Direct Sales date back thousands of years with roots in Egypt, Syria, Babylonia and India. Traders, merchants and caravans are examples of the early direct seller who formed this ancient tradition and basic need to exchange goods. Fast forward to a century ago here in the U.S. and you’ll find the birth of The Direct Selling Association (DSA) who will celebrate it 100th birthday next year. As a fan of Direct Sales, I wrote an article about one of the oldest Direct Sales Companies still in existence today. Founded in 1886, they’re a real powerhouse today – producing $10.7 BILLION in annual sales. Never heard of The California Perfume Company? They changed their name to Avon in 1939.

With all the economic news that this country has had to endure over the last year, it’s refreshing to see one business model that’s not only surviving, but thriving in these tough economic times.

Direct Selling News just released a comprehensive list of the the worlds top direct selling companies with wholesale revenue of $100 million or more. On the list we find some very old and prominent companies such as Avon, Mary Kay, Primerica Financial Services, Herbalife, Tupperware, Nu Skin, Shaklee, ACN, Pre-Paid Legal, Market America, Keller Williams, Pampered Chef, Southern Living At Home, and oh…lookie here…YTB International.

If you’ve never heard of this list before – well, it’s never been out before. Think Travel Weekly Power List here, but for the Direct Sales Industry. For the first time, Direct Selling News decided to come up with a list of it’s own for the Direct Sales Industry. I realize that for some, Direct Sales doesn’t amount to much, (in fact, it’s despised by some who just plaster the word “pyramid” on what ever they like) but when you look at these sales by the numbers, and compare them with some of the dates these companies were founded, you have to admit it’s pretty impressive list of “Networkers” who some claim will eventually run out of people.

The purpose of the list in Direct Selling News was to “journal the might of the direct selling industry”. In the report, YTB International ranked #46 overall with $162.5 million in sales. Not too shabby for a company that’s been a very heated topic in the travel industry, had it’s share of legal battles and has been a daily rant for a select few with a false and limiting belief that Direct Sales is a sham. While YTB’s numbers are fairly straight forward, reporting it’s numbers to the SEC as a publicly traded company, like the travel industry, very few Direct Sales companies do the same.

Like Travel Weekly, Direct Selling News made every effort to verify sales in this industry with checks and balances via sources like Hoover’s Company Records and Dun & Bradstreet, SGA Executive Tracker Companies, Standard & Poor’s Descriptions Plus News, Company Briefs–Gale Group, Global Duns Market Identifiers, Market Guide Company Profiles, America’s Corporate Finance Directory and Directory of Corporate Affiliations.

According to Direct Selling News, one thing became clear during their research: A number of Direct Sales companies are still growing despite the economy and despite all the misrepresentations and myths surrounding the industry.

“Almost miraculously, our organization has continued to grow,” says Joe Urso, Aerus Chairman and CEO. “Selling high-end products is not easy, especially in a down economy. Our team has continued to grow by inspiring others to pursue the opportunity for a better life that we offer.”

The report also states that USANA recorded its sixth consecutive year of record sales, Pampered Chef had a 5 percent increase in recruiting and Tastefully Simple product sales bumped up 5 percent. And like YTB’s Founders are telling their field or TSO’s and Website Sellers right now, Executives from other companies are telling people that despite the economy, their companies are not only larger in regard to revenue, but are coming out of this recession better than ever.

From the report.

And many direct selling executives tell us they believe the industry will emerge from the recession bigger, faster and stronger. “Over the course of the next few years,” says USANA President Fred Cooper, “we anticipate USANA—and the network marketing industry in general—to continue to show patterns of growth.”

Emerging bigger, faster and stronger has special meaning for those of us in YTB. The company wasn’t fighting just the recession and the poor economy. Just over a year ago YTB was in another club, sued for $100 million by a bunch of ambulance chasers who wanted a quick buck. A year later, the class action thrown out for being redundant, immaterial, impertinent, and scandalous, YTB is prominently placed in a $100 million club for actual sales with another prestigious group of peers.

My how things have changed for YTB as the debate over pyramid crumbles and legitimate rises from the ashes.

Congratulations to all 65 members of this list. You’re the cream of the crop in the Direct Sales Industry who have collectively produced billions of dollars in revenue – one person – one sale – one day at a time.

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I picked up on a story Monday that I thought might be a good topic for today’s post but didn’t realize how timing would play out with President Obama speaking to the Nation last night. I’ve got to admit, our new President is one of the most eloquent speakers I’ve seen in some time. I can appreciate a well delivered speech when I see one and he needs to get Congress on his side when he submits his tax and spending plans to Congress on Thursday.

