If you’re on social media, you’ve likely seen friends, family members and distant acquaintances trying to promote their latest product.
According to the Direct Sellers Association (DSA), Canada has 1.3 million independent sales consultants, which generated $2.6 billion in annual sales in 2017. Of all the independent Canadian consultants, 82 per cent are women.
“If you’re a new stay-at-home mom… it’s a nice way to make a little bit of money while also having a social outing,” Derek Hassay said. He’s an assistant professor in entrepreneurial thinking at the Haskayne School of Business at the University of Calgary.
Hassay said there are far more companies today using direct selling, also known as network marketing, compared to 15 years ago.
“There are more and more small companies that have started up and have used this as their entrepreneurial approach to the market place,” he said.
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While pyramid schemes are illegal in Canada, multi-level marketing is often a compensation method for many direct sales companies. For example, when a sales consultant sells a product, they not only receive commission, but the person who might have sponsored them also receives commission.
“People might say, ‘Well it looks like a pyramid.’ What I’d say is every organization looks like a pyramid, whether it’s the government or a health organization,” Hassay said.
Success stories
Lisa Wolny represents the epitome of a direct marketing success story. Eight years ago, she was at home with two young kids and was approached about buying Isagenix, a multi-level marketing company that sells dietary supplements and personal care products.
“I was exhausted. I hit rock bottom. I wasn’t sleeping at night,” Wolny said from her Calgary home. “When I really hit rock bottom, I always say that was the greatest gift. Because I was finally open to trying his stuff.”
Within 14 months of hard work, she was making a six-figure residual income. She’s since earned more than $1 million with the company.
“I always said I built an empire through the cracks of diapers and nap time. It was just 10 minutes here, 15 minutes there,” Wolny said.
She attributes a big part of her initial her success to selling to people at the gym.
“I started working out. They had a daycare, I could bring my kids there,” she said.
However, Wolny cautions that not everyone will achieve similar success.
According to a survey conducted by the DSA in 2016, 22 per cent of independent sales consultants were very satisfied with their direct selling experience, 46 per cent of were satisfied, and 20 per cent were neither satisfied nor unsatisfied. The DSA did not provide the result of the percentage of consultants who said they were unsatisfied.
“It really depends on people’s effort, their skills, their demographic,” Wolny said. “Don’t expect the money to fall from the sky. This is network marketing. It does require work. You have to be consistent.”
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Heather Jespersen has been selling Stella & Dot for eight years. Two years ago, she quit her nursing career to pursue direct sales full time. She said she’s far replaced her nursing income by selling jewelry.
“It’s not rocket science. It’s not a job that’s incredibly difficult. You have to put the time and energy in,” Jespersen said from her family’s dairy farm near Westlock, Alta.
“I saw the huge opportunity and the flexibility was really important with the age of our kids.”
Income not guaranteed
Hassay said people can’t expect to build a business on the back of friends and family members on social media.
“The person who is afraid to get out of their own social network and friends are unlikely to be very successful,” he said.
Constantly pushing friends to host parties and buy products can often be a turnoff.
“I think there can be a huge ‘ick’ factor in this industry. You have to constantly rise above that and just be different. Have respect for what you do,” Jespersen said.
For people looking to make a career out of direct sales, Hassay, Wolny and Jespersen agree that the job takes work and often years of persistence.
“How can you expect full-time pay for part-time efforts?” Hassay said. “You must exert the effort. You must exert the time.”
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