DSA Cautions Public to Avoid Taking Financial Adventures During Times of Uncertainty
April 2020 – The world at large is set for a tough economic recovery period following the coronavirus pandemic. In such times we see much anxiety, job loss, fear and desperation. It will be more important than ever, to safeguard your hard-earned money and not fall for ‘get-rich quick schemes’, says Direct Selling Association of South Africa’s (DSA) chairman, Rajesh Parshotam.
“It’s to be expected that opportunists will take the recovery period as a chance to exploit people. We would like to take this opportunity to warn the public to err on the side of caution,” he said.
Parshotam says there will be opportunities in the future to generate income through legitimate non-conventional means such as direct selling.
The DSA, an industry self-regulator, puts all new direct selling companies who apply for membership through a rigorous 12-month compliance process to ensure they are sustainable as well as ethically and professionally sound. Local and international member companies, of which close to 30 belong to the DSA, have to comply with the country’s laws before they can be upgraded from probationary member to full member status.
“The public should, at all times, but more especially now, exercise financial prudence rather than pursue untested financial expeditions. We’ve fielded many calls in the recent past, where members of the public needed to verify companies purporting to be direct selling operations. This is the type of behaviour we commend. Before trusting a company with your hard-earned money, research it, know their history and business practice and ensure they are aligned to a regulator,” he says.
Additionally, Parshotam says there are other factors to consider.
• “Is the company associated with a direct selling association locally or abroad? Is it registered with the South African Commission of Intellectual Property and Companies (CIPC)? Does it have registered offices in South Africa? Is it registered with the South African Revenue Services (SARS)? Are commissions, bonuses and other incentive payments based on actual sales of products and services and not on recruiting other direct sellers? Is the organisation promising unrealistic rewards for little effort required?
Parshotam adds that the protection of all consumers and the public in general is a top priority for the DSA.
“This is a duty we take very seriously. The protection of both the consumer and the industry is critical to our strategic intent,” he says.
Parshotam says, after the Covid-19 storm has passed, the industry will be a safe avenue for many looking to generate additional income, which is why safeguarding it, protecting consumers and cautioning members of the public is of vital importance.
"We are certainly living in unprecedented times. There’s no telling what will happen tomorrow. We have however seen projections in the news media that the economy will take a while to recover from all this. Thousands of people -- breadwinners, families and households -- will surely be affected. Instead of taking the first available avenue out of a hard time, we strongly advise that people think long-term and evaluate how sustainable the potential venture will be",concludes Parshotam.
SA government should follow Namibia’s example in eliminating Ponzi schemes
March 2020 -
Namibia recently took decisive action against an alleged pseudo direct selling company operating in its jurisdiction.
“We commend the Bank of Namibia for protecting Namibian citizens against such companies and would like to urge the South African government to voice their disapproval of non-compliant operations in the country,” says Direct Selling Association of South Africa’s (DSA) chairperson, Rajesh Parshotam.
Crowd1, allegedly a ‘get-rich-quick’ scheme, was recently banned and labelled a pyramid scheme in Namibia. Recent media reports have alleged that South Africa is Crowd1’s biggest market. It has been reported that the Bank of Namibia declared the company’s operation an “undesirable practice” which, in that country, could translate to 10 years in prison or a R1-million fine for anyone who continues to promote the business.
In South Africa, and indeed in many other countries around the world, vetted and legitimate direct selling companies sell tangible goods or valuable services. Crowd1 has been reported to not offer any of the two. It allegedly generates income through the sale of membership packages to new members. The more members one has, the more money they make. The bank of Namibia is said to have expressed concern that this model was unsustainable and that citizens would eventually lose hard earned money.
Compliant direct selling companies assistallow direct sellers to generate income through the sale of services or goods whether they have new members or not.
According to the said reports, Crowd1 is a mobile application whose actual operations are unclear; they have been reported to dabble in internet software and sports betting. It was launched in South Africa in November 2019.
“As the DSA we’ve recently decided to up the ante in the fight against non-compliant organisations in the local sector. The protection of all consumers and the public in general is a top priority for us,” says Parshotam.
The DSA, an industry self-regulator, puts all new direct selling companies who apply for membership through a rigorous 12-month compliance process to ensure they are sustainable as well as being ethically and professionally sound. Local and multi national member companies, of which close to 30 belong to the DSA, have to comply with the country’s laws before they can be upgraded from probationary member to full member status.
“We have our finger on the pulse of the local direct selling industry. Over the years we’ve seen South Africans conned by fly-by-night pseudo direct selling companies, which has tainted the good name of legitimate companies which are making a major difference in the lives of South Africans, affording them an opportunity to making a living, and at times career equivalent income,” he says.
The DSA mourns the passing of Ernest J du Toit, an industry leader
The direct selling industry begins the year with a heavy heart mourning the loss of one of its greatest champions. Ernest J du Toit, former chairperson of the Direct Selling Association of South Africa (DSA) passed away on the 31 December 2019.
Du Toit spent decades entrenched in the industry and served on the Board of Directors of the DSA as Director, Vice Chairperson and Chairperson. During his tenure as vice-chairperson and chairperson of the DSA he served as a board member of the World Federation of Direct Selling Associations (WFDSA).
“We are deeply saddened to hear of Ernest’s passing. He served the direct selling community for more than 25 years and contributed immensely to the development of the industry across South Africa, across cultures, age groups and people from all walks of life,” says Rajesh Parshotam, DSA chairperson.
“Ernest’s ability to make every person with whom he came into contact feel important was so special, and his vision and foresight in business and life were extraordinary. His achievements are there for all to see as a testimony of the legend he will always be.”
Parshotam says it has been a sad period for the local industry. “We have lost someone who was passionate about developing people’s potential and knew how to use this industry as a tool to bring out the best in people. He was truly a remarkable human being. May his legacy continue to inspire us all.”
This is indeed a very sad period of time in the history of direct selling in South Africa as we mourn the passing of a truly remarkable human being and celebrate the life of a great man.
“On behalf of the DSA, its Directors and Member Companies I wish to express our sincerest condolences to Angelique, their children Claire, Jean-Pierre, Bayley and Rhyde as well as the rest of Ernest’s family and friends. Our thoughts and prayers are with them during this very challenging time,” concludes Parshotam.
New DSA chairperson looks ahead to the new decade
December 2019 – As we head into a new decade in the local direct selling industry, the Direct Selling Association (DSA) of South Africa has recently appointed a new chairperson, Rajesh Parshotam.
Parshotam, fondly known as Raj, is the General Manager at Amway in Southern Africa and takes over the reins from Cornelle van Graan, former Managing Director at Ascendis Health Direct who resigned in October.
Parshotam has been part of the direct selling industry in South Africa since Amway landed on the local market in 1997.
“I joined this industry 22 years ago. Prior to joining the industry, much of my conditioning in business was all about profit and maximising returns.” Parshotam holds a Diploma in Business Management.
“The greatest lesson from joining the industry was that it was people before profit and that if we look after the people and partnered with them in the accomplishment of their goals, no matter how small or large, profit would follow. This was a big mindset shift for me, authentic relationships became key and centre to success,” says Parshotam who has been a DSA director since 2012 and the vice chairperson since 2017.
Parshotam says that South Africa desperately needs to promote and foster small business.
“Direct selling is the perfect model, it has been achieving success in developing ordinary people, irrespective of their backgrounds, qualifications and/or race, into micro enterprises and a collective making a meaningful contribution to the country’s economy.
“This achievement is also a sustainable one and it supports government’s growth objectives. These small business owners or distributors as we call them also help create jobs as they need support in their lives and homes. Further to this, there is also a positive impact from a skills development perspective through the efforts of all our member companies,” he says.
Under former chairperson Van Graan’s tenure, the DSA saw great success, stability and recognition, including that of Platinum Member of the World Federation of Direct Selling Associations (WFDSA). Looking to the decade ahead, Parshotam says great things lie ahead.
“We are just getting started, we are excited about the potential that social and digital platforms have to offer our industry. Let me unequivocally state that the DNA of this industry is our people and this will never change. If we want to grow with the young, then we must evolve. Social and digital platforms are not here to compete with the person-to-person interaction, they are here to enhance this method of communication,” he says.
Digital platforms have allowed distributors in the industry a wider reach at a minimal cost, says Parshotam. He says they have also created ways to meet individuals at their point of convenience, so distributors can do training, run their business and catch up on developments within their companies at their own pace.
He says the decade ahead will be ruled by numerous accessories on the digital front - big data, the Internet of Things, Artificial Intelligence (AI) and Virtual Reality.
“As the gig economy continues to grow, driven by the needs of young people, the direct selling business must present itself as an attractive option due to the low cost of entry as well as the flexibility it offers - this is one of the key needs of young people. They want to determine what they do, when they do it and how they do it,” he says.
The Direct Selling Association of South Africa cautions South Africans against get-rich-quick-schemes at play in the South African Market
October 2019 -
Ongoing media reports on get rich quick schemes disguised as legitimate investment opportunities only highlight how badly South Africans long for financial freedom.
The festive seasons is fast approaching and the current economic climate in the country could leave a large number of employed people without a bonus come December, and worse still those who are unemployed with no avenues for something extra in their pockets.
The South African economy has seen better times. Reports in the media this year have alluded to the idea that the country’s economy was in better shape 11 years ago compared with today, which is an indication that to survive financially one must leverage all possible legitimate avenues for additional income.
“I cannot stress enough how, when looking for ways to make money, caution has to be extensively exercised,” says (Acting Chairperson?) of the Direct Selling Association (DSA) of South Africa.
“As the DSA we condemn any exploiting of the people of this country under the guise of enhancing their wallets. Unfortunately, when these types of stories emerge, they are labelled as pyramid schemes, which at times incorrectly gets linked to direct selling.
“Direct selling differs greatly from pyramid schemes. In direct selling participants are sold a product or service which they can use, repurchase and start a business that will generate income for them whether or not they recruit more people under them. By definition, pyramid schemes place more emphasis on recruiting people to generate an income as opposed to selling products or services,” ?? says.
The DSA has more than 30 ethical member companies who undergo a rigorous process to complete membership. All new DSA members undergo a 12-month probationary period. During that time the DSA assesses the company’s compliance with its Code of Conduct and the country’s legislation. After the probationary period the company is proposed for full DSA membership.
“This process makes direct selling a legal and ethical avenue for the generation of income. To succeed in direct selling, you need to do more than merely recruit people, it’s a profession, it requires hard work and strategy like any other career path,” says (Acting Chairperson?).
The DSA Code of Conduct stipulates, among other things, that companies shall not use misleading, deceptive or unfair recruiting practices in their interaction with prospective or existing direct sellers. Companies and direct sellers shall not misrepresent the actual or potential sales or earnings of their direct sellers. These are just some of the stipulations in the Code of Conduct available on the DSA website (www.dsasa.co.za).
“We would like to caution the public to be vigilant when trying to grow their money. If it’s through a company whose model is similar to that of direct selling, please ensure that it is a DSA member and has undergone a thorough vetting process. Individuals must do their own independent research.
“When researching, ascertain if the company is registered with a direct selling association locally or abroad; if it is registered with the Commission of Intellectual Property and Companies (CIPC); if it has registered offices in South Africa; if the company is registered with the South African Revenue Services (SARS); if the company has received South African Reserve Bank approval for funds leaving South Africa; if the company has products or services they are selling; if it is paying for recruitment which would be a negative indicator; and finally research the difference between pyramid schemes and direct selling which is also available on the DSA website,” says (Acting Chairperson?).
Consumer rights must include awareness and enforcement
Johannesburg, 26 March 2018 – When a product does not work properly or a service provider does not deliver as expected, indignant consumers are quick to assert that they know their rights, but they often do not.
"Most people are simply too busy to find out what their rights really are and tend to rely on assumptions, advice from a friend or colleague, or a vague recollection of something that they had heard or read," says Cornellé van Graan, chairperson of the Direct Selling Association of South Africa (DSASA).
This month which celebrates World Consumer Rights day, Ms. van Graan would like to bring awareness of the consumer rights that are emphasised in a sector that is growing rapidly and has contributed nearly R13 billion to the South African economy in 2016.
Direct selling is attracting entrepreneurs, with established social networks of likeminded people and who require the flexibility of working for themselves. Of the over 1.3 million independent direct selling resellers, nearly a million are independent female business owners and 86% are black.
"It is a dynamic, growing industry which can only be sustainable if consumers have confidence in the professionalism, customer service and business ethics of the resellers and the direct selling companies which they represent."
For this reason, the DSASA is uncompromising regarding its Code of Ethics, a legally binding document that members and their resellers are obliged to comply with as a condition of membership.
"The Code has been in place for a number of year," says Van Graan. "The focus now is on increasing awareness of the Code, so that consumers are aware of their rights and independent resellers are aware of their rights and responsibilities. It is also very important for consumers and resellers to know what to do if the Code is not being adhered to."
The Code protects resellers and consumers by, amongst other provisions, ensuring that member companies provide:
- resellers with accurate information about products and services;
- sufficient and ongoing training to resellers on product information
- sufficient and ongoing training to resellers on ethics and marketing practices.
It also requires resellers to:
- Respect customer wishes to discontinue a product demonstration or sales interaction;
- Ensure product and service rates, descriptions and claims are accurate;
- Provide a receipt to the consumer allowing the consumer to cancel any purchase order of products or services within at least five working days from the date of purchase and receive a full refund.
- For the full Code of Conduct visit:
Van Graan is quick to point out that the Code is more than words on a website – it has teeth, specifically to those companies belonging to the Direct Selling Association of South Africa who would ensure enforcement in cases where the Code is not being adhered to.
"Obviously the first port of call in a dispute is the reseller. If he or she is unable to resolve the issue, it can be escalated to the related member company, failing which the DSASA should be contacted by E-mail at firstname.lastname@example.org for an unbiased assessment of the issue and steps for remedying the issue, if required."
The continued growth of direct selling in South Africa means more consumers will be buying more products and services from more independent resellers, more often. The Code ensures that these transactions are professional and ethical and that both consumer and reseller are protected if the Code is not adhered to.
To find out more about direct selling and the Direct Selling Association of South Africa visit: http://www.dsasa.co.za
For further information or comment please contact Sam Logan at email@example.com, on 083 334 8091.
Note to editor:
The Direct Selling Association of South Africa is a self-governing organisation that protects the interests of South African consumers and its members, as well as the independent representatives of its members. It ensures that all member companies abide by the DSASA’s strict Code of Conduct and operate in a legitimate, honest and ethical manner. The DSA will respond to any complaint by any member of the public or any of its members, alleging any unethical or unprofessional behaviour. All complaints will be handled and resolved with member companies and all unresolved complaints or complaints about non-member companies will be referred to the National Consumer Commission.
Issued by Meropa Communications On behalf of The Direct Selling Association of South Africa
Related Document: 1538045906.pdf
How direct selling is transforming the beauty industry
Johannesburg, 06 September 2017 -- The internet has changed the way women think about beauty and cosmetics but not, it seems, the value of personal face-to-face advice.
Figures just released by the Direct Selling Association of South Africa (DSASA) indicate that personal care and beauty is still the best performing sector in the industry, accounting for over 46% of the total direct sales during 2016.
“Personal care and beauty products generated almost R6-billion in sales during 2016, reflecting an increase over the previous year,” says Cornelle van Graan, chairperson of South Africa’s Direct Selling Association (DSASA).
She says although the internet provides tutorials, testimonials, reviews and cautionary tales there’s so much information available that online marketing hasn’t supplanted the personal touch when it comes to cosmetics and skin care sales.
McCann Bucharest conducted a global study which found that despite arming themselves with as much knowledge as possible women still get stressed when selecting beauty products.
“Direct selling has proven to be the best way to market personal care and beauty products. The recommendation of another woman during a face-to-face encounter is more likely to influence the choice of beauty product than a vlog or beauty blog.”
More good news for independent beauty consultants is that the beauty business is nearly impervious to recession.
McCann’s research indicates 83% of women worldwide view beauty as a ‘non-negotiable’ no matter what the economic conditions. Some 70% feel that being beautiful influences them getting what they want and 93% indicated that looking good improved their confidence.
According to McCann women in emerging markets are more likely to change their beauty routines. This provides local beauty consultants with a receptive market, particularly those selling cost-effective products, suitable for the South African climate and skin types.
“A broad range of quality personal care, skin care and beauty products are available to customers through our direct selling member companies,” says van Graan. “Also supporting beauty from within, nutrition should not be overlooked. Nutritional products are also available through direct selling.”
The DSASA represents 17 member companies offering a variety of personal care, beauty and nutritional products, these include: Amway South Africa, Annique Health and Beauty, Avon Justine, Ascendis Health Direct, Avroy Shlain Cosmetics, Azara Team Marketing, Canyon Organics, Forever Living Products, NeoLife GNLD, Herbalife Nutrition, Jeunesse, Mannatech, Nu Skin Enterprises SA, Sh’zen, Table Charm, The Art of Skin Care, and Watkins Valeur.
Visit www.dsasa.co.za for more information or contact details of any of these companies.
Related Document: 1538045807.pdf
Direct Selling providing more opportunities for more women
Johannesburg, 16 August 2017 -- Figures just released indicate that unlike many other sectors in the economy direct selling is growing, providing more micro-entrepreneurial and income generating opportunities for women.
Currently some 1 333 223 South Africans benefit from direct selling and have the opportunity to build their own small business, of which 72% are women.
Despite the flagging economy, direct sales in 2016 were 18 percent up on 2015, totalling nearly R12.9 billion
According to Cornelle van Graan, chairperson of South Africa’s Direct Selling Association (DSASA), direct selling attracts female entrepreneurs because it offers opportunity, flexible working hours, training and the ability to work from home.
The number of women who make a full-time living from direct selling has grown by almost 30% with the majority operating in the health and wellness, personal care or household good sectors.
Van Graan says that the sector also provides opportunities for women who have an existing full-time job, but want to supplement their income.
“Direct selling is also a good way for stay-at-home mothers to make a living, while being actively involved in the lives of their children. Getting started is generally easy, low cost and low risk.”
“Mothers usually have an existing network of other moms, giving them excellent access to a market with similar needs and interests. Their personal relationships and endorsement gives buyers confidence, so these women can be very effective sales people.”
About three-quarters of all direct sales people in South Africa are involved part-time.
Besides flexibility and access, part of the appeal of direct selling may be that money can be earned immediately the sale is made. There’s no waiting until the end of the month or the next payment cycle.
Van Graan says while motivation can vary from paying for a child’s education to saving for a dream holiday, most women get involved in direct sales to provide for their families.
There are 34 direct selling companies who are members of the DSASA. There are more than a million independent business owners associated with DSASA member companies. They make sales totalling nearly R13 billion a year. Everything from financial services to beauty products and skin care, from fragrances and fashion accessories to nutrition and health supplements, from dinner services and a host of other tableware and kitchenware to household cleaning supplies are sold.
What you need to know about direct selling:
If you are thinking of becoming a direct seller here’s what you need to consider to help decide what direction you want to pursue.
1. Product selection
The direct selling industry offers a range of products within sectors such as health, beauty, homeware, financial and investment products, nutritional supplements and weight-loss management. Although it is preferable to choose products which you are familiar with or interested in, you will receive training on all products being offered by the DSA member company that you choose to join. Believing in your product is vital to effectively market and sell your product, as well as personal fulfilment.
2. Choosing which company
Visit www.dsasa.co.za for a full list of member companies and scroll down and identify the companies offering the type of product or service of interest to you or the business opportunity that appeals to you. Attend a demonstration or visit the website of the company to help decide which company you feel best suits your needs and ideals.
3. Research appealing companies
Read through all their marketing collateral and agreements to get a good understanding of the stability and history of business and of your responsibilities.
4. Investigate the start-up costs
All DSASA member companies are obliged to keep start-up costs low. Your initial investment will typically cover a sales kit with all company information, product samples and training materials. Avoid companies expecting a large investment or who push overzealous inventories, you should be allowed to grow at your own pace and affordability.
5. Study the return policy
All DSASA member companies are obligated to buy back any unsold, re-saleable product inventory, promotional materials, sales aids and kits purchased within the previous 12 months at the selling price less an administration fee of up to 10% of the selling price.
6. Fully understand the compensation
Check the member companies’ compensation plans as they all differ. Make sure you understand details of earnings and the overall business model.
Related Document: 1538045755.pdf
What every small business owner should know about tax
J31 July 2017, Johannesburg -- Most independent business owners start their companies thinking they just need to earn enough money to cover their living costs and forget about tax returns. Frequently the initial growth is so rapid and often unexpected that they find themselves struggling to manage the day-to-day needs of the business as the admin piles up.
It all seems to be going so well that they just soldier on, promising themselves that they’ll get to the admin tomorrow, but never seem to have the time. It’s an approach which can be a recipe for disaster.
“There are too many cases of enthusiastic entrepreneurs who think their business is going well, but have failed to provide for tax. At the end of the financial year, when their provisional tax return has to be submitted, the tax liability can cripple the business,” says Ernest du Toit, chairman of the Direct Selling Association.
He suggests getting the right professional advice from the outset. Ask the company you’re representing, fellow direct sales agents or the Direct Selling Association, if they can recommend an accountant who is registered with SARS as a tax practitioner.
“If your expertise is in health and beauty products rather than tax law, it’s worth making a small investment to ensure your tax affairs are covered. It could prevent a nasty surprise later on. It should also pay dividends as the business grows,” says Du Toit.
Some basic tax tips micro business owners should know:
- All businesses need to register at the start of their business for income tax, and need to submit tax returns irrespective of how little profit the business is making or even if it’s incurring losses.
- Every business voucher, invoice or receipt needs to be kept
- Write details of expenses on the reverse side of the voucher as soon as the expense has been incurred
- Maintain a log book for all business travel
- All business documents should to be processed regularly
- Ensure that the business accounting records are maintained
- Understand the financial position of the business through monthly reporting
- Plan for any financial requirements the business may have, this needs to be reviewed monthly
- Project and plan for any cash requirements the business may need
- Be aware that VAT registration is compulsory for a business with a turnover of a million rand or more. A business may voluntarily register for VAT before the turnover reaches this level.
Administrative procedures include things like keeping track of bank deposits and all business-related expenses.
Typically we find that the most successful direct sellers are those who are meticulous about their administration. It’s the attention to detail that sets them apart.
Related Document: 1538045705.pdf
Direct Selling booming amidst downgraded economy
Johannesburg, 18 July 2017 -- In an economy facing a third possible downgrade, mounting living costs and scarce jobs opportunities, it’s reassuring that the direct selling industry is one of the few sectors showing positive growth over the past 18 months.
An estimated 1.3 million independent business owners have generated R12.9 billion for the national economy in the form of sales directly to customers.
The Direct Selling Association of South Africa (DSASA) announced its industry results in Johannesburg this week at a gathering of the Association’s 34 direct sales business entities.
These entities cover sectors such as health, beauty, homeware, financial and investment products, nutritional supplements and weight-loss management. Member companies distribute goods and services directly to consumers, in a face-to-face model, away from fixed retail locations.
Chairman, Ernest du Toit says direct selling is an important contributor to the economy and also an important skills development and employment provider, at a time when jobs are scarce and disposable income is declining.
“The direct selling business model is aimed at providing opportunities for all South Africans, regardless of their financial or educational standing, to earn a fulltime living or extra income part-time,” says Du Toit.
The DSA of South Africa is a self-regulating, corporate membership organisation. As a condition of acceptance and continuing membership all DSA member companies pledge to adhere to an industry Code of Conduct and compliance with all legislation is also essential. A very small upfront investment is required of new entrants to whom comprehensive training is provided.
During 2016 the number of direct selling business owners had grown by over 122,000 over the previous year – an increase of 35%.
“Direct sales adds value to lives, giving people the opportunity to achieve financial independence, without the limitations of being office bound. This is a very attractive proposition, especially in today’s modern society where single-parent families struggle to balance their home and working lives”.
“We have also seen a rise in the number of rural direct sellers. This is encouraging as not only are we able to provide job opportunities to those most in need, but we are also able to supply consumable, financial and lifestyle products to areas without access to modern conveniences such as shopping malls or financial brokers.”
The direct selling industry is not only thriving in South Africa, but globally too. The USA has over 140 member companies and 20.5miilion sales agents generating $35.5 billion in sales in 2016.
“We have seen a positive shift in corporate thinking with many companies starting to include direct selling into their marketing mix. This proven business model is based on utilising personal relationships to promote goods and services, with word-of-mouth still considered to be one of the oldest, yet most effective sales and marketing tools.” In fact, research in the Health and Beauty industry shows that up to 57% of all sales are based on personal endorsement!
“There is no limit to what you can sell – you can sell virtually anything as long as the value-add is clear and evident,” says Du Toit. In the United States of America even electricity supply is sold via a Direct Selling model.
While direct selling is well established across South Africa, it is clear that Gauteng remains the engine room - delivering 35% of the total sales value, followed by Kwa-Zulu Natal at 17% and Limpopo at 8%.
“Direct selling has a much greater reach than retail outlets have. Retail outlets have a fixed footprint in specific geographic locations, whereas direct selling can reach as far as any individual can travel or have their product delivered. It offers far better penetration into the distant rural markets, but without the costs evident in the more urban markets,” says Du Toit.
A very positive development is that the industry as a whole, already reflects the population profile of South Africa. This is evident in the mix of independent business owners – the 2016 statistics demonstrate that 86% were from the black community, 11% were white, 2% were Indian and Asian and 1% were coloured, whilst at least 72% of all independent business owners are women from the black community.
In 2016, independent business owners collectively earned almost R5 billion with 33% of active business owners operating in a fulltime capacity and 67% working part-time.
Related Document: 1538045564.pdf
What consumers need to know about direct selling
Johannesburg, 21 June 2017 -- With rapidly evolving technology changing the way we interact, bank and even book holidays, it stands to reason that the way we buy things is also changing. Digital technology is increasingly becoming an integral part of the sales mix, yet despite this, the oldest sales technique known to man, is still flourishing.
The worldwide growth of direct selling is indisputable. According to the Direct Selling Association of South Africa (DSASA), in the 2015 financial year the South African direct selling industry made sales of more than R11 billion, which is an annual growth of 13% over the previous year.
DSASA chairman, Ernest du Toit, says that one of the reasons for this growth is that digital marketing and social media are making direct selling more effective than ever before. Sellers can now research potential clients’ interests, position themselves in a more effective manner and reach further than ever before, using Social Media.
With direct selling constantly evolving, so too are consumer perceptions about the industry.
"The industry has moved on from the image most people have of a man in a suit knocking on the door, with a volume of encyclopaedias or household products wedged under his arm. Today direct selling agents are trained professionals, informed about their customers, have in-depth product knowledge and increasingly are making a full-time living from direct sales."
The DSASA is improving and upholding the standards in the industry. Equally important is its campaign to inform and protect consumers. Here’s what you need to know:
1. Protecting consumers
The DSASA defines and sets ethical practices and safeguards consumer interests, by ensuring all members and sellers adhere to a strict Code of Conduct aligned with the Consumer Protection Act as well as World Federation Direct Sellers Associations code of conduct. The DSASA further ensures that all member companies subscribe to and operate within the strict guidelines of the Code of Conduct.
2. Invoking professionalism
The DSASA requires members to provide comprehensive training, both in acceptable sales methods and product knowledge. All members ensure that their sellers act in a professional manner. With more than 57% of all products sold worldwide, being based on personal endorsement, the current direct seller’s insights and product knowledge gives them the edge in today’s world where consumers are well informed.
3. Your friend in a time of crisis
Most importantly, the DSASA provides effective recourse for consumers and sanction for non-compliant members. All complaints are dealt with by the independent DSA Secretariat, who endeavours to resolve all issues. Failing this, the matter will be elevated to an independent Code Administrator and failing this, to an Independent Arbitrator, or the National Consumer Commission.
Direct sellers are making a difference across the world; changing lives, helping people to take ownership of their own wellbeing and achieving financial freedom. More and more consumers are embracing this lucrative industry. With self-regulating Associations like the DSASA, consumers can now have peace of mind, knowing that there are strict professional operating guidelines in place and that their best interests are at heart and under the protection of the professional, self-regulating DSASA.
Related Document: 1538045482.pdf
Corporates are not the only option for job creation in a declining economy
Johannesburg, 04, May 2017 –– The corporate job market is slowing and South Africans are increasingly going to have to find alternatives to working for a big company to earn an income.
Internationally, changing working practices, the use of specialist consultants or project–based workers, the rapid growth of technology, speed–to–market and the need to be lean and nimble are all changing traditional corporate culture.
Domestically, issues such as political uncertainty and the recent economic downgrades will further discourage already cautious corporates from investing in the South African economy, limiting corporate growth and jobs.
It’s an environment in which direct selling is becoming an increasingly popular way for people to supplement or earn an income.
Ernest du Toit, chairman of the Direct Selling Association of South Africa, says that health and beauty companies were amongst the first to effectively outsource their sales departments to self–employed agents, but that the practice is now expanding to other sectors.
"The number of people involved in direct sales grew by 5.5% from 2015 to 2016 to 1.1 million and sales increased by 13% to R10.93 billion. We anticipate this growth to increase exponentially as more people look for opportunities and more companies seek better and more efficient ways to sell."
He says that given global trends and a constrained domestic economy providing fewer full-time jobs, direct selling is becoming even more appealing as companies offer free training and support, making it relatively simple and risk-free compared to other entrepreneurial ventures.
"It’s been said that South Africa’s high unemployment rate may be more a consequence of a lack of skills than a lack of opportunity. Direct selling is a sector that’s bridging that gap."
While the prospect of being a self-employed entrepreneur or earning additional money each month is tempting, there are some guidelines to consider.
Be honest with yourself
Although it seems self–evident, remember direct sales involves selling. Before you get too enthused about flexible working hours and the prospect of more money consider how comfortable you are about asking family, friends, acquaintances or strangers to purchase products or to host a group of prospective customers? Although the rewards can be considerable, not everyone is cut out for a career in sales.
Go with what you know
Be guided by your knowledge, interests or passion. You’re much more likely to make sales if you’re working in a market you know, have some interest in the products or are enthusiastic about the sector. It stands to reason that if you’re an avid home cook you’d be better off selling kitchenware than running shoes.
Selling a product that aligns with your pursuits or lifestyle also means you’re likely to have networks of people with similar interests. This will give you an advantage when you get started and also a foundation upon which to expand your networks. Knowledge of a sector allows you to share your insights and observations on social media and build new networks.
Do your homework
If you’re a keen runner, have a good network of running buddies and find a company looking for agents to sell running gear it may seem like a match made in heaven. A good place to start is with the products that made a difference in your own life. If a product helped you lose 10kgs then it is easy to talk to others who have the same need. Similarly if your acne skin has been healed, it is easy to talk with passion to others who are experiencing skin problems. But, before you sign up, check if the company is listed on the Direct Selling Association website. You can search by company or by category. The good news is that if it is, it must abide by the Association’s Code of Conduct and ethics. This offers you protection and recourse.
Once you’ve established the company’s credentials ask about the support and training it offers. Is there an induction programme? Will you be offered marketing material to try or give to your first few customers? How often are there sales meetings and briefings on new products and sales techniques?
Ask about any costs. Do you have to purchase a starter pack or carry a minimum amount of inventory?
You may be enthused about embarking on your dream job, working in a sector that interests you and being your own boss, but as with most other careers, success doesn’t come overnight.
It will take time to build a customer base and you’ll need to invest time and effort in order to generate the returns you want. Also remember there is behind the scenes work such as placing product orders, doing paperwork and attending training sessions in order to improve and grow your business.
"Set yourself reasonable goals and targets. Initially start short-term, a quarter, six months, a year. As you progress you may evolve to a five-year plan. If you can, find a mentor who has some experience in the field and test your goals and assumptions with them," advises Du Toit.
"Direct sales isn’t a shortcut to success. It requires the same degree of drive, professionalism, commitment to personal development and enduring enthusiasm that it takes to achieve in any other field. What it does offer is a lot of opportunity, support and flexibility."
Related Document: 1538045383.pdf
Direct Selling trumps tough times
Johannesburg, 09 March 2017 -- A difficult economy and uncertain times don’t mean adversity for all businesses. Anton Rupert started Rembrandt in 1948 when South Africa was struggling to repay war debt and faced huge political uncertainty. Pam Golding founded her successful property business during a recession.
Brian Joffe famously placed a sign at one of his companies reading: "Here we do not participate in a recession."
The country narrowly escaped falling into a technical recession last year and growth in 2017 is expected to increase to a sluggish 1.3%. It’s not enough to make any inroads on the huge unemployment numbers, officially at 26.5% for the last three months of 2016.
Add to this an inflation rate of over 6% and the Damocles-like prospect of a ratings downgrade and most would agree, recession or not, that these qualify as tough times.
It’s in such tough times that entrepreneurs such as Rupert, Golding, Joffe and others, including Bill Gates, have pursued new ventures to seize opportunities or supplement or replace their income.
Not everyone wants to or is capable of starting a multinational from their home or garage, but for people wanting to earn some money or add to their income in a dismal job market, direct selling may provide opportunities not otherwise available in a poorly performing economy.
It’s something that became apparent during the Great Depression. Direct sales was already an established and recognised sector in the United States’ economy during the 1920s. Between 1929 and the late 1930s direct sales recruitment shot up as alternative forms of work were not available.
This appears to remain true. The US Direct Selling Association’s 2016 Growth & Outlook Survey reports unprecedented growth both in terms of retail sales and the number of people involved since the 2007 - 2009 recession.
Sales grew for six straight years reaching US$36.12 billion in 2015, a 4.8% increase on the previous year, outpacing overall retail sales (1.6%) and GDP growth (3.5%). The number of people involved grew by 11% from 18.2 million in 2014 to 20.2 million in 2015.
The United States is not the only place where home-based entrepreneurs are leveraging their networks to supplement or earn an income.
As you’d expect, the South African chapter of the Direct Selling Association’s numbers are proportionate to an economy 25 times smaller, but the trends are similar.
In 2015 there were 1.16 million people in the industry in South Africa, an increase of 61 084 or 5.5% over the previous year. Clearly the training which the Direct Selling Association and its members are doing is paying off as sales grew by an impressive 13% from R9.66 billion in 2014 to R10.93 billion in 2015.
Ernest du Toit, chairman of the Direct Selling Association of South Africa, says that besides providing job opportunities for self-motivated people, part of the attraction of direct selling is that it puts entrepreneurs in charge of their own future, giving them the tools, the means and the support to create their own success.
In South Africa, just over 75% of active sales people are considered part time, working less than 30 hours a week, but Du Toit believes that in line with developed markets such as the United States the number of full-time sales agents will increase as the industry matures.
So too, he says, will the gender profile. Traditionally women have accounted for the majority of sales people, but since 2013 this imbalance has improved from 82% to 75%.
"Part of the reason may be that companies selling health and beauty products were early adopters of direct sales strategies, but now other businesses are starting to understand the benefits of a sales force that has established relationships with their customers and personally endorse the products."
If he’s right then there’s a perfect storm developing with growth being driven both by more people looking for ways to make ends meet and more companies seeking better, more efficient ways to sell.
But there may also be another reason.
"We’re constantly being told that it isn’t the large corporations that will turn the South African economy around, but small business. As a result more people are eschewing the idea of traditional employment and considering entrepreneurship. It’s become sexy to be an entrepreneur.
"For increasing numbers of South Africans direct selling is the simplest, safest and most effective way to do this and be in business for yourself, but not by yourself."
Related Document: 1538045331.pdf
Direct Selling Association challenges commonly held assumptions
Johannesburg, 01 February 2017 -- For many years, direct selling has a bad rap. Perceptions haven’t shifted much from an image of a man in a hat on a doorstep with a pile of encyclopaedias or the intrusive knock as you sit down for dinner.
In fact, done right, it’s neither antiquated nor annoying, according to the Direct Selling Association of South Africa. But they would say that, wouldn’t they?
What’s indisputable is the sector provides jobs for 1.1 million independent business owners - a number that, at last count, is increasing by over 13% annually. It contributes more than R11 billion in sales to the South African economy and revenue is anticipated to grow by at least 7% this year.
"Direct selling is tried-and-tested and remains as relevant today, in the age of social media, big data and digital marketing, as it ever was," says Ernest du Toit, chairman of the Direct Selling Association.
He’s someone who should know, having effectively grown one of South Africa’s most successful beauty brands almost entirely through direct sales.
"Instead of banging out tons of information on digital platforms and passively waiting for the sales to happen, direct sellers actively follow up on leads, make sense of swathes of information for consumers and provide the personal touch that many brands advertise but don’t deliver."
From a business perspective direct selling also has some distinct advantages. Research proves that up to 57% of purchase decisions around beauty and health products, are made based on personal endorsement.
Another benefit is that unlike retail outlets, direct selling is not restricted to specific locations, but can extend as far as a salesperson can travel or deliver the product.
It is also an effective way for businesses to extend their reach to rural areas without huge capital outlay, costly infrastructure and fragmented marketing campaigns.
While the numbers and business opportunities may appear compelling, sceptics will argue that direct selling’s image problem, trumps these.
Du Toit concedes that while some bygone practices, a lack of training and occasional instances of unprofessional behaviour have contributed to this perception, he’s adamant that in South Africa the DSA has over many years, got the house in order.
An independent direct selling administrator enforces the DSA’s stringent Code of Conduct to which all its current 36 members must abide.
As well as defining ethical sales practices, providing recourse and redress for consumers and sanction for non-compliant members, amongst other provisions, the code also requires members to provide comprehensive training, both in acceptable sales methods and product knowledge.
"The Code sets the standards for member companies, the direct sales agents to whom they offer the business opportunity as well as the relationships between the parties - and it’s tough. It exceeds existing legal requirements and has been aligned with the Consumer Protection Act."
But Du Toit is quick to point out that there’s more to building consumer confidence and enhancing the reputation of the sector than waving a big stick.
Together with the University of Johannesburg, the DSA has co-developed a work-integrated learning project to provide practical experience for students studying personal selling and sales management.
The project not only seeks to enhance students’ employment prospects when they complete the course, but also how to establish and grow their own direct selling businesses.
"It has the dual benefits of enhancing standards and professionalism in the industry and encouraging the establishment of micro, small and medium businesses in a growth sector of the economy," says Du Toit.
Since inception more than 14 000 student have benefited from the programme, have made sales exceeding R22 million and have earned more than R8 million. He acknowledges that the DSA has taken on a lot: setting rigorous standards, enforcing these, providing succour for consumers, improving training, challenging outdated perceptions and enhancing the sector’s reputation, all while reinforcing the benefits of membership.
"We’re absolutely being ambitious, but make no apologies or concessions for this. If we succeed we’ll double the size of the sector with all resultant benefits for the economy, businesses, job-seekers and consumers alike."
Related Document: 1538045247.pdf