Direct Selling WSJ Feature

8/11/2019 Direct Selling WSJ Feature

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THE ULTIMATESOCIAL BUSINESS MODEL

A Special Supplement to The Wall Street Journalby Direct Selling News

In 2010, direct sellingcompanies generated over

$125 billion in revenue in

150 countries through more

than 75 million men and

women who are changing

lives serving others. This isthe story of direct selling.

WhyNowIs PrimeTime

forDirectSelling

From March 2009to May 2011, the

top 7 publiclytraded directselling companiesaveraged a 268percent increase instock price.

INSIDE: DSNGlobal 100 Listing of the Top Direct Selling Companies in the World


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Serving the Direct Selling and Network Marketing Executive Since 2004A SUCCESS Partner CompanyContents

COVER STORY

4 The Ultimate SocialBusiness Modelby Katherine Ponder

Direct selling is the original socialnetworking business and nowis prime time for direct sellers.

8 Solution to a Shrinking JobMarketby J.M. EmmertWorld-renowned economist,professor and best-sellingauthor Paul Zane Pilzer offers aperspective on the direct sellingindustrys role in todays economy.

FINANCE10 Making Dollarsand Senseby Emma JohnsonDirect selling makes a lot ofsense, not only for the individualsworldwide who make a livingselling products from their home-based businesses, but also forsavvy investors the world over.

11Top Publicly Held DirectSellers Achieve Record

Sales and Profitability

by Tim Blackwell

More than half of the top 12 publiccompanies that sell direct haveoutperformed the average stockreturn by impressive marginssince the market dipped to its lowin early 2009.

13 Jefferies Reportby Douglas M. LaneThe direct selling model isuniquely well-positioned in thecurrent investment environment.

INTERNATIONAL

14 A Truly Global Channelby Katherine PonderDirect selling is a globalphenomenon. There are now 20countries that are billion-dollarmarkets for direct selling.

TECHNOLOGY

18 Speed, Power, Reachby Teresa DayTechnological advances in mobiledevices and apps, as well asin social media tools, serve toincrease the speed, power andreach of whats already utilized inthe direct selling model.

INDUSTRY

22 Megawatt Returnsfor Energy Providersby Jennifer L. Mills

Deregulation in several stateshas opened up competition forthe retail portion of the energybusiness. And thats where directsales companies are steppinginand changing the game.

24 Of the People, by thePeople, for the Peopleby Teresa Day

The business model thriveswhen those who participate buildbusinesses and share with othershow they, too, can do the samething, creating a positive socialand economic impact on familiesand communities.

27The Heart of DirectSelling: The Home

by Barbara Seale & John Fleming

Whats the ideal home-basedbusiness? More than 15 million

Americans think its direct selling.They represent the hundreds ofU.S. direct selling businesses,creating a significant social andeconomic impact.

29 Direct Selling Newsby DSN StaffWhether providing readers withvaluable information, offering aforum for executives to shareideas or profiling companies,DSN is the journalistic resourcecovering the direct selling way ofdoing business.

31 DSN Global 100by DSNStaffDirect Selling Newspresentsits Global 100, the onlycomprehensive list of the top100 revenue-grossing directselling companies in the worldfor 2010.

As the trade publication for our vibrant industry, each month we bring you the latest news and information

about the companies and the people who lead them.

For more information, email [email protected] or call 940-497-9775 | www.directsellingnews.com | 800-279-5249

Serving the Direct Selling and Network Marketing Executive

Reach the IndustryThrough our multiple advertising platforms, we are

the best way to build name and brand recognition

and to market your products and services directlyto decision-makers.

Learn the IndustrySubscribe toDirect Selling News,

a trade publication for industry

executives and decision-makers.

Founder & CEOStuart P. Johnson

Publisher and Editor in ChiefJohn Fleming

jfleming@direc tsellingnews.com

Managing EditorJudith Emmert

[email protected]

EditorsJennifer L. Mills

Teresa Day

Creative DirectorCarl Waters

Production ManagerAlan Dwel le

Production ArtistKarla M. Garcia

Copy EditorPeter Tepp

ContributorsTim Blackwell

Emma JohnsonDouglas Lane

Katherine PonderBarbara Seale

Advert ising ManagerJerry Reagan

jreagan@dire ctsellingnews .com

OperationsSteve Norton

Direct Selling News

200 Swisher Road Lake Dallas, Texas 75065Phone: 800-279-5249 Fax: 940-497-9988

www.directsellingnews.com

2011 Direct Selling News. All rights reserved.


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Direct selling is the originalsocialnetworking business. Long beorewe even knew what a computer was,people were getting together or un,socializing and shopping. Add intechnological power and globalization,and youve got a winning ormula.

Model AdvantagesWhether a company is working

in a mature market or an emergingone, the direct selling modelhas many advantages. In maturemarkets, the existing inrastructureand high technology saturation

make interacting with customersextremely easy. Advancements inmobile devices and apps, as well asin social media tools, simply increasethe reach o this socially drivenmodel. Far-flung riends and amilyare now easily included in a tightcircle, and new riends across thenation and world are made throughcommon interests.

In an emerging market suchas China, having scores osalespeople working directly withriends and amily to make thepersonal pitch just reaches back in

time. Te direct selling model is over150 years old; it has never neededtechnology to be successul. A socialnetwork and a good product is all thatis necessary. Additionally, the socialconnections put you ar ahead othe competitors who either cant getproduct on the shelves or are pushedinto obscurity. And those competitorsdont have a constant line straight totheir customers to gauge demandand eedback.

Products and services delivereddirectly to customers throughpersonalized presentations that are

ofen educational, entertaining andcertainly social have enabled directselling to thrive or decades eventhrough recessions, including thislatest one. Te effect holds true no

matter what the category as directselling companies represent virtuallyall goods and services customerswant and need. Te DSN Global100 list o the top revenue-grossingdirect selling companies in the worldrepresents $66 billion in revenue or2010, proo that this social businessmodel has economic power.

Te products and services soldby these companies range across

such diverse categories as cosmetics,financial planning services, homedecorating, home improvement andsolutions, energy services, personal-care, health and wellness, apparel andaccessories, legal services and finewines. Each company on the list hadto have reached $80 million in 2010revenue just to be listed.

Analysts have noticed some othe advantages o direct selling.

Doug Lane is Managing Directorat Jefferies, a ull-service securitiesand investment banking firm thatwas recently ranked No. 1 in U.S.stock picking by the Financial Times/ StarMine Research Analysis. Hethinks that direct selling companiesare successul because they havestrong top-line growth driven byoutsized exposure to the rapidlygrowing emerging markets;relatively high gross margins tobuffer against the recent dramaticrise in commodity cost inflation;and ownership o the distributionchannel and the tendency towardspremium priced products that enablethe direct sellers pricing power overtraditional retail. Lane goes on toexplain that direct selling companiesofen have under-leveraged balancesheets and large ree cash flows,which tend to put the direct sellingbusiness model on particularly strongfinancial ooting.

Jim Cramer, host o investmentshow Mad Money, has caught onas well. Te direct selling model isgoing great guns, he said, noting itcould be the best way to sell goods inthe Tird World.

The Ultimate Social Business Modelby Katherine Ponder

continued on page 6

Cover Story


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This is the companythat puts mascaraonlashesand food on tables,

thatfightswrinkles with one hand andBreast Cancer

with the other. That knows the value of a perfectlip,

but still opens its mouth and speaks outagainst

Domestic Violence and for womens financial independence.

This is the company that not only brings beautyto doors,

but also opens them. The company thatsupports6.5 million

Representativesin over 100countr ies. This is Avon.

The company that for 125 years has stood for beauty,

innovation, optimismand above all for women.

avoncompany.com


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Attracting Attentionand

InvestorsWithin the DSNGlobal 100 list, the top 10companies contributed $39 billion to the globaleconomy in 2010. Te company at the top othis listAvon, the 125-year old brand knownin virtually every household, which generated$10.9 billion o that numberis publicly held,as are five additional companies on the top10 list. Amway, privately held and anotherhousehold name, secured the No. 2 spot on thelist at $9.2 billion in sales. Other amiliar names

on the top 10 list include Herbalie (public),Mary Kay (private) and upperware (public).Vorwerk (private) is a household name inEurope and is the parent company o UnitedStates company JAFRA. Te list rounds outwith additional companies Natura (public),Oriflame (public), Forever Living Products(private) and Nu Skin (public).

Clearly, the economic impact o direct sellingcompanies or the United States and or the

world simply cannot be overlooked or sweptunder the rug. Scott Van Winkle, CFA, is a

Research Analyst at Canaccord Genuity, knownor serving institutional and corporate clientsthrough investment banking, research, salesand trading services. Van Winkle covers directsellers Herbalie, Nu Skin Enterprises, USANAHealth Sciences and Mediast. He says, I thinkthere is finally broad confidence in the directselling model in the private equity community.

Interest overall does appear to be growing.Financial advisors and investors both areseeing direct selling companies with new eyes,

ocusing on the efficient business model, rapidgrowth, and generally low on-going capitalinvestment afer the initial surge. Van Winklesays, I dont go a week now without getting aphone call rom a private equity firm lookingat a direct selling asset, and that was justnonexistent 5 years ago.

