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The FTC Retains Injunctive Powers and Demonstrates That Previous Behavior Is Now Punishable

Following the Supreme Court’s unanimous ruling that the FTC had been wrongfully exercising its authority under Section 13(b) of the FTC Act, it appeared that the FTC’s ability to impose monetary damages without first going through the administrative processes outlined in Section 5 of the FTC Act would be limited.

The court found that the FTC did not need to obtain a prior preliminary injunction or temporary restraining order via the administrative process before seeking a permanent injunction under Section 13(b) in a recent decision regarding a 2019 complaint filed by the FTC against Neora and affiliated parties, citing that the company was operating as an illegal pyramid scheme.

The FTC fought back, claiming that previous behavior might predict future acts, and the court agreed. Neora contended that the FTC was basing its complaints on a long-retired compensation scheme from years ago, but the FTC fought back, claiming that past behavior can be predictive of future actions. The court determined that the FTC’s complaint that Neora was violating or “about to violate” the FTC ADR was justified based on allegations that 95 percent of Neora distributors paid more than they earned each month and that Neora’s compensation plan had characteristics similar to those of an illegal pyramid scheme, as well as the fact that Neora never acknowledged its past misconduct or promised to never repeat it.

The FTC and the court agreed with Neora that the previous AMG Capital court judgment barred the commission from seeking equitable monetary remedy under Section 13(b), and the court denied the FTC’s motion for consumer redress, restitution, refunds, and ill-gotten gains disgorgement.

For direct selling companies that discover non-compliance issues within their compensation model or distributor actions—both past and present—the recent court ruling demonstrates that the FTC can seek injunctive relief, causing significant damage to a company’s business operations or even shutting it down.

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Nature’s Sunshine Reports $109 Million In Second-quarter Net Sales, A New High

Nature’s Sunshine Products, Inc. announced a 25% year-over-year growth in net sales, hitting a new high of $109 million. The adjusted net income per diluted share was $0.32, up from $0.28 in the prior year’s comparable period.

Terrence Moorehead, CEO of Nature’s Sunshine, stated, “For the fourth consecutive quarter, we achieved the greatest revenues in the company’s history.” “Growth across our operational business divisions drove these fantastic results, and we remain dedicated to our business transformation and five global growth strategies.”

With $43.5 million in net sales, the company’s position in Asia led sales growth, followed by $37.3 million in net sales in North America.

“We achieved double-digit growth in Asia, Europe, and Latin America, driven by product launches and solid execution of our strategies,” Moorehead added. “We also saw our ‘Subscribe and Thrive’ auto-ship program and affiliate network continue to gain popularity in the United States. Our direct-to-consumer business fared better than planned, and we’re striving to expand our digital capabilities to help accelerate this channel even further. With the current momentum, we are looking forward to starting our Personalization Program later this year. It’s another program aimed at improving the customer experience, and it’ll mark the next step in our digital-first transition.

In the third quarter, selling, general, and administrative expenditures climbed to $35.6 million, up from $28.5 million in the prior-year period. This rise is attributed to greater expenditures connected with business transformation projects and expansion in areas with higher variable costs, according to the firm.

Adjusted EBITDA grew by 38% to a new high of $13.4 million, owing to robust net sales growth, according to the business. The firm has $74.9 million in cash and cash equivalents on hand as of June and $3 million in debt.

“We expect our distributors and customers to continue to respond favorably to our changed business model and new branding in the second half of 2021,” Moorehead added. “Our consumers love the new packaging and labeling, as well as our new unpacking experience, which we’ll be rolling out across the board with our Synergy brand. We’re on a multi-year path right now, and while there are supply chain headwinds and ongoing COVID-19 issues, we’re still operationally and financially healthy, and we’re confident in our capacity to produce value for our shareholders.”

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Calming Adaptogen Elixir Is A New Product From Isagenix

Isagenix International has released its Adaptogen Elixir, a nutritional supplement that contains five adaptogens to assist users battle tiredness and soothe their internal turmoil.

“It’s no secret that stress is a significant problem for many people in today’s hurried environment, and as a wellness company, we had to do something about it,” said Sharron Walsh, CEO of Isagenix. “Adaptogen Elixir was developed to help people feel better, and we’re certain it will become a favorite element of our customers’ daily routines.”

The new product debuted during the company’s virtual Celebration 2021 Event and is now accessible in the United States, Puerto Rico, Australia, and New Zealand.

This elixir is made up of sparkling kombucha tea and the following adaptogens, which are packed in single-serve recyclable glass bottles:

• Ashwagandha
• Astragalus
• Eleuthero root
• Rhodiola
• Schisandra

Preferred customer rate is $39.99 for ten bottles or $119.97 for 30 bottles (inside the United States and Puerto Rico).

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Primerica Revenues Exceed $650 Million In The Second Quarter

Primerica, Inc. reported a 25% rise in second-quarter sales over the same period the previous year. With total revenues of $654.7 million and a net income of $128.2 million, the company had a profit of $128.2 million. The company’s earnings per diluted share (EPS) grew by 28 percent year over year to $3.22. The return on investment (ROI) remained at 26.3 percent.

