Jim Brown - Direct Selling News https://www.directsellingnews.com The News You Need. The Name You Trust. Thu, 25 Jan 2024 19:01:54 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.2 https://www.directsellingnews.com/wp-content/uploads/2021/04/DSN-favicon-150x150.png Jim Brown - Direct Selling News https://www.directsellingnews.com 32 32 USANA Manufacturing Facility Earns GFSI Certification  https://www.directsellingnews.com/2024/01/25/usana-manufacturing-facility-earns-gfsi-certification/?utm_source=rss&utm_medium=rss&utm_campaign=usana-manufacturing-facility-earns-gfsi-certification Thu, 25 Jan 2024 19:01:49 +0000 https://www.directsellingnews.com/?p=20729 USANA’s 43,000 square-foot manufacturing facility in Salt Lake City, Utah has earned a Global Food Safety Initiative certification from the Safe Quality Foods program. This particular manufacturing plant houses the company’s bar, gusset, single-serve and powder-blending production.

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USANA’s 43,000 square-foot manufacturing facility in Salt Lake City, Utah has earned a Global Food Safety Initiative (GFSI) certification from the Safe Quality Foods (SQF) program. This particular manufacturing plant houses the company’s bar, gusset, single-serve and powder-blending production. 

“Receiving our GFSI certification is a landmark moment for USANA and our manufacturing capabilities,” said Jim Brown, USANA President and CEO. “In the crowded health and wellness space it’s important to differentiate yourself. Receiving this certification is a great way for us to do just that. I’m extremely proud of our manufacturing and quality teams who have implemented the standards and practices necessary to pass this demanding audit.” 

The goal of GFSI is to reduce recalls and deliver safer products to consumers, and this certification signifies that USANA’S enrobed snack bars and drink mix powders meet stringent requirements for food safety management systems. 

“SQF is considered to be the highest standard in the industry, and our certification with them places us at the top of the mountain,” said Walter Noot, USANA Chief Operating Officer. “Having SQF certify our dedication to the safest and highest-quality production standards is a huge benefit to us—especially with our foods products. I look forward to the new opportunities this certification can create for us. Thank you to everyone at our USANA foods facility for all their hard work.” 

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USANA Named Top Manufacturer in Utah  https://www.directsellingnews.com/2023/11/28/usana-named-top-manufacturer-in-utah/?utm_source=rss&utm_medium=rss&utm_campaign=usana-named-top-manufacturer-in-utah Tue, 28 Nov 2023 16:34:29 +0000 https://www.directsellingnews.com/?p=20314 For the second consecutive year, USANA Health Sciences, Inc. has been awarded Manufacturer of the Year by the Utah Manufacturers Association. 

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For the second consecutive year, USANA Health Sciences, Inc. has been awarded Manufacturer of the Year by the Utah Manufacturers Association. 

“This win is outstanding for our manufacturing and operations teams,” said Jim Brown, USANA CEO and President. “I am so proud to work for a company that continuously seeks improvement and goes above and beyond. USANA is committed to excellence, and being named manufacturer of the year for a second year in a row proves that.” 

USANA’s manufacturing facility is FDA-registered and GMP-certified by USP and NSF, and features nutritional supplement machines that can produce up to half a million tablets per hour. Each machine is also designed to monitor its output for specific quality attributes and can customize or change the shape and size of each supplement. 

“USANA has a mission to manufacture high-quality products, and because we take pride in our manufacturing practices, we create products people trust,” said Walter Noot, USANA Chief Operating Officer. “We are one of the few companies to manufacture almost 70% of our products in our state-of-the-art, FDA-registered facility (excluding Mainland China), something I am truly proud of.”

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USANA Reports $213 Million in Q3 Net Sales  https://www.directsellingnews.com/2023/10/26/usana-reports-213-million-in-q3-net-sales/?utm_source=rss&utm_medium=rss&utm_campaign=usana-reports-213-million-in-q3-net-sales Thu, 26 Oct 2023 19:53:13 +0000 https://www.directsellingnews.com/?p=20106 USANA Health Sciences, Inc. released its third quarter financial results, reporting net sales of $213 million, a 9% decline from $233 million during the same period of 2022, and a 10% decline sequentially.

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USANA Health Sciences, Inc. released its third quarter financial results, reporting net sales of $213 million, a 9% decline from $233 million during the same period of 2022, and a 10% decline sequentially. Diluted EPS was $0.59, compared to $0.78 during the same quarter in 2022. Active Customers totaled 464,000, a slight decline (2%) from Q3 2022. 

Asia Pacific proved to be the strongest market for the company, reporting $170 million in net sales, a 7% decline from Q3 2022, with 362,000 Active Customers. 

