Tag Archive: Avon


By Brittany Glenn

Tired of reading about the global economic crisis?

Here’s the good news: Among the many industries falling by the wayside, the direct selling industry is charting a strong and steady course around the world. So strong and steady that we thought it would be interesting to see how the industry’s top companies—those with annual billings of more than US$1 billion—were faring, despite all the doom and gloom reported by the media.

We decided to call this very exclusive group of industry leaders the billion-dollar club. Although each company has a healthy respect for today’s global economic challenges, each is experiencing continued growth and success.

Most of the executives we spoke to believe the current financial crises are responsible, at least in part, for the direct selling industry’s current solvency and success.

And now, we’d like to invite you to peek inside the companies that comprise the direct selling industry’s own billion-dollar club.

1. Avon Products Inc. $10.9 Billion

Topping the billion-dollar club list is, of course, New York City-based public company Avon (AVP—NYSE), the industry’s mother ship. As the world’s largest direct seller, Avon markets to women in more than 100 countries through 5.5 million independent sales representatives.

Judging by Avon’s latest financial figures and its third-quarter earnings statement, the company is in a growth cycle.

In 2007, Avon’s revenue was $9.9 billion. Over the last four quarters—Q4 2007 through Q3 2008—Avon’s revenue was $10.9 billion. Additionally, third-quarter 2008 revenue grew to $2.6 billion, a 13 percent increase over Q3 2007.

“Avon’s third-quarter performance reflects continued momentum of our turnaround plan,” Andrea Jung, Avon Chairman and CEO, said in a press release. “Our investments in advertising and the Representative Value Proposition (RVP) are yielding strong results.”

Avon was ranked No. 265 on the 2008 Fortune 500 list.

Name of Company: Avon Products Inc.
Type of Company: Public (AVP—NYSE)
Number of Employees: 42,000
Number of Markets: More than 100
Revenue: $10.9 billion in revenue for last four quarters (Q4 2007 – Q3 2008); $9.9 billion in revenue for 2007
Jul – Sep 2008 (Q3 2008): $2.6 billion in revenue
Apr – Jun 2008 (Q2 2008): $2.7 billion in revenue
Jan – Mar 2008 (Q1 2008): $2.5 billion in revenue
Oct – Dec 2007 (Q4 2007): $3.1 billion in revenue

2. Amway Corporation $8.2 Billion

In the No. 2 spot is direct selling giant Amway. Its annual sales for 2007 were $7.16 billion, and for 2008 were $8.2 billion. Amway Chairman Steve Van Andel says the company continues to remain optimistic about its future growth potential, despite a bleak economic outlook in some of its markets. “Amway’s rapid expansion around the world and the acceptance of the direct selling business model by countries such as Russia, India, Ukraine and others, has blunted the impact of the economic downturn on our company,” he says.

In late 2007, Amway completed its production and warehousing facility in Vietnam. Since then, Amway Vietnam Co. Ltd. has become one of the company’s fastest-growing markets. “Officially launched in February 2008, Amway Vietnam now has more than 40,000 independent business owners throughout the country,” Van Andel says.

In 2009, Amway plans to increase its efforts in more established markets such as the United States and Great Britain—“to revive our former buoyancy,” Van Andel says.

“We’re expecting big things to happen in 2009, such as continuing to increase our visibility through advertising, sponsorships and a growing physical presence around the world,” he says.

Name of Company: Amway Corporation
Type of Company: Private
Number of Employees: 13,000
Number of Markets: More than 80
Sales: $7.16 billion annual sales in 2007; $8.2 billion annual sales in 2008

3. Vorwerk & Co. KG $3.15 Billion

Founded in 1883 as a carpet company, Wuppertal, German-based private firm Vorwerk & Co. KG has been selling quality products—from household appliances to cosmetics—through the direct sales channel since 1930. For 2007, Vorwerk reported a sales volume of $3.15 billion (€2.32 billion).
Vorwerk is the parent company of JAFRA Cosmetics, which had a sales volume of $469.71 million (€342 million) in 2007.

Regarding the current monetary malaise affecting countries worldwide, “Vorwerk’s managing partners decided not to participate in the global economic crisis,” says Vorwerk Senior Vice President of Corporate Communications Jürgen Hardt. “In truth, the European—and especially German—economy is better prepared for global turbulences than other parts of the world.”

While Hardt says Vorwerk’s growth has been significant in the past 10 years, he admits the firm must be careful to balance potentially negative influences. “The company will not be totally free of the negative impact of the crisis,” he says.

But to a certain extent, Vorwerk is protected from financial turbulence. “As a financially viable, family-owned company, we are not dependent on banks,” Hardt says.

