shop.com annual report 2014

ANNUAL REPORT 2014

Market America | SHOP.COM has evolved to become recognized as a leader in Internet marketing and online shopping. By enabling entrepreneurs to develop their UnFranchise® DNA (belief in the UnFranchise Business and a commitment to following the proven system, selling Market America-branded products and creating a Shopping Annuity®) and convert spending into earning, anyone can become successful with the UnFranchise Business. Market America is molding the future of online shopping with the integration of SHOP.COM’s technology and the people power of the UnFranchise Business and Market America worldwide.

This is such an exciting time for our UnFranchise Owners and customers as we continue to connect technology with our digital marketing vision to empower entrepreneurs. With our new technology, applications, systems, tools, products, business model and expansion efforts around the globe, the world continues to discover the UnFranchise Business and SHOP.COM.

I am still amazed at the tools available today for all UnFranchise Owners versus when I started this journey over 20 years ago. We’ve created systems and functionality to make it faster and more efficient to successfully develop an UnFranchise Business. We’ve simplified many facets of the business that allow our UnFranchise Owners to focus their time and energy on what really counts — building the business and generating an ongoing income. Improvements to the UnFranchise Business Presentation (UBP) make it easier than ever to present the business. We now have the improved technology and functionality of SHOP.COM, plus the Fast Start Program, prospecting and retailing videos, mini-websites, mobile technology and many more tools that make execution of the proven business system simple.

The following pages of the Annual Report 2014 outline and reflect on our revenue over the past year, but it’s in my nature to stay focused on what lies ahead. As our technology has advanced right alongside the growth of the Internet, we’ve been able to make huge strides on a global scale. I couldn’t be more excited about our future.

Our trend of increasing total sales from one year to the next continued. Market America | SHOP.COM saw worldwide sales top $550 million in 2013, which is up 8.7 percent over the previous year’s total of $506 million. Based on our global expansion efforts hitting stride and our products reaching entirely new customer bases, we can confidently project a 13.6 percent increase for sales during 2014.

That increase in total sales translates into more commissions and retail profits for our UnFranchise Owners during this past year. In total, UnFranchise Owners earned $144 million in commissions during 2013, up from the previous year.Estimated retail profits earned by UnFranchise Owners also saw growth, as they topped off at $134 million, a substantial increase from 2012.

The bottom line here is that UnFranchise Owners have earned over $3.1 billion in estimated retail profits and commissions since the company’s inception.† As more and more entrepreneurs realize the true power of the UnFranchise Business, this number will continue to increase.

According to eMarketer, business-to-consumer worldwide e-commerce sales will hit $1.471 trillion in 2014, which is an increase of nearly 20 percent compared to 2013. Market America | SHOP.COM is in the perfect position to capitalize on these staggering increases in e-commerce.

To coincide with our growth — both in revenue and in global expansion — we’ve continued to streamline and simplify all areas of managing the UnFranchise Business so it remains consistent and duplicatable across all markets. The powerful

capabilities of SHOP.COM are matched by the enhanced functionality of the UnFranchise Business Account, which is powered by the most advanced technology available. The easy- to -use interface allows you to get an entire overview of what’s going on in your business with a single glance. It’s customizable, better organized and optimized for your success.

MeetON (unfranchise.meeton.com) has made distance a thing of the past as UnFranchise Owners on the other side of the country can get a front row seat to some of the most compelling speakers and critical information

presented at regional conventions and other training events. New this year, UnFranchise TV provides UnFranchise Owners access to valuable instructional and informational videos to support their business growth and success. These videos make it simple to leverage the knowledge and enthusiasm of trailblazing UnFranchise Owners with ease from anywhere.

In addition to all of that, some revolutionary new programs launched earlier this year — like SHOP.COM Groceries, which opens up entirely new markets while offering customers even more of what they want and need. UnFranchise Owners worldwide are reaching new levels of success. With all these tools and technologies, success is only limited by your ability to think big and execute a proven business plan. Market America | SHOP.COM is changing the way that people shop and changing the economic paradigm so everyone can become financially independent by creating their own economy.

I believe in you. Keep growing.

AN AMAZING PAST ... AN EVEN BRIGHTER FUTURE

JR RidingerPresident & Chief Executive Officer

Market America | SHOP.COM saw worldwide sales top $550

million in 2013, which is up 8.7 percent over the previous year’s

total of $506 million.

2013 FinancialsEstimated retail sales*: $550 millionUnFranchise Owner Earnings: $278 million (estimated retail profits* and commissions)

2014 Projections Retail sales of $625 million 13.6 percent increase

*Estimated retail profits and sales are based on suggested retail price

†As of June 30, 2014

GLOBALAT A GLANCE

1 Annual Report 2014 Market America | SHOP.COM

THE SHOPPING ANNUITYBy implementing the Shopping Annuity®, UnFranchise® Owners and their customers can convert spending into earning by simply replacing competitor brands used throughout their homes with Market America’s exclusive brands. It’s a smart and easy way to make some slight shopping modifications that will pay off big in the long run. This is exactly why the concept is called the Shopping Annuity, and it is the very essence of the UnFranchise Business.

