July 2021 Direct Selling News by directsellingnews

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DIRECT SELLING NEWS

VOLUME 17 / ISSUE 7

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THE CHANGING WORLD OF COMPENSATION PLANS / A MACRO VIEW THE BATTLE OVER 13(B) NATURE’S SUNSHINE / BRILLIANTLY HARNESSING THE POWER OF NATURE

The Reputation-Building Blueprint REPUTATION IS EVERYTHING.

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KINDRA HALL, Author, Speaker, & SUCCESS Chief Storytelling Officer STUART JOHNSON, Founder & CEO, DSN, NOW Technologies and Direct Selling Capital Advisors JACOB MCCLAIN, SVP & Chief Strategy Officer, MONAT WAYNE MOOREHEAD, Marketing, Branding and Direct-to-Consumer Industry Expert

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AMI PERRY, VP, Business Development, NOW Technologies SHELLEY ROJAS, Publisher and Chief Brand Officer, DSN GLENN SANFORD, Founder & CEO, eXp Realty; CEO, SUCCESS MARK STASTNY, Chief Marketing Officer, Scentsy

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C O N T E N T S J U LY

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F E AT U R E

The Changing World of Compensation Plans: A Macro View B Y G O R D O N H E S T E R

The Battle Over 13(b) B Y S A R A H PAU L K

48 66

SPOTLIGHTS

Nature’s Sunshine:

Brilliantly Harnessing the Power of Nature

B Y J E N N Y V E T T E R

DEPARTMENTS

74 Executive Insights

Stuart MacMillan Interviews Mark Pentecost

WORKING SM ART /

Next-Level Technology:

6 Signs that Your E-commerce System is Truly Scalable B Y N OA H W E S T E R LU N D & H E AT H E R M A R T I N

NEW PERSPECTIVES /

Your Vibe Attracts Your Tribe

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TO N Y J E A R Y

I N EV ERY ISSU E 8-9 AD INDEX // 11 FROM THE EDITOR // 15 INDUSTRY NEWS // 40 FORWARD THINKING // 99 DSA MESSAGE // 100 SUPPLIER DIRECTORY //

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COVER STORY

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THE REPUTATIONBUILDING BLUEPRINT

Control the Message and Own Your Mistakes. Reputation is Everything. BY THE D S N EDITORS AND SAR AH PAULK

Direct Selling News (ISSN 15546470) is published monthly by SUCCESS Partners, 5800 Democracy Drive, Suite 100, Plano, TX 75024. Periodicals postage paid at Lake Dallas, TX and additional mailing offices. POSTMASTERS please send change of address to 5800 Democracy Drive, Suite 100, Plano, TX 75024. Subscription Rate: Free to direct selling and network marketing executives; all others in USA and Canada $50. Overseas subscriptions are $100. All subscriptions must be paid in U.S. dollars. ©2021 Direct Selling News All rights reserved. Material may not be reproduced in whole or in part in any form without written permission. No statement in this publication is to be construed as a recommendation to buy or sell securities or to provide investment advice. Direct Selling News 5800 Democracy Drive, Suite 100, Plano, Texas 75024 / Phone: 800-279-5249 www.directsellingnews.com

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/ FROM THE EDITOR /

Reputation Builds Brands! REPUTATION IS BECOMING A HOT STRATEGIC TOPIC within the world of business. Companies are paying attention to brand perception because perceptions impact customer acquisition and retention effectiveness. Reputation builds brands, and most importantly, reputation is the critical component that supports the sustainability of brands! Our cover story, The Reputation-Building Blueprint, offers insights from Kevin Guest, USANA CEO and Chairman of the DSA, Ryan Napierski, Nu Skin CEO and Advocacy Chairman of the WFDSA, on Direct Selling’s reputation crisis, owning our message and the priorities for the reputation of the channel. One area that has caused confusion and reputation issues is the complexity of compensation plans. Industry expert Gordon Hester tackles The Changing World of Compensation Plans: A Macro View on page 48. Hester describes seeing a key evolution of comp plans that support a customer-centric approach to building business. The feature article on page 66, The Battle Over 13(b), explores the complicated relationship the channel has with the FTC, the Supreme Court’s unanimous ruling and the new bill seeking to unravel that decision. DSN will continue to monitor and observe these rulings and publish updates on our website. The Executive Insights interview series is back! In this interview, found on page 74, Stuart MacMillan, President of MONAT Global, interviews his friend Mark Pentecost, CEO of It Works! They discuss problems, pivots and plans. You can read a portion of the interview in this issue and watch for the video and podcast at directsellingnews.com/overview/listen-watch/. At DSN, we strive to bring you more! We are excited to introduce the Direct Approach Podcast with Wayne Moorehead. Wayne and his guests will tackle the channel’s most pressing strategy and marketing issues in a fun, fastpaced and frank format. You can learn about the Direct

Approach podcast series on page 78 and tune into it at directsellingnews.com/listen-watch-category/podcast/. We love reporting on companies within the channel and sharing their stories. In this issue, Nature’s Sunshine shares the story of their renaissance revival. Terrence Moorehead and his team developed five strategies for their renaissance. “As soon as a new horizon presents itself, you start doing different things,” Moorehead explains. “You adjust your strategy. You adjust your tactics. You adjust your programs, whatever they are. So really, brand power (or any of the five strategies), it’s not so much an endpoint as it is a direction towards it.” Direct Selling is an industry experiencing exponential growth. The Next-Level Technology article found on page 86 gives six signs that your e-commerce system is truly scalable. Learn from industry expert Noah Westerlund on how to anticipate your business needs and develop an e-commerce system that will grow with you. DSN is always looking to broaden and deepen our scope by providing new tools designed to help hard-working direct selling companies and distributors educate the public about the channel. We have added an exciting new resource on our website, directsellingnews.com. Found under the research tab are several scholarly resource articles that we feel will be beneficial in supporting the channel. We will continue to build this new section with current and compelling articles. Our article on page 94 will introduce this new resource. At Direct Selling News, we endeavor to be a source, resource and thought leader for the entire direct selling channel. So, if you have a suggestion, a need or an inspiration to share, please reach out. We would love to hear from you. All the best,

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/ INDUSTRY NEWS /

The Month in News Affecting Our Channel 16 / News In Brief 20 / Insights 22 / Executive Announcements 28 / Direct Selling Capital Advisors Stock Watch 32 / DSA Growth and Outlook Survey 38 / Customer-Centric Recognized Companies

/ INDUSTRY NEWS /

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For the full articles, visit directsellingnews.com/ category/news/

ACN Acquires Kynect Ltd.

A Zyia Active CEO Named Entrepreneur of the Year

yia Active CEO and founder Erin Bradley was honored by Ernst & Young LLP with the Entrepreneur of the Year 2020 National Award. Bradley was selected as a Utah regional award winner in October and was one of 13 national winners. Bradley launched Zyia from her living room in 2017 as a family-run business and has grown the company to include 300 full-time employees, thousands of distributors and a 130,000-square-foot warehouse. “A little over three years ago, Zyia Active didn’t exist—this all feels so surreal and I’m incredibly honored to be recognized as a national Entrepreneur of the Year,” said Bradley. “At Zyia, we focus not just on what we sell, but why, and so this distinction also belongs to our employees and representatives across the U.S. and Canada who have played a critical role in our success as a company and embraced our mission from day one.” The Entrepreneur of the Year award celebrates visionary leaders through regional and national awards programs in more than 145 cities in over 60 countries. Bradley will now be eligible for the EY World Entrepreneur of the Year title. DSN

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CN Inc., an essential services direct selling company, announced its agreement to purchase the assets of Kynect Ltd. Formerly known as Stream Energy, Kynect was founded in 2005 as an energy service provider in the direct selling space before adding wireless, home security and other essential services to its product portfolio. The two companies will begin merging effective immediately to expand ACN’s global reach and create a smooth transition process for both companies’ independent distributors. ACN will retain Kynect CEO Bouncer Shiro, a founding board member, on staff during and beyond the transition period. “Ultimately, this agreement is about enhancing the opportunity for our Kynect army and ACN’s Independent Business Owners,” said Kynect founder Rob Snyder. “We here at Kynect have built a culture that puts people and personal connections above all else. It’s no coincidence that we’ve entrusted ACN to carry that torch in partnership with our Independent Associates as they embark on this new journey.” DSN

MONAT CEO Wins Gold Stevie Award for Entrepreneur of the Year

ONAT Global Corp. was honored with two Stevie Awards, including a Gold Stevie for Entrepreneur of the Year for MONAT CEO Ray Urdenata and a Bronze Stevie for Company of the Year. “Twenty twenty was a difficult year globally for most retail, but MONAT was prepared and able to find the silver lining to continue the momentum from our growth in 2019 because we had the tools and community in place to motivate our independent sales force of Market Partners,” said Ray Urdaneta, co-founder and CEO, MONAT Global. “MONAT is only six years old, and the success MONAT has experienced is a testament to our incredible team. Being recognized by the U.S. premier business awards is impactful to our business and I am thrilled that MONAT has earned this recognition.” “I am proud that Ray has been recognized once again by the Stevie Awards for outstanding leadership,” said Stuart MacMillan, president, MONAT Global. “His success story shows that hard work pays off, and I cannot think of anyone more deserving of this award.” DSN

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Jeunesse Wins 11 Stevie Awards Including Company of the Year

eunesse was honored at the 2021 American Business Awards with eight Gold and three Silver Stevie Awards. The company received Gold Stevie Awards for Company of the Year—Consumer Products and a Silver Stevie Award for Company of the Year—Health Products & Services. “The past year presented challenges for many companies, requiring various adjustments and innovative solutions,” said Jeunesse Chief Visionary Officer Scott Lewis. “Perhaps this year more than ever, it is an honor to be recognized in the American Business Awards alongside diverse and acclaimed brands such as Estée Lauder, T-Mobile, John Hancock, and State Farm. We celebrate these achievements with our dedicated family of Jeunesse distributors and employees, who made quick adjustments, reimagined processes, and worked hard to help us achieve success.” DSN

Nature’s Sunshine Launches Proprietary Personalization Program

ature’s Sunshine announced the debut of its new personalization program, which gives distributors and retailers the ability to offer customized health packs to consumers. Within these health packs are presorted, pre-packaged nutritional supplements that address a customer’s individual health and wellness needs and can be taken on-the-go. This program will begin operating in North America this summer as part of the company’s five-point strategic roadmap for revitalizing its business through a digital-first transformation. “This program represents an exciting next step for our company, and we are thrilled that our practitioners and retailers will now have the ability to provide this level of personalization to their customers,” said Terrence Moorehead, CEO, Nature’s Sunshine. “This is just one of several initiatives designed to improve the customer experience and increase earnings for our highly trained practitioners and retailers who are already seeing a sharp increase in sales with the recent introduction of our new business model.” DSN

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L’OCCITANE en Provence Enters Direct Selling Channel

’OCCITANE en Provence announced plans for the company to expand its omnichannel beauty and lifestyle brand through the direct selling model. This expansion is part of the company’s North American business transformation and is expected to help the company develop a more personal relationship with prospective customers. Leading the company’s social selling initiative will be Jesse Stamm, an established executive within the direct selling industry. “As a customer-centric brand, our strategy is to continue to create authentic relationships with our customers and soon consultant community,” said Yann Tanini, Regional Managing Director, North America. “As such, our goal with the launch of this new social selling channel is to be able to reach new customers who we are not currently able to connect with through our existing business model. We are thrilled to have Jesse lead such an important strategic initiative for L’OCCITANE.” This emphasis on social selling is a continuation of a move begun in early 2020, when L’OCCITANE en Provence launched DUOLAB, a direct selling-based skincare startup, to strengthen its ecommerce sales and expand its digital brand. DSN

Scentsy Co-CEOs Inducted into the Direct Selling Hall of Fame

centsy’s Co-CEOs Heidi and Orville Thompson, the husbandand-wife team who have led Scentsy since purchasing the company in 2004, were inducted into the Direct Selling Hall of Fame. The Thompsons were selected for this award as a result of their contributions to the advancement of the industry’s mission and cause and devotion to the business opportunity over a significant number of years. “We have a motto of ‘contribute more than you take,’ and we’ve received a lot from the Direct Selling Association,” Orville said. “So, we have done our best to make sure we leave it better than we found it, and that we give more than we take. This is quite an honor.” The Direct Selling Hall of Fame award is given to individuals who dedicate years of service and make considerable contributions to the Direct Selling Association (DSA), Direct Selling Education Foundation (DSEF) and the industry as a whole. Previous inductees include executives from Avon, Mary Kay, Amway and more. DSN

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/ INDUSTRY NEWS /

N E W S

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INSIGHTS

B R I E F

For the full articles, visit directsellingnews.com/ category/news/

The FTC’s Aggressive Expansion of the ROSCA Act

ollowing a unanimous ruling by the U.S. Supreme Court in April of this year that the Federal Trade Commission (FTC) could not rely on Section 13(b) of the FTC Act to invoke monetary penalties against companies, the commission’s approach to regulatory action has been evolving. Part of that evolution is a drastic shift by the FTC in its use of the Restore Online Shoppers Confidence (ROSCA) Act, a federal statute that regulates sellers and the systems they use for charging consumers for products or services sold through the internet in negative option programs. These negative option programs are defined by the FTC’s guidelines as: prenotification negative option plans, continuity plans, automatic renewals and free-to-pay conversion offers. Prenotification negative options include plans like music clubs where sellers send notices, and without consumer action, the product is shipped and consumers are charged. In continuity plans, customers receive periodic shipments of products until they cancel the agreement. Automatic renewals, like many magazine sellers offer, will resume service automatically after it expires unless a consumer cancels the subscription. With free-to-pay, sellers offer customers goods or services free of charge during a trial period. Afterward, sellers automatically charge a fee unless customers cancel or return the products. In other words, negative option plans allow for a customer’s inaction or silence to be legally interpreted as acceptance of a seller’s offer. The spirit of the ROSCA Act is to help consumers avoid recurring payments for products or services they had no intention of buying, and to prevent obstacles for customers who want to cancel their orders and payments. But in a recent complaint against MoviePass, the FTC leveraged the ROSCA Act in a never-before-seen way. While the FTC points out that MoviePass violated Section 5 of the FTC Act by throttling high-volume users of the app to deceptively limit their use of the subscription, which was advertised as “unlimited,” it is also saying that MoviePass’s failure to tell customers it would do so before obtaining their billing information violates ROSCA.

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“The novelty here is that, for the first time, the Commission is treating a deception about the characteristics of the underlying product—not the negative option feature—as a violation of ROSCA,” Commissioner Noah Phillips wrote in his dissenting statement. “[…] Instead of examining whether consumers understood the negative option feature, had given consent to that, or were able to cancel in a simple way, this complaint instead looks to the characteristics of the product that MoviePass sold to some of its consumers.” With this move, the FTC implies that any company who fails to disclose a product characteristic that the Commission later determines (at their discretion) to be substantial, is at risk for monetary and civil penalties. “The negative option is the aggressive tactic that Congress was concerned about, and the statutory requirements of disclosure of terms, consent to collection of financial information, and simple cancellation protect specifically against its abuse,” wrote Commissioner Phillips. “But there is nothing in the statute—and little, for that matter, in the legislative history—to suggest congressional intent to regulate disclosures about the products or services being sold, as opposed to disclosures about the negative option.” DSN

Medifast Survey: Majority of U.S. Adults Set Health Goals

nationally-representative survey conducted for Medifast, the parent organization for direct selling company OPTAVIA, illustrated consumer health priorities and motivator findings. A similar survey conducted at the end of last year showed that 63 percent of U.S. adults were developing positive health routines amid the pandemic, with 96 percent planning to continue these healthy efforts. Six months later, this new study suggests that the majority of U.S. adults (93 percent) have adopted health and wellness goals and 84 percent are actively working to achieve them. “Even throughout a challenging time, we saw Americans adopting new, healthy habits,” said Dan Chard, Medifast Chairman and Chief Executive Officer. “Now, the majority of U.S. adults have health goals and are actively working toward them. This is not only a result of the physical, mental and emotional challenges of the past year but, more importantly, a clear indicator of the shift in consumer

mindsets and prioritization of their health–both mind and body. Every day, our community of independent OPTAVIA Coaches help people make positive changes, and we believe our offer will continue to resonate as more and more Americans look to get healthy.” Notable findings from the survey include: • 76 percent of U.S. adults prioritize their health because they want to feel better, both physically and mentally • 67 percent are motivated by having more energy and reducing stress and anxiety • 55 percent believe seeing physical results motivates them to stay committed to their goals • People are most likely to find support from healthcare providers (40 percent), followed closely by family (32 percent) and friends (25 percent) • Men (46 percent) are more likely than women (39 percent) to prioritize their health and wellness in order to look better physically. DSN

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/ INDUSTRY NEWS /

E X E C U T I V E

A N N O U N C E M E N T S

For the full articles, visit directsellingnews.com/ category/news/

EXECUTIVE ANNOUNCEMENTS

Dr. Carolyn Rachaner

Ilaria Profumi

A.K. Khalil

The Happy Co., Director of Product Development & Compliance The Happy Co. named Dr. Carolyn Rachaner to the role of Director of Product Development and Compliance. Dr. Rachaner is a direct selling veteran and health and wellness expert who specializes in product development. “Carolyn’s deep knowledge of nutrition and her extensive education and understanding of product development makes her a pivotal player in the future of The Happy Co.,” said Bo Short, CEO of Elevacity Holdings LLC. “As we broaden our platform to include multiple categories of innovative products, it is vital that we bring this expertise in-house. It is time to take that next big step forward and Carolyn is the perfect choice to help us do just that.”

eXp Realty, Regional Director of EMEIA eXp Realty has appointed Ilaria Profumia as the Regional Director for the company’s presence in Europe, Middle East, India and Africa (EMEIA). Profumi is a real estate veteran with experience operating in Italy, where she was a chief real estate executive for 15 years. Profumi is also a lawyer who spent two decades in legal roles within the real estate industry, including head of legal affairs and head of business development. Profumi will focus on strengthening the company’s global footprint and presence in EMEIA, and will report to eXp Global President Michael Valdes. “Profumi’s strong experience and skills will be of high value to our overall strategy and growth in the region,” said Valdes. “I am excited for her to play an integral role in accelerating the growth of the eXp brand throughout EMEIA.”

