based Belcorp Ltd., which placed 10th. “This is a very special year for us as we celebrate our 45th anniversary. This acknowledgment reflects the extraordinary efforts of our 9,000 employees. We want to dedicate this distinction to our amazing independent beauty advisors because without their passion, their commitment and their hard work on a daily basis, from the outskirts of the Amazon to the streets of San Francisco, this would never have been possible.”

Oriflame Senior Vice President Michael Cervell accepted for the Luxembourg-based company, which placed 9th. “On behalf of Oriflame, we are very proud to be in this [ranking], but we are not satisfied. We want to be higher than we are now.”

Greg Darlington, Vice President of Nu Skin, accepted for his company, which placed 8th. “On behalf of our 900,000 distributors and our customers around the world, we thank you for the opportunity to receive this award.”

No. 6 Mary Kay was represented by Senior Vice President Nathan Moore. “Mary Kay always said that if you aim for the moon and you miss, you land amongst the stars. It’s an honor to be among all of you stars tonight.”

Keynote speaker and Bravo Leadership Award winner Carlucci accepted for No. 5, Natura. “On behalf of our 1.5 million consultants around Latin America, we would like to say ‘thank you.’ ”

Hans ter Pelle, Chief Financial Officer of JAFRA Cosmetics, accepted for Germany-based Vorwerk, the No. 4 direct seller. “On behalf of the owner family of Vorwerk and the managing partners, I will gladly take this award and pass it on to them. We aim for higher goals, and we aim for touching many more people on this globe, so let’s put in some healthy competition and see where we end up next year.”

“With leadership comes responsibility, and as such, we will continue to support the industry and its interests going forward.”
—Sandy Spielmaker, Vice President of Sales, Amway North America

The No. 3 direct seller in the world, Herbalife, was represented by Brian McKinley, Senior Director of Corporate Alliances. “Don’t believe everything you read,” McKinley said in reference to recent scrutiny of the company. “Our company is fantastic, our industry is amazing and the future is very bright.”

Angelo Rossi, Avon Group Vice President, accepted for the No. 2 direct seller. “We are honored to be here and accept on behalf of the over 30,000 associates and 6 million independent contractors around the world. I would also say we are honored and humbled tonight to recognize the new top direct selling company in the world.”

AmwayThat new No. 1 direct seller was Ada, Michigan-based Amway, which achieved $11.3 billion in revenue for 2012. Sandy Spielmaker, Vice President of Sales for Amway North America, accepted for the company. “It is really an honor to be a leader in an industry of such great, reputable companies. With leadership comes responsibility, and as such, we will continue to support the industry and its interests going forward,” said Spielmaker. “We also know that, as an industry, we are being attacked by outsiders, but we are not in this alone. We are in it together and we will continue to support each and every one of you and this entire industry.”

Avon CEO among Forbes’ Most Powerful Women

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Avon
Forbes

Every year, Forbes compiles a list of the “100 Most Powerful Women” from among top politicians and CEOs, activist billionaires and celebrities, next-gen entrepreneurs and philanthropists. Avon CEO Sheri McCoy, who ranked No. 39 in 2012, landed the No. 27 spot on this year’s list of power women. Prior to joining Avon last April, McCoy spent 30 years at Johnson & Johnson, where she oversaw 60 percent of revenue as Vice Chair of the pharmaceutical giant.

In a February Q & A with Forbes, McCoy shared her vision for Avon’s future. She said her team’s turnaround plan focuses on “driving growth—getting the right growth platforms—simplifying and getting our business much more efficient, and in doing that driving costs out, and ultimately to build organizational capabilities and strengths for the future.”

Commencing its simplification efforts, Avon has already announced plans to cut 400 jobs and pull out of the Irish market; however, the company has no intention of scaling back in its information systems and selling tools. McCoy shared plans to invest $200 million in embracing digital tools and developing social media capabilities to better support the company’s Independent Sales Reps.

View the full profile from Forbes.

The Latest from Direct Selling News? There’s an App for That!

