Direct sellers are once again the target of unfounded accusations by critics and journalists who either don’t understand the direct selling business model or simply choose to ignore the facts.
The headline of MarketWatch’s recent “10 things direct-sales marketers won’t say” column holds more truth than the author (or the copywriter who wrote the headline) probably intended. The reason direct sellers won’t say these 10 things is because they aren’t true – at least not in the cloak and dagger double entendre way that was intended for this article.
Author Kelli Grant spent a great deal of time on the phone with me going over in detail each one of these tired accusations that are bantered about by industry critics with reckless disregard for the truth, so I had some level of hope that the story would be fair and balanced after she learned of the facts the critics conveniently tend to leave out. But not surprisingly even perfectly reasonable activities (like having to work to earn money!) were portrayed as negatives, with key information that clearly illustrates why the critics’ arguments hold no water as an “oh by the way” at the end of each segment.
For example, a professor of marketing at Georgetown (who for all I know has no expertise in direct selling at all) does some quick math (like the critics do) and advises people to divide a company’s revenue by the number of salespeople. That could sound reasonable, but what it doesn’t take into account is the fact that a significant percentage of direct sellers join companies to buy the product at a discount and never try to sell to others or recruit anyone. They aren’t eligible to earn commissions but yet this calculation throws them into the mix, artificially lowering the “average” per consultant. The critics leave out that little glitch in their math. In fact, there are plenty of people who earn nothing – but for most it’s because they don’t even try to sell or recruit! The best advice for anyone considering direct selling is to assess how much time you plan to spend on your direct selling business, identify your income goals and talk to enough people to determine if your expectations are reasonable. No simple math computation will answer those questions for you.
Then there’s the assertion that “this stuff might not sell in stores.” In fact, the products best suited for direct sales are those that can benefit from demonstration so critics who make this assertion might be right – but what’s wrong that? There are plenty of products that don’t sell well on store shelves so smart marketers take them directly to the customers and show them the features and benefits. And don’t forget assertions about the price of direct selling products. The author cites one product that sells for $31 through a direct selling company and a “nearly identical” model for $20 at a discount store. While it’s unclear what “nearly identical” means, anyone who has ever been in a retail store in a free-market economy knows that one can find a wide range in price levels of just about any product. Products that aren’t priced competitively won’t sell – regardless of the sales method.
While each of the “10 things” cited provides an alarming “buyer beware” beginning before reluctantly revealing the truth at the end, one of my favorite examples was from a woman who recalled an experience she had 30 years (yes, that’s three decades) ago. It struck me because most of the critics who malign direct selling haven’t updated their facts for just about that long. Today more than 16 million Americans participate in direct selling for a wide variety of reasons. Some support their families with their income, some pay the cable bill and some buy the products at a discount. It’s just a shame that news outlets like Marketwatch find the negative spin to be preferable to describing the millions of people who have found success in direct selling, but then again, that’s one of the “things they won’t say.”