Well, multiply that by 400,000 and you get the picture of how big Doyee Tumpalan has grown the family business and changed the landscape of network marketing in the country. For those who don’t know, Doyee is the stylish woman behind First Quadrant, the biggest multi-level marketing company in the Philippines which recently opened an office at Milpitas in Silicon Valley, California. She’s been called the "Mary Kay of the Philippines" but perhaps more fitting titles would be "Dreamer" or "Entrepreneur of the New Millennium."
If you want to go a little further down the history of this shoemaking lady, you would have to go back to the 1860s, when Marikina was a sleepy agricultural town and a kapitan, her great-great-grandfather Laureano "Kapitan Moy" Guevara, bought a pair of shoes in Germany and then dismantled them here to learn how to make them. But more on that later.
Today, Doyee finds herself in the unique position of turning her grand dreams into reality, of exporting her local company and making it global, of selling millions of shoes, bags, makeup, clothes and "everything you need," and in effect fulfilling the dreams of hundreds of thousands of people involved in First Quadrant. But to her, the most important thing is putting Filipino products on the global market. Doyee herself is a great advertisement for the country: She’s young, ambitious, hardworking and with a soft spot in her heart for people who want to make their lives better – it doesn’t matter if you’re rich or poor, just as long as you want to gain financial freedom and share your blessings.
Milpitas is just the start of First Quadrant’s internationalization, a business she and her husband Socrates Tumpalan have grown phenomenally in two-and-a half years. "Not even in my wildest dreams did I think it would come to this," she says with a smile.
Of course, her partnership with Soc has been the secret of the company’s success. While she’s the public face of the company, her reticent husband is the quiet one working in the background. She’s the dreamer, he’s the architect. "He’s the brains behind the company," she says. "He translates my concepts into reality."
One of those concepts became real three weeks ago when FQ launched its Milpitas office with US partners Noni and Rubi Estevez as FQ International COO and CEO respectively. "We decided to make it international because of the demand. Plus, Filipinos are born networkers, every single one of them has a relative in another part of the world, kahit saan may contact."
Milpitas may not be very well known to the average Pinoy whose idea of California is LA and Daly City, but like those two cities this small town is teeming with Filipino-Americans. Milpitas Mayor Joe Estevez is a Pinoy from Pangasinan who migrated to America in 1980, worked his way from his engineering profession to the city council and is now serving his first term as mayor (he’s the second consecutive Pinoy mayor of Milpitas). The official count of Pinoys, according to the mayor, is 13 percent of the 65,000 residents. A small number really – the same percentage as residents of Chinese and Vietnamese origin – but "it’s a tight-knit, active community that it seems like we make up more than 50 percent," he says.
"We have the same mission; his is for Milpitas, mine is for First Quadrant and the Philippines. He wants to bring the Filipino heritage to Milpitas," says Doyee.
Mayor Estevez predicts that for First Quadrant, "Filipino Americans are just the start because you start with who you are. If Filipinos can’t appreciate their own products, it would be difficult for other groups to appreciate them."
How can our products compete with more well-known and easily accessible brands and will they be sold as "Filipino products"? Doyee won’t back down in her crusade. Yes, part of the business strategy is to sell them as Filipino products. "I know it’s crazy but we’ll make it work, and part of the strategy is to build up the nucleus first, which is the Filipino community. But I have reserved 20 percent of our international catalogue to US products to co-exist with products in the country that’s hosting us. In the US we’ll change the catalogue every six months, in the Philippines it’s four months."
Yes, Doyee is the kind of woman who would gladly wear FQ’s Doyee brand of shoes side by side with her own Blahniks, or her Newport bags with Hermes.
So the Milpitas launch had a Filipiniana theme all throughout. Doyee wore her Joe Salazar ternos proudly during the office blessing at the Milpitas Town Center and the launch dinner at the Sta. Clara Convention Center where Lea Salonga performed as guest artist (though her repertoire of very sad songs was very inappropriate for the happy occasion). What made both events also special was the performance of the University of San Francisco Kasamahan dance troupe. I’ve never been so proud at seeing teenage Pinoys do traditional dances like tinikling and pandango sa ilaw. You could see that these kids – perhaps all of them now American citizens – are not just in touch with but are also interested in learning and sharing their heritage.
