The multi-level marketing (MLM) industry has experienced significant growth in recent years, with the global market generating 98 billion yuan in 2020, a 5% increase.

In 2020, nearly 3.5 million distributors joined 314 marketing entities, with one in six people over 20 years old becoming distributors.

However, the industry has also faced criticism, with 96% of marketing businesses using a "conditional join" with "order goods" and "pay a deposit" model, which can lead to exploitation of distributors.

Some companies, such as Optavia-Medifast, have experienced significant revenue growth, generating $1,600 million in revenue in 2022, but also faced a decline of 34.7% in Q2.

In contrast, other companies like LuLaRoe have been accused of being a pyramid scheme, with a business model that prioritizes recruitment over sales, leading to catastrophic growth and collapse.

The COVID-19 pandemic has had a mixed impact on the MLM industry, with some companies like Educational Development Corp benefiting from the shift to home-based learning, while others have faced challenges due to supply chain disruptions and changing consumer behavior.

Companies like Nu Skin have seen a surge in business during the pandemic, with their stock tripling in value from March 2020 to June 2021, but have since experienced a decline.

Despite the challenges, some MLM companies have continued to operate and even expand, such as Mary Kay, which has a significant presence in Russia and Ukraine, despite the ongoing conflict.

However, the industry as a whole has faced criticism, with many distributors earning little to no income, and some companies facing lawsuits and regulatory scrutiny.

The MLM business model has been criticized for its emphasis on recruitment over sales, with many companies requiring distributors to purchase inventory, leading to debt and financial hardship for some.

Some companies, like Avon and Tupperware, have seen their stock value decline significantly over the years, with Avon's stock value falling from $30 to $3 between 2000 and 2019.

The industry has also seen a shift towards online sales and recruitment, with social media platforms playing a significant role in the growth and decline of MLM companies.

Overall, the MLM industry has experienced significant trends and changes in recent years, with both successes and failures, and ongoing challenges and criticisms.

The Indian direct selling industry, which includes multi-level marketing (MLM) companies, grew 12% in 2022-23, with a turnover of Rs 21,282 crore.

This growth can be attributed to the increasing demand for wellness products, which contributed 73.5% to the industry's turnover.

The COVID-19 pandemic had a significant impact on the MLM industry, with some companies experiencing a surge in sales, such as Educational Development Corp, whose revenue growth increased during the pandemic.

However, other companies, such as Optavia, saw a decline in revenue, with a 34.7% drop to $296 million in Q2.

The decline in Optavia's revenue can be attributed to the plummeting sales and limited network marketing visibility.

In contrast, Nu Skin's revenue grew during the COVID-19 pandemic, and its stock tripled in value from March 2020.

However, Nu Skin's revenue declined 17% to $2.23 billion in 2022, due to disruptions in Mainland China and global inflation.

The pandemic also had an impact on the revenue of pharmaceutical companies, such as Pfizer, whose COVID revenue is expected to drop to $21.5 billion in 2023.

Moderna's revenue is also expected to fall to around $7 billion in 2023, due to the decline in COVID vaccine sales.

The decline in COVID vaccine sales has also affected other companies, such as 3M and Honeywell, which saw a decrease in demand for masks.

The US mask market has been particularly affected, with demand slowing down due to lifted mask orders.

Some MLM companies, such as Avon and Tupperware, have seen a significant decline in their stock value over the years, with Avon's stock value falling from $30 to $3 between 2000 and 2010.

Tupperware's stock value has also dropped over 90% in the last 5 years.

The MLM industry has also seen some companies switching to a simple direct sales model, although there is no specific information on this trend in the provided documents.

Overall, the MLM industry has experienced a mix of growth and decline in recent years, with the COVID-19 pandemic having a significant impact on the revenue of many companies.

The shift towards online sales and recruitment in the MLM industry has led to significant changes, with companies adapting to the new landscape by upgrading technologies and expanding online offerings.

Some businesses, such as Lightyear Strategies, have seen their monthly revenue increase over 10 times since 2019, largely due to their ability to adapt to the online shift.

The pandemic has accelerated the trend towards online sales, with companies like Runamok Maple and Copper Dog Books experiencing a surge in online sales.

However, not all companies have been successful in making the transition, with some, like Tiber River, dropping their ambassador program due to business challenges.

Tiber River has since shifted its focus to direct-to-consumer online sales, a trend that is becoming increasingly common in the industry.

Despite the challenges, many companies are optimistic about the future, with two-thirds of Winnipeg Chamber of Commerce members expressing optimism about 2023.

The rise of online sales has also led to the closure of physical stores, with Radiance Gifts closing its brick-and-mortar location due to costs.

However, Radiance Gifts has been able to operate successfully out of a warehouse, highlighting the potential for online sales to reach a global customer base.

The MLM industry has also seen a shift towards online sales and recruitment, with companies like Arieyl introducing apps and online platforms to facilitate sales and recruitment.

Arieyl's app features live selling and customization options, as well as a compensation plan that offers 12 ways to get paid.

The company also pays commissions to influencers, ranging from 25% to 35%, and offers a loyalty program that generates rewards.

Other companies, like Nu Skin, have seen a surge in business during the pandemic, with the company's stock tripling in value from March 2020 to June 2021.

Nu Skin's success can be attributed in part to its large customer base in China, which accounts for over 20% of the company's revenue.

However, not all MLM companies have been successful, with some experiencing significant declines in revenue and stock value, such as Avon and Tupperware.

Avon's stock value fell from $30 to $3 over a 10-year period, while Tupperware's stock value dropped over 90% in just five years.

The decline of these companies has been attributed in part to their shift towards recruiting salespeople and selling inventory, rather than focusing on direct sales.

In contrast, companies that have adapted to the online shift and focused on direct-to-consumer sales have been more successful, highlighting the importance of innovation and adaptability in the MLM industry.

The use of cloud platforms and MLM software has also become increasingly important, with these tools providing scalable and flexible solutions for companies.

These platforms have real-time value and offer user-friendly interfaces, making it easier for companies to manage their online sales and recruitment efforts.

Overall, the shift towards online sales and recruitment in the MLM industry has presented both challenges and opportunities for companies, and those that have been able to adapt and innovate have been more successful.

The key psychological factors that contribute to an individual's decision to join a multi-level marketing (MLM) company include promises of financial gain and personal development.

MLMs often target individuals on social media platforms like Facebook and Instagram, using manipulative tactics to recruit and retain salespeople.

Certain demographics, such as those in the Church of Jesus Christ of Latter-day Saints, may be more susceptible to MLM recruitment due to emotional connections and sense of community.

People are drawn to MLMs due to promises of unlimited income, with companies like Avon and Tupperware being cited as examples of direct selling.

However, most MLM participants lose money due to high churn rates, with 94% of Tupperware's party planners earning less than $12/week.

The top 1% of MLM participants receive most commissions, while the majority of salespeople earn little to no income.

MLMs often prioritize recruiting over selling actual products, leading to debt and financial hardship for salespeople.

Companies like LuLaRoe have been accused of being pyramid schemes, selling empty dreams and causing financial losses for many consultants.

LuLaRoe consultants paid up to $15,000 in start-up costs and earned money by recruiting new salespeople, but many lost money, homes, and marriages due to the company.

QNet, another MLM company, targets people with financial difficulties and uses brainwashing techniques to exploit vulnerabilities.

QNet has been banned in several countries, including Saudi Arabia and India, due to its fraudulent activities.

The MLM business model has been criticized for its lack of transparency and misleading information, contributing to an individual's decision to join.

Some MLM companies have shifted to a simple direct sales model without a recruitment component, while others have closed down due to lawsuits and financial difficulties.

Trades of Hope, an MLM that works with artisans globally, has been criticized for its "White savior complex" and use of

The multi-level marketing (MLM) industry has experienced significant growth in recent years, with the global market generating 98 billion yuan in 2020, a 5% increase.

Title:

Content: [Street Industry Watch] In the Year of the Pandemic, many people joined the "marketing" to pull down the line, but nearly half of the revenue was used to pay "multi-level" commissions.
Photo Credit: Central News Agency
What we want you to know is
At the same time, the body product channel and product spokesperson can further bring the "offline", which is the start of expanding the business and crossing the threshold of receiving commissions.
But this threshold seems easy, but not everyone can climb, because whether it is old or new distributors, most of them only contribute to the commission of the supporting role......
In the summer of 2020, it is supposed to be the graduation season of college students and the time when social newcomers are pouring out of the cage, but I saw a youthful face at a few lively junctions in the business district of Banqiao, and started the work of “listing people ” for housing construction.
Single-handed advertising placard, carrying a backpack leaning against the road light pole, the other holding a thin, seemingly split reference book, on the hot sun, earning the card holder's hard hourly salary, and paving the way for future job hunting.
When a PT (Part Time, Part-time, Part-time, Part-time) job that was originally labeled as a middle-aged, second-degree employment face, there were many young faces, can not help but make people shiver in the heat of the day!
The virus has hit households and disrupted the job market, affecting youth employment.
We have to admit that the epidemic has disrupted the pace of new people entering society and seeking jobs. Although it is at a time when the virus has not really invaded the door, the job market has been chaotic.
According to the Ministry of Labor ’ s “Youth Employment Status ” report, there are about 280,000 college graduates in 2020, a decrease of 5.4% compared to 2019. This reflects not only the decrease in the number of children and the decrease in the number of college students, but also the explosion of life extension in 2020. If further deduction is further deducted, the number of people who can work (including military service) is a low of nearly 5 years (223,000), a decrease of 12% compared to 2019. And...
As of the end of January 2021, only 68.3%, about 152,000 people, of the post-secondary students who graduated in 2020 and are working people, joined the ranks of labor / agriculture / public insurance, which is not only a low point in the past five years, but also a decrease of 24% compared with the previous year.
In other words, there are many college graduates, after more than half a year of job search, still have not successfully entered the workplace; the pressure of job search and living economy, so that they have to make very choices in this extraordinary period.
The job market is cold, and marketing continues to expand its organization, becoming a potential employment option for new people in society.
In 2021, the virus officially "invaded the door" in May, before graduating from college in the new year.
The alert of the epidemic, so that this year's job market has a cold wind, but also the unemployment rate in July this year (4.53%), blowing up the same period of high in the past decade, recently graduated social fresh people, inevitably have to face the fear of graduation, namely unemployment.
However, there is a saying in the workplace: Despite the economic downturn, business jobs such as insurance and distribution are always recruiting.
If this is not true, we can try to turn off or turn on the query function of the above industries on the job search platform to achieve a full personal experience.
However, in 2020, the number of people registered for the personal insurance business survey (85,000) increased by 5% compared to the previous year, and the number of new entrants to the marketing business is also a million people.
This is the type of occupation that people need to earn life, some people are joining is no retreat, but some people are carrying a dream forward, but the dream is very rich, the reality is very bones, when we dream in the winter, do not forget to pragmatically understand the mode of operation of the industry.
Today, let ’ s talk about selling!
Most people's stereotypes of marketing remain in the "brainwashing" of marketing conferences, constantly inculcating that this is a "personal business," getting rid of being hired as social animals, and directly attacking the freedom of wealth, and in addition, trying to give individuals the self-esteem and ability to think independently, suggesting that "thinking for themselves, not having to discuss with others."
Perhaps, some people have experienced this process of marketing to pull members off the line, some people join, some people feel that it is a "cult", but making money, quality of life, and self-empowerment (Self-empowerment) these material and psychological skills, is indeed for most people have a certain hypnotic effect.
However, most of our understanding of marketing is just the “recruitment ” discourse, and we do not have a deep understanding of how it works.
Perhaps, when we understand the logic of the industry, we can better understand why the so-called brainwashing conference is a starting point for marketing recruitment.
Multi-level marketing requires multiple distributors as sales and marketing channels
According to the Fair Trade Commission ’ s “Multi-level Marketing Business Development Survey ”, nearly 3.5 million distributors (each“ individual ” who joined members or purchased goods is an independent distributor) of 314 marketing entities (such as Anli, Ruxin, etc.) in 2020 generated a turnover of 98 billion yuan, a slight increase of 5% over the previous year. In contrast to the population over 20 years of age (more than 19.4 million people), about one in six people join the ranks of distributors.
Since all distributors replace all types of retail channels, they not only have the function of the channel, but also have the function of marketing, that is, word-of-mouth marketing, so whether they emphasize themselves as retail (sales) orientation, product recommendation (head-pulling) orientation, or emphasis on membership, they are ultimately based on "people" and "organizational hierarchy".
And the product channel and marketing costs saved by the marketing business are converted into the commission of the distributor.
Therefore, when we contact distributors and ask them why they are involved in the marketing industry, they will almost unanimously reply, "The product is great!"
Distributors continue to pay for new members by pulling down the line, expanding the organization and expanding the commission
That being said, it ’ s one thing to see how great a product is in the domain of a distributor, and constantly adding new blood is the highest goal for continuous marketing, expanding the organization, and increasing revenue and commission revenue.
Similarly, according to the Fair Trade Association report, the number of new entrants to the market in 2020 is about 1 million, and for the past five years, the number of new entrants has remained at around 1 million each year.
And in 314 marketing businesses, 96% of the joining system is to take "conditional join", of which, the most important is "order goods" (62%), "pay a deposit or membership fee" (59%), so "conditional join" is not only contributing to the marketing business and the top level of the sales (the one who pulls you in), but also contributing to the level of the commission.
In contrast, if someone joins, someone exits. The number of MLM merchants who quit in 2020 is about 450,000, and the number of exits in each of the past five years has been around 400,000 to 500,000.
The main reason for exiting is “non-renewal of contract ” (83%), which means no longer operating, no longer consuming, and the product is no longer considered“ great ”.
However, in this process, there will always be new blood distributors who will contribute to the expansion of the organization and the commission generated after the consumption of the product.
Whether old or new distributors, most are only supporting players who contribute commissions
As has been mentioned, the distributor at the same time with the product channel and product marketing (endorsement) people, their own recognition of the product, use, and purchase, to become a new member of the body and teaching.
Of course, once you can further bring in new members, new distributors, or offline, it is the beginning of expanding your business and crossing the threshold of receiving commissions.
It seems that the threshold is easy, but not everyone can climb it.
According to a survey conducted by the Fair Trade Association, 222 of the 314 marketing businesses (about 70%), and more than 60% of its distributors will make stable orders to the company; however, only 27% of all marketing companies (about 960,000 people) receive commissions, and the average commission per person is 45,000 yuan.
Therefore, most distributors who order goods either maintain their status as distributors by buying products, or sincerely recognize and continue to use the products; and by bringing in new distributors, order sales, and achieve a commission threshold, and can earn a stable salary or even become rich in this industry, not only are rare, but also the successful cases seen in various conferences or education and training survivors. "The Beautiful Misunderstanding We Have".
It doesn ’ t matter if the product is worth the price
In addition to the threshold, this kind of personal marketing and sales channels, to achieve the "multi-level" (that is, constantly expanding the organization down the line) of the business of distribution, not only eat personal interpersonal skills, "multi-level" commission distribution will indirectly increase product prices.
According to a survey conducted by the fair society, the import cost of the pyramid scheme business accounts for only 28% of the turnover, but the commission accounts for 44% of the turnover, in other words, the real cost of selling a commodity of $100 is only $28, $44 is used as the commission of the pyramid scheme business, and the remaining $28 is the administrative expenses and profits of the pyramid scheme. Whether the essence of a product is value for money is one thing, the marketing business will compress its own profits, expand its commission expenditure, and recruit and expand the organization with a strategy of large is beautiful, so that we can find: there are so many people who have joined the ranks of marketing!
Marketing has always been a very special industry, in which a small number of people have been able to earn their fair share of commissions, and become the mainstay of business operations, but the vast majority of people are only a supporting part of this multi-level marketing structure, and by paying membership fees, buying and using products, they become a part of the source of commissions.
Back to the intention of writing this article, no matter how difficult the job search for new people in society during the epidemic, I hope that by understanding the operation mode of an industry, I can assess whether to use the marketing industry as the first job to enter the society.
Through the Fair Commission report, we have gained a profound understanding, no matter how many of these people successfully earn high commissions and create successful careers, this data is hinting at us: if this industry is the main occupation, not only requires a certain degree of interpersonal relationships and skills, there may be a period of social novices can not understand life or career experience.
Source: Ministry of Labor “Youth Employment Status ”, Fair Trading Commission“ Multi-level Marketing Business Development Survey ”
Extended reading
Editorial responsibility: Ding Zhaojiu
Editor ： Weng Shihang
Tags:

In 2020, nearly 3.5 million distributors joined 314 marketing entities, with one in six people over 20 years old becoming distributors.

However, the industry has also faced criticism, with 96% of marketing businesses using a "conditional join" with "order goods" and "pay a deposit" model, which can lead to exploitation of distributors.

Some companies, such as Optavia-Medifast, have experienced significant revenue growth, generating $1,600 million in revenue in 2022, but also faced a decline of 34.7% in Q2.

Title:

Content: Optavia – Limited Network Marketing Visibility Leads To Decline?

By Team Business For Home

Optavia-Medifast, a Billion Dollar network marketing company, reportedly generated $1,600 million in revenue for 2022. The company has strong financials with a healthy cash position and no debt, but its sales have plummeted. Their Q2 report showed that the company revenue was down 34.7% to $296 million. For more specific details on this report, you can refer to the article here.

According to the OPTAVIA website:

“Optavia offers four components to support you as you begin your journey toward Lifelong Transformation, One Healthy Habit at a Time. Your independent OPTAVIA Coach guides and supports you throughout your journey to optimal health & wellbeing.”

If any network Marketing company has a strong decline it is very hard to turn the decline around. We have observed strong lack of independent distributor recognition.

Optavia – Medifast in Facts and Figures

Facts and figures as of the day of publication of this article:

  • Business for Home rating: A+
  • Current Business for Home Momentum Rank: 70 out of the 900+ world-wide network marketing companies in the BFH database.
  • Similarweb Rank: 61,126 globally, which ranks it 31 out of the 900+ world-wide network marketing companies in the BFH database.
  • Optavia – Medifast has 0 reviews on Business for Home, which ranks it at position 377 out of the 900+ world-wide network marketing companies in the BFH database.
  • Number of Recommended Distributors: 0
  • Business for Home Pageviews: 18,555
  • CEO of Optavia – Medifast: Daniel R. Chard
  • Company location: United States

Data provide by the proprietary Business for Home Intelligence Engine

(article continues below)

Why Optavia is downgraded to a Business for Home A-grade

There are various reasons contributing to a lower rank, such as incomplete information, sparse press releases, lack of transparency, lack of presence of top earners and top leaders, and distributor and social media influencers visibility.

Incomplete Information

Business for Home relies on comprehensive, factual, and substantiated information to accurately assess a company. However, the information shared by Optavia – Medifast appears to be either fragmented or unsubstantiated, adversely affecting its credibility for network marketing prospects.

Sparse Press Releases

Regular and informative press releases and success stories are vitally essential to keep the wider industry abreast of the sales force achievements and decisions. Missing out on this, Optavia – Medifast loses the chance to directly communicate its progresses with prospects.

Absence of Top Earners and Top Leaders visibility

Visible successful (top) earners are vital to any Network Marketing company. They serve not just as inspiration for prospects, but also proof of the company’s success. With a noticeable lack of top earners, Optavia – Medifast is missing out on a key aspect of its appeal.

Distributor Presence

The lack of strong presence in the industry by Optavia – Medifast’s distributors compared to Triple A grade companies adds to its challenges. A visible robust distribution network is vital to make the products more accessible and visible to consumers. Companies sharing consistently success stories are getting the eyeballs on their business opportunity.

How Optavia – Medifast could improve their visibility

Publishing success stories and company press release offer several advantages for Optavia. Here are some of the key advantages of publishing success stories and links to several high performing articles from different companies as examples of a shining marketing strategy anno 2023 :).

Inspiration Motivation, Credibility and Trust

Success stories serve as sources of inspiration and motivation for others. When people read about others who have overcome challenges and achieved their goals, they are often motivated to pursue their own aspirations. They can enhance your credibility and build trust with your audience. Real-life examples of achievements provide evidence that your strategies, products, or services are effective and can deliver results.

Social Proof and Differentiation:

Success stories provide social proof that your offerings have been valuable to others. Potential customers or clients are more likely to engage with your products or services if they see that others have benefited from them. In competitive markets, success stories can set you apart from competitors. Demonstrating your track record of achieving results can give you a unique selling point.

Overall, success stories and press releases have the power to inspire, educate, and foster connections. Whether in the business, personal development, or social spheres, sharing stories of achievement can bring about positive change and growth in Network Marketing.

Optavia – Medifast Conclusion

Based on the information provided by Business for Home, it seems that Optavia – Medifast has the potential to generate decent income for an independent distributor.

However, their limited Network Marketing transparency suggests caution when evaluating the company’s profitability for a Network Marketing Professional. The company seems to have a strategy like Network Marketing company Melaleuca:

“Do not talk about the Network Marketing opportunity, focus on the products.”

That seems not to work to well anymore.

The post Optavia – Limited Network Marketing Visibility Leads To Decline? appeared first on Direct Selling Facts, Figures and News.

Source:: https://www.businessforhome.org/2023/11/optavia-limited-network-marketing-visibility-leads-to-decline/

In contrast, other companies like LuLaRoe have been accused of being a pyramid scheme, with a business model that prioritizes recruitment over sales, leading to catastrophic growth and collapse.

Title:

Content: Cult Classics

You need to watch the most compelling cult docuseries on Amazon Prime ASAP

“Oh my god, I’m in a cult”

What do you think of when you think of cults? Drinking kool-aid, singing hymns, maybe some weird mind control?

Well, while those elements certainly are present in several cults, some of the largest active cults are much more difficult to identify. In fact, you may not see them as cults at all. That’s what makes them so dangerous.

This 2021 four-part docuseries, now streaming on Amazon Prime, breaks down what looks like a fantastic opportunity for women and reveals the terrifying control that lies within, all wrapped in the guise of comfortable leggings.

LuLaRich follows the unstoppable rise and inevitable fall of clothing multi-level marketing company (and alleged pyramid scheme) LuLaRoe. Begun as a well-intentioned way for young women to start their own businesses, LuLaRoe quickly spiraled into a web of manipulation, nepotism, and shady legal practices.

Mormon couple Mark and Deanne Stidham founded LuLaRoe, and from the get-go, the pair established their family as unlike any others. When Deanne married Mark, she had seven children, four biological and three adopted from Romania. Mark had four children of his own. Together Mark and Deanne adopted three other children, bringing the total up to 14. (While having 14 kids is unusual enough, what is even odder is that two of their adopted children eventually married each other.)

When their startup company, which sold comfortable and loud-patterned clothes, took off in a major way, they wanted to support their family. So, they hired their children and relatives in high-powered positions.

Altogether, this is all a recipe for catastrophic growth. What makes LuLaRoe a likely pyramid scheme is how they made money not by selling goods but by recruiting others to be distributors. The company grew exponentially, and the executives weren’t able to keep up with the growth.

But what makes LuLaRoe a cult? Well, those involved are working to please and seek the approval of Mark and Deanne, even if that means selling breast milk to afford the startup package or getting a risky weight loss surgery at Deanne’s urging.

Sure, there’s no religious element to LuLaRoe (aside from the Stidhams’ Mormon teachings leaking into their business model), but that doesn’t mean they’re not a cult. Just one look at the loud, clashing patterns and huge parties run by Deanne’s nephew, and it’s clear this is a group that has complete financial control over its followers.

