Cost Structures and Profitabilities, Q1 2016

What Does The Q1 Reports Show Us About The Profitability Of Network Marketing?

Sponsored by:

It has always been interesting to see how direct selling companies compare on various grounds. Where they spend their money and at the end of the day, how much money they generate for their investors absolutely rank among the most interesting ones.

In this article, we will be briefly reviewing 11 direct sellers with varying sizes of business and with different product portfolios. These are Avon, Herbalife, Mannatech, Natura, Nature’s Sunshine Products, NHT Global, Nu Skin, Oriflame, Tupperware, USANA and Youngevity. This review will be based on their 2016 first quarter figures.

Oriflame: Will It Be Able to Shine Again?

What Does The Furuture Look Like For Oriflame?

Oriflame’s story begins in 1967 in a small office in Stockholm, Sweden. Three partners, Jonas and Robert af Jochnick brothers and Bengt Hellsten give a start by selling cosmetics through the direct sales method.

Company’s name originates from a royal banner of medieval France that was opened only on the battlefield. The original word  is “Oriflamme” and means “golden flame”. The first company logo is shown on the right.

The business grows in time, expands into some of the Western European countries and even goes public on the London Stock Exchange. Until late 1980s, Oriflame registers no major international success, though.

World Of Direct Selling Reports: Oriflame’s Choices

oriflame.logoRegular readers would know that here, we take a brief look at the performances of the largest public direct selling companies every quarter. This used to include Oriflame until mid-2013 when Oriflame’s figures started coming significantly later than all others. So, our last two reviews did not cover Oriflame.

This company though, being one of the leading direct sellers in the world and the largest European, deserved a deeper look in my opinion. This is especially so given its performances in the last few years. So, this week’s review will cover Oriflame only.

When we look at Oriflame’s yearly sales figures below, we see a steady growth until 2009. After that, leaving a spike in 2010 aside, obviously Oriflame has been stumbling since then. In 2010, Oriflame had a big success in its largest region, CIS & Baltics that it could not match afterwards. Company’s profitability generally follows the trend in sales.


Moreover, you will see at the below chart that the negative trend continues in 2013. It seems, 2013 will be worse than 2012 for Oriflame. For this not to happen, Oriflame should achieve a sales figure of Euro 458m in the last quarter, a quarterly figure that the company could not reach in any quarter in the last four years.


Oriflame divides its operating world into four regions, namely CIS & Baltics, EMEA, Asia and Latin America, in the order of their shares in Oriflame’s global business. CIS & Baltics region represents more than half of the company’s volume. Under this, Oriflame has Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Russia, and Ukraine. Oriflame has been suffering a lot in this CIS & Baltics region for quite some time and this has a strong negative impact on the whole picture. This region’s last quarter growth performance was -11% and was -10% in the last three quarters all together.

Oriflame has traditionally been strong in post-Eastern Bloc countries but now, apparently, Oriflame is hurt by being so dependent on this region. It has been obvious by now that the management could not make the necessary turnaround there. So, should Oriflame expand into other regions such as the US, Western Europe where it is either not present or weakly-represented? And should it also consider emphasizing and investing more in Asia and Latin America? I would think so.

Oriflame implements an “Avon-like” strategy with frequent regular catalogues, together with frequent, short-term price promotions and cross-sell campaigns. On the other hand, the company uses a typical, “Amway-like” stairstep-breakaway compensation plan on the field. Can it be that leaders are tired of trying to cope with both? Maybe.

Not so many are aware of it but this company has a food supplements line, too. First launched in a few oriflame.wellnessmarkets towards the end of 2008, this line was extensively introduced in 2009. In 2010, this category accounted for 3% of Oriflame’s business and it has not grown much since then. The category still represents only 5% of Oriflame’s global sales. For a cosmetics-only company since its inception in 1967, obviously, such an entirely different category introduction is much more complicated than it might seem. Looking at the business it generates after four years, maybe this category was not really necessary or maybe Oriflame should put more efforts behind it in terms of marketing activities.

Looking from outside, Oriflame definitely has some important choices to make. Investors might already have raised their voices looking at their shares’ value at the stock exchange as below:


// < ![CDATA[
lang: en_US
// ]]>

Post to Twitter

Weekly MM News Report: From New MLM Coffee Start Up to Category Creator Falling Fast And More Direct Selling News

This weeks MLM News report covers MLM Coffee start up VidaCup, MLM travel company YTB, Mannatech, Avon, TriVita, Amazon Herb Company and Amway.

Home Business Radio Network

Dr. Daria Davidson

Vidacup is thrilled to announce the addition of our CSA, Dr Daria Davidson. Dr. Davidson has been in healthcare for over 35 years. She began her healthcare career as a registered nurse, specializing in pediatric intensive care. For the last 30 years she has been a practicing physician, first board-certified in Emergency Medicine and now also board-certified in Integrative/Holistic Medicine. During her 20 years as an emergency medicine physician, she spent 11 years working in, and running, a Level 1 Trauma Center. She transitioned from the world of emergency medicine into the world of integrative medicine in 2004.

