Title of post: Social media’s impact on Direct Sales’ supply chain
Organization: Steeped Tea
Industry: Direct Sales
CEO: Tonia Jahshan
Web references: Logistics Viewpoint, Supply Chain 24/7, The Canadian Business Journal, Direct Selling Association, Fast Company, Supply Chain Opz, Facebook,
Social media has been widely used in general business for marketing, but we are starting to see an increase in its application to other parts of the business model, like supply chain management. Although slow to the game, businesses are starting to see the value social media plays in streamlining their supply chain and the various aspects where it can be utilized. From effective collaboration and trend analysis during the research and design phase, to researching customer reviews on Facebook for shipping companies to align with, monitoring what users are saying about what’s popular to better stock your shelves, and even monitoring who other similar companies are following on Twitter to see who they are working with, all provides valuable contributions to supply chain management.
The experts at SupplyChainopz have put together an infograph outlining how a business might go about streamlining a supply chain.
An area in which this has had an interesting impact on is the world of direct sales. Gone are the days of Avon ladies and Fuller Brush salesmen regularly showing up at customers’ doorsteps – in today’s world social media connections and web conferences have replaced door-to-door handshakes and cataloge drops. Direct sellers are embracing the digital age and getting their product out there through avenues like Facebook. In fact, most direct mail companies encourage their reps to use social media to get the word out to their friends by using Facebook events to invite their network to parties, use private messages to take orders and work out drop offs, and even share network lists to find reps in customers’ preferred areas. Facebook has almost completely replaced the need for an actual company website – you can even set up your own market place. It’s also staggering to learn that in 2013 nearly 16 million direct sales people rang up over $30 billion in retail sales (according to the Direct Sales Association).
Let’s look at direct sales company Steeped Tea as an example – the company started in founder Tonia Jahshan’s basement after she fell in love with loose leaf tea on vacation. She quickly expanded with Dragon’s Den investors Dave Chilton and Jim Treliving on an episode of their hit television show, landing a $125,000 for 10% of their company. Currently, the company has 7500 consultants throughout Canada and the U.S.
Here’s how the company got started and the benefit of being one of their consultants.
For a lot of entrepeneurs, the direct sales model is desirable because that sales force isn’t employed by the company; they’re their own business owners who represent the company and earn a commission based on what they sell. Steeped tea boasts that their commitment to their consultants has led to their success – Steeped Tea consultants earn a commission of 25-35% based on where they are in the company’s compensation plan, and they have made the process of joining the team as a consultant as straightforward as possible. “We don’t have qualifications for consultants. We don’t interview consultants. We don’t screen consultants. Practically anybody can be a consultant,” stress Jahshan. “They just need to purchase a kit at $99, which has all the basics to get you going. It’s literally priced at cost, and makes the start-up process very simple. As soon as people join and purchase the kit, they get their own virtual back office which they can log into for training and placing orders. They have three months of free access to their own shopping cart and website, and newsletters that go out to their customers.” It is interesting to note from Steeped Tea consultants that I spoke to that once the three month trial period for your personal website it over, many consultants turn to Facebook to run their business – listing events, taking orders, and coordinating shipment – and Steeped Tea continues to grow at 600%. The use of Facebook to run your business can be argued as a basic benefit of social media to supply chain management – the ability to network, advertise and invite your friends to events, taking orders, arranging shipment, recruiting other consultants (even communicating with other consultants), and collaborating on what customers are saying they’d like to see new in the product list can, and are, all done through social media and direct sales.
Lessons for others
Social media is about building relationships, but it can also be used in a supply chain to build and grow relationships between businesses and customers. As a direct sales consultant or representative it is also a cheap and easy way to run a profitable business. It allows you to build and maintain relationships, expand, advertise, take orders, host events, determine key performance indicators, determine industry competition, and collaborate and solicit information about products and improvement. Ignoring the impact social media can have on your supply chain is going to be the difference between 100% growth and 600%.