Lessons From The Omegatrend Crisis
As West Australian based home business company Omegatrend appoints voluntary administrators, we have to ask ourselves what went wrong.
This is a company with excellent leadership, an ambitious expansion program and very motivated associates. The media cites the strong Australian economy as the reason for the companys' demise. In fact, the appointed administrator, Cliff Rocke is quoted as saying: "the business was struggling with sales slumping to $12-$15 million per annum because in boom times members were less inclined to supplement their incomes by selling Omegatrend products."
Fair enough - but shouldn't associates continue using the products anyway? - I mean they're obviously making money in their jobs. The curious thing is that another home based business company, USANA Health Sciences, had 12 consecutive quarters of record sales and almost trebled their turnover in Australia during that period.
USANA did not do this as a start-up opportunity, the company has been in that market since 1997. So why did one compay grow rapidly in an unfavourable market, while the other declined?
I can only imagine that the Omegatrend products are not terribly different to products you can buy in a supermarket and when the products do not make a difference to your life, you buy something that's on special in the supermarket instead, while you're getting your groceries.
I believe the lesson from the Omegatrend story is that you need more than just motivated people and a good system of compensation to hold a company together through tough times. You need unique products - Products that people will continue to use because it makes a difference to their lives.
This is a company with excellent leadership, an ambitious expansion program and very motivated associates. The media cites the strong Australian economy as the reason for the companys' demise. In fact, the appointed administrator, Cliff Rocke is quoted as saying: "the business was struggling with sales slumping to $12-$15 million per annum because in boom times members were less inclined to supplement their incomes by selling Omegatrend products."
Fair enough - but shouldn't associates continue using the products anyway? - I mean they're obviously making money in their jobs. The curious thing is that another home based business company, USANA Health Sciences, had 12 consecutive quarters of record sales and almost trebled their turnover in Australia during that period.
USANA did not do this as a start-up opportunity, the company has been in that market since 1997. So why did one compay grow rapidly in an unfavourable market, while the other declined?
I can only imagine that the Omegatrend products are not terribly different to products you can buy in a supermarket and when the products do not make a difference to your life, you buy something that's on special in the supermarket instead, while you're getting your groceries.
I believe the lesson from the Omegatrend story is that you need more than just motivated people and a good system of compensation to hold a company together through tough times. You need unique products - Products that people will continue to use because it makes a difference to their lives.
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