It appears that wise investors are gettingin now. Sequoia Capital investors boughtinto jewelry and accessories direct seller

Prime Time for Direct Sellingcontinued from page 4

Te direct selling industrystop seven public companies,based on Direct Selling NewsGlobal 100 ranking,accounted or $23.9 billionin revenue or 2010.

Avon Products Inc.Country: USA2010 Rank: 12010 Revenue: $10.9 billion

Avon is the founder of modern directselling and the acknowledged worldleader in cosmetics, fragrances andtoiletries. Avons well-known productlines include Avon Color, Anew, Skin SoSoft, Advance Techniques Hair Care,Avon Naturals and mark.

Markets: 100+Distributors: 6.5 million

Employees: 42,000Headquarters: New York, N.Y.CEO: Andrea JungYear Founded: 1886Stock Symbol: AVPNYSE

Natura Cosmeticos SACountry: Brazil2010 Rank: 32010 Revenue: $3 billion

Natura is a cosmetics giant withmore than 900 products. Thecompany operates in Argentina,Chile, Peru, Mexico, France,Venezuela and Colombia. Corporatesocial responsibility is one of itscore emphases.

Markets: 7Distributors: 1 million

Employees: 5,000+Headquarters: So Paulo, BrazilCEO: Alessandro G. CarlucciYear Founded: 1969Stock Symbol: NATU3.SASo Paulo

Herbalife Ltd.Country: USA2010 Rank: 52010 Revenue: $2.7 billion

Herbalife sells nutritional supplementsand weight-management and personal-care products. Its products have beendeveloped by scientists, physiciansand nutrition experts, includingNobel laureate in medicine LouisIgnarro, Ph.D.

Markets: 75Distributors: 2.1 million

Employees: 4,300Headquarters: Los Angeles, Calif.CEO: Michael O. JohnsonYear Founded: 1980Stock Symbol: HLFNYSE

PublicCompanies:The Big 7


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Stella & Dot or $37 million (10 percent oownership) last January, certain that it had

pursued a winner. Sequoia Capital is a SiliconValley venture capitalization firm that is estimatedto control as much as 14 percent o the valueon NASDAQ. Sequoia rarely sees a businessbuilt so strong, with such little capital, saysSequoia partner Alred Lin, who more recentlyadded: We wanted to become business partnerswith Stella & Dot because it was a great businessrun by a very special ounder and entrepreneur,Jessica Herrin.

Blyth, Inc. also ound value in direct sellers

PartyLite and ViSalus. PartyLite was doing$7 million in sales when Blyth acquired it

in 1990, and its over $500 million in annualrevenue today, recounts Robert B. Goergen Jr.,

President o Blyth. ViSalus, a relatively youngcompany, is currently experiencing rapid salesgrowth. We embrace a portolio approach, withnon-competitive products and companies indifferent stages o development across multiplegeographies. Indeed, PartyLite sells premiumcandles and home ragrance products, andViSalus sells weight management and healthproducts. Blyths strategy or investing in variousdirect selling companies has proven verysuccessul or them.

raditionally, private equity firms makea material investment into a business and

within 5 years either take it public or sell it.Investment in direct selling companies has brought

about a new exit strategy or some private equityfirms, according to Van Winkle. He says, Weveseen direct selling companies turn around andtake out their private equity investors with cashflow. Tats a whole new model or private equitythat the asset theyve acquired could ultimatelybuy itsel out.

Van Winkle and others know the time is right.Many o the innovative investors are reapingrewards or acting upon their confidence inthe direct selling industry. Others are just now

seeing the value, but the opportunity is still availableto be part o this successul sales model.

Tupperware Brands Corp.Country: USA2010 Rank: 72010 Revenue: $2.3 billion

Tupperware is a global direct seller ofinnovative premium products, includingdesign-centric preparation, storage andserving solutions for the kitchen and homethrough the Tupperware brand, and beautyand personal-care products through ArmandDupree, Avroy Shlain, BeautiControl, Fuller,NaturCare, Nutrimetics and Nuvo.

Markets: Nearly 100

Distributors: 2.6 millionEmployees: 13,500Headquarters: Orlando, Fla.CEO: Rick GoingsYear Founded: 1946Stock Symbol: TUPNYSE

Oriflame Cosmetics S.A.Country: Sweden2010 Rank: 82010 Revenue: $2.2 billion

Oriflame is a beauty company offeringcosmetics, fragrances and personal-care,skin-care, hair-care and wellness products.The company operates in 62 countries and isthe market leader in more than half. Oriflamehas a presence in Mexico, Central America,South America, Europe, Asia and Africa.

Markets: 62Distributors: 3.5 million

Employees: 8,000Headquarters: Luxembourg, LuxembourgCEO: Magnus BrnnstrmYear Founded: 1967Stock Symbol: ORI-SDBStockholm

Nu Skin Enterprises Inc.Country: USA2010 Rank: 102010 Revenue: $1.5 billion

Nu Skin Enterprises Inc. is a global directselling company operating in 48 internationalmarkets throughout the Americas, Europeand the Asia-Pacific region. Going far beyondcosmetics, toiletries and fragrances, Nu Skinsells more than 200 products through threedistinct brands: Nu Skin, Pharmanex andBig Planet.

Markets: 51

Distributors: 800,000Employees: 1,200Headquarters: Provo, UtahCEO: Truman HuntYear Founded: 1984Stock Symbol: NUSNYSE

Primerica Inc.Country: USA2010 Rank: 112010 Revenue: $1.3 billion

Primerica provides financial products andservices, including term life insurance, mutualfunds, variable annuities, loans, long-termcare insurance and legal services to 6 millionclients, primarily middle-class individualsand families.

Markets: 5Distributors: 100,000Employees: 2,000

Headquarters: Duluth, Ga.CEOs: John Addison and Rick WilliamsYear Founded: 1977Stock Symbol: PRINYSE

From March 2009 to May 2011, the top 7 publicly traded direct selling companies

averaged a 268 percent increase in stock price. DSN


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Solution to a Shrinking

Job Market

P rofessor Paul Zane Pilzer has kept a watchful eye on the direct sellingindustry for more than 30 years. In the 1990s, the renowned economistwho served in two White House administrations predicted that networkmarketers would help make the then-emerging $200-billion health and wellnesschannel the next trillion-dollar industry. The success of companies such asHerbalife, Medifast, Monavie, Amway, Nu Skin, USANA and Blyth are helping toconfirm Pilzers theory.

As the current economic crisis continues to take a toll on people aroundthe world and unemployment rates steadily rise, direct selling may be theanswer to a shrinking job market. Pilzer warns that too many people today seeunemployment as part of the economic cyclethat when the economy recovers,employment will naturally go up.

However, unemployment is not a macro-economic problem, he says. It is amicro-economic issue, typically related to a skill deficiency on an individual level.The question lies not in economic recovery but employment recovery, saysPilzer, who has written nine bestsellers. We have a massive social problem.What are we going to do with 30 million people who are now permanentlyunemployed? The No. 1 social need in the United States right now has nothing todo with the economy.

The real challenge is to replace lost jobs with new earnings opportunities andprovide much-needed training. The jobs that baby boomers and Gen Xers trainedfor years ago have disappeared. Technology has replaced millions of workers anddemanded new skills that too many older Americans just dont have.

Instead of focusing on new methods of training, our politicians and newsmedia are looking at unemployment and the economic recovery as linkedandthey are not because most of the unemployed people today are skills-deficient.If they are over 50 years old, they probably dont touch-type or e-mail, and thatdoesnt work in todays economy.

So what happens to those displaced workers? Direct selling may havethe answer. The direct selling business model has always had a competitiveadvantage in the training that it offers, both in business and personal skills. Itallows people to be retrained while they pursue something new. It gives peoplean opportunity when no one else will.

The biggest need in every sector of the economy, says Pilzer, is intellectualdistributionthe dissemination of information about products and services. Wehave a huge backlog of better products and services that people arent buyingbecause they dont know about them. Direct selling is the most efficient methodfor the distribution of intellectual information that will improve your life. It is theideal model that allows anyone to reach out.

Direct selling offers people the skills and tools to create new incomeopportunitiesto venture out on their own as entrepreneurs and grow inconfidence versus being consumed by the fear associated with a shrinking jobmarket. Technology is available to everyone at home and is even better thanwhat you can get in a large company, says Pilzer. When we examine the

workplace, we often find outdated computers and data management systems.However, the best tools and support needed to run a home-based business arenow available to individuals at an affordable cost. This makes a home-basedbusinessand a direct selling opportunity, in particularvery appealing.

by J.M. Emmert

AN INTERVIEW WITH PAUL ZANE PILZER


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Jefferies analyst Doug Lane has long been achampion o the sector, which relies on itssalespeople to market the product, mostlyto their local community. Lane has toldinvestors that the modelalso reerred

to as network marketingcontinued to thrivethroughout the recession in part because it offersthe unemployed an easy, low-risk way to be inbusiness or themselves, and that it also capitalizeson the act that consumers preer to buy productsrom people they know and like.

