The direct selling industry globally has witnessed significant growth in the last few years. Today, there are over 116 million entrepreneurs representing direct sales companies around the world, according to the WFDSA (World Federation of Direct Selling Associations) - https://wfdsa.org/.

As per reports, (https://www.businesswire.com/news/home/20210526005567/en/Direct-Selling-Association-Releases-Data-Showing-Record-High-Sales-Sellers-and-Customers-in-the-U.S.-in-2020), the direct selling channel generated $40.1 billion in retail sales in 2020 – this up 13.9 percent from the previous year. In addition, The number of people selling products or services using the direct selling model grew 13.2 percent, with 7.7 million U.S. entrepreneurs selling on a part-time or full-time basis. In 2020, there were 41.6 million preferred customers and discount buyers purchasing through the direct sales channel, with notable growth coming from preferred customers. (This customer count excludes those who have not signed an agreement with a direct selling company).

However, despite the proven success and scale of the direct selling industry, it continues to grapple with its share of issues. Here are some of the most common myths about direct selling that will help you understand this growing industry better.

Direct selling is a pyramid scheme
It is true that pyramid schemes are illegal but the issue arises when direct selling lineage programmes, which look exactly like a corporate organizational chart, both of which are pyramid shaped, are understood as a pyramid scheme. On an organizational chart, the CEO is at the top, VPs next, Managers in the middle and the worker bees at the bottom. Can the worker bees and middle managers ever get to the top? Highly unlikely in the corporate world today. On the contrary, any direct seller can start a business today and exceed the income of their upline leader(s), based on how much work and effort they put into their business. Like any entrepreneur, direct sellers are paid based on their hustle and do not sit back eating bon-bons, getting rich on residual income. As Smith-Barney says, they make money the old fashioned way…they earn it (https://milliondollarpartygirl.com/06/5-myths-about-direct-selling/).

Direct sellers are not ‘real’ entrepreneurs
Even today, there is a section of people who are of the opinion that direct sellers are not true entrepreneurs due to the ease of access this industry offers to people from all walks of life. Not many know that direct selling does not require large capital to start with and can be done part-time as well. While some pursue direct selling as a hobby to generate supplementary income, the fact remains that direct sellers have to invest their time and effort to produce results. Among other things, product expertise, business acumen, exceptional communication, and organisational skills are just some of the abilities needed for success in the direct selling business, making each direct seller an entrepreneur in their own right.

The products are of low quality
Due to the stigma around direct selling companies, it is assumed that their products are inferior to similar ones found in the market. This is far from true because oftentimes direct selling companies invest millions of dollars into research and development. This helps them create exceptional products that in most cases cannot be found in any retail store.

The industry is not regulated
Just like any other industry, the direct selling industry has codified laws, business policies and clear guidelines to comply with. This ensures that both the direct selling company and the marketer are bound by strict guidelines. In India, the Ministry of Consumer Affairs put in place Direct Selling Guidelines in 2016 to be implemented by each State. These guidelines have been formulated to distinguish between fraudulent companies and genuine direct sellers, and also protect consumers. In the USA, for instance, the Anti-Pyramid Promotional Scheme Act of 2016, titled H.R.5230, was created to prosecute illegal pyramid schemes, thereby ensuring consumer protection. Direct Selling Associations throughout the world fully support this Act.

To conclude, despite the legitimate status of the direct selling industry, many myths continue to plague the industry. As a buyer, keep these myths in mind and choose a firm with a strong long Presence track record as it is usually a safe way to enter the field.