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Direct Selling, the Economy & Entrepreneurship

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DSN Cover, November 2012

The economy is no longer experiencing a recession, but a reinvention.

As political leaders on both sides of the aisle continue to promote ways to return America to its former strength, there is a growing population of people who are looking to the future rather than the past—direct selling entrepreneurs.

The soul of the American economy is the small-business owner. While corporate America continues to shed jobs nearly every quarter, the majority of new hires are within small and mid-sized entrepreneurial ventures across the country. In fact, the Association for Enterprise Opportunity recently reported that “if 1 in 3 American small businesses hired one person, the nation would be at full employment.”

The soul of the American economy is the small-business owner.

And yet, new venture formation is at its slowest pace in decades. According to the New America Foundation, “the number of new entrepreneurs and business owners has been dropping—as a percent of the working-age population—for more than a generation, declining by 53 percent between 1977 and 2010. The share of self-employed Americans, meanwhile, has declined by more than 20 percent since 1991.”

What does this mean for direct selling? Could the nation’s persistent unemployment and decreasing levels of traditional entrepreneurship present an opportunity for the direct selling industry?

Entrepreneurship in America

Historically, there are two paths for new entrepreneurs—launching a startup or purchasing a franchise business.

“I have seen it from both sides,” says Angela Loehr Chrysler, CEO of Team National. Chrysler’s father, Dick Loehr, founded the direct selling company after struggling with his own franchise in the automotive industry. “Dad fell in love with the idea of helping other people become small-business owners after seeing how he struggled with all of the dealership and franchise fees.”

“A traditional startup is so much more expensive than a direct selling business, which does not come with such fees, overhead or inventory costs.”
—Angela Loehr Chrysler, CEO, Team National

Under her leadership, Team National has also started its own subsidiaries to support its business. “I can tell you that a traditional startup is so much more expensive than a direct selling business, which does not come with such fees, overhead or inventory costs.”

In light of these challenges, many reports indicate that traditional entrepreneurship has been in decline for some time. While the rate of new business formation has been increasing in less developed countries in recent years, the Global Entrepreneurship Monitor reported that “total U.S. early stage entrepreneurial activity continued the marked decline … which has been consistent since 2005.” Additionally, the report cites that an increasing percentage of these new entrepreneurs started their business out of necessity rather than opportunity—up from 25 percent in 2009 to 29 percent in 2010.

Furthermore, the Ewing Marion Kauffman Foundation for Entrepreneurship recently released a study that showed how the typical new business now only has 4.7 employees (compared to 7.7 employees in 1999). As reported in The New York Times, serial entrepreneur Mike Farmer of Leap2 says: “I think we’re all headed toward an agent economy, where everyone becomes an agent or a service provider instead of an employee at some big corporation. That’s just how the world is evolving. It’s like telecommuting, but it’s taken to the level of telecompanies.”

The Kauffman Foundation’s report also highlights the changing face of the typical U.S. entrepreneur: Immigrants were more than twice as likely as the native-born to start businesses each month in 2011. Additionally, the greatest increase in entrepreneurship is occurring among those with the least education: In 1996, only 0.39 percent of Americans without a high school diploma were entrepreneurs; that number had grown to 0.57 percent by 2011.

More and more unemployed Americans are now realizing that their old jobs may not be coming back—particularly among seasoned executives and older professionals. While some of these business leaders are now turning to entrepreneurship as a way to capitalize on their decades of experience, many lack the financing to launch a startup or secure a franchise due to the impact of their prolonged unemployment.

“It doesn’t matter how motivated or talented you are, the biggest barrier to small business ownership is financing,” says Jeff Olson, the Founder and CEO of Nerium International and an experienced entrepreneur.

While many lament this transition in the structure of the American economy, Olson believes that this crisis also presents a unique opportunity for the direct selling industry. The vast number of unemployed business professionals presents a major opportunity to expand the ranks of direct sellers who are looking to replace a significant salary. Considering that only one out of every 10 current direct sellers approaches their business as a full-time job, this should be a welcomed opportunity across the industry.

Direct Sellers as Entrepreneurs

Doug DeVos, President of Amway, says: “People who want to build a traditional business put a lot on the line—their time, their money and their future. Direct selling is a comparatively low-cost, low-risk way to earn income. It even provides access to business training that can be used in all aspects of your life, both personally and professionally. Direct selling has the added benefit of helping people create a business that can financially support their families as well as improve their quality of life—both now and for future generations.”

Olson adds: “The skills that you need to succeed in business are the same skills that you need to succeed in direct selling. I am seeing a dramatic shift from people looking at this industry for part-time work or a side income to professionals who now want to build their whole careers in the industry.”

“The skills that you need to succeed in business are the same skills that you need to succeed in direct selling.”
—Jeff Olson, Founder and CEO, Nerium International

Daniel W. Pullin, University Vice President for Strategic Planning and Economic Development for the University of Oklahoma, says: “Direct selling is one of the purest forms of entrepreneurship. Direct selling provides the opportunity to run a business where financial success is tied directly to the effort expended and the impact created. While the costs of entry are low, the upside is limitless. Success in direct selling is a function of the combination of effort, ability, creativity and adaptability. These components describe history’s great entrepreneurs, most of which began selling a product or service directly to a customer. Direct selling provides a robust opportunity for the budding entrepreneur.”

Direct Selling’s Overlooked Impact on the Economy

Particularly during this political season, tremendous attention is paid to the jobs report. But these reports frequently overlook the number of people who turn to self-employment, particularly direct selling.

“We are a significant piece of the economic pie that is not talked about often,” says Olson. “Just look at Nerium—we are only a few years old, and we now have 100-plus employees with jobs that didn’t exist a few years ago. We have over 20,000 distributors collectively earning millions of dollars in income that they did not previously have.”

With the Direct Selling Association (DSA) reporting that there are around 16 million such direct sellers across the country, this is an enormous number of people who are creating their own form of employment that is likely not included in most job reports.

Team National’s Chrysler, who recently joined the DSA on a trip to Washington, D.C., to speak to legislators about the importance of decreasing the burdens on small-biz owners, continues: “Honestly, I believe the role of small-business owners is essential to the U.S. economy and will drive the economic turnaround. They may only have one to two employees, but entrepreneurs have to keep themselves engaged in the community and giving back. They are also the ones keeping other business-to-business services operating.”

“It’s our job as an industry—and as individual direct selling companies—to make people aware of direct selling as a viable opportunity.”
—Doug DeVos, President, Amway

Amway’s DeVos adds: “It’s our job as an industry—and as individual direct selling companies—to make people aware of direct selling as a viable opportunity. It’s a thriving industry, and it continues to grow as more and more people discover the rewards of being an entrepreneur. Some of the best ambassadors for direct selling are our distributors. We encourage distributors to share their stories and support that in any way we can. Our blogs and global social media channels are full of these conversations. You read something new every day.”

The Economy’s Impact on Direct Selling

When asked how the slow economy affects the viability of direct selling, Chrysler responds that there is no bad time to be involved in direct sales. “We give people of all races, faiths and backgrounds the chance to make money for themselves. What we do is much bigger than just looking at the economy.”

Connie Tang, President and CEO of Princess House, agrees. She says: “When the economy is up, customers have more money to buy products, so sales are a bit easier. Easier sales help booking and recruiting, too. When the economy is down, more people need the income opportunity that direct sales provides and are open to trying new, nontraditional avenues.”

In fact, Chrysler claims that one of her primary roles as CEO is to be the “Chief Encouragement Officer,” since the primary effect of the economy is a psychological one. “Our business is about confidence. People are doing better than last year and not realizing it, not giving themselves credit for it. People focus on bad news in the media and not the good news they are creating for themselves.”

DeVos adds: “When people ask me about the best time to start a business, I say it’s now. Don’t worry about what’s happening with the economy. It doesn’t matter. Start it now—because I believe that business is the solution to strengthening our economy. Business has the capacity to create prosperity. With prosperity we generate economic freedom, which leads to personal freedom. Unleashing that spirit of entrepreneurship will help infuse the confidence and optimism needed to improve our economic outlook as well as our personal quality of life.”

How Direct Selling Stacks Up

Compared to other forms of entrepreneurship, direct selling presents fewer barriers to entry, a faster return rate and a more stable long-term strategy.