And that’s not all. LuLaRoe leaders urge everyone to make their social media page entirely about their business, promoting a lavish lifestyle to prove how successful they are. Every part of their life had to revolve around the company to make any profit. So, not only was LuLaRoe controlling its followers' financials, but they also had complete lifestyle control.

It’s clear Mark and Deanne didn’t set out to start a cult. They had only the best intentions, as their participation in LuLaRich underlines. But sometimes cults aren’t created; they just happen. And the worst impulses in the leaders’ personalities are brought out, whether that’s something deadly like a mass suicide or just profiting off a false idea of success.

Sure, LuLaRoe may not be your classic cult, but in a way, that’s what makes it even more insidious. Not many of us know someone who has packed up and moved to a reclusive commune, but people in multi-level marketing companies are everywhere. The line between a company and a cult seems to get blurrier by the day.

LuLaRich is now streaming on Amazon Prime.

Related Tags
Share:

The COVID-19 pandemic has had a mixed impact on the MLM industry, with some companies like Educational Development Corp benefiting from the shift to home-based learning, while others have faced challenges due to supply chain disruptions and changing consumer behavior.

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.
Follow

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.

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.

Companies like Nu Skin have seen a surge in business during the pandemic, with their stock tripling in value from March 2020 to June 2021, but have since experienced a decline.

Title:

Content: We've detected you are on Internet Explorer. For the best Barrons.com experience, please update to a modern browser.GoogleFirefox

Nu Skin’s Biggest Customer Base Is in China. Now It’s Accused of Spreading Covid.

  • Order Reprints
  • Print Article

The Covid pandemic was good for the business of multilevel marketing firms like Nu Skin Enterprises, as furloughed workers tried to make ends meet by selling vitamins and skin creams from home. Salespeople swelled the bottom of Nu Skin’s marketing ranks, and its stock tripled in value from March 2020 to a June 2021 peak of $62, before sliding back to a recent $47.

Now Covid is a problem for the company in China, the nation where Nu Skin (ticker: NUS) gets its largest number of customers and more than 20% of its revenue. A...

Despite the challenges, some MLM companies have continued to operate and even expand, such as Mary Kay, which has a significant presence in Russia and Ukraine, despite the ongoing conflict.

Title:

Content: BETA
This is a BETA experience. You may opt-out by clicking here
Edit Story

These Women Are Selling Mary Kay Makeup From Bomb Shelters In War Torn Ukraine

Following

As the country’s war with Russia rages on, thousands of Ukrainian women have turned to the multi-level marketing company’s pink-packaged offerings to support their families.

By Lauren Debter, Forbes Staff

In the weeks following Russia’s invasion of Ukraine in February 2022, Marichka Lukyanova was inundated with messages from family and friends checking in to make sure she and her two children were safe from the air strikes in Lviv, where she lives. They were safe, luckily, but Lukyanova feared that her business selling Mary Kay cosmetics would be one of the casualties of war.

“I said to myself, Marichika, who will need your cosmetics if there is a war in your country?” recalled Lukyanova.

But one message surprised Lukyanova: Even in those early weeks of the war, one of her clients wanted to buy more Mary Kay facial cream before she ran out. “She did not want to age, even if rockets were flying overhead.”

American multi-level marketing company Mary Kay has shown surprising staying power during the war, with a growing Ukrainian salesforce of an estimated 70,000 women hawking its makeup, even if it means navigating frequent air siren alarms, shelling and blackouts. According to interviews with 16 people selling Mary Kay products on the ground, the cosmetics have become a lifeline for some looking to support their families or make extra money as Ukraine’s economy has suffered from the war.

“For many, it is the only source of income. Many now have husbands, brothers or children fighting,” said Elena Krivchenkova, 58, who has been selling Mary Kay products since the 90s when the company first launched in Ukraine. “It is a way to distract themselves from the horror of what is happening.”

But it’s been tough going, and the salespeople have been faced with a war-torn economy and double-digit inflation — skincare and cosmetics sales in Ukraine fell 13% to $189 million last year, according to GlobalData — along with the challenges inherent in Mary Kay’s business model.

Like other multi-level marketing companies, Mary Kay relies on individual people not just to sell its products to their relatives, friends or others in their social circle, but to recruit them to sell the products, too. There is often an intense pressure to recruit because of the pay model: Consultants, as Mary Kay calls them, make more money when they recruit new people, and their recruits recruit new people. Most people make little or no money working for a multi-level marketing company, warns the Federal Trade Commission.

"They are not helping,” said Robert FitzPatrick, a critic of multi-level marketing companies who has researched the industry for more than two decades. He noted that these types of companies can prey on people who are desperate, “selling themselves as the last best hope” but not delivering, he added.

Mary Kay itself has suffered from skepticism about its business model: Sales worldwide fell to $2.5 billion in 2022, down from $3.6 billion five years earlier, according to Forbes’ list of America’s largest private companies.

“We converted the shelter into a beauty salon.”

Tatiana Korniychuk

“Like the rest of the world, we continue to actively monitor the situation in Ukraine,” said Mary Kay spokesperson Crayton Webb. “Our leadership in Ukraine is actively engaging with employees and the independent sales force, doing everything they can to ensure their safety and supporting the viability of the business.”

Dallas-based Mary Kay, famous for giving out pink Cadillacs to its top salespeople, arrived in Ukraine three decades ago, where it found a burgeoning workforce of women eager for income. While it has a strong presence there, Russia remains an even bigger market — its fifth largest — with 180,000 consultants. But unlike major brands like Starbucks and McDonald’s and other prominent multi-level marketing companies like Herbalife and Amway that closed up shop in the country after the invasion, Mary Kay still operates there. It has had to traverse a tangle of sanctions by staying.

“We have many Independent Beauty Consultants in Russia who also rely on Mary Kay, in many cases, for their livelihood. Again, we remain committed to our mission,” Webb said, adding the company ensures “complete adherence to all laws and sanctions.”

Most of the Ukrainian consultants that Forbes spoke to say they oppose Mary Kay’s decision to remain in Russia, but seem resigned to it. “I try not to dwell on it because I cannot influence it,” said Krivchenkova. “In Russia, there are many women who have survived only thanks to their Mary Kay business. They did not want this war.”

The company’s operations ground to a halt in Ukraine after the war started because of the intense bombing in Kyiv, where Mary Kay’s main warehouse is located. In those first few months of war, consultants resorted to selling whatever products they had on hand to support themselves and their families. Some consultants have hosted charity beauty marathons where a portion of sales are donated to the war effort.

Tatiana Korniychuk, 50, began hauling her Mary Kay products into the bomb shelter during air alerts, letting women try new cosmetics while they waited for the time to pass. “We converted the shelter into a beauty salon,” said Korniychuk, who lives in Zhytomyr.

Maryna Chaikivska, 29, sold tubes of eye cream, cleanser and charcoal face masks she had stocked in her office after the war broke out. She said that netted her about $1,000 a month, paying the bills for six months. Her husband had lost his job at a pharmaceutical company after bombing in Kharkiv severely curtailed production capacity and was heading to the frontlines to put his medical degree to use treating injured soldiers.

“Mary Kay brought colors to a difficult period of life.”

Olga Boysyan

“There was no other way out,” said Chaikivska, who continued to pitch Springtime skincare regimens and bottled-up concoctions that could help combat stress-induced breakouts and wrinkles to her 1,500 Instagram followers.

Chaikivska, who lives in Lviv, used to keep some $15,000 worth of inventory on hand, but now she worries about something happening to it. She heard about another consultant who lost all her inventory after her house was hit by explosions and went up in flames. Now she keeps a third of that amount of inventory on hand.

Three months into the war, Mary Kay began delivering the cosmetics it had in its partially destroyed Kyiv warehouse. By late 2022, it was slowly beginning to ship new products as its consultants rebuilt their customer bases after millions fled the nation in search of safety. More than six million Ukrainians remain outside the country’s borders. (Mary Kay’s Webb says the company shipped products “as soon as possible.”)

That’s had a dramatic impact on businesses built on top of the multi-level marketing company. Because so many customers and consultants have left Ukraine, Elena Krivchenkova said that the incomes on her 2,000-person team have fallen by an average of 30% during the war.

Consultants have also been impacted by rolling blackouts, which make it difficult to get online to pitch products. Six months into the war, Natalia Sokratova, a 35-year-old former teacher, bought a generator so she could continue posting to Instagram, hosting online tutorials and checking in with her team. Others have bought SIM cards from different wireless providers, so that if one provider struggles to provide Wi-Fi they can try another provider.

Some have struggled to make much money from selling Mary Kay cosmetics. Natalia Marynets, a trained lawyer who began selling in 2023, spends two or three hours a day on Mary Kay and has recruited 16 consultants, but still only makes about $200 a month.

Mary Kay did not respond to questions about how much the average consultant makes in Ukraine. It does not release earnings figures except in Canada, where it says the average consultant makes $200 a year.

For many of the other women Forbes spoke to, the additional income, however incremental, wasn’t the only benefit of working as a Mary Kay consultant during the war.

“Mary Kay brought colors to a difficult period of life,” said Olga Boysyan, a former pharmacist who joined the company last year. She told Forbes selling cosmetics is a welcome distraction when she’s waiting to hear from her husband and son, who are serving in the army.

“I have an opportunity to distract our women from negativity and at the same time give them a good mood,” Marynets said. “Even during the Second World War, red lipstick was like an antidepressant for women.”

MORE FROM FORBES

MORE FROM FORBESEBay, Losing Shoppers To Amazon, Keeps Trying To Woo SuperfansMORE FROM FORBESDespite Skepticism Over The Rise In Retail Theft, Stores Are Adopting Police TechnologyMORE FROM FORBESHow Struggling College Bookstores Found A Way To Beat AmazonMORE FROM FORBESWas Your Clothing Made By Forced Labor? These Startups Can Tell You
Follow me on TwitterSend me a secure tip

However, the industry as a whole has faced criticism, with many distributors earning little to no income, and some companies facing lawsuits and regulatory scrutiny.

Title:

Content: Multi-level Marketing scheme "disguised as an advocacy organization" draws criticism

Here's another multi-level-marketing scheme to be aware of. It's called "Trades of Hope" and Hannah Alonzo describes it as an MLM scheme "disguised as an advocacy organization." Here's how the Trades of Hope website pitches the business to potential "partners" and "advocates" (that's what they call folks who join the MLM to sell merchandise and recruiting additional sellers for their downline):

"Create job opportunities for women leading their families out of poverty and human trafficking by shopping ethically made home decor!"

The company works with "Artisan partners" across the globe, who create the products that are then sold by folks who sign up for the MLM. Trades of Hope describes their relationship with the artisans:

We pay our Artisan partners 100% of their asking price (they set the price!) for a product order before you even see that product on our website! We are in a business partnership with them. Not a charity. Our Artisans receive 3 to 6 times what they would normally make in their region. The Fair Trade communities that are helping them get their product to market follow guidelines of checks and balances to give back, not just to the Artisan, but to their community as a whole as well. This includes things like wells, children's schools, education for adults, land, and developing homes. It is life changing. Fair Trade is about providing a living wage for those in extreme poverty and giving them a chance for a better life.

If the business just worked with artisans to sell their products to the public, I'd have no problem with it, and would actually see it as a positive thing. However, Trades of Hope doesn't simply support artisans—its business model is based on recruiting sellers who then recruit other sellers, which makes it a typical MLM. The recruitment page of the Trades of Hope website clearly states: "Enjoy The Rewards and The Partner Does All The Work!" The problem is, though, that very few people are actually "enjoying the rewards," as it's been shown time and again that 99% of people who participate in MLMs lose money.