“Operating results for the third quarter did not meet our expectations, largely because of challenging economic conditions across many of our regions and a lower cadence of promotional activity during the quarter,” said Jim Brown, USANA President and Chief Executive Officer. “These factors made it difficult to generate both Active Customer growth and top line momentum in our business. Notwithstanding these near-term challenges, the strength of our balance sheet and business model allowed us to continue investing in key strategic initiatives during the quarter, and we plan to continue to invest in and execute these strategies going forward. We also believe that the expanding global nutrition category, and consumers’ increased focus on health and wellness, provide a compelling opportunity for us to leverage our best-in-class health products and business opportunity. Consequently, we remain confident and optimistic that our strategies will generate long-term Active Customer and sales growth for USANA.” 

The company ended the quarter with $307 million in cash and cash equivalents and generated $22 million in operating cash flow.  

Fiscal year 2023 outlook now includes consolidated net sales of $900-$920 million with a diluted EPS between $2.80-$3.05. 

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USANA Foundation Supports Feeding America  https://www.directsellingnews.com/2023/09/07/usana-foundation-supports-feeding-america/?utm_source=rss&utm_medium=rss&utm_campaign=usana-foundation-supports-feeding-america Thu, 07 Sep 2023 20:13:40 +0000 https://www.directsellingnews.com/?p=19753 In honor of Hunger Action Month, USANA is raising awareness about hunger in America and supporting organizations that help make a tangible difference in the battle against food insecurity in the U.S. A portion of donations made during the month of September to the U.S.-based USANA Foundation will go to Feeding America, an organization that […]

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In honor of Hunger Action Month, USANA is raising awareness about hunger in America and supporting organizations that help make a tangible difference in the battle against food insecurity in the U.S. A portion of donations made during the month of September to the U.S.-based USANA Foundation will go to Feeding America, an organization that empowers families with sustainable solutions to end malnourishment. 

The foundation also leads a program called USANA Kids Eat, which serves 6,700 food-insecure children in Utah and delivers packed meals to schools for kids to eat during the weekend. Throughout the month of September, the company is inviting distributors and customers to become a one-time or monthly donor; sponsor a Garden Tower community, which grows food to feed ten families; or volunteer for a USANA Foundation service trip. 

“Hunger Action Month is an amazing initiative for us here at USANA,” said Jim Brown, USANA President and CEO. “We’re dedicated to ending world hunger each and every day through the USANA Foundation. And I believe we’re truly making a significant difference. Together, we can create sustainable, long-term solutions to eradicate world hunger.”

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USANA 2023 Americas & Europe Convention Highlights Product Innovation  https://www.directsellingnews.com/2023/08/14/usana-2023-americas-europe-convention-highlights-product-innovation/?utm_source=rss&utm_medium=rss&utm_campaign=usana-2023-americas-europe-convention-highlights-product-innovation Mon, 14 Aug 2023 15:05:51 +0000 https://www.directsellingnews.com/?p=19638 USANA hosted its annual Americas & Europe Convention in Salt Lake City, Utah, welcoming distributors for a deep dive into product education, in-depth trainings and a keynote from Erin King who spoke on the power of digital persuasion to elevate and transform businesses.

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USANA hosted its annual Americas & Europe Convention in Salt Lake City, Utah, welcoming distributors for a deep dive into product education, in-depth trainings and a keynote from Erin King who spoke on the power of digital persuasion to elevate and transform businesses. 

This year’s convention featured what the company called a “smaller, more intimate” format and had a strong focus on the science and innovation behind the company’s development, innovation and formulation of its products.  

“We are constantly researching and developing what we provide to our customers,” said Jim Brown, USANA President and CEO. “Nutrition is essential to a healthy life and that is why USANA is committed to creating new and innovative products.” 

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USANA Reports Second Quarter Net Sales of $238 Million  https://www.directsellingnews.com/2023/07/26/usana-reports-second-quarter-net-sales-of-238-million/?utm_source=rss&utm_medium=rss&utm_campaign=usana-reports-second-quarter-net-sales-of-238-million Wed, 26 Jul 2023 15:42:21 +0000 https://www.directsellingnews.com/?p=19547 USANA Health Sciences announced its financial results for the second fiscal quarter ending July 1, 2023. The company achieved second quarter net sales of $238 million during this period, compared to $264 million in the second quarter of 2022. Diluted EPS was $0.89, down from $1 in the second quarter of 2022. The company’s active […]

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USANA Health Sciences announced its financial results for the second fiscal quarter ending July 1, 2023. The company achieved second quarter net sales of $238 million during this period, compared to $264 million in the second quarter of 2022. Diluted EPS was $0.89, down from $1 in the second quarter of 2022. The company’s active customers totaled 487,000, a 13% decline from the same quarter of 2022, and a 1% decline sequentially. 

The Asia Pacific region led as the strongest market for the company, with $194 million in net sales and 384,000 active customers, representing an 11% and 12% decline respectively from the second quarter of 2022. Americas and Europe accounted for $44 million in net sales and 103,000 active customers. 