A personal cancer diagnosis in 1992 became the start of a broadening perspective on maintaining or regaining health. In 1995 Dr. Davidson began seriously looking into the scientific basis of supporting health through the appropriate use nutritional supplementation and nutraceuticals. With 18 years of experience, she is now convinced that there are simple and very effective natural ways to help our bodies in the ongoing process of optimal functioning. (Read The Full Article at VidaCup) Source: VidaCup Blog

How to Empower Yourself

There is so much in life that we can’t control, and you may sometimes feel powerless when things don’t go as planned. However, by learning to empower yourself, you can begin to have a more positive outlook on life and enable yourself to succeed. The following suggestions can help you feel more in control, and allow you to better enjoy both your professional and personal life.

Remember that your past failures don’t predict the future. Think of that big test you failed back in high school; did it prevent you from graduating? Did that time you knocked over the cone while parallel parking stop you from becoming a good driver? Past failures are nothing more than learning experiences. Instead of dwelling on them, figure out what you can actually learn from them. That test you failed probably taught you how to study more effectively for future tests, just as that parking incident helped you realize that you need to adjust your mirrors differently. Learn from your mistakes and move on. Empower yourself by taking control of your past to succeed in the future.

Lower the threshold for good things and raise it for bad things. Don’t make mountains out of molehills, but changing your perspective can show you what’s really important in life. This morning, for example, you woke up healthy and able to take on your day. Realize what a great thing that is, and don’t take it for granted. On the other hand, remember that spilling your coffee on the way to work isn’t the worst thing that can happen; your house catching fire is more along the lines of something really bad happening that can change your life. Empower yourself by taking a moment to be grateful for all the positive things you have, big and small.

Eat healthier and exercise. A nutritionist wrote on her blog, “Note to self: when I eat badly, I feel badly.” This couldn’t be more true. Of course we all indulge once in awhile, but implement a healthy eating regimen if you don’t have one already. Additionally, make sure you are getting at least 30 minutes of exercise 3 times a week. Do something you enjoy, like power walking, taking a kickboxing class to relieve stress, or play some Wii Fit in the privacy of your own home. The better you treat your body, the better you will feel. Empower yourself by being as physically healthy as possible.

Make a list of everything good in your day. This is especially important when you’re feeling like everything is going wrong. For example, did your children wake up smiling and happy to see you? Great! Add it to the list. Did a customer express her satisfaction with your service today? Put it on that list. Empower yourself by recognizing and appreciating the positive.

Look for and expect something great each day. Every day will have something good in it, so be on the lookout for it. If you expect greatness in your life, you’ll find that it comes more easily because you will be open to recognizing it as it happens. Being a business owner is something most people don’t have the courage to undertake, so at the end of each day, if nothing else, take a minute to pat yourself on the back. You completed another day, achieving your dream and doing what you love. Empower yourself by developing an upbeat attitude and an optimistic point of view.

By making some adjustments to your mindset, you will feel more empowered to take on your world and reach your goals. How do you empower yourself on a daily basis? Please share your ideas below! Source: Direct Selling Education Foundation

Direct Selling Assocation

Amway is planning to build its largest overseas production base in South China, which will produce top-selling Nutrilite products. The 78,000 square meter facility will be located in the Economic and Technology Development District of Luogang Area in Guangzhou, Guangdong province, and will be completed in 2016.

The Avon Hello Green Tomorrow project, a global fundraising and mobilization program, has awarded a total of $1 million to The Nature Conservancy and World Wildlife Fund to help end deforestation. This latest contribution brings total Hello Green Tomorrow funds raised to more than $4.5 million since the program was launched in 2010. The $1 million represents funds raised through mid-year 2012 from ongoing Avon Hello Green Tomorrow global efforts.

Mannatech held its annual convention, MannQuest 2012, at Walt Disney World last weekend. Touted as the “Ultimate Training Weekend,” independent sales associates from across the U.S. and Canada were in attendance.

Oriflame has collaborated with actress Demi Moore to produce a premium collection of makeup products, fragrances and accessories-More by Demi.

TriVita and Amazon Herb Company have merged. Amazon founder John Easterling and his wife, actress Olivia Newton-John, will continue to work directly with TriVita to advance the company’s wellness mission.

In other company news, TriVita will be launching Southeast Asian operations on Sept. 18, 2012. The company’s goal is to expand its operations to 100 companies in 10 years.

YTB International has called off its proposed merger with LTS Neutraceuticals, also a non-member. YTB Chairman J. Scott Tomer has resigned from his posts with the company. Robert Van Patten, the company’s president, CEO, interim CFO and board member, resigned from the company in April of this year. A management committee is overseeing operations until a new CEO is appointed.

