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Cosmetics

Forever Living Products hopes to see sales up in H2

Autor: Andreea Groenendijk | Data: 10 Aug 2006
 
The nutritional supplements and cosmetics company bets on stronger turnover this year despite having ended the first half below last year's level.

Forever Living Products in the first half of this year posted turnover worth 30.9 million RON (8.7 million euros), 13% lower than the figure registered in the similar period of last year, says Gabor Szocs, the general manager of the company.

Together with his wife, Dora Szocs, he has been running the Forever Living Products business since its entrance on the market, seven years ago.

"In July 2005, we operated a price increase of 25%, a reason why the
 

 
 
value of our sales exploded in the first half of last year compared with the corresponding period of 2004. In the first six months of this year, we derived 87% of the sales volume we reached in the first six months of the previous year," explains Szocs.

On the other hand, the company has budgeted growth by at least 10% from 2005 for the entire 2006. "The second half will definitely bring a significant sales advance compared with the same period of 2005 and we are confident we will manage to end 2006 with 10-15% growth compared with 2005," says the representative of Forever Living Products.

The company reached turnover worth 18.2 million euros and income standing at 0.7 million euros last year. It had 55 employees at the end of 2005. Last year's sales were almost double the ones generated in 2004.

"We are targeting growth by only 10-15% this year because we are sure it will not be easy for us to get past the moment of price increases. After more than six years during which we had not pushed prices up, we had to bring product prices in line with the policies embraced by the company in Europe," Szocs also said.

The company's products are distributed in a Multi-Level-Marketing (MLM) system and target people with average and above-the-average incomes. The MLM sales system entails several layers of distributors - individuals earning money on the basis of commissions from their own sales and from sales generated by their downline (other people they got to join the system, whom they coordinate).

The way products are promoted in a MLM system has been often criticised, in the sense that not all distributors manage to sell enough products to register substantial gains. Moreover, in such a system it is the ability to discuss face to face with potential customers that matters.

On the other hand, there have been discussions related to the fact that not all distributors pay taxes to the state for sold products, which casts a shadow of doubt over companies amid the lack of proper legislation.

The company ended last year with a number of about 150,000 distributors, with the company's representatives stating they were aiming to expand the network by 20%.

Forever Living Products

  • In H1 posted turnover worth 30.9m RON (8.7m euros), down 13% from the same period of last year

  • In July 2005 raised prices by 25%, which pushed up sales in the first half of last year

  • Has budgeted full-year growth by at least 10% for 2006 compared with 2005

  • Registered turnover worth 18.2m euros and income of 0.7m euros last year, amid doubling sales compared with 2004

  • Its products are distributed in a MLM system andreea.groenendijk@zf.ro
     
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