There are over 10,000 multi-level marketing (MLM) around the world with the United States as the founding country 50 years ago. Like most businesses that are involved in networking one way or another, MLMs are not spared of controversy. The US is perhaps the country with the strictest regulations and laws governing MLM, which many people mistake for a pyramid scheme (the latter is illegal in all states of the US and banned in most countries around the world) because it recruits other people to sell products. First Quadrant has not been spared of that controversy either, especially in the early days.
To establish the US office, FQ hired Michael Sheffield, chairman of the Multi-Level Marketing International Association (MLMIA) and CEO of Sheffield Resource Network, a direct sales and MLM consulting firm based in Arizona. This is the guy who met with Mikhail Gorbachev in 2000 when Russians began doing MLM, and also the same guy who helped pioneer the business in China.
"We wanted to do it right from the very beginning, which is why we got him," says Soc Tumpalan during the Sta. Clara dinner which was attended by over 2,000 Filipino-Americans.
Sheffield speaks of MLMs as a "People helping people business." Throughout the world, 30 million people are involved in MLM. In the US alone, according to Sheffield, over $30 billion have been made through this channel of distribution and it’s growing 20 percent each year.
"First Quadrant, its founders and executives are committed to doing the right thing, to helping their fellow men and providing people with opportunities they never had before," he says. "Apart from the financial rewards and the tremendous opportunities, these people you will meet will become your lifelong friends. And that’s what multi-level marketing is: It’s a relationship business."
Sheffield quotes a famous line when he says, "Our philosophy goes something like this: ‘Service to mankind is the rent that we pay for our space on earth."
Doyee and FQ business associates (they don’t like to call them "members") echo the same sentiments when they talk about people who have made it good in First Quadrant: a banker, jeepney driver, street sweeper, teacher or secretary who has made more money than they would in a lifetime of 9 to 5 jobs.
The same opportunities that let people earn from thousands to millions of pesos a month are the same things that raise skepticism and one’s eyebrow: How could a person earn that much in so short a time?
"There are many types of compensation plans, all originating from the US. In our case, we adopted the binary compensation plan because it is the most equitable since for every recruit you already get compensated," says Doyee.
There are four ways of earning in the FQ plan as a business associate (BA): Through direct selling (you get 50 percent discount of all products), through direct selling rebate (you get 5 percent lifetime rebate from all the product sales of direct referrals), direct referral or sponsoring (you can refer two persons — group A and B — to become BAs and they will be enrolled automatically under your sales group), and referral bonus (each time group A and B are paired you earn a bonus).
FQ gives seminars for free, after which you can decide to become a seller in which case you don’t pay anything but simply become a sub-agent of a BA, or choose to become a BA and pay the P8,800 fee. If you decide to become a BA but are too shy to propose the business plan to your prospective members, any of the BAs in FQ will gladly do it for you. Says Doyee, "Even crosslines would do it, meaning people who will not earn anything from your referrals. That’s the culture we try to teach. We’re one big happy family."
One of the success stories at FQ is Thomas Joseph "TJ" Arteche, who’s only 24 years old. He worked as a transaction officer at Citibank before he joined First Quadrant. A cousin invited him to discuss the "business plan" and he grudgingly went. Over coffee at Starbucks, and later when he went to the FQ office, he had a change of heart. "Before, I looked at networking na parang nakaka-downgrade sa tao. But I thought, even if I don’t sell products or the business plan, bawi na ako at 50 percent off on the products which I could either use or give away as gifts."
His father, Filomeno Arteche, told him, "Bakit ka nagpapaloko sa ganyan?" TJ says, "He’s a lawyer by profession, so he was very skeptical at first. He couldn’t see how you could put in P8,800 and earn P10,000 a week. But he couldn’t do anything because it was my money I used to enroll. It’s a copy business so pinasok ko mom ko and sister ko. Ako ang nagtrabaho for my mom, I put two people under her to prove to my dad that it worked. Her first check was P1,500. Now she gets close to P110,000 per week."
