Re:Beauty is reimagining the direct-sales model.
The brainchild of Mary Kay’s former Central Europe president Marcela Speert, the beauty company is structured to field a representative base that’s productive and profitable. Supported by that base eagerly pursuing skin-care and cosmetics sales, Speert has bold ambitions for Re:Beauty to generate $300 million to $500 million in annual revenues in five years.
“I have been in the direct-selling industry for over 25 years, and I have truly analyzed every single company in this industry and their compensation plans,” said Speert, an adviser to The Blackstone Group, CCMP Capital, Oak Hill Capital and Cerberus Capital on consumer products and direct-sales operations. “It is very important in direct sales that women are financially rewarded immediately when they come into the business, and just as important is the investment she has to make coming into the business.”
Two welcome kits initiate Re:Beauty representatives: a four-item kit priced at $75 and an 11-item option at $199. The kits are designed to contain enough merchandise for a month’s worth of product demonstrations. Representatives receive 40 to 50 percent discounts on products and aren’t required to purchase additional inventory. As they attempt to amass their own sales forces, they earn commission on the first person as well the subsequent people they enlist in their own teams.
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“When a women purchases a product from us at $65, $32.50 is her profit. From the moment she comes into the business, she can succeed,” Speert said. “If you don’t have a representative earning money in 30 to 60 days, you lose her. I want to make sure we incentivize her and make sure she will be financially rewarded in the first 30 days, which is really crucial. Many companies lose representatives they recruit almost right away.”
Although direct-sales firms are often judged by the number of representatives signed up, Speert emphasized that number may not be as revealing as the activity level of the representatives, and she’s focused on keeping her representatives committed. “There are many companies that don’t have active representatives and have high turnover. I built other companies from ground zero, and my turnover was less than 10 percent and 85 percent of my representatives were active,” she said, defining active as order placements monthly or quarterly.
To help stave off turnover, Speert is sharing equity in Re:Beauty with select founding representatives. “As we build the company together, we are earning together,” she explained. In addition, she’s encouraging purchasing on the company’s Web site, a tricky platform for direct-sales brands trying to attribute sales to specific representatives. Re:Beauty is overcoming the problems associated with online purchases by pooling retail profits from its Web site and splitting those profits between representatives.
Speert is cognizant of the criticism lobbed at the direct-sales industry that it has lagged behind technological advancements. Re:Beauty has developed an app called Re:Beauty Connect that gives representatives access to information and training videos, and will have the capability to process orders in the future. “We have invested a lot of financial resources in technology,” stressed Speert.
Re:Beauty is starting with a suite of skin care products priced from $32 to $85 that will be followed promptly by a full line of color cosmetics. A peptide-infused complex Re:Beauty calls Re:Vitaplex powers the skin care by shoring up collagen, exfoliating dead skin cells and delivering continuous moisture, according to Speert. Among the standout products are the cleanser Re:New, the face oil Re:Balance and the eye cream Re:Store.
“Our Re:New cleanser is very gentle, yet takes off makeup completely. The face oil has borage oil in it. I wanted an oil that was good for congested skin and acne-prone skin, and provided hydration for dry skin, too,” she said. Discussing Re:Store, she added, “I was always in search of an eye cream, and the eye creams I had seen never really provided enough hydration. I would see fine lines and dryness around my eyes. I also didn’t see much help with my dark circles. Our eye cream de-puffs and moisturizes. It has leaf cell culture extracts which are wonderful for dark circles.”
Speert envisions Re:Beauty’s products spreading well beyond the U.S. borders. Within a few years, she suggested the company could expand to Mexico, Canada, Brazil, and several countries in Europe and Asia. “I have high goals for myself and, more importantly, for our representatives,” Speert said. “Our sales are growing consistently, and our representatives are growing, and I am seeing them be active every single day. That is very rewarding.”