Women vulnerable to Ponzi schemes in South Africa
Johannesburg, August 2020 -- Women more vulnerable to Pyramid and Ponzi schemes in South Africa.
The Direct Selling Association of South Africa (DSA) says it welcomes the aggressive stance taken by relevant authorities to stop the rapid growth of Pyramid and Ponzi schemes.
DSA vice-chairman Mthunzi Mbali says: "There are wide-spread media reports suggesting that leaders of suspected Ponzi scheme operations have had their funds frozen. This means the authorities are taking a more active role in scrutinising businesses suspected of defrauding the public. As the DSA we welcome the no-nonsense approach in protecting the livelihoods of so many vulnerable people in our communities."
Mbali says in South Africa, women have embraced direct selling business opportunities so enthusiastically and are consequently more vulnerable to Pyramid and Ponzi schemes.
This is because Pyramid and Ponzi schemes tend to structure their businesses to look-like direct selling businesses.
The direct selling industry, with an annual turnover of about R13 billion, has a community of over a million passionate entrepreneurs from diverse backgrounds.
Seventy-five percent of these entrepreneurs are female and 87% are from black communities, operating on a full-time or part-time basis as direct sellers.
Mbali says the direct selling industry in South Africa supports more than 6 million individuals who must be protected from Ponzi schemes, which are a form of fraud.
Typically, Ponzi schemes pay “profits” to earlier “investors” with funds from more recent “investors”.
The scheme leads victims to believe that profits are coming from product sales or other means when in fact other investors are the source of funds. Inevitably, when the bubble bursts investors lose their money.
Several women, who are breadwinners in their families, rely wholly or partially on income derived from direct selling activities.
Mbali says: "Letting the Ponzi scheme industry operate with impunity is as good as taking food right out of their mouths."
The DSA vice-chairman adds: "We are also particularly excited to see the media fraternity responding to our call earlier this year to support our industry in exposing Ponzi schemes."
These schemes can be local or international. They are online or chat platform-based. These schemes can even imitate established community-saving clubs like Stokvels.
"In times of economic difficulties, people who are facing severe financial challenges will explore many avenues to generate some form of income and Ponzi scheme operators capitalise on this vulnerability," warns Mbali.
"Real direct selling businesses do exist in South Africa and we encourage the public to visit our website at www.dsasa.co.za to explore legitimate direct selling business opportunities operating in a safe and regulated environment."
"All DSA-member companies in South Africa are required, as a condition of membership to the association, to adhere to a code of ethics that aims to protect consumers, the public and the industry in general."
Self-regulation keeps industry honest
In his budget adjustment speech, the Minister of Finance Tito Mboweni announced that the economy could contract by as much as 7.2 percent and was expected to continue to shed jobs.
Owing to the weak economy exacerbated by the Covid-19 lockdown, many of South Africa’s top brands, with a history that predates the dawn of democracy, have announced impending job cuts on a mass scale.
The current economic conditions are a perfect breeding ground for an increase in get-rich-quick Ponzi schemes, warns Mthunzi Mbali, vice-chairman of the Direct Selling Association of South Africa (DSA).
Mbali says the DSA was established to set standards that member companies are expected to observe and adhere to as a way to guarantee a level of professionalism and ethical standards the public can trust.
DSA member companies’ operations cover nearly the entire cross-section of the economy and as such, some of them also fall under various regulatory regimes.
“Mbali says it was important to establish a self-regulatory mechanism that will be able to assure industry participants and consumers of the highest standards of ethical conduct.
The self-regulatory mechanism helps the public to distinguish genuine direct sellers from those that simply wish to leverage the direct selling business model for nefarious purposes.
“We have drafted a code of ethics that all member companies registered with the DSA are required to observe at all times,” reveals Mbali.
“We believe very strongly in self-regulation to the extent that DSA South Africa has been instrumental in establishing self-regulation mechanisms in other jurisdictions on the African continent.
“As the DSA, we can hold member companies accountable for their behaviour towards the public as this reflects on the reputation of the industry as a whole."
Mbali says it is important for the DSA to be very stringent in holding member companies accountable because the direct selling business model is vulnerable to “copy-cats” that lack integrity.
These copy cats are accountable to no one as witnessed in the recent past with the mushrooming of Ponzi schemes masquerading as direct selling business operations.
While the self-regulator is unable to censure businesses that are not members of the DSA, Mbali encourages the public to conduct some basic due diligence to establish the legitimacy of any business venture they wish to participate in.
“Membership to an industry self-regulatory body such as the DSA is one place to start in vetting the veracity of a business that claims to be a legitimate direct selling operation,” says Mbali.
