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The Story of Ava Anderson and What Entrepreneurs Can Learn from It

By Nate McCallister / a couple of months ago
Ava Anderson

The story of Ava Anderson is as interesting as it is enlightening. 

As Stefon from Saturday Night Live would say, "This story has everything."

An unlikely hero who rises to riches only to lose everything and then, sort of, come back from it.

A scandal.

And, most importantly, a valuable lesson for marketers and entrepreneurs like you and me. 

All entrepreneurs can benefit from hearing this young girls story and avoiding the same pitfalls that caused her seemingly unstoppable company to come crashing down just as fast as it went up. 

Who Is Ava Anderson?

 Ava Anderson

Let's start by talking about who Ava Anderson was back in 2009. 

In 2009, Ava Anderson was just a 15 year old high school student in Rhode Island who, with the help of her parents, founded a company called Ava Anderson Non-Toxic.

The company made soaps, cosmetics, household goods and a bunch of other products that were all advertised as being made without any harmful substances. 

This really was a great business model and on paper, it seemed like a golden goose for Ava and her family. 

Flash forward 5 years to 2014 and Ava Anderson Non Toxic had turned into a full fledged empire. 

The company offered 75 individual products across 11 different product lines. Their annual revenue in 2014 was estimated at over 200 million dollars. They had grown over 300% from the previous year and were showing no signs of slowing down. 

In 2016, to the shock of everyone who followed the brand (including the 12,000+ promoters of the product line) Ava Anderson Non Toxic closed it's doors. 

The company wrote in a statement that is no longer available online, “we will be closing our doors..."our capable management team (will soon) re-open with a new company, brand and many of the same wonderful products that our customers have grown to love.”

Ava Anderson

If you visit the site now, it's an ominous ghost town. A shell of what was once a multi-million dollar empire.

Why Did Ava Anderson Non Toxic Close? 

The family cited cyber harrassment as the main reason they closed.

Statement from Ava Anderson Non-Toxic Regarding Closing

“...disparaged and harassed unrelentingly for years online and in person... Sadly, there are many who are ‘keyboard brave’ who have made this experience intolerable for our daughter and our family. It has accelerated over time, and we see no end in sight. We know we have made the best decision for our family, and believe that anyone would take this same action if their child or family was being treated in this manner.”

As the facts came out, it became clear that wasn't the full story. 

Ava Anderson "Not So" Non Toxic

After the dust settled, more details began to emerge regarding what really caused the company to close down. 

A blog called EcoFriendlyMamaUSA had doubts about the products "non toxic" claims due to how well they worked. 

There is after all a reason that not all companies don't use non toxic ingredients! No one LIKES using toxic chemicals (I think). 

The blogger had the product sent off and tested and confirmed that the claims about the ingredients were not completely true. 

She wrote,

“In the past year or so, numerous issues have come up with these products that I have a great deal of mistrust in them: the products, the labels, and the company. I’m not going to repeat the allegations, which would make a very long list, as there’s a chance some of them are not true, and I don’t want to slander anyone without having proof of said allegations. I can tell you the allegations are numerous, concerning, and I do happen to believe many of them.

News outlets ran with this development and backlash started to pour in on the Ava Anderson Non Toxic company. 

What Ava Anderson Non Toxic's Failure Should Teach Entrepreneurs (Especially Multi Level Marketers)

Ava Anderson Non Toxic chose (like many bootstrapped cosmetic companies do) to operate under a MLM (Multi Level Marketing) model. 

Multi level marketing is a system in which people promote a brand and get paid for "recruiting" other people do promote it as well. 

During it's peak, Ava Anderson's company had over 12,000 promoters and many of them were sharing how they were making over $100,000/year in commissions. 

If you follow me, you know I typically despise multi level marketing. 

As far as MLM companies go, the Ava Anderson Non Toxic commission structure was enticing...

Ava Anderson Commissions

via http://www.marikinavalley.com

Promoters were also encouraged to recruit others to promote the product. This is probably my least favorite facet of MLMs since they sell people on SELLING the product rather than just selling the product. These recruiters typically start with, "you can make so much money!" when they should start with, "this is really a great product and here is why I promote it and maybe you should to..." 

Ava Anderson "Pyramid Scheme"

Via http://www.marikinavalley.com

That image does a good job of making it not look like a pyramid scheme, but if you dissect it further, you can see some real similarities. 

The only part that makes these MLMs not pyramid schemes is that the people on the lowest tier can still make commissions selling just the product. A real pyramid scheme would leave the people at the bottom out of money (kind of like the social security system in the US, but don't get me started on that...)

Guess what happened to those commissions though when the company dissolved overnight?

THEY DISAPPEARED!

The Ava Anderson Non Toxic promoters lost all of their hard work. Their "teams" were no more and their future earnings were completely wiped out. 

The Ava Anderson Non Toxic company rebranded to PUREhaven ESSENTIALS but the commissions from Ava Anderson Non Toxic products were all wiped out but the company "lived on" with a bit of a duck and cover approach. 

Lesson #1 from the Ava Anderson Collapse

Deliver on Your Big Promises

The biggest reason that the Ava Anderson Non Toxic brand was so successful was their promise to use only non-harmful ingredients. 

This is awesome, but also, a HUGE promise that required more effort than the company was willing to put in. 

They didn't keep up with testing the products and ensuring that manufacturers were sticking to the commitment to produce only non-toxic products. 

This is what made closing necessary. Once you lose the trust of your customers, you lose your customers.

Lesson #2 from the Ava Anderson Collapse

Multi Level Marketing SUCKS!

Ok, that is too harsh. Let's say that the lesson is to NOT put all of your eggs in one basket.

If you make your livelihood promoting one brand, you are at the mercy of an Ava Andrson-esque collapse. 

About the author

Nate McCallister

Nate is the founder and main contributor of EntreResource.com. He is a lifestyle entrepreneur who spends his time building businesses and raising his two kids Sawyer and Brooks with his beautiful wife Emily. His main interests include copywriting, economics and piano.

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