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Fair Selling Compass

fair selling

Companies such as Avon, Amway, Herbalife, Mary Kay, Tupperware, and Vorwerk represent a growing worldwide industry. In 2015, more than 103.3 million people around the world worked for such companies, selling products such as cosmetics, household products, insurances, jewelry, and nutritional supplements.

All these organizations are so-called direct selling, multi-level marketing or network-marketing companies that market their products through self-employed distributors who work from home. Distributors often not only sell products, but also recruit, motivate, and educate new distributors to do the same.

While the many millions of people involved in the direct selling industry demonstrate its attractiveness, the industry has been facing severe legal and ethical problems. These include temporary shut-downs for illegal pyramid practices, massive complaints by distributors about the misrepresentations of how much one can earn as a distributor, and a plethora of complaints about distributors making illegal product claims towards customers.

A simple reason for these ethical and legal problems is the lack of transparency: distributors and consumers often have little access to key figures such as how much distributors earn on average, the costs of starting the business, the number of distributors in a given country or even simple information as the national turnover. The lack of transparency strongly contributes to the frustration among (former) distributors, to a low distributor retention rate for companies, and to a contested industry reputation.

The aim of Fair Selling Compass is to to improve the quality of the direct selling industry by increasing its transparency. In particular, the aims of the fairsellingcompass.com are to:

  1. serve as a guide to what (future) distributors need to know;
  2. compare major players in the field to stimulate a “race to the top” amongst them, i.e. to stimulate an increase in transparency and fairness; and
  3. provide data to support the public debate on this growing but contested industry.

Fairsellingcompass.com contributes to “Creating Knowledge for Society” – the mission of the Institute for Management at the Radboud University. Read more

See the results here:

Project member

Dr Claudia Gross

Funding

Radboud University

Duration

2016 - 2018