Te direct selling business model is also provingto be a bonanza in developing countries. Growthpotential is huge because as these economiesexpand, their appetites or consumer goods growand previously underemployed womenwhohave historically been the oundation o manydirect sales organizationsare prospering, thanksto newound economic opportunities. Te mostrecent figures show that within the $125 billionglobal direct sales industry, a mere $28.3 billioncame rom the United States, while $49 billioncame rom the Asia-Pacific region, and LatinAmerican sales reached $18 billion. Te sectorsgrowth leaders were also in the developing world;India joined the list o billion-dollar nations,generating $1.06 billion in revenue or 2009. Chinasaw 2009 sales increase nearly $3 billion, andRussia, though it experienced a somewhat modestgain o $200 million, still moved up to No. 9 in theDSNranking o the top billion-dollar markets inthe world, with $3.06 billion in 2009 sales.

One reason investors love these companiesis that they have low overhead. Tere are ewretail expenses, since the products are sold out

o salespeoples homes, andmarketing and advertisingexpenditures are minimal. Itturns out [direct selling] maybe the best way to sell goods inthe developing world, wherepeople listen to testimonialsnot advertisements and retailsalespeople, Jim Cramer toldhis audience.

Other leading investorsare nabbing opportunitiesto profit rom networkmarketing. Warren Buffetthas been a proponent o themodel since scooping upTe Pampered Che in 2002,calling it one o the bestinvestments hed ever made; hesubsequently invested in sevenmore direct sales companies.Even British mogul Richard Branson launcheda direct sales cosmetics firmnow called Vie atHomewhich he sold to direct sales investorHelmut Spikker last year.

In 2002, private equity firm Whitney & Co.invested $700 million in supplement giantHerbalie. Te investment made by SequoiaCapital into Stella & Dot in January o this year iscertainly an example o how investors are lookingdifferently at direct selling companies and theirleadership. Also earlier this year, Pre-Paid LegalServices agreed to sell to private equity firmMidOcean Partners or $650 million in cash; thedeal is expected to close by the time we go to press.

One o the most eye-opening events or investorswas last years IPO o direct sales financial servicescompany Primerica. Its impressive opening-dayperormance on April 1, 2010, lef investorswhowere oversubscribed by 21 timesconfident aboutPrimericas competitive advantage in the insuranceand asset-management industry. Primerica closedat $19.65 the first day30 percent more than itsinitial public offering price o $15afer its marketdebut. Its strong perormance made it one o thetop-perorming IPOs or the year.

Afer years o skepticism, the investmentcommunity is finally waking up to the viability odirect selling as a good investment opportunity,says Lane. Teyve become true believers.

Mad Money market guru Jim Cramer recently

told his CNBC viewers: Direct selling has never

gotten its due from Wall Street. Its time we

recognize that the direct sales model works,

and it works well. There is little question why

financial notables like Cramer, Warren Buffett,Ray Chambers and Suze Orman have touted

businesses based on direct selling.

After years of skepticism, the

investment community is finally waking

up to the viability of direct selling as agood investment opportunity.Doug Lane

Making Dollarsand Sense by Emma Johnson


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Since the market crash on March 9,2009, the major indices have steadilyrebounded with 95 percent growth,but some direct selling companies are

experiencing enviable price increases on Americanand foreign exchanges. Many of the top directselling companies have achieved record salesand profitability and most appear to have

lasting fiscal momentum in an improvingeconomy. Stock percentage growth forHerbalife Ltd.(HLF NYSE), TupperwareBrands Corp. (TUPNYSE), Nu SkinEnterprises (NUSNYSE) and Medifast Inc.(MEDNYSE) soared as high as three toseven times the average gain of the S&P500 and Dow Jones Industrial Average byearly May 2011.

Herbalife shares climbed 764 percentfrom $12.28 to $106.15 before the

companys board of directors approveda two-for-one split in May. Furthermore,the company raised its dividend by 60percent, representing a 20-cents-per-sharepost-split quarterly dividend. The globalnutritional companys sales increased17.3 percent from $2.3 billion in 2009 to$2.7 billion in 2010, with net income of$297million. Herbalife topped that with a recordfirst quarter 2011, which includes a 28.5 percentincrease in sales and $26.8 million improvement

on adjusted net income.At the companys first-quarter conference call,Chairman and CEO Michael O. Johnson attributedthe companys growth to an improved distributorretention rate of 48.9 percent, up 20.7 percentfrom 2002. In an effort to broaden future earnings,he announced the release of the companys new

Herbalife 24 sports product line, which is designedto meet high-end nutritional needs for athletes.

Two years ago Tupperwares stock hoveredaround $11.00 per share, but an 8 percent increasein annual sales to $2.3 billion in 2010, plus a 15percent improvement to the bottom line helped liftthe share price above $64a 457 percent gain.

The global direct seller of storage and servingsolutions as well as beauty and personal-careproducts experienced double-digit sales increases

in the first quarter 2011 from its emergingmarkets in Brazil, India, Indonesia, Malaysia/Singapore, the Philippines, Turkey and Venezuela.Tupperwares adjusted diluted share earnings forthe first quarter of this year were 14 cents betterthan for the same period in 2010, including apositive foreign currency impact of 4 cents.

Nu Skins stock has shot up 364 percentfrom $8.04 per share to more than $37 afterrecord sales and profits in 2010. The companyincreased revenue 15 percent over 2009 to$1.5 billion, culminating three consecutiveyears of record-breaking revenue. The fourthquarter was the companys first ever $400 million

revenue quarter, marking early

achievement of a five-year plan that beganin 2007 to double Nu Skins earnings to$2 per share of stock. The company isnow planning to double its earnings to $4per share by 2015.

Medifasts stock has been on itsown fast-track to the top, soaring from$4.42 a share two years ago to $20.39in early May. A streak of 45 consecutiveprofitable quarters has strengthened theseller of weight and health management

consumables; the company had recordrevenues of $257.6 million and improvedprofits by 73 percent last year. Medifast,the parent company of Take Shape forLife, was named No. 1 on Americas 100Best Small Companies list by Forbesmagazine for 2010.

The stock performances of BlythInc., Natura/Brazil, USANA Health Sciences,

Avon and Natures Sunshine all exceeded S&P500 and Dow Jones averages for the past

two years.Sales increases, net income improvementsand gains for the top publicly held direct sellingcompanies may be an indication of promisinggrowth for an entire industry, especially forthose who include emerging markets in theirstrategic plan.

Top Publicly Held Direct Sellers AchieveRecord Sales and Profitability

The two-year rebound in the stock market has many investors smiling again,especially those who have put their money in direct selling companies. Many of the top12 public companies that sell direct have outperformed the average stock return by

impressive margins since the market dipped to its low in early 2009.

by Tim Blackwell


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COMPANY SYMBOLPRICE

3/9/2009

PRICE

5/9/2011

PERCENT

INCREASE

Herbalife Ltd. HLF $12.28 $106.15* 764%

Tupperware Brands Corp. TUP $11.61 $64.77 457%

Nu Skin Enterprises NUS $8.04 $37.31 364%

Medifast Inc./Take Shape for Life MED $4.42 $20.39 361%

Blyth Inc. BTH $16.12 $44.48 175%

Natures Sunshine NATR $5.26 $11.59 120%

Natura Cosmeticos (Brazil) NATU3 $19.85 $43.00 116%

USANA Health Sciences Inc. USNA $19.09 $37.71 97%

Avon Products Inc. AVP $15.20 $29.15 91%

Oriflame (Sweden) ORI-SDB $216.00 $360.00 66%

Telecom Plus PLC (UK) TEP $330.25 $475.25 43%

Primerica Inc. PRI $19.65 $22.30 13%

Market cap above $100 million.* Stock split on 5/18/2011 at $103.86. Price reflected in chart is pre split.Based on 13-month period from initial public offering on April 1, 2010. Percent increase reflects start date of July 1, 2009.

Top Publicly Held Direct Selling Companies

Stock Performance 20092011

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The direct selling business model is one that can

level the playing field and close the gap between

the haves and have-nots.

RAY CHAMBERS, Entrepreneur, Philanthropist

and Humanitarian

The partnership with Avon is a logical and natural

extension of everything I believe in. I am confident

we can make a huge difference toward the goal

of empowering women and helping them achieve

their financial hopes and dreams.

SUZE ORMAN, Internationally Acclaimed Personal

Finance Expert

Direct selling is actually one of the oldest, most

respected business models in the world and has

stood the test of time.DONALD TRUMP, Billionaire Businessman

One reason I have such strong respect for

network marketing is that it is a genuine equal-

opportunity business. Network marketing casts a

very wide net. When you look closely at the more

than 60 million people worldwide who are engaged

in the business, youll find people of every color

and creed, every age group, and every level of

background, experience and skill.

ROBERT T. KIYOSAKI, author of Rich Dad Poor Dadand

The Business of the 21st Century

What is the one bright spot on the entire horizon

that would give someone an opportunity to be

retrained to learn new skills? Direct selling.

