Many controversial Asia-based online retailers that have cut out the middle man have many local businesses worried.
With good reason too.
“In terms of customs legislation, if you bring in small packages, you don’t pay duties, that is because the duties are reserved for larger consignments.
"And so, what Shein seems to be doing is exploiting that loophole by exporting in very small quantities often directly to the customer or their local distribution warehouses,” the Southern African Clothing and Textile Workers Union’s (Sactwu’s) national industrial policy officer, Etienne Vlok, told News24 earlier in March when it was confirmed that the Department of Trade, Industry and Competition (DTIC) is investigating Shein, the Chinese fast fashion giant that’s now based in Singapore and has become the world’s largest fashion retailer.
In South African rands, the online fashion retailer – among many foreign-based ones such as Alibaba and Amazon which is expected to have warehouses up and running by the end of this year – the products are dirt cheap.
Dresses and shoes for below R100, makeup for less than R50 – the prices are unheard of, which while good news for customers, raises alarm bells for unions such as Sactwu and National Clothing Retail Federation (NCRF), which allege that “Shein may be exploiting tax loopholes to bring in goods far more cheaply than other international players and local companies”.
“We think it is bad news for workers, it’s bad news for the economy and it’s bad news for the environment,” says Etienne, alluding to the rumours of copyright infringement and unfair labour practices that fast fashion giants such as Shein and Temu are accused of.
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“These are disposable fashion companies,” Maxine Bédat, founder of the New Standard Institute tells CNN Business.
“That’s the crux of what they are. This stuff is not meant to last in your wardrobe. Their business wouldn’t function if it did.”
More than the crises of contributing to landfills and possibly entrenching problematic labour practices, a number of independent designers all over the world who cannot compete with these online retail giants have flagged that their creativity is simply replicated on a mass scale and at prices at which they cannot compete.
“After seeing how many items they (Shein) sold of our items already, it was like, we’re already doing business without agreeing to,” Justin Romero, a co-founder of the fashion brand Freak City, told the New York Times.
It’s a problem local South African retailers are worried threatens their entire existence.
If you want to start direct selling but have ethical issues about where the products are sourced and how, you need to really question the things that matter to you. These ethical concerns can include but are not limited to:
– Does the company use unfair labour practices?
– Is there transparency in how they source their products and their commitment to sustainability?
– Are the products vegan, not tested on animals, have a zero to low environmental impact?
– Does the company give back to the community in its which it’s based or have CSI initiatives that make a positive different to the planet?
Having answered these questions, here’s how you can start your direct-selling hustle with just a credit card, internet and ethical base of suppliers from all over the world.
1) Research your options
Start your journey by researching companies that are known for this type of selling model. You should only invest your time and resources into a reputable company. Look for one that's been in business for a long time that has research and development behind their products and has an established brand that you can leverage.
That way, you know that the brand already has a loyal customer base, and that its products have been tried, tested, and refined to reflect what the market wants. The company you go with should provide certain protections so sellers don’t need to spend a lot of money to start selling and can easily return any unused products within a reasonable timeframe.
Look for a brand that has proven research and development credentials so you also know you are selling a high quality product.
Make sure that the company you choose is registered with an organisation like the Direct Selling Association of South Africa (DSASA).
It has an established reputation of vetting its member companies’ compensation plans, compliance to its Code of Ethics, and compliance to the Laws of South Africa. So, you can rest assured knowing that companies associated with the DSASA are legitimate and credible.
A substantial benefit of joining the right direct selling business is an existing support network. Joining this network will allow you to learn from others in the field and gain valuable entrepreneurial, interpersonal, and communication skills to help you sell more effectively.
2) Get good tax advice and makes sure you register your business
There are tax implications once you start making an extra income. It’s always good to make sure all your bases are covered as far as the correct registration and revenue compliance of your hustle are concerned.
3) Consider how much time you want to spend on your side-hustle
Direct selling gives you an opportunity to determine your hours and how much you want to work in relation to how much of your income you want to supplement.
If you want to invest many hours a day into your venture, you can. But if you only have a few hours a week to devote to it, that’s fine too. You set your own goals and work at your own pace. But remember, the more time and effort you put into your direct selling side hustle, the more likely you are to generate more income from it.
4) Build your customer base
It will take time for you to build a loyal customer base, but this is essential for the success of your direct selling side hustle.
Look to your circle of influence for your first customers – friends, friends of friends, family, colleagues, and neighbours. Then, ask them to refer you to people in their own circle of influence who you can approach. A good customer experience is critical for generating word-of-mouth referrals. If you’re quick to reply to queries, ensure deliveries are speedy, and deal transparently with your customers, they will be more willing to refer you to others. Always be polite and professional – even if it’s with family and friends.
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You can also use social media to extend your reach and find customers. Reach out to groups on social media, start a social media page to connect with customers, or create your own group on WhatsApp to easily communicate with people at the same time. Use creative ways to grab attention and encourage your audience to engage. This could include meetups with groups or competitions to increase interest.
5) Know your product
It’s essential that you are familiar with the products you are selling. You need to use the products and share your results with prospective customers in person or on social media to show that you believe in them. Share how the products can help people meet their individual needs, aspirations, and goals so they feel inspired to need your brand.