Jeunesse, President of Global Field Development Jeunesse announced it has appointed A.K. Khalil to the role of President of Global Field Development. Khalil brings more than two decades of experience in the industry, including working in the role of distributor, consultant and corporate executive. “We are so pleased to welcome A.K. to the Jeunesse Family,” said Jeunesse Chief Visionary Officer Scott Lewis. “His passion for the direct selling industry, depth of experience, and genuine desire to serve others are key attributes that will have a great impact on helping Jeunesse distributors around the world achieve their goals. We are excited to have A.K. on our team and confident he will play an integral part in helping us achieve our goals now and well into the future.”

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E X E C U T I V E

A N N O U N C E M E N T S

For the full articles, visit directsellingnews.com/ category/news/

Alissa Neufeld

Oliver Dibblee

Samir Khandhar

LifeVantage, General Counsel LifeVantage welcomed Alissa Neufeld to its executive team as the company’s General Counsel. Neufeld brings experience working in mergers and acquisitions at a national law firm and has held in-house counsel positions, including four years within the direct selling industry. Neufeld pointed to LifeVantage’s commitment to inclusion and its gender-diverse senior management team, as well as the company’s family-focused culture as important factors in her decision to join the executive team. “I know numbers are the way we tend to measure success, and, of course, it is important that the numbers are there,” Neufeld says. “However, for me, the truest win is when the people around you feel positive, engaged and happy about their work and their accomplishments. I feel that LifeVantage provides that culture, and I am incredibly thankful to be a part of it.”

Amare Global, Associate Vice President of Sales Amare Global announced it has named Oliver Dibblee to the company’s newly created role of Associate Vice President of Sales. Dibblee has more than 12 years of sales experience, including creating and implementing new training programs for field distributors using data-driven coaching. “We are happy to welcome Oliver Dibblee to our Amare team,” said Amare Founder & CEO Hiep Tran. “He brings a strategic and enthusiastic approach to empowering the success of our Independent Wellness Partners. We are confident that Oliver’s approach to data-driven sales growth will add to our momentum.” In his new role, Dibblee will focus on working with the field through development, training and coaching. “I’m excited to join the Amare team,” Dibblee said. “As the category-leader in mental wellness, we are perfectly positioned for massive growth.”

Arbonne, Chief Digital Experience Officer Arbonne announced it has selected Samir Khandhar for the role of Chief Digital Experience Officer. Khandhar will oversee Arbonne’s innovations and enhancements in digital products, social commerce, merchandising, loyalty, CRM, customer service and insights that impact the overall customer experience. “I am confident that Samir will help drive this transformative journey that will support our future growth expectations and ability to compete in an ever-changing marketplace,” said Arbonne Chief Executive Officer Tyler Whitehead. “Samir will continue to align CX service delivery to organizational strategy and digital experience.” Khandhar will also be responsible for leading the development of Arbonne’s digital strategy and delivering it at pace. “I look forward to innovating digital experiences and solutions that reimagine how we deliver our strategies to make our customers successful and deeply engaged with the Arbonne brand,” Khandhar said.

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Meredith Tieszen

Howard Chow

ASEA, Senior Vice President Regional Vice President ASEA Asia ASEA Americas ASEA announced it has named Meredith Tieszen the Senior Vice President of ASEA Americas and Howard Chow the Regional Vice President of ASEA Asia. Tieszen will lead the company’s U.S., Canada and Latin America sales teams as they focus on driving sales and field initiatives. With almost two decades of high-level business experience, Tieszen brings senior leadership skills and an understanding of sales systems and programs to her new role. “We are thrilled Meredith and Howard will be leading sales across North America and Asia,” said Jarom Webb, President of ASEA. “During the global pandemic, we learned that we must change the way we do business in order to remain successful as we drive toward the future. Meredith and Howard have what it takes to bring ASEA to the next level.” Chow’s responsibilities will include a continuation of the building process already begun in Asia, where the company has a presence in Hong Kong, Malaysia, the Philippines, Singapore, Taiwan and Thailand. Chow joined ASEA in 2019 as sales director for ASEA Hong Kong and has more than two decades of experience in the industry as well as manufacturing, and local and overseas property development. “We look forward to building on the strong foundation ASEA has established over the past decade,” Webb said. “Our corporate Leadership team and I are excited about the impact Meredith, Howard, and our entire sales team will make on our global growth plans.

Ryan Napierski and Emma Battle Nu Skin, Board of Directors Nu Skin Enterprises, Inc. has added Emma Battle and President and CEO-elect Ryan Napierski to its Board of Directors. “We welcome our newest board members and the experience and insights they have in business, entrepreneurship and digital strategies,” said Steven J. Lund, executive chairman of the board. “Ryan understands our business as well as anyone, and as he continues the transition into his new role, we are excited to see him lead the company in building on the strategy and momentum built over recent years. Emma’s extensive background in digital marketing and strategy will be valuable as we continue to build our digital business. We are also pleased with continued progress in our efforts to add more diversity to our board, broadening our perspective and collective experience.” Battle is the CEO and founder of strategic consulting and digital marketing firm Market Vigor and a current member of the Board of Directors for Unifi and Bassett Furniture Industries. She is also an active champion for several charitable and civic causes like UNC’s Director Diversity Initiative, OnBoardNC, Take Your Seat and Santa Clara University’s Black Corporate Readiness program. Battle has a bachelor’s degree from Duke University and MBA from Harvard Business School. Napierski will fill current CEO Ritch Wood’s position on the Board, who will retire September 1, 2021. DSN w w w. d i r e c t s e l l i n g n e w s . c o m 2 7

/ INDUSTRY NEWS /

S T O C K

W A T C H

DIRECT SELLING C A P I TA L A D V I S O R S DIRECT SELLING STOCKS SIGNIFICANTLY OUTPERFORM THE MARKET IN MAY

AY SAW a surge in direct selling stocks, driven by a strong first quarter, which included aggregate growth revenue of more than 63 percent among the Direct Selling Capital Advisors (DSCA) large cap tracking set. The Direct Selling Capital Advisors Direct Selling Index (DSCI) rose 18.4 percent during the month, as compared to a gain of 1.9 percent for the Dow Jones Industrial Average (DJIA) These gains have led the DSCI to sit at a record high, up 111 percent since the tracking period began on March 1, 2020. This is compared to a gain of 35.9 percent for the DJIA during the same period. Year-to-date, the DSCI is also outperforming the broader markets with gains of 33.5 percent, while the DJIA gains 14.2 percent. “May represented one of the strongest monthly performance periods for direct selling stocks since the inception of our tracking set in March 2020,” said Stuart Johnson, Direct Selling Capital Advisors CEO. “Particularly impressive was the manner in which it occurred, which was primarily without the support of the broader markets. The relative strength is not necessarily surprising; however, the dramatic spread is certainly impressive.”

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LARGE CAP STOCKS Each of the eight large cap stocks within the tracking set outperformed the broader markets since tracking began. Only two companies declined, but both have experienced noteworthy runs during the year. n Medifast, Inc. (NYSE: MED) rose 46.3 percent, driven by the company’s first quarter financial results announcement, which included revenue growth of 91 percent, year-overyear. At the end of May, MED stands up 318 percent since tracking began and includes gains of 73.6 percent in 2021 year-to-date, making it the clear leader in the group. n USANA Health Sciences, Inc. (NYSE: USNA) rose 17.5 percent and now stands 60% above its February 2020 levels. With 2021 gains of 35.7 percent, it is the second leading company in the large cap tracking set. n Herbalife Nutrition, Inc. (NYSE: HLF) moved aggressively higher after impressive first quarter results and increased 14.9 percent throughout May. HLF is now 62.5 percent above its initial tracking date levels, but continues to lag somewhat with gains of only 5.4 percent for the year. n Nu Skin Enterprises, Inc. (NYSE: NUS) rose 14.5 percent and now stands 155 percent above the initial tracking date.

Each of the eight large cap stocks within the tracking set outperformed the broader markets since tracking began.

Year-over-year revenue growth of 31 percent announced in its first quarter results created a continued upward trend and a near-record 52-week high before selling off slightly in early June. n Betterware de Mexico (NASDAQ: BWMX) declined 7 percent and now stands 31.2 percent higher since the beginning of the year and 361 percent higher than March 2020. The company’s first quarter financial results included net sales growth of 205 percent yearover-year, leading the stock to trade off slightly and it has since been trading in a sideways to slightly down consolidating pattern since then. n Tupperware Brands Corporation (NYSE: TUP) rose

5.2 percent and is now 800 percent up since the end of February 2020. TUP has become a remarkable turnaround story and became a top performer in 2020, but has lagged behind in 2021, standing down nearly 20 percent year-todate as of the end of May. The stock is trading in a general downward trend, possibly an indication of profit taking after the stock’s impressive run last year. n eXp World Holdings (NASDAQ: EXPI) lost approximately 6 percent during the period, but despite declines over the last several months, the stock remains up 5.1 percent year-to-date and 574.9 percent since the initial tracking period began. n Primerica, Inc. (NYSE: PRI) rose 1.8 percent during May, w w w. d i r e c t s e l l i n g n e w s . c o m 2 9

/ INDUSTRY NEWS /

S T O C K

and now stands 48.1 percent higher than its initial levels, and 25.7 percent up year-to-date. On May 5, the stock set a new 52-week high following strong first quarter financial results, which included 21 percent year-over-year revenue growth, and set a new 52-week high again in early June.

SMALL CAP STOCKS Mannatech Incorporated (NASDAQ: MTEX) gained 29.2 percent in May, and then began a process that seems

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W A T C H

to clearly indicate they are in the process of preparing for a “go-private” transaction. After several years of repurchasing shares, the company announced a tender offer to purchase up to 211,538 of its shares at a price of $26, representing a premium of nearly 28 percent to the stock’s closing price in the previous session. This tender offer represents more than 10 percent of shares outstanding, and insiders currently hold more than 48 percent of the stock, which will likely exceed 50 percent of the total following the completion of the offer.

During the month of May, the number of sell-side analysts maintaining “buy” and “hold” ratings on industry stocks remained flat at approximately 97 percent.

SHORT INTEREST AND DATA ANALYSIS During the month of May, the number of sell-side analysts maintaining “buy” and “hold” ratings on industry stocks remained flat at approximately 97 percent. Analysts recommending “sell” ratings remained miniscule. “Second quarter of 2021 results are where things will get interesting,” Johnson said. “While first quarter results were very impressive, the year-over-year

comparable period did not include the pandemic period trends that helped to launch the current growth cycle the industry is experiencing. However, by the second quarter of 2020 these trends had begun to take root and positively impact results in many cases. As such, the upcoming second quarter results will have a much higher hurdle to jump for many companies to continue to show significant YoY growth.” DSN

DIRECT SELLING CAPITAL ADVISORS is a boutique investment banking, business development and corporate finance advisory firm primarily focused on the direct selling vertical, as well as ancillary businesses. Located in Dallas, Texas, Direct Selling Capital’s core service offerings include both buy and sell-side M&A advisory, equity and debt financing, as well as joint venture and partnership opportunities. For more information please contact us at: info@directsellingcapital.com This is a summarized report; for more information, please contact info@directsellingcapital.com.

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/ INDUSTRY NEWS /

S T A T E

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S TAT E O F DIRECT SELLING

For the full articles, visit directsellingnews.com/ category/news/

4 REASONS FOR DIRECT SELLING OPTIMISM POST-PANDEMIC

BY BEN GAMSE

110

SPRING BLOOM WILL TURN INTO A SUMMER BOOM GDP Q$ 2019= 100

SUMMER BOOM

105

Q3* Q2*

100

Q4*

PR E- VI R

U S PA TH

20 1 9 Q 4 L E V E L

SPRING BLOOM

95 90 85

19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4

Source: Oxford Economics Source: Oxford Economics

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IRECT SELLING demonstrated its resilience in a challenging environment in the last year achieving record highs in sales, sellers and customers in the U.S. As the U.S. economy continues its recovery from the pandemic, a continued rapidly evolving retail and labor market provides opportunities and challenges for direct selling, along with a few key reasons for long-term optimism. Before we dive into the direct sellingspecific data and analysis, below is some macroeconomic context with trends impacting the direct selling channel.

STATE OF U.S. ECONOMY Although last year’s recession triggered by the Coronavirus pandemic was historically sudden, deep, and broad, the recovery in the U.S. has been faster than many initially expected. Oxford Economics expects U.S. GDP to exceed the pre-pandemic level and prepandemic growth path by Q3 of this year. Last month, the National Retail Federation issued an upward revision to its forecast that retail sales will increase “between 10.5 percent and 13.5 percent to more than $4.44 trillion this year as the economy accelerates its pace of recovery.” After a spike in the unemployment rate well exceeding Great Recession levels, unemployment is continuing to decline toward pre-pandemic levels:

U.S. UNEMPLOYMENT RATE APR 2007 - APR 2021

14.8%

14 12 10 8 6

6.1%

4 2

APR-21

APR-19

OCT-19 APR-20 OCT-20

OCT-18

APR-17

OCT-17 APR-18

APR-16

OCT-16

OCT-15

APR-14

OCT-14 APR-15

APR-13 OCT-13

OCT-12

OCT-11

APR-12

APR-10

OCT-10 APR-11

APR-09

OCT-09

APR-07

OCT-07 APR-08 OCT-08

Source: US Bureau of Labor Statistics

The U.S. Congressional Budget Office forecasts the unemployment rate will rebound to its prepandemic level in 2022. Consumer confidence is also nearing prepandemic levels. In part due to increasing values of stocks and homes, U.S. household wealth increased to a record $136.9 trillion in Q1, 2021. (This represents a 3.8 percent increase over the previous quarter and almost double Americans’ wealth from 10 years ago). And, thanks to government stimulus efforts, American income and savings is higher than prepandemic. However, not everything in the economy is going smoothly: Global supply chain challenges are widespread, and inflation is edging up. Although, there is reason to think these inflation/supply issues will not be long-term. According to Chief U.S. Economist at Oxford Economics, Greg Daco, “Inflation is a feature of this recovery, not a bug. Essentially it reflects this imbalance between very strong demand from consumers and businesses and a gradually responding supply to that very strong demand. And, as there is this mismatch between very strong demand and gradually accelerated supply, there are pockets of price pressures.”

DIRECT SELLING HAS DEMONSTRATED REMARKABLE RESILIENCE According to DSA’s 2021 Growth & Outlook Survey, direct selling set record highs in sales ($40.1 billion), direct sellers (7.7 million), and customers (more than 41.6 million) in the U.S. in 2020. Following are more detailed breakdowns of these stats and some potential drivers of the growth.