PAUL ZANE PILZER, World-Renowned Economist and

Best- Selling Author of The Next Millionaires

The rapid growth dynamics both in terms of

consumers purchasing products and associates

participating as direct sellers is driving strong

interest from private equity groups and strategic

acquirers in direct selling companies.

LORIN DEMORDAUNT, Managing Director, McColl Partners

Network marketing has come of age.

Its undeniable that it has become a way to

entrepreneurship and independence for millions

of people.

STEPHEN COVEY, Author of The Seven Habits of Highly

Effective People

This country was founded on entrepreneurialism

and we are returning to it. The future of

employment is self-employment. Direct selling isone of the few business opportunities that offers

average people, with above average ambition to

achieve an above average lifestyle, peace of mind

and financial security.

DARREN HARDY, Publisher of SUCCESSMagazine

Strong top-line growth driven byoutsized exposure to the rapidlygrowing emerging markets

Avon Products, Herbalife, Nu SkinEnterprises and Tupperware Brands

all derive more than 75 percentof their revenues from outside theUnited States, with particularly strongpresences in the emerging marketsof Latin America, Eastern Europe and

Asia. We think Avon is strategically wellpositioned with its iconic global brandand by having approximately 70 percent ofits profits come from the attractive emergingmarkets of Latin America and EasternEurope, where the Cosmetics, Fragrances

and Toiletries (CFT) industry is growingat above-average rates and direct sellinghas been gaining market share. Organicsales growth, stripping away the impact offoreign currency translation and acquisition,has been especially strong for Herbalife,USANA and Nu Skin. In the first quarter2011, Herbalife was up nearly 25 percent.USANA has grown local currency sales onaverage in the low teens dating back to thefirst quarter 2010, and Nu Skin also grew

double digits throughout 2010. Conversely,our larger traditional packaged goodscompanies have struggled to generate morethan low single-digit organic growth of late.

Relatively high gross margins tobuffer against the recent dramaticrise in commodity cost inflation

While input cost inflation has been front ofmind for many investors of late, our direct

selling companies have actually beendelivering gross margin expansion. In fact,USANA has had flat or higher gross marginsseven quarters in a row, while Nu Skin hassix in a row and Herbalife four. Conversely,our traditional packaged goods coverage hasaveraged gross margin contraction the pastthree quarters.

Ownership of the distributionchannel and the tendency towardpremium-priced products

This gives the direct sellers pricing powerthat tends to be more of a struggle for mosttraditional package-goods companies thathave to sell through big-box retailers.

Under-leveraged balance sheets andlarge free cash flows

Both tend to put the direct selling businessmodel on particularly strong financial footing.Notably, Herbalife, Nu Skin, Tupperware andUSANA have adopted a more aggressiveapproach to dividend increases and/or share

repurchases, such that their cash returnedto shareholders is on par with or betterthan most of their peers in the traditionalpackaged goods universe.

Jefferies Report

Direct SellingWell Positioned

The key attributes that we believe uniquelybenefit direct sellers in the current investmentenvironment are:

by Douglas M. Lane

Douglas M. Lane is Managing Director of Equity Research for Jefferies & Company, Inc.


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3. Brazil$13.5 billionTe national DSA, Associacao

Brasileira de Empresas de VendasDiretas (ABEVD), remains bullishon its members perormance.Te ABEVD, which has 48 direct

selling members, reported a salesincrease o 18.4 percent rom 2008to 2009. In a year o adversity ormost sectors o the economy, thedirect sales opportunity generatedincome or 2.3 million people.

4. China$10.9 billionChina continues to be a tantalizing

yet elusive market or directselling companies. Its sales in theindustry grew by almost $3 billionbetween 2008 and 2009, proving

that companies areoperatingsuccessully within its borders.Many are ounded in China; yet ormultinational companies, the marketremains a challenge. All eyes are onthe explosive growth in China, withanalysts taking bets on when it willsurpass the United States and Japan.

A Truly Global Channel

Te ollowing is a special report rom Direct Selling News. Te article, which is based on statistics

reported by the World Federation o Direct Selling Associations (WFDSA), interviews with local

Direct Selling Associations (DSAs) and third-party reporting, tells the story o the cumulative

impact o the direct selling way o doing business in key markets around the world.

by Katherine Ponder

1. United States$28.3 billionWith $28.3 billion in sales or

2009, U.S. direct selling was downalmost 4.4 percent rom 2008. U.S.direct sales declined, but retailingas a whole declined 7.3 percent over

the same period. Looking orwardto 2011, analysts expect that thosewho entered the direct sellingarena as a way to make up or lostincome will remain active even asthe economy recovers. Tat trendwill likely lead to higher sales orthe year.

2. Japan$22.4 billionDirect selling in Japan has

literally had its ups and downsin recent years. Between 2006(the previous reported timeramerom WFDSA) and 2009, it lost

approximately $400 million insales. When youre the No. 2 nationin the industry, this looks relativelysmall. But Japans economicrecession has been every bit as badas that in the United States, andeconomic problems began longbeore 2007.

Figures are year-end results or 2009; 2010 ull data not yet available.


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5. South Korea$7.84 billionSouth Korea moved up one notch in

our international rankings by gaining$840 million in sales in 2009, according toWFDSA. Te industry has approximately4 million distributors and 64 membersin the Korean DSA. Research shows thatone-sixth o the population has beeninvolved with direct selling at somepoint in their lives. Indications or 2010final sales figures are that South Koreawill hit $9 billion. Te 2011 orecast orthe industry is to parallel the nationaleconomy by growing 4 to 5 percent.

6. Mexico$4.83 billionMexico rose one place in our annual list

by gaining approximately $430 million insales rom 2008 to 2009. It was an increasemade even more remarkable because itcame during troubled economic times.Te Asociacion Mexicana de VentasDirectas estimates that the 39 member

companies account or 85 percent othe industrys sales in the country, withgrowth o almost 6 percent rom 2008to 2009.

7. Germany$3.76 billion

Germany is the largest direct sellingmarket in Europe. It has an affluent andtechnologically advanced economyalarge proportion o which is over 50with high-disposal incomeand highunemployment. Direct sellers in Germanyare 67 percent women, and 84 percentsell through a personal sales method.Te Bundesverband Direktvertrieb

Deutschland e.V, the oldest direct sellingagency in Germany, estimated turnovero member companies ell slowly by 1.3percent; however, in general the state odirect selling in Germany is good, andbusinesses are optimistic about the uture.Germany is by ar still No. 1 in Europeand in the top 10 world markets.

Its small, frivolous and delightfully chic. And yet, since 1967, it

has transformed the lives of millions through a unique business

concept: Make Money Today And Full Your Dreams Tomorrow.

At Oriame, fullling dreams is our heart and soul. Our mission

is simple: empower people to realise their full potential, full

their dreams and lead a richer, more meaningful life. By selling

our beauty products, our 3.6 million consultants, in more than 60

countries, have the freedom to set their own targets, income and

working hours. There are no limits.

What we offer with a single lipstick can start out as a fun hobby

and develop into something truly great. Its your choice.

Never underestimate the power of a lipstick.

Not just a pretty face.

MarketEstimated2009 Sales

(US$ inbillions)

2008 Sales(US$ inbillions)

No. Salespeople(2009)

No. Salespeople(2008)

1. United States 28.3 29.6 16,100,000 15,100,0002. Japan 22.4 22.8 2,700,000 2,700,0003. Brazil 13.5 10.0 2,377,336 2,028,0984. China 10.9 8.00 not available not available5. South Korea 7.84 7.00 3,987,933 3,089,1586. Mexico 4.83 4.40 2,000,000 1,900,0007. Germany 3.76 9.00 not available not available8. Italy 3.36 3.36 390,955 366,0009. Russia 3.06 2.87 4,995,508 4,413,918

10. France 2.41 2.40 265,000 242,00011. United Kingdom 2.1 3.56 400,000 419,500

12. Taiwan 1.7 1.64 4,442,000 4,111,00013. Thailand 1.56 1.59 10,000,000 5,400,00014. Canada 1.3 1.18 644,455 608,00015. Colombia 1.26 1.50 900,000 867,00016. Australia 1.25 .844 500,000

17. Argent ina 1.15 1.17 731,122 714,00018. Malaysia 1.13 1.03 4,000,000 4,000,000

19. Venezuela 1.12 .887

565,000

20. India 1.06 .586 2,012,940

NOTE: All figures obtained by the WFDSA.

*Not ranked in our 2010 list as having more than US$1 billion in sales. 2006 figures 2007 figures

Direct Sellings Billion-Dollar Markets


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8. Italy$3.36 billionItaly moved up in global rankings with an increase

o $3.36 million in sales while many nationsdropped. Te salesorce also grew, adding morethan 30,000 people to the rolls. Both increases are instark contrast to the national economy, which hadincreasing unemployment and a 5 percent decreasein economic growth or 2009.

9. Russia$3.06 billion

Russia increased its sales by $190 million,earning it an advancement o one spot in therankings. Te alling U.S. dollar against the Russianruble made this change more pronounced, butthe industry showed its muscle by increasing evenas the national economy suffered through theeconomic crisis.

