Direct Selling, according to experts, may be one of the fastest growing industries in the world, based on a legacy that began in the U.S. with companies like Avon, which initiated its first opportunity for representatives in 1886. After Avon, Stanley Home Products helped to kick off the canonical “party plan” for selling in 1930, establishing the model Tupperware entered in 1951 and Mary Kay Cosmetics joined in 1963.
But change affects us all. After peaking in 2013 at $140.1B, the global market for direct selling declined for two consecutive years, to $130.6B in 2015 and then rebounded, according to CoreSight Research. In 2017, according to Statista, global direct selling generated $189.6B in U.S. dollars, with 34 percent of this revenue now coming from wellness products.
The U.S. is the top region in the world for direct selling, but China is not far behind and may even surpass the U.S. within the next several years according to the Statista research. What does this mean for today’s independent marketers?
While the industry for wellness and vitality is growing and the “cut out the middleman” advantages of the direct selling model are great, it’s a sector that has a few challenges, too, such as:
• Reputation issues. Through the years, unregulated activity and bad behavior have contributed to the “shudder factor” many people still experience at the thought of relentless mercenary individuals pursuing membership sign-ups at any cost among their families and friends.
• The choice of company counts. The Direct Selling Association (DSA) estimates there are some 1,400 companies in business in the U.S. at any given time; however, the sector has become so rife with bad entrants that many fail to gain sufficient traction to grow. In fact, they note, many of these may come and go before they can even be counted.
But There Are Strengths
Clearly scoping the integrity, the operational strength, and the scope of any company you may deal with or market through is fundamental, regardless of how exciting the product or wellness technology may be. Beyond this, particularly in the business era during and following COVID, there can be some distinct advantages to direct selling as well:
• Globalization. This may be one of the most exciting possibilities for individuals and families looking to “get off the grid” of traditional models for advancing wellness now, before (or instead) of the need to address illness. Through new and traditional channels, the prospect of garnering new market and revenue in the U.S. from buyers in China is exceedingly tricky due to tariffs, restrictions and other supply chain issues that continue to fill our newsfeeds every day.
In fact, most typically, the revenue for independent sellers moves from the U.S. into China and other countries through channels such as Amazon. This is a model that is not only a detriment to U.S. marketers but also a risk for U.S. buyers who must attempt to weed through phony reviews, vet the authenticity and quality of the products and then endure extraordinary wait times for the products they purchase.
But in an effective direct selling model, the playing field is leveled in both directions. The veracity and quality of products is easier to evaluate, the supply chain maintains fresh inventory in both regions, and adherence to good practice on all sides is assured. As an example, my own company, Vasayo, entered mainland China through a cooperative agreement with a native China-based company, Nu Life International, in mid-2021.
When this type of partnership happens, it brings the advantage of allowing revenue to flow in both directions. A home-based marketer in Kansas, for example, can bring revenue from China into the U.S., which is an unusual and beneficial way to level the playing field for an individual seller.
• Millennial participation. The ability to find a marketing mechanism that works and appeals to millennial sellers and buyers can be either a detriment or an extraordinary advantage to a direct selling model. While direct selling has traditionally been the bastion of Boomer-level participants, the methods these sellers have formerly favored (hand to hand and through home-based parties) has become less predominant and less effective. For today’s direct marketing organizations to grow, they need to engage and capture millennial participants with higher success.
Millennial participants are motivated, as we are increasingly aware, by a sense of mission, flexibility, and autonomy. They would like to forge their own path but would also like to have the advantages traditional employees enjoy such as collaboration, the support of an extended network, and the ability to tap into effective structures for collateral and educational materials, ideas, and team motivation.
The mission purposes must be meaningful and apparent to sellers who are perhaps looking to gain better health and vibrance, augment or support their family’s income while also raising children or supporting elder family members, and making meaningful contributions to a bigger purpose such as changing a million lives in Africa, collectively providing the means to provide communities in another hemisphere with clean water—these are highly motivating factors and even essential to allow the marketing model to thrive.
As we head into the “newer normal” of business and life in 2022, we can summarize what’s needed most in the current business community as “vibrance.” Functionally, we need to address the challenges of direct selling head on with more effective means of engaging and propelling a program’s participants in the unique aspects of direct selling and applying them effectively as a means of taking greater power over wellness and vitality, financial independence, and the ability to make a positive difference to communities through the world.