Spring 2021

Avalara’s Fifth Annual Sales Tax Changes Report Explores Key Legislative Developments and Explores Emerging Trends

Brian Brown - Avalara

Now that 2020 is behind us, what is in store for direct sellers in terms of legislation? An overarching theme is how the decline in state’s sales tax revenues will impact their budgets moving forward. It’s expected that states will broaden their tax base rather than increasing rates. They’re balancing the need for revenue without increasing the economic burden on taxpayers. Not surprisingly, that probably means more enforcement (audits) on remote sellers. There is the potential for additional taxation on marijuana, with an increasing acceptance to legalize both the medical and recreational use (i.e. South Dakota).

Direct sellers should be especially aware of terms like “marketplace facilitator” and “economic nexus”. While the taxation news is dominated by these headlines, their impact is mostly mute on direct selling’s compliance triggers. It’s a rookie mistake that often inadvertently snares many startups.

The trend of online sales steadily increasing remains a theme for 2021, Hopefully that is good news for your independent sellers driving sales through your ecommerce solutions. If it’s increasing your compliance footprint, the Streamlined Sales Tax (SST) program continues to prove to be a relief to corporate teams looking to manage their resource commitment to administering sales tax.

The SSTs latest contract (renewed this year) specifically mentions how Direct Sellers qualify under the “CSP-compensated seller” status to receive free services in qualifying states.

For the more detailed breakdown, download the full report or receive the recorded version of our webinar exclusively for our Direct Selling community.

Links:

• 2021 Sales Tax Changes report
• Streamlined Sales Tax
• Changes Webinar for Direct Sellers

The True Value of Retention

Michel Bayan - DirecTech Labs

We often spend a lot of time thinking about how to extract value from the market by recruiting new customers and reps, and while we have the best of intentions in terms of the value we bring to the market in return, few have proposed concrete metrics that we can use as indicators of whether we are truly delivering significant value to our people. Since the data shows so few distributors earn more money than they spend on products, the value proposition we must focus on can't be that, lest we open ourselves up to even more regulatory and market scrutiny.

So what about retention? After all, if our products and the experience we provide our people are really so good, shouldn't they stick around for more than just a couple of purchases? How many orders will a typical person place with your company? How much will the spend? These are direct indicators of the value you're giving them beyond the hype of the initial sale. Retention is also a multiplier metric. The better you get it, the more it multiplies new revenue. How does your company's retention stand up to industry benchmark? Reach out and we'll tell you for free. Retention is the key to our reputation and regulatory issues. More importantly, it's the key to a stable business that doesn't suffer from "pop and drop". If we want to say we're doing good we've got to be able to prove it with hard metrics. What better metrics than the ultimate win-win of retention?

Incentives and Recognition That Drive Desired Distributor Behaviors

George Elfond - Rallyware

One of the biggest failings in traditional incentive and recognition programs is that they reward results. But results are the end product of activity and daily behaviors. It’s not uncommon for the majority of distributors to accept that each different incentive program has an obvious winner as the nature of it plays into a particular individual's strengths. This does little to motivate the rest of the field and nothing towards motivating and upskilling individuals to grow and reach their goals.
   
By analyzing millions of data points in recent years, we at Rallyware have identified various distributor behavior patterns and activities which trigger those behaviors. One of the interesting findings was that more personalized incentives and recognitions were driving 1.8x higher recruiting and sales performance. By linking personalized motivation factors to business KPIs, direct selling companies have seen a 24X increase in ROI.
   
There was a time when measuring anything other than end results was laborious and time-consuming. That time is now history. People analytics and behavioral science allow organizations to measure multiple people metrics and deliver personalized journeys to success to help each individual progress towards their goal. This provides an opportunity to automatically identify the most successful or most necessary activities and focus incentives on the most effective behaviors. Encouraging each individual to do the right thing at the right moment will, in itself, drive performance and achieve the desired results.

Direct Selling Rockstars Who Stick Around for Generations Behave Differently than One-Hit Wonders

Marvelless Mark - Marvelless Mark Speaks

Take a note from these titans of music:

Have a Clear Purpose and Vision
Kiss went into the music industry with the intention to be the greatest rock band of all time. Everything they did, from the long days of practicing to set themselves apart, was in service of that vision. It served as their guiding star, helping them make decisions, and making sure that every bandmate was on the same page. Make sure your whole team understands your purpose and vision, and can clearly communicate it to their recruits will help you stay on the path to a long, healthy business.

