Shaklee-FYI

[Guest guest]

1) From article: " He said that Shaklee's vitamins and supplements can help

poor people combat malnutrition, while its multilevel marketing model offers

a way for them " to gain an income and do it in a way that allows them to

help other people. "

2) " Many of the distributors at the meeting were body workers -- massage

therapists, Pilates instructors -- who sell Shaklee as an adjunct to their

businesses. "

3) " " A lot of distributors do this to justify spending $1,200 to $1,500 a

year on their own health, " Van Winkle said. "

4) " Critics say Shaklee and other sellers of supplements often exaggerate

product claims. What's more, they say, Shaklee's prices are higher than

those charged by drugstores. Shaklee counters that its claims are backed by

scientific research and that higher quality justifies higher prices. "

------------------------------------------

1) But who are they going to sell the overpriced supplements to? Other poor

people with empty promises?? You also take advantage of your friends and

relatives who don't know how to say no.

2) Where are the hairdressers? This is taking advantage of your clients...

3) That could buy alot of fruits and vegetables and other healthy food!

4) They have been saying this for 30 years that I have heard of the

company - where is the research?

I cringe every time I get an invite to these various " parties " .

________________________________________________________________________________\

___

Fifty years ago, during the era of synthetic fabrics, processed food and TV

dinners, an Oakland chiropractor started a company to sell natural products to

improve people's health. Even earlier, in 1915, before the concept of vitamins

was widely understood, Dr. Forrest Shaklee had invented something called

Vitalized Minerals.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/08/13/SHAKLEE.TMP

Shaklee Corp., the company he founded, now operates in Pleasanton, selling

vitamins and other nutritional supplements, natural makeup and biodegradable

cleaning products through a multilevel marketing force of 750,000 distributors

and members.

Later this week, 10,000 Shaklee distributors will converge on San Francisco's

Moscone Center for their annual conference and 50th anniversary celebration.

They'll hear from such luminaries as Nobel Peace Prize-winner Wangari Maathai,

Arctic explorer Will Steger and former New York Mayor Rudolph Giuliani.

Under the leadership of new owner Barnett, 41, a Wall Street financier,

the company is pushing to go increasingly green and global. For example, it

plans to plant trees in San Francisco and Kenya to offset the emissions its

convention will create.

Barnett, who is chairman and chief executive officer, spent $310 million of his

and his family's money to buy Shaklee two years ago. Under its previous owner,

Yamanouchi Pharmaceutical Co. of Japan, sales slumped from $627.5 million in

1988 to less than $500 million last year. Barnett said sales have resumed

single-digit growth and the company remains profitable.

Although Barnett has a blue-chip business background, with degrees from Yale and

Harvard universities, he speaks of Shaklee in evangelical terms, saying it can

spread economic prosperity and good health around the world.

The company " can serve as a model for combining private- and public-sector

goals, " he said in an interview at the company's Pleasanton offices, which are

outfitted in soothing earth tones of green and brown and surrounded by gardens

growing samples of herbs used in its products.

Shaklee now operates in five countries: the United States, Canada, Mexico,

Malaysia and Japan. Barnett hopes to expand it into 50 countries within a

decade. He said that Shaklee's vitamins and supplements can help poor people

combat malnutrition, while its multilevel marketing model offers a way for them

" to gain an income and do it in a way that allows them to help other people. "

For some people, made cynical by stories about get-rich-quick ploys and pyramid

schemes, multilevel marketing carries an unsavory whiff of hucksterism.

Multilevel marketing, practiced by such companies as Shaklee, Avon, Kay and

Tupperware, involves networks of independent salespeople selling directly to

customers, often in their homes. There are no fixed retail locations.

Salespeople earn commissions and bonuses both on the sales they make directly

and those generated by salespeople they recruit.

In contrast, pyramid schemes, which often are scams, promise payments just for

bringing in new recruits rather than for actually selling products.

Analysts who follow multilevel marketing, also called direct sales, say it's a

valid strategy that lets companies eliminate the expenses of storefronts,

salaried salespeople and advertising while harnessing the power of anecdotal

testimonials and devoted distributors who work entirely on commission.

" Anytime you're a finance guy looking at the direct-selling business model, you

can't help but love it, " said Van Winkle, managing director of Canaccord

, a Canadian investment bank that counts direct sellers Herbalife and Usana

Health Sciences as clients.

" It's very low capital, " he said. " You have an outsourced sales force. You don't

have to make big investments behind the selling of your product. The gross

margins in direct selling are very good -- about 80 percent gross margin on

sales. They give essentially half of that to the distributor as a sales

commission and end up with 40 percent. That's a good margin. "

Shaklee has a remarkably low headcount for a company its size. It has 334

employees, 193 of them at its Pleasanton headquarters, 57 at a Hayward R & D

facility and 84 in its Groveport, Ohio, distribution center. Its products are

manufactured by outside contractors.

Shaklee's distributors each peddle products according to their own business

plan, anything from Tupperware-style parties to one-on-one meetings to online.

