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.”

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