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January 02, 2011

Regional Contributors

Can Direct Selling Help the Irish Economy?

by Roger Brown

Roger BrownAFTER hearing the details of the much-anticipated Irish ‘bail-out’ by the EU, it’s doubtful the economic situation here will see much improvement over the next few months and into the coming year.

There is a sense of foreboding at every level, with a rumoured €70 billion deficit and 13 per cent unemployment, which harks back to the early 90s before the birth of the ‘Celtic Tiger.’

Compare these figures to those reflected in the last annual survey of the Direct Selling Association of Ireland (DSAI), which showed an increase of almost 7 per cent in the total number of people engaged in this kind of occupation… Agents, Representatives, Distributors, Consultants and so on.

With around 16,000 people involved in direct selling, DSAI member companies report sales growth of up to13 per cent over the same period, with combined turnover reaching €60 million. These are positive figures when seen against a reported decline of 7.6 per cent in GDP (source: National Treasury Management Agency).

Experience shows that direct selling as an industry benefits from an economic downturn as long as companies can adapt accordingly. More people are clearly looking for a new source of income, and in the past 12 months there have been some outstanding figures reported in Ireland.

Andy Smith, Chairman of the DSAI and Country Manager of Amway UK and Ireland, reports an amazing 30 per cent increase in recruitment, with a substantial increase in sales from their new customers. About 90 per cent of this increase comes from eastern Europeans now living in Ireland – a new and dynamic source of potential recruitment that has been noted by many other companies.

Barbara Mieczkowska swapped a full-time job in customer service to become an Authorised Independent Avon Business Developer in 2009 and leads a team of more than 100 independent Avon sales Representatives. About half of her team are foreign nationals who became familiar with the Avon brand when still in their home countries. While most of them are of Polish origin (like Barbara herself), they also come from the Czech Republic, Latvia, Brazil, Thailand and even Mauritius.

“Of course, it is easier to appoint a new Representative if they know and love the brand from home, but everyone is different and has their own reason for joining,” she said.

Gavin Aley from Herbalife, Country Director UK and Ireland, also reports ‘double digit growth in recruitment with healthy sales’ while Bill Crymble of Forever Living Products reports an upswing of more than 20 per cent, with an 18 per cent sales increase.

These results confirm that opportunities for expansion are ripe in direct selling, although it must also be acknowledged that consumer depression may inevitably lead to less spending power.

For companies who have not yet discovered what some call the ‘green secret’ and are yet to consider adding Ireland to their market portfolio, now really is the time to get their Distributor base in place to capitalise on current conditions and be ready for growth once the economy starts to recover… the tiger may yet recover its roar!

Roger Brown is Secretary General of the Direct Selling Association of Ireland and principal of marketing consultancy Roger Brown Associates. A former schoolteacher, he joined the toy industry and became sales and marketing director for Mettoy. In 1987, he joined Avon to head their children’s business, and in 1994 led the company’s market entry into Ireland, where he served as General Manager until 2003.