2021 GROWTH & OUTLOOK SURVEY NOTE ON DSA’S 2021 GROWTH & OUTLOOK SURVEY: Growth & Outlook is DSA’s annual survey that reports on the size and scope of direct selling in the U.S. and is audited by Nathan Associates, a third-party international economic consulting firm.

w w w. d i r e c t s e l l i n g n e w s . c o m 3 3

/ INDUSTRY NEWS /

$45

S T A T E

$12.1 $12.1

$12.4 $12.4

$15 $10 $10 $5 $5 $0 $0

$7.9 $7.9

$11.8 $11.8

$30 $25

$20 $15

S E L L I N G

$15.0

$40 $35

$25 $20

D I R E C T

DIRECT SELLING CATEGORY RETAIL SALES ($ BILLIONS)

$45 $40

$35 $30

O F

$7.7

$7.6

$7.7

$7.6

$5.9

$5.9 $6.2

$5.9 $5.8

$6.2 $3.2 $0.9 $3.2 2015 $0.9 2015

$12.6 $12.6 $8.0 $8.0

$12.7

$15.0

$12.7

$8.1 $8.1

+18% +18%

$9.1 +13%

$9.1 $7.2

+13%

$5.6

$5.9 $5.8

$5.6

$5.6 $5.5

$5.6 $5.3

$5.8 $2.9 $0.9 $2.9 2016 $0.9

$5.8 $2.9 $0.9 $2.9 2017 $0.9

$5.5 $2.7 $1.0 $2.7 2018 $1.0

$5.3 $2.5 $1.0 $2.5 2019 $1.0

$5.3 $2.5 +20 $1.0 $2.5 2020 +20 $1.0

2016

2017

2018

2019

2020

Source: DSA 2021 Growth & Outlook Survey

In the last year, direct selling was a source of in‑demand products and services during a time when brick and mortar was largely shuttered and other parts of retail were slowed by significant supply chain issues. You can see growth across many categories within direct selling, much of which is reflective of broader consumer trends.

INCREASING CUSTOMER-CENTRICITY Customers reached an all-time high driven by a 19.4 percent YOY increase in preferred customers* to 32.6 million in 2020. (*Preferred customers are those that have signed a preferred customer agreement with a direct selling company where they may be eligible to pay wholesale prices for products/services. They are not eligible to sell products/services to others, and they are not eligible to earn). According to DSA-Ipsos 2020 Consumer Attitudes & Entrepreneurship Study, consumers value the following most about direct selling; “I feel good about supporting a small business” (69 percent) and “the personal service that direct sellers provide” (67 percent).

$7.2 $5.3

+29% +29%

Wellness Wellness Services Services Home & Family Care/Home Durables Home & Family Care/Home Durables Personal Care Personal Care Clothing & Accessories Clothing Leisure&&Accessories Educational Leisure & Educational

(YOY Change)

(YOY2020 Change)

(YOY Change)

There was also a record high in direct sellers in 2020, with 7.7 million direct sellers in the U.S. in 2020 (a 13.2 percent increase over 2019). The DSA-Ipsos 2020 Consumer Attitudes & Entrepreneurship Study shows that Americans still desire entrepreneurship and supplemental income opportunities. Direct selling compares favorably against the alternatives such as the gig economy.

7.7 MILLION DIRECT SELLERS DURING 2020 +13.2% YOY

6.8 Million Part-Time

.9 Million Full-Time

Source: DSA 2021 Growth & Outlook Survey

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DSA’s 2021 Digital Transformation Study shows several direct selling companies invested significant resources to transforming their companies virtually including: e-commerce/ mobile commerce, social selling, virtual events, faster payments, etc. These digital transformations likely put those companies in a stronger position to compete even as the brick & mortar reopens and retail competition ramps up. The ability to combine the improved e-commerce/m-commerce/social selling experience and its increased reach with the personal touch that is a key differentiator for direct selling and can help drive sustained growth.

There are several possible post-pandemic retail trends that direct selling can capitalize on:

HOW DOES DIRECT SELLING ACHIEVE SUSTAINED GROWTH? First, there are a few key challenges/questions the direct selling channel must overcome: n As retail competition ramps up with the continued reopening of brick & mortar, will that have a negative impact on direct selling?

As the labor market tightens (nearing full employment, labor shortages, rising wages, and increasing demand for gig competitors like Uber, Lyft, Airbnb, etc., which were negatively impacted during the pandemic).

The following are four reasons for optimism for direct selling overcoming these challenges:

According to DSA’s DataTracker (quarterly KPItracking survey), QuickPulse (monthly pandemic/ recovery-tracking survey), and public company Q1 filings, there’s no indication that direct selling growth is slowing in 2021 YTD.

Americans’ expectations of work are shifting. There are indications that entrepreneurship and flexible, supplemental earning opportunities will still be in demand. Even with declining unemployment, there will likely be demand for diversified, supplemental income streams. Direct selling continues to compare favorably.

Community n Direct selling provides consumers with personalized knowledge and recommendations on products and services, coaching and support in reaching personal goals (e.g. weight loss, fitness, cooking, etc.), and it provides a broader sense of community (which can all be important as people seek face-to-face community and connection after the pandemic). Rachel Bonsignore, Vice President, GfK Consumer Life at GfK said, “There’s a couple of areas to think about when you consider consumers and where they stand in this critical moment as well and in the near future. One area that we’ve really been looking closely at is how the rise in social responsibility in the last couple years has really transformed into a stronger emphasis on community and connecting with people locally. We’ve seen people increasingly say that they want to belong to groups that share their interests or beliefs, that they express themselves through their communities or their cultures. We’ve seen throughout the pandemic that things like mutual aid and supporting local and small businesses have really been a way for people to leverage the power of groups and the power of community. We think that’s a really interesting trend that is going to continue as people move further away from self interest and only doing things because it’s something they want and realizing it’s something that serves the collective good and mutual interest.” w w w. d i r e c t s e l l i n g n e w s . c o m 3 5

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Meeting customers with anything… anywhere, anytime n As Steve Dennis says in Remarkable Retail, “the power in retail has shifted to the consumer.” As the American consumer becomes more knowledgeable, expectations increase, and behavior continues to shift, it’s important for retailers to continue to meet consumers where they are. Direct selling has shown agility in going digital in the last year. Now, there will likely be more of a balance of in-person. n “We’ve seen that balance of power in the information age—the access consumers have to the info about the brands they want to shop and frequent. It’s shifted even further, and it’s accelerated in favor of the consumer who now shops for anything, anywhere, anytime, and does so with a different mindset from even a few years ago… In this environment, understanding the customer and anticipating what they need, what they want, and then offering products, services, and the experiences that resonate with that customer is increasingly critical to the success and survival at a time when the industry is evolving so quickly.” -Matthew Shay, CEO National Retail Federation

In-person sales will still represent the majority of retail for the near future n According to Emarketer, “Following a strong Q1 fueled by government stimulus, we have increased our forecast for U.S. retail e-commerce sales in 2021. U.S. e-commerce sales are expected to grow 17.9 percent this year (higher than the 13.7 percent predicted in January 2021) to reach $933.30 billion. That pushes e-commerce’s share of total U.S. retail sales to 15.3 percent, up from 14.0 percent last year. E-commerce is now on track to surpass 20 percent of total retail by 2024.” Even though e-commerce grew at 32 percent last year and is expected to grow 18 percent this year, e-commerce only represents a fraction of overall retail. (15 percent by Emarketer estimates). The reopening of in-person shopping provides an enormous opportunity to meet customers where they are and combine the best of both worlds, leveraging the reach and convenience of online with the community, coaching, and personalization of in-person.

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D I R E C T

S E L L I N G

Despite the predictions above, we don’t yet know exactly what direct selling and retail changing consumer behavior will look like in the second half of 2021 and beyond. We do know it will be constantly changing, evolving, and require continued innovation and creativity on behalf of retailers. DSA and its Industry Research Committee are still working to establish our forecast for 2021 and beyond, which will be included in DSA’s 2021 Growth & Outlook Report to be published later this summer. This Report will provide a forecast and actionable recommendations on how to leverage trends impacting direct selling to meet or even exceed the upper bands of this forecast.

REVISITING ANTIFRAGILITY Last year in this publication I explored how direct selling can be “antifragile” or being able to benefit from volatility and disorder. What worked in the last 16 months may not be what works in the next 16 months. But, using this as a continued opportunity to strengthen your business, continuously adapting can position direct selling for long-term growth. As Harley Finkelstein, President of Shopify says, “It feels like we’re in a time of great breakage, of great change. And it feels to me like what is emerging through this global pandemic are two types of people and two types of entrepreneurs and two types of individuals, which is those that are resistant that are waiting for things to go back to the status quo that are looking forward and anticipating when normalcy will return. But then there’s this whole other cohort of people, a whole other cohort of businesses even, who are resilient, who are not waiting for the status quo to return but rather are thinking about how they can use what is happening as this incredible catalyst to change everything and to pivot and to adapt.” Why aspire to return to normal when we can use this as an opportunity to be creative, innovative, and reimagine the channel? DSN

BEN GAMSE, Director of Industry Insights, Direct Selling Association, is passionate about uncovering market trends, understanding consumer behavior, and delivering actionable insights to help make better business decisions and drive growth. For more than eight years, Ben has led the market research department at Direct Selling Association.

Moving Forward Together to Better

It’s time. Time to connect with colleagues, see what’s new, and catch up with old friends. Save the dates for these upcoming DSA events and we will see you in person this October!

Legal& Regulatory Seminar Sponsored by

OCTOBER 13–15

OCT. 31 - NOV. 2

WASHINGTON, DC

NEW ORLEANS, LA

VISIT DSA.ORG TO LEARN MORE

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based solely on a company’s customer-to-distributor ratio taking into consideration the following definitions:

Distributor—someone who

DOES have a distributor agreement in place

Customer—someone who DOES NOT have a distributor agreement in place

R E C O G N I T I O N

BE CU STOM ERCENTRIC RECOGNIZED.

The CCR Program is

C U S T O M E R - C E N T R I C

Active is defined as each

customer and distributor must have made a product purchase during the last six months. Active customer and distributor counts are limited to those in

Direct Selling News is excited to present the Customer-Centric Recognition (CCR) Program to celebrate companies that are leading the way toward a sustainable, customer-centric future for the industry. Qualifying companies utilize business models that boast high

the U.S. and Canada.

customer-to-distributor ratios and prioritize customer sales.

Companies must have been in business for at least one year and have a minimum of $5 million in annual revenue. Qualifying companies must

DSN

attain: 5:1 up to 10:1 for Gold status and 10:1 or more for Platinum status.

DIRECT SELLING NEWS

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Companies who wish to learn more or submit a CCR Program Application can go to www.directsellingnews.com/ccr/ or contact editor@directsellingnews.com

IRECT SELLING COMPANIES with a strong retail base of satisfied customers are

experiencing impressive growth and deserve recognition and acknowledgment for

their efforts. With evolving consumer expectations and regulatory scrutiny, customer‑centric equals success for everyone—distributors, direct selling companies, and the channel as a whole. The DSN Customer-Centric Recognition Program acknowledges these companies.

GOLD

/ 5:1 up to 10:1

P L AT I N U M

/ 10:1 and above

MONAT GLOBAL

ACN

NEORA

BHIP GLOBAL, INC.

PERFECTLY POSH

IT WORKS!

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KYNECT

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SCENTSY, INC.

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F O R W A R D

T H I N K I N G

A U G M E N T

YO U R

M A R K E T I N G

Augment Your Marketing Augmented reality experiences are driving the next evolution of marketing BY DAVID LEE

REATING UNIQUE EXPERIENCES THROUGH ADVANCING DIGITAL TECHNOLOGY is strengthening customer relationships with businesses. One of the fastest-growing and most effective technologies is augmented reality (AR). Unlike virtual reality that creates a totally immersive virtual experience, AR works with and enhances your environment with overlay digital information, typically using a mobile device.

Why AR Matters

Since augmented reality enhances the surrounding environment, it is incredibly mobilefriendly, easily integrating with smartphones and tablets. It incorporates video, animation and 3D interactive images to create unique interactive experiences. Apple’s Tim Cook said that AR will eventually be as important in our everyday lives as eating three meals a day. There’s no doubt augmented reality is rapidly growing in popularity, and technological advances are making it cost-effective. “This year, the economic impact of virtual and augmented reality is predicted to reach $29.5 billion,” according to HubSpot. It also drastically increases attention and engagement. The Drum reports that AR can capture people’s attention for more than 85 seconds on average, increase

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interaction rates by 20 percent, and improve click-through rates to purchase by 33 percent. Enhancing the shopping and buying experience for customers while tracking results in real-time is a core goal for businesses implementing AR. A white paper published by Ventana Research noted that “AR is proven to dramatically speed the buying experience and reduce the time and cost of resources required to address buyers’ needs. The intent should be to develop a compelling new virtual buying experience, one that uses AR to provide a more comprehensive way for buyers to understand and engage with products.”

How is AR Being Used in Marketing?

Since the focus of AR is enhanced experiences, businesses are creating ways for customers to test products before they buy and offering valuable content in an ongoing basis. Direct mailers, brochures and catalogs include scannable codes that unlock experiences that let customers see what

AP Post’s 5 DOs for Using Augmented Reality in Marketing 1.

n StubHub

allows 3D virtual tours of some event venues so customers can visualize the experience from specific seats before buying tickets.

S TA R T W ITH V I D E O

n Netflix

has used AR face filters to promote content for upcoming original shows such as the hit series “Stranger Things.”

KEY POINT: Video views and engagement are much easier to track, which lets you know if the content is connecting with the audience. If they enjoy the experience, you may want to invest in other forms of media using the same content.

2 . CO M PA R E

Two obvious applications for direct selling companies are in the makeup and personal care categories, but AR applications can go beyond products. It can be used to preview and promote branded swag. Scannable codes can be added to customized promotional cards that can link directly to a distributor’s replicated website for shopping. Product packaging can link to video recipes, testimonials, challenges or social media campaigns. Opportunity presentations can feature interactive experiences that encourage audience participation using their mobile devices. AR can be used to involve customers and distributors in designing product packaging and new product development. By using updated translation technology, some AR platforms can scan and translate text to break down communication barriers.

B E N C H M A R KS

KEY POINT: The point of using a response mechanism, such as a scannable QR code, is to increase conversions and not necessarily to increase the number of responses.

3 . S C A L A B I L IT Y

KEY POINT: Unless you need a fully custom augmented reality experience, choose a tool and platform that makes it easy to upload and manage your AR campaigns.

4 . P U B LI S H

YO U R A R E X P E R I E N C E O N E X I S TI N G P L ATFO R M S

KEY POINT: If you create AR face filters, they likely could be used on top social media platforms such as Facebook, Instagram, Snapchat and Tik Tok.

5 . L I M IT

E X P E C TATI O N S

KEY POINT: Give yourself time to experiment, test, and receive feedback when implementing augmented reality experiences. Don’t toss it out after just a few months!

(Source: aipost.com)

certain products will look like in their home, watch video tutorials or testimonials, and even share recipes or how-to videos. Car manufacturers let you see what you look like inside a shiny new vehicle. Clothing retailers create virtual fitting rooms so you can see how styles look on you. Users can share their AR experiences via text, chat apps or social media. Here are a few specific examples: n Mary

Kay’s Mirror Me app lets users virtually try on makeup and test preset styles to see what works for them. They can even add specific products and product bundles right to their shopping bag inside the app.

n Ikea’s

Studio app allows you to see what different furniture will look like in your home.

n Home

Depot’s Project Color app previews different paint colors in certain rooms and now includes things like faucets and furniture.

n Taco

Bell incorporated AR features on packaging for its popular Doritos Locos Tacos that unlocked product-related Twitter and Facebook content.

Final Thought

“[Augmented reality] stands to be one of the driving forces behind sales and marketing innovations over the next decade. Using AR, forward-looking businesses will be able to upgrade the experience they offer their customers, leading to increased business opportunities and sales,” says a projection by SmartInsights.com.

Call-Out Numbers

of shoppers purchased items they had not planned to purchase because of augmented reality. (smartinsights.com)

of customers expect to use AR and VR to sample products in 2021, and 63 percent are willing to use AR and VR to visit remote locations. (Futurum Research)

69% 42.9

Global AR and VR market is expected to

% experience a 42.9 percent CAGR between 2020 and 2030. (P&S Intelligence). DSN

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Results > Ingredients Four wellness companies focusing on product benefits and results over ingredients

BY DAVID LEE

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That’s not to say product ingredients aren’t important, but from a customer point of view, communicating the results and benefits are much more effective.

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S THE CLASSIC SALES AND MARKETING RULE GOES, “Tell them what it DOES, not what it IS.” The core of that principle is built on the fact that customers are looking for solutions to their problems. That’s not to say product ingredients aren’t important, but from a customer point of view, communicating the results and benefits are much more effective. This starts from the corporate marketing language, which guides the distributor field’s message. Here’s how four health and wellness companies focus their marketing message on product results and benefits.