Trends Driving People Toward Direct Selling

Beyond the economy, three major trends are driving aspiring entrepreneurs toward the direct selling industry.

First, as DSN explored in its January 2012 cover story, “The Big Shift: The Next Great Generation Has Arrived,” direct selling is becoming very appealing to Generation Y—those born between 1980 and 1994. As Olson explains: “The industry is really hot with young people who are more mobile and independent. I call it the ‘anti-cocooning effect’—they do not want to be tied down and they want to travel more. This model is more adaptable to that and what they want in life; in my entire career I have never seen so many people in their 20s involved.”

Many people believe that college is no longer the vehicle for a guaranteed career that it used to be. According to Chrysler: “One of our top earners is a couple newly out of college. They could not find traditional jobs and turned to Team National for full-time careers.”

“Many universities, including OU, strive to make entrepreneurship courses and programs available to a diverse group of students across all academic backgrounds.”
—Daniel W. Pullin, University Vice President for Strategic Planning and Economic Development, University of Oklahoma

Professor Pullin describes how this trend is beginning to affect not just students, but the universities they attend: “Many universities, including OU [University of Oklahoma], strive to make entrepreneurship courses and programs available to a diverse group of students across all academic backgrounds. Take Harvard, for example. Their recent establishment of the Harvard iLab business accelerator is designed to foster university-wide entrepreneurial activity. The university has clearly stated that iLab is a place for all Harvard learners, not just those in the Business School.”

In addition to changing the classroom, Pullin claims that higher education has rapidly advanced the number of real-world learning experiences for its students, including programs designed for students to launch their own businesses as part of their coursework: “At OU, we have at least two such programs, the Integrated Business Core (IBC) in the Price College of Business, and the Center for the Creation of Economic Wealth (CCEW), an interdisciplinary program. IBC allows students to start a product-based business, the revenue model for which revolves around direct selling experiences to consumers, while CCEW focuses on the commercialization of technological advancements. In both instances, OU students have the opportunity to conceive and launch their own business enterprises. Collectively, our students have helped attract or generate over $8 million in funding in just the past few years through their authentic entrepreneurial efforts.”

Second, in addition to an influx of younger direct sellers, the industry is also seeing a change in the typical demographics of its new entrants. Princess House’s Tang, whose company has realized a double-digit increase in the number of new consultants joining this year, believes that this is because direct selling is becoming recognized as “the easiest pathway to entrepreneurship.”

“The major trend that I see is in the diversity of people joining us—mirroring the growing diversity in the United States. What this tells me is that direct selling, as an industry, remains true to its hallmark principle—that of equal opportunity for all! It remains one of the only business models that truly levels the playing field and closes the gap between the haves and have-nots.”

“[Direct selling] remains one of the only business models that truly levels the playing field and closes the gap between the haves and have-nots.”
—Connie Tang, President and CEO, Princess House

At Team National, Chrysler is also seeing a trend within the company’s traditional base of 30-45-year-olds. While stay-at-home moms have been the traditional demographic of this base, she is now “seeing more people who have graduated and are looking for greater income potential or for a change.”

“Another big difference in direct selling is that you own the business—the business doesn’t own you. You set your hours, but you also set your income.”
—Angela Loehr Chrysler

Third, even before the economic downturn, social and cultural trends began creating an environment that was better suited for direct selling than traditional entrepreneurship or a corporate career. Through the advent of social media and mobile technology, people are more connected than ever before. They are building networks that they can tap efficiently and effectively, in addition to being exposed to many business opportunities outside of a traditional career.

Beyond seeking a way to survive in a changing world, many of the newest direct sellers were attracted to the industry by the personal-development aspect. As Chrysler says, “Direct selling makes people into better people. I have received emails from moms who said they were becoming a better mother because of their involvement in our personal-development and training programs.

“Another big difference in direct selling is that you own the business—the business doesn’t own you. You set your hours, but you also set your income. We also reward teams of people, not just individuals.”

For Olson, direct selling needs to be about personal development at every single point. “We are truly investing in a group of entrepreneurs, not employees. You build the person, and they will build the business.”

Direct Selling Entrepreneurs Recognized by Inc.

Nine direct selling companies recently made Inc. magazine’s 31st annual Inc. 500|5000, an exclusive ranking of the nation’s fastest-growing private companies.

  • No. 57 – Stella & Dot
  • No. 221 – J. Hilburn
  • No. 516 – Scentsy
  • No. 662 – It Works! Global
  • No. 1220 – YOR Health
  • No. 1305 – Ambit Energy
  • No. 1555 – Initials
  • No. 2900 – 5LINX Enterprises
  • No. 4951 – Isagenix International

These companies achieved a minimum of 770 percent in sales growth. The Inc. 500’s aggregate revenue is $15.7 billion, with a median three-year growth of 1,431 percent.



A Need for Unity

Despite all of these trends, the industry still struggles with some common misunderstandings about the nature and integrity of the direct selling model.

As Olson argues, the industry needs to “weed its own garden. The biggest thing we can do as an industry is operate with integrity. And we need to point out all the good we are doing.”

As the head of the second-largest direct selling company in the world, Amway’s DeVos agrees: “Community involvement is another way we can spread the word about direct selling. Getting involved with different charitable organizations or even other business organizations, such as local chambers of commerce and Rotary, are great ways to increase awareness of direct selling and help educate others about the benefits of being part of this industry.”

As a very active leader in the DSA, Team National’s Chrysler believes that the industry needs to get more involved in the work and mission of both the Direct Selling Association and the Direct Selling Education Foundation (DSEF).

She says, “We need every direct selling company to join the DSA so that they can be aware of legislation that will affect us. We will also have more power to address things like losing the independent contractor status of our IBOs, which would crush our industry.

“There are a variety of ways to get involved in the DSA and DSE Foundation, from serving on committees to advocacy,” Chrysler continues. “And the foundation has made great progress on working with the NACCE [National Association for Community College Entrepreneurship] to develop a Direct Selling Entrepreneurship instructor manual for community colleges, which will be launched in 2013. We are also looking at a ‘career day’ model to highlight the various DSA members at community colleges to show students the models out there and what they do. Partnership with schools is a natural fit for our industry, and this will also address the negative connotations of the industry while getting more Gen Y involved.”

Princess House’s Tang also believes that the industry can promote educational efforts to help IBOs at any direct selling company to learn how to grow their business into a full-time job.

“I think the Direct Selling Association has made great strides in continuing to build a positive brand around this business model,” she says. “As a group we need to instruct and educate by ensuring that we’re living by the DSA Code of Ethics; by sharing our success stories as often as possible; by telling the truth that success doesn’t happen overnight … it happens through a combination of efforts and dedication. The DSEF also plays a vital role in helping educate the public, which is so critical to the better future we all strive for.”

TriVita and Amazon Herb Co.: Driven by Mission

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Trivita

Company Profile

  • Founded: 1999
  • Headquarters: Scottsdale, Ariz.
  • CEO and Founder: Michael Ellison
  • Products: Natural health products and skincare formulas

The mission is the magic.

Mission is what inspired the creation of unique direct seller TriVita, and mission is what led it to welcome the newest member of its family, the mission-driven Amazon Herb Co. The combined company now can reach even more people with its message of wellness and sustainability as well as the opportunity they create.

The two companies have much in common. Each looks to plants for the ingredients of their products, and both founders created their companies in response to their recovery from a health crisis. But first and foremost, their mission is at the heart of their business. It’s even what typically attracts and retains their distributors.

It started with the man who came to be known as Amazon John Easterling. After he finished college, he trekked to Peru. He describes himself as a treasure hunter. He spent years trading in exotic South American artifacts and gemstones. But the ultimate treasure he found was a solution to his health crisis.

Easterling’s health had been compromised years before by hepatitis and Rocky Mountain spotted fever. As a residual of that, he began running fevers in the Amazon jungle. The indigenous people introduced him to rainforest botanicals, and it changed his life forever.

“Botanicals are the greatest treasures of the Amazon.”
—Amazon John Easterling, Founder, Amazon Herb Co.

“It was an awakening for me,” he recalls. “Those botanicals are the greatest treasures of the Amazon.”

