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One of the characteristics that sets direct selling apart from other business models is the fact that, within the sales channel, companies that might otherwise strictly be competitors so often collaborate to further the practice and professionalism of the direct selling model—creating a community more than just another industry.
This interconnectedness is instrumental to the long-term growth and vitality of direct selling. It is what furthers the free flow of ideas, innovative thought and transparency both within direct sales and in outreach to the general public. It allows us to educate and attract the general public to our business opportunity and products, and it helps us to mobilize millions across the world in support of a wide variety of causes and philanthropic initiatives.
This camaraderie amongst direct sellers has proven invaluable over the decades, and it has become equally important for today’s direct selling leaders to realize the extent to which we are all connected.
In the past few months, the direct selling business model has encountered a significant, sustained attack by biased journalists, a prominent hedge fund manager and others. At the heart of these attacks are questions about the legitimacy of the direct selling business model, including the propriety of product purchases made and personally consumed by consultants themselves. Although the genesis of this attack targeted a particular company with the intent of driving down its stock prices for financial gain, the repercussions of this attack reach deep into the heart and soul of direct selling, questioning whether those who make little money but gain huge satisfaction from their product purchases are as legitimate as those who make a six-figure income.
Suddenly, companies of all shapes and sizes across the country must be prepared to defend their compensation model. Despite having upheld only the highest standards of business ethics for years—and, in many cases, decades—so many of today’s most innovative and transformative direct selling companies find that fundamental aspects of their business are being questioned and debated.
While this is not new, it is at a time like this when it is most critical to remember and value the interconnectedness that is a hallmark of our industry. The tendency may be to try to distance one’s company from the conversation, but once the many layers are stripped away, any company that uses an independent salesforce to sell or recommend its products is vulnerable to the attacks we see today. It is critical to unite with a consistent message to combat inaccuracies and educate the general public about what makes this a phenomenal industry.
This common thread woven between direct selling companies of all shapes and sizes is what also makes our relationships with local-level, state and federal lawmakers so invaluable to our continued success. In early May, the state of Montana expanded its registration requirement for all multilevel distribution companies—with one important exception. Companies subject to the self-regulatory requirements of the DSA Code of Ethics by virtue of membership in the Association are exempt from the registration requirement.
The bill’s sponsor, Sen. Larry Jent (D-Montana), worked closely with the Montana Securities Commissioner’s Office and DSA to ensure consumers are protected from illegal pyramid schemes, and that legitimate direct sellers were not affected.
Given that DSA’s membership review process and requirements under the DSA Code of Ethics is more rigorous than the review process implemented with the Montana registration requirement, the Commissioner’s office supported the exemption of DSA member companies.
Importantly, the implications of the Montana law will extend far beyond that state’s borders. This enactment is a landmark for direct sellers—a well-defined action by a state legislature to make clear the acceptable standards that differentiate illegal schemes from those who uphold a commitment to a high standard of ethics. With the enactment of the Montana law, DSA members can point to Montana’s legislation as a new precedent for which other state legislators can follow.
We represent a truly interconnected industry, therefore, now—more than ever before—we must recognize that no single challenge or legislative victory stands as simply that. Each represents an opportunity for the industry, as a whole, to unite together as one force around a common cause—and that’s something that truly sets us apart.
Amy M. Robinson is Chief Marketing Officer of the U.S. Direct Selling Association, and Alyssa A. Wolice is Marketing Communications Specialist.
