Friday, September 11, 2015

Cautionary Tale from a Group of Direct Sellers - Don't get Burned

The Direct Selling industry can be the answer for many men and women located around the world. It allows them to work from home, set their own hours, and spend more time with their families. Yes, sounds like a win, win all the way around.

I've been involved in the Direct Selling industry for many years and many of you have been for even longer. It is an industry that has stood the test of time and will continue to far into the future. The problem is, what does the future entail for this industry???

Men and women put their heart and souls into the DS business that they choose and why shouldn't they? This is providing for their family by putting food on the table, paying their rent/mortgage, purchasing school supplies and the list goes on and on.


I'm personally married and a mother to 3 children whom I home school. I started in direct sales when my oldest child was just a baby. I've seen a lot of changes over the past 11+ years. It allowed me to have a hobby on the side that I would do in my spare time and still allow me to contribute to our household. I was able to work as much, or as little as I choose and make my own schedule. It worked out great for our family and allowed me to spend lots of time with my children.

Throughout this past 11+ years, I've seen many direct selling business grow beyond belief and several have closed in the process as well. Yes, it is a hard industry to stay afloat but if you have the right personnel leading the company it will attract amazing followers, such as reps, customers, etc that will allow the company to become very successful. We know who those companies are and please do not comment, spam this post with those as that is not the point of this story. Anyone that has anything to do with direct sales already knows who they are.


The point of my story is that  you have to be able to trust those leaders and ensure they have every one's well being at heart. Why you may ask......

Because we put 110%  into everything we do to make sure we're successful and expect the same of the leaders too. Well, recently myself along with many other reps were befriended by the company in which we worked for. I was approached in September 2014 by the Director of Field Development with Chelsea Row. This company is a spin off of Kitsy Lane which was started a few years earlier by the same CEO, Andy Fox. The CEO had created a software program that allowed reps to do virtual parties from home and decided to launch it under Chelsea Row. The Director of Field Development started reaching out trying to recruit people to join Chelsea Row. Well, I as one of those people. At the time I was not looking to join a DS company but talked to my husband and figured I'd give it a try. The Director of Field Development was my biggest cheerleader coaching me along the way. Throughout the next several months we had new Boutique Owners coming on board and things were going great. I started noticing some changes but honestly did not think anything of it.


Now looking back it was all plain as day. I would personally get asked from day one about the software. How it was working, if I was having any problems, and the list goes on and on.

If I did have problems they would fix them and then they would have me test them out to see if they were corrected. This went on for months and months.


As each month past throughout 2015 I noticed that our normal white shipping boxes were becoming brown. Once again didn't say anything because I just assumed they were low on supplies until a shipment came in. They stopped shipping items in the black velvet pouches we were known for. Instead of using our card stock for packaging they were literally wrapping jewelry in bubble wrap.

By this time I was not the only one noticing these changes. My customers were as well and making it known to me that they were not happy at all.  Yes, I had a gut something was happening but didn't want to face the fact. Even my husband had a feeling too.


Well, my gut was right. While I had family visiting , we were getting ready to go out to dinner and I got a message on June 26th, 2015 that there was a last minute meeting. Of course I could not attend due to going out with my family. Well, by the end of my dinner my phone was blowing up with messages, notifications from my friends, customers, etc. asking me what in the world was going on.

Yep, those words were spoken.

CHELSEA ROW WAS CLOSING


Like I said, we had that gut feeling something was happening.

They company then decided to do an inventory liquidation sale for 75% off everything. Many girls were leery of taking part as they were not sure the company would come through with paying out commissions, filling orders, etc. I talked to the Direct of Field Development in which we worked with personally from the start. She was are go to person. She ensured me that all orders would be processed, all commissions paid, etc.

I decided to go ahead and promote the sale as did many others beings we were reassured of this information. Needless to say that final month my customers went crazy making purchases. I personally sold approx. $10,000.00 worth of inventory, and that was at the 75% off rates. The company raised our commission rates that if we did $1,000.00 in sales or more we would receive 50% commission so as you can assume I was owed a hefty chunk of change for all of my hard work. I literally worked around the clock answering questions, giving updates on quantities, checking on status of orders for customers, etc. It was my passion and I loved what I did. I wanted to make sure my customers were taken care of just as I would like to be if I were in their shoes.


