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Coronavirus Begins to Impact Direct Sales Channel
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Coronavirus Begins to Impact Direct Sales Channel

COVID-19 upends everyday life around the world and in the U

By Dave Rauf

“The scope and duration of business disruption and the related financial impact from the coronavirus can’t be reasonably estimated at this time.”

—John Agwunobi, CEO, Herbalife

“No company is immune, but those that are more reliant on social media to execute business and have a higher degree of subscription sales in their business models are going to be relatively better off.” 

—Doug Lane, principal, Lane Research

Direct sellers are bracing for a significant financial blow as the reality of the novel coronavirus sweeping the globe sets in. At press time for this issue, the pandemic is in full swing, with cases being reported in every state and rising daily.

The virus that causes the disease called COVID-19 has upended everyday life around the world, and rattled the global economy.

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April 1, 2020 0 comment
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FTC Doubles Down on Compensation Plan Scrutiny
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FTC Doubles Down on Compensation Plan Scrutiny

Agency claims ‘money transfer scheme’ in latest enforcement action

By Dave Rauf

The vast majority of participants in Success By Health lost money as the company’s compensation plan rewarded distributors based on how many new recruits they could sign up and how much inventory they could sell to those same recruits, not from retail sales.

—Paraphrased from FTC suit against Success by Health

“The FTC is trying to rewrite the law through enforcement proceedings.”

—Brent Kugler, partner, Scheef & Stone

The Federal Trade Commission (FTC) has dropped the hammer on another MLM, marking the third pyramid scheme case brought against a direct seller in the last several months as part of a series of enforcement actions that have rattled the industry.

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March 1, 2020 0 comment
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Direct Sellers Lag in Hispanic Market
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Direct Sellers Lag in Hispanic Market

Buying power to top $1.9 trillion

By Dave Rauf

Many companies are still behind the curve and are missing the opportunity to develop a growing segment of the Latino market.

At a recent Direct Selling Association meeting, Ideneth Vega began her presentation to dozens of executives a bit differently—by speaking in Spanish. The room, full of non-Spanish speakers, looked quite puzzled at first, she says.

But there was a good reason for the bilingual approach. Vega, the vice president of marketing for Houston-based Zurvita, was presenting on direct selling marketing efforts geared toward the burgeoning Hispanic demographic, a segment of the population growing faster than any other minority group in the country and whose purchasing prowess is also increasing exponentially. 

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February 1, 2020 0 comment
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Trade War Threats Continue
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Trade War Threats Continue

White House doubles down on tariffs as a weapon in trade talks

By David Rauf

Last year, the U.S. imposed new duties on steel and aluminum imports from Canada and Mexico, prompting the Mexican government to react with its own set of retaliatory tariffs that ended up having an impact on some U.S. direct sellers that sell health supplements.

“If China wants to restrict anything coming from the U.S. or tax any company it sees fit from the U.S., it could do that very easily. In that scenario, what’s going to happen is that the cost is going to be absorbed by the company or passed on to the consumer.”

—Rafael Miner, partner, Miner Group Consulting

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July 3, 2019 0 comment
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