“Sales performance in our core businesses continue to be quite strong,” said Glenn Williams, CEO. “As the licensing process normalizes and new hires resume their pre-COVID activities, we are delighted by our ongoing progress and remain focused on increasing our sales force.”

Customers exhibited a strong desire for future and retirement planning solutions, and Primerica’s investment goods sales for the quarter surpassed $3 billion, a new high for the firm.

Sales commissions and operational expenditures rose $9.2 million, with $2.1 million of that coming from the company’s acquisition of e-TeleQuote. The company’s cash on hand and investment assets reached $666 million at the end of June. That figure stood at $169.1 million immediately after the transaction was funded.

Term Life Insurance had a 17 percent increase in revenue year over year to $383.5 million. Death claims in the Term Life sector increased due to increased mortality, owing in part to COVID-related fatalities.

The business announced a $0.47 per share dividend, which will be paid on September 14, 2021.

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Amway’s Chief Marketing Officer, François Renard, Has Joined The Company

François Renard has been named as the new chief marketing officer of Amway, entrepreneur-led health, and wellness firm. Renard will report to Chief Executive Officer Milind Pant.

Renard comes to Amway from Renault Group, where he was the worldwide chief marketing officer.
Renard’s responsibilities include:

• Creating brands, products, and digital experiences that encourage new consumers to try Amway goods inspire loyalty and enable Amway Business Owners (ABOs) to establish customer connections and generate sustainable growth throughout Amway’s portfolio of brands.

• Leading a worldwide team devoted to customizing customer experiences across the web, mobile, and social media.

Renard oversaw a worldwide marketing and consumer insights team responsible for digital transformation, brand positioning, and segmentation strategies at Renault Group as a global chief marketing officer. Renard also chaired an executive group charged with redefining and transforming the company’s mission, which was based on innovation and sustainability.

Renard began his marketing career in Europe with Unilever’s care business as a senior brand manager. Before embarking on regional and global marketing leadership responsibilities, he established himself as a leader in the food, beverage, nutrition, and hair care categories at Unilever Vietnam and Unilever China. Renard was hired chief executive officer of Unilever’s luxury cosmetics brand Kate Somerville in 2016.

“We are pleased to have François join the Amway Global Leadership Team because he is a passionate, dynamic, digital, and consumer-centric international marketer.”

Milind Pant, Amway’s Chief Executive Officer, stated.

“François will play a critical role in the design, stewardship, and integration of our brands and product portfolio strategy, allowing Amway Business Owners to build and nurture their client base.”

About Amway

Amway is a health and wellness firm located in Ada, Michigan, founded by entrepreneurs. It is dedicated to assisting people in living better, healthier lives in more than 100 markets across the world. It is one of the top 50 privately held, family-owned businesses in the United States, according to Forbes magazine.

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Even In The Midst Of A Pandemic, Direct Selling Proves Its Worth To Local Economies

Despite local governments’ vaccination campaigns across the world, we are still in the midst of the epidemic. According to the IMF, the world economy would contract by 4.4 percent in 2020. The majority of the world’s economies are seeing growing unemployment. One industry, though, has remained stable. According to the World Federation of Direct Selling Associations’ (WFDSA) annual Direct Selling Report, worldwide direct sales grew by 2.3 percent year over year, from US$175.3 billion in 2019 to US$179.3 billion in 2020.

Despite the destruction inflicted by Covid-19, the 3-year Compound Annual Growth Rate (CAGR) is increasing, according to the study. The Direct Selling industry grew at a 3.0% CAGR (excluding China) from 2017 to 2020, exhibiting resilience in a time when other commercial sectors are witnessing a declining trend due to the pandemic.

The ongoing expansion of the direct selling sector is unsurprising. In the past, this industry has always seen growth amid economic downturns. During difficult economic times, individuals are increasingly conscious of the need to diversify their revenue sources, and for those seeking to start a business, direct selling offers an appealing chance to do so without a large investment or the headaches of operational and logistics.

The Pandemic Effect

The relationship and personal touch that distributors create with their clients and team members is the cornerstone of the direct selling company. The direct selling sector took a hit in the early days of the epidemic, as the lockdown forced social distance and extended periods of seclusion. Most businesses, on the other hand, rapidly recovered as they adapted to the new normal by shifting to digital engagement tools, virtual events, and training programs.

Many organizations were obliged to accelerate their digital deployment as a result of the epidemic. This was especially important for the direct selling sector, which has historically relied on in-person contacts. Those that were able to make the transition swiftly and connect with and assist their consumers and distributors not only survived but flourished!

Direct Selling: the future of regular and gainful income?

According to the International Labour Organization (ILO), workplace closures in countries with Covid-19-related limitations would result in the loss of 114 million jobs in 2020. This is especially true for women and young people. Because of its low entrance barrier, Direct Selling is proving to be a viable option for building economic stability, as the data show. It offers people searching for a supplemental income during difficult times the opportunity to become micro-entrepreneurs and active gig economy participants, making it an appealing and flexible income option.

