Strengthening Trust and Credibility in the Direct Selling Channel: The Importance of Industry Self-Regulation
For over a century, American businesses have embraced the belief that industries should be accountable for maintaining their own ethical standards. This principle is especially ingrained in the direct selling channel, where consumer trust and entrepreneurial opportunity have long gone hand in hand.
Since the 1970s, the Direct Selling Association (DSA) has upheld this commitment through a comprehensive Code of Ethics, overseen by an independent administrator, which governs everything from marketing practices to income disclosure.
Even before the rise of social media and digital advertising transformed the marketplace, DSA member companies recognized that trust is not imposed by regulation—it’s cultivated through consistent, principled behavior. Strengthening trust in the direct selling channel requires companies and their independent salesforce members to uphold ethical, transparent, and substantiated marketing practices.
Central to this effort is BBB National Programs’ Direct Selling Self-Regulatory Council (DSSRC), an independent oversight program created in 2019 in partnership with DSA. DSSRC offers a self-regulatory model for promoting accountability within the industry. Leveraging advanced monitoring tools, DSSRC reviews online direct-selling promotional content to identify potentially misleading product and income claims and engages with companies to resolve issues before they escalate into reputational harm or regulatory action.
In an era where digital misinformation travels at lightning speed, the industry’s continued support for independent, proactive self-regulation is not only prudent—it is essential to preserving trust and credibility.
Effective self-regulation is rooted in independent oversight, transparent procedures, and a credible commitment to accountability. It empowers industries to lead in shaping ethical norms while building a culture of compliance.
Self-regulation initially emerged in the U.S. as a proactive response to consumer protection challenges. In 1971, the National Advertising Division (NAD) was established by leaders in the advertising industry to set a new benchmark for independent review of truth-in-advertising claims. Administered by BBB National Programs, NAD has long served as a reliable and efficient forum for resolving advertising disputes and upholding standards of truth and accuracy—offering an alternative to the time and expense associated with litigation.
It is important to recognize that self-regulation is not a replacement for government enforcement. Rather, it acts as a complementary safeguard, offering a proactive approach that allows industries to identify and correct problematic practices early. Regulatory agencies such as the FTC have recognized the value of credible independent self-regulation, often referring matters to self-regulatory programs or factoring voluntary compliance into their enforcement decisions.
Self-regulation delivers substantial benefits to businesses, consumers, and regulators alike.
Ultimately, industry self-regulation—when done right—bridges the gap between the industry stakeholders and public accountability, reinforcing ethical standards that benefit the marketplace as a whole. By allowing businesses to reconcile misleading or unsubstantiated claims early, advertising self-regulation programs help prevent consumer harm, level the playing field for reputable business to engage with consumers, and support the broader public interest.
The industry operates at significant scale. According to the World Federation of Direct Selling Associations, the global direct selling market surpassed $180 billion in sales in recent years, with more than 100 million independent sellers participating worldwide. In the U.S. alone, DSA reports tens of millions of individuals engaged in the channel.
DSSRC was established as a proactive initiative to reinforce the industry’s values and ensure that direct sellers’ product and income claims align with high standards of integrity and accountability— reinforcing the central role that trust and transparency play in the direct selling industry’s long-term success.
To create concrete impact, DSA established DSSRC as an independently administered self-regulatory program. Serving as an impartial monitor of the marketplace, DSSRC reviews income and product claims made by companies and their independent salesforce members, addresses complaints, and refers matters to regulators when appropriate. This initiative provides a transparent and effective mechanism for accountability.
As Linda and O.C. Ferrell outline in their article featured in this journal, self-regulation allows industries to proactively establish standards, build public trust, and maintain credibility without relying solely on external enforcement. This principle is demonstrated across a range of sectors.
Through these efforts, businesses demonstrate that self-regulation is not only a tool for compliance but also a commitment to ethical leadership and public accountability.