All DSA member companies are listed on the organisation’s website (www.dsasa.co.za).
The DSA urges the public to continue to make use of information that the organisation makes publicly available about its members.
The DSA can vouch for these member companies as legitimate and above board.
“We are seeing an increase in traffic to our digital platforms including our social media pages where the public is beginning to engage with us more regularly to test the reliability of claims by several operations in our space coming to the market,” says Mbali.
“As we have mentioned before, the acid test on whether a business is legitimate and sustainable should include-membership to an industry self-regulatory body, availability of a physical structure that the public can inspect, existence of a product or service exchanging hands and the promise of unrealistic returns in a very short space of time from modest investment is a definite red flag.
“If it is too good to be true, then you definitely need to investigate further because it probably isn’t true,” concludes Mbali.
DSA calls on media and civil society to help rid SA of Ponzi schemes
Johannesburg, 01 June 2020 - The country’s media fraternity and civil society have been called on to play an active role in eradicating Ponzi and pyramid schemes that are devastating families and societies.
In recent times, member companies have reported to the DSA-a spike in both local and cross-border pyramid schemes of all manner of shapes and sizes intent on seizing scarce financial resources from the unsuspecting public.
Mthunzi Mbali, the vice-chairman of the Direct Selling Association of South Africa (DSA) says: “We are extremely worried about the proliferation of pyramid schemes in South Africa”.
He says the DSA has been at the forefront of exposing this economic crime for “as long as we have been around”.
Mbali adds: “We need the help of the media and ordinary citizens to expose business operations that we believe will hurt the public”.
Mbali says there are several signs that the public can rely on to determine if a venture they are getting involved in has any chance of success or if it is going to be sustainable.
The DSA vice-chairman says first look at what they are offering and their remuneration structure.
He says potential investors must also check if there is an oversight body that the scheme is accountable to and also find out if it is part of any legitimate association.
“Most importantly though, if there is no underlying product or service being offered, then you need to be very concerned,” cautions Mbali. Mbali cautions against compensation plans that pay for recruitment of people stating that “legitimate direct selling businesses pay compensation to their Direct Sellers based on sales of their products and services and not for recruitment of people, since the recruitment of people is the channel by which Direct Selling businesses increase their reach through the development of Direct Sellers that are recruited, similar to traditional business models that recruit sales representatives to increase their reach, with the main difference being that Direct Sellers are independent entrepreneurs.
He says pyramid schemes thrive because in some instances they fashion themselves as direct selling companies even though the two have absolutely nothing to do with each other.
“Consequently, there is a tendency by some media to lump the two together-which is also not helpful,” says Mbali.
“If ever in doubt, we invite the media to consult the DSA or visit our website (www.dsasa.co.za) to confirm the legitimacy of businesses that we are prepared to vouch for because we have vetted them and are comfortable that their business models pass the sustainability test.”
Referring to a recent national radio conversation between presenters and a member of the public, Mbali says the DSA would like to appeal to the media fraternity to familiarise themselves with legitimate direct selling business models so that they do not add to the confusion.
“Legitimate direct selling business models work, not just in South Africa but around the globe,” insists Mbali.
“This is a nearly $200 billion global enterprise. In South Africa-annual sales are approaching R13 billion-with a total network of more than 1.2 million entrepreneurs supporting no less than 6 million individuals.
“We need the media to be on the right side of the fight against Ponzi schemes. The DSA was established to protect the interests of the industry and to do that we must first protect the interests of the consumer and the general public.”
DSA urges public to take a look at direct selling for consistent and reliable income
Johannesburg, 21 May 2020 – With the economy expected to shrink by an estimated 15 percent in 2020, direct selling offers an opportunity for South Africans with an appetite for entrepreneurship to generate steady and reliable income, says Mthunzi Mbali, Vice-Chairperson of the DSA of South Africa (DSA).
"“Government has done a phenomenal job in many respects with regards to encouraging entrepreneurship through various entities offering both intellectual capital and funding support because government recognises that small businesses are the real engine of our economy and a strategic sector when it comes to arresting rising unemployment,” says Mbali.
“Sadly, many entrepreneurship opportunities require considerable capital investment and few people have access to funding, however direct selling provides training as well as being able to jump-start an entrepreneurial career with little upfront capital commitment,” add Mbali.
“The DSA member companies in South Africa provide business opportunities to more than 1.2 million individuals who in turn support roughly six million individuals from the income they generate in direct selling activities,” says Mbali.