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DSN app

Here at Direct Selling News we are in the business of storytelling. Specifically, we tell your stories, and we think more people should know about the exceptional individuals, values and products that drive this industry. One of our goals is to provide innovative and effective means of spreading your story. Until now, we have accomplished that in a couple of ways—by offering reprint services to supply marketing opportunities to your company and through our active social media presence, making it simple for your story to go viral across many networks.

Now we are excited to bring you even greater value and services through a new app available for both iOS and Android. Our new digital format delivers the news of the direct selling industry in an attractive, engaging and easy-to-use way. Of course, we will still print the magazine, and subscribers will continue to receive the hard copy in the mail. Having a beautiful digital issue available will allow you to take the industry’s leading publication with you wherever you go. This digital version will also give our international subscribers and your international employees an easy way to read the magazine.

That’s why we’ve partnered with MAZ, a company whose platform powers digital publications like Forbes, Inc. and many others. Their tools enable us to create content that, in a sense, jumps off the page. Readers can glide between the magazine, DirectSellingNews.com and the wider Web as they explore the latest issue. With the capability to layer links atop our magazine PDFs and embed interactive content like video and audio, we can now bring you the news in an exceptionally convenient, user-friendly way.

We want to help you start a conversation about the innovation and achievement taking place in your own company and across the industry. The increasing ubiquity of smartphones and other mobile devices presents an unprecedented opportunity to deliver Direct Selling News to a worldwide audience. When your company is featured in the magazine, you can immediately access the issue on mobile devices. When you want to share a novel concept with your management team, your international executives can quickly and easily download the digital format.

DSN appOur excitement about this new format could be summed up in one word: connection. Once inside the app, readers can connect to Direct Selling News through any of our social media pages. Readers can also connect to their own networks by posting content to sites like Facebook, Twitter, Tumblr or Pinterest. The easy-to-use Clippings tool allows you to capture a quote, idea or image and share it instantly. The format also connects consumers to participating advertisers; simply click through the ad to visit their site and learn more.

In addition to our monthly publication, mobile readers can download a special edition of the DSN Global 100 Annual Report. If your company is ranked on the DSN Global 100, that’s news worth sharing. We’ve made it simple for you to do so with a report profiling each company and its extraordinary accomplishments in 2012.

You can download Direct Selling News through the App Store or Google Play Store. Qualified print subscribers receive free access to our digital content. We’re excited to offer more news to more people in more places through our new app. We hope you’ll be one of them.

Download your DSN Digital Publication.

Jamie Oliver Launches North American Arm

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Jamie Oliver at Home

One of the fastest-growing direct sellers in the UK is bringing its business to North America. Jamie Oliver at Home has officially launched in the United States with the grand opening of its new headquarters in Pawtucket, R.I. Company President and CEO Tim Brown says the new location holds particular appeal for the eating and entertaining company: its Hope Artiste Village neighborhood is also home to the thriving Pawtucket Farmers Market.

British chef, TV personality, author and restaurateur Jamie Oliver launched the UK’s Jamie at Home in 2009. Its North American counterpart, Jamie Oliver at Home, offers Consultants the opportunity to sell the Jme Collection, which the company’s website describes as “a handpicked range of products inspired by Jamie Oliver’s relaxed approach to eating, entertaining and enjoying life at home.”

Oliver’s passion for cooking and fresh food inspired his mission of “Better Food Better Life,” an approach he applies to more than just party planning. Oliver founded the California-based Jamie Oliver Food Foundation, which partners with the Better Food Foundation in the UK and the Good Foundation in Australia to bring food education and skills to children, in addition to raising awareness of the need for policy changes at the local and national level.

Jamie Oliver at Home does not require Consultants to develop cooking expertise. Oliver, whose 14 cookbooks have sold 35 million copies worldwide, plays “host” at each party, personally demonstrating by video the products he uses in his own kitchen.

Read more on the new Jamie Oliver at Home.

South Africa’s Growing Direct Sales Industry

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DSA SA

The Direct Selling Association of South Africa reports positive growth of 12.4 percent in 2012 for the country’s direct sales industry. DSA SA Vice-Chairman Ernest du Toit talked to SABC News program Morning Live about why the industry has continued to grow an average of 10 percent over the past 3 years, even as South Africa’s economy has undergone a recession.

