New Data Reveals Canadian Direct Selling Grew Significantly in 2020 

The recent release of Canadian industry statistics for 2020 has brought good news. What a difference 15 months makes!

In March last year, there were so many unanswered questions about the direct selling industry and the world in general. So, to be at a point in mid-2021, where we are able to publish data showing record Canadian sales growth in 2020, seems a little surreal. In fact, retail sales for direct selling companies in 2020 were up 26% over 2019 numbers, which in retrospect is hard to believe.

In mid-March of 2020, international flights were grinding to a halt, the NBA had just cancelled games, and governments were scrambling to understand what was happening and how to deal with it. Similarly, the challenges for direct sellers seemed equally large and potentially existential. Among the questions many of our members asked were:

• Will my distribution center be allowed to stay open?
• Will my consultants be interested in moving to fully online selling?
• Will I be able to source raw materials from overseas?
• Without incentive trips and conferences, how will we connect with and reward people?
• Will consultants be drawn to government support programs, instead of entrepreneurial activities?
• Will my staff do any work at home?

And most importantly:

• Will my company even be able to keep its doors open for the next six or twelve months?

As the President of DSA Canada, I heard all of these questions and didn’t necessarily have all the answers. But through the hard work of our members, many calls with government officials, support from industry suppliers, and some aspects of the pandemic that actually favoured our business model, we have arrived at today.

So, here are some of our topline numbers from our 2020 industry survey:

• Retail sales grew 26% over 2019, to C$4.15 billion. 2020 was the largest ever year, in dollar value, for direct sellers in this country. This growth is significant, and also compares favourably with growth in other direct selling markets.

• The number of Canadians signed up as independent sales consultants rose to 1.39 million, up 20% over 2019. This total number is comprised of 5% full-time business builders (or those working 30 or more hours per week), 70% part-time business builders (or those working less than 30 hours per week or more) and 25% other independent representatives (or those who are not active).

• The percentage of the independent sales force in Canada who are women rose by 2%, to 84% overall. A small rise, but significant. Perhaps this is a sign of the “she-cession” that has been discussed as one of the pandemic impacts. Hopefully, it is also a part of the “she-covery”, which is helping to lead us out of our challenges.

It is also interesting to consider one other part of the industry that is evolving at this point, that being the existence of preferred customer programs. As of this survey, just over half of DSA member organisations, or 53%, have a preferred customer program, and this accounts for 11% of their sales. This will likely be an area where we continue to see growth in future years.

Why did sales spike like this? I have a few thoughts:

• Consumers wanting to shop safely from home; to buy products that were important to them during a pandemic (such as healthcare products and kitchenware); and to support the entrepreneurial business of their families, friends and social circle;

• People looking for additional earnings opportunities; perhaps rethinking their careers; and spending more time working on their existing direct selling business; and

• Direct selling companies having effective and established digital platforms for carrying out commerce (or at least being able to speed up an existing digital transition)

I recognize that not all companies experienced the same level of growth and many did struggle with significant pandemic-related challenges, but overall, the industry had a phenomenal year. The next question many of our members are asking is, can these sales numbers be maintained and can industry participants continue to post year-over-year growth? I know that this is something that direct selling companies are working on right now, by building connections with newer independent consultants, altering product selections to suit our new reality, finding innovative ways to recognize success and by diving headlong into the new digital reality.

DSA Canada will continue to work with members and stakeholders to set the table for success. We encourage all direct selling companies to participate fully in industry research efforts, as with verifiable numbers comes advocacy power.

I can’t wait until this time next year, when we release our 2021 numbers. Then we will have an even better understanding of how this crazy time in our lives has impacted direct selling in Canada.

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Peter Maddox 

Peter Maddox
Traditional Retail is Coming Around to Direct Selling’s Way of Thinking

These are tough times in business, particularly in retail. You only have to look at the number of lay-offs, store closures and bailout discussions to realize that we are in uncharted waters. Across North America, there are daily discussions of famous brand names who will either not exist in the future or will be around in a very different format.

