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Country Focus on Canada
by Jennifer L. Mills
Opportunity in Canada is as diverse and vast as the country itself. Occupying a major part of North America and touching three oceans, Canada is composed of 10 provinces and three territories, all grouped into regions referred to as Western, Eastern and Northern Canada. The three Northern territories—the Yukon, Northwest Territories and Nunavut—stretch across more than half of the Canadian land mass, but counted all together barely top 100,000 human inhabitants. Polar bears, beluga whales, caribou, musk oxen, fur seals and many other wild creatures share the wide open spaces.
The nation also contains landscapes that are beyond compare. Like the United States, Canada stretches from sea to sea; its western edge is the vibrant North Pacific coast. Awe-inspiring blue whales roam the icy Atlantic waters between Nova Scotia and Newfoundland. And in the lower western middle lands, farmers, cattle and sheep make their homes in the grasslands and prairies.
With approximately 33 million people—about one-tenth the population of the United States—Canada also has one of the highest standards of living in the world and is home to thriving urban centers—Ontario is the largest province with a population of 12 million followed by Quebec at 7 million. In fact, the majority of Canada’s population is generally concentrated here in the southern provinces, and 90 percent live within 99 miles of the U.S. border.
This neighbor to the north is one of the world’s wealthiest nations. It is also a diverse nation with a welcoming immigration policy. From the Aboriginal peoples who inhabited it for millennia to the Vikings and later the British and French explorers who colonized there beginning in the late 15th century, new immigrants continue the tradition, entering its borders every day and adding to the mixture that creates a similar diversity to the citizens of the United States. Actually, Canada’s population has increased by 5.4 percent in the last five years primarily due to immigration. A direct result of this multiculturalism is that the nation has two official languages: French and English. The French were the first Europeans to make permanent settlements in 1605. French is mainly spoken in Quebec, though there are large French-speaking areas throughout Canada. In fact, law requires materials directed to the people of Quebec be printed in both languages.
With close proximity and relative similarities to the United States, Canada has significant opportunities for U.S. companies taking their first step in international expansion. Canada is the second largest country in the world by total area, next to Russia—and its citizens already utilize catalog and direct mail services to receive items not readily available in nearby retail stores. Previously familiar with shopping in different ways, the Canadian market is a wonderful supporter of direct selling. Even the French language requirements in Quebec create an opportunity for companies to test the waters with foreign-language materials.
Bobbie Creber, formerly President of the DSA in Canada from 1987 to 1992, and now serving as Managing Director, lia sophia Canada LP, advises that it is crucial to recognize Canada as its own unique entity when considering doing business there. “It’s very important to recognize Canada as a separate market,” says Creber. “While we are best friends as nations, and in many cases you would be hard-pressed to know whether you’re speaking to an American or Canadian, there are some cultural differences. There is a pride among the Canadians that they are Canadians. Companies need enough presence to let them know you are Canadian, that you understand the dynamics of the country.”
FACTS About Canada’s Direct Selling Industry
- Over 900,000 Canadians are associated with the direct selling industry.
- The Canadian DSA represents 48 companies with sales revenue of over $1 billion annually.
- The direct selling industry accounts for more than 16 percent of non-store retail sales in Canada.
- Canadian DSA member companies employ close to 3,000 people.
- 91 percent of Canadian direct sellers are women.
- Canada’s direct selling organizations donate nearly $8 million to charities annually.
by J.M. Emmert
From far and wide, more than 900,000 Canadians are finding that direct selling has an unlimited capacity to create income earning opportunities.
The direct selling industry in Canada, the 14th largest market in the world with total retail sales of more than $1.3 billion in 2009, is a dynamic segment of the Canadian economy. It has seen sales grow 11.2 percent in the last five years and sustained a 10 to 20 percent increase over the last decade.
The Prairie Provinces—Alberta and British Columbia—continue to lead the country in share of market penetration, with Alberta recording sales per capita of $63.97. Ontario and Quebec are showing marginal increases over last year, with strong performances coming from Manitoba, Saskatchewan and Atlantic Canada.
As a delivery channel in Canada, direct selling offers consumers access to hundreds of products, from food and nutritional items to clothing, cosmetics and jewelry. While non-store retail (catalogs, online sales) is common in the country, direct selling is the only personalized, interactive channel; for the many who cannot find what they need in local stores or do not have Internet access—26 percent of direct selling consumers live in rural areas and over 13 percent are over the age of 65—the industry provides the goods that they might not otherwise find.
Currently, 75 companies comprise Canada’s direct selling industry, with more than two-thirds of them—including such household names as Amway, Avon, Mary Kay, Nu Skin, PartyLite, Regal Gifts, Tupperware and USANA—participating as active members of the Direct Sellers Association of Canada.