10. France$2.41 billion

Frances international rankings brought it up onelevel as well, rom No. 11 previously. French directsales stayed in the same $2.4 billion range rom2007 (the last period reported through WFDSA)to 2009, leaving it a winner or keeping up its paceyear over year.

11. United Kingdom$2.1 billion

Our annual rankings saw the United Kingdom allrom the No. 8 spot last year. WFDSA sales statisticsor the country show a decrease o more than hal,rom $3.6 billion in 2007 (rankings last year werebased on 2007 data, as it was the last inormationreported to the WFDSA) to $1.4 billion in 2009.However, there seems to be a renewed optimism inthe United Kingdom, with people and businessesstepping up to seize the opportunities that everyoneeels sure are coming.

12. Taiwan$1.7 billion

aiwan moved up one spot by gaining $60million in sales over the course o 2009. Tis wasgreat news or the country, marking a 9.2 percentincrease and the end o a three-year slide in sales.Te aiwan ROC Direct Selling Association notesthat distributor numbers were also up, increasing8 percent to 4.4 million.

13. Thailand$1.56 billion

Despite having $30 million less in sales,Tailand still moved up two spaces on our

international list. Tese figures include sales oboth Tai Direct Selling Association members andnon-members as well. Tere are 10 million peopleselling through 590 companies, o which 29 areDSA members. Te Tai DSA believes that the2010 figures will show almost 12 million distributorsand a strong increase o 15 to 20 percent insales numbers.

14. Canada$1.3 billionWorld economic troubles challenged Canada

as well as much o the rest o the internationalcommunity. Sales declined 3.5 percent during 2009as the recession took its toll. Official numbers romthe Direct Sellers Association o Canada put 2009sales at $1.3 billion, and estimates or 2010 numbersshow that the direct selling industry in Canada willdecrease 6.2 percent to $1.23 billion in 2011.

15. Colombia$1.26 billion

Colombias sales were down slightly rom $1.5billion in 2008, but it kept its spot on our list. Tebeauty and personal-care segments have dominatedthis market. While the national economy grew only0.8 percent in 2009, the beauty and personal-caremarket grew 6 percent. Skin care registered nearlydouble-digit growth, with anti-aging productsleading the way.

16. Australia$1.25 billion

Australia is new to the list this year. Te $1.25billion is a substantial increase over its $844 millionreported in 2008. Sales or 2010 are expected tobe strong but not huge. However, direct selling isperorming better than the rest o the retail world inAustralia. Salesorce numbers are also expected toincrease slightly, and leading categories continue tobe health care and personal goods.

17. Argentina$1.15 billion

Te industry in Argentina decreased enough tobring them down one notch in our annual rankings.Sales decreased nationally by $20 million. Tisis hardly surprising, considering that Argentinahad its own share o economic problems evenbeore the worldwide recession.

18. Malaysia$1.13 billion

Te direct selling industry in Malaysia is steadilygrowing, enjoying the benefits o more companieslaunching within its borders. Te Direct SellingAssociation o Malaysia boasts 57 members and 4million salesorce members.

19. Venezuela$1.12 billion

A newcomer to the $1 billion list, Venezuela iscounting its successes. From 2006 (the latestnumbers or WFDSA last year) to 2009, its collectivedirect sales totals rose by more than $200 million.

20. India$1.06 billion

New to the list this year, Indias sales nearly doubledrom 2008 to 2009. Figures or 2010 are expected toshow a 20 to 30 percent growth, according to ChaviHemanth, Secretary General o the Indian DirectSelling Association. Forecasts call or the industry tobe at $1.5 million by 20122013.

A Main StreetCompany

for Main Street

North America Founded in 1977, Primerica is the

largest independent financial services

marketing organization in North America.The company, headquartered in Duluth,

GA, is a public company listed on the New

York Stock Exchange, trading under the

symbol PRI.

For more than 34 years, Primerica

has helped families get properly protect-

ed, debt free and financially independent.

The Primerica business opportunity gives

people from all walks of life a chance to

live their dreams.

Primerica at a glance:

More than 4.3 million lives insured

through our life companies

More than 2 million clients maintain

investment accounts with us

Our clients have $35 billion in assets

under management through us

An average of $2.6 million in benefit

claims paid every day

Greater than $656 billion life insur-

ance in force

www.primerica.com


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We MeanBUSINESS.

www.USANA.com


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Smartphones, tablets, apps and socialnetworking tools have no doubt changedthe way the world connects. o directsellers, who have always shared their goodsand services with their social network

and the new customers and riends they have metthrough existing ones, the rest o the world havefinally caught up.

Radio reached an audience o 50 million in38 years. elevision reached the same number

in only 13 years. Te Internet reached 50 millionin only our years, iPods had 50 million users inless than three years and Facebook had themin only two. MySpace has over 200 millionregistered users; Facebook added that manyusers last year alone. In 1992, there werean estimated 1 million Internet-capabledevices in use, and today that numberexceeds 1 billion. Simply put, currenttechnological advances in mobile devicesand apps, as well as in social media tools,

serve to increase the speed, power andreach o whats already a competitiveadvantage in the direct selling model.

Prior to these tech advances in connectingpeople, direct sellers were limited to physicalplacesliterally going door-to-door, the partyat someones home, the meeting room at the localhotel. Now, business can be conducted anywhere

and everywhere. Conversations about purchasingproduct can be turned into a buying experience atan accelerated level with a mobile device and anappropriate app.

I vendors are making quantum leaps in thedevelopment o apps or the independent business

owner (IBOs) in direct selling or all aspectso the business. IBOs can access their teaminormation and sign up new business owners onthe spot, wherever they happen to meet. Short,interactive opportunity presentations, createdspecifically or smartphones and tablets, enableindependent business owners to hold a meetingover coffee or anywhere people can engage in a3-minute conversation.

Stuart Johnson, Founder and CEO o

VideoPlus, which specializes in the refinementand transmission o direct selling companies coremessages, says, Te undamentals o the direct

selling model havent really changed in decades,but the deliveryo the message has changeddramatically. In todays technologically drivenworld, we can provide a ocused, simple,authentic and transparent message in lessthan three minutes, and in some cases, in just60 seconds.

All o the current technologies allow

independent business owners to meet theircustomers wherever their habits take them

and to integrate into that behavior. Withindividuals busier than ever and used to having

access to inormation, as well as the ability toconnect using their mobile devices, meeting peoplewhere they are is a critical component o anybusiness transaction.

Direct sellers have historically held a competitive edge over traditional retailers of goods andservices because of their skills in connecting with people, their personal ethics in businessdealings and in the automatic trust and respect generated when dealing with word-of-mouthadvertising through networking. After all, direct selling is the ultimate social business model,and technology is now redefining perceptions of what thats all about.

Speed, Power, Reach

by Teresa Day

continued on page 20

How Direct SellersAre Leveraging NewTechnology


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Obesity epidemic creates epic opportunity!!One of the fastest-growing co. in directselling.

A solution to the recession?!A new social business model?!

Hey, u heard about ViSalus?

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Co is giving away over $10M/year infree product, prizes & vacations!

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Heard what?

EditsMessages

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Mannatech

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Direct sellers wont be lef behind in thetechnology race, and some companies are at the

very oreront.Nu Skin, XANGO, Amway, Herbalie,

Primerica, MonaVie, lia sophia and ACN are justa ew o the direct selling companies to align thepower o apps on smartphones and tablets withthe company goals o recruitment, retention andsales. Te investment is paying off in a big way.

Anything that supports the story [o NuSkin] is a strong ROI or us, says Nu SkinVice President o Business echnology AndreaHayhurst. Tese kinds o tools enable thismass o communicators [independent businessowners] to tell our story much more effectively.

Primerica, a financial services company,provides termlie insuranceas one o itsproducts.In the past,enrollmentor a newcustomerwas a lengthypaper processwith a waitingperiod orreceivingacceptance orrejection, withadditionalwaiting orthe rep to getpaid. oday,a Primericarepresentativewith a tabletcan present to

a customer,apply or thepolicy, getit approved,bind it, deliverit and get paid the commission in minutes.Primericas incorporation o hardware andsofware apps into the daily experience o therepresentative illustrates the boost o power thattechnology adds to personal relationships.

echnology is also expanding the reach

o personal relationships. All people belongto social networks o some sort; most peopleare part o several social networks. Peopleconnect with others or many reasons,whether it is or riendship, shared activitiesor backgrounds, common causes or beliesystems, just to name a ew.echnologyhas not at all changed the act that people

connect to one another. It has, however,dramatically changed the scope and reach othose connections, using the Internet to shrink

vast distances and connect riends withoutgeographic constraint.

oday, 50 percent o the worlds populationis under 30, and 96 percent o them areestimated to have joined a social medianetwork. But this trend does not stop withthe younger generation. Te astest-growingsegment o Facebook users is emales 55 to 65.Clearly, social media represents a permanentshif in the way people communicate and ormrelationships. It has also created a permanentshif in the way companies approach theircustomers. Johnson says, Business is

happening onsocial networks.Social networkingleads to socialconnecting, whichleads to socialsharing. Groupon,LivingSocial andothers are notselling sociallythey are sharingsocially and thatleads to revenuegeneration.

