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Growth and Wellness

Posted by Tommy Driscoll on April 16, 2013 at 11:45 PM Comments comments (44)

(IDAHO FALLS, ID) — Consumer direct marketing company Melaleuca, announced annual revenues of $1.13-billion for calendar year 2012. This is a 9.2 % increase over the previous year. As one of the country’s most consistent growth companies, Melaleuca has grown in 26 of the last 27 years.

Prior to 1985, companies that offered home-based business opportunities traditionally used a Multi-level marketing (MLM) business model. The Multi-level Marketing model has multiple levels of distribution where distributors purchase products from the company and then try to make a profit by reselling those products to other distributors or to customers. A criticism of Multi-level Marketing is that those who cannot resell inventory they purchase end up losing money and are stuck with boxes of product in their possession.

In 1985, Melaleuca launched a new business model called “Consumer-direct marketing,” which operates substantially differently than Multi-level Marketing. In Melaleuca’s Consumer-direct marketing model, there are no distributors who purchase and resell products and there are no multiple levels of distribution. Instead, marketing executives refer customers directly to the company. Customers then purchase product directly from the company instead of from a distributor. This means no one makes any investment in inventory and there is no way for anyone to lose money, making operating a Melaleuca business essentially a risk-free venture. Prior to 1985, this concept had never been tried.

When Melaleuca first announced it was going to use a Consumer-direct marketing model rather than Multi-level Marketing, many industry experts forecasted that the company would fail. (It was assumed that unless a company sold case lots of products or large quantities in each transaction amounting to at least $100 or more per transaction no company could survive.) In the beginning, Melaleuca anticipated sales of approximately $30 per month per household – not even close to the $100 minimum threshold. Experts in the direct selling industry thought that the cost per sale would exceed the profits from such a tiny transaction and therefore, they forecasted Melaleuca’s rapid demise. But, after 27 years of success, Melaleuca claims it has proven the experts wrong. That claim may be valid as Melaleuca’s sales in the U.S. have now exceeded the annual sales of MLM companies such Amway, NuSkin, Shaklee and Herbalife.

In spite of an economy that has caused competitors to slide backwards or maintain the status quo, Melaleuca continues to flourish. The majority of the company’s growth in 2012 came from the U.S. and Canada, and the balance came from 14 other countries.

Melaleuca CEO Frank VanderSloot stated, “Melaleuca’s growth is a tribute to our unique marketing strategy. When we decided to dump the Multi-level Marketing model and switch to Consumer-direct marketing in 1985, we were told the Consumer-direct model would not work and we would go broke trying to make it work. I think our 27-year history of consistent growth proves that theory wrong. The Consumer-direct marketing model has proven to be far superior to Multi-level Marketing.”

There continues to be strong consumer demand for Melaleuca’s health and wellness products. Melaleuca touts its high-quality natural ingredients which make up over 350 proprietary and patented formulas.

It was just last December when VanderSloot announced plans for a new headquarters for the company to be located south of Idaho Falls. The new 40-plus acre campus will cost an estimated $50-million dollars and will consolidate all of the companies departments bringing them all under one roof. Construction on that facility is set to begin sometime later this Spring.

 

Secret To Success

Posted by Tommy Driscoll on April 9, 2013 at 11:40 PM Comments comments (0)

A well-known company is saying their consumer-direct marketing business model is helping them flourish.

Melaleuca has announced a 9.2% increase in annual revenues over last year. They say it’s their business model that’s helping make a difference.

“Having an opportunity that has absolutely no risk, has been a big benefit to us, where people can market our products, refer customers to us, not invest in any inventory whatsoever, not have to re-sell anything, just refer customers to Melaleuca, we do the transaction. That makes it risk free for them, no one can get hurt when they didn’t make any investment at all” said Melaleuca CEO Frank VanderSloot.

Melaleuca has grown in 26 of the last 27 years; they say it’s thanks to their consumer-direct marketing as opposed to multi-level marketing.

“Melaleuca’s business model of consumer-direct marketing is the antithesis of multi-level marketing” continued VanderSloot. “In multi-level marketing people have to buy from the company and re-sell, the fact that they have to carry an inventory and then re-sell an inventory entices them to make an investment that they may lose because they couldn’t re-sell the product, so the business model is just to sell inventories to people and then they’ve got to get rid of the product in multi-level marketing.”

Melaluca made the decision to go to consumer-direct marketing in 1985; which has allowed their customers to purchase products directly from the company instead of the distributor.

“We were told by all the direct selling experts and the multi-level marketing experts that you couldn’t have a transaction where people could just buy what they would use in a monthly basis, you needed to sell them case lots, you needed to sell them at least $100 – $150 a month in order just to cover your costs of doing the transaction” said VanderSloot.

Despite the negative forecasts, Melaleuca went forward with their business model anyway.

“They said we’d go out of business, the margins aren’t great but when you have several hundred thousands of customers it adds up, we provide an excellent business opportunity, hundreds of thousands of people have joined us now just in the United States alone, and I think we’ve proved the nay-sayers wrong, after 27 years I think it’s time to say we proved them wrong” continued VanderSloot.

Melaleuca develops, manufactures and markets more than 350 environmentally friendly health and wellness products.


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