On DSN’s 20th anniversary, we asked industry leaders and legends to share how past evolutions and current opportunities are shaping the future of the industry.

In 2004, Stuart Johnson, now CEO of Direct Selling Partners, Direct Selling News (DSN) and NOW Tech, held a clear vision: to create a monthly publication that offered timely and useful information to direct selling executives. Today, that vision has expanded beyond a print publication to include podcasts, workshops, executive forums and informative in-person events featuring the biggest names in the industry. The format and appearance of the magazine has changed throughout the years, but the original foundation of Johnson’s vision remains unchanged.

As we celebrate 20 years of innovations and insights, we take a look back on a few of DSN’s most important milestones. But even before DSN’s debut in 2004, Founder and CEO Stuart Johnson had an illustrious career influencing the channel. He founded VideoDirect in 1987, which ultimately became VideoPlus and then SUCCESS Partners. He launched SUCCESS Partners University, an education conference for direct selling corporate executives in 2002.

DSN, now in its twentieth year of publication, continues to be the go-to resource for well-researched global industry news, expert insights and interviews with the founders and executive leaders behind the channel’s legacy companies and rising stars.

Deborah K. Heisz, now Neora Co-CEO, and John Fleming, a DSN Legend and former Avon executive, were two of the original staff members tasked with assembling the publication’s flagship print issues.

“At the time, there was no real periodical resource for legitimate news and information for people who were leading and operating direct selling companies,” Heisz said. “People were hungry for a trade journal they could rely on, and we received feedback from dozens—if not hundreds—of executives and owners across the industry letting us know we had truly filled a need.”

From a simple eight-page newsletter to the robust, global magazine it is today, DSN remains committed to supporting, informing, connecting and challenging direct selling executives across the US and around the world.

“I planned to stay for two to three years, but I remained Publisher and Editor in Chief for nine,” Fleming said. “We started by building something relevant and, in many ways, it has become far more relevant than we ever envisioned.”

Twenty Years of Industry-Changing Trends

The past two decades have been host to some of the most dramatic shifts in the channel, including the proliferation of the internet; the broad adoption of mobile devices; and pandemic-induced social distancing that forever changed the way shoppers buy products and interact with brands. With each paradigm shift, the direct selling industry learned to evolve and adapt.

We asked these executives: In the last 20 years, what changes have had the greatest impact on the industry?

“The vast majority of companies started in the industry by sharing products at home parties. Now, we’re sharing the opportunity virtually and across the globe without concern for physical barriers. Digital platforms forced all of us to adjust, while opening up a world of opportunity.”—Mark Pentecost / It Works! Founder and Chairman

“The operating landscape has permanently changed. Millennials want their own gig, but the average direct-to-consumer venture lacks the ability to scale up the way a direct selling company can with sales organizations.”—Rick Goings / DSN Legend, Chairman Emeritus and former CEO of Tupperware Brands

“Twenty years ago, signups and applications required a stack of paper. Today, it’s all done digitally. Technology has enabled much more efficient point-of-sale transactions and created the ability to connect and communicate with more people.”—John Addison / Addison Leadership Group; Board Member for Primerica, LegalShield; Senior Advisor to Utility Warehouse

“The digital revolution of the early 2000s felt, at the time, like a once-in-a-lifetime revolution, but it proved to be just the beginning of an avalanche of technology and business models that would profoundly change the world around us. Through all of these changes–the rise of social media, gig platforms and AI, and the challenges of the pandemic—we have demonstrated that, as a channel, we can adapt and evolve quickly.—John Parker / Amway Chief Sales Officer

“Technology has been the biggest gamechanger for us. I believe you have to have a robust strategy in both automation and face-to-face interactions for success in today’s marketplace. It is a delicate balance. Simplicity and speed can be the difference between success and failure.”—Kevin Guest / USANA Executive Chairman

The Next 20 Years

Lessons from the past 20 years have illustrated that change is not only inevitable; it is a critical part of healthy evolution. It was by welcoming social media, ecommerce and a digital-first footprint that the industry was prepared to not only survive but thrive during the pandemic. And as industry leaders look to the horizon, it will be that same bold approach and nimble, open mindset that will prepare the next generation of direct sellers for success.

We asked these executives: What actions should leaders be taking now to prepare for the future?

“We need to remember what got us here. We have always been an industry that focuses on building people, and then those people go on to build our business. We can ensure our future success by remembering that the most valuable asset any direct selling company has is our loyal, hardworking distributor field!—Rudy Revak / DSN Legend, Founder of Symmetry and Xyngular

“As technology continues to create opportunities and disruptions, I believe the future of direct selling will have to be centered around community and the social dynamic in our businesses. Great products, compelling income opportunities, competitive customer and representative experiences will continue to be basic requirements, but the community and social experiences we offer can be real differentiators.—John Parker / Amway Chief Sales Officer

“We empower women and others to work a meaningful business in pockets of their day. That’s the best part of direct selling. That’s how we win. We must continue to create and emphasize this opportunity—the side hustle is always in style.—Sarah Shadonix / Scout & Cellar Founder and CEO

“Leaders in the channel should plan for growth. Those who stay current by investing in the technologies of today and tomorrow—including new ways to purchase, improve speed to customer and product value—will thrive.—Joni Rogers-Kante / SeneGence Founder and CEO

“Direct selling will continue to thrive where the exchange of value is ongoing and supportive—like in following a nutrition or fitness plan—because of the importance of accountability to achieve success, but we need to acknowledge that affiliate marketing will replace network marketing where the relationship is purely transactional.—Carl Daikeler / BODi CEO

“Personalization and integration of AI in customer service are trends that we find exciting and that we are integrating into our strategy. Direct selling is also very unique; we never work solely online or offline. The future is hybrid, and we are relying on hybrid solutions in our strategy and development to be active pioneers in our industry.—Rolf Sorg / PM-International Founder and CEO

Creating a Lasting Impact

DSN has always strived to stay on the cutting edge of direct selling trends, news and thought leadership through its educational initiatives and events. We asked these executives: How has DSN’s coverage and perspective impacted your businesses over the past two decades?

