We will be covering 11 public direct selling companies of various sizes and with different product portfolios: Avon, Herbalife, Mannatech, Natura, Nature’s Sunshine Products, NHT Global, Nu Skin, Oriflame, Tupperware, USANA and Youngevity.

 Symbols: AVP= Avon, HLF = Herbalife, MTEX = Mannatech, NATU3= Natura, NATR = Nature’s Sunshine, NHTC = NHT Global, NUS = Nu Skin, ORI = Oriflame, TUP = Tupperware, USNA = USANA, YGYI = Youngevity

Cost of Sales

Cost of sales (or “cost of goods sold”) consists of all direct costs attributable to manufacturing the goods at a company. It includes all costs of materials bought and used in production and also the costs of direct labor utilized in producing the goods.

Within the 11 companies analyzed, Avon and Youngevity have the highest product costs (both, roughly 40%) relative to their revenues. Herbalife, NHT Global and USANA are on the other end with the lowest product costs (around 18-19%).

Operating Expenses

On our chart, this is divided into two sub-categories as a) commissions paid to the field members, and b) all other operational expenses. As you see, some companies’ commissions are presented as “n.a.” This means they did not disclose their such expenses as a separate item.

Among the seven companies that disclose commissions data, USANA has the highest bonus payments as a percentage of its sales: 45%. The second highest is NHT Global (43%).

When the total operating expenses are compared, Mannatech stands out by having the the most costly operation (almost 80%). Herbalife follows Mannatech with 72%, and Nature’s Sunshine Products with 70%.

Tupperware (52%), Natura (55%) and Avon (56%) had the lowest total operational expenses.

Profitability

Some high, some low but all 11 companies on the chart reported operational profits in at the end of 2016. The two highest operationally profitable companies were NHT Global (22%) and Tupperware (16%). Mannatech’s operational income on the other hand, was roughly at break-even.

The bottom line figure, net income or net loss, includes non-operational gains or losses like interest income or expense and taxes. Here, three companies reported net losses: Avon, Mannatech, and Youngevity. NHT Global (19%) and Tupperware and USANA (both 10%) reported solid net profit figures.

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Hakki Ozmorali is the Principal of WDS Consultancy, a consulting firm specialized in providing services to direct selling firms. He is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication. He is an experienced professional with a strong background in direct sales. Hakki was the first corporate professional in the Turkish network marketing industry. His work experiences in direct selling include Country Manager roles at Oriflame, Herbalife and LR Health & Beauty Systems, and Regional Director, North America role at Lifestyles Global Networks.







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In this article, 11 direct selling companies with varying sizes of business and with different product portfolios will be covered: Avon, Herbalife, Mannatech, Natura, Nature’s Sunshine Products, NHT Global, Nu Skin, Oriflame, Tupperware, USANA and Youngevity. The review will be based on their 2016 half-year (Q1+Q2) performances.

Symbols: AVP= Avon, HLF = Herbalife, MTEX = Mannatech, NATU3= Natura, NATR = Nature’s Sunshine, NHTC = NHT Global, NUS = Nu Skin, ORI = Oriflame, TUP = Tupperware, USNA = USANA, YGYI = Youngevity

Cost of Sales

This figure consists of all direct costs attributable to manufacturing the goods at a company. It includes costs of materials bought and used in the production process and also the direct labor costs.

Among the 11 companies analyzed, Avon and Youngevity (both, roughly 40%) are the ones that have the highest product costs relative to their revenues. Herbalife, NHT Global and USANA stand on the other end with the lowest product costs (around 18-19%. The difference is really striking!

Operating Expenses

Not all companies disclose their commissions payout as a separate expense item. Such companies’ figures are shown as “n.a.” on the chart. Among those we have the commissions data for, NHT Global has the highest bonus payments as a percentage of its sales: 47.2%. The second highest is USANA (44.6%).

When the total operating expenses are compared, Mannatech has the most costly operation (79%). Herbalife follows Mannatech with 74%, and then comes Nature’s Sunshine Products (70%).

Tupperware (54%), Natura (57%) and Youngevity (57%) had the lowest total operational expenses in the first half of 2016.

Profitability

All 11 companies reported operational profits in the first six months. The three highest operationally profitable companies were, NHT Global (19%), USANA (14%) and Natura (12%). Mannatech’s operational income on the other hand, was almost nil.

The bottom line, net income, includes non-operational gains or losses like interest income or expense and taxes. Here, two companies reported losses: Avon (-4.9%) and Mannatech (-0.3%). NHT Global (15%), USANA (10%), and Tupperware (9%) reported solid net profit figures.

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It has always been interesting to see how direct selling companies compare on various grounds. Where they spend their money and at the end of the day, how much money they generate for their investors absolutely rank among the most interesting ones.

In this article, we will be briefly reviewing 11 direct sellers with varying sizes of business and with different product portfolios. These are Avon, Herbalife, Mannatech, Natura, Nature’s Sunshine Products, NHT Global, Nu Skin, Oriflame, Tupperware, USANA and Youngevity. This review will be based on their 2016 first quarter figures.

Symbols: AVP= Avon, HLF = Herbalife, MTEX = Mannatech, NATU3= Natura, NATR = Nature’s Sunshine, NHTC = NHT Global, NUS = Nu Skin, ORI = Oriflame, TUP = Tupperware, USNA = USANA, YGYI = Youngevity

Cost of Sales

This cost item is basically the total of the direct costs attributable to production of the goods at a company. It includes all costs of materials bought and used in the production process and also the direct labor costs. This is sometimes referred to as “cost of goods sold”, too.

Among the 11 companies analyzed, Avon (41%) and Youngevity (39%) are the two that spend the highest portion of their revenue on products. Herbalife, NHT Global and USANA on the other hand are on the other extreme, with costs of sales of 18-19%. Quite a difference between the two ends, isn’t it?

An interesting observation here is that both Avon and Herbalife made roughly the same operational expenses in absolute terms and generated revenues not too far from each other. However, Avon’s cost of sales ($519m) was more than twice as much of Herbalife’s ($213m). All other things being equal, it seems Avon can gain a lot by doing some savings in its production costs.

Operating Expenses

From the industry perspective, it would be great to see companies’ commissions payouts to sales force but not all disclose this information. Those figures are shown as “n.a.” on the chart.

Among those we have data for, NHT Global stands out with the highest bonus payments as a percentage of its sales: 47.2%. Close to it is USANA with its 44.7% commissions expense. Herbalife has the lowest figure here with 28%.

When we look at the total operating expenses combined, we see Mannatech with the most costly operation. In the first quarter, Mannatech spent more than 78% of its revenue to run its operations. Mannatech was followed by Nature’s Sunshine with 71%.

Tupperware (55%) and Youngevity (58%) had the lowest operational expenses.

It is interesting to note here that while NHT Global (15%) and Youngevity (16%) had very low “other” operational expenses, this figure was comparingly rather high in the case of Mannatech (40%).

Profitability

All 11 companies reported operational profitability in the first quarter. Among them, NHT Global’s (19%), Herbalife’s (15%), USANA’s (14%) and Tupperware’s (13%) were double-digit.

When we include the non-operational items such as financial gains and expenses and taxes to the picture and come to the bottom line, we start seeing companies making losses. In the first quarter of this year, Avon and Natura posted net losses of -13% and -4%, respectively.

NHT Global reported 15% net income as the highest of the 11 direct sellers here. USANA’s (9%), Tupperware’s (8%) and Herbalife’s (9%) net income ratios were quite healthy as well.

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