Betterware Mexico: A Successful Multi-Tier Direct-Selling Model


Betterware Mexico ranks among the most successful direct-selling marketing companies, taking the 20th position in the 2022 DSN Global 100 List.

This direct-selling company established a successful multi-tier business model while focusing on high-quality household products. It even became the first Mexican company listed on the Nasdaq stock exchange in New York, USA.

In this in-depth analysis, we’ll explore all the critical aspects that make the company so successful.



Insights

  • Betterware Mexico is a leading direct-to-consumer company focusing on household products and is the first Mexican company listed on the Nasdaq stock exchange in New York.
  • The company’s success can be attributed to its high-quality household products, a strong network of distributors and associates, and its unique two-tier direct-selling model.
  • Betterware Mexico manufactures its branded products in China and Mexico, with a product range that includes kitchen and food preservation, home solutions, technology, and mobility.

Section 1 – The Company

In this first part, we focus on Betterware’s history, market performance, and other factors relating to the company’s development.

Overview of Betterware Mexico

Betterware de México, S.A.P.I. de C.V. (BWM) is a leading direct-to-consumer company in Mexico with a focus on household products. 

The company, founded in 1995, became the first Mexican company listed on the Nasdaq stock exchange in New York under the symbol “BWMX,” on March 12th, 2020.

With a wide range of products in its portfolio, Betterware is primarily focused on the home organization segment. Its product range includes kitchen and food preservation, home solutions, technology, and mobility. 

The company has subsidiaries in Mexico and Guatemala, including BLSM Latino América Servicios, S.A. de C.V., Betterware de Guatemala, S.A., Programa Lazos, S.A. de C.V., and Innova Catálogos, S.A. de C.V.

Betterware logoPin

Market Performance

According to Direct Selling News (DSN), Betterware Mexico ranked 20th on the 2022 Global 100 list, with a reported revenue of USD 803 million in 2021 (a different amount from the publicly reported revenue of $494,812,200, due to unique reporting requirements for the publicly listed company).

In 2022, Betterware Mexico’s publicly reported revenue was $571.4 million, with a gross profit margin of 68.16% and a net margin of 6.39%.

As of January 3rd, 2021, Betterware Mexico had 1,294 employees, and the company’s distributors and associates had approximately 24% household penetration in Mexico.

The company’s success in the direct selling industry can be attributed to its focus on high-quality household products and a strong network of distributors and associates.

History

Betterware, a leading direct-to-customer company in Mexico, has a long history spanning over eight decades. 

The company started in 1928 in East London as an MLM company selling household products. It was originally named Betterwear and sold brushes door-to-door. In 1970, the company was renamed Betterware to reflect a wider range of products.

Betterware created a subsidiary in Mexico in 1995. In 2001, Luis Campos, the current Chairman of Betterware Mexico, bought the Latin American division and established the distribution center in 2003, in Guadalajara, Jalisco. 

Before Betterware, Campos served in various leadership roles in companies like Tupperware Americas and Hasbro Mexico.

On March 12th, 2020, Betterware became the 1st Mexican company listed on the Nasdaq. The company has since made significant acquisitions, including the JAFRA acquisition in January 2022 from the Vorwerk Group for USD 255 million. JAFRA is a leading direct sales brand in the Beauty and Personal Care industry.

Betterware has also made strategic investments in other companies, such as GurúComm, a Mobile Virtual Network Operator, and Innova Catálogos, S.A. de C.V., a company dealing in clothing, footwear, and accessories.

Who Founded Betterware?

While there is no clear information on who founded the company, it was first purchased in 1983 by Stanley Cohen for £253,000. Fast forward to 2001, Luis Campos purchased the Mexico/ Latin America division from Betterware UK and transformed its business model and strategy.

CEO of Betterware Mexico

This company has a family-oriented leadership, with Luis Campos serving as president and Chairman of the Board; Andrés Campos, his son, serving as the CEO and a board member; and Santiago Campos, another son, serving on the Board of Directors.

Other key executives include:

  • Diana Jones – Chief Financial Officer
  • Carlos Doormann – Chief Strategy
  • Luis Lozada – Chief Strategy Officer

Owner of Betterware Mexico

In 2021, Campalier was the key shareholder with 52.51% of all shares, and other investors owning the remaining 47.49%.

In 2022, Campalier S.A. de C.V. owned 53.38 % of all shares and Cede & Co. owned 46.62 %.

Betterware organization structurePin
Credits: Betterware

Where is the Betterware Mexico Headquarters?

The company headquarters is located in El Arenal, Jalisco, Mexico at Cruce carretera GDL-Ameca-Huaxtla Km 5, El Arenal, Jalisco, CP 45350, México.

