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, indicating a surge in the MLM business model in recent years.

Wellness and nutraceutical products accounted for 73.5% of the industry's overall turnover in 2022-23, showing a shift in consumer preferences towards health and wellness products.

The number of active direct sellers in India increased to around 86 lakh in 2022-23, from 84 lakh in 2021-22, demonstrating a growth in the number of people involved in direct selling.

LifeVantage Corporation, a multi-level marketing company, reported an adjusted EBITDA increase of 289% year-over-year to $3.1 million in the second quarter of fiscal 2024, indicating a surge in profitability.

However, some MLM companies have experienced a decline in profits, with Avon's stock value falling from over $30 to just over $3 between 2000 and 2020, and Tupperware's stock value dropping over 90% in the last 5 years.

The majority of MLM participants, around 90-99%, lose money, and the business model is designed to favor the top 1% of participants, raising concerns about the sustainability and fairness of the MLM model.

The global direct selling establishments market is projected to reach $1,125.52 billion by 2027, with a compound annual growth rate (CAGR) of 10.2%, indicating a growth in the overall direct selling industry.

Key players in the direct selling establishments market include Herbalife, Amway, Mary Kay Inc., Infinitus, Tupperware, Vorwerk, Natura, JoyMain, DXN, and Belcorp, highlighting the diversity of companies involved in the direct selling industry.

The COVID-19 pandemic has had a significant impact on the direct selling industry, with some companies experiencing a surge in sales and others facing significant challenges, highlighting the need for companies to be adaptable and resilient in the face of uncertainty.

Some MLM companies, such as Educational Development Corp. (EDUC), have seen significant growth during the pandemic, with a doubling of its consultant count, while others, such as Optavia-Medifast, have experienced a decline in revenue.

The MLM business model has been impacted by technological advancements, such as artificial intelligence and e-commerce, which have presented both opportunities and challenges for MLM companies.

Successful MLM companies have implemented strategies such as pushing for tighter regulation and clarity from the government, and distinguishing themselves from fraudulent schemes through regulatory amendments, to adapt to changing market conditions and regulatory environments.

The psychological factors that contribute to the attractiveness of MLM companies to potential workers include the promise of financial independence and success, which can be a powerful draw for individuals, especially those looking to start their own businesses.

MLM companies often present themselves as fantastic opportunities for women, particularly those looking to start their own businesses, and use social media to promote a lavish lifestyle and create the illusion of success.

The demographic groups most vulnerable to the recruitment tactics used by MLM companies include women, particularly those interested in social justice and ethical consumerism, as well as individuals who are looking for flexible or supplemental income opportunities.

Young women, especially those looking to start their own businesses, are also a demographic group that is vulnerable to the recruitment tactics used by MLM companies like LuLaRoe.

Individuals who are seeking financial independence, a sense of community, and a supportive network are more susceptible to these tactics.

The common characteristics or circumstances that make individuals more susceptible to these tactics include a desire for a lavish lifestyle, a need for approval and validation from others, and a willingness to please and seek approval from authority figures.

There is no mention of any MLM companies that have closed or transitioned to a direct sales model since 2020 in several of the provided documents.

Avon and Tupperware, once iconic direct selling companies, have transitioned to a multi-level marketing (MLM) model, but this change occurred before 2020.

Some direct sales companies have transformed their business models in recent years, including changing names, shifting to e-commerce, micro-business, courses, and investment, but it is not specified if these companies were previously MLMs.

The MLM business model has been criticized for its potential to be used as a pyramid scheme, with the main source of revenue coming from salespeople buying their own products, rather than from sales to end-users.

The success of an MLM company depends on various factors, including the quality of the product, the effectiveness of the sales strategy, and the ability to recruit and retain salespeople.

Network marketing can provide an opportunity to build a business with minimal initial cash investments, and some MLM projects do not require any initial investments.

The use of psychological manipulation and persuasion techniques by MLM companies can have serious consequences for individuals who become involved, including financial loss, damage to their relationships and reputation, and a decline in critical thinking and intelligence.

MLM companies often exhibit leadership traits known as the Dark Triad, which includes narcissism, psychopathy, and Machiavellianism, and these traits can create a toxic environment detrimental to employees and the organization.

The consequences of hiring someone with Dark Triad traits can be significant, including poorer job performance, increased counterproductive work behaviors, and negative perceptions from others.

Excessive flattery and passive aggression are methods of manipulation used by some MLM companies to influence individuals, and recognizing manipulation is the first step in resisting it.

The use of social influence and social identity by MLM companies can lead to a loss of individual rationality and autonomy, as people transfer their power of thinking to the media and capital behind them.

New media and technology play a significant role in shaping the "net red aesthetic" phenomenon, by creating new needs and desires, and leading people to enter the scene of its setting in the illusion of net red aesthetic.

The "net red aesthetic" phenomenon can have negative implications for individual well-being and financial stability, as people may become overly focused on pursuing uniform aesthetic standards and lose sight of their own independent thoughts and desires.

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, indicating a surge in the MLM business model in recent years.

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'.

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    Stories you might be interested in

Wellness and nutraceutical products accounted for 73.5% of the industry's overall turnover in 2022-23, showing a shift in consumer preferences towards health and wellness products.

The number of active direct sellers in India increased to around 86 lakh in 2022-23, from 84 lakh in 2021-22, demonstrating a growth in the number of people involved in direct selling.

LifeVantage Corporation, a multi-level marketing company, reported an adjusted EBITDA increase of 289% year-over-year to $3.1 million in the second quarter of fiscal 2024, indicating a surge in profitability.

