With over 37 million people, Canada has excellent potential for continued development and expansion.
Given the close geographic and cultural relationship between the U.S.A. and Canada, it is no surprise that many U.S.-based direct selling companies have a long and established presence north of the border. Add a number of successful Canadian and international companies into the mix and it is easy to see why the direct selling channel continues to go from strength-to-strength in the Great White North.
The best news is that the Canadian market, of over 37 million people, is far from saturated, with excellent potential for continued development and expansion. As can be seen from the comparative WFDSA 2017 Global Direct Selling Survey data in the table below, there is definitely room for growth. The percentage of independent consultants as part of the entire population is lower than that in the U.S. (3.5 percent vs. 5.7 percent) and the average annual sales per consultant is also slightly lower ($1,538 vs. $1,882).
Combining these numbers with an upward trend in consumer confidence, a generally prosperous economy and favorable attitudes towards the direct selling model, and there has seemingly never been a better time for companies to enter the Canadian market or to expand their local operations.
It is estimated that more than 85 percent of Canadians live within 100 miles of the U.S. border, and for many American companies opening in Canada is the obvious first step into international markets. But while it appears close and inviting, it’s important that U.S. companies do not treat the Canadian market as merely a “51st state.”
History is littered with examples of one-American-size-fits-all expansion attempts, leading to hasty retreats and financial strain. The failed entry of Target Corporation into Canada is a recent and expensive instance from the retail world.
Expansion Basics to Keep in Mind
For direct selling companies, some basics to bear in mind when considering operations in Canada:
- There are two official languages in Canada, English and French. All packaging must display both. While a majority of the country’s residents speak English, in the province of Quebec and other significant pockets, French is number one (totaling around 19 percent of the population).
- Canadians are savvy online shoppers and price hunters. They know their products and price points, and won’t be fooled into paying more than is charged in the U.S. or into accepting a lesser product selection.
- The Canadian direct selling industry is strongly regulated. The federal Competition Bureau closely analyses each businesses compensation plan and advertising, to ensure they meet the requirements of the Competition Act. On top of that, various provincial regulators require a mix of surety bonds and licenses for both companies and individual consultants.
- Once you cross an international border, customs duties will have an impact and tax regimes will be different. Despite ongoing trade negotiations, which hope to minimize disruptions, careful planning is always required to ensure that products get to consumers in a timely and cost-effective manner and that business practices meet legislated standards. Decisions need to be made about customized logistics, software, payment systems and customer service practices.
“Canadians are savvy online shoppers and price hunters. They know their products and price points, and won’t be fooled into paying more than is charged in the U.S. or into accepting a lesser product selection.”
Important Trends Impacting Canadian Direct Selling
Many of the technological and socio-economic trends that are facing Canadian direct sellers are familiar across the global industry. These include the emergence of a growing ‘gig’ style economy, the sometimes fraught line between defining employees and contractors, and the ever-looming pressure from online retailers such as Amazon and eBay.
More specifically for Canada, there are some important societal trends that should be considered by proactive direct selling companies:
- Canada continues to be a nation of immigrants. In 2016, 22.9 percent of the Canadian population were 1st generation immigrants vs. 13.2 percent of the population in the United States. (2016 Canadian Census and 2016 U.S. Census data). New immigrants are often at the forefront of seeking out entrepreneurial opportunity.
- New immigrants tend to wield considerable spending power. “Not only do recent immigrants represent a new and consistently growing consumer base, they are also arriving in better financial position than previous generations, reflecting the current Canadian immigration policy towards admitting skilled professionals.” (Euromonitor—Lifestyles Report 2017)
- The power of networking and selling via social media is strong. 34 percent of Canadian online shoppers said they would consider buying an item from a brand’s advertisement on social media if recommended by a friend or family member. (Euromonitor—Lifestyles Report 2017)
Partner with the Direct Sellers Association of Canada
Membership of DSA Canada is an important factor for success in the Canadian market and focuses on creating value for its members via:
Public Affairs: An emphasis on being a strong advocate to government on issues that directly and positively improve the business landscape for direct selling companies and consultants.
- Ethics & Integrity: Promotion of DSA’s Code of Ethics as the mark of trust and integrity in the direct selling industry. DSA Canada members and their consultants are recognized as the best of the best by government and consumers.
- Communications: A communications strategy that offers members timely and valuable information, and proactively promotes the amazing opportunity that is the direct selling industry.
- Member Events & Education: An investment in providing value for money to all members—through events, educational opportunities, enhanced research, online resources, industry promotion and more. Attendees consistently say that the DSA Canada Annual Conference is the most informative and fun conference they attend all year.
DSA Canada also plays a role as the eyes and ears on the ground for U.S.-based direct selling companies, particular those with a limited bricks and mortar presence. DSA Canada works closely with regulators to ensure that members are first to know about issues impacting them, and that regulators and government understand and appreciate the value that the direct selling industry brings to individual Canadians and to the overall economy.
There is no reward without at least a little risk, but in Canada, those rewards can be significant. What are you waiting for?
Peter Maddox is the President of the Direct Sellers Association of Canada. He has extensive experience in the association world and the marketing industry, having previously held positions with the Canadian Propane Association, Canadian Tire Corporation and Professionals Australia. Peter’s focus at DSA Canada is to promote the positive impact of both the Association and the industry.