Avon, Dissatisfied, Withdraws From DSA
In a press release dated September 12th, Avon stated they were withdrawing from the DSA because of their dissatisfaction with the organizations direction. They sent a letter, addressed to U.S. direct selling colleagues, which shares their decision was driven by two key issues:
1. They believe the DSA's agenda in the U.S. is overly focused on issues of a few specific brands rather than industry-wide challenges.
2. They believe that the U.S. DSA Code of Ethics requires updating to better reflect the current state of the industry in the U.S.
Avon is not exiting the World Federation of Direct Selling Associations, local market DSAs, or other direct selling trade organization outside of the United States (many of which they are founding members of). They believe these associations play an important role for Avon. Avon continued to share that there are three major aspects of their business model that they believe further safeguards their representatives and consumers.
1. The Avon business model does not rely on nor does it encourage sales of inventory, training or business support materials between representatives. The core of their model is retailing.
2. Avon has reasonable return policies and representatives are not left holding excess inventory.
3. Avon limits earnings to three generations. They do not promise commissions on infinite sales. This, they believe, promotes and incentivizes representatives to focus on retailing products.
Here is the Avon press-release, which can also be found on their website:
Avon has made the decision to withdraw from the U.S. DSA based on our belief that in the U.S., the DSA is not advocating effectively for Avon and our Representatives. We are committed to direct selling in the U.S. and markets around the world. Avon’s number one priority is supporting our 6 million Representatives worldwide. We succeed when they succeed.
Avon has financially struggled in both revenue and shares over the last year and their CFO resigned the same week as this press-release. Many of the companies that are members of the DSA are in an upward growth and momentum stage. Whether this statement reflects a change that needs to be made internally in Avon or with the DSA, as they feel, is yet to be determined.
Avon, the company for women, is a leading global beauty company, with $10 billion in annual revenue. As one of the world's largest direct sellers, Avon is sold through more than 6 million active independent Avon Sales Representatives. Avon products are available in over 100 countries, and the product line includes color cosmetics, skincare, fragrance, and fashion and home products, featuring such well-recognized brand names as Avon Color, ANEW, Skin-So-Soft, Advance Techniques, and mark.