This week I share about a new format I will be using in reporting the news in 2013, and some of fantastic news on the financial health of the direct selling industry and the network marketing community that makes it what it is.
Direct Selling Companies You May Not Have Heard Of!
Awbrey Smith started this company out of her home in 2011. With little to go on besides a crazy idea and “dream” of what she wanted to accomplish for women all over the country, 2CP has grown by leaps and bounds since it’s opening. According to Awbrey, the success of 2CP lies within her amazing team (listed below) and the consultants and customers who make each day an exciting one! Work is no longer what she has to do to help pay the family bills, it is now a growing change that Awbrey is helping make in women’s lives all over.
We have been helping women build businesses for over 20 years.
Cookie Lee jewelry is delivered directly to customers through shows, fundraisers and personal shopping. Our ever-growing base of independent Consultants operates throughout the United States.
A HISTORY OF SWEET SUCCESS!
DOVE CHOCOLATE DISCOVERIES™ launched in February 2007 as one of the latest ventures from Mars, Incorporated. Now, a global leader in chocolate, Mars roots goes back to the kitchen. In the 1880’S, when Frank Mars was a young boy, his mother taught him to hand-dip chocolate. With his wife, Ethel, Frank started a home candy-making business in Tacoma, Washington, that eventually grew into Mars, Inc., a world-wide industry leader in chocolate confections. Going back to its direct-selling heritage, Mars created DOVE CHOCOLATE DISCOVERIES™. Since then, the Chocolatier sales force has taken off. There are now Chocolatiers in 48 states.
With over 100 years of candy-making experience behind us, DOVE CHOCOLATE DISCOVERIES™ is dedicated to creating the ultimate chocolate experience – in the comfort of your own home, providing an opportunity to share some sweet moments with family and friends. Plus, as a Chocolatier, you’re walking in the door with respect and recognition. What could be sweeter than that!
The lia sophia Story
Jewelry has been a passion in the Kiam family for decades. In fact, lia sophiaisn’t the only jewelry company that family patriarch and entrepreneur Victor Kiam and his wife, Ellen, were a part of. They learned a great deal about the business from the Friendship Collection, which they started as a mom-and-pop enterprise in their apartment decades earlier. By the 1970s, it had grown into the United States’ largest importer of jewelry, antiques and artifacts from China. Even early on, their instincts were good. (Read On)
We had a question in early 2010- what would happen if women were able to earn some extra money selling designer jeans at a discount? Well, based on the success we have had so far, the answer is pretty clear. Vault Denim is a direct sales company that is a little different than others. Our consultants don’t have to spend money to purchase their own inventory- we provide it. Customers don’t place orders at home parties and then wait for products to be shipped- they wear their new jeans home. And because we sell the same jeans found in department stores for up to 50% less, people are lining up to host parties and become a part of this fast-growing, exciting company.
Leslie Montie never dreamed she would become the founder of a company that helps families enjoy great tasting, nutritious meals in minutes.
When Leslie discovered that her two young children had medical conditions requiring special dietary restrictions, she began her search for healthy alternatives. “It was amazing how this impacted our entire family.” recalls Leslie. â€œI needed to come up with meals that my children would not react to, yet still enjoy. And since I was a full-time working mom, they had to be easy to make.” (Read On)
At Willow House, our mantra is Simply Good Design — and it permeates everything we do.
Our in-house designers strive to create high-quality products with impeccable design and effortless style, from the sparkling luxury of our designer Jewelry by Sara Blaine to our line of exclusive home décor and American artisan pieces.
More than simply “on trend,” our exclusive home décor and jewelry collections are thoughtfully designed to be timeless. They’re pieces that you’ll enjoy wearing and decorating with season after season.
But Simply Good Design runs deeper than our look — it’s in the very soul of our company. You see, Willow House offers our family of Consultants two strong divisions to grow their own small business — Jewelry by Sara Blaine and Style for Home. We empower our Consultants with the tools needed to succeed in this ever-growing industry.
Willow House is the most compelling home-based business opportunity in America. Through e-commerce, savvy social media marketing and our on-trend blog, Plate & Pattern, we help our Consultants connect with their customers in new, exciting, and profitable ways.
Network Marketing Company News
AdvoCare will continue its partnership and primary sponsorship of Austin Dillon’s No. 3 AdvoCare Chevrolet for the 2013 NASCAR Nationwide Series season. This follows the company’s sponsorship of Dillon and the No. 3 car for 20 races in the 2012 NASCAR Nationwide Series season.
Berkshire Hathaway, parent company of Kirby, The Pampered Chef and World Book, announced its financial results for the third quarter of 2012. The conglomerate reported that its third-quarter profit rose as strength in the railroad and utility businesses, as well as investment gains, offset weaker results in its insurance units. Berkshire said its cash holdings grew to $47.78 billion, up $10 billion from the start of the year. View the full press release online.
