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What is Direct Selling?
Direct selling is the sale of a consumer product or service, person-to-person, away from a fixed retail location, marketed through independent sales representatives who are sometimes also referred to as consultants, distributors or other titles. Direct sellers are not employees of the company. They are independent contractors who market and sell the products or services of a company in return for a commission on those sales.
Orders are usually placed in person or via the consultant’s Web page. Sometimes the phone is used to place orders or reorders, but only about 12% of sales take place this way. Home shopping parties are the most widely recognized sales method, where friends, family or acquaintances get together for a few hours to learn about or sample a range of products or services. However, the majority (about 70%) of the direct selling industry’s sales actually occur using a one-to-one approach where one seller may present the products or services to a single consumer.
Just about any product or service can be purchased through direct selling somewhere in the world. Many people think of cosmetics, wellness products and home décor as products that are often sold through direct sales, but add to that countless other product categories including kitchen products, jewelry, clothing, organic gardening supplies, spa products, scrapbooking supplies, rubber stamps and much, much more.
Direct selling should not be confused with other types of sales that take place away from a fixed retail location such as magazine sales, home repair services, telemarketing, wholesaling, real estate sales, or “work-from-home” businesses such as envelope stuffing or product assembly.
Proselyting
Proselyting is the term of art used in direct selling to describe the attempt to convert one or more salesforce members from one company to another. The ethics and legality of efforts to attract salespeople from one company to another is a subject of frequent and intense discussion by industry members. The Direct Selling Association has adopted guidelines regarding these practices of which salespeople and companies should be aware. The guidelines and open letter set out below attempt to describe what the Association believes is the state of the law regarding such practices as well as acceptable direct selling business practice in this regard.
Proselyting Guidelines of the Direct Selling Association
It is considered to be an improper practice when Company A, or its representatives, specifically and consciously targets the salesforce of Company B with the intent of persuading Company B’s salespersons or employees not only to sell or work for Company A, but also to cease selling or working for Company B, thereby interfering with Company B’s business or contractual relations. This is not intended to encompass the occasional incident or two, but it does apply to situations involving more than several persons, where the pattern, approach and timing of Company A would clearly indicate an intention to adversely impact on Company B. If Company B sends correspondence to Company A regarding alleged proselyting activity, Company A is expected to appropriately respond within 30 days after receipt of the correspondence.
An Open Letter to Direct Sellers from
DSA President Joseph Mariano
Occasionally, direct sellers in the field will be approached by other companies or their sales leaders with solicitations to join those companies. Sometimes, these solicitors present misinformation and denigrate the company you are with. Those solicitations can be inappropriate, unethical, misrepresentative, or even illegal and may be at odds with the Proselyting Guidelines of the Direct Selling Association (DSA). Under those guidelines, it is considered unethical behavior throughout the industry for one company to target the salesforce of another company in an attempt to lure salespeople into their own organization and stop selling for their original company.
It is unfortunate when such behavior reflects poorly upon the direct selling industry and results in misinformation about our business being spread throughout our salesforces and the public. That is why we urge current direct sellers, or anyone who might be interested in a direct selling opportunity, to evaluate those opportunities on the basis of facts about the company doing the recruiting. Rumor or innuendo about other opportunities often prove to be just plain wrong. So when you’re recruited, examine the appeal of the products offered, the attractiveness of the earning potential, and a company’s commitment to the ideals and obligations embodied in the DSA Code of Ethics. Those are the factors most important to you in evaluating your current company or any future opportunity you may pursue.
All members of DSA are bound by our Code of Ethics and should follow our Proselyting Guidelines, which constitute our industry’s ethical standard. To review our Code, please visit our website at www.dsa.org. We wish you strength, success, and growth in your direct selling career.
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