Melaleuca grows its sales from the ground up. Deriving its name
from the tea tree (Melaleuca alternifolia), the
company is a leading manufacturer and direct seller of more
than 350 personal care and household products, many of which are
environmentally friendly. Its products portfolio includes
cosmetics, laundry care items, household cleaners, first-aid kits,
and vitamins. They're marketed through a global network of
independent sales representatives and through Melaleuca's website.
Besides consumer products, the company offers home security
systems in the US and Canada. The company was founded in 1985 to
market a tea tree oil formulation called Melaleuca Oil.
Based in Idaho, Melaleuca operates its business primarily across
North America, but also in Europe, the Middle East, and
Melaleuca has focused on growing its operations in recent years
to boost its production capabilities. The company built
a 223,000-sq.-ft. addition to its manufacturing and
distribution center in Knoxville, Tennessee. It
also built a 37,000-sq.-ft. plant near
its headquarters in Idaho. The two projects cost
more than $26 million, which represents just a portion of
more than $110 million Melaleuca has poured into infrastructure
investments since 2009 to support its business.
It's also moving in 2014 to new digs it has been building since
late 2012. Having outgrown its existing home office, Melaleuca
plans to unveil a new 371,000-sq.-ft. headquarters that will house
both its domestic and international operations, sans the company's
manufacturing and distribution.
Sales and Marketing
The consumer products company operates worldwide across 17
markets. It markets its products directly to its customers through
catalogs and online. Rather than allocating funds to advertising,
middlemen, and retail stores, Melaleuca focuses on scientific
research and product effectiveness to get its name out.
Some 63% of Melaleuca's customers are only interested in the
company's products. The remaining group pursues the financial
opportunities offered through the company's direct sales model. One
out of nine customers (or 11%) decide to start their own Melaleuca
business and achieve director status or above.
Melaleuca logged a 9% increase in worldwide sales to $1.13
billion in fiscal 2012. While it serves several global markets, the
company posted its biggest gains in the US and Canada. While it
continued to grow its business in North America in 2013, the
company's international efforts accounted for 45% of its revenues
The direct seller has extended the global reach of its
sales force to make it less reliable on the US. Its brand is
expanding throughout the Asia/Pacific region, especially
in Japan, Taiwan, and South Korea. About a
quarter of the company's revenues are generated outside the
US. And even amid the global economic downturn, the company's
revenues have been on an upswing in recent years. In 2014 Melaleuca
extended its reach to Mexico, chasing after strong demand for its
wellness items and the country's entrepreneurial spirit.
The direct-sales industry as a whole has seen an increase in the
ranks of independent sales representatives as some companies have
slowed hiring or reduced their headcount to stay afloat. Other
individuals have also started careers in direct sales to supplement
their existing incomes.
CEO Frank VanderSloot took over Melaleuca in 1985, when it was
much smaller and suffered from poor management. His focus on
frugality has helped to drive the company's earnings and growth
since then. VanderSloot, a devout Mormon with 14 children, also
encourages sales representatives to support causes that espouse
traditional family values. As such, the company has backed
humanitarian efforts in the US and abroad through its
Melaleuca Foundation. In recent years the foundation has extended
assistance to Ecuador, donating time from volunteers and funds to
support St. Lucia's Children's Home.