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Direct Selling in New Zealand
Direct Selling in New Zealand is conducted in a variety of ways, from the party plan to individual one to one selling. All can be highly successful and some methods are particularly tuned to each individual company. These are described along with the current trends:
MLM or Multi-level Marketing (Selling or Reward)/Network Marketing Direct Selling
The term "multi-level selling" is a more recent term relating to a tiered sales reward structure that has proven successful both inside New Zealand and elsewhere in the world. Around 85 percent of DSANZ members utilize MLM as their core sales reward structure. In principle the method is that of Network marketing & this is another term often used. Some companies even use the term Binary System to describe their operation. None of these terms should be confused with Pyramid Schemes which often use the same terms to hide the fact that they are a pyramid scheme.
True Multi-level selling sees a reward to both the product seller and those within the structure who have recruited and trained that seller to perform the sale.
This has an equivalent in many sales organizations through roles such as Sales Managers who receive reward from the efforts of their sales team.
There really is no such selling as "Multi-level selling", as the term really relates to Multi-level rewarding of direct sales using Network Marketing of products.
This more clearly indicates that if there is no sale of a product or genuine service then there is no reward unlike the Pyramid schemes which are illegal in New Zealand.

Pyramid or Genuine Multi-Level Business Opportunity?
Most MLM New Zealand Direct Sellers use an average number of four levels. Many apply just three. This does not mean that a company with more is a pyramid but the difficulty in applying rewards with greater levels is particularly complex.
With multilevel selling in New Zealand there must all ways be a consciousness of  that which can be defined as Pyramid. Hence the prime purpose must always be to sell products and using products as a disguise to hide the fact that recruiting is the principle for reward does not make the scheme legal.
Failure to adhere to this has seen some non members prosecuted and fined severely in recent years.
Those prosecutions may viewed at the Commerce Commission Site found through our Government Links Page.
The sale of reports which hold no commercial value are expressly defined in the Fair Trading Act as Pyramid Schemes and are not genuine MLM business opportunities. Equally you can not use the sale of a product which is a required purchase as part of the recruitment. Again this is likely to be a pyramid scheme.

Party Plan Direct Selling
While there are some who continue to use individual selling very successfully, many members use the Party plan sales systems in New Zealand. 
With those companies applying party plan as their core sales system, some also use variations of the MLM system to ensure growth and business opportunity to be part of their system. for Hostesses and distributors.
It is fair to say that within the Party Plan adherents, those with the greatest growth use a 1 or 2 level MLM structures to enhance the business component. It is rare for Party Plan to use more than 2 levels of MLM.
Within most Party Plan members the ratio of Female distributors is 95% although this does not preclude the business opportunity for males.
Party Plan in recent years has seen a resurgence in New Zealand and around the world. Average sales ratios of distributors are historically higher for products sold by this method than all other methods except direct door to door sales.

Traditional Door to Door Direct Selling
Many times we forget to remember the roots of Direct Selling started with the traditional Door to Door selling of products. In New Zealand we remember well the the Bon Brush man, Electrolux and Rawleighs. Of course it is great to note that two of those names just mentioned still exist and operate in the New Zealand market. (Electrolux is now known as just Lux)
Door to Door or Traditional Direct Selling is as strong as ever and has a significant growth record that competes well with the other sales methods.
Growth using technology, including mobile shops and strong promotion are just part of the new Door to Door market. While traditional method still hold a strong position, the use of inovation and promotion to get to the market has been a key factor in the growth of Door to Door. Of key interest in this market has been the number of traditional retail outlets that have gone for combinations of retail and Direct Selling using the Door to Door sales process. 
Because this form of Direct Selling does not usually develop into a grow you own business opportunity as is promoted by other plans, it has often been dismissed. However more and more the ability to make both a full time and a good income can also be very attractive as an employment opportunity.
On a base ratio of potential in New Zealand, it is reasonable to assume that the overall Direct Selling Market for New Zealand can grow to at least 3 and possibly 4 times its present size on dollar value and around double the number of distributors
This is justified by taking the US and Japanese ratios and applying them to New Zealand. (If we were to take the Japanese, Korean, Taiwanese or Malaysian markets then the potential is far greater when considering the per capita sales)
This assumes that New Zealand can grow to the same ratios from its present of 1 in 36. If markets like those in Asia were considered then perhaps the present level of Direct Selling is just the tip of the iceberg!
Companies considering setting up a Direct Selling operation in New Zealand are advised to contact the DSANZ to obtain a copy of the Code of Practice and discuss their sales plan for potential problems.
There is no charge for this service but clearly the DSANZ would look to those companies to take up membership and adhere to the Code of Practice when commencing operations in New Zealand

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