“Our strategic focus remains squarely on increasing the number of Active Customers,” said Jim Brown, USANA President and Chief Executive Officer. “In addition to the emphasis on in-person meetings and events, our efforts include new market expansion, incentive opportunities for our salesforce, the ongoing pursuit of accretive acquisition opportunities, and expanding our digital commerce capabilities. We remain optimistic that the successful execution of our strategies will position USANA for a return to long-term growth.” 

USANA updated its fiscal 2023 net sales guidance to $900-$950 million with a diluted EPS guidance of $2.65-$3.30.  

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USANA to Expand into India  https://www.directsellingnews.com/2023/05/04/usana-to-expand-into-india/?utm_source=rss&utm_medium=rss&utm_campaign=usana-to-expand-into-india Thu, 04 May 2023 15:19:48 +0000 https://www.directsellingnews.com/?p=18829 USANA Health Sciences, Inc. revealed the next stage in its international expansion, announcing it will open operations in India in the third quarter of 2023. With this launch, the company will now be present in 25 markets.

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USANA Health Sciences, Inc. revealed the next stage in its international expansion, announcing it will open operations in India in the third quarter of 2023. With this launch, the company will now be present in 25 markets. 

“USANA’s expansion into India is our first new market in five years and provides an exciting and gratifying opportunity to introduce USANA’s world class health and wellness products to a new country, culture and demographic,” said Jim Brown, USANA President. “We have spent several years of extensive research and meticulous work to prepare for this expansion into India. We are confident that our products and business model are ideally suited for India, and we believe in our team’s ability to develop and grow this important market as we work toward our vision of creating the healthiest family on earth. While we are optimistic about the long-term growth opportunity that India presents, we also recognize that there will be learning opportunities as we serve an entirely new culture. As such, we will take a deliberate and diligent approach to launching this market and executing our long-term growth strategy.” 

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USANA Named Utah Manufacturer of the Year   https://www.directsellingnews.com/2022/11/15/usana-named-utah-manufacturer-of-the-year/?utm_source=rss&utm_medium=rss&utm_campaign=usana-named-utah-manufacturer-of-the-year Tue, 15 Nov 2022 16:09:47 +0000 https://www.directsellingnews.com/?p=17602 USANA Health Sciences, Inc. was honored by the Utah Manufacturers Association and awarded Manufacturer of the Year in the “Extra-Large” category.

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USANA Health Sciences, Inc. was honored by the Utah Manufacturers Association and awarded Manufacturer of the Year in the “Extra-Large” category. 

“Utah is a hub for manufacturing, so to be named the best among so many great companies is a huge honor,” said Jim Brown, USANA President. “As a global leader in cellular nutrition–we take pride in our manufacturing processes and our ability to make our high-quality products in-house. We wouldn’t be able to say we have the best products in the world if we didn’t start with the best manufacturing team and facilities.” 

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USANA: Cheers to 30 years! https://www.directsellingnews.com/2022/10/14/usana-cheers-to-30-years/?utm_source=rss&utm_medium=rss&utm_campaign=usana-cheers-to-30-years Fri, 14 Oct 2022 15:19:25 +0000 https://www.directsellingnews.com/?p=17368 For more than 30 years, CEO Kevin Guest has had a front row seat for USANA’s steady growth and commitment to innovation. As he and the company celebrate three decades in business, the team is more excited about what lies ahead for USANA, the possibilities on the horizon and a growing global presence.

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Founded | 1992

Headquarters | Salt Lake City, UT

Top Executives:
Kevin Guest, Chairman and CEO
Jim Brown, President

Product Category | Health and Wellness

For more than 30 years, CEO Kevin Guest has had a front row seat for USANA’s steady growth and commitment to innovation. As he and the company celebrate three decades in business, the team is more excited about what lies ahead for USANA, the possibilities on the horizon and a growing global presence.

Discipline and Direction

Exceedingly few companies have the privilege of celebrating 30 years in business, as average company lifespans have been consistently shrinking. With sexy startups and technology darlings dominating the headlines, it’s easy to forget that consistency is often the most important factor in the success or failure of a business. And it’s anything but boring.

“I think one of the hallmarks to our success for the past 30 years is discipline,” Kevin Guest, Chairman and CEO shared. “What I’m most excited about is that the base that we have to jump off from for the next 30 years is extremely solid. We have a great balance sheet. We have no debt. We have all the things in place along with a great product offering.”

The company’s consistency also shines in their commitment to the same core values for three decades.

“In our 30-year history, our core values have never changed,” said President Jim Brown. “Excellence, community, health and integrity have always been the guiding principles for our company. We have also seen our USANA family grow significantly around the world the past 30 years, but the family feel has always stayed the same.”

USANA currently operates in 24 international markets with over 900 corporate employees in the United States and 1,952 employees abroad. The company serves over 560,000 active customers, comprised of USANA Associates and Preferred Customers.

