Leadership in Action - English - 202101

ABusiness Built for the LittleGuy

Positioned for Persistent Growth Melaleuca is a growth-oriented business. Our success just continues to build upon itself. From the outside, that success may be surprising, but for us, it makes perfect sense. We were founded on solid principles. And we continue to attract quality, hardworking individuals who are looking for a way to get ahead in life. A Melaleuca business is the unique solution that allows you to prosper as you focus on helping others.

In 1985, a young executive named Frank VanderSloot left his position as vice president in a Fortune 500 company to help some friends with a fledgling business called Oil of Melaleuca. They told him it was a multilevel marketing (MLM) company. When he agreed to take the job, Frank did not fully understand how an MLM worked, but he knew the founders of the company well and he trusted them. So the fact that it was an MLM did not originally concern him. When Frank arrived in Idaho Falls, the company had been in business for only three months. The main product was Melaleuca Oil. It was unique, natural, and was very effective for a spectrum of uses. Frank thought it had great potential. He also thought it would be fun to be involved with starting a new company with a unique new product. The more he learned about Melaleuca Oil, the more excited he got about its potential. But soon after joining the company, Frank became concerned about the company’s business model. Rather than trying to sell products to end consumers, the company was focused on “setting people up in business” in hopes that they would purchase large quantities of “starter kits” and other products to get started. The goal was to try to get them to purchase $5,000. If that didn’t work, the next goal was $2,500 – and, as a last resort, $1,000. “Business builders” could earn big money by getting others to buy inventory up to one of those three levels. Right from the start, that didn’t seem right to Frank. As you might expect, some people were making a lot of money and others were getting hurt. The more Frank learned about the multilevel marketing model, the more concerned he became. Although he was only 36 years old at the time, he had already spent 12 years in management in two very successful Fortune 500 companies. In those two companies, he had learned that the key to having a successful business is to have products that

consumers really want to buy and use. That’s a completely different model than enticing people to buy huge amounts of products that they could never use. He soon realized that not only could the company’s MLM model never be successful over the long term, it was morally wrong. It did not take Frank long to decide that he did not want anything to do with MLM. After just three months, Frank told the owners of the company that he was not willing to operate the MLM business model they had designed, and he convinced them that they should close it down. But Frank did not have plans to abandon the distributors of Oil of Melaleuca. He had been won over by their grit and determination to make a better life for themselves and for their families. Frank knew he could not let them down. He promised them that he would develop a new business model that would focus on developing natural, environmentally friendly products to sell to end consumers rather than into inventories of gullible “business builders.” He invited the former owners of Oil of Melaleuca to partner with him in this new venture. They agreed. Frank reached out to scientists to help him create an array of new natural cleaning products that would be free of toxic chemicals and be environmentally friendly. The new company would simply be called “Melaleuca.” The doors of Melaleuca officially opened on September 1, 1985. On the first day of business, Frank announced that the mission of the company would be “To enhance the lives of those we touch by helping people reach their goals SM .” That mission has not changed to this day. It explains everything we do. Melaleuca simply exists to help people reach their goals – whatever they may be. Frank grabbed his suitcase and went on the road to explain the new company to

“Inmy 29 yearswithMelaleuca, I’ve talked to hundreds of peoplewho come from other businesses, and I always ask them, ‘What was your company’smission statement?’ Most say they didn’t have one and the rest say that they can’t remember, which is poignant because if you can’t remember it, it’sworthless. “It’s our job tomake sure that newMarketing Executives really hearMelaleuca’s Mission Statement loud and clear, because that’swhat drives us. The truth is if you don’t fully buy into theMission Statement and the power behind it, you probably won’t be very successful here.

The original company Frank was hired to run shortly before shutting its doors forever.

