The Southeast Idaho Business Journal profiles Melaleuca’s innovative business model and the company’s growth over its 30-year history.
In his column, Dan Cravens, an Idaho Department of Labor economist who holds a law degree from Gonzaga University, points to the company’s model as a key ingredient in its long-term success.
He states that Melaleuca is not a traditional business that uses advertisers and retail outfits to sell its products, nor is it an MLM that relies on distributors to resell inventory. “Melaleuca is a consumer products manufacturer that effectively uses a direct marketing strategy and not an MLM model,” he says.
He agrees with the Idaho State Tax Commission, which says that “Melaleuca, Inc. does not fall within the legal definition for a multi-level marketer.”
According to the Federal Trade Commission, an MLM is defined as a network of distributors who make money from their own sales and the sales of their recruits. “Melaleuca has no such network,” Cravens states. “Melaleuca’s customers do not purchase inventory or resell it. They refer other customers to Melaleuca, and each time their referral makes a purchase, they earn a small commission.”
Craven’s column echoes an Idaho Falls Magazine article, in which several industry experts describe Melaleuca as a direct-marketing manufacturer or retailer and not an MLM.
Cravens’ column is an in-depth look at what took Melaleuca from a seven-employee startup in 1985 to the $1.2 billion wellness company it is today. Melaleuca began in Idaho with just eight wellness products but now manufactures more than 450 products and does business in 18 countries across the globe.
Cravens traces Melaleuca’s success to CEO Frank VanderSloot’s humble beginnings and the work ethic instilled in him as a young man. He also credits the company’s high-quality products as a major factor in Melaleuca’s sustained growth.