Adapting to shifting consumer attitudes, generational trends and regulatory challenges to thrive in a competitive marketplace
By Jenna Lang Warford
“High recruiting numbers don’t equal the activation of those distributorship—good leadership is what impacts that.” —Shirley Kimmes, Country Manager, Sanki Global
“You have to look at the people who built the customer base and sales field in the first place; and that means also looking at what you’re taking away from them.” —Hillary Alston, Senior Vice President of Sales, LuLaRoe
“The priority would be what works for the field. And although this type of situation is never easy, it’s much more doable when the bottom line is, is that good for the people?” —Bret Bonacorsi, Founder and CEO, jBloom
Direct Selling executives agree on two things: The pandemic had a substantial inflating effect on the channel’s sales, and those sales shouldn’t be considered as part of the trends by which expectations and goals are set moving forward.
Removing the peak retail sales of the pandemic years 2020-2022 shows that 2023 direct selling retail sales are up $1.5 billion over 2019, $1.3 billion over 2018, and $1.8 over over 2017. But as cost-of-goods has increased, this may not be as positive as it initially seems.
Shifting Models and Legal Battles
Neora’s four-year court case against the Federal Trade Commission (FTC) on whether it operated as an illegal pyramid scheme ended in September 2023 with the court ruling in favor of the beauty and wellness company. However, the district court ruled in May 2024 that the company cannot recover its $23 million in legal fees and expenses.
AdvoCare, which also faced charges by the FTC and ultimately reached a settlement, shifted to a single-tier compensation plan. “(While) we did go through it in a way that I would not wish upon my worst enemy, at the same time, we found success…,” Christina Helwig, CEO of AdvoCare, said. “At the end of the day, leaning into our customers has resulted in success—not only for our distributors, but for our brand.”
Though AdvoCare was required through litigation to lead the way, several well-known brands such as BODi, Rodan + Fields, Pure Romance, Seint, Tastefully Simple and Modere have created affiliate or affiliate-hybrid compensation plans. Even legacy companies such as Nu Skin and Mannatech currently offer an affiliate option.
The affiliate model has also emerged in direct selling startups. From launch, newcomer Bella Grace Global designed its compensation plan with an affiliate—or “Influencer”—option. Its most recent product offering, a subscription-based learning platform focusing on leveraging social media influence for monetization, leans into the idea that there is a market with an entrepreneurial bent that prefers serving customers over building a team.
Creating Clear Paths for Distributor Success
Veteran direct selling executive Shirley Kimmes, now country manager for Sanki Global, was formerly part of the corporate team at a company that switched to single-tier.
She says, “There are so many different factors prompting companies to choose single-tier compensation plans; foremost the regulatory challenges presented by the Federal Trade Commission (FTC) and the expense in fighting that has pushed many companies to simplify their compensation structures to reduce the perceived risk of operating on a multi-level model. Also decreases in enrollment of new distributors and the resultant decrease of quality leadership in the field.”
“That decrease in good leadership is important to consider, because when a company is overly focused on driving recruiting numbers, the result is usually a decrease in the quality of new leaders. It’s also important to recognize that high recruiting numbers don’t equal the activation of those distributorships—good leadership is what impacts that.”
Smarter Strategies, Better Tools
The solution, Kimmes says, lies in shifting how and where the company invests. “Every company needs to invest in training and tools—this is too important to be left up to various lines of sponsorship; although of course they’ll have their own favorite modes.” Kimmes believes that the training of the past isn’t the key to success.
“Trainings have to align with the trends of today,” she says. “To survive—much less thrive—we have to be innovators, offering them the tools that can propel their sales as well as their leadership skills. Sometimes distributors are capable but don’t know yet how to lead.”
Kimmes continues, “It’s important for companies to address this immediately before financial pressure forces them into a corner, going to single-tier or even direct-to-consumer. Take a look at what is provided to those who are joining—what tools are supplied? What training is offered? Because if they don’t have a clear path, they can’t see how to develop themselves and how to duplicate so they’re capable of leadership. Then you’re left with a no-win formula.”
Hillary Alston, whose former vice president of sales role resulted in her leading Stella & Dot’s sales field through the transition from multi-level compensation to a single-tier plan, notes that a company’s philosophy plays a large part in which strategies are chosen.
“In cases when sales fields were larger but have declined, I think you can decide to scale back the business to fit the size of the consultants that you have actively working,” Alston says. “Or you can use the ‘pie in the sky’ approach to try to reach the dollars in sales that you were making prior. Clearly, that’s not sustainable if you’re not steadily recruiting new consultants.”
Impact of Executives’ Philosophies
Alston, who is currently senior vice president of sales at LuLaRoe, contrasts the approach of different management teams. “With LuLaRoe, instead of scaling back the comp plan or switching the model, we’re adding in other areas to offer easier and simpler ways to create sales.
“Whereas with Stella & Dot, their approach was much more cut and dried. It was a decision of ‘we can’t afford to continue to pay this comp plan so we’re going to change to a completely different model.’”
Shellie Sullivan, who led Urban Retreat as chief sales officer through the company’s devastating inventory loss immediately following its U.S. launch, is a 20-year veteran of the direct selling channel.
“Shifting to an affiliate model is often a decision born out of necessity rather than choice—a recognition that the foundation of the business model, including compensation structures, behaviors, and incentives, may no longer support long-term success,” she says. “This kind of change takes tremendous courage from corporate leadership, as it acknowledges the need to reset and rebuild, knowing it will impact thousands of lives in the process.”
Alston and Kimmes believe that one of the most important factors in determining whether to find more innovative strategies is taking a good look at the existing sales field.
