New and unheard-of opportunities for the world’s citizens

New and unheard-of opportunities for the world’s citizens

Economic and political upheavals are creating previously unheard-of opportunities for the world’s citizens

For the first time in the history of the modern world, a majority of people have been released from their economic shackles. No longer are daily activities regulated by harsh and restrictive rules. More important, no longer is every penny of income under the auspices of some central bureaucratic authority. In short, we are experiencing a revolution of the individual. Governments around the world are now permitting their citizens — from the sprawling apartment complexes of Beijing to the humblest of Amazonian huts — to earn a profit. This spells great opportunity for those involved in network marketing. As a grassroots kind of business — part one-to-one selling, part recruiting of new distributors — it is tailor-made for the emerging nations. Indeed, the international segment of the network-marketing industry already accounts for $60 billion of the industry’s $80 billion in annual revenue. And most experts agree that the global market for direct sales is now set for a tidal wave of new growth. “I’m still very bullish on the industry’s overseas prospects,” says Neil O!=en, president of the Direct Selling Association. “We will recruit nearly 200 million salespeople over the next decade.” If you’re planning to go global, your biggest challenges will lie in finding the hottest markets for your wares, recruiting a foreign legion of distributors, and hacking through the jungle of regulations that can make international expansion a scary and risky prospect. Sound daunting? Here’s how a few of your colleagues are making their way in the world.Herbalife: TURNING CATASTROPHE INTO OPPORTUNITY IN INDONESIABad economic news in areas from the Pacific Rim to Russia has proved an unexpected boon to firms looking to expand their downlines, or groups of distributors, in the coming years. The management at Herbalife, the Los Angeles–based seller of nutrition products, is betting that global financial woes will enhance its recruitment e!=orts abroad. “In some instances, [a region’s economic troubles] create an excellent recruiting environment,” says Erik Randerson, director of investor relations for Herbalife, which has just opened an operation in Indonesia despite the country’s political and economic turmoil. “As unemployment rises, more individuals are looking for alternatives to earn a living or supplement their current income.”Herbalife, which had retail sales of more than $1.4 billion last year, has been hiring lawyers and product consultants to help it cut through the web of red tape that accompanies every launch. The company, which already has over 750,000 independent distributors, is also spending more than $2 million to develop the market and establish a support sta!= to train and recruit a distribution force in Indonesia. By the time Herbalife announces its formal launch, it should have thousands of distributors trained and ready to sell its products. “You can’t ignore Asia,” says O!=en emphatically. He points out that Japan accounted for more than $30 billion in sales in 1997, more than the $22 billion Herbalife did in U.S. sales. Randerson’s reason for targeting Indonesia: “It has the fifth-largest population in the world. It can’t be overlooked.”Neways: BEEFING UP SALES DOWN UNDER “If you count Canada, we’ve been a multinational company since almost the very beginning. Because we had our first foreign experience there, in a country that is both close to home and very international [owing to its commercial ties to Great Britain and Australia], we felt we were in a great position to go global.” That’s the way Thomas Mower Sr., president and founder of Neways International, explains how his Salem, Utah–based company — which not only distributes but also manufactures a host of nutrition, cosmetic, and health-related items — got its start in the global marketplace. “And once NAFTA [the North American Free Trade Agreement] went into e!=ect, pushing Canada into recession, we thought it only natural to expand overseas.” Mower’s first stop? Australia, which, by virtue of its being English-speaking, allowed the company to transfer its marketing, packaging, and promotional strategies seamlessly. Once established down under, Mower expanded the company’s operations into New Zealand and Malaysia, two countries with ties to Australia. And from there, it was on to other parts of Asia, Russia, Great Britain, and, recently, Israel. Today Mower’s company is doing $300 million a year in business, has placed 400,000 distributors in 40 countries, and is weathering the economic storms that have hurt companies with operations in only a few countries. “The Asian crisis has been a mixed bag for us,” he says. “In Malaysia, for example, we got hurt by the deregulation of their currency. But in Australia, our sales are at an all-time high.” Nu Skin: TODAY, L.A.’S “LITTLE TOKYO”; TOMORROW, JAPANThe best way to target new international markets is to search for pioneers within your own ranks. Interested in Japan? Tap your strongest performers in L.A.’s Little Tokyo. That’s the route Nu Skin took when it began its strategic move into Japan in 1990. Looking for ways to increase revenue, Nu Skin first studied the demographics of its own distributor base. The skin-care company discovered that 20 to 25 percent of the firm’s consumers and distributors were ethnic Asians. Confident that their kin back home shared their tastes, Nu Skin staked its foreign expansion on the Asian market. It set up shop in Hong Kong (1991), Taiwan (1992), and Japan (1993). Today, Nu Skin has operations in 26 countries, more than 500,000 active independent distributors, and a balance sheet that registered nearly $1 billion in sales last year. “We saw clearly that Asian Americans and Asian Canadians were doing very well,” says Corey Lindley, chief financial officer for Nu Skin Enterprises. “We are not going into a market unless we have a base of distributors that are interested in that market.”Symmetry: KEEPING CURRENT ON CURRENCY FLUCTUATIONS In an age of monetary instability and fickle government regulations, pricing and distributor payments must be adjusted to compensate for economic volatility. And the only way to keep pace with the wild swings of the global market is with strong technology. “You have to be flexible [to be an e!=ective international player],” says Thomas Muller, vice president of global operations at Symmetry Corp., a Milpitas, Calif.–based company that sells personal-care products and nutritional supplements. “If you’re rigid, you can’t adjust pricing, and you’ve got to be able to change prices monthly.”Muller learned this lesson the hard way. Three years ago Symmetry didn’t have the flexibility it needed when it established one of its first overseas operations, in Trinidad. Product orders, to be filled, had to be delivered by courier from the Caribbean to California. By the time a check was cut for the distributor who had made the sale, so much time had passed that everyone in that downline was in an uproar, and that slowed the momentum of the sales force. To correct the problem, the firm hired top-notch programmers to develop a system that linked Symmetry’s operations in 10 foreign countries. The new system, which cost about $1 million to create, tracks fluctuating currencies around the world in real time. Through an Internet hookup, it provides up-to-the-minute information on a range of factors, including the sales activities of a distributor’s downline. More important, it guarantees that distributors receive checks within a week of a sale, no matter what country they made the sale in. “There are two things in this business that can make or break a company: whether your product works and whether you pay your distributors on time,” says Muller. So far, so good. Symmetry’s 90,000 active distributors are expected to generate more than $35 million in revenue this year. “We want to make sure our existing distributors are so happy with us that they won’t go anywhere else.”A

Posted by on March 23, 1999

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