Blyth, parent company of PartyLite and ViSalus, reported earnings for the third quarter of 2012. Net sales for the three months ended Sept. 30, 2012, increased 40 percent to $268.8 million versus $191.5 million for the comparable prior-year period, primarily due to the 132 percent year-over-year sales growth at ViSalus. International sales for Blyth represented 25 percent of third-quarter sales this year, compared to 34 percent last year, driven by ViSalus’ strong domestic sales growth. View the full press release online.
Fuller Brush recently celebrated its 106th anniversary.
Mannatech has reported net income of $2.2 million for the third quarter ending Sept. 30, 2012, compared to a net loss of $3.7 million for the third quarter of 2011. In achieving net income of $2.2 million for the third quarter of 2012, non-cash items impacting profitability included a reduction in a previously recognized deferred tax asset valuation allowance of approximately $1 million, a release of reserves related to transaction taxes of $800,000 due to the expiration of statutes of limitations, and income from foreign currency exchange rate fluctuations of $500,000. Third-quarter operating profitability and net income adjusted for the non-cash items listed above was near even as the company moves closer to its goal of profitability.
Net sales for the third quarter of 2012 were $43 million, a decrease of 14.8 percent, compared to $50.5 million in the third quarter of 2011. Net sales for the U.S. and Canada declined 16.3 percent to $20.5 million, compared to $24.5 million in the third quarter of 2011. International net sales of $22.5 million decreased 13.5 percent, compared to $26 million in the third quarter of 2011. View the full press release online.
Medifast, parent company of Take Shape for Life, announced its financial earnings for the third quarter of 2012. Net revenue increased 20 percent to $91 million from net revenue of $76.1 million in the third quarter of the prior year. Each of the company’s three primary distribution channels, Take Shape for Life, Direct Response Marketing and Medifast Weight Control Centers and Wholesale Physicians, contributed to this year-over-year revenue increase. Revenue in the direct sales channel, Take Shape for Life, increased 20 percent to $55.6 million in the third quarter of 2012 compared to $46.4 million in the same period last year. Growth in revenue for Take Shape for Life was driven by increased customer product sales as a result of an increase in the number of active health coaches and an increase in the monthly revenue per health coach. The company ended the third quarter with approximately 10,800 active health coaches and the average revenue per health coach per month for the quarter increased 3 percent to $1,634 compared to $1,585 in the third quarter of 2011. View the full press release online.
Nature’s Sunshine Products recently reported its third-quarter financial results. Net sales were $91.2 million, compared with $91.1 million in the same quarter a year ago, an increase of 0.1 percent; however, net sales increased 2.1 percent in local currencies. As of Sept. 30, 2012, active managers worldwide were 28,700, an increase of 1.8 percent from Sept. 30, 2011, while active distributors and customers worldwide were 656,800, a decrease of 3.7 percent from the end of the quarter a year ago. Operating income was $8.7 million, compared with an operating loss of $5.1 million and pro forma operating income from continuing operations of $9.6 million (excluding contract termination costs) in the same quarter a year ago, a decrease of 9.7 percent year-over-year. For the first nine months of the year, net sales were $277.1 million, compared with $275.8 million in the same period a year ago, an increase of 0.5 percent; however, net sales increased 2 percent in local currencies.
Net income was $20.9 million, compared with net income of $10 million and pro forma net income of $19 million (excluding contract termination costs) in the same period a year ago, an increase of 9.9 percent year-over-year. In the U.S., net sales were $33.7 million, compared with $33.5 million in the same quarter a year ago, an increase of 0.5 percent. Net sales for core products increased by 1 percent, but were partially offset by the discontinuance of non-core products. Active managers within NSP U.S. totaled approximately 5,300 and 5,600 at Sept. 30, 2012 and 2011, respectively. Active distributors and customers within NSP U.S. totaled approximately 191,500 and 210,300 at Sept. 30, 2012 and 2011, respectively.
Synergy WorldWide, a wholly owned subsidiary of Nature’s Sunshine Products, Inc., reported net sales of $26.3 million, compared with $24.5 million in the same quarter a year ago, an increase of 7.1 percent. In local currencies, net sales increased 13.1 percent compared to the same quarter a year ago. Active managers within Synergy Worldwide totaled approximately 3,200 and 2,600 at Sept. 30, 2012 and 2011, respectively. Active distributors and customers within Synergy Worldwide totaled approximately 89,100 and 85,000 at Sept. 30, 2012 and 2011, respectively. View the full press release online.
