– It had to stop once, we had an adventurous growth of 15 years. Late or day had to decrease. Everything does not reach the sky, says the founder and the main shareholder of the Norwex group, Bjørn Nicolaisen.
Last year, the owners obtained a record dividend of 306 million Norwegian crowns in Norwex.
This means that the owners have contracted a dividend of 1.2 billion in the last ten years, about one billion in the last five years.
Nicolaisen owns almost 51% of Norwex shares and has therefore received dividends of more than half a million of the group over the last five years.
During the same period, the Norwex Group obtained a pre-tax profit of almost 1,500 million NOK.
Norwex is specialized in the sale of microfiber fabrics and other household items, mainly through "home games".
Most of Norwex's income comes from "domestic parties" in the United States and Canada, where a sales agent invites friends and acquaintances to their homes or to visit other people.
– The concept of Homeparty is that sellers are not employees, usually live with a commission or discount. Sellers must obtain "hostesses" who want to open their homes and let sales consultants return home to do a demonstration.
Nicolaisen claims that the "host" hosted by guests receives a reward in the form of free or cheaper products.
– In "home parts" three things are done: it is sold, it is about bringing new hostesses and it is about contracting new sales consultants. You also get a sales commission from the sellers you've hired.
Decrease of growth
Norwex was established in 1994 under the name of Eidsvoll Miljøprodukter. Since then, the company has grown significantly, but it was only when the group settled in Canada in 1999 that growth accelerated.
Until 1999, the company had all of its turnover in Norway, but today the billing in Norway is below one percent of the total of the group. Of the three billion companies that sold, sales in North America accounted for more than 90%.
The entrepreneur is pleased that he has managed to build a company in Norway to become an international corporation, which for the first time had sales of more than 3,000 million Norwegian crowns, which rose from 2.7 million euros US dollars in 2017.
In spite of a growth of more than ten percent, Nicolaisen points out that growth is about to slow down, for example in the US.
– We are not so happy about this growth, since we are used to growing more, but we have increased a quarter of millions, so I think we have to be satisfactorily satisfied.
Despite the growth of the two-digit percentage in the first line in 2018, the result was lower in 2018 than 2017. Accounts show that last year's costs grew more than revenue.
– We opened a new factory in Dallas that cost. Then there have been opening costs in Malaysia, which opened in April this year, but a good part of this cost was in the 2018 accounts, says Nicolaisen.
He says that Malaysia is a new area of growth.
– Malaysia has fired. It's been pulled out completely. It is a culture in Malaysia for our sales model, as well as having a very good leader there.
Challenged for digital solutions
Nicolaisen believes that the business model is being challenged by the rise in e-commerce and that, therefore, growth in some areas is declining, such as in Norway and the USA. Therefore, the boss believes that you should spend money on digital solutions to be competitive in the future.
– We have not managed to keep up with the development of the product and I suspect that we have not been good enough to develop in line with the development of information technology that occurs in society. We have a large IT department, but we still have a lot to work on.
Therefore, the group wants to increase its digital investment, but is afraid of losing some of the sales agents that build the entire business model, if you open an online store. He says that, therefore, they are working on a digital solution that will still be attractive to sales agents.
– It's a very risky area, if we make mistakes, all the sellers leave us. We have developed our traditional model, but we are working to facilitate the agents to sell our products through web and applications. (Terms)Copyright Dagens Næringsliv AS and / or our providers. We would like to share our cases using the link that takes us directly to our pages. The copy or other forms of use of all or part of the content can only take place after a written permission or as permitted by law. For other terms, see here.