Thought our current Team newsletter was ontopic:

"Corporate America Embraces Direct Sales

Last night I was reading this month's Power Issue of Fortune Magazine (the one with Bill Gates on the cover) and ran across a section worth quoting.

The article of interest focuses on the sputtering economy, and the independent contractors (distributors) who are reenergizing the U.S. retail industry through the art of direct selling.

Here are a few key paragraphs that are particularly interesting:

" Call it the age of direct selling. With its emphasis on personal, one-on-one relationships between distributor and consumer, convenience, and a high degree of consumer education, the industry may be tailor-made for today's consumer—and company.

"The result: The industry, with U.S. sales of $28.7 billion in 2002, up 7.5% from the year before, has become a magnet for both corporate behemoths lured by its efficiencies and dozens of entrepreneurs attracted by the lower cost of market entry...

"Last year, for example, Warren Buffett's biggest purchase was The Pampered Chef...Hallmark's Binney and Smith is launching its own direct-selling company, called Big Yellow Box by Crayola...

"Most direct-selling businesses now employ a multilevel system, in which distributors earn money on their own sales in addition to those of people they recruit (called the 'downline') and individuals brought in by their personal recruits. That's different from the single-level approach, in which you only make money on your own sales. In 1990, about 20% of the Direct Selling Association members in the U.S. used the multilevel plan; today, it's about 80%...

"'I saw...something that I could do with my sons,' said Russ Widger Sr., a former manufacturing company owner...'I thought, with this business, they could do in about 10 years or less what had taken me more than 20 years with conventional business. The key was that they could start building a long-term residual income.'

"'[Direct sales] provided me with financial security that I would not have achieved if I had continued working a regular job, ' claimed Meg Kelly-Smith, a (former) banking executive. 'I compressed an entire career's worth of earnings into about five or six years.'

"A growing number of distributors are placing orders through their company's website instead of using the usual faxes or snail-mail orders. Distributors are using...web sites for help in recruitment and training...and as a channel for customer reordering.

"In 1990, Lisa Wilbur was laid off from her $15,000-a-year secretarial job, living in a 12- by 70 foot trailer with her husband, and trying her best to stave off creditors. Then she decided to sign on with Avon. Over the past ten years she's made more than $1.4 million in bonuses...not every representative makes nearly that much money—or wants to. Many reps...get into the business with the intention of working part-time or even, say, earning a little extra cash around the holidays.

"Although today's economic times offer a variety of challenges, solutions are available for those individuals willing to seek them out. With direct selling companies providing alternate avenues for income generation, more and more people are able to give their current jobs the pink slip."

- Fortune, The Power Issue, vol. 148, No. 3


So, Is MLM Really Legit?

After seeing that corporate america is quickly embracing the methods and strategies of network marketing (direct selling), it's important for many people to make the differentiation between a legitimate marketing strategy used by companies releasing legitimate products, and illegal pyramid schemes that scam innocent people.

I know every single one of us has heard at least once, "Oh, one of those pyramid things." It couldn't be further from the truth in XanGo's case.

To quote a government website (Division of Consumer Protection):

"Multi-level marketing companies differ from pyramid schemes because they are usually legitimate business opportunities. The sale of legitimate products is what distinguishes multi-level marketing operations from pyramids. Pyramid schemes want to make money from you, not the product sales."

"Pyramid Scheme vs. Multi-level Marketing

• Compensation based on recruiting vs. Compensation based on sales
• Few or no sales to consumers vs. Sell legitimate products to established markets
• Substantial start-up costs vs. Generally small start-up fee
• Potential to be stuck with large amounts of unsold goods vs. Will buy back unsold goods if you decide to quit the business
• Make money from you vs. Make money with you"


It's nice to know that XanGo™ meets every criteria for being a legitimate marketing company. To top it off, our CEO is the former chairman of the board of the Direct Sellers Association, the organization that establishes the ethics in which contractors introduce product in to the market."