Robert Christian knows multilevel marketing is a bad word — “and it has been for a long time,” he said last week — but he doesn’t pretend that LifePlus International, the Batesville company he now owns by himself, isn’t an MLM.
“I don’t want to say, no, we aren’t multilevel when there are multiple people who get paid, so strictly speaking it is,” Christian told Arkansas Business. “But we have built it, really, to try to avoid all of that [negative] stuff.”
Tens of thousands of associates, mostly older folks, are responsible for generating annual revenue north of $200 million on more than 100 dietary supplements and nutritional products, most developed, manufactured, packaged, labeled and shipped by 100 employees in a brightly lit plant on the north side of town.
Fifty more work in the nearby corporate offices.
Christian will forgive you if you are unfamiliar with a 30-year-old Arkansas company of that heft since the vast majority of its revenue is generated in Europe, where another 350 direct employees work and where pre-pandemic sales conferences could attract 10,000 brand evangelists.
But he plans to start spreading the word and is working with an international agency to incorporate more traditional marketing strategies while maintaining the network that has fueled the company thus far.
The boyish 61-year-old helped found LifePlus, and he was in business with the other founders for a decade before that. As the “young kid of the group,” he used bank loans to buy out partners Bob Lemon, Tim Nolan and Bill Evans over the past four years.
With his partners’ retirements secure, he’s now expanding LifePlus in three ways:
► Expanding its marketing in the United States and other countries, which includes allowing consumers to purchase directly from the company as well as through MLM associates;
► Expanding categories of products, including gummies and CBD products; and
► Expanding the manufacturing plant in Batesville in four phases, ultimately doubling the local presence.
A 40-Year Project
In 1982, California native Robert Christian was barely in his 20s and working for a company that designed and installed network marketing systems that ran on revolutionary new technology called personal computers. He set up a system for a group of entrepreneurs in Batesville and was asked to stay and help grow their business.
Their original dietary supplement company is long gone, but another of their projects, ProDentec, employed 350 people to make and sell oral care equipment for dental offices when it was sold in 2006 for $34 million to Zila Inc. of Phoenix. After that sale, Christian and his partners were able to devote their full attention to LifePlus.
“It’s been a 40-year project of which LifePlus has been 30 years,” he said.
The formation of the European Union in 1993 streamlined the health-conscience European market. And as sales took off there, the company kept feeding that market, Christian said
Now multiple 40-foot containers leave Batesville every week for facilities in Britain and the Netherlands. Those distribution warehouses are each 30 to 40 times the size of the space set aside at the Batesville plant for distribution in the United States, according to George Dust, the general manager who marked his 17th anniversary with LifePlus last week.
The plant receives raw ingredients and mixes them in precise formulations for powders, tablets and capsules that are then dispensed into bottles that are scanned for metal contaminants, capped, weighed to make sure not a single dose is missing and then boxed for shipment. The process is subject to random inspection by the U.S. Food & Drug Administration, but LifePlus executives are careful not to claim any pharmaceutical benefits.
“These are nutritional products,” said General Counsel Scott Lancaster. “They aren’t medicine and aren’t represented as such.”
Sales associates are also forbidden to make unauthorized claims about the products, whose labels vary from country to country. “I don’t want regulators knocking on your mother’s door in the middle of the night saying [she is] selling a dubious product,” Christian said. “So we’re extremely conservative in protecting our people and work very hard at risk management so that your mom’s not at any risk.”
Next Up
LifePlus expects to break ground in the next few weeks on the first of four new buildings that will double the current footprint to about 250,000 SF and double the local workforce to about 300 within five years. The project’s architect is James Meyer of Taggart Architects in North Little Rock. M&A Jones Construction Co. of Batesville is the general contractor.
The total cost, according to Lancaster, will be at least $32 million but could be as much as $45 million, depending on inflation in construction costs and how big the fourth building, a new corporate office, needs to be.
An incentive package from the Arkansas Economic Development Commission including a $500,000 Community Development Block Grant, the Create Rebate incentives for new hires and a sales tax rebate on materials used in the new construction.
LifePlus is also buying 28,000 SF that used to be a Sears store on Harrison Street (Highway 69) for more manufacturing space, Lancaster said.
Dust, the plant manager, has been dispatched to choose equipment for making gummies, which is a bigger deal than it may sound. The gummy format has become wildly popular, but manufacturing capacity industrywide is limited. LifePlus currently has only one gummy product, a children’s vitamin manufactured by a small third-party vendor, and the big manufacturers are busy with major retail brands.
Not being able to make gummies or get an outsourcer to make them “has been a growth impediment,” Lancaster said. With its own equipment, LifePlus will be able to deliver many of its existing products in gummy form and even make third-party gummies, he said.
Sales Growth
On Nov. 1, LifePlus will roll out major changes in its marketing model.
Currently, all customers must have a sponsor and must technically become an associate eligible to earn commissions for referring other customers.
Associates are not required to buy inventory to resell, which is a common MLM practice, and there is no incentive to do so, Christian said. All orders are fulfilled directly by the company, no matter who gets the commission. Fewer than 30% of associates ever sponsor anyone else; most join in order to buy products for their own use.
Because every customer must identify a sponsor, there has been no point in traditional marketing to drive potential customers to the website — the kind of marketing that would make the LifePlus brand more familiar. “If you came in cold … and you just tried to order, you would have gotten stopped because you would have to give a sponsor,” Christian said.
So starting next month, LifePlus will have a company shop as well as individual online shops for traditional associates. “If I now sponsor an athlete or do something with Google AdWords or do an event or do anything normal marketing-wise that would push them to the website … without a sponsor they can now order.”
Christian said his sales network accepted the news that the company would now sell directly because commissions on new corporate sales will be divided, pro rata, among the associates. “The reason I was able to sell that to the network is because, one, having a really good relationship with them because in 30 years we’ve never screwed anybody and, two, the way I’ve built the system they are going to benefit either way.”
An MLM that has never screwed anybody? Can that be true?
A search for litigation and complaints suggests it just might be. The Arkansas attorney general’s office could find no complaints in the past 20 years, Google turned up no specific cases, and federal court records reveal only occasional litigation of the kind typical of any business — the most recent was a patent dispute.
“If I didn’t have other things to do, I’d be like the Maytag repairman,” said Lancaster, the general counsel. “I don’t get to do much lawsuiting.”
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