Alston says, “You have to look at the people who built the customer base and sales field in the first place; and that means also looking at what you’re taking away from them. And just as important, what are the promises that you made as a company to these people?”
Star Trek: All the Generations
Dannette H., a field leader who was a top-tier earner with several companies, including Younique, now uses a combination of affiliate models and a traditional compensation plan payout to create revenue. She brings a unique perspective to understanding what motivates different generations in the sales field.
“The best way to look at these generational differences is through the Star Trek™ lens,” Dannette explains. “The Baby Boomers—where network marketing truly got its strong roots—are like the original “Star Trek.” Think of who was on that ship—the same people. And primarily, they were going in and taking over something else and showing those people the correct way.”
This approach reflects the typical Boomer generation mentality in direct selling, where the focus is on product superiority. Their recruiting style, Dannette notes, centered on the message that “My product is the best for you; no other product can compare.”
Gen X brings a different approach, which she likens to “Star Trek: The Next Generation.” “More multicultural, they’re there to learn and solve. Their mentality and approach in direct sales is, ‘I have something to offer you that is going to solve your problem.’”
The newest generations have their own distinct style. “Affiliate-only programs do appeal to Millennials and Gen Z because they’re more like ‘Star Trek: Voyager,’” says Dannette. “They have a woman captain, have new views and values, and they’re not there to just learn; they’re there to assimilate. And that’s how they became influencers.”
Creating Strategies Based on Research
Although Dannette hasn’t read it, her views are supported by the Bridgehead Collective’s 2022 research. While the entrepreneurial spirit is alive and well in these younger demographics, their perspective is contradictory to Gen X. Bridgehead’s research, which focused specifically on entrepreneurial opportunities in direct selling, showed that Millennials and Gen Z will dismiss as a scam any opportunity/gig that purports to offer more than $500 per month in income. So their solution is to have several side gigs that provide that level of income.
Gen X, according to the Bridgehead Collective’s research, will dismiss as not worth their time any opportunity or gig that doesn’t offer at least $1,000 per month in income.
Surprise Solutions
With these challenges, executive teams that think outside the box can still create winning solutions for their fields, employees, and companies. Bret Bonacorsi, founder and CEO of jBloom, implemented one such solution by acquiring the field of a struggling company. Although the two companies had different cultures and values, they prioritized the needs of their consultants to create a win for everyone involved.
According to Bonacorsi, “The biggest win was for what we call our designers—our consultants. From the initial conversations we had with Plunder—another jewelry company—we made it very clear that it wouldn’t be about what works for (them) and what works for (us). The priority would be what works for the field. And although this type of situation is never easy, it’s much more doable when the bottom line is, ‘is that good for the people?’”
Bonacorsi’s team created a thorough and strategic approach to help the transitioning field members adapt. One of its first steps was developing a comprehensive online document containing all the necessary materials—videos, direct links, and instructions—to bring new members up to speed. For two to three weeks, jBloom hosted daily Zoom sessions to guide attendees through the toolkit and answer questions.
The team also organized an onsite leader event to build connections between the new and existing leaders. “It was worth every penny spent to fly in their top 25 or so people, along with ten of our top leaders in that first week, so that we could get to know each other,” Bonacorsi shares. Many of jBloom’s leaders had experienced similar transitions before joining the company, making their perspective invaluable.
To ensure new members felt welcomed, the jBloom team intentionally limited the number of its own leaders at the event. “We wanted the newcomers to feel comfortable; so we had six or eight of them at a table vs. one or two jBloom leaders,” Bonacorsi explains. This approach avoided overwhelming the new field and allowed them to feel included.
Bonacorsi emphasizes the importance of remaining true to company values throughout the process. While the team welcomed new ideas and feedback, they were upfront about preserving jBloom’s core practices.
“We appreciate that the newcomers have great knowledge, and we want to learn from them; sharing ideas is great, always,” he says. “But we were also always upfront and honest when it came to our core values, saying, ‘Hey, that’s not how we do it here.’ And that’s hard sometimes.”
By prioritizing transparency and maintaining open communication, Bonacorsi’s team successfully integrated the new field members while staying true to their company culture.
Blending Fields
The jBloom team found the fields merged remarkably well, but Bonacorsi adds that they were careful and intentional about explaining their company culture and values to the incomers. “You can take tools from other companies, you can take their tactics and learn from them, absolutely. But you can’t change your culture. That’s something we believe and it’s worked well for us.”
While this out-of-the-box solution created a win for both fields, the companies didn’t merge corporate teams; although one key member of Plunder’s staff did join jBloom permanently after the originally planned 3-month transition was over.
Regardless of how a company’s team decides to craft their 2025 strategies, direct selling executives who want to thrive will need to implement tools and trainings that address their fields’ modern approach to business and take into account the changes in consumer attitudes (because ultimately, their field is composed of consumers of their opportunity).
Executives will also need to address and meet the needs of the attitudes and perspectives of each generation, as well as develop solutions that take into account the market conditions and relationships between field members and their customers and teams.
Affiliate Models: Simplified But Not Risk-Free
It is important to note that transitioning to an affiliate model does not shield companies from regulatory scrutiny or enforcement actions. While affiliate structures may simplify compensation plans and mitigate some perceived risks associated with multi-level marketing, they still face challenges of compliance, particularly regarding income and product claims.
Regulatory bodies such as the FTC continue to target misleading practices across all compensation models. Furthermore, affiliate models come with their own hurdles, including maintaining consistent messaging and ensuring affiliates adhere to established guidelines. Companies must remain vigilant and proactive in building robust compliance frameworks to navigate these challenges effectively.