“DSN has challenged the way I think about our business and the future of our channel. It helps me sift through the hype and understand the real innovations and opportunities that will shape our future. I am so grateful for the connections and insights that DSN has brought to me and our industry.”—John Parker / Amway Chief Sales Officer

“What DSN provides is something critical for the industry: a collegial way to share best practices with one another. One of the great things about the direct selling industry is people’s willingness to share both their successes and failures. DSN gives executives a way to learn and grow their businesses.—John Addison / Addison Leadership Group CEO; Board Member for Primerica, LegalShield; Senior Advisor to Utility Warehouse

“DSN is a powerful source of knowledge, allowing companies to learn from each other and grow. DSN has always offered great insights and innovative ideas. When there can be criticism of our industry, it’s important to have a platform like DSN to speak of the positive impact we’re having around the world.—Mark Pentecost / It Works! Founder and Chairman

“DSN is an important forum for keeping abreast to fast changing forces and how others are approaching and adapting to remain vital and resilient.—Rick Goings / DSN Legend, Chairman Emeritus and former CEO of Tupperware Brands

“The DSN articles and DSU events have been an amazing asset to the corporate leaders of this channel. They both create opportunities to gain valuable information, ideas and strategies, and they give guidance during changing and challenging times.—Rudy Revak / DSN Legend, Founder of Symmetry and Xyngular

“DSN continues to be an important voice and resource for steering the direction of this method of sales and marketing. It’s easy for institutions and regulators to lose sight of the individuals who legitimately use direct selling as their livelihood. DSN helps us all remember who is most important in this industry, and it’s not the company—it’s the distributors and customers.—Carl Daikeler / BODi CEO

“When DSN started, I remember thinking: ‘Finally! One place to get timely, reliable and insightful information on other direct sellers.’ Before DSN, people had to constantly scan multiple sources. It was very easy to miss company announcements and releases because so many direct sellers were private or just starting out.—David Holl / Mary Kay Chairman and former CEO

“DSN is my ‘go-to manual’ when I have questions; seek insight; look for surveys; or simply look for inspiration when I need it. I never throw away a publication, as I know I’ll need to refer to it one way or another. It helps me stay informed and current with what is going on in our channel.”—Joni Rogers-Kante / SeneGence Founder and CEO

“The community gains so much strength when we all work together, and DSN makes that happen. They are invaluable to the ongoing growth and professionalism of this industry, and I am so grateful for their work.”—Michele Gay / LimeLife by Alcone
Co-Founder & Chairwoman

“The coverage of the direct selling landscape in DSN is like no other, providing a clear and nuanced view into an industry that thrives on personal connections and innovative strategies. The articles are a testament to the precise research and commitment to detail that the team embodies, making Direct Selling News an invaluable resource for anyone involved in or interested in the dynamic world of direct sales. It’s journalism that not only informs but enriches and compliments the conversation around this unique sector of commerce.—Rolf Sorg / PM-International Founder & CEO

Building a Legacy Meant to Last

Reflecting on the past 20 years, the DSN team continues to build and plan for an even brighter future with more events, global coverage, expanding platforms and an unflinching grasp of Johnson’s original vision. The next 20 years will expand on that relevancy and commitment, providing more insights, developing broader resources and presenting more opportunities to support the executives working diligently to strengthen and scale the one-of-a-kind entrepreneurial possibilities found within the direct selling channel. 

From the January/February 2024 issue of Direct Selling News magazine.

The post Cheers to 20! first appeared on Direct Selling News.

As a solution, the DSA proposed incorporating 26 USC § 3508 in a final rule, which the association believes would help clarify the ruling for direct sellers. An additional, separate comment was filed by both the DSA and the National Association of Realtors, stating again the need to incorporate 26 USC § 3508 into the final rule. 

“Retaining independent contractor status for independent salespeople has been a top priority at DSA for many years,” said DSA President Joseph N. Mariano. “Members of Congress, federal agencies and state legislators have all supported clear definitions to ensure that direct sellers are clearly defined as independent contractors. The standards and analysis in the United States Department of Labor NPRM could create uncertainty and does not recognize modern business practices of direct sellers. We hope the Department of Labor creates a standard in the final rule that will ensure clarity for millions of micro-entrepreneurs in the United States.” 

The post DSA Files Comments with US Department of Labor Regarding Independent Contractor Classification  first appeared on Direct Selling News.

In her new role as Publisher, Patricia will lead the content strategy, execution and editorial position of the magazine including print, online and DSN’s multiple platforms and free resources. Additionally, she will support DSN’s advertising and event sponsorship offerings. 

“The team and I are incredibly excited to welcome Patricia back to the organization in her new role. Patricia’s connection to and deep knowledge of the direct selling channel will help enhance DSN’s mission and brand promise to edify, educate and support the entire direct selling community now and into the future,” said Shelley Rojas, Chief Brand Officer.

Additionally, Lisa Robertson will transition from Acting Editor to Editor working closely with Patricia and continue to drive and execute DSN’s content strategy and initiatives.

