A response to “10 things direct-sales marketers won’t say,” published in Wall Street Journal Market Watch, October 26, 2012, by Kelli B. Grant, https://secure.marketwatch.com/story/10-things-direct-sales-marketers-wont-say-2012-10-26 .
Ms. Grant offers ten supposed “facts” about direct selling in her October 26, 2012 article, “10 things direct-sales marketers won’t say.” These aren’t really “facts” and many of them misrepresent the nature of direct selling. The bottom line is that you should do your homework before deciding to become a direct-selling distributor to begin with, or before homing in on your company of choice. The products, the compensation plan, the degree and type of mentoring available, and the fit of the opportunity with your goals are all important criteria to consider. The choice is yours – both about joining, and about the type of investment of time and money in building your business. But these guidelines are just good business practice, whether you are considering direct selling or some other business opportunity or investment.
Here are some of the things Ms. Grant didn’t say – but you should know – about direct selling.
“Slinging French fries may be a better option for you… or not. It depends.”
Ms. Grant’s statement that “You’d do better slinging French fries” is incomplete on two counts: first, it’s not true for everyone; second, the statement’s flawed premise is that the goal of all direct sellers is to make this their full-time job. One of the attractive elements of direct sales is the ease of entry: there’s no job interview and few barriers to signing up. This means that a wide variety of people can, and do, decide to try direct selling. Not all of them are adept at selling, and many cannot or do not acquire those skills. Still others choose to work the business part-time rather than full-time. But, it takes both hard work and skill to build a large enough direct-selling business to make it your primary income. That is why legitimate direct-selling businesses are not get-rich-quick schemes.
“Invest sensibly in your direct selling business, and you won’t end up in debt.”
The idea that the direct selling company “might put you in debt” is just not correct. A direct selling company does not “put” its distributors in debt. How much a direct selling distributor spends on expenses like training, traveling to conferences, etc. is entirely up to the distributor, not the direct selling company.
Of course, there are plenty of other types of new-business opportunities that do require the entrepreneur to invest a large sum of money up front: franchising, starting your own bricks-and-mortar retail shop, starting your own online business, etc. Unlike these opportunities, a direct-selling distributor does not have to rent shop space, pay utilities, insure the space, develop her own business plan, or develop commercially viable new products, among other expenses.
“No, selling isn’t easy… but learning successful selling and mentoring techniques leads to a viable business and friend retention.”
While Ms. Grant’s comment that “Selling ain’t easy” is true (if ungrammatical), this isn’t a critique of direct selling per se. Some people may be “born salespeople,” but for many, selling is an acquired skill that is honed through hard work and training. Even direct sellers who are not great salespeople or sales managers may still be very satisfied with their direct-selling experience, because many join to achieve short-term goals rather than to make a full career of it. Direct selling companies make it clear to potential distributors that success is a function of one’s goals, and a high sales or income goal is achievable only through hard work and persistence.
Whether your friends are alienated by your direct selling business is a function of how you promote it; one of the tenets of successful selling is to find out what the buyer values, and provide that set of benefits better than anyone else can. One of the ways in which “selling ain’t easy” is in developing this consumer insight that results in your consumers asking to buy from you rather than you asking to sell to them – whether you are in direct selling, bricks-and-mortar retailing, customer service in a hotel chain, or any other touch-the-consumer environment.
“Recruiting alone is not in your best interest, but recruiting with mentorship is part of a successful direct seller’s strategy.”
Recruiting – that is, sharing the direct selling opportunity with other people so that some of them ultimately also join as direct sellers – is in fact part of a career direct seller’s path to success, and thus is in the direct seller’s best interest. But mere recruiting does not generate income in a legitimate direct selling opportunity; only sales does so. A business-building direct seller therefore has to mentor and develop the business skills of distributors downline from her (those she recruits and those recruited by her recruits) in order to reap the benefits that a direct selling compensation system provides.
As for the saturation argument made here, welcome to the wide world of retail competition. A successful retailer in any business has to figure out how to make her offering better than that of the competition. Think about how broadly available Tide detergent, Scott paper towels, Oral B toothbrushes, Oreos, and hundreds of other grocery products are; if unique product, sold by a retailer with no local competitors, were the only path to survival and success in the grocery business, we wouldn’t see multiple grocery stores surviving in any market. The fact that we do suggests there’s more to this game than product and price. In fact, in direct selling as in any other retail business, the name of the game is to augment the selling process so that the consumer is able to buy your products, plus personalized and valued service, in a way that beats the competition.
“Consumers aren’t as easily duped as you think, so you will be necessary to them if you offer direct-selling services of value along with the products you sell.”
Ms. Grant’s vision of consumers is surprisingly dim; she depicts them as both gullible and ignorant, so that they fail to check out alternatives before buying and thus might not be “well served” by direct selling offers. In reality, consumers can and do routinely check out alternatives before they buy; it’s this very behavior that is currently causing bricks-and-mortar retailers concern about “showrooming.”
Further, consumers buying from legitimate direct sellers don’t have to keep a product they regret buying. Direct selling companies that are members of the Direct Selling Association are required to offer a standard three-day cooling-off period for every sale, and to offer a full refund if the consumer changes her mind in this time period. Beyond this, direct sellers commonly offer 30-day 60-day, 180-day, or one-year return and refund policies, which can be easily found in an online search.
But beyond these protections, consumers routinely make quick purchase decisions in many retail environments without spending agonizing time and effort looking for the very best offer in every market. How often have you bought a bottle of Coke at a gas station and spent twice as much on it as you would have spent at your grocery store? Yet you aren’t dissatisfied by this purchase, even though you are aware that you could have paid less for that product.
The reason this kind of very common consumer behavior is not ignorant is because the consumer is buying not just the product, but also a bundle of services; it’s the entire bundle of the product plus services that the price pays for. If it doesn’t make the consumer happy, she is perfectly free to say “no.” This explains why a consumer might be happy to buy that Tomboy Tools cordless screwdriver from the direct seller rather from K Mart, which Ms. Grant notes offers the item for $11 less. That consumer might be comparing the convenience of purchasing from the direct seller with the inconvenience of driving several miles (and paying for gas to do so) to get to the nearest K Mart – perhaps to find that the item is not in stock. It’s easy to see why paying more for the same product is still a good deal – when you factor in the “full cost” of finding the lowest-priced product. The direct seller who recognizes the full value the consumer seeks won’t be unnecessary, because she’ll be providing the combination of product plus service that merits the extra $11 in price.
“Direct selling companies require their distributors to tell the truth about their products – so if you hear a cancer-curing promise, be skeptical and alert the company.”
It is illegal for any firm, direct seller or not, to fraudulently represent their product as curing a disease if it does not do so. So it isn’t clear why this is a reason to suspect direct sellers in particular. A legitimate direct selling firm does not misrepresent its products’ performance characteristics any more than a legitimate non-direct-selling firm does.
“Consider your work environment if you join a direct-selling company just as you would if you interviewed for an office job.”
Allegations of “cult-like” status of direct selling companies are overstated. Individuals become direct sellers for many reasons, some of which are purely economic and others that are more social in nature. As with any other business prospect, it’s up to the potential direct selling distributor to assess the climate of the business and decide if it’s right for her. Becoming a direct-sales distributor is a personal choice, not a forced action, and the distributor is free to quit any time she wants. Departure from a legitimate direct selling company is as easy as joining, with the direct selling company taking back your unsold and in-date product.
(c) 2012 Anne T. Coughlan.
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