He worked with health practitioners to craft the botanicals into wellness-supporting formulas. In 1990 he started marketing them to physicians, chiropractors, acupuncturists and other healthcare providers under the name Amazon Herb Co. Before long the formulas developed a following, and patients began calling him directly to acquire the products without having to go to their doctors for them. So Easterling changed his business model. He started selling directly to consumers and sent their healthcare providers a commission on each sale. By 1992, his business developed into a full-scale direct selling company. Its mission: to bring the healing potential of the Amazon rainforest to millions and thereby supporting a sustainable future for the Amazon.

As Amazon Herb Co. grew, more and more people used the company’s herbal supplements, skincare products and teas; and through those sales, the company made life-changing differences to Amazonians. At the same time, it paid millions of dollars in commissions to its distributors.

Trivita Founder and CEO Michael Ellison with his wife, Susan, and Amazon Herb Company Founder John Easterling with his wife, Olivia Newton-John.Trivita Founder and CEO Michael Ellison with his wife, Susan, and Amazon Herb Company Founder John Easterling with his wife, Olivia Newton-John.

From Illness to Illumination

Monetizing Media

The use of media is the visible tool that makes TriVita different from most direct sellers. Its distributors, called Independent TriVita Business Owners, or ITBOs, can operate their business in a traditional direct selling manner by recommending products and introducing the business opportunity to friends, family and acquaintances. But TriVita offers a second avenue to gain customers outside their warm market. They can participate in the company’s co-op advertising program. It leverages the power of media, such as television, radio, Internet and print, to reach more customers.

“Media is a very powerful way of connecting to a lot of people,” TriVita CEO and Founder Michael Ellison explains. “Our mission is to help people experience wellness. So when we reach a customer through that first media connection, the person comes through a series of communications to help them have a complete wellness experience. They’re buying products from the company, but they’re also getting a lot of information. On the other side, our ITBOs follow up with those people who are becoming customers because they respond to media. It’s a way of driving our mission around the world.”

When an ITBO participates in co-op advertising, they help fund the cost of, for example, television advertising of TriVita products such as Nopalea, TriVita’s flagship wellness drink made primarily from the Nopal cactus. They’re not buying leads. They’re acquiring customers. When customers respond to media and place orders, TriVita puts them into the pool of advertising-generated customers. The co-op advertising option lets an ITBO buy the compensation rights to these customers, letting the ITBO earn income generated from specific customers’ product purchases for life.

Then a more traditional direct selling relationship begins. But even it is driven by the company’s mission of helping people experience wellness; the products open the door. The ITBO follows up with the customer to ensure their satisfaction, learn their needs and answer questions. When and if conditions are right, the ITBO may introduce the TriVita income opportunity. But some 90 percent of TriVita sales are to customers who don’t know about the opportunity.

The customer also becomes part of the TriVita database so that it can provide wellness information—a way of driving its mission. The company offers information through several media, such as email, its monthly publication VitaJournal, and even through employees in its call center, which TriVita named its call care center.

 

While Amazon John was seeking treasure, Michael Ellison—CEO and Founder of TriVita—was running an international media company, Ellison Media and GDF Fulfillment Solutions/Media Productions. He was an energetic entrepreneur who literally thought that sleep was a waste of time. Why spend time sleeping, he reasoned, when he could be doing so many more interesting things? But it caught up with him. At age 50 he lost his health.

Retreating to his ranch under doctors’ orders, he had to learn to sleep and embrace wellness. As his health slowly improved, he began to ask himself, “What are the essentials in the physical, emotional and spiritual world that would give me a sense of well-being?” The answers took years to find, but when his vigor returned, Ellison wanted to share what he had learned with the world. Using his expertise in business and media, he founded TriVita in 1999 to help people experience wellness and create wealth that would support their life’s purpose.

Ellison’s first step in starting the company: hire a leadership team. Then for three days, the team fleshed out the company’s mission and guiding principles. That carefully crafted calling still guides every action it takes, every product it develops and every decision the company makes.

Their companies’ missions and principles were front and center for both Ellison and Easterling when they met to consider uniting their companies.

“When we sat down with John and Olivia [Easterling’s wife, Olivia Newton-John], the first thing that became very evident among us was that we had common mission, vision and values,” Ellison says. “When those three things came together, we knew that there was an opportunity for a relationship and synergy among ourselves. We can be more effective together than apart.”

Ellison says that throughout the merger discussions, there never was a strained moment. Easterling describes the process as “like destiny.”

The first thing Easterling wanted to ensure was that his rainforest missions would continue. Ellison was in complete alignment.

“That was absolutely critical to me,” Easterling says. “It’s my life’s purpose. So I wanted to be certain that they had a sincere interest—not just ‘yes, we’ll donate money,’ but a sincere, authentic heart space for the value of the living rainforest. It’s actually written on the front page of our deal. Everything else follows.”

Ellison saw the possibilities, too.

Mediating Mission

“The more we learned about the herbs and their products and how they provided an opportunity for people to experience wellness, the more we knew that it fit in with our mission,” Ellison recalls. “Then we looked at the story and the experiences. John has spent a lot of time making people aware of the Amazon’s richness and its importance to mankind—oxygen, nutrients in its plants, the indigenous people. We knew he had a story to tell that was bigger than just putting it through a traditional distributor model. We knew it fit our media model. Then when you take Olivia’s personal brand and connect her belief in the products, we knew we had tremendous synergy between the two companies.”

“The more we learned about the herbs and their products and how they provided an opportunity for people to experience wellness, the more we knew that it fit in with our mission.”
—Michael Ellison, CEO and Founder, TriVita Inc.

The opportunity to advance his company’s mission more quickly through TriVita’s media model was irresistible to Easterling. Growth had been flat at Amazon Herb, which meant that the number of people experiencing the Amazon’s healing powers was stagnant, too. He had already told the Amazon Herb distributors that he was seeking the company’s next evolution, and they were behind him. TriVita was the ideal match.

“The more I got to know Michael Ellison as a man of integrity, the more interesting the possibility became for our distributors,” Easterling says. “We wanted to take Amazon Herb to the next evolution, to get the Amazon’s healing properties to more people faster. TriVita has a platform that reaches millions with its story and products.”

Ellison continues as the combined companies’ CEO, with Easterling focusing on his two passions: formulation of new products, which he’ll do in collaboration with TriVita’s Chief Science Officer Brazos Minshew, and telling the story of the Amazon to as many people as possible—now, in part, through TriVita’s extensive media resources.

The companies will completely combine forces in January 2013, when TriVita’s full product line and select Amazon Herb products will be available to all distributors.

The companies will completely combine forces in January 2013, when TriVita’s full product line and select Amazon Herb products will be available to all distributors. Amazon Herb will become a product line within TriVita, and a new product catalog including Amazon Herb’s products is already in production. The Jupiter, Fla., call center that has served Amazon Herb will continue to serve the company’s distributors, while most operational functions will be handled by the TriVita corporate staff. TriVita has already begun contacting Amazon Herb’s previous and current customers and is integrating them into the database used to provide wellness information to clients. Meanwhile, the Amazon Herb Distributor Summit already scheduled for October became the TriVita Summit. The annual gathering presented a premier platform for the passing of the Amazon Herb’s torch to TriVita and for distributors to learn the ropes of their new company. It also let distributors see firsthand the TriVita commitment to the Amazon, along with how its media platform can support that mission and create a greater business opportunity.

Trivita Products

IPO—Initial Product Offering

Attendees also scored an exclusive preview of the first product created from the combined companies’ joint resources. The immune system-building product is formulated from several active ingredients from the Amazon, including camu camu and the agaricus mushroom. Both Ellison and Easterling are so optimistic about the product that they believe it could be as popular as TriVita’s top seller, Nopalea. And it will have the magic of media and celebrity behind it.

“Olivia Newton-John along with her husband Amazon John Easterling will be the primary promoters of the product on television and other media, along with Brazos Minshew,” Ellison notes. “It will be released next year.”

