MLM (multi-level marketing) companies remain prominent while traditional direct-selling icons like Avon and Tupperware have sharply declined in recent years.

The author Robert FitzPatrick states that direct selling became obsolete generations ago and that MLM is distinct from historical direct selling.

FitzPatrick reports large stock declines for several public companies associated with the segment, including Herbalife down 64% YTD, Nuskin down 31%, USANA down 49%, Medifast down 45%, and Primerica down 13%.

Avon experienced continuous global revenue declines over a decade, saw its share price fall from over $30 to just over $3, split off its North American business to LG, and its remaining global business was later sold to Natura.

Avon’s Canadian disclosure reported that a typical Avon Leadership Representative’s 2020 earnings were between $0 and $2,620.

Tupperware’s stock dropped over 90% in the last five years, many party planners were low‑earning or inactive, the company began selling products in Target, and its filings warned it might violate loan covenants.

Some MLM‑style businesses grew during the COVID‑19 period; Educational Development Corp. (Usborne Books & More) nearly doubled consultants from about 33,000 to 60,000 and saw pandemic-driven tailwinds.

Sources link pandemic-era growth to school closures, higher unemployment and increased remote selling, and they note broader shifts toward virtual and consultative sales since the pandemic.

Documentaries and reporting have highlighted social‑media-fueled popularity and legal troubles for firms such as LuLaRoe, which grew in the 2010s and later faced legal action and allegations of retailer harm.

Rather than widespread straightforward closures, the context shows sales, ownership changes, restructuring, and bankruptcy risk for legacy direct-selling or MLM-related firms in recent years.

MLM (multi-level marketing) companies remain prominent while traditional direct-selling icons like Avon and Tupperware have sharply declined in recent years.

Title:

Content: 'Direct Selling' - Avon, Tupperware - Is Extinct

Nov. 18, 2022 11:25 AM ETHLF, MED, NTCO, NUS, PRI, TUP, USNA3 Comments
Robert FitzPatrick
394 Followers

Summary

  • Direct Selling became obsolete generations ago. So how is it that millions today get recruited for "income opportunity" in "direct selling" and billions are traded on "direct selling" stocks?
  • Avon and Tupperware are cited by "multi-level marketing," or MLM, promoters as "proof" that MLM, e.g., Amway, Herbalife, is "direct selling."
  • Usable data on actual income and churn rates of MLM "direct sellers," market saturation, and retail sales to actual customers are not provided.
  • In fact, Avon and Tupperware for years have been walking dinosaurs, still trying to do "person-to-person" sales to end-users with commodity products, while MLMs hype "unlimited" income.
  • The shrunken and devolved state of Avon and Tupperware today reveals that direct selling is extinct. MLM is not, and never was, direct selling.

It is generally accepted that "direct selling" was killed off generations ago by mass merchandising, big box stores, mail-order and then the internet, among other societal changes. The "Fuller Brush man" is long gone. No one's at home. No one wants or needs or has time for a "personal" salesperson. Everything's in stores or online. And, even when "direct selling" still lived, no one ever went into that tough line of work thinking they would get rich from it.

Yet, each year, millions are recruited, and pay thousands, for the "opportunity" to work as "direct sellers," with promises and expectations of "unlimited" income. The number involved today is many, many times greater than ever worked in that "extinct" field decades ago. Billions are being traded on Wall Street for shares of "direct selling" companies. How can this be?

In my book, Ponzinomics, the Untold Story of Multi-Level Marketing, I document the death of "direct selling" and the 1945 invention of "multi-level marketing," or MLM. I describe how "MLM" falsely assumed direct selling's revered old identity. I trace MLM from its Adam, a little California-based company called "Nutrilite," to today's "industry" led by Amway, Herbalife (HLF) down 64% YTD, Nuskin (NUS) down 31%, USANA Health Sciences (USNA) down 49%, Primerica, Inc. (PRI) down 13%, and Medifast (MED) down 45%. MLM's financial solicitations for consumers to become "direct sellers" have reached into – and led to losses for – virtually every household in America.

In the newly invented "MLM," the main source of revenue shifted from end-user customers to the salespeople themselves who are incentivized to "be their own customer" by buying their own products. Obviously, no one makes money purchasing their own inventory, but MLM offered a unique reason to do so – "unlimited" income potential.

No More Need to Knock on Doors

All MLM "direct sellers" can potentially gain "unlimited" income by recruiting an "endless" chain of other "direct sellers." No need to pound the pavement and get rudely rejected at front doors any more. Each "direct seller" on the chain has to meet a quota to "qualify" for future rewards from their recruits who, in turn, are their "own customers" and recruiters too, ad infinitum. The chain can grow without continuous personal effort. The qualifying quota can usually be met by just making a personal monthly purchase of inventory. "Commissions" on all these transactions, all the way down to the "last ones in," flow up the chain. In the MLM pay plan, most of the total commissions go to the top 1%. So, all new "direct sellers" try mightily to recruit (and buy) their way to those top ranks. Of course, only a tiny few can ever be at the top.

Some people argued this is a pyramid recruiting scheme, inherently unfair and deceptive, and a counterfeit of direct selling. In the design and the pay plan, bottom ranks – the vast majority – will inevitably lose. They said constantly adding salespeople in any area destroys profitable retail selling potential, if any exists to start with. They cited data on 90-99% loss rates and huge churn rates among new "recruits" and asked, where are the retail "customers"?

While offering no data on retail customers or salespeople losses or market saturation, MLM promoters offered "proof" that MLM is direct selling by pointing to two long-established and respected direct selling companies in their ranks, Avon and Tupperware (TUP). Both companies were members of the Direct Selling Association, DSA, and both were "direct selling" icons, Avon for its "ladies" and Tupperware for its "parties." To any pyramid scheme accusations, MLM promoters indignantly countered: "Are you calling Avon and Tupperware pyramid schemes?"

Walking Dinosaurs

The truth for both companies is very different from the MLM-spin. Avon and Tupperware used to have differentiated products and real consumer demand. Their salespeople made money from their own retail sales. But moving into the 21st Century, Avon and Tupperware became walking dinosaurs, vestiges of the extinct era of "direct selling." They were still trying to base their businesses on their historical brands and on person-to-person retail sales to real customers, as direct selling companies always used to do.

Despite MLM's citing Avon and Tupperware, and thereby bestowing legitimacy on the "MLM" members of the Direct Selling Association, deep differences between those icons of the old era and MLM burst into public view in 2013-14. The two companies publicly quit the Direct Selling Association, charging ethics violations and DSA-member connections to pyramid schemes.

Avon's Long Good-Bye

Avon had been a true direct seller for decades before MLM was invented. But as the door-to-door model faded, Avon began a long decline. In 2000, Avon began shifting its focus to "incentivizing" salespeople to recruit more salespeople and getting them to buy inventory, MLM-style. In 2009, during the Great Recession, Avon ran its most expensive ad in history, on television during the Super Bowl. The ad never mentioned any Avon products! It only solicited "salespeople." Still, global revenue dropped continuously over the next 10 years. Avon stock value fell from over $30 to just over $3.

Finally, Avon split off its faltering North American business and sold it to the Korean company, LG Household & Health Care. Avon claimed to have 250,000 sales representatives in North America. The remaining global business was later sold to the Brazilian MLM, Natura (NTCO) down 50% YTD, which also owns the retailer, Body Shop. Though Avon global was much larger, Avon shareholders traded 3 shares of Avon for just one in Natura.

The Korean-owned segment of Avon in North America is now classic MLM, selling the proverbial MLM "income opportunity" along with "health" supplements, make-up, jewelry, clothing, scented candles, even toothpaste.

On the Canadian Avon website, Avon promotes the "income opportunity," urging prospects in large bold black type: "Think big. Sell Avon part-time, full-time, you decide how much! It’s your business, your way!"

A disclosure (legally required in Canada, but not in the USA) appears midway down a long webpage in tiny, barely visible gray lettering: "The 2020 earnings of a typical Avon Leadership Representative was between $0 and $2,620 in commissions and bonuses." That's $0 to $50 a week, before subtracting all costs! And the "disclosure" does not break out how much of that tiny return comes from personal sales or the "downline."

Avon quietly rejoined the Direct Selling Association. The Brazilian company, Natura, which took over Avon's global business in 2020, has lost over 60% of its stock value in the last year.

Tupperware on the Brink

Tupperware was one of the first "party plan" companies, which are technically a small subset of MLM. They employ an "endless" recruiting chain, but are more rooted in retail sales transacted at "parties." Tupperware used to have a popular brand with innovative, differentiated products. But, as true direct selling began to disappear, Tupperware went into decline. It added MLM-type "health and beauty" commodities to bolster recruiting appeal but then deleted them. This year, it began also selling its products in Target department stores. Its kitchen-related goods are generally not distinct from other brands. A 10-months "Income disclosure" for Canada (not published in the USA) showed that half the "party planners" were classified "inactive," earning less than $30 for the period on average. 94% of the "active" ones reportedly received about $12 a week on average, before expenses.

In the last 5 years, the stock value of Tupperware has dropped over 90%. Its latest financials warned investors the company may violate loan agreements, setting off speculation Tupperware might declare bankruptcy.

The shrunken and devolved state of Avon and Tupperware, the most famous brand-icons of "direct selling," makes citing them as a defense of "multi-level marketing" as extinct as their old business model.