Total Life Changes (TLC)

TLC teases its sampling program with the headline “Samples You’ll Feel” and the call-out “Sample The Benefits You Deserve.” Again, it’s about the benefits and how they make you feel. That’s the connection. Teasers include “decreased appetite,” “improved mental clarity” and “promotes digestive wellness.” One of TLC’s main products is Iaso® Tea Instant that promotes digestive health. The four-sample pack lists ingredients but details how users will feel trying the product. There are three other packs, and each pack includes a short video on “what you’ll feel” trying each product.

doTERRA

Essential oil company doTERRA offers a 10-pack sample of its Deep Blue Rub, targeted to help people recover from workouts by helping to soothe muscles. The three main benefits listed detail what to expect, such as “leaves your skin soft and non-greasy” and “provides a cooling and soothing sensation to targeted areas.”

Isagenix

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Prüvit’s products center around its exogenous ketone supplement drink mix, KETO//OS NAT. While the “biohacking” technology, as it’s referred to, can be somewhat complicated to understand, Prüvit uses a short cartoon video to explain how the supplement works. The three main benefits detailed include Fierce Focus, Rapid repair C-Med 100 and Favorable Fat Loss. “Experience unparalleled mental clarity and optimized cognitive function,” “with increased appetite suppression,” and “helps burn fat by controlling your hunger and reducing your urge to snack” are examples of solving specific problems. DSN

TOTALLY MOBILE & SOCIAL

Prüvit

FABULOUS PARTY MANAGEMENT

The theme “Begin Your Better” appears right on the home page of the Isagenix website. It encompasses four main categories of results for visitors to choose from: Feel Better, Eat Better, Move Better, Look Better. The company’s Whole Body System is teased with “Everyone deserves to feel better” and “Have it all: whole-body health and total peace of mind,” which focuses on the ultimate goal.

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Must Reads THRIVIN’—THE AMERICAN DREAM AUTHOR: JASON CAMPER WITH DON YAEGER (ENVISION BOOKS, 2021)

WHEN JASON CAMPER LAUNCHED LE-VEL with co-founder Paul Gravette, his guiding vision was to

create a company, a brand and a product line that had never been seen before. Over 10 million customers, approaching $3 billion in sales and 30 patents later, the inventor of the THRIVE premium product line has fulfilled each goal. In THRIVIN’: The American Dream, Camper gets personal, sharing the grit, grace, and hard-earned wisdom that went into building a transformative wellness brand and achieving success on his own terms. This memoir traces a path from troubled youngster to global entrepreneur, including candid discussions of the failures along the way which became steppingstones to a billion-dollar enterprise. Readers will gain practical insights for pursuing their ambitions in business and beyond.

REPUTATION RULES: STRATEGIES FOR BUILDING YOUR COMPANY’S MOST VALUABLE ASSET AUTHOR: DANIEL DIERMEIER, PH.D. (MCGRAW-HILL EDUCATION, 2011)

AN AWARD-WINNING PROFESSOR at the Kellogg School of Management,

Northwestern University, Dr. Diermeier has blazed a path to understand the significance of reputation management and to demonstrate how a company can create a program so powerful that it can help turn a potential public disgrace into a public image success story. Reputation Rules offers the frameworks, strategies, and processes for changing your company’s focus as quickly as the world is changing around you. Brimming with keen insights and lucid examples, Reputation Rules is a guidepost for your organization’s future—and a salve for crisis management.

UNLOCKING US BRENÉ BROWN (SPOTIFY ORIGINAL) Join researcher and #1 New York Times best-selling author Brené Brown as she unpacks and explores the ideas, stories, experiences, books, films, and music that reflect the universal experiences of being human, from the bravest moments to the most brokenhearted. Listen to conversations that unlock the deeply human part that allows people to live, lead and love with more courage and heart. DSN

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LISTEN TO THIS.

Dynamic, relevant and exclusive content for today’s direct selling executives.

SUBSCRIBE TO THE PODCAST TODAY!

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The Changing World of Compensation Plans:

A Macro View Having a well-designed comp plan helps turn the vision of a company into reality. BY GORDON HESTER

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EVOLUTIONARY

STAGES OF

THE BUSINESS

Birth of Direct Selling

Birth of Network Marketing [Quota System]

1800’s

1945

MODEL

“

We are seeing a key evolution of comp plans that support a customercentric approach to building the business.

/ Customer-Centric Era /

S THE MARKETPLACE AND INDUSTRY EVOLVE, many direct selling and network marketing companies have either modified their comp plans or are considering it in the future. I have been involved in changes of this nature with various companies from both a design and technology standpoint. I often find companies are in the weeds of micro components of comp plan design before covering the macro components that are critical to the success of the micro components. Even if you hire a comp plan expert for the micro components, you will still need to consider the macro components I outlined in this article. Whether a company is building or modifying a comp plan, there are some key questions to consider:

1. Do you want to build an opportunity-centric or customer-centric business model?

2. How much should a company payout in their compensation plan? According to BusinessforHome.org, the 2020 average cumulative payout was 34.64 percent. 3. How does a company allocate commission between those who sell their products and services vs. those who override that group? However, in your comp plan

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Birth of Modern‑Day Network Marketing

Birth of the CustomerCentric Era

Birth of the CulturalCentric Era

1970’s

2016

2021

/ Opportunity-Centric Era /

/ Cultural-Centric Era /

payout, how much is variable in nature (incentives, bonuses, etc.)? A well-designed comp plan does not require incentives to drive revenue. Incentives magnify the fixed payouts of a comp plan, but if they become too much of the total compensation, they will likely diminish the profitability of the company. It is important to set a ceiling on the variable payouts to ensure the profitability of the company.

4. How are you allocating commissions between recruiting and customer acquisition vs. for relationships?

5. What behaviors are essential to drive in their compensation plan? Compensation plans often focus on money and movement. Culture is about behavior. There needs to be alignment between the two. 6. How do companies address the imbalance between performance and compensation paid? The imbalance is created over time when commissions to those overriding sales are passive vs. rewarded for performance. You must consider how to allocate between junior leaders (performance drivers),

managers (manage to organize but not personally building), and ambassadors (legacy leaders that work to achieve passive income). While keeping in mind that the questions should be addressed with all the stakeholders involved in building or modifying a comp plan, there are other factors to be considered as well. To build a more empowering future, we must understand the past. Comp plan architecture has evolved. Currently, we are seeing a key evolution of comp plans that support a customer-centric approach to building the business. This is driven by changes in both the marketplace and regulatory community.

A Quick History Lesson

Over the life of the direct selling channel, there have been various key periods and pivot points. Many of these were defined based on the philosophies that drove the business during these periods. The industry started solely as a distribution channel. In the mid ‘40s, we began to see an evolution that introduced a different business model that allowed a distributor to build a team. During that time, to be a distributor, you had to operate as a sales rep

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Opportunity-Centric Comp Plans

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Before you build or modify a comp plan, you have to ensure the vision of the company is well defined.

Opportunity-centric comp plans have their foundation around moving up a company’s marketing plan and making more money. Recruiting and recognition are the two highestpaid activities that drive sales. Personal growth plays a big role in addicting distributors to the culture. They are typically defined by the following components:

1. A large percentage of the commission dollars are paid in overrides vs to those distributors that sell products.

2. A significant percentage of distributors make little to no money. 3. There is a heavy focus on recruiting and customer acquisition.

4. These comp plans drive business by marketing hope around the business opportunity. Too often, that hope is created around extreme examples of highly successful distributors.

5. These types of comp plans tend to create a customer base that is heavily skewed around distributor buying vs. sales to end consumers.

6. These companies create a lot of disengagement of microentrepreneurs and customers. We refer to this as “churn,” and the most churn occurs in the first six months of a new distributor’s journey. Typically, when these distributors leave, so do their customers. under an existing distributor until you earned the right to be an independent distributor. In the ’70s, we moved toward what we know today as the opportunity-centric era. While opportunity will always be a key part of building a larger sales force, the marketplace has evolved to more of a customer focus. This began what we refer to as the “customer-centric era” that is driving business today. Today, we are seeing a renewed focus on culture and what I refer to as the birth of the “cultural-centric era.” Culture is the differentiator with direct selling companies. The discussion is no longer which has what priority in building the business; leading with opportunity or leading with the product. These two paths mustn’t compete for priority but work in tandem to build a healthy culture that is strong on relationships.

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7. The design of these comp plans tends to be excessively complicated in both design and language of comp plan acronyms. Any direct selling company must investigate a few key factors that are typical with opportunity-centric comp plans. The markup of products ranges from 8x to 14x the cost of goods sold, which often makes selling to end consumers challenging if the price was a key factor in their decision. Comp plan payouts could comprise as much as 50 percent of sales. Over time, this created large imbalances between performance and compensation. Most importantly, this type of comp plan creates regulatory risk and is typically the ones that regulators often define as “illegal pyramids.”

Customer-Centric Comp Plans

Customer-centric comp plans lead with the product and services sold by the company and its distributors. While the

business opportunity is still important, the path to success is found through building a big customer base, especially with end consumers. They are typical defined by the following components:

1. A large majority of commission dollars are paid to retailers vs. overrides.

2. Active distributors can earn a significant part-time income by simply building a customer base.

Your brand identity offers a unique opportunity

to make powerful and

lasting emotional connections with

your customers, prospects, and salesforce.

3. These companies tend to have a high “customer density”. Customer density is defined as the number of consumers per active distributor. You will see customer density ratios of 8 to 1 (8 customers per active distributor) or higher.

4. Customer acquisition drives sales, but customer retention drives the stability of the business.

5. Recruiting is often tied to converting satisfied customers to become distributors who want to market a company’s products or services because they are raving fan customers. 6. The income narrative is typically around part-time income focused on (1) building a customer base and (2) find a few teammates who do the same.

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experience and expertise to help drive your branded engagement engine, providing customizable merchandise via a branded online company store.

7. A large majority of sales are driven by repeat end consumers.

My Advice

There are various ways to build a direct selling business. You have to judge which one is best for you. We are seeing an increased innovation in comp plan architecture and new hybrid models. Before you build or modify a comp plan, you have to ensure the vision of the company is well defined. That includes defining the key behaviors that will turn your vision into reality. A well-designed comp plan helps turn the vision of a company into reality. For those companies that are looking to modify an existing comp plan, you have to accept that with any comp plan change, there will be winners and losers. The pushback will likely be from your legacy leaders who seek to protect their income and influence in the company. Ultimately, it is important to educate them that a reduction in compensation (which is likely) isn’t a loss but more of an investment into the stability and healthy growth of their income over time. This is especially challenging for leaders that built their business during the opportunity-centric era and believe:

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FOCUS =

T YPE OF

Prospecting & Recruiting

CULTURE

(BATHTUB MODEL)

Relationship Management

(ENGAGEMENT PROCESS)

Lost Relationship

(DISENGAGEMENT )

1. They were promised what they earn in the current compensation plan.

2. They earned the right to passive income. 3. The behaviors that drove success in the past will continue to drive success in the future. We must always remember that complexity is the enemy of execution. The profile of a direct selling entrepreneur is not a seasoned entrepreneur. Therefore, simplicity is critical in comp plan design. In the back office design my tech company, Shapetech Solutions LLC, built for the marketplace today, it is not critical for someone to understand the comp plan to be successful in the business. The days of back offices operating as information portals are over. A successful back office should drive key behaviors and actions that drive revenue over the lifetime journey of a distributor. Comp plan design should be aligned with the design of a company’s back office to truly be successful. Finally, focus on the tub. As you can see from the graph above, sales can be driven through the faucet, tub, or drain. However, success is tied to creating a massive amount of relationships. The two largest relationship groups are customers and micro-entrepreneurs. Good comp plan design focuses on building relationships with these two groups. Leaders are created from these groups, and if you fail to keep these relationships, leaders

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will churn also. Focus on distributor engagement and customer retention. It is important to remember that when we lose customers, distributors will likely disengage or leave the business. Compensation design must address this issue if the goal is to build a healthy and stable direct selling business. In closing, as I mentioned at the beginning of this article, we are entering into a “cultural-centric era”. We are seeing the beginning of the “Pygital Movement” that requires successful businesses to build culture both online and offline, now more than ever. Culture is driven by people’s experiences, and great companies are masterful at the experience game. I can assure you that if the culture doesn’t practice the proven behaviors that create an empowering and engaged community, the value of any comp plan will be compromised. Like product and opportunity, the comp plan lives within culture, not independent of it. Cultures evolve but people tend to stay true to their core values. In that context, what often defeats comp plan modifications is not the design of a comp plan itself but more the courage it takes to change one that is holding on to old thinking. DSN GORDON HESTER is a direct selling industry veteran, lecturer, consultant and an accomplished author. He is on the DSA Research Committee, the DSA Government Relationship Committee and is on the Board of the DSEF. Hester owns a stack technology company, Shapetech Solutions.

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Why Reputation Matters – An Overview

BY THE DSN EDITORS

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Our purpose in this month’s cover story is to encourage the discussion about the importance of reputation and support the objectives of both domestic and global channel leadership. 5 6 D I R E C T

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RECENT EVENTS in the direct selling channel have mentioned, focused or alluded to the critical importance of reputation. Kevin Guest, the new Chairman of the U.S. Direct Selling Association and Ryan Napierski, the Advocacy Chairman of the World Federation of Direct Selling Associations, have both named reputation as a priority on their agendas. Individual brands always acknowledge the importance of reputation. When induvial brands use the same channel of distribution, they collectively form a brand. Direct selling, as a form of selling, has been in existence for over a century, a testimony to the relevance of the direct selling model and recognition of direct selling as a relevant channel of distribution. Direct selling is also a brand. No brand or channel of distribution is ever immune from scrutiny or perceptions associated with the brand; therefore, the reputations we are creating are always very important, individually and collectively. Direct selling currently finds itself in the conversation of both regulatory and public policy makers. Whenever we experience changes in governance, local or national, possible changes or adjustments to policy are to be expected.

DIRECT SELLING MODELS ARE UNIQUE. They are changing—becoming more customer‑focused, embracing more technology, becoming more digital, becoming less complex, easier to engage and embrace.

Our purpose in this month’s cover story is to encourage the discussion about the importance of reputation and support the objectives of both domestic and global channel leadership. Both Mr. Guest and Mr. Napierski have chosen to focus on the importance of reputation. What builds our reputation, and what detracts from it? Reputation is critical to public perception and effectiveness in attracting those in the marketplace who represent the brand and choose to be clients and customers of the brand. Therefore, reputation is definitely a factor when evaluating marketplace potential and growth.

The Realities of Reputation

As we reflect on the state of direct selling, we see a model we have proudly reported on for over 17 years, and we are excited about the future of the channel. The gig economy and its focus on providing new microentrepreneurial opportunities have created new channels of distribution, disrupted old/ outdated channels and created new ways to connect products and services with clients and customers. There are more ways than ever before for the average person to turn their time and resources into viable income opportunities connecting products and services with those who seek excellent products and services. Direct selling models are expected to benefit from the growing interest in micro‑entrepreneurship and the growing importance of digital platforms. Direct selling models are unique. They are changing—becoming

more customer‑focused, embracing more technology, becoming more digital, becoming less complex, easier to engage and embrace. More personal relationships with customers and independent contractors will create new competitive advantages, necessitating a focus on the everevolving reputation that defines our channel. Reputation is generally based on what an entity has been. The focus on what direct selling is becoming will be defined by our collective efforts. The focus on reputation is both timely and of critical importance to optimizing the possibilities. To gain more insights into the importance of our collective reputation, we reached out to the new DSA Chairman and the Advocacy WFDSA Chairman. They are focused on reputation as a vital domestic and global initiative and … it’s easy to understand why. The channel’s overall reputation impacts the reputation of each individual entity, and each individual entity’s reputation helps to shape the collective reputation of the “direct selling” brand. We hope this month’s cover story inspires you to reflect on the importance of your brand and your reputation as we collectively continue to navigate the challenges and activate the possibilities. w w w. d i r e c t s e l l i n g n e w s . c o m 57

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The ReputationBuilding Blueprint

BY SARAH PAULK

Control the message and own your mistakes. Reputation is everything. IT’S THE “IT FACTOR” behind the most beloved and profitable brands, the vibe that lets customers feel confident spending their hard-earned money, and the set of standards that builds fruitful relationships with suppliers and vendors. A good reputation is the intangible but key ingredient for any company seeking to drive growth. And while it can’t be purchased, companies who fail to heavily invest in building it won’t survive.

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A good reputation is the intangible but key ingredient for any company seeking to drive growth.

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LIKE A BANK ACCOUNT, reputation is constructed through individual investments that are rarely made in lump sum deposits but rather amassed through individual integrity-filled choices over the lifetime of a company. A company that curates those positive actions, responses and decisions over the years will have the credibility necessary to survive and even thrive in the event of a public relations crisis. “There will be times in business when you have to withdraw from that account,” says Kevin Guest, Chief Executive Officer of USANA and Chairman of the Direct Selling Association (DSA). “If you don’t have that account built up with things you have done that are positive, and the first time you’re thinking about reputation is when you’re faced with an issue that can hurt your reputation, it’s too late.”

