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The direct selling industry today is at a critical juncture. We can capitalize on the rising wave of the “Gig Economy,” in which people are increasingly looking to work independent from a traditional employer and with more flexibility. Or we can allow ourselves to be displaced into irrelevance by the rising tide of new ventures like Uber and Postmates, due to public misperception that we are an antiquated business model offering low earnings potential.
When facing this fork in the road, which path will we choose? We know that the potential for direct selling is vast. More than 18 million people were involved in the industry in the United States in 2014, with estimated sales reaching $34.5 billion, a 5.5 percent increase from 2013, according to the U.S. DSA. The direct sales channel continues to experience steady growth, as more individuals generated more revenue in 2014 than any year previously.
We also know that the gig economy is on the rise, no matter what you label it—sharing economy, on-demand economy, peer-to-peer economy, freelance nation, etc. By any name, the trend of individuals seeking to work independent from an employer with more flexible hours and more flexible locations is becoming a movement. According to a poll from Time magazine, Burson-Marsteller and the Aspen Institute Future of Work Initiative, 44 percent of U.S. adults have participated in this type of work, as lenders and borrowers, drivers and riders, hosts and guests.
Amway’s own annual Amway Global Entrepreneurship Report (AGER) also uncovers the increasing desire people have for more independent work. We surveyed nearly 50,000 people in 44 countries in 2015 and found that 75 percent have a positive attitude toward entrepreneurship. The age group most optimistic toward entrepreneurship was under 35, with 81 percent of respondents citing a positive attitude.
But is the direct selling industry considered a part of the Gig Economy trend? Perhaps the bigger question is, do we even want to be?
I would argue that yes, of course, we want to be part of this trend. In fact, we must be, if we want to continue to thrive. Whether they’re called solopreneurs, side-giggers or freelancers, these people want similar work options—income opportunity, flexibility in hours and location, and independence from an employer, all with low barriers to entry. These are benefits direct sellers have been offering for decades, since long before anyone ever uttered the term “Gig Economy.”
But we don’t often see direct selling referenced in the current conversation about the future of work. What’s holding us back from being top of mind as an attractive income opportunity for today’s entrepreneurs?
I challenge all of us to work on the following six areas. Many of these deal with how we tell our story. That’s because in my more than 20 years in the industry, I’m continually dumbfounded by the disconnect between the value of what direct selling actually offers and the public’s perception of our industry. The misunderstanding is clearly, in part, on us. We need to do a better job of owning our story and telling it consistently, clearly and concisely.
Keep It Real
It’s critical that we position our income opportunity realistically. Statistics show most people work direct selling businesses part time and earn part-time income. When there is a gap between the income expectation created with a new distributor and the earnings they actually generate, there is real dissatisfaction that leads to a negative reputation. Clearly stated earnings disclosures are critical to managing expectations.
There are not only widespread misperceptions about direct selling, there also are many misunderstandings about what we sell, how people earn money, what separates legitimate direct selling from illegal schemes, etc. Proactively and candidly explaining who we are and how our businesses work is an area we need to improve.
At Amway, we’re launching a new website called “Amway Answers,” which answers the most commonly asked questions about our business head-on. This includes the more difficult questions about pyramid schemes, retention rates, the role of recruiting, and others. We’re straightforward with these questions and empower Amway Business Owners with a resource from which to share answers or refer others.
Emphasize Our Products
Despite what some outside our industry might think, no one earns money in direct selling until a product is sold. And direct selling companies offer a wide array of high-quality, differentiated products that meet a variety of customer needs in health, beauty, jewelry, apparel, home care, kitchenware and other categories. Products are the income generator of our businesses and the very reason we are a $34.5 billion industry. We must be sure to emphasize this more often.
Demonstrate Distributor Value
A common question we receive is “Why would I buy from a distributor when I could just go to the store?” While the answer can be found partly in the above point on our differentiated products, the answer also lies in demonstrating the unique value that distributors bring to every sales transaction. Direct sellers have deep product expertise and customer service skills, enabling them to build relationships and provide their customers a level of personalized service that cannot be found by shopping in a traditional store or on a website. This is an aspect of our business that we must better illustrate in order to remain competitive.
Deliver Strong Consumer Protections
Direct selling is an inherently low-cost, low-risk venture. On top of our low barrier to entry, we need to improve our policies to ensure we offer the best satisfaction guarantees of any industry on products and registration fees. This is further proof that we care about our customers and do right by those who engage with us. It’s imperative we not only offer these strong consumer protections, but also make them front and center in our communications to underscore our industry’s commitment to customer protection.
Embrace Social and Digital
I’m often asked how we “compete” with online shopping, which I find a rather shortsighted question. Direct selling doesn’t compete with e-commerce—we’re part of it. Online shopping is a powerful tool for our distributors, as is social media for connecting with customers and sales groups, apps for demonstrating products, and mobile platforms for managing businesses. No industry is better poised to capitalize on the incredible rise of social and digital than direct selling. Pairing the personal touch of our model with today’s technology offers both customers and entrepreneurs the best of both worlds.
But don’t just take my word for it. We’ve done research at Amway that supports the importance of communicating more proactively and openly on the above areas. In 2015 we conducted a national survey and a series of focus groups to learn more about the best way to tell our story. Our research showed that when we use specific language and messaging, we can change perceptions. We saw individuals who at the beginning of the conversation were not at all open to direct selling, but as we changed our language they began to change their minds.
Those of us who are part of the direct selling industry know firsthand what an incredible platform we offer the world—quality products customers want combined with a low-cost, low-risk way people with entrepreneurial mindsets can own their own business selling those products. It’s our responsibility to ensure the world outside of our industry also understands our story. Improving how we communicate about ourselves, better connecting the value we provide to people looking for different ways to earn income, and addressing the misperceptions and misunderstandings about the industry head-on will enable us to capitalize on the trends in today’s business environment and continue to thrive well into the future.
John Parker is Chief Sales Officer at Amway Inc.