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April 01, 2012

Cover Story

Direct Selling’s Billion Dollar Markets

by Marilynn Hood

WFDSA—Working to Improve Statistical Reporting

WFDSA—Working to Improve Statistical Reporting

For serious researchers, statistics provide a good starting point. However, it’s always a good idea to delve deeper and understand how the numbers are derived. Ross Creber, President of the Direct Sellers Association of Canada, emphasizes just how important it is to understand what a given statistic actually represents.

“We probably created more excitement than we should have,” Creber says about Canada’s hefty increase in retail sales within the industry. He then went on to explain that the numbers reported to the WFDSA most recently were those from a socio-economic impact study done on the direct selling industry in Canada back in 2010. This data was on the entire industry, as opposed to data from only DSA member companies, as had been reported in 2009 and prior years. “That’s what has created these numbers,” he says. “It’s distorted from what we had been presenting in the past.”

The WFDSA has created a new Global Research Sub-Committee so that the data collection process of direct selling statistics can be standardized around the world

Indeed, when some countries provide data on their entire market, while others provide data only on DSA member companies, an apples-to-apples comparison among countries cannot be made. The WFDSA has Global Research Sub-Committee to address this issue so that the data collection process can be standardized around the world. Judy Jones, who serves as Chair of this WFDSA sub-committee and also of the United States DSA Industry Research Committee as well as Insights Lead, Consumer & Market Insights for Amway, notes that the data year-to-year will not be strictly comparable until the new process is completely implemented.

Jones goes on to explain why implementing this standardized process to include entire markets is so important to the direct selling industry and how they plan to do it:

“The direct selling industry must present credible statistics in order to be viewed as a serious industry,” Jones says. “Statistics form the basis for the story of direct selling and why it is such a powerful engine of opportunity. And this story is used for government affairs purposes, to ensure that new legislation and regulations relating to direct selling actually protect consumers and company distributors, while not being restrictive.

“The direct selling industry must present credible statistics in order to be viewed as a serious industry.”

—Judy Jones, Chair, WFDSA Global Research Sub-Committee

“As well, when journalists wonder about the direct selling ‘opportunity engine,’ it is again statistics that are used to tell the story at the global, regional and local country levels for these media relations purposes,” she continues.

“Finally, direct selling statistics can be highly useful at the individual company level, providing a benchmark against which any one company’s performance can be measured.

“By way of process, we collect company data from all the member companies of DSAs around the world, in over 60 countries,” Jones says. “We have a 2012 goal of 100 percent participation from all member companies. In addition, this year our goal is to size the entire industry beyond just member companies, and to do so we have a group of professional researchers from Avon, Mary Kay, Natura, Tahitian Noni, Amway and Seldia (the European Direct Selling Association) on our research sub-committee. This team will apply their expertise to research the sales of non-members of the direct selling industry, as well as to size those areas of the world where there are no DSAs yet in place.”

Certainly, with an improved data collection process in place, statistics in the future will present an even clearer picture of the direct selling industry.