The World Federation of Direct Selling Associates estimates that today there are 91.5 million direct selling companies around the world. The industry accounts for $153,727 (USD millions) worldwide. Avon, Tupperware, Amway and Arbonne are just a few examples of successful direct selling companies who maintain a strong foothold year after year. For these companies, success lies in the ability to continually tap new markets and a new customer base, whether via a single associate’s freshly opened circle of friends and family, or by entering new international markets. While the former may be a short term goal, it’s the latter that serves as an effective strategy to propel long term growth.
Many a direct selling company has failed because they miscalculate demand. When a market is saturated it plateaus, and there is no further opportunity for market penetration. But even though you cannot manipulate supply and demand, you can successfully identify markets where there is an opening for the specific product and proceed to prepare for expansion. All of the major MLM companies started small, established a solid foothold and then proceeded to expand internationally.
Since the ultimate goal of any business is the exchange of goods for money, you’ll also need to pay particular attention to how your representatives will take payments, and how they will in turn be paid. In international markets, a specific set of challenges exist for marketers looking to accept and send payment.
So what constitutes an attractive market? How do you decide where to expand?
Marketers who have set their sights on international markets can easily jump borders by taking their most successful domestic campaign and prepping it for the international stage. Start by strategically selecting your new countries. Careful market research does require an initial investment, but you won’t regret the time and money once you’re confident that your chosen markets are suitable.
Some numbers to consider: Asia/Pacific markets account for 44% of all global direct selling sales, followed by the Americas at 39% and Europe at 16%. China is the fastest growing major market (22%) while Malaysia is the fastest growing market overall in Asia/Pacific (37%).
You may also want to refer to the WFDSA website, which has a plethora of useful information on the largest direct selling markets worldwide.
Once you’ve honed in on the markets you wish to enter:
- Play by the Rules – the ICC recently revised its International Code of Direct Selling, you can find it on the ICC website.
- Evaluate the Offer – Is there a need for your product, or are similar offerings widely available in this region? If you will be one among many, how can you differentiate yourself? If you can provide your offer at a lower price point, or create a USP that elevates your wares above the rest, it may be worth considering.
- Evaluate the Relevance – Don’t make the mistake of not doing your homework when it comes to how relevant your product is in specific markets. Self tanning cream is a popular product with Canadian clientele, but would be poorly received in Asia, where people shun the sun and its after effect, the tan.
- Evaluate the Imagery – Imagery is a powerful medium for evoking emotion in your customers. Be aware of any imagery that may hold different meaning for the local audience. All images, from stock photos down to symbols and icons, must be adapted to suit the local culture. Some particularly sensitive areas include hand gestures, animals and anything that could be taken in a religious context. And don’t stop there. Consider the predominant colours of your site; colours carry strong meaning in different cultures. For example, although white is a bridal colour in North America, it is associated with death in Asian cultures. For a deeper understanding of how colour impacts people from different cultures, visit the Visual Color Symbolism Chart by Culture at about.com.
- Consider the Wording – Pay careful attention to the turns of phrase that, once translated, could be construed as offensive to the locals. Slang should be avoided, as should references to popular culture – these could create confusion, or worse, be insulting. Make sure that your translation company has marketing savvy translators that can identify which words should be translated literally, and which phrases should be replaced by a culturally appropriate alternative.
- Provide Payment Options – This critical area can make or break your campaign. It’s important to offer an array of locally relevant inbound payment options. You can set your representatives up for success by allowing them to offer pricing in the local currency and to provide payment options that are convenient for everyone. Tailor your payment strategy for your demographic. If you only provide one method of payment that is either unfamiliar or unpopular with the locals, you are setting yourself up for failure. Many online stores only accept payment by credit card, but according to a recent post on multichannel merchant, that could be a devastating tactic in areas such as South America, where most of the population is extremely reticent to enter card details on the web. A seasoned Payment Services Provider can advise you on the most popular methods of payment for different locales and help you build a local payment strategy. Plus, you’ll have access to valuable advice on how to implement a payment suite perfectly suited to your target area.
What’s the Best Way to Pay?
How will you pay your international distributors? Making appropriate distribution and commission payments to your distributors in a critical part of your expansion. They are, after all, the lifeblood of your company and responsible for your success. Many options exist, such as check, credit card credits and electronic transfers. The best approach is to implement a compensation plan that is flexible, allowing for distributors to be paid they way they expect.
However, the question of payment takes on new importance when considered in an international light. It’s tempting (and quite common) for companies to erroneously believe that every sales associate will be pleased to see USD checks. The reality of the situation is that most international beneficiaries will see the check as a burden and not a boon: Did you know that when cashing a US check through a foreign bank, beneficiaries can pay up to $40 in bank fees, and be forced to wait 6 – 8 weeks before the funds are settled in their account? After the time, effort and fees have been factored in, the check itself becomes worthless, or almost worthless. You might sabotage your international venture at the outset if you provide payment options as unpopular as this. Your distributors want payment that’s fast, and easy to access.
In all countries that use checks, e.g. USA, France and the UK, sending payment by a local currency check that is easy for the recipient to cash will solidify your reputation as a leader in thoughtful, appropriate payment. However, in order to properly meet the needs of international recipients, you need to pay using a check that is drawn on a bank within your representative’s home country. The checks should be drawn at a major local bank, which will make it easy and affordable for your representatives to cash. It is possible to do this quite conveniently through companies that offer international payout services.
Local electronic payments are fast, affordable and familiar to payees in over 60 countries around the world. Electronic payment services include ACH credits in the US, Faster Payments in the UK, EFT in Canada, and many more local services besides. Electronic payments are perfect for recurring payments as you only need to collect your distributor’s banking information once. Electronic funds transfers are sent locally and do not incur the high fees associated with international wire transfers. They are fast, elegant and affordable for both sender and receiver.
Visa card credits
Visa card credits are a method of payment where a direct credit is applied to a Visa card using the information from the OCT (Original Credit Transaction). While it is necessary that a debit from the card occurs before the credit can be made, it can be an excellent tool in the case of recurring payments.
Going international means a considerable initial investment of time and resources, but for a mid range direct selling company, it is an important facet of a long term growth plan. The tools required for expansion are quite easily found online: from web translation services to international payout providers. The key to real success lies in taking the necessary steps so that you don’t find yourself trawling in international waters with a domestic license.