Standing Guard
Watching over the industry is the DSA of Canada, established in 1954 and today recognized by Canada’s federal and provincial governments as a highly respected and effective organization.
The DSA is devoted to preserving the integrity of the direct selling industry in Canada. It works on behalf of member firms to address important issues, educate the public and enforce the high standards set forth in its Code of Ethics.
“We have had a very strong government relations program for decades, with a proven track record of being able to influence, change and protect the industry against unnecessary or onerous legislation at both the federal and provincial levels,” says Ross Creber, President of the DSA. “We have our finger on the pulse of government at all levels, monitoring issues, consulting regulatory bodies and officials and lobbying on behalf of the association.”
The DSA also offers many of the same services, albeit on a smaller scale, that the U.S. DSA provides to its members, including education and training through its annual conferences; workshops and seminars throughout the year on such topics as tax, health, industry trends, and best practices; and providing updates through its newsletter and timely updates on developments in the marketplace. It also has a resource base of industry research data collected through its Socio-Economic Impact Studies, Quick Polls, and Pulse Surveys as well as data on the diverse cultural groups in Canada.
In addition, the DSA has a program available to independent sales contractors (ISCs) and employees of member companies—the DSA Rewards Program, that provides a wide range of products and services. “We have discounts on gasoline, office supplies, health and dental insurance, home auto insurance and much more,” says Creber.
Canada Beckons
The work of the DSA is paving the way for international companies to expand their operations into Canada. Creber believes this is one of the best times for direct sellers to consider entering the Canadian market.
“The DSA has always encouraged companies to come to Canada,” he says. “For those considering international expansion, Canada is the first market to consider for a number of reasons.”
Those reasons include the fact that Canada is a very mature and receptive direct selling market that has tremendous consumer support and acceptance. It is a great market to test a company’s infrastructure before moving forward to other more distant markets.
It also has two official languages (English and French), provides close proximity to the United States and offers a diverse multicultural population.
“Some additional considerations are that the productivity of Canadian direct sellers is generally higher than those in the United States, and many companies who have started their international expansion in Canada have used the profits to help fund startups in other markets,” says Creber.
And lastly, Canada has a strong DSA that is there to support member companies and its independent consultants.
“If a company is marketing products in Canada and is not a part of the DSA, they do not have an opportunity to have their voice heard,” Creber adds.
Prime Minister Stephen Harper |
On Jan. 25, Canadian Prime Minister Stephen Harper issued the following statement declaring 2011 the Year of the Entrepreneur:
“Canada’s entrepreneurs are the backbone of our economy, creating jobs and driving economic growth in communities large and small across our country. They invest themselves completely in their businesses, working countless hours on every aspect of their enterprises, from research and development to manufacturing, marketing and delivery.
I am therefore pleased to declare 2011 as the Year of the Entrepreneur as part of our Government’s efforts to raise public awareness of the importance of entrepreneurs to Canada’s economy and pay tribute to their drive and dedication.
Our Government has listened carefully in the last five years to what entrepreneurs told us they need to succeed. We have listened and have taken decisive action to address their needs and concerns, including reducing taxes and red tape, improving access to business financing, making substantial investments in training, research and development, and opening up new markets.
I encourage Canadians to participate in activities taking place this year to support local entrepreneurs and to thank them for contributing to the quality of life we all enjoy.”
Company Views
Amway
Amway has been conducting business in Canada for nearly 50 years. Amway Canada, the first of Amway’s international affiliates, has been providing independent business owners with quality products supported through national advertising, sponsorships, and social media efforts that help to increase awareness of the Amway, Artistry and Nutrilite brands.
“A lot of time, energy and resources have gone into transforming the Amway business over the last several years to ensure that it remains cutting edge,” says Angela Abdallah, Manager of Communications and Government Affairs for Amway Canada. “Investments in advertising, training, new product launches, enhancements to our website and mobile applications that put the Amway business in the palm of your hand are just a few of the ways we support the incredible efforts of our Canadian IBOs.”
MaryKay
Mary Kay in Canada opened on Sept. 13, 1978. Throughout the years the company has become known by government officials, the public and its salesforce as an organization that enriches the lives of women, conducts business on the highest ethical level and provides great opportunities for personal growth and financial independence.
“In our three and a half decades of business, we have enjoyed considerable growth; after 35 years of conducting business in Canada, our salesforce has grown to 15,000 individuals,” says Ray Patrick, President of Mary Kay Cosmetics Canada. “As our salesforce grows, so has our sales revenue grown accordingly.”
