Translation of the 2002 American Chamber of Commerce Centennial Special Edition

Melaleuca, INC

Melaleuca Corporation

ONE OF THE NATION'S FASTEST GROWING HOME-BASED BUSINESSES, Melaleuca, INC, OFFERS ADVANCED NUTRITIONAL SUPPLEMENTS; PURE, NATURAL, SKIN-AND HAIR-CARE PRODUCTS; AND ENVIRONMENTALLY FRIENDLY CLEANING PRODUCTS.

Melaleuca is one of the fastest growing household products companies in the United States. Providing the best nutritional supplements, purely natural skin and hair care products, and environmental cleaning supplies.

1770: In New South Wales, Australia, Captain Cook learns that local aborigines treat a number of their ailments with a tea brewed from the leaves of the Melaleuca tree, a shrub like tree he names the “tea tree ."

1770: In southern New South Wales, Australia, Captain Cook learned that local Aboriginal people used tea brewed from the leaves of the Melaleuca tree, which resembled the tree, to treat their many ailments. The shrub he named "tea tree".

2001: In Idaho Falls, Idaho, Melaleuca, inc.——launched originally to market products based on the Melaleuca tree——conducts a $450 million per year business, with an enviable catalog of healthful and therapeutic home hygiene, nutrition, and personal care products.

2001: In Idaho City, Idaho, Melaleuca, Inc. - initially markets Melaleuca tree-based products, each Generating annual turnover of $450 million from a high-profile catalog with information on health and healing home hygiene, nutritional and personal care products.

How Melaleuca oil found its way from a miniscule part of Australia into millions of American households—while inspiring a business that in 1991 was described by Inc. magazine as America's 37th fastest growing private company and since then has been consistently ranked among the inc. top 2000—is tantamount to an incredible entrepreneurial journey.

How Melaleuca expanded from a miniscule in Australia to millions of American homes and, in 1991, The company was named the 37th fastest growing private company in the United States by Enterprise Magazine and has been ranked on the inc list ever since. Before 2000, it was an incredible journey as an entrepreneur.

In 1985, current Melaleuca president and CEO, Frank L. VanderSloot—at the point content in his post as regional vice president for a Fortune 500 company—received a call from Roger Ball, an old family friend, who had teamed up with an Australian who claimed to have 80 percent of all the Melaleuca trees in the world on his ranch. Ball wanted VanderSloot to help the two partners build a company to market Melaleuca Oil, as well as various complementary products.

In 1985, Vandersloot, now the chairman and CEO of Melaleuca, was a vice president of a Fortune 500 company. He received a call from an old friend named Roger Ball, who wanted to talk to Vandersloot. The two husbands collaborated to establish a company to sell Melaleuca oil, and various auxiliary products on the market. Because he said that he had cooperated with an Australian to grow 80% of the world's Melaleuca tea trees on his large farm.< /p>

Reluctant as first, VanderSloot finally agreed, quit his job, moved his family to ldaho, and threw himself into the business with enthusiasm. But he soon discovered seemingly insurmountable problems. After investigating the company's literature, he determined that many of the medical claims the company had been making about Melaleuca Oil were outside the bounds set by the U.S. Food and Drug Administration. He also discovered that many of the products lacked credible research and that the company's marketing plan was based on a multilevel marketing scheme that was probably illegal in all 50 states. Finally, VanderSloot discovered that the company's Australian partner did not control anything near 80 percent of the world's Melaleuca trees. In fact, he owned barely 5percent of them. Sales plummeted.

Mr. Vandersloot was reluctant at first, but eventually agreed to leave his job, move to Idaho, and devote himself full time to the business. But he soon discovered problems that seemed insurmountable. After investigating the company's materials, he found

The company already produced Melaleuca essential oils to quality standards that were outside the requirements set by the U.S. Food and Drug Administration. He also found that many products lacked feasibility studies and that the company's marketing plan was based on a multi-layered sales plan, and Such plans may not be legal in all 50 states. Finally, Mr. Vandersloot discovered that in fact the company's Australian partner did not own 80% of the world's Melaleuca tea trees. He only owned 5%, causing sales to plummet.

Not surprisingly, the decision was made to close down Oil of Melaleuca, Inc, which had taken off with such great promise.

Not surprisingly, the decision was made to close down Oil of Melaleuca, Inc, which had taken off with such great promise. Made from tea tree essential oil, this one has never been found before where can I find several such great promises.

