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Melaleuca,Frank VanderSloot, CEO

Melaleuca CEO Frank VanderSloot Idaho’s Richest Person With $1.9 Billion

According to an article in Forbes:

Idaho might supply a third of America’s potatoes, but you won’t find its richest resident among the state’s 325,000 acres of potato fields, or even in its capital city of Boise. He’s in Idaho Falls (pop. 60,211), running one of the nation’s largest online retail companies from his headquarters four miles from downtown.

Idaho’s wealthiest person, with an estimated net worth of $1.9 billion: Frank VanderSloot, the 68-year-old founder and CEO of Melaleuca, which bills itself as “the wellness company.”

Melaleuca manufactures more than 450 products ranging from vitamins and health supplements to environmentally-friendly household cleaners. It then sells them direct from the factory to more than 1.8 million consumers every month through its online store.

About two-thirds of customers simply buy products for personal use. But Melaleuca also offers commissions to those who want to refer customers of their own. Most just earn a 3-4% commission on goods purchased by people they have directly referred, but it’s possible — depending on how many people you have referred and how active a role you take in the company each month — to earn higher rates and commissions on purchases made by the Melaleuca customers referred to the business by your own Melaleuca customers (the chain extends, at most, seven iterations).

It’s a business model that has been compared to that of companies like Herbalife and Amway, but Melaleuca is quick to reject the comparisons and insist that it’s not a multi-level marketer.

That’s because every customer buys products directly from the company, not from other customers who distribute the goods, so no one is forced to fill their garage with inventory that may never sell. Commissions are paid only when a customer actually buys a product to use, not for signing other people up.

Idaho might supply a third of America’s potatoes, but you won’t find its richest resident among the state’s 325,000 acres of potato fields, or even in its capital city of Boise. He’s in Idaho Falls (pop. 60,211), running one of the nation’s largest online retail companies from his headquarters four miles from downtown.

Idaho’s wealthiest person, with an estimated net worth of $1.9 billion: Frank VanderSloot, the 68-year-old founder and CEO of Melaleuca, which bills itself as “the wellness company.”

Melaleuca manufactures more than 450 products ranging from vitamins and health supplements to environmentally-friendly household cleaners. It then sells them direct from the factory to more than 1.8 million consumers every month through its online store.

About two-thirds of customers simply buy products for personal use. But Melaleuca also offers commissions to those who want to refer customers of their own. Most just earn a 3-4% commission on goods purchased by people they have directly referred, but it’s possible — depending on how many people you have referred and how active a role you take in the company each month — to earn higher rates and commissions on purchases made by the Melaleuca customers referred to the business by your own Melaleuca customers (the chain extends, at most, seven iterations).

It’s a business model that has been compared to that of companies like Herbalife and Amway, but Melaleuca is quick to reject the comparisons and insist that it’s not a multi-level marketer. That’s because every customer buys products directly from the company, not from other customers who distribute the goods, so no one is forced to fill their garage with inventory that may never sell. Commissions are paid only when a customer actually buys a product to use, not for signing other people up.

When someone pays off their mortgage thanks to commissions, VanderSloot personally hosts a mortgage-burning party to celebrate the milestone. For those in the uppermost tier (just 0.01% of customers), who earned an average of $1.27 million last year according to the company’s published income statistics, that seems possible.

But Melaleuca — which markets itself as a part-time opportunity and stresses frugality — admits that most people don’t make that kind of money. Of the 34% of customers who earn commissions, about two thirds are “product advocates” (those who have referred only one to eight people and may not be actively seeking commissions at all) who earned between $93 and $550 on average last year. The remaining 12% of Melaleuca customers are “business builders” — people who are working to earn income from referrals. While a few of these “builders” go on to make six, or even seven, figures, 90% of them made just $2,047 on average.

“This is not a get-rich-quick scheme,” VanderSloot told Forbes in 2004, but noted that the income can still “make a real difference to a family earning $30,000.”

 

Read further here: www.forbes.com

Get more information, facts and figures about Melaleuca, click here for the Melaleuca overview.

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