“I am thrilled to be able to return to Direct Selling News and work with such a dedicated team. I look forward to connecting and reconnecting with those in the channel to hear your thoughts as we continue to be a source, resource and thought leader in bringing you the news impacting the direct selling channel,” said White.  

Congratulations to both Patricia and Lisa!

The post Direct Selling News Announces Patricia White as Publisher first appeared on Direct Selling News.

Rojas is a long-time veteran of the brand, having previously served as Senior Vice President of Marketing and Publications. In fact, she has been involved in DSN working at its sister company, SUCCESS Partners, for 20 years. 

“Shelley has been an integral part of DSN’s success from the very beginning,” explains Stuart Johnson, Founder and CEO. “Her creative insights, leadership abilities, dedication and professionalism have always been key ingredients in our ‘secret sauce.’ Shelley has crafted a unique vision and voice for the brand. I can’t wait to see how DSN will grow and evolve under her tutelage.” 

The appointment of Rojas ensures DSN will continue to bring direct selling executives the news, insights and stories they need on the platforms they use most, providing an expanded, robust digital and multi-media component to the brand’s coverage.  

As Johnson explains, “Shelley is the perfect fit for this position. She has led the rebranding of DSN for the past nine months—and, as a result, we have launched a sleeker, more intuitive new website and new exclusive content including two podcasts. Our weekly emails and social media presence have also been revamped. Shelley’s influence has been game changing for the brand.” 

In her role as DSN’s Publisher and CBO, Rojas will oversee the day-to-day operations of the brand’s multimedia outlets, which include digital and print publications, podcasts, original content and research as well as a 20-year history of premiere networking, recognition, awards and educational events. 

Patricia White, DSN Editor says, “With Shelley taking the Brand Officer/Publisher role, I am more excited than ever about the important guidance and resources Direct Selling News provides the channel. Shelley’s multimedia expertise allows us to bring more up-to-the-minute news and trends to direct selling executives across all platforms.”

“I’m incredibly humbled and excited to assume the role of Chief Brand Officer and Publisher for Direct Selling News,” says Rojas. “DSN has a rich history, a formidable team and a purpose-driven future. We are excited to honor the legacy and to expand the brand’s reach and impact by providing more value than ever before serving the channel as its primary source for global news, emerging trends and inspiration.”

Direct Selling News can be found across social media, including Facebook, Twitter and LinkedIn.

The post Direct Selling News Names Shelley Rojas Chief Brand Officer and Publisher first appeared on Direct Selling News.

That means that for the last 17 years, we have been researching, reporting and curating important industry news and trends. To that end, we’ve profiled hundreds of executives and companies; compiled thousands of statistics; and chronicled countless trends, regulatory concerns and technical innovations.

We’ve been here through the inevitable ups and downs and given our readership the insights and information they need to weather the storms or ride the waves. Over the years, we’ve also highlighted some of the newest names and brightest thinkers in personal development, technology and entrepreneurship.

In short, we’ve been a constant touchstone for direct selling and the executives that lead it—and for that, we are very proud.

Marking an Important Milestone

Now, as DSN reaches this important publishing milestone, we wanted to pause for a moment and reflect on what the channel means to us and what we mean to the channel. What do we do best? What do we need to do more of? How can we better serve the entire channel now and in the future?

DSN was the brainchild of Stuart Johnson, DSN’s Founder and CEO. Because of the scope of the channel as well as the scrutiny it garners, he recognized a need for a global industry publication targeted exclusively to direct selling executives—and, as an entrepreneur, Stuart decided to fill it.

From the beginning, Stuart’s vision for DSN was to provide an up-to-the-minute, easily accessible resource to busy direct selling executives—a tool industry decision makers could always rely on as they led a channel that was constantly growing, evolving and adapting to shifting market needs and emerging technologies.

Stuart understood that DSN could help shape and edify the channel and—in turn—improve the lives of the millions of people involved with direct selling worldwide, whether in the corporate office or in the field. And he built a thriving publication that has managed to both lead and follow as situations and circumstances dictate. From the beginning, DSN has been a prominent voice and standard bearer for the channel.

Maintaining a Legacy

I only recently took over the reins of DSN, so I knew that as we looked back on what the magazine has accomplished, I needed to enlist the help of the people (and mentors) who have led the magazine over the past 17 years.

I reached out to Stuart as well as Paul Adams and John Fleming. Each of these industry titans played a pivotal role in the development, launch and success of DSN. I asked each of them for their thoughts on what DSN has accomplished in the past; how we serve the channel now; and how we can best move forward in the future.

Paul Adams, Founder of the Adams Resource Group and early Direct Selling News contributor, looked
back on the early years of the publication fondly. As he explains, “From day one, it has been trusted and valued. Direct Selling News has always provided a place for executives, suppliers and experts to share their observations and ideas with others—all for the betterment of the channel.”

He is proud of his role in the publication and still admires how DSN continues to evolve and improve.

“I may be a bit biased, but I cannot imagine a way to measure the positive impact Direct Selling News has had on our industry,” he shares. “It was created for all the right reasons, and it was something I knew we could all be proud of.”

Paul also fondly remembers the decision to provide the publication as a free resource. “Of course, I thought Stuart was crazy for wanting to give DSN away for free to any and every corporate executive,” Paul laughs. “But he was right to do so. DSN was created to do something good—and it has!”

John Fleming shared that his primary purpose for DSN, as the former Editor and Publisher, was to focus on a new form of positive journalism that would help to inform, educate and inspire.

“I wanted to celebrate the best of who we are as direct sellers,” John explains. “And more importantly, examine who and what we could become.”