This article was written by

394 Followers
Robert L. FitzPatrick is the author of the new book, Ponzinomics, the Untold Story of Multi-Level Marketing (2020),the first comprehensive history and analysis of the "MLM" phenomenon, addressing its political influence, propaganda techniques and use of cult persuasion. FitzPatrick is an expert in examining and revealing deception and fraud in Ponzi schemes, pyramid schemes and bogus home-based businesses. He served as expert or consultant in more than 30 court cases involving pyramid schemes and multi-level marketing. He is co-author of False Profits (1997), an examination of the values and beliefs that support the delusions of pyramid schemes. He was featured on NBC Dateline, ABC World News, and CBS 60 Minutes, the documentary film, Betting on Zero and the podcast, The Dream.He has been quoted in many newspapers around the world, including the New York Times and Wall Street Journal. His booklet, Pyramid Nation, has been translated to Chinese and used by government regulators in writing China's first laws on pyramid schemes. His booklet, "The 10 Big Lies of Multi-Level Marketing", has been translated into four languages and posted on numerous websites. His White Paper, "The Main Street Bubble", which details the extensive influence-buying of the direct selling industry was featured in a CNBC Documentary, Selling the American Dream. In 2005, he delivered a seminar to in Colombo, Sri Lanka to central banking representatives from that country as well as India, Bangladesh, Bhutan, Maldives and Nepal. Robert FitzPatrick has developed informational resources for consumers, journalists, academics and regulators including a multi-media PowerPoint presentation and a statistical analysis of the losses suffered by participants in pyramid selling schemes. He also published a widely read booklet on the landmark federal case brought against the Amway Corporation. He is a expert network member of GLG Research, and Coleman Research Group, as well as other networks of experts who are referred to clients for consultation, speaking and report writing. In this capacity, he has provided expert consultation to financial many analysts who sought information about multi-level marketing companies and pyramid and Ponzi schemes. Robert FitzPatrick co-founded and serves as president of Pyramid Scheme Alert, the first international organization to expose and prevent pyramid scheme fraud. He personally responds to hundreds of consumer and news media inquiries each year. He has served as consultant and expert witness for Attorney General or State Attorney offices in four states, the US Dept. of Justice, and in numerous cases involving distributor fraud and pyramid schemes. Robert FitzPatrick is not an investor in multi-level marketing companies. He has never owned and never plans to own stocks of multi-level marketing companies. He has never been compensated based on any stock's performance. He does not offer investment advice and he is not an attorney.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is for educational purposes only. It discusses fundamentals of the "direct selling" business model and the evolution of "multi-level marketing."

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The author Robert FitzPatrick states that direct selling became obsolete generations ago and that MLM is distinct from historical direct selling.

FitzPatrick reports large stock declines for several public companies associated with the segment, including Herbalife down 64% YTD, Nuskin down 31%, USANA down 49%, Medifast down 45%, and Primerica down 13%.

Avon experienced continuous global revenue declines over a decade, saw its share price fall from over $30 to just over $3, split off its North American business to LG, and its remaining global business was later sold to Natura.

Avon’s Canadian disclosure reported that a typical Avon Leadership Representative’s 2020 earnings were between $0 and $2,620.

Tupperware’s stock dropped over 90% in the last five years, many party planners were low‑earning or inactive, the company began selling products in Target, and its filings warned it might violate loan covenants.

Some MLM‑style businesses grew during the COVID‑19 period; Educational Development Corp. (Usborne Books & More) nearly doubled consultants from about 33,000 to 60,000 and saw pandemic-driven tailwinds.

Title:

Content: Educational Development Corp.: Growth Risk Might Be Overblown

Moat Investing
1.46K Followers

Summary

  • EDUC is the exclusive US co-publisher of educational children's books produced by famous Usborne Publishing by leveraging multilevel marketing (MLM) strategy.
  • It has strong fundamentals, fair valuation, and a compelling growth story that is being ignored by the market.
  • We arrived at a target price of $12.4 to $14.6 without incorporating any future growth and expansion in operating margins.

Investment Idea

Educational Development Corporation (NASDAQ:EDUC) has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, and management has skin in the game (owns 23% of shares outstanding). For these reasons, we remain bullish.

Business Overview

EDUC is the exclusive US co-publisher of educational children's books produced in the UK by Usborne Publishing, and EDUC also exclusively publishes books through their ownership of Kane Miller.

The business operates in two segments:

Home Business Division (Usborne Books & More or "UBAM") -(95% of revenues) - This segment sells books through consultants directly to consumers using a multilevel marketing model (MLM). Consultants sell books by hosting home parties, social media, and hosting book fairs with schools and public libraries.

Publishing Division – (5% of revenues) - Sells books to bookstores, toy stores, and other retail outlets.

If you would like to get the gist of our thesis, you can watch our YouTube video below.

Value Proposition

The children's books market is very competitive and fragmented. There are more than 135 publishers of children's books in the US. EDUC is competing with Scholastic and Pearson, which have extensive resources to run marketing campaigns and are well-positioned in both online and offline distribution channels. Although EDUC has a little moat, they have some strengths to their business model that will allow long-term value creation.

They have an exclusive and long-term relationship with Usborne. Therefore, clients of the Usborne in the US must acquire their books via EDUC. Also, there is a consensus that Usborne books are high quality and among the industry's best.

Their sales are a function of the number of active sales consultants. Commissions paid to consultants are a variable cost, and they are only paid when sales are made. Although this makes SG&A grow as the top line grows, since it's not a fixed cost to the business, it allows EDUC to achieve significant operating leverage. Also, it allows them to scale quickly and have flexibility.

Direct sales strategies like multilevel marketing are commonly referred to as pyramid and Ponzi schemes. However, the table below shows that it does work sustainably and increases revenue growth over the long run despite the negative press.

Source: S&P Capital IQ

Why might EDUC be mispriced?

There are multiple factors. Firstly, it's a micro-cap. This usually means there is limited analyst coverage, and due to the stock's illiquidity, there is low institutional interest. These factors, coupled with others, leave the company under the market radar despite its business is doing well and has promising perspectives.

Second, there is negative press around the MLM business models. The MLM model deployed by EDUC is vastly different from dodgy tactics used by other players. For example, many MLM models require the seller to purchase the inventory from the company before selling. However, this reduces the risk for the company and puts extra pressure on the seller, which can be left with expensive inventory that cannot be sold or returned. In the case of EDUC, there is no requirement to hold inventory.

Third, markets might be believing that the business's tailwinds are temporary due to COVID. Amidst Covid, schools were closed, and parents were working from home; this drove home-based learning and benefited EDUC. Additionally, unemployment rates soared, and many were left looking for work. This allowed EDUC almost to double its consultant count from 33 to 60 thousand. We believe the post-pandemic work from home trend will persist, supporting their sales. Furthermore, the active consultant might not fall back to the pre-pandemic level as these roles are usually part-time work which fits nicely with the trending gig economy.

The evidence speaks louder than words

There are also some clues from the management that revenue generated amidst pandemics might be sticky.

Management increased its dividend per share from $0.20 to $0.32. A dividend increase should be seen as a signal that a business is in solid financial shape and management is confident about its future.

Management increased capital expenditures to $4.15 million from $0.64 in 2020. This expenditure was primarily associated with equipment purchases to increase daily shipping capacity. These are some early signs that management is expecting positive growth going ahead. Additionally, this also improves their margins as amidst Covid they paid a premium for extra shifts.

EDUC has increased its inventory; the inventory build-up is approximately 60% of its total assets. This has been in anticipation of an increase in the sales, as it takes a four to six-month lead-time to have a title printed and delivered to them.

Source: Koyfin

Value Investing Approach: Asset Value

To calculate the actual asset value of the company, we tried to replicate the business from scratch. Therefore, below you will find the last reported balance sheet, where we have made some adjustments.

The value of the land recorded on books was $4.1 million. They own a 40-acre complex at 5402 South 122nd East Ave, Tulsa, with 400,000 square feet of office and warehouse space. They also own a facility located at 10302 East 55th Place, Tulsa, that has 105,000 square feet of usable space. According to our channel checks with realtors, the average price per square foot of their land lies between the range of $100 to $115. To remain conservative, we took the average price square feet to be $85. Therefore, we estimate the value of its land to be $42.9 million.

They also have a network of around 55,000 active consultants. To construct such a network from scratch is both costly and time-consuming. We estimate the replication cost of this network to be around $27.5 million ($500 per consultant). This is also roughly five months of sales commission cost incurred by EDUC in the fiscal year 2021.

The rest of the items are taken on book value.

Based on the above adjustment, we arrive at the total asset value of 106.7, and the fair value per share to be $12.4

Source: Moat Investing

Value Investing Approach: Earnings Power Value

This approach allows us to value EDUC without incorporating any growth. Here, we consider the business's historical figures (last five years) to get the normalized earnings and operating margin. To calculate the sustainable earnings, we smoothed out the company revenues for the previous five years to $131 million and then calculated the firm's average operating margin (6.5%) to arrive at the sustainable Operating Income of $8.5 million.

We add back the expenses typically spent on growth, and we estimate around 4.5% of sales is spent on growth marketing, i.e., promotion, advertisement, and discounts. Hence, we add this back as this expense is not required if the firm was not aiming to achieve growth.

We assume the normalized tax rate to be 26% and the estimated cost of equity at 9%. Therefore, we estimate Earning Power Value of the operating business to be $134 million. To that, we add the non-operational cash ($1.8 million), and we subtract long-term debt (10.8); we arrive at an implied market cap of $125.6 million or $14.6 price per share, with 12.3% upside potential, without incorporating any growth or expansion in operating margins.