The Shopping Annuity is helping thousands achieve financial success by converting their spending into earning through their UnFranchise Businesses and SHOP.COM. The Shopping Annuity concept provides a systemized way for people to earn money by purchasing the things they buy every month through SHOP.COM and save money by comparison shopping as well as earn Cashback on qualified purchases. These savings and Cashback earnings are like having an ongoing, perpetual annuity. The core DNA of the UnFranchise Business has remained the same for more than 20 years: matching people to products and products to people. Now, this opportunity for success is bigger and more powerful than ever with the Shopping Advisor on SHOP.COM.

Identify Ways To Save And EarnThe Shopping Advisor was developed to help customers simply and easily identify products that can enhance daily living, while helping to save money

in the process. It is a much more advanced, fun and interactive version of the Home Shopping List that UnFranchise Owners and customers have been using for years. By making this tool available online, anyone can now discover the products they can purchase from their UnFranchise Business and SHOP.COM to save and make money.

The Shopping Advisor navigates throughout a virtual home to identify negative products (items not purchased through the UnFranchise Business or SHOP.COM) that could be replaced with positive products (Market America’s exclusive brands and products purchased through SHOP.COM), keeps track

of Cashback and IBV that could be earned, and then makes it easy and fast to make the switch. When trying to convert spending into earning, simply think about what the home really needs. Have children? Check out DNA Miracles™. Experiencing joint issues? Explore the wide range of health and nutrition supplements from Isotonix® and Prime™. Need groceries? SHOP.COM Groceries even enables customers to fund the Shopping Annuity while buying food essentials. From the pantry to the patio, funding a Shopping Annuity couldn’t be easier.

Duplicate To Create MomentumMarket America’s business model was built to best succeed while working with others. Teamwork makes the dream work — building a Shopping Annuity is no exception. It’s important to share with everyone just how easy and powerful it is to convert spending into earning. Anyone can benefit from the concept of a Shopping Annuity. UnFranchise Owners can create an ongoing income by encouraging other business partners in an organization to implement their own Shopping Annuity. Customers can see the savings pile up and the Cashback amount grow right before their eyes for products they are already purchasing somewhere else.

Decide that today is the day to stop throwing money away and, instead, invest in an UnFranchise Business with the Shopping Annuity.

CONVERT SPENDING INTO EARNING

“The Shopping Annuity is helping thousands

achieve financial success by converting their spending into earning through their UnFranchise Businesses

and SHOP.COM.”

The Shopping Advisor was developed to help customers simply and easily identify products that can enhance daily living, while helping to save money in the process.

Market America | SHOP.COM Annual Report 2014 2

United Kingdom2013 FinancialsEstimated retail sales*: $1.5 million USDUFO estimated retail profits* and commissions: $503,000 USD

Taiwan 2013 FinancialsEstimated retail sales*: $240 million USDUFO estimated retail profits* and commissions: $97 million USD

Australia2013 FinancialsEstimated retail sales*: $5.8 million USDUFO estimated retail profits* and commissions: $3.2 million USD

Hong Kong2013 FinancialsEstimated retail sales*: $19.5 million USDUFO estimated retail profits* and commissions: $10.6 million USD

SingaporeMarket opened September 2014

*Estimated retail sales and estimated retail profits are based on suggested retail price.

United States2013 FinancialsEstimated retail sales*: $250 million USDUFO estimated retail profits* and commissions: $150 million USD

Canada2013 FinancialsEstimated retail sales*: $32 million USDUFO estimated retail profits* and commissions: $17 million USD

Mexico2013 FinancialsEstimated retail sales*: $1.4 million USDUFO estimated retail profits* and commissions: $623,000 USD

MARKET AMERICA WORLDWIDEAT A GLANCE

2014 ProjectionsRetail sales of $1.5 million USD

2014 ProjectionsRetail sales of $290 million USD








AT A GLANCEEMERGING MARKETS PROGRAM (EMP)

In a digital age where the only borders are the limits of one’s imagination, the company is poised for explosive growth with a strategic way to expand globally. The Emerging Markets Program (EMP) is a simplified, streamlined and modular strategy designed specifically for testing new markets around the world.

The EMP helps to build a foundation in a new country or region by leveraging personal consumption through GLOBAL.SHOP.COM, thereby building toward becoming a ‘market’ country (i.e., Market America, Market Taiwan).

Market America Worldwide is divided into three geographic regions: The Americas, Europe and Asia-Pacific. Current EMP countries within The Americas include Colombia, Panama, Ecuador, Jamaica, the Bahamas and Dominican Republic — each has access to Market America products. In Europe, Spain has been a great success and will open as a full market country by the end of 2014. Currently within the Asia-Pacific region, New Zealand is an EMP country.

EMP UnFranchise® Owners participate in the same Management Performance Compensation Plan (MPCP) as their region and can sponsor in any other EMP or market country within that region. Commissions from sales through GLOBAL.SHOP.COM are still based on the MPCP criteria and earned the same way as any market country.

Growing an EMP organization is as simple as business can be. GLOBAL.SHOP.COM is even available as a mobile website, making it easy for shoppers around the world to discover Market America’s high-quality products. Now that the program is gaining momentum, more and more new countries will be added soon. As each new EMP country opens, that’s an entirely new market to reach, and now every UnFranchise Owner has the means to reach it.

Market America | SHOP.COM is creating a true global economy. Welcome to a new era of entrepreneurism.

Emerging Market CountryMarket Country


TECHNOLOGY TO LEAD E-COMMERCEMarket America integrates cutting-edge technology with the latest social networking tools in the pursuit of revolutionizing the way people shop.