We received commission checks once a week. We were told on July 27th, 2104 that all remaining commissions would be in one big lump sum and as my cheer leading stating mine would be massive.


Well, today is September 11, 2015 and I've received no commission check and neither have all the other reps owed money. I've been non-stop in communication with the company in regards to this since they announced the last day they would remain open. I told the Director of Field Development that I wanted contact info for someone after her final day. She stated she would do what she could if it took her getting the info for the chairman of the board. Well, none of this came through at all expect for an email address for the CEO. I did email him to hear back that the investors told him they would be following through with paying out all commissions.

Yep, this company was fully funded by investors. Three to be exact that have funded in $6.5 million in funding over the past several years. He told me they expected to have commissions paid out by the end of September 2015. I begged him to stay in contact with me in regards to this. Well, he didn't keep his promise. I found out a week later that the CEO, Andy Fox was no longer in charge and it had been handed over to the Kallander Group. The CEO, all 3 investors and the firm are all located in the Boston area as well. Once finding out this info I emailed Andy Fox back stating this news. He said he had not been in control for quite sometime and gave me the Kallander Groups info and told me to contact Barry who is now handling things. I immediately contacted Barry with the Kallander Group to get answer. He stated he was in the process of helping the company and get things worked out and trying to sell the company. I questioned him in regards to this. If the company closed why try to sell it and if so why didn't they try to do this months before. He said that the company has no funds and the company is not worth anything. Their trying to sell the software, in which I told you all about earlier in this post. The software in which all the reps were guinea pigs testing it out for them.

It is funny how he said the company is not worth anything. All sales that final month were processed and the company received payments from customers when the packages were shipped. That means in that last month they had the money in which to pay our commissions and could use the left over for whatever they choose. I've since spoken to the Director of Field Development in which was our leader to ask if she received her final check and she said she did. If they had the money to pay the handful of staff in the office then why didn't we receive our checks???? She/they would not have had a job that last month if it wasn't for all of the Boutique Owners bringing in orders for them to process. Guess that is why she was my biggest cheerleader at the end telling me to get as many sales as I could. I secured a paycheck for her and the others in the office.

Since this talk we've all been sent Claim Forms from the Kallander Group to fill out stating the amount that were owed. That will then add us to the claim pool. If their successful in selling this software then the money collected from the sale will go to pay off the creditors in the claim pool. The problem with that is in the claim form it states the investors have not received anything in the past 3 years, plus how many other creditors are out there????? We'll probably never know.

Let's just say with the investors being owed you know they'll be at the top of that claim pool and probably have first dibs on the money they receive from a sale. Then they will go down the list and all the Boutique Owners will probably be at the very bottom of the list and when they finally arrive to our names I'm sure there will be noting left to pay us out.

Like I said too that is a wish and a prayer as this is only possible if they can get a sale.

As you can imagine how upset we all are. We've all grouped together to fight this and will do everything in our power to not allow the BIG guy to Screw the Little Guys!!!

We have a group of approx. 40 Boutique Owners right now and that list is growing on who all is owed money. I'm personally owed $4,283.34  so you can imagine how upset I am.

These girls were going to use their commissions, to pay bills, purchase books for college, buy their children school supply/clothes and more. I was personally using mine to be added to money we had set aside for a down payment for a house.


Our main goal is to get our money that is owed to us. We have to think down the road and like I said even if their lucky enough to sell the software their probably won't be anything left for us so we'll still lose.  With that being said we DO NOT want them to be able to sell the software. The CEO Andy Fox is known in the tech field for creating software/companies. Then when there doing good he sells them to make a nice profit. Looking back all the Boutique Owners now feel that was his intention the entire time with this particular software and like I said we were used as guinea pigs to test and work all the kinks out for him.

It is now my goal as the other boutique owners to get the word out about this. We want all the other Direct Selling companies to be aware of what has been going on in regards to this and to let them know how this person operates.


Like they always say. Don't mess with a Momma Bear and her Cubs. Well this is exactly what is happening. They're messing with the Momma Bear and taking things from her cubs/family. Momma Bears do not go down with out a fight. We worked hard for those commissions that are rightfully owed to us. Our goal is to get the word out and hopes it gets seen by a national news station, magazine,etc. We need a louder voice in this and seeking help.

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