Distributors also learned about yet another commonality among the blended companies: wellness centers. The Olivia Newton-John Cancer and Wellness Centre opened in Melbourne, Australia, in July. TriVita will open its first wellness center in Scottsdale, Ariz., in November, incorporating medical treatments, cutting-edge telemedicine and wellness education programs. An additional center will open next year in Hong Kong that will work closely with the Scottsdale facility, taking advantage of telemedicine capabilities to expand services such as lifestyle coaching to TriVita clients internationally—a new revenue option for TriVita’s wellness entrepreneurs, called Independent TriVita Business Owners, or ITBOs. For interested people who can’t visit one of the physical centers or who want to sample TriVita’s expertise first, the company website features an online wellness center filled with information produced by experts. ITBOs will learn to leverage wellness center capabilities at TriVita’s Wellness Entrepreneur Academy, the company’s extensive training program.

That kind of innovative, mission-oriented thinking has given the company consistent organic growth over the last 13 years. TriVita ranked No. 70 on the Direct Selling News 2012 Global 100 list—leaping from No. 92 in 2011—with $102 million in net sales. The merger with Amazon Herb obviously makes the company larger, but for Ellison and Easterling, size is just a tool. For both of them, it’s all about advancing the mission. They’re simply stronger together.

“We are moving into a world that is an online, connected world. We don’t need offices in 100 countries. We need people doing the mission in 100 countries.”
—Michael Ellison

TriVita has offices in the United States, Canada, Australia and Hong Kong that serve 14 countries. Ellison says that the power of technology will allow the company to do business in 100 countries in 10 years, expanding its mission around the world.

“We are moving into a world that is an online, connected world,” Ellison says. “We don’t need offices in 100 countries. We need people doing the mission in 100 countries—people who have been equipped with the technology needed to make presentations so that people can experience wellness and get products into 100 countries. Our goal is to expand TriVita globally to help people everywhere experience wellness.”

Giving on Principle

Even before they had sold their first product, the corporate leaders of TriVita determined that one of the startup company’s principles would be to give to those less fortunate. Its charitable organization, House of Giving, funnels donations directly to needs selected by a board of its Independent TriVita Business Owners (ITBOs).

“We knew that people would make significant revenue with TriVita in the future, so from the beginning we wanted to be prepared to give back,” says TriVita CEO and Founder Michael Ellison. “We tried donating directly to nonprofit organizations, but we couldn’t be sure that our donations went directly to where we designated them. Our people wanted to be more specific regarding where the money went, so in 2001 we formed the nonprofit organization.”

The House of Giving raises funds through the company’s ITBOs and channels 100 percent of every dollar raised to a specific cause. Any expenses are covered by Ellison himself, Ellison Media Company, or TriVita.

With so many of its product ingredients coming from desert plants, the board keenly understood the value of water—not just in the Sonoran Desert (in the Southwestern United States), but around the world. In fact, drinking water is the second of its “10 Essentials for Healthy Living.” It has an ongoing water well initiative that brings clean, safe drinking water to poor areas throughout the world. It also supports food programs in Africa, helps victims of domestic violence, and has provided emergency relief during crises such as the Haitian earthquake and the Australian flood. When it merged with Amazon Herb Co., it immediately expanded its reach, taking over ongoing support of that company’s existing programs in the Amazon rainforest. Amazon Herb had partnered with the Amazon Center for Environmental Education & Research (ACEER) on many of its projects, including providing scholarships, helping obtain land titles and deeds, enhancing communications with solar-powered radios, and securing the future of the Peruvian rainforest. TriVita will continue that partnership.

“We are committed to giving back to the regions where we find value in the plants for our products,” Ellison says. “Through donations to ACEER to specific projects, we can track the impact we’re making on those projects. John [John Easterling, Amazon Herb’s founder] has developed relationships with the indigenous tribes, so we’ll be able to work with them to identify specific projects to support. We hope to support the all-around sustainability of the Amazon rainforest and its indigenous people. The area has lost approximately 90 tribes in the last 100 years. It’s important that they can co-exist in our world and be a part of the Amazon. We’re about sustainability.”

Easterling is enthusiastic about the expansion of support that TriVita can offer to his beloved rainforest.

“We get the plants of the Amazon into people’s bodies and provide them with a new life experience of wellness,” he says. “That generates resources to do sustainable activities in the Amazon and to continue the projects we’ve been working on there. It completes a circle of healing. That’s what drives me.”

 


Gamification Demystified

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Of the most critical business areas specific to the contemporary direct sales business model, the areas of e-communication and e-marketing have experienced the greatest transformation.

The first phase of change began with the introduction of social media, which incorporated sharing, posting and forwarding functionality to promote engagement and social community development. The secondary phase is leveraging this engagement and community to ultimately drive some form of conversion (e.g., friend to prospect; prospect to customer; prospect/customer to new recruit, hostess or repeat purchase). All of this is a strenuous attempt to make good on the promise that direct sales companies will soon be able to realize a return on investment from social-marketing-related initiatives.

In order to motivate and incentivize individuals to convert by taking a specific action we often use promotions, special offers and even forms of recognition to reward those who respond to CTAs (calls to action). Creating a call-to-action “reaction” is the first critical step for moving an individual through the lead generation/capture funnel to a point of conversion.

Regardless of the type, mode or value of an offer (e.g., content, promise, reward), identifying behaviors that motivate individuals to act and incorporating those “motivational behavior triggers” in CTAs are key to promoting program success, increasing reactions, and most important, gaining a higher probability of conversion events. Although the process of incorporating “motivational behavior triggers” is relatively familiar to any company or executive focused on driving growth through sales and marketing campaigns, it is actually a powerful element of game design mechanics and it represents the basis of “gamification.”

What is gamification?

Gamification is the process of applying game design thinking to non-game applications to motivate behaviors and make certain activities more enjoyable.

Simply put, gamification is the process of applying game design thinking to non-game applications to motivate behaviors and make certain activities more enjoyable. Consequently, they also make the steps that need to be followed easier to understand and accomplish. This is done by providing users with frequent feedback and reinforcement by earning rewards or symbols of achievement as they move toward loftier goals.

For example, the design mechanics are meant to keep game players (gamers) deeply engaged and motivated to play video games for hours on end to win a match, receive a badge, gain special achievements or to “unlock” new features as rewards for playing with increasing proficiency and reaching next stages (leveling-up) of skill, status and accomplishment.

Non-game applications of gamification, however, go far beyond the familiar example we described earlier regarding its use to entice or prompt people to respond to CTAs. Game design mechanics can be applied to independent sales and marketing campaigns, implemented in programs relevant to training, leadership and career development, and importantly, applied to the available technologies or systems individuals use to manage and grow their business.

Gamification is potentially relevant in almost any industry to create increased engagement, retention and higher levels of performance. By implementing game mechanic principles in key business areas (sales, marketing, training, leadership and field development, and others) and creating alignment between motivational behavior drivers in programs and systems with corporate goals and objectives, gamification can help companies differentiate through innovation and “level-up” to their next stage of evolution.

How important is it?

Last year, former vice president Al Gore gave the keynote address at the 2011 Games for Change Festival in New York, where he said, “Games are the new normal.” He spoke emphatically on the power of gamification and how adoption of game design thinking can effectively bring about social change, improve learning and increase engagement through technology.

In a recent study completed by Stamford, Connecticut-based Gartner Inc., Gartner advised that “by 2014, a gamified service for consumer goods marketing and customer retention will become as important as Facebook, eBay or Amazon, and more than 70 percent of Global 2000 organizations will have at least one gamified application.” That same study further projects that by 2015 more than 50 percent of organizations that manage innovation processes will “gamify” them.

Changing the Game in Direct Sales

The goals of gamification in non-game applications (e.g., education, sales and training, and others) are to achieve higher levels of user engagement, modify behaviors, create retention and stimulate innovation. Gamification has more potential and greater opportunity for application in the direct selling market when compared to any other industry, due to the structure and business nature of the direct sales model.

Gamification has more potential and greater opportunity for application in the direct selling market when compared to any other industry, due to the synergistic nature of the direct sales model.

The reason is that game mechanics may be more effective in applications when achievements of reward and recognition have real value, not perceived. In games, players are motivated by conquering objectives that give them a sense of accomplishment. In the non-game world, conquering an objective results in accomplishment that yields real tangible rewards.

As a result, the power and value of gamification may be more capable of delivering unprecedented impact on conversion and network velocity for direct sales than any other traditional approach today.

Gamification concepts can be applied to anything from having more engaged reps, prospects and customers to improving salesforce and sales leader performance, increasing retention and driving higher levels of productivity. Consequently, due to the natural alignment with direct selling’s business structure, the benefits of gamification can be leveraged without the need to integrate overly complex game mechanics. Incorporating basic elements may be enough, depending on a company’s stage of growth, to develop a gamified system designed to motivate a salesforce to “outperform.”

