BBB National Programs, in partnership with the U.S. Direct Selling Association, released the long-awaited new “Guidance on Earnings Claims” in July this year. This new guidance is the most comprehensive one ever released. It was also published at a time when the authorities in the United States were issuing warnings on questionable earnings claims during the pandemic.
Are there really doubtful income claims made in the direct sales industry? Well, the answer can easily be found through a simple search on the Internet. And it is that easy for the regulators to find out as well.
To shed light on this whole issue and help educate the novice, I think we should just take a look at the real picture. Below are some facts from eight of the major direct selling companies’ income disclosures for 2019:
Arbonne District Managers’ average was $3,724, Area Managers’ $17,848, Regional Vice Presidents’ $72,434, and finally, National Vice Presidents earned $271,311 in 2019 who made up 1% of the field force.
Of these, 15% did not earn any commissions. 56% (4,804 distributors) earned less than $245. 12% made more than $4,350 and 2% (162 people) made more than $82,000 in 2019.
Click for Jeunesse Global’s compensation report.
Company’s top 8 associates made $149,000-$740,000.
Click for Mannatech’s compensation report.
In 2019, 12,964 distributors earned commissions, representing 42% of the actives. 22% earned between $1-$100/year. 11% of the actives made $100-$1,000. About 3% of Nature’s Sunshine’s active distributors earned in excess of $5,000 in 2019.
Click for Nature’s Sunshine’s compensation report.
Nu Skin’s active number of distributors averaged 80,000 in 2019. 12% of these actives made about $400/year in bonuses. The top-income group called “Blue Diamond Directors” are 0.18% of the active distributors and they earned approximately $410,000 on the average in 2019.
Click for Nu Skin’s compensation report.
Roughly 0.5% of Optavia Independent Coaches’ annual income was $100,000 and above. This group was with Optavia for at least 50 months on the average.
Over the course of 2019, Rodan + Fields had 362,300 consultants in the U.S. About 55% of them (approx. 200,000) received a payment in at least one month and the remaining 45% did not earn any compensation from the company.
Of those who received a compensation, 67% made less than $1,000 annually. 30% earned between $1,000 and $10,000. 70 R+F consultants earned more than $1.2 million on the average.
Click for Rodan + Fields’ compensation report.
45% of these associates did not earn any income. About another 45% earned less than $1,000 last year. The top group that make up 0.2% of USANA’s members made more than $100,000.
Click for USANA’s compensation report.
There are several significant takeaways from these figures. To me, these statistics once again show three important things:
1) It is actually possible to achieve really high income levels through direct selling.
2) Not everybody reaches those high levels.
3) In fact, “1” and “2” above are public information that everyone has access to.
Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is a Supplier Member of the Canada DSA. It is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.
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