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Wednesday, January 31, 2007

My New Client is Perverse -"Be Aware"

From Wikipedia, the free encyclopedia

DS-Max ("Direct Sales to the Maximum"), or more precisely D S Max USA Inc [1] and its affiliates, is a direct sales company that originally specialized in selling discount/overstock/damaged merchandise directly to the public, and later expanded to include sales of discount coupons, telecommunications contracts like AT&T, credit card processing services and other sales packages on behalf of more service based industries.

* 1 Company beginnings
* 2 Division of DS-MAX, 2003
* 3 Offices and Distributors
* 4 Affiliated companies
* 5 Complaints about DS-Max companies
* 6 External Links

Company beginnings

Started in Toronto, Ontario ,Canada in the late 1970's by Murray Reinhardt who began selling goods directly to the public, it later expanded to become an extremely large organization, with thousands of affiliated offices and a presence in numerous countries. Murray Reinhardt recruited fellow Canadians Larry Tenebaum and Avie Roth to join the organization at the very genesis of what would become DS-Max worldwide. These three men are known as "The Big Three" in DS-Max folklore. Today, Larry Tenebaum is the most powerful man in the DS-Max network. He oversees all operations over every division. Mr. Tenebaum is also the CEO of ThreeSixty Sourcing which sources Asian based product suppliers. Avie Roth oversees all of Cydcor. Murray Reinhardt is retired from the business but does occasionally show up at DS-Max conventions to deliver high spirited motivational speeches.

As of October 2006, with provisions to allow corporate letterhead, signage, corporate name to change, etc., the Innovage Parties being Innovage Inc.(U.S.A.), DS-MAX Canada Inc., and DS-MAX International Inc. shall and do transfer to Nu-Life Inc., of Toronto, Ontario Canada, all of their rights, title and interests anywhere in the world in any trade mark, trade name, corporate name or domain name which includes the term DS-MAX.

Division of DS-MAX, 2003

In 2003 DS-Max divided into three main braches. The products division (Clearance) became Innovage.The advertising division became Granton Marketing, which has just recently been renamed Smart Circle International. The communication division became Cydcor. These three divisions are still under the DS-Max / Innovage umbrella but this connection is not promoted and even avoided if possible when discussing the structure of the business with new distributors.

Offices and Distributors

DS-Max claims to have more than 15,000 offices around the world and more than 2.2 million independent distributors. The company also boasts a presence in more than 40 countries and a net worth of 75 Billion US Dollars. However, because the company is privately held and represents a loose confederation of independent offices there is no reliable way to verify these estimates.

The name DS-Max is often used to refer to the whole distribution system that includes DS-Max USA Inc., its affiliated suppliers and independent offices. Each affiliated sales office is an independent and incorporated business. This legal separation between the DS-Max supplying organizations and each individual office insulates DS-Max from any legal or financial liability should something happen within an individual office. Because all sales offices are independently owned and operated each individual distributor and manager/owner reaps the rewards of and is both financially and legally responsible for his own business. The majority of all distributors work as independent contractors and thus are not paid a salary, receive no health benefits and are responsible for paying their own taxes.

The DS-Max system runs similarly to network marketing businesses but with several key differences:

1) Sales representatives (distributors) generally work full-time (often six days, 60 hours or more a week), relying on their sales for their primary source of income, rather than a slow transition from part-time to full-time.

2) The individual owner assumes the cost and advertises for new distributors and finds a mentor for them, rather than the distributor absorbing the cost of recruiting.

3) Distributors receive the products on consignment rather than paying for them up front and there is no fee for becoming a distributor.

The business only grows when new distributors are added. While DS-Max as a whole has grown quite large through the years the vast majority of distributors and managers have not achieved the high level of success that was promoted to them during the initial recruitment process. In the 20 plus years of operation the DS-Max business model has generated some tremendous success for a small group of Vice-Presidents, or as they are referred to now, National Consultants, but the question of how many have found success in DS-Max compared to the number who have attempted to achieve success can only be answered by analyzing accurate and detailed records of these organizations and their affiliates. This type of public financial disclosure is almost impossible to obtain because each individual office is privately owned and thus they are not required to disclose this information.

All participants begin as canvassing salespeople (door to door, both residential and commercial) and must work to build their organizations by adding more sales people to achieve higher sales goals.

Affiliated companies

Affiliated companies include Grupo B&F, IPG Imports,The Cobra Group and Happy Valet Dry cleaners among others. Innovage and Smart Circle International are participating members in the Direct Selling Association and as such are bound by the organization's code of ethics. However, the fact that each sales office is an independent incorporation and is only legally bound to the parent company through distribution contracts, makes the implementation of these strict guidelines on ethical conduct difficult to enforce.

Complaints about DS-Max companies

One of the most common complaints about DS-Max affiliated companies is in their recruiting and advertising practices. Often the position is advertised as an "entry level management position", and claims to operate in any number of glamorous, competitive, high profile, industries ranging from pro sports and entertainment to 4 star restaurants and world travel, when in reality the position is that of a door-to-door salesperson who peddles pizza coupons, discount baseball tickets, 5 dollar umbrellas, designer knock-off hand bags, and travel alarm clocks, none of which the applicant will actually discover until they are out "in the field" with a distributor on their "second interview."

A common interviewing formula used by the independent sales offices consists of:

1. A very short first round interview conducted in the office of the manager. Typically in this interview the manager will briefly outline the structure of the business to the potential new distributor. A typical DS-Max manager will interview anywhere from 10 to 30 people a day so this first interview is usually short on detail and any prolonged question and answer sessions are avoided if possible.

2. A full day "second interview" in the sales field where the potential distributor shadows a current distributor while they attempt to sell their products or services door-to-door. This full day interview is an attempt to show the potential distributor how a typical day in the field works. This full day interview, like the first interview is purposefully vague on details and most questions are not answered fully or more difficult questions get passed on to the manager/owner to handle during the final interview. This is known within DS-MAX circles as the "Day of Observation" or the "Day of O".

3. A "final interview" takes place in the manager's office when the potential distributor returns after a full day in the field. If the applicant has any problems or objections, the manager may attempt to overturn them. If the potential distributor needs some clarification in order to understand the "big picture" of this business opportunity the manager will attempt to explain the business beyond just selling products door-to-door. The goal of every manager is to encourage the interviewee to start full time the very next day.


Blogger Michael Slater said...

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January 8, 2015 at 6:39 AM

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