Transparency and Trust

As USANA rounds the corner on three decades in the industry, the company is focused on three key areas: product innovation, strategic relationships and international expansion.

While the company has launched well over a hundred products and product updates in their three decades in business, USANA’s dedication to impeccably high standards has never wavered. Dr. Myron Wentz, microbiologist and USANA’s founder, chose to set standards he hoped the rest of the direct sales industry would follow when he laid the groundwork for the science company.

“Because of Dr. Wentz’s background, he was used to creating products that were in the pharmaceutical realm and had to be accepted by hospitals and doctors,” Kevin explained. “Thirty years ago, he set out to make sure that our vitamins were produced under the same standards, which back then was unheard of. Even today, it’s not widely done. We’re an FDA-registered facility, which we’re not required to be creating nutritional supplements. That has filtered its way through all three decades. We’ve really, really tried to hold our reputation up like that as we go through the years.”

Though no new products are scheduled to launch in the immediate future, USANA’s Research and Development team is hard at work developing new ways to maintain health through enhancements to the existing product lines and new innovations outside of traditional oral supplements.

“My hope is that we’ll find new ways to deliver nutrition outside of a pill,” Kevin shared. “That’s something we’re talking a lot about, something that we would love to work on. We’re seeing other innovations happen. We have yet to see a different delivery system that can offer the same amount of dosage that we want to deliver as it relates to nutritional supplements. That’s just the hope of mine that we’ll see coming in the future. The other thing that really has our attention are wearables to help monitor our fitness outside of what we’re consuming, so we can keep track and use technology to help us be healthier by being more aware.”

Innovations outside the company’s product offerings are also in development, including new opportunities for USANA’s Associates in the field.

“The next few months to close out 2022 will feature some big changes but will also be a time of development and getting things ready for 2023,” Jim shared.

“First off, we are launching a new business opportunity later this year that will be huge for the company and will give Associates and customers alike a new way of selling.”

As USANA pursues new and innovative ways of maintaining healthy lives and healthy businesses, the team is actively pursuing relationships that will help the company achieve its long-term goals.

“We’re going to continue to pursue strategic relationships,” Kevin explained. “Whether that’s through business acquisition or through relationships where we can be part owners in companies that could help us increase our core competencies; help us enter a different marketplace; or help us bring some innovation. Those are probably the key areas that we’re looking for in a strategic relationship. But we’re aggressively moving forward in those areas as well as the company.”

Expectations and Expansion

While so much has remained constant throughout USANA’s history, one important shift for the company has been to make the consumer the starting point for decisions regarding Associate incentives and promotions. As in every direct sales company, the success of USANA’s field team is paramount to the success of the company. But by focusing on the consumer, understanding their expectations and the value the product represents to them, USANA is more powerfully equipping their Associates.

“Thinking about the consumer first and working backwards is a completely different approach than we’ve done in 30 years in our business,” Kevin said. “It all comes down to, what is your value proposition to the person that’s consuming your product? You have to meet their expectations, or you lose them and they’re no longer your customer. If we could start there, I think it increases the value proposition, and we’re more likely to fulfill our product promise and beat their expectation from a value proposition so that they will continue to reorder from us.”

As USANA works backwards from consumer motivations to Associate business support, incentives and promotions, the team has noticed how differently those expectations are amongst the 24 global markets they serve. And they’re planning to notice even more differences as USANA enters new markets in the coming years. Following their tried-and-true, disciplined approach to expansion, Kevin and the team are confident in their next steps abroad.

“You’ll see many companies that are 30 years old that are in four times the countries that we’re in,” he explained. “We’ve decided that we’re going to move to new countries as we become profitable in the countries we’re in without spreading our resources too thin. Then we can give our all to the areas we’ve committed to. Something you’ll see in the future is that we’re going to continue to expand internationally and grow internationally. We haven’t opened a new market in quite some time, but we believe as a company we’re ready to move in that direction. International expansion will be something we can look forward to in the future.”

With as much to look forward to as they have to celebrate, USANA is ready to pursue the next three decades with the same discipline, integrity and innovation that has served them well all these years.


From the October 2022 issue of Direct Selling News magazine.

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The Making of a Billion Dollar Company https://www.directsellingnews.com/2022/03/01/the-making-of-a-billion-dollar-company/?utm_source=rss&utm_medium=rss&utm_campaign=the-making-of-a-billion-dollar-company Tue, 01 Mar 2022 15:17:00 +0000 https://www.directsellingnews.com/?p=15825 Common Practices. Managerial Courage. Calculated Risk. If a founder’s belief in a hero product starts a company on its journey toward the billion-dollar mark, then it’s stellar decision-making and a determined field that can propel them into momentum and triple digit multimillion-dollar status. But scaling to a billion or more? What does it take to get […]

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Common Practices. Managerial Courage. Calculated Risk.