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LifeVantage Corporation (NASDAQ:LFVN) Q2 2024 Earnings Call Transcript

LifeVantage Corporation (NASDAQ:LFVN) Q2 2024 Earnings Call Transcript January 30, 2024

LifeVantage Corporation isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's Conference Call to Discuss LifeVantage's Second Quarter of Fiscal 2024 Results. [Operator Instructions] Hosting today's conference will be Reed Anderson with ICR. As a reminder, today's conference is being recorded. And now I'd like to turn the conference over to Mr. Anderson. Please go ahead, sir.

Reed Anderson : Thank you. Good afternoon, and welcome to LifeVantage Corporation's conference call to discuss results for the second quarter of fiscal 2024. On the call today from LifeVantage with prepared remarks are Steve Fife, President and Chief Executive Officer; and Carl Aure, Chief Financial Officer. By now, everyone should have access to the earnings release, which went out this afternoon at approximately 4:05 p.m. Eastern Time. If you have not received the release, it is available on the Investor Relations portion of Life Image's website at www.lifevantage.com. This call is being webcast, and a replay will be available on the company's website as well. Before we begin, we would like to remind everyone that our prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions.

These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties, including those identified in the Risk Factors section of LifeVantage's most recently filed Forms 10-K and 10-Q. Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis. Management believes these financial measures can facilitate a more complete analysis and greater transparency into LifeVantage's ongoing results of operations, particularly when comparing underlying operating metrics from period to period. We've included a reconciliation of these non-GAAP measures with today's release.

This call also contains time-sensitive information that is accurate only as of the date of the live broadcast, January 30, 2024. The LifeVantage assumes no obligation to update any forward-looking projections that may be made in today's release or call. Now I will turn the call over to Steve Fife, the President and Chief Executive Officer of LifeVantage.

Steve Fife : Thanks, Reed, and good afternoon, everyone. Thank you for joining us today. During our second quarter, we continued to advance our strategic transformation and execute well against the core elements of LV360. I significantly improving profitability was a key takeaway from our latest results. Adjusted EBITDA increased 289% year-over-year to $3.1 million. In the second quarter, and our adjusted EBITDA margin was up 450 basis points to 6%, reflecting ongoing efforts to strengthen our core business and drive productivity. We are very pleased with the trends we are seeing in revenue for consultants. In each of the last 4 quarters, which coincides with the introduction and implementation of several key LV360 initiatives, our revenue per consultant has grown at a solid double-digit rate.

For example, in the second quarter, revenue per consultant increased over 13% year-over-year. While total revenue in the second quarter were down slightly versus last year, robust demand for TrueScience, liquid collagen, coupled with the positive trends we are seeing in consultant productivity and our performance in markets like Japan, where Q2 revenues were up 3.9% on a currency-neutral basis, give us a high degree of confidence in our long-term growth outlook. Revenue attributable to liquid collagen, including the Healthy Glow Essential Stack, which bundles liquid collagen with Protandim Nrf2 Synergizer exceeded $13 million in the second quarter, an increase of over 44% versus a year ago. In the Americas region, where the product was first introduced in June 2022, we continue to experience strong growth with sales up approximately 13% on a year-over-year basis.

In the U.S., consultant penetration of liquid collagen rose to 31.6% in the quarter up from 27.2% in Q1 with a continued focus on Healthy Glow Essential Stacks. Customer penetration was 27.2% in the U.S. during this Q2 compared to 28.1% in Q1 and 26.9% in Q4 of fiscal '23. International sales of liquid Collagen accounted for approximately 22% of Q2 liquid collagen revenue, mostly reflecting results from Australia, New Zealand and Japan, where the product was first introduced in March 2023. In late September 2023, we expanded the international launch of liquid collagen with the initial rollout into Mexico, and this was followed by introduction to the Philippines and Canadian markets in November. We are also pleased with the recent progress on other new innovative products.

For example, early in the second quarter, we introduced TrueScience True Renew daily firming complex, a clean cosmetic retinal alternative that is proven to tackle 11 visible signs of aging. Importantly, this unique product is a perfect complement to Protandim Nrf2 Synergizer and TrueScience liquid collagen, further building on the power of our core positioning around being the activation company, along with creating momentum for our TrueScience activated skin care line. A couple of weeks ago, we held our annual global kickoff event where we unveiled the launch date for the next phase of LV360 along with new sales incentives and additional consultant tools. Rise era was announced as a theme for the year with a strong call to action to consultants to rise and build on the strong foundation LV360 has laid for the future.

We've streamlined and simplified the message for consultants to drive growth and success by focusing on 3 basic behaviors of network marketing, enrolling, retaining and rank advancing for [ERA] era. This focus is supported by a new Rise Eera incentive that enables consultants to earn enticing lifestyle and business prices including shareable items like luggage and travel vouchers based on achievement in enrolling, retaining and advancing. Cape Town, South Africa, including an African safari was revealed as the first-ever executive destination trip under the new Evolve compensation plan. Qualification criteria for this once-in-a-lifetime trip is based on era behavior and achievements through the year with travel scheduled for February 2025. New consultant tools were also launched at our global kickoff event, including the new Evolve Possibilities pathway, which emphasizes 4 pivotal consultant ranks within the Evolve compensation plan and what is unlocked at each stage to inspire and motivate rank advancements.

Our major events continue to be an important element driving consultant behavior and capitalizing on the strength of our broader LifeVantage community. The global kickoff in January, set the tone for calendar 2024, and we will build on this excitement with our upcoming in-person Momentum academies in March. The next phase of our LV360 transformation will commence in a few days at the start of February, Evolve our contemporary compensation plan and reward circle our unique customer loyalty program, we'll be launching in Mexico, Canada and Europe. Recall, we first launched these programs in the U.S., Japan, Australia, New Zealand and March of 2023, as part of LV360 and they have been key elements of our success over the past year. In addition to our Rise Era initiatives in our Phase II launch, we've established an optimization team to lead ongoing strategic efforts to build our active account base.