Through SHOP.COM, UnFranchise® Owners are instantly able to offer millions of products, allowing customers to find anything they want, anytime they want it. SHOP.COM provides access to thousands of popular brands and retailers, as well as thousands of exclusive Market America products. With its intuitive search and comparative shopping feature, customers can find the best prices on more than 40 million products.

Owning a SHOP.COM website puts entrepreneurs in the perfect position to capitalize on the largest shopping migration since Walmart opened more than 50 years ago. Consumers all over the world are realizing the endless benefits to buying online.

The Benefits of SHOP.COMHere are some advanced features that led to SHOP.COM’s ranking by Internet Retailer as one of the fastest growing online retailers in the world for the past two years:

Customers earn Cashback for every qualified purchase made through SHOP.COM, from the same stores they already love and trust. The SHOP.COM Cashback symbol makes it easy to identify the more than 3,000 stores that offer Cashback, and redeeming is simple – just apply the Cashback amount at checkout or request a payout check. Getting paid to shop is a great reward, but it’s just the start.

Market America is revolutionizing the way the world shops with the SHOP Mobile app.


SHOP.COM Groceries offers the ultimate in convenience for an everyday necessity. There are many reasons why SHOP.COM Groceries is the premier choice for grocery shopping from home. Unlike the other sites, SHOP.COM Groceries will never charge a membership fee. With a low, flat $5.99 shipping fee, items are delivered straight to the customer’s door quickly and hassle-free. Plus, with Cashback earned on every order, it’s never been easier to save and be rewarded for every day purchases.

SHOP.COM’s Shopping Advisor combines convenience with the power of demonstration, showing users exactly how much they can save and earn by switching from current brands to Market America’s exclusive quality brands. The Shopping Advisor guides customers through a virtual home, identifies which products they could benefit from most and shows why Market America brands are superior. Convert spending into earning with the Shopping Advisor.

Shopping is fun on SHOP.COM, where it’s simple to combine social and shopping in one place with SHOPBOX. This great tool allows customers to share their favorite products with their friends by creating a unique Facebook store. Not only can friends view the SHOPBOX and make a purchase without ever leaving Facebook, but the customer who shared the SHOPBOX will receive referral cash for every purchase made!

eGifts electronic gifts are the perfect present in a pinch. It allows someone to create a custom group of products available on SHOP.COM, then send the collection to a recipient via email so they can select the gift they like most. The chosen item is shipped to the recipient and the sender’s credit card is charged. Great for last-minute gifts or when you’re unsure what style or size they would like best!

With such advanced features and a program that pays people to shop, it’s easy to see why SHOP.COM is a top online retailer year after year.

SHOP.COM Direct is a wholesale provider that allows Market America | SHOP.COM to offer top consumer goods at the lowest possible price. Find electronics, office supplies and more with higher Cashback and IBV.

Savvy shoppers are always on the lookout for the best savings, and SHOP.COM delivers. The website features more than 12,000 Hot Deals every day.

AutoShip is a great advantage to SHOP.COM, ensuring that customers never run out of their favorite exclusive company brands. Customers can set the frequency at which they want to receive regular shipments so they’ll never have to worry about taking the time to reorder — it’s the ultimate in convenience. In addition, shoppers who add items to AutoShip receive an instant 5 percent discount on their orders.

Moving with m-CommerceAs shopping trends continue to migrate to the web, a big chunk of those sales are already spilling over into mobile platforms as consumers rely more and more on convenience with the use of smartphones and tablets. Market America is revolutionizing the way the world shops with the SHOP Mobile app, placing the best technology and access to millions of products in the palm of consumers’ hands. The SHOP Mobile site offers most all of the functionality of the main site in a mobile-friendly form.

With the SHOP Mobile app, customers have access to: • 40 million products on SHOP.COM• Barcode scanning feature • Increased Cashback deals• Coupon codes• And much, much more!

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GLOBAL.SHOP.COM AND E-COMMERCE

As the world becomes more connected through the Internet and social media, people constantly find themselves with contacts and potential customers all around the world.

GLOBAL.SHOP.COM helps UnFranchise® Owners serve those customers now, providing shoppers nearly anywhere in the world with access to the company’s exclusive brands such as Isotonix®, Motives® and Lumière de Vie®, among others.

GLOBAL.SHOP.COM not only supports multiple languages like English, Traditional Chinese and Spanish, but will automatically detect both the language of the person visiting the site and the country from where they are browsing the site. If either of those preferences needs to be changed,

there’s a simple navigation at the top of the screen that allows the visitor to easily modify both with the simple click of a button.

Additionally, GLOBAL.SHOP.COM is now available as a mobile website bringing the company’s products to an even wider audience around the world. This year, customers will also be able to ship to mainland China. Shopping has never been more convenient!

These aspects of GLOBAL.SHOP.COM let UnFranchise Owners of both ‘market’ countries and EMPs develop a customer base in nearly any country around the world. The site is also a major benefit for those UnFranchise Owners and their customers in countries that participate in a Personal Consumption program like Australia or Canada.

GLOBAL.SHOP.COM opens up new opportunities and taps into the trend of explosive e-commerce growth everywhere. Online sales are growing throughout the world. According to eMarketer, business-to-consumer worldwide e-commerce sales hit $1.471 trillion in 2014, which is an increase of nearly 20 percent compared to 2013. Now, every UnFranchise Owner has the chance to capitalize on that growth!


