Multi-level marketing businesses are much maligned in and out of the business world today, but that does not deter many local startups from going that route.
To some, Utah County seems to be the network marketing headquarters of the world, and there is valid reasoning behind that. According to a 2014 report by Mark Januszewski of WorldsLaziestNetworker.com ranking the top 100 MLM companies by revenue, seven of the top 50 were from the state of Utah, and five of those were from Utah County alone. The country of Japan is the only place claims more top 50 spots.
As to why there are so many MLMs in Utah, many, like Tom Wood of the social media site Quora.com, postulate that it’s due to the network marketing, friendly business atmosphere of the state and the talent pool.
“A smart kid graduates from college and spends two years in another country on a religious mission. The skills they learn in dealing with people and linguistics are a direct sales company’s dream,” Wood said.
Whatever the reasons, and regardless of one’s feelings on the business model, network marketing companies are raking in big money in Utah. Some of the more famous ones in the state are NuSkin, Neways, Xango and Morinda (formerly known as Tahitian Noni).
One such company, Younique Products in Lehi, is a newcomer to the industry, but they are already seeing major success using the direct sales model. Founders and siblings, Derek Maxfield and Melanie Huscroft started Younique with two goals in mind – to be a direct sales business that empowers women, and to be able to fund and create a foundation for to strengthen and uplift sexually abused women.
When they started in Maxfield’s attic in 2012, they were hoping to fund the foundation within eight years of business. It’s only been three, and the Younique Foundation is already funded and planning retreats for adult women who have been sexually abused in their youth.
“Our goal with both the business and the foundation is to uplift, empower, and validate women,” Huscroft said.
Younique sells cosmetic and skincare products incorporating only natural ingredients. Their biggest seller is their 3-D fiber lashes – a healthier alternate to other forms of fake eyelashes, according to Huscroft.
The company also pioneered the virtual party model. Based on traditional direct sales companies like Tupperware and Avon, the Younique virtual party caters to today’s tech savvy women entrepreneurs, and uses social media exclusively. Interested customers receive invites through Facebook or Twitter, and are directed to a seller’s unique website for ordering. This takes out a lot of cost in overhead, time, and location, and allows every seller to reach out to their network across the world.
Using their own network of family and friends, Maxfield and Huscroft started the business, and were soon too big for the attic. They soon grew too big for an office near a liquor store, and then a larger one in a strip mall in Pleasant Grove.
The company, that proudly touts they are debt free and privately funded, recently moved their headquarters to the Xango building in Lehi’s Thanksgiving Point. They also took over the large XSI factory at the Point of the Mountain for their production and shipping facility, but they did leave one of the five original basketball courts untouched for employee use. Additionally, they broke ground in May on a new five floor 125,000 square foot corporate office building just southwest of their shipping building.
“We’ve had some crazy growth. In one 18-month period, we went from $500,000 revenue per month to $40 million revenue per month,” Maxfield said. “Our hypergrowth has been our only challenge – just keeping up our product supply chain for all the demand.”
Another rising network marketing star is ASEA, currently based in Salt Lake City. The company has only been around for five years, but it is already earning its spot on high ranking direct selling lists. Due to its own speedy growth, the company recently completed construction of a large FDA registered NFS certified production facility in Pleasant Grove.
ASEA founder Verdis Norton built the business based on groundbreaking technology related to the science of redox signaling molecules – life-sustaining cellular messengers that help protect, rejuvenate, and keep cells functioning at optimal levels.
“Verdis had worked in Fortune 50 companies, and he’s a retail genius. He knew how to price products. But he saw that the ASEA tech was ahead of its time, and realized he couldn’t put the ASEA products on the store shelves and expect consumers to pick them up and read the ingredients and understand what they can do,” said Kurt Richards, executive vice president of ASEA.
Norton went directly to a network marketing business model so people could use the product and share their experiences with others. ASEA embraces the MLM designation, because it allows its associates, as they are called, to create teams of sellers and benefit from the sales of those teams.
“We actually have a large amount of sellers who are medical practitioners – that is very unique to us. We also have a large segment that are strictly consumers and not sellers,” Richards said.
While based in Utah, both Younique and ASEA are already operating in the global realm. Younique boasts more than 200,000 sellers worldwide, while ASEA hovers just more than 160,000. Both companies rely heavily on technology, both in the research and science behind their product, and in getting out to consumers. And both readily admit they are a multi-level marketing company – not one based on the “get-rich-quick selling and opportunity” mentality – but fully based behind products sold by honest people.
Apparently the business model, in the right hands, works.