Over on Reddit, in the terrific subreddit r/antiMLM ("Stop MLM schemes from draining your friends dry. Multi Level Marketing (MLM) schemes are a drain on our society. Its participants either build the pyramid taller or get squashed by it.") I found some interesting discussions of Trades of Hope. Here's some insight from a former member:

I escaped from them. It's basically an MLM. You don't need to keep product on hand, you have a personal seller website and you pressure people to host parties. Their schtick is that they sell items made by people in developing countries so they use a lot of guilt and religious crap to pressure people into buying the items. We were told to post things on Facebook like "help this family out of poverty one bracelet at a time" etc. I finally noped out after realizing that their method is stupid and sustainable development can be found in ways that don't require me to guilt my friends and family into having stupid online parties. As MLMs go, the buy in is $150 so people don't lose their houses over this. The website is $12 or $13 a month. So not like lularoe requiring $4000+ buy ins but it's def an MLM, there's a lot of pressure to recruit and maintain a downline.

If you want to learn more about Trades of Hope, Hannah Alonzo recently posted a terrific deep dive into the company. Her analysis includes a critique of the company's recruitment structure, as well as critical commentary on how the entire operation oozes with "White savior complex."

The MLM business model has been criticized for its emphasis on recruitment over sales, with many companies requiring distributors to purchase inventory, leading to debt and financial hardship for some.

Title:

Content: The Hotel That Multilevel Marketing Built

However you feel about the Amway Corporation, it’s responsible for saving this historic Grand Rapids hotel.

Whether it's a cabana on a private Caribbean island or a room in a medieval Irish castle, sometimes where we stay is even more important than where we go. Late Checkout is your key to the most memorable lodgings around the world.

Step into the Pantlind Lobby of the Amway Grand Plaza for the first time and you’re sure to let out a dramatic sigh. It’s nearly impossible not to. A soaring gilt ceiling—the largest gold leaf installation in the country—dazzles under the light of three massive Czechslovokian crystal chandeliers weighing 4,000 pounds each. Intricate plasterwork, a copper fountain, art deco touches, and a wooden gilded sunburst that originally graced the ballroom of the Palazzo Moroscini for over a century all add to the absolutely overstated opulence of one of the most ornate hotel lobbies in the United States.

This showstopping example of historic architecture is somewhat surprisingly located in the midwestern city of Grand Rapids, Michigan. Originally built in 1913 as the Pantlind Hotel, the building was named as one of the 10 finest hotels in America in 1925. During the heyday of the logging industry, the hotel—and the city—thrived. With the decline of industry throughout the Rust Belt during the second half of the 20th century, the hotel lost its patina and many rooms sat empty each evening. Residents of Grand Rapids flocked to the suburbs, and downtown began to resemble more of a ghost town than a hub of innovation and business.

In 1979, an unlikely benefactor stepped in to restore the Pantlind Hotel: the Amway Corporation. Owned by two wealthy Grand Rapids clans, the De Vos and Van Andel families, Amway has a storied and complicated history in the US. The multilevel marketing corporation has risen and fallen in popularity through the decades, as the business model has been heavily critiqued in recent years. During its heyday, though, Amway parties were the place to be. Distributors for the billion-dollar company used social selling, often in the form of house parties, to attract customers and recruit more distributors. Amway continues to thrive today, with hundreds of thousands of distributors worldwide, but it got its start in Grand Rapids.

With the purchase of the Pantlind Hotel, the Amway Corporation made a decision to invest heavily in its local community. While locals have diverse and varied opinions about Amway as a company, most agree on one point—that its investment saved downtown. “That acquisition, right then and there, has been attributed to be the spark that started the resurgence of downtown Grand Rapids,” says Ross Bartlett, general manager of the hotel. He’s been at the Amway Grand for eight years and has been general manager for three, coming from Arizona Biltmore to invest his skills into this small midwestern city.

Following the acquisition of the hotel by an Amway Corporation subsidiary called AHC Hospitality, Bartlett says the historic Pantlind underwent significant changes. Renovations began on every corner of the property, and a massive glass tower that added 277 rooms to the hotel was erected along the riverfront. The tower also contains a spa, indoor pool, and rooftop pickleball courts.

In 2015, AHC Hospitality made the decision to join Hilton’s Curio Collection. “What that means is that we are part of this distinguished group of authentic, true to their locality, historically independent hotels,” says Bartlett. Partnering with Hilton allowed the Amway Grand Plaza to drive further awareness of Grand Rapids while also accessing features like Hilton’s reservation and reward system for guests. “It's been a really great partnership for us.”

With single rooms beginning around $375, there’s a range of options in both the historic portion of the hotel and the glass tower. When I visited, I stayed in a king suite overlooking the Grand River near the top of the tower, surrounded by floor-to-ceiling windows that offered a panoramic view of the city. The entire tower was remodeled beginning in 2020, which included replacing 6,600 panes of glass and adding 180 tons of reinforcing steel. The project cost a cool $40 million, but this significant investment had a huge impact. The finishes in every room are both high end and understated, letting the unique features of each wing of the hotel shine through.

At the angled top of the 29-story tower sits MDRD, a Spanish tapas restaurant headed by executive chef Erika Brigham. A tiered floor plan means every table has a view. Overall, there are nine dining establishments located within the Amway Grand, including familiar chains like Starbucks and Ruth’s Chris Steakhouse, as well as unique ventures such as MDRD and Rendezvous. An Instagrammable speakeasy, IDC, and a sports bar with duckpin bowling called Woodrow’s sit firmly outside the box when it comes to hotel dining. The property is also connected via glass elevated sidewalks to the neighboring JW Marriott—also owned by ACH Hospitality—for more dining options.

A riverwalk and bridges with wide pedestrian walkways run along the front of both hotels. This riverfront area bustles into the late evening with bikers, fly fisherman, and couples out for a stroll. A planned renovation to the riverfront’s Lyon Square, just outside of the hotel, will bring in an outdoor music and wedding venue and revitalize the area.

This is all part of a $55 million investment by the city to rehab the river, remove dams, and create more space for recreation, a recent step in an ongoing effort to keep Grand Rapids grand. When I walked along the river on a warm fall evening during the city’s annual ArtPrize competition, nothing about downtown Grand Rapids felt dead or outdated. The shuttered storefronts and decaying infrastructure that enticed Amway to invest in the city are nearly impossible to imagine today.

Bartlett says that for him, his favorite thing about working for the Amway Grand Plaza is the reaction he sees from visitors, be they travelers or locals stopping in for an iconic selfie. “There’s always a moment… people who’ve never seen it before or people who come back, they are constantly taking pictures because of its allure,” he says. “It’s one of the most iconic hotel lobbies in the country, in my opinion.”

Want more Thrillist? Follow us on InstagramTikTokTwitterFacebookPinterest, and YouTube.

Meg St-Esprit (she/her) is a freelance writer chasing down and covering the most interesting and quirky ideas about parenting, home design, education, and travel. She lives with her husband, four kids and way too many pets in Pittsburgh. Her work has appeared in a variety of publications including the New York Times, Washington Post, Romper, Fodor's, and more. Meg studied counseling and human development during her higher education journey, and applies that knowledge and expertise to her writing as well. When she's not writing, she's definitely camping.

Some companies, like Avon and Tupperware, have seen their stock value decline significantly over the years, with Avon's stock value falling from $30 to $3 between 2000 and 2019.

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."

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.

The industry has also seen a shift towards online sales and recruitment, with social media platforms playing a significant role in the growth and decline of MLM companies.

Title:

Content: View more in
Business

Amazon Unveils Trailer for 'LuLaRich,' Investigative Docuseries About the LuLaRoe Pyramid Scheme

SFGate
 4 days ago

“LuLaRich” is a four-part docuseries — from “Fyre Fraud” documentarians Jenner Furst and Julia Willoughby Nason — examining the pyramid scheme that was (and shockingly still is) LuLaRoe. The explosive growth of the clothing company, which began as a multi-level marketing scam in which people (mostly women) sold leggings to one another, while also signing up new retailers to be beneath them in the pyramid, has played out, as so many evil things do, mostly on Facebook. The doc series features former retailers and LulaRoe staffers as talking heads, who’ve tried to dig themselves out from their ruined lives.

www.sfgate.com

Comments / 0

Comments / 0

Overall, the MLM industry has experienced significant trends and changes in recent years, with both successes and failures, and ongoing challenges and criticisms.

The Indian direct selling industry, which includes multi-level marketing (MLM) companies, grew 12% in 2022-23, with a turnover of Rs 21,282 crore.

Title:

Content:     The Economic Times daily newspaper is available online now.

    Direct selling industry grew 12% in 2022-23, crosses Rs 21,000 crore in turnover: IDSA

    Synopsis

    Indian Direct Selling Association and Kantar's report revealed a 12% industry growth to Rs 21,282 crore turnover. The sector aims to strengthen with government support, distinguishing from fraudulent schemes through regulatory amendments.

    India’s direct selling industry grew over 12% year-on-year in 2022-23, clocking an overall industry turnover of Rs 21,282 crore, an annual survey report released by the Indian Direct Selling Association (IDSA) and compiled by market researcher Kantar said on Wednesday.

    The report noted that the sector grew 8.3% by CAGR in the four-year period between 2019-20 and 2022-23.

    According to the report, wellness and nutraceutical products contributed 73.5%, while cosmetics and personal care accounted for 11.3% of the industry’s overall turnover. The number of active direct sellers touched around 86 lakh from 84 lakh in 2021–22, the survey said.

    Vivek Katoch, chairperson of IDSA, said in a statement: “The direct selling industry is poised to strengthen further in the years to come on the back of a promising regulatory framework by the government.”

    India ranked 11th in the global direct selling ranking in 2022, up from 15th in 2019.

    Direct selling companies sell to consumers through direct-seller members and not through retailers. Amway, Oriflame, Herbalife and other direct selling companies have been pushing for tighter regulation and clarity from the government, to differentiate them from multi-level-marketing ponzi companies.

    Mid last year, the consumer affairs ministry modified the Consumer Protection (Direct Selling) Rules, 2021, through a notification, to distinguish between fraudulent pyramid and money-circulation schemes and legitimate, direct-selling players. IDSA executives have said further clarity is needed in the definition of 'network of sellers'.

    (You can now subscribe to our Economic Times WhatsApp channel)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more

    (You can now subscribe to our Economic Times WhatsApp channel)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more

    Stories you might be interested in

This growth can be attributed to the increasing demand for wellness products, which contributed 73.5% to the industry's turnover.

The COVID-19 pandemic had a significant impact on the MLM industry, with some companies experiencing a surge in sales, such as Educational Development Corp, whose revenue growth increased during the pandemic.

However, other companies, such as Optavia, saw a decline in revenue, with a 34.7% drop to $296 million in Q2.

The decline in Optavia's revenue can be attributed to the plummeting sales and limited network marketing visibility.

In contrast, Nu Skin's revenue grew during the COVID-19 pandemic, and its stock tripled in value from March 2020.

However, Nu Skin's revenue declined 17% to $2.23 billion in 2022, due to disruptions in Mainland China and global inflation.

Title:

Content: Nu Skin Revenue 2022 Down 17% To $2,230 Million

By Team Business For Home

Nu Skin Enterprises, Inc. (NYSE: NUS) today announced fourth quarter and full year 2022 results.

Revenue: $522.3 million; (22)% (7)% FX impact or $(51) million. Earnings Per Share (EPS):

$1.15 or $0.89 excluding restructuring and impairment chargesassociated with the company’s strategic resource reallocation and arecent IRS-approved favorable tax method change, compared to $(0.18) or $1.11 excluding restructuring and impairment charges in Q4 2021.

  • Customers: 1,147,124; (16)%
  • Paid Affiliates: 236,956; (13)%
  • Sales Leaders: 48,737; (21)%

Executive Summary 2022 vs. 2021

  • Revenue: $2.23 billion; (17)%
  • (5)% FX impact or $(150) million
  • Earnings Per Share (EPS):

$2.07 or $2.90 excluding restructuring and impairment charges and a tax method change, compared to $2.86 or $4.14 excluding

restructuring and impairment charges.