The executive offices are located at Luis Enrique Williams 549, Colonia Belenes Norte, Zapopan, Jalisco, 45145, México.

Strategic Pillars

Betterware Mexico’s three main strategic pillars include:

  • product innovation
  • technology
  • business intelligence

The company leverages its big data capabilities and digital platforms to optimize product offerings and rewards programs.

Additionally, Betterware Mexico has committed to social and environmental issues, having obtained 1,500 million pesos through its Sustainable Bond Program in 2021.

The funds will be used for environmental and social impact projects, including reducing electricity and water consumption, using recyclable materials, supporting vulnerable groups, empowering women, and developing local suppliers.

Section 2 – Business Model

For this section, we evaluate the unique aspects of Betterware’s marketing strategies and uncover how it incentivizes its sales force to grow the company.

How Betterware Mexico Markets Its Services

Betterware Mexico has a unique two-tier model that serves more than one million households each six-week period in 850 populations across Mexico. The company operates as a purely direct-selling system, unlike its British origins as a multi-level marketing (MLM) company.

Betterware’s distributors and associates earn commissions from sales made by distributors or associates they enroll, rather than compensation for recruiting.

This is a unique business model tailored to Mexico’s geographic, demographic, and economic dynamics. The company currently has 66,400 distributors and 1,250,000 associates who are tightly monitored through an in-house business intelligence platform tracking weekly performance.

The company’s sales process involves associates sending purchase orders to distributors, who turn to Betterware to ship the products to them. 

The distributors are then responsible for delivering products to associates and collecting payments, and then paying Betterware. The associates then deliver products to the end customer within 24-48 hours, saving the last mile delivery cost for the company.

The company incurs minimal social media and transit advertising costs representing 0.8% of net revenue.

Betterware’s well-mapped sales force locations and socio-economic region targeting avoid cannibalization between distributors.

How to Make Money on Betterware Mexico

The company’s rewards program attracts, retains, and motivates both Distributors and Associates through discounts, points awards, trips, and gifts.

Here’s how Distributors earn:

  • Form a group of associates to earn from them.
  • 24% discount on personal purchases.
  • Additional 12% to 16% discounts on personal and group purchases (greater discounts at higher levels).
  • 14-day credit for purchases.
  • Betterware Points on personal and group purchases to redeem for prizes.
  • Home delivery of products.
  • National and international trips.

And here’s how Associates earn:

  • 24% discount on personal purchases.
  • Free catalogs.
  • Betterware Points for personal purchases to exchange for prizes.

Betterware Mexico Compensation Model Explained

Betterware’s sales force features two groups: Distributors and Associates.

Distributors link the company and Associates and they are divided into 3 levels:

  • Basic
  • Leader
  • Master

Associates place orders with their assigned distributors and can be the final consumers or resellers to other clients.

Betterware compensation planPin
Credits: Betterware

How Many Betterware Mexico Distributors Are There?

In 2022, Betterware Mexico had a total sales force of 952,400 people, made up of 908,000 Associates and 44,400 Distributors. Jafra, Betterware’s beauty company subsidiary, had a total sales force of 432,200 people. This gives a combined total sales force of 1,384,600 people.

The company indicates that the latest sales force count features 66,400 Distributors plus 1,250,000 Associates.

How to Become a Betterware Distributor

You can sign up as a Distributor or Associate on the company website by filling in the required details including:

  • your full names
  • postal code
  • state in Mexico
  • city
  • street
  • outdoor number
  • cell phone
  • email

How Much Money Can You Make With Betterware Mexico?

Although Betterware hasn’t provided a publicly accessibly income statement for distributors, the 2019 data on the sales force activity gives some useful insights:

  • Out of a pool of 20,000+ Distributors, +78% place orders weekly with an average order of USD 350.
  • Out of a pool of 20,000+ Distributors, 41% had tenure higher than 1 year.
  • Distributors buy exclusively to resell to Associates.
  • Out of a pool of 380,000 Associates, +32% of active Associates placed weekly orders with an average of USD 48
  • Out of a pool of 380,000 Associates, 31% had tenure higher than 1 year.

Cost to Join Betterware Mexico

Joining Betterware Mexico as an associate requires no initial product purchases or investment.

Associates first get orders from other associates before placing an order with distributors. Distributors also get a two-week credit line when buying products.

Section 3 – Products

Betterware offers a range of products that stand out in its target market; hence, we dig deeper to understand what makes it so special.

What Betterware Mexico Sells (Video)

Betterware Mexico offers a wide range of products through various categories, including kitchen and food preservation, bathroom, home solutions, laundry, cleaning, tech, mobility, and bedroom products.