“The direct selling industry accounts for a significant portion of small business activities in South Africa, and because the industry has such low-barriers to entry it might very well be the engine the country will need when the economy embarks on its upward trajectory,” adds Mbali.
“However, with lockdown set to ease to level three by end of May, we are confident that we will see a quick up-tick in sales and more economic activity in this sector,” says Mbali.
Mbali believes direct selling is a strategic sector in the South African small business environment which needs nurturing. “Without the direct selling industry, the level of unemployment in South Africa will be at stratospheric levels. The economy will need this sector, South Africans need this sector to thrive,” adds Mbali.
“This industry absorbs individuals who are often left out of the mainstream economy because of their limited educational background or lack of experience in other sectors,” adds Mbali.
“The direct selling industry is a resilient sector which has survived many recessions and it will continue to play a strategic role in arresting unemployment,” concludes Mbali.
DSA Cautions Public to Avoid Taking Financial Adventures During Times of Uncertainty
April 2020 – The world at large is set for a tough economic recovery period following the coronavirus pandemic. In such times we see much anxiety, job loss, fear and desperation. It will be more important than ever, to safeguard your hard-earned money and not fall for ‘get-rich quick schemes’, says Direct Selling Association of South Africa’s (DSA) chairman, Rajesh Parshotam.
“It’s to be expected that opportunists will take the recovery period as a chance to exploit people. We would like to take this opportunity to warn the public to err on the side of caution,” he said.
Parshotam says there will be opportunities in the future to generate income through legitimate non-conventional means such as direct selling.
The DSA, an industry self-regulator, puts all new direct selling companies who apply for membership through a rigorous 12-month compliance process to ensure they are sustainable as well as ethically and professionally sound. Local and international member companies, of which close to 30 belong to the DSA, have to comply with the country’s laws before they can be upgraded from probationary member to full member status.
“The public should, at all times, but more especially now, exercise financial prudence rather than pursue untested financial expeditions. We’ve fielded many calls in the recent past, where members of the public needed to verify companies purporting to be direct selling operations. This is the type of behaviour we commend. Before trusting a company with your hard-earned money, research it, know their history and business practice and ensure they are aligned to a regulator,” he says.
Additionally, Parshotam says there are other factors to consider.
• “Is the company associated with a direct selling association locally or abroad? Is it registered with the South African Commission of Intellectual Property and Companies (CIPC)? Does it have registered offices in South Africa? Is it registered with the South African Revenue Services (SARS)? Are commissions, bonuses and other incentive payments based on actual sales of products and services and not on recruiting other direct sellers? Is the organisation promising unrealistic rewards for little effort required?
Parshotam adds that the protection of all consumers and the public in general is a top priority for the DSA.
“This is a duty we take very seriously. The protection of both the consumer and the industry is critical to our strategic intent,” he says.
Parshotam says, after the Covid-19 storm has passed, the industry will be a safe avenue for many looking to generate additional income, which is why safeguarding it, protecting consumers and cautioning members of the public is of vital importance.
"We are certainly living in unprecedented times. There’s no telling what will happen tomorrow. We have however seen projections in the news media that the economy will take a while to recover from all this. Thousands of people -- breadwinners, families and households -- will surely be affected. Instead of taking the first available avenue out of a hard time, we strongly advise that people think long-term and evaluate how sustainable the potential venture will be",concludes Parshotam.
SA government should follow Namibia’s example in eliminating Ponzi schemes
March 2020 -
Namibia recently took decisive action against an alleged pseudo direct selling company operating in its jurisdiction.
“We commend the Bank of Namibia for protecting Namibian citizens against such companies and would like to urge the South African government to voice their disapproval of non-compliant operations in the country,” says Direct Selling Association of South Africa’s (DSA) chairperson, Rajesh Parshotam.
Crowd1, allegedly a ‘get-rich-quick’ scheme, was recently banned and labelled a pyramid scheme in Namibia. Recent media reports have alleged that South Africa is Crowd1’s biggest market. It has been reported that the Bank of Namibia declared the company’s operation an “undesirable practice” which, in that country, could translate to 10 years in prison or a R1-million fine for anyone who continues to promote the business.
In South Africa, and indeed in many other countries around the world, vetted and legitimate direct selling companies sell tangible goods or valuable services. Crowd1 has been reported to not offer any of the two. It allegedly generates income through the sale of membership packages to new members. The more members one has, the more money they make. The bank of Namibia is said to have expressed concern that this model was unsustainable and that citizens would eventually lose hard earned money.
Compliant direct selling companies assistallow direct sellers to generate income through the sale of services or goods whether they have new members or not.