Now What? Now Now What? What? If this is the question If this is the If this is the question question you keep asking, you you keep keep asking, asking, we can help. we can we can help. help. 70+ direct selling clients since 2015. 70+ direct selling clients since 2015. 70+ direct selling clients since 2015. 300+ years of direct selling experience. 300+ years of direct selling experience. 300+ years of direct selling experience. Direct Selling’s Own Reputation Crisis

While the DSA’s 2020 Consumer Attitudes & Entrepreneurship Study shows that the vast majority of people (80 percent) hold a favorable impression of direct sales, the industry has a history of battling criticism and the consequences of a negative public perception. “We have seen inflated insurance rates,” Guest says. “It’s gone up double-digits, and we were told straight-up it was because we are a direct seller.” This cost inflation is known in the industry as the “direct selling tax,” and it’s attributed to the wake of distrust left behind by the handful of bad apples who damage the market landscape for everyone else. “It’s almost guilt by association,” Guest says. “Even though you might be a pristine company that does everything right, you’re still part of an industry that is questioned by a lot of naysayers out there who are constantly pumping out negative information.” w w w. d i r e c t s e l l i n g n e w s . c o m 6 1

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Million-Dollar Decisions with BillionDollar Consequences

In previous decades, a dissatisfied customer would have to publish their thoughts in a letter to the local newspaper or catch the attention of the evening news. Today, every single customer has a digital megaphone at their disposal with the potential to virally influence thousands or millions of other customers. In the direct selling industry, this risk to reputation damage is higher because there are hundreds of thousands of distributors who function as spokespersons not only of their company but the entire channel as well. But Guest believes there is an antidote to the reactive management style that causes embarrassing fumbles in the media and creates bad word-of-mouth advertising among disgruntled customers online. A set of standard operating procedures put in place before a crisis happens ensures everyone—from distributors to c-suite executives—stays true to the company’s core values. It’s a method Guest has implemented and witnessed the efficacy of firsthand at USANA. “We’re focused on putting the customer first at USANA, and an example of that would be a few years ago when we had a batch of product test positive for microbes,” Guest says. “We had a choice to make. We could sell the product as is, and most likely no one would ever find out; we could nuke the product to kill the microbe and cause degradation of the product; or we could throw the product away and cost the company millions of dollars. We had a standard operating procedure in place, so the manager knew he had to throw it out.”

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USANA’s protocols empowered an employee at the manager-level to make a multimillion-dollar decision without it ever hitting an executive’s desk. “We didn’t have to debate what it would do to our profit margins,” Guest says. “The decision was already made because product quality is what we live and die by. We’re a thirty-year-old company, and that could have ruined our reputation, which is worth billions, for the sake of saving a few million dollars.”

A New Approach to Compliance

Companies focused on building outstanding reputations are taking a fresh look at how they present themselves to the world, like Amway, who became the first direct selling company to create the role of Chief Reputation Officer within its executive team. Candace Matthews, who now holds that title, encouraged direct selling leaders not to shy away from difficult conversations, complicated histories and lessons learned through past failures during her speech at the 2021 Direct Selling University event in April.

Q&A

With DSA Chairman Kevin Guest & WFDSA Advocacy Chairman Ryan Napierski Direct Selling News spoke with Kevin Guest, USANA Chief Executive Officer and incoming chairman of the Direct Selling Association (DSA), and Ryan Napierski, Nu Skin CEO and Advocacy Chairman of the World Federation of Direct Selling Associations (WFDSA), about their collaborative global reputation campaign.

“

How we do it matters—we do it with integrity, honesty, and sincere intent to benefit all whom we serve, customers, affiliates, and employees.

What is your vision for the industry? KEVIN GUEST: My vision for the industry would be for us to have a broader digital footprint outside of our own audience. That’s an area we haven’t placed a lot of focus on, but I think it’s very relevant in today’s world. How will that emphasis on expanding the industry’s digital presence impact its reputation? KEVIN GUEST: What difference would it make if a bad article is published in a magazine that might have 40-50,000 followers when we have six million distributors in the U.S.? It’s all about digital, SEO and how we can help raise all the boats in the harbor. I’m hoping I can take the unification of all of these companies that are in some ways competitors and have us working towards one goal: owning our message. How is the WFDSA working to improve the industry’s reputation? RYAN NAPIERSKI: I see the WFDSA’s role broken into four key deliverables: branding and messaging, behaviors and standards, training and compliance, and advocacy and outreach. The WFDSA Advocacy Committee consists of direct selling CMOs and CCOs who will lead the global work,

— RYA N N A P I E R S K I / N u S k i n C E O a n d A d v o c a c y C h a i r m a n o f t h e Wo r l d Fe d e r a t i o n of Direct Selling Associations

partnering with local DSAs to localize and execute the work. What should be the priorities for direct selling distributors and executives as they seek to improve the industry’s reputation on both a domestic and global scale?

RYAN NAPIERSKI: There are three key practices. First, who we are matters—we are companies that are a force for good, empowering people to find a better version of themselves. Second, what we do matters to the world—providing amazing products through a uniquely empowering channel that lifts lives. Third, how we do it matters—we do it with integrity, honesty, and sincere intent to benefit all whom we serve, customers, affiliates, and employees. w w w. d i r e c t s e l l i n g n e w s . c o m 6 3

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We certainly do police and correct, but in today’s digital world, reputation is all about controlling the message. — K E V I N G U E S T / U S A NA C E O & C h a i r m a n o f t h e D i re ct S el l i ng A s s o c i ati o n ( D SA )

“[It] will take all of us to impact change,” Matthews said. “[We] must include all people and all perspectives to create a culture where we learn and grow from each other.” While policing is still a vital element to maintaining a lawful and compliant organization, the new focus will be to devote resources to teaching distributors how to run their businesses with integrity, stay true to the company’s message and then provide tools that help them replicate proper behavior. Systems that encourage and enforce honesty and transparency are now gaining popularity in place of systems that reactively monitor and keep tabs on distributors and their claims. “We changed the name of our compliance department to an ethics department,” Guest says. “I want to train people how to do things right versus catching them doing things wrong. We certainly do police and correct, but in today’s digital world, reputation is all about controlling the message.” Part of controlling that message, Guest says, is shouting from the rooftops all the positive things direct selling companies are doing, including sustainability efforts, scholarships for diverse

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groups, programs that support women in business, philanthropy and, of course, entrepreneurship. Also important is busting the common myths and stigmas that haunt the industry, like inventory loading and high participation fees–none of which are allowed by the DSA. “The great thing is that we are a legitimate business that offers products that have a demand in the marketplace by real consumers,” Guest says. “So many people are talking about us as a scam, but it’s much harder for them to do that when they understand that we are giving back to the community, that we have a global foundation in place, and that we do have legitimate products that customers have been using for decades.” “Replacing the messages spread by critical voices with the reputation-building positive stories that result from sticking to a strict code of ethics will be an essential step in counteracting the negative opinions that still float through the marketplace,” Guest describes. “When a crisis of reputation does arise, operating in a trustworthy manner will be crucial for mending and repairing those broken public perceptions.” “If something goes wrong, my personal opinion is you have to own it, be transparent, and then make it right,” Guest says. “Timing is everything. If you’ve already decided your core values and who you are, it’s not a problem to act quickly. You already made the decision, long before the crisis ever happened.” DSN

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F E AT U R E

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By misusing Section 13(b), the agency has been skipping over due process and freezing or seizing assets without warning or trial.

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The Battle Over 13(b) The Supreme Court ruled that the FTC cannot use Section 13(b) to seek monetary relief without due process. Now a new bill is seeking to unravel that decision.

BY SARAH PAULK

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To be clear, the Federal Trade Commission has said that they see the direct selling channel as a sound and legal business opportunity for consumers.

HE Federal Trade Commission and the direct selling industry have a complicated relationship.

To be clear, the Federal Trade Commission has said that they see the direct selling channel as a sound and legal business opportunity for consumers. At a recent virtual panel hosted by The College of New Jersey School of Business, former director of the Bureau of Consumer Protection for the FTC, Andrew Smith, told participants, “The U.S. Federal Trade Commission has never said that multi-level marketing is illegal. Direct selling is and should be a legitimate way to distribute products and services directly to consumers.” Smith went on to describe the direct selling channel as a method that can actually be more advantageous than traditional retail because of its ability to reach consumers and communities who might be underserved. But the conversation surrounding regulatory compliance language and the ways the FTC has pursued those they deem to be outside the bounds of the law has created tension between the channel and the government agency—a tension that recently escalated all the way to the Supreme Court.

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But the conversation surrounding regulatory compliance language and the ways the FTC has pursued those they deem to be outside the bounds of the law has created tension between the channel and the government agency—a tension that recently escalated all the way to the Supreme Court.

Skipping Over Due Process

In 1914, President Woodrow Wilson created the FTC Act as a way to protect consumers and promote competition. Sections have been added since then to strengthen consumer protection measures and provide guidelines for enforcement, including Section 13(b), which gives the FTC injunctive powers and the ability to swiftly take matters to court following the issuance of a cease-and-desist order.

Since the 1970s, however, the FTC has been relying on Section 13(b) to implement monetary consequences and remedies. Section 19, which was added later, does give the FTC the authority to collect fines, restitution and disgorgement if the administrative adjudications required in Section 5 are followed. In other words, the FTC can freeze a company’s accounts or take possession of assets, but only after the accused company has had its

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Section 13(b) does not explicitly authorize the Commission to obtain court‑ordered monetary relief.

— J U ST I C E B R EY E R , i n a Su p rem e Co u r t op i n i o n

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day in court. By misusing Section 13(b), the agency has been skipping over due process and freezing or seizing assets without warning or trial. In an opinion authored by Justice Breyer, after a unanimous ruling by the U.S. Supreme Court concerning Section 13(b) in AMG Capital Management v. Federal Trade Commission in April of this year, the court stated that “no one imagined that Section 13(b) of the FTC Act would become an important part of the Commission’s consumer protection program. […] By contrast, the Commission’s broad reading would allow it to use Section 13(b) as a substitute for Section 5 and Section 19…. that could not have been Congress’ intent.” Continuing, Justice Breyer clearly summed up the limitations of Section 13(b) by stating: “Section 13(b) does not explicitly authorize the Commission to obtain court-ordered monetary relief.”

The Need for a Clear Definition of Compliance

Safeguards and legal actions against bad actors who might enter the channel with intent to harm or defraud consumers are vital for the industry to maintain integrity. It’s why the industry’s trade association, the Direct Selling Association, created the Direct Selling Self-Regulatory Council (DSSRC) in 2019. Administered by the BBB National Programs, the DSSRC monitors the industry for unsubstantiated earnings and product claims and makes referrals to the FTC when companies are in violation of industry standards.

A Section 13(b) Case Study

In August 2015, the FTC was granted a temporary restraining order against then direct selling company Vemma, alleging that the company was operating as an illegal pyramid scheme and was making false earning claims in recruiting new distributors. The order put the company in the hands of a temporary receiver, who within hours of the ruling laid off almost all 300 members of the corporate staff, halted sales and prohibited commission payments to the company’s distributors in the U.S. and 47 countries. Vemma CEO B.K. Boreyko made his case in court a month later and regained control of his company, but the damage was already done. Much of the salesforce had fled in the interim and securing a merchant bank willing to process credit card payments for the company was almost impossible. “The FTC can do a lot of damage in a short period of time,” Boreyko told Direct Selling News in 2016. “Fifteen FTC agents and ten Tempe police officers stormed my building, took over my company and froze my bank accounts for three weeks before I even got the opportunity to talk to a judge.”

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www.eadion.com Call 1-800-445-1007 for a distributor near you. w w w. d i r e c t s e l l i n g n e w s . c o m 7 1

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Direct selling leaders are beginning to express concern that the FTC is asking for powers that are meant to belong to Congress.

But the FTC’s definition of “unfair and deceptive” is a subjective line, and since it is determined on a case-by-case basis, direct selling leaders can’t look to past settlements for compliance guidance. One chief executive within the industry, who spoke with Direct Selling News under the condition of anonymity, said this vague language is the critical issue because it can allow the agency to cause irreparable damage to companies without first proving violation. “There is never a clear definition for us of what rules we need to follow,” the chief executive said. “We’re always guessing and interpreting. They use words that they don’t define, like ‘typical’ income claims. What’s ‘typical?’ If you make $50, is that OK? Who knows? Because there are no actual rules. Instead, there is this ever-evolving guidance that we’re all trying to interpret.”

The Bill Seeking to Fortify 13(b)

In response to the Supreme Court’s ruling that Section 13(b) did not give the FTC the authority to retrieve money without administrative adjudications, Congressman Tony Cárdenas introduced the Consumer Protection and Recovery Act, which would allow the FTC to return to its four-decade pattern of invoking financial penalties without trial, and pursue restitution, refund of property and other monetary relief.

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Included in the bill is the addition of the term “has violated,” which, while it may seem insignificant, would give the FTC the authority to seek injunctions for conduct that is no longer occurring. In particular, this bill would extend the three-year limitation found in Section 19 to ten. Combined with the power to seek monetary relief without administrative adjudication, this could lead companies to be vulnerable to the loss of a decade worth of assets. “A major problem with the insertion of “has violated” into 13b is the draft language offers no clear statute of limitation for how far back the agency can go to address past conduct that is no longer occurring in the market,” wrote Executive Vice President, Chief Policy Officer and Head of Strategic Advocacy at the U.S. Chamber of Commerce Neil L. Bradley in a letter introduced to the Senate Committee in April. The new bill introduced by Congressman Cárdenas also erases the phrase “a reasonable man would have known under the circumstances [that the conduct] was dishonest or fraudulent,” which is included in Section 19’s language to set boundaries for its use. The FTC is seeking to address legitimate concerns through the proposal of this new bill. There is an undertone within their approach to policymaking that suggests the commission is preparing for battles with anti-trust and big data. Creating clear lines in the sand now would slow down the agency’s ability to pursue tech companies known for changing so rapidly that they make laws obsolete. In the meantime, however, direct selling leaders are beginning to express concern that the agency is asking for powers that are meant to belong to Congress. “There is a rule-making process where Congress can make a law,” the chief executive said. “They want to shortcut that by going straight to 13(b) without allowing any comment or oversight, decide something is wrong and come after companies. Frankly, that’s not the American way.” DSN From the Editors: It is important to those in the channel to be educated and aware. DSN will continue to monitor and observe these rulings. Updates to this article may be posted as needed.

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EMEMBER WHEN it was easy to network with your peers during industry events and meetings? Remember the insights and ideas that those conversations prompted? The DSN Executive Insights interview series is working to bring those priceless exchanges of stories and ideas back. In the second interview in the series, Stuart MacMillan, President of MONAT Global, and his friend and colleague, Mark Pentecost, CEO of It Works!, discuss problems, pivots and plans. Here is a partial look at parts of their conversation. To watch or listen to the entire interview, visit DirectSellingNews.com. STUART MACMILLAN: I have the honor and privilege of hanging out for a little while with my friend, Mark Pentecost, from It Works!. The last 18 months have been extremely interesting for both your company and ours. Where did you have to pivot? Where did you have to go, ‘Hey, we need to do this differently?’

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But over time, different things have crept in, and I hear different words today.

MARK PENTECOST: We didn’t expect this. We didn’t say, “Let’s go home, work from home for the next 16 months.” We thought it was just going to be for a month or two. In the beginning, it was like, “Hey, this is fun, working from home. It’s exciting. It’s something different.” But over time, different things — M A R K PENTECOST have crept in, and I hear different words today. I hear COVID fatigue, Zoom fatigue. Some highfliers that work well by themselves, and there are people that don’t. My background’s coaching. So, I was thinking, what if I never went to practice and just rolled the balls out and said, “Hey, guys, practice hard. I’ll be back in two hours.” And so that really got me to thinking of how do we empower our people, but how do we inspect what we expect? I heard something the other day that I really w w w. d i r e c t s e l l i n g n e w s . c o m 75

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liked— “Don’t let your comfort zone dictate your destiny or your success.” And I thought, “That’s happening here. We’re getting in a comfort zone.” The biggest challenge to me has been with changes— especially big changes. We just didn’t know what they were. I love to read, but I couldn’t pull a book out and say, “All right. What is the playbook for COVID pandemic, and you have to go home for, you don’t know how long?” We’ve just had to maneuver. Is that how you feel? STUART: I feel the same, and I think that it’s been enlightening. I know you and I are similar. We have this sense that we need to control a lot of things and watch it, and I think, if this has done anything for me, and I’m wondering if it has for you, it’s given me a sense of, “Hey, it’s okay.” It’s that balance, right? So, it’s the tension between, ‘Yes, we still need to measure, but hey, it’s okay for them not to be under my eyes 24/7.’ MARK: Our secret sauce is the hugging and acknowledgment, and pats on the back. It’s not as easy to do that out of your home. I think team and teamwork is so important, but an organization’s success depends on strong individual performances Recently, I was looking at the different people in the Zoom. And I’m like, “Oh, my goodness, I haven’t said good job to her, or I haven’t congratulated that person.” It really overwhelmed me on how do I show appreciation, and how do I coach someone that’s maybe underperforming or someone that is really knocking it out of the park, and I let them know, “I see you. Nice job, I really appreciate it.” STUART: I actually had the same challenge. One of the things I would often do is walk across the parking lot to the Cooper’s Hawk Restaurant and go, “Hey, you. You know what? You’ve done a great job. Come with me.” And having not done that for a year, I realized that a piece of my management style was gone. I hadn’t replaced it with anything. So, what are you doing to combat that, in this kind of environment? MARK: There are three things I’m focused on—boosting engagement, encouraging collaboration, and increasing morale. I wanted to make sure our field team knew how much I appreciated how they’re working through this period. And those are the three things that I realized people needed the most.

