Melaleuca (company)

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This article is about the direct-consumer company; for the genus of plants, see Melaleuca
Melaleuca, The Wellness Company
TypePrivate
Founded1985
HeadquartersIdaho Falls, Idaho
IndustryHealth
Revenue $782 Million Sales Graph 1985 to January 2007
Employees2,500
Websitewww.Melaleuca.com

Melaleuca, The Wellness Company , often called simply "Melaleuca", is a $780 million nutritional, cosmetic, and personal care products company founded in 1985 and headquartered in Idaho Falls, Idaho, USA.

Melaleuca was listed on the Inc. 500's list of fastest-growing companies in 1990, 1991, 1992, 1993, and 1994 and today is one of the largest privately owned companies in Idaho. [1]

History

The company began under the name "Melaleuca Oil" with the offering of a single product called "T36-C5 Melaleuca Oil" which was formulated from extract of the melaleuca tree, commonly known as tea tree oil. A previous Melaleuca-based company by the name of "Oil of Melaleuca" operated as a standard multi-level marketing company whose literature made health claims the FDA would not approve. The company sold products whose uses and benefits were not verifiably documented. There were also exaggerated claims of the efficacy of the active ingredient, tea tree oil, and claims that the company was a sole source of the same, creating an impression of privileged access to a unique product.[2]

In 1985, the company was taken over by Frank L. VanderSloot who dissolved the previous company, created a new marketing plan to support consumers, immediately launched an initiative to bring the company's product line into compliance with FDA regulations, and started this new company under the name of "Melaleuca, Inc.". He made the compensation plan more favorable to Marketing Executives, by establishing Consumer Direct Marketing. Independent Representatives were no longer required to sell products but instead became membership enrollment facilitators. Since VanderSloot has taken the helm, Melaleuca has experienced consistently increasing sales and revenues and expanded internationally.

Melaleuca now has over 2,500 employees as well as sales offices in Hong Kong, Japan, and Australia, Taiwan, New Zealand, and United Kingdom and grossed US $782,000,000 in sales in 2006. [3] Melaleuca began sales in Singapore, Netherlands, and Jamaica in 2006.

Sales History

File:MelaleucasRevenueGraph2006.jpg
Melaleuca sales history from 1985 through 2006.

Melaleuca was recognized by Inc Magazine as one of the fastest growing companies in the United States for five consecutive years (1990-1994). [4] In addition, Melaleuca has seen 22 years of consecutive growth since its foundation in 1985.

Though sales reached $782 Million in 2006, Melaleuca holds less than .5% of the North American marketplace, with their largest competitors being Procter & Gamble and Johnson & Johnson. It should also be noted that sales do not always grow proportionately with profits.

Products and business model

While initially based predominantly on melaleuca plant extracts, the product line has since expanded beyond this initial focus. Melaleuca now markets over 350 items such as household cleaners, personal care items, pharmaceuticals and nutritional supplements. The company markets itself as being earth-friendly, and many of their products are certified organic. They also launched a cosmetics line in partnership with fashion designer Nicole Miller in January 2003.

Melaleuca has been outspoken against the abuses inherent to multi-level marketing and the damage they can cause. By contrast, Melaleuca does not allow inventory loading (a practice used by many multi-level marketing companies encouraging them to purchase up to thousands of dollars worth of inventory), limits the marketing chain to 7 generations, and prohibits "breakaways" (another practice commonly found in multi-level marketing). According to the company, another way it is less exploitive than MLM's is that Melaleuca does not require its marketing executives to maintain an inventory. In order to receive commissions from one's customers, marketing executives must produce a minimal number of 35 product points per month (the equivalent of about $45-55 each month) to remain an active Marketing Executive. This in turn qualifies the customer to receive a 30-40% discount. The company also offers an opportunity to receive up to 15% of your monthly order back in "Advantage Awards" dollars. After receiving $20 in Advantage dollars the customer is allowed to redeem these dollars towards products. The products being purchased are everyday items such as shampoo, hairspray, and cleaning supplies. Distributors claim that the minimum required level is compatible with typical household or personal use.[citation needed]

