The Landscape of Business Ethics
An industry expert weighs in on the new corporation
Companies are viewed through an increasingly transparent lens. As the younger generations of Millenials and Z have aged into viable consumers, the focus on corporations has shifted from a narrow band to a panorama where the products are no longer the totality of why a consumer shops a brand. Growing activism and a changing social climate are also fueling the new paradigm. People want robust information about a company and its values; in this modern decision-making matrix of purchasing, ethics now stand prominently alongside the mainstays of efficacy and affordability. Consumers expect to know who a brand is and what it stands for.
Across industries, direct selling has received perhaps more intense scrutiny than any other business model out there. The discussion can be polarizing and has resulted in passionate editorial and documentaries. But what is direct selling? Why has it been vilified? To set the record straight, Kim Drabik, Senior Director of Corporate Affairs at Plexus Worldwide, shares her thoughts on how ethical business practices are not only an essential component of direct selling, but the foundation of small business ownership.
What is Direct Selling? Direct selling is selling of products directly to consumers. Multilevel marketing is a means of compensation, like any other sales organization. In finance, retail and other industries you are paid for meeting your goals and the goals of your team. Direct selling provides entrepreneurs with the infrastructure and a low-cost/low-risk way to start a business of their own with high quality products and services through a direct-to-consumer approach.
Why is direct selling viewed negatively by some people? First, like in any industry, there are businesses where profit is the only goal. Fraudulent companies have set unrealistic start-up costs, including large inventory requirements, and made the goalpost recruitment rather than product sales. This approach sets a negative tone for all of direct selling, when in fact, the best of direct selling companies are focused on producing superior products that their distributors can sell. Second, it’s not the standard way that people are used to doing business. Corporations follow a formula, but what direct selling brings to the forefront is teamwork. That’s a critical component of any successful business, direct selling or otherwise. My advice to people thinking about entering direct selling as an entrepreneur is do your research – ensure that the company is providing a high-quality product that is in demand and that you are adequately compensated for your results.
What direct selling companies offer people that other companies may not? Throughout the past 100 plus years and into the future there is a space where direct selling will always win and do better than anyone else – – connection, experience, customer service and community. As human beings we need a sense of belonging and connecting with others. Personal connection and recommendations from people you know, even in the digital age, is what makes direct selling continue to thrive. During 2020, we saw our Plexus Worldwide Brand Ambassadors remain undaunted and agile. As entrepreneurs they pivoted, reached new customers, supported their teams and connected as a community.
Did the pandemic change the way that people viewed income? Prior to COVID-19, there was an expectation that you would always remain employed. The pandemic shifted our perspective. Suddenly, large groups of people were either laid-off or furloughed and they were left scrambling to provide for themselves and their families. It showed us that contingency plans are essential. Small business entrepreneurship through direct selling is a way to provide supplemental income as a safeguard in an uncertain economy.
What is the true business opportunity? We asked ourselves the same question. While we have our own data, it was important that we have people analyze Plexus Worldwide objectively. We decided to work with the team at Arizona State University Seidman Research Institute to quantify the impact of Plexus Worldwide as an inclusive, diverse, and compelling economy for all. In 2020, the study through the Seidman Research Institute showed Plexus Brand Ambassadors had a $639 million GDP impact and supported 4034 jobs, during a severe economic downturn from the pandemic. And with vendor purchases of over 146 million dollars, Plexus was not just a viable part of the economy, but a vibrant one.
How are you working to ensure ethical business practices in the direct selling industry? After 30 years of seeing the impact small business entrepreneurship has on individuals, especially empowering woman in leadership around the world, from being a part of a community, learning business skills or earning extra income, I have become fierce advocate for ethics and transparency. I served as the Advocacy Committee Chairman of the World Federation of Direct Selling Associations from 2014 – 2020, where our strategic focus was to protect consumers from fraud, educate and inform key stakeholders around the world and partner with elected officials to eliminate fraud. Now, I am serving on the WFDSA Ethics Committee where we are tasked with enhancing standards and creating awareness among companies, media, regulators and consumer groups. Here in the U.S. I have been working with the states’ Attorneys Generals, specifically Sean Reyes in Utah, whose father was an immigrant from the Philippines and was able to make an income as a direct seller. Sean is a great partner in this effort because he too is passionate about ethical companies standing out in the marketplace to eliminate fraud.
How much work is left to be done in the industry? As daunting as it may sound, there is not a finite end to it. Direct selling, like every industry, is a work in progress, an evolution. We’ve made mistakes along the journey, and we’ve adjusted, refined, and improved. And I can say with certainty there will be more mistakes. The only way to become better is to be driven to do the right thing while remaining open to learning when you’re doing something wrong.
Where are things going for Plexus? I see a bright future for Plexus Worldwide. As we expand in both our current markets and through geographical expansion, we will do so by being a thought leader in ethical business practices and transparency. Our vision is to have a positive impact beyond our company and into the communities and societies where we operate.