Market America

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Market America
Type Private
Industry Internet Marketing
Founded 1992
Founders JR Ridinger
Loren Ridinger
Headquarters Greensboro, North Carolina, United States
Area served Worldwide
Key people JR Ridinger (President and CEO)
Loren Ridinger (Senior VP)
Marc Ashley (COO)
Vince Hunt (COO, Shop.com)
Marty Weissman (EVP)
Dennis Franks (EVP)
Joe Bolyard (EVP)
Kevin Buckman (VP)
Kirk Wall (CFO)
Michael Brady (CTO)
Revenue USD 284.4 million (2009)[1]
Total assets USD 146.1 million (2010)[2]
Employees 650[3]
Website marketamerica.com

Market America/SHOP.com is an internet marketing and product brokerage company that utilizes the internet (including social media platforms) and one-to-one marketing to distribute a variety of products across numerous markets. The company was founded in 1992 by JR and Loren Ridinger. Market America now serves more than 3 million customers and has over 180,000 Shop Consultants worldwide. Headquartered in Greensboro, N.C., the company employs roughly 650 people worldwide in the United States, Australia, Canada, Hong Kong, Mexico, Taiwan, Philippines, Singapore and the United Kingdom.[4] Market America sells household cleaning supplies, jewelry, personal care products, auto care, cosmetics, nutritional supplements, custom websites, water purifiers, weight management, and more. It conducts business through several affiliated companies and was ranked 57th in Internet Retailer’s Top 500 List for 2014.[5] The company ranked 27th in The 2013 DSN's Global 100 List.[6]

History[edit]

In 1992, Market America was founded by former top Amway distributor JR Ridinger (real name, James Howard Ridinger), his wife Loren, and her brother Marc Ashley, now Chief Operating Officer. The company is headquartered in Greensboro, NC and employs around 650 non-union employees. It has around three million registered customers (called “Preferred Customers").[7]

Over the years, Market America has sold items such as auto care, electronics, apparel, water filtration systems, flowers, coffee, and oral hygiene through affiliations with outside companies that advertise and offer these items on Market America’s site.

In 1999, Market America and its CEO resolved, without admitting or denying any allegations, certain charges by the United States Securities and Exchange Commission concerning the manner in which the Company was taken public in 1994. The charges related to alleged violations of the federal securities laws in connection with the distribution of unregistered Market America stock. The company’s CEO agreed to refrain from future violations of the federal securities laws. The SEC matter related solely to Market America’s initial stock distribution in 1994 and was unrelated to the company’s day-to-day business or its direct selling business model.[8] However, the company was made private when all outstanding shares were purchased by the company's CEO in 2001.[9] The company has remained private since.[10]

The international expansion of the company began with the opening of Market Australia in 2002, Market Hong Kong in September 2007,[11] and Market Philippines in October 2010.[12] In February 2012 Market United Kingdom was launched[13][14] followed by Market Mexico in June 2012.[15]

At the August 2008 Market America International Convention, COO Marc Ashley announced the partnering of Market America and iMirus.[7] This partnership resulted in MA Newsstand which would offer Market America customers both digital and print versions of magazines, books, and catalogs.

Later that year, the announcement for integration of Silver Creek Systems [16] into Market America’s website to increase the data quality and consistency in online search performance was released. In late 2010, the company bought shopping comparison giant Shop.com for an undisclosed amount.[17]

Products and Services[edit]

Market America branded products cover various industries such as: health & nutrition (Isotonix, etc.), home & garden care (Snap), pet care (Pet Health), automotive care (Autoworks), weight management (TLS), anti-aging, personal care (Royal Spa, Fixx, Skintelligence), cosmetics (Motives by Loren Ridinger), high-end jewelry (Loren Jewels, Yours by Loren Ridinger), and water filter systems (Pure H20). Services include personal financial management (ma Capital Resources) and commercial websites (ma WebCenters).

Health & Nutrition[edit]

Market America’s Isotonix line of nutritional supplements was introduced in 1993 and today contains more than 20 products that focus on a number of areas, including cardiovascular system health, antioxidant protection, blood sugar maintenance, and immune system support. Isotonix products use a proprietary isotonic delivery system of powder which the end user mixes with water to produce a solution.[18] The company recommends that this solution be consumed on an empty stomach.

The Isotonix brand has grown in recent years with the inclusion of Might-a-Mins Spectrum,[19] a line of children’s supplements designed for children in need of digestive, metabolic, or neurological support; Isotonix Custom Cocktail, a supplement blend that can be customized for the specific needs and wants of the consumer; and Mochatonix.