DSSRC similarly exemplifies these principles through a rigorous and impartial process. DSSRC proactively monitors the marketplace, identifying potentially problematic claims across digital platforms, including social media and independent salesforce communications. These findings trigger formal inquiries in which DSSRC reviews the claim in the context of the advertising, engages with the company, and issues a public case decision with recommendations for corrective action, when necessary.
Since its inception, DSSRC has identified over one million pieces of online content across various platforms related to direct selling companies and their independent salesforce members. DSSRC inquiries have resulted in the removal or substantial revision of more than 4,000 product and earnings claims disseminated by almost 500 different direct selling companies, significantly reducing the presence of misleading or unsubstantiated information in the marketplace.
A recent study conducted by the Emory Goizueta Business School examining the effectiveness of DSSRC found that the self-regulation program provides substantial benefits to DSA-member companies. Compared to non-member organizations, DSA members exhibit stronger adherence to responsible marketing practices. Specifically, DSA members make fewer product and income claims, respond to compliance concerns more promptly, and are less likely to require additional enforcement to resolve violations.
The study also revealed that DSA members resolve inquiries more efficiently and show higher levels of cooperation with DSSRC’s final decisions. Moreover, DSA members are significantly more proactive in modifying or removing problematic claims and addressing compliance issues, distinguishing them from non-DSA member companies.
Credible self-regulation promotes a level playing field by holding companies to consistent standards, discouraging bad actors, and reinforcing the integrity of the broader industry. For responsible businesses, self-regulation is not just a shield against external scrutiny—it’s a strategic commitment to long-term sustainability, transparency, and public confidence.
A key component of this shift has been DSSRC’s focus on education and outreach. Through webinars, industry guidance, one-on-one consultations, and published case decisions, DSSRC provides companies and their independent salesforces with practical tools to identify and avoid problematic claims.
A cornerstone of this effort has been the development of practical, forward-looking compliance guidance. DSSRC collaborated with industry stakeholders to produce the Guidance on Earnings Claims in the Direct Selling Industry and the Guidance on Income Disclosure Statements in the Direct Selling Industry. These resources serve as clear, objective frameworks for ensuring that income-related representations are presented in a way that avoids ambiguous or unsupported projections of expected income for prospective salesforce members interested in the direct selling business opportunity.
DSSRC’s presence and influence have also contributed to the decline of outdated and potentially misleading terms, such as “financial freedom,” “unlimited income,” and “career-level income,” which were once common in the industry. Today, companies are more mindful of the language used in promotional materials, leading to improved claim substantiation and enhanced consumer protection—building a stronger foundation for ethical growth across the channel.
As the direct selling industry continues to evolve, so too must the standards that govern it. Emerging challenges from digital marketing, social media, influencer promotion, and international expansion require adaptive oversight. DSSRC has expanded its monitoring scope to include influencer content, global claims, and even AI-generated promotional materials.
By embracing new technologies and staying ahead of marketplace trends, DSSRC ensures that self-regulation remains relevant, effective, and responsive—providing timely guidance that helps companies navigate complexity while upholding consumer trust and ethical standards in a rapidly shifting environment.
As policymakers consider the future of consumer protection in the direct selling industry, several core principles of effective self-regulation should be reinforced.
Robust, independent self-regulation is a powerful tool for reinforcing trust, credibility, and long-term success—particularly in dynamic industries like direct selling. By taking ownership of high standards and ethical business practices, direct selling companies can demonstrate accountability, protect consumers, and elevate the reputation of the entire channel.
The work of DSSRC exemplifies how industry-led oversight—rooted in transparency, education, and proactive monitoring—can effectively reduce the need for reactive enforcement and align business practices with public expectations. As direct selling continues to evolve, sustained collaboration among industry leaders, regulators, and consumer advocates will be essential to strengthening marketplace integrity and helping the channel be both innovative and trustworthy.
Originally published in the Journal of Direct Selling Research
Since the 1970s, the Direct Selling Association (DSA) has upheld this commitment through a comprehensive Code of Ethics, overseen by an independent administrator, which governs everything from marketing practices to income disclosure.