Source: Moat Investing

Risks to Our Investment Case

  • Stringent regulation regarding MLM companies. For instance, the requirement to treat consultants as employees. This could have implication when it comes to taxation, wages paid and welfare concerns for workers. This could, in turn, shrink the bottom line or, worse, business model tatters.
  • The most straightforward risk is consultants quitting or switching to find other employment as the US economy improves. However, within our valuation model, we have smoothed the growth of revenue in the last five years, which is a function of l consultants recruited. Even if there is some mean reversion in terms of consultants working with EDUC due to the COVID base effect, our thesis would be less impacted.
  • As highlighted earlier EDUC’s inventory level is a significant portion of its asset. Whatever reason they become unsalable (i.e., change in taste or controversy in terms of published content) could impact our valuation.
  • Oil prices have increased significantly since last year (see below). Shipping costs are amongst the most significant component of its COGS; further rise in oil prices (consequently increasing shipping cost) could make it difficult for EDUC to remain profitable.

Source: Trading Economics

Conclusion

EDUC has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, management has skin in the game (owns 23% of shares outstanding), and investors are not even paying for any future growth at current prices. For these reasons, we remain bullish.

This article was written by

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We are a group of experienced investors that like to dig deeper into stocks to find growth stories at a reasonable price with strong economic moats. We also aim to conduct high-quality analysis by deep diving into valuations, key business drivers, risk/reward, and different future scenarios.
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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Sources link pandemic-era growth to school closures, higher unemployment and increased remote selling, and they note broader shifts toward virtual and consultative sales since the pandemic.

Title:

Content: X

The 'Great Sales Transformation' is consultative, digital-first and AI-powered

Eight in 10 sales professionals say sales roles have changed since the pandemic, and nearly six in 10 say sales today is more appealing than five years ago.
Written by Vala Afshar, Contributor on

According to a recent Salesforce study, it is time to rewrite the sales job description. There is a 'Great Sales Transformation' underway as sales evolves beyond cold calling and high-stakes tactics. Today, sales professionals are more consultative, digital and comfortable with new technologies like AI to service customers in a capacity aimed at becoming trusted advisors and strategic business partners. With 87% of business buyers expecting sales reps to act as trusted advisors, sales teams are building more consultative relationships with their customers -- and maintaining those relationships to do more than just land the deal.

In 2022 research, it is clear that today's connected customer is expecting a much more intelligent, relevant, timely and proactive engagements with sales. In a trusted experience-led economy, companies must transform their sales organizations to adapt to a more decentralized, digital-first, and hyper-knowledge sharing economy. Investing is sales in an investment in your customers. We know this because research shows us that in order to improve the customer experience, businesses must start with the employee experience.

Salesforce surveyed nearly a 1,000 Sales Professionals in the US, UK and Germany to shed light on the state of the talent pipeline enterprise sales teams rely on, and spotlight just how different and sophisticated "sales" is today than even one, two or even five years ago. The research sought to understand: 1. How sales teams and the sales profession has evolved and 2. What technology has helped improve customer relationships among sales professionals.

The research identified a great transformation in the sales function: 8 in 10 sales professionals say sales roles have changed since the pandemic, nearly 6 in 10 say sales today is more appealing than 5 years ago Here are some of key findings the research:

There is a shift from purely transactional relationships, as buyers expect more from their sales teams

  • 89% say sales today is more about listening to the customer than talking to the customer
  • 79% say closing deals is not enough to be successful at their job
  • 74% say sales roles have become more consultative and less transactional since the pandemic
  • 81% of salespeople say intelligent insights improves their customer relationships

Developing relationships virtually has its challenges, and many sales reps crave more training

  • Half (51%) of reps expect to primarily sell virtually moving forward
  • But about 6 in 10 sales reps say virtual selling is harder than from an office.
  • Only 29% also report receiving training on selling virtually.

The future is bright for sales

  • 61% of respondents want to continue working in sales in five years
  • 58% of reps say working in sales today is better than 5 years ago
  • 44% of reps say their work/life balance has improved since the start of the pandemic
  • 30% say diversity has improved

Looking ahead, technology can play a large role in ensuring sales is a promising career path

  • 91% say having intelligent insights helps cut closing times significantly
  • 83% say having integrated CRM tech makes sales a more appealing career path
  • 66% say self-service tech improves relationships with customers
  • 64% say subscription management tech improves relationships with customers
  • Despite nearly half saying work life balance has improved, 1 in 3 say mental health has declined

The research shows that developing virtual relationships in sales has significant challenges and that sales professionals are craving training. While half (51%) of sales professionals expect to primarily sell virtually moving forward, 58% say it's harder than selling from an office. Despite these challenges, only 29% report receiving training on selling virtually. More than 6 in 10 respondents see themselves working in sales in five years. Therefore the need for professional development and career path development is welcomed by all.

The research also highlights that supporting the 'Great Sales Transformation' -- and the talent within it -- requires the adoption of cutting edge technology. Nearly all sales professionals believe intelligent insights help cut closing times significantly, giving them time to focus on building deep customer relationships.

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Documentaries and reporting have highlighted social‑media-fueled popularity and legal troubles for firms such as LuLaRoe, which grew in the 2010s and later faced legal action and allegations of retailer harm.

Title:

Content: W TV CLUB

LuLaRich is Not Your Average Fashion Documentary

Cult allegations, manipulation, and debt—LuLaRich is not just a documentary about some basic leggings sold by an MLM company.

Courtesy of Amazon

Welcome to W TV Club, in which W magazine’s editors choose a television show they’d recommend you binge-watch. Our November picks will be a selection of docuseries. This week, culture editor Brooke Marine recommends Amazon Prime’s LuLaRich, which is more than just a documentary about leggings.

This year, it seems like there has been quite an uptick in the number of docuseries produced and distributed by the various streaming platforms that rule my life. Admittedly, I have slept on a few. One of those docuseries is LuLaRich, the four-part investigation into the legging brand LuLaRoe, and how its multilevel marketing business model wreaked havoc on the lives of its salespeople and customers.

LuLaRoe started as a maxi skirt company before dipping into leggings territory. I had never seen any of these skirts or leggings on my feed, though in the documentary—which includes interviews with the company’s founders DeAnne and Mark Stidham as well as former LuLaRoe retailers—it’s explained that the company became quite popular in the 2010s, particularly on Facebook and Instagram.

“We’re not in the clothing business,” co-founder Mark Stidham says, “We’re in the people business.” Sure—that becomes abundantly clear once the series outlines how his company’s MLM model not only scammed the company’s retailers into debt, but also how the founders were accused of starting a cult. Yes, a cult.

Multilevel marketing is technically legal, in case you were wondering. As explained in the documentary, the business model began decades ago with a company called Nutrilite (a food supplement) which paved the way for Amway, a company that made the salesperson into the customer. In the MLM model, a company generates revenue by multiplying the number of sales people, who buy into the company with fees. It doesn’t matter what the product is—it could be beauty products, “wellness” supplements, or even, as demonstrated in the HBO docuseries The Vow, which chronicled the explosion of the NXIVM cult in North America, a “self-help” seminar. In LuLaRich, it’s the leggings. You could sell a concept as part of an MLM, and as long as you have enough levels of loyal salespeople willing to be both customer and recruiter, the people or person at the top will have a stream of revenue.

That’s all explained in the first episode of the four-part series; LuLaRoe seemed to have legitimate origins. But then weird stuff started happening. The legging designs seemed to suggest sexual innuendos. The inventory wasn’t matching up with what was being sold. In the first episode alone—and I am not even joking, yet I truly wish I were—there are sound bites from former LuLaRoe retailers saying, “The whole house smelled like the dead-fart leggings.”

There are also a few strange anecdotes from the LuLa Roe founders, the Stidhams, who are proud members of the Church of Jesus Christ of Latter-day Saints (the Mormon church, in other words). A few of the LulaRoe founders’ 14 children are adopted, and one of those adopted kids is married to one of the founders’ biological daughters, though the parents ham-handedly assure the viewer they have zero blood relation and never grew up in the same house together. And what’s even wilder is that DeAnne Stidham’s maiden name was Startup. It’s stranger than fiction, really.

LuLaRich, directed by Jenner Furst and Julia Willoughby Nason, can at times feel like a parody of an MLM scheme, not a truthful report of actual events. While watching, I had to remind myself a couple of times that this is not a Search Party subplot. It really happened, and as outlined in the docuseries, legal action was later taken against the company. But I won’t spoil the ending for you—this series must be seen to be believed.

Rather than widespread straightforward closures, the context shows sales, ownership changes, restructuring, and bankruptcy risk for legacy direct-selling or MLM-related firms in recent years.


A recent analysis argues that classic person-to-person "direct selling" has largely become obsolete and that modern multi-level marketing (MLM) is a distinct phenomenon that arose after 1945.

The same analysis states that MLM business models shifted the main source of revenue from end-user retail customers to the salesforce, often by incentivizing salespeople to buy inventory and qualify for commissions.

That commentary lists large recent public declines in several MLM-related companies' stock performance, specifically citing Herbalife down 64% year-to-date, Nu Skin down 31% year-to-date, USANA down 49% year-to-date, Primerica down 13% year-to-date, and Medifast down 45% year-to-date.

Avon is described as having entered a long decline after shifting toward recruitment-incentivizing practices around 2000, with global revenue declining over a decade and its stock falling from over $30 to just over $3 before parts of the business were sold.

The article reports Avon sold its North American unit to LG Household & Health Care and that Avon later sold its global business to Natura.

The context states Avon claimed about 250,000 sales representatives in North America and that a Canadian Avon disclosure showed a typical Avon Leadership Representative earned between $0 and $2,620 in 2020.

The commentary reports that Natura, which acquired Avon’s global business, experienced large stock value declines noted in the article (figures cited include around a 50% YTD decline and an observation that Natura lost over 60% of its stock value in the prior year).