Patrick says that the company is incredibly optimistic for the future of direct selling in Canada and for the future of the DSA. “As we look forward to our 35th anniversary, we are currently enjoying considerable growth in the Quebec market as well as Prairie Provinces,” he says. “We expect to enjoy growth from the cultural groups in Canada, particularly the Asian markets.”
Silpada Designs
Silpada Designs has been operating in Canada since April 2008. According to Jerry Kelly, CEO of Silpada, Canada was a natural choice when his company was looking to expand outside of the United States.
“The close proximity of the two countries and the fact that both countries speak English are contributing factors,” says Kelly. “In addition, many Canadians experienced Silpada when visiting the United States and expressed interest for Silpada to expand into Canada.”
Silpada has experienced consistent growth in representatives each year it has been in business in Canada. The company is expecting a 15 to 20 percent increase in the number of representatives in 2011.
In addition, Silpada’s growth in Canada throughout the global recession has exceeded expectations. “We have a very positive outlook for 2011 and beyond with continued growth and brand awareness that will keep Silpada Designs at the forefront of this industry for years to come,” Kelly says. “It was very important for Silpada Canada to be a standalone Canadian operation, separate from our U.S. operation, with its own dedicated field development, support and fulfillment infrastructure, not just a sales office. This has created a very unique and valuable Canadian Silpada-ish culture and reflects our long-term commitment to Silpada Canada.”
Immunotec Inc.
Immunotec Inc. is Canada-based, and according to COO Robert Felton, the only publicly held direct selling company trading on the Canadian exchange. The company has been in business 15 years and operates in the United States, Canada, United Kingdom and Ireland, and Mexico. Their largest market is still Canada.
Immunotec has years of scientific research and clinical trials behind their products. Their flagship product, Immunocal, was developed at McGill University in Canada and is listed in the Physician’s Desk Reference. Fifteen years ago, when research on the product was presented to a pharmaceutical company, executives passed on it since it works primarily as a “preventative” product by optimizing the immune system. So one of the founders and investors in the research turned to network marketing as the distribution channel, starting the business out of his garage in Quebec.
“For the past several years, the company has been positioned to treat illness, but is in the midst of a repositioning toward wellness, for people who want a better quality of life,” says Felton.
Regal Gifts
Regal Gifts is another company with roots in Canada. The company was founded in Toronto in 1928 and is a well-known brand name in Canada with over 80 percent consumer recognition. It was in the Top 5 of direct selling companies in Canada prior to a restructuring in 2005. Since then it has refocused on its core business and direct selling model and, although smaller, is profitable and growing.
“Our independent reps have grown steadily the last number of years and through the recent recession,” says Greg Neath, President and CEO of Regal. “So far this year we are up almost 10 percent in reps and we have also had slightly less growth in our sales.”
Neath admits that the company’s growth has been challenged by lower consumer spending, but that has not deterred executives from finding new opportunities like social media, which they see as perfectly suited to the direct selling model.
“We are finding that the older ISC trying to do business in the same model of the last 20 years is seeing declining sales, while newer ISCs, who are using the new tools, are seeing strong results,” says Neath. “We are in a transitionary stage where these newer ISCs are growing and beginning to replace the lost revenue from the old model, but are yet to reach the annual sales that took years for our older ISCs to achieve.”
Neath believes that Regal will continue to grow in the coming years despite the challenges now faced. “Our business is growing and we see high single or low double-digit growth through the next number of years as the newer web-based ISCs really begin to take-off,” he says. “The ups and downs of the economy will continue but we believe strong direct sellers who recognize how to compete for the consumer dollars are in a better position than most retailers. Through keeping costs variable and organizing around the ability to quickly react and change in real-time speed, Regal will continue to be a strong Canadian brand for many decades to come.”
DSA Members Gather at Historic Fairmont Banff Springs Hotel
The conference kicked off with the first-ever Richard Lamb Memorial Golf Tournament. The Fairmont Banff Springs Golf Course provided a timely tribute to the DSA’s dear friend and colleague. Bordering the beautiful Bow River under the snow-capped peaks of Sulphur Mountain and Mount Rundle, the course provided an idyllic beginning to a fantastic conference. The final night of the conference was an evening of awards where the Direct Sellers Association honoured its best of its best.
“We are delighted to acknowledge the strong contributions and efforts these companies and individuals have made to the direct selling industry,” said Ross Creber, President of DSA Canada. “Their dedication and passion have enriched the lives of many—not only those affiliated with their organizations but also those benefiting from the charities that they support.”