According to the said reports, Crowd1 is a mobile application whose actual operations are unclear; they have been reported to dabble in internet software and sports betting. It was launched in South Africa in November 2019.
“As the DSA we’ve recently decided to up the ante in the fight against non-compliant organisations in the local sector. The protection of all consumers and the public in general is a top priority for us,” says Parshotam.
The DSA, an industry self-regulator, puts all new direct selling companies who apply for membership through a rigorous 12-month compliance process to ensure they are sustainable as well as being ethically and professionally sound. Local and multi national member companies, of which close to 30 belong to the DSA, have to comply with the country’s laws before they can be upgraded from probationary member to full member status.
“We have our finger on the pulse of the local direct selling industry. Over the years we’ve seen South Africans conned by fly-by-night pseudo direct selling companies, which has tainted the good name of legitimate companies which are making a major difference in the lives of South Africans, affording them an opportunity to making a living, and at times career equivalent income,” he says.
The DSA mourns the passing of Ernest J du Toit, an industry leader
The direct selling industry begins the year with a heavy heart mourning the loss of one of its greatest champions. Ernest J du Toit, former chairperson of the Direct Selling Association of South Africa (DSA) passed away on the 31 December 2019.
Du Toit spent decades entrenched in the industry and served on the Board of Directors of the DSA as Director, Vice Chairperson and Chairperson. During his tenure as vice-chairperson and chairperson of the DSA he served as a board member of the World Federation of Direct Selling Associations (WFDSA).
“We are deeply saddened to hear of Ernest’s passing. He served the direct selling community for more than 25 years and contributed immensely to the development of the industry across South Africa, across cultures, age groups and people from all walks of life,” says Rajesh Parshotam, DSA chairperson.
“Ernest’s ability to make every person with whom he came into contact feel important was so special, and his vision and foresight in business and life were extraordinary. His achievements are there for all to see as a testimony of the legend he will always be.”
Parshotam says it has been a sad period for the local industry. “We have lost someone who was passionate about developing people’s potential and knew how to use this industry as a tool to bring out the best in people. He was truly a remarkable human being. May his legacy continue to inspire us all.”
This is indeed a very sad period of time in the history of direct selling in South Africa as we mourn the passing of a truly remarkable human being and celebrate the life of a great man.
“On behalf of the DSA, its Directors and Member Companies I wish to express our sincerest condolences to Angelique, their children Claire, Jean-Pierre, Bayley and Rhyde as well as the rest of Ernest’s family and friends. Our thoughts and prayers are with them during this very challenging time,” concludes Parshotam.
New DSA chairperson looks ahead to the new decade
December 2019 – As we head into a new decade in the local direct selling industry, the Direct Selling Association (DSA) of South Africa has recently appointed a new chairperson, Rajesh Parshotam.
Parshotam, fondly known as Raj, is the General Manager at Amway in Southern Africa and takes over the reins from Cornelle van Graan, former Managing Director at Ascendis Health Direct who resigned in October.
Parshotam has been part of the direct selling industry in South Africa since Amway landed on the local market in 1997.
“I joined this industry 22 years ago. Prior to joining the industry, much of my conditioning in business was all about profit and maximising returns.” Parshotam holds a Diploma in Business Management.
“The greatest lesson from joining the industry was that it was people before profit and that if we look after the people and partnered with them in the accomplishment of their goals, no matter how small or large, profit would follow. This was a big mindset shift for me, authentic relationships became key and centre to success,” says Parshotam who has been a DSA director since 2012 and the vice chairperson since 2017.
Parshotam says that South Africa desperately needs to promote and foster small business.
“Direct selling is the perfect model, it has been achieving success in developing ordinary people, irrespective of their backgrounds, qualifications and/or race, into micro enterprises and a collective making a meaningful contribution to the country’s economy.
“This achievement is also a sustainable one and it supports government’s growth objectives. These small business owners or distributors as we call them also help create jobs as they need support in their lives and homes. Further to this, there is also a positive impact from a skills development perspective through the efforts of all our member companies,” he says.
Under former chairperson Van Graan’s tenure, the DSA saw great success, stability and recognition, including that of Platinum Member of the World Federation of Direct Selling Associations (WFDSA). Looking to the decade ahead, Parshotam says great things lie ahead.
“We are just getting started, we are excited about the potential that social and digital platforms have to offer our industry. Let me unequivocally state that the DNA of this industry is our people and this will never change. If we want to grow with the young, then we must evolve. Social and digital platforms are not here to compete with the person-to-person interaction, they are here to enhance this method of communication,” he says.
