LuLaRoe, Silpada, etc.

[Deleted]

I know we've discussed multi-level marketing plans before (Amway, Mary Kay, Herbalife, etc.). But last week I saw another example of these businesses turning their backs on the dealers who worked so hard to build the brand.

I'd been to a couple of Silpada parties before Avon bought them and really liked their jewelry. The prices went up after Avon bought them but still good stuff. Avon gave up and sold it back to the original owners at a huge loss. Owners shut it down in May, leaving dealers with unsold inventory, of course.

Now I'm getting e-mails because a firm owned by Berkshire-Hathaway bought them. The web site is up, they sell direct (with sale items that are probably left over from before the sale). They say they're talking to former dealers, but one I know is livid. She'd helped her dyslexic daughter build up a loyal business and then it disappeared. They've gone in to a similar business called "Poetic", I think.

Hope springs eternal, I guess. I'm tempted to buy some sale items off Silpada's site except for the shabby way they treated their dealers.

Anyone else have friends stung by MLM businesses?

[milee]

I'm not sure I'd categorize a business that's sold, goes out of business and then another new owner tries to revive it as necessarily trying to screw over dealers.  Business sales and closures do happen and they hurt both the business and the dealers, so without more info I don't know that they necessarily did any of that in a way to hurt dealers.  Now, if they did something shady like force all the dealers to take extra inventory and then immediately closed, that would be a nasty move and worthy of contempt.  But just closing?  Not something that was done "to" the dealers.

As for the former dealer who's livid that she built up a loyal customer base before the business disappeared, I'd think her customer list would still have value.  In fact, going into a new business she may get even more sales out of her customers since she would now have new products to offer.  People can only have so many silver doohickeys before their jewelry box is full and their neck can't support the weight of their necklaces...  

[bean29]

I am interested in a link for Silpada...I really would like to replace an item I loved so much I wore it out, afraid if I just use google, I will hit the wrong site.

I have a cousin and a niece that always seem to be marketing something. I don't know if they have been "stuck" with inventory though. My cousin is now selling wine, via party plan-so she probably doesn't have to worry too much.

[zibazinski]

Why don't I ever get invited to those kind of parties 🎉? The wine ones.

[dannylion]

Dec 14, 2016 12:32:01 GMT -5 bean29 said:

I am interested in a link for Silpada...I really would like to replace an item I loved so much I wore it out, afraid if I just use google, I will hit the wrong site.

I have a cousin and a niece that always seem to be marketing something. I don't know if they have been "stuck" with inventory though. My cousin is now selling wine, via party plan-so she probably doesn't have to worry too much.

I would think the silpada.com website would be the one you want.

I hope it does well. I have a lot of Berkshire Hathaway stock. 

[Deleted]

Dec 15, 2016 9:17:54 GMT -5 dannylion said:

I would think the silpada.com website would be the one you want.
I hope it does well. I have a lot of Berkshire Hathaway stock. 

Yes, that's the link. I've got B-H stock, too!

Just had an interesting thought: at the Annual Meeting they have a giant Exhibit Hall with vendors from many B-H companies and some offer very good discounts.  That's how I got my Justin pink and blue cowboy boots, which I LOVE and wear all the time.  Some purchases can't be discounted- Geico, for example, has agents there but insurance premiums are regulated so there's no discount to B-H shareholders.  I wonder if Silpada will be there and if there will be discounts.  (Although DH would point out that it doesn't make much sense to drive 3 hours and stay overnight in a hotel to get a discount of $110-$200.)

[Rukh O'Rorke]

I had a friend really taken advantage of via Mary Kay.

I think it's a real monomer telling people they have their own business. Pushing them to invest in them selves/ their business buying merchandise for resale.

[dannylion]

Dec 15, 2016 9:43:13 GMT -5 @athena53 said:

Dec 15, 2016 9:17:54 GMT -5 dannylion said:

I would think the silpada.com website would be the one you want.
I hope it does well. I have a lot of Berkshire Hathaway stock. 

Yes, that's the link. I've got B-H stock, too!

Just had an interesting thought: at the Annual Meeting they have a giant Exhibit Hall with vendors from many B-H companies and some offer very good discounts.  That's how I got my Justin pink and blue cowboy boots, which I LOVE and wear all the time.  Some purchases can't be discounted- Geico, for example, has agents there but insurance premiums are regulated so there's no discount to B-H shareholders.  I wonder if Silpada will be there and if there will be discounts.  (Although DH would point out that it doesn't make much sense to drive 3 hours and stay overnight in a hotel to get a discount of $110-$200.)

Is the Geico no-discount policy something new?  I recall getting a B-H annual report some years ago (maybe 10) with a notice that B-H stockholders would get an 8% discount on Geico insurance.  (My first thought upon reading this was why 8%.  Did they talk it over and decide 5% was too small but 10% was too much?)  At the time, Geico did not offer homeowner's insurance (they may still not offer it--I really don't know), so I wasn't interested and never paid any more attention to it.   

I would love to attend a B-H annual meeting someday.  It's on my bucket list. 