The team is focused on 3 areas: first, ensuring our enrollers, the group of consultants actively enrolling consultants and customers each month is increasing, arming our enrollers with a strong dollar per hour earnings potential message, so the business is seen as an enticing business opportunity for those looking for a side hustle. Second, that there is a clear replicable path to enrolling someone in your first 30 days as a consultant. And finally, that we are making it easy for our rating product fans to share their incredible results and our unique product story in new, innovative and compelling ways. We will be updating you on the progress of these optimization efforts in coming quarters. In summary, we are pleased with progress on our strategic transformation, LV360.

Our improved outlook for profitability in fiscal 2024 despite a still challenging top line environment underscores our confidence in the trajectory of key initiatives as well as the strength of our competitive position. Engagement levels remain high across the entire organization. And we look forward to our business momentum continuing to build as we expand our efforts across all our international markets over the next several quarters. We remain focused on executing our plan while remaining agile to ensure we are optimizing the key elements of LV360 to drive sustainable, profitable growth and value for shareholders. Capital allocation continues to be a key area of focus. And during the second quarter, we remain steadfast in our balanced approach of returning excess capital to shareholders through dividends and share repurchase.

Carl will cover this in more detail in his section. Now let me turn the call over to Carl Aure, our Chief Financial Officer, to review our second quarter financial results. Carl?

Carl Aure : Thank you, Steve, and good afternoon, everyone. Let me walk you through our second quarter financial results. Please note that I will be discussing our non-GAAP adjusted results. You can refer to the GAAP to non-GAAP reconciliations in today's press release for additional details. Second quarter revenue was $51.6 million, down 3.8% on a year-over-year basis and foreign currency negatively impacted revenue by $0.2 million. Excluding the negative impact of foreign currency fluctuations, second quarter revenue was down by $1.8 million or 3.4% as compared to the prior year period. Revenue in the Americas region decreased 1.6% to $39.1 million in the quarter, primarily driven by a 9.5% decrease in total active accounts, partially offset by higher average revenue per account, resulting from changes in product mix due to continued penetration of our TrueScience Liquid Collagen product.

Revenue in our Asia Pacific and Europe region decreased 10% to $12.6 million in the quarter, driven by an 18.2% decrease in total active accounts the closure of our e-commerce business in China and the negative impacts from foreign currency exchange rate fluctuations. Excluding the negative impact from foreign currency fluctuations, second quarter revenue in our Asia Pacific and Europe region was down 8% as compared to the prior year period. The foreign currency impact continues to be driven by fluctuations in Japan, accounting for $300,000 of the impact. Adjusting for this impact, revenue in Japan increased 3.9% on a constant currency basis in the quarter as compared to the prior year period. Gross margin was 78.6% for the second quarter compared to 78.1% in the prior year period.

The increase in gross margin was primarily due to changes in sales mix along with lower shipping related expenses in the quarter, resulting from changes in shipping methods. Commissions and incentive expense in the second quarter decreased $1.8 million year-over-year. As a percentage of revenue, commissions and incentive expense decreased 180 basis points to 42.1% versus 1 year ago levels, which was primarily driven by changes in sales mix, impacts from our Evolved compensation plan as well as the timing and magnitude of promotional and incentive programs. Non-GAAP adjusted SG&A expense was $17.4 million compared with $19.4 million in the prior year quarter and was down 230 basis points as a percentage of revenue to 33.8%. Adjusted non-GAAP operating income was $1.4 million, compared with a loss of $0.9 million in the prior year period.

Adjusted non-GAAP net income was $1.4 million or $0.10 per fully diluted share in the second quarter, compared to adjusted net loss of $0.8 million or $0.07 per fully diluted share in the comparable period last year. We recorded a tax benefit of $0.5 million in the second quarter of 2024 compared to $17,000 in the prior year period. The increase in tax benefit was primarily due to changes in taxable income and the favorable impact of discrete items. We expect that our effective tax rate will fluctuate slightly during the remainder of fiscal 2024 as the impact of discrete items and other permanent differences are recognized. Adjusted EBITDA for the second quarter was $3.1 million or 6% of revenues compared to $0.8 million and 1.5% in the same period a year ago.

Please note that all of the adjustments from GAAP to non-GAAP that I discuss today are reconciled in our earnings press release issued this afternoon. We ended the second quarter in a strong financial position, with $17.3 million of cash and no debt. We also continue to maintain $5 million of availability under our revolving line of credit. Capital expenditures totaled $0.5 million in the second quarter. We anticipate total capital expenditures for fiscal 2024 to be approximately $2.5 million. In addition to maintaining a strong balance sheet, we continue to focus on our capital allocation priorities to drive value for stockholders. During the second quarter, we used approximately $1.9 million in cash to repurchase approximately 288,000 common shares under our share repurchase authorization.

And through the first 6 months of fiscal 2024, we have used approximately $2.7 million to repurchase approximately 433,000 shares. As of December 31, 2023, there is $24.2 million remaining under our stock repurchase authorization. We also announced a quarterly cash dividend of $0.035 per common share of stock or approximately $450,000 in the aggregate. This dividend will be paid on March 15, 2024, to stockholders of record on March 1. Since the beginning of fiscal 2024, including this latest dividend announcement, we will have paid cash dividends of $0.505 per share or approximately $6.4 million in the aggregate. So far this fiscal year, we will have returned over $9 million in total value to our stockholders through share repurchases and dividends.

