Monday, February 11, 2013

Melaleuca announces $1.13 billion in sales for 2012

Melaleuca CEO Frank VanderSloot
Melaleuca announced Monday that its worldwide sales for 2012 were up 9.2 percent, amounting to $1.13 billion. The bulk of that growth occurred in the United States and Canada, although the Idaho Falls-based company has representatives selling household, health and wellness products in 16 countries.

Melaleuca started in 1985 with eight workers. When it posted its first million in sales the figure was written on a blackboard. In December, it announced it was building a new headquarters south of Idaho Falls. The cost then was estimated at $50 million, but it's more likely to be $60 million, CEO and President Frank VanderSloot said Monday.

Melaleuca's sales in the United States are now greater than Amway's, NuSkin, Herbalife and Shaklee. VanderSloot used the occasion of Monday's announcement to stress the difference between Melaleuca's consumer-direct marketing system and multi-level marketing, where inventories are sold from one level to the next.

No Melaleuca representative has ever wound up with a garage full of inventory he or she can't sell, he said. "Marketing executives refer customers directly to the company. We're the ones with the inventory, and the customer gets it directly from us."

None of this is terribly new information. "VanderSloot is insistent about not burdening new recruits with huge startup costs or a garageful of inventory," wrote Phyllis Bermann in a 2004 profile of VanderSloot that appeared in Forbes magazine.

VanderSloot said he rejected the multi-level business model early in 1985, and met with a considerable amount of scorn at the time. "They told me I would go broke, that we needed to sell case lots to make any money," VanderSloot said. "Yet here we are today. I think our 27-year history of consistent growth proves that consumer-direct marketing is superior to multi-level."