Even before the rise of social media and digital advertising transformed the marketplace, DSA member companies recognized that trust is not imposed by regulation—it’s cultivated through consistent, principled behavior. Strengthening trust in the direct selling channel requires companies and their independent salesforce members to uphold ethical, transparent, and substantiated marketing practices.
Central to this effort is BBB National Programs’ Direct Selling Self-Regulatory Council (DSSRC), an independent oversight program created in 2019 in partnership with DSA. DSSRC offers a self-regulatory model for promoting accountability within the industry. Leveraging advanced monitoring tools, DSSRC reviews online direct-selling promotional content to identify potentially misleading product and income claims and engages with companies to resolve issues before they escalate into reputational harm or regulatory action.
In an era where digital misinformation travels at lightning speed, the industry’s continued support for independent, proactive self-regulation is not only prudent—it is essential to preserving trust and credibility.
Understanding Industry Self-Regulation
At BBB National Programs, industry self-regulation refers to a structured, voluntary process in which industries adopt and adhere to standards of conduct that promote responsible business practices, protect consumers, and address potentially deceptive or misleading behavior—often before regulatory action becomes necessary.Effective self-regulation is rooted in independent oversight, transparent procedures, and a credible commitment to accountability. It empowers industries to lead in shaping ethical norms while building a culture of compliance.
Self-regulation initially emerged in the U.S. as a proactive response to consumer protection challenges. In 1971, the National Advertising Division (NAD) was established by leaders in the advertising industry to set a new benchmark for independent review of truth-in-advertising claims. Administered by BBB National Programs, NAD has long served as a reliable and efficient forum for resolving advertising disputes and upholding standards of truth and accuracy—offering an alternative to the time and expense associated with litigation.
It is important to recognize that self-regulation is not a replacement for government enforcement. Rather, it acts as a complementary safeguard, offering a proactive approach that allows industries to identify and correct problematic practices early. Regulatory agencies such as the FTC have recognized the value of credible independent self-regulation, often referring matters to self-regulatory programs or factoring voluntary compliance into their enforcement decisions.
Self-regulation delivers substantial benefits to businesses, consumers, and regulators alike.
- It promotes consumer confidence by signaling that companies are committed to ethical, transparent, and credible business practices. This assurance is particularly critical in industries—such as direct selling—where independent salesforce members are on the front lines of customer engagement.
- For government stakeholders, self-regulation can reduce the burden on regulatory agencies by independently resolving routine or lower risk matters.
- Self-regulation can serve as an early-warning system for regulators, flagging and addressing emerging issues before they become widespread.
- It provides flexible, real-time guidance informed by industry expertise, ensuring that compliance expectations keep pace with innovation and evolving business practices.
Ultimately, industry self-regulation—when done right—bridges the gap between the industry stakeholders and public accountability, reinforcing ethical standards that benefit the marketplace as a whole. By allowing businesses to reconcile misleading or unsubstantiated claims early, advertising self-regulation programs help prevent consumer harm, level the playing field for reputable business to engage with consumers, and support the broader public interest.
The Direct Selling Industry: Scale, Reach, and Challenges
Direct selling is a global method of marketing and retailing goods and services that takes place outside of a fixed retail location. It typically involves independent salesforce members—often referred to as distributors, consultants, or ambassadors —who engage in person-to-person sales, whether through in-home demonstrations, online platforms, or social networks. Beyond selling products, direct selling offers individuals the opportunity to build a business with low entry barriers, flexible hours, and the potential for supplemental income.The industry operates at significant scale. According to the World Federation of Direct Selling Associations, the global direct selling market surpassed $180 billion in sales in recent years, with more than 100 million independent sellers participating worldwide. In the U.S. alone, DSA reports tens of millions of individuals engaged in the channel.