“We made steady progress toward our Nu Vision 2025 strategy, despite persistent macro-economic challenges, which primarily included COVID-related disruptions in Mainland China, global inflation and foreign currency headwinds,”

said Ryan Napierski, Nu Skin president and CEO.

“We achieved several key milestones during 2022 including the introduction of our first connected device, ageLOC® LumiSpa® iO, further strengthening our position as the world’s leading beauty device system brand; the rollout of our Vera and Stela apps in all markets, which provide increased consumer and affiliate engagement; and steady advancements with our social commerce model.

While we saw our sales channel contract primarily due to macroeconomic factors, we drove annual revenue growth of 4 percent in the U.S. and 2 percent in Southeast Asia/Pacific. Japan and Hong Kong/Taiwan also grew in constant currency, while reported revenue was down due to FX headwinds.

Looking ahead, while the macro-environment remains uncertain, we expect it to steadily improve throughout the year. We remain confident in our Nu Vision 2025 strategy to help drive long-term growth and increase shareholder value, which we will update on our earnings call today. During the year, we will be advancing our EmpowerMe personalized beauty and wellness strategy by introducing our body iO smart, connected device system and rolling out our TRMe® weight management line.

We will also continue to enhance our Vera and Stela apps with additional capabilities, features and improvements to streamline the overall user experience. In addition, as we continue to expand our affiliate-powered social commerce model, we will focus on stabilizing performance in more challenged regions and leveraging best practices from our markets that are further along in their social commerce transition.

Lastly, as we navigate the year ahead, we will continue to be conservative in our guidance and prudent in our cost management while we invest in our future.”

About Nu Skin Enterprises

Nu Skin Enterprises, Inc. (NYSE: NUS) is a global integrated beauty and wellness company, powered by a dynamic affiliate opportunity platform. The company helps people look, feel and live their best with products that combine the best of science, technology and nature.

Backed by more than 35 years of scientific research, Nu Skin develops innovative products including Nu Skin® personal care, Pharmanex® nutrition and the ageLOC® anti-aging brand which includes an award-winning line of beauty device systems.

Nu Skin operates in approximately 50 markets worldwide in the Americas, Asia, Europe, Africa and the Pacific. Rhyz Inc. is the company’s strategic investment arm that includes a collection of technology and manufacturing companies to support growth in the core Nu Skin business.

Nu Skin is committed to sustainability, including global initiatives such as transitioning to reduced and sustainable packaging for all products by 2030. The Nu Skin Force for Good Foundation also strives to improve children’s health, education and economic circumstances throughout the world. For more information, visit nuskin.com.

The post Nu Skin Revenue 2022 Down 17% To $2,230 Million appeared first on Direct Selling Facts, Figures and News.

Source:: https://www.businessforhome.org/2023/02/nu-skin-revenue-2022-down-17-to-2230-million/

The pandemic also had an impact on the revenue of pharmaceutical companies, such as Pfizer, whose COVID revenue is expected to drop to $21.5 billion in 2023.

Title:

Content: FOCUS-Drug companies face COVID cliff in 2023 as sales set to plummet

By Michael Erman and Patrick Wingrove

NEW YORK, Feb 6 (Reuters) - Pharmaceutical companies that made billions from the pandemic over the past two years selling vaccines and treatments are now up against a steep COVID cliff and investor pressure to spend their windfalls wisely.

Western drugmakers including Pfizer Inc, BioNTech SE , Moderna Inc, Gilead Sciences Inc, AstraZeneca Plc and Merck & Co are estimated to have brought in about $100 billion in revenue from COVID vaccines and treatments in 2022.

Company and analyst estimates suggest those sales could fall by nearly two-thirds this year due to built up product inventories around the world including in the countries that pay the most. Population immunity from high rates of vaccination and previous infections means that demand for treatments could dip as well.

These companies are used to steep revenue drops known as patent cliffs that occur when their exclusivities on big-selling drugs expire and generic rivals move in, but they strategize for those swings for years.

"When you think about traditional drug and vaccine development and longevity of sales, it's usually much more spread out," Morningstar analyst Damien Conover said. "This is very, very concentrated."

The sudden inflow of revenue should prod companies to strike deals and link up with new partners, he said.

BMO Capital Markets analyst Evan Seigerman said companies should use the quick cash for transformative deals.

"Pfizer did these $10 billion deals to build their portfolio and I think they need to do something bigger and more impactful," he said, referring to the $5.4 billion buyout of Global Blood Therapeutics and $11.6 billion purchase of migraine drugmaker Biohaven Pharmaceutical.

Pfizer has been the biggest corporate beneficiary of the pandemic financially, with more than $56 billion in 2022 revenue from the vaccine it developed with German partner BioNTech and from its COVID-19 antiviral treatment Paxlovid.

Pfizer has said it expects that revenue to drop to around $21.5 billion in 2023, although some analysts believe that forecast is overly optimistic.

"We remain skeptical that COVID revenues will grow in 2024 and beyond," JP Morgan analyst Chris Schott said in a research note, adding that vaccination rates could fall even further than the significant decline seen with booster shots in 2022.

Vaccine maker Moderna also expects 2023 revenue to fall sharply. The company's only product - its messenger RNA COVID vaccine - pulled in around $18.4 billion in 2022. Analysts expect that to drop to around $7 billion in 2023. The company is due to report earnings later this month.

Oppenheimer & Co analyst Hartaj Singh said investors are "frustrated Moderna hasn't used their firepower more effectively to prepare for revenues and earnings going down in 2023 or 2024."

Moderna shares are up in recent months, but a $173.25 closing price on Friday is more than 65% off their pandemic high of close to $500 in August 2021.

"There are examples of companies that have sat on their hands and the share price has not done well, and Moderna could go down that path," Singh cautioned.

MERCK, LILLY PLAN FOR DECLINE

Other companies have seen a more modest impact from their COVID businesses.

"We are not counting on Lagevrio as a driver of growth for our business," Merck Chief Executive Rob Davis said in an interview last week of the company's antiviral pill. "We very much saw Lagevrio as an opportunity to make a meaningful difference at a time of need."

Merck reported sales of $5.7 billion from the treatment last year. Analysts expect that to drop below $1 billion this year. Merck had over $59 billion in total sales in 2022.

Eli Lilly and Co made $2 billion in 2022 from monoclonal antibody COVID treatments and is not expecting any revenue from the business in 2023.

The U.S. Food and Drug Administration pulled its authorization of Lilly's latest antibody bebtelovimab in November because it was not effective against circulating Omicron subvariants.

"We did fine with COVID," Eli Lilly CEO Dave Ricks said in an interview. "We made a little bit of money with it. What we did with that was we mostly reinvested it in R&D (Research and Development), and last year was a record R&D spending year for the company."

(Additional reporting by Khushi Mandowara in Bengaluru; Editing by Caroline Humer and Bill Berkrot)

FOCUS-Drug companies face COVID cliff in 2023 as sales...

Moderna's revenue is also expected to fall to around $7 billion in 2023, due to the decline in COVID vaccine sales.

The decline in COVID vaccine sales has also affected other companies, such as 3M and Honeywell, which saw a decrease in demand for masks.

Title:

Content: 3M sees mask demand, sales growth slowing

Listen
Text
  • Small
  • Medium
  • Large

The demand for masks has slowed as the COVID-19 pandemic eases, leading manufacturer 3M to see a likely reduction in growth by 2 percentage points this year, The Wall Street Journal reported this week.

After accounting for lower mask uptake, the company estimated sales will grow by 2 percent to 5 percent organically this year.

Other companies have also seen demand for COVID-19-related products decline recently. Honeywell International, another mask maker, told the Journal in the Feb. 14 article that  lower sales contributed to a 3 percent drop in companywide revenue in the three months through December. The projected revenue for Honeywell will decrease by about a percentage point this year, the Journal reported.

Copyright © 2022 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

The US mask market has been particularly affected, with demand slowing down due to lifted mask orders.

Title:

Content: 3M, a major N95 mask manufacturer in the United States, said on Monday that the slowdown in the epidemic is expected to reduce demand for masks and that sales growth is likely to slow this year, making it the latest company to predict a decline in the epidemic protection products business.
Since 2020, masks have emerged as 3M ’ s $1 billion business.
At that time, the rapid spread of the coronavirus, and people were wearing masks to avoid infection, making masks the most popular product.
Now that the number of Omicron diagnoses in the United States has plummeted and US companies have lifted mask orders, 3M has warned that slowing mask sales could reduce organic growth by about two percentage points this year.
3M currently expects earnings per share to fall by 45 cents to between $10.15 and $10.65 in 2022, roughly in line with Wall Street expectations.
It also expects sales growth to be between 1% and 4% this year.
Some companies that previously benefited from the anti-epidemic business opportunities have also recently predicted that demand for related products will decline.
Honeywell International, another U.S. mask manufacturer, said sales of masks slowed, causing a 3% drop in revenue in the fourth quarter of last year, and it expects to reduce revenue by another 1% this year.
# Masks # Sales Growth # US # Slowdown

Some MLM companies, such as Avon and Tupperware, have seen a significant decline in their stock value over the years, with Avon's stock value falling from $30 to $3 between 2000 and 2010.

Tupperware's stock value has also dropped over 90% in the last 5 years.

The MLM industry has also seen some companies switching to a simple direct sales model, although there is no specific information on this trend in the provided documents.

The MLM industry has also seen some companies switching to a simple direct sales model, although there is no specific information on this trend in the provided documents.

The MLM industry has also seen some companies switching to a simple direct sales model, although there is no specific information on this trend in the provided documents.

Overall, the MLM industry has experienced a mix of growth and decline in recent years, with the COVID-19 pandemic having a significant impact on the revenue of many companies.

Overall, the MLM industry has experienced a mix of growth and decline in recent years, with the COVID-19 pandemic having a significant impact on the revenue of many companies.

Overall, the MLM industry has experienced a mix of growth and decline in recent years, with the COVID-19 pandemic having a significant impact on the revenue of many companies.

The shift towards online sales and recruitment in the MLM industry has led to significant changes, with companies adapting to the new landscape by upgrading technologies and expanding online offerings.

Title:

Content: Skip to main content

For some Mass. businesses, the COVID-19 pandemic pushed changes for the better

When disaster strikes, sometimes, innovation follows.

At Titcomb’s Bookshop in East Sandwich, it all started with the PPP loan. The store, attached to the Titcomb family’s 17th-century home, had been operating on the Cape for five decades when the pandemic swept in.

Demand for books soared as residents rallied around local businesses, but the shop’s mostly part-time staff — working from home during lockdown — was overwhelmed. So owner Vicky Titcomb took a chance, using some of the store’s federal Payroll Protection Program funds to bring on more full-time employees when the store reopened. Titcomb promoted a part-timer to take over from her as manager, and she has been a dynamo, coordinating virtual events and reaching out to local artisans to expand the store’s gift selection. She also oversaw new hires, one focused on expanding the toy selection, another on rare and antique books, and a third on social media.

In 2020, the shop had its best year ever. And 2021 was even better.

Advertisement

“COVID changed everything at our store,” Titcomb said. “It made us a better business by far.”

The pandemic crushed many small companies, as health concerns, supply chain issues, and labor shortages converged. But some were able to adapt — and thrive. They upgraded technologies and expanded online offerings. They sought out new customers and jump-started new lines of business. Others, like Titcomb, saw an opportunity and ran with it.

The pandemic didn’t kill them, it made them stronger.

For nearly two years, there has been a “global scrambling” as companies try to stay afloat, said Sridhar Tayur, professor of operations management at Carnegie Mellon University. And this crisis mindset has sparked changes that could have a lasting impact. Businesses are tracking customers’ online orders in ways they never did for in-person sales, he said. Operations are being automated and simplified.

