Firms using a direct selling (DS) distribution channel delegate selling and sales management responsibilities to an independent-contractor distributor force. The DS firm’s inability to directly control distributors’ efforts, and the fact that most active distributors choose to work part-time rather than full-time at their DS business, makes an examination of the drivers of DS performance outcomes important for academic study and managerial insight.

In a recent publication in the Journal of Research and Management (aka Marketing ZFP), the authors Anne T. Coughlan (Kellogg School of Management, Northwestern University), Michael Gerke (post-doctoral researcher, University of Münster) and Manfred Krafft (Marketing Center, University of Münster) examine the effects of continuance commitment factors on distributors’ two most salient performance outcomes (income from direct selling and size of downline) using a dataset of 16,388 DS distributors from 68 companies in the US.

The authors consider two reasons for being a DS distributor as moderators of the drivers of their performance outcomes: “direct selling as a career” and “products at a discount”. The associations of the continuance commitment factors with performance outcomes are strengthened for distributors who identified with a career reason. In contrast, the link was attenuated for distributors who identified with a discount buying reason.

The moderator “direct selling as a career” is the strongest, but both moderators are significant. The model’s strong explanatory results and significant moderating effects show that DS distributors are segmented by their underlying reasons for participating in the DS business opportunity.

Find the article here.