Turning to our fiscal 2024 outlook. We anticipate our fiscal 2024 revenue will be in the range of $207 million to $213 million, from the previous range of $216 million to $226 million. Additionally, we continue to anticipate adjusted non-GAAP EBITDA in the range of $16 million to $18 million with adjusted non-GAAP earnings per share in the range of $0.57 to $0.67 per share, increasing from the previous range of $0.52 to $0.62 per share. For fiscal year 2024, we expect our annual effective tax rate to be approximately 22% to 24%. Included in our fiscal 2024 guidance is over $2 million of nonrecurring expenses related to an expiring sponsorship agreement and costs associated with the rollout of LV360 to our remaining markets. We remain committed to improving our adjusted EBITDA margins, and we believe we are on track to reach our long-term target of low double digits.

And with that, let me turn the call back over to the operator for questions. Operator?

See also Jim Cramer is Bullish on These 10 Stocks and 15 Cheapest Countries to Get Second Citizenship.

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However, some MLM companies have experienced a decline in profits, with Avon's stock value falling from over $30 to just over $3 between 2000 and 2020, and Tupperware's stock value dropping over 90% in the last 5 years.

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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

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

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

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

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The majority of MLM participants, around 90-99%, lose money, and the business model is designed to favor the top 1% of participants, raising concerns about the sustainability and fairness of the MLM model.

The global direct selling establishments market is projected to reach $1,125.52 billion by 2027, with a compound annual growth rate (CAGR) of 10.2%, indicating a growth in the overall direct selling industry.

Title:

Content:
Global Direct Selling Establishments Market On Trajectory Of Substantial Growth, Projected To Reach $1,125.52 Bn By 2027

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Direct Selling Establishments Global Market Report 2023 : Market Size, Trends, And Global Forecast 2023-2032

The Business Research Company's Direct Selling Establishments Global Market Report 2023 – Market Size, Trends, And Global Forecast 2023-2032

The Global Market Report for Direct Selling Establishments by The Business Research Company, detailing market size, trends, and providing a global forecast for the years 2023 to 2032.” - The Business Research Company

LONDON, GREATER LONDON, UK, December 12, 2023 /EINPresswire / -- The global direct selling establishments market is positioned for remarkable expansion, characterized by a segmentation based on type, products, and price range.

Market Size and Growth Projection: The market size for global direct selling establishments is set to burgeon from $688.45 billion in 2022 to $763.85 billion in 2023, exhibiting a robust compound annual growth rate (CAGR) of 11%. Looking ahead, the market is anticipated to soar to $1,125.52 billion in 2027, sustaining a CAGR of 10.2%.

Driving Factors: The escalating demand for additional income avenues, particularly in developing and underdeveloped countries, stands out as a primary driver for the direct selling establishments market. The Associated Chambers of Commerce and Industry of India (Assocham) forecasts the Indian direct selling industry to reach $2,169 million by 2021, underscoring the growing significance of direct selling as a viable part-time income source. Promoting self-employment and financial independence, direct selling addresses the need for supplementary income opportunities, a trend expected to propel market growth.

Explore comprehensive insights into the global direct selling establishments market with a detailed sample report:

Major Players : Key players in the direct selling establishments market include Herbalife, Amway, Mary Kay Inc., Infinitus, Tupperware, Vorwerk, Natura, JoyMain, DXN, and Belcorp. These industry leaders play a pivotal role in shaping market dynamics through innovative approaches and product offerings.

Market Restraints: The surge in demand for online shopping poses a challenge to direct-selling establishments, as e-commerce platforms often entice consumers with discounts. To adapt, some direct selling platforms have shifted their business models to incorporate e-commerce channels, addressing the evolving market landscape. The competition from online portals and changing consumer preferences is influencing strategic shifts within the direct-selling industry.

Emerging Trend : Artificial Intelligence (AI): Artificial Intelligence (AI) is emerging as a transformative trend in the direct selling establishment market. AI applications are revolutionizing customer interactions, enabling personalized marketing strategies, and optimizing inventory management. Technologies like chatbots and AI-powered software, such as Ventaforce, are enhancing operational efficiency and customer service in the direct selling industry.

Regional Insights: In 2022, Asia-Pacific led the direct selling establishments market, with North America securing the second-largest position. The geographical coverage of the direct selling establishments analysis encompasses Asia-Pacific, Western Europe, Eastern Europe, North America, South America, the Middle East, and Africa.

Access the complete report for an in-depth analysis of the global direct selling establishments market:

Direct Selling Establishments Global Market Report 2023 from TBRC covers the following information:
.Market size date for the forecast period: Historical and Future
.Market analysis by region: Asia-Pacific, China, Western Europe, Eastern Europe, North America, USA, South America, Middle East and Africa.
.Market analysis by countries: Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.

Trends, opportunities, strategies and so much more.
The Direct Selling Establishments Global Market Report 2023 by The Business Research Company is the most comprehensive report that provides insights on direct selling establishments market size, direct selling establishments market drivers and direct selling establishments market trends, direct selling establishments market major players, direct selling establishments market competitors' revenues, market positioning, and market growth across geographies. The direct selling establishments market report helps you gain in-depth insights on opportunities and strategies. Companies can leverage the data in the report and tap into segments with the highest growth potential.

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Elevate Your Lifestyle: Luxury Furniture Market Insights, Growth Drivers and Sustainable Elegance

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Key players in the direct selling establishments market include Herbalife, Amway, Mary Kay Inc., Infinitus, Tupperware, Vorwerk, Natura, JoyMain, DXN, and Belcorp, highlighting the diversity of companies involved in the direct selling industry.

The COVID-19 pandemic has had a significant impact on the direct selling industry, with some companies experiencing a surge in sales and others facing significant challenges, highlighting the need for companies to be adaptable and resilient in the face of uncertainty.

Title:

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

Moat Investing
1.46K Followers

Summary

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

Investment Idea

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

Business Overview

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

The business operates in two segments:

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

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

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

Value Proposition

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

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

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

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

Source: S&P Capital IQ

Why might EDUC be mispriced?