DSSRC’s Oversight Role
The creation of DSSRC in 2019 was driven by the direct selling industry’s recognition of the need to demonstrate commitment to ethical conduct and to improve industry practices. Rooted in the belief that integrity and responsible conduct drive sustainable growth, direct selling companies recognized the importance of enhancing consumer and regulatory trust through transparent, responsible business and marketing practices.DSSRC was established as a proactive initiative to reinforce the industry’s values and ensure that direct sellers’ product and income claims align with high standards of integrity and accountability— reinforcing the central role that trust and transparency play in the direct selling industry’s long-term success.
To create concrete impact, DSA established DSSRC as an independently administered self-regulatory program. Serving as an impartial monitor of the marketplace, DSSRC reviews income and product claims made by companies and their independent salesforce members, addresses complaints, and refers matters to regulators when appropriate. This initiative provides a transparent and effective mechanism for accountability.
Pillars of Effective Self-Regulation
The business community engages in self-regulation as a proactive and principled approach to uphold industry standards, foster consumer trust, and demonstrate accountability. For self-regulation to be a meaningful force in promoting trust and integrity in the direct selling industry, it must be built on four foundational pillars: credibility, transparency, accountability, and an objective standard of review.- Credibility begins with independence. To be most effective, a self-regulatory program should be administered by a third party that is free from industry influence, ensuring that decisions are impartial and grounded in established principles rather than business interests. This independence lends weight to its findings and garners respect from both industry participants and regulators.
- Transparency is often the most challenging and important component in establishing a credible self-regulatory framework. Processes must be clearly defined, publicly accessible, and include the publication of decisions or outcomes to demonstrate how standards are applied. This openness not only builds confidence among stakeholders but also serves as a guiding framework for industry-wide compliance. DSSRC maintains program transparency through publicly available case decisions and annual reports that highlight the basis for DSSRC’s findings and the companies’ responses.
- Accountability ensures that businesses are held responsible for their conduct. A self-regulatory program must have effective mechanisms to address non-compliance and, when necessary, escalate unresolved matters to government agencies. Accountability is achieved by DSSRC through a structured referral system: when companies fail to respond, refuse to make the recommended changes, or cannot be located, DSSRC refers these matters to the FTC or the appropriate state attorney general.
- Finally, an objective standard of review requires that all marketing claims — particularly those concerning income opportunities and product efficacy — are communicated truthfully and accurately and are substantiated by reliable evidence.
As Linda and O.C. Ferrell outline in their article featured in this journal, self-regulation allows industries to proactively establish standards, build public trust, and maintain credibility without relying solely on external enforcement. This principle is demonstrated across a range of sectors.
- The Financial Industry Regulatory Authority (FINRA) plays a vital role in safeguarding market integrity by enforcing ethical rules among broker-dealers and educating investors.
- In the child-directed food marketing industry, BBB National Programs’ Children’s Food and Beverage Advertising Initiative (CFBAI) ensures that its participants only advertise foods to children that meet strict nutrition criteria and provides companies with a unique opportunity to regularly collaborate and engage with other like-minded industry leaders.
- The Distilled Spirits Council of the U.S. (DISCUS) has implemented a rigorous code that governs advertising and marketing across the beverage alcohol industry, setting standards that often exceed legal requirements.
Through these efforts, businesses demonstrate that self-regulation is not only a tool for compliance but also a commitment to ethical leadership and public accountability.
DSSRC similarly exemplifies these principles through a rigorous and impartial process. DSSRC proactively monitors the marketplace, identifying potentially problematic claims across digital platforms, including social media and independent salesforce communications. These findings trigger formal inquiries in which DSSRC reviews the claim in the context of the advertising, engages with the company, and issues a public case decision with recommendations for corrective action, when necessary.
Since its inception, DSSRC has identified over one million pieces of online content across various platforms related to direct selling companies and their independent salesforce members. DSSRC inquiries have resulted in the removal or substantial revision of more than 4,000 product and earnings claims disseminated by almost 500 different direct selling companies, significantly reducing the presence of misleading or unsubstantiated information in the marketplace.
