I’m the Director of Anti-Diversion. My main responsibility is spearheading our anti-diversion efforts. I’m also responsible for patent violations, counterfeiting, warehouse theft, and internal investigations. I spent twenty-six years as an FBI Agent. I started my career in Chicago, then went to San Antonio and ended my FBI career here in Los Angeles. At the time of my retirement I was the Supervisor of the Public Corruption/Civil Rights Unit. It was a very fulfilling first career. Now, as I’m into my second career, I find that I’m able to use my training as an FBI agent to fight diversion in the beauty industry. Through my years with the FBI I conducted countless interviews with criminals and have heard just about every story imaginable. I seem to hear many of these same excuses when I interview salon owners and distributors that are diverting our products. Don’t get me wrong; the majority of the salon owners and distributors are honest, hard working people who are as concerned and troubled about diversion as we are. Yet there are some who will do anything to make a dollar no matter how it effects their profession. It all comes down to ethics. A salon owner or distributor that diverts our products, who has signed a contract with us, assuring us that they will protect our products, and then sells them out the side door is probably not an ethical person. One really nice thing about my job is that I don’t get bored. I deal with new problems each day. Each day I spend time following up on diverting accounts, comparing purchasing trends of suspected accounts, returning calls from our “diversion hotline number”, talking to distributors about their accounts, following up on diverted product codes that are sent in by concerned stylists. I even manage to talk to various sources that I’ve developed in the past two years, which include private investigators and truck drivers who observe unusual behavior when they deliver our products. I constantly hear from stylists who report descriptions, license plate numbers, telephone numbers, and even supply us with business cards of individuals who are acting as collectors for major diverters. There have literally been hundreds if not thousands. It’s quite exciting really. New information comes into our offices almost every day. Many salon owners and stylists are joining with us, taking up the fight and reporting individuals who are attempting to purchase our products for the sole purpose of sending them to a diverter. It’s not how many lawsuits we have pending; it’s the value of information we receive. We do something with each bit of information we receive. It’s like putting a puzzle together. Each connecting piece leads to the next piece. Mark Riedel is our general counsel and he’s always looking for solid information to strengthen our ongoing legal action. We code many of our products and especially our best sellers. We encourage our sales consultants to visit unauthorized retailers and report incidents of diverted product. To show our progress, we have monthly reduction goals, and data collected by Proctor & Gamble’s Nationwide Sales Gathering Force, numbering over 1,000 representatives. They’ll supply us with product codes which we can trace back to the account that purchased the product. Once we do this, we also know the account responsible for the diversion. After that, we decide if we continue sales under a watchful eye or request action by our legal department. We require our distributors to have similar plans. They need to assure their clients that we’re working hard to eliminate the problem. They can even encourage their clients to call our hotline. We’ll be glad to talk with them and help them understand that purchasing our products from a salon is the only way those products can be guaranteed to be legitimate and new. We want to get as many people involved in this fight as possible, and some of that is simply a matter of knowledge. Salons should also encourage their clients to visit this web site to get regular updates. Only sell what they think their client can use. Remember we don’t allow our product to be sold in bulk. Keep in mind, a collector won’t pick up only one or two cans of hairspray for diversion. They want to buy by the case and they want to pay no more than 20% more than the salon paid for the product. When I find a salon that’s diverting our product and I’m told by the owner that they are not selling to collector’s and that they can’t understand how their product showed up in an unauthorized retail outlet, I find that answer very hard to swallow. Believe me, they know because the collector is paying a lot less than their legitimate client. You bet we can win the fight, but not without help. Salons out there—join us! Together, we can be aggressive, we can explore new avenues, and we can find the diverters and stop them in their tracks! I’m dedicated to winning this battle. I made that decision when I came here and I’ll stay as long as it takes. We’re all dedicated to reducing diversion and I promise each and every salon owner and distributor, if I find out differently, I’ll leave. Obviously my goal is to see a decrease in diversion each year. I guess I’m taking it a year at a time. I’m dedicated to fighting diversion, to making this a better company, and contributing in any way possible. I want them to know that our anti-diversion policy is stronger than ever and that we are dedicated to stopping diversion. I want them to know that they can’t go unnoticed forever, and when we identify them, they will no longer be permitted to purchase our products. And, I want them to know I’ll continue to pursue avenues of criminal or civil action when possible. I want to remind any salon owner, stylist, or beauty store owner to be vigilant and report any unusual activity. Become involved. Get a business card, license plate number, telephone number, or description, and report it on our hot line. Sooner or later a collector will knock on your door, asking you to purchase more product than you can use. He’ll promise you he will show up each month and buy the product from you at several percentage points above what you paid. He will be your best friend. Remember this, when the product shows up in your local grocery store it destroys not only your business, but the entire profession. It’s only going to happen if we all make a pledge to keep Wella•Sebastian products where they belong: in salons and in beauty supply stores. If consumers are encouraged to purchase in salons or authorized beauty supply stores, they can feel safe about the products they’re buying. Why? Because the product is guaranteed!
Copyright Wella•Sebastian 2008.