In the News
Is Better Business Bureau (BBB) Really Better?
DSA - Not what it appears to be
ARE ALL INDUSTRY ASSOCIATIONS GOOD FOR DISTRIBUTORS?
You would think they should be. After all, isn’t the direct sales and network marketing industry built on the backs of distributors? If you continue to read this “Publisher’s Perspective” you may have a rude awakening. Why? All industry associations are not built the same. They were created by different segments of the industry with different interests. There are four main associations that serve the direct sales and network marketing industry. They are:
(1) Distributor Rights Association (DRA)
(2) Direct Selling Association (DSA)
(3) Direct Selling Women’s Alliance (DSWA)
(4) Multi-Level Marketing International Association (MLMIA).
I will discuss them in the order that they’re listed in above – alphabetical. DSA is oldest but is it best? The DSA is the oldest and best-financed association. Although with less than 10 percent of the industry companies as the only voting members, it has the fewest voting members. It was founded in 1910. About 15 years ago, it almost went bankrupt. Amway, and a few other large companies, helped save the DSA. Dues Start at $1,500 for new companies and quickly rise based on net sales for the previous year to as much as $250,000. Supplier companies pay a rate of $2,500. By the time the large companies pay fees for various committees, the DSEF, sponsorships and donations, they can easily spend more than a million dollars a year with the DSA. The DSA is a private, non-profit corporation. What does that mean? When I asked Joe Mariano, the DSA’s executive vice president, who owns the DSA, he said, “Member companies own the DSA.” I asked, “Do all member companies own the DSA equally or are they prorated in amount of dues? He replied, as you can expect a lawyer would, “All the companies that own the DSA are member companies.” So who own the DSA? Do your own research. Don’t be surprised to find the same large companies heading the important committees year after year are the same ones that contribute the majority of the total funds and receive most of the awards. Only direct sales companies can be voting members of the DSA. Its members include about a dozen large direct sales and network marketing companies that virtually control it and a couple of dozen mid-sized companies. The balance of the DSA voting membership consists of mainly small party plan companies. The DSA also accepts dues from vendors, who have no votes or virtually no say, but distributors cannot be members at all. Who’s interest do you think the DSA has in mind? Vendors? Distributors? Anyone but the few large controlling companies? Do you think the DSA even represents the interest of the small corporate members or are these small corporate members just being used to give the DSA and large corporate members the appearance of legitimately representing the industry? Do you think the DSA cares at all about distributors other than as assets of companies? Consider the following. I have never heard the DSA consider one distributor issue out of concern for distributors. Any policy that seems to protect the distributors has been a result of trying to protect the companies, usually from over regulation. When the NSA company came under fire for “front-end loading,” the DSA implemented a 90-day buy-back rule. It may help protect distributors now, but if it was not for the threat of corporate regulation, do you think that the DSA would have implemented the 90-day buy-back rule? Consider what the DSA has done over the years. It has held training sessions teaching companies how to write policies so that distributors do not have any rights. These include clauses that give companies the right to terminate distributors without cause and to define the distributor’s entire business to be the sole property of the company. It has advised companies to control the ability of distributors to sell their businesses or forbid passing their businesses to their heirs. At an annual conference, in a speech by Neil Offen, the DSA’s president, he talked of the need to stop distributor associations. He said it may become necessary for the DSA to start its own distributor association so that it can continue to control the distributors. NMBJ and MMM have reported on these events in past issues. Recently a top DSA executive was named as an expert witness to defend a company who, without a written policy on the issue, had taken a distributor’s business away. This distributor had been numerously recognized for her high performance and support of her downline. The company also allowed cross-sponsoring and downline raids of cross downlines. Is the DSA defending these actions because, under the DSA’s apparent policies, a company can do whatever it wants with a distributor’s business, since the DSA believes the company owns it? Why would any distributor want to be a member of a company that belongs to the DSA? If your company does, what should you do? I cannot tell you to ask your company to resign or petition them to resign. I cannot suggest that if the company remains a member, that you should move your business to a non-member company. But ask yourself, why would your company belong to an association that does not represent or seems to not even respect distributors’ rights and not be members of the other three associations that protect distributor rights? Why would you want to join a company that does not support distributor rights?