Market America | SHOP.COM works hard to stay ahead of the curve and anticipate shifts in the market in order to set up UnFranchise® Owners for unparalleled success. Now, the company is using advanced digital marketing tools to predict what consumers want before they even know they want it. This is a game changer for the UnFranchise Business!

As Market America continues to make technological advancements on its websites, attention can move beyond integration to targeted marketing initiatives. A sharper focus on merchandising, recommendations, home page customization and customer acquisition are just the start of the company’s sophisticated marketing campaigns that will support growth for all UnFranchise Owners.

Earlier this year, Market America began using powerful testing, targeting and recommendation tools from Adobe that enable the Digital Marketing Team to personalize the customer experience on SHOP.COM and motivescosmetics.com. These marketing tools, explained below, help to maximize revenue and will be implemented on other Market America websites around the world to enhance the shopping experience for all UnFranchise Owners and customers.

• The use of A/B testing allows Market America’s Digital Marketing Team to easily set up and run concurrent tests to quickly determine the best product offers and content messaging to fit each unique website visitor.

• Automated personalization and behavioral targeting systems update the website content to be tailored for each individual visitor using a self-learning algorithmic program.

• Multivariate testing provides data to understand the most impactful marketing elements and establish best methods for delivering real-time targeted content for each visitor.

• The Digital Marketing Team uses preset or customized rules, including those defined by visitor location, to target content to a specific audience.

• Analytics-enhanced reporting automatically syncs visitor data and activity insights.

• The Recommendations engine provides visitors with personalized product recommendations that increase product awareness and promote up-selling.

Adobe’s tools provide the technology to automate the above-mentioned processes so the Digital Marketing Team can quickly deliver relevant suggestions and experiences, then easily monitor their impact on consumer behavior and purchasing habits.

In 2014, the Search Engine Marketing (SEM) and Search Engine Optimization (SEO) teams became part of Market America’s new inclusive Digital Marketing Team, which also includes a dedicated Web Merchandising group. With this unified focus, Market America has continued to

expand its online search campaigns to acquire new shoppers and is utilizing Product Listing Ads (PLAs) on Google Shopping, Bing Shopping and Yahoo! Shopping. PLAs are a powerful ad format for retailers, allowing a brand to reach consumers via search queries. The ads include product images and are selected to match the search. This type of visual marketing is extremely effective and will expose Market America’s high-quality products to a larger audience than ever before.

Another way Market America is opening up new markets is with Application Programming Interfaces (APIs). At the most basic level, APIs are the building blocks of ecommerce websites that allow products and services to talk to other products and services. Today, Market America leverages thousands of APIs/web services to run its e-commerce, mobile, iPhone and Android applications, which expose the products and services to new markets.

The next major focus is to build more direct relationships with suppliers via SHOP.COM Direct. This will enable Market America to focus on desirable high-margin categories, such as electronics and office supplies. The direct selling approach builds strong brand loyalty by keeping shoppers on SHOP.COM.

This powerful arsenal of digital marketing tools puts Market America | SHOP.COM on track to once again revolutionize the way people shop.

DIGITAL MARKETINGTHE LATEST STRATEGIES, OPPORTUNITIES AND INITIATIVES

“A sharper focus on merchandising, recommendations, home page customization and customer acquisition are just the start of the company’s sophisticated marketing campaigns.”


THE UNFRANCHISE BUSINESS

For the ultimate in convenience, the UnFranchise Business Account is optimized for mobile devices. Available in all countries, you can order products, check sales volume and even register UnFranchise Owners on the go.

Founded in 1992, Market America is a product brokerage and Internet marketing company that specializes in one-to-one marketing and social shopping. Like a franchise, Market America provides systemization, standardization, state-of-the-art management systems, merchandising and marketing tools and growing visibility. However, unlike a franchise, there are no franchise fees, monthly royalties or territorial restrictions, plus little to no risk and minimal startup expenses. Best of all, UnFranchise® Owners can begin on a part-time basis with flexible hours.

There are three ways to earn income. First, provide products through an individualized Market America website. UnFranchise Owners can earn 30 to 50 percent gross retail profit by servicing the needs and wants of 10 -15 Preferred Customers with this site. Second, leverage time and duplicate efforts by creating a sales organization with others doing the same things. Third, earn Cashback from each SHOP.COM and Partner Store transaction and from customers’ online transactions. Simply put, the UnFranchise Business provides a path to financial independence by allowing UnFranchise Owners to secure a stream of ongoing income.

UnFranchise Owners earn commissions and retail profits based on Market America’s revolutionary Management Performance and Compensation Plan (MPCP), which enables individuals to earn ongoing income over time.

Market America provides the products and services, creates the marketing materials, and handles the shipping and distribution. Most of the administrative and operational duties of an UnFranchise Business are handled by Market America, allowing UnFranchise Owners to focus on serving their customers’ needs, and creating a lucrative business and financial security for themselves.

To get started, UnFranchise Owners follow a detailed plan and are provided a custom website and management tools to run the business. In addition to a customizable SHOP.COM website, which provides the best public-facing platform that has the latest technology, best functionality and cutting -edge convenience, each UnFranchise Owner also has access to the UnFranchise Business Account. This account makes operating the UnFranchise Business simple, yet sophisticated.