If a founder’s belief in a hero product starts a company on its journey toward the billion-dollar mark, then it’s stellar decision-making and a determined field that can propel them into momentum and triple digit multimillion-dollar status.

But scaling to a billion or more? What does it take to get there? Is it possible to suss out common denominators that give rise to the birth of a legacy company? What has to change along the way? What doesn’t?

Cropped shot of a mature businessman giving a presentation in the boardroom.
Billion-dollar companies understand if they do not put the customer first, the customer will simply find a company that does.
Yuri A/shutterstock.com

There are a several billion-dollar domestic companies in the channel: Ambit, Amway, doTERRA, eXp Realty, Forever Living, Herbalife, Melaleuca, Medifast, Nu Skin, Primerica, Rodan + Fields, Scentsy, Tupperware, USANA and Young Living. These questions were top of mind when DSN reached out to a select list of these billion-dollar companies.

The idea was to make a common denominator checklist of sorts, gleaned from their responses to questions about their approach to business. We asked about manufacturing, information technology, environmental, social and governance initiatives, in-house research and development and the like. Do they consider themselves customer-centric? What do they gain from segmentation?

No small surprise—billion-dollar companies have plenty of tangibles in common. After all, these companies are headed by industry leaders, the likes of which identify and promote best practices throughout the broader direct selling industry.

No company—billion dollar or otherwise—uses the identical building blocks in precisely the same manner. Here, we aim to highlight the benefits, as these companies see it, to consistently apply best practices in order to meet their corporate goals.

We also consider the less tangible and harder to measure corporate and leadership characteristics that billion-dollar companies share and why these attitudes and behaviors are vital for those companies who someday want to claim that billion-dollar status themselves.

What Makes a Billion Dollar Company?

It took two decades or more from their founding for several of the participating billion-dollar companies to reach the illusive billion dollars in sales. Scentsy, a newcomer to the list in 2021, found their stride in just 17 (discover more about their journey on page 60). But Rodan + Fields met the mark in an astonishing eight years, simultaneously becoming the number one premium skin care brand in the United States in 2016.

No doubt, industry best practices applied over the years pushed them all toward their goals and continue to inform the strategic thinking that keeps them growing. But what else came into play to get them to a billion? We asked Heather Chastain, Founder and CEO of the direct selling consultancy Bridgehead Collective, just that.

“You don’t see timid companies reach that level. You see bold companies, who take calculated risk, thoughtful risk, mission-minded risk, but risk nonetheless,” Chastain, who has worked in the C-Suite of companies like Shaklee, Arbonne, Celebrating Home and BeautiControl, shared.

There’s an immense amount of patience and foresight necessary to scale a direct selling business. It also takes corporate recognition that what earned them their current status may not be what ultimately gets them across the billion-dollar threshold.

As Chastain explained, “Too many companies that I see, their pitfall is they stay insular. They think, ‘This is what got us here and it will get us to the next level.’” Chastain helps companies think through marrying innovation and strategy by opening up and engaging management teams to embrace strategic thinking as a daily activity as opposed to a one-time event.

Companies, large and small, can weave this kind of day-to-day strategic thinking into their commitment to and application of industry best practices. Billion-dollar companies long ago began this process and have reaped the advantages.

So, what are these best practices and how do billion-dollar companies put them to work?

Customer Centricity

Billion-dollar companies put customers at the center, whether that’s improving the shopping experience; better understanding wants, needs, goals and motivations; or maximizing data and analytics to help customers make informed choices and their distributors deliver products that excite and satisfy. They understand if they do not put the customer first, the customer will simply find a company that does.

Cheerful young man and woman shaking hand to man sitting in front of him across the desk
G-Stock Studio/shutterstock.com

“We have a Customer Experience (CX) office led by the C-Suite of the company that manages and socializes customer journeys across our personas, to prioritize and address the top needs of the customer according to the data the team gathers,” explained Ruth Todd, Senior Vice President and Chief Reputation Officer at Nu Skin.

That CX team prompts collaboration across Nu Skin’s departments and markets to deliver key customer experiences that drive attraction, connection and retention. Customer need and experience is paramount at every touchpoint, as it helps affiliates attract new customers and grow their customer base.

Global Responsibility

Environmental, social and governance (ESG) initiatives resonate with customers as well, but that’s not the only reason billion-dollar companies embark upon them. Doing good is good for business, and it also helps secure the direct selling business model in the marketplace.

People, planet and product—those are the areas of ESG focus for billion-dollar companies, who wrap sustainability, charitable giving and social impact into their business strategies and create governance committees at both the board level and internally to assure efforts remain aligned with company core values, vision and goals.

“We make no distinction between our Global Responsibility and operating our business: Both are reflected in our long-term growth strategies and our day-to-day activities. We are committed to creating positive impacts for our independent distributors, employees, communities and the planet, while driving sustainable business growth,” Herbalife CFO Alex Amezquita said.

