Top Desk
November 2009
Why the future looks bright for Poland…
Michal Mierzwinski is Managing Director of Betterware Poland, established less than three years ago. Previously Michal held a key position with Oriflame which was one of the first direct selling companies to set up in Poland after the fall of Communism in 1989. Here Michal puts the spotlight on a maturing market which he believes has a great future…
People in Poland are extremely entrepreneurial. For 50 years we didn’t have much opportunity for running our own businesses and when times changed with the fall of Communism, the entrepreneurial spirit really took off.
The direct selling industry in Poland provides great opportunities for ordinary people who don’t have too much money to invest, as in this business, there are no financial barriers. The industry provides a lot of support and training which helps people to get started. What is also particularly helpful is that they do not have to quit their jobs. They can run the business parallel to their jobs and then quit their regular jobs when they start to do well.
Business for Betterware Poland is going really well. Even though we have been in the market for less than three years we have made a big impact. I would say at the end of next year we will be one of ten biggest direct selling companies in Poland. Poland is the first central European country to be
entered by Betterware as a starting point to expand in more countries in the region soon.
I have been involved with the company since it was first established here. Once a decision was taken by Betterware to enter the Polish market they just needed someone to lead the organisation in Poland and I took up that role.
I have been in direct selling since 2001 when I joined Oriflame Poland where I was Operations Manager and also a board member. Oriflame was one of the first two direct selling companies to set up in Poland after the fall of Communism. The other company was Amway and both
companies were established in Poland at the beginning of the 1990s.
I think there are very big opportunities here for the industry. The Polish market has started to become very competitive with over 200 direct selling companies now operating here. When you look at the general turnover for 2008 of 2.2billion, you must bear in mind that this is only half a per cent of general trade, whereas in western Europe it is three per cent, so the potential is huge. I believe that for the direct selling industry there are fantastic opportunities for the future here.
However, though the future looks bright for the industry in Poland, there are also challenges - the biggest being obstacles created by our laws here. Poland is still a young direct selling market and the industry is still not appreciated here as it should be. The industry in Poland provides opportunities for 750,000 people and yet this is hardly noticed by our politicians. There are all kinds of regulations and business rules which create obstacles.
For example, when you set up your own company you need to be legally registered and then you pay a lot of taxes and fees which kill your profits at the very beginning. Consequently, people often wait a long time before starting a business because the money they earn at first will not even cover the fees they have to pay.Bureaucracy in Poland is also a challenge. Hopefully, things will get better but at the moment Poland is considered to be one of the more bureaucratic countries. This is difficult enough for the company so imagine how difficult it must be for the ordinary person who doesn’t know about the law and the fees involved with setting up.
Hope for us lies with the European Union. We are currently lobbying the European Parliament for regulations which will reduce bureaucracy and reduce these fees. We are doing this through the Polish Direct Selling Association which is also part of FEDSA.
It is extremely important that high standards are maintained in Poland and that direct selling companies are members of the Polish Direct Selling Association. When direct selling first came to Poland in the 1990s, all of a sudden the economy started to develop and many unscrupulous people started
direct selling businesses which created a negative image.
From the end of the 1990’s all the companies got together to try to create a more positive image.
Those companies which belong to the direct selling association here are attracting 80 per cent of the business.
We offer more to customers and our Distributors than is required by law in the way of guarantees, a good information system and so on, and this is good for the reputation of the industry in Poland.
Through our direct selling association, we also keep an eye on any companies acting unethically so they don’t spoil the market for the rest of us. Protection for customers in Poland is at the same level as in the rest of Europe. Products can be returned within 14 days but we give 30 days.
In Poland over 80 per cent of our Distributors are women. This may be because direct selling is still perceived here as additional income. Another reason is probably due to the fact that 70 per cent of the products sold in direct selling in Poland are cosmetics. Household products account for 16 per cent of products sold in Poland. This is very typical of European countries, bearing in mind that the first direct selling companies to set up in Poland were the cosmetic companies, Oriflame and later Avon.
In Poland, Betterware is operating as an MLM company so we operate very much through face to face meetings. Our Distributors visit homes and organise home presentations.
It is completely different from the UK, where you can put catalogues through the door.
Like most direct selling companies, Betterware Poland benefits from the internet. Our website gives access to people 24 hours a day so they can manage their business online. However, I feel we are sometimes so focused on new technologies that we forget the personal touch. Next to the internet, the most important facility I have is my call centre. We don’t have shops around, so this provides the opportunity to speak to a person at the end of the phone. I also have sales people travelling round the country meeting people face to face.
The one piece of advice I would give to others in the industry is to keep it simple. When I see what other companies offer to people in the way of benefits and so on, it is often so complicated that I have to read the details three times before I understand them. I believe keeping it simple, along with the
personal touch, is the key to success.
My philosophy generally is that direct selling is a people business and this also relates to the people I work with within the company. I believe in the empowerment of people and in giving them as much responsibility as they dare to take. I always believe it is worth helping people to achieve their first success - bearing in mind that the company can only achieve success through the success of its people.
