Reclaiming integrity in the direct selling industry.
Too often, bad actors are permitted to masquerade as legitimate enterprises—especially during periods of rapid growth and optimism. In those moments, the lines between sustainable business practices and short-term opportunism can blur, creating confusion for participants and risk for the industry as a whole. For direct selling to evolve from a controversial side hustle into a respected pillar of the gig economy, it must embrace a culture of radical transparency.
At the same time, the regulatory environment is shifting. We have seen the evolving nature of the Federal Trade Commission’s playbook through high-profile actions like the Lyft and Walmart settlements.
The focus on income claims has become increasingly clear, while traditional concerns around pyramiding are no longer front and center. The direct selling industry’s playbook should evolve accordingly—placing greater emphasis on clarity, accountability and truthful representation.
Recruitment vs. Retail: The Identity Crisis
A healthy business can be defined by its ability to sell products to the general public. In the direct selling space, however, the line between “customer” and “distributor” is frequently blurred. This creates a “closed loop” economy where the primary consumers of the product are the participants themselves.
True sustainability in direct selling requires a “product-first” mandate—where the value of the goods stands independent of the business opportunity. Income claims are undoubtedly a recruitment mechanism, but they should not be the driving force for any business. They frequently do much more harm than good.
This is because the digital transformation of direct selling has introduced a new complication: the curated lifestyle. On social media, the “transparency gap” manifests as attraction marketing where distributors are encouraged to showcase a high-end lifestyle to lure new recruits.
Let’s take a recent example. For years I have seen a certain individual on social media displaying a luxurious life with watches, cars, parties and penthouses. After recently speaking with the company in which this person works, it became clear that this person is nowhere near the top and the commissions earned are decent but by no means as lifechanging as the social media posts imply.
It’s critical to teach and promote diligent and responsible behaviors. In a world of glam and pop, it most certainly will not be easy. But I can guarantee it will be viable long term when the most recent glam-and-pop fad has long failed.
A Blueprint for Reform
If the direct selling industry is to thrive in an era of social media influencers and consumerism, it must adopt a higher standard of ethics. This transition requires three critical shifts:
1 / Business Education: New distributors should be trained on the basics of a Profit and Loss (P&L) statement. Understanding the difference between a check in the mail and a profitable business is essential for long-term success.
2 / Regulatory Compliance as a Brand Value: Rather than doing the bare minimum to avoid litigation, companies should lead with transparency as a competitive advantage. Build something you yourself would want to buy.
3 / Play Your Game. How do you beat Tiger Woods? You don’t play him in golf.
Direct selling offers a unique opportunity for community and entrepreneurship, but it cannot survive on the “smoke and mirrors” of the past. By closing the transparency gap, the industry can protect its most vulnerable participants and build a future based on genuine value and sustainable growth.
Closing the Transparency Gap
Three Shifts for a Stronger Direct Selling Industry
As the direct selling channel evolves alongside social media and the gig economy, transparency is no longer optional—it’s essential. Building long-term trust with customers, regulators and distributors requires a clear shift in how companies approach growth and communication.
Here are three key areas where companies can lead:
1 / Prioritize Product Value
Sustainable direct selling businesses are built on products that stand on their own merit. When customers purchase because they genuinely value the product—not the opportunity attached to it—the foundation for long-term growth becomes much stronger. A product-first mindset helps move the channel away from recruitment-driven models and toward true retail demand.
2 / Elevate Business Education
Helping distributors understand the fundamentals of business—especially profit and loss—creates more informed, resilient entrepreneurs. A commission check does not always equal profitability. By equipping the field with financial literacy, companies can foster healthier expectations and more sustainable participation.
3 / Make Transparency a Competitive Advantage
Rather than treating compliance as a requirement, leading companies are embracing it as a differentiator. Clear, accurate income representations and responsible messaging build credibility and reduce risk. In a digital environment where perception can easily outpace reality, transparency becomes a powerful brand asset.
The future of direct selling depends on trust. By aligning products, education and messaging with that principle, companies can create a more sustainable and respected path forward.
Partner at Thompson Burton PLLC Clay Brewer’s practice focuses on advising both established companies and startups on a wide range of matters such as business planning, capital raising, corporate structuring, regulatory risk and cross-border transactions. A prolific writer and thought leader, Clay provides strategic counsel to clients and has a strong interest in the evolving direct sales industry as well as digital assets and blockchain technologies.
From the May/June 2026 issue of Direct Selling News magazine.
