Those of us who have been involved with the direct sales industry know how rewarding it can be. Even beyond the perks that can come with doing direct selling for a company whose products you love, it’s a great way to get social and have fun meeting like-minded, entrepreneurial people. 

And clearly, we’re not the only ones who feel that way. Direct selling continues to be a booming industry, with a projected market value of $286.7 billion by 2028. As we can see, direct sales is a legitimate industry, but how does it manage to ensure that the quality (and safety) of its products and services are regulated for both consumers and the salesforce?

Meet the DSA

Originally started as an association for traveling salesmen in 1910, the Direct Selling Association (DSA) has regulated and organized direct-selling companies since the Tupperware boom in the 1950s. It’s primarily dedicated to two important areas: protecting the consumer and protecting the salesforce. To do that, it created a Code of Ethics in 1970 that all their members must adhere to and post somewhere on their websites.

Here’s the DSA’s Code of Ethics: 

Our Code of Ethics protects consumers and independent salespeople with standards that ensure member companies are held accountable when it comes to claims about earnings, product, and other important areas.

  • Our member companies must provide their independent salespeople with accurate information about products and services, sales and marketing methods and compensation plans
  • Our member companies and members of their independent salesforce must provide documentation for claims and representations when marketing products/services and the opportunity to become a direct seller
  • Our members must honor the repurchase policy, requiring the company to purchase any unused inventory from independent salespeople within 12 months at 90 percent or more of the original cost
  • Our member companies must provide adequate training to their independent salespeople on ethics, marketing practices and field interactions
  • Our members must offer reasonable entry fees and costs and encourage salespeople to purchase reasonable levels of inventory

Our Code of Ethics requires independent salespeople affiliated with DSA member companies to adhere to the Code’s guidelines and ensure a high level of professionalism, customer service and business ethics when interacting with consumers.

  • Independent salespeople must respect a consumer’s wishes to discontinue a product demonstration or a sales interaction
  • Independent salespeople must market income representations and product descriptions consistent with company directives and ethics training
  • Independent salespeople must provide a receipt from the member company that permits the consumer to withdraw from a purchase order within a minimum of three days from the date of the purchase transaction and receive a full refund of the purchase price

Several member companies, such as USANA Health Sciences, work together with the DSA because of their commitment to guarantee quality and honesty in their products. But while cultivating a culture of honesty and integrity is great, the DSA recognizes that regulations need to go beyond posting the Code of Ethics on their website. Here’s a quick overview of all the levels of regulation the DSA requires its members to adhere to:

Local, State, & Federal Regulations

All DSA members are subject to local, state, and federal laws, same as any other business. Depending on the product or service being offered, they can also be subject to rulings from the US Food and Drug Administration (FDA). If a direct-selling company is found to have broken any laws regarding inaccurate earnings, income, and product claims, they can be reported to the Federal Trade Commission (FTC) or State Attorney General, both of whom are dedicated to protecting consumers.

It’s worth mentioning that the DSA regards pyramid schemes—business models where sellers are compensated for the number of people they recruit—as unlawful and needing prosecution. A true direct-selling platform has the salesforce gain their profits through the sale of products or services, not recruitment.

The BBB & DSSRC

Beyond local laws, members—and even non-members—of the DSA are subject to monitoring by the Direct Selling Self-Regulatory Council (DSSRC). Founded in 2019 under the Better Business Bureau (BBB)’s National Service, the DSSRC ensures both salespeople and consumers can have complete faith in the direct-selling business model. They independently monitor earnings and product claims made by the direct-selling community.

The DSSRC also enforces and resolves disputes surrounding a company’s product claims or income representations. They’ll investigate complaints from consumers and salesforce alike to ensure direct-sales companies offer quality products and services and accurate financial information.

Consumer Regulations

Finally, the DSA requires all members to have a link on their website so consumers can file a complaint or report other business issues they may have with a direct-selling company. They can also reach out directly to the DSCA Code Administrators or the DSSRC for monitoring. If a consumer or salesperson has found issues regarding inventory loading, terms of sale, warranties, and product guarantees, the DSA encourages them to file a complaint with the FTC or their State Attorney General.

While direct selling may never shake the opinions of people who don’t understand the business model, rest assured that, like any other industry, it is highly regulated to provide security and quality to people on both sides of the sales. With the DSA’s stringent policies and adherence to local regulations, member companies will provide nothing but the best to their customers and their salesforce.