Tupperware is described as having fallen from its earlier party-plan strength, expanding retail distribution (including sales in Target) while its stock dropped over 90% in the last five years and its financial filings warned it might violate loan covenants.

A Canadian Tupperware income-disclosure referenced in the article showed that half of party planners were classified as inactive and that among active planners the average reported earnings were around $12 per week before expenses for a 10-month period.

The LuLaRoe case gained popularity in the 2010s via Facebook and Instagram and later drew documentary coverage and legal action that raised allegations of retailer debt and cult-like dynamics.

Educational Development Corporation (EDUC) operates a Home Business Division that uses a multilevel marketing consultant model to sell Usborne books in the U.S.

The EDUC analysis reports the company nearly doubled its consultant count from about 33,000 to roughly 60,000 during the COVID period and attributes that growth to school closures, remote work, and elevated unemployment.

Authors covering EDUC noted management increased dividends and capital expenditures during and after the pandemic, which they present as signals of expected sustained demand.

The EDUC coverage also highlights risks including potential regulatory pressure on MLM structures and the possibility that consultants recruited during COVID could leave as the general economy improves.

A separate sales-industry study cited in the context shows that the pandemic accelerated a shift to more consultative, digital-first, and virtual selling approaches among sales professionals.

The provided documents link economic downturns and the pandemic to surges in recruitment or consultant counts for some MLM operations while other legacy direct-selling brands experienced long-term commercial decline.

None of the supplied documents provides a comprehensive list of MLM companies that have definitively closed or publicly converted their businesses to a pure direct-sales model without a recruitment component.

In summary, the materials show that traditional direct selling declined, several public MLM-related firms recorded notable stock drops in recent years, the pandemic produced temporary recruitment and consultant-growth tailwinds for some MLMs (e.g., EDUC), and prominent legacy brands such as Avon and Tupperware have undergone long-term decline and restructuring.

Conclusion: Based on the provided documents, MLM remained active in recent years with mixed financial performance, pandemic conditions temporarily boosted recruitment for some firms, several legacy direct-selling brands have declined or restructured, and the supplied materials do not document widespread company closures or clear conversions to non-recruitment direct-sales models.

A recent analysis argues that classic person-to-person "direct selling" has largely become obsolete and that modern multi-level marketing (MLM) is a distinct phenomenon that arose after 1945.

Title:

Content: 'Direct Selling' - Avon, Tupperware - Is Extinct

Nov. 18, 2022 11:25 AM ETHLF, MED, NTCO, NUS, PRI, TUP, USNA3 Comments
Robert FitzPatrick
394 Followers

Summary

  • Direct Selling became obsolete generations ago. So how is it that millions today get recruited for "income opportunity" in "direct selling" and billions are traded on "direct selling" stocks?
  • Avon and Tupperware are cited by "multi-level marketing," or MLM, promoters as "proof" that MLM, e.g., Amway, Herbalife, is "direct selling."
  • Usable data on actual income and churn rates of MLM "direct sellers," market saturation, and retail sales to actual customers are not provided.
  • In fact, Avon and Tupperware for years have been walking dinosaurs, still trying to do "person-to-person" sales to end-users with commodity products, while MLMs hype "unlimited" income.
  • The shrunken and devolved state of Avon and Tupperware today reveals that direct selling is extinct. MLM is not, and never was, direct selling.

It is generally accepted that "direct selling" was killed off generations ago by mass merchandising, big box stores, mail-order and then the internet, among other societal changes. The "Fuller Brush man" is long gone. No one's at home. No one wants or needs or has time for a "personal" salesperson. Everything's in stores or online. And, even when "direct selling" still lived, no one ever went into that tough line of work thinking they would get rich from it.

Yet, each year, millions are recruited, and pay thousands, for the "opportunity" to work as "direct sellers," with promises and expectations of "unlimited" income. The number involved today is many, many times greater than ever worked in that "extinct" field decades ago. Billions are being traded on Wall Street for shares of "direct selling" companies. How can this be?

In my book, Ponzinomics, the Untold Story of Multi-Level Marketing, I document the death of "direct selling" and the 1945 invention of "multi-level marketing," or MLM. I describe how "MLM" falsely assumed direct selling's revered old identity. I trace MLM from its Adam, a little California-based company called "Nutrilite," to today's "industry" led by Amway, Herbalife (HLF) down 64% YTD, Nuskin (NUS) down 31%, USANA Health Sciences (USNA) down 49%, Primerica, Inc. (PRI) down 13%, and Medifast (MED) down 45%. MLM's financial solicitations for consumers to become "direct sellers" have reached into – and led to losses for – virtually every household in America.

In the newly invented "MLM," the main source of revenue shifted from end-user customers to the salespeople themselves who are incentivized to "be their own customer" by buying their own products. Obviously, no one makes money purchasing their own inventory, but MLM offered a unique reason to do so – "unlimited" income potential.

No More Need to Knock on Doors

All MLM "direct sellers" can potentially gain "unlimited" income by recruiting an "endless" chain of other "direct sellers." No need to pound the pavement and get rudely rejected at front doors any more. Each "direct seller" on the chain has to meet a quota to "qualify" for future rewards from their recruits who, in turn, are their "own customers" and recruiters too, ad infinitum. The chain can grow without continuous personal effort. The qualifying quota can usually be met by just making a personal monthly purchase of inventory. "Commissions" on all these transactions, all the way down to the "last ones in," flow up the chain. In the MLM pay plan, most of the total commissions go to the top 1%. So, all new "direct sellers" try mightily to recruit (and buy) their way to those top ranks. Of course, only a tiny few can ever be at the top.

Some people argued this is a pyramid recruiting scheme, inherently unfair and deceptive, and a counterfeit of direct selling. In the design and the pay plan, bottom ranks – the vast majority – will inevitably lose. They said constantly adding salespeople in any area destroys profitable retail selling potential, if any exists to start with. They cited data on 90-99% loss rates and huge churn rates among new "recruits" and asked, where are the retail "customers"?

While offering no data on retail customers or salespeople losses or market saturation, MLM promoters offered "proof" that MLM is direct selling by pointing to two long-established and respected direct selling companies in their ranks, Avon and Tupperware (TUP). Both companies were members of the Direct Selling Association, DSA, and both were "direct selling" icons, Avon for its "ladies" and Tupperware for its "parties." To any pyramid scheme accusations, MLM promoters indignantly countered: "Are you calling Avon and Tupperware pyramid schemes?"

Walking Dinosaurs

The truth for both companies is very different from the MLM-spin. Avon and Tupperware used to have differentiated products and real consumer demand. Their salespeople made money from their own retail sales. But moving into the 21st Century, Avon and Tupperware became walking dinosaurs, vestiges of the extinct era of "direct selling." They were still trying to base their businesses on their historical brands and on person-to-person retail sales to real customers, as direct selling companies always used to do.

Despite MLM's citing Avon and Tupperware, and thereby bestowing legitimacy on the "MLM" members of the Direct Selling Association, deep differences between those icons of the old era and MLM burst into public view in 2013-14. The two companies publicly quit the Direct Selling Association, charging ethics violations and DSA-member connections to pyramid schemes.

Avon's Long Good-Bye

Avon had been a true direct seller for decades before MLM was invented. But as the door-to-door model faded, Avon began a long decline. In 2000, Avon began shifting its focus to "incentivizing" salespeople to recruit more salespeople and getting them to buy inventory, MLM-style. In 2009, during the Great Recession, Avon ran its most expensive ad in history, on television during the Super Bowl. The ad never mentioned any Avon products! It only solicited "salespeople." Still, global revenue dropped continuously over the next 10 years. Avon stock value fell from over $30 to just over $3.

Finally, Avon split off its faltering North American business and sold it to the Korean company, LG Household & Health Care. Avon claimed to have 250,000 sales representatives in North America. The remaining global business was later sold to the Brazilian MLM, Natura (NTCO) down 50% YTD, which also owns the retailer, Body Shop. Though Avon global was much larger, Avon shareholders traded 3 shares of Avon for just one in Natura.

The Korean-owned segment of Avon in North America is now classic MLM, selling the proverbial MLM "income opportunity" along with "health" supplements, make-up, jewelry, clothing, scented candles, even toothpaste.

On the Canadian Avon website, Avon promotes the "income opportunity," urging prospects in large bold black type: "Think big. Sell Avon part-time, full-time, you decide how much! It’s your business, your way!"

A disclosure (legally required in Canada, but not in the USA) appears midway down a long webpage in tiny, barely visible gray lettering: "The 2020 earnings of a typical Avon Leadership Representative was between $0 and $2,620 in commissions and bonuses." That's $0 to $50 a week, before subtracting all costs! And the "disclosure" does not break out how much of that tiny return comes from personal sales or the "downline."

Avon quietly rejoined the Direct Selling Association. The Brazilian company, Natura, which took over Avon's global business in 2020, has lost over 60% of its stock value in the last year.

Tupperware on the Brink

Tupperware was one of the first "party plan" companies, which are technically a small subset of MLM. They employ an "endless" recruiting chain, but are more rooted in retail sales transacted at "parties." Tupperware used to have a popular brand with innovative, differentiated products. But, as true direct selling began to disappear, Tupperware went into decline. It added MLM-type "health and beauty" commodities to bolster recruiting appeal but then deleted them. This year, it began also selling its products in Target department stores. Its kitchen-related goods are generally not distinct from other brands. A 10-months "Income disclosure" for Canada (not published in the USA) showed that half the "party planners" were classified "inactive," earning less than $30 for the period on average. 94% of the "active" ones reportedly received about $12 a week on average, before expenses.