Hardt says, as others have, that more people may be willing to join Vorwerk—and other direct selling companies, too—during tough financial times. “Availability of salespeople is one of the most important factors for success in direct sales,” he says. “Our growth expectations are unlimited.”

Name of Company: Vorwerk & Co. KG
Type of Company: Private – parent company of JAFRA Cosmetics
Number of Employees: 23,000
Number of Markets: 61
Sales Volume: €2.32 billion ($3.15 billion) in sales volume for 2007

4. Herbalife Ltd. $2.4 Billion

Los Angeles-based public company Herbalife (HFL—NYSE) sells its products through more than 1.9 million independent distributors who conduct business worldwide. In 2007, Herbalife’s net sales were $2.14 billion. Over the last four quarters—Q4 2007 through Q3 2008—the company’s net sales were $2.4 billion.

“While our business isn’t countercyclical to the economy, as of Q3 2008, it seems to be resilient to the economy,” says Des Walsh, Herbalife Executive Vice President, Worldwide Operations and Sales. “Eighty percent of our business is outside the United States, so we’re constantly operating in various economies. Naturally, in a tough economic climate, our business opportunity is even more attractive to someone who loses his job or is in need of supplemental income.”

Walsh says Herbalife has made substantial investments in markets outside the United States. In 2008, Herbalife opened four new markets: Honduras, Guatemala, Nicaragua and Ecuador.

Herbalife has also invested more than $50 million in upgraded Oracle applications, so it has the IT infrastructure necessary to support significant future growth.

“We’re currently doing business in 70 countries, but there are several markets we are planning to open in 2009,” Walsh says. “Also, we’re focused on more deeply penetrating our existing markets and globalizing best practices.”

Name of Company: Herbalife Ltd.
Type of Company: Public (HFL—NYSE)
Number of Employees: 3,644
Number of Markets: 70
Net Sales: $2.4 billion in net sales for last four quarters (Q4 2007 – Q3 2008); $2.14 billion in net sales for 2007
Jul – Sep 2008 (Q3 2008): $602.2 million net sales
Apr – Jun 2008 (Q2 2008): $639.7 million net sales
Jan – Mar 2008 (Q1 2008): $604.4 million net sales
Oct – Dec 2007 (Q4 2007): $578.1 million net sales

5. Mary Kay Inc. $2.4 Billion

Addison, Texas-based private company Mary Kay Inc. was founded in 1963 by Mary Kay Ash with her life savings of $5,000. From its humble beginnings in a 500-square-foot Dallas storefront, Mary Kay Inc. has grown into one of the largest direct sellers of skin care and color cosmetics in the world, with a global independent salesforce exceeding 1.8 million.

Since the firm’s founding, Mary Kay Inc. has averaged double-digit growth each year. In 2007, the firm generated $2.4 billion in wholesale sales.
Mary Kay opened its first international market—Australia—in 1971, and its most recent—India—in 2007. Among its more than 35 active markets, Mary Kay’s three top international markets are China, Russia and Mexico.

In 2009, Mary Kay Inc. plans to invest time and money in its corporate social responsibility initiative, Pink Changing LivesSM. Mary Kay Inc.’s financial and product donations spotlight changing the lives of women and children around the world, with a focus on the prevention of violence against women. Additionally, Mary Kay Inc. will plant 100,000 trees in North America and embark on a groundbreaking initiative to turn waste from its manufacturing process into usable energy.

Name of Company: Mary Kay Inc.
Type of Company: Private, family-owned
Number of Employees: 5,000
Number of Markets: More than 35
Sales: $2.4 billion in wholesale sales for 2007

6. Primerica Financial Services Inc. $2.3 Billion

Based in Duluth, Ga., private firm Primerica Financial Services—a subsidiary of public parent company Citi (C—NYSE)—boasts the largest salesforce in the financial services industry. There are approximately 100,000 licensed, independent Primerica representatives across the United States (including Puerto Rico), Canada and Spain.

For Primerica, the current credit crunch is a blessing in disguise, or maybe just a blessing. Primerica Co-CEO John Addison is known for saying, “There might be a recession in America, but there’s no recession at Primerica.”

The numbers bear him out. “Through the first three quarters of last year, of the top 100 largest life insurance companies in the United States, 89 had a net decrease in their capital base,” Addison says. “Only 11 had an increase in their capital base, and the third largest capital base increase out of all the life insurance industry was Primerica Life at $120 million.”

At a time when layoffs and cutbacks are the rule not the exception, especially in the financial services industry, Primerica is investing in its future. “We’ve implemented a new bonus that’s very much aimed at licensing and building new people,” Addison says. “We’re making significant investments in our technology platform to make the recordkeeping for our independent contractors simpler.”