Direct selling systems that incorporate innovative game design mechanics have the ability to provide enhanced reward/recognition triggers that fuel anticipation and motivation of users (consultants or distributors) to stay the course to achieve performance overdrive and “elite” status recognition among peers.

Aligning Game Mechanics with Direct Selling Model Attributes

Although there are almost 50 game design variables, 19 have relative potential for direct selling market application, and of those, five have the greatest potential for fueling performance and conversion results as well as accelerating growth for direct selling companies. The following game design elements can be applied independently or combined to drive your company’s next levels of engagement, loyalty, influence, revenue and network velocity:

a) Behavioral Momentum is the tendency of users to keep doing what they have been doing. The key here is to integrate Behavioral Momentum mechanics to ensure adoption of best practices and to reinforce a user’s tendency to keep “playing” while getting better at specific activities.

• Behavioral Momentum is a key design variable that supports the four principles of effective system/development to promote higher levels of user performance to achieve company objectives: Adoption, Utilization, Dependency and Replicable Behavior (see section: Motivating Behaviors to Drive Performance)

DS Example: As independent representatives use the system more, the better they get. The better they get, the more they use the system. The longer they use, the greater their rewards. If they keep earning rewards, they keep using the system. And if they can progress to higher levels by continuing to use the system, others can do the same.

b) Status is associated with rank or standing and users are often motivated to increase proficiency and effort to reach a more “elite” status level of recognition.

• This design element correlates to the need for recognizing accomplishments and motivating independent representatives to achieve higher levels in rank by rewarding them at various instances of achievement with awards of increasing value as performance results increase.

DS Example: By aligning system notifications and activities with rank advancement criteria, independent representatives would receive system-based badges of recognition that are socially shareable and visible on their profiles. These badges publicly acknowledge their achievements and proficiency for following prompts on their road to career path rank promotions.

Levels are part of a “system” or ramp—much like direct selling compensation plans—in which users are rewarded with points, rewards or capabilities of increasing value.

c) Levels are part of a “system” or ramp—much like direct selling compensation plans—in which users are rewarded with points, rewards or capabilities of increasing value. “Leveling-up” is one of the highest motivational components for gamers, where features or functionalities are unlocked as they progress to higher levels.

• Leveling-up is a component of progression dynamics (conquering challenges along a set path by achieving multiple objectives to reach a defined goal) that is in direct alignment to how independent representatives transition through compensation/rewards programs on the path to career development.

DS Example: An independent representative who makes consistent use of the system and follows the prompts to achieve career path objectives (e.g., using all key system attributes effectively to achieve positive results in recruiting, sales and next level rank advancement) would “level-up” to an elite “Power User” status.

d) Achievements are virtual or physical representations of accomplishments that are often considered “locked” until users have met a series of tasks that are required to “unlock” the achievement/reward.

• Achievements can be applied to any recruitment, retention or sales program to motivate progression toward personal and downline accomplishments.

DS Example: Upon achieving Power User status (leveling-up), the system would “unlock” a new feature, capability or tool as a valuable reward that is otherwise not available, providing users with advanced capabilities to further enhance performance and accelerate growth.

e) Virality is a gamification element that requires collaboration among multiple users and has a strong social component for getting others in on the action to accomplish a given task.

• This game design element has the capability of raising peer performance levels and motivating social networks comprised of customers and prospects to drive recruitment and sales activity.

DS Example: Companies use a system that motivates the field to share product or opportunity promotions with customers who are incentivized to promote the same to others in their personal networks. The value of the promotion increases up to a set amount as the number of shares and redemptions increase. The more people participate, the greater the benefit everyone receives.

Motivating Behaviors to Drive Performance

To validate the exciting similarities between gamification and direct selling system application, it is easy to illustrate the evident relationship the five game design elements above have with industry-specific compensation, reward and recognition programs.

Direct selling compensation plans incorporate behaviors to motivate performance and reward achievements and are comprised of two main components: a) Requirements for Qualification and b) Types of Compensation. Behaviors (achievements/accomplishments) of qualified representatives are rewarded with various types of compensation and recognition to motivate performance, sales, recruiting and leadership development on multiple levels for personal and team success. By definition, this is the concept of “Program Gamification.”

Gamification can be further leveraged by integrating game elements in direct selling technology systems that are aligned to behavior motivators in comp plan design. This is an important evolution in system development that, if incorporated properly, can deliver a huge impact for companies by motivating and enforcing consultant/distributor behaviors along the four most critical aspects of direct selling and subscription-based system design: Adoption, Utilization, Dependency and Replication.

Adoption

Creating reward, recognition and motivational drivers to increase Adoption of a direct selling system is the primary step for getting powerful tools and business management solutions in the hands of more independent representatives. Two ways to accomplish this is to embrace simplification and improve intuitive design to minimize learning curves and reduce barriers to adoption by eliminating unnecessary complexities. This can be achieved by focusing only on key attributes and giving the salesforce ready access to applications they need most to drive success. In this case, behavior is focused on what they “should” do rather than on what they “can” do.

Utilization

As adoption is realized, the focus turns to Utilization. Game mechanics can be used to drive increased utilization of direct selling systems by introducing frequent prompts and notifications that advise independent representatives on what to do to achieve personal and team successes. Once they act on that prompt, they are rewarded for taking action through an award of points or recognized with a symbol of achievement. As independent representatives continue to use core system attributes and act on behavior-driven prompts, they continue to be incrementally rewarded and recognized (privately, publicly or socially) as their level of system use and productivity increase. If motivational drivers of system utilization are appropriately aligned to behaviors that drive success, then increased utilization will deliver increased performance and accelerated results.

Dependency

As independent representatives continue to receive recognition for using core system attributes on their path of progression (e.g., beginner to power user), their behaviors are tangibly rewarded by the results of their efforts (commissions, downline growth, sales leader promotions, rank advancements, and so forth). While frequent recognition provides instant gratification and validation that continued system use can make them successful, compensation provides the ultimate reward.

As independent representatives continue to experience incremental recognition and larger rewards, they become dependent on using the system and are motivated to embrace new challenges to achieve higher levels of accomplishment. A very interesting game element with a lot of potential at this stage is to introduce one or several “unlocks” to reward consistency and uber-performance achievements. In this scenario, a new system feature would be “unlocked” (at no additional cost), providing independent representatives with enhanced system capabilities that can help increase earnings or accelerate their career path as a reward for accomplishing utilization-based system challenges.

Additionally, these high achievers may also be recognized publicly with “elite” badges of achievement that are visible on profiles and socially shared among peers to motivate others to accomplish the same. By socially broadcasting accomplishments at the moment of achievement throughout their peer network, the achiever receives instant gratification and recognition, and notice of their accomplishment drives excitement, motivation and ambition in others.

This pushes the peer network to work toward progressive achievements by motivating them to look forward to aspirations of “what’s next?” “I can do that” and “I want that too!”

Replication

The effect of achieving high-levels of success and system dependency is implied retention and increased results multiplied by the number of dependent users. As more independent representatives achieve results by responding to the comp-plan-aligned motivational behavior triggers in the system, greater success will be achieved by increasing numbers of the salesforce.

Additionally, gamification of sales leader development principles can help motivate high-achievers to replicate their success in others by recognizing and rewarding mentorship and top-down leadership-led training initiatives.

As with most aspects of the direct sales model, increased results are achieved when all variables are aligned to drive goals and objectives by nurturing and perpetuating the right behaviors. By integrating already gamified programs with game mechanics in system design, reward and recognition triggers work in concert with all motivational drivers to fuel higher levels of performance.

Gamification and other exciting developments in innovation such as Social Marketing Automation (SMA), social network foot-printing, mobile and social fusion and geo-fencing hold different keys for direct sales companies that, if leveraged properly, can reinvigorate a salesforce, supercharge performance, jump-start growth, and open new possibilities and opportunities for achieving and sustaining accelerated growth.

Sebastian LeonardiSebastian Leonardi is President and Chief Business Strategist at DSXgroup LLC, a DSA Supplier Member consultancy focused on driving sales, conversion and accelerated growth for direct sales, private equity and technology companies. He can be reached through the company website at http://dsxgroup.com or by email: sjleonardi@dsxgroup.com.

