MLM

Word has spread quickly about directselling411.com! After just a few short days with our “doors” open to the public, the buzz is beginning.

A quick Google search today uncovered a blog post questioning not only the motivations behind this site, but also the Direct Selling Association’s credibility. I think the directselling411.com mission has been made very clear – to provide accurate information about direct selling, as well as a forum for dialogue about direct selling. Don’t agree with the information provided? Then let’s talk about it. There aren’t many other sites about direct selling out there that provide a two-way street for the dialogue. It’s fine if, in the end, you disagree with the information on the site, but at least engage in the conversation.

I’ll be the first to admit that the direct selling industry is not without its issues – if it were perfect you wouldn’t be reading this blog. But contrary to what industry critics would have you believe, the vast majority of participants in this industry are honest, ethical human beings.

The part most critics choose to ignore is that the good guys are working hard to address the industry’s issues – as well as change outdated stereotypes kept alive only through the misinformation spread by those who refuse to understand direct selling is an honorable and time-tested method of product distribution that helps millions of people achieve their goals.

Do the good guys ever err? Of course – that’s one of the reasons the Direct Selling Association’s Code of Ethics, enforced by an independent Code Administrator, is a great consumer protection vehicle. Anyone who has encountered a problem with a DSA member company is invited and encouraged to file a Code complaint. Complain to your friend or neighbor if you choose, but to get a resolution, file a Code complaint. DSA member companies are required to resolve all issues to the satisfaction of the Code Administrator – their membership depends on it.

I was hoping this post wouldn’t get too long, but quickly I want to respond to some of the specific statements from the aforementioned post.

1. “Most of the direct selling that is done by direct selling companies are to their distributors.” FALSE! What’s true is that more than 50% of Americans have purchased through direct selling in the past year. In addition, there are a significant number of people who sign up only to purchase the products at a discount – they never intend to sell a single thing (or make a single dollar for that matter!). Some companies have a fairly high percentage of people in this category – often called discount buyers. However, certainly anyone reading this post knows more than a handful of people with kitchens outfitted with direct selling products, homes accented with direct selling products and even jewelry boxes, well, you know…
2. “In past years the FTC has taken a dim view of [sales made to participants in the plan, a.k.a. internal consumption].” FALSE! While the FTC maintains an interest in making sure bad actors do not use internal consumption as a cover for inventory loading, and has looked closely at this issue with regard to specific companies (and in some cases has imposed requirements specific to those companies based on their findings), there is no FTC rule regarding internal consumption. In fact, in a 2004 staff advisory opinion, the FTC specifically states that the amount of internal consumption does not determine whether a plan is illegal; such a determination is instead dependent on the source of funds for commissions.
3.  “The DSA operates to keep direct selling businesses in business.” TRUE! That’s the nature of a trade association. But what’s also true is that DSA helps keep its companies in business by making sure they operate in a legal and ethical manner. And through the work of the Direct Selling Education Foundation (DSEF), direct sellers work with consumer protection groups around the world to advance the rights of consumers everywhere. (Incidentally, the post in question also asserts “the DSA probably manages to put mucho cashola in Senate and Congressional pockets very effectively.” Anyone who believes legislators and regulators are influenced by DSA’s money vs. being on the right side of the issue should check here to get the real picture.)

The bottom line is this:

Anyone who asserts DSA is doing anything that is not open and honest clearly hasn’t spent too much time on this site. The facts are here for all to see – with an invitation to comment. Sure, we can be accused of “whitewashing MLM,” making an “attempt to paint [the] business with respectability,” and “treating the public like small children,” but in the end, DSA’s goal is to make sure all direct selling companies are operating ethically and fairly. I would encourage those who share this goal to work with DSA to improve the industry.

I was waiting at a traffic signal today when an Army Recruiter vehicle made a left turn in front of me. It got me thinking about all the different types of organizations and businesses that recruit people. Colleges, sports teams, and even retail stores and restaurants are constantly looking for new people to join their ranks. The military is also great example – with a volunteer army, it’s constantly necessary to educate people about the opportunities the military offers and encourage interested individuals to sign on. Some will say yes, but most will say no. For some who say yes, it’s an opportunity to build self confidence. For others, it’s a way to earn money for college, or it may just sound like an exciting adventure. Once recruited, some will drop out after the first day of boot camp. Others will make a career out of it. Some will be criticized by their families for signing up. Others will become the heroes of their hometowns. The motivations are many, as are the ways to define success.

I’m sure you can see where I’m going with this – try inserting “direct seller” into any of the scenarios above. There are a lot of similarities. Unfortunately, the recruiting techniques of some more passionate direct sellers have become the stuff of legends, sometimes becoming fodder for late-night variety shows, but in the end resulting in a public that has a lot of preconceived notions about direct selling and recruiting.

But the truth of the matter is that recruiting is important to almost every type of business. Turnover requires bringing on new people on a regular basis, and there is a natural hierarchy in any business where a few people at the top manage progressively larger numbers of people below them (and are rewarded accordingly). But, in the end, no business can be successful, regardless of the number of “recruits,” without the sale of products and services. As a result, the emphasis on selling versus recruiting must be balanced.

It’s likely that at some point everyone will be approached with a direct selling opportunity. The opportunity may sound intriguing, or you may not be interested right now (never say never). Either way, just be straight with the person who’s trying to recruit you – don’t be afraid to say no, but also keep in mind that they are approaching you because they like what they do and as a friend, neighbor, colleague, etc. want you to be involved too. If you say no, don’t be surprised if they continue to try to convince you, and know that they’ll probably try again later. Can you imagine if consumer products companies ran one ad for a product and then never tried again? Or if colleges sent only one marketing brochure to their top prospects?

And sellers, if someone says no, accept it and consider trying again later if it’s appropriate. It’s not worth your time or effort to recruit people who aren’t really interested because they’re not likely to be successful. Let the person know that you respect their decision, but if they change their mind, you would love to have them on your team. The next person you meet might say yes and become the next star seller – imagine if you had wasted your time on someone who would only resent you and the opportunity later. Plus, remember that your friends and neighbors are that, first and foremost. Don’t risk your relationships when you have a whole world of potential customers out there – it’s just a matter of meeting them.

So, the Army recruiter I saw this morning was probably on his way to a high school or community event. He probably talked with dozens of people about signing up. Maybe one or two will ultimately do so. It’s possible, but not likely, that one of those people will one day be a five-star general. But either way, the recruiter will probably be out again tomorrow, doing the same thing again. Along the way, it’s likely that he’ll run into a direct seller. They’ll certainly have lots of stories to share with each other. Who knows, maybe that army recruiter will decide to earn a little extra money by selling financial services, pet products, personal care products or any of a multitude of products and services sold through direct selling.