Digital platforms have allowed distributors in the industry a wider reach at a minimal cost, says Parshotam. He says they have also created ways to meet individuals at their point of convenience, so distributors can do training, run their business and catch up on developments within their companies at their own pace.
He says the decade ahead will be ruled by numerous accessories on the digital front - big data, the Internet of Things, Artificial Intelligence (AI) and Virtual Reality.
“As the gig economy continues to grow, driven by the needs of young people, the direct selling business must present itself as an attractive option due to the low cost of entry as well as the flexibility it offers - this is one of the key needs of young people. They want to determine what they do, when they do it and how they do it,” he says.
The DSA donates thousands of rands to reduce absenteeism of Soweto learners through its sanitary-pad drive
Johannesburg, 15 October 2019 - Since last year, the Direct Selling Association of South Africa (DSA), the industry body that represents over 30 local and international direct selling companies, has handed over, to female learners at schools, 300 reusable sanitary pads to the value of R60 000 through the generous donations of its member companies.
“The sanitary pads were handed over to female learners at two schools in Soweto,” says Cornelle van Graan, Chairperson of the DSA.
On the eve of International Girl Child Day last week, the DSA handed over 100 reusable sanitary pads to young female learners at Protea Glen Secondary School in Soweto.
The pads, a product of D.A.R.E. To Be Empowered, have been fashionably designed to keep them fun for young women to use.
“The importance of sanitary towels cannot be stressed enough. Recent global statistics still paint a tragic picture for the girl child around something as natural as their menstrual cycles,” she says.
One in ten schoolgirls in Africa miss classes or drop out as a result of their menstrual cycles, according to UNICEF.
“This initiative is about keeping the girl child in school and relieving worry around the monthly costs that come with being a woman. The beauty of these sanitary towels, locally created and designed by D.A.R.E. To Be Empowered, lies in their reusability. This completely eliminates any concerns of placing pads on the monthly budget for years to come,” says Van Graan.
The DSA promotes self-empowerment through its member companies whose business models are structured to unleash the entrepreneurial potential in each individual, she says. These companies are also concerned about the socio-economic injustices that plague our society, added Van Graan.
“Education gives us the ability to rewrite our stories, to self-actualise and develop. To have something natural keep you from being the best version of yourself should be a shame. It is for this reason that the DSA’s member companies responded so enthusiastically to help young female learners further their education without hindrance,” says Van Graan.
It is common knowledge that women are the pillars of many households in South Africa, and to deny women an education is tantamount to holding back the socio-economic progress of an entire community.
As you’d expect, the South African chapter of the Direct Selling Association’s numbers are proportionate to an economy 25 times smaller, but the trends are similar.
“Our long-term vision is to see as many learners as possible reach their educational and financial goals, and we are ready to hold their hands along that journey where we can,” says Van Graan.
D.A.R.E To Be Empowered, a company run by Mooniba Bhyat, brokered the relationship between the DSA and the school. The partnership between Bhyat and DSA began last year. D.A.R.E. has created jobs for women in under-privileged communities through this initiative.
“By partnering with D.A.R.E. we continue to support women in need past the schools that we provide with these items,” says Van Graan.
Each of the learners received a pack of six washable and reusable sanitary pads.
“Each pack will enable each recipient to have access to decent menstrual health for a period of three years,” says Bhyat.
The Direct Selling Association of South Africa cautions South Africans against get-rich-quick-schemes at play in the South African Market
October 2019 -
Ongoing media reports on get rich quick schemes disguised as legitimate investment opportunities only highlight how badly South Africans long for financial freedom.
The festive seasons is fast approaching and the current economic climate in the country could leave a large number of employed people without a bonus come December, and worse still those who are unemployed with no avenues for something extra in their pockets.
The South African economy has seen better times. Reports in the media this year have alluded to the idea that the country’s economy was in better shape 11 years ago compared with today, which is an indication that to survive financially one must leverage all possible legitimate avenues for additional income.
“I cannot stress enough how, when looking for ways to make money, caution has to be extensively exercised,” says (Acting Chairperson?) of the Direct Selling Association (DSA) of South Africa.
“As the DSA we condemn any exploiting of the people of this country under the guise of enhancing their wallets. Unfortunately, when these types of stories emerge, they are labelled as pyramid schemes, which at times incorrectly gets linked to direct selling.
“Direct selling differs greatly from pyramid schemes. In direct selling participants are sold a product or service which they can use, repurchase and start a business that will generate income for them whether or not they recruit more people under them. By definition, pyramid schemes place more emphasis on recruiting people to generate an income as opposed to selling products or services,” ?? says.