Gigi Hill: Fashion Meets Function

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Gigi Hill

Company Profile

  • Founded: 2009
  • Headquarters: Yorba Linda, Calif.
  • Founders: CEO Gabrielle DeSantis-Cummings and President Monica Hillman
  • Products: Handbags, totes and accessories

There’s a reason that “soccer moms” get so much attention, and soccer moms Gabrielle DeSantis-Cummings and Monica Hillman are prime examples. The two women met on the soccer field when their daughters, in kindergarten at the time, ended up on the same team.

As young moms everywhere can attest, lugging around all kinds of “stuff” can be challenging; finding a bag to not only accommodate all the “stuff,” but one that also looked fashionable, was virtually impossible. But that was then—this is now.

The company they co-founded, Gigi Hill, addressed this need through a line of bags and accessories that are high quality, stylish and—most important—offer the functionality that busy women need to be organized, whether they’re moms, grandmothers, busy professionals, travelers—or anything in between.

DeSantis-Cummings, Founder and CEO, is the “natural entrepreneur” of the pair. When they met, she had just moved to town. Having spent most of her life on the beach, she found that when she moved inland to Yorba Linda, Calif., and had to drive her kids to the beach that the right bag was suddenly a necessity.

“I’d never really thought about there being something in between being in the corporate world and being at home.”
—Monica Hillman, President

Gigi Hill Founders Gabrielle DeSantis-Cummings (left) and Monica Hillman (right) launched a casual friendship into a successful handbag company.
Gigi Hill Founders Gabrielle DeSantis-Cummings (left) and Monica Hillman (right) launched a casual friendship into a successful handbag company.

Hillman, Founder and President, came from a corporate background, and at the time she met DeSantis-Cummings, was looking for “something different.”

“When I met Gabrielle and she started talking about how she had started her own companies, it really opened up in my mind the idea that there were more opportunities out there,” Hillman says. “I’d never really thought about there being something in between being in the corporate world and being at home.”

Those early discussions led to the realization that they definitely wanted to start a business together, but what kind of business?

“What really rose to the top of the list,” Hillman says, “was the need for a better bag.” Their own experiences and those of their friends who were going to the lake, the beach or the pool, initially made them realize that the bags they were using simply weren’t delivering—“they were ugly bags and they didn’t have any pockets,” Hillman recalls.

“We definitely knew there was a need out there and the more we investigated it the more we knew we could provide a great product that was fashion-forward but really delivered as far as being functional—it had pockets for everything, it had water bottle pockets, it had a strap that was comfortable. We really thought about all of those things that so many of the bags on the market didn’t address whatsoever.”

Developing a Prototype

Entrepreneurs everywhere know that the development of a sound business plan is a critical first step for any successful endeavor. Many entrepreneurs, though, fail to take this step formally. Not DeSantis-Cummings and Hillman. Their collective experience led them to spend a significant amount of time researching their idea, potential business models and their market.

“Once we knew what the product was we really just put one foot in front of the other and started to build on our ideas,” says DeSantis-Cummings. On the business side, the women developed a business plan based on a review of case studies of others who had gone before them and on consultation with industry experts.

“Once we knew what the product was we really just put one foot in front of the other and started to build on our ideas.”
—Gabrielle DeSantis-Cummings, CEO

In addition to a solid business plan, they knew they would need to create a prototype that they could use to bring their product to life.

Neither of the women had any design expertise, but they didn’t let that hold them back. “We cut out patterns from paper bags,” says DeSantis-Cummings with a laugh. “We pasted, glued and stapled them together and then took them to a local seamstress and asked her to make a bag and she did. It wasn’t perfect, but it was good enough for that moment,” she recalls.

After that, they connected with a manufacturer who, she says, “does make handbags for a living.” They took their rough prototype to him and “he turned it into a real bag from a real manufacturer.”

With an actual prototype and a manufacturer, the women next went out to the marketplace and looked at fabrics. “We picked fabrics that were appealing to us—we wanted them to be vibrant so we looked for vibrant patterns,” says DeSantis-Cummings. They picked about 100 patterns, which they narrowed down to about 35, which were launched as a test in 2006 at their first party.

“That night we were in business,” she says. “We spent the rest of 2006, 2007 and part of 2008 doing parties. Monica and I went out and did parties every week and we learned so much about the business model from the business side and about the consumer and the purchases they were making. From that experience we learned about the best of Gigi Hill and what it was going to be.”

When they officially launched the company in 2009 they had a well-developed product line and a comprehensive and competitive business model. The rest, as they say, is history. Now their goal is to achieve $100 million in sales.

The Gigi Hill Platinum Showcase is offered to stylists at an affordable price and includes a variety of bags, accessories and business tools to launch their business.The Gigi Hill Platinum Showcase is offered to stylists at an affordable price and includes a variety of bags, accessories and business tools to launch their business.

Growing to Meet Demand

Hillman and DeSantis-Cummings knew early on that to grow at the pace they envisioned, and that demand suggested they could achieve, they would need outside investment.

“We had the opportunity of being interviewed for the Los Angeles Times and we were very open about what our goal was and what we needed, [an outside investor].”
—Monica Hillman

“In 2008 we knew that we wanted to go national and we knew at that point we needed to bring in an investor,” Hillman says. While many companies find this to be challenging—think of the experiences of those eager entrepreneurs who pitch their ideas on ABC’s Shark Tank—Gigi Hill found themselves in the enviable position of having investors come to them.

“We had the opportunity of being interviewed for the Los Angeles Times and we were very open about what our goal was and what we needed,” Hillman says. “Our phones didn’t stop ringing for the next three weeks after that article came out.”

The women found their first angel investor through this experience, and the funding helped them lay the foundation to launch nationally in 2009.

Then, in 2011, another investor found them. “We were not out seeking any venture capital,” says DeSantis-Cummings. In fact, she recalls, the investor found them through Direct Selling News. “They saw an article about us in there and cold-called. We always say that Direct Selling News was responsible for connecting us with Maveron.”

Maveron is a venture capital firm that was established in 1998 by Dan Levitan, who had been a director at one of Wall Street’s leading investment banking firms, and Howard Schultz, CEO of Starbuck’s.

“It was huge—it really was,” says DeSantis-Cummings.

“We plan to be $100 million-plus in the next several years. We spent the last 16 months really laying the foundation to be able to support that growth.”

Both Hillman and DeSantis-Cummings feel that their relationship with Maveron is a perfect fit. “Maveron is a consumer products investor,” says DeSantis-Cummings. “They, first and foremost, are looking for consumers products that are very e-commerce driven.” And, she adds, “They really let us spend the last 16 months doing what we needed to do to lay the foundation for our growth.”

Iconic is the latest Gigi Hill collection for Fall, featuring beautiful blues, reds, animal prints, and statement-making blacks and whites in a range of fun fabrics.
Iconic is the latest Gigi Hill collection for Fall, featuring beautiful blues, reds, animal prints, and statement-making blacks and whites in a range of fun fabrics. 		Recognition is a big part of Gigi Hill culture. Stylists celebrate their sales and leadership achievements at the annual Success Summit.
Recognition is a big part of Gigi Hill culture. Stylists celebrate their sales and leadership achievements at the annual Success Summit.

Offering Independence and Balance to Stylists

Gigi Hill’s vision is to “empower women to accomplish their unique goals and achieve success by sharing a lifestyle collection that offers function and style and enables customers to be confident and fashionable.” They’re achieving this vision by providing their sales team—who they call stylists—with an opportunity that fits their lifestyles and personal needs.

Hillman and DeSantis-Cummings had researched the direct selling business model before they launched their company and felt it was a perfect fit. “If our bags were sitting on a shelf in Nordstrom’s they would not get the attention that they get in a living room at a party in front of several women,” Hillman says. “The stylist can really describe the bag and explain it to the customer. The customer can really hear the full story about how this bag is going to add value for them.”

The business model resonated with Hillman, in particular, because she had been searching for this type of opportunity—an opportunity that would bridge the gap between a full-time, corporate job and staying at home to be with her family.