Advertisement

“Necessity is the mother of invention,” he said. “I don’t think they’ve had this amount of necessity at least in the last 20 or 30 years.”

Lightyear Strategies, a marketing firm in Boston, witnessed the shift in its clients. At first, the mindset seemed to be, “the world’s ending ... let’s get rid of the marketing,” said chief executive Nima Olumi. But a few months later, clients realized they needed help adapting to a changed and largely virtual world.

A New York property management firm asked Lightyear to figure out how to e-mail thousands of residents about new sanitization measures. Boston hospitals wanted videos educating patients about safety protocols.

At the same time, Olumi realized he needed to narrow his focus rather than trying to be a jack-of-all-trades “yes man.” Today, his recurring monthly revenue is more than 10 times what it was in 2019.

“If you make hot dogs,” he said, “stick to making hot dogs.”

For other business owners, though, the pandemic was the right time to branch out. Runamok Maple in Fairfax, Vt., saw its online syrup sales skyrocket, while restaurant and hotel sales slumped. So the company decided to launch Sparkle Syrup, infused with edible pearlescent mica, to “bring a little bit of joy,” said co-owner Eric Sorkin. And it’s been a huge hit. “All the working dads out there were now at home, and what does a working dad know how to make?” he said. “They make breakfast.”

Advertisement

At Copper Dog Books in Beverly, mastering online orders when nobody wanted to shop in person opened the door to shipping gift boxes, including a monthly subscription with two sci-fi novellas, a snack, and a small item such as a journal or key chain. Scenic Roots Garden Center in Sandwich launched a virtual landscape design business and started selling produce from a nearby farm. Both businesses have had record-breaking sales for the past two years.

Adopting new technologies has been a game-changer for many companies. In response to COVID restrictions, the owner of a nautical jewelry business in Washington state put scannable QR codes next to each necklace and bracelet in her window display, directing shoppers who couldn’t come inside to the items on her website. A business consultancy in Utah started digitizing operations when the world went online, including using artificial intelligence to help predict employee turnover, a major challenge during the pandemic. Financial services firms have turned to facial recognition technology from Bedford biometric software provider Aware to give mobile customers a more secure way to check their accounts.

Many companies have embarked on a “digital transformation” during the pandemic, said Mark Tina, vice president of sales for Verizon Business in the eastern US. New high-speed Internet-based services not only have more capabilities than older technologies, they are less expensive, he said, which is key for businesses struggling to survive.

When workers stopped going into their offices, Dependable Cleaners, based in Quincy, saw its business drop to a fraction of what it used to be, driving the dry cleaner to look for ways to become more efficient, said director of operations Carlyn Parker. It switched to a Verizon service that assigns one business number to ring on multiple mobile devices and desk phones, and it added a texting feature to its biweekly pickup-and-delivery service.

Advertisement

Now, instead of visiting every home-delivery customer twice a week, the drivers only go where requested, allowing the company to add more customers without more drivers. Before Omicron drove companies to push back office reopening dates, Dependable Cleaners had climbed back to 80 percent of pre-pandemic levels.

“We’re in the fourth generation,” said Parker, whose grandparents started the company. “We’re here to stay.”

Finding new customers has also been a life-saver. When travel came to a halt in March of 2020, revenues dropped to “nearly zero” for LugLess, a Boston company that ships luggage for travelers. But it quickly started playing up the fact that using its services meant less human contact, said chief executive Aaron Kirley. No more waiting in line at the airport to check bags, no more gathering with the masses at the baggage carousel. The company also partnered with moving companies to reach the surge of digital nomads who could suddenly work wherever they wanted —and likely didn’t have room in their cars for all their stuff. And when people complained they could no longer print out shipping labels because they weren’t at work, LugLess developed digital labels.

Advertisement

By the fall of 2020, business had tripled from its pre-pandemic high, then tripled again last year.

“It kind of forced us to open our eyes and look at new opportunities,” Kirley said.

Some of the new opportunities revealed during the pandemic aren’t just boosting revenues. They’re also saving lives.

Groups Recover Together, an addiction therapy provider based in Burlington, has almost doubled the number of people it serves around the country since it started offering virtual sessions. Before COVID, people battling opioid abuse had to attend group therapy in person due to the medication being provided, said chief executive Colleen Nicewicz.

But when that requirement was rescinded during the shutdown, Groups Recover Together started holding sessions over Zoom, and then through a new app. The organization now reaches more than 10,000 people a week, nearly a third of whom live in counties with no physical site. Opioid addiction is rampant in rural areas, Nicewicz said; in one Indiana county with a population of just 10,000, Groups Recover is serving one out of every 200 residents, even without a clinic.

Crucially, data show that virtual group therapy is just as effective at keeping people off drugs as in-person sessions, she said. At a time when the opioid epidemic is worse than ever — overdose deaths rose nearly 29 percent in the 12 months ending in April 2021 compared to the year before — reaching more people is critical, said Nicewicz, who is hopeful virtual therapy will become a permanent offering.

“We really met an unmet need,” she said.

Katie Johnston can be reached at katie.johnston@globe.com. Follow her on Twitter @ktkjohnston.

Some businesses, such as Lightyear Strategies, have seen their monthly revenue increase over 10 times since 2019, largely due to their ability to adapt to the online shift.

The pandemic has accelerated the trend towards online sales, with companies like Runamok Maple and Copper Dog Books experiencing a surge in online sales.

However, not all companies have been successful in making the transition, with some, like Tiber River, dropping their ambassador program due to business challenges.

Title:

Content: 'How can we adapt': Local businesses moving online amid rising challenges

Tiber River, known for its natural body care products, is dropping its ambassador program due to numerous business challenges.

The company said the program, where people sell products based on commission, is no longer sustainable.

"Our economy is heading into a recession, supply chain issues are numerous, interest rates are at an all-time high and people have to make choices between necessities and desires when making purchasing decisions," read a joint statement from Adriana De Luca and Michelle Lalonde, Tiber River's owners.

"Costs are going up, but the ability people have to pay for consumer goods and services is going down."

The company will now focus on direct-to-consumer online sales but will still have a Winnipeg store.

The Winnipeg Chamber of Commerce said many of the hardships Tiber River is experiencing are being felt by the wider business community.

"Part of that ongoing experience of being a business owner, you're always looking at your model and how you operate, saying, 'how can we adapt to an ever-changing environment,'" said Loren Remillard, the chamber's president and CEO.

In a recent survey of chamber members, two thirds say they are optimistic about 2023, but the majority are expecting slower growth and a much smaller profit margin.

Remillard said many businesses were already expanding their online presence prior to the pandemic, but COVID-19 and subsequent challenges accelerated the process.

"You're now able to sell your wares all around the world, but you're also competing on the internet with every business around the world," explained Remillard. "How do you differentiate? How do you make sure you're connecting to potential audiences?"

Even with more businesses moving online, Remillard doesn't see physical stores going away.

THRIVING ONLINE

Radiance Gifts decided to give up its brick-and-mortar location last year after 27 years on Corydon Avenue.

Lisa Tjaden, the store's owner, said she made the move due to increased overhead costs and ongoing safety challenges.

"The significant cost that sort of drove us to this was actually shrinkage, the shoplifting, so that made the decision more palatable."

Now operating out of a warehouse, Tjaden said the change in business model was a success, being able to offer more items at a reduced price.

She noted the transition was still bittersweet for loyal customers.

"It was sad for them and does take a bit of adjusting. To realize it is still us and it's still the same business," said Tjaden.

She said she offers same or next-day delivery, and customers can still use the chat feature if they want to communicate with staff.

"We are still a local business. That's the perspective that is sometimes difficult for people to understand," Tjaden said. "We're still contributing to our community."

Tiber River has since shifted its focus to direct-to-consumer online sales, a trend that is becoming increasingly common in the industry.

Despite the challenges, many companies are optimistic about the future, with two-thirds of Winnipeg Chamber of Commerce members expressing optimism about 2023.

The rise of online sales has also led to the closure of physical stores, with Radiance Gifts closing its brick-and-mortar location due to costs.

However, Radiance Gifts has been able to operate successfully out of a warehouse, highlighting the potential for online sales to reach a global customer base.

The MLM industry has also seen a shift towards online sales and recruitment, with companies like Arieyl introducing apps and online platforms to facilitate sales and recruitment.

Title:

Content: Arieyl Bold Statements At The Rockstar Rising Convention

By Team Business For Home

“We have given you everything. I promised we would make your lives easier. We got the app, the Look Book, Rock for Free, the Audition. I said you could attract and retain your customers.

We have the Subscription, new products, VIPs now have referral links. I said I would help you make more money and we made it easier to rank up, elevated QV, VIP royalty residuals. It’s now up to YOU. We’ve given you all the tools, it’s now for you.”,

said Kristen Butler, co-CEO of Arieyl, on February 12th at the close of their second annual convention, Rockstar Rising 2023.

Bold statement but, coming from leaders consistently pushing the envelope in what can and should be done for those in the network marketing industry, it’s certainly a refreshing sign of what’s to come.

Arieyl’s convention weekend unleashed new ways of not only successfully running a team but also attracting others who caught the vision long ago but burned out on the old, tired ways of doing it. With the pandemic in the rear view mirror, it’s time to get network marketing back to the face to face, relationship driven example the industry thrives on.

One of the powerful tools Arieyl’s Rockstars received was the cutting edge MyArieyl app, which allows them to utilize an ever growing selection of content to connect with their community beyond the constraints of social media platforms.

Featuring Live Selling, the MyArieyl app allows potential VIPs to simultaneously engage with live content while shopping featured products. The app also allows customization of uploadable content so that Rockstars can best display their personal brand as well as highlight their favorite products with direct, clickable links to streamline the shopping experience.

Using simple tech to build relationships, the secret to the Butlers earning more than $7 million in 3 years, is best displayed in the MyArieyl app’s “Look Book”.

Though the beautifully styled, 18 page PDF can be printed out and shared, the heart behind its inception is to be cast from the app to a home television where friends are gathered to sample some of Arieyl’s 70 plus product line as well as learn more about the Unicorn company’s ground breaking opportunity.

Featuring real Rockstars from every walk of life, it’s easy for anyone to see themselves locking arms with the fast-growing industry startup.

And this is where the new “Audition” steps into Arieyl’s spotlight. By simply providing an email address, hopefuls will secure their place in a “Tour Manager’s” organization, allowing the auditioner 7 days to decide if they have what it takes to be a Rockstar.

During the audition, potential Rockstars will learn about all things Arieyl, including the Amplified Compensation Plan now with 12 ways to get paid.

Subscriptions that boast dollar for dollar Rank qualifying volume, VIP referral links which generate Arieyl Bucks loyal fans can exchange for favorite products, Royalty Residuals paid on VIP purchases regardless of their Binary position, how to Rock for Free and maximize the new Influencer program.

Know any Influencer? Arieyl has a seat at the table waiting for them! Once approved, Arieyl Influencers are provided with a link to the products their audiences will love, enhancing the experience of social selling as well as roaring into a lion’s share of commissions without building a team.

Arieyl has zero love for hyenas, picking the bones of less than 5% commissions, which is why Arieyl pays 25% to 35% based on following and the Rockstars who discover these superstars will reap the rewards.

As Travis Butler closed out Rockstar Rising 2023, he said

“If you don’t do it now, with everything we’ve given. I told you in the beginning, it’s time to quit, move on with your life. But if you want to freaking run and you want to climb that damn mountain, do it with us.”

The best is yet to come.

About Arieyl

From Food Stamps & Foreclosure to Financially Freedom. Kristen and Travis Butler, top earners in the industry decided to create an opportunity for people just like them to live out their craziest dreams.

With our fast paced, busy lifestyles we give you the flexibility to grow a successful business at your fingertips. Arieyl is more than just creating a source of income, it is about creating your best life! Getaway with our fun incentive trips and spoil yourself with prizes you’d probably never splurge on.