Through all of this upheaval, many direct selling businesses are surviving and thriving, and traditional retail is taking notice. We are already seeing big brands like PepsiCo and Kraft Heinz, jewellery brands like Michael Hill, and even Canada Goose, going direct to consumer in their recovery plans, utilizing aspects of the direct selling model to sell their products. We can anticipate that in the not-too-distant future, we may even see famous retailers fully moving into the direct selling space.

This is a great credit to the direct selling industry, both the direct selling companies, as well as the supplier ecosystem that supports them. Operating in an area with less indoctrinated tradition has allowed for both a culture of innovation and the ability to turn on a dime. There’s also not the same fear of the unknown that many large, bureaucratic, traditional retailers have.

Two questions arise from this momentum: What things do direct sellers do particularly well; and what lessons can bricks-and-mortar retailers learn from our channel?

Relationships

The entire direct selling business model is based on personal relationships. Both customers and sellers are found via people’s network of friends, family and colleagues. These types of business relationships create incredible stickiness – consumers love to support their own community and are more likely to continue buying daily needs and larger purchases from someone they know.

Traditional retailers are eternally searching for this kind of connection, via loyalty cards, referral programs and special buying events. The challenge for them is to continue to grow these connections. In a recent KPMG report, Redefining Customer Loyalty: Beyond the Points, 57% of Canadian’s agreed that a “strong personal connection with the company” helps to ensure their loyalty to a specific retailer. However, historically retailers have struggled to build longer-term relationships and engagement with their customers to keep them coming back.

Technology

Being nimble and finding a niche is what successful direct selling businesses do so well. In recent years, this has been driven significantly by a move to innovative technology solutions, such as personalized websites, gamified apps, virtual communities and instant commission payment. The statement that “if you can’t do it with your thumb while scrolling on your smartphone, it is too complicated” is becoming ever truer.

In 2018, approximately 84% of Canadian internet users shopped online, according to data from Statistics Canada, and the pandemic has led to even larger increases in online shopping. As retail is forced to focus on both online business and more efficient instore experiences, they must similarly look to evolve quickly and provide owners, franchisees, staff and customers with innovative tools to support transactions.

Reach

Imagine having a sales outlet in every community across the country. While that is virtually impossible for traditional retailers, it is exactly what direct selling allows – passionate independent sellers promoting the business anywhere there is a potential market. While these independent minds sometimes create their own challenges, they are the single greatest resource direct selling has.

With over 91% of Canadians using the internet and 75% of those interacting on social networks, bricks-and-mortar retailers are looking to a variety of methods, including social media influencers, localized distribution facilities and online communities, to try to replicate this reach.

Flexibility

Working from home? Not such a big deal for the direct selling industry, where working remotely or supporting others that do is part of the DNA.

Activating a flash sales promotion? Easier to do by changing digital assets than updating a whole store and window displays.

While traditional retailers will always require sales staff in-store and need to have physical signage at the point of purchase, the challenge for them is to build flexibility and, via technology and other tools, diversify how they communicate and sell.

Shared Vision

Finally, direct sellers have a history of working collectively as an industry to overcome challenges. Whether this stems from an “us-against-them” mindset or simply due to the strong relationships across the industry, it continues to support growth and relevancy.

For Mary Kay, a long-standing and active Direct Sellers Association of Canada member, “The core of who we are as an organization is the willingness to help one another. Over the last several years, we’ve been working collectively with other direct sellers on Canadian tax and trade issues, to ensure that we are all are supported equally across the country,” says Lynda Rose, General Manager for Mary Kay Cosmetics in Canada.

In a time of massive upheaval, other sales channels could learn from this and gain benefit from similar shared action.

Conclusion

While direct selling continues to face challenges, many of the industry’s strategic pillars, as well as business decisions that have been made in recent years, have created an ability to withstand the pandemic impacts better than most.

Traditional retail is taking notice and it is apparent that many brick-and-mortar companies will try to replicate elements of the direct selling business model. We may also see an influx of big-name products and retailers enter the direct selling space, creating major omni-channel competition. Investments by cosmetics giants such as Groupe Rocher and LG Household & Health Care are illustrations of this movement.