“It was a very comfortable business model because it was really fulfilling what I wanted and also giving other women that same opportunity,” she says. “It’s about doing something else while you are a mother, while you are a wife, and having the ability to bring income into your household but not sacrificing your ability to be with your family.”

That model resonates with others as well. Gigi Hill has benefited from a passionate team of stylists who love the product and love holding parties to talk about and demonstrate the product to other women.

“We love our stylists,” Hillman says. “They’re very passionate about our product, so it’s really fun. They’re so passionate about their stories and how they use the product. They always say ‘it’s just so much fun.’ ”

Training is a large part of the support that Gigi Hill provides to stylists and something that has been done very intentionally to help build the brand and ensure a consistent message.

“We learned very early on that the best way to communicate your brand and get the message across is that they’ve got to hear it from us,” Hillman says. “So we provide very extensive training through videos, webinars, live training—just giving them the brand awareness, brand education, product education, so when they’re out at parties they’re truly communicating the message they heard from us and not a watered down version of it.”

Gigi Hill stylists can work as little as 3 or 4 hours a week and earn an average of about $650 a month holding a single party each week—or as much as they’d like based on their own needs and busy schedules. At a five-parties-a-week level, Gigi Hill estimates average potential earnings of about $3,250 a month, with an investment of about 15-20 hours. Sponsoring new team members can lead to even greater rewards through commissions on team member sales. Stylists can also qualify for free products and business tools, monthly and annual sales recognition, training and access to Gigi Hill home office-sponsored events, as well as vacations and other incentives. A low startup investment also makes the company attractive to potential stylists.

The Future

“This business is back-to-the-basics. … And that’s really what our focus is to get us to the next level with our company.”
—Gabrielle DeSantis-Cummings

Gigi Hill’s success has been built on the basics, says DeSantis-Cummings. “This business is back-to-the-basics,” she says. “It’s the training, it’s the support, it’s the messaging, it’s the branding. And that’s really what our focus is to get us to the next level with our company.”

The passion that DeSantis-Cummings and Hillman have for their business is apparent and has not dimmed since their initial meeting on the soccer field. “Right now we feel really good about where we are,” says DeSantis-Cummings. “This is what we love; this is our passion.”

Values and Ethics Leave a Lasting Impression

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Amway

Today, more than ever, entrepreneurs are discovering direct selling. Hard-working people are attracted to the opportunity to start a business, set goals and pursue a better quality of life. As a result, the direct selling industry is growing, with more than 15 million distributors and nearly $30 billion in sales in the United States.

Doug DeVos
Doug DeVos

As we continue to grow, our industry takes a higher profile, too. That’s a tremendous benefit to our distributors, who leverage the name recognition, product quality and personal nature of direct selling that is so unique to our business.

That’s why, like any high-profile brand, it’s critical that we build and maintain a positive brand for direct selling. As we look to share our businesses with even more people around the world, the first impression is always the most important and most lasting.

Our industry has long fought to integrate professional ethics at every level. This commitment can be seen in the DSA’s Code of Ethics, which clearly identifies what both consumers and distributors can and should expect when conducting business. And any company that wants to become a DSA member must pledge to abide by these standards. But we can do more.

Rooted in this Code of Ethics are values and principles that underscore the importance we place as an industry on ethical business practices. The expectation is that distributors can rely on leaders in their organizations to uphold the highest levels of honesty, integrity, responsibility and accountability. And they can count on these values to be placed front and center when it comes to ensuring products are safe, individuals are reliable, compensation is fair, training is effective, and support and guidance are readily available. At the same time, consumers should be able to trust that people in this industry possess strong principles, moral character and sound judgment.

As we look to share our businesses with even more people around the world, the first impression is always the most important and most lasting.

As members and leaders in DSA and its global counterparts, we must continue to bring these values and principles to the work we do each and every day. Using them to guide decisions and strategies is what will help sustain direct selling businesses regardless of the climate in the marketplace. And it is these ideas that will help us continue to strengthen our businesses, improve our products and brands, and deliver exceptional distributor and customer experiences.

But there are more fundamental reasons. When people throughout an organization adhere to a common set of values, there is a trickle-down effect. When others see that working in this manner is not just expected, but reinforced through decisions and actions by their leaders, it inspires them to think and behave the same way. For direct selling, the result is an increase in morale, a more motivated salesforce and stronger, more successful businesses. That’s how we earn trust and respect from our customers.

Fortunately, we see these values put into practice all the time. As a member of the CEO Council for the World Federation of Direct Selling Associations, I am proud to say that each one of us strives to serve as a role model to demonstrate these values. All of us understand the unique opportunity we have to set the example for the industry as well as the individual businesses we represent.

Direct selling was founded on helping others, and those values continue to be brought to life through countless charitable and philanthropic activities that our companies and direct sellers participate in each year. For instance, last year, USDSA companies donated a total of more than $16.5 million in products and cash to the TODAY Show’s Annual Holiday Toy Drive. And a very personal example is when USDSA company executives mentored the next generation of entrepreneurs during our June annual meeting, thanks to DSEF partnering with the Network for Teaching Entrepreneurship.

I know many direct sellers use a strong set of values to take care of more than just their business, employees and customers. As an industry, we show we care about the communities we live in, because we understand that once success is reached at a certain level, not only do we have the resources to turn our attention toward others in our communities, but we have an obligation. And when communities see firsthand the commitment direct sellers have toward making other people’s lives better, it helps improve how we are thought of as well.

When we lead with values and act in ethical ways, our reputation grows.

That’s why first impressions are important. Many of us are the first introduction people have to our industry. So our role in shaping their perceptions is critical. A reputation is something that’s earned. And it takes time and effort to be perceived a certain way. So when we lead with values and act in ethical ways, our reputation grows. And the more favorably we are looked upon, the more people will want to be a part of our industry. So as you work to enrich lives by offering more people an opportunity for success, we encourage you to continue to focus on helping others be better achievers with discipline, integrity and honesty.

As direct selling quickly becomes the path of choice for many entrepreneurs, we must preserve the work that has built a strong foundation of goodwill. Great strides have been made in showing the world, the millions of independent business owners and countless other budding entrepreneurs that this industry is filled with people who believe that values are just as important as the bottom line. We have seen where abiding by strict ethical standards can take us, but there is potential to go so much further. We must. And with your help, we will—in every decision we make, every encounter we have and every person we meet.

Doug DeVos is President of Amway.

Letter from John Fleming, November 2012

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John Fleming

The month of November will be remembered for another presidential election, the results of which are not known as we go to press. What we do know is Thanksgiving, one of our most treasured holidays, is about to be celebrated. Regardless of what else might be going on in our world, we stop and realize that there is something very real about an attitude of gratitude, and that there is always much to be thankful for.

Over the past few years I have written many “From the Publisher” pieces, and on two occasions I chose to discuss a personal encounter because it related so much to what the direct selling industry is all about. With so much more discussion about the importance of jobs and the pursuit of prosperity in what is continuously described as challenging times, it seemed most fitting to focus again on what inspires us most, not what challenges us.

Over the past two months, I have been vividly reminded of the great value that can be derived from the building of a successful direct selling business at the independent contractor level. Through my participation in a few events and subsequent conversations, I enjoyed encounters with several independent contractors who are starting on a new journey—that of building a direct selling business. All that I spoke with were starting their journey for different reasons. Joe and his wife (real names are not being used) had been successful in the construction business for many years employing over 100 people. However, over the past few years, the business climate changed for the services and expertise they were offering, and consequently they had to make new choices. The first choice was to maintain a positive attitude and be grateful for their health. With an attitude of gratitude, they made additional choices as to how they would continue to pursue entrepreneurial opportunities. They are now in two new businesses and one of them is a direct selling business. They are happy with their choices and recognize the wonderful attributes of a business pathway that does not require the overhead and employment of others to be successful.

