Forbes: The Rising Success of Rodan + Fields

 The Rising Success of Rodan + Fields Thanks to Nontraditional Retail and Savvy Women

Nicole Leinbach - Reyhle, contributor

Think you know what a direct-marketing sales rep looks like nowadays? Rodan + Fields distributors often don't fit the stereotype. 

She's the pretty mom at school drop off . . . the friendly neighbor next door . . . the funny friend everyone wishes they had. But even more than being a familiar face, she's often educated, successful and hard-working . . . hardly a combo that lines up with the pyramid-scheme stigma that many customers have when it comes to multi-level marketing companies. 

With some 150,000 distributors hawking its skin-care products, Rodan + Fields reported revenue of $626.9 million in 2015. Getting on board with business kits whose costs range from about $400 to $1000, the dream is of big riches through direct sales and recruiting more distributors, or consultants, as the company calls them - the classic pyramid model of multi-level marketing companies in which the recruiter gets a slice of the sales of those who they sign up. 

It doesn't happen for most. According to a company disclosure statement, the average annualized income for active Rodan + FIelds distributors for sales in 2015 was $3,182 with entry-level consultants making an average of $790.  

But for some this model has proven so successful that in addition to their money earned, they also earn a luxury car in exchange for their high sales achievement. 

Developed in 2002 by two Stanford trained dermatologists, Katie Rodan and Kathy Fields, Rodan + Fields follows the success of their first product line, Proactiv, which has since been sold from the Doctors so they can focus solely on Rodan + FIelds. Unlike Proactive, which was sold primarily via infomercials, Rodan + Fields was first introduced to customers similar to how most skincare lines are, via traditional brick and mortar retailers. Specifically, Rodan + Fields was sold in department store, but the Doctors quickly realized this was not the best avenue for their brand to capture more customer attention and ultimately, gain stronger success. 

"While our brand was successful in department store channel, our vision for Rodan + Fields was much bigger. Recognizing that word of mouth - not the advertising or marketing programs of the stores - accounted for our growing customer base, we decided to create an alternative method of distribution. This method, we know, had to be one that gave the sales commission to the people who loved and recommended our products while preserving the consultative one-on-one experience found in department stores," shares Dr. Rodan and Dr. Fields. 

This new model of distribution would later be coined "community commerce" by the doctors, referring to the "demographic trends of the decline in deparment store foot traffic, the rise of social media, the emergence of the entrepreneurial economy, and the growing interest in anti-aging products and prevention among twenty and thirty something year olds," as explained by Dr. Rodan and Dr. Fields, who Forbes recognized in 2015 as two of the most successful, self-made women in the United States. 

Lindsay Liakatas, a Rodan + Fields's Consultant based in the Chicago area, is among those who was attracted to this flexible, community minded business model. An Interior Designer by trade, Liakatas started her Rodan + Fields business in 2011 alongside her already busy schedule of designing model homes. Having been raised by a single professional mother, Lindsay recognized the personal sacrifices and professional limitations she would inevitably endure as a career woman and mother in traditional business and believed that with Rodan + Fields, she could find the flexibility and financial comfort she was aiming for.

“Although I owned my own business, I didn’t own my time. The developers, builders and housing market owned it. My time with my then 2 year old son was negotiable and it tormented me to miss out on all of the precious things I was not there to witness,” explained Liakatas.

Keeping this in mind, Liakatas gradually grew her Rodan + Fields business since she first began as a consultant – the term Rodan + Field uses to refer to their sales reps – from 2011 to today, where she now drives to playdates and business meetings in a shiny new Lexus , a reward given to those consultants on the Rodan + Fields team who meet specific sales volume goals. Joining her recently in this elite status at Rodan + Fields is her business partner Megan Celba Thomas, who Liakatas actively recruited to join her in selling Rodan + Fields in 2013.

“I knew in order to accomplish something big with Rodan + Fields, I would need a power partner. I needed someone I trusted, respected and admired, so I began to use my social media to track this person down,” explained Liakatas. This person, as it turns out, already had a seemingly full life that was filled with flexibility in time and financial security already – two reasons many individuals sign up to become consultants with Rodan + Fields in the first place. Yet Thomas aimed to “create something of her own”, as she refers to it, while still maintaining the life she already lived with her power partner husband Frank Thomas, Hall of Fame baseball player known as The Big Hurt who played in the MLB for 19 years. Despite being his biggest fan, Thomas embraced the idea of doing something on her own and joined Liakatas as a consultant with Rodan + Fields. As Thomas describes it, “the company had an incredible guarantee that enabled me to try the products and business for 60 days and if there wasn’t a fit, I could return the business kit for a refund of my small initial investment.  I had nothing to lose, and everything to gain.”