The initiatives are plentiful and varied. USANA, in addition to their efforts to create more sustainable products and packaging, has undertaken a large-scale information initiative to help employees learn how to make the company a more inclusive, equitable and sustainable workplace.

Nu Skin works closely with supply chains, product and facilities teams to do their part to protect the environment, while supplying VitaMeal to the world’s neediest through charity partners. “By working closely with experts on the ground, we have a clearer picture of how we can best help and know that we are making the greatest impact,” explained Todd.

So engrained is giving in Scentsy’s culture that since 2010, the Scentsy Family Foundation has donated more than $14.3 million to more than 175 global and local charities that their communities most value.

At Rodan + Fields, the company’s charitable arm, Prescription for Change has invested more than $15 million in programs for 1.5 million young people to give them the skills they need to thrive in school, work and life.

“Our community of distributors and home office team members are passionate about doing good and giving back. I’m constantly inspired by the various ways they demonstrate our purpose to be life changing by making a positive impact,” said Jessica Raefield, Chief Human Resources Officer.

“We also launched an ESG effort in 2019, as well as formulating 2025 Do Good goals that focus energy on the environmental and social commitments most material to stakeholders and their core business strategy,” shared Raefield.

Segmentation

Member/Customer segmentation offers clear differentiation between people who want to purchase retail products or to build a sales organization and those who simply want discounts on products for their own consumption. Billion-dollar companies embrace segmentation because it creates the most accurate picture of customer activity, intent and goals, while also improving the company’s ability to communicate and market effectively.

Detailed customer segmentation can be used throughout product and program design and development so that a company is crystal clear on a product’s unique value proposition for a target audience. It also informs the creation of compensation plans for companies like Scentsy, who do not attract large numbers of preferred customers. Scentsy distributors, for example, are not compensated on a “wholesale/retail” pricing structure, but rather a commission structure with the opportunity for bonus overrides.

Information Technology

Extensive in-house IT teams, who are called upon to manage diverse components that make up a company’s overall IT infrastructure, are a hallmark of billion-dollar companies. Because these departments have a deep understanding of the company’s values and its business operations, they are often the most effective way to reach IT goals. In-house teams support customization, help develop right-sized efforts and maintain focus. However, to prioritize and meet business needs, some companies reach to trusted IT partners for outside thinking and specialized expertise.

Manufacturing

Warehouse setting with smiling female engineer in helmet
“Manufacturing on-site allows us to remove as many unknown variables as possible, which leads to higher quality products.”—JIM BROWN / USANA President
Art_Photo/shutterstock.com

All of our respondents exercise at least some autonomy over the manufacture of their products, either through company-owned and operated manufacturing facilities or those owned by strategic investment arms. Some companies report an estimated 60/40 split between in-house manufacturing and outsourcing. Often the question of in-house manufacturing depends upon the product and where it is sold.

“Manufacturing on-site allows us to remove as many unknown variables as possible, which leads to higher quality products. When we are able to oversee virtually every aspect of product manufacturing, we can more easily spot any quality issues and what is causing those issues,” President Jim Brown says of USANA’s well-equipped in-house processes.

Herbalife—who maintains two manufacturing sites in the U.S., three abroad and eight quality control labs—began expanding self-manufacturing investments in 2010. According to COO Mark Schissel, investments in research, technology, science, manufacturing facilities and other areas allowed Herbalife to weather many supply chain disruptions and has given the company the ability to develop better and safer products that build consumer trust.

It’s a worthwhile investment according to many billion-dollar companies. Just last year Amway announced an investment of more than $50 million over the next five years in the company’s Ada, Michigan-based manufacturing capabilities and footprint.

And at Young Living it’s an integral part of the company’s commitment to quality that began with founder D. Gary Young and continues until today. Young always wanted to know where essential oils came from; how the plants were grown and harvested; how the they were extracted; and how they were stored. The company has continued that philosophy by investing in their own farms and developing sourcing and compliance programs that give them an extensive knowledge of their global essential oil supply chain.

Regional Distribution Centers

To better serve a quickly expanding customer base, many of these five billion-dollar companies utilize regional distribution centers. RDCs streamline global shipping, delivery and order fulfillment processes. Herbalife opened its third U.S. regional distribution center in Hagerstown, Maryland in September last year. Nu Skin utilizes distribution centers and warehouses in many markets, with principal facilities in Provo, Utah and mainland China. By April 2022, Scentsy will have three North American distribution centers.

Research and Development

Billion-dollar companies maintain a collaborative research and development (R&D) philosophy that combines in-house capabilities ranging from staffs of 75 in-house scientists, as is the case with Nu Skin, to co-development research and clinical testing third-party partnerships managed by in-house teams.

“Rodan + Fields develops innovative products and proprietary technologies with expertise from many professionals including esteemed doctors, PhDs, R&D experts and strategic partnerships, as well as insight from our very own brand founders, who are esteemed practicing dermatologists themselves,” shared Dr. Sumita Butani, Senior Vice President of R&D and Innovation. “Our breakthrough products begin in a world-class laboratory in Berkeley, California where our team of scientists collaborate.”