For more information please visit www.arieyl.com

The post Arieyl Bold Statements At The Rockstar Rising Convention appeared first on Direct Selling Facts, Figures and News.

Source:: https://www.businessforhome.org/2023/03/arieyl-bold-statements-at-the-rockstar-rising-convention/

Arieyl's app features live selling and customization options, as well as a compensation plan that offers 12 ways to get paid.

The company also pays commissions to influencers, ranging from 25% to 35%, and offers a loyalty program that generates rewards.

Other companies, like Nu Skin, have seen a surge in business during the pandemic, with the company's stock tripling in value from March 2020 to June 2021.

Nu Skin's success can be attributed in part to its large customer base in China, which accounts for over 20% of the company's revenue.

However, not all MLM companies have been successful, with some experiencing significant declines in revenue and stock value, such as Avon and Tupperware.

Avon's stock value fell from $30 to $3 over a 10-year period, while Tupperware's stock value dropped over 90% in just five years.

The decline of these companies has been attributed in part to their shift towards recruiting salespeople and selling inventory, rather than focusing on direct sales.

In contrast, companies that have adapted to the online shift and focused on direct-to-consumer sales have been more successful, highlighting the importance of innovation and adaptability in the MLM industry.

The use of cloud platforms and MLM software has also become increasingly important, with these tools providing scalable and flexible solutions for companies.

Title:

Content: Multi-level marketing tasks can be done with careful analysis and proceeding with through reliable sources of action plans. MLM Software is designed for multi-level marketing and boosts up the ranking and profits online. Grow your business with an authentic and reliable source of action plans and approaches from smart choices according to the priorities and interest levels. Financial and investment issues can also be done careful analysis and to proceed with careful steps and according to the priorities and the inspirational levels to follow the useful guidelines. There are varieties of ideas and useful strategies that can be assistive and fast result printed to find the best and perfect possible solutions according to the needs and inspirational levels.

MLM software has become one of the ideal choices to get benefits and explore unique ideas for small-scale and large-scale business setups. People who are interested in multilevel marketing have the best option to contact a flexible cloud platform for MLM companies that have Atlantic and genuine resources regarding your business needs. Cloud platforms always facilitate the people through their MLM software that can be assistive and helpful for business communities to get instant benefits according to their desired goals there are different package plans regarding monthly subscriptions customers on regular basis success stories successful projects and regarding business concerns.

There is no doubt that Cloud Platform has a great future and great aspects that have some values and that can be chosen according to the needs and priorities levels of the people. To provide scalable and flexible cloud solution is the main priority to use the best opportunity to proceed with a simple and reliable source of action plans. To manage their network relationship, there are different strategies and useful inspirations that have some values and that can be considered important to get instant benefits with easy and quick accessibility resources through genuine resources.

MLM business scenarios are of different types that can be assistive and have versatile feature plans to get ideas and useful inspirations to approach from easy and smart choices. Proceed with careful steps and make sure which type of strategies and the parameters are the best to approach from easy and smart choices. Your MLM enterprise and landscape can be set according to the priorities and the interests levels of the people. Show your best confidence and interest levels to precede with easy and simple accessibility resources according to the needs and priorities levels.

Get the best chance and useful ideas that have some values and can be approached easily with smart choices according to the needs and inspirational values. There is an opportunity to use the most modern and flexible cloud platform through easy and simple accessibility plans with genuine resources according to the needs and inspirational levels. Show your best competencies and the skills that have some values and that can be helpful to approach from instant responding resources through fast and quick accessibility plans. Find the best and perfect possible solution according to the needs and priorities levels of the people.

Enjoy multitasking and multimode Marketing software that can be helpful to enable the business communities to achieve their objectives start. There are different types of Strategies and useful in inspirations that can be helpful for business communities to set their targets and to market their plans with the help of a can take and reliable sources proceeding through simple and online accessibility resources regarding business sales and volume can be helpful to take right time decisions and to implement strategies that can be helpful to get instant benefits.

Approach your network marketing sources through easy and simple accessibility of MLM software that has a user-friendly interface. Powerful cloud platforms have real-time value and have the ability to grow your business as per your needs. There are no hard and fast rules applied to assess the software because it's user-friendly and has an easy setup to quickly start configuration regarding your business needs. There is a payment integration plan which is easy and has an open architecture Concept for others.

MLM Software features explore the ideas and useful inspirations that have some values to access from easy and smart choices. Powerful management platforms have user-friendly platforms to get benefits from easy and simple accessibility resources with the easy and simple sources of acknowledgment. Grow your business and set your targets that can be helpful for you to proceed through genuine sources and that can be helpful to take full initiatives regarding online accessibility source of action plans.

ⓒ 2021 TECHTIMES.com All rights reserved. Do not reproduce without permission.
Tags:

These platforms have real-time value and offer user-friendly interfaces, making it easier for companies to manage their online sales and recruitment efforts.

Overall, the shift towards online sales and recruitment in the MLM industry has presented both challenges and opportunities for companies, and those that have been able to adapt and innovate have been more successful.

The key psychological factors that contribute to an individual's decision to join a multi-level marketing (MLM) company include promises of financial gain and personal development.

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.

MLMs often target individuals on social media platforms like Facebook and Instagram, using manipulative tactics to recruit and retain salespeople.

Certain demographics, such as those in the Church of Jesus Christ of Latter-day Saints, may be more susceptible to MLM recruitment due to emotional connections and sense of community.

People are drawn to MLMs due to promises of unlimited income, with companies like Avon and Tupperware being cited as examples of direct selling.

However, most MLM participants lose money due to high churn rates, with 94% of Tupperware's party planners earning less than $12/week.

The top 1% of MLM participants receive most commissions, while the majority of salespeople earn little to no income.

MLMs often prioritize recruiting over selling actual products, leading to debt and financial hardship for salespeople.

Companies like LuLaRoe have been accused of being pyramid schemes, selling empty dreams and causing financial losses for many consultants.

Title:

Content: Living

How LuLaRoe cost some women their homes, cars, savings, and marriages

In 2015, Roberta Blevins was a busy hairstylist, traveling between San Diego and Los Angeles for work — and struggling to find balance between her career and co-parenting a four-year-old and nine-year-old.

Then she heard about LuLaRoe from a Facebook mom’s group. The California clothing company — known for its brightly patterned leggings and dresses — offered sales consultants a way to “earn full-time income for part-time work” from the comfort of their own homes.

For Blevins, it sounded like a dream come true.
 “I could sell leggings,” Blevins, now 40, remembers thinking. “It’s so easy. Everyone wears them.

“What I know now is that it was a scam,” she told The Post.

From 2014 to 2019, LuLaRoe leggings were pervasive on social media — slavishly peddled by women seeking the holy grail: setting their own hours and working from home, with the promise of big money. It was a classic multi-level marketing set-up — or, as the Washington State Attorney General’s Office claimed in a 2019 suit against the company, a “pyramid scheme.”

It’s now the subject of “LuLaRich,” a four-part docuseries streaming on Amazon Prime that offers a look inside the brand’s explosive growth and how it led to fraud accusations, lawsuits and, ultimately, consultants losing money, cars, homes and even their marriages.

Directors Jenner Furst and Julia Willoughby Nason also made “Fyre Fraud,” a Hulu documentary about the notorious 2017 musical festival, and say the subjects have a lot in common.

Both stories are filled with “delusions of grandeur — and this type of incessant entrepreneurship that is promoted from influencers to [strangers] on Facebook,” Nason told The Post.

By September  2017, just a little over a year after she signed on, Blevins — who hosts the podcast “Life After MLM” (as in multi-level marketing schemes) — had seen the light. LuLaRoe was a pyramid scheme selling empty girl-boss dreams. She quit.

“There were red flags from the beginning,” Blevins said.

LuLaRoe sprang from humble beginnings. Around 2012, DeAnn Stidham — who previously organized clothing parties for retailers — started selling homemade maxi-skirts from the trunk of her car.

Within five months, the vivacious Californian had moved 20,000 pieces, she says in the docuseries. In 2013, DeAnn met a woman in Utah who said she could unload a bunch of the skirts to her friends.

DeAnn called her husband, Mark. “[I] said, ‘What can I do to make it valuable to her?’” she says in the docu-series. His advice: “You sell them to her … and she gets to make double the money [selling them to her friends].

“It was instant cash and instant opportunity,” she added.

That woman became the first sales consultant for LuLaRoe, which is named for  the Stidhams’ granddaughters Lucy, Lola and Monroe.

While old-school multi-level marketing brands like Tupperware or Amway were all about women — often, stay-at-home moms — hosting parties to push product and recruit other women as sales people under them, recent counterparts such as the skincare line Rodan + Fields  rely on social media. Even the actress Ione Skye got into multi-level marketing a few years ago, selling Doterra essential oils with her singer husband Ben Lee and promoting them on Instagram and YouTube.

Consultants took to Facebook to advertise LuLaRoe leggings parties and flaunt the financial freedom, big homes and fancy cars their new gig provided.

The message spread like a wildfire. By 2016, LulaRoe had raked in more than $70 million.

It worked like this: Once a woman’s — or, sometimes, a husband-and-wife team’s — application was accepted, they paid the start-up costs (as much as $15,000) and started hustling the clothes. Typically, they marked the leggings up to $25, after having bought pairs for $10.50 each wholesale.

When Blevins joined in February 2016, buying in for an initial fee of $9,000, there was a leggings shortage — so she had to shell out more money to buy them off other consultants.

At the time, eager wannabe consultants were waiting anywhere from 90 to 100 days for approval because the company didn’t have enough manpower to keep up with demand.
LaShae Kimbrough, 43, was part of the onboarding team. She’d collect new consultants’ money — which desperate women raised by any means necessary, including taking out loans, opening zero-interest credit cards and even selling their breast milk.

Kimbrough 43, told The Post that her team was bringing in at least a $1 million dollars a day.

Consultants were compensated for recruiting new sales people to their teams. They received a cut of onboarding costs paid by their protégés who, then, brought in people under them.

In the docuseries, married couple Tiffany and Paul Ivanovsky said that, at one point, they had 1,100 people on their team and raked in anywhere from $22,000 to $42,000 a month in bonuses over the course of a year.

While the gospel of LuLaRoe spread coast to coast, the company at large was flying by the seat of its pants. The Stidhams, who have 14 children between them, installed their inexperienced offspring in executive roles.

“Did any of them have a clue how to run a company of this size? No,” former employee Derryl Trujillo says in the film.

Blevins grew skeptical when she started receiving shipments with damaged leggings — including wet pairs that she described smelling like “chlorine and death.” On Facebook, more customers were posting about how their LuLaRoe clothing was ripping on the first wear.

Sources in “LuLaRich” say it was emblematic of larger issues  — like inexperienced leadership and growing too big too fast, which led to shoddy production.

“It was like flying the plane while you’re still building the plane. And you don’t even know how all the pieces of the plane work. And you don’t even know how to fly the plane. You’re not a pilot,” said Sam Schultz, DeAnn’s nephew and former employee. He was hired to produce company cruises and retreats where acts like Katy Perry and Kelly Clarkson performed.

On one cruise for top sellers, Blevins complimented a fellow consultant on how good she looked in a swimsuit. “She said she had gotten ‘the weight loss surgery’ in Tijuana,” Blevins recalled. “She called over a mentor leader who told me all about it.”

According to former consultant Courtney Harwood who appears in “LulaRich,” DeAnn pressured top performers to travel to Tijuana and undergo gastric bypass surgery performed by her own doctor.

For Blevins, who was growing wary of a culture that was similar to religious fanaticism, it was another reason to defect. “I was like, ‘How do I get away from this conversation? Do you really think I need [the surgery]?’. That whole trip was very culty.”

