MLMFacts

Natural Products Group, parent company to direct selling company Arbonne International has filed for Chapter 11 bankruptcy protection in the United States.

In theory this simply allows the company to restructure and continue operations, but with liabilities ($804 million) outstripping assets ($286million) and revenues ($450 million in 2008) it’s going to be tough. Indeed, documents suggest the debtors have now taken a majority stake in Arbonne – I’ve not yet established who they are, so it will be difficult to judge what their future goals with the company may be.

In an interesting but perhaps rather belated PR move the company has launched a blog today. Nothing but an opening posts as yet but I imagine there’ll be some damage control going on once the news gets out.

My thoughts and best wishes with the many, many Arbonne reps around the world who must be nervous with the news.

UPDATE: Arbonne has some information and a video from CEO Kay Napier on their website.

Bazi and XELR8 distributors must be in shock today with the following announcement. Apparently without much warning the parent company has announced that they will no longer be operating a multilevel networking plan. Hundreds, perhaps thousands of people are likely to lose significant incomes! One more reason, in my opinion, to choose an established company.

To: XELR8 Independent Distributors

Re: XELR8 Multilevel Marketing Program

After careful consideration, the Board of Directors of XELR8 has determined to pursue an alternative business model resulting in the discontinuation of our XELR8 Multilevel Marketing Program in its current form, and has asked me to inform all XELR8 Independent Distributors of this decision. As a result, the current XELR8 Compensation Plan will be terminated effective February 28, 2010, and you will be offered the ability to participate in a program to be announced on a national call on February 3, 2010. At that time you will be offered an attractive incentive for you to continue to enjoy XELR8 products as well as compensation for existing and new customers that you introduce to Bazi.

Although the current XELR8 Compensation Plan remains in effect until February 28, 2010, please be advised that no new Distributors may be enrolled as of the date of this letter. While you will no longer be able to enroll new Distributors, you, and your customers (both existing and new customers) may continue to order XELR8 products. Commission and bonus payments earned prior to the date of this letter will be paid according to the current XELR8 Compensation Plan. Commission and bonus payments earned after the date of this letter through February 28, 2010 will be paid on or about March 15, 2010. Following the payment of these commissions and bonuses, no further bonuses or commissions will be paid to any XELR8 Independent Distributor under the current XELR8 Compensation Plan.

Although the Company has elected to terminate the current multilevel marketing program, XELR8 products will continue to be available through Independent Distributors through February 28, 2010, and other direct marketing channels to be announced on our national call on February 3, 2010. If you are enrolled in our AutoShip program, you will continue receiving your monthly AutoShip order until such time as you elect to cancel your participation in the AutoShip program. Preferred Customers will also continue to receive their automatic monthly orders until such time as they choose to cancel their Preferred Customer Agreements. If you wish to cancel your monthly AutoShip order, please send your notice of cancellation to us at 480 South Holly Street, Denver, Colorado 80246. Alternatively, you may fax or email your notice of cancellation to us at (303) 316-8078 or support@xelr8.com. Please include your Distributor ID Number in your notice of cancellation.

As mentioned above, XELR8 intends to continue distribution of our products through Internet sales and other direct marketing channels. As our thanks to you for your support over the past several years, you will be offered the ability to enroll new customers after February 28, 2010 and receive compensation under a new compensation plan at a preferential compensation payout to be announced on February 3, 2010. If you are not on our AutoShip program, you may still enroll as a customer under our AutoShip program by contacting our Customer Service Department at 888-935-7808 or email support@xelr8.com.

In closing, I want to thank ALL of our Independent Distributors for their support of XELR8. While the decision to terminate our multilevel marketing program was not a decision that any of us at the Company wanted to make, ultimately it was deemed necessary to insure that our products remain available to support the health and vitality of our customers. We are extremely grateful for your efforts to spread the word about XELR8 products and wish you success in your future endeavors.

Best regards,

XELR8 HOLDINGS, INC.
By /s/ Sanford D. Greenberg
Sandford D. Greenberg
Chairman and Founder

The NSW (Australia) government has issued an official media release about Liberty League International. As I highlighted a couple of days ago, they’ve indicated they believe it’s an illegal pyramid. The press release is available here – Pyramid schemes alert: Judge. Note that they do say it’s ultimately up to a court to decide if LLI is an illegal pyramid. It’s interesting to note that LLI has recently renamed themselves Polaris Media Group and reportedly introduced a range of lower cost products.

Reports coming out of Australia indicate that the Office of Fair Trading in the Australian state of New South Wales (NSW) have declared that Liberty League International is an illegal pyramid under the 1987 Fair Trading Act. The OzSoapBox blog has a post including a scan of an official letter which states -

Liberty League is an American based company which markets lifestyle coaching products via independent promoters in Australia and internationally. The Scheme has been examined and found to be a pyramid sales scheme within the meaning of the Fair Trading Act 1987 (NSW).

Section 60U of the Fair Trading Act prohibits participation in or promotion of a pyramid sales scheme. The maximum penalty for a contravention of that provision is $22,000 for individuals and $110,000 for corporations.

Liberty League (perhaps not coincidentally recently renamed Polaris Media Group) ostensibly sells 3 products, a 90 day home personal development course Beyond Freedom, a 3 day personal development seminar Liberty 3 day Conference and a 5 day personal development seminar Summit 5 day Conference. According to the Liberty compensation plan, in Australia these cost (retail) - Read More »

Richard St John interviewed 500 highly successful people in order to find out the commonalities of success. In a 3 minute presentation at TED, here’s the 8 Secrets of Success. Network Marketers I think will particularly appreciate his point at about 3:10.

The top 5o MLM Companies globally, by 2008 revenues, as determined by Direct Selling News

Read More »

For those interested, here’s a list of the acai and resveratrol companies Oprah is suing. Over 50 are explicitly named, and there’s anoth 500 “Doe and ABC Companies”, ie websites where they have not explicity named the person or business behind the websites.

On a positive note for the network marketing industry, the only MLM company I recognize is MonaVie.

The named companies are – Read More »

MLM is not a business – it’s a type of compensation plan and a marketing strategy used to attract agents to promote a particular companies products and services.  While MLM and Network Marketing are often considered synonyms, they’re not really the same thing either. Network Marketing is a strategy of marketing products through networks of people, typically via word of mouth. Read More »

My first encounter with the world of MLM, though I didn’t know it at the time, was nearly 30 years ago in my native Australia. At the time I was about 12 or 13 years old and my mother used to buy numerous products from a company called Amway. To this day I remember how good Amway products were, even back then. One of the products my mother bought was a small spray can of glass cleaner, called Crystal Clear. It was small and designed to be able to be carried in a pocket or purse and used to clean eye glasses. I wore glasses and I found the product literally changed my view of the world! In fact I loved it so much I showed it to some of my school mates. They asked me to get some, so I did and then sold it to them. I don’t recall if I charged them a markup and earned a profit from the sale, but I’d just become a direct seller. Read More »