Amway shares a similar philosophy. “We have a global Innovation and Science team of 800 full-time explorers, engineers, formulators, scientists and other experts who pour their hearts and minds into every product we create,” explained John Parker, Chief Sales Officer and Regional President, West. “Having Innovation and Science as a force internally helps us guarantee scientific excellence at each and every step of the way.”

A portrait of an industrial woman engineer standing in a factory
Halfpoint/shutterstock.com

While the activities associated with in-house R&D vary greatly from company to company depending upon their product category, the over-arching effect of in-house teams proves advantageous. They can enhance vertical focus and consumer-driven responses; strengthen resource oversight and control; and reduce time-to-market.

Young Living has an in-house Research and Development department lead by Dr. HK Lin. The greatest advantage to the company is the ability to create an environment to foster the next generation of research and development leaders who will carry out the company’s vision well into the future.

“With in-house R&D, it provides us with a tighter connection to product development for greater innovation and speed to market. As we listen to our customers, we are able to focus on unique research for developing products that meet their needs, and it gives us the ability to test and gain even more understanding after products launch for ongoing enhancements,” Todd explained.

Brown agreed, “Having our R&D team in-house is a great benefit to the company because they understand the full impact of our mission and what we are trying to deliver with our products.”

Public or Private—The Great Debate

Amongst the twelve companies we considered, there is an almost even split between public and private. It’s not surprising because there is no right or wrong answer to whether or not going public is the best course of action. Each path has potential benefits and pitfalls.

Private companies face less scrutiny from shareholders and don’t have to release quarterly and annual reports like public companies do. And the process of going public is also lengthy and costly.

But there are considerable benefits to becoming a public company as well. It can mean a huge influx of critically needed cash for a growing company trying to take the next step, which can be used for strategic investments in vital areas such as supply chain, technology and international expansion to name just a few.

Leadership—More Than Checking Off Best Practices

It turns out, best practices, while extremely valuable and essential, are the easiest billion-dollar commonalities to quantify, assess and talk about. They more or less fit nicely onto a checklist, but they represent a fraction of what goes into building a billion-dollar direct selling company.

Even if a company applies them in the most advantageous ways, there’s no guarantee they will reach the proverbial pinnacle they are seeking. So what else is in play inside direct selling’s most successful companies? What can aspiring companies and their leadership teams learn from those already on the list?

Billion-dollar companies have three commonalities that make a huge difference in their eventual rise: A consistent and relentless focus on their mission; seemingly unending commitment; and managerial courage.

“The companies that get to that billion-dollar level often have founders and management teams that walk the walk. They are genuinely invested in the mission of their companies beyond the confines of a job. For them, it’s not a job. It’s a purpose,” Chastain said.

These leaders excel at sharing that mission and engaging and enlisting their fields and employees in the mission on a regular basis and absolutely not deviating from that mission even when things get challenging.

On-going commitment, even when it’s challenging to stick with an annual or a three-year or five-year strategic plan means these companies are not concentrating on short-term results or quick fixes. They are focused on the long-term objectives and have discipline throughout their organizations.

And that takes managerial courage. Chastain encouraged companies to “Take big steps; make bold changes when the market calls for it and when the field calls for it.”

“Our leadership recognizes the need to be agile and always innovating, backed by the ability to make the necessary decisions for the long-term success of the company,” Todd said.

How those decisions get made is infinitely more complex as a company scales toward a billion dollars in sales. Eighty percent of companies in the $500 million range discover in an honest assessment that a CEO or Founder is holding on too tight to too many decisions.

“To scale, everything can’t continue to come through one single point of contact. That means hands-on Founders, who have grown their businesses to say the $500 million mark, need to make space in the spotlight for others in the organization; relinquish some control; and delegate to trusted hires,” Chastain explained.

The organizational structure of the company itself matters little. In fact, billion-dollar companies can have country managers or presidents, global entities or everything can be run through corporate. But the one thing that billion-dollar companies do have in common is autonomy for their department heads, however that’s defined internally.

They are trusted and granted latitude to work autonomously. Not carte blanche, but with enough autonomy to effect change in their function. They are trusted, respected leaders who are expected to understand the mission; understand where the company is headed; understand the strategic plan; but they can go execute somewhat freely to deliver what they’ve been hired to deliver.

But often, companies pushing toward billion-dollar sales goals don’t recognize what’s holding them back. What’s lacking is new energy and a fresh perspective.

That can come in the form of a couple new hires or outside consultancies, but the time to search for help is when things are going well. The time to plan for the next wave of growth is during the current wave of growth.

“That’s where we can get true radical change,” Chastain said.