Maintain a Narrow Focus
Bands don’t set out to make music in every genre. U2 never sat backstage and thought, “We should incorporate opera into our songs. This isn’t to say you can’t shift your focus. This will actually help you stay fresh and relevant. Just don’t try to do everything at once.

Always Be Practicing
Rockstars with staying power know that the hours spent practicing in the studio are what enables them to get on stage and do what they love. The most important moment in your day isn’t sitting across from a prospect. It is learning about your products, and how your business works. Master it.

Your Band is Your Best Asset
Frontmen (and women) who don’t appreciate their bandmates are destined to be solo artists. You may wear every hat in your organization but to grow your organization you need a strong team that you trust and appreciate. Understand that your team is your best asset. Choose wisely and then shower them with gratitude.

Hybrid Events Take Center Stage

Mae Ibe, CMP - Meetings & Incentives Worldwide

Great events support business goals and growth objectives. They are the standout moment when a brand or organization breaks through the noise, connects with a person, and creates a memorable experience that lasts far beyond that moment in time. There is clear and strong evidence virtual experiences are here to stay and hybrid events will take center stage in the future because they can extend your REACH.

• Revenue – Attendance at online events has hit all-time highs this past year. With hybrid, you can leverage both physical and digital tactics to drive top line revenue and bottom-line impact.
• Engagement – Event marketers and show organizers can vastly expand audiences and transform their in-person events into a powerful integrated engagement vehicle and create opportunities for global audiences to consume your event content year-round.
• Awareness – Each touchpoint is an opportunity for new impressions and reinforcement of brand messages. Now, you can reach different audiences with precision.
• Conversations – Create a dialogue versus a monologue by bringing in-person and virtual attendees together, interacting with your content, asking questions, answering polls, making comments, and posting on social media.
• Highly-Targeted – Hybrid opens doors of flexibility to select and segment larger audiences. It goes well beyond whether we are trying to get them in a room or keep them on Zoom.

   
Check out the Hybrid Event Planning Quick Start Guide for top considerations and best practices when it comes to planning your next hybrid event. 

An Exhilarating Business Experience is Hypergrowth in Direct Sales

Terrel Transtrum, CEO -ServiceQuest

Those who have experienced hypergrowth in direct sales as executives, owners, board members, and consultants unanimously conclude that sales growth never continues uninterrupted. Double-digit growth is intoxicating and can make it easy to ignore important warning signs. To be fair, even the most rational executives understand that hyper-growth won’t last forever, yet they are so consumed with managing the meteoric growth that their bandwidth to consider the possibilities of slow-down or decline can become overwhelmed.
   
Three powerful constants found in companies that navigate the ongoing parade of business inflections in direct sales are culture, systems, and innovation.
   
The culture constant is your company’s unique commitment to philosophies that drive customer service, distributor success, and company values, combined with practices such as field councils and top executives who get out from behind their desks and get into the field, even if it’s the CEO marching into customer service and donning a headset.
   
The systems constant is a key to simplicity in an otherwise chaotic growth environment. From tech-ops and administration to communications, sales incentive cycles, customer acquisition systems, and the annual convention, systems create consistency, which creates trust arising from a sense of control and stability in the field.
   
The innovation constant demands that you move from reactive innovation to informed innovation, accepting that what works to get the company to each new level will not typically work as factors evolve such as demographics, market appetite, technology, and competition.
   
These constants always transport scaling direct sales companies.

How to Evaluate Fulfillment Warehouse KPIS

Zach Rogers - FIDELITONE

Have the supply chain disruptions caused by the pandemic made you think a bit more about warehouse key performance indicators? Even in “normal” circumstances, consistent review of fulfillment KPIs improves your ability to make well-informed business decisions and react to changing circumstances.
   
Ultimately, evaluating warehouse KPIs is about finding opportunities and setting goals. Without first determining where improvements can be made by reviewing KPIs, you can’t identify goals for the future.
Here are some important categories of fulfillment KPIs, how to evaluate key indicators.

