AN OPEN LETTER… TO DIRECT SALES ORGANISATIONS
This is the first in a series of 6 Open Letters to Direct Selling Companies and
Organisations. Every Tuesday for 6 weeks commencing 30th May, we’ll be looking at some of the problems faced by the Direct Selling industry.
OPEN LETTER 1 of 6
We here at PAN European Direct Selling Solutions are enthusiastic advocates and supporters of this industry. It pains us therefore to see the damage done to such a legitimate sector, by new entrants who do not understand, or who sadly, perhaps choose to disregard the ethos of the industry.
Such damage is not confined to new companies entering the sector. Equally, damage may be caused by sales people who have joined an established business – as a direct seller or as an employee and then, fail to follow the standards required.
Pros and Cons of running a Direct Sales Force
The self-employed nature of the sales-force is intrinsic to Direct Selling, and is a single factor which goes a long way to explaining the continuing and great success of the business model.
At the same time, however, it presents a real challenge to the Direct Selling Organisation (DSO) who may not know much about what happens in the field, yet may well be held responsible for the conduct of participants. This has very serious implications as regards reputation management, public
liability and legal responsibility.
Half-a-Million Opportunities & Threats
To take a fairly obvious example, the sales-force will be out and about in people’s homes and places of work. With almost 500,000 salespeople in the UK alone, and even allowing for some being less active than others, that represents a huge number of home visits.
The scope of products is wide and varied. It is almost inevitable that there will be sales-person- orchestrated accidents in people’s homes. As an independent contractor, that sales-person is legally responsible, and quite possibly, the DSO is not legally responsible.
Q: What happens if the salesperson doesn’t deal with the situation perfectly?
Q: What happens if the salesperson isn’t insured?
A: He/she will not be covered by the DSO’s public liability insurance, as that is limited to covering the company and its employees; the householder will be onto the DSO and/or the media as quick as a flash.
What can be done?
We strongly recommend that as a business in the sector, you ensure your salespeople have appropriate insurance in place, including for public liability.
This can be enforced through the salesperson's contract if it is a high-risk product (e.g. candles) and it should certainly be followed up and referred to in training manuals/ training calls, stressing the importance to the salesperson of compliance.
There are well-established and economical schemes available through the DSA Supplier members.
…more from our OPEN LETTER Series
We are very interested to have your feedback.
Learn anything new?
Can you relate to the issue?
Please share your experiences and stories in the comments section of this post and let’s all learn from
each other.
… and, if you’ve found this useful/interesting, please share and remember to pop back next week and every Tuesday thereafter for the next 5 Open Letters in our series.
This article is not intended to be either comprehensive or advice as to the law in any respect.