Direct sellers should embrace this evolution. A mainstreaming of our business channel strategies will be positive in the eyes of consumers, consultants, government and regulators. For forward-thinking direct sellers, this will provide the ability to touch more lives and enable continued growth.

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A few weeks ago, the Canada Direct Sellers Association reported the findings of an important study on the Canadian direct sales industry.

The study was commissioned to Nathan Associates that used three principal resources to construct the estimates of industry impact:

* A survey that was conducted in spring 2019 of nearly 5,000 individual direct sellers,
* A survey of 17 direct selling companies again, that was done in spring 2019,
* Statistics Canada’s reports.

Industry Grows

To me, one of the most significant findings is that the industry has been growing in Canada. In fact, from 2015, retail sales grew by 5% to $3.50 billion in 2018. The growth during the last 10 years (between 2008-2018 period) was 16%.

Besides, new companies continue to enter the Canadian market. In recent years, for example, Zinzino from Sweden launched in 2015, Infinitus from China in 2016, AdvoCare from the U.S. in 2018, and Vorwerk from Germany in 2019. Currently, the number of direct selling companies that exist in the industry exceeds 200.

According to the study, there are 1.16 million independent direct sellers operating in Canada, up 4% from previous year.

Socio-Economic Impact of the Industry

Economic

The direct selling industry contributes to the overall Canadian economy through the income, sales, and employment it generates. Companies in this industry create employment opportunities, that result in wages and salaries for their employees and compensation for their field members. These are the industry’s direct contributions:

* Sales revenue of $3.50 billion,
* Participation of nearly 1.2 million direct sellers and employees of direct selling companies,
* Household income of $1.21 billion, and
* Tax revenue of $886 million.

Additionally, there are also “indirect contributions”. For example, these companies purchase goods and services from other Canadian businesses, resulting in additional employment, income, and sales in those industries.

Direct selling also generates employment, personal income and sales. This happens through the spending done by the individual direct sellers, employees of direct selling companies and by employees of suppliers to the industry. And these are direct sales industry’s “induced contributions” to the economy.

These indirect and induced contributions, as reported, are:

* Sales revenue of $3.85 billion,
* Employment of 21,500 people,
* Household income of $876 million, and
* Tax revenue of $424 million.

Social

The study finds that a typical Canadian direct seller has lived in the same province/territory for over 20 years, is female, is mid-forties, is married, defines themselves as Canadian, speaks English, lives in a 2-3-person household, has an annual household income around $70,000, and has some post-secondary education.

Behind this average profile of a direct seller, the study shows there is a diversity that reveals direct selling is open to all, especially to women. In the Canadian economy, half of all employees and 38% of the self-employed workforce are women. However, 82% are women among direct sellers.

The survey tells us that direct selling is not only an opportunity to make money. It also provides an opportunity for self-improvement. 32% say, they become involved in direct selling to learn something new and 45% for personal development (e.g. to become more confident or better business minded). Moreover, 75% believe the benefits carry over into their private life.

“Direct selling is an important retail channel, which delivers a wide range of products and services to Canadians”, says Peter Maddox, President of the Canada DSA. “Through financial opportunity and social benefits, it also plays an integral role in improving the quality of lives for all those associated with this industry.”

I couldn’t have said it better myself!

…..

Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is a Supplier Member of the Canada DSA. It is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.

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We have come to the end of 2019! I had asked some of the prominent persons of the direct selling community to offer their perspectives on what they see coming in 2020.

“What will be the most important issue, whether it be an opportunity or a threat, in the direct selling industry that will need a closer focus Next Year?” was the question.

Last week’s article covered the first group of responses. You will now read the second group below. Feel free to add your own comments at the end of the text.

Brenton Kugler, Partner at Scheef & Stone, LLP

“MLM companies operating in the U.S. must take a fresh look at their compensation structures in the wake of heightened FTC scrutiny of MLM compensation plans and new criteria announced by the FTC for determining what is and is not a legally compliant compensation plan. Companies should review and update antiquated compensation plan terminology and concepts, and where necessary rewrite the compensation plan so that it is easy to understand (and conversely, is not capable of being misunderstood or misconstrued by a regulator). The FTC has promised further “aggressive” enforcement activity directed at MLM companies operating in the U.S. Companies should ensure that their compensation plans in structure, practice and terminology make it clear that compensation paid to program participants is primarily based on verifiable sales of products and services to non-participant consumers.”