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I want to acknowledge that we started opening the office on June first. We’re working on a hybrid solution, and I want it to be led by our employees. I want them to tell me what they need to be the most efficient. The world’s never going to be the same. We’re going to go back, and it will be different. There are no rules we need to follow. How much do we need to be in the office? What departments never need to be in the office? Who needs the collaboration and people? We’ve started opening the office, so that if you want to come into the office, you’ll be able to. We’ll be there. We’ll sanitize. We’ll keep it safe. We’ll have some rules, but we’re not going to tell you yet that you have to come back, or you have to do this. STUART: I think we’re all facing some of those similar challenges. One thing you said that I think is really interesting is that this hybrid initiative is going to be employee led. I think what that will mean is that while we can throw out some ideas, it’s going to be unique to the company. It’s going to be unique to the personality of the company and unique to the departments. Which departments, in your mind, are the ones that really seem to be missing that collaborative, creative catalyst? Sometimes, the hallway is a catalyst for great discussion. Where do you think that’s missing? MARK: I love marketing. I love sales. I think one of the things It Works! does well is social selling, gathering customers. We do it with Zoom, but what inspires me and really gets my creative juices going is when I’ve got five or six other people together, sometimes a little bigger, at the office, and someone goes, “Man, I got a crazy idea.” That’s usually when my antenna goes up. That seems to be code for, “This is about to get good.” I miss that part because I’ll have some good ideas, but after some people pick holes in it or push a little bit, or, “Why not this?” We’ve tried to create that. For those who live in the area, we met outside at my house. I was amazed by what happened to a great idea when we were in the same place together. We ended up doing a promotion. And when we’re trying to duplicate that, it’s just different.

STUART: It is. It’s not quantifiable, but it absolutely is true. You sit in the same room and ideas happen. It’s hard to get the energy you have in a room of a bunch of people who are trying to think about things. To get that on Zoom is tough. Speaking of energy, so one of the things I’ve admired is your ability to transfer passion. Part of the success of It Works! is for your ability to convey passion and excitement and take things to a whole ‘nother level. How do we channel that into getting people excited about our business and what we had to offer? MARK: What I’m realizing is that I’ve got to try and be intentional. If people are laughing and enjoying, we’re winning! Winning doesn’t mean always just the score, you’re the winner. Winning is helping people pay off debt. It’s helping people control their time through this. Winning is helping people feel accepted wherever they’re at. STUART: Let’s talk a little bit about customers. There was a bit of a pivot from where It Works! started to say, “Hey, we’re going to focus on having products that standalone, that would be bought by anybody, irrespective of the channel.” You guys are doing a great job in terms of your customer-to-distributor ratio. Talk to me about your adjustments. MARK: We battled that for quite a few years. I think in the beginning, people thought we were a little crazy. Some people actually thought, if you got a customer, you had failed because you didn’t understand the opportunity to become a part of the team. That’s just the way they’re brought up, but we could see that it’s two separate things. We had two different buckets. One bucket was a customer, and one was someone selling products for us. The biggest change out there today is how to get a customer because people don’t watch commercials anymore. So, we have the opportunity in our industry to talk to people. We realize customers are so important, and they are the lifeblood. We get customers so well because of the interaction. And the competition now is, you believe this as I do, it’s not the other companies. The competition is Amazon. We have a little motto—Amazon leaves a box on your front porch with a smile on it. We stay around for the hug. We got to smile, but we got to hug them. We don’t have to convince people to get customers anymore. I think they realize that if you don’t have customers, you don’t have the lifeblood of a strong business. And today, it’s how we keep getting better at it.

STUART: Well, when you think about it, we should have an unfair advantage over the Amazons and the retailers because we’re all about relationship, right? Talk to me about compliance and the environment. How are you adapting to the new world—where it’s very difficult to actually sell the opportunity. There are so many things you can’t say. How do you get around that? MARK: That is tough. There are some rulings lately that maybe there’s some light at the end of the tunnel, but I do feel like some of the regulations have put more strain on our channel, industry than others. Sometimes you feel like, “Here. This is a brown bag. Look at it. See what you think. I can’t say anything about it.” It’s put more on us to be sure of our products—that we can get ingredients that we can have clinicals on. I think our product team has done a great job realizing this. There are some claims right now that we’re able to say because of the clinicals. We’re being very intentional. On the business side, we’ve got our income disclosure. There are people like, “Why do we have to do it?” Almost like raising our kids. “Why do we have to be in at curfew? Nobody else does.” My response is “I don’t pay that group, but I know I want to keep paying you. I want to make sure we have a great opportunity. And yes, it is, but we take the extra step.” We’ve added more compliance. It protects and educates us. We’re training more on what we can say or not say. We do a lot more in training, and we try to put more time into it. That’s our reality. You got to know the rules of the game, so that you can stay in the game, and that’s what we spend time, even behind the scenes. STUART: At the end of the day, our role is to build a long-term sustainable business for customers and our distributors, and that’s what I told our folks. I would encourage other presidents and CEOs and other leaders of organizations, let’s take the high road and keep focused. Our role as executives in this industry is really to create that level playing field, and to fertilize it, so that everybody has a place to play and everybody has the same opportunity. DSN

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Introducing Direct Approach with Wayne Moorehead

DSN’s new, twice-monthly podcast takes a deep dive into branding and strategy.

E ALL KNOW THAT direct selling operates differently from virtually every other business model. The unique relationship between the field and corporate creates challenges—and opportunities—that distinguishes it from any other channel. This might be most evident in direct selling’s approach to marketing. Motivating, educating and empowering a diverse field of distributors to represent your products, your brand and your corporate values with enthusiasm, integrity and compliance can present a huge challenge.

Insights and Innovation

It is with this need in mind that DSN is excited to launch a new podcast hosted by Wayne Moorehead called Direct Approach. Wayne has deep experience in marketing and brand strategy. He has applied his expertise and passion to help

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companies (from startups to Fortune 100) define, communicate and activate their brands. His experience includes CMO roles at some of the most successful direct selling companies as well as Head of Strategy at multiple brand agencies where he has worked with many iconic brands. Wayne’s rare blend of experience and success has shaped his philosophy on effective growth strategies, and he believes the future of the channel will blend the best of direct selling with the best of direct-to-consumer. Wayne and his guests—some of the leading marketers and innovators in direct selling—will tackle the channel’s most pressing marketing issues in a fun, fast-paced and frank format, covering topics like customer acquisition and retention, consistent and effective messaging, reputation management, emerging trends and a lot more.

The Right Resource Right Now

The goal for the podcast is to be the channel’s primary resource for practical advice, simple strategies and straightforward action items, each designed to motivate your field, inspire your customers and further your brand’s reach and impact. In the inaugural episode, Wayne will be joined by Mark Stastny, CMO at Scentsy. Mark boasts more than 25 years of passion and experience in marketing strategy, communications, promotions

Brands are elastic. You can stretch them into new categories, but you can also stretch them so far that they break. — WA Y N E M O O R E H E A D / F r o m E p i s o d e # 1

and programs, customer segmentation, public relations, digital and social marketing and building world-class brands. Scentsy is GROWING—and Mark will explain how they are managing their season of renewal—both in the field and at corporate. He’ll also share his thoughts on the importance of understanding and applying your company’s values to every decision— it’s the key to successfully conquering any problem! Wayne and Mark will also discuss how Scentsy continues to harness the power of data to send the right messages at the right time and on the right platform. A new episode of Direct Approach will be available every two weeks. You can subscribe, listen or watch Direct Approach at DirectSellingNews.com or on iTunes, Apple Podcasts and other popular directories. DSN w w w. d i r e c t s e l l i n g n e w s . c o m 79

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S U N S H I N E .

N AT U R E’ S S U N S H I N E /

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We orchestrated the biggest transformation in the history of the company, maybe within the history of the industry. And we did it all during a pandemic.

Working from their small kitchen table in Provo, Utah, Gene and Kristine Hughes had no way to know that the cayenne pepper capsules they were filling by hand would ultimately launch not only their own wellness company but an entire industry. They were simply finding a more palatable way for Gene to ingest an effective, natural alternative to the many conventional stomach ulcer treatments he’d tried with no relief. Kristine’s brilliant idea to encapsulate a natural substance would inspire health seekers around the world to harness the power of nature. The family business exploded, fueled by the health and fitness craze of the 1980s and ’90s, establishing the Hughes’ places as leaders in the new health and wellness industry with their lines of vitamins, minerals and herbal remedies. But over time, Nature’s Sunshine would find itself a bit lost in the newly crowded industry it had helped build. Transformational changes were needed.

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Reviving Relevancy

Terrence Moorehead joined Nature’s Sunshine as Chief Executive Officer in October 2018 and began to lay the groundwork for a full brand relaunch that ultimately went live in September 2020. Guided by an exhaustive market research and analysis of both commercial data and the stories of customers, consultants, distributors and affiliates, Moorehead and his team developed five strategies for Nature’s Sunshine’s renaissance—Brand Power, Field Energy, Digital First, Manufacturing Inc. and The Right Stuff. “These strategies were born out of our history and our culture,” he explains. “We were trying to find a path to what is going to make Nature’s Sunshine relevant and exciting and motivational in the hearts and minds of consumers. And really trying to get back to what it was that made Nature’s Sunshine this great dynamic, exciting company. When we were founded, we were these adventurous pioneers, industry leaders sharing the healing power of nature with everyone. We were

NATURE’S SUNSHINE, HERBAL EXPERTS

he brand may look different these days, but Nature’s Sunshine formulas remain some of the most tested and highest quality in the industry: g g

constantly experimenting, testing, trying new things, making sure that we were really pushing the edge.” Nature’s Sunshine had to find a way to revive the brand in a way that simultaneously attracted new audiences and engaged loyal customers. It was a tall order; keep the heart and soul that has guided the company for nearly fifty years while updating nearly every facet of the brand—from bottles and labeling to packaging and unboxing experiences. “It’s every single aspect of the brand, end to end, highly considered to meet the consumer’s needs,” Moorehead says. “We started with a ton of research. Who’s the consumer, and who would be interested in a product, and in a company like Nature’s Sunshine? We spent a small fortune and a ton of time, more than a year actually, going out and talking to distributors, talking to thousands and thousands of consumers about the brand and a branding proposition, and then went back to them with an actual new articulation of the brand.”

Over 600 quality and purity tests Sourced from raw materials then developed, manufactured, tested and stored on-site NSF, CGMP, USDA Organic, TGA, Kosher, Halal and ISO-9001 certifications

The response was overwhelmingly positive. Longtime customers felt the new branding not only captured who Nature’s Sunshine is today but who the company has always been. New customers were thrilled with the changes, too. “There was just this great sense of pride around the articulation of the brand,” Moorehead explains. That was with the existing consumers and existing distributors, and then what we found was that new customers, who would flat out reject the brand before, they loved it.” Nature’s Sunshine currently offers over 700 wellness and personal care products across six product lines: general health, immune, cardiovascular, digestive, personal care and weight management. The company announced record sales for the fourth quarter of 2020 and net sales of $385.2 million for the year, an increase of 6 percent from 2019.

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“As soon as a new horizon presents itself, you start doing different things,”

Reenergizing the Field

The brand relaunch didn’t just change the look and feel of the brand; Moorehead’s five-point strategy changed Nature’s Sunshine from the inside out, including a new ordering process, an updated payment system, autoship options and more. Nature’s Sunshine consultants, affiliates and distributors had a lot to learn in a short amount of time, not to mention during a global pandemic, but this new way of working infused new life into the field. “I’m so proud of them,” Moorehead beams. “They’ve handled everything, they’ve kept on going, we haven’t lost a beat in terms of new people coming in, customer acquisition is up, meeting attendance is up. Every kind of key indicator that you’d want to look at are all moving in the right direction. During a pandemic!” A key aspect of the relaunch was a new social selling strategy. The company continues to offer membership options for regular customers to save on products and shipping, as well as a consultant program for wellness advocates looking to build a business. The latest addition to Nature’s Sunshine’s selling strategy is its affiliate program. “We’ve introduced a new affiliate program that’s designed to bring in a whole new group of people,” Moorehead says. “They’re not necessarily our hardcore practitioners and retailers, but they really are engaged in nutrition and health and wellness. They love to share, and so they’re sharing like crazy. They’re using their networks to share Nature’s Sunshine in ways that it hasn’t been shared in the past. We’ve built in a whole new set of tools to the website so that customers, affiliates and our consultants can all share much easier, with a click of a button on their social media platforms, much easier than in the past.” Nature’s Sunshine’s field is sharing like never before, through new consumer-facing URLs, a new personalization program, and being paid like never before as well, through the company’s PayQuicker payment solution that compensates consultants within 30 minutes of a purchase. “We orchestrated the biggest transformation in the history of the company, maybe within the history of the industry,” Moorehead points out. “We’re seeing the results of our efforts as a majority of our distributors are having more success under the new compensation program. And we did it all this during a pandemic.”

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Reorienting for the Horizon

Global pandemic notwithstanding, Moorehead and Nature’s Sunshine have had quite the wild ride in the last twelve to eighteen months. But he insists that the momentum the company has won’t be slowing any time soon. The five driving strategies that launched Nature’s Sunshine into a new era will be guiding Moorehead and his team for the foreseeable future. He sees the five strategies as guides that can be applied in new and different ways as the company achieves its goals. “As soon as a new horizon presents itself, you start doing different things,” he explains. “You adjust your strategy. You adjust your tactics. You adjust your programs, whatever they are. So really, brand power (or any of the five strategies), it’s not so much an endpoint as it is a direction towards it.” Nature’s Sunshine launched an entire industry simply by seeing a new way to serve people. In 1972, that looked like pioneering a new way to harness nature’s power. Today, Moorehead and his team are building on that legacy, harnessing nature’s power through new products but also optimizing the power of technology, meeting the incredibly unique needs of consumers and consultants, affiliates and distributor entrepreneurs. “We’re a company with 50 years of only caring about delivering the best quality products in the world, the best ingredients to the world, sharing the healing power of nature with people all around the world,” Moorehead says. ”We have huge aspirations for our company, for our customers and their health, and for consumers around the world. We want to be that nutrition company—that vitamin company of the future. That really is what we want to be all about.” DSN

Sampling is a Proven Method to Acquire Paying Customers From Concept to Fulfillment in as Little as 6 Weeks

With over 35 years of direct selling experience, we’ll make sure your sampling program is a success! Strategize Manage

Market Deliver

LET’S TALK | 310-428-9936 info@now-tech.com

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Next-Level Technology Six signs that your e-commerce system is truly scalable.

IRECT SELLING is an industry known for

not staying put. Our model is conducive to exponential growth, with many companies regularly posting substantial year-over-year revenue increases. On the most recent Direct Selling News Global 100 list, 17 companies reported growing by $100 million or more from 2019 to 2020. Growth is good. It’s better—and more sustainable—when intention underlies the expansion. This is where the concept of scalability comes in. Making sure your organization has a sound but flexible infrastructure and design that can support growth is the best way to keep it from buckling under the pressure of becoming larger. In our “E-commerce Excellence” story earlier this year, we touched on the basic elements of scalable technology, in particular. We told you that it’s fluid and integrated, it works well for one-on-one and one-on-thousands applications, and it translates easily across international borders. This month, we elaborate on the idea of scalability, giving you six signs that your e-commerce system is suited for every next level.

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BY NOAH WESTERLUND with H E ATH E R M A R TI N

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If you view your organization as an ecosystem—a web of interdependent parts—you will be more likely to move

beyond traditional thinking about your technology.