TJ earned his first million in four months and bought his first BMW in a year. His father, needless to say, was convinced and pretty soon joined First Quadrant where he now out-earns his son.
Another success is Garry Norman, a former electrician at Electrolux, who was able to build his own house worth P10 million.
These are the kind of stories that encourage people, but also cast doubts in their minds – especially for people like us who are trained to be skeptical and used to hearing tall tales. How can one out-earn the person that brought you into the company, or out-earn a person who is more educated than you are? The answer perhaps lies in the nature of the business: Everybody’s on equal footing, it doesn’t matter if you’re a lawyer or a driver, what matters is if you’re willing to put in hard work and perseverance – two things that are easier said than done.
TJ, who earns his income from both selling and referring, says, "At first nahirapan akong magbenta but ang kagandahan nito itulog mo lang yan and the next day you start again."
So we asked Doyee: Are sellers born or made? "They’re made," she says emphatically. "Anybody can sell anything as long as they have the right attitude, the training and a company that provides good products to sell."
Try to picture five daughters in color-coded dresses (the easier to tell them apart) making shoeboxes in a factory after school. That’s how Doyee Tactacan-Tumpalan started. At three years old, she was on the floor helping put shoeboxes together. At 10, she’d help deliver shoes to Shoemart. At 15, she was talking to retailers and booking orders. At 16, she was going to international trade fairs and doing the negotiations with leather suppliers in Hong Kong and Singapore. At 19, as a fresh graduate of Communication Arts from Maryknoll, she was handling the entire operations, from accounting to product development – just like her three elder sisters Vicky, Dina and Tetet did before her (youngest sister Julie married young and missed that rite of passage) – and she’s never looked back since.
This is the heart of the First Quadrant business: A shoe factory in Marikina called D. Tactacan Manufacturing, which made Lady Rustan shoes for Rustan’s, Le France for Shoemart (remember that blue box with white polka dots?), for Gallerie Lafayette in Paris and other parts of the world. They made shoes that were used by Laila Benitez of Student Canteen and Dolphy in the movie Pacifica Falayfay.
Back then Marikina was a thriving shoe capital. Then came China with its cheap prices and Filipino retailers couldn’t resist importing, and then came the economic slump in 1997. It was like kicking an already dead horse.
That’s when Mayor Marides Fernando stepped in with her Marikina-made shoes. She pulled five of the young entrepreneurs of Marikina to represent the city in trade shoes abroad; the city would pay for the exhibition booths in shows held in Las Vegas and New York, the entrepreneurs would shoulder the rest and do their best to sell, sell, sell.
"Around that time I stumbled on multi-level marketing," says Doyee. "I did research, looked at various compensation plans. I knew that if you build a network you sell faster." (Doyee had experience in direct-selling before when she and her sisters distributed their own Newport shoes through this channel, but learned the hard way that credit lines sometimes remain just that – credit and not profit; so she went the next step, MLM, which is a spin-off of direct-selling.)
"I didn’t want to do it for my company alone. First Quadrant is selling 45 independent brands. My mission was to revive the industry and we’ve done that in just two years. The company alone is supporting about 100,000 people in the workforce including their dependents. There are more in the sub-industries like people making adhesives for the shoes, etc."
It brings to mind the story of Kapitan Moy, her great-great-grandfather and the recognized founder of the Marikina shoe industry. After he went home to Marikina in the 1860s with his German pair of shoes, and he needed to repair them, he thought: Why not make shoes here? All that was available locally was slippers, you had to buy your shoes in Europe.
So he said, while people waited for harvest season they might as well do something. That was how shoe manufacturing became a cottage industry in Markinina: the women would do the upper, the men would do the lip, and they would go back to their farms when it was time to harvest.
Thousands of miles from Marikina, in Milpitas, Doyee tells us over dinner: "There are 250 components in a pair of shoes and 15 processes to make one pair."
Imagine that. It took her just two steps to build her company: Dream big and do big.