AdvoCare

AdvoCare International, L.P. is an American multi-level marketing company that sells dietary supplements. The company, founded in 1993 by Charles Ragus, operates in the health, wellness, and weight management sectors. The name AdvoCare is short for "Advocates Who Care". Initially, AdvoCare's business model was focused on multi-level marketing (MLM), where its products were sold through a network of distributors. However, in 2019, AdvoCare announced a significant change in its business model from MLM to a direct-to-consumer and single-level marketing compensation plan.

History

AdvoCare was established in 1993 in Plano, Texas, by Charles Ragus. Ragus, a former distributor for Herbalife, aimed to create a company that offered nutritional supplements alongside a business opportunity for individuals. Over the years, AdvoCare expanded its product line and distributor network. The company gained attention through endorsements from professional athletes and sponsorships of sporting events.

In 2019, AdvoCare announced a restructuring of its business model, moving away from the multi-level marketing strategy. This decision came after discussions with the Federal Trade Commission (FTC), which has been critical of MLM practices that it considers deceptive or unfair.

Products

AdvoCare's product portfolio includes weight management shakes, dietary supplements, and energy drinks, among others. These products are grouped into several categories, such as Trim for weight management, Active for energy, Well for general wellness, and Performance Elite for sports performance enhancement.

Controversies

AdvoCare has faced criticism and legal challenges related to its business practices. In 2017, the company settled a class-action lawsuit that alleged it operated as a pyramid scheme. Although AdvoCare denied any wrongdoing, it agreed to a $150 million settlement. The FTC's scrutiny of AdvoCare's MLM model led to the company's shift to a direct sales model in 2019.

Business Model Transition

The transition from a multi-level marketing model to a direct-to-consumer approach marked a significant shift in AdvoCare's business strategy. This change meant that distributors, who previously earned commissions from sales and recruitment, would now only earn from direct sales to customers. AdvoCare stated that this move was intended to simplify the business and focus on product sales directly to consumers.

See Also

• Multi-level marketing
• Dietary supplement
• Federal Trade Commission
• Pyramid scheme