Exclusive opportunity, or corporate exploitation?
By Miranda Butler
Published: Wednesday, January 20, 2010
Updated: Wednesday, January 20, 2010
Imagine how lucky you’d be if an amazing summer internship came straight to you.
In general education classes across campus, mysterious sign-up sheets are getting passed around during class. They give vague descriptions of an internship program that accepts students of any major and pays them $9,000 on average for one summer’s worth of work.
The corporation that’s offering these internships is called Southwestern Company, and they’ve invited countless UA students to informational meetings about their program.
Southwestern explains that they’re a book publisher seeking interns for an exclusive opportunity: The company sends students to a workshop that teaches marketing skills, and then they allow these students to create their own businesses. Interns get the privilege of setting their own goals, meeting with clientele to perform business negotiations and are encouraged to make as much money as they can — all while boosting their resumes. It sounds too good to be true, and for many college students, it is. This “exclusive” deal is not exactly what it sounds like.
You know those telemarketers who always call at the worst times? The obnoxious door-to-door salesmen who don’t take no for an answer? Southwestern is actually giving students the “privilege” of becoming one of them.
The Southwestern Company hires “interns” to sell books door-to-door. Interns are required to purchase these books wholesale, and then try to sell them to others. That enticing $9,000 is far from guaranteed. Students are often so unsuccessful that they end the summer indebted to Southwestern.
Also, because interns have the “opportunity” to run their own business, they are not actually employees of the company. Thus, Southwestern is not responsible for interns’ health, well-being or success — and if the students don’t do well, the company loses nothing. In fact, Southwestern gains money either way. So, although they claim to be exclusive, they’ll hire anybody. That’s why they recruit interns in Gen ed classes, accepting anyone who needs a job.
Southwestern is so intent on hiring hordes of interns that they ask potential employees for names and phone numbers of their friends as well. After all, the more students that Southwestern hires, the more money they can make with no risk to their profits.
But it’s a huge risk to financially burdened college students who might not fully understand the truth before accepting a job. Southwestern claims to teach valuable skills by sending interns to different cities. The company does assign its interns certain regions in which to sell their products; however, interns have no guarantee that these locations will be safe or that they will contain the proper demographic of people who would even be interested in purchasing educational books. Once again, since students don’t work for the company, they are required to pay for their own transportation and gas expenses that quickly add up when traveling to more than 30 homes per 12-hour day.
Southwestern does not force students to work 72 hours per week, but they do acknowledge that truly successful interns usually toil that much. Nevertheless, even the best salesmen usually only sell books to two houses out of 30 that they visit. That’s 28 other grueling trips where hardworking college students receive no reward for their efforts.
So, the Southwestern Company may seem promising, but there are countless college students who have had horrible summers at Southwestern. The Web site www.southwesterncompanytruth.com supplies numerous testimonies of negative Southwestern experiences. An anonymous UA student posted their story in an article titled “Do your research before Southwestern!” Here, the student explains that they put 10,000 miles on their mom’s car while working for the company, and didn’t even come home with much to show for it: “I didn’t meet one first year that made $8,000 dollars over the summer; in fact I walked away with a check for a little over $200.” (Keep in mind, that $200 was from 2+ months of work.) The student also adds: “I just wish I would have listened to a friend when he told me of his buddy’s experience selling for Southwestern.”
If our own peers have had such atrocious summers with this company, is Southwestern the kind of corporation that talented UA students should work for? Many students — and their parents — don’t think so. The Southwestern Company has been barred from some colleges, including the University of Birmingham. There, they were banned from recruiting interns during lectures because “Southwestern places the welfare of students into jeopardy.”
Thus, we at the UA should realize Southwestern entices potential interns with an opportunity that oftentimes backfires, and is far from worthy of students’ skills and abilities. Allowing Southwestern to advertise during Gen ed lectures just seems like an accident waiting to happen.
— Miranda Butler is a creative writing sophomore.
She can be reached at letters@wildcat.arizona.ed
