Direct Selling
Description
Companies in this industry sell a wide variety of products, primarily door-to-door or through other person-to-person contact. Major US companies include Amway, Avon, Mary Kay, and Tupperware, as well as Coway (South Korea), Herbalife (Grand Cayman), Infinitus, and Perfect (both from China), Natura (Brazil), and Vorwerk (Germany).
Worldwide revenue for direct selling companies is about $248.51 billion in 2024, according to the Business Research Company. The US is the world's leading market for direct sales, followed by China, Korea, Germany, and Japan, according to Statista. China, the US, and Japan, are some of Amway's top markets.
The US direct selling industry includes about 1.1 million establishments (single-location firms and units of multi-location firms) with a combined annual revenue of $4.9 trillion.
COMPETITIVE LANDSCAPE
Personal income and consumer preferences drive demand for the diverse array of products sold by the direct selling industry. Profitability for companies depends on the success of independent representatives who sell products to the public. Large companies enjoy economies of scale in marketing and in training and supporting representatives in the field. Small companies can compete effectively by offering popular products. The US industry is fragmented: the 50 largest companies account for about 40% of industry revenue.
Competition for the industry includes online, catalog, and brick-and-mortar retailers.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include automobiles and light-duty trucks, which account for about 20% of the industry's revenue. Other products include medicines, vitamins, minerals and supplements, about 10%, followed by automotive fuels (about 10%) and food dry goods and other foods (less than 5%).
Most direct selling companies hire local contractors, often called consultants, who sell products either door-to-door, through parties or events, online, one-on-one, or a combination of methods.
Compensation for consultants varies as well, with many earning money from commission on product sales or by buying products wholesale and selling at retail prices. Many direct selling companies also offer bonuses and gifts to consultants for reaching sales goals and compensation for recruiting additional consultants. Depending on the product sold, some consultants keep inventory on hand while others order products directly from the company as orders come in.
Worldwide revenue for direct selling companies is about $248.51 billion in 2024, according to the Business Research Company. The US is the world's leading market for direct sales, followed by China, Korea, Germany, and Japan, according to Statista. China, the US, and Japan, are some of Amway's top markets.
The US direct selling industry includes about 1.1 million establishments (single-location firms and units of multi-location firms) with a combined annual revenue of $4.9 trillion.
COMPETITIVE LANDSCAPE
Personal income and consumer preferences drive demand for the diverse array of products sold by the direct selling industry. Profitability for companies depends on the success of independent representatives who sell products to the public. Large companies enjoy economies of scale in marketing and in training and supporting representatives in the field. Small companies can compete effectively by offering popular products. The US industry is fragmented: the 50 largest companies account for about 40% of industry revenue.
Competition for the industry includes online, catalog, and brick-and-mortar retailers.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include automobiles and light-duty trucks, which account for about 20% of the industry's revenue. Other products include medicines, vitamins, minerals and supplements, about 10%, followed by automotive fuels (about 10%) and food dry goods and other foods (less than 5%).
Most direct selling companies hire local contractors, often called consultants, who sell products either door-to-door, through parties or events, online, one-on-one, or a combination of methods.
Compensation for consultants varies as well, with many earning money from commission on product sales or by buying products wholesale and selling at retail prices. Many direct selling companies also offer bonuses and gifts to consultants for reaching sales goals and compensation for recruiting additional consultants. Depending on the product sold, some consultants keep inventory on hand while others order products directly from the company as orders come in.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
Pricing
Currency Rates
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