The DSA has more than 30 ethical member companies who undergo a rigorous process to complete membership. All new DSA members undergo a 12-month probationary period. During that time the DSA assesses the company’s compliance with its Code of Conduct and the country’s legislation. After the probationary period the company is proposed for full DSA membership.
“This process makes direct selling a legal and ethical avenue for the generation of income. To succeed in direct selling, you need to do more than merely recruit people, it’s a profession, it requires hard work and strategy like any other career path,” says (Acting Chairperson?).
The DSA Code of Conduct stipulates, among other things, that companies shall not use misleading, deceptive or unfair recruiting practices in their interaction with prospective or existing direct sellers. Companies and direct sellers shall not misrepresent the actual or potential sales or earnings of their direct sellers. These are just some of the stipulations in the Code of Conduct available on the DSA website (www.dsasa.co.za).
“We would like to caution the public to be vigilant when trying to grow their money. If it’s through a company whose model is similar to that of direct selling, please ensure that it is a DSA member and has undergone a thorough vetting process. Individuals must do their own independent research.
“When researching, ascertain if the company is registered with a direct selling association locally or abroad; if it is registered with the Commission of Intellectual Property and Companies (CIPC); if it has registered offices in South Africa; if the company is registered with the South African Revenue Services (SARS); if the company has received South African Reserve Bank approval for funds leaving South Africa; if the company has products or services they are selling; if it is paying for recruitment which would be a negative indicator; and finally research the difference between pyramid schemes and direct selling which is also available on the DSA website,” says (Acting Chairperson?).
Direct Selling providing more opportunities for more women
Johannesburg, 16 August 2017 -- Figures just released indicate that unlike many other sectors in the economy direct selling is growing, providing more micro-entrepreneurial and income generating opportunities for women.
Currently some 1 333 223 South Africans benefit from direct selling and have the opportunity to build their own small business, of which 72% are women.
Despite the flagging economy, direct sales in 2016 were 18 percent up on 2015, totalling nearly R12.9 billion
According to Cornelle van Graan, chairperson of South Africa’s Direct Selling Association (DSASA), direct selling attracts female entrepreneurs because it offers opportunity, flexible working hours, training and the ability to work from home.
The number of women who make a full-time living from direct selling has grown by almost 30% with the majority operating in the health and wellness, personal care or household good sectors.
Van Graan says that the sector also provides opportunities for women who have an existing full-time job, but want to supplement their income.
“Direct selling is also a good way for stay-at-home mothers to make a living, while being actively involved in the lives of their children. Getting started is generally easy, low cost and low risk.”
“Mothers usually have an existing network of other moms, giving them excellent access to a market with similar needs and interests. Their personal relationships and endorsement gives buyers confidence, so these women can be very effective sales people.”
About three-quarters of all direct sales people in South Africa are involved part-time.
Besides flexibility and access, part of the appeal of direct selling may be that money can be earned immediately the sale is made. There’s no waiting until the end of the month or the next payment cycle.
Van Graan says while motivation can vary from paying for a child’s education to saving for a dream holiday, most women get involved in direct sales to provide for their families.
There are 34 direct selling companies who are members of the DSASA. There are more than a million independent business owners associated with DSASA member companies. They make sales totalling nearly R13 billion a year. Everything from financial services to beauty products and skin care, from fragrances and fashion accessories to nutrition and health supplements, from dinner services and a host of other tableware and kitchenware to household cleaning supplies are sold.
What you need to know about direct selling:
If you are thinking of becoming a direct seller here’s what you need to consider to help decide what direction you want to pursue.
1. Product selection
The direct selling industry offers a range of products within sectors such as health, beauty, homeware, financial and investment products, nutritional supplements and weight-loss management. Although it is preferable to choose products which you are familiar with or interested in, you will receive training on all products being offered by the DSA member company that you choose to join. Believing in your product is vital to effectively market and sell your product, as well as personal fulfilment.
2. Choosing which company
Visit www.dsasa.co.za for a full list of member companies and scroll down and identify the companies offering the type of product or service of interest to you or the business opportunity that appeals to you. Attend a demonstration or visit the website of the company to help decide which company you feel best suits your needs and ideals.
3. Research appealing companies
Read through all their marketing collateral and agreements to get a good understanding of the stability and history of business and of your responsibilities.
4. Investigate the start-up costs
All DSASA member companies are obliged to keep start-up costs low. Your initial investment will typically cover a sales kit with all company information, product samples and training materials. Avoid companies expecting a large investment or who push overzealous inventories, you should be allowed to grow at your own pace and affordability.