During his tenure, John was always mindful of the industry’s reputation. He was acutely aware that direct selling faced unique challenges created by those who either misrepresented or misunderstood the business model. And, under his leadership, DSN was always selective about who and what it covered.

While John kept DSN laser-focused on direct selling executives, he was also mindful of the academics, business leaders, government officials and even regulators that might read it. In fact, at one time, John made sure every member of Congress was on DSN’s mailing list. “I wanted people outside the channel to know all the good things happening inside the channel.”

John was proud to provide an invaluable tool that honored what direct selling does best and offered solutions on how it could always get better. “We always operated with integrity and respect.”

While Stuart Johnson was happy to look back upon the history of the publication he founded, he was most excited about what the future holds. “When we launched DSN, it was to provide information and insights to direct selling executives,” he shares. “There wasn’t anyone doing that at the time. Our channel can face tough regulatory challenges and sharp spikes of both growth and decline. I felt there was a real opportunity to share best practices and insights in a targeted way.”

Stuart recognizes that while the need for DSN is still important, there are ever-evolving ways to deliver the information it curates. “As we grow forward, we are embracing fresher forms of media such as podcasts and video series to make sure we remain an engaging and relevant resource for the industry.”

DSN is also launching a new digital subscription format and a more robust presence on social media. The website is being revamped to allow for more late-breaking news and information.

“Our goal is to be more timely—to become a daily resource for direct selling executives,” Stuart says. “The print publication will continue to offer deep dives and sound research while we begin to be more proactive on fast-breaking news and developments on the web. We want our subscribers to read and engage daily with us on DirectSellingNews.com as well as on our social channels.”

Additionally, this year marks the 13th annual DSN Global Celebration. This is the most highly anticipated awards and recognition industry event of the year. Stuart also shared that DSN will host Direct Selling University going forward. Held virtually this spring from April 19-23, DSU and the Global Celebration are free to all direct selling executives and will offer educational and motivational content designed to inspire and encourage growth in the channel.

Modernizing Our Approach

Today, it is my pleasure to continue to guide the publication—building upon our past; reestablishing our foundational objectives; and—most importantly—setting a vision for how we approach our work and how we continue to bring you the ideas, insights, best practices and insightful stories you’ve come to expect from us.

It’s obvious that the direct selling model is going through a great period of innovation, transformation and redefinition. The work we do at DSN has never been more important or timely.

Making a Difference

As we move toward our next 200 issues and beyond, our core principles and values remain the same: positive, proactive journalism that brings you relevant information and insights. Additionally, we are refreshing the look and feel of both our print and online presence, and I can’t wait to share these new platforms with you.

I believe you will find the new DirectSellingNews.com to be easier to navigate, more timely and more robust. Our content strategy will continue to keep you first and foremost in our minds.

Here’s to another 17 years!

The post Celebrating DSN’s 200th Issue: A Look Back. A Glance Ahead. first appeared on Direct Selling News.

The Customer Centric Recognition (CCR) Program celebrates companies that are leading the way toward a sustainable, customer-centric future for the industry. Qualifying companies utilize business models that boast high customer-to-distributor ratios and prioritize customer sales.

The CCR Program is based solely on a company’s customer-to-distributor ratio taking into consideration the following definitions:

• Distributor—someone who DOES have a distributor agreement in place
• Customer—someone who DOES NOT have a distributor agreement in place
• Active is defined as each customer and distributor must have made a product purchase during the last six months. Active customer and distributor counts are limited to those in the U.S. and Canada.

Companies must have been in business for at least one year and have a minimum of $5 million in annual revenue. Qualifying companies must attain: 5:1 up to 10:1 for Gold status and 10:1 or more for Platinum status.

Direct selling companies with a strong retail base of satisfied customers are experiencing impressive growth and deserve recognition and acknowledgment for their efforts.  Being customer-centric equals success for everyone—distributors, direct selling companies and the channel as a whole.

DSN CCR Program acknowledges the following companies that have submitted their CCR application and been approved:

Companies who wish to learn more or submit a CCR Program Application can go to www.directsellingnews.com/ccr/or contact editor@directsellingnews.com.

The post DSN Announced the First Customer-Centric Recognized Company List first appeared on Direct Selling News.

Throughout this year the editors at Direct Selling News have had no shortage of topics to talk about. Never before have we seen such a year that has so dramatically impacted the future of direct selling.

We began 2019 with troubling news out of China and ended with a landmark change for one of our industry’s biggest companies. In between, a new ingredient from the old world became liquid gold for many direct selling companies, learned customer behaviors are still rapidly evolving, while growth in gig work alternatives continued to challenge our status quo. Finally, 2019 was a year we had to look at ourselves in the mirror and eventually come to the conclusion that the status quo isn’t a path to the future. Our friends at the FTC reminded us not once, but twice. In this year end wrap-up, we examine the five events that had the biggest impact on our channel. We reflect on what we need to do to thrive in the 2020s.

China Cracks Down

For many direct selling companies, breaking into China is a big goal. But when a Chinese company broke the direct selling rules in late 2018, being a direct seller in China became more complex than it already is.

In December, a Tianjin-based health and wellness products company made unsubstantiated claims about how its products can fight cancer. By January, the Chinese government had launched the “Hundred Days of Action,” in which it investigated direct selling companies all over the country, revoking selling rights for 49 products.

Whether or not the government came knocking, all direct selling companies were on edge, and financials took a hit. Earnings at USANA Health Sciences, Nu Skin and Herbalife Nutrition, three of the industry’s largest publicly traded companies, fell significantly—between 8 percent and 25 percent for the first quarter. Hopes were high that business would rebound once the review period ended in April. Still, sales continued to fall dramatically in quarter two, resulting in all three companies resetting expectations for the second half of 2019.