The UnFranchise Business Account “dashboard” design allows entrepreneurs to customize their landing page — adding, moving and removing widgets at any time using the “Edit Dashboard” function. The dashboard gives a complete snapshot of a particular UnFranchise Owners’ business so they can easily see the most important aspects of running the business with just a glance. Those in the U.S., Canada, Mexico, Singapore, Spain and EMP countries already have access to this intuitive interface. This same technology will be coming to UnFranchise Owners in Taiwan, Hong Kong, the United Kingdom and Australia next.

The UnFranchise Business is a proven plan for financial success. Market America | SHOP.COM is changing the way people shop and changing the economic paradigm so anyone can become financially independent by creating their own economy — Built on Product. Powered by People®.

A PROVEN PLAN FOR FINANCIAL SUCCESS

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BUILT ON PRODUCTBuilt on Product. Powered by People.® It is scripted in our logo; it is spoken at our events. It defines our past and secures our future. This phrase has become more than just a tagline for Market America — it is our purpose, our commitment, and our promise to provide the highest-quality, science-based, market-driven products with the most personal customer service available anywhere.

A Strong FoundationIt all starts here. Market America believes that excellence in quality must be built into a product as a design requirement.

Our quality control process involves dedicated scientists, strategic relationships with manufacturers, and a rock-solid commitment to customers. Product excellence is more than one department or group of people assuring quality — quality involves every individual at Market America. The company oversees all stages of the process, from product concept to manufacturing and delivery.

The Best Ingredients Make the Best ProductsIngredients are sourced from only the most trustworthy suppliers. The raw materials used in every company-branded product undergo a comprehensive evaluation by the manufacturers to ensure that they meet stringent purity and potency requirements. Verification and approval by a Certificate of Analysis (COA) is required

for each raw material. Approved raw materials are subject to laboratory confirmation of physical characteristics and material potency before being used in manufacturing.

Each product is then carefully prepared following a written master manufacturing record and every batch is reviewed and approved by the manufacturer’s highly trained quality control personnel. Products are also inspected at Market America’s warehouse for damage, label accuracy, appearance, taste and identity prior to release.

Quality and science take precedence over popular and trendy. Market America products are made with ingredients backed by clinical research. The company finds suppliers of ingredients that have the clinical studies backing up their application in a formulation.

As a product broker, not a manufacturer, Market America can act as an independent quality inspector between the manufacturer and the customer. If something doesn’t satisfy the standard, it’s returned to the manufacturer for replacement. Every product is scientifically engineered and must be manufactured consistently with regard to purity, performance, strength and uniformity.

The company forms long-lasting relationships with vendors and manufacturers, and unlike some companies, doesn’t just shop around for the best price. Instead, Market America prefers to develop a relationship and stay with the same manufacturers who will produce consistent quality products from year to year.

Good Manufacturing PracticesObviously, good quality control involves high standards. Market America not only has them, but holds its manufacturers to the same. For example, all Isotonix® health and nutrition products are produced under Good Manufacturing Practices (GMPs). GMP is a recognized standard for dietary supplements. Therefore, Market America’s exclusive Isotonix manufacturer carries a current GMP certificate by an independent auditor. In addition, manufacturers are audited by our Quality Control unit. A typical audit includes reviewing batch records, laboratory test results, training records, label control, sanitation procedures and ingredient control records.

Being GMP compliant means complying with regulatory Standard Operating Procedures (SOPs), which provide details about keeping the manufacturing process under control to produce a consistent product that meets all specifications. Some examples of topics that lend themselves well to the SOP format include inventory procedure for raw materials, facility security, vendor qualification, employee training, and so on.

All manufacturing equipment that comes in contact with our products must be cleaned according to mandated procedures between production runs and verified to ensure sanitation has been performed prior to use. Product samples are collected at various stages of production for chemical and microbiological analysis to ensure consistency and purity. Lot code confirmation, weight checks, label and material checks are performed according to exact written procedures.

The Importance of TestingMarket America’s world headquarters in Greensboro, N.C. has an excellent in-house laboratory with ever-expanding capabilities that can perform such testing as microbiological contamination, isotonic range, presence of gluten allergens, pH, microscopic analysis and spectroscopic analysis. Every shipment received into the distribution center must be inspected and approved before it can go out to the customers.

Understanding what happens behind the scenes gives a better sense of how much Market America emphasizes quality. This is the company’s commitment — Market America will not ship anything that falls short of superior quality.

Our quality control process involves dedicated scientists,

strategic relationships with manufacturers, and a

rock-solid commitment to customers.


A reliable, advanced product line that works as a complete age maintenance system

Anti-aging nutraceuticals that feature cutting-edge technology and scientifically supported ingredients

Products that help keep people looking and feeling healthy and vibrant in all stages of life

Spa quality in the quiet of home

Extensive line designed to address the most essential body care needs with effective, gentle formulas

Each product is enhanced with some of nature’s most revitalizing elements, such as aloe vera and chamomile

Awake® Energy Shots help provide energy and focus throughout the day

Formulated with caffeine, B vitamins, amino acids and other nutrients to provide long-lasting physical and mental energy

Two great-tasting flavors – orange and grape – with zero calories and zero sugars

Instant gratification and therapy to fix your beauty flaws

A line of solution-oriented skincare products developed using innovative ingredients that offer speedy results

The quick fix that your skin needs to look firm, smooth and radiant

Designed to promote overall cardiovascular health

Contains vital nutrients your heart needs to stay healthy and strong

Sytrinol® helps maintain normal cholesterol levels

One of the most concentrated aloe products on the market, available in four delicious flavors

IASC-certified (International Aloe Science Council), ensuring aloe content and purity

Promotes a healthy immune system and proper nutrient absorption

These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure or prevent any disease.

