We monitor the Internet for all news that may affect network marketers and send it out in our
MLM Industry News Alerts. Today, this came through:
- Lehi-based XanGo cuts 10 percent of workers - 2nd Layoff since
March '07 Salt Lake Tribune - Salt Lake City, UT, USA 03/13/2009
The article mentions several of the other juice companies and then makes an interesting comment, "
layoffs are signs of stress in the multilevel marketing industry that generally touts itself as resistant to recessions because people who lost jobs or who are looking for more income sign up as distributors."
What do you think? Are sales of juice down for Xango because of the economy? Or should the reporter did deeper?
I would be interested in your opinion.
I will post non-Spam, thoughtful comments.
Interesting article. I believe the MLM industry is a recession proof industry but a lot of firms face stiff category competition. I believe Xango expanded so fast and became corporate "heavy" and are now feeling not only the competition from the "juice" industry but a dose of reality. It's a good solid company that needs to focus on keeping expenses in check.
ReplyDeleteI am new to MLM - two years. But I have almost 2,000 down-line in a uni-level stair-step pay plan. Ninety percent of new company growth is coming through my down-line and we are seeing a 40% increase over last year this same time. Every stat I have read says times like these give birth to MLM boom times. Due to the magnitude of this recession, there has to be a greater number than ever of people willing to do MLM.
ReplyDeleteXango has been around for several years and is now facing a lot of "juice" competition. Plus, it is hard for individuals to justify $30 a bottle on autoship when they need to make a house payment. Dropped autoships are going higher and therefore, growth may be retracting.
ReplyDeleteI can not think of a single industry or vertical that is "recession proof". Some are of course less vulnerable (sales of caskets) but these business are also less likely to exponentially grow during an expanding economy.
ReplyDeleteThe problem with the "juice" companies is simple economics 101 - too much competition. This includes competition from other MLM companies as well as from traditional distribution channels. I'd go so far as to say that a pint of fresh organic strawberries competes well with the exotic juice products.
Yes, let's dig deeper.
ReplyDeleteBrenda in PA
The benefits of the many expensive juice products made from exotic-plants-no-one-has-ever-heard-of-before are in most cases non-existant. The market is flooded with too many juice products with little or no true science or scientific validation behind them these days. Many are just cheap "me too" knock-offs of effective products developed by companies that actually spend money on real science. Others appear to be nothing more than products looking for a cause (i.e. something to "cure"), and other than being more healthy than soda pop drinks and a way to make money, they provide little if any benefit. People are starting to figure this out. I have no idea whether Xango fits in there or not. And forget all the testimonials - every juice or nutritional product I have looked at has someone who will stand up and claim that it "cured" just about anything. My advice: if you are going to promote a nutritional product, stick with a product line developed by a reputable company that spends significant funds developing products by (1) doing primary research and (2) validating product effectiveness with human clinical trials.
ReplyDelete