ViSalus Sciences, aweight-managementdirect sellingcompany, hasincorporatedsocial sharing as astrategic part o theirmarketing approach.Te company

created a laser-ocused messagewith their Bodyby Vi Challengeand utilized social

networks to spread that message to reach newaudiences. CEO Ryan Blair says, We have asimple, ocused, authentic story that our ans areexcited about and because o that, we add over1,000 new customers per day to our company.

Additional advancements over the coming year

are sure to urther contribute to the speed, powerand reach o the direct seller, creating even moreopportunity or connecting with new customers.Tis combination o the successul distributionmodel o direct selling with the explosivegrowth in communications technology can onlycontinue to play to the strengths o the directselling industry.

Direct selling is the ultimate social

business model, and technology

is redefining perceptions of what

thats all about.

continued from page 18


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Source: Direct Selling News Global 100

FOR ADDIT IONAL INFOR MATION PLEASE CONTACT YOUR LOCAL IGNITE INDEPENDENT ASSOCIATE

SMTurning Energy Into Income


22/40

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HELP USsustainthe continuingprovision of the life-changingSUCCESS for Teensprogram toour youth.www.SUCCESSFoundation.org.

Eight great life skills andcharacter-developmentprinciples are reachingthousands of our nationsteens through dedicated,passionate educators and

youth mentors.

The SUCCESS Foundationrecognizes the spirit of community and generosity of direct selling companiessupporting the distribution of 2 million SUCCESS for Teens

programs through

schools and youth organizations.

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AttitudeIsEverything

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YoureAlwaysLearning

TheresNoSuchThingAsFailure

EverythingStartswithSmall Steps

YouCanMakeYourDreamsComeTrue

Megawatt Returns for Energy Providers

Energy deregulationcould lead companies to takeany route when selling the essential services of gas

and electricity, but by using the direct selling channel

of distribution there is already a natural fit. Independent

business owners (IBOs) are actually customers themselves.

They also have a built-in market for services and products

because everyone uses energy. The opportunity to possibly

save money as a customer and earn money by educating

others on their energy options is unique.

by Jennifer L. Mills

With companies such as Ignite, ACN, Ambitand elecom Plus as industry standouts, energymay be going the same successul route that thetelecommunications industry did in the 1980s when

the A& monopoly was split and competitionentered the industry. Advocates o deregulation alsosay advances in technology and price competitionwould bring the value directly to consumers withlower prices.

Ignite, the wholly owned subsidiary o StreamEnergy, is the recognized market leader in theindustry, but a company that almost didnt happen.

We were two years into the deregulation o theindustry and I was only hearing it or the first time,

says Rob Snyder, Co-Founder and Chairman oStream Energy. I had no idea exas had deregulatedits electricity market. Trough his research on thetopic he ound out that a number o companies were

offering electricity at 20 percent less than what he waspaying or the service. With that seed o opportunityplanted, he was spurred to launch Stream/Ignite.

Many other ounders o these retail energyproviders similarly had no direct sales and networkmarketing knowledge, so they brought in experts.Tis made good business sense as a model whenlooking at the education needed to sell the serviceas well as the relationship necessary to gain trustrom customers.

Chris Chambless, Co-Founder and ChieMarketing Officer o Ambit Energya retail energy

company that drew attention when it was named Inc.500s astest-growing company last yearsaw thesignificance o ollowing such a business model.

I think there is some degree o educationneeded, especially in some o these marketswhere deregulation is a airly new phenomenon,Chambless says. A lot o people have just beenconditioned not to have a choice. You have anopportunity in a direct sales model to go outand educate people.


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Of the People, by the People, for the People

Of the PeopleTe Economic Policy Institute estimates 4.4

unemployed workers are available or every jobopening. Tis number does not take into account theestimated 2.3 million sidelined workerspeoplewho have lost jobs recently but are not yet trying tore-enter the workorcemaking the ratio between

job openings and available workers even higher.In the midst o multiple opinions about causes

and cures or our current economic state, theactivity surrounding small-business ownershipappears to be increasing. Direct selling companiessuch as Scentsy, Herbalie and ViSalus Sciences haveprocessed more applications to start businesses thanever. In act, just among the top 20 revenue-grossingcompaniesthere are an estimated 2,000 U.S.companies using the direct selling business model

more than 500,000 new applications are processedin any given month.

Yet the numbers o individuals starting theirown direct selling businesses are not counted inthe Department o Labors statistics, nor are theyrecognized by most economists as significantindicators or the economy. With collectivegross revenues o U.S. direct selling companiestopping $28 billion annually, it might be astatistic worth considering.

By the PeopleIn direct selling, individuals market and sellproducts and services directlyto the consumer,either through individual contact or group selling,such as the in-home party. Individuals own theirown businesses but still have the support o a parentcompany. Te direct selling model has similaritiesto the ranchising model, another type o popularbusiness ownership. Unlike the ranchisee, however,the direct seller is an independent contractor withcomplete control over building and conducting

the business. Most direct selling companiesadvocate a robust ethical code and encourageadherence to ensure optimal relationships amongellow contractors (business owners) and consumers.

Te direct selling industry is very democratic,inviting all segments o the population to participatein business ownership, regardless o income,education or assets. Te age range o direct sellers

mirrors the age range o adults: 18 to 65+, with somesurveys indicating up to 22 percent o direct sellersare over 55 years old. Te product categories are justas diverse, including nearly every product or serviceimaginable, rom energy to financial planning,rom health and wellness to beauty, rom homeimprovement to sel-improvement.

For the PeopleDirect selling is also an extraordinarily philanthropic

industry, with nearly every company, regardless osize, participating in some kind o charitable endeavor,whether it is setting up its own oundation, partneringwith humanitarian organizations, or regularlysupporting existing charities. Companies such asAmway, Nu Skin, Herbalie, Shaklee, Te PamperedChe, ahitian Noni and XANGO also are among

first responders to help when disaster strikes, herein the United States and across the world, offeringmillions o dollars in reconstruction efforts, products,and even basics such as ood and blankets to affectedpeople. Amways generosity is rooted in the belie oits ounders and owners that we need to share ourresources with the communities where we do business,says the companys president, Doug DeVos.

Participating in the generosity o the industryprovides another compelling reason that people wantto sign on with direct selling companies. According

to USANAs Chie Marketing Officer Kevin Guest, theindustry attracts people who want to make the worlda better place. Our entire business is about helpingothers, he says. It seems only natural to me thataltruism would spill over into other aspects o theirlives as well. USANA partners with Te ChildrensFund, delivering ood and vitamins to children acrossthe globe, and even making it possible or employeesand associates to volunteer in other countries.

Direct selling company CEOs are also known ortheir personal philanthropy in support o many causes

around the world. A recent example o this giving spiritcan be ound in Andrea Jung, CEO o Avon, who gifedher entire long-term bonus o $5,362,500 to the AvonFoundation or Women, which has raised more than$800 million to support womens issues such as breastcancer awareness and ending domestic violence.

Direct selling: o the people, by the people, andmost definitely, or the people.

by Teresa Day

More than 12 million jobs have been eliminated from the U.S. economy since December 2007,and according to the Brookings Institute, it could take 12 years to re-create whats been lost.

Many individuals are looking to the direct selling model for a different answer.


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The age rangeof direct sellersmirrors the agerange of adults: 18to 65+, with some

surveys indicatingup to 22 percentof direct sellers areover 55 years old.


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success.com/symposium

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Long Beach Convention CenterLong Beach, California

Get the Competitive Advantagein Business and in Life

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Publisher, SUCCESSMagazine

Scentsy, Inc.Founded in 2004 in an ocean shipping container on

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With only $60,000 in paid-in capital, Scentsys business

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Entrepreneurshipis the answer.

Direct Selling works.


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Whats the ideal home-basedbusiness? More than 16million Americans think itsdirect selling.

Tey represent one o the hundreds o U.S.direct selling businesses, and together theygenerated $28.3 billion in annual sales last year.While a ew direct sellers work at their businessesull time, about 90 percent work part time tosupplement their income. Some 80 percent odirect sellers are women, and almost all say theyappreciate the schedule flexibility and low cost o

starting their business. Customized technologylets them make their business portable andconvenient. Tey can show high-quality productsor share their business opportunity at a homeparty, but its just as easy to do at a coffee shopor restaurant.

Direct selling companies, sometimes reerredto as network marketing companies, are gainingthe attention o some o the worlds oremostfinancial experts, including Suze Orman, notedauthor, television personality and consultant to

Avon Products Inc.; Robert Kiyosaki, best-sellingauthor o the Rich Dad Poor Dadseries, who hassold more books on financial guidance than anyauthor in history; and David Bach, New YorkTimesbest-selling author, to name just a ew. Allhave responded positively to the significance othe direct selling business model.

Te beauty o the direct selling businessopportunity is that its all done or you, Bach says.Tere isnt any real startup time. You dont haveto create a business plan. You dont have to create

a product. Te only thing you need to do is find areputable companyone that you can trustthatoffers a product or service that you believe in andcan get passionate about.