Of course, that success could never come if Melaleuca didn’t provide unique, affordable products that customers love to use and are excited to share with their friends. For more than three decades, Melaleuca has led the way on several key consumer trends. Pioneers in Natural Products: Melaleuca has been a pioneer in the natural-products marketplace since the mid-1980s. Not only is our dedication to the environment apparent in our product line but in every aspect of our business. And we are one of the only nature-inspired product companies left that is still privately owned and hasn’t sold out to large national conglomerates. Our products are not only inspired by nature, they are proven by science. As innovators in health and wellness, our products are unequaled. We utilize clinical research, and many of our products are protected by patents. Over the years, we have created an all-star roster of product formulas and technologies that are unrivaled anywhere in the world. We call them jaw-droppers because once people understand how they work and what they do, their eyebrows go up, their eyes get wide, and their jaws quite literally drop. And once customers experience them, they never go back to grocery store brands.

“One of my favoritewords in theMission Statement is ‘reach.’ You can’t help someone reach their goals unless they reach back. So you both have to reach. But when you help people reach their goalswith Melaleuca, it comes back to you tenfold.” – Corporate Director 9 Ed Bestoso

the former distributors of the old “Oil of Melaleuca.” He explained that he was no longer going to operate the MLM model of loading inventories, but he hoped that people would purchase approximately $29 every month. That’s what he thought they would consume on a monthly basis. People quickly did the math. A 7% commission times $29 a month = $2.03. That means that a Marketing Executive would only receive $2.03 per customer every month. Perceiving that this was no longer going to be a “get- rich-quick scheme,” many said they were not interested. They left for greener pastures. But a few stayed on with Frank to begin the new venture. They saw his vision of residual income. And they understood that the $2.03 from every customer, every month would eventually add up to larger commissions over time than they had been getting on the one-time purchase of a huge inventory. They saw the value of residual income that would be there month after month rather than just a one-time shot. Those early pioneers built the foundation for a huge, successful company. Their faith in the company and their hard work have paid off. Many of them have made millions of dollars over the last 35 years. The company that they helped start has been one of America’s fastest-growing companies. The concept of exceptional products at reasonable prices has caused the company to flourish. Needless to say, with the company’s stellar track record, it is much easier to start a new Melaleuca business today than it was back then. We are grateful for these pioneers who paved the road for the thousands who followed them. When we asked Frank if he knew in the beginning that the company was going to be this successful, he told us, “I thought it was going to be great. But I didn’t know it was going to be this great!” Melaleuca’s global headquarters today, built and operated debt-free.

Made in the USA: We develop, manufacture, and distribute our own products – made by our own employees right here in the United States. In fact, Melaleuca is the largest consumer packaged goods manufacturer in the Northwest. Delivered Directly to You: At Melaleuca, we invented the first monthly shopping club. For more than three decades, we have allowed consumers to shop from the comfort of their homes and experience direct-to-their-door delivery. We have become a world leader in e-commerce, mobile shopping, and fast-turnaround home delivery. Lucrative Customer Referral Program: For those who decide to tell their friends about Melaleuca, we have a lucrative customer-referral program that rewards

those who simply share the shopping club experience with people they know. It’s lucrative, straightforward, and provides unequaled income. The best part? It can work for everyone! It’s perfectly scalable, whether you’re looking to completely redefine your lifestyle or just supplement your income. 95%+ Monthly Reorder Rate: Shoppers are so impressed with Melaleuca products that 95% of the customers who shopped with Melaleuca this month will shop again next month. Because our shoppers love our products, you know that the customers you have helped enrol in the shopping club will come back month after month, generating a residual income commission for you every time they shop. That’s the power of a 95% reorder rate.

“It’s so refreshing to have locked arms with a company that day in and day out embodies their mission statement. I awaken with so much excitement and focus knowing I represent products and a company that truly enhance lives. Nowadays, people are not as motivated by simply

a paycheck. It’s safe here. No one can get hurt. And it’s much easier to do the necessary work when you feel connected to a deeper purpose or mission.” – Corporate Director 4 Jefferson Green

While the formulas may have evolved over the years, the dedication to creating unique, effective, nature-based wellness solutions has not.

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