Addison expects these investments to pay dividends in the near-term—and even in the midst of a recession. “Our model of building distribution weathers the storms that are going on in the world incredibly well,” he says. “Our goal is a 20 percent increase in recruiting, a 20 percent increase in licensing. While everybody else is focused on doing damage control, we’re going to go do some damage.”

Name of Company: Primerica Financial Services Inc.
Type of Company: Private, subsidiary; Parent company, Citi (C—NYSE)
Number of Employees: 2,000
Number of Markets: Three
Revenue: $2.3 billion in revenue in 2007

7. Tupperware Brands Corporation $2.21Billion

Publicly traded Tupperware Brands Corporation (TUP—NYSE), based in Orlando, Fla., sells storage and serving products through Tupperware, and beauty and personal care products through Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo and Swissgarde.

In 2007, Tupperware’s sales were $1.98 billion. In the last four quarters—Q4 2007 through Q3 2008—the company’s sales were $2.21 billion.
“Our emerging markets accounted for 56 percent of our third-quarter sales, and the bulk of these businesses continued to perform extremely well,” says Chairman and CEO Rick Goings in Tupperware’s Q3 earnings release. “We believe we will generate modest local currency growth from established markets in 2009 and forward, as we’ve seen the payoff in selected markets of the work we’ve done over the last several years to revitalize these businesses.

Tupperware is listed as No. 903 on the 2008 Fortune 1,000 list.

Name of Company: Tupperware Brands Corporation
Type of Company: Public (TUP—NYSE)
Number of Employees: 12,800
Number of Markets: 100
Sales: $2.21 billion in sales for last four quarters (Q4 2007 – Q3 2008); $1.98 billion in sales for 2007
Jul – Sep 2008 (Q3 2008): $513 million in sales
Apr – Jun 2008 (Q2 2008): $584 million in sales
Jan – Mar 2008 (Q1 2008): $543 million in sales
Oct – Dec 2007 (Q4 2007): $577 million in sales

8. Forever Living Products International Inc. $2.1 Billion

Private firm Forever Living Products, based in Scottsdale, Ariz., sells aloe vera drinks and aloe vera-based aromatherapy products, cosmetics, dietary and nutritional supplements, lotion, soap and tooth gel products in some 135 markets. Annual sales for 2007 were $2.1 billion.
According to Rex Maughan, Forever Living CEO and Chairman of the Board, “2008 has been a remarkable year for Forever Living.
“In spite of the global turmoil, I am grateful for the fact that Forever Living is going strong,” Maughan says. “Although I have not seen all the figures yet, I am confident that 2008 will be a great year. Although no business is recession-proof, there is always opportunity in every business climate.

“When times are tough, people often look for ways to earn more money or even find an alternate source of income in case their ‘main’ job is threatened.”

Name of Company: Forever Living Products International Inc.
Type of Company: Private
Number of Markets: 135
Annual Sales: $2.1 billion in sales for 2007

9. Oriflame Cosmetics $1.68 Billion

Swedish company Oriflame offers high-quality skin care, fragrances, color cosmetics, toiletries and accessories. Oriflame has grown rapidly, recently opening two markets—Iran and China.

“We have increased sales by more than 17 percent per year on average for the last 20 years,” says Magnus Brännström, Oriflame’s CEO. “This is clearly above-market growth. We intend to continue to grow more than the cosmetics market in the future. We believe we will take market share in 2009.”

Name of Company: Oriflame Cosmetics
Type of Company: Public (ORI—SDB.ST)
Number of Employees: 7,000
Number of Markets: 61
Sales: $1.68 billion in sales for 2007

10. Natura Cosmeticos SA $1.52 Billion

São Paulo, Brazil-based firm Natura Cosmeticos SA is traded on the São Paulo Stock Exchange (NATU3). Natura operates in the Chile, Peru, Argentina, Mexico, Colombia and Venezuela. It manufactures deodorants, sunscreens, lotions, creams, lipsticks and perfumes. Over the last four quarters—Q4 2007 through Q3 2008—Natura’s revenue was $1.52 billion.

Natura’s Q3 earnings statement says: “The globalized world’s main economies are currently undergoing a period of significant change. Developing countries, however, may be less affected by the crisis, and could thus play an important role in the growth of the global economy. Our company is highly profitable, has strong cash generation and a treasury that operates safely and selectively.”

Natura is focusing on international expansion, but the firm is choosing its markets with care. “Studies for the implementation of a United States operation have shown that the moment is not suitable,” reads the Q3 earnings report. “We have decided to suspend our entry into that market for an indeterminate period. We will maintain our operation in France as part of a group of initiatives to build our global brand and as a source of learning about demand in a highly sophisticated market.”

