Direct Selling or the Gig Economy?
May 14, 2019
Who’s winning the battle for independent workers?
According to a recent McKinsey Global report, Independent Work: Choice, Necessity and the Gig Economy, 162 million people in Europe and the United States—or 20 to 30 percent of the working-age population - engage in some form of independent work.
Independent work is appealing for many reasons. Working from home or on the go, independent workers have more control over their schedules and how they spend their time. The selling point proponents advocate for independent work is that each person gets what they put into it. They manage their earning potential and they are not held to a standard.
Traditionally independent work roles have been largely associated with direct selling/ MLM companies. Way before it was considered the norm to catch a ride with a stranger, direct selling was the first and only option to make additional income outside of office hours. However, more recently the gig economy has taken this trend by storm; and companies such as Uber, Lyft, Door Dash, Airbnb, and Task Rabbit have taken its popularity to new heights.
So, the question is: “Who’s winning this battle in the independent work market?”
Looking at the numbers
It’s clear that part-time work is on the rise. The U.S. department of Labor found that in 2018, 30% of adults were working side jobs to help increase their income. in addition to this, the independent work market today is viewed as a viable and necessary solution to making a sufficient living as a primary job.
In 2017, direct sellers were measured at 18.6 million representatives according to the Direct Selling Association. The gig economy, however, encompasses more than three times as many workers. Intuit reported that 34% of US workers were working independent gigs in 2017 and predict that this will rise to 43% by 2020.
Direct sellers had previously been focused primarily on how to combat online retail giants such as Amazon, allowing stealthy gig economy competitors to come to the forefront under the radar, and are now influencing the direct selling channel. Today, when it comes to comparing the size of the industries at least, it seems that the gig economy could be winning this battle.
Risk or reward?
Direct selling has been the industry pioneer when it comes to offering perks to its employees when they meet specific qualifications/levels, including car programs, residual bonuses, and complimentary vacations. The gig economy has taken a page from the direct selling playbook by offering similar rewards.
Now direct selling businesses can similarly learn from the gig economy, and take advantage of those insights.
It’s not just about the perks. Today’s gig economy workers want to work in an environment that allocates extra income on demand, and the option to choose from several levels of income and effort with minimum investment. And the true reward arises from the emotional capital that comes from working for a company that brings the customers to you.
How can direct selling revolutionize the industry and win the war?
Direct selling companies can learn from the gig economy model and improve upon the digital platform in which they engage their independent consultants and customers. And like gig economy businesses, direct sellers need to get leads from their customers and make the customer and distributor sign up process frictionless. Would it be possible for direct selling companies to make onboarding representatives so easy that all they have to do is turn on their phones and be told what to do next? Yes! If they can focus on changing lives and not just incomes direct selling could win this war.