Marie Lacroix, Executive Director of European Direct Selling Association (Seldia)

“It is clear by now that companies who miss the digitalization train will not survive in the coming years. Besides that, at least in the EU, there has been a great deal of attention afforded lately to the opportunities arising from flexible working conditions. In the context of a changing world of work where people stop working from 9 to 5 the same job all their lives, one of the strengths of our industry is salesforce training. In the near future, companies should focus on transferable soft skills, as well as a strict ethical framework benefitting both consumers and sellers”.

Sebastian J. Leonardi, President & Chief Business Strategist at DSXgroup

“For direct sales and social commerce companies, the current state of market transformation is a board level agenda item. An imminent threat facing traditional direct sales models is failure to recognize that transformation isn’t just here, it’s accelerating. Today, while some DS companies explore the impact of Gig Economy pressures, companies such as Uber (a favorite DS comparison) are expanding and multiplying opportunities for independents through Uber Works and other technology-driven growth initiatives. Simultaneously, retail brands are continuing their pursuit of omnichannel nirvana by honing personalization, strengthening emotional connections, and innovating fresh experiences- all designed to retain and capture new customers. Aside from simplifying compensation plans, refining messaging, and initiating compliance audits; what’s your strategy for driving customer acquisition, brand loyalty, and network growth in the retail transformation age?”

Alan Luce, Senior Managing Partner at Strategic Choice Partners

“The next five years will see direct selling become more retail-oriented with the focus on customer acquisition, customer retention and customer service. At the same time, direct selling sales force attraction will focus more than ever on having an attractive, competitive and compelling part-time income opportunity for people looking to earn $500 to $1,500 a month.”



Peter Maddox, President of Direct Sellers Association of Canada

“I believe that the most important issue for direct selling in 2020 is ensuring that our business practices continue to evolve – to a point where we can consider ourselves a positive role model to all industries. This doesn’t mean always agreeing with regulators, nor does it prevent us from fighting back when we are unfairly targeted. But it does mean working together through forums such as DSA Canada, questioning colleagues when we are not sure that their actions are best for the industry, and investing in compliance. In this changing landscape, DSA Canada membership provides excellent value. We act as our member’s extra set of eyes and ears, helping to protect their investments in this market.”

Nick Mallett, Director at Pan European Solutions

“Whatever the political, social or economic view one takes, surely our General Election creates certainty that BREXIT will happen, on 31 January 2020. BREXIT is still shrouded in uncertainty, as regards the timing and substance of the all-important trade deal, even down to whether there will be a “deal” or not. BREXIT does not raise any concern that the UK-origin law should be changed – quite the opposite, given the clamour for recovering sovereignty. EEC/EU-origin law was all implemented into UK law by UK legislation, so that will remain in force indefinitely. For the UK government to voluntarily change any law of relevance to the direct selling industry would damage the integrity of the single market, which would surely be unwise. So, the status quo is bound to prevail for quite some time, as there is no BREXIT-related need to change any law in this area.”

Gillian Stapleton, Executive Director of Australia Direct Selling Association

“In 2017, Direct Selling Australia celebrated its 50th anniversary with a conference theme of ‘Disrupt Yourself Before You Get Disrupted’. Two years on and shifts both domestic and global mean we can linger no longer. Right now, the media target our industry with relentless frequency, regulators have the channel on their radar and consumers seeking flexibly and remote working options have many choices. The industry must address education and training of the distributor, improved compliance and compensation and change the culture of recruiting. In Australia, DSA is focused on making the industry attractive once again, by sharing the realities of our best product – our people, always with the aim to enhance reputation and better protect and promote our members. When they succeed, we succeed. Disruption is here but now, like a Phoenix, the channel will gain new life that is stronger, that connects across cultures and celebrates another 50 years of growth.”