In the last 5 years, the stock value of Tupperware has dropped over 90%. Its latest financials warned investors the company may violate loan agreements, setting off speculation Tupperware might declare bankruptcy.

The shrunken and devolved state of Avon and Tupperware, the most famous brand-icons of "direct selling," makes citing them as a defense of "multi-level marketing" as extinct as their old business model.

This article was written by

394 Followers
Robert L. FitzPatrick is the author of the new book, Ponzinomics, the Untold Story of Multi-Level Marketing (2020),the first comprehensive history and analysis of the "MLM" phenomenon, addressing its political influence, propaganda techniques and use of cult persuasion. FitzPatrick is an expert in examining and revealing deception and fraud in Ponzi schemes, pyramid schemes and bogus home-based businesses. He served as expert or consultant in more than 30 court cases involving pyramid schemes and multi-level marketing. He is co-author of False Profits (1997), an examination of the values and beliefs that support the delusions of pyramid schemes. He was featured on NBC Dateline, ABC World News, and CBS 60 Minutes, the documentary film, Betting on Zero and the podcast, The Dream.He has been quoted in many newspapers around the world, including the New York Times and Wall Street Journal. His booklet, Pyramid Nation, has been translated to Chinese and used by government regulators in writing China's first laws on pyramid schemes. His booklet, "The 10 Big Lies of Multi-Level Marketing", has been translated into four languages and posted on numerous websites. His White Paper, "The Main Street Bubble", which details the extensive influence-buying of the direct selling industry was featured in a CNBC Documentary, Selling the American Dream. In 2005, he delivered a seminar to in Colombo, Sri Lanka to central banking representatives from that country as well as India, Bangladesh, Bhutan, Maldives and Nepal. Robert FitzPatrick has developed informational resources for consumers, journalists, academics and regulators including a multi-media PowerPoint presentation and a statistical analysis of the losses suffered by participants in pyramid selling schemes. He also published a widely read booklet on the landmark federal case brought against the Amway Corporation. He is a expert network member of GLG Research, and Coleman Research Group, as well as other networks of experts who are referred to clients for consultation, speaking and report writing. In this capacity, he has provided expert consultation to financial many analysts who sought information about multi-level marketing companies and pyramid and Ponzi schemes. Robert FitzPatrick co-founded and serves as president of Pyramid Scheme Alert, the first international organization to expose and prevent pyramid scheme fraud. He personally responds to hundreds of consumer and news media inquiries each year. He has served as consultant and expert witness for Attorney General or State Attorney offices in four states, the US Dept. of Justice, and in numerous cases involving distributor fraud and pyramid schemes. Robert FitzPatrick is not an investor in multi-level marketing companies. He has never owned and never plans to own stocks of multi-level marketing companies. He has never been compensated based on any stock's performance. He does not offer investment advice and he is not an attorney.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is for educational purposes only. It discusses fundamentals of the "direct selling" business model and the evolution of "multi-level marketing."

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The same analysis states that MLM business models shifted the main source of revenue from end-user retail customers to the salesforce, often by incentivizing salespeople to buy inventory and qualify for commissions.

That commentary lists large recent public declines in several MLM-related companies' stock performance, specifically citing Herbalife down 64% year-to-date, Nu Skin down 31% year-to-date, USANA down 49% year-to-date, Primerica down 13% year-to-date, and Medifast down 45% year-to-date.

Avon is described as having entered a long decline after shifting toward recruitment-incentivizing practices around 2000, with global revenue declining over a decade and its stock falling from over $30 to just over $3 before parts of the business were sold.

The article reports Avon sold its North American unit to LG Household & Health Care and that Avon later sold its global business to Natura.

The context states Avon claimed about 250,000 sales representatives in North America and that a Canadian Avon disclosure showed a typical Avon Leadership Representative earned between $0 and $2,620 in 2020.

The commentary reports that Natura, which acquired Avon’s global business, experienced large stock value declines noted in the article (figures cited include around a 50% YTD decline and an observation that Natura lost over 60% of its stock value in the prior year).

Tupperware is described as having fallen from its earlier party-plan strength, expanding retail distribution (including sales in Target) while its stock dropped over 90% in the last five years and its financial filings warned it might violate loan covenants.

A Canadian Tupperware income-disclosure referenced in the article showed that half of party planners were classified as inactive and that among active planners the average reported earnings were around $12 per week before expenses for a 10-month period.

The LuLaRoe case gained popularity in the 2010s via Facebook and Instagram and later drew documentary coverage and legal action that raised allegations of retailer debt and cult-like dynamics.

Title:

Content: W TV CLUB

LuLaRich is Not Your Average Fashion Documentary

Cult allegations, manipulation, and debt—LuLaRich is not just a documentary about some basic leggings sold by an MLM company.

Courtesy of Amazon

Welcome to W TV Club, in which W magazine’s editors choose a television show they’d recommend you binge-watch. Our November picks will be a selection of docuseries. This week, culture editor Brooke Marine recommends Amazon Prime’s LuLaRich, which is more than just a documentary about leggings.

This year, it seems like there has been quite an uptick in the number of docuseries produced and distributed by the various streaming platforms that rule my life. Admittedly, I have slept on a few. One of those docuseries is LuLaRich, the four-part investigation into the legging brand LuLaRoe, and how its multilevel marketing business model wreaked havoc on the lives of its salespeople and customers.

LuLaRoe started as a maxi skirt company before dipping into leggings territory. I had never seen any of these skirts or leggings on my feed, though in the documentary—which includes interviews with the company’s founders DeAnne and Mark Stidham as well as former LuLaRoe retailers—it’s explained that the company became quite popular in the 2010s, particularly on Facebook and Instagram.

“We’re not in the clothing business,” co-founder Mark Stidham says, “We’re in the people business.” Sure—that becomes abundantly clear once the series outlines how his company’s MLM model not only scammed the company’s retailers into debt, but also how the founders were accused of starting a cult. Yes, a cult.

Multilevel marketing is technically legal, in case you were wondering. As explained in the documentary, the business model began decades ago with a company called Nutrilite (a food supplement) which paved the way for Amway, a company that made the salesperson into the customer. In the MLM model, a company generates revenue by multiplying the number of sales people, who buy into the company with fees. It doesn’t matter what the product is—it could be beauty products, “wellness” supplements, or even, as demonstrated in the HBO docuseries The Vow, which chronicled the explosion of the NXIVM cult in North America, a “self-help” seminar. In LuLaRich, it’s the leggings. You could sell a concept as part of an MLM, and as long as you have enough levels of loyal salespeople willing to be both customer and recruiter, the people or person at the top will have a stream of revenue.

That’s all explained in the first episode of the four-part series; LuLaRoe seemed to have legitimate origins. But then weird stuff started happening. The legging designs seemed to suggest sexual innuendos. The inventory wasn’t matching up with what was being sold. In the first episode alone—and I am not even joking, yet I truly wish I were—there are sound bites from former LuLaRoe retailers saying, “The whole house smelled like the dead-fart leggings.”

There are also a few strange anecdotes from the LuLa Roe founders, the Stidhams, who are proud members of the Church of Jesus Christ of Latter-day Saints (the Mormon church, in other words). A few of the LulaRoe founders’ 14 children are adopted, and one of those adopted kids is married to one of the founders’ biological daughters, though the parents ham-handedly assure the viewer they have zero blood relation and never grew up in the same house together. And what’s even wilder is that DeAnne Stidham’s maiden name was Startup. It’s stranger than fiction, really.

LuLaRich, directed by Jenner Furst and Julia Willoughby Nason, can at times feel like a parody of an MLM scheme, not a truthful report of actual events. While watching, I had to remind myself a couple of times that this is not a Search Party subplot. It really happened, and as outlined in the docuseries, legal action was later taken against the company. But I won’t spoil the ending for you—this series must be seen to be believed.

Educational Development Corporation (EDUC) operates a Home Business Division that uses a multilevel marketing consultant model to sell Usborne books in the U.S.

Title:

Content: Educational Development Corp.: Growth Risk Might Be Overblown

Moat Investing
1.46K Followers

Summary

  • EDUC is the exclusive US co-publisher of educational children's books produced by famous Usborne Publishing by leveraging multilevel marketing (MLM) strategy.
  • It has strong fundamentals, fair valuation, and a compelling growth story that is being ignored by the market.
  • We arrived at a target price of $12.4 to $14.6 without incorporating any future growth and expansion in operating margins.

Investment Idea

Educational Development Corporation (NASDAQ:EDUC) has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, and management has skin in the game (owns 23% of shares outstanding). For these reasons, we remain bullish.

Business Overview

EDUC is the exclusive US co-publisher of educational children's books produced in the UK by Usborne Publishing, and EDUC also exclusively publishes books through their ownership of Kane Miller.

The business operates in two segments:

Home Business Division (Usborne Books & More or "UBAM") -(95% of revenues) - This segment sells books through consultants directly to consumers using a multilevel marketing model (MLM). Consultants sell books by hosting home parties, social media, and hosting book fairs with schools and public libraries.

Publishing Division – (5% of revenues) - Sells books to bookstores, toy stores, and other retail outlets.

If you would like to get the gist of our thesis, you can watch our YouTube video below.

Value Proposition

The children's books market is very competitive and fragmented. There are more than 135 publishers of children's books in the US. EDUC is competing with Scholastic and Pearson, which have extensive resources to run marketing campaigns and are well-positioned in both online and offline distribution channels. Although EDUC has a little moat, they have some strengths to their business model that will allow long-term value creation.

They have an exclusive and long-term relationship with Usborne. Therefore, clients of the Usborne in the US must acquire their books via EDUC. Also, there is a consensus that Usborne books are high quality and among the industry's best.

