July 31, 2016
5 Ways Third-Party APIs Are Reshaping the Direct Selling Industry
by Bill Crowley
Over the past decade, rapid developments in technology have fundamentally changed how direct selling organizations operate. From mobile apps to social media, digital tools have given companies new ways to connect with their customers and deliver better experiences to their distributors. But there’s one particular area of technological advancement that has yet to receive the attention it deserves from the direct selling community: It’s the API, and it’s going to change the way your direct selling organization does business.
Application programming interfaces, better known as APIs, are essentially sets of rules and protocols that dictate how one piece of software can communicate with another. APIs are the interface by which one program can command another to perform specific tasks, exposing pieces of its functionality for use by other applications. In itself that’s not particularly interesting, but new developments in cloud computing have made these connections between applications faster and easier to implement—and now they’re taking the tech world by storm.
Recently, a number of big-name platform providers like Facebook and Uber have exposed their APIs to the public, opening the doors for developers to plug their functionality into both new and existing applications. Think about the apps on your smartphone. Many have social media integration through Facebook and Twitter APIs. This makes it easy and seamless for you, as a user, to follow social feeds and share content to your profile without switching between apps. Other apps have integrated the Google Maps API to help users locate nearby restaurants, or use the Google Calendar API to quickly record event information to your Google account. Because developers don’t have to spend time building these services themselves, they’re able to deliver highly functional and frictionless experiences within their mobile apps in a fraction of the time it would have previously taken.
Enterprise APIs Are on the Rise
Of course, the trend toward APIs isn’t limited to social media and selfie sharing. A growing number of enterprise software systems are now seamlessly “talking” to each other through API calls and modular integrations. The motivation is simple: Developers have realized that much of the functionality they thought they needed to build into their software and/or apps is redundant as a result of what’s already been developed by other companies. Rather than reinventing the wheel, these companies are choosing to partner, tying into the pre-existing functionality they need through open and accessible APIs.
This shift is hitting many industries, and direct selling is no exception. Consider all of the behind-the-scenes operations and functions that are vital to keeping a direct selling organization on its feet: customer relationship management, enrollment, order processing and tracking, lineage management, reporting, inventory management, inbound payments, commission payouts, data analysis—it goes on and on. Traditionally, direct selling companies have had to tackle these processes on their own or rely on a collection of third-party software systems. Now they have another option: API integrations.
But why should companies opt for APIs over their existing software solutions? Below are five huge benefits of third-party APIs to direct selling organizations like yours.
No. 1: An Integrated Ecosystem
Given all of the operational processes listed above, it’s not surprising that companies often need to redirect their distributors outside of the corporate ecosystem to perform certain functions through a third-party provider. For instance, a direct selling organization might outsource their commission payments to a payments provider that only allows distributors to change their account settings or manage their earnings through a separate online portal. Some companies may not see that as an issue; others, though, will feel that it impedes distributor efficiency and ultimately dilutes the brand.
With API technology, companies can pull that kind of third-party functionality into their own application. In the above example, rather than sending distributors to a separate online portal or app environment, the direct selling organization could integrate third-party payment technology directly into their native application, allowing users to collect their commissions without ever leaving the app. Before API connectivity, the company would have had to build all of this payment functionality in-house. Now, direct selling companies can simply integrate with their commission payment provider’s APIs to create an integrated ecosystem within their application. As a result, distributors can easily manage their earnings without ever leaving the company’s digital space, providing a more fluid and efficient independent business experience.
No. 2: Improved Functionality
Third-party APIs give direct selling companies access to a far broader range of functionality than traditional software solutions. To give an idea, ProgrammableWeb maintains a repository of more than 15,000 APIs that are available to developers, including thousands categorized for enterprise users. Rather than settling just for the functionality available through rigid enterprise software, savvy direct selling companies can integrate unique capabilities into their applications through third-party APIs.
No. 3: Fast and Flexible Implementation
Traditional enterprise software systems come with a unique set of challenges. For one, introducing them into a direct selling business is often an ordeal, as the company will need to migrate existing operations and processes onto a new platform. Secondly, customizing these out-of-the-box solutions to suit an organization’s unique needs is extremely difficult—if not outright impossible—meaning that companies often end up paying for functionality that they have no use for.
API technology alleviates both of these issues. Once a direct selling platform is equipped to connect with APIs, adding and removing functionality requires minimal effort. And because API-based SaaS (Software as a Service) suppliers typically break their functionality into smaller microservices, companies can integrate just the functionality that they actually need.
No. 4: Reduced Compliance Risks
When direct selling companies keep certain operational processes in-house, it can expose them to unnecessary administrative and security challenges. To draw on an earlier example, consider the process of commission payments, which—in order to conform with compliance regulations—requires that direct selling organizations store sensitive distributor information: Social Security numbers, banking information, and so on. Of course, handling this data requires that companies take the necessary security precautions to mitigate the associated risks. In contrast, API integration allows direct selling organizations to host these processes in their digital ecosystem without ever handling certain sensitive information—it can be routed to, and managed by, the appropriate third-party provider.
No. 5: Powerful Mobile Apps
Mobile technology is improving every year, but our smartphones still have a finite amount of processing power and storage space. Instead of straining these limited resources, app developers are increasingly relying on third-party integrations to do most of the heavy lifting. With APIs, direct selling organizations can develop mobile apps that simply request and display information processed by a third-party host, dramatically reducing the storage space and processing power required to run the app. As a result, companies can deliver a range of independent business management and sales tools to a single, unified mobile interface.
APIs Are the Future
Consider the tremendous technological changes that have impacted the direct selling industry in recent years. Interactions that previously took place in person are now happening over social media. Training has gone mobile. Data processing has moved into the cloud. Make no mistake: APIs are the future. And, given the tremendous benefits that come with third-party API integrations—improved efficiency, greater functionality, reduced cost—it should come as no surprise that this is the direction enterprises and software vendors are trending.
Bill Crowley is Chief Product Officer at Hyperwallet, a global payout platform specializing in commission distribution. Crowley has more than 15 years of experience building forward-thinking payment solutions for the direct selling industry.