IDENTIFY IMPORTANT FULFILLMENT KPIS
Fulfillment warehouses are incredibly intricate operations, and performance in one facet of the operation has cascading effects on other areas. Identifying where supply chain friction originates from can help you capitalize on opportunities to improve. To identify friction points, regularly review these fulfillment KPI categories.
   
Inbound metrics

• Dock-to-stock cycle time
• Inbound accuracy
• Percentage of damage-free supplier order 

Outbound metrics

• On-time shipments
• Total order cycle time
• Backorders as a percentage of total orders
• Order-picking accuracy

Financial metrics

• Inventory on-hand
• Inventory accuracy
• Inventory turns

   
HOW TO MEASURE FULFILLMENT KPIS
A successful approach to measuring fulfillment KPIs starts with consistency. Timeliness, communication, and consistent access to data is at the heart of a frictionless fulfillment operation. Make use of real-time data and communicate with your fulfillment partners on a regular basis to find ways to improve cost-efficiencies and earn customer loyalty.

InfoTrax Systems Announces New Chief Executive Officer

Mike Christensen - InfoTrax Systems

OREM, Utah—InfoTrax Systems, a leading provider of enterprise-level direct selling software solutions, announced today that Sean Smith will serve as Chief Executive Officer (CEO), and member of the Board of Directors. Sean Smith succeeds Scott Smith, who served as CEO from 2018–2021, who will now serve as Chairman of the Board.
   
Sean Smith joined InfoTrax in 2011 as a member of the commission analyst team. Since that time, he has held leadership roles across InfoTrax, working in client support and leading the account management, sales, and marketing teams. He most recently served as the company’s Chief Revenue Officer, helping to reshape the way InfoTrax presents and prices their class-leading commission engine.
   
“The time is right for Sean to lead InfoTrax and accelerate our next phase of product growth,” says Scott Smith. “Sean has been a key leader in our product shift to provide the most robust, easily integrated, commission engine platform in direct selling. He represents InfoTrax values in every interaction, and on behalf of the board, we are confident he can lead InfoTrax to new heights.”
   
Before joining InfoTrax, Sean was a founding member of Mountain West Insurance and the owner and CEO of Maple Ridge Construction. His background in business operations, with a focus on client satisfaction, has shaped his approach to business leadership.
   
“I am honored to have this extraordinary opportunity and I am grateful for the board’s support in this new role,” says Sean Smith. “I firmly believe in InfoTrax as a leader in the direct selling software category. I have always felt at home at InfoTrax and have been lucky to work with so many incredibly talented people here. I cannot wait to show our colleagues and the industry what we have planned. Stay tuned.”
   
About InfoTrax Systems
InfoTrax® Systems, a trusted name in MLM software, is an industry-leading provider of commissions management software and online distributor tools for the Direct Sales industry. From fast, accurate, and reliable business data to a platform of easy-to-use communication and reporting tools, InfoTrax® provides commission solutions supporting organizations from growth-stage ventures to international corporations supporting millions of users.

Labor Availability is the Key Criteria in the Evaluation Process

Sharon Morrison, SIOR - esrp

A clear lesson learned from 2020 is eCommerce distribution networks need to be robust, flexible, and able to withstand unforeseen challenges such as COVID-19. It’s safe to say the pandemic has changed the way businesses operate – forcing rapid changes and shifts in operations and labor.
   
Many are looking to invest in additional facilities in 2021, and we would suggest labor availability is the singular most important criteria to evaluate when conducting your site selection. Gone are the days of endless labor. In today’s marketplace, there is more competition than ever before, and wage rates continue to escalate. Oftentimes, even within a market, labor availability and average wages vary greatly. Sites within a few miles from one and other can have a very different profile.
   
Want to make sure you are choosing the right location to minimize your labor risks?
   
We harness the power of the best consumer data and interpret it in ways which fuel your strategic decisions and offers new insights. Our proprietary data and analytics dashboard will not only help you make the right choices in terms of labor availability analysis, we also assist with network optimization and customer segmentation. esrp will identify the best locations to reduce attrition, increase productivity, and improve quality of service to secure your quality labor force.