Their sales are a function of the number of active sales consultants. Commissions paid to consultants are a variable cost, and they are only paid when sales are made. Although this makes SG&A grow as the top line grows, since it's not a fixed cost to the business, it allows EDUC to achieve significant operating leverage. Also, it allows them to scale quickly and have flexibility.

Direct sales strategies like multilevel marketing are commonly referred to as pyramid and Ponzi schemes. However, the table below shows that it does work sustainably and increases revenue growth over the long run despite the negative press.

Source: S&P Capital IQ

Why might EDUC be mispriced?

There are multiple factors. Firstly, it's a micro-cap. This usually means there is limited analyst coverage, and due to the stock's illiquidity, there is low institutional interest. These factors, coupled with others, leave the company under the market radar despite its business is doing well and has promising perspectives.

Second, there is negative press around the MLM business models. The MLM model deployed by EDUC is vastly different from dodgy tactics used by other players. For example, many MLM models require the seller to purchase the inventory from the company before selling. However, this reduces the risk for the company and puts extra pressure on the seller, which can be left with expensive inventory that cannot be sold or returned. In the case of EDUC, there is no requirement to hold inventory.

Third, markets might be believing that the business's tailwinds are temporary due to COVID. Amidst Covid, schools were closed, and parents were working from home; this drove home-based learning and benefited EDUC. Additionally, unemployment rates soared, and many were left looking for work. This allowed EDUC almost to double its consultant count from 33 to 60 thousand. We believe the post-pandemic work from home trend will persist, supporting their sales. Furthermore, the active consultant might not fall back to the pre-pandemic level as these roles are usually part-time work which fits nicely with the trending gig economy.

The evidence speaks louder than words

There are also some clues from the management that revenue generated amidst pandemics might be sticky.

Management increased its dividend per share from $0.20 to $0.32. A dividend increase should be seen as a signal that a business is in solid financial shape and management is confident about its future.

Management increased capital expenditures to $4.15 million from $0.64 in 2020. This expenditure was primarily associated with equipment purchases to increase daily shipping capacity. These are some early signs that management is expecting positive growth going ahead. Additionally, this also improves their margins as amidst Covid they paid a premium for extra shifts.

EDUC has increased its inventory; the inventory build-up is approximately 60% of its total assets. This has been in anticipation of an increase in the sales, as it takes a four to six-month lead-time to have a title printed and delivered to them.

Source: Koyfin

Value Investing Approach: Asset Value

To calculate the actual asset value of the company, we tried to replicate the business from scratch. Therefore, below you will find the last reported balance sheet, where we have made some adjustments.

The value of the land recorded on books was $4.1 million. They own a 40-acre complex at 5402 South 122nd East Ave, Tulsa, with 400,000 square feet of office and warehouse space. They also own a facility located at 10302 East 55th Place, Tulsa, that has 105,000 square feet of usable space. According to our channel checks with realtors, the average price per square foot of their land lies between the range of $100 to $115. To remain conservative, we took the average price square feet to be $85. Therefore, we estimate the value of its land to be $42.9 million.

They also have a network of around 55,000 active consultants. To construct such a network from scratch is both costly and time-consuming. We estimate the replication cost of this network to be around $27.5 million ($500 per consultant). This is also roughly five months of sales commission cost incurred by EDUC in the fiscal year 2021.

The rest of the items are taken on book value.

Based on the above adjustment, we arrive at the total asset value of 106.7, and the fair value per share to be $12.4

Source: Moat Investing

Value Investing Approach: Earnings Power Value

This approach allows us to value EDUC without incorporating any growth. Here, we consider the business's historical figures (last five years) to get the normalized earnings and operating margin. To calculate the sustainable earnings, we smoothed out the company revenues for the previous five years to $131 million and then calculated the firm's average operating margin (6.5%) to arrive at the sustainable Operating Income of $8.5 million.

We add back the expenses typically spent on growth, and we estimate around 4.5% of sales is spent on growth marketing, i.e., promotion, advertisement, and discounts. Hence, we add this back as this expense is not required if the firm was not aiming to achieve growth.

We assume the normalized tax rate to be 26% and the estimated cost of equity at 9%. Therefore, we estimate Earning Power Value of the operating business to be $134 million. To that, we add the non-operational cash ($1.8 million), and we subtract long-term debt (10.8); we arrive at an implied market cap of $125.6 million or $14.6 price per share, with 12.3% upside potential, without incorporating any growth or expansion in operating margins.

Source: Moat Investing

Risks to Our Investment Case

  • Stringent regulation regarding MLM companies. For instance, the requirement to treat consultants as employees. This could have implication when it comes to taxation, wages paid and welfare concerns for workers. This could, in turn, shrink the bottom line or, worse, business model tatters.
  • The most straightforward risk is consultants quitting or switching to find other employment as the US economy improves. However, within our valuation model, we have smoothed the growth of revenue in the last five years, which is a function of l consultants recruited. Even if there is some mean reversion in terms of consultants working with EDUC due to the COVID base effect, our thesis would be less impacted.
  • As highlighted earlier EDUC’s inventory level is a significant portion of its asset. Whatever reason they become unsalable (i.e., change in taste or controversy in terms of published content) could impact our valuation.
  • Oil prices have increased significantly since last year (see below). Shipping costs are amongst the most significant component of its COGS; further rise in oil prices (consequently increasing shipping cost) could make it difficult for EDUC to remain profitable.

Source: Trading Economics

Conclusion

EDUC has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, management has skin in the game (owns 23% of shares outstanding), and investors are not even paying for any future growth at current prices. For these reasons, we remain bullish.

This article was written by

1.46K Followers
We are a group of experienced investors that like to dig deeper into stocks to find growth stories at a reasonable price with strong economic moats. We also aim to conduct high-quality analysis by deep diving into valuations, key business drivers, risk/reward, and different future scenarios.
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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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The EDUC analysis reports the company nearly doubled its consultant count from about 33,000 to roughly 60,000 during the COVID period and attributes that growth to school closures, remote work, and elevated unemployment.

Authors covering EDUC noted management increased dividends and capital expenditures during and after the pandemic, which they present as signals of expected sustained demand.

The EDUC coverage also highlights risks including potential regulatory pressure on MLM structures and the possibility that consultants recruited during COVID could leave as the general economy improves.

A separate sales-industry study cited in the context shows that the pandemic accelerated a shift to more consultative, digital-first, and virtual selling approaches among sales professionals.

Title:

Content: X

The 'Great Sales Transformation' is consultative, digital-first and AI-powered

Eight in 10 sales professionals say sales roles have changed since the pandemic, and nearly six in 10 say sales today is more appealing than five years ago.
Written by Vala Afshar, Contributor on

According to a recent Salesforce study, it is time to rewrite the sales job description. There is a 'Great Sales Transformation' underway as sales evolves beyond cold calling and high-stakes tactics. Today, sales professionals are more consultative, digital and comfortable with new technologies like AI to service customers in a capacity aimed at becoming trusted advisors and strategic business partners. With 87% of business buyers expecting sales reps to act as trusted advisors, sales teams are building more consultative relationships with their customers -- and maintaining those relationships to do more than just land the deal.

In 2022 research, it is clear that today's connected customer is expecting a much more intelligent, relevant, timely and proactive engagements with sales. In a trusted experience-led economy, companies must transform their sales organizations to adapt to a more decentralized, digital-first, and hyper-knowledge sharing economy. Investing is sales in an investment in your customers. We know this because research shows us that in order to improve the customer experience, businesses must start with the employee experience.

Salesforce surveyed nearly a 1,000 Sales Professionals in the US, UK and Germany to shed light on the state of the talent pipeline enterprise sales teams rely on, and spotlight just how different and sophisticated "sales" is today than even one, two or even five years ago. The research sought to understand: 1. How sales teams and the sales profession has evolved and 2. What technology has helped improve customer relationships among sales professionals.

The research identified a great transformation in the sales function: 8 in 10 sales professionals say sales roles have changed since the pandemic, nearly 6 in 10 say sales today is more appealing than 5 years ago Here are some of key findings the research:

There is a shift from purely transactional relationships, as buyers expect more from their sales teams

  • 89% say sales today is more about listening to the customer than talking to the customer
  • 79% say closing deals is not enough to be successful at their job
  • 74% say sales roles have become more consultative and less transactional since the pandemic
  • 81% of salespeople say intelligent insights improves their customer relationships

Developing relationships virtually has its challenges, and many sales reps crave more training

  • Half (51%) of reps expect to primarily sell virtually moving forward
  • But about 6 in 10 sales reps say virtual selling is harder than from an office.
  • Only 29% also report receiving training on selling virtually.

The future is bright for sales

  • 61% of respondents want to continue working in sales in five years
  • 58% of reps say working in sales today is better than 5 years ago
  • 44% of reps say their work/life balance has improved since the start of the pandemic
  • 30% say diversity has improved

Looking ahead, technology can play a large role in ensuring sales is a promising career path

  • 91% say having intelligent insights helps cut closing times significantly
  • 83% say having integrated CRM tech makes sales a more appealing career path
  • 66% say self-service tech improves relationships with customers
  • 64% say subscription management tech improves relationships with customers
  • Despite nearly half saying work life balance has improved, 1 in 3 say mental health has declined

The research shows that developing virtual relationships in sales has significant challenges and that sales professionals are craving training. While half (51%) of sales professionals expect to primarily sell virtually moving forward, 58% say it's harder than selling from an office. Despite these challenges, only 29% report receiving training on selling virtually. More than 6 in 10 respondents see themselves working in sales in five years. Therefore the need for professional development and career path development is welcomed by all.