Kimbrough believes DeAnn was feeding off other women’s money, hard work — and their adulation. “[DeAnn] was able to come up with a recipe to have people groveling at her feet. I give them credit for it because it happened for a long time, and they made damn good money.”

Eventually, there were more consultants than interested buyers. The market was too flooded  to turn a profit.

And the lawsuits had started pile up — numerous ones over copyright infringement, claiming LuLaRoe stole artwork to print on leggings. A 2017 class-action lawsuit challenged the company’s return policy, with customers alleging the leggings were poor quality. The brand was also sued by a former supplier  over unpaid bills

As morale started to wane, the brand implemented a policy where consultants could send back stock for a  refund of their wholesale costs. The change led to an exodus.  “I believe LulaRoe paid over a hundred million in refunds during that time,” Blevins said.

She added that the cancellation of that policy, in late 2017, led to her breaking point because she couldn’t handle people on her team saying they were going to lose their homes if they couldn’t get refunds.

In 2019, the attorney general of Washington state filed a suit against LuLaRoe saying it was a pyramid scheme that bilked thousands of people out of millions of dollars. The case was settled in 2021, with the brand paying $4.75 million.

When all was said and done, Blevins shelled out over $78,000 for inventory and sold about $83,000 — a $5,000 gross profit. She earned about $65,000 in bonuses for signing up other women, something she now regrets. But she also took out a loan to buy the clothes and still has credit-card debt.

Harwood, who was one of the top consultants, had purchased a new house and matching Chevy Tahoes for her and her husband — all to keep up appearances and look successful on the LuLaRoe food chain, and because she believed the money would keep rolling in. When she left in 2018, she had to file for bankruptcy, losing her home, vehicles and even her marriage.

“I thought I was better than everyone else,” she tearfully says in the series.
Consultant Ashleigh Lautaha, who left the company, says in the doc that she got so wrapped up in the LuLaRoe culture that she only had time for either her family or her job. Her marriage broke up.

“The company got bigger than [the Stidhams], and what they could keep up with,” co-director Willoughby Nason said of the couple. “They were putting out fires left and right.”

But she also sees how desperate women got caught up in the drive for success.
“There was a corrosive element of greed that was beyond them.”

LuLaRoe consultants paid up to $15,000 in start-up costs and earned money by recruiting new salespeople, but many lost money, homes, and marriages due to the company.

QNet, another MLM company, targets people with financial difficulties and uses brainwashing techniques to exploit vulnerabilities.

Title:

Content: HI, {{username}}
Manage account
Change password
HEADLINES
{{headlineCount}} new {{headlineCount = = 1?
'update': 'updates'}}
+ MORE HEADLINES
QNet victims: "We ate the beatings...
Watch what happens to us! ”
30.
NOVEMBER
2023.
A
+
A
- Ah!
Print
Email
Email
A
+
A
- Ah!
Karen Abdel Nour -
In the Shouf, he mortgaged his house and his car.
At the end of the day, he sold his jewelry.
In the Bekaa, the conflict within the family flared up after one of its members involved the entire family.
One of the men who took the oath of divorce against his wife in one of the villages after she borrowed without his knowledge and drowned him in debt.
The chaos also reached clerics and members of the security forces (former and current) after some of them fell into the trap.
What is the story of QNet, which is covered up by marketing activity to promote a fraudulent business?
This is the testimony of one of the victims: “Young people are sticking with you day and night until you get $3,000 and see how your life changes.
And if you don ’ t have them, it ’ s simple.
They convince you in a professional way that you recover within a month, and take advantage of your financial situation.
Before you start, you are forced to attend conferences aimed at brainwashing you with religious rituals and stimulating positive energy, and show you the testimonies of people who have become above the wind after they were underground, and of course you discover two dimensions that it is all an illusion.
I mean you want to miss more than 30 thousand dollars on the company to recover your money, by convincing people in your role to join the network, provided that they are close to the closest so that you do not think one day you will withdraw.
When you have eaten, you have two choices: You have left for the sake of those who have worn out with you, or you have a black face.
I ate the beating and pawned all my jewelry and I don & apos; t know what to do
Be careful what happens to me. ”
That's how the trap is set.
Zahi (pseudonym) also tells us what happened to him: “I was a rogue in difficult circumstances and my son was going to miss college.
My co-worker kept asking me if I could arrange a grant.
Suddenly Shifto offered his resignation and started traveling and wearing brands and driving a new car.
I asked him once about his job, he said, “Family business. ”
what do you say you come with me, I & apos; m waiting for a scholarship from here and there
You get $3,000 and take 20 nights at a hotel. ”
Last March, after I was unable to secure the grant, I agreed on the condition that I know what the nature of the job is and if there are taboos, ” he replied: “If you don ’ t trust me?
I sold my car, I mortgaged things from my house, and I took out a loan.
we will find the second day in one of the hotels in the capital until they handed over the money, and when he explained to me about the job, I felt that it was a haram job and told him I won & apos; t enter
but they reach a stage of experience they will tell you and you are happy
Then I missed a conference that was attended by more than 350 people, most of them Syrians and some of them Iraqis.
They presented testimonies of people and cited Quranic verses to convince us that work is halal, and told us about the dream car and the travels of life.
And they stopped us from clicking about the company, and we only get information from us directly...
I didn & apos; t finish even though they insisted I miss my brother and friends to get my money back
And I lost the money even though I could have legally refunded it within 7 days, but they hide it.
“The hotel was built with a roof over its head. ”
Sarah (pseudonym) also did not hesitate to tell us what she experienced.
“They took my mobile phone from me, opened it and started asking me about every name in my name.
who is he and what is he doing and what is his situation
And this is how they plan to control it.
They take you on the Circle of Influence, which means that you are hunting someone close to you.
They asked me to call some people and who I was until the time you told me.
And I have 48 hours to get two people, one on my right and one on my left, and this is the only way to start paying back my money...
You call people and talk normally and ask them about their situation, and say that you have started a new job, and they hear that the job changed my life, but on condition that you do not give details about the nature of the work.
and they come back a few times and convince them to get the money and join the network
And when we meet, the appearances must be overwhelming, from the way of dress and the people around them, and they become to give me a teacher.
All of this is part of the trap that they set up and forced others to sign it, or else they will fly the Egyptians. ”
About QNet
It is a foreign company and one of the Pyramid Scheme (Pyramid Scheme) marketing companies, banned in many countries, which lurks behind the cover of legally legislated network marketing, in order to circumvent the law.
The company ostensibly carries out some kind of marketing, but in reality it uses certain products and offers (watches, stones to ward off negative energy, hotel stay), to cover up subsequent frauds.
Its danger lies in targeting people who are inexperienced and inexperienced, or who suffer from financial difficulties, and it tempts them to profit quickly.
As for the beneficiaries, they are at the top of the pyramid and make huge profits.
The fact that the company's business is mainly based on secrecy and oral marketing, it does not pay any taxes to the State.
While it is active in places such as Dubai, Turkey and Malaysia, as well as in countries where money laundering is active, other countries, such as Saudi Arabia, India, Togo and Nigeria, have banned it.
Involving victims and turning them into perpetrators is one of the most important goals.
In the first session, the marketer deliberately reminds the “victim ” that she is out of shape and that a world of dreams is waiting for her to pull her out of her bitter reality.
All of a sudden, she is offered access to the network.
The conditions are simple: securing at least $3,000 in cash for one of the products mentioned, which in fact does not exceed hundreds of dollars; in addition to recruiting two people, one on the right and the other on the left, to convince them to enter the network, and so on.
The profit comes tirelessly through the “victim ” receiving $300 for every addition to the network.
Huge profits for the head of the pyramid, then, and crumbs for the victims.
Lebanon in the Goal
On April 27, 2016, the General Directorate of Internal Security Forces – Public Relations Division announced that, as a result of close follow-up, the Beirut Judicial Detachment in the Judicial Police Unit was able to arrest people who were carrying out sorcery operations in one of the cafes of Verdun, all of them Syrian affiliates.
They were also seized with a laptop, necklaces, wristwatches, positive energy necklaces, and notebooks and books promoting QNet.
The gang soon "spawned" again with other people and under a different cover.
However, ironically, the company was legally registered in Lebanon on 16 / 03 / 2017 under the number 2884, taking the name QNet Limited.
Strange and wondrous!
The company ’ s activity here subsided for years until it re-emerged as the economic crisis deepened, taking advantage of the many Lebanese need for additional income.
The members of the “gang ” relied on the lack of awareness of some, especially in closed and crowded areas such as in some religious environments, mountain areas and clubs.
How do they succeed in their goals?
For starters, they practice a kind of brainwashing on their victims for four days at a time, intensifying meetings and contacts and turning the focus of the supposed “victim ” thinking.
They then exploit vulnerabilities according to the reality of each of the victims, until they agree to enter the pyramid.
“Military ” and religious leaders.
Those in the company ’ s orbit did not just create their own secret society, blocking the truth of their work from the “victim ” until they were caught, that is, joining the network and paying the money.
But it is remarkable that they have increasingly penetrated Lebanese society in all its sects, regions and categories under the slogan: “Have positive energy and do not give up.
You finish your race today, and you only finish it at the finish line. ”
They went so far as to “hunt ” a number of members of the security forces — some of them who left their corps and became more involved, and others who are active and continue to serve.
There are clerics (in more than one denomination) who ended up taking off their religious uniforms and engaging...
Then travel in luxury cars and around the world.
The head of the Druze monotheistic sect, for example, recognized the seriousness of the situation, especially after luring members of some “religious ” families into the trap.
She warned in a statement of the danger of being encouraged to join QNet, and that any dressed person who joined it would be outside the religious rules that are based on the fear of God and virtue and prohibit dealing in falsehood and harming others.
Here, there are those who see the need for action by other religious authorities, especially since the company ’ s members are spread out across different environments.
I'm the victim...
I'm the executioner.
Followers gather that QNet ’ s activity includes fraudulent acts that fall under the crime of money laundering.
In a quick economic reading, there is no product for sale, since the first offers – watches, water filters, etc. – are merely a way to justify the payment of the “victim ” in thousands of dollars, when the aim is to catch them and bring them into the pyramid.
The talk of quick and easy profit contrasts with the simplest principles of transparent work, which is difficult, and may be impossible, to make large profits in a short time.
In this context, lawyer Imad al-Khazen, in an interview with Nidaa al-Watan, points out that what is happening is illegal, but the crime of fraud must be proven.
In the first stage, the “victim ” is provided with the bait to be inserted into the pyramid and then turned into a broker to implicate others.
However, there is nothing to prevent the intervention of the Financial Public Prosecution – as well as the Cybercrime Bureau – to prosecute them.
He called on those who signed into the company ’ s window to file complaints within the legal deadline for the Public Prosecution to act on them.
Someone was caught in the trap without understanding its subtleties.
Some understood the goals but were discouraged by greed.
There are also those who remain convinced of the legitimacy and legality of the business simply because QNET is a global foreign company.
But in any case, we are faced with a recipe ready to turn overnight into a victim and executioner at the same time.
Home Call
MORE ABOUT
ADVERTISE HERE
JUST IN
TRENDING
HEADLINES
{{headlineCount}} new {{headlineCount = = 1?
'update': 'updates'}}
+ MORE HEADLINES
TRENDING
• online ordering system for restaurants
• The best online ordering systems for restaurants
•

QNet has been banned in several countries, including Saudi Arabia and India, due to its fraudulent activities.

The MLM business model has been criticized for its lack of transparency and misleading information, contributing to an individual's decision to join.

Some MLM companies have shifted to a simple direct sales model without a recruitment component, while others have closed down due to lawsuits and financial difficulties.

Trades of Hope, an MLM that works with artisans globally, has been criticized for its "White savior complex" and use of

Trades of Hope, an MLM that works with artisans globally, has been criticized for its "White savior complex" and use of

Trades of Hope, an MLM that works with artisans globally, has been criticized for its "White savior complex" and use of