Market America is a multi-level marketing company that describes itself as a product brokerage and internet marketing company. Market America, which distributes a variety of products in several countries, was founded in 1992 by JR and Loren Ridinger. Headquartered in Greensboro, N.C., the company employed over 650 people as of 2010. Market America's offerings include household cleaning supplies, jewelry, personal care products, auto care, cosmetics, dietary supplements, custom websites, water purifiers, and weight management products. It conducts business through several affiliated companies. The company uses the web domain Shop.com for retail sales which it acquired from Microsoft founder, Bill Gates.
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History
In 1992, Market America was founded by former top Amway distributor JR Ridinger (real name, James Howard Ridinger) and his wife Loren. The company is headquartered in Greensboro, NC and employed over 650 employees as of 2010. 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 the firm's site.
The company later expanded its operations to Australia (2002), Taiwan (2005), Hong Kong (September 2007), Philippines (October 2010), United Kingdom (February 2012),. Mexico (June 2012)., Singapore (2014), and most recently Malaysia (2017).
In August 2008, the firm announced the partnering of Market America and iMirus to produce MA Newsstand, offering digital and print versions of magazines, books and catalogs. In late 2010, the company bought shopping comparison firm Shop.com for an undisclosed amount. The acquisition prompted the company to shift its retailing domain name from marketamerica.com to Shop.com, with the aim of expanding the cashback program Market America introduced in 2008.
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Products and services
Market America's product categories include health and nutrition (Isotonix), home and garden care (Snap), pet care (Pet Health), automotive care (Autoworks), weight management (TLS), personal care (Royal Spa, Fixx, Skintelligence), cosmetics (Motives by Loren Ridinger), jewelry (Loren Jewels, Yours by Loren Ridinger), and water filter systems (Pure H20). Services include personal financial management (maCapital Resources) and Internet marketing services for small to medium-sized businesses (maWebCenters).
The firm's Isotonix line of dietary supplements was introduced in 1993, and came to include more than 20 products. Its Prime line of nutraceuticals consists of 12 supplement formulations. In 2004, the Transitions Lifestyle System (TLS) weight management program was introduced.
Business model
According to Market America, all of its products are manufactured by other firms and are exclusively marketed by Market America. The company refers to individual persons and business entities as independent distributors or "UnFranchise Business Owners" who may also operate online retail websites called "Partner Stores". Individual distributors pay startup and monthly fees, and are expected to recruit others.
Market America distributors are eligible to earn money from product sales commissions and recruiting new members to their sales team. In June 2017, the startup fee to become a Market America distributor was reportedly $399 plus additional monthly payments of $129. Market America representatives operate as independent contractors, but are required to spend between $130 and $300 on Market America products and attend seminars and training events that are estimated to cost between $20 and $200 each.
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."
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".
In December 2010, Market America began acquisition of Shop.com, a shopping comparison site on the Internet. The acquisition combined shop.com's database technology with Market America's Cashback program and network of independent distributors ("Independent Shop Consultants"). Market America was to remain in Greensboro, N.C. and the previous shop.com staff were to remain in Monterey, California and London, UK. In September 2011, the two-step integration process was half-complete.
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."
Legal actions and lawsuits
In 1999, the firm 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 case was settled with a $100,000 fine and payment to the SEC of $235,498 (plus interest). The company's CEO agreed to refrain from future violations of the federal securities laws. The company was made private when all outstanding shares were purchased by their CEO in 2001.
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. Sawyer appealed to the North Carolina Supreme Court, which denied review on December 11, 2008. 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.
In a 2017 federal lawsuit, two distributors accused the company of violating the Racketeering Influenced and Corrupt Organizations Act and California state law. The suit claims the company targets Chinese-American immigrants to sell products to friends and relatives in Asia. The lawsuit characterizes Market America's business practice as "racketeering" and says that "while the executives tell distributors they can earn more than $560,000, only those at the top make that kind of money. Ninety percent of sellers do not receive a penny".
Source of the article : Wikipedia
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