MLM Weekly News Report: Covering The Network Marketing Community For The Week of August 24th 2012

This week’s MLM News Report covers some great info from Vemma, MonaVie, ViTel, Ocean Avenue, and many of the top 500 and 5000 companies of the Inc. Magazine’s fastest growing companies.

Beachside CEO

BK Boreyko founder of VEMMA emailed me this week to ask me if I knew what $5.5 Million dollars looks like?

ViTel Wireless Touring The Nation Laning In Atlanta The First Week of Septermber 2012

Vitel Wireless Atlanta Promo from Rick James Stapp on Vimeo.


Direct Selling clearly on the rise in Poland
The direct sales market in Poland increased by 1.3% year on year in 2011 to €585.4m. Cosmetics and personal care products accounted for 69% of the revenues of companies affiliated in the Direct Selling Association of Poland (PSSB). The year before this category held 70% while a European Union average in 2010 stood at 38%. The second largest value share in the Polish direct sales market had household appliances, which generated 13.4% of the overall direct retail sales in the country, marking a 3.4% increase year on year. OTC medicines and dietary supplements accounting for 11.6% of direct sales in Poland in 2011 and growing at 3.1% on a yearly basis. Approximately 870,000 individuals were involved in direct sales in Poland last year, of which 88% are women.

Companies operating on the market employed about 1,497 people, and 96% of the revenues came from person to person sales. Companies on the direct sales market include Amway, Avon Cosmetics, Forever Living Products, Herbalife, Mary Kay Cosmetics and Oriflame. Poland is the fifth largest direct sales market in Europe after France (€3.7bn), Germany (€2.7bn), Italy (€2.4bn), and Great Britain (€1.4bn).

Direct Selling Assocation

Inc. Magazine announced its list of the top 500 and 5,000 fastest-growing companies. Direct selling companies included in the top 500 list were Stella & Dot (no. 57) and non-member J.Hilburn (no. 221). Companies included in the top 5,000 were Scentsy (no. 516), non-member It Works! Global (no. 662), YOR Health (no. 1220), Ambit Energy (no. 1305), Initials (no. 1555), non-member Acuity (no. 2020), 5LINX Enterprises (no. 2900), Supplier member FONA International (no. 4031), Symmetry (no. 4121) and Isagenix International (no. 4951).

The 2012 International Business Awards, a.k.a. the Stevie Awards, were announced this week. Winners will be celebrated and presented with their awards at a banquet in South Korea this October. DSA congratulates the following direct selling companies for their achievements:

Subscriber member ARIIX: Bronze Stevie Award –
Company of the Year – Health Products & Services and Pharmaceuticals
Morinda Bioactives: Bronze Stevie Award – Best New Product or Service of the Year – Consumer Products
Nu Skin U.S.: Bronze Stevie Award – Management Team of the Year

Nu Skin Korea/North Asia:
Gold Stevie Award – Company of the Year – Health Products & Services and Pharmaceuticals
Gold Stevie Award – Fastest-Growing Company of the Year in Asia (China, Japan and Korea)
Silver Stevie Award – Executive of the Year – Health Products & Services: Luke Yoo, CEO

Non-member The Learning Annex: Gold Stevie Award – Executive of the Year – Internet/New Media: David Galvan, CEO
Bronze Stevie Award – Management Team of the Year
Bronze Stevie Award – Customer Service Department of the Year – All Other Industries

AdvoCare recently held a Success School Conference in Fort Worth, Texas, during which independent distributors collected more than 1,400 backpacks and raised more than $27,000, all of which will benefit Operation Homefront, an organization that provides emergency financial and other assistance to families of service members and wounded warriors. This is the third year AdvoCare has stepped forward to help Operation Homefront. The company is on target to surpass its Platinum-level commitment of $250,000.

Pending member AnyArt recently launched the Canvas for a Cause program, whereby each independent distributor, in cooperation with their home party hostess, can select from a list of charities the one they would like a percentage of their parties’ sales to benefit. Guests are made of aware of such charitable donations through the invitations and reminders for the party.

Avon has announced that Paula Abdul will be a spokeswoman for their accessories collection, “Forever” selected by Paula Abdul.

Natural Health Trends, parent company of NHT Global, announced its financial earnings through June 30, 2012. The company reported first-half sales of $20.1 million, up 62 percent over the $12.4 million of a year ago. In the second quarter, sales, at $11 million, were up 52 percent over a year ago. View the full press release online.

Oriflame of Sweden has reported its financial earnings for the second quarter of 2012. For the three months ended on June 30, 2012, local currency sales increased by 1 percent and Euro sales were up by 2 percent to €373.6 million. Average size of the salesforce decreased by 5 percent to 3.6 million. Oriflame consultants and closing salesforce was down by 6 percent. For the past six months that ended on June 30, 2012, local currency sales increased by 2 percent and Euro sales were up by 1 percent to €769.3 million. View the full press release online.