Kevin Thompson, Partner and Co-Founder of Thompson Burton

“2020 is going to be a challenging year in our sales channel. The negativity in mainstream media will continue to climb, making it more difficult for distributors in the field.  Then there’s the litigation between the FTC and Neora. The stakes are high and I expect there to be some consequences to come out of that case, for better or worse. There’s a stampede coming and the intelligent companies are going to find ways to ‘climb up a tree’ to avoid being crushed.”

Terrel Transtrum, President and Founder of ServiceQuest

“Direct selling works when companies understand that humans are hard-wired for connection, growth, and significance. Service is the key to helping people see their way to success, by clearing hurdles, lifting burdens, and building hope. More than ever before, 2020 is the year to focus on serving customers and reps. From cracking down on hold times or using social media as a contact center touch-point, to one-call problem resolution and amazing on-boarding, the prize will go to the business that understands who is king (the customer) and who is the heart of direct sales (the distributor).”

Daryl Wurzbacher, CEO of ByDesign Technologies

“We have a tremendous opportunity to elevate the credibility of direct selling with better reporting and tracking of retail sales to customers. Consumers around the world depend on the innovation our industry delivers, making retail sales the backbone of what we do. For companies that ship directly to customers, this is a given and easy to show; but for companies where there’s a “cash and carry” component, there needs to be a better solution. As an industry, we need an easy-to-use method to demonstrate objectively what we already know — that real customers are driving our sales.”

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As we have left another year behind, I asked some of the prominent figures of the global direct selling community what they saw coming in 2019.

“What will be the most important issue, whether it be an opportunity or a threat, in the direct selling industry that will need a closer focus Next Year?” was the question.

Below are their responses:

Oscar Cano Arias, Managing Director of Direct Selling Europe

“2019 will be a crucial year for the sector in the EU from a regulatory perspective. First of all, 1Q will see the closure of the amendment of the Unfair Commercial Practices Directive, which will change the way to operate unsolicited marketing sales in the EU. Another important piece of legislation to be completed soon will be the new EU law on Collective Redress, which will have some similarities to the American one. Furthermore, in May 2019 a new EU Parliament will be elected for a new 5-year-term period, in parallel to a new EU Commission – the EU executive branch. Direct Selling Europe is working with all key decision makers and industry representatives to ensure that the interests of well reputed and sustainable direct selling companies continue well preserved with the new EU decision-makers.”

Jeff Babener, Legal Counsel at Babener and Associates

“In 2019, dual challenges, business and legal, face direct selling. On the business front, can the industry leverage the personal touch of direct selling to overcome the satisfying Amazon consumer buying experience, and the instant earning experience of gig opportunities such as Uber and Lyft? On the legal front, can the industry continue to cement its independent contractor exemption under state unemployment laws in such states as Connecticut and Oregon, and develop a strategy with the gig industry in California and at the federal level to avoid application of fair labor standards laws that require minimum wage and hours?”

Michel Bayan, CEO of Directech Labs

“Direct sellers will need to continue to step even further out of the box, questioning ideas that may seem completely fundamental to us, and become the attainable “gigs” that people around the world are looking for. In order to do that we’ll first have to let go of selling the idea of riches. Some people are setup to achieve this, but most are not. We’ll have to lever our data to better understand our customers and sellers, offering them the experience that’s right for them, and not the experience we wish they would have. Those who experiment and learn rapidly will win big.”

Sean Eggert, CEO of Hanna Shea Executive Search 

“According the the U.S. DSA 2017 Direct Selling Report the largest age segment within the industry is now millennials. This is a group that has often been misunderstood and in my opinion unfairly labeled in a negative way. They have been brought up in a world that is very different from the one previous generations grew up in. The failure of a direct selling business to understand this group in terms of how they learn, socialize and share opportunities could severely limit the growth potential of an organization. The companies that embrace this unique group and offer solutions to them that compliment their learning and selling style along with having a strong mission statement will have a much better chance of success.”