A Growing TrendWhat is most appealing about becoming a

direct seller is that anyone can do it. odaystechnology offers many viable options orworking rom home, not to mention the comortand enjoyment o not having to go to a place

o employment at a certain time each day. Teessential activities related to building the businessare usually conducted in the home. Te partyplan approach to selling is ound to be very easyto learnand to enjoy. Meeting prospectivecustomers and potential direct sellers at a coffeeshop is ar more relaxing than the traditionalbusiness conerence room.

As the ultimate equal-opportunity solution,a direct selling home-based business mayrepresent the purest orm o equality through reeenterprise. Tats one o the most striking aspectso direct selling as a business model: It involvesmen and women rom all walks o lie, all ages,and all racial, ethnic and socioeconomic groups.According to the Direct Selling Association,

the industrys trade organization, 24 percento direct sellers have a high school diploma orless education; however, 35 percent are collegegraduates and 1 in 12 has a postgraduate degree.Tese statistics are expected to possibly changedramatically as technology redefines the waydirect sellers conduct their businesses andmore and more Americans look or easier waysto attempt entrepreneurship by starting theirown business.

The Primary Benefit:WorkLife Balance

A home-based business is a valuable assetwhen it is developed successully. Since thereis no commute to work, ones business can bemanaged to accommodate ones working hours,amily lie and personal interests. Tis is one o the

primary benefits that have historically attractedwomen to the business model. oday, there aremillions o men and women who seek a businessopportunity that offers the ultimate workliebalancing potential.

Around the world, millions o amilies useearnings rom their direct selling businesses tomake their monthly car or mortgage payments,

take amily vacations, send their children toprivate schools or purchase a ew luxuries. Forthese individuals, the money earned each month,regardless o the amount, makes a big difference.And the big benefit? Its that they are doing it ontheir terms and in accordance to the time they arewilling to invest.

The Benefit of Owning YourOwn Business

Some direct sellers and network marketers (allare independent business owners) choose to viewtheir business as an opportunity with unlimitedearning potential. Tey realize they can increasetheir chances o achieving financial reedom bybuilding a strong business. Tis requires time andenergy to attract customers, sell their productsand build a sales organization o others who

by Barbara Seale& John FlemingThe Heart of Direct Selling: The Home


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are recruited, coached and supported in their efforts to also buildsuccessul businesses. By treating the opportunity as a true business,these direct sellers have the potential to earn significant profits romtheir investment o time.

The Benefit of Personal DevelopmentPersonal developmentis a phrase ofen used when direct sellingcompanies describe the benefits associated with the training they offer.Direct sellers tend to rave about the support they receive regardless owhether they are in the business or a new lietime career or just a ewmonths to earn some needed extra income. Some have been knownto report that as a result o the training offered by the direct sellingcompany they choseusually offered ree or at minimal costtheywere able to step out o their comort zones, engage in conversationsmore effectively, speak in ront o groups o people, manage time andmoney more effectively and, ultimately, enrich their lives through

the experience.

The Ideal BusinessWhile every company has its unique traits, the entire direct selling

way o doing business shares common threads o empowering menand women to dream, to reach beyond what they thought to bepossible, and to be supported in a very strong manner. Direct sellingis a great example o how the ree enterprise system can be engagedwithout the traditional risks associated with a brick-and-mortarbusiness model.

Top 5 Reasons for Consideringa Direct Selling Business

Be Your Own BossYou are in complete control of how you invest your timeand how you go about building your business.

Save Time and MoneyAs an independent business owner, you purchasethe products you love at discounts and you operate all activities from your home.

Expand Your Circle of FriendsDirect selling business opportunitiesare based on building relationships. When building a direct selling business,customers and other team members appear to quickly become important andrewarding aspects to ones life.

Be Recognized and Rewarded for AchievementIts not every daythat an adult receives praise for an effort well done, but direct selling companiesrecognize and reward their independent business owners through bonuses, tripsand prizes. This is an essential component to the business model.

Build IncomeThe direct selling compensation model offered by mostcompanies allows the building of organizations that have the potential to createincomes beyond those earned from the personal selling/servicing efforts of thedirect seller.

www.partylite.com

The number one

direct seller of

premium candles

and home-fragranceproducts in the world.

United States | Australia | Austria | Canada | Czech Republic | Denmark | Finland | France | Germany | Italy | Mexico | Norway | Poland | Slovakia | Switzerland | United Kingdom


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Direct Selling News, thetrade publication or thedirect selling and network

marketing executive, is theonly publication o its kinddedicated to reporting the

news as it happens in the direct selling industry.Each month, DSNdemonstrates its partnershipwith direct selling companies by telling theirremarkable stories and examining the issuesimportant to the industry at large.

From providing its readers with thelatest industry news to profiling maturecompanies and startups,

DSNseeks to educate,inorm and inspire.

Straightforwardand Authentic

Whether providingreaders with valuableinormation aboutcompensation plansand growth strategies,

offering a orumor direct sellingexecutives and suppliers to sharetheir ideas or profiling direct sellingstartups in Young Company Focus, DSNstrives to deliver inormation that can help directsellers be more successul. Direct Selling Newshas proven to be a great partner or SwissJust,says Jacques Mizrahi, CEO o SwissJust. Teyare a true partner because we have helpedthem with their stories, and they have helped

us enormously in our path rom a startup tocontinuous growth.

Companies also requently use DSNarticlesto support their strategies and growth. Fromposting articles on their websites to sendinge-mail blasts to their salesorce, to includingarticle reprints in their starter kits, thecompanies DSNcovers say the editorial staff s

reporting helps them generate excitement amongthe public, their customers and their salesorganizations and, in some cases, helps increaserecruiting efforts.

Relevance and EducationDSNprovides its readers with much more

than industry news and company profiles. Tepublications Working Smart section covers thetactics and strategies that enable companies tomeet industry challenges, improve efficienciesand achieve business objectives. Tis sectionnot only gives direct selling company executivesand suppliers the opportunity to share their

knowledge with others in the industry bycontributing articles, but it also provides directselling companies with inormation and insight

that can directly affect their businesses.USANA President Dave Wentz says he and

his company learn much about the day-to-dayissues aced by companies rom Working Smartarticles. I have been consistently impressed bythe management strategies and marketing tacticsshared in these regular sections, and I haverequently used them to promote discussion

and strategic planning in my staffmeetings, he says.

Insightful andPerceptive

DSNs NewPerspectives sectionoffers commentaryon contemporaryissues romrespected directselling executives,business proessors

and industryconsultants. Itsmonthly op Desk

essay is contributed by a direct selling CEOor president and addresses such important topicsas leadership and ethics. Personally, Ive had theopportunity to share my thoughts in such areasas ethics and integrity with our entire industry,says Herbalie Chairman and CEO Michael O.Johnson. Its gratiying to know that such a

venue exists, where matters that are especially

important to all o us are given an open orumor discussion.

Direct Selling Newsis read not only bydirect selling executives and suppliers butalso by members o the academic community,who use the publication to educate theirstudents and the community at large aboutthis industry. What makes direct selling

Direct Selling News

Serving the Direct Selling and Network Marketing Executive

by DSNStaff

From providing its

readers with the latest

industry news to profiling

mature companies and

startups, DSNseeks

to educate, inform

and inspire.


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un to teach is that when someone enrolls in adirect selling opportunity, they are buying intoa proven business model, with a proven firm,with proven products and identified markets,says Larry Chonko, Ph.D., Tomas McMahonProessor o Business Ethics at the Universityo exas at Arlington. Te entrepreneur,instead o having to start a business rom

the ground floor, must engage in a seriousevaluation o the strategies and tactics o thedirect selling company and his/her prospectivefit with that company. Most students will beemployed by companies with existing plans andstructures. Te evaluative process o choosinga direct selling company is one that providesa transerrable learning oundation or what

students are most likely to experience as anemployee or uture business owner.

Global in ScopeDSNalso aims to provide its U.S. readers with

comprehensive inormation about direct sellingin other parts o the world.

Direct selling executives in Europe are so

interested to hear whats happening acrosstheir region, says Kathy Slater, a DSNeditor.Tey tell me that DSNprovides them with

valuable, accurate inormation about differentcompanies, cultures and business legislation.Readers have also said that DSNis at the hearto bringing together direct selling companiesand associations within the industry, by

ensuring they all have a voice and a recognizableace, brought to lie within one reputableindependent source.

A Journalistic ResourceDirect Selling News is committed to

keeping direct selling company executivesabreast o the latest news and trends around

the world; profiling individual membercompanies, their accomplishments and theirefforts to give back; providing a orum orsharing ideas and industry best practices;and acting as an advocate or industryethics and integrity. Te monthly printpublication is or direct selling executivesand decision-makers.

The DSNGlobal 100An Industry Event

Direct Selling Newscelebrated its second annualDSNGlobal 100 list with an awards banquet on

April 27. The event, which recognized the top 100revenue-grossing direct selling companies in the world for2010, was attended by nearly 300 members of the directselling industry, representing more than 140 companies.

Brian Connolly, former President of Avon North Americaand Executive Vice President of Avon Products Inc.,

emceed the event. John Fleming, Publisher and Editor inChief of Direct Selling News, presented the awards to thetop 10 companies.