5. Study the return policy
All DSASA member companies are obligated to buy back any unsold, re-saleable product inventory, promotional materials, sales aids and kits purchased within the previous 12 months at the selling price less an administration fee of up to 10% of the selling price.
6. Fully understand the compensation
Check the member companies’ compensation plans as they all differ. Make sure you understand details of earnings and the overall business model.
What every small business owner should know about tax
J31 July 2017, Johannesburg -- Most independent business owners start their companies thinking they just need to earn enough money to cover their living costs and forget about tax returns. Frequently the initial growth is so rapid and often unexpected that they find themselves struggling to manage the day-to-day needs of the business as the admin piles up.
It all seems to be going so well that they just soldier on, promising themselves that they’ll get to the admin tomorrow, but never seem to have the time. It’s an approach which can be a recipe for disaster.
“There are too many cases of enthusiastic entrepreneurs who think their business is going well, but have failed to provide for tax. At the end of the financial year, when their provisional tax return has to be submitted, the tax liability can cripple the business,” says Ernest du Toit, chairman of the Direct Selling Association.
He suggests getting the right professional advice from the outset. Ask the company you’re representing, fellow direct sales agents or the Direct Selling Association, if they can recommend an accountant who is registered with SARS as a tax practitioner.
“If your expertise is in health and beauty products rather than tax law, it’s worth making a small investment to ensure your tax affairs are covered. It could prevent a nasty surprise later on. It should also pay dividends as the business grows,” says Du Toit.
Some basic tax tips micro business owners should know:
- All businesses need to register at the start of their business for income tax, and need to submit tax returns irrespective of how little profit the business is making or even if it’s incurring losses.
- Every business voucher, invoice or receipt needs to be kept
- Write details of expenses on the reverse side of the voucher as soon as the expense has been incurred
- Maintain a log book for all business travel
- All business documents should to be processed regularly
- Ensure that the business accounting records are maintained
- Understand the financial position of the business through monthly reporting
- Plan for any financial requirements the business may have, this needs to be reviewed monthly
- Project and plan for any cash requirements the business may need
- Be aware that VAT registration is compulsory for a business with a turnover of a million rand or more. A business may voluntarily register for VAT before the turnover reaches this level.
Administrative procedures include things like keeping track of bank deposits and all business-related expenses.
Typically we find that the most successful direct sellers are those who are meticulous about their administration. It’s the attention to detail that sets them apart.
What consumers need to know about direct selling
Johannesburg, 21 June 2017 -- With rapidly evolving technology changing the way we interact, bank and even book holidays, it stands to reason that the way we buy things is also changing. Digital technology is increasingly becoming an integral part of the sales mix, yet despite this, the oldest sales technique known to man, is still flourishing.
The worldwide growth of direct selling is indisputable. According to the Direct Selling Association of South Africa (DSASA), in the 2015 financial year the South African direct selling industry made sales of more than R11 billion, which is an annual growth of 13% over the previous year.
DSASA chairman, Ernest du Toit, says that one of the reasons for this growth is that digital marketing and social media are making direct selling more effective than ever before. Sellers can now research potential clients’ interests, position themselves in a more effective manner and reach further than ever before, using Social Media.
With direct selling constantly evolving, so too are consumer perceptions about the industry.
"The industry has moved on from the image most people have of a man in a suit knocking on the door, with a volume of encyclopaedias or household products wedged under his arm. Today direct selling agents are trained professionals, informed about their customers, have in-depth product knowledge and increasingly are making a full-time living from direct sales."
The DSASA is improving and upholding the standards in the industry. Equally important is its campaign to inform and protect consumers. Here’s what you need to know:
1. Protecting consumers
The DSASA defines and sets ethical practices and safeguards consumer interests, by ensuring all members and sellers adhere to a strict Code of Conduct aligned with the Consumer Protection Act as well as World Federation Direct Sellers Associations code of conduct. The DSASA further ensures that all member companies subscribe to and operate within the strict guidelines of the Code of Conduct.
2. Invoking professionalism
The DSASA requires members to provide comprehensive training, both in acceptable sales methods and product knowledge. All members ensure that their sellers act in a professional manner. With more than 57% of all products sold worldwide, being based on personal endorsement, the current direct seller’s insights and product knowledge gives them the edge in today’s world where consumers are well informed.