Tamuna Gabilaia, Executive Director and COO of the WFDSA

“This year marked a milestone WFDSA 40th Anniversary. We saw sustained growth in all regions – global retail sales increased by 1.6% and the industry experienced 3.7% CAGR. As I look around, it gives me an immense satisfaction to see that millions of people are involved in direct selling and we have played a part in impacting ordinary people’s lives. Our industry’s future is bright as we move in 2019. Direct selling is an omnichannel marketing – marriage of traditional direct selling with internet tools while maintaining individual approach. Little advertising, word of mouth recommendations, best products at competitive prices. Mobile tools help run a business and present products, social media gives direct sellers an ability to reach their customers in new ways, live/interactive training makes learning more accessible. Therefore, we must continue proudly promoting the positive story of our industry and solutions we provide for people all over the world while maintaining individual approach which our industry does better than any other industry!”

Ed Jarrin, President and Co-Founder of Exigo

“Long before innovation created the ‘Amazon Effect’ for consumers, ‘direct sales’ software providers spearheaded our own technological revolution by developing the capabilities to connect and pay millions of distributors simultaneously and differentially with the same ease of paying a one-time commission on a simple retail sale. Without those breakthroughs, their is no gig economy, no downloading a biz opp from a smartphone faster than you can make a phone call or should I  say, “Send a Snapchat.” Our greatest opportunity in front of us, is to create a new direct sales experience that transports customers to a new destination of personalized and authentic real-time data centered right in the palm of their hand.”

Robert Kreklewetz, Founding Partner of Millar Kreklewetz

“The Canadian direct selling marketplace continues to be dynamic in terms of compliance concerns. First and foremost is the Competition Bureau’s evolving administrative position on legal and illegal recruitment requirements, and all direct sellers operating in Canada should be revisiting their compensation plans. Low US tax rates are also making many current Canadian ownership structures stale, at the same time that the USMCA and Canadian retaliatory tariffs threaten to impose duties on imported goods. Clearly, international tax and customs reviews are called for in 2019. We have been fielding a lot of calls and emails on all of this lately, and I think it is just going to get worse!”

Roberta Kuruzu, Head of Business Development and Services at Kuruzu & Marostica

“Both for 2019 and for any short-term planning direct sales companies should focus on developing tools to digitize its sales force, as well as position itself strongly in attracting the new generation of entrepreneurs (millennials and new retirees who are highly qualified and will lose their jobs in the near future).”

Sebastian J. Leonardi, President & Chief Business Strategist at DSXgroup

“Direct sales companies must recognize that retail’s transformation and the rise of e-commerce marketplaces have set the tone for all customer expectations. As retail continues to prioritize relationships over transactions, direct sales has to evolve to remain competitive, relevant and sustainable in what is clearly a global omnichannel marketplace. One that has been transformed by technology, culture and generational shifts in buying power. Direct sales is no longer an impenetrable bubble and we cannot escape the influence of transformation. To survive, companies need to be proactive and preemptive. Focusing on a ‘Reactionary Approach’ to define strategy will lead you to extinction.”

Alan Luce, Managing Partner at Strategic Choice Partners

“The most serious issue facing direct selling in the new year is the fact that the US direct selling industry is becoming ever more fragmented. Not so long ago the Direct Selling Association membership included nearly all the top names in the US industry and could claim to represent nearly 90% of the independent sales forces. Today that is no longer true. Many of the largest and best-known companies no longer belong to DSA and more and more small and start-up companies for various reasons are choosing not to join. At some point this lack of universal representation in the association will weaken its ability to speak for the whole industry in regulatory and legislative matters. Industry leaders must work to find consensus and support a unified voice again that benefits and will attract all direct selling companies.”

Peter Maddox, President of the Direct Sellers Association of Canada

“In 2019, I believe that we must continue building a positive narrative about our industry. We can do this by emphasizing the trustworthy and ethical business opportunity that direct selling provides, and by showing that our distribution model creates solutions to help build strong economies and communities. Our CEOs, staff and entrepreneurs must place ethics at the front of their minds and never be afraid to proactively proclaim what makes this industry so great – wonderful people, acting with integrity and building dreams. The DSA Code of Ethics is at the heart of this commitment.”