The evening opened with the presentation of theDSNBravo Awards for outstanding achievementTurnaround, Growth and Leadership. The first awardwent to the company that experienced the bestturnaround over the previous 12 months, which was

ViSalus Sciences. The health transformation companyfocused its 2010 efforts on marketing its Body by ViChallenge and grew to an estimated $10 million in

monthly sales.

Co-founders Ryan Blair, Nick Sarnicola andBlake Mallen accepted the award, along with ToddGoergen, whose family owns Blyth, the parentcompany of ViSalus.

Starting a company is about the ups, the downsand celebrating successes along the way, Blair says.Winning the Turnaround Award during the worsteconomic time of recent history was a testament to

the hard work of our distributors, the power of our Bodyby Vi messaging, our products and our comp plan.

The second Bravo Award went to the company withthe highest growth rate over the prior year. The winnerwas Stella & Dot, which saw sales of $33 million in 2009increase to $104 million in 2010, a growth of 215 percent.The jewelry company made news in February when theinfluential venture-capital firm Sequoia Capital invested$37 million for 10 percent of the ownership.

The award, presented by 2009 winners Orvilleand Heidi Thompson of Scentsy, was accepted

by Mike Lohner, Chairman of Stella & Dot. Coco

Chanel said that girls should be two things: classy andfabulous. I think were doing our part to help that be atruism, says Lohner.

The final Bravo Award went to the leadership teamof ACN: Greg Provenzano, Robert Stevanovski, MikeCupisz and Tony Cupisz. Provenzano accepted theLeadership Award, which was presented by 2009winner John Addison, Co-CEO of Pr imerica.

Given the high caliber of people who are here tonight,its a surprise and an honor to be able to accept thisaward on behalf of all of ACN, Provenzano says. Weappreciate being in business with you. Its a great industry.Lets continue to do great things together.

After the presentation of the Bravo Awards, DSNunveiled its Global 100 for 2010. Tom Kelly, Senior VicePresident of Global Direct Selling for Avon, accepted theaward for No. 1 direct selling company in the world. Westrive to be the best. Tonight, to be recognized as the bestof the best in your eyes is a big honor and means a lot to

us, says Kelly.

Tom Kelly, Senior Vice President for Global

Direct Selling for Avon, accepts the award forNo. 1 direct seller in the world.

ViSalus Sciences Co-Founders Ryan Blair, Nick

Sarnicola and Blake Mallen and team acceptthe Bravo Turnaround Award.

ACN Co-Founder Greg Provenzano accepts

the Bravo Leadership Award from 2009 winnerJohn Addison of Primerica.

Mike Lohner, Chairman of Stella & Dot accepts

the Bravo Growth Award from 2009 winnersHeidi and Orville Thompson of Scentsy.


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When we published theDSN

Global100 ranking last year, it was the firsttime in the history of the industry thata comprehensive list of the top 100direct selling companies (by revenue)was researched and presented.

1 Avon Products, Inc.2010 Revenue: $10.9 billionCountry: USA

Avon is the founder of modern direct selling andthe acknowledged world leader in cosmetics,fragrances and toiletries. Avons well-known

product lines include Avon Color, Anew, SkinSo Soft, Advance Techniques Hair Care, AvonNaturals and mark.

2009 Rank: 12009 Revenue: $10.3 billionMarketing Style: Person-to-personCompensation Plan: Single-level and multi-levelProducts: Beauty, fashion jewelry and apparelMarkets: 100+Distributors: 6.5 million

Employees: 42,000Headquarters: New York, N.Y.Executive:Andrea JungYear Founded: 1886Stock Symbol:AVPNYSE

2 Amway2010 Revenue: $9.2 billionCountry: USA

Amway, under parent company Alticor, offersArtistry cosmetics and skin-care products,Nutrilite nutritional products and loyalty-inducing

household products.

2009 Rank: 22009 Revenue: $8.4 billionMarketing Style: Person-to-personCompensation Plan: Multi-levelProducts: Nutrition, beauty, personal-care andhome-care productsMarkets: 80+Distributors: 3 millionEmployees: 14,000+

Headquarters:Ada, Mich.Executives: Steve Van Andeland Doug DeVosYear Founded: 1959

3 Natura Cosmeticos SA2010 Revenue: $3 billionCountry: Brazil

Natura is a cosmetics giant with more than 900products. The company operates in Argentina,Chile, Peru, Mexico, France, Venezuela and

Colombia. Corporate social responsibility is oneof its core emphases.

2009 Rank: 52009 Revenue: $2.4 billionMarketing Style: Person-to-person and retailCompensation Plan: Bi-levelProducts: Personal-care products and fragrancesMarkets: 7Distributors: 1 millionEmployees: 5,000+

Headquarters: So Paulo, BrazilExecutive:Alessandro G. CarlucciYear Founded: 1969Stock Symbol: NATU3.SASo Paulo

4 Vorwerk & Co. KG2010 Revenue: $2.9 billionCountry: Germany

Vorwerk is a family-owned company that has beenfocusing on the direct selling channel since 1930.Products include household appliances and high-

quality cosmetics. Vorwerk is a global group thatincludes JAFRA Cosmetics, which reported salesvolume of more than $600 million in 2010.

2009 Rank: 32009 Revenue: $3.5 billionMarketing Style: Person-to-person andparty planCompensation Plan: Multi-level(JAFRA Cosmetics)Products: Cosmetics and home appliances

Markets: 61Distributors: 600,000Employees: 23,000Headquarters: Wuppertal, GermanyExecutives: Walter Muyres and Reiner StreckerYear Founded: 1883

DSN Global 100

by DSNStaff


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5 Herbalife Ltd.2010 Revenue: $2.7 billionCountry: USA

Herbalife sells nutritional supplements andweight-management and personal-care products.

Its products have been developed by scientists,physicians and nutrition experts, including Nobellaureate in medicine Louis Ignarro, Ph.D.

2009 Rank: 62009 Revenue: $2.3 billionMarketing Style: Person-to-personCompensation Plan: Multi-levelProducts: Nutritional supplements; health/fitness,wellness, skin- and hair-care; and weight-management products

Markets: 75Distributors: 2.1 millionEmployees: 4,300Headquarters: Los Angeles, Calif.Executive: Michael O. JohnsonYear Founded: 1980Stock Symbol: HLFNYSE

6 Mary Kay Inc.2010 Revenue: $2.5 billionCountry: USA

Mary Kay was founded by Mary Kay Ash with thegoal of helping women achieve personal growth and

financial success. The companys skin-care andcolor cosmetics products are sold in more than 35countries around the world.

2009 Rank: 42009 Revenue: $2.5 billionMarketing Style: Person-to-person and party planCompensation Plan: Single-level and multi-levelProducts: Skin-care products andcolor cosmeticsMarkets: 35+

Distributors: 2 millionEmployees: 5,000Headquarters:Addison, TexasExecutive: David HollYear Founded: 1963

7 Tupperware Brands Corp.2010 Revenue: $2.3 billionCountry: USA

Tupperware is a global direct seller of innovative,premium products through an independent

salesforce. Product brands and categories includedesign-centric preparation, storage and servingsolutions for the kitchen and home, and beauty-and personal-care products.

2009 Rank: 82009 Revenue: $2.1 billionMarketing Style: Person-to-person and party planCompensation Plan: Single-level and multi-levelProducts: Storage and serving products; beauty-and personal-care products

Markets: Nearly 100Distributors: 2.6 millionEmployees: 13,500Headquarters: Orlando, Fla.Executive: Rick GoingsYear Founded: 1946Stock Symbol: TUPNYSE

8 Oriflame Cosmetics S.A .2010 Revenue: $2.2 billionCountry: Sweden

Oriflame is one of the fastest-growing beautycompanies in the world. The company operates in

62 countries and is the market leader in more thanhalf. Although it has no U.S. presence, Oriflamehas a presence in Mexico, Central America, SouthAmerica, Europe, Asia and Africa.

2009 Rank: 92009 Revenue: $1.8 billionMarketing Style: Person-to-personCompensation Plan: Multi-levelProducts: Beauty productsMarkets: 62

Distributors: 3.5 millionEmployees: 8,000Headquarters: Luxembourg, LuxembourgExecutive: Magnus BrnnstrmYear Founded: 1967Stock Symbol: ORI-SDBStockholm

13 Miki Corporation2010 Revenue: $927 millionCountry: Japan

Miki Corporation began as a textile importer andseller. Today, it is a multimillion-dollar seller ofsupplements made from prune extracts as well ashousehold cleaners, personal-care items and muchmore. The company has sales agents in Japan,Taiwan and Malaysia.

2009 Rank: 142009 Revenue: $969 millionMarketing Style: Not availableCompensation Plan: Not availableProducts: Foods, cosmetics andhousehold productsMarkets: 3Distributors: Not availableEmployees: 270Headquarters: Osaka, Japan

Executive: Toshikazu KadotaYear Founded: 1964

14 Ignite Inc.2010 Revenue: $902 millionCountry: USA

Ignite Inc. was founded in 2004 by parent companyStream Energy to meet the changing needs ofconsumers. With en

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