Although there is nothing cookie cutter about these companies, you can see from this checklist that there are a few traits and commonalities they share. Their product lines and origin stories vary widely, but there are many similarities in their business philosophies—we’ve compiled them here.

Amway logo

Headquarters |
Ada, Michigan

Founded |
1959

Product Category |
Health and wellness

Hero Product |
Nutrilite (accounts for more than half of global sales)

Founders |
Richard DeVos and Jay Van Andel

Current Leadership |
CEO Milind Pant

Hit Billion-Dollar Status |
1980

Privately held

International Markets |
More than 100 countries and territories worldwide

COMMONALITIES:

  • Identifies as Customer Centric
  • In-house Research and Development
  • In-house Manufacturing: Combination
  • ESG Initiatives
Herbalife Logo

Headquarters |
Los Angeles, California

Founded |
1980

Product Category |
Weight management, sports nutrition, health and wellness

Hero Product |
#1 brand meal replacement and protein supplements in world

Founder |
Mark Hughes

Current Leadership |
Chairman and CEO John Agwunobi

Hit Billion-Dollar Status |
2001

Public (HLF: NYSE)

International Markets |
95

COMMONALITIES:

  • Utilizes segmentation: In nearly all key markets
  • Identifies as Customer Centric
  • In-house Research and Development: Combination
  • In-house Manufacturing: 65% of product
  • Utilizes Regional Distribution Centers
  • ESG Initiatives
Nu Skin Logo

Headquarters |
Provo, Utah

Founded |
1984

Product Category |
Beauty and wellness

Hero Product |
60/40 split in favor of personal care products

Founders |
Blake Roney, Sandie Tillotson, Steve Lund

Current Leadership |
President and CEO Ryan Napierski

Hit Billion-Dollar Status |
Fiscal year 2004

Public (NUS: NYSE)

International Markets |
approximately 50

COMMONALITIES:

  • Utilizes segmentation: Outside Mainland China
  • Identifies as Customer Centric
  • In-house Research and Development
  • In-house Manufacturing: In Mainland China; Trusted third-parties elsewhere
  • In-house IT: Combination
  • Utilizes Regional Distribution Centers
  • ESG Initiatives
  • Transparent Communications Priority
Rodan Fields Logo

Headquarters |
San Francisco, California

Founded |
2002 (retail), 2008 (direct selling)

Product Category |
Skin care

Hero Product |
Rodan + Fields Core Regimens

Founders |
Dr. Katie Rodan and Dr. Kathy Fields

Current Leadership |
CEO and President Dimitri Haloulos

Hit Billion-Dollar Status |
2016

Privately held

International Markets |
4

COMMONALITIES:

  • Identifies as Customer Centric
  • In-house Research and Development
  • In-house IT: Combination
  • ESG Initiatives
Scentsy Logo

Headquarters |
Meridian, Idaho

Founded |
2004

Product Category |
Home durable and consumable within home fragrance space

Hero Product |
Scentsy Warmers and Fragranced Wax

Founders |
Heidi and Orville Thompson

Current Leadership |
Dan Orchard, President and Interim CEO

Hit Billion-Dollar Status |
Fiscal year 2021

Privately Held

International Markets |
5

COMMONALITIES:

  • Utilizes segmentation: To provide crystal clear value proposition for target audience
  • Identifies as Customer Centric
  • In-house Research and Development: In-house works in tandem with outside partners
  • In-house Manufacturing: For fragrance; not for hard goods.
  • Utilizes Regional Distribution Centers
  • In-house IT
  • ESG Initiatives
  • Transparent Communications Priority
Usana logo

Headquarters |
Salt Lake City, Utah

Founded |
1992

Product Category |
Nutritional supplements, skin care, lifestyle, weight management

Hero Product | USANA CellSentials

Founder |
Dr. Myron Wentz

Current Leadership |
CEO and Chairman Kevin Guest

Hit Billion-Dollar Status |
Fiscal year 2016

Public (USNA: NYSE)

International Markets |
24

COMMONALITIES:

  • Utilizes segmentation
  • Identifies as Customer Centric
  • In-house Research and Development
  • In-house Manufacturing: 65% of product
  • Utilizes Regional Distribution Centers
  • In-house IT
  • ESG Initiatives: Employee and associate/customer
  • Transparent Communications Priority
Young Living Logo

Headquarters |
Lehi, Utah

Founded |
1994

Product Category |
Essential oils and essential oil-infused products

Hero Product |
Ningxia, Thieves, Lavender

Founder |
D. Gary Young

Current Leadership |
Mary Young

Hit Billion-Dollar Status |
2015

Privately Held

International Markets |
Service and ship globally with markets in North and South America, Europe, Asia and Africa

COMMONALITIES:

  • Identifies as Customer Centric
  • In-house Research and Development
  • In-house Manufacturing
  • ESG Initiatives

From the March 2022 issue of Direct Selling News magazine.

The post The Making of a Billion Dollar Company first appeared on Direct Selling News.

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