Last week, President Barack Obama signed the sprawling $787 billion economic stimulus package into law, saying it will help the struggling U.S. economy but warning that the recovery process will be challenging. I would agree with the warning, because it will end up costing over $1 Trillion when it’s all said and done. (It needs to be paid back, you realize that?) The Market reacted to the news by selling off and savvy investors realize how much this bailout will hurt when it’s time to pay it back.

Right or wrong about this stimulus package being good or bad, bailing out America seems to be a hot topic these days and there are large numbers who appear to want a piece of the action, including the ASTA. I don’t know if you saw this editorial cartoon in Travel Weekly the day after the inauguration, but it spoke volumes about how demanding and desperate this industry is. I’ve had it up to here with all this talk about how everything is fine and things are “great” when actions certainly don’t provide a very good foundation to those statements. With all the victim talk we’ve read about day after day, the mud slinging and spin on the “issues” with Travel MLM’s, Agencies either downsizing, or disappearing overnight, and involuntary bankruptcy filed by Agents themselves things aren’t as rosy as some claim. Things have gotten so bad for the industry that after decades of fighting to keep banks out of the industry, all of the sudden Agents are willing to look the other way.

And now we find out that the ASTA DID have it’s hand out for part of the $787 billion to stimulate there struggling model once again.

“The inclusion of a direct lending program in the House-passed version of this bill raised hope among ASTA’s small business travel agents,” said Chris Russo, ASTA president and chair. “Sadly, Congressional negotiators, meeting behind closed doors, chose to remove the direct lending provision mere hours before the bill was complete. Whatever small cost savings they achieved came at the expense of the small business community.”

In a letter sent last week, Russo asked President Obama to call for the swift passage of legislation to expand the authority of the Small Business Administration to lend directly to small business owners.

Based on what I heard last night, they’ll be given another shot at even more money to be spent by this new administration next year.

But I have to ask why the ASTA even needs this money in the first place when everyone is telling me that business is better than ever? Some certainly know how to talk the talk, but when it comes to walking the walk we get this? Very odd don’t you think?

The ASTA is still pitching (or promoting) how important they are to the Travel Agent community after this failed attempt to help the industry while even they admit that “the brand damage from the old days when ASTA was perceived as too political”. The ASTA claims agents need an “attitude adjustment” (finally, something we can agree on!) but Agents need the ASTA to help them.

To be fair, I have seen a couple of issues they’ve been helpful in over the last year, but apparently it’s not enough for the majority of the Travel Agent community to shift their perceptions concerning how this organization can help them. Honestly, I’ve come to the conclusion most of these agents who don’t join are just more comfortable about complaining than they are about effective change, so this plea by the ASTA in this article will fall on deaf ears. In addition, most agent don’t truly understand what leverage can do to benefit them. Instead, most ridicule the concept and poke fun at it being only an MLM concept.

It is however comforting to see that even the ASTA is having difficulty getting their message across to a group who believes they know better, and not willing to change their flavor of Kool-aid, because it sounds too much like MLM.

Maloney said that ASTA now has some 200 Premium members and 4,000 Core members, a number that he said “we can grow,” if agents are aware of the range of services they can get from ASTA for “77 cents a day” – the per diem cost of annual Core membership.

This “.77 cents a day” is taken directly from MLM, (or so they think) and it doesn’t play well. Instead of seeing the benifit, they reject this concept because most have been trained to. (It’s also called brainwashing.)

Time will tell if this industry wakes up and pulls ITSELF out of this funk they’re in. I see people everyday who are making smart choices and even sacrifices today that will pay off for them in the long run. I promise you’ll see a good number of people who will come out of this extremely wealthy because of it.

I doubt it will be because of a handout or bailout, it rarely is.

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I happen to be out of town, (without internet access!) but enjoying the Holiday with family none the less. I decided to schedule something for today before news became old news next week. First and foremost however, I hope everyone had a wonderful Christmas, and although at the time of this writing, presents are still wrapped under the tree, by the time this is posted and you are reading, I’ll be enjoying gifts my kids had made for me, and of course finding what Santa brought.

That being said, don’t think for a second that there isn’t something to talk about over this extended Holiday weekend.

Are you kidding me? This Industry?

While the jury may be out if some made Santa’s “Naughty” or “Nice” list, after what I’ve been reading the last several months, it’s time to bring this “Naughty” Agency to the forefront after a year long hiatus.

Back in October 2007 this blog gained considerable notoriety after tackling the issue head on concerning Royal Caribbean who terminated its relationship with no more than four Agencies. Two of those agencies came to light very quickly and the industry outrage on the internet concerning “Card Mills” came to a head.

Although it’s been documented that Royal Caribbean did in fact terminate four Agencies, Lisa Bauer, VP of Sales with Royal Caribbean at the time, skirted the direct questions asked by Travel Weekly concerning just who these Agencies were. To this day, there has been nothing to verify, although there has been plenty of speculation, any more than two Agencies. That being of course YTB and the other being Joystar.