The next generation of skincare, proven to promote the natural healing process of all skin types

Utilizes the power of the sea and the earth to help provide revitalized radiance, improved clarity and younger-looking skin

Acts as first aid for the skin

Gentle, natural and safe for babies and children

Specifically formulated from the best ingredients

Products including gummy vitamins, probiotics, diaper cream and a delicate foaming baby wash are loved by moms everywhere

®

MARKET AMERICA’S EXCLUSIVE BRANDSAs a product brokerage company, Market America identifies the highest quality market-driven products and services. By moving with the marketplace, Market America does not rely solely on the sales of any single product or service.

Without the costly burdens of manufacturing, mass marketing and advertising, greater resources are placed in product development and quality

assurance, which guarantees that every Market America product is backed by substantial science, rigorous testing and peer-reviewed research.

With hundreds of exclusive products and services, UnFranchise® Owners can capitalize on numerous multibillion-dollar industries including health and nutrition, cosmetics, anti-aging, weight management, home and garden, baby and

children’s care, pet care, auto care, website solutions, financial services and more.

UnFranchise Businesses do not rely on the sale of any single product or service, resulting in short-term and long-term stability and profitability. Whatever the trend, Market America is in a position to capitalize on it.



Motives® by Loren Ridinger is the award-winning cosmetics line defined by its creator — a trendsetter who has changed the face of the beauty industry. Simple to use and sexy to wear, Motives provides an amazing color payoff, a flawless look, and a luxurious feel and finish. With the trendiest colors and industry-leading ingredients to give eyes, cheeks, lips, face and nails a beautiful look and feel, Motives — like Loren Ridinger — is changing the face of cosmetics.

Most weight management programs only target one aspect of weight loss, which is why most people don’t achieve their goals, or they regain the weight. TLS® Weight Loss Solution teaches low-glycemic eating and how to identify new favorite foods, resulting in new, healthy behaviors. This leads to improved body composition, which gets the metabolism operating in high gear. Plus, with the help of support materials, tools, and specially-formulated TLS supplements, anyone can find their fit in no time.

Isotonix® products offer the fastest and most efficient delivery system of nutraceutical supplements. Formulated using only the most advanced and scientifically proven ingredients, Isotonix products provide both rapid delivery and superior results. Isotonix products are completely free of binders and fillers common in traditional tablet and capsule products, so you know that you are getting only the quality ingredients you expect. Isotonix has you covered with products from antioxidants to vision support.

@motivescosmetics now has more than 1.1 million Instagram followers!

maWebCenters® provides a comprehensive Internet marketing solution for small- to medium-sized businesses, including high-quality eCommerce-ready websites, social media marketing, search engine optimization, contact management, e-mail newsletter marketing and much more. Combine our incredible technology with our unlimited, award-winning customer care service and you have the best solution on the market today.

Joanne HsiINTERNATIONAL FIELD PRESIDENT

Earnings of $100,000 - $124,999 in four weeksNEW YORK, N.Y.

Frank & Gingie KeeferSENIOR EXECUTIVE FIELD VICE PRESIDENT

Earnings of $63,000 - $79,999 in four weeksMARCO ISLAND, FLA.

Dolly KuoSENIOR EXECUTIVE FIELD VICE PRESIDENT

Earnings of $63,000 - $79,999 in four weeksWALNUT, CALIF.

Tony & Pam BowlingEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksLUTZ, FLA.

Tina ChenEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksLIVINGSTON, N.J.

Nina HaleEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksCOVINA, CALIF.

Min LiuSENIOR EXECUTIVE FIELD VICE PRESIDENT

Earnings of $63,000 - $79,999 in four weeksOAKLAND GARDEN, N.Y.

Patrick Hsieh & Alice ChenSENIOR EXECUTIVE FIELD VICE PRESIDENT

Earnings of $63,000 - $79,999 in four weeksBURNABY, B.C.

Norm & Mary RothEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksFOUNTAIN HILLS, ARIZ.

Julie SchollEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksMARCO ISLAND, FLA.

Vikki LeeEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksLONG BEACH, CALIF.

Market America has been responsible for creating hundreds of millionaires since the company’s inception in 1992. Overall, individuals have earned more than $3.1 billion in commissions and estimated retail profits.*POWERED BY PEOPLE

Elizabeth WeberINTERNATIONAL FIELD CHAIRMAN

Earnings of $125,000 - $149,999 in four weeksMELROSE, MASS.

Ben GinderFIELD PRESIDENT

Earnings of $80,000 - $99,999 in four weeksRED LION, PA.

Victor &Alice ChiouSENIOR EXECUTIVE FIELD VICE PRESIDENT

Earnings of $63,000 - $79,999 in four weeksMILPITAS, CALIF.

Marian &James KuoFIELD PRESIDENT

Earnings of $80,000 - $99,999 in four weeksARCADIA, CALIF.

