|Posted by Tommy Driscoll on April 9, 2013 at 11:40 PM|
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.