Direct selling is a very lucrative industry that has significantly grown over the last few decades. With over 60 million sales consultants worldwide contributing to over $114 billion in sales, it goes without saying that direct sales certainly plays a large role in the economic sector. Everyone talks about direct selling changing millions of people’s lives but to really understand the potential behind this massive industry, it is worth looking at the actual numbers. It’s one thing to describe such a thriving sector in words and another to look at it through actual facts and statistics. Below is a closer look at the direct sales industry in numbers:
In the United States alone, millions of people get into direct sales either as a part-time venture or a full-time one. There has been a steady growth when it comes to the direct selling population in the country. From 12.2 million sales consultants in 2001, the number has risen to 16.1 million in 2009 and experienced a very minor decline from 16.1 million to 15.8 million in 2010.
According to the Direct Selling Association census, 81.8% of direct sales reps in the US are female and the remaining 18.2% are male. A large percentage of direct sellers are within the ages of 30 to 46, which accounts for 37.1% of sales consultants in the country. Sales representatives aged 47 to 64 and 65 and above account for 34% and 15.3% of the direct selling population in the US, respectively. Direct sellers aged 18 to 29 accounts for 13.7% of direct sellers.
It is a common misconception among many people who have had no experience in direct sales that the turnover rate of direct sellers is high because there is no real potential in the industry. While it is certainly higher than that of the retail industry’s, one has to keep in mind that some people who get into direct sales do so to earn some extra money and don’t really intend on staying too long after they have reached their income goal from the venture. The annual turnover rate in retail is 53% and 56% in direct sales. The very nature of the industry accounts for this number, as direct selling companies typically offer a supplemental source of income with very flexible working hours. Nonetheless, 82% of direct sellers have been with their companies for more than a year and those who drop out do so because they have already achieved what they wanted to.
Since direct sales is a very dynamic industry, it is only natural to have a relatively high turnover rate, especially since most people who join the industry either become direct sellers alongside working full-time or join to raise some extra money for vacations and other such items of leisure and luxury. Moreover, 91.1% of direct sellers in the US only work part-time and 8.9% work full-time.
The highest revenue of direct sales was in the year 2006, with total sales amounting to $32.18 billion in the US alone. There has been a steady increase in annual revenue from $26.69 billion in 2001 to $32.18 billion in 2006. The industry has experienced a short drop in sales the following year, with annual revenue amounting to $30.80 billion. In 2010 annual revenue was marked at $28.56 billion. Within a period of ten years from 1998 to 2008, there has been a 2.6% growth rate in sales made from direct selling. Within a year from 2010, sales growth was marked at 0.8%. On average, a direct seller earns about $1,974 a year from working part-time in direct sales.
84% of direct sellers meet their monthly income expectations and 91% of direct sellers expressed that direct selling is much more profitable for less the amount of work than with running an independent business.
The highest number of direct sellers is in companies specializing in home products, which accounts for 24.4% of the total direct selling population in the United States. Second place goes to health and wellness products, with 23% of direct sellers working for companies specializing in this category. 19.4% of direct sellers work for personal care and beauty direct sales companies, 11% for clothing and accessories, and 3% for educational products. 19.2% work for companies specializing in other products and services.
While a lot of direct sales companies employ the party-plan system, majority of sales consultants still opt to employ the “person-to-person” strategy as their primary mode of selling. 63.5% of direct sellers in the US use person-to-person selling, 27.9% employ party-plan systems, 7.5% acquire sales through direct orders, and 1.1% employs other methods.
Based on the aforementioned information, it is clear that majority of people who get into direct sales do not end up disappointed with their venture and that income goals are fulfilled. The direct sales industry has experienced such a massive growth in the number of representatives joining every year and a stable growth in sales, proof that the industry is not going anywhere anytime soon.