Name of Company: Natura Cosmeticos SA
Type of Company: Public – São Paulo Stock Exchange (NATU3)
Number of Employees: 5,919
Number of Markets: Seven
Net Revenue: $1.52 billion in net revenue for last four quarters (Q4 2007 – Q3 2008)
Jul – Sep 2008 (Q3 2008): Net revenue R$921.1 million = $412.21 million
Apr – Jun 2008 (Q2 2008): Net revenue R$883.1 million = $395.21 million
Jan – Mar 2008 (Q1 2008): Net revenue R$668 million = $298.66 million
Oct – Dec 2007 (Q4 2007): Net revenue R$937.8 million = $419.29 million

11. Nu Skin Enterprises Inc. $1.23 Billion

Provo, Utah-based publicly traded company Nu Skin Enterprises Inc. (NUS—NYSE) markets personal care products under the Nu Skin® brand; science-based nutritional supplements under the Pharmanex® brand; and technology-based products and services under the Big Planet® brand.
Over the last four quarters—Q4 2007 through Q3 2008—Nu Skin Enterprises’ revenue was $1.23 billion. In 2007, the firm’s revenue was $1.15 billion.

Ritch Wood, Nu Skin Enterprises Chief Financial Officer, says although there are repercussions for every company because of the current economic situation, he believes Nu Skin Enterprises is in a position to weather the storm due to its sales momentum, innovative products and strong balance sheet.

“In 2008, we experienced double-digit growth in many of our markets around the world, and we look for this momentum to continue in 2009,” Wood says. “We are looking forward to a great 2009.”

Nu Skin Enterprises opened two new markets—South Africa and the Czech Republic—in 2008, bringing the company’s market total to 48. “We have already seen great excitement in these two markets,” Wood says. “As of December 2008, South Africa has welcomed 2,100 distributors. We look forward to continued growth from both of these markets in 2009.”

Finally, Nu Skin reminds us that sharing success is the key to attracting more success.

“Nu Skin and its distributors continue to generate success—and in the process, continue to be a force for good by giving back to those in need,” Wood says. “As dollars for charitable giving shrink, the Nu Skin Force for Good Foundation continues to grant more than $1 million each year to help nourish the minds and bodies of children.”

Name of Company: Nu Skin Enterprises Inc.
Type of Company: Public (NUS—NYSE)
Number of Employees: 1,200
Number of Markets: 48
Revenue: $1.23 billion in revenue for last four quarters (Q4 2007 – Q3 2008); $1.15 billion in revenue for 2007.
Jul – Sep 2008 (Q3 2008): $310.27 million in revenue
Apr – Jun 2008 (Q2 2008): $321.7 million in revenue
Jan – Mar 2008 (Q1 2008): $298.1 million in revenue
Oct – Dec 2007 (Q4 2007): $306.1 million in revenue

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See Original Article Here in Direct Selling News

Avon Review – Is Avon A Scam Or Legitimate Company? Is it really necessary to ask this? Avon ladies, Avon products, and “Avon calling” advertising have been part of the American scene for well over a century. Currently, it conducts business world-wide, and is the world’s largest direct-marketing company.

In 1886, Mr. David McConnell founded the “California Perfume Company”. (Ironically, though, it wasn’t begun in California, but in New York.) Mr. McConnell was a door-to-door book salesman who gave away bottles of perfume to encourage ladies to buy his books. But, when he found that the perfume had become more popular than his books, he left the book business and set up the new company to sell his perfume. The company changed its name to Avon in 1939.

Avon markets a wide selection of fragrances, cosmetics, skin care products and jewelry for women, men, and children. More recently, they’ve begun to sell children’s toys. A lot of the products are novelty items, which they only sell on a seasonal basis. Avon has endorsed some celebrities including Reese Witherspoon and Courtney Cox.

Avon representatives who sell greater than $10,100 worth of products a year will be inducted into the Presidents Club. Those who sell more than $20,200 worth a year will belong to the Honor Society. The Rose Circle is for those who sell more than $38,000 worth a year. Next, is the McConnell Club, for those with more than $66,500 in annual sales. Sales of more than $112,000 a year will put a person into the Presidents Council, and top-selling reps with more than $280,000 in annual sales be inducted into the Inner Circle.

New Avon reps earn a 50% commission on their first four sales campaigns. After that, the commission rate will vary with the size of the order, anywhere from 20% to 50%. For orders over $1550, the commission is 50%. Members of the Presidents Club will earn a minimum of 40% commission for each order during the next year. Members of the Rose Circle will earn a minimum of 45% commission for the next year.

Avon originally used a normal, single-level direct-marketing model. It only recently started using the Multi-Level-Marketing approach.


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