Press materials describe distributors as including " stay-at-home moms, heartland

couples, retirees and young entrepreneurs. "

On a recent weekday, a half-dozen distributors gathered at the Berkeley home of

Margaret Trost for a semiweekly meeting at which Trost, a Shaklee " key

coordinator, " offers advice and support to help them build their businesses. It

was an informal and friendly gathering, with a baby and a miniature poodle in

attendance.

Trost, 43, started with Shaklee 16 years ago and built her network to the point

where she says she made $103,000 last year working 10 hours a week. She devotes

most of her time to a nonprofit organization she founded to feed children in

Haiti.

The others have much smaller Shaklee businesses, ranging from 10 to 40 customers

(or members, because most customers pay $19.95 a year to get a 15 percent

discount on the products). That's typical of Shaklee's distributors, most of

whom are women selling the products part time for supplemental income.

Many of the distributors at the meeting were body workers -- massage therapists,

Pilates instructors -- who sell Shaklee as an adjunct to their businesses.

Others came from diverse careers: There was an ordained minister and a

government executive. All spoke fervently of the role Shaklee products had

played in their own lives, helping with problems from insomnia to PMS to

exhaustion.

That level of loyalty tends to characterize distributors at many multilevel

marketing companies.

" There are a lot of hard-core believers of the products they sell, " said Van

Winkle, the investment banker. Moreover, distributors often are their own best

customers. Some primarily sell to themselves and a few friends and neighbors.

" A lot of distributors do this to justify spending $1,200 to $1,500 a year on

their own health, " Van Winkle said.

Trost talked the group through some basics of selling: approaching people

without imposing, communicating product information, following up.

" It takes a long time to educate customers to the point where they're committed

to their health, " she said.

The women talked about ways to find potential customers, such as

business-networking groups.

" Even though the product is so awesome, you have to deal with many of the

challenges sales brings up, " said Hammon, 45, a massage therapist.

Critics say Shaklee and other sellers of supplements often exaggerate product

claims. What's more, they say, Shaklee's prices are higher than those charged by

drugstores. Shaklee counters that its claims are backed by scientific research

and that higher quality justifies higher prices.

" Shaklee makes a lot of claims that are just not substantiated by scientific

evidence, " said Schardt, senior nutritionist at the Center for Science in

the Public Interest in Washington. For example, he said, Shaklee said its Memory

Optimizer has two clinically proven ingredients to increase memory function.

" Research for the individual ingredients is not very convincing: very little,

weak, inconsistent (and) effects are modest, " Schardt said.

Shaklee disagreed with Schardt's assertion, saying it researched, reviewed and

used data from more than 50 scientific studies and research articles to develop

the formulation.

Dr. Barrett, who runs Quackwatch, which monitors multilevel marketing

companies, agreed that Shaklee's product claims seem overblown and its prices

high. For example, he said, it sells 90 100-milligram chewable Vitamin C tablets

for $7.60 (member price) to $8.95 (nonmember price). That's four or five times

what the supplement company NBTY charges, he said.

In a written response, Shaklee said: " Our higher cost is based in part on the

quality and potency of our products. ... One clinical study confirms the vitamin

C bioavailability of Shaklee chewable Vita-C 100-mg. "

Shaklee CEO Barnett said the company " is incredibly cautious and careful in our

claims. ... We don't produce products that aren't clinically proven. "

--------------------------------------------------------------------------------

It all started with vitalized minerals

Chiropractor Dr. Forrest Shaklee founded the company that bears his name in

Oakland in 1956 at age 61. He traveled throughout California with his two sons

in a Plymouth station wagon, selling his products. Two decades later, Shaklee

saw his business become a Fortune 500 company.

During his life, he played golf with Edison, met Harvey Firestone (of the

tire company) and Henry Ford, was friends with Jennings and flew

with Lindbergh in a plane called Spirit of Unrest. He also corresponded

with Casimir Funk, the Pole who coined the term " vitamin " in 1912 (three years

before Shaklee introduced vitalized minerals called Vita-Lea) and created

headlines in 1919 as one of the first doctors in Iowa to make house calls by

airplane (a two-passenger Curtis).

Shaklee had his own radio show on which he often spoke about conservation. He

designed a forerunner of the modern recreational vehicle, which he called a

" touring home. " He cultivated " Dr. Shaklee's experimental garden " on the roof of

his office building, consisting of organic vegetables and greenery grown in sea

sand. The sand was fertilized with his vitalized minerals.

The good doctor recommended a diet of whole wheat bread, vegetables, fish, white

meat of chicken, no sugar and no fats. Egg yolks were restricted, while egg

whites were permissible.

Source: " When Nature Speaks: The Life of Forrest C. Shaklee Sr,, " Shaklee Corp.

Check Nutrition at:

Nutrition.teach-nology.com

Ortiz, RD

nrord@...

" Too much of a good thing can be wonderful. "

Mae West