Brian Palmer, CEO at Krato

“In 2019 there will be a burst of new direct selling companies who will be able to launch in just a few months and with a quarter of the budget that it used to take to launch a company five years ago. Here’s why: Technology is making everything possible. People with the right knowledge and tools can launch a new direct selling company using an affiliate model. While limited in levels and back office access a company can test their concept faster. This will allow many e-commerce stores to give direct selling a chance without investing a lot of money.”

Rich Schubkegel, V.P. of Business Development at Thatcher Technology Group

“Direct selling has always prided itself on offering individuals an opportunity to earn extra income and build a business while accomplishing it around their own personal schedules. Now that the “Gig Economy” has validated the attractiveness of those same concepts, the threat that direct selling faces is whether we can execute the model as well as these new competitors. Ask yourselves a few simple questions: How easily can someone find out about your opportunity among thousands of alternatives? How easily can they sign up? How easy is it to sell your products or perform your services? Then, if you have gotten them that far, how quickly will they be compensated, incentivized and recognized for their performance?”

Gillian Stapleton, Executive Director of the Australia Direct Selling Association

“The direct selling channel is fueled by passion but this alone will not drive growth and innovation. With digitization, the growth of the gig economy, the channel must stay relevant to meet the changing needs. We have for a longtime stood out as being connected to our customer base but this is being eroded away by the changing nature of commerce. Fear or excitement towards this change depends only on your point of view. In my mind, the channel has never been as relevant as it is now. Flexible work, more time and money are on everyone’s agenda and the channel has always been able to offer that. The fundamentals remain solid; customers still respond to personal touches and moving stories and they as consumers, want to feel empowered. Exceptional products, great value, fair and rewarding plans and distribution systems that meet the needs of the consultants and consumers will ensure sustainability and relevancy of the channel I have loved for 30 years.”

Kevin Thompson, Partner and Co-Founder of Thompson Burton

“2019 represents a great opportunity for the industry to implement self-regulation in a meaningful way. Dubbed the Direct Selling Regulatory Council, or “DS-SRC,” the effort looks like a solid step towards having true, independent accountability in the industry.  The current FTC seems to be cooling off, which makes it more important than ever that the industry work together to weed out the rotten companies.  I expect this entity to make a meaningful splash in 2019, teeing it up for greater importance in the future for both companies and consumers.” 

Terrel Transtrum, President and Founder of ServiceQuest

“The threat: In general, business is driven to be more transparent than ever before. Yet direct sellers (though they think they are transparent) can be closed if for no other reason than they are remote and, some perceive, in a far-away fortress. Consumers want more than a transaction. They want a relationship. But a relationship depends on transparency, and too few direct selling companies are prepared to be that frank, to be that open. It’s a grave threat to direct sales as other direct-to-consumer companies embrace this expectation. We need to get serious about pulling back the curtain and inviting people to come in to build their trust. In practice, it means sharing things like ingredients, supply chains, and real compensation. These relationships matter, and they are fortified by giving people a reason to believe in us in the first place.”

Do you want to share your own views with us? Please write them below.

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Peter Maddox

Could you tell us about your education and your professional background?

Originally from Australia, I have an MBA from Chifley Business School and a Marketing Degree from the University of Tasmania, both Australian schools. Over my career, I have managed files as diverse as government relations, regulatory affairs, marketing analysis, member engagement, communications, business development and sales, both in corporate roles and with respected national associations in Canada. My role at the DSA calls on all of these skills and experiences to help achieve the organization’s strategic goals.

I worked for the Canadian Propane Association, Canadian Tire Corporation, the Australian Professional Engineers Association (now Professionals Australia), the Australian Pharmacy Guild and Rhone-Poulenc Rorer Pharmaceuticals.

What were your opinions and observations on direct sales before?

I had definitely had some contact with direct selling companies, through family and friends.