“We are looking for stabilization [in China] for the rest of this year, and then we should see a resumption of growth in the early part of next year as the whole 100-day episode is further and further in the rearview mirror.” —Douglass Lane, Securities Analyst

In the most favorable times for direct selling, China can be a tricky place to do business. The government heavily regulates and keeps a close eye on this model, which in China is particularly beset by scams and pyramid schemes. In 1998, China shut the channel down, calling it an “economic cult.” U.S.-based legacy companies like Amway, Avon and Mary Kay helped rebuild trust in direct selling in China, but the country continues to be a volatile market for us.

As of September, the Chinese government was reportedly conducting random compliance checks. These were keeping direct selling companies on high alert, and prolonging the rebound experts were predicting would happen this year.

“The clear theme is that this is going to take a while,” securities analyst Douglas Lane of Lane Research told Direct Selling News in August. “But I get the sense from the conference calls and narratives that these companies are starting to head in the right direction. We are looking for stabilization for the rest of this year and then we should see a resumption of growth in the early part of next year as the whole 100-day episode is further and further in the rearview mirror.

Gigs Dig In

“We are now moving into what I call ‘the war of the side hustle,’ LifeVantage President & CEO Darren Jensen told an audience at the fall Direct Selling Association conference.

Jensen’s right. Companies like Uber, Task Rabbit, Airbnb and other gig income providers have turned our once proprietary playing field into a battleground. We used to be the only choice for people who wanted to make their own hours and control their own income. Now we’re fighting for their attention and commitment.

According to a recent McKinsey Global report, more than 160 million people in Europe and the United States are earning money in the gig economy. This is more than three times the 18.6 million U.S. direct sellers—4.1 million of whom are discount buyers or have no plans to sell the products and 9 million of whom have gone inactive. Direct selling worldwide is a $189 billion market, with North America accounting for $39 billion of that total. But on its own, Amazon, which got into the gig game recently with Amazon Marketplace, a market capitalization of $865 billion. Uber’s market cap is $55 billion.

The lure of non-direct selling gigs is strong because they usually require little capital or training. You don’t need sales skills to be an Uber driver, Lane told Direct Selling News. “You wake up, turn on your phone—and customers fall out of the sky.” On the other hand, Lane asked, are Lyft drivers deeply passionate about being taxi drivers?

“The Hemp Farming Act made hemp legal in all 50 states—it had been legal in 40 prior to that. The law came with several restrictions, but it still opened the floodgates for sales of products with cannabidiol (CBD).”

This is where our industry has a prime opportunity, experts say. We can be competitive by appealing to the desire most people have to work for more than a paycheck. We want what we do to have a greater purpose, and we are wired for continuous change. Direct selling sits perfectly at the intersection of those two things: Our high-quality research-based products and our business opportunities can transform people’s lives in small and big ways.

“During a tight labor market that’s achieved 50-year lows in the unemployment rate, the gig economy has increased the appeal of flexible, part-time earning opportunities,” wrote DSA Market Research Manager Ben Gamse in July. “This should be direct selling’s sweet spot where we can compete and win.”

CBD Sales Soar

In December 2018, when federal lawmakers said they are (basically) cool with hemp now, CBD became the hottest new wellness ingredient to hit the market in years.

The Hemp Farming Act made hemp legal in all 50 states—it had been legal in 40 prior to that. The law came with several restrictions, but it still opened the floodgates for sales of products with cannabidiol (CBD), a nonaddictive oil derived from the hemp plant.

The direct selling industry has dominated the CBD market, with such companies as Kannaway, HempWorx, PrimeMyBody and Green Compass reporting exponential growth. In 2016, Kannaway’s revenue was $2 million, and last year it generated more than $60 million. HempWorx’s sales were $9.6 million in 2017 and $100 million in 2018. Some experts project that direct selling CBD revenue alone will be $1 billion next year.

Midway through this year, the Direct Selling Association (DSA) put a bit of a damper on the enthusiasm about CBD. The DSA code administrator announced that the sale of ingestible CBD products violates DSA’s code of ethics. But then the DSA said it wouldn’t cite member companies that sell CBD products for 90 days. It said it wanted to give the U.S. Food and Drug Administration time to “articulate a path forward” that would exempt CBD from a rule that prohibits using a new substance in food or dietary supplements unless the substance was first marketed as such.

“With the rise of mobile, social, and cloud technologies, customer expectations are increasing dramatically, and they are demanding a more seamless experience.”

Industry executives responded with disappointment. “We believe the DSA has not accurately portrayed the law with respect to CBD,” said Blake Schroeder, CEO of Kannaway. “And we vehemently disagree with their position.” In August, DSA suggested it might extend the moratorium on citations. In September, the industry trade group formally requested clarification on the FDA prohibition and asked the agency to make a timely decision.

Customer Behaviors Are Changing Rapidly

According to a 2017 Direct Selling Association “Evolving Marketplace Survey,” at least 60 percent of companies’ segment business builders from buyers with no intention of selling their product. And roughly half offer a preferred customer program, allowing members to buy products at wholesale prices without having to sell products in exchange for the discount.

We’re getting better, but we need to be even better. Recruiting customers has to be just as important as building our distributor base.

For starters, we could pay more attention to how our retail counterparts are marketing to and serving customers. They’ve been doing this for a long time, and they’re savvy about whom they target and how they talk to them.