What happened next is the stuff of marketing history. Out of failure, VanderSloot learned the secret to Melaleuca's current success.

The key to the problem was accidentally discovered in the marketing records. . From failure, Mr. VanderSloot learned the secret of Melaleuca’s current success.

“I learned,” says VanderSloot, “that a lot of ordinary, hardworking people want to get ahead, but that they have no real way to do it. Though America is supposed to be the land of opportunity, with corporate mergers and buy outs, it is nearly impossible for the little guy to get in."

"I learned," Vandersloot Mr. Wang said, “Many ordinary and hard-working people want to have better development, but they have no effective way. Although the United States should be a place full of opportunities, due to corporate mergers and amateurism in buying and selling, for many weak people

“Little wonder that throughout the ages there has been a popular cry to redistribute wealth,” he continues. “The problem is that socialism and communism just haven't worked, and of course, they never will. I realized that what we need is not the redistribution of money, but the distribution of opportunity."

"In every age there have been calls for a miracle of redistribution of wealth. He continued: "This problem can be avoided in socialist and communist societies, but of course, they never have to." I realized that what we need is not a redistribution of money, but a redistribution of opportunity.

”

VanderSloot knew that Melaleuca Oil really did have great therapeutic potential. And with his newfound knowledge that significant numbers of people longed for the opportunity to secure an independent income, he developed new formulas, as well as an innovative new marketing plan.

Mr. Vandersloot knew that Melaleuca's Tea Tree Essential Oil was indeed a wonderful, potentially therapeutic essential oil. And he had made some important new discoveries that many people had been hoping for a reliable opportunity. and a stable and independent income, so he developed a new model, and an innovative marketing plan.

He rearranged his deal with the original owners, became a partner in the business, invested his life savings , and set out to establish a brand new organization. He met with chemists, pharmacists, doctors, attorneys, and other experts of various stripes, then he launched Melaleuca, Inc., in September 1985. With a loyal office staff of seven, he developed a mission statement that pledged to “enhance the lives of those we touch by helping people reach their goals” and vowed to “never charge more for our products than what they are worth.”

He and the original The owner regrouped, became a partner in the business, invested his life savings, and declared a new trademark organization. He met various chemists, pharmacists, doctors, agents and other experts , he then established Melaleuca Corporation in September 1985. With seven loyal company employees, he stated a pledge "to help people achieve their goals to increase the value of their lives" and vowed to "never defend our products, but more to study their value." .

”

VanderSloot's efforts paid off when, in 1991, he accepted the prestigious Blue Chip Enterprise Award from U.S. Chamber of Commerce. This award recognizes companies that overcome great adversity on their way to success. In 1998, VanderSloot was named “Idaho Business Leader of the Year” by Idaho State University, and in 2001, he was named “entrepreneur of the Year” for the northwest United States.

In 1991, Mr. Vandersloot’s efforts paid off , he received the prestigious Blue Stock Corporate Award from the American Business Association. This award represents the company's overcoming all obstacles on the way to success. In 1998, Mr. Vandersloot was named the University of Idaho's "Ada of the Year" Dutch Business Leader" and in 2001, he was named "Entrepreneur of the Year" in the Northwest United States.

Today, in the Melaleuca Country Catalog, there are more than 200 top-of-the-line nutritional supplements; fast-acting natural cures for aches and pains; economically and ecologically sensible laundry and cleaning products; and luxurious, beneficial shampoos, bath gels, skin care preparations, and cosmetics for both men and women. Indeed, VanderSloot and his scientists guarantee that the products distributed by Melaleuca are of a higher quality----and are a better value----than any to be found in a grocery store.

Today, in the Melaleuca corporate catalog, there are 200 A variety of top-notch products.

Nutritional supplements; quick and natural cures for aches and pains; professional cleaning products that are economical and environmentally friendly; high-quality shampoos, shower gels and cosmetics prepared to care for the skin of men and women. Indeed, Mr. Vandersloot and his The scientists of Melaleuca guarantee that the products sold by Melaleuca are the lowest priced and the best quality among the same quality products.

“Today, we are in the position where top scientists approach us with their inventions, ” notes VanderSloot. “They sometimes spend years developing awesome products with no way to take them to market. Melaleuca becomes that avenue to the marketplace. PROVEXCV, a revolutionary heart-protection supplement containing specific varieties of grape skin and grape seed, was developed at the University of Wisconsin; our best-selling vitamin and mineral Vitality Pak, processed with a fructose compound that allows the body to fully assimilate minerals, was developed by scientist David Mitchell; and our Access Fat-Conversion Activity Bars were developed from the research of Dr. Larry Wang into adenosine, a nucleoside involved in the body's capacity to metabolize fat."

