Direct Sales

An estimated 13 million people are involved in direct selling in the U.S., and more than 47 million worldwide. Most are women, though nearly a third is men or two-person teams such as couples. The vast majority of Direct Sales Consultants are independent business people - they are micro-entrepreneurs whose purpose is to sell the product and/or services of the company they voluntarily choose to represent - not employees of the company. Approximately 90 percent of all consultants operate their businesses part-time. Are Direct Sales in the United States increasing and could this possibly be thru consultants? Yes. Direct selling is a rapidly growing industry. U.S. sales totaled $28.7 billion in 2002, up from 26.7 billion in 2001, with more than 55 percent of the American public having purchased goods or services through direct selling. Sales are also very strong with nearly $85 billion in total sales.

Virtually every consumer product or service can be purchased through Direct Sales. People who purchase through direct selling cite product quality, uniqueness and money-back guarantees as the top reasons for shopping through direct selling. There is a difference between Direct Sales and Direct Marketing. Direct Sales works by selling a product or service through its network of Consultants in either a person-to-person or party plan method. Direct marketing uses a catalogue method of sales.

In Direct Sales the consultants sell thru a distribution method, whereas multilevel marketing refers more specifically to a type of compensation plan found in direct selling. A direct selling company that offers a multilevel compensation plan pays its representatives/distributors based not only on one's own product sales, but on the product sales of one's "down-line" (the people a representative/distributor has brought into the business, and, in turn, the people they have brought into the business). You may ask “what is the difference between single level and multilevel compensation plans which are used for the consultants”? Single level compensation plan means a representative/distributor is compensated based solely on one's own product sales. In a multilevel compensation plan, representatives/distributors are compensated based not only on one's own product sales, but on the product sales of one's down-line. How many Direct Sales companies are there to choose from?

It is impossible to estimate the number of direct selling companies operating at any given time. This is a result of several factors. First, most states do not require direct selling companies to register as such. Therefore, no exhaustive list exists. Second, as with any business, many direct selling companies do not thrive in the direct selling market and have a relatively short life span. In fact, many companies may even come and go before they could even be "counted." However, the Direct Sales Association estimates that the sales made by its members account for about 90 percent of all Direct Sales in the United States.