Other than YTB, I can’t think of another Agency that has been the target of more controversy than Joystar. If you look at the founders history, you’ll get a better understanding to just why, and I did document his exploits with the first Travel MLM (TravelMax) back in the mid 1990’s. It looks as if both Bill Alverson’s and Joystar’s issues have not subsided, but in fact increased a year later.

While you found nothing concerning any new issues on this blog, there has been plenty to write about concerning Joystar a year after being terminated by Royal Caribbean. In addition, no less than three headline news stories broke back in October of 2008 concerning the Host Agency. One, October 9^th, reported that Joystar failed to pay commissions owed to its independent contractors along with laying off 14% of its staff. Later in the month, on October 23^rd, it was reported the CLIA revoked Joystar’s Membership for not renewing its Seller Of Travel License with California. (Although it appears that SOT’s have been made current as well as its association with CLIA.) The very next day, October 24^th, it was reported that InterContinental Hotels Group filed a federal lawsuit against Joystar for claiming more than $163,000 in improper commissions.

And some think YTB has problems?

Actually, that’s what a small group would like you to believe as they obsess over anything they can drum up to cast fear and doubt because they’re convinced the YTB “model” is flawed…doomed to collapse. (Yet the “model” started to take shape over a century ago, and still standing tall.) Part of drumming up anything these poor folks can think of is this notion that after more than a year of inactivity, suppliers will again take up the cause of these Agents and Associations and start terminating relationships with Agencies critics simply don’t agree with moving into 2009.

One of the favorite ploys of critics is not implicating YTB directly, but word posts and threads in a way that gives them an out if egg is then thrown back in their face. Naughty for sure after reading comments, as there appears to be no question just who they hope the Agency is. Just one of the dozens of posts I sent to Santa this year for the “Naughty List”. As they wait to see if the rumor is true with gleeful anticipation, Santa more than likely coaled the entire lot of them for lack of good cheer.

I never like this type of speculation and rumor. It’s far too easy for hearsay like this to come back and bite you when documentation squashes the rumor you’re attempting to spread. Especially when you find out that the rumor started in an attempt to point the finger at one host, was initially about an entirely different host.

It appears the glass slipper that some are attempting to slip on YTB belongs to Joystar.

Agents are using the Joystar community board to voice their complaints. One posting dated Dec. 17 claimed Carnival Cruise Lines was prepared to cease doing business with Joystar if the agency did not make good to agents. When queried about the posting, Carnival declined to comment.

To be fair, there is nothing to substantiate ANY rumor that Carnival or any other supplier for that matter will be terminating anyone. Instead, I would look at the last year and ask just how many suppliers terminated its relationship with any Agency in 2008.

Of course that answer is Zip…Zilch…Nada…not one.

Yet there are some who still want to hang onto this small glimmer of hope that suppliers might come around. If the rumor is true about Carnival terminating its relationship with Joystar, can you blame them? (That would be “No”.) It’s been documented that Carnival believes these Agents, no matter what host they’re associated with are the life blood of their sales force.

But how much would you want to wager, that if Carnival does terminate Joystar because its failed to pay the commissions owed its Agents, the speculation will be that YTB is next in line? It’s what some will do I’m sure in order to restore this whole fiasco about suppliers “getting it” to surface yet one more time. I know that sounds irrational, but you have to understand the anger and resentment that creates such illogical thinking. Just accept that this is another small thread critics reach for in their attempt to pin someone else’s misfortune to YTB.

With the news out Tuesday about Joystar being down to just 5 employees and the thousands of dollars in commissions owed its Agents, I have to wonder if Peter Stilphen, (a pompous and overzealous Joystar critic who’s been plastering both Bill Alverson and Joystar for years) will be having a Merry Christmas this year?

I don’t know if there will be anyone really posting about this over the Holiday’s or into next week for that matter. I guess I’ll have to check and update you when I get back first of next week.

In the meantime, I’d like to enjoy my time with family and finalize some goals I have moving into 2009 while I have some time away from the internet and all it’s trappings.

It will be interesting to see what 2009 will bring, and while there are some who claim to know what’s going to happen, take some time to do what a couple of my favorite mentors have taught me over the years.

“Don’t believe a word you hear, unless you can verify it on your own to be true.”

Which I suppose is one of the reasons why people like this blog so much. Instead of spreading rumors and hearsay about what they’ve heard about or read about somewhere else, without a single shred of documentation to back it up, they come here for documentation and truth.

That’s why I’m on Santa’s “Nice List”.

PS - If you're involved with YTB, sign up for our FREE Newsletter. As a Website Owner or Website Seller, we'll keep you up to date with all the latest news, acquisitions, and developments with YTB.

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