Melaleuca, Inc

Frank Leonard VanderSloot (born August 14, 1948) is an American entrepreneur, radio network owner, rancher, and political campaign financier. He is the founder and former chief executive officer of Melaleuca, Inc. October 15, 2004 His other business interests include the Riverbend Ranch and Riverbend Communications. VanderSloot also serves on the board of directors and executive board of the U.S. Chamber of Commerce. ''The Land Report'' listed him as the nation's 92nd largest landowner. In 2017, Forbes listed VanderSloot as the richest person in Idaho and the 302nd wealthiest American with a net worth of $2.7 billion.

VanderSloot served as a national finance co-chair for Mitt Romney's presidential campaigns in 2008 and 2012. He contributed $1.1 million and helped to raise between $2 million and $5 million for Romney's 2012 campaign. He is a significant financial contributor to Republican presidential candidates and Idaho political campaigns. He has also paid for advertising in opposition to several Idaho Democratic political candidates.
VanderSloot is the primary financier of the American Heritage Charter School in Idaho Falls.Nate Sunderland, "Idaho Falls Charter School Backed by Melaleuca's VanderSloot Touts Patriotic, Business-Focused Learning," ''Idaho Statesman,'' August 20, 2013
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Early life and education

VanderSloot was born on August 14, 1948, to Peter Francis (Frank) VanderSloot (1913–1982) and Margaret May Christensen Sindberg-Woodley VanderSloot (1915–2004). The family lived in Sheridan, Wyoming, and Hardin, Montana, before moving in 1949 to Cocolalla, Idaho, where they lived on a ranch. The elder VanderSloot worked as a painter for the Northern Pacific Railway. Payment required. Reposted by ''Melaleuca News.

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Frank VanderSloot graduated from Sandpoint High School in 1966. At the age of 16, he joined the Church of Jesus Christ of Latter-day Saints (LDS Church), and later studied at Brigham Young University in Provo, Utah, where he worked and lived as a cleaner at a laundromat. After two semesters, he left school to serve a two-and-a-half-year LDS Mission in the Netherlands. Following his mission, he earned an associate's degree in business at Ricks College in Rexburg, Idaho. He then returned to Brigham Young University, where he earned a bachelor's degree in marketing in 1972.

Career

ADP and Cox

After graduating from college, VanderSloot worked for 9 years at Automatic Data Processing in three cities. He first worked in sales and marketing before moving to general management and operations.Carlson, Brad
"Frank VanderSloot / Melaleuca CEO: Dark days proved worthwhile."
Idaho Business Review. Boise. June 5, 2006. Copyright 2006, Gale Group Inc. Accessed through NewsLibrary.com. Payment required. He left ADP to work as regional vice president at Cox Communications in Vancouver, Washington.

Oil of Melaleuca, Inc

In September 1985, VanderSloot's brother-in-law Roger Ball and Roger's brother Allen Ball offered VanderSloot the helm of Oil of Melaleuca, Inc., a startup multi-level marketing business based in Idaho Falls. VanderSloot said "the company was a mess" when he arrived. According to Dan Popkey, "A supposed 80 percent corner on the tea tree market turned out to be 5 percent. The FDA came knocking, because salespeople were exaggerating medical claims. A multilevel model that lured people to buy $5,000 in inventory offended VanderSloot's sense of fairness." Oil of Melaleuca failed to achieve significant market share, and the partners shut down the company later in 1985. Half the legacy distributors from Oil of Melaleuca left after Melaleuca, Inc., was formed (below).

Melaleuca, Inc

In 1985, VanderSloot founded the multi-level marketing company Melaleuca Inc, which sells nutritional supplements, cleaning supplies, and personal-care products, and he has been president and chief executive officer ever since. Melaleuca operates internationally, with U.S. operations centered in Idaho Falls, Idaho, and Knoxville, Tennessee. Customers buy directly from Melaleuca's website or retail locations and "independent marketing executives" receive commissions from Melaleuca for each purchase made by people they refer and by people their customers refer, through seven "referral generations". The company refers to this arrangement as "Consumer Direct Marketing", a term it has trademarked.

According to a 2004 article by Phyllis Berman, Melaleuca's sales flattened in 1998, and VanderSloot "discovered that some senior directors were living off their residuals and doing little in the way of recruitment." This resulted in "a new policy that reduced payments to those who didn't either bring in new converts or help others do so." The company has large international operations, and 25 percent of its revenue comes from Taiwan, Korea, Japan, Australia, New Zealand, and the United Kingdom. Melaleuca reported gross sales in excess of one billion dollars in 2011 and $1.13 billion in 2012."Another Record Year in Sales for Melaleuca."
East Idaho News. February 11, 2013. Accessed February 14, 2013 In Idaho Falls, Melaleuca has a local workforce of about 2,000 employees.

