Archive for 2017

Direct Selling as a Business Opportunity in the New Economy 

Direct Selling as a Business Opportunity in the New Economy 

Nearly a quarter of all Americans earned money from part-time “gigs” over the past year, reports CNN Money. Millennials are more likely to have a side hustle than any other age group, and universities, seeing a decline in corporate opportunities for graduating seniors, are exposing millennials to part-time business opportunities in classrooms across the nation. “Direct selling should be included in class discussions about the sharing economy,” says DSEF’s 2017 Educator of the Year, Dr. Brenda Cude, Professor and Undergraduate Coordinator at the University of Georgia (UGA). “DSEF campus events are a great way to educate students about direct selling companies and their independent salesforce.”

DSEF partnered with Dr. Cude to host the “Direct Selling as a Business Opportunity” campus event on October 18, during FACS Week, the signature event of UGA’s College of Family and Consumer Sciences (FACS) that celebrates communities, academic excellence and the future of families. Executives from leading direct selling companies were invited to explore topics on ethical business practices, direct selling as a side hustle and social responsibility with nearly 1,000 students at UGA and Athens Technical College throughout the day.

Unlike most income-earning opportunities in the gig economy, direct selling offers several distinct advantages to independent contractors.

In many companies, direct sellers serve not only as entrepreneurs, but intrapreneurs, who provide solutions to company leaders that enable course corrections. “I have a council of creative partners who provide feedback on products, sales campaigns and new team members, says Britney Vickery, CEO and Founder of Initials, Inc. “As I grow my team, it’s all about what we can do together. That’s the power of direct selling.”

Direct selling also offers opportunities for people to invest their time in social causes. Millennials, in particular, want work with a purpose, according to Deloitte’s 2017 Millennial Survey. Karin Mayr, CEO and Founder of Sabika, Inc. shared her company’s remarkable story of partnering with its jewelry consultants on two social causes – Breast Cancer Research and ChildLaw Services to assist abused children. For the past seven years, Sabika consultants have raised $1.7 million for breast cancer research through product sales and commission donations, which the company matches dollar-for-dollar. “I wanted to connect women from all walks of life. We chose direct selling because it enables us to do that,” says Karin.

Moreover, direct selling affords micro-entrepreneurs business support that most side hustles do not. “In direct selling, you work for yourself, but not by yourself,” says Dave Merriman, Executive Vice President of ACN, Inc, a telecommunications and energy services provider. “You run your business, manage your costs, build and train your team, but the company creates training tools and provides websites for each independent business operator.”

Furthermore, start-up and overhead costs are minimal for independent contractors, based on the provisions of DSA’s Code of Ethics. Konrad Mayr, Special Advisor to Sabika, explains. “At Sabika, we have a trunk show system. Consultants place orders for display products for their home parties and send any unused items back. We don’t require our consultants to hold inventory. The risk is ours to manage.”

In addition to providing students with a real-world view of direct selling as a business opportunity, the event inspired future entrepreneurs to believe in themselves and their business ideas. “When I started Initials, Inc., I was told by an investor to go home and be with my kids,” says Britney. “My advice is that you can’t listen to naysayers; you have to buck up and go do it. When it’s your idea, you can see farther than anyone.”

DSEF Welcomes Its Newest Fellows

DSEF Welcomes Its Newest Fellows

DSEF’s academic partnerships serve to inform and educate students – highlighting direct selling as a go-to-market strategy and pathway to entrepreneurship and micro-entrepreneurship.

DSEF warmly welcomes our newest Fellows:

Dr. Honghui Deng
Associate Professor of Business Administration
University of Nevada

Dr. Nawar N. Chaker
Assistant Professor of Marketing
Elon University

Dr. Ronald E. Michaels
Professor & Chair, Department of Marketing
University of Central Florida

Dr. Kacy Kim
Assistant Professor of Marketing
Elon University

Dr. Ramarao Desiraju
Professor of Marketing
University of Central Florida

Dr. Mark Bergen
Associate Dean, James D. Watkins Chair in Marketing
University of Minnesota

Mary Hunt
Assistant Professor of Business & Psychology, Internship Coordinator

Dr. James Lynch
Associate Professor of Management and Law
Brooklyn College

Dr. Annie Liu
Associate Professor, Marketing
Texas State University

Dr. Angeline Close Scheinbaum
Associate Professor, Advertising & Public Relations
University of Texas at Austin

