FIS Blog

Discover how to build and maintain connections in direct selling

Jarid Raftery | Senior GTM Marketing Manager — Retail, Grocery, and Petrol

June 30, 2022

Despite significant changes for direct sellers in the past two years resulting from the pandemic, one thing is evident: direct selling has bounced back. In 2021, the US had record-high retail sales of $42 billion dollars from 7.3 million distributors. 1

Although the concept of connectivity has remained important for direct selling, what has changed is how customers and distributors expect to be able to connect with each other. The digitalization of direct selling has created opportunities to build strong, meaningful connections – along with an increase in ways to make and receive payments.

Here are three tips for building and maintaining connections with direct selling:

Expand with a plan

As direct sellers grow in size and revenue, they look for opportunities abroad. Previously, most direct sellers didn’t expand until they had been in business for several years and made $50-60 million a year in business . 2With US direct selling volume increasing, many companies might want to expand quickly, but there are a few key considerations to evaluate when moving into new markets.

The first step is to thoroughly research your intended target market. Understanding elements such as laws, currencies, cultural differences, technology and distribution systems can make all the difference between success and failure. Evaluating these aspects can help you determine if expansion is the correct choice for your company in the short term.

The United States remained the largest direct-selling market in the world over the past two years 3. If you’re a direct seller headquartered in the US, you may be looking at markets such as China and Korea that have a high sales volume. Moving into these nations comes with several mandatory legal requirements. For example, China restricts network marketing commissions to a single level and multi-level marketing (MLM) is illegal there, and distributors are limited in what products they can sell.2 Some MLM companies have sold products to consumers through cross-border e-commerce as a successful workaround solution2. It is possible to do business in this market, and those that do have enormous potential to grow; China is the second largest worldwide market by direct selling volume2. Direct sellers that take the time to learn, understand and work within the legal regulations are likely to find a lot of success in China.

In Korea, the amount paid out in commissions is strictly regulated. A company cannot pay more than 38% of the wholesale price, so any company that enters this market may want to consider adjusting its commission plan2. These are just a few examples of the complexities of expanding to international markets.

Another area to consider is the worldwide commission plan, which must be tailored for each market rather than using one-size-fits-all approach. A worldwide downline is a great approach to growing the workforce and staying connected. With this model, your distributors can sponsor new recruits in countries where you do business. Commissions are then paid based on the commission plan of the country where the sale was made rather than where the recipient lives2. The advantage is that distributors can sponsor whomever they want while accounting for each country’s specific needs.

If expanding internationally is something your business is striving for, it’s important to carefully plan before making the jump.

Encourage interactions through social media

When it comes to social selling, the appeal for both businesses and customers is clear. Distributors that utilize social selling are 71% more likely to exceed their quota than those that don’t.4 For the customer, the value comes from being able to enjoy individualized attention from the distributor thus enhancing their buying experience and encouraging loyalty.

Social media has become essential for connecting with audiences and is the method most preferred by Gen Z distributors5 . Making connections with customers has always been crucial in both selling more products and signing up new distributors, but the ways to interact have shifted.

Social media plays a large part of the purchasing decision for consumers with two-thirds of shoppers relying on their channels to help make purchase decisions.6 Furthermore, a third of shoppers turn to social media influencers to learn about products.6 The most successful distributors are often influencers with digital platforms that give them a wider reach to customers and potential new recruits.

The flip side of this is that many former MLM participants are taking to these channels to voice their negative experiences. This anti-MLM sentiment can be seen on social media networks such as YouTube, Facebook, Instagram and TikTok7 . The latter has gone as far as restricting how MLM recruitment can be done on their platform. 8 This could make potential distributors nervous about joining, but direct sellers can address this with training on how to handle and respond to criticism. Direct sellers should craft a social media savvy work force that is adept at navigating these platforms and maximizing their potential.

Since negative reactions are present on social media, it’s important to provide a positive digital experience and monitor feedback.

