Tuesday , April 16 2024
Understanding the Realities of Direct Selling

Understanding the Realities of Direct Selling

By Biram Fall

In a region where traditional job markets can be limited, direct selling offers a flexible and accessible pathway to entrepreneurship. In the traditional retail model, shop owners buy goods from manufacturers and mark them up to pay for their business costs such as rent, before selling them on to the end consumer. In the direct selling model, distributors sell high-quality goods directly to the customers outside of the store environment, reducing business costs and eliminating the need to raise prices on their goods.

In addition to providing unique, life-enhancing products to consumers, the direct selling industry has had a significant impact on Sub-Saharan economies. According to the World Federation of Direct Selling Associations annual report, the region’s direct selling market was valued at USD627 million in 2021, with over 5.4 million distributors actively participating in entrepreneurial activities that generate household income and contribute to the broader economy.

The Good, the Bad, and the Truth on Direct Selling

One of the primary reasons individuals are joining direct selling is because it allows them to start businesses with minimal upfront investment and no formal education requirements. Not only are new distributors able to start their business efficiently, but they also have the opportunity to gain valuable skills through free training sessions, workshops, and conferences where they can improve their sales techniques, soft skills, and leadership abilities.

This opens doors for those with limited resources or who face barriers to traditional employment, such as stay-at-home parents or individuals in underserved communities. Because of the low barrier to entry and support resources many direct selling companies offer, many people can generate additional income, build social networks, and develop essential business and life skills by becoming distributors.

Also Read: QNET Launches Direct Selling Disinformation Centre

For instance, the flexible earning opportunities benefit the stay-at-home spouse through joining a direct selling company, choosing products to sell, and earning commissions or profits based on their sales volume. With the flexibility to manage their own schedule, they can balance household responsibilities while actively promoting and selling products. The income generated supplements household finances, helping to meet expenses, save, and achieve personal goals. Additionally, direct selling offers training and support, enabling individuals to develop valuable sales and entrepreneurial skills.

In addition to benefiting local entrepreneurs, direct selling companies offer an extensive portfolio of goods, including innovative beauty and wellness products, eco-friendly household items, exclusive lifestyle items and accessories, nutritional supplements, and much more to customers. These products are frequently developed in-house or incorporate proprietary ingredients and formulas that are unique in the market.

While the industry has improved the lives of many, it also faces legitimate criticisms – especially in emerging markets that have little or no exposure to this type of sales model.

Africa has often been called the new frontier of growth for the direct selling industry with the region experiencing one of the highest three-year CAGR at 6%. Yet, in many African nations, legitimate direct selling businesses are often misunderstood as illegitimate schemes due to lack of awareness and relevant legislation.

The lack of industry regulatory bodies, such as a direct selling association whose mission is to provide education about the business model, has resulted in an insufficient legal definition of the industry and serious misunderstandings among authorities and the public. One common misconception is that it is a pyramid scheme or get-rich-quick fraud. Some critics point out that certain dishonest entities, many of whom masquerade as direct selling companies, have violated the laws by making exaggerated revenue promises, pressuring sales representatives to purchase products, and using unethical marketing strategies.

These issues affect the direct selling industry worldwide, and Sub-Saharan Africa is no exception, making it harder for legitimate organisations to attract and retain distributors and customers.

Despite the challenges, many direct selling companies are determined to change the industry’s image in Sub-Saharan Africa. The largest organisation representing the global direct selling industry, the World Federation of Direct Selling Associations (WFDSA), published an official Code of Ethics governing the actions of direct selling companies and their responsibilities towards ensuring fair competition and operating according to local customer protection laws – a toolkit that direct selling companies adhere to worldwide.

For businesses such as QNET, a lifestyle and wellness-focused direct selling company, implementing more robust procedures, such as regular training and monitoring of distributors’ activities to ensure adherence to sales practices, product sales and compensation claims, and product safety regulations, is a crucial component to addressing the misconceptions about direct selling. For example, training programmes, such as QNETPro, help educate, inform, and train distributors on how direct selling works, QNET’s product portfolio, and compensation plans.

Direct selling companies can improve transparency by providing clear and accurate compensation plans and product pricing information to governments, legislative bodies, distributors, and customers to combat misinformation regarding the industry. Creating and maintaining freely accessible resources, such as the WFDSA website and the Direct Selling Disinformation Centre, are positive steps towards shifting the public’s perspective on direct selling, and help local communities benefit from this industry.

The Way Forward

Direct selling in Sub-Saharan Africa has emerged as a significant driver of alternative employment opportunities and economic empowerment, while also providing customers with unique and diverse products. The industry has successfully enabled individuals, including those with limited resources, to start their own businesses and generate income, fostering entrepreneurship and skill development.

However, direct selling faces challenges in the region, including misconceptions, regulatory gaps, and fraudulent entities. To overcome these obstacles, direct selling companies are taking proactive measures, such as adhering to codes of ethics, implementing training programs, and enhancing transparency. By educating the public, engaging with regulatory bodies, and providing accessible resources, the industry aims to transform the narrative and highlight the positive impact of direct selling in Sub-Saharan Africa, empowering individuals and contributing to local economies.

 

 

Bio – Biram Fall

Biram Fall is a well-rounded business leader with about 30 years work experience spanning critical spheres of business development and management.

Mr. Fall started his career at Citibank in New York City in the United States as an Economist and Financial Analyst. As a resilient and result-oriented professional, he worked at Citibank and other leading organisations, helping deliver value, meeting and exceeding set-targets. His professional journey is always on the upward trajectory, rising through the ranks into senior management and other strategic positions.

Currently, Mr. Fall is QNET’s Regional General Manager (RGM) for sub-Saharan Africa (SSA) managing a challenging, diverse but highly promising African business turf for the global wellness and lifestyle Company. He has vast experience in stakeholder management and government relations. He believes and ensures that every stakeholder in a business’ spectrum is well mapped and adequately engaged.

He is passionate about the development of young Africans and their ability in ushering Africa into the much-anticipated dispensation of prosperity and effective leadership.

Biram is an avid lover of visual arts and his gaze glimmers in geopolitics.

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