Ms. Heather Cooper Bisalski
Instructor of Management
Dalton State College

Dr. Kaustav Misra
Chair and Associate Professor of Economics
Saginaw Valley State University

Ms. Wendy Plant
Director, Center for Student Engagement
Jim Moran School of Entrepreneurship
Florida State University

DSEF and USASBE Announce Call for Papers

DSEF and USASBE Announce Call for Papers

DSEF, in partnership with the U.S. Association of Small Business’s (USASBE’s) Minority and Women Entrepreneurship SIG, is pleased to announce a 2017 Call for Papers. Winners of each of the six categories will receive $1,000 and an opportunity to participate in one of three annual industry conferences (U.S. domestic travel reimbursed). To submit an entry, please email an electronic copy directly to USASBE. Use the conference submission site at https://www.softconf.com/i/usasbe2018/.

Submissions must follow the guidelines set forth by USASBE for competitive papers.  They must be typed in 12-point font and no more than 30 pages in length. All submissions must include:

  • An academic abstract (no more than 100 words)
  • An executive summary (no more than 300 words). The executive summary should include a synopsis of the central thesis, methodology, findings, how the author’s work contributes to the advancement of direct selling and entrepreneurship and how the findings can be implemented.
  • Fully developed paper (not developmental)
  • Winning papers must be presented at the USASBE conference in Los Angeles during January 2018.

Key Dates

Submissions Accepted: May 15 to October 15, 2017.
Proceedings Due: December 15, 2017.

Recommended Topics

Direct Selling Entrepreneurship among Underserved Populations: Direct selling offers people of all backgrounds an opportunity to launch independent businesses in any product or service sector, with the intention of empowering millions of would-be entrepreneurs who left out of the mainstream economy through factors such as inability to access higher education, prohibitive job training costs, and challenges in adhering to fixed employment schedules due to family or other commitments. Topics may include, but are not limited to the following communities/demographic groups: military spouses/personnel, veterans, minorities (African-American, Hispanic), rural residents, and women.

Direct Sellers as Intrapreneurs and Entrepreneurs: Corporations are investing in innovation and record levels and have begun to focus on building core competencies around innovation and intrapreneurship. Direct selling companies are uniquely positioned to receive immediate feedback from their independent salesforces – that serve as both intrapreneurs and entrepreneurs – to generate faster problem-solving, innovation and competitive advantage.

Ethics in Entrepreneurship: The direct selling industry has a long history of protecting direct selling entrepreneurs and their customers through self-regulation.  This differs from gig economy companies (Uber). All Direct Selling Association (DSA) member companies are required to adhere to a Code of Ethics as a condition of membership. Companies go beyond the Codes to provide ethics training for their salesforce.

Entrepreneurship Comparison – Direct Selling, Etsy, Start-ups: Direct selling companies create the products and brands, conduct R&D, implement compensation plans, manage IT systems, track inventory, provide customer service through call centers, maintain quality controls, ship, and provide a royalty-free platform for marketing sellers’ independent businesses.  All of these empower would-be entrepreneurs to build a business and learn valuable business skills for the cost of a start-up kit (average cost: $100).

Direct Selling Company Case Studies:  The stories of and decisions facing direct selling companies can provide excellent material for case studies.  The founders have identified opportunities in compelling ways, made strategic decisions, and faced numerous challenges.
 
Social Entrepreneurship:  Many direct selling companies make social entrepreneurship a foundational component of their business model. Independent contractors are drawn not just to the entrepreneurial opportunity and products, but to companies’ philanthropic efforts, which are often tied to product sales.

About DSEF

The purpose of the Direct Selling Education Foundation is to engage, equip and empower educators to provide students with an accurate understanding of the direct selling industry as a powerful go-to-market strategy, distribution model and entrepreneurial option, and to teach the correct principles of direct selling, with an emphasis on ethical business practices.

