CityFarmer made interesting observations, some of which I agree and others disagree =>>.
Direct Selling biz model's revenue trend, should tally with membership trend, IMO. Members are getting size-able discount, thus it is reasonable to assume, consumers are highly motivated to become members.
Overall, in the last four quarters, DS membership grew from 375K (2Q15) to 421K (2Q16) or +12%, while DS revenue grew +57% from $25 million to $40 million. Few of the probably reasons, are higher proportion of active members (especially in Taiwan), and each members stocked-up more goods. ]The growth isn't sustainable, without similar growth in membership, IMO.
One dilemma of Direct Selling, is members are not employees of the company, but the company is accountable to their biz conduct. A high growth in membership, without a proper training and control processes, is a sure path to regulatory issues.
The Nu Skin recent regulatory issue, might due to an explosive growth of >100% in membership and revenue (Greater China) in 2013 alone, which has taken the company 2-3 years to rectify, and back to its slow recovery path in 2016.
Without a breakdown of product sales (different price and margins), it is difficult to understand the logic of your analysis vis a vis membership growth with revenue.
As I have mentioned before BW must take due care with regard to regulatory issues and to ensure full compliance. It is not always a case of pushing for strong revenue growth. As a long term strategy, I would rather BW grows its market share steadily in key markets and to project a respectable corporate image. Corporate branding is an essential attribute of a successful corporation.
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