- Who is involved in direct selling?
- Are U.S. direct sales increasing?
- What products and services are marketed through direct selling?
- What is the difference between direct selling and direct marketing?
- What is the difference between direct selling and multilevel marketing?
- How does compensation in a multilevel distribution company work?
- How many direct selling companies are there?
- Who can become a DSA member?
- What are DSA's membership dues?
- I am a representative with a DSA member company. What benefits does DSA provide for me?
- What are my responsibilities as a representative/distributor of a DSA member company?
- A representative with another company is trying to recruit me. Does the Code of Ethics address this?
- What if I feel a DSA member company or representative/distributor has violated the Code of Ethics?
- Does DSA offer health insurance for representatives/distributors of DSA member companies?
- I'm considering starting a direct selling company of my own. Where do I start?
- I'm considering an opportunity with a company that's not a DSA member. How can I determine if it's a legitimate opportunity?
Q. Who is involved in direct selling?
A. An estimated 15.9 million people are involved in direct selling in the U.S., and more than 90 million worldwide. About 80 percent of US direct sellers are women. The vast majority are independent business people - they are micro-entrepreneurs whose purpose is to sell the product and/or services of the company they voluntarily choose to represent - not employees of the company. Approximately 90 percent of all direct sellers operate their businesses part-time.
Q. Are U.S. direct sales increasing?
A. Direct selling is a robust industry. U.S. sales totaled about $31.6 billion in 2012, with more than 74 percent of the American public having purchased goods or services through direct selling. Worldwide sales are also strong with more than $154 billion in sales.
Q. What products and services are marketed through direct selling?
A. Virtually every consumer product or service can be purchased through direct selling. People who purchase through direct selling cite product quality, uniqueness and money-back guarantees as the top reasons for shopping through direct selling.
Q. What is the difference between direct selling and direct marketing?
A. Direct selling is selling a product or service in either a person-to-person or party plan method. Direct marketing is catalog and telephone sales.
Q. What is the difference between direct selling and multilevel marketing?
A. Direct selling encompasses a variety of distribution methods; multilevel marketing is one type of distribution and compensation method. In a multilevel distribution model products are distributed from one level of distributor to another and compensation is based not only on one's own product sales, but on the product sales of one's downline. Several states, including Georgia, Idaho, Louisiana, Massachusetts, Montana, Nebraska, Oklahoma, South Dakota, Texas, Washington and Wyoming, statutorily define multilevel distribution companies.
Q. How does compensation in a multilevel distribution company work?
A. In a multilevel distribution model products are distributed from one level of distributor to another and compensation is based not only on one's own product sales, but on the product sales of one's downline.
Q. How many direct selling companies are there?
A. It is impossible to estimate the number of direct selling companies operating at any given time. This is a result of several factors. First, most states do not require direct selling companies to register as such. Therefore, no exhaustive list exists. Second, as with any business, many direct selling companies do not thrive in the direct selling market and have a relatively short life span. In fact, many companies may even come and go before they could even be "counted." However, DSA estimates that the sales made by its members account for about 90 percent of all direct sales in the United States.
Q. Who can become a DSA member?
A. DSA is a corporate membership organization. Direct selling companies are admitted to the association following a minimum one-year pending period during which time the company's business plan is reviewed to verify compliance with all provisions of DSA's Code of Ethics. At present, only companies with direct selling operations in the U.S. are eligible for membership. Companies considering beginning direct sales or companies operating only in foreign countries may consider subscriber status or Global Associate Membership, respectively. DSA does not have a membership category for representatives/distributors of direct sales companies.
Q. What are DSA's membership dues?
A. The dues are based on the yearly total of direct sales a company generates. This does not include any retail or catalog sales a company may have, only the direct selling portion of the business.
Q. I am a sales representative with a DSA member company. What benefits does DSA provide for me?
A. As a representative with a DSA member company, you receive the benefit of your company's pledge to abide by the DSA Code of Ethics. You are encouraged to share your affiliation with a DSA member company with all of your customers as DSA membership is a symbol of the highest possible business ethics. You can expect your company to:
- Provide you with legal and accurate information on the company's pay structure, products and sales methods.
- Refrain from any unlawful or unethical recruiting practice and exorbitant entrance or training fees.
- Base all actual and potential sales and earnings claims on documented facts.
- Abstain from encouraging you to purchase more inventory than you can sell in a reasonable amount of time.
- Repurchase 90% of the marketable inventory and sales aids you have purchased within the past 12 months if you decide to leave the business.
- Explain the repurchase option in writing.
Additionally, you may be eligible to participate in DSA's health and liability insurance plans for representatives/distributors of participating DSA member companies. Please contact DSA or your company for information about your company's participation in either of these programs.
Q. What are my responsibilities as a representative/distributor of a DSA member company?
A. As a representative/distributor of a DSA member company, you are responsible for upholding the same high standards of business ethics your company has pledged to uphold, which are embodied in the DSA Code of Ethics. As a sales person, you should always:
- Tell your potential customers who you are, why you're approaching them and what products you are selling.
- Explain how to return a product or cancel an order.
- Respect the privacy of your customers by calling at a time that is convenient for them.
- Promptly end a demonstration or presentation at the request of your customer.
- Provide accurate and truthful information regarding the price, quality, quantity, performance, and availability of your product or service.
- Offer a written receipt in language your customers can understand.
- Provide your name and contact information, as well as the contact information of the company you represent.
- Offer a complete description of any warranty or guarantee.
Q. A representative with another company is trying to recruit me. Does the Code of Ethics address this?
A. Proselyting, the attempt to convert one or more salesforce members from one company to another, is not addressed in the Code of Ethics, but the legality of such activities is a subject of frequent and intense discussion by industry members. DSA has created a set of guidelines that address this question.
Q. What if I feel a DSA member company or representative/distributor has violated the Code of Ethics?
A. If at any time a DSA member company representative/distributor or customer feels that company has violated one or more provisions of the Code of Ethics, the incident should be reported to DSA's independent Code Administrator. The Code Administrator will review the incident in question and prescribe a remedy based on his findings. DSA member companies are required to abide by all rulings made by the Code Administrator to maintain membership in the association. To find out more, visit the Code of Ethics section on our website.
Q. Does DSA offer health insurance for representatives/distributors of DSA member companies?
A. Yes, DSA does offer some insurance plans for representatives/distributors of DSA member companies. To find out more about the coverage available and if your company participates, please contact your salesforce representative at your company or click here to find out more.
Q. I'm considering starting a direct selling company of my own. Where do I start?
A. DSA offers a number of resources for companies considering direct sales. DSA's SmartStart Toolbox (available from the publications page) contains information you need to get started in direct selling. In addition, you may be interested in subscriber status with the association. As a subscriber, you will have access to DSA's legal staff who can keep you up to date on the latest direct selling legal trends. You might also wish to browse through DSA's directory of supplier members who can provide you with services from legal representation and consulting to incentive jewelry and convention services.
considering an opportunity with a company that's not a DSA member. How can I determine if it's a legitimate opportunity?
A. Before taking advantage of any direct selling opportunity, you should read the information on our website regarding how to distinguish a pyramid scheme from a legitimate opportunity.