DSEF partners with members of the academic community to support research and education programs that expand knowledge and understanding of the fundamental principles of direct selling. The Foundation works with professors in a variety of disciplines—including entrepreneurship, marketing, ethics, business and economics—to deliver multi-faceted programming aimed directly at the contemporary issues facing direct selling companies and consumers in a global marketplace. DSEF also sponsors campus programs to help students and faculty better understand direct selling as an industry, a channel of distribution and a pathway to entrepreneurship, and to introduce them to career opportunities at direct selling company corporate headquarters. We also sponsor and support various events, projects and initiatives, like campus events, to further support our overall mission: DSEF engages and educates the public about how direct selling empowers individuals, supports communities and strengthens economies worldwide.

About Direct Selling

Direct selling is a retail channel used by top global brands and smaller, entrepreneurial companies to market products and services to consumers. Companies market all types of goods and services, including jewelry, cookware, nutritionals, cosmetics, housewares, energy and insurance, and much more.

The direct selling channel differs from broader retail in an important way. It isn’t only about getting great products and services into consumers’ hands. It’s also an avenue where entrepreneurial-minded Americans can work independently to build a business with low start-up and overhead costs.

Direct selling consultants work on their own, but affiliate with a company that uses the channel, retaining the freedom to run a business on their own terms. Consultants forge strong personal relationships with prospective customers, primarily through face-to-face discussions and demonstrations. In this age of social networking, direct selling is a go-to market strategy that, for many companies and product lines, may be more effective than traditional advertising or securing premium shelf space.

DSEF Welcomes Its Newest Fellows

DSEF Welcomes Its Newest Fellows

DSEF’s academic partnerships serve to inform and educate students – highlighting direct selling as a go-to-market strategy and pathway to entrepreneurship and micro-entrepreneurship. DSEF has partnered with more than 75 professors over the past year, and is making significant process toward mainstreaming the channel on college campuses across the country.

DSEF will continue creating partnerships within the academic community by reaching 200 DSEF Fellows by 2019 and expanding student reach to promote deeper knowledge of direct selling as a legitimate channel of distribution and path to entrepreneurship. We are excited to welcome our newest Fellows:

Dr. Mark Bergen
Associate Dean, James D. Watkins Chair in Marketing
University of Minnesota

Dr. Nawar N. Chaker
Assistant Professor of Marketing
Elon University

Dr. Angeline Close Scheinbaum
Associate Professor
University of Texas at Austin

Dr. Honghui Deng
Professor of Business Administration, IC2 Fellow
University of Nevada, Las Vegas

Dr. Ramarao Desuraju
Professor of Marketing
University of Central Florida

Mary Hunt (PhD candidate)
Assistant Professor of Business & Psychology, Internship Coordinator
Ave Maria University

Dr. Kacy Kim
Assistant Professor of Marketing
Elon University

Dr. Annie Liu
Associate Professor of Marketing
Texas State University

Dr. James Lynch
Associate Professor of Management and Law
Brooklyn College

Dr. Ronald Michaels
Professor of Marketing
University of Central Florida

U. N. Umesh
Professor of Marketing
Washington State University Vancouver

Cutting Out the Middle Man: New Video

Cutting Out the Middle Man: New Video

DSEF recently released its newest video teaching tool, The Direct Selling Business Model: Cutting Out the Middle Man.

The new video was filmed live at the University of Texas at Arlington during DSEF’s Business Ethics Forum Campus Event. Al Bala, President and CEO of Mannatech, explains the direct selling business model in a way that business students and entrepreneurs can understand. “Eighty percent of the cost of a product in normal retail channel is in distribution. A large percentage of that is spent on advertising. Direct selling cuts out the middle man by redistributing the costs of advertising and distribution to pay independent contractors.” says Al.

The video was distributed to DSEF Fellows and is designed to be used both by direct selling companies and easily incorporated into a variety of university and community college courses, such as:

  • marketing classes
  • distribution channels courses
  • sales classes
  • entrepreneurship classes
  • management, communications and ethics/reputation courses

DSEF’s growing bank of video content also includes the Ask the Experts series, which may be viewed on our Vimeo channel.

DSEF-Funded Research Wins Best Paper Award

DSEF-Funded Research Wins Best Paper Award

At the 2017 Global Sales Science Institute (GSSI) Conference held in Mauritius in June, Julian Allendorf (Ph.D. Candidate, Institute of Marketing, University of Muenster, Germany) received the GSSI 2017 Best Doctoral Student Paper Award for his paper on “Direct Selling Distributors – Why Do They Stay or Leave!”, developed through a grant and data provided by DSEF. The prize-winning paper is based on Allendorf’s joint work with DSEF Fellows Dr. Anne T. Coughlan, PhD (Northwestern University) and Dr. Manfred Krafft (University of Muenster, Germany), and demonstrates how DSEF ‘s academic partners are producing data-driven research that validates the channel. The award was presented to Manfred Krafft by the President of the island nation of Mauritius, Ameenah Firdaus Gurib-Fakim, during a conference reception on June 8.

“Being awarded the GSSI Best Doctoral Student Paper Award for the work we have done so far feels like a great honor to us and provides the motivation for future endeavors,” said Allendorf.

In their joint research, the authors highlight similarities and differences between traditional sales and direct selling, and build on Agency Theory to develop predictions about the ways in which individuals stay in the direct selling distributorship, and what explains their intention to leave.

The authors analyzed a unique dataset of over 13,000 individual direct-selling distributors from 68 firms and asked the the “nature vs. nurture” question: does a “stayer” retain the same motivations as a “joiner,” or do distributors develop and change their motivations over time? Nurture doesn’t refer only to environment. Joiner-Stayers do indeed receive support and training from their companies and uplines, but they also learn about themselves (personal development).

The Stay-Leave decision is represented by the question, “How likely are you to continue representing the company for the next year?” Dr. Coughlan and Dr. Krafft used regression analysis to determine which factors are most likely to have a positive or negative impact on the decision to stay versus the decision to leave.

The drivers of income identified in the study, also called predictor variables, are consistent with those used in academic research and the long history of research on selling. The incremental effect, in dollars, of a change in a predicted variable – either positive or negative – is explained in the study. All effects assume that other drivers are held constant and should be interpreted for changes on the margin.

The results are consistent with the authors’ modified Agency Theory model and suggest academic, managerial and policy implications regarding direct selling investments and assessments.

Twenty-Five DSEF Fellows Attend DSA’s Annual Meeting; Several Present Research on Direct Selling Channel

Twenty-Five DSEF Fellows Attend DSA’s Annual Meeting; Several Present Research on Direct Selling Channel

The 2016 formation of the DSEF Fellows program is an important step in deepening the Foundation’s connection to academic leaders who advance knowledge of the direct selling channel in their field of study. To support and sustain these important partnerships, DSEF created Fellows Learning Journeys – a pathway for exploration and discovery through immersive experiences with executive leadership and staff – for Fellows participating in DSA’s Annual Meeting.

“I appreciated the opportunity to attend the Direct Selling Association’s Annual Meeting as a DSEF Fellow,” says Dr. Andy Gold, Business Administration and Entrepreneurship Professor, Hillsborough Community College.  “It was a unique opportunity to learn about this complex and growing marketing channel. The insights from the Annual Meeting and keynote speakers will certainly help inform my students about this channel.”

The Fellows Learning Journey began with the Direct Selling Boot Camp, which provided academics with a comprehensive understanding of the business challenges that new direct selling companies face, and continued with a DSEF Fellows Workshop, in which Fellows shared their direct selling white papers and teaching successes with incoming Fellows.

Fellows also participated in networking and education tracks throughout the conference. “Throughout the Boot Camp and Annual Meeting, I saw countless examples of leaders doing the right thing, both for their companies and for their representatives,” says Dr. Bonnie Canziani, Associate Professor, Marketing, Entrepreneurship, Hospitality & Tourism Department; Coleman Fellow in Entrepreneurship at University of North Carolina at Greensboro (UNCG).

DSEF invests in dynamic partnerships with leading academics, who bring short-term impact through research and data-driven third-party validation for the channel. Seven Fellows highlighted recent and upcoming research during three business intelligence panels for executive attendees.

“It was wonderful to receive instant validation of our research from people who are living the reality of direct selling and entrepreneurship every day,” says Dr. Canziani, who co-presented with Dr. Dianne Welsh (UNCG) research comparing satisfaction rates among franchisees and direct sellers. “Our findings suggest that being aware of the field’s needs for flexibility and recognition is an important step in keeping sellers interested and motivated to maintain connections with their companies.”

DSEF Presents First Educator of the Year Award to Dr. Brenda Cude of UGA

DSEF Presents First Educator of the Year Award to Dr. Brenda Cude of UGA

To recognize the significant contributions and achievements of its valued academic partners, the Direct Selling Education Foundation created the Educator of the Year award, and presented the inaugural award to Dr. Brenda Cude, University of Georgia (UGA), during the Awards Gala, at the Annual Meeting held in Orlando in June.

“I was incredibly surprised and honored by this recognition,” says Dr. Cude, who serves as Professor and Undergraduate Coordinator at UGA’s College of Family and Consumer Sciences. “Serving as a member of the DSEF Board has been a great experience, and I appreciate DSEF’s support of educational programs to expand students’ knowledge of direct selling.”

Recipients of DSEF’s Educator of the Year Award demonstrate outstanding service to the Foundation through leadership, personal involvement, teaching and research.

“Brenda served two terms on DSEF’s Board of Directors, and has made immeasurable contributions as a strategic and tactical advisor to the Foundation’s Academic Advisory Council.” said Gary Huggins, DSEF Executive Director. “Brenda has also hosted multiple DSEF Campus Events, reaching thousands of students with accurate information about the direct selling channel and the industry’s commitment to ethics.”

People First: Social Entrepreneurship in the Real World

People First: Social Entrepreneurship in the Real World

Social entrepreneurship and corporate social responsibility are twin drivers of positive social change. Direct selling companies and the independent salespeople that represent them are a quintessential example of the power of networks as a force for social good. The Direct Selling Education Foundation (DSEF) shared that message with 300 students at the University of San Francisco during the “Putting People First: Changing the Way We Do Business” campus event on March 2.

DSEF’s “Changing the Way We Do Business” event, which also featured business innovation in the classroom, was conceived by DSEF Board Member, Dr. Elizabeth Davis, Dean of the USF School of Management and Dr. Peggy Takahashi, Associate Dean of Undergraduate Programs. The DSEF event kicked off USF’s Social Entrepreneurship and Innovation Conference and Tech4Good Startup Weekend, which brought together business leaders, investors and social entrepreneurs to discuss how socially-conscious action, innovation and education can change the world.

Shaklee Chairman and CEO Roger Barnett and Trades of Hope Founder Chelsie Antos shared their companies’ remarkable stories of service, social entrepreneurship and sustainability on panel moderated by Executive Advisor, Retired President and CEO and USF’s Executive-in-Residence Lori Bush. Many US companies have Corporate Social Responsibility programs in place, but direct selling companies are in a unique position to scale those efforts through their independent salesforce. “Wangari Maathai, founder of the Green Belt Movement and Nobel Peace Prize winner, challenged me to plant one million trees.” says Roger. “At the time, Shaklee had 700,000 direct sellers. I realized that if each person planted one tree, that’s nearly three-quarters of our goal.”

Sales networks can serve as a powerful catalyst for social change.

Trades of Hope’s hand-made jewelry is fairly-traded with women artisans in developing countries, which are then sold through “Compassionate Entrepreneurs” – or direct sellers – in the United States. “When you empower one person out of poverty, they bring three people with them,” says Chelsie. “42,000 people in developing nations are being positively impacted by the work these artisans are doing in their communities,” supported by the sale of these products by direct sellers, who can build businesses of their own.

Social entrepreneurship is also a market disruptor, given the right circumstances.

Ruby Ribbon, a shapewear company that sells products through home parties known as “Trunk Shows,” is using social entrepreneurship and innovative garment technology to disrupt the shapewear market and radically change consumer experience. Market disruption occurs when a smaller company with fewer resources is able to successfully challenge an established industry. “Our investors told us there was no way women would try on shapewear in other people’s homes,” says Ruby Ribbon Founder and CEO Anna Zornosa, “but our customers benefit from being professionally fitted by our Stylists,” in a private, rather than public, space.

Exposure to direct selling companies as real-world businesses changes hearts and minds of students and faculty. “I was impressed with the companies that visited USF,” says Dr. Sonya Poole, “DSEF’s program shifted my perception and understanding of the direct selling business model.” Dr. Vanessa Hasse echoed that sentiment, “My students shared their thoughts about the presentations and they all loved it. It was an enriching classroom experience.”