What DSA Membership Means

DSA undertakes a thorough review of any company being considered for membership. After submission of a membership application the pending process takes at least one year and are three main things happen during this period:

1. DSA reviews company materials, including a starter kit and other documents that represent what a potential recruit would receive, to ensure compliance with the DSA Code of Ethics. For example, does the company offer a 90% buyback policy? Are the startup costs reasonable? Are there any statements that indicate inventory loading or other prohibited practices?
2. DSA makes inquiries to law enforcement and consumer protection agencies such as the Attorney General in the state where the company is located, the Better Business Bureau, and, on a case-by-case basis, any other entity that may have relevant information to share. It is also important to note that the mere existence of a complaint with any of these bodies does not in and of itself preclude membership, what is also considered is the way any such issues have been resolved.
3. The two activities above could be completed in far less than a year. However, one of the most important parts of the pending process is what is essentially a waiting period during which potential issues have an opportunity to surface. These are issues that may not necessarily be obvious through a review of a company’s materials, but are exposed by the marketplace over time.

Should questions arise from any of the three activities above, companies must answer and/or address those questions before they can move forward to full membership. In fact, each year there are dozens of companies that submit a membership application and either withdraw it or are not put before the Board of Directors for approval because of unresolved issues.

Additionally, once a member, companies go through the entire review process at least once every five years. Members must continue to meet DSA standards regarding sales and recruiting practices. Those standards are embodied in the DSA Code of Ethics.

The Code is not a perfect document – and the DSA Ethics Committee and Board are constantly evaluating and revising the Code to reflect what is going on in the marketplace. But it is an enforceable standard of behavior for DSA members and a mechanism that does aid salespeople and customers alike in getting answers to many of their complaints. Thankfully, despite millions of consumer transactions each year, we get relatively few complaints. That’s a testament to the standards themselves and the pledge that DSA member companies make to abide by them.

That’s what DSA membership really means – that DSA member companies:

• pledge to abide by the rigorous standards of the Code
• will buyback inventory from departing distributors
• will not allow inventory loading
• will not require unreasonable upfront fees
• will not make misrepresentations about their products or opportunities
• will not be pyramid schemes
• will not hide behind the independent contractor status of their salespeople to avoid application of the Code.

If a member company doesn’t abide by these standards, it will be subject to the judgment of an independent Code Administrator who makes determinations that are in the best interests of the consumer and the industry – not necessarily the company. The Code Administrator will take action to force the company to comply, help any individual complainant, or if necessary, ask the company to leave DSA, make the matter known publicly, or refer it to law enforcement for action.

Even the best of us make mistakes, and DSA’s purpose is to minimize those mistakes by creating the standards described above and providing a mechanism to address them when they happen.

What about companies that are accused of breaking the law? Fortunately, DSA member companies are rarely accused of this in any credible way. But as in any industry it sometimes happens that one of the hundreds of DSA members, or some of their millions of salespeople, are charged with serious wrongdoing. DSA’s rigorous process for reviewing companies prior to their becoming association members is designed to help weed out companies that may not abide by the Code. If a member company is accused of a fundamental wrongdoing, DSA takes it seriously. If there is an allegation, it is forwarded it to the Code Administrator for possible further action based on his review and the evidence and conclusions that come from any government claim.

However, DSA’s reviews and standards are ultimately no substitute for one’s own wisdom, caution and education about direct selling. Whether a company is a member of DSA or not, anyone considering direct selling should always ask the same questions – Is the cost to get started reasonable? Is the product a viable one that you think you can sell? Is the compensation of the plan based on sales to real users of the product and not merely based on recruiting other people? Are you being told that this will take hard work to succeed? Does the company have an inventory buy-back policy?

DSA is confident that when you ask these questions about our members, they’ll be answered to your satisfaction. DSA is proud of its Association, its Code, and its member companies and the standards it adopts, fights for, and enforces are an important part of making sure direct selling is a business model that represents the best for consumers, sellers and companies.