A recent study conducted by the Emory Goizueta Business School examining the effectiveness of DSSRC found that the self-regulation program provides substantial benefits to DSA-member companies. Compared to non-member organizations, DSA members exhibit stronger adherence to responsible marketing practices. Specifically, DSA members make fewer product and income claims, respond to compliance concerns more promptly, and are less likely to require additional enforcement to resolve violations.
The study also revealed that DSA members resolve inquiries more efficiently and show higher levels of cooperation with DSSRC’s final decisions. Moreover, DSA members are significantly more proactive in modifying or removing problematic claims and addressing compliance issues, distinguishing them from non-DSA member companies.
Credible self-regulation promotes a level playing field by holding companies to consistent standards, discouraging bad actors, and reinforcing the integrity of the broader industry. For responsible businesses, self-regulation is not just a shield against external scrutiny—it’s a strategic commitment to long-term sustainability, transparency, and public confidence.
Building a Foundation for Responsible Business Practices
Sustaining consumer trust in the direct selling industry requires more than reactive enforcement—it demands a long-term commitment to transparency, ethics, and responsible business practices. Since 2019, DSSRC has played a pivotal role in helping the industry establish and uphold these principles. By working collaboratively with companies and offering guidance grounded in legal and regulatory expectations, DSSRC has helped shift the industry toward a more proactive and preventative compliance culture.A key component of this shift has been DSSRC’s focus on education and outreach. Through webinars, industry guidance, one-on-one consultations, and published case decisions, DSSRC provides companies and their independent salesforces with practical tools to identify and avoid problematic claims.
A cornerstone of this effort has been the development of practical, forward-looking compliance guidance. DSSRC collaborated with industry stakeholders to produce the Guidance on Earnings Claims in the Direct Selling Industry and the Guidance on Income Disclosure Statements in the Direct Selling Industry. These resources serve as clear, objective frameworks for ensuring that income-related representations are presented in a way that avoids ambiguous or unsupported projections of expected income for prospective salesforce members interested in the direct selling business opportunity.
DSSRC’s presence and influence have also contributed to the decline of outdated and potentially misleading terms, such as “financial freedom,” “unlimited income,” and “career-level income,” which were once common in the industry. Today, companies are more mindful of the language used in promotional materials, leading to improved claim substantiation and enhanced consumer protection—building a stronger foundation for ethical growth across the channel.
As the direct selling industry continues to evolve, so too must the standards that govern it. Emerging challenges from digital marketing, social media, influencer promotion, and international expansion require adaptive oversight. DSSRC has expanded its monitoring scope to include influencer content, global claims, and even AI-generated promotional materials.
By embracing new technologies and staying ahead of marketplace trends, DSSRC ensures that self-regulation remains relevant, effective, and responsive—providing timely guidance that helps companies navigate complexity while upholding consumer trust and ethical standards in a rapidly shifting environment.
As policymakers consider the future of consumer protection in the direct selling industry, several core principles of effective self-regulation should be reinforced.
- Self-regulation is most effective when it is truly independent and enforceable, with clear standards and consequences for non-compliance.
- Ongoing marketplace monitoring—such as that conducted by DSSRC—helps deter misconduct early, preventing consumer harm before it escalates.
- Collaboration between self-regulatory bodies and government agencies strengthens enforcement efforts, enabling a more efficient and responsive system of consumer protection.
- Education is essential; empowering companies and their salesforce with clear guidance fosters a culture of proactive compliance.
Robust, independent self-regulation is a powerful tool for reinforcing trust, credibility, and long-term success—particularly in dynamic industries like direct selling. By taking ownership of high standards and ethical business practices, direct selling companies can demonstrate accountability, protect consumers, and elevate the reputation of the entire channel.
The work of DSSRC exemplifies how industry-led oversight—rooted in transparency, education, and proactive monitoring—can effectively reduce the need for reactive enforcement and align business practices with public expectations. As direct selling continues to evolve, sustained collaboration among industry leaders, regulators, and consumer advocates will be essential to strengthening marketplace integrity and helping the channel be both innovative and trustworthy.
Originally published in the Journal of Direct Selling Research