The ability to evolve and adapt to changes in technology and consumer demand is critical to the success and longevity of any industry or business. For more than 100 years, the direct selling industry – a sales model that avoids intermediaries in the supply chain and allows for direct, person-to-person sale – has endured because of its ability to adjust and appeal to different, ever-changing consumer needs.
More people than you may think are in the direct selling business: approximately 128 million around the world, according to the World Federation of Direct Selling Associations. Sometimes referred to as independent distributors or sales representatives, these individuals encompass a diverse group of people, including schoolteachers, nurses, and the stay-at-home parent next door, who are supplementing their full-time income or earning their own extra money through direct sales. And they sell everything from cosmetics and wellness products to household goods and financial services.
Direct Selling Today: Why the Model Is Still Relevant
In the direct selling business model, independent distributors can earn commissions based on sales and retain the flexibility to run a business on their own terms.
Trusted direct selling companies that have been around for decades have evolved their business to adapt to changing times – by harnessing the power of technology and satisfying the demand for high-quality products. One of the reasons the industry remains relevant is because successful direct selling companies offer best-in-class products while maintaining the highest business practice standards, like offering comprehensive satisfaction guarantees.
Here are some reasons why direct selling is a viable business thriving in the 21st century:Â
1. It’s a model that empowers the individual.
Whether it’s being able to pay for a child’s extracurricular activities, planning a vacation, or taking a little pressure off from paying monthly bills, earning supplemental income – extra money you make on top of your regular income – can be a way to help cover family and personal expenses.
Most people don’t want to put their savings at risk to earn extra income; they need a more flexible option to fit their specific circumstances. Direct selling empowers them to take that step without compromising their stability because it’s:
A low-cost opportunity
Getting started in the direct selling business does not require high-capital investment. For example, according to the U.S. Direct Sales Association, start-up costs are typically low compared to other opportunities like ride-sharing. Usually, a sales kit is all that’s needed to get started, and there is little or no inventory or other cash commitments to begin.
A low-risk opportunity
Direct selling doesn’t necessarily involve incurring overhead costs that typical brick-and-mortar stores do, like traditional advertising or the salary of salespersons. This allows entrepreneurs to focus their investments – however small – directly into getting their business up and running.Â
An opportunity open to anyone
No special education or training is required to enter the direct sales industry, so this is an opportunity that welcomes people from all different backgrounds, ages, and interests. Though there are no educational or professional prerequisites to join, most companies offer training, mentoring, and business development tools to help independent distributors build their businesses.
Ultimately, direct sellers define their own success – the business model simply provides them with the structure and mentorship to make it happen.
2. It’s a model that allows flexibility.
Statistics from around the world confirm one thing: people are increasingly interested in entrepreneurship opportunities.
According to the U.S. Direct Selling Association, 77% of Americans are interested in flexible, entrepreneurial/income-earning opportunities. A couple of recent global surveys conducted by Herbalife Nutrition and OnePoll also found that women and younger generations are particularly inclined to seek these opportunities.
The top reasons motivating people to start their own business are:
- The flexibility in work/life schedule
- Becoming their own boss
- The ability to pursue their passion
- The potential to grow their income
The direct selling model has the potential to satisfy each of those goals, especially flexibility, since the model is designed to allow an individual to decide for themselves how much time and effort to put into selling product.
Independent distributors working for a direct selling company earn a profit on every product they sell but work for themselves. They set their schedule, create their plans for attracting and retaining customers (usually with the support of company tools and mentorship), and determine whether to work toward building a sales team and how to mentor those within it. They have the chance to develop and grow their own business and run it how they see fit, as long as they adhere to regulations and business ethics codes.
For many, direct selling offers an alternative to traditional employment for those wanting a flexible opportunity to supplement household income. For example, in the U.S., 6.8 million people sell part-time, according to the Direct Selling Association.
3. Evolving methods to do the business
A business model that has existed for over a century would necessarily have gone through several ways of operating. As culture and technology evolve, so does the way of doing business to keep up with new trends and ways to serve consumers better.
Direct selling started as a door-to-door business around 1900, and cosmetics and books were the main products sold. By 1930, the party plan model was introduced, where independent distributors would organize small gatherings to demonstrate how a product worked while maintaining the ability to discuss one-on-one with potential customers.
Since its beginnings, the foundation of direct selling has been based on establishing a trusting relationship between seller and customer: distributors forge personal relationships with their customers, cater to their unique goals, and provide personalized recommendations.
For a long time, this was done primarily through face-to-face meetings and product demonstrations, but technology has allowed for further reach, new connections, and optimized interactions:
- Social media allows direct sellers to expand their geographical reach while engaging younger generations.
- Through personalized e-commerce sites that are company-sponsored, many direct sellers can reach new customers, connect with existing ