Fall 2021

Key Trends Driving Demand to Reimagine Payouts from Checks to Tech

Crystal Holtzendorff - PayQuicker

There are 4 key market trends direct selling management teams need to know to support a case for innovation in their commission payout processes.

Digital Experiences:
The increased need for digital transactions has forced the direct selling experience online and accelerated the use of digital tools such as affiliate portals, digital shopping carts, and mobile payments
   
The Worldpay FIS 2021 Global Payments Report predicts that digital transactions will be over 52% of all payments globally by 2024. This trend will accelerate within the direct selling industry in the coming years as organizations catch up by moving from checks to tech.
   
Younger Workforce:
In 2021, our direct selling clients’ focus is squarely on recruiting millennial and gen Z distributors and customers into the brand to capture the longer customer lifetime value of a younger population. By 2025, 75% of the global workforce will be made up of millennials.
   
Speed:
To make and receive payments quickly is now a market requirement for digitally-savvy millennials. Payout frequency is also an accelerating trend that keeps distributors engaged and motivated to grow their business and, in turn, grow the direct selling organization’s business.
   
Security:
The staggering number of high-profile data breaches from 2015 through 2021 continues to fuel the need for organizations to invest in the highest levels of data security. Increased data security requirements and the rise in cyber-attacks drive direct selling companies to partner with payout providers with proven expertise in security and compliance to avoid the risk of costly breaches of sensitive personal data.
   
   Contact PayQuicker at www.payquicker.com to learn more.

Buy Now, Pay Later for Direct Sellers

Holly Worst, Director of Vertical Growth -Worldpay from FIS

The buy now, pay later (BNPL) market is expected to grow 181 percent by 2024 according to the 2021 Global Payments Report by Worldpay from FIS. In fact, according to the same report, BNPL services rose nearly 78 percent in 2020—the biggest leap of all payment types and is projected to account for 4 percent of global eCommerce spend by 2024. The concept of post-purchase installment programs isn’t new, but the ease of use, flexibility, and mutual benefit they deliver at various phases of the value chain have made them one of the fastest growing segments in payments.

Is this payment type right for direct sellers to offer their consumers?

The answer is, yes! BNPL offers benefits to both consumers and your distributors. For consumers, BNPL allows them to spread the cost of a purchase over several months interest free, and as long as they pay on time, they avoid interest fees all together. For direct selling distributors, BNPL increases the average ticket size thus increasing their overall revenue. Offering BNPL can also help attract a new consumer base as BNPL users tend to be younger.

If you would like to learn more about BNPL, please get in touch: Get In Contact | Worldpay from FIS (fisglobal.com)

Announcing Avalara's New Solution Page

Brian Brown - Avalara

For over a decade, Avalara has dedicated resources and expertise to helping direct selling organizations tackle their toughest compliance challenges. With nearly 300 customers worldwide, Avalara recently launched a solution page uniquely catered for direct selling companies.
   
The solution page helps direct selling finance professionals navigate the challenges of resource management, mitigating risk and expanding nexus.
   
Regardless of the stage of business (startup, emerging, mid-market, enterprise, etc.) direct sellers face a monumental task in maintaining tax compliance. Having a clear perspective on what technologies are integrated to a sales tax automation platform like Avalara was also a key element of the newly launched resource page.
   
Lynda Gerbe, Director Sales at Avalara for direct selling said, “Avalara has spent years helping direct selling businesses manage sales tax complexity by automating the most tedious and time-consuming tasks related to tax compliance. Avalara’s consolidated resource page for direct sellers is a logical extension of the knowledge, experience, and technology solutions for the benefit of MLMs dealing with the most onerous aspects of omnichannel commerce. We recognize that direct sellers are laser focused on growth and customer acquisition but must simultaneously address several areas critical to modern commerce, including tax compliance. We’re pleased to be working with the most recognizable technologies and service providers in direct selling to offer our mutual clients solutions that mitigate risk along the path to growth and success.”
   
We hope direct sellers will find the new resource page incredibly helpful and we welcome any feedback you’d have on what could be included.

Is your company thinking about expanding to the Mexican market via NFR or Informal Entries? Think Again!

Rafael Miner - Miner Group LLC

Some companies may initially consider expanding to different international markets using a “Not for Resale” or “Informal Entry” models and then move to a more formal clearance and distribution process.

For Mexico, this is not the right idea.

For Mexico, there is no regulatory or legal framework for a “Not for Resale” customs clearance process or distribution model, and informal entries are limited to direct personal purchases and use.
Furthermore, all the expenses generated during the Mexican customs clearance process for these models, including final shipping, are not allowed for tax purposes by a Mexican entity.

On top of that, the Mexican Government may consider that a company using the informal or personal use entry model to sell their products in Mexico is doing so to avoid regulatory compliance and may hamper its potential future formal expansion.
In our experience, to successfully expand to the Mexican market, there is no other way than to commit to the expansion process by first thoroughly researching the Mexican market and establishing a formal business model.

Choosing the right partners for the process is also essential for the market expansion success and assigning all the necessary resources to comply with regulations established by Mexican authorities.

Expanding to the Mexican market is unquestionably a process that will take time, effort, and considerable resources for any company. Still, it may be a very rewarding one if done right. 

What’s the Right Ratio of Temporary Vs. Full-Time Warehouse Staff?

Harry Drajpuch, CEO - Amware Fulfillment

One of the difficult labor decisions direct sellers must make is the mix of temporary vs. full-time employees (FTEs) in the fulfillment warehouse.
The primary benefit of temp labor is that you pay only for the labor you need, which can be a huge plus if your order volumes fluctuate. Plus, you avoid all the benefit-related overhead costs.
   
The downside of temp labor is that you might see an increase in inaccurate orders, improper packaging and late deliveries versus what you would get from trained FTEs. Temp staff will turn over more frequently, requiring regular retraining. Also, they won’t have the same connection to the brand.
   
Another labor management strategy is heavy use of automation to reduce required workers. The proper mix of FTEs vs. temps vs. automation will depend on your situation.
   
A HIGH-FTE MODEL makes sense if the business is mature, volume is predictable, and quality execution in order processing is a priority.
   
 A HIGH-TEMP MODEL makes sense if order volumes fluctuate or the business is growing fast and in ways that are hard to predict.
   
A more AUTOMATED MODEL makes sense if required fulfillment tasks are consistent and if the business is more static than changeable – so the same automation equipment could be used over a long period.
   
Your dominant strategy for labor management will depend on your situation. If you work with a third- party fulfillment company, choose one that is equally adept at managing the right mix of FTEs, temps and warehouse automation.

Looking Back at 2020 and Onwards

Michael McClellan - Global Access

2020 taught us much about the global economy in which we now live. During the year 2020, all international carriers faced disruptions due to Covid-19. In response to these disruptions, carriers reacted with varying degrees of success. Some failed completely. Others struggled, but survived. A select few even flourished--and enjoyed tremendous growth.
   
2020 brought custom brokerage delays, lack of passenger planes (used for consumer product shipping), restrictive import policies, limited ability to export from certain markets, and demand shifts of the products sold.
   
Whether it is a resurgence of some type of Covid, a drought, a lumber shortage, legal changes, or something yet unknown, the solution is the same: it is important to understand your failure points and have a plan in place. It is most effective to utilize the infrastructure that key partners have already put into place, as it can be very costly to build our your own

The key is to review what the struggles were, what made the difference for those that succeeded and failed, and then take action to cement your place among the successful.
   
“A wise man learns by the experiences of others; an ordinary man learns by his own experience; a fool learns by nobody’s experiences (American Proverb).”
   
Let us all aspire to be the wise men and women. Learn from the experiences of those business that succeeded in the face of a global pandemic and ensure your business is prepared to overcome the next big challenge the future throws at us.

Do You Hear Your Customers?

Terrel F Transtrum - ServiceQuest

With the rise of direct-to-consumer sales by DSA companies, customer centricity has come of age. For instance, the measure of compliance is now based on the prominence that a company places on customers. Importantly, companies that understand that happy customers are the purpose of their business have long found this to also being the key to attracting and keeping distributors who successfully find and keep those customers.
   
Direct sales companies that are tuning in to the often-overlooked frontier of keeping customers happy are learning that renewed growth or scale can actually be found in the ears of those listening to customers and distributors. The customer service front-line team is the nerve center for every direct sales company. Calls, emails, tickets, chats, returns – all are packed with data and insights that point you to the secrets to creating a remarkable customer journey from onboarding a new customer to retaining life-long partners.
   
As Peter Drucker taught, “the purpose of business is to create a customer.” The longevity of top DSA organizations relies on the strength of their customer base. Happy customers make it much easier to attract and keep independent representatives who eagerly seek customers who are easy to please and keep happy!
   
Whether you provide customer service access for customers and reps, or if your only contact is with independent representatives who interact directly with their customers, when you listen carefully and respond quickly with solutions, you will create a company that customers and distributors will never want to leave!

Comp Plans: Valuable Tools For Growth

Rodger Smith - DirectScale

Comp plans are critical. Independent reps live by them. But you probably could use yours more effectively than you are. Sadly, most think comp plans are written in stone and can’t be changed without major hassles and cost. But you can change that! In fact, your comp plan is one of your most valuable tools for growth.
   
A comp plan is much more than just a record of commission percentages and rank volume requirements; it’s a versatile tool that helps you maximize sales, which makes your business more profitable. For example, every promotion you offer should have optimal commissions and volume requirements that motivate your sales team to action.
   
Healthy payouts motivate your sales team to sell more, which directly benefits your bottom line. Using your historical data, comp plan modeling helps you build the ideal commission structure to maximize sales for each promotion.
   
What is Comp Plan Modeling?
Comp plan modeling is simply testing plan variables against your own historical data and then committing the optimal set of numbers to your plan that helps reach your goals. You should be doing this for each promotion you plan. Plugging in different percentages and rank volumes, etc., helps find the ones that will generate the most sales, which will validate a promotion using your own data! You can also use this method to find optimal price points.
   
So if you’re not already, start using comp plan modeling to maximize your promotions. DirectScale is the pioneer of comp plan modeling; contact them to learn more.

The New Look For Meeting Planners

Arlette Garibay - Ontario CVB

Meeting planners now face a range of challenges that a few months ago, were not a consideration. While creating a safe environment that makes attendee health and safety  the top priority, business goals still need to be met. The Greater Ontario Convention & Visitors Bureau has developed an approach that accomplishes just that.

As planners work to resume in-person events, the GOCVB offers the following suggestions:

1. Understand the venue’s commitment to ensuring safety protocols.

   Look for accreditations that demonstrate a venue’s knowledge of the latest disinfection and cleaning standards.  The Global Biorisk Advisory Council (GBAC) Star Accreditation, for instance, indicates not only adherence to best practices, but also professional knowledge.  One of our greatest accomplishments over the past year has been the GBAC Star Accreditation, which means that our venues are disinfected to appropriate standards. Similarly, the ASM Global VenueShield indicates a venue’s alignment with government officials and health care experts.

2. Collaborate with event planners to craft events that adhere to the new normal.

   Communication is key – The pandemic educated us in how to adapt policies to ensure that guidelines from the CDC, State, and County are being followed.  To inform your guests on the latest codes of conduct, emails, your website, and social media channels are best.  We at Greater Ontario showcase our latest protocols and policies on our website.

3. Choose a venue that prioritizes creating a hospitable culture.

We care and are committed to offering the best possible experience for all who choose Greater Ontario as their next destination.  Our staff are all expertly trained in guest services, and as a sales team, we attend several shows and events at other convention centers across the nation; we bring back examples of excellent services we’ve experienced and figure out how we can implement them back home.

2021 was a Year Marked by Digital Transformation, and This Will Only Continue into 2022

George Elfond - Rallyware

The events of the past several years have prompted businesses worldwide to drive forward digital transformation in the direct selling industry, and we predict that, looking ahead to 2022, this will continue to be a key area of focus. Today, digital transformation is necessary in order to keep up with evolving distributor and consumer expectations.
   
In an analysis of distributor preferences over the past year, Rallyware discovered that usage of mobile apps is growing. We found that users prefer mobile apps over the web (both computer devices and mobile browsers), and had 2.6X times more sessions with personalized learning native apps.
   
Research also pointed to the power of smart notifications enabled by mobile devices, spurring productivity through personalized re-engagement, finding that the percentage of completed tasks among those who received but did not open notifications was 0.1%, while this increased to 29.4% for those who viewed more than one notification. As discovered previously, the more learning and enablement tasks completed, the higher the sales productivity.
   
Such findings highlight the power of Performance Enablement Platforms. Platforms that prescribe the right activity at the right time have shown to drive an average of 24X ROI for direct selling companies.
   
Since 2012, Rallyware has been driving forward digital transformation for companies including Nu Skin, Avon, Tupperware, and others. Now, with a recent $22M boost in funding, we are taking our AI-driven performance enablement technology to the next level, and working to digitally transform and modernize direct selling companies worldwide.