I also met a young man who had recently completed his architectural education, yet he had also started a direct selling business. His story was very interesting to me because we shared a similar background. I met another young man who is 18 years old and building his direct selling business after debating on whether to go immediately into college and then struggle with the “bill,” or try his hand at building a business. The business would have the potential to earn him money and allow for residual benefit as well as offer the opportunity to continue his education at what might be a better time financially for him and his family. I met men and women from all walks of life, of all ages and with as varied responsibility as you can imagine, yet excited about building their own direct selling business. What I remember most is what has always motivated me to be a part of this industry. When involved in direct selling, you are excited—you have to be, because the business model works best when relationships are forged, and relationships are best developed when two or more are excited about something. It’s also this business model’s blessing that it is built upon people engaging people, and the people can come from all walks of life regardless of age, past experience, inexperience or even personal challenge. When you are in the presence of direct sellers, you see life unfolding very differently. You witness the importance of integrating personal development into the business mix, and you also witness the diversity in age and ethnic background. You see the wheelchairs and often feel the struggle, but always you sense the hope, the eagerness to learn, the belief in the promise of a better future. 

What I have reflected upon is simply what our direct selling companies offer each and every day to millions who seek not the next job but the perfect complement to what they are already doing. This is the ideal business model for the times, and for some it is their pathway to entrepreneurship and business ownership that offers the freedoms rarely found in any other business model available to the masses.

We may be challenged as a people but we are also inventing a new way. Hundreds of thousands search for, hope for, and often pray for, but still do not know of … the incredible opportunities direct selling companies offer. Here at Direct Selling News, we are always grateful for the opportunities we experience in sharing the stories you create. We are also grateful for the suppliers who advertise with us and all who support direct selling companies in being what you are: a source of opportunity! What does it all mean? This industry is one of the finest forces for good on the planet.

Happy Thanksgiving!

Until next month … enjoy the issue!

John Fleming
Publisher and Editor in Chief

Thirty-One Supports Girl Scouts’ 100th Anniversary

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Thirty-One Gifts Founder and CEO, Cindy Monroe, gives an inspirational talk, ‘Belief is in the Bag’ to Girl Scouts and alumnae during the special Girl Scout moment on Oct. 19 in the Hall of State during the 2012 State Fair of Texas.

The Girl Scouts of Northeast Texas welcome Thirty-One Gifts Founder and CEO, Cindy Monroe, to the 100th Anniversary Exhibit at the 2012 State Fair of Texas and thanks the Company for their generous support of $300,000 for the exhibition.
The Girl Scouts of Northeast Texas welcome Thirty-One Gifts Founder and CEO, Cindy Monroe, to the 100th Anniversary Exhibit at the 2012 State Fair of Texas and thanks the Company for their generous support of $300,000 for the exhibition.

Thirty-One Founder and CEO Cindy Monroe traveled from Ohio down to the 2012 Texas State Fair on Oct. 19 in support of the 100th Anniversary of the Girl Scouts of the USA. Monroe visited the 100th Anniversary Exhibit and spoke to a crowd gathered in the historic Hall of State with a speech titled, “Belief is in the Bag,” a message about empowerment and belief. Monroe said, “I am thrilled to have the opportunity to present my mission moment at the State Fair of Texas while Girls Scouts is celebrating its 100th anniversary in such a grand way.”

Thirty-One has supported Girl Scouts this year with a $300,000 cash and in-kind gift from their new initiative Thirty-One Gives (www.thirtyonegives.org). Thirty-One is a direct-selling company providing women with a unique business opportunity as well as fun, personalized and giftable bags and totes.

Thirty-One believes in Her – women and girls. Thirty-One embraces Her inner beauty and celebrates Her natural gifts. It is the Thirty-One mission to celebrate and empower Her, helping to strengthen Her belief in herself, strengthen Her family, and to lead a purposeful, thriving life. We do this through Home Office partnerships, Consultant giving, product donations and exclusive Gives products. Thirty-One believes that by empowering Her, the company is strengthening families and communities and change lives.

Girl Scouts of Northeast Texas serves nearly 35,000 girls and 17,000 adults in 32 counties. For more information on how this organization builds girls of courage, confidence and character, visit www.gsnetx.org.

Thirty-One

First SUCCESS Partners CEO Summit Held

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SUCCESS partners

C-level executives attended the first SUCCESS Partners (SUCCESS Magazine, Video Plus, and Direct Selling News) CEO Summit this past weekend at the Montage Resort in Laguna Beach, Calif. They gathered to interact, discuss topics relevant to the current state of the industry, and be inspired by one another.  Three exceptional speakers, Peter Diamandis, Chairman of the X-Foundation, John Maxwell, world-renowned for his leadership guidance and coaching, and Shawn Achor, author of The Happiness Advantage, provided additional thought provoking content.

Stuart Johnson, CEO of SUCCESS Partners, along with co-host Darren Hardy of SUCCESS Magazine and John Fleming of Direct Selling News, provided those attending with three very special days. The summit was designed to be an interactive forum where the executives were involved to determine the topics for discussion they felt most important to the future of the direct selling/network marketing industry. CEOs whose companies were ranked in the Direct Selling News Global 100 – Top Companies in the World, or those achieving $50 million in annual revenues, were invited to attend.

Darren Hardy facilitated the event activating relevant and robust conversation that created valuable interaction among the group. Optimism for an industry that is growing more and more to be the micro-entrepreneurial solution to the challenges of the times was apparent. All speakers delivered thoughtful and insightful content and the executives attending experienced a very unique atmosphere of dialog, sharing and contribution.

PM International Celebrates World Congress

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PM International AG kicked off the beginning of its 20th anniversary year 2013 by celebrating its recent World Management Congress.

More than 1,500 business partners from all over the world traveled to Mannheim, Germany, to enjoy the experience that will set the tone for the upcoming year, sharing a wide range of information, inspiration and motivation.

Besides a tour of the already sold-out venue for the 20th anniversary World Congress, the SAP Arena—which is expected to draw more than 10,000 participants—attendees were introduced to the company’s brand-new products as well as sales training by industry expert and PM Advisory Board member, Larry Thompson.

Rolf Sorg, Founder and Executive Director of PM International AG, discussed the achievements of the company over the past year, including being No. 46 on the Direct Selling News Global 100 list of Top Direct Selling Companies as well as the Top Innovator in the competition for Top 100 German Enterprise for the 11th time.

In addition, Sorg announced that the number of newly registered Team Partners was 50 percent higher compared to August 2012 and 70 percent higher than the previous year.

For more information on PM International, visit www.pm-international.de.

Stella & Dot’s CEO featured in MORE

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StellaSocial selling company Stella & Dot and its Founder and CEO, Jessica Herrin, are featured in October’s issue of MORE magazine. Herrin is a long-time entrepreneur, having founded her first business at age 24 while in business school at Stanford. Stella & Dot’s success, however, is projected to outstrip all of her previous endeavors, including the successful WeddingChannel.com business that she sold.

Read the entire article here.

Direct Sellers Recognized as Top Technology

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Ambit
Primerica

Ambit Energy, a national retail energy provider, and Primerica Inc., an independent financial services marketing company, have been recognized on the 2012 InformationWeek 500 List of Top Technology Innovators, an annual listing of the nation’s most innovative users of business technology. The distinction was revealed at a gala awards ceremony at the exclusive InformationWeek 500 Conference, which took place at the St. Regis Monarch Beach Resort in Dana Point, CA.

According to InformationWeek Editor-In-Chief Rob Preston, “The InformationWeek 500 has recognized the most innovative users of business technology for 24 years, and this year’s innovations were particularly impressive. What the editors looked for are unconventional approaches—new technologies, new models, new ways of grabbing business opportunities and solving complex business problems with IT.”

Additional details on the InformationWeek 500 can be found online at www.informationweek.com/iw500.

The entire press release can be found here.

Nu Skin Grows 27% in Thailand

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Nu Skin

According to the Bangkok Post, sales of Nu Skin Enterprises (Thailand) Co Ltd, the direct sales skincare company, grew by 27 percent year-on-year in the first eight months to 2 billion baht. The growth rate, almost four times the industry’s, was driven by the new AgeLoc anti-aging product line.

Pakapun Leevutinun, the president of Nu Skin’s Thai and Vietnamese operations reported that “sales of AgeLoc products topped 450 million baht in August alone, the highest monthly sales for Nu Skin since it set foot in Thailand 15 years ago.”

Riding on the trend, Nu Skin will introduce the new AgeLoc R2 food supplement line next year. It is also developing its information technology system for greater efficiency in online ordering, part of measures aimed at enabling the salesforce to continue business in the event of unforeseeable incidents such as last year’s floods. At the same time, the company plans to add small distribution centers nationwide for improved logistics.

The entire Bangkok Post report can be found on the publication website here.