Grand Rapids native Nick Sarnicola is a multimillionaire co-founder of Troy-based ViSalus, which is fighting to keep its place among the world’s biggest multilevel marketing companies.
Launched in 2005, ViSalus makes nutritional supplements and weight loss shakes that it sells through a network of independent sales agents. These agents, which the company calls “promoters,” earn commissions based on sales to customers, as well as on sales made by and to other ViSalus distributors whom they’ve recruited to join the company.
Generally speaking, the higher a promoter’s position on the network chain, the greater his or her potential revenue stream.
A subsidiary since 2008 of Greenwich, Conn.-based Blyth, ViSalus became a breakout success last year in the challenging and often controversial multilevel marketing industry, which includes long-established names like Mary Kay, Tupperware, Amway and Herbalife. But the company will need to pull up from its recent sales decline to prove itself as more than a flash in the pan.
With $623 million in sales and $69 million in profit in 2012 representing 171% annual growth, ViSalus is considered the 21st-largest multilevel marketing company in the world by revenue and second largest in Michigan to Ada Township-based Amway, the largest on the globe, according to the industry trade publication Direct Selling News.
With savvy management, creative promotions and a full embrace of social media as a sales and recruitment platform, ViSalus burst on the scene last year as one of the hottest and fastest-growing multilevel marketing firms on the globe.
But ViSalus’s growth — as high as 450% year-over-year last summer — tapered off and was in full reverse by the fall, leading to the cancellation of the company’s planned $175-million IPO and a shareholder lawsuit against its parent company, on claims that Blyth executives tried to conceal problems with ViSalus’s business model in hopes of a more lucrative public offering.
Blyth’s legal counsel says it is fighting the suit’s claims.
Multilevel marketing began making headlines in the business press after hedge fund manager William Ackman disclosed in December his $1-billion market bet against Herbalife, a shake and supplement business started in 1980 that he considers an unsustainable pyramid scheme that is bound to collapse. Other big-name investors have since made opposite bets favoring Herbalife’s future.
Although down from its mid-2012 peak, ViSalus generated $4.2 million in profits in this year’s first quarter from $104.3 million in net sales, according to Blyth’s financial statements.
ViSalus says it has about 420 staff employees in Troy and 80 in a Los Angeles office. It reported a network sales force across the U.S. and Canada of more than 70,000 promoters as of March 31, down from its 114,000 promoters in mid-2012, yet well above its 29,000 count two years ago.
To regain momentum, ViSalus this spring launched its product line and trademark Body By Vi 90-Day Challenge in the U.K.
“Just like any business, everything goes through cycles,” Sarnicola, 34, said in a Free Press interview. “We had a great three-year, nonstop upward run, and then you have a bit of a settling. Then you regroup and you make that second run.”
ViSalus’s three co-founders — Sarnicola, Blake Mallen and Ryan Blair — launched their business by direct selling the re-branded vitamins of Dr. Michael Seidman, an ear, nose and throat doctor at Henry Ford West Bloomfield Hospital whom Sarnicola and Mallen approached.
Sarnicola credits Blair, a California native and tech entrepreneur who is ViSalus’s CEO, with providing the business acumen and investor connections that allowed ViSalus to scale up its operations and make good management decisions.
The paperback version of Blair’s autobiography and how-to book , “Nothing To Lose, Everything to Gain: How I went from Gang Member to Multimillionaire Entrepreneur,” debuted at No. 1 in April under the New York Times’ “advice and misc.” sales category.
In the book, Blair, 35, describes how less-scrupulous multilevel marketing companies have a “lopsided ratio” of customers to independent distributors. “That’s why so many companies out there are schemes,” he wrote. “The sad part is that a lot of them aren’t even schemes on purpose.”
In a recent interview at ViSalus’s bright new East Big Beaver Road headquarters, Blair said the multilevel marketing model provides for an enthusiastic sales force of individuals who all use ViSalus products and are “walking billboards.”
ViSalus promoters often have their own web pages and are encouraged to be prolific users of Facebook and Twitter.
With these advantages, ViSalus has no plans to ever sell its shakes and workout drinks on traditional store shelves, Blair said.
Dale Peake, 41, of Lawton is one of the most successful promoters.
Selling ViSalus, Peake said he made $913,000 in gross income in 2012, netting about $500,000 after taxes and business expenses. He also lost 100 pounds on a ViSalus shake diet.
He said there are about 4,000 promoters in his “downline” comprised of other ViSalus promoters whom he recruited and the recruits of those recruits. He estimated his team has about 12,000 active customers.
Peake sold enough product and new recruits in his first eight days to qualify for ViSalus’s “Bimmer Club,” an incentive program that offers $600-per-month bonuses for the purchase or lease of a BMW. The club’s cars come with sassy ViSalus-issued “Told U So” license plates.
Robert FitzPatrick, president of the organization Pyramid Scheme Alert, said he considers ViSalus’s shakes and supplements as side products. The main product it’s selling, FitzPatrick claims, is income opportunities for people who recruit others into the chain.
ViSalus, which does not disclose the typical earnings of sales agents, says roughly two-thirds of its revenues are indeed from sales to customers. The rest, it says, are mostly from sales to promoters, many of whom are using the products themselves.
Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com, and follow on twitter @JCReindl
Posted in Network Marketing
Tags: blair, book, business, direct-selling, facebook, industry, spring, visalus
Launched in 2005, ViSalus makes nutritional supplements and weight loss shakes that it sells through a network of independent sales agents. These agents, which the company calls “promoters,” earn commissions based on sales to customers, as well as on sales made by and to other ViSalus distributors whom they’ve recruited to join the company.
Generally speaking, the higher a promoter’s position on the network chain, the greater his or her potential revenue stream.
A subsidiary since 2008 of Greenwich, Conn.-based Blyth, ViSalus became a breakout success last year in the challenging and often controversial multilevel marketing industry, which includes long-established names like Mary Kay, Tupperware, Amway and Herbalife. But the company will need to pull up from its recent sales decline to prove itself as more than a flash in the pan.
With $623 million in sales and $69 million in profit in 2012 representing 171% annual growth, ViSalus is considered the 21st-largest multilevel marketing company in the world by revenue and second largest in Michigan to Ada Township-based Amway, the largest on the globe, according to the industry trade publication Direct Selling News.
With savvy management, creative promotions and a full embrace of social media as a sales and recruitment platform, ViSalus burst on the scene last year as one of the hottest and fastest-growing multilevel marketing firms on the globe.
But ViSalus’s growth — as high as 450% year-over-year last summer — tapered off and was in full reverse by the fall, leading to the cancellation of the company’s planned $175-million IPO and a shareholder lawsuit against its parent company, on claims that Blyth executives tried to conceal problems with ViSalus’s business model in hopes of a more lucrative public offering.
Blyth’s legal counsel says it is fighting the suit’s claims.
Multilevel marketing began making headlines in the business press after hedge fund manager William Ackman disclosed in December his $1-billion market bet against Herbalife, a shake and supplement business started in 1980 that he considers an unsustainable pyramid scheme that is bound to collapse. Other big-name investors have since made opposite bets favoring Herbalife’s future.
Although down from its mid-2012 peak, ViSalus generated $4.2 million in profits in this year’s first quarter from $104.3 million in net sales, according to Blyth’s financial statements.
ViSalus says it has about 420 staff employees in Troy and 80 in a Los Angeles office. It reported a network sales force across the U.S. and Canada of more than 70,000 promoters as of March 31, down from its 114,000 promoters in mid-2012, yet well above its 29,000 count two years ago.
To regain momentum, ViSalus this spring launched its product line and trademark Body By Vi 90-Day Challenge in the U.K.
“Just like any business, everything goes through cycles,” Sarnicola, 34, said in a Free Press interview. “We had a great three-year, nonstop upward run, and then you have a bit of a settling. Then you regroup and you make that second run.”
ViSalus’s three co-founders — Sarnicola, Blake Mallen and Ryan Blair — launched their business by direct selling the re-branded vitamins of Dr. Michael Seidman, an ear, nose and throat doctor at Henry Ford West Bloomfield Hospital whom Sarnicola and Mallen approached.
Sarnicola credits Blair, a California native and tech entrepreneur who is ViSalus’s CEO, with providing the business acumen and investor connections that allowed ViSalus to scale up its operations and make good management decisions.
The paperback version of Blair’s autobiography and how-to book , “Nothing To Lose, Everything to Gain: How I went from Gang Member to Multimillionaire Entrepreneur,” debuted at No. 1 in April under the New York Times’ “advice and misc.” sales category.
In the book, Blair, 35, describes how less-scrupulous multilevel marketing companies have a “lopsided ratio” of customers to independent distributors. “That’s why so many companies out there are schemes,” he wrote. “The sad part is that a lot of them aren’t even schemes on purpose.”
In a recent interview at ViSalus’s bright new East Big Beaver Road headquarters, Blair said the multilevel marketing model provides for an enthusiastic sales force of individuals who all use ViSalus products and are “walking billboards.”
ViSalus promoters often have their own web pages and are encouraged to be prolific users of Facebook and Twitter.
With these advantages, ViSalus has no plans to ever sell its shakes and workout drinks on traditional store shelves, Blair said.
Dale Peake, 41, of Lawton is one of the most successful promoters.
Selling ViSalus, Peake said he made $913,000 in gross income in 2012, netting about $500,000 after taxes and business expenses. He also lost 100 pounds on a ViSalus shake diet.
He said there are about 4,000 promoters in his “downline” comprised of other ViSalus promoters whom he recruited and the recruits of those recruits. He estimated his team has about 12,000 active customers.
Peake sold enough product and new recruits in his first eight days to qualify for ViSalus’s “Bimmer Club,” an incentive program that offers $600-per-month bonuses for the purchase or lease of a BMW. The club’s cars come with sassy ViSalus-issued “Told U So” license plates.
Robert FitzPatrick, president of the organization Pyramid Scheme Alert, said he considers ViSalus’s shakes and supplements as side products. The main product it’s selling, FitzPatrick claims, is income opportunities for people who recruit others into the chain.
ViSalus, which does not disclose the typical earnings of sales agents, says roughly two-thirds of its revenues are indeed from sales to customers. The rest, it says, are mostly from sales to promoters, many of whom are using the products themselves.
Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com, and follow on twitter @JCReindl
Posted in Network Marketing
Tags: blair, book, business, direct-selling, facebook, industry, spring, visalus