VanderSloot says that the company has a "business model for those people who want to supplement their income." However, according to the US Federal Trade Commission study on multi-level marketing companies, fewer than 0.29% of Melaleuca distributors make any profit and more than 99% of distributors lost money. The FTC report goes on to note that the odds of winning from a single spin of the wheel in a game of roulette in Las Vegas are "22 times as great as the odds of profiting after enrolling as a Melaleuca distributor".

Melaleuca is a member of the United States Direct Selling Association, a trade association that engages in public relations and political lobbying on behalf of the multi-level marketing industry. In 2008, VanderSloot began a three-year term as one of the eight members of the Direct Selling Association's board of directors. In December 2009, VanderSloot and his wife contributed $10,000 to the Direct Selling Association's political action committee (PAC).

Between 1991 and 1997, Melaleuca was investigated by Michigan regulators, the Idaho attorney general's office, and the U.S. Food and Drug Administration for various marketing violations. In 1991 Melaleuca received a cease-and-desist order for violating Michigan's anti–pyramid scheme laws. In 1992, Melaleuca signed a consent decree with the states of Michigan and Idaho agreeing to "not engage in the marketing and promotion of an illegal pyramid." In 1997, the U.S. Food and Drug Administration sent Melaleuca a warning letter for "false and misleading" claims about two of its supplements. In a paper on multi-level marketing, the FTC notes that "Melaleuca fails to disclose that approximately 99% of all participants lose money and therefore get further behind financially because of their participation".
In June 2020, the FTC sent a warning letter to Melaleuca regarding false and deceptive earnings claims during the COVID-19 pandemic that were unsubstantiated and inconsistent with earlier FTC findings that less than 1% of Melaleuca distributors realize any profit with the vast majority losing money.

Other businesses

Ranching

In 1993, VanderSloot founded Riverbend Ranch, one of the largest purebred ranches and largest commercial cattle operations in the United States. The ranch received 21 awards at the Utah State Fair between 1995 and 1997. The Ranch runs a genetics and breeding program and hosted the world's largest Angus bull sale in March 2012. According to Riverbend Ranch general manager David Brown, VanderSloot established its mission as "providing ranchers in the Intermountain West with the best genetics at an affordable price." Riverbend Ranch has operations in three other states, including Fort Ranch Quarter Horses, a horse ranch in Promontory, Utah.

Natural Guardian Land Holdings

In 1994, VanderSloot created Natural Guardian Limited Partnership (doing business as Natural Guardian, LLC, as of 2011), a holding company that owns or leases approximately 1,500 acres of land in Wolverine Canyon, Bingham County, Idaho.

Broadcasting

VanderSloot owns Riverbend Communications, a group of radio stations in Eastern Idaho. He purchased the company from Bonneville Communications in 2006. Riverbend Communications operates KLCE Classy 97, KCVI Kbear 101, KTHK 105.5 The Hawk, KFTZ Z103, KEII News-Talk AM 690 – 1260, and KNBL AM 1260."Steve Poulson New GM for Riverbend in Idaho Falls."
Radio Ink Magazine.

Snake River Cheese factory

In 1994, VanderSloot was approached by two dairy farmers with a plea to invest in the Snake River Cheese factory in Blackfoot, Idaho, after Kraft Foods had announced a decision to close it. Kraft had operated the plant since the early 1920s. In response, VanderSloot bought a $1 million interest in the plant, and an investment company assumed control, but the operation closed anyway within six months. VanderSloot then paid off a $2 million debt the company owed to the dairymen, staffed the plant with his own personnel and supplemented the milking herd with two thousand head of cattle.O'Connell, John
"Controversial donor praised by dairymen."
Capital Press. August 30, 2012
He promised that all five hundred people whose jobs depended on the plant would remain employed and leased the plant to Beatrice Cheese, a subsidiary of ConAgra. In 1999, the facility netted $278 million in sales. The next year, VanderSloot sold his interest in the company to Suprema Specialties after Beatrice broke its lease. VanderSloot again promised that employees would keep their jobs. In 2006, the factory, which by then had been renamed as the Blackfoot Cheese Company, was sold to Sartori Foods, and in 2013, the plant was purchased from Sartori by Glanbia Foods, Inc.

Paving and construction

VanderSloot was the owner of HighStone (formerly Eagle Rock Construction; RBH Gravel; VIP Construction), an Idaho Falls-based asphalt construction and maintenance company. HighStone was the prime contractor on a $421,000 state government contract to repair a stretch of Idaho State Highway 33 in Idaho Falls, and worked on a road project in Rexburg. In September 2011, HighStone merged with DePatco, a family-owned heavy construction company in St. Anthony, Idaho

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