Melaleuca claims to focus on developing products that support a healthy lifestyle and are safer for the home. In the home, the company focuses on researching and bringing to market cleaning products that use more natural cleaning products that are claimed to be safer than "harsh chemicals." Melaleuca touts that its products are as good or better than what is found at the local grocery store, but without the bleach, lye, or other chemicals typically found in other brands. [5]

The company has developed an extensive line of nutritional products such as vitamin and mineral supplements which claim to promote heart health, cardiovascular, and blood pressure supplements, and a glucosamine product for healthy joints. They also have developed products using natural ingredients that the company claims support healthy vision, healthy prostate, healthy urinary tract, as well as other nutritional supplements. It also has a body and bath product line, beauty and makeup line, and weight management line.

The company uses a direct to consumer delivery model, where a customer can place an order via telephone or online (over the internet) and products are delivered to the door via postal service or national mail carrier.

Nutritional Supplement Regulation

Dietary Supplements are considered a food and are less regulated by the federal Food and Drug Administration.[6] Some doctors and pharmacies point out that some natural supplements may have an effect on prescription medications and someone taking strong prescription medications may want to consult their doctor before taking some nutritional supplements. Additional information on herbal supplements and their uses and regulations can be found at the Wikipedia's herbal supplements page.

Awards and Public Recognition

Melaleuca and its 22 year President and CEO, Frank VanderSloot, have been the recipients of numerous distinguished honors and awards:

  • Five Time Inc. 500 List of Fastest Growing Businesses - Melaleuca is one of only a few business in history who have been listed in the Inc. 500 five consecutive times.[7]
  • Inc 500 Hall of Fame - In 2005 Melaleuca was inducted into the Inc. 500 Hall of Fame.[8]
  • Blue Chip Enterprise Award - In 1991, the United States Chamber of Commerce honored Melaleuca by presenting it the Blue Chip Enterprise Award.
  • Healthy Workplace Award - Melaleuca was one of 15 organizations in 2004 recognized nationally by the American Psychological Association with a "Best Practices Honor" for efforts to foster Family Support in the workplace.[9][10]
  • IACI Environmental Excellence Award - in 2003 Melaleuca was awarded the Idaho Association of Commerce and Industry Environmental Excellence Award. Criteria for the award includes environmental practices, investment in pollution control, recovery from waste streams, conservation, and other environmental achievements.[11]
  • Entrepreneur of the Year Awarded - Ernst & Young and CNN awarded Melaleuca's President and CEO Frank VanderSloot the Entrepreneur of the Year Award for the Northwestern United States in 2001. Past recipients have include Amazon.com, eBay, Southwest Airlines, and Enterprise Rent-a-Car.[12][13]
  • Salvation Army "The Others" Award - In 2007 the Salvation Army awarded Melaleuca with its highest national civic award, "The Others" award", for sending more than $1,000,000 in relief to victims of the Gulf Coast hurricanes of 2005. The company and its people gathered enough food, water, clothing and emergency supplies to fill 11 semi-trucks for the victims of Hurricanes Katrina and Rita.[14]

References

  1. "Inc. 500 Hall of Fame," Inc. Magazine, September, 2006.
  2. "Hall of Fame Profile: Frank L. Vandersloot," Inc. Magazine, October 2004.
  3. Melaleuca Annual Gross Sales, 1985 through 2006 (Company publication)
  4. Inc. 500 Listings
  5. http://www.SaferForYourHome.com
  6. http://www.fda.gov
  7. Inc. 500 Listings
  8. Inc. 500 Hall of Fame
  9. American Psychological Association Healthy Workplace Award
  10. Healthy Workplace Award
  11. Environmental Excellence Award
  12. Earnst & Young and CNN Entrepreneur of the Year Award
  13. Entrepreneur of the Year Award
  14. Post Register, 76 (205), pp. B1, May 24, 2007 Missing or empty |title= (help)

External links


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