The most fundamental changes that are happening right now are centered on the consumer. With the rise of mobile, social, and cloud technologies, customer expectations are increasing dramatically, and they are demanding a more seamless experience. They want to buy products where, when and how they want. In our November cover story entitled “Think Like a Retailer” guest author Wayne Moorehead, CMO of Young Living, stated that we need to remember that customers don’t think in terms of channel, even though we do– they just think in terms of product and availability. This has really brought about the rise of the direct to consumer brand (DTC). It’s fundamentally changing the relationships that companies have with the end-user.

Partnering With Our Distributors On Customer Acquisition

“There is a huge opportunity for us to partner more closely with our distributors, to be more involved in telling the brand story and in customer acquisition,” says Moorehead. “I predict the brands that are able to bring together the best of direct selling with the best of direct to consumer are the ones who will be the most relevant five years from now.

Moorehead went on to say that it’s important that we start acting and thinking more like a retailer, and how we appeal to, communicate with, and provide value to today’s customer. “We need to make learning about interacting with us more convenient, seamless and simple. We can no longer expect our customers, prospective customers or distributors to put up with outdated designs, clunky processes and outdated technologies.”

Finally, says Moorehead “The best way to get more distributors is to get more customers. Customers are the warmest market and most qualified lead pool that we have. They’re the best people to transition into distributors.”

Past Can’t Be Prologue & The FTC’s Heavy Hand

For years, many direct selling pitches led with promises that “You, too, can be a millionaire!” Images of beautiful people in expensive clothing on impossibly luxurious vacations dominated our marketing.

Thankfully, we’ve been moving away from that approach for some time—but subtle and sometimes explicit suggestions that network marketing and certain products can make financial and health worries go away still plague our industry.

It has to stop, say leading industry executives and experts. “The appeal to greed is repugnant,” said LifeVantage President & CEO Darren Jensen at the Direct Selling Association’s 2018 Fall Conference. “We keep going back to that well time and time again, and we need to shift away from it.”

First, massive wealth is not what motivates the majority of people to become direct selling distributors. Only one in five direct selling distributors works 30 or more hours per week, according to the latest DSA research. And of those who are interested in building a full-time business, fewer than one percent will become elite performers, says Direct Tech Labs. These numbers strongly indicate that the majority of people who come to you aren’t interested in being entrepreneurs. They’re picking up side work mostly to cover an income gap while adding some flexibility to their schedules.

ADVOCARE Settles, NEORA Decides To Fight

Perhaps the most headline-grabbing examples that happened in 2019, unfortunately, were FTC related. In October, AdvoCare and its former chief executive officer agreed to pay $150 million and be banned from the multi-level marketing business to resolve Federal Trade Commission charges that the company operated an illegal pyramid scheme that deceived consumers into believing they could earn significant income as “distributors” of its health and wellness products.

Two top AdvoCare promoters also settled charges that they misled consumers about their income potential, agreeing to a multi-level marketing ban and a judgment of $4 million that will be suspended when they surrender substantial assets.

“We can be competitive by appealing to the desire most people have to work for more than a paycheck.”

Then one month later, the FTC announced they were suing Neora for essentially the same reasons. One difference, Neora has decided to challenge the FTC’s claims and is suing them for essentially changing the rules of the game, which is a fair assessment given some of the language used by the FTC in settlement documents and their media briefings.

The first paragraph of the Neora complaint doesn’t mince words. “A business cannot operate without being able to know the law. Improper attempts to retroactively change federal law and to effectively preempt state law are unconstitutional. In fact, Neora is going as far as saying the FTC is trying to put an end to our long-standing, legitimate, and popular method of making direct sales to consumers: multi-level marketing.”

This is a fight I think the channel is ready for, and we predict many companies will join in supporting Neora’s fight. As Co-CEO Deb Heisz stated to DSN, “In talking with the FTC they wanted to limit commissions in our businesses to only the person making the sale and the person who recruited the person making the sale,” says Heisz. “We’re not willing to make that change and disrupt the businesses that our brand partners have worked so hard to create. The reality is the lawsuit that we filed doesn’t just protect our business; it is to protect the businesses of the 20 million Americans that are engaged in direct selling.”

Going Forward

The significance of FTC’s ruling on AdvoCare—and now with Neora under the same scrutiny—cannot be overstated. So what does it mean to our channel going forward?

For years, the FTC has made their dislike of volume requirements known. Former FTC Commissioner Edith Ramirez in her keynote remarks at the DSA Business & Policy Conference in September of 2016, said the following: Any requirements or incentives that participants purchase product for reasons other than satisfying genuine consumer demand—such as to join the business opportunity, maintain or advance their status, or qualify for compensation payments—are problematic.

As Todd Eliason, Publisher & Editor in Chief of DSN said in a recent post, “If your company is skirting any number of these compensation plan requirements, be aware because you have just been put on notice. This behavior will not fly with the FTC going forward. Yes, you can take the risk and fly under the radar for the next five years, but is it worth losing your company over? This means looking at the purchase requirements for paying out bonuses, maintaining certain ranks or commissions, along with any sponsoring fees, even hidden fees.”

Rooting Out The Bad Actors

“If we are constantly operating in this gray area that allows operators to masquerade as legitimate direct selling companies, the regular public can’t distinguish between the two,” says Jensen. “I want to live in the sunlight in full transparency because I believe that the truth is enough.”

Fortunately, most companies in this industry are committed to ethical business practices, and we are slowly changing perceptions. But we still have to be aware of and do our best to counter stereotypes. “The misunderstandings of our industry are sometimes rooted in truth,” says Eliason. “There are people who have behaved badly, and maybe we haven’t always corrected those bad behaviors quickly enough. We need to call out any bad actors; if we don’t, it hurts everyone.”

