Global direct selling market - statistics & facts
Knock knock: direct selling is a business model in which a company utilizes person-to-person interactions to sell products. Typically, the process involves an independent seller buying the goods from the parent company and then selling them to other individuals (single-level marketing), sometimes recruiting them to also become independent sellers (multi-level marketing). This business practice takes place across the globe, but is especially common and successful in the Americas and the Asia Pacific region. And although many legitimate companies and representatives around the world operate in this manner, direct selling is sometimes confused with or deemed controversial due to 鈥減yramid schemes鈥, as certain major multi-level marketing (MLM) companies have been accused of forming such illegitimate business models. A pyramid scheme is an unsustainable business model in which sellers receive money for recruiting other sellers, who must then also recruit their own sellers in order to turn a profit, creating a business structure that resembles a pyramid, frequently without a genuine product to sell.
Herbalife, primarily offers weight management and nutritional products, and reported annual net sales of approximately five billion U.S. dollars.
Across the globe, the direct selling industry has seen better days, with declines in sales being recorded for many companies and in many countries. Although the model is far from gone, it would not be a stretch to call in-person direct selling somewhat antiquated. A similar model that has become much more prevalent in the last decade is direct-to-consumer e-commerce, a model in which manufacturers sell their products directly to their customers' doorsteps using online channels, effectively omitting the need for third-party retailers and sellers.
Direct selling worldwide
Globally, there are many direct selling companies specializing in numerous areas and providing various products from wellness supplements and cosmetics to household and home improvement items. Combined, they generated some 168 billion U.S. dollars' worth of annual global retail sales in 2023, which is a noticeable drop compared to one year earlier. Direct selling companies specializing in wellness products make up about a third of the industry鈥檚 total sales, making it the largest direct selling product category.Direct selling in the United States
In the United States, the world鈥檚 largest direct selling market, the industry had seen an increase in retail sales in 2020, when the country鈥檚 yearly direct sales jumped to 40 billion U.S. dollars. In 2021, U.S. sales even amounted to nearly 43 billion U.S. dollars. That said, the spike did not last, as annual sales figures resembled pre-COVID-19 numbers once again as of 2023. Furthermore, the size of the U.S. direct selling community, i.e., sellers and customers, had declined in similar fashion, amounting to less than 44 million people as of 2023.Leading MLM companies
Some of the world's largest multi-level marketing and direct selling enterprises include the likes of eXp Realty, Natura &Co, Coway, Nu Skin Enterprises, PM-International, and so on. The top direct selling companies in the United States are Amway and Herbalife. The larger of the two, Amway, generated about seven and a half billion U.S. dollars in 2023 and offers a broad range of products, with nutritional items, cosmetics, and home goods accounting making up the vast majority of the company's sales. The second-largest company,Across the globe, the direct selling industry has seen better days, with declines in sales being recorded for many companies and in many countries. Although the model is far from gone, it would not be a stretch to call in-person direct selling somewhat antiquated. A similar model that has become much more prevalent in the last decade is direct-to-consumer e-commerce, a model in which manufacturers sell their products directly to their customers' doorsteps using online channels, effectively omitting the need for third-party retailers and sellers.
