Direct Selling

Direct Selling

Brief Excerpt from Industry Overview Chapter:

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, Schwan Food, and Tupperware, as well as Coway (South Korea), Herbalife (Grand Cayman), Infinitus, and Perfect (both from China), Natura (Brazil), and Vorwerk (Germany).

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 30% of industry revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include medicines, vitamins, minerals and supplements, which account for roughly 30% of the industry's revenue. Other products include hardware, nonpower hand tools, and other building materials (more than 20%), and prescriptions (about 20%). Soft drinks and non-alcoholic beverages as well as window treatments accounted for the remainder.