Looking In The Mirror

Direct selling has been doing a lot of soul searching lately, and that’s a good thing. Asking tough questions about who we are and who we want to be moving forward is the only way to determine whether we’re positioned correctly for growth. We are an industry built on the idea that doing things differently is the surest road to success. So let’s embrace these opportunities for change and see where they take us.

Balancing Customer Focus with Distributor Loyalty

Half the companies that responded to a 2017 Direct Selling Association (DSA) “Evolving Marketplace Survey” said they allow customers to order directly from the company, bypassing registered distributors. While this reflects the trend toward direct selling companies being more customer-oriented, some industry executives think online direct-to-consumer sales are a huge threat to the channel.

In August, new Avon CEO Paul Yi announced the company would no longer sell directly to consumers on Avon.com and would instead use online tools solely to support business builders. The news was applauded by some, including former Direct Selling News Publisher & Editor in Chief of John Fleming, who wrote an open letter to Yi in August: “There are many who found your [decision] to be the equivalent of a breath of fresh air. … a demonstration of leadership that recognizes the Avon Representative as the focus of the brand and the chosen channel of distribution.”

Jeff Kaufman, outgoing Chair of DSA’s Research Committee, also believes that the industry must be careful to preserve the things that make it unique in the retail marketplace—including the critical role that distributors play. “Direct selling, like any industry, needs to evolve with macro and consumer trends,” he told DSA Market Research Manager Ben Gamse in July. “But it should not compromise on its inherent points of differentiation, such as the priceless personalized experience a customer has with their direct seller.”

Still, the industry must be careful not to fall back into the patterns that put it in regulatory hot water to begin with.

We must continue to collect data that tells us who our retail customers are and who our distributors are. We must be able to quantify real demand for our products. We also have to continue to study what our customers want so that we can use technology—whether or not we have an online shopping cart—to create seamless buying experiences.

Jordan Meyer, Director of Market Entry for Lehi, Utah-based Younique, talked at the DSA Growth & Outlook breakout workshop in June about the ride sharing channel and how it has created a win-win for drivers and riders.

“If you’re a driver, you don’t have to do anything [to get customers],” Meyer said. “You just sign on to the app, and the customers are there waiting for you. I know several people in the industry think this is an important model that direct selling needs to adopt—pulling customers on our platform and matching them with distributors.”

The post 5 Events That Impacted Direct Selling In 2019 first appeared on Direct Selling News.

With consumer sophistication growing, how and where customers buy products and services depends on meaningful and authentic interactions with brands. In the case of direct selling, these interactions often come down to one-on-one contact with independent distributors.

Active listening is key to connecting with today’s consumer and, Tony Jeary, author and Direct Selling News columnist, says that companies need to think strategically about training distributors in active listening.

Prospects want to feel they’ve been heard. They want to know products or services apply to them and their world and their vision of success. They also want to see their values, goals and priorities reflected back to them from their teammates, Jeary wrote in January’s issue.

So Jeary’s advice begs another question—If listening is key to prospect and consumer relationships, why not capitalize on active listening to strengthen the relationship between corporate and their independent sales force? They are, after all, the collective engine that makes the company run.

“Input can bridge understanding gaps, provide diversity of thought, and even prevent costly mistakes.”

Reciprocity

Organizations are quick to measure employee engagement and satisfaction. Winning companies listen to that feedback and treat the employee/corporate relationship as reciprocal. It’s not one-sided. Rather, it’s about perpetuating the momentum of each part.

“Reciprocity is key; cultivating wisdom requires being in touch with what matters most to your employees and giving them the room to express their opinions and put their ideas to the test,” writes Glenn Llopis, business strategist and author of The Innovation Mentality.

A Legit Line

While independent distributors are not employees per se, much of a direct selling company’s success or failure rests on their shoulders. They are collaborators with corporate and to forgo a legit line of communication with this collective would be a mistake.

How best to open and manage this line of communication with the sales field is a matter of debate across the industry, but most direct selling executives agree it is valuable. Input can bridge understanding gaps, provide diversity of thought, and even prevent costly mistakes.

Direct Selling News asked several industry executives about the pros and cons of creating a designated field council for this purpose, as well as alternative methods for gaining sales field input. We listened, took copious notes and now combine some of their anonymous comments to provide insight into a sometimes fraught but always educational process.

“Field councils can also suck time and inadvertently morph top field leaders into bureaucrats, distracting them from building their businesses.”

The Field Council

The field council is a formal group of independent distributors representing either a specific market or entire direct selling company’s sales field. Requirements to participate vary, as do individual roles and responsibilities.

The debate about the value and effectiveness of the field council is ongoing. They can give the sales field a voice in the planning and actions of the company, create buy-in and feelings of ownership, allow the field to work smarter and more efficiently, and save corporate from costly product or programming mistakes.

However, field councils can also suck time and inadvertently morph top field leaders into bureaucrats, distracting them from building their businesses. Sometimes it causes the field to mistakenly believe they are corporate decision-makers, causing friction between them and the executive team who are charged with running the company.

Optimizing The Field Council

Opening and optimizing a legitimate and effective line of communication can be two different things. From inception, companies should define the field council’s purpose and overarching role of participants. It is wise to make it clear that the field council plays an advisory role and is not a decisionmaking group.

Some companies find the field council works best when members are “green and growing, rather than ripe to rotten.” When legacy distributors dominate a larger, broader council, they can limit diversity of thought and choke off necessary input from newer generations of independent distributors.

Some companies avoid this by forgoing participation or rank qualifications altogether. Corporate handpicks individuals and assigns specific roles to everyone on the council. This can prevent a “moan and groan” climate and encourages members to report in only on their roles.