[Deleted]

Dec 15, 2016 17:23:24 GMT -5 dannylion said:

Is the Geico no-discount policy something new? I recall getting a B-H annual report some years ago (maybe 10) with a notice that B-H stockholders would get an 8% discount on Geico insurance. (My first thought upon reading this was why 8%. Did they talk it over and decide 5% was too small but 10% was too much?) At the time, Geico did not offer homeowner's insurance (they may still not offer it--I really don't know), so I wasn't interested and never paid any more attention to it.

I would love to attend a B-H annual meeting someday. It's on my bucket list.

I was guessing based on my knowledge of the insurance industry and I guessed wrong! I know they can't just knock 8% off their regular rates without the approval of the state insurance department. The regulators, in turn, won't approve discounts unless there's statistical justification- not just "we want to do something nice for our shareholders". My guess is that they did a study and found that loss experience for their stockholders was better than average and enough to justify that discount. Since Progressive found years ago that people with good credit histories were better risks (and there's been endless speculation as to why that correlation exists ever since), it's possible that people who are responsible and solvent enough to buy B-H stock are also better than average.

The meetings are an experience. One year NetJet pilots were picketing, one year Right to Life was (at the time B-H contributed to Planned Parenthood, after that Buffet threw up his hands and said shareholders could make their own decisions with their own money but he wasn't donating any company money to any charity). Q&A has become less interesting but more business-focused since they require questions to be submitted in advance and they're sorted out and asked by 3 financial journalists. This avoided the people who would have their adorable kid read a little poem before asking a question, Native Americans protesting an action by a B-H owned utility and other people with an agenda.

[dannylion]

Dec 15, 2016 19:13:40 GMT -5 @athena53 said:

Dec 15, 2016 17:23:24 GMT -5 dannylion said:

Is the Geico no-discount policy something new? I recall getting a B-H annual report some years ago (maybe 10) with a notice that B-H stockholders would get an 8% discount on Geico insurance. (My first thought upon reading this was why 8%. Did they talk it over and decide 5% was too small but 10% was too much?) At the time, Geico did not offer homeowner's insurance (they may still not offer it--I really don't know), so I wasn't interested and never paid any more attention to it.

I would love to attend a B-H annual meeting someday. It's on my bucket list.

I was guessing based on my knowledge of the insurance industry and I guessed wrong! I know they can't just knock 8% off their regular rates without the approval of the state insurance department. The regulators, in turn, won't approve discounts unless there's statistical justification- not just "we want to do something nice for our shareholders". My guess is that they did a study and found that loss experience for their stockholders was better than average and enough to justify that discount. Since Progressive found years ago that people with good credit histories were better risks (and there's been endless speculation as to why that correlation exists ever since), it's possible that people who are responsible and solvent enough to buy B-H stock are also better than average.

The meetings are an experience. One year NetJet pilots were picketing, one year Right to Life was (at the time B-H contributed to Planned Parenthood, after that Buffet threw up his hands and said shareholders could make their own decisions with their own money but he wasn't donating any company money to any charity). Q&A has become less interesting but more business-focused since they require questions to be submitted in advance and they're sorted out and asked by 3 financial journalists. This avoided the people who would have their adorable kid read a little poem before asking a question, Native Americans protesting an action by a B-H owned utility and other people with an agenda.

Thanks for the explanation!  As I said, the insurance wasn't a good fit for me, so I didn't pursue it any further. 

Someday I will make it to an annual meeting.  I hope it is a quiet year devoid of demonstrations, though.  I went to college in California in the 60s and have seen all the demonstrations I care to see. 

[Rukh O'Rorke]

while I can see how the MLM biz model worked in the 50's and 60's - it seems that the internet would certainly make it obsolete.

I can't see the appeal - either as a seller or buyer.

[Deleted]

Dec 16, 2016 13:13:48 GMT -5 Rukh O'Rorke said:

while I can see how the MLM biz model worked in the 50's and 60's - it seems that the internet would certainly make it obsolete.

I can't see the appeal - either as a seller or buyer.

I agree- one observation I've seen over and over (including from Silpada's founders when they sold out for the second time) is that party plans are no longer a good business model because so few women are home during the day and are very busy on weekends.  I did know an Avon dealer who placed catalogues in all the ladies' rooms at a previous employer.  I always wondered if anyone else had the right to do that (never saw catalogues with anyone else's name) or if she was the only one.

[swamp]

Dec 16, 2016 13:32:11 GMT -5 @athena53 said:

Dec 16, 2016 13:13:48 GMT -5 Rukh O'Rorke said:

while I can see how the MLM biz model worked in the 50's and 60's - it seems that the internet would certainly make it obsolete.

I can't see the appeal - either as a seller or buyer.

I agree- one observation I've seen over and over (including from Silpada's founders when they sold out for the second time) is that party plans are no longer a good business model because so few women are home during the day and are very busy on weekends.  I did know an Avon dealer who placed catalogues in all the ladies' rooms at a previous employer.  I always wondered if anyone else had the right to do that (never saw catalogues with anyone else's name) or if she was the only one.

Most of the "parties" I see now are online.