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Network marketing continues to be growing outlet for supplements

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By Hank Schultz

14-Apr-2016
Last updated on 14-Apr-2016 at 17:44 GMT2016-04-14T17:44:18Z

Network marketing continues to be growing outlet for supplements

Network marketing continues to be a huge outlet for nutritional products, and direct selling companies with supplements in their portfolios are among the best performing of these companies.

Network marketing, otherwise referred to as multi-level marketing to refer to the compensation structure for active sellers, is a business model that has been used to market a wide variety of products, from household goods, to gifts, to financial products and has even been used to market electricity and natural gas to household users. But nutritional and personal care products seem to be an especially good fit, as the personal transformation message seems to come across powerfully in the face-to-face transactions that characterize the sector.

Direct Selling News, a trade magazine that covers the industry, publishes each year an updated list of the top direct selling companies based on reported revenues. Companies for which nutritional products, including dietary supplements and functional foods, comprise all or a goodly portion of their product lists form a large share of the magazine’s most recent DSN Global 100 list.

Amway leads, Herbalife No. 3

The top slot is occupied by Amway, and has been for many years. Amway’s Nutrilite brand of vitamins, supplements and foods predates the company itself, having started in 1934 (Amway was founded in 1959).  Amway, which is privately held, does not break out sales by product segment. According to DSN, Amway notched $9.5 billion in sales in its most recent fiscal year.

Coming in at No. 3 on the list is Herbalife, a publicly traded company. Herbalife is entirely devoted to sales of nutritional products, including meal replacement shakes and supplements.  The company’s 2015 revenue as reported by DSN was $4.5 billion. Herbalife has been under pressure recently from activist investor Bill Ackman and his Pershing Square private investment firm.  Ackman has taken a short position on Herbalife’s stock that has been valued at as much as $1 billion, and has embarked on an unprecedented public campaign to discredit the company, in part by calling in an illegal pyramid scheme. Herbalife seems to have weathered that storm, and sales continue to rise.

Infinitus is another company on the list that sells a wide variety of supplement-type products. This Malaysian company, little known in North America, sells Chinese herbal products and other wares in and outside of China.  Annual revenue is quoted as $3.9 billion for 2015.

Jeunesse grows by more than 100% in 2014-2015 time frame

Jeunesse is a relative newcomer to the list.  The Florida-based company sells personal care and nutritional products with a beauty bent.  The company was listed at No. 18 on the list, with slightly more than $1 billion in 2015 revenue (this is up from $419 million in net sales in 2014).

Another company that like Infinitus sells the lion’s share of its products in China is Usana, even though the company is based in Utah. Usana, listed at No. 21, features a wide variety of supplements and foods. 2015 revenue came in at $915 million.

"Last year was another outstanding year for USANA," said Kevin Guest, co-CEO of Usana. "We generated our 13th consecutive year of record sales, reported our highest net earnings in the history of the company, as well as a record number of active customers. We believe that 2016 will be another outstanding year for USANA and anticipate surpassing $1 billion in net sales.”

Other significant nutritional product players on the list include Advocare (No. 31, $719 million), Arbonne (No. 40, $502 million), Plexus (No. 46, $348 million), Nature’s Sunshine (No. 51, $325 million), LifeVantage (No. 69, $190 million) and Mannatech (No. 71, $180 million).

3 comments (Comments are now closed)

Ms.

Where is Nutrilite manufactured, are any production plants in Washington state?

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Posted by Judy K Bond
03 October 2016 | 00h212016-10-03T00:21:01Z

Mrslove

Love MLM marketing you get a wonderful product but get a renumeration while using it.

WIN WIN

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Posted by Michelle Gill
26 June 2016 | 06h372016-06-26T06:37:38Z

What about Nu Skin/Pharmanex?

I'm really surprised that with all these small network marketing companies mentioned in this article there's a complete absence of Nu Skin?

With revenues of $2.6Bn of which approx half is derived from the supplements division Pharmanex it's clearly a major player in the industry, and it's flagship supplement Lifepak is the world's highest selling supplement by revenue.

If you're going to talk about supplementsales by network marketing companies how can you miss out the network marketing company that sells the #1 supplement in the world?

more info on Lifepak at http://j.mp/lifepakUS

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Posted by Darren Ferneyhough
14 April 2016 | 18h412016-04-14T18:41:58Z

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