According to the Direct Selling Association (DSA), about 20.2 million Americans are involved in direct selling the U.S. This is up from 15.8 million in 2010.
Also known as multi-level marketing, retail sales by direct selling companies increased from $28.6 billion to $36.1 billion. This makes direct selling a relatively bright sector of the retail industry.
The vast majority of direct sellers - all of whom are independent workers - work part-time. This is clear from the data above. A quick calculation shows the average rep sells about $1800 in products.
A recent Bloomberg article on direct selling also points out that most direct sellers make relatively small amounts of money. Key quote:
Active Arbonne reps earn, on average, about $674 a year, according to a compensation summary the company shared. And Keep estimates that active Herbalife reps make $627.55 a year on average, based on data from the publicly traded company—roughly equivalent to working two hours a week at the federal minimum wage of $7.25.
The motivations for working in direct selling are similar to the motivations for working in the online on-demand economy (ODE) with the obvious exception of product discounts.
According to the DSA the top motivations include:
- Being able to purchase products one likes at a discounted price (62%)
- Flexibility and work-life balance (65%)
- Entrepreneurial opportunity, including earning extra income (62%), income potential (59%),
- The ability to drive their career (41%)
So much like ODE, direct selling provides a low friction, highly flexible way to earn supplemental income.
Also like the ODE, direct sellers report being satisfied with their work. A Bloomberg Government survey found that 77% of direct sellers are highly satisfied.
A couple of other interesting data points on the direct selling industry are women make up 77% of sellers and wellness products are driving the growth of the industry (see chart below; click to enlarge).
Direct selling doesn't get nearly the attention that the online on-demand/gig economy does.
But as is obvious from this data, it's much bigger in terms of employment. The most recent estimate from the Intuit On-Demand Economy study is about 3.9 million Americans are working with online, on-demand marketplaces.
So even if you assume half of those "working" as direct sellers are only doing so for product discounts, it's still more than twice the size of the online gig economy in terms of employment.
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