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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 seem to 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 that the industry is poorly regulated. As distributors are self-employed, no trade union or workers’ council exists to protects workers’ interests. In addition, many companies are privately owned, so companies do not need to provide key company figures that might help (future) distributors or regulators. And since selling and recruiting most often takes place in private homes, headquarters can too easily dodge responsibility for misbehavior by self-employed distributors.
The aim of fairsellingcompass.com is to
- serve as a guide to what (future) distributors need to know;
- 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
- 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 here.
About Claudia Gross, PhD
Claudia Gross is an assistant professor at the Institute for Management Research,Radboud University, the Netherlands. Her work concerns questions such as: how to design organizations that support ethical behavior? How to improve organizational practices? And: how to ‘translate’ academic knowledge into better organizational practices? She publishes her insights in academic books and articles, but also in popular outlets such as websites and media interviews.
The Fair Selling Compass is a result of her research work on the legal and ethical problems of the direct selling, multi-level marketing and network-marketing industry. This research has resulted in more than ten publications, the most relevant of which are:
- Groß, C. (2011). Direktvertrieb, Network-Marketing & Multi-Level-Marketing. Versprechen der Unternehmen unter der Lupe, Fakten aus der Wissenschaft, Empfehlungen an Interessierte, Mitglieder und politische Entscheidungsträger. Münster: Monsenstein und Vannerdat. Freely available here.
- Groß, C. (2008). Multi-Level-Marketing: Identität und Ideologie im Network-Marketing. Wiesbaden: VS Verlag für Sozialwissenschaften.
- Groß, C. & Haunschild, A (2013). Liberté toujours? Gerechtigkeit und Gemeinschaft in neoliberalen Arbeitsregimen am Beispiel der Amway GmbH. Zeitschrift für Personalforschung, 27 (2), 152-173. doi: 10.1688/1862-0000_ZfP_2013_02_Gross
See more about Claudia’s research work on the website of the Radboud University here.
The Fair Selling Compass is based on research about direct selling, multi-level marketing and network-marketing companies at the Radboud University, The Netherlands.
How we evaluated the transparency and fairness of the companies, is explained here.