What is next for the industry?

Companies that provide health and wellness goods saw a large rise in sales as a result of the pandemics increased awareness and personal health concerns. With $64.8 billion in global direct sales, these items grabbed the lead. This pattern is expected to continue in the next years.

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An International Health Industry Forum Was Held By Tiens Group

Tiens Group, as one of China’s most powerful multinational corporations, has been committed to the development aim of improving people’s lives since 1995. Tiens Group’s primary goods at first comprised calcium products, which were considered healthful. However, it has established diverse enterprises in a variety of sectors, including cross-border e-commerce, international tourism, live broadcast, and terminal experience stores, and has served more than 47 million families globally through its 110 locations.

Tiens Group will host an international health industry development event on August 3, 2021 (China time) to address the global health industry’s growth. This forum has gotten a lot of media attention throughout the world due to Tiens Group’s global reach. Tiens Group Chairman Li Jinyuan stated that the company will continue to strive for a “community of human health” as a significant player in the worldwide huge health sector.

China introduced the Belt and Road Initiative in 2013 as a way to expand transcontinental global commercial cooperation. The Belt and Road Initiative has opened up several chances for trade promotion in a variety of nations while also lowering transportation and trade expenses for certain countries. Tiens Group plays a significant role in the construction of the Belt and Road by promoting economic and commercial cooperation and growth between Tiens Group and the Belt and Road nations.

Li Jinyuan, Chairman of Tiens Group, launched the direct selling company in 1995 and began to expand international business in 1997, recognizing the need for economic and trade cooperation for various economies. It’s worth noting that it’s embryonic cross-border e-commerce industry has been quickly growing, with markets created in Europe, Asia Pacific, Africa, America, and the Middle East, and a business scope that spans 224 nations and regions. To assure the support of the worldwide supply chain, three large foreign warehouses, including a European Czech warehouse, a European Asian warehouse, and an African warehouse, were recently opened.

Tiens Group has evolved from a single product to a diversified product structure, integrated health services, and subsequently multi-industry innovative and integrated development over the last 26 years, establishing a worldwide network encompassing all nations. It has embraced cutting-edge new concepts and processes to assist families in accumulating wealth via consumption, promoting employment and entrepreneurship, facilitating global trade, and promoting growth.

Many participants of the “Belt and Road” initiative from across the world have reportedly been interviewed in China and given good feedback. Tiens Group has been promoting, researching, and applying innovative business models and concepts to develop a worldwide business system since its inception. It has evolved into a Chinese national brand that will ultimately expand into a worldwide brand to support greater global economic growth as a practitioner of “the Belt and Road.”

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The Direct Selling Summit: Increasing Consumer Trust Through Industry Education

On July 27, the BBB National Programs Direct Selling Self-Regulatory Council (DSSRC) held the inaugural Direct Selling Summit, which brought together direct selling industry executives, legal professionals, advertising experts, and salesforce members. Following a busy year of marketing problems for direct selling firms and their independent salesforce members, the virtual Summit, an educational event designed to provide individuals in the direct selling sector an inside look at how their advertising is monitored, took place.

The Direct Selling Summit featured three panels with in-house and outside lawyers, as well as business compliance officials, who reviewed the current challenges affecting the direct selling sector. The Summit’s keynote included Mary Engle, BBB National Programs’ Executive Vice President of Policy, in a one-on-one discussion with Beth Delaney, Attorney Advisor to FTC Commissioner Noah Phillips, from the Federal Trade Commission. Eric D. Reicin, President and CEO of BBB National Programs, gave the opening comments. In our program guide, you can learn more about the programs and speakers that attended the Direct Selling Summit.

Participants in the first panel, Between the Lines: Staying Out of Legal Trouble, discussed a tsunami of compliance that has swept the direct selling business in recent years, embracing a consumer-centric approach. More specifically, the panel discussed the FTC’s advocacy for increased use of its penalty offense authority, which places companies on notice of deceptive acts or practices in litigated administrative cases and then seeks civil penalties against notice recipients if they engage in those acts or practices after receiving the notice. The panel also reviewed the Federal Trade Commission’s decision that it will review the Business Opportunity Regulation, which comes amid requests for a new rule that would encompass direct selling businesses and give a foundation for obtaining civil fines for false earnings claims.

In her keynote address, On the Record with the FTC, Beth Delaney stated that we may expect more rulemaking from the FTC in the future, with an emphasis on individual defendant responsibility. Ms. Delaney stated in her one-on-one interview with Mary Engle that more freedom in rulemaking would allow the FTC to implement more imaginative and broad remedial remedies, with a stronger emphasis on consumer redress and legally compelled restitution of ill-gotten earnings earned by wrongdoers.

The third and final panel, Salesforce Best Practices: Strengthening the Branches, brought the event to a conclusion by continuing the essential discussion about sales executives and their downline sales staff maintaining open lines of communication. Many of the issues stated by previous panels, such as the need for salesforce monitoring, adherence to social media best practices, and the essential role a salesforce plays in a direct selling company’s brand integrity, were repeated by this panel.