Sign

YOUR SALES AND MARKETING TEAM COMMUNICATES WITH YOUR TECH TEAM. One of the biggest mistakes direct selling companies make is not having enough crosssectional input when they’re developing their e-commerce system. The IT department has to understand the business needs and plans of the sales and marketing team so that it can recommend or develop a system that supports those needs. Likewise, the business team won’t get far with a strategy that requires certain tech capabilities if it hasn’t consulted with the IT folks to make sure it’s possible. As author Brett Blake writes in his book “Systems Scale: Eight Simple Systems that Ignite Growth,” if you view your organization as an ecosystem—a web of interdependent parts—you will be more likely to move beyond traditional thinking about your technology. It’s not just a collection of computer codes. It’s a dynamic system that can grow and improve as long as it has all the information it needs.

Sign

YOUR TECHNOLOGY SYSTEMS COMMUNICATE WITH EACH OTHER Just as sales and IT have to communicate to develop an effective e-commerce system, the systems themselves have to easily share information. If you launch a mobile app that distributes samples and then 15 percent-off coupons, but your back-office system doesn’t have the capacity to collect the right data from customers during the transaction, you’ll have no idea how well the app is working. You won’t know things like your close ratio or what offers work best with what demographics.

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Pay attention to the API (application programming interface) of the system you’re investing in. This is the software that allows applications to talk to each other. The more seamless the data sharing, the more valuable analysis you’ll get from your system, which makes the system more cost-effective. Cost-effectiveness is key as you scale your business, according to consultant Peter Cohan. “Scalable is a word that gets thrown around in business conversations,” he writes in Inc. magazine. “But what does it mean? For me, it means ... as your business grows, its costs will go down so much that it will change from a burner to a producer of cash.”

Sign

YOUR SYSTEM IS BUILT TO EXPAND As your organization grows, you will want to collect data from an increasing number of customers and increasing amounts of data per customer. For example, you might start out asking shoppers to fill out a form every time they purchase a product, but eventually, you’ll want them to create customer profiles. And maybe those profiles will expand over time to include more data about their product and lifestyle preferences. Your data collection system needs to be malleable enough to accommodate more fields for customers to fill out, and it needs to be able to store and make accessible all of that information for whoever in the company needs it. You can get caught with your heads down trying to meet quarterly goals and forget to look up and out to the future. Try to anticipate what your business needs will be before you need them, and develop an e-commerce system that will grow with you.

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Thinking ERP? Think Squire.

YOUR SYSTEM IS ROBUST AND GLOBALLY ACCESSIBLE Don’t forget about the technology nuts and bolts. Your e-commerce system needs enough processing power so that your online catalogs load quickly, for example. It needs the ability to make millions of concurrent connections so that it can handle a surge in orders. It needs to be accessible in international markets, too, complying with the unique commerce and data privacy laws in various countries.

Sign

A NetSuite implementation from Squire is unique:

YOUR COMPENSATION SYSTEM SUPPORTS YOUR E-COMMERCE STRATEGY Good direct selling ideas die in places where they’re not supported by the compensation plan. If your compensation plan rewards distributors primarily for recruiting other distributors, that’s the activity you’ll get from your sales teams. They might not be as inclined to use the sampling and coupon features on the app you spent so much time and money developing.

Sign

We take the time to understand your business goals and processes. Only then do we create a custom NetSuite solution that will meet your unique business needs.

YOUR E-COMMERCE PARTNERS ARE SCALABLE, TOO Choose manufacturing and fulfillment partners with the production, warehousing and logistical capacity to accommodate your projected growth. Speaking of partners, consider working with a third party to develop and maintain your e-commerce system. You might have some internal capacity and even talent to develop one, but most direct selling companies are better off working with a provider whose job it is to do nothing but keep its clients’ IT systems cutting edge.

The Human Element

USAGE OF TAGLINED LOGOS

The tagline "AUDIT.TAX.ADVISORY" Technology has gotten quite smart. It’s easy to think only accompanies the logo in circumstances where context requires it will manage itself, responding and expanding clarification about what Squire can do for current and in exactly the ways we need it to, withoutpotential a lot customers of (the audience). thought or planning from us. But it’s only as good For example, Squire.com and its as the thoughts we put into it and the web attention wethe onesubsequent pages feature tagline version (HIGHER pay to whether it’s actually meeting our needs. PERSPECTIVE ONLY) of the Squire logo because the subpage content Yes, technology is a powerful tool, but it provides still adequate throughout the site context to visitors. requires human beings to put their heads together the other hand, ifitthe team attends DSN and decide when, where and On how to plug in. a national financial trade show where

Squire should differentiate itself from a neighboring financial software company, then trade show banners need to include the tagline, “Audit-TaxAdvisory.” Treat the secondary tagline like it’s part

NETSUITE IS THE WORLD’S MOST DEPLOYED CLOUD ERP SOLUTION

Learn more at a briefing seminar at

One-tagline version of full color logo

Secondary-tagline version of full color logo

One-tagline version of white logo

netsuite.squire.com ( 801) 225-6900

AUDIT · TAX · ADVISORY

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“The way to gain a great reputation is to endeavor to be what you desire to appear.” — S O C R AT E S

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Your Vibe Attracts Your Tribe

BY TONY JE ARY - THE RESULTS GU Y

EPUTATION IS DEFINED AS how

people judge your overall quality of character and how you’re

placed in public esteem or regard. In other words, it’s your good name. It is vitally important that you think strategically about everything, including

your reputation. I’ve noticed for years that certain people attract others, almost as if with a magnet. I’ve dissected that, and my colleague Daniel Marold and I have been studying what causes it to happen. Over the last year, we’ve put together a new book called Vibe: Energy = RESULTS Faster. Vibe is the energy emitted by a person or an organization, and we’ve determined that the greater your vibe, the better your results. We’ve entitled this article “Your Vibe Attracts Your Tribe,” and we’re going to give you the “what” and the “how” to bring that to life.

The “what” is that having a great reputation— and attracting great people—at the highest level requires that you emit a great vibe, both as a leader and as an organization. You want to be strategic about your vibe so when people research you, your team, or your organization, the attraction is magnetic. As an executive, you want to attract members of your corporate team as well as field team members. It’s really about more than who you attract. It’s also about “how” you inspire others as well as what they retain. As we all know, those are the three miraculous elements of the direct-selling multilevel-marketing business: attract, retain, and inspire. Now let’s go to the how. There are five opportunities to enhance your vibe, keep your reputation at its highest level, and attract the right people, and I’ve listed five steps associated with each opportunity.

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FIVE OPPORTUNITIES TO ENHANCE YOUR VIBE

1 Word of mouth. What are people saying about you and your organization?

2 Web search. When people search for you on the web, what are they finding?

3 Your website(s). Are they up to date, and are they designed to attract the right people?

4 Your training tools. Are they updated, and do they have vibe?

5 Social media (such as Facebook, Instagram, LinkedIn, Twitter, and YouTube). How do you convey your vibe across these media?

FIVE STEPS TO MAXIMIZE EACH OPPORTUNITY

STEP : Select an element.

STEP : Assess it and determine where you are and where you want to be.

STEP : Assign a lead person (generally from the marketing department or perhaps a person in the field.)

1 You select the first one, word of mouth. 2 You assess it. What are people saying about you?

3 Determine who the lead person is on your

team who should be in charge of word of mouth. Let’s say it’s the IDC—the independent counsel from the field—who is the lead person to handle word of mouth. Or it could be someone internally who works in your marketing department who would team up with someone in the field.

4 Then define specific actions we want to take

STEP : Define specific actions for anything in the assessment you don’t like so you can tweak it and raise it to the next level. STEP : Manage it so you can keep it up, measure it, and continue tweaking it in order to keep your vibe at its highest level.

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I’m suggesting that you apply each of these steps to each opportunity. Here’s what I mean:

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to improve it. Be strategic.

5 Then you go about managing it. Every so

often, you might take some surveys to see how word of mouth is working for you.

Be CustomerCentric Recognized. The Customer-Centric Recognition (CCR) Program celebrates companies that are leading the way toward a customer-centric future for the industry. Qualifying companies utilize business models that boast high ER-CE N OM T

customer-to-distributor ratios and prioritize customer sales. S

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CCR

For web search, you might have someone in your organization constantly be doing web searches to see what comes up. For your website, you might take a good look to see if it’s outdated or whether it conveys your vibe. For your training tools, you might look at what’s being put out by other companies and see if they may be a fit for today’s situation. An obsolete training tool could certainly affect your reputation.

And of course, social media in today’s world is one scenario where you have to be constantly and consistently updating. What kind of vibe do you have? How is it affecting your reputation? And is it attracting the kind of tribe you want? DSN n

TONY JEARY—THE RESULTS GUY™—IS A PROLIFIC AUTHOR AND A STRATEGIST. HIS ORGANIZATION, TJI, FACILITATES POWERFUL MEETINGS, KEYNOTE EVENTS AND COACHES HIGH PERFORMERS TO ACCELERATE THEIR RESULTS. w w w. d i r e c t s e l l i n g n e w s . c o m 93

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CCR

Now follow each of the five steps for the other four elements. The last step, managing, may involve these actions:

The CCR Program is based solely on a company’s customer-to-distributor ratio taking into consideration the following definitions:

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P L A T I N U M

■ Distributor—someone who DOES have a distributor agreement in place R

D E C O G N I Z E

■ Customer—someone who DOES NOT have a distributor agreement in place ■ Active is defined as each customer and distributor must have made a product purchase during the last six months. Active customer and distributor counts are limited to those in the U.S. and Canada. Companies must have been in business for at least one year and have a minimum of $5 million in annual revenue. Qualifying companies must attain: 5:1 up to 10:1 for Gold status and 10:1 or more for Platinum status.

Submit Your CCR Program Application Today

DSN DIRECT SELLING NEWS

Companies who wish to learn more or submit a CCR Program Application can go to www.directsellingnews.com/ achievements/ccr-program/ or contact editor@directsellingnews.com

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Gaining Respect. Building Credibility. SCHOLARLY PAPERS ENHANCE YOUR REPUTATION AND INFORM THE CHANNEL.

IRECT SELLING IS EXPERIENCING MANY POSITIVE CHANGES—both in its growth and its perception. The outdated notions and beliefs surrounding our channel are evolving, and direct selling is becoming more mainstream and accepted. Many factors have contributed to this boost in reputation. A renewed emphasis on customer acquisition, the rise of the gig economy and shifting perspectives and beliefs surrounding social selling and sharing all play important roles. The challenge for direct selling companies is spreading the word—overcoming the obstacles of lingering bad press and celebrating all of the positive things happening in the channel. At Direct Selling News (DSN), our mission is clear: to serve and inform the channel. We achieve this by being the channel’s daily resource for breaking global news, emerging trends and powerful stories. DSN is always looking to broaden and deepen our scope by providing new tools designed to help hard-working direct selling companies and distributors educate the public about the channel.

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Based on extensive research and surveys, these papers provide key insights into the gig economy and the people that succeed in it.

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Gig workers are more likely to be millennials than baby boomers, and 71 percent have a college degree.

1 An Important New Resource for Direct Sellers

With that in mind, we have added an exciting new resource on our website, directsellingnews.com. Found under the research tab are several scholarly articles co-authored by University of Texas at Austin Professor Robert A. Peterson and former DSN Editor John Fleming. Based on extensive research and surveys, these papers provide key insights into the gig economy and the people who succeed in it. They tackle misconceptions and inaccuracies about who is involved and what kind of work they do. Most importantly, they give concrete and powerful proof of the long-term viability of the side hustle culture. We will continue to build out this resource over time in order to provide a current and compelling snapshot of the gig economy. We encourage and invite our readers to utilize the content and data these papers have compiled to educate your field and prospects and edify the industry. Here’s a sneak peek at the valuable insights and information found in the papers. To read them in their entirety, visit directsellingnews.com/ overview/research/.

SU RP RI SI N G DEMOGRAP HI C S SU RROU N DI N G GI G WORKERS One of the research papers, The Implications of the Gig Economy, discusses the scope of the side hustle movement and addresses several of the issues and complexities surrounding it—for the government, for the companies that hire independent contractors and for the contractors themselves. Several interesting demographic facts about gig workers are uncovered in this piece. n

55% work more than one gig

31% work more than three

41% work via online platforms

The paper also dispels commonly held myths about gig workers—including that they are making less money than they expected to. In fact, 80 percent of gig workers earn what they anticipated. The paper further illuminates the lifestyle changes the gig economy contributes to. Overall, the workforce is looking for more flexibility. Gigs allow people to not only work when they want to and how they want to, gigs give them the freedom to be unrestricted by location as it eliminates the need to commute to a traditional office. w w w. d i r e c t s e l l i n g n e w s . c o m 9 5

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Gig workers and the gig economy have disrupted traditional work models, even industries, and more disruptions can be expected.

REDEF I N I N G T HE N AT U RE OF WORK

S EPAR AT I N G FAC T F R O M FIC TION The second paper, Dispelling the Myths of the Gig Economy, disputes some of the negative connotations surrounding direct selling’s legitimacy and viability with powerful and compelling evidence. One of the prevailing myths about independent contractors is that they are somehow exploited or mistreated by the companies that utilize them. The responses from participants in the side hustle culture clearly refute this. The vast majority of gig workers—87 percent—rate their experience as positive, and 86 percent would recommend gig work to a friend or colleague. Additionally, 90 percent have healthcare coverage, which is contrary to the claims that it is difficult for them to obtain health and retirement benefits. The idea that gig workers are somehow on the margins and vulnerable to exploitation is also based on misinformation. The paper documents that gig workers tend to be well educated; nearly three quarters indicate they have college degrees. In fact, a relatively large proportion of gig workers are attorneys, accountants, web designers and coders, freelance writers and other professionals who simply prefer flexibility and whose primary clients are corporations, rather than individual consumers.

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The final paper, Independent Contractors: Efficient and Very Satisfied, addresses the impact the gig economy has on how work is defined and rewarded. Much gig work is performance based. Rather than being strictly compensated by hours worked or a predetermined salary, gig workers are most often compensated on the basis of completed tasks. This is a model that easily translates more efficiently to digital platforms which is evidenced in service fields such as child care, dog walking and long-haul trucking. Professions such as college instruction and architecture, which could be characterized as “pay for performance,” could easily follow suit. Perhaps most importantly the research and papers clearly demonstrate that people engage in gig work because they want to control their work schedules. Gig workers seek flexibility associated with their work location and hours—which is why the model is proving to be so popular and to have real staying power. The most apparent problems with gig work could potentially be lack of training and reduced loyalty due to the transient, transactional nature of these endeavors. But the overwhelming majority of gig workers are satisfied with the compensation and lifestyle side hustles afford them. These three papers and the research and surveys that were conducted to produce them can be a valuable resource for direct selling companies to utilize in better understanding the wants and needs of gig workers and to promote relationship marketing as a viable option for them. DSN

Available Now

at Your Favorite Bookseller www.ultimategigresources.com

The gig economy is redefining how we work.

"Our motivation for taking on the research of the gig economy and writing this book is rooted in a belief that the gig economy is providing a new reality: flexibility and freedom in how work is done can be achieved.” — John. T. Fleming

MAINSTREAMING THE CHANNEL DSEF Fellows Make a Difference for Direct Selling Through their direct selling-related research, co-created teaching content, and case studies, nearly 250 DSEF Fellows from universities across the US are changing how direct selling is taught

“It has been a privilege to serve as a DSEF Fellow. I have been able to include multiple direct sellingrelated case studies in the fifth edition of a textbook on entrepreneurship and to complete multiple innovative academic and industry research projects. Each experience has resulted in growth and opportunity. The results have been clear and measurable. Dr. Caroline Glackin Associate Professor of Entrepreneurship Fayetteville State University

“As a DSEF Fellow, I was able to develop a teaching case that connected my research interest in effectuation and social entrepreneurship with the founders of Trades of Hope. As a bonus, many students were introduced to the direct selling distribution channel as an avenue for social entrepreneurship. Dr. Christine Mollenkopf–Pigsley Assistant Professor & Program Director in Applied Organizational Studies Minnesota State University, Mankato

and viewed. Here’s what they have to say about their partnership with DSEF.