Other companies establish the field council based on meritocracy, rotating distributors every 18 months, to help curb confusion about the council’s role and improve diversity of thought.

“Make it clear that the field council plays an advisory role and is not a decision-making group.”

While smaller, market-specific field advisory boards commonly meet with general managers, upper level executives can have closer contact with the broader field council. This can be problematic for CEOs, whose comments may be misconstrued, misrepresented or even shared broadly as one-on-one consults with top leadership. Some executives steer clear of field council meetings for this reason.

Utilizing field councils effectively comes down to direct selling companies driving the process. As one top CEO put it, “Stop letting the tail wag the dog.”

Not Just A Faster Horse

The field council often gets the first glimpse at new products or programs generated by corporate. Employees seek initial buy-in to ensure overall field success. They may also look to the field council for new ideas.

However, the field council always seems to want a faster horse. They may think they know what they want or need, but they may not be qualified to accurately assess that need. This can be a dangerous path. It’s the responsibility of the company to create more than a to-do list from field council input.

As such, companies can bring field councils together for candid planning sessions, held off-site and in confidence. They can create a corporate culture and meeting atmosphere that gives voice to sales field concerns and helps them recognize and strategize about broader field issues and trends. At all costs, avoid meetings that devolve into, “This is what the company needs to do.” Instead ask, “What are you doing as a leader to address these issues?”

Opting Out

While field input is vital, some companies opt out of the formal field council. They believe the process leaves little time for actual work, and say that is not advantageous to anyone. Instead, ranking distributors participate in information calls before major program rollouts. Corporate wants them to “punch holes” through plans and ask questions early on, so there is clarity when a program begins. They also reserve the right to un-invite those who break confidentiality.

Other companies utilize anonymous sales field feedback, believing it encourages greater candor, thoughtfulness, and transparency than face-to-face encounters. Anonymity also dissolves concerns about hierarchy that can keep lower-ranking field council members silent. It also ensures no one voice carries the day.

One example is a system, whereby distributors share topics via Post-it Notes placed on a digital wall. Sheer numbers tell corporate what field topics need attention. It’s also a SWOT (strengths, weaknesses, opportunities and threats) exercise that enables people to post and push, what and when they want. For example, “Here’s corporate’s plan to increase enrollments. Give us your ten best ideas to accomplish this.”

“Today’s consumers want more than a transactional relationship with a brand, independent distributors want something more and can give value beyond their selling abilities.”

Success Is Collaborative

In much the same way today’s consumers want more than a transactional relationship with a brand, independent distributors—immersed in the daily rituals of product sales, recruitment and running a business—want something more and can give value beyond their selling abilities. Direct selling companies are wise to seek reciprocity and collaboration from their sales fields.

Success is a collaborative effort, and it’s important to remember that collaboration is perpetual and neverending. Jacob Morgan, author of The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization, writes, “When going down the collaboration road within your organization, it’s important to make employees a part of the decision-making process from step one. Listen to their ideas, their needs, and their suggestions and integrate their feedback in your technology and strategy.”

The post New Thinking On Field Councils first appeared on Direct Selling News.

Last week, more than 100 crewmembers from Royal Caribbean’s Empress of the Seas became the first to activate the company’s disaster relief operation to bring relief supplies and 20,000 daily meals to the Grand Bahama Island community. Crewmembers prepared sandwiches, proteins with rice and fruits and snacks. Over the succeeding days additional ships from the fleet—Symphony of the Seas, Celebrity Equinox and Mariner of the Seas—all repeated the process.

Along with Empress, the company is deploying container ships with much-needed supplies, including 47,000 bottles of water, 362 generators, 250 tarps, 25,000 square feet of plywood, 55,400 diapers and 7,500 pounds of pet food.

Dorian was a category 5 hurricane when it struck the Bahamas. Satellite data suggests that 76–100 per cent of buildings analyzed have been destroyed. Hubert Minnis, the prime minister of the Bahamas, has said the natural disaster will leave “generational devastation” as it will take years to rebuild and recover from the psychological toll of the destruction.

Royal Caribbean is committing $1 million to Dorian disaster relief and matching every dollar of guest and employee donations. To make sure those donations go where they can do the most good, they are collaborating with the Bahamian government and its non-profit partner, the Pan American Development Foundation, and a network of Bahamian charities and other local organizations, including the Bahamas Feeding Network.

“We can’t make every bad memory of Dorian go away. But we can start making things better—today,” said Richard Fain, chairman and CEO of Royal Caribbean Cruises Ltd.

The post RCL Activates Disaster Relief Operation for Grand Bahama Island first appeared on Direct Selling News.

The DSN source added that it’s not strange for the government to follow up, especially given how many wellness companies were affected with the 100-day action, direct selling industries included. DSN will update as soon as new information is available.

In our July 2019 feature titled The China Conundrum, we discussed the possible impact China’s 100-day review of the health market would have on direct selling companies past the first quarter of 2019. Although optimism was high at the end of the first quarter that business would return to normal following the review period that ended in April, sales in China have decreased dramatically in the second quarter for Herbalife Nutrition, Nu Skin, and USANA. This resulted in all three companies resetting expectations for the second half of 2019. This new action will now cast a shadow on Q3 and Q4 earnings and possibly into 2020 .

According to WFDSA, 46 percent of the global revenue for direct selling came from Asia/Pacific (32% North America, 21% Europe) with China its largest market making up the bulk of that number (nearly 40%).

The post DSN Source: China Conducting Random Compliance Checks first appeared on Direct Selling News.