"Today, our top scientists work with us on their inventions," Mr. Vanderske emphasized. "They sometimes spend After years of developing a compelling product but unable to bring it to market, Melaleuca became their gateway to the market with Grape Seed CV, a revolutionary heart-protective supplement containing grape skin and grape seeds, developed by the University of Wisconsin. Discovered; our best-selling Vitamin and Mineral Vitality Pak product, treated with a fructose compound that allows the body to fully absorb minerals, was developed by scientist David Mitchell; our Vitality Bars were developed by Dr. Larry Wang It was found that it can effectively actively participate in the conversion of fatty substances in the body.

”

And how does Melaleuca market its products? For a $29 investment, marketing executives can buy comprehensive information on every product and a 12-month subscription to the company's monthly magazine. Then, using the catalog, along with knowledge of the real science behind every product, they can market the line to their friends, neighbors, and relatives. Their customers order from the catalog each month, and Melaleuca pays commissions to whoever gave the customer the catalog. Moreover, since Melaleuca ships every order directly to the customer, executives don't have to contend with stocking products or managing inventory.

How does Melaleuca sell its products? With a $29 investment, the marketing executive gets paid from the company every month. Buy any product from the extensive product catalog for 12 months. Then use the catalog to gain a truly scientific understanding of each product and sell the product to their friends, neighbors and relatives every month. When you order a product from the catalog, Melaleuca pays the introducer's commission, and Melaleuca takes care of every step of shipping the product to the customer, so the marketing manager doesn't have to worry about shipping the product and managing the inventory.

In April.

In the April 2001 commission review, Melaleuca Corporation distributed $162,000 in commissions, ranging from $2.03 to more than $185,000. In 2000, two independent marketing executives earned over $1 million in commissions, and More executives received commissions in the hundreds and thousands.

“Our business is actually tailored to supplement people's existing incomes,” VanderSloot says. “Many marketing executives sell Melaleuca products part-time.” For those starting out, the average income is $1,500 per month. And while this alone can make a significant impact on the average family budget, the potential for growth is substantially greater.

“Our business is really about subsidizing people’s existing incomes,” Mr. Vandersloot said. “Many The marketing director works part-time at Melaleuca. When he first started, the average monthly income was $1,500. This can have a significant impact on the budget of an ordinary family, and its development potential is huge. ”

Also, with its loyal customer base, the company has been able to negotiate good rates on a number of services on behalf of its customers. For example, Melaleuca's Preferred Customers----those who have a minimum standing order for $35 worth of products each month ----can now enjoy substantially reduced rates for Internet access, airline ticket, and long-distance telephone service.

That is because it has many loyal customer bases, allowing the company to Get good discounts on its services on behalf of its customers. For example, Melaleuca's loyal customers—those who consistently order at least $35 worth of products each month—can now enjoy deep discounts on Internet access, airfare, and long-distance calls.

Currently, Melaleuca signs somewhere between 17,000 and 20,000 new house holds every month. It is already in one out of every 200 households in the United States and Canada, and it recently opened branches in Hong Kong, Taiwan, Japan, and Australia.

Now, Melaleuca’s monthly new customer signings have reached between 17,000 and 20,000 households. It has penetrated into an average of 200 households in the United States and Canada, and it has recently launched in Hong Kong, Taiwan, Branches have also been opened in Japan, Australia, Singapore, the Netherlands, and China.

Finally, on the key to leadership, VanderSloot offers, “I have learned that people want to have a dream. They want to have hope. It is an awesome responsibility that we have as leader, that people are following us. It is important that we live worthy of their trust in us. We must provide them substance, with superior products, and financial reward in proportion to their contribution. We really are redistributing opportunity.

Finally, on the key point of leadership, Mr. Vandersloot stated, “I understand that people want to have a dream. They want to have hope. That’s part of what we do as leaders. It is a sacred duty and people are following us, most importantly because we are worthy of their trust. We must provide them with materials, including quality products, and give them corresponding economic rewards for their contributions. We're really redistributing opportunity to everyone.

And the result is only fun, it’s incredible!

And the result is only fun, it’s incredible!