I knew that direct selling is an industry that rewards entrepreneurship and hard work, and that it is also often a “side gig” for people looking for something more from everyday life. However, I was also aware of the perceptions and misconceptions that exist about the industry, specifically regarding a small minority of companies and individuals occasionally pushing the boundaries of appropriate business practice. Fortunately, I have discovered that, in Canada in particular, both the DSA and regulators set and maintain a very high standard for those involved in the industry. Our member companies pride themselves on achieving and exceeding these high standards.

What made you choose Direct Sellers Association of Canada as a place to work for?

I was just incredibly impressed and inspired by the energy and the passion of the people I met during the hiring process. And even though many of our member companies compete with each other, they seem really open to collaborating and growing the industry as a whole.

From a personal perspective, this role gives me the opportunity to drive an organization that has so much potential, in an industry that has innovation and creative thinking in its DNA. It really was a case of “right time, right place” for me career-wise.

From your perspective, what are the biggest threats or challenges to the Canadian direct sales industry?

The way that people are purchasing and consuming is changing, particularly from generation to generation. As we become “time poor” it is important that the direct selling industry continues to position itself as a great model for both consumers and those looking to create a business for themselves. If the industry stops innovating and fine-tuning its tactics to meet the latest consumer needs, challenging times will surely follow.

I think the industry’s other major challenge is to uphold the highest possible standards in everything we do. There are other consumer goods distribution models who we compete with fiercely, so we cannot afford to be our own worst enemies by letting standards slip. It is very important that the DSA, through our Code of Ethics and Business Practices, continues to support our members in their aspirations.

And the biggest opportunities are?

People are looking for more freedom and control in the way they make a living. Direct selling offers exactly that, without a huge investment in real estate or products. And Canada is still a little bit of an untapped market, particularly when you look at the number of direct sales companies in the US who haven’t yet ventured north of the border. We offer low-barrier entry to generating income for individuals and an attractive environment to invest and grow for businesses.

Canada is a great first step for US companies looking to expand globally. It’s close, business practices are similar and consumer tastes are relatively closely aligned. But it does take focus and dedication to make it work.

Secondly, there is an opportunity for the industry to be a strong lobbying presence and to proactively play a part in the evolution of regulation and policy. As an example, the Canadian DSA has taken strong positions in NAFTA negotiations and we have subsequently built meaningful relationships with various government departments. Where appropriate, it is better to work with government in shaping policy, rather than fighting against it.

The federal government, especially, has demonstrated a clear interest in supporting policy and industries that allow women opportunities to earn, learn, and succeed. Direct selling is well-aligned on this, with 83% of participants being women, so we are continuing to deliver this message.

What will be your priorities in the coming weeks or months?

Initially, my goal is to get to know the people, companies and issues that are central to our industry. If I can’t speak from a position of knowledge, then I will have little chance of convincing stakeholders to support and embrace what we do.

The next step will be to continue our advocacy work. We need to find ways to leverage the political power of the estimated 1.2 million independent sales consultants involved in direct selling in Canada – that is a great basis for having a strong voice with policy makers. I have already had an opportunity to do some lobbying in Ottawa and am focused on establishing relationships that will pay long-term dividends for our industry.

Beyond that, we have the challenge of upgrading and revamping our messaging and communications, to ensure that our members are involved and that they see value in the work that we do. This will start with new online resources, and will also include programming more events, refining our news distribution, and providing more in-depth research and information for members.

What would you recommend to a person considering becoming an independent salesperson?

Research, research and then maybe a little more research. Find out about the company you are considering, including their products and business model. Talk to people who have been a consultant for them and see if their experiences meet your expectations. Consider your talents and ambitions, and whether they align with the skills required and likely outcomes of being a consultant.

Of course, you should also confirm that the company is a member of DSA Canada, to ensure integrity and trust!

Thank you for your time Peter, and wish you all the best! Anything you would like to add before we conclude?

Thank you! The World of Direct Selling is an important communication channel for the industry. I am glad I had this opportunity to speak with and I hope to share more with you as the Canadian DSA evolves and grows.

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Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting firm in Canada specialized in providing services to direct selling firms. WDS Consultancy is a proud Supplier Member of the Canadian DSA . It is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.
 
 

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