Supplement MLM LifeVantage takes a lesson from Uber and AirBnB
LifeVantage is a multi level marketing company, based in Sandy, UT, that was founded a number of years ago on a base dietary supplement product called ProTandim, which is a mixture of botanical ingredients that includes ashwagandha. The company now offers a more complete line of products including a sports nutrition and weight management line marketed under the PhysIQ label as well as a line of beauty topical products.
In a recent earnings call with analysts, CEO Darren Jensen said the company was taking lesson from how Uber and AirBnB connects prospective customers with drivers or the owners of rental properties. A key question for any network marketing company is how it acquires new consumers. In the ‘traditional’ model, the company produces the products and provides a distribution platform, and the independent distributors sell the products, either by themselves or through the additional distributors they recruit.
Moving toward an ‘uberized’ industry
But as the online commerce universe grows, increasing numbers of consumers are seeking to buy from the company directly, without having to find a local independent distributor. Jensen said LifeVantage is trying to develop a way to act as a funnel between the consumers who find out about the company via the Real Salt Lake sponsorship or in other ways and the independent distributors who can service those potential new accounts.
“The industry overall is coming under tremendous pressure to almost move into an ‘uberized’ way of doing business,” Jensen said.
“The Real Salt Lake relationship gives us the ability and has put us in a position where we leverage that relationship and all of the customers that are channeled to us from that relationship, we in turn pass those back to new distributors in our business at key port periods in their distributor lifecycle,” he added.
“So we see this relationship as an important part of our strategy in helping us compete against some of these entrepreneurial generating companies like an Uber, like an Airbnb and it gives us really position that many other companies within our channel do not have,” Jensen said. He made is remarks as part of an earnings call with analysts that was posted on the website seekingalpha.com.
Earnings details
LifeVantage posted $58.2 million in its second quarter of fiscal 2019representing 17.6% increase year-over-year and a 4.6% sequential increase when we compared to the first quarter of fiscal 2019. Revenue in the Americas increased 15% to $42.4 million and revenue in Asia Pacific and Europe increased 25% to $15.7 million all year-over-year. Both regions also reported growth on a sequential basis with revenue in the Americas increasing 3.3% while revenue in Asia Pacific and Europe increased 8.2% led by our growth in Greater China.
The company said it is now projecting full fiscal 2019 revenue to come it at $222 million to $232 million, up from an expected $215 million to $225 million.