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

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

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

The evidence speaks louder than words

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

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

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

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

Source: Koyfin

Value Investing Approach: Asset Value

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

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

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

The rest of the items are taken on book value.

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

Source: Moat Investing

Value Investing Approach: Earnings Power Value

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

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

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

Source: Moat Investing

Risks to Our Investment Case

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

Source: Trading Economics

Conclusion

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

This article was written by

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

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Some MLM companies, such as Educational Development Corp. (EDUC), have seen significant growth during the pandemic, with a doubling of its consultant count, while others, such as Optavia-Medifast, have experienced a decline in revenue.

The MLM business model has been impacted by technological advancements, such as artificial intelligence and e-commerce, which have presented both opportunities and challenges for MLM companies.

Successful MLM companies have implemented strategies such as pushing for tighter regulation and clarity from the government, and distinguishing themselves from fraudulent schemes through regulatory amendments, to adapt to changing market conditions and regulatory environments.

The psychological factors that contribute to the attractiveness of MLM companies to potential workers include the promise of financial independence and success, which can be a powerful draw for individuals, especially those looking to start their own businesses.

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.

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MLM companies often present themselves as fantastic opportunities for women, particularly those looking to start their own businesses, and use social media to promote a lavish lifestyle and create the illusion of success.

The demographic groups most vulnerable to the recruitment tactics used by MLM companies include women, particularly those interested in social justice and ethical consumerism, as well as individuals who are looking for flexible or supplemental income opportunities.

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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."

Young women, especially those looking to start their own businesses, are also a demographic group that is vulnerable to the recruitment tactics used by MLM companies like LuLaRoe.

Individuals who are seeking financial independence, a sense of community, and a supportive network are more susceptible to these tactics.

The common characteristics or circumstances that make individuals more susceptible to these tactics include a desire for a lavish lifestyle, a need for approval and validation from others, and a willingness to please and seek approval from authority figures.

There is no mention of any MLM companies that have closed or transitioned to a direct sales model since 2020 in several of the provided documents.

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Content: SUIC, Midas's Partner Suntech Has Successfully Introduced Customized Products and Services To Its VIP Multiple Level Marketing Companies. Suntech Estimates To Quadruple Profits to $8 Million. SUIC Midas Will Partner With 20 Global PSP Partners in 2022 To

Autor: Accesswire
21.09.2021, 12:00  |   |   |

NEW YORK, NY / ACCESSWIRE / September 21, 2021 / Sino United Worldwide Consolidated Ltd. (OTC PINK:SUIC) and Midas Touch's PSP partner in Taiwan, Suntech, has successfully introduced the four products and services to its existing VIP MLM customers. …

NEW YORK, NY / ACCESSWIRE / September 21, 2021 / Sino United Worldwide Consolidated Ltd. (OTC PINK:SUIC) and Midas Touch's PSP partner in Taiwan, Suntech, has successfully introduced the four products and services to its existing VIP MLM customers. Suntech estimates To quadruple profits to $8 Million. SUIC Midas Touch will partner with 20 global PSP partners in 2022 to promote these products and services.

Suntech Taiwan is the largest Taiwan O2O Company, with over 50,000 Merchants and 15 Million users. Suntech Taiwan is going to lead these VIP MLM companies' enterprise-wide business transformation and design exclusive product and service packages. These MLM companies include: PM-International, Taiwan, which is a branch of PM-International AG, Luxembourg. It has more than 30 subsidiaries in more than 40 countries. It provides high-quality nutritious and fitness foods and beauty care products carried through its own brands. PM-International has been recognized as one the Top 100 Direct Sales companies worldwide and is currently ranked 10th in 2021; and the Tsingshan Group of Companies has ten major business groups with a global scope covering more than 30 countries around the world. The holding group has captured the focus of major international media. Among the accolades it has gathered over the decades, its biotechnology company has received high recognition and won, among others, the Taiwan Biotechnology Award, the Taiwan's No. 1 Brand Award, and the Taiwan Golden Quality Award.

"Thanks to the breakthrough innovations and products of SUIC, Midas Touch, Suntech is estimating an increase in net profits to four-fold, expected to reach $8 million on its $1 billion sales turnover. Midas Touch products and services provide instant, emergency funds for our partner merchants and customers. This has been a big success especially during this critical period of pandemic. We are set to increase customer lifetime value with our advanced DeFi business models and strategies," says Joa Chen, Suntech's General Manager.

SUIC Midas is now finalizing and identifying additional 20 PSP partners this year through 2022, with over two million merchants that will bring an aggregate sales turnover of $20 billion, generating $8 million profits for each of the PSP partners as a result. SUIC Midas Touch will fully support these 20 PSP's to earn a total of $160 million in net profits and achieve a total $20 billion in aggregate sales turnover.

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SUIC, Midas's Partner Suntech Has Successfully Introduced Customized Products and Services To Its VIP Multiple Level Marketing Companies. Suntech Estimates To Quadruple Profits to $8 Million. SUIC Midas Will Partner With 20 Global PSP Partners in 2022 To NEW YORK, NY / ACCESSWIRE / September 21, 2021 / Sino United Worldwide Consolidated Ltd. (OTC PINK:SUIC) and Midas Touch's PSP partner in Taiwan, Suntech, has successfully introduced the four products and services to its existing VIP MLM customers. …

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Avon and Tupperware, once iconic direct selling companies, have transitioned to a multi-level marketing (MLM) model, but this change occurred before 2020.

Some direct sales companies have transformed their business models in recent years, including changing names, shifting to e-commerce, micro-business, courses, and investment, but it is not specified if these companies were previously MLMs.

