A concerning trend has emerged in the direct selling space over the past year. Some companies, including Rodan and Fields, are abandoning the network marketing business model and moving to an entirely affiliate model, or a combination retail/affiliate model. Other significant companies, like Beauty Counter, have closed their doors.
Regardless of the business reason driving these decisions, one thing is certain: the leaders who have helped to grow these companies are the ones who are suffering. For those who have spent years building their business with the expectation that they were securing a foundation for their families, this is, in my opinion, the ultimate betrayal. Further, these poor decisions have the potential to create unneeded fear and uncertainty about the channel and what its future looks like.
The truth is that the market dynamics of how people want to shop and work have never been more in our favor. The industry is being challenged to adapt to current times by providing both a stellar customer experience at all touch points as well as offering a compensation plan that aligns to what entrepreneurs are seeking. And from where I sit, this means having a plan that is based not on games, gotchas and situations in which one person wins and another loses—but instead, offers compensation that is transparent and creates an equal starting point for all. There are those who have already or will rise to the occasion and massively increase their market share—and those that will miss it.
Affiliate models are not new or revolutionary. And in direct sales, many companies pay MORE on customer sales than typical affiliate models. For example, Neora currently pays 20-40% to the person making the sale to a new customer. The beautiful thing about the direct sales model is that entrepreneurs can begin earning on their customer sales as soon as they get started and, at any point in their career, they can decide to step into the back-end of the model, where they can build leveraged income and time.
I want to be the first business owner to stand up and go on record that Neora will never leave the multi-level marketing model. We are here to stay and be a part of what I believe will be one of the most exciting, growth-filled chapters of this industry.
For more than 30 years, I have been devoted to building as a business owner and field leader in direct sales. I love the business model. I love the opportunity and the transformation that it can provide.
One can only speculate why companies are making these decisions. It is likely that their business model is broken, and they cannot find a way, or do not have the courage, to fix it.
Successful companies in direct selling have found a new way to operate that rewards customer getters, as well as the business builders—and in doing so have created a world-class customer experience.
What is clear is that some companies are dedicated to growing within the model and sharing with the distributors that helped them build the business, and others are focused on maximizing profits for their owners and investors, many of whom have no experience in the industry.
Neora President Amber Olson Rourke shared a powerful State of the Union last night on the future of direct sales. I encourage you to listen, and for all of us to join together to be a light in our communities, teams, and companies in showing the world what the direct sales space of the future looks like. Let’s lead together with transparency, integrity, and heart.
One Response
So grateful to Mr. Jeff Olson for standing up to protect our team commissions and the right to build a solid business! It has been an incredible journey over the past 12 years as part of his company and I know we are just getting started!!