Roger WuEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksCOVINA, CALIF.

Wan Rong YuanEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksCOLLEGE POINT, N.Y.

Ying ZhaoEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksOAK HILL, VA.

Amber YangEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksBAYSIDE, N.Y.

Jim & Lisa WinklerEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksOKAUCHEE, WIS.

Stacy TungEXECUTIVE FIELD VICE PRESIDENT

Earnings of $45,000 - $62,999 in four weeksNEW TAIPEI CITY, TAIWAN


The examples of income shown are not intended to be representative of any specific class of Market America UnFranchise® Owner, nor are they intended to represent that any given UnFranchise Owner will earn income in that amount. Rather, the income figures testify to the results that have been accomplished by UnFranchise Owners who have devoted time, talent, hard work and a willingness to follow the proven UnFranchise Business plan in building their Market America business. Do not be misled by claims that huge income is easily achieved. The success of any Market America UnFranchise Owner will depend on the amount of hard work, talent and dedication that he or she devotes to the building of his or her Market America business.

Jacki & Christopher BlaskoFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksCHETEK, WIS.

Mary Beth DocosFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksOSWEGO, N.Y.

Phil & Sue GuidoFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksDIX HILLS, N.Y.

David LinFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksDIX HILLS, N.Y.

Arlene LowyFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksPITTSBURGH, PA.

Karri WuFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksVANCOUVER, B.C.

Kwei Fang LiuFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksBURNABY, B.C.

Kenneth & Tara BeckFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksBOYNTON BEACH, FLA.

Beatrice LiFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksBOYNTON BEACH, FLA.

Andy DocosFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksOSWEGO, N.Y.

Chi-Heng Ma & Shu YangFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksSOUTHLAKE, TX.

Lisa & Edward GrantFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksSTAMFORD, CONN.

Lou ManfrediFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksYORK, PA.

Lisa Lieberman-Wang & Yardley Wang FIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksWEST MILFORD, NJ.

Emily ChengFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksARCADIA, CALIF.

Min Chen & Wei WangFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksONTARIO, CAN.

Keith & Kim DoyleFIELD VICE PRESIDENT

Earnings of $36,000 - $44,999 in four weeksYORK, PA.

Total estimated retail profits earned*:

$1,573,254,964 Total commissions earned:

$1,559,151,173Total UnFranchise Owner earnings:

$3,132,406,137†+ =*Estimated retail profits are based on suggested retail price. †As of June 30, 2014.


WORLDWIDE SALES GROWTH

2013

Sales $334,000,299Cost of Sales 108,218,626

Gross Profit 225,781,673

Selling ExpensesCommissions 127,985,587

General and Administrative Expenses 87,458,820

Income From Operations 10,337,266

Other Expenses 658,102

Income Before Taxes 9,679,164

Income Taxes 2,811,929

Net Income $6,867,235

MARKET AMERICA WORLDWIDE, INC. AND AFFILIATES CONSOLIDATED STATEMENTS OF INCOME FOR YEAR ENDED DECEMBER 31, 2013

WORLDWIDE COMPANY SALES

During 2013, the company made significant investments in infrastructure and technology that were expensed. Significant expenditures for inventory to support the continued international expansion efforts were also expensed.

Changes in the IRS Code allowed this to be done. Changes in accounting rules also allowed a more aggressive expensing of intangible assets that the company took advantage of to offset current income and reduce corporate taxes.

15 Annual Report 2014 Market America | SHOP.COM15 Annual Report 2014 Market America | SHOP.COM

WORLDWIDE COMMISSIONS AND ESTIMATED* RETAIL PROFITS

*Estimated retail profits are based on suggested retail price.

YEAR ENDING

YEAR ENDING

YEAR ENDING

$0

$0

$0

$50

$20

$20

$90

$40

$40

$130

$60

$60

$170

$80

$80

$210

$100

$100

$250

$120

$120

$290

$140

$140

$330

$160

$160M

illio

ns

Mill

ion

sM

illio

ns

TOTAL UNFRANCHISE® OWNER EARNINGS

TOTAL UNFRANCHISE® OWNER RETAIL PROFITS*

TOTAL UNFRANCHISE® OWNER COMMISSIONS

2006

2006

2006

2007

2007

2007

2008

2008

2008

2009

2009

2009

2010

2010

2010

2011

2011

2011

2012

2012

2012

2013

2013

2013

2005

2005

2005

2004

2004

2004

2003

2003

2003

2002

2002

2002

2001

2001

2001

2000

2000

2000

1999

1999

1999

1998

1998

1998

1997

1997

1997

1996

1996

1996

1995

1995

1995

1994

1994

1994

1993

1993

1993

In 2013, UnFranchise Owners were paid over $144 million in commissions.

Since the company’s inception in 1992 to the end of calendar year 2013, the total amount of commissions paid was over $1.5 billion.

In 2013, UnFranchise Owners earned an estimated $134 million in gross retail profits.

Since the company’s inception in 1992 to the end of calendar year 2013, the total amount of gross retail profits earned by UnFranchise Owners was over $1.5 billion.

In 2013, UnFranchise Owners earned over $278 million in commissions and estimated gross retail profits.

Since the company’s inception in 1992 to the end of calendar year 2013, the total amount of commissions and estimated gross retail profits earned by UnFranchise Owners was over $3 billion.


