Best World

[Boon]

Is the company special among DS companies? IMO, conclusion based on Taiwan recent success, is premature.

Will the company become one of tomorrow global champions?

First of all, what make a DS company great?

- Great product. Few products of the company, has withstood the test of time. DR Secret/Seager and Optrimax are the few products, which well-accepted by consumers more than a decade. The company products are also suitable for DS, which are require high touch and personal service.
- Sustaining product innovation, based on previous successes. We knew, the company has regular new product launches.
- Effective training, promotional events. Training is always a big part of company strategy. Few will dispute with the company's ability on motivational speeches. Anyone?
- Compensation of distributors and members. Based on the distribution expenses in ARs, the compensation is competitive.
- Financially strong and viable. DS revenue, could be volatile with its biz model, thus financially strong is very important, IMO. The company is debt-free, and financial ratio and cash flow are good.

The company has the key ingredients, the rest is luck and execution, IMO. What do you think?

(not vested, why? price not right  )

P/S: Online facilities have been deployed by other major DS companies for years, but no success highlighted in their ARs. I reckon, the online facility might reduce the logistic cost, but will not play significant role in profitability and biz growth. I don't know the reason? May be personal touch, is still the big part of the biz model, and non-replaceable by machine. Any comment?

Ultimately, “special” = “ability to compete”
 
Just to add on to the “key ingredients” list:
 
Experienced management team with great strategic vision and execution capability is also essential.

Supply chain management capability is also essential – this includes production capability to meet both qualitative and quantitative demands. To meet this end as business grows, in-house manufacturing capability become critical as well.
 
Ability to attract and retain distributors is critical in DS business - competitive compensation scheme alone is not enough.

Up to date and relevant distributors support infrastructure (training, online platform etc.) that would empower distributors could make a difference but might still not be enough.

Company values such as harmonious culture, fairness and integrity could ultimately make a difference, I reckon.

Fairness and integrity include never go around distributors and never compete with distributors – e.g. distributors should get their fair share of commission for online orders placed by their customers – online platform should never be intended to compete with distributor but to improve efficiency of supply chain management.
 
A strong balance sheet could support both organic and inorganic growth.

BTW, Amway also peaked in 2013 (the 4th peak in 55 years).
 
Amway global sales (2010 to 2015):
2010 =   9.2 b
2011 = 10.9 b
2012 = 11.3 b
2013 = 11.8 b (peak)
2014 = 10.8 b
2015 =   9.5 b
 
IMO, given time, the grow-peak-decline pattern would ultimately be visible to all companies regardless of size or revenue (below or above USD billion), if it is not yet observable now in some.
 
Ultimately, what makes a company special, IMO, is its ability to bounce back stronger following each declining phase – which essentially boils down to ability to compete (again).
 
Amway had shown this ability to bounce back stronger following each decline. Can it do it again this time? Only time will tell…………………..
 
For BWI, it has also shown this special quality of being able to bounce back stronger following its first declining phase, attributable to its ability to compete and gain market share in the competitive Taiwanese market.
 
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BTW, investment in online platform already paid dividends……..

In 2Q2016 results announcement:

Taiwan
With the new contribution from the launch of the online store and opening of the third RC in Kaohsiung during the first quarter of the year, Taiwan market continued to gain traction in 1H2016. Revenue from Taiwan increased by $40.6 million in 1H2016 mainly due to the following: 

• Online platform contributed $16.4 million;
• Our Kaohsiung RC, which was opened in January this year contributed $12.1 million;
• Taichung RC and Taipei RC registered $12.1 million increase in sales. 
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