Market America’s Prime anti-aging line consists of 12 formulated[20] supplements geared toward individuals concerned about aging. These include but are not limited to HGH production, visual system maintenance, sexual function, and healthy metabolic rate.

In 2004, the Transitions Lifestyle System (TLS) weight management program was introduced. It does not use calorie restriction; rather, it utilizes a food’s ranking on the Glycemic Index. In addition to a low-glycemic index diet, it also emphasizes regular exercise and behavior modification, as well as the use of Transitions Lifestyle System-branded supplements that support weight management efforts. In 2010, Market America launched the TLS Shape Up program. Using similar concepts as Transitions Lifestyle System, TLS Shape Up is geared to children ages 10–17.[21]

Customized solutions consisting of nutritional supplements are also offered through its nutraMetrix® division.[22]

Cosmetics[edit]

Introduced in 1997 by Market America and re-introduced in 2009, "Motives by Loren Ridinger" is a cosmetics line. Among the products are custom mineral powders, silk lipsticks, anti-aging lip liners, and custom eyeshadow palettes. In early 2012, the line was extended with "Motives for LaLa".[23]

Business operations[edit]

Business model[edit]

According to Market America, all products are manufactured by other firms and are exclusively marketed by Market America. Individual persons and business entities alike register as independent distributors, referred to as "UnFranchise Business Owners" or as independent sales representatives. The latter gets paid commissions, as well as makes money from retail profits on products sold. Products are marketed and sold through traditional word-of-mouth as well as through a standardized online shopping portal. Customers can also access and shop from websites of many online retailers and manufacturers called "Partner Stores"[24]) via the portal. In summer 2011, Market America introduced barcode scanning[25] for iPhone and Android as well as ShopBox for use on Facebook.[26]

Acquisition of shop.com[edit]

In December 2010,[3] Market America began acquisition of Shop.com, a shopping comparison site on the Internet.[27] The acquisition combined shop.com’s database technology with Market America’s Cashback program and network of independent distributors (now called "Independent Shop Consultants"). Market America will remain in Greensboro, N.C. and the previous shop.com staff will remain in Monterey, California as well as in London, UK. In September 2011, the two-step integration process was half-complete.[28]

Reception[edit]

Criticism[edit]

Market America has been criticized as an "incarnation of multilevel marketing" whose products are "almost interchangeable with what you could find in your local CVS or Duane Reade for half the price" and as a business driven "by distributors finding customers, introducing them to Market America products, and then explaining to them that by selling this product, they can become as wealthy as, well, JR Ridinger."[29]

In 2004, Consumer awareness group president Robert FitzPatrick commented that based on available figures, the company's growth "could not go on forever" and disputed the claim that "distributors can achieve "financial independence", and Mario Cibelli of the investment firm Marathon Partners said Market America was "a well-run business" and "seemed pretty solid and honest" but that in his opinion "It's not necessarily the most sustainable business model. Eventually, they'll be challenged for growth".[30]

In 2011, Consumer Awareness Institute president Jon M. Taylor ascribed Market America's success to a "stage" typical of multilevel marketing companies, saying, "What happens in these companies, because of the endless chain of recruitment, they get into a momentum phase where they grow rapidly, and to avoid leveling off, they set up new products and go to new countries." According to Taylor, a study of similar multilevel marketing businesses showed that "99.6 percent of people who sign up as distributors wind up losing money."[29]

Lawsuits[edit]

On March 3, 2006, Steve Sawyer sued Market America in Guilford County, North Carolina claiming breach of contract and violation of the North Carolina Wage and Hour Act with respect to certain Internet consulting services he was providing to the company. Sawyer alleged that Market America failed to pay him for $8,333.34 in monthly services and a $25,000 bonus.

In 2007, the court granted Market America’s Summary Judgment motion with respect to Sawyer’s claim that Market America had violated the North Carolina Wage and Hour Act. Sawyer appealed the decision to the North Carolina Court of Appeals, which affirmed the trial court’s decision in favor of Market America in June 2008.[31] Sawyer appealed to the North Carolina Supreme Court, which denied review on December 11, 2008.[32] On December 26, 2008, Sawyer filed a lawsuit against Market America in Multnomah County, Oregon, based on the same facts as the North Carolina lawsuit. In 2009, Market America sought to bring the North Carolina lawsuit to trial. Sawyer filed a motion to stay the North Carolina lawsuit, which was granted.