Primerica announced its financial results for the third quarter of 2012. Total revenues were $299.1 million in the third quarter of 2012 and net income was $45.6 million. Operating revenues increased by 7 percent to $295.2 million in the third quarter of 2012, compared with $276 million in the third quarter of 2011. Net operating income grew by 21 percent to $45.1 million in the third quarter of 2012, compared with $37.3 million in the third quarter of 2011. The size of the company’s life-licensed insurance salesforce was 91,506 at Sept. 30, 2012, up modestly from 90,868 at June 30, 2012.
There was downward pressure on recruiting in the second and third quarters as the company placed more focus on licensing initiatives, which improved the percentage of new recruits obtaining a license in those quarters. Lower sequential recruiting levels in the second quarter and a 3 percent decline in recruiting in the third quarter from the second quarter translated into 12 percent fewer new life licenses in the third quarter than in the second quarter of 2012. On a year-over-year basis, the life-licensed salesforce was down slightly from 91,970 at Sept. 30, 2011. Coming off the unusually high post-convention recruiting surge in 2011, recruiting declined 43 percent to 47,639, and new life licenses declined 17 percent to 8,613 compared with the third quarter of 2011. View the full press release online.
Stella & Dot won the Retail Innovation award for the 16th annual Accessories Council Excellence Awards. The company was also listed as No. 11 on the “100 Fastest Growing Private Companies in the Bay Area” list, published in the San Francisco Business Times.
Stream Energy is working to assist low-income families this winter with a donation to the Fuel Fund of Maryland. The donation will help families in distress with their heating and energy needs. The company has provided electricity services to customers in Maryland since 2011.
Direct Selling on Wall Street: Despite Challenges, Companies Post Record Q3 2012 Results
As the United States continues to emerge from the effects of the global recession, direct selling companies are seeking—and, in many instances, capitalizing on—opportunities for growth and expansion in the U.S. and abroad.
Herbalife reported record third-quarter net sales of $1 billion, a 14 percent increase year over year; and Nu Skin announced record third-quarter results with revenue of $526.2 million, a 23 percent improvement over the prior-year period. Additionally, USANA’s net sales for the third-quarter 2012 increased by 15.1 percent to $165.2 million.
Although such results are not representative of the entire industry, they are indicative of the steady growth various companies across the channel have experienced in recent months.
“We truly believe, as direct sellers, we’re at the right place at the right time,” said DSA President Joe Mariano. “We’re an industry that clearly thrives on better service, consumer education and opportunities that aren’t necessarily available to the rest of the market. We’re centered on the fact that people trust what we do and share a passion for what we do and that’s something unique.”
In many ways, this uniqueness that defines the direct sales channel proffers an advantage as companies look to enter the public market.
“As more and more direct selling companies continue to do well in the public market, that will be great for the overall industry and attract more investors,” said Rodney Clark, Managing Director and Co-Head of U.S. Consumer Investment Banking with supplier member Canaccord Genuity Inc. “The model has worked extremely well and growth is strong. As direct selling companies mature, they have to find ways to continue their growth, whether it’s through new products or distribution or expansion to new markets.”
While financial gain is most commonly viewed as the distinct advantage to going public, for many companies—particularly direct selling companies—another key benefit is an increased public awareness of the company as well as the business model itself.
“There is somewhat of an education element present in that people who don’t know much about the direct selling model might have picked up on the bad case studies that are out there and based their opinions on those instances,” Rodney said. “The direct selling industry is going to have to distance itself from those cases over time. It’s very similar to what’s happened in the nutrition industry. There was once a lot of turmoil but, in that industry, we’ve seen a lot of strategic big deals. Just like the nutrition industry, as direct selling gains traction, investors will become more astute to the fact that this is a highly productive channel.”
Even when negative coverage of the direct sales channel is not making front-page news, broad-sweeping generalizations, however inaccurate they might be, pose challenges to direct selling companies looking to break into the public market.
“The industry has had some challenges in the public’s eyes so valuations aren’t very rich right now,” Rodney said. “It’s been a little challenging for direct sellers to attract new investors because there’s been a spotlight on the industry and there hasn’t always been a positive tone in some of the coverage that’s out there. But, what companies are showing coming out of the recession is that many are getting the right products and services into distributors’ hands and are seeing strong growth. These business models are fantastic and if you’ve got the right products in the right hands and distributors who are excited and engaged, you can post positive results.”
As direct selling companies new to the public sector face a number of challenges including legal and accounting fees, Securities and Exchange Commission reporting requirements and pressure to increase earnings, it is important to recognize that the greatest challenges are often those that companies face internally.
“Abstracting from the direct selling industry and looking at the broader market, any company can face challenges in the spotlight, but that doesn’t necessarily mean that the rest of the industry isn’t doing well or shouldn’t be viewed favorably,” Rodney said. “The challenges could be company-specific, such as management issues. Overall, the industry is a strong industry and for the companies that are well-managed and on trend, they’re firing on all cylinders in the public market and even experiencing a great deal of international growth.”