The products are Betterware branded, unique, and manufactured by certified manufacturers in China and Mexico.

The company constantly innovates and introduces around 338 products every year, which represents 11% to 18% of the total products in a catalog.

Until September 2021, Betterware Mexico sold its products through nine catalogs published throughout the year, approximately six weeks outstanding each.

From October 2021 onwards, the company started selling its products through twelve catalogs published throughout the year, one per month. Each catalog offers an average of 340 products.

Some of the products that Betterware Mexico offers include: food containers, bathmats, shoe racks, cable organizers, closet solutions, brushes, coat racks, shower lids, toilet racks, gel packs, mop, washing machine cover, lint remover, and many more.

Where Betterware Mexico’s Products are Made

This household and organization products company manufactures its unique branded products in China and Mexico. Over 302 certified third-party manufacturers produce their products, with 90% of the manufacturing being done in China and the remaining 10% in Mexico.

To maintain quality control, Betterware has an office in Ningbo, China. After production, the products are then shipped to their warehouses in Guadalajara, Jalisco, for processing and packing.

Where to Buy Betterware Mexico’s Products

Customers can place their orders through associates or distributors over the phone, through WhatsApp, or in person. Betterware also launched its own app and website.

Delivery options include selecting a distributor to deliver the order or having one assigned at the time of purchase. The products are only delivered within Mexico.

Betterware Mexico’s product testing and certification

Betterware Mexico manages product testing and certification through a combination of outsourcing, in-house expertise, and academic collaboration.

The company states that they have a specialized design laboratory and partnerships with over a dozen universities. Hence, they are able to launch 300 new products annually, a process that typically takes between 5 to 9 months.

Betterware de México, S.A.P.I. de C.V. recently achieved Fitwel® certification for the Betterware Campus and national distribution center located in Guadalajara, Mexico.

This certification highlights the company’s commitment to promoting the well-being of its employees by implementing health-promoting strategies in design and operations.

Independent Reviews of Betterware Mexico

Betterware’s BWMX 21X and BWMX 21-2X bonds have been awarded as the first corporate sustainable bonds of a consumer goods company in Mexico. A sign of its positive brand perception.

Moreover, the BetterWare app has been downloaded over one million times, with 3.7/ 5 stars from 7,020 reviews.

Section 4 – Doubts and Misconceptions About Betterware Mexico

Through this section, we seek to uncover critical issues that may not be clearly understood about the company.

What Happened to Betterware?

Betterware UK was a company that sold household and cleaning products through catalogues and a network of distributors. The company had been in operation since 1928, but in 2018 it went into administration due to financial difficulties leading to eventual closure.

Betterware Mexico, on the other hand, is a separate company that operated independently from Betterware UK.

It was started in 1995 and grew to become a leading direct selling company in Mexico, selling a wide range of products including home organization, and cleaning products.

Is Betterware an MLM Company?

Betterware is purely a direct selling company that operates primarily in Mexico and sells household and personal care products. It does not feature an MLM compensation model in Mexico.

Sales representatives are not required to build extensive downline teams to earn commissions.

Section 5 – FAQs and Recap

In conclusion, we summarize some key concepts by answering frequently asked questions about Betterware.

What is the primary focus of Betterware Mexico’s product offerings?

Betterware Mexico primarily focuses on home organization, offering a wide range of products in categories such as kitchen, bathroom, cleaning, and mobility. The products are manufactured by certified manufacturers in China and Mexico.

How does Betterware Mexico’s direct-selling model work?

Betterware Mexico employs a unique two-tier direct-selling model, where distributors and associates earn commissions from sales rather than compensation for recruiting. The company currently has a large sales force including thousands of distributors and associates.

How does Betterware Mexico ensure the quality of its products?

Betterware Mexico maintains quality control by working with over 302 certified third-party manufacturers in China and Mexico. They also have an office in Ningbo, China, to oversee production and ensure that products meet their quality standards.

How can someone become a distributor or associate for Betterware Mexico?

To become a distributor or associate for Betterware Mexico, individuals can sign up on the company’s website by providing their full name, postal code, state, city, street, outdoor number, cell phone, and email address.

Are Betterware Mexico and Betterware UK the same company?

Although they share a common origin, Betterware Mexico and Betterware UK are separate entities. Betterware Mexico operates independently from Betterware UK, which went into administration in 2018 due to financial difficulties.


Sources


  1. Amway
  2. Vorwerk
  3. Tupperware

Author: Victor Nyorani

Victor Nyorani - Network Marketing Start