Retain your workforce through flexibility

Not only do direct sellers need to appeal to customers, they must also meet the expectations of their workforce. Many businesses have flexible work options for employees over the past two years, but this has always been part of direct selling. This flexibility is attracting the attention of Gen Z; currently only 6% of distributors are in this age range, but that’s likely because the oldest members of this generation are in their mid-20s 9. Research from the Direct Selling Association found that 91% of Gen Z is interested in entrepreneurship.9 This alignment of values and flexibility makes this generation an ideal fit as distributors.

One large direct seller uses a segmented compensation plan that is a great example of providing flexibility. This allows their distributors to get paid their sharing bonus almost instantly after selling a product. This daily pay feature gives them the option to receive their money on their time, whether it’s immediate or after a day of selling 10 . Implementing new technology that makes getting paid easier is likely to make distributors happy.

This company has also found success with its customizable training module. Rather than a one-size-fits-all training, they ask new distributors to select the areas that best match their interests and experience level 10. This connection between the distributors seems to make the workforce remain engaged and invested.

By investing time into discovering how their workforce wants to be paid and do business, direct sellers can increase the chances of retaining their distributors.

How it all connects

Whether you are expanding to new markets, engaging and influencing customers in new ways or finding new incentives for your workforce, a connection is key for direct sellers.

Worldpay from FIS® has the experience, products, and partnerships to help you create and maintain these connections. Talk to us about how we can help you innovative payment solutions with for your direct selling company.

1Direct Selling Association. 2021. Direct Selling in the United States 2021 Overview. [ONLINE] Available at:
https://www.dsa.org/statistics-insights/factsheets[Accessed 06 June 2022].

2MLM.com. 2019. International Expansion for Network Marketing Companies. [ONLINE] Available at:
https://www.mlm.com/international-expansion-for-network-marketing-companies/ [Accessed 06 May 2022].

3Statista. 2021. Leading direct selling markets worldwide in 2020. [ONLINE] Available at:
https://www.statista.com/statistics/743446/leading-direct-selling-markets-worldwide/. [Accessed 06 June 2022].

4Forrester. 2017. Add Social Selling to Your B2B Marketing Repertoire. [ONLINE] Available at:
https://www.forrester.com/report/Add-Social-Selling-To-Your-B2B-Marketing-Repertoire/RES136248. [Accessed 07 June 2022].

5The Atlantic. 2021. When Multi-Level Marketing Met Gen Z. [ONLINE] Available at:
https://www.theatlantic.com/technology/archive/2021/11/breakaway-movement-gen-z-multilevel-marketing/620592/ [Accessed 06 June 2022].

6Forbes. 2021. How Shoppers Are Using Social Media. [ONLINE] Available at:
https://www.forbes.com/sites/forbesagencycouncil/2021/08/27/how-shoppers-are-using-social-media/?sh=9840e0d72ebe. [Accessed 06 June 2022].

7The Atlantic. 2021. How the Pandemic Stroked a Backlash to Multilevel Marketing. [ONLINE] Available at:
https://www.theatlantic.com/technology/archive/2021/01/anti-mlm-reddit-youtube/617816/. [Accessed 06 June 2022].

8The Atlantic. 2021. The Internet is Starting to Turn on MLMs. [ONLINE] Available at:
https://www.theatlantic.com/technology/archive/2020/12/tiktok-bans-multilevel-marketing-mlm/617422/[Accessed 06 June 2022].

9Direct Selling News. 2020. Z Future: Capturing Gen Z is Direct Selling’s Next Best Move. [ONLINE] Available at:
https://www.directsellingnews.com/z-future-capturing-generation-z-is-direct-sellings-next-best-move/.[Accessed 07 June 2022].

10PDirect Selling News. 2021. Customized Compensation. [ONLINE] Available at:
https://www.directsellingnews.com/customized-compensation/[Accessed 06 June 2022].