“As a DSEF Fellow, I have access to a rich variety of teaching materials, including case studies, videos, peer-reviewed research, and teaching notes. These materials inform and complement concepts I discuss in the classroom, and help me keep my content current. By participating in DSEF-hosted functions, I’ve had the opportunity to network with the leadership of direct selling organizations from around the world, which has led to several top executives visiting our campus as guest speakers. Dr. Adam Mills Assistant Professor of Marketing Loyola University New Orleans

1667 K Street, NW, Suite 1100, Washington, D.C. 202-452-8866

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info@dsef.org

•

www.dsef.org

D S A

M E S S A G E

Here for the Channel

HE ISSUES facing direct selling, and thus the Direct Selling Association (DSA): • Challenges to the independence of our individual salespeople; • Regulatory questions about the inherent legitimacy of the business model; • Threats and opportunities from the growing gig economy; • Reputational issues are facing most, if not all, direct selling companies. Remarkably, despite these challenges, direct selling has fared well while confronting the past year’s existential threats, even as traditional brick and mortar retail struggled significantly. DSA’s greatest desire and preference is for a company to join the membership. While each company’s brand and culture are unique and product lines vary, there is considerable benefit in a company having a seat at the table to share their perspective with their industry peers. During this moment of change, together with our shared commitment to doing the right thing for our customers and salespeople, we can propel direct selling to new heights and prominence in the market. This opportunity brings all direct sellers together. DSA members help shape a multi-pronged advocacy effort on both the independent contractor status issue and the need for regulators to understand the difference between legitimate direct selling companies and illegal pyramid schemes. With the Presidential Administration change comes new challenges for DSA’s work to protect the independent contractors who comprise our salesforces; DSA will continue helping legislators differentiate between direct sellers and these technology platform-based workers. In 2021, the Association is actively working at the state and national levels to: • Ensure the independent contractor status of direct sellers;

JOSEPH N. MARIANO is the President of the U.S. Direct Selling Association and the Direct Selling Education Foundation.

• Improve the reputation and understanding of the direct selling model among policymakers and other critical audiences; • Reduce unnecessary regulatory scrutiny and bureaucratic requirements that might be imposed on direct selling; • Provide the highest level of confidence to individual consumers and salespeople of direct selling companies; • Ensure that the tax treatment of direct sellers and companies is fair and equitable; • Protect the opportunity for individuals to start their own direct selling enterprises; • Grow the member support for the DSSRC, the channel’s self-regulatory program that continues to raise the bar; • Guide new proposals regarding the gig economy, job sharing, and similar models to guarantee that direct selling is not inhibited but encouraged. DSA members reap returns from the industry’s investment in the Direct Selling Education Foundation (DSEF). As DSEF Fellows developed a highly effective response to an FTC-related paper, and their work continues to deepen the academic research into the channel, they gain increased importance. Industry leaders recognize that DSA will be able to compete in this new marketplace most effectively once we have dealt with the real and perceived problems that have dogged the direct selling channel. DSA and the DSSRC can and will take the next important step in this re-definition, but it is only one step. Ultimately, the competitiveness, the reputation, the viability of direct selling will be determined not by these actions but by the commitment of all direct selling companies to join these efforts, share their perspective and strength and become agents of change. DSN

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For nearly 50 years, Squire & Company has provided financial excellence and NetSuite expertise for clients in the Direct Selling industry. We offer personal service, responsiveness, and expertise in all areas.

INTERNATIONAL PAYOUT SYSTEMS INC. 540 NE 4th St. Fort Lauderdale, FL 33301 866-218-4668 i-payout.com

More payment options in 150 countries via the most flexible and customizable software solution. Unbeatable pricing.

PAYQUICKER 400 Linden Oaks, Suite 320 Rochester, NY 14625 844-258-3006 www.payquicker.com Instantly make secure and compliant global payouts to your distributors in local currency with PayQuicker’s fully customizable, client-branded solution. We offer secured bank accounts with prepaid debit cards, virtual cards and more—all through a single point of integration.

1160 N. Town Center Drive, Ste. 100 Las Vegas, NV 89144 702-757-9600 www.metricsglobal.com

Landing a more sophisticated brand of talent takes a more sophisticated recruiting partner. Bringing 25 years of Direct Sales executivelevel experience from around the world and with a Team speaking 5 languages we know what it looks like to have success in a diverse and international environment. Our goal is to become an extension of your brand.

SCP offers the most holistic consulting services specific to direct selling companies today. We’ve worked with more than 70 companies over the last three years alone, and served more than 250 years collectively in the industry.

2201 Long Prairie Road, Ste. 107-316 Flower Mound, TX 75022 407-891-9265 https://strategicchoicepartners.com/

J U LY 2 0 2 1

Complete Merchant Solutions (CMS) is a full-service US merchant account provider representing multiple banks. CMS safely and securely supports many types of payment processing for direct selling companies.

METRICS GLOBAL, INC

LaCore Payment Technologies is a payment platform designed to support direct selling companies globally. Our services include: Global connectivity to 150 countries in 50 currencies, including direct connectivity to most alternative payment types, secure tokenization, customized fraud solutions, including our proprietary Fraudhawk™, advanced reporting tools, and online dispute management.

S ELLING NE WS

727 North 1550 East 3rd Floor, Orem, UT 84097 877-267-4324 www.cmsonline.com

Keller, TX 817-697-4321 www.cpkrell.com

STRATEGIC CHOICE PARTNERS

1 0 0 D I R E C T

COMPLETE MERCHANT SOLUTIONS

CP & KRELL GROUP

LACORE PAYMENT TECHNOLOGIES

900 Wilmeth Road, McKinney Texas 75069 Info@lacoretechnologies.com www.lacorepayments.com/

C R E D I T C A R D/ P AY M E N T P R O C E S S I N G

1329 South 800 East Orem, Utah 84097 801-515-0977 www.squire.com

C O M M I S S I O N P AY M E N T S E R V I C E S

SQUIRE

C O N S U LTA N T S / M A N A G E M E N T

C O M M I S S I O N P AY M E N T S E R V I C E S

ACCOUNTING SOF T WARE/S ERVICES

SUPPLIER DIRECTORY

We are the industry’s leading payments partner, long-established advocate, and problem-solver. Our unified commerce & payments platform will connect you to a global marketplace, enable your international expansion strategy, and fuel your exponential growth plans. Let us show you how. Contact Us: info@metricsglobal.com

NEXIO 727 N 1550 E, 3rd Floor Orem, UT 84097 1-877-551-5504 www.nexiohub.com Nexio manages the chaos of payments offering: • Faster roll out for distributors or partners • Simplifies payment processing for corporations Nexio does this by being integrated with the majority of back-office software solutions in the Direct Sales Industry.

2889 Ashton Blvd, Ste. 350 Salt Lake City, UT 84070 877-811-8108 www.globalaccess.com International expansion expertise and technology and logistics solutions that grow clients’ businesses and brands around the world.

AMWARE FULFILLMENT

LACORE LOGISTICS

4505 Newpoint Place Lawrenceville, GA 30043 866-888-2999 Sales@AmwareLogistics.com www.AmwareLogistics.com

900 Wilmeth Road, McKinney Texas 75069 214-817-4802 www.lacorelogistics.com

Handle fulfillment for 14 direct sellers. DSA member with 15 fulfillment centers, nationwide, for 1–2 day delivery to 95% of the US. Offer comprehensive B2C fulfillment services, including complex kitting, plus discounted parcel shipping based on our large volume of freight.

LaCore Logistics provides distribution and order fulfillment services. Our highly automated distribution center provides both domestic and international direct-to-consumer shipping solutions. We offer omni-channel fulfillment solutions ranging from marketplace fulfillment for leading marketplaces to businessto-business fulfillment for leading retailers.

CANADA CARTAGE LOGISTICS SOLUTIONS

VERST E COMMERCE FULFILLMENT

Single Source Solutions, Order to Delivery B2C Solutions, On-Time Order Fulfillment, Real-Time Inventory Visibility, NHP Site Compliant, SOP/GMP Compliant, and locations across Canada.

Verst offers robotic picking, 99% order accuracy, 6.5+M sf scalable warehousing space, air/rail-served, 1-2 days to over 85% of the U.S. Services include pick-pack, labeling, kitting, and custom packaging. Our Business Is… An Extension of Your Business

1615 Clark Blvd. Brampton, Ontario L6T 4W1 905-564-2115 x2 www.canadacartage.com/logistics

300 Shorland Dr., Walton, KY 41094 800-978-9307 www.verstlogistics.com

EVENT PRODUCTION

Since 2001, a2b Fulfillment has been helping companies work smarter by outsourcing business support services, including order fulfillment, customer care, and valueadded solutions. Its same-day fulfillment philosophy ensures that customers aren’t waiting, and its one-call customer service resolution standard keeps them coming back.

GLOBAL ACCESS

E XECUTIVE RECRUITMENT

150 Stewart Parkway Greensboro, GA 30642 866-843-3827 www.a2bf.com

INCENTIVES/RECOGNITION

A2B FULFILLMENT

D I S T R I B U T I O N / F U L F I L L M E N T/ L O G I S T I C S

TO BE INCLUDED IN THE SUPPLIER DIRECTORY, EMAIL ADVERTISING@DIREC TSELLINGNEWS.COM

KATAPULT EVENTS 5840 Red Bug Lake Rd, Ste. 140 Winter Springs, FL 32708 407-915-9060 www.katapultevents.com Fresh. Exciting. Bold. Your field deserves the best and we help you deliver. Out-of-the-box creative production with experienced show management. We execute on budget and make you look AMAZING!

HANNA SHEA 1835 W Chandler Blvd 103, Chandler, AZ 85224 844-344-7177 www.hannashea.com Since 2007, Hanna Shea Executive Search has been the go-to search firm in support of the direct selling industry. Hanna Shea finds top talent for companies in need of building or improving an executive leadership team for organizational success.

E.A. DION, INC. 33 Franklin McKay Road Attleboro, MA 02703 800-445-1007 www.eadion.com Dion’s jewelry solutions are perfect for career path, sales & recruiting, corporate anniversaries and incentive travel recognition awards.

w w w. d i r e c t s e l l i n g n e w s . c o m 1 0 1 PMS 70% Black

PMS 7686

M A R K E T I N G/B R A N D I N G

M A N U FAC T U R I N G/P R O D. D E VE LO PM E N T

1080 Caribbean Way Miami, FL 33132 Royal Caribbean International’s Corporate Sales Team 800-345-7225 (SELECT 2, THEN 1) www.royalcaribbeanincentives.com ICONIC SHIPS. EPIC ADVENTURES. ULTIMATE EVENTS. Royal Caribbean® transforms events into the ultimate productivity paradise. Impress your attendees with epic venues, vibrant restaurants, onboard thrills and beautiful destinations.

PROGRESSIVE LABORATORIES 3131 Story Road W Irving, TX 75038 972-518-9660 www.progressivelabs.com 40+ years of quality manufacturing of nutritional formulas specializing in capsules and powders. FDA registered and 3rd party UL certified facility.

NOW TECH 5800 Democracy Drive, Suite 100 Plano, TX 75024 310-428-9936 www.now-tech.com The most comprehensive and powerful business management solution for direct sellers. We put more than 35 years of industry experience into creating strategies and tools to consistently grow your business. Contact us for a demo today.

SMART OFFICE SOLUTIONS, INC.

217 N. Westmonte Drive, Ste. 1007 Altamonte Springs, FL 32714 800-891-8601 www.SmartOfficeSolutions.com

S O F T WA R E / TEC H N O LO GY S O LUTI O N S

ROYAL CARIBBEAN INTERNATIONAL

MOBILE APPS & COMMERCE

INCENTIVES/RECOGNITION

SUPPLIER DIRECTORY BYDESIGN TECHNOLOGIES 9503 Princess Palm Avenue Tampa, FL 33619 813-253-2235 www.bydesign.com Award winning SaaS solutions including Geneology Management & Commissions, Inventory, Replicated Websites, Premier Rep Tools, Branded Mobile App, Virtual Parties, E-vites, Hostess Rewards, Bookings, Social Sharing, Promotions, & Shopping.

DIRECTSCALE 1510 N. State St. Orem, Utah 84057 801-701-3285 www.directscale.com

Your mobile strategy should be as smart as the phone in your pocket. Make a powerful statement about the value of social networks and personal connections with the SmartMobile app. Transform every share, text, call, and email into a positive sales and recruiting result.

The most customizable enterprise SaaS platform for managing all aspects of your direct selling, affiliate and influencer marketing business. Edit your comp plan and test it against your live data! From startup to billion dollar company, it automatically scales to meet your needs so you never have to upgrade again.

HARLAND CLARKE

SOCIALSALES.IO

DIRECTECH LABS

2435 Goodwin Lane New Braunfels, TX 78132 sales@dsa.harlandclarke.com http://dsahome.harlandclarke.com/

2024 W. 15th St., Ste. F-324 Plano, TX 75075 214-659-1549 hello@socialsales.io www.socialsales.io

929 Colorado Ave Santa Monica, CA 90401 310-730-1246 CustomerCare@directechlabs.com www.directechlabs.com

Convert your social fans into paying customers. Our global SaaS platform includes the tools your sales force needs to succeed in today’s social selling environment. Scalable to fit any sized organization from startups to large global enterprises.

The AI-powered messaging and analytics platform. Be a better opportunity in the gig economy. Actionable dashboards and automated opportunities that get your field and customers engaged into measurable action anywhere in the world.

Harland Clarke provides customer engagement solutions that help connect your business and salesforce with their customers. Harland Clarke provides relevant business building products and solutions to direct selling companies and have developed turn-key, customized solutions designed to provide additional profit centers for your company while ensuring brand compliance and standardization.

1 0 2 D I R E C T

S ELLING NE WS

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The global leader in cloud-based Platformas-a-Service (PaaS) for direct selling companies. An open framework for billiondollar giants to startup companies. Exigo supports MLM, Party Plan and Affiliate models, operating in single global markets.

JENKON 915 Broadway Street, Ste. 400 Vancouver, WA 98660 360-256-4400 www.jenkon.com From Startup to Enterprise, Jenkon provides Direct Selling companies an award-winning, scalable platform unifying the future of direct selling: Openness, connectivity, omni-channel and conversational marketing.

INFOTRAX SYSTEMS

MW2 DIRECT

1875 S. State Street, Ste. 3000 Orem, UT 84097 801-431-4900 www.infotraxsys.com

2033 Gateway Place, 5th Floor San Jose, CA 95110 408-573-6310 www.mw2consulting.com/direct

Software & SaaS solutions for startup, emerging, and global direct selling companies. See our ad on the back cover.

Combine the Magento Platform with powerful social and direct selling features available in the MW2 Direct platform. Solving Digital Transformation for direct selling with personalization, party management, influencer marketing, commission, analytics.

INTERNATIONAL DIRECT SELLING TECHNOLOGY CORP.

THATCHER TECHNOLOGY GROUP, LLC

Global Operations Management Software. Advanced Comp Plan Programming. Sales Force Backoffice & Automation. Web Site Design & Replication.

Thatcher Technology Group provides Sales Force, Compensation and Incentive Management Software for the Direct Selling Industry.

1208 E. Kennedy Blvd., Ste. 222 Tampa, FL 33602 813-277-0625 www.idstc.com

S O F T WA R E / TEC H N O LO GY S O LUTI O N S

1600 Viceroy Dr., Suite 125 Dallas, TX 75235 214-367-9933 www.exigo.com

TA X S E R V I C E S

EXIGO

S O F T WA R E / TEC H N O LO GY S O LUTI O N S

TO BE INCLUDED IN THE SUPPLIER DIRECTORY, EMAIL ADVERTISING@DIREC TSELLINGNEWS.COM

XIRECT SOFTWARE SOLUTIONS

686 E 110 S Unit 104 American Fork, UT 84003 385-448-1800 www.xirect.com Scalable software from startup to enterprise. Your delivery expert in Commissions Calc / Consulting, Replicating Websites, E-Commerce, Reporting, Promotions, Localization, Multi-Currency, and more- The Perfect Cloud-based Direct Selling Software Partner!

SOVOS 200 Ballardvale St. Wilmington, MA 01887 1-866-890-3970 www.sovos.com Sovos was built to solve the complexities of the digital transformation of tax with complete, connected offerings for global compliance. Our SaaS products integrate with a variety of business applications and government compliance processes.

55 Shuman Blvd., Ste. 350 Naperville, IL 60563 866-698-3848 www.thatchertech.com

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Introducing the DSN Dashboard. One email. Once a week. Only the essential news and stories. Curated specifically for busy direct selling executives.

DSN

DIRECT SELLING NEWS

The news you need. The name you trust.

Subscribe to the DSN Weekly Dashboard at directsellingnews.com d i r e c t s e l l i n g n e w s .co m | i n f o @ d i r e c t s e l l i n g n e w s .co m

A boutique investment banking, business development and corporate finance advisory firm with a primary focus on the direct selling vertical.

Stuart Johnson, the Founder and Chief Executive Officer of SUCCESS Partners and Direct Selling News, is a cofounder of the new firm. Direct Selling Capital Advisors’ experience and relationships are unmatched within the direct selling community.

SERVICES OFFERED INCLUDE: • Buy side and sell side M&A advisory • Equity and debt financing • Proprietary transactions • Joint venture and partnership opportunities • Institutional advisory

The firm has quickly established itself as a significant resource for direct selling industry participants and is actively engaged in the marketing of potential transactions in excess of $700 million.

info@directsellingcapital.com

Stuart Johnson, Partner | spj@directsellingcapital.com Ryan Bright, Partner | jrb@directsellingcapital.com

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801.431.4900 | infotraxsys.com