3. Your friend in a time of crisis
Most importantly, the DSASA provides effective recourse for consumers and sanction for non-compliant members. All complaints are dealt with by the independent DSA Secretariat, who endeavours to resolve all issues. Failing this, the matter will be elevated to an independent Code Administrator and failing this, to an Independent Arbitrator, or the National Consumer Commission.
Direct sellers are making a difference across the world; changing lives, helping people to take ownership of their own wellbeing and achieving financial freedom. More and more consumers are embracing this lucrative industry. With self-regulating Associations like the DSASA, consumers can now have peace of mind, knowing that there are strict professional operating guidelines in place and that their best interests are at heart and under the protection of the professional, self-regulating DSASA.
Corporates are not the only option for job creation in a declining economy
Johannesburg, 04, May 2017 –– The corporate job market is slowing and South Africans are increasingly going to have to find alternatives to working for a big company to earn an income.
Internationally, changing working practices, the use of specialist consultants or project–based workers, the rapid growth of technology, speed–to–market and the need to be lean and nimble are all changing traditional corporate culture.
Domestically, issues such as political uncertainty and the recent economic downgrades will further discourage already cautious corporates from investing in the South African economy, limiting corporate growth and jobs.
It’s an environment in which direct selling is becoming an increasingly popular way for people to supplement or earn an income.
Ernest du Toit, chairman of the Direct Selling Association of South Africa, says that health and beauty companies were amongst the first to effectively outsource their sales departments to self–employed agents, but that the practice is now expanding to other sectors.
"The number of people involved in direct sales grew by 5.5% from 2015 to 2016 to 1.1 million and sales increased by 13% to R10.93 billion. We anticipate this growth to increase exponentially as more people look for opportunities and more companies seek better and more efficient ways to sell."
He says that given global trends and a constrained domestic economy providing fewer full-time jobs, direct selling is becoming even more appealing as companies offer free training and support, making it relatively simple and risk-free compared to other entrepreneurial ventures.
"It’s been said that South Africa’s high unemployment rate may be more a consequence of a lack of skills than a lack of opportunity. Direct selling is a sector that’s bridging that gap."
While the prospect of being a self-employed entrepreneur or earning additional money each month is tempting, there are some guidelines to consider.
Be honest with yourself
Although it seems self–evident, remember direct sales involves selling. Before you get too enthused about flexible working hours and the prospect of more money consider how comfortable you are about asking family, friends, acquaintances or strangers to purchase products or to host a group of prospective customers? Although the rewards can be considerable, not everyone is cut out for a career in sales.
Go with what you know
Be guided by your knowledge, interests or passion. You’re much more likely to make sales if you’re working in a market you know, have some interest in the products or are enthusiastic about the sector. It stands to reason that if you’re an avid home cook you’d be better off selling kitchenware than running shoes.
Selling a product that aligns with your pursuits or lifestyle also means you’re likely to have networks of people with similar interests. This will give you an advantage when you get started and also a foundation upon which to expand your networks. Knowledge of a sector allows you to share your insights and observations on social media and build new networks.
Do your homework
If you’re a keen runner, have a good network of running buddies and find a company looking for agents to sell running gear it may seem like a match made in heaven. A good place to start is with the products that made a difference in your own life. If a product helped you lose 10kgs then it is easy to talk to others who have the same need. Similarly if your acne skin has been healed, it is easy to talk with passion to others who are experiencing skin problems. But, before you sign up, check if the company is listed on the Direct Selling Association website. You can search by company or by category. The good news is that if it is, it must abide by the Association’s Code of Conduct and ethics. This offers you protection and recourse.
Once you’ve established the company’s credentials ask about the support and training it offers. Is there an induction programme? Will you be offered marketing material to try or give to your first few customers? How often are there sales meetings and briefings on new products and sales techniques?
Ask about any costs. Do you have to purchase a starter pack or carry a minimum amount of inventory?
You may be enthused about embarking on your dream job, working in a sector that interests you and being your own boss, but as with most other careers, success doesn’t come overnight.
It will take time to build a customer base and you’ll need to invest time and effort in order to generate the returns you want. Also remember there is behind the scenes work such as placing product orders, doing paperwork and attending training sessions in order to improve and grow your business.
"Set yourself reasonable goals and targets. Initially start short-term, a quarter, six months, a year. As you progress you may evolve to a five-year plan. If you can, find a mentor who has some experience in the field and test your goals and assumptions with them," advises Du Toit.
"Direct sales isn’t a shortcut to success. It requires the same degree of drive, professionalism, commitment to personal development and enduring enthusiasm that it takes to achieve in any other field. What it does offer is a lot of opportunity, support and flexibility."