Later in 2009, Market America filed a motion to stay the Oregon lawsuit, which was granted. Sawyer appealed the decision to stay the Oregon lawsuit to the Oregon Supreme Court, which denied review in January 2010.[33]

Philanthropy[edit]

Market America was the title sponsor of the 10th annual Fashion Art Ball to benefit the Cystic Fibrosis Foundation in early April 2008.[34]

See also[edit]

References[edit]

  1. ^ "The Inc 5000 Market America profile". 2010. Retrieved 17 August 2011. 
  2. ^ "Market America Worldwide, Inc. and Affiliates Consolidated Balance Sheet" (PDF). 31 December 2010. Retrieved 17 August 2011. 
  3. ^ a b Robin Wauters (15 December 2010). "Market America Acquires Bill Gates-Backed Shopping Site Shop.com". Retrieved 17 August 2011. 
  4. ^ Top 500 U.S. E- retailers
  5. ^ "Internet Retailer - Top 500 - Market America profile". 2010. Retrieved 17 August 2011. 
  6. ^ "The List - Direct Selling News". 2013. Retrieved 15 June 2013. 
  7. ^ a b "Market America and iMirus Partner to Create World’s Largest Online Newsstand for Magazines, Catalogs, and Books" (Press release). 16 September 2008. Retrieved 17 August 2011. 
  8. ^ "Litigation Release No. 16131A / May 4, 1999". U.S. Securities and Exchange Commission. 4 May 1999. Retrieved 17 August 2011. 
  9. ^ "Market America CEO looks to take company private". Retrieved 26 March 2012. 
  10. ^ "Company Overview of Market America, Inc.". Retrieved March 26, 2012. 
  11. ^ "Market America opens operations in Hong Kong". Retrieved 26 March 2012. 
  12. ^ "Market America opens Philippines site". Retrieved 26 March 2012. 
  13. ^ "Market America expanding into UK". Retrieved 26 March 2012. 
  14. ^ "Market America expands to the United Kingdom". Retrieved March 26, 2012. 
  15. ^ "Market America Launches in Mexico with Tremendous Success". Retrieved 15 June 2012. 
  16. ^ "Market America Selects Silver Creek Systems". 22 December 2008. Retrieved 17 August 2011. 
  17. ^ "Shop.com finds a buyer". Retrieved 26 March 2012. 
  18. ^ "Isotonix Delivery System". Retrieved 26 March 2012. 
  19. ^ "Children's Isotonix". Retrieved 29 September 2011. 
  20. ^ "Prime Anti Aging Nutraceuticals". Retrieved 29 September 2011. 
  21. ^ "Market America 2010 International Convention: Looks to Social Media, Celebrity Partnerships & Technology Enhancements, Scottie Pippen & Kim Kardashian Partner with Market America" (Press release). 11 August 2010. Retrieved 1 August 2011. 
  22. ^ "About the Company". Retrieved 26 March 2012. 
  23. ^ "La La Anthony launches makeup line". Retrieved 26 March 2012. 
  24. ^ "Partner Stores". Retrieved 23 August 2011. 
  25. ^ "Barcode Scanning". Retrieved 23 August 2011. 
  26. ^ "ShopBox". Retrieved 23 August 2011. 
  27. ^ "Market America to buy Shop.com". 15 December 2010. Retrieved March 26, 2012. 
  28. ^ "Market America completes the heavy lifting of integrating Shop.com". September 26, 2011. Retrieved March 26, 2012. 
  29. ^ a b "Market America's American Dream Machine". June 23, 2011. Bloomberg Businessweek. Retrieved 1 May 2014. 
  30. ^ Hoag, Christina (February 16, 2004). "Direct Sales Company Allows Miami-Area Founders to Enjoy Extravagant Lifestyle". The Miami Herald Knight Ridder/Tribune Business News (via HighBeam (subscription required)). Retrieved 2014-05-02. 
  31. ^ Steve Sawyer v. Market America, Inc., COA07-1257 (North Carolina Court of Appeals 3 June 2008).
  32. ^ "Supreme Court of North Carolina Petitions 11 December 2008". 11 December 2008. Retrieved 17 August 2011. 
  33. ^ Steve Sawyer v. Market America, Inc., 7 (Oregan Supreme Court 21 January 2010). Text
  34. ^ "Loren and James Ridinger Announce marketamerica.com will Sponsor 10th Annual Fashion Art Ball to Benefit Cystic Fibrosis" (Press release). 1 April 2008. Retrieved 17 August 2011. 

External links[edit]