MARKET AMERICA WORLDWIDE, INC. AND AFFILIATES

CONSOLIDATED BALANCE SHEETSDECEMBER 31, 2013

Assets 2013

Current AssetsCash $73,414,323Interest receivable 244,239Accounts receivable – trade 1,227,022Inventories 20,721,914Other current assets 10,424,033

Total Current Assets 106,031,531

Property and Equipment, Net 24,121,822

Goodwill and Intangible Assets, Net 3,273,406

Other Assets 6,433,733

Total Assets $139,860,492

Liabilities And Stockholders’ Equity 2013

Current LiabilitiesCurrent portion of long-term debt $133,333Accounts payable – trade 5,659,384Commissions payable 6,140,002Sales tax payable 950,092Income tax payable 1,225,032Other accrued liabilities 5,514,349Unearned revenue 8,328,189

Total Current Liabilities 27,950,381

Notes Payables 433,334

Stockholders’ EquityCommon stock, $0.01 par value;1,000,000 shares authorized; 15,710 sharesissued and outstanding at December 31, 2013 157Additional paid-in capital 73,336,636Retained earnings 37,101,861Accumulated other comprehensive income:Foreign currency translation adjustments 1,038,123

Total Stockholders’ Equity 111,476,777

Total Liabilities and Stockholders’ Equity $139,860,492


ANTHONY AKERSVICE PRESIDENT OF COMMUNICATIONS

EDDIE ALBERTYVICE PRESIDENT OF STRATEGIC PARTNERSHIPS

STEVE ASHLEYVICE PRESIDENT OF MOBILE & SOCIAL PRODUCTS

MICHAEL BRADY CHIEF INFORMATION OFFICER

AGNES CRUZVICE PRESIDENT OF CREATIVE DESIGN

CLEMENT ERHARDTGENERAL COUNSEL JEREMY FENNEMADIRECTOR OF INTERNET SERVICES & TRAINING

KATHLEEN FAIRALL VICE PRESIDENT OF HUMAN RESOURCES

PETER GOLD CHIEF MARKETING OFFICER

VINCE HUNT CHIEF OPERATING OFFICER, SHOP.COM

CHRIS PEDDYCORD VICE PRESIDENT OF BUSINESS ANAYLSIS

BRANDI QUINNVICE PRESIDENT OF OPERATIONS

SAMANTHA RITCHIEVICE PRESIDENT OF RESEARCH & DEVELOPMENT

KEN VANDEN BERGSENIOR GLOBAL CORPORATE CONTROLLER

EUGENE WALLACECHIEF TECHNOLOGY OFFICER

ANDREW WEISSMANVICE PRESIDENT

JIM WINKLER VICE PRESIDENT OF SALES

DIXON HUGHES GOODMAN LLP GREENSBORO, NC

LOREN RIDINGER

SENIOR VICE PRESIDENT

JR RIDINGER

PRESIDENT & CEO

MARC ASHLEY

CHIEF OPERATING

OFFICER

MARTY WEISSMAN

EXECUTIVE VICE PRESIDENT

DENNIS FRANKSEXECUTIVE

VICE PRESIDENT

JOE BOLYARD

EXECUTIVE VICE PRESIDENT

OF INTERNATIONAL DEVELOPMENT

KEVIN BUCKMANVICE PRESIDENT

OF TRAINING & FIELD

DEVELOPMENT

DEEDRAMASON, ND

DIRECTOR OF CLINICALEDUCATION & RESEARCH

ROGER SPAHR, MD

MEDICAL DIRECTOROF NUTRAMETRIX®

MARKLANGE, Ph.D.

DIRECTOR OFQUALITY CONTROL

ROBERTBLAIR, Ph.D.

STRATEGIC RESEARCH SCIENTIST

MARKET AMERICA WORLDWIDE

EXECUTIVE BOARD

MANAGEMENT TEAM

MEDICAL & SCIENTIFIC AFFAIRS

AUDITORS

WORLD CORPORATE HEADQUARTERSMarket America1302 PLEASANT RIDGE ROADGREENSBORO, NC 27409-9326MARKETAMERICA.COM

Market America (Mexico)C.A.P. COAHUILA D.F., COAHUILA 5, ROMA NORTE, CUAUHTÉMOC, MÉXICO, D.F. 06703, APARTADO POSTAL H-048MX.SHOP.COM

SHOP MA, Inc.21 LOWER RAGSDALE DRIVEMONTEREY, CA 93940SHOP.COM

Market United KingdomSALISBURY HOUSE5 CRANMER ROADLONDON SW9 6EJUK.SHOP.COM

Market Australia 1/1 TUCKS ROADSEVEN HILLS, NSW 2147AU.SHOP.COM

Market Taiwan 14 F NO.101, FUXING N ROAD, SONGSHAN DISTRICT, TAIPEITAIWAN, R.O.C.TW.SHOP.COM

Market Hong Kong MARKET HONG KONG LTD.UNIT 1010-1014, 10/F,LIPPO SUN PLAZA,28 CANTON ROAD, TSIM SHA TSUIKWOLOON, HONG KONG HK.SHOP.COM

Market Singapore MARKET_SINGAPORE PTE. LTD.51 CUPPAGE ROAD, #08-03/06SINGAPORE 229469SG.SHOP.COM


shop.com annual report 2014

Small Business & Entrepreneurship