Title:

Content: Do direct sales students disappear? He is shocked that "no one can find" the truth inside the industry: turn this line
▲ Original PO said that students who used to do direct sales seem to have disappeared now. (Illustration / Reprinted from pixabay)
Posts Tagged ‘ CTWANT ’
There are hundreds of occupations, and everyone's choices are different, and direct selling is one of them.
However, a recent Internet friendly strange article said that for many years, many students or friends who do direct sales industry in the predecessor side often call to pull people, but in recent years it seems to have gradually disappeared, so that the original PO questioned "no one found that Taiwan's direct sales industry has disappeared in recent years?"
The original PO on PTT said that I remember many years in the front desk of many direct sales industry in Taiwan, "a bunch of classmates and friends who have not seen you for a long time suddenly contact you, I know he wants to promote direct sales with you", but the original PO found these direct sales people, in recent years seems to have disappeared inexplicably. Has the sales industry disappeared in recent years, and why has it become so? ”
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A post, caused a heated discussion, many netizens for the original PO answer, in fact, did not disappear just transformation, "change the name, e-commerce, micro-business, courses, investment", "direct sales have long been transformed, which will directly talk to you direct sales, now tell you about micro-business", "many new brands, sales have said their annual revenue", "you do not have a lot of", "," "Online direct sales have begun with the advancement of technology," and "it should all be turned into live sales."
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The MLM business model has been criticized for its potential to be used as a pyramid scheme, with the main source of revenue coming from salespeople buying their own products, rather than from sales to end-users.

The success of an MLM company depends on various factors, including the quality of the product, the effectiveness of the sales strategy, and the ability to recruit and retain salespeople.

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/

Network marketing can provide an opportunity to build a business with minimal initial cash investments, and some MLM projects do not require any initial investments.

Title:

Content: Network marketing: build a business without risks!
Moderators: more, bot, translate
Network marketing: build a business without risks!
by sonnick84 » 12 Mar 2022, 12: 35
Network business is a great opportunity to leave an unloved job and organize your own business without significant cash investments.
But is this true in reality and what nuances should be aware of those who just decided to participate in some project?
In this article, we will discuss the main points, as well as write some important recommendations!
Own business is first of all freedom and network marketing, the shortest and easiest way to it.
Think for yourself, in order to sell services or goods, you do not have to open a physical store, hire workers.
Basically, there is no need to go anywhere and absolutely all workflows are made directly from the PC.
The initial costs are small, if we are talking about goods, you will have to buy the initial batch.
However, after a few sales, this is no longer a problem.
But there are also such MLM projects where investments are not needed at all.
We recommend you to read: on this site MLM reviews and not only.
Absolutely all routine business is handled by the company itself, and you should only sell the product!
Which is usually of high quality and at an attractive cost.
It is difficult to implement only at the first stage, after the buyers themselves call and make new orders.
It is no longer necessary to go to apartments, there are many sales channels on the network, for example, social networks.
Income is unlimited, the more effective you act, the higher the profit will be, everything is simple!
In words it looks beautiful, but not everyone will suit the MLM business.
In any case, you need to try, besides the risks are minimal.
The worst thing that can happen is that you will have the goods purchased for sale.
Of the shortcomings, we can distinguish the fact that sales directly, this is the ability to qualitatively submit goods and cause the desire to buy from the person who was not going to spend money on it.
Many people have a negative attitude to the network business, in this regard, you need to be stress-resistant.
Income is floating and it will depend on many factors.
In some cases, you will need to get an IP, and this is already taxes and some responsibility.
But again, you do not need to do this immediately only after you know that you are ready to make money!
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The use of psychological manipulation and persuasion techniques by MLM companies can have serious consequences for individuals who become involved, including financial loss, damage to their relationships and reputation, and a decline in critical thinking and intelligence.

MLM companies often exhibit leadership traits known as the Dark Triad, which includes narcissism, psychopathy, and Machiavellianism, and these traits can create a toxic environment detrimental to employees and the organization.

The consequences of hiring someone with Dark Triad traits can be significant, including poorer job performance, increased counterproductive work behaviors, and negative perceptions from others.

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Content: advertisement
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The dark traits of leadership—and how to avoid them

Many top political and business leaders exhibit narcissism, psychopathy, and Machiavellianism—the so-called Dark Triad of personality. Here’s why that’s damaging to organizations.

[Photo: CSA Images/Getty]

The psychological theory of personality known as the Dark Triad—narcissism, psychopathy, and Machiavellianism—often carries a sinister undertone. When it comes to leaders, research has shown that these traits demonstrate a complex relationship with leadership and leader effectiveness.

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Despite being negatively related to responsibility, job performance, and overall accomplishments, the Dark Triad has been positively correlated with charisma, creativity, strategic thinking, and communication skills. Individuals high in dark traits may appear successful in certain situational contexts, particularly if their work requires a rational and emotionless behavioral style, willingness to take risks, and a focus on achievement, even if that means harming others. This suggests that these individuals may be able work effectively at an individual level while simultaneously damaging the organization.

Dark Triad leaders can create a toxic environment that can be detrimental to employees, coworkers, and an organization as a whole.

So, what are these dark traits, and how can we distinguish them?

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  • Psychopathy—guiltlessness, low levels of empathy and responsibility, and high levels of egocentricity and impulsivity
  • Machiavellianism—ruthlessness, selfishness, and having a manipulative personality
  • Narcissism—feelings of personal entitlement and superiority, envy of success, and exploitative behaviour

While each of these three traits have elements that distinguish them from their Dark Triad counterparts, there is a substantial degree of overlap among them. The common behavioral subcomponents that are found, at least to some degree, in each of the Dark Triad characteristics include excessive self-interest, ruthless disregard for others, manipulative behavior, and emotional insouciance.