Du Toit attributes much of the industry’s job-creating power to the inclusive nature of the direct selling opportunity. “The industry creates job opportunities for everybody, irrespective of your race, your color, your creed, your gender or your limited education,” du Toit said.

The opportunity to earn additional income in a tough economy, while also developing personal and professional skills, has attracted 1.4 million South Africans to participate in direct selling. Du Toit also explains the DSA SA’s role in the regulation and oversight of its 36 member companies.

Read more on South Africa’s growing direct sales industry.

Video link.

Recognition and Expansion for North American Power

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North American Power

During its 3 years in business, retail energy supplier North American Power has experienced exponential growth, increasing revenues from $25 million in 2010 to $165 million in 2012. The success of the company’s direct sales model of marketing renewable energy products earned it a spot on Forbes’ 100 Most Promising Companies list for 2011.

North American CEO Kerry Breitbart has also been named a finalist in Ernst & Young’s Entrepreneur of the Year Awards for New York, a program that honors market leaders that raise the standards of excellence both within their industries and their communities. Breitbart is receiving recognition for his success in growing the company’s revenues and developing its business model, as well as leading its Missions to Millions social responsibility initiative, which currently donates more than $50,000 per month to designated charities.

Read more on North American and CEO Kerry Breitbart.

North American and its leaders show no intention of resting on their laurels. This week, the company opened a new headquarters in Norwalk, Conn. In addition to its Connecticut operations, North American has entered deregulated energy markets in seven other states. The company serves more than 250,000 customers nationwide.

Read more on North American’s new headquarters.

Icahn and Herbalife See Positive Gains

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herbalife

Earlier this month, Herbalife stock made a full recovery despite the unrelenting campaign that hedge fund investor Bill Ackman launched against the company in December. Shares in Herbalife traded above the price they brought prior to Ackman’s allegation that the nutritional supplements company operates a pyramid scheme.

Ackman’s fellow investor Carl Icahn has played a leading role in stabilizing and bolstering Herbalife’s stock. Earlier this year, Icahn stepped in as a major shareholder in Herbalife—a move closely followed by the addition of two Icahn representatives to its board of directors.

The company’s strong performance this week prompted a Forbes headline declaring “Carl Icahn And Herbalife Are Crushing Bill Ackman.” Investors have reacted positively to Herbalife’s comeback earlier this month, as well as the company’s Tuesday announcement of its new auditing firm, PricewaterhouseCoopers. Shares in Herbalife rose 10 percent Monday, followed by almost 5 percent Tuesday, putting the company’s shares up 53 percent in 2013.

Read more from Forbes on Herbalife’s positive gains.

Thirty-One’s Happy Culture Spurs Healthy Profits

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Thirty-One

“What’s your why?” It’s not a question central to every corporate culture, but it’s one displayed on a board in the customer-rep center of Thirty-One. The direct-sales company based out of Columbus, Ohio, offers a line of purses, totes, backpacks and similar items—with the option of a monogrammed personal touch.

Thirty-One Founder Cindy Monroe and her husband Scott, the company’s Chief Brand Officer, extend that personal touch to Thirty-One’s corporate culture as well. They encourage their salespeople to find happiness in the work, whether it be hosting parties or helping others improve their lifestyles through the business. “We say, ‘When you walk through the doors, you can be yourself—and we want you to be better when you leave,’  ” Scott said.

Promoting the happiness of employees and sales representatives has proven a successful strategy at Thirty-One. As it celebrates its 10th anniversary, the company has grown to nearly 2,000 employees, in addition to 115,000 independent consultants across the country. Thirty-One brought in $718 million in revenue last year, placing it at No. 18 on the DSN Global 100 ranking.

The company’s momentum shows no signs of slowing. Thirty-One extended into Canada last year, and just last month launched sister company Jewell.

The newest arm of Thirty-One caters to a higher-end demographic through invitation-only boutiques.

Read more on Thirty-One’s pursuit of happiness and growth here.