The research also highlights that supporting the 'Great Sales Transformation' -- and the talent within it -- requires the adoption of cutting edge technology. Nearly all sales professionals believe intelligent insights help cut closing times significantly, giving them time to focus on building deep customer relationships.

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The provided documents link economic downturns and the pandemic to surges in recruitment or consultant counts for some MLM operations while other legacy direct-selling brands experienced long-term commercial decline.

None of the supplied documents provides a comprehensive list of MLM companies that have definitively closed or publicly converted their businesses to a pure direct-sales model without a recruitment component.

In summary, the materials show that traditional direct selling declined, several public MLM-related firms recorded notable stock drops in recent years, the pandemic produced temporary recruitment and consultant-growth tailwinds for some MLMs (e.g., EDUC), and prominent legacy brands such as Avon and Tupperware have undergone long-term decline and restructuring.

Conclusion: Based on the provided documents, MLM remained active in recent years with mixed financial performance, pandemic conditions temporarily boosted recruitment for some firms, several legacy direct-selling brands have declined or restructured, and the supplied materials do not document widespread company closures or clear conversions to non-recruitment direct-sales models.


Messi joined Barcelona's La Masia academy at age 13 and made his first-team debut for Barcelona in 2004 at age 17.

He has won numerous club trophies including ten La Liga titles and four UEFA Champions League titles.

He has won a record seven Ballon d'Or awards.

He scored over 700 official career goals as of 2021.

He captained Argentina to Copa América victory, the nation's first major trophy in 28 years.

He was voted the best player of the 2014 FIFA World Cup.

By 2022 he had played in five World Cups and had 11 World Cup goals across those tournaments.

He is widely praised for exceptional dribbling, close ball control, vision, pace, and a low centre of gravity that aids quick direction changes.

He is frequently compared and debated alongside Cristiano Ronaldo in the GOAT discussion.

He became the second all-time top scorer in men's international football after surpassing Ali Daei.

He moved to Inter Miami and helped increase MLS visibility, with reported viewership figures surpassing one million.

A talkSPORT commentator called him 'the best player of all time' and other pundits described him as a 'football miracle'.

He is ranked the world's most marketable athlete on SportsPro's list and supports causes such as UNICEF and environmental initiatives.

Because of his sustained trophies, individual awards, scoring records, unique playing style, and global influence, Messi is widely considered the number one football player in the world.

Messi joined Barcelona's La Masia academy at age 13 and made his first-team debut for Barcelona in 2004 at age 17.

Title:

Content: What Was Lionel Messi Known For?

News

What Was Lionel Messi Known For?

Lionel Messi, the Argentine football superstar, is widely regarded as one of the greatest players in the history of the sport. Known for his exceptional skills, agility, and goal-scoring ability, Messi has left an indelible mark on the world of football. From his early days at FC Barcelona to his international success with the Argentine national team, Messi’s career has been nothing short of extraordinary.

Early Career and Rise to Prominence
Born on June 24, 1987, in Rosario, Argentina, Messi showed immense talent from a young age. He joined the Barcelona youth academy, La Masia, at the age of 13, where he honed his skills and developed his unique playing style. Messi made his first-team debut for Barcelona in 2004, at the age of 17, and quickly became a key player for the club.

Playing Style and Skills
Messi is known for his exceptional dribbling ability, close ball control, and lightning-fast speed. His low center of gravity allows him to change direction quickly, leaving defenders in his wake. His vision and passing accuracy are also remarkable, enabling him to create scoring opportunities for his teammates. However, it is his goal-scoring prowess that truly sets him apart. Messi has an incredible ability to find the back of the net, often with stunning precision and creativity.

Records and Achievements
Throughout his career, Messi has shattered numerous records and achieved countless milestones. He has won numerous individual awards, including the prestigious FIFA Ballon d’Or, which he has claimed a record-breaking seven times. Messi has also led Barcelona to numerous domestic and international titles, including ten La Liga titles and four UEFA Champions League titles.

FAQ

Q: What is Messi’s playing position?
A: Messi primarily plays as a forward or attacking midfielder, but his versatility allows him to excel in various positions on the field.

Q: Has Messi ever won the FIFA World Cup?
A: Despite his immense success at the club level, Messi has yet to win the FIFA World Cup with the Argentine national team. However, he has led Argentina to the finals in 2014 and has won several other international tournaments, including the Copa America.

Q: How many goals has Messi scored in his career?
A: As of 2021, Messi has scored over 700 goals in official matches for both club and country.

In conclusion, Lionel Messi is known for his exceptional skills, agility, and goal-scoring ability. His playing style, records, and achievements have solidified his status as one of the greatest footballers of all time. Whether it is his mesmerizing dribbles or his ability to find the back of the net, Messi’s impact on the sport will be remembered for generations to come.

He has won numerous club trophies including ten La Liga titles and four UEFA Champions League titles.

He has won a record seven Ballon d'Or awards.

Title:

Content: Jump directly to the content
INCREDIBLE

‘He’s a football miracle’ – Lionel Messi labelled as ‘best player of all time’ and is one way from emulating fellow icon Diego Maradona, who watched ‘from football heaven’

A ‘football miracle’, a ‘joy’ to watch, a ‘hero’, a ‘star’ and the ‘best player of all time’.

Those are just some of the superlatives used to describe Argentina and football icon Lionel Messi, who spearheaded them into another World Cup final.

talkSPORT’s Adrian Durham was left in awe of the 35-year-old who is on the cusp of finally winning football’s holy grail.

Messi notched in his fifth goal in Qatar – his 11th overall across his five World Cups – as Argentina breezed past Croatia to set up a final meeting against either France or Morocco.

From being sent off on his international debut within a minute against Hungary in 2005, Messi is one game away from eternal glory.

It will be the second time Messi will have featured in the showpiece match after Germany edged out the South American nation in the 2014 final.

Durham says Diego Maradona would have been watching on from ‘football heaven’ – purring over his successor’s dazzling display.

And in what will likely be his last appearance in the global tournament, Durham was nothing but effusive in his praise for the Paris Saint-Germain forward.

Speaking after the 3-0 victory against the 2018 runners-up, Durham said: “What a privilege to be here, what a joy to witness this.

“Lionel Messi, sent off on his Argentina debut, he saw red 30 seconds into his Argentina debut. But he recovered quite well, didn’t he?

“He scored on his World Cup debut in 2006, couldn’t excel under Maradona in South Africa in 2010, in 2014 he was voted the best player at the World Cup.

“But he couldn’t overcome the Germans in the final, 2018 the coach was visibly looking to Messi on the pitch to make decisions in game, it just didn’t work.

“Messi considered retirement from the Albiceleste, then he captained Argentina to Copa [America] glory last summer – their first trophy in 28 years, continental champions.

“Are they going to follow it up with World Cup glory? Their first World Cup since 1986 when Diego Armando Maradona was the talisman.

“And now with Maradona watching from football heaven, it’s Messi who is the main man, he’s the hero, he’s the star, and the fans love him.

“Can he take the World Cup back to Argentina? Well whether he does or not, Lionel Messi has richly entertained us tonight, and all his career.

“Quick feet, injections of pace, strength belying his small stature and frame, fouled constantly but never injured, it’s a medical miracle. He’s a football miracle.

“And now all the Argentina players that have gone over to their fans, gathered all in a line, arms around each other, bouncing up and down in celebration, and Lionel Messi is right in the middle of that.

“He’s never looked so happy playing for his country in his life, at times it was a chore, and at times it was a burden too much for Messi to carry.

“But right now he seems happy, the management structure is right, the teammates are right, everything is right for Lionel Messi to get it right in this World Cup.

“So far, so good. For Messi, goals and assists they just keep racking up, it’s more than the numbers though, it’s what we call the eye test.

“Just watch Lionel Messi play, this is the joy of football I’ve been talking about for a couple of years now.

“This is what it’s all about, this is entertainment, the very best player of all time, for me, he doesn’t need a trophy to back it up.

“But Messi – lifting the World Cup – wouldn’t that make a great picture to frame for his mantelpiece alongside his record seven Ballon d’Or trophies.

“Messi makes you smile when you watch him play the beautiful game, more beautifully than anyone has ever played it before.

“Stand up for the main man – the magic man – he’s had to follow Maradona for his country, and he’s done it.

“[Johan] Cruyff and Ronaldinho and others at Barcelona, he’s done it. But he’s done it with pure football joy in his heart.”

talkSPORT World Cup 2022 Coverage

talkSPORT is bringing you wall-to-wall coverage of the 2022 World Cup.

We are broadcasting all 64 games in the tournament live, with over 600 hours of coverage across our network.

You can tune in to talkSPORT and talkSPORT 2 via our free online streaming service at talkSPORT.com.

talkSPORT is widely available across the UK via DAB digital radio and on 1089 or 1053 AM.

You can also download the talkSPORT app, or ask your smart speaker to play talkSPORT.

He scored over 700 official career goals as of 2021.

He captained Argentina to Copa América victory, the nation's first major trophy in 28 years.

He was voted the best player of the 2014 FIFA World Cup.

By 2022 he had played in five World Cups and had 11 World Cup goals across those tournaments.

He is widely praised for exceptional dribbling, close ball control, vision, pace, and a low centre of gravity that aids quick direction changes.

Title:

Content: How Tall Is Lionel Messi?

News

Lionel Messi: The Height of Greatness

Introduction
Lionel Messi, the Argentine football sensation, has captivated the world with his extraordinary skills and mesmerizing performances on the field. As fans and admirers continue to marvel at his talent, one question that often arises is, “How tall is Lionel Messi?” In this article, we delve into the height of this football icon and provide answers to some frequently asked questions.

How Tall Is Lionel Messi?
Lionel Messi stands at a height of 1.70 meters, which is approximately 5 feet 7 inches. Despite his relatively modest stature compared to some of his towering opponents, Messi has proven time and again that height is no barrier to success in the world of football. His agility, speed, and exceptional ball control have allowed him to outmaneuver and outshine many taller players.

FAQ: Frequently Asked Questions

Q: Does Messi’s height affect his performance on the field?
A: Not at all. Messi’s height has never hindered his ability to dominate matches. In fact, his low center of gravity and quick acceleration give him a significant advantage, enabling him to change direction swiftly and leave defenders in his wake.

Q: How does Messi compare to other footballers in terms of height?
A: While Messi may be shorter than some of his contemporaries, his impact on the game is immeasurable. His exceptional skills and achievements have solidified his place among the greatest footballers of all time, regardless of height.

Q: Are there any advantages to being shorter in football?
A: Absolutely. Being shorter can provide players with enhanced agility, balance, and speed. It allows them to maneuver through tight spaces, maintain better control of the ball, and evade tackles more effectively.

Q: Has Messi’s height ever been a subject of criticism?
A: Occasionally, critics have pointed out Messi’s height as a potential weakness. However, time and again, he has proven them wrong consistently delivering outstanding performances and achieving remarkable success at both the club and international levels.

Conclusion
Lionel Messi’s height may be modest, but his impact on the world of football is immeasurable. Standing at 1.70 meters, he has shattered the notion that height is a determining factor in achieving greatness on the field. Messi’s exceptional skills, determination, and unwavering passion for the game have made him an inspiration to aspiring footballers worldwide, proving that true greatness knows no bounds.

He is frequently compared and debated alongside Cristiano Ronaldo in the GOAT discussion.

Title:

Content: Lionel Messi has done it again. The Argentine superstar recently surpassed Ali Daei to become the second all-time top scorer in men's international football, reported by B/R Football. With this achievement, Messi is now chasing his eternal rival, Cristiano Ronaldo, who holds the top spot. This milestone has reignited the heated debate among football fans about who truly deserves the title of the greatest of all time (GOAT).

In a recent international match, Messi added another goal to his impressive tally, moving past Iranian legend Ali Daei. This goal placed him second on the all-time international goal-scoring list, a significant achievement in the world of football. Messi’s consistent performance at the international level continues to solidify his place among the greatest players in the sport's history.

The ongoing GOAT debate

With Messi now sitting just behind Ronaldo in the international scoring charts, fans and pundits have once again started debating who deserves the GOAT title. On social media, the arguments are as passionate as ever. One fan, h'bozz, commented, “This two goat gimmick might be the most cringe thing we’ve seen, we all know if you swapped Messi’s accolades with Ronaldo’s they wouldn’t keep the same energy. There is only one GOAT.”

On the other hand, Ronaldo supporters, like Freddy, congratulated Messi but took a playful dig, saying, “Congrats. 21 to go :)” This reflects the rivalry's light-hearted yet competitive nature, with each camp supporting their favorite with equal fervor.

Lionel Messi's edge

One of the main arguments in favor of Messi revolves around the quality and significance of his trophies compared to Ronaldo’s. Messi's fans argue that his achievements, including multiple Ballon d'Or awards, Champions League titles, and a Copa America win, make his case stronger. They believe that while Ronaldo may have more goals, Messi's overall contribution to the game is unparalleled.

Critics of Messi, however, point to moments like his recent goal, where some claimed he “robbed” Enzo Fernandez of a goal. One detractor stated, “Messi robbing Enzo goal. He can't be my goat never.” Such incidents fuel the ongoing debate, with each side finding reasons to elevate their preferred player while downplaying the other.

Despite the intense debates, there is a consensus that both Messi and Ronaldo are in a league of their own. Their dominance in the sport is unmatched, and they have set records that may stand for decades. Whether it’s Messi’s magical dribbling and playmaking or Ronaldo’s incredible athleticism and goal-scoring prowess, both players have brought unparalleled excitement to football fans worldwide.

The rivalry between Messi and Ronaldo has transcended individual accolades and statistics. It’s a clash of styles, personalities, and legacies that has captivated the football world for over a decade. Each milestone one player reaches adds another chapter to this fascinating story.

Looking ahead for Lionel Messi

As Messi continues to chase Ronaldo’s goal-scoring record, the football world will be watching closely. Every match, every goal, and every performance will be scrutinized and compared. This rivalry has defined an era in football, and fans will continue to debate the GOAT question long after both players have retired.

In the end, whether you are Team Messi or Team Ronaldo, there is no denying the impact both players have had on the sport. They have pushed each other to new heights, inspired millions of fans, and created memories that will last a lifetime. As the debate rages on, one thing is certain: we are witnessing the careers of two of the greatest footballers ever to play the game.

He became the second all-time top scorer in men's international football after surpassing Ali Daei.

He moved to Inter Miami and helped increase MLS visibility, with reported viewership figures surpassing one million.

Title:

Content: Lionel Messi, the iconic figure in the world of soccer, has embarked on a new chapter in his illustrious career with Inter Miami in the United States. Beyond his unparalleled prowess on the football pitch, Messi has revealed a newfound interest in American football, shedding light on his diverse sporting passions.

Amidst his tenure at Inter Miami, Messi has captivated the soccer world and garnered attention from various sports enthusiasts. In a recent interview with the Big Time Podcast, Messi disclosed his admiration for various sports, including tennis, padel, basketball, and American football. Expressing his eagerness to learn more about the intricacies of the sport, Messi's embrace of American football underscores his open-mindedness and curiosity beyond his domain of expertise.

Messi's revelation about his interest in American football adds another layer to his multifaceted persona, highlighting his willingness to explore new horizons beyond soccer. As he immerses himself in the intricacies of the sport, Messi's presence at Inter Miami not only elevates the profile of the MLS but also fosters cross-sporting interactions and collaborations.

In his own words, during the Big Time Podcast interview, Messi shared, “Tennis, padel, basketball, and American football. I'm learning a lot about American football, getting to know it better, and loving it.” This statement underscores his genuine enthusiasm for delving into new sporting ventures and his willingness to expand his horizons.

Indeed, Messi's influence transcends the boundaries of soccer, attracting luminaries from other sporting disciplines to Inter Miami matches. Tennis stars Stefanos Tsitsipas and Paula Badosa were among the notable personalities who received personalized Messi shirts during their visits to the club. Similarly, NFL players Joe Burrow and Ja'Marr Chase donned FC Cincinnati shirts to support Messi during his inaugural season in the MLS.

Moreover, Messi's arrival in the United States has ignited unprecedented interest in Inter Miami games, with viewership numbers surpassing the million mark. Such staggering figures place Inter Miami alongside the likes of the NFL and college football in viewership, underscoring Messi's transcendent appeal and global impact.

While Messi recuperates from injury, his imminent return to action for Inter Miami's Champions Cup clash against Monterrey on April 3 is eagerly anticipated. As he continues to mesmerize audiences both on and off the field, Messi's journey with Inter Miami promises to be a captivating fusion of sporting excellence and cultural exchange.

Watch Messi live. Every club, every match, including playoffs. Subscribe now to MLS Season Pass!

A talkSPORT commentator called him 'the best player of all time' and other pundits described him as a 'football miracle'.

He is ranked the world's most marketable athlete on SportsPro's list and supports causes such as UNICEF and environmental initiatives.

Title:

Content: Lionel Messi has emerged as the most marketable athlete in the world, surpassing basketball icon LeBron James, according to the latest rankings from SportsPro's 50 Most Marketable (50MM) list, reported by GOAL. Michael Long, editorial director at SportsPro, shared insights on Messi's rise to the top during an episode of the Footballco Business Podcast. “It's a really interesting dynamic to see Messi in America. A match made in marketing heaven.”

With Messi leading the pack and an impressive 22 footballers making the cut, Long discussed the factors that contributed to Messi's dominance in the rankings. He highlighted the unique blend of sports and entertainment culture present in football, particularly in leagues like Major League Soccer (MLS), where Messi now plies his trade with Inter Miami.

Long emphasized the significance of Messi's transition to MLS, noting that it places him in a new realm where he intersects with cultural icons from various spheres, including sports and entertainment. This shift, Long suggests, could potentially elevate Messi to the status of a commercial powerhouse akin to legendary footballer David Beckham.

However, Messi's position at the top of the 50MM list is not solely attributed to his on-field performances or celebrity status. Long pointed out that Messi's active involvement in charitable causes and support for social and environmental initiatives played a crucial role in enhancing his marketability.

The top ten Most Marketable Athletes:

  • 1. Lionel Messi
  • 2. LeBron James
  • 3. Alex Morgan
  • 4. Giannis Antetokounmpo
  • 5. Megan Rapinoe
  • 6. Mikaela Shiffrin
  • 7. Lewis Hamilton
  • 8. Simone Biles
  • 9. Kylian Mbappe
  • 10. Max Verstappen

The Argentine superstar's public support for causes such as UNICEF and environmental sustainability has resonated with fans and brands alike, contributing to his appeal beyond the realm of sports. Long underscored the importance of athletes aligning themselves with meaningful causes, as it has become a key consideration for brands when choosing endorsement partners.

In essence, Messi's ascent to the pinnacle of sports marketing is a testament to his multifaceted appeal, combining athletic excellence with social consciousness to solidify his position as a global icon both on and off the pitch.

Watch Messi live. Every club, every match, including playoffs. Subscribe now to MLS Season Pass!

Because of his sustained trophies, individual awards, scoring records, unique playing style, and global influence, Messi is widely considered the number one football player in the world.