It is not always easy at the recruitment stage to ascertain who will display these characteristics. In general, individuals tend to de-emphasize their negative traits. Individuals high in dark traits are more likely to underplay their dark traits because they have a natural propensity to self-enhance. The recruitment context presents a clear external reward (receiving a job offer) and individuals high in dark traits are prone to manipulation and presentation management to receive a desired outcome.

The challenge is how to identify them before irreparable damage is done. It starts at the recruitment stage, making sure the right candidate is selected and vetted appropriately.

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Identifying Dark Triad in a recruit

Most assessments are looking for well-rounded individuals who score highly in attributes that are valuable to an organization and the role they are seeking to fill. Many of these assessment measures are traditional self-reporting personality instruments where individuals respond to a series of statements related to their attitudes and beliefs.

But there are some concerns that this type of measure can be subject to response distortion by the respondent.

Given the manipulative nature of some dark trait individuals, an off-the-shelf approach to assessment is less likely to reveal inconsistencies if the candidate understands how they are being assessed. This then begs the question—would a less transparent approach be more effective?

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An alternative is to use conditional reasoning, where responses are not linear and involve measuring a range of implicit emotions, beliefs, attitudes, or motives. It is an approach that is better able to mask an assessment’s explicit purpose and has successfully been used to identify undesirable traits such as aggression or lack of integrity.

A hybrid approach to assessment, using both psychological theory and data-driven methodologies, helps to detect and measure undesirable attitudinal traits and behaviors via algorithmic response patterns on self-report assessments. This allows recruiters and hiring managers to evaluate the probability of a candidate’s risk on specific toxic personality traits, which can be further scrutinized during interviews or references.

It should be emphasized that these subclinical measurement approaches cannot replace proper professional clinical diagnoses of personality disorders. An individual may indeed score highly on one or more of these scales and still not meet the clinical criteria for personality disorder. However, it is encouraging to see that leveraging data science can help us measure traits that have been traditionally more difficult to capture, and which may have a significant impact on work behavior.

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How dark traits negatively impact organizations

In an environment where recruitment and retention of talent is a challenge, it’s tempting to skip or take a lighter approach to recruitment—sacrificing quality for speed. However, time spent getting assessment right pays dividends.

The consequences of a bad hire have long been recognized. According to the Society of Human Resource Management, the average cost to hire an employee is $4,700 with that cost tripling for executive and leadership roles.

The cost of hiring someone with dark traits can be even more, with fallout from subordinates, clients, finances, and reputation. At high levels of DT traits, you run the risk of these individuals cultivating a negative organizational climate. These personalities can be more likely to engage in immoral and unethical behaviors to achieve their goals, including bully tactics, deceit, concealment, and general opposition to rules or norms accepted by society.

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Research has shown that, in general, dark trait individuals have been linked to several negative and potential costly outcomes in the workplace including:

  • Poorer job performance from themselves and their subordinates.
  • Increased counterproductive work behaviors.
  • Fewer organizational citizenship behaviors.
  • Lower levels of ethical decision making.
  • Negative perceptions from others
  • Low team morale.
  • Greater likelihood to engage in criminal/illegal behaviors.

Unfortunately, those in a more senior role have the greatest potential to wreak havoc. They are in a position of influence, party to confidential information and finance, and are responsible for making decisions, good or bad.

The impact on an organization can be significant, not only financially but reputationally as well.

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It really is a question of the potential risk to the company for making a bad hire, which can be context dependent. The traits that contribute to effective leadership are a function of the context in which the leader operates. For those with responsibility for vulnerable people, in finance, governing a nation, or where health and safety are essential, the consequences of a bad hire and associated fallout could be far-reaching. The first step is for the recruitment process to be rigorous to facilitate early detection of toxic leaders in order to restrict the potential for their destructive forces in organizational contexts.

Kristin Delgado is research and development manager at talent recruitment agency Talogy.

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Excessive flattery and passive aggression are methods of manipulation used by some MLM companies to influence individuals, and recognizing manipulation is the first step in resisting it.

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Psychologist will teach free to recognize manipulations and resist them
465
But in order to resist them, you first need to recognize this type of influence.
This (and whether it is good to be able to manipulate yourself) will be told at a psychological seminar in the Open living room of Lermontovka.
Free of charge.
18 +
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“You are the best.
No one can do better than you, ” the boss said.
And here the employee is working on the project on his day off.
It's nice to be the best, it's flattering that no one else can do it.
It is embarrassing that this is happening for the “eleventh ” time and the employee suspects something is wrong.
Excessive flattery is one of the methods of manipulation, and very effective: you do not want to lose the status of features, exclusivity.
Suppose the employee figured out the reception and politely refused extracurricular activities.
The boss did not reproach with a word, but began to seem to ignore, and this is obvious to colleagues.
This was followed by the following manipulative method: passive aggression.
In this case, psychologists advise not to pay attention, to behave calmly: the manipulator will get tired of playing this role.
It is interesting, but the calmness of the employee can be considered a retaliatory manipulation?
Psychologist, business coach Anna Belyaeva will explain whether there is unconscious manipulation, whether manipulations are possible “for the good ”, what mechanisms, techniques and techniques exist in the psychological impact – and how to resist this.
All with examples.
We learn to manipulate manipulations at the psychological seminar “Manipulation.
To know, to be able, to resist ” on December 9 in the White Hall of the Lermontov Library (Liteyny pr., 17 – 19).
Start at 12: 00.
Alexandra Sheromova
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The use of social influence and social identity by MLM companies can lead to a loss of individual rationality and autonomy, as people transfer their power of thinking to the media and capital behind them.

Title:

Content: Health · Life
The "net red aesthetic" should be less catered to
October 29, 2023 08: 33 Source: Guangming Daily
【 Viewers have heart 】
With the rapid development of new media, "Internet celebrities" with high popularity and traffic are frequent.
Therefore, "net red card point", "net red milk tea", "net red restaurant" and "net red clothing" have become the target of many people.
People have long been accustomed to the aesthetic phenomenon of net red, consciously or unconsciously participate in it: choose net red design when working, choose net red fashion when dressing, choose net red food when eating, listen to net red lipstick song when leisure, look at the skin filter net red film and TV drama when bored, when traveling to "think your wind blowing to ×" and other signs like card photo......
With the help of media, the aesthetic phenomenon of net red quickly occupies the space of daily life of the public.
With the popularity of net red aesthetic, the original colorful aesthetic experience has been continuously reduced to the imitation of net red model, and the social aesthetic standards have gradually become uniform, but this aesthetic standard is not consistent with the diversity and complexity of real life.
On the one hand, aesthetic standards will distort the public aesthetic, so that some people give up independent thinking about beauty, resulting in aesthetic superficiality, such as some of the net red signs with little aesthetic value are just imitation works, some of the net red milk tea with little nutritional value is the result of careful marketing by businesses, but just because they see others "like", some young people follow suit. All will further strengthen the aesthetic "standardization" of works and products, and over time, it will fall into the mold and lose its innovative vitality.
Aesthetic is a subjective and diversified concept, different countries, different cultural background people will have different aesthetic.
Net red aesthetic, at most can only be regarded as a kind of aesthetic, but why so many people pursue it?
People's acceptance and pursuit of net red aesthetic is to a large extent in the collective psychology of the recognition of the collective sense of belonging.
Gustav Le Pen pointed out in "The Ubiquitous: A Study of Popular Psychology": "The group always roams the territory of the unconscious, will be at all times obedient to all hints, show the special passion of the creatures indifferent to the influence of reason, they lose all criticism, there is no other possibility except extreme credulity." A shared sense of belonging and security in the world around us.
Once the individual is unable to integrate into the group, he or she is in a sense detached from the stable camp and has to assume unknown fears in psychology, opinion and action.
People in the face of landscape, food, clothing and many other optional things, the heart is more concerned about how the outside world evaluates, how others choose, they are eager to experience the public's preferences, rhythm, get the individual's sense of existence, but also establish a psychological comfort or fantasy into society.
Whether net red milk tea and other brands have taste differences, net red attractions are so beautiful, net red signs are very local characteristics, these are usually not important for the individual, the important thing is that people through the net red aesthetic attempt, once again obtained the experience of the public psychology, narrowing the gap between personal experience and the outside world, reconfirming their consistency with the group in the aesthetic position.
In the era of information explosion, attention is increasingly scarce, in addition to a very small number of people with hot topics and important events, it is difficult for ordinary people and things to obtain public attention.
In order to stand out in the information space of huge information density, it is difficult to achieve without the help of “push hands ” behind it.
This “push ” is often capital.
Behind the net red milk tea, net red card points, net red clothing, there is a hidden figure of capital.
Capital creates influencer characters and influencer phenomena through various channels, uses its own power to radiate it in the media society, and artificially creates the people ’ s need for aesthetic experience of influencer, and “helps ” people to artificially create interest.
After the individual receives the aesthetic information of the net red transmitted by the invisible big hand, the curiosity and the hearts of the people are stimulated, and they are guided step by step to the net red card point to experience it firsthand.
This, in turn, reinforces the public ’ s sense of need and interest in experience.
Therefore, some so-called "net red", but the capital deliberately packaging to increase the flow or sales of props.
If people lack independent aesthetic awareness and blindly pursue the so-called net red aesthetic, they may eventually become "leeks" that are harvested by capital.
All kinds of influencers are shaped by media, especially new media.
According to Marshall McLuhan, “The most obvious perceptual ‘ off ’ or psychological impact of any new technology is precisely what people want about it. ”
Before the advent of the automobile, no one needed a car.
No one was interested in television before it appeared.
Technology produces a power that forces people to need it, but this power cannot exist independently of technology, which is an extension of the human body and the senses. "New technologies give birth to new media, and new media create new needs.
Under the manipulation of capital, the new medium will lead people to enter the scene of its setting in the illusion of net red aesthetic by creating the illusion of "what society needs" and "what the public thinks".
Once people lack a clear understanding and naturally accept all kinds of information, they may transfer the power of thinking to the other party, and deliver individual rationality to all kinds of media and the capital behind them.
As Marshall McLuhan once admonished people, “Once we hand over our senses and nervous systems to someone else who wants to profit by renting our eyes, ears, and nerves, we have virtually no right left. ”
Therefore, the aesthetic vigilance of net red is also the vigilance of the potential binding force and inducing force of new media.
In short, the continuous emergence and dissemination of net red aesthetic phenomenon reflects the motivation of some commercial organizations to create a focus of attention and strive to cash out of the eye economy.
Capital through the media to shape the net red aesthetic, guide people to pursue the net red aesthetic, the fundamental purpose is to hype its heat, enhance its value, in order to harvest the flow or sales dividends.
In the face of the emerging net red aesthetic phenomenon, we should be more vigilant, less pandering, in the public carnival in the cold eye observation, in the voice of the people to dare to question, only in this way, in order to find the real beauty.
(Author: Ryukin, Associate Professor and Doctoral Supervisor, Dean of Humanities, Shanghai Jiaotong University)
(Edited by: Luo Zhi, Yang Di)

New media and technology play a significant role in shaping the "net red aesthetic" phenomenon, by creating new needs and desires, and leading people to enter the scene of its setting in the illusion of net red aesthetic.

The "net red aesthetic" phenomenon can have negative implications for individual well-being and financial stability, as people may become overly focused on pursuing uniform aesthetic standards and lose sight of their own independent thoughts and desires.