The awards for 2011 included:
IVAN P. PHELAN AWARD
As the industry’s highest personal recognition, the Ivan P. Phelan Award is presented to an individual who has made a significant contribution to the advancement of the direct selling industry in Canada.
This year’s recipient was Angela Abdallah, Manager, Communications Government Affairs, Amway Canada Corporation.
MAKING A DIFFERENCE AWARD
This award recognizes the efforts of companies that have made a profound difference in communities across Canada. Criteria for this honour include consideration of the level of involvement in the community, the effort relative to the size of the company and the company’s vision and motivation.
Awardee Amway Canada Corporation and its independent business owners have raised nearly $360,000 for Easter Seals Canada in the last five years alone.
INDUSTRY INNOVATION AWARD
This award recognizes the implementation of a program or service unique to the Canadian direct-selling industry by a DSA member company.
Mary Kay Cosmetics Ltd. received the award for developing and implementing a unique programme called Lynda’s March Madness.
DSA Rewards Program
The DSA now offers significant discounts exclusive to members on everything from fuel, movies, insurance and travel to everyday business items like office supplies, online calendars and contact management tools. All ISCs of Canada are eligible as long as they are members of the DSA, and this also includes member company employees.
The organization also brings the understanding of professionalism and validity of the direct selling channel, thus helping ISCs to gain confidence and a sense of belonging to something big—the World Federation of DSAs. Companies like Regal Gifts, who just launched the DSA Rewards Program with their ISCs this spring, are very satisfied with the results. “Not only is this great for our reps, it is a huge bonus for Regal because this free offer is viewed as coming from Regal and the DSA,” says Wayne Desbarres, Regal Sales Director. “Our reps see this as an extension of being a Regal member and a real benefit to staying with Regal.”
When it comes to continued growth as a business owner, a Certification Program is there to educate ISCs and help them to better understand the direct selling industry, including legislation and regulations from an organization that makes it a goal to provide a foundation of trust for its ISCs and customers. For more information, visit www. dsarewards.com.
DSA Canada Takes Lead Role at Fraud Prevention Conference
Fraud: It’s big business in Canada. Statistics show that 65 percent of all Canadians have been targets of some form of it—phone scams, fake letters, virtual kidnappings or identity theft—accounting for $10 billion in losses annually. So when the DSA came across these startling statistics more than a year ago, its leaders felt it was a definite call to action. They reached out to experts at the Fraud Prevention Forum (of which the DSA is a member) to organize an international conference to address the growing problem of fraud in Canada. The ultimate goal was to bring together law enforcement as well as businesses and industry and trade associations to share information and develop a national strategy to address the concern.
More than 200 delegates gathered at the Fairmont Chateau Laurier in Ottawa to share, network and learn from each other.
As a result of the key role of the DSA in the development and organizing of this event, President Ross Creber was invited to co-host with the Canadian Bankers Association’s Maura Drew-Lytle. Greg Neath, the Board Chair of the Direct Sellers Association, was given podium time to provide the audience with a briefing on the direct selling industry and the role of the DSA.
The No. 1 recommendation that came out of the conference was the need to break down the barriers between organizations and figure out ways to work together to provide a cohesive solution. The organizing committee will meet over the next several months to develop a plan that addresses those concerns.
DSEF Canada Focused on Key Issues
The Direct Selling Education Foundation (DSEF) is a not-for-profit
organization established by the Canadian DSA in 1994 to promote public
awareness of the direct selling industry in Canada. The DSEF serves the
public interest through educational programs, research into direct sales
and micro enterprise, and the establishment of links with consumer and
government organizations.
The DSEF is focused on providing programs and information that address issues of importance to business leaders, academics, students, public policy officials and members of the micro-entrepreneurial community. In 2010, the DSEF website was completed and now provides a link to the research projects and a bibliography of case studies. Through the Academic Programme Committee (APC), the DSEF hopes to develop new case studies for use in North American business schools.
This past May, the Academic Programme Committee identified areas of mutual interest of the industry and the academic members of APC. The outcome was a commitment by members to pursue practical research projects related to three research themes: recruiting and development of independent sales contractors (ISCs), branding, and customer relationship management. A number of projects are already in progress:
- Case study of the DSA rebranding exercise
- Study of direct selling brand awareness and attitudes within the youth market
- Study into the effects of call reluctance/fear of rejection and its role in recruitment/development failure
- Study into the effect of short-term performance measures upon turnover
- Study into brand–personal identity integration and the role that congruence plays in ISC turnover intentions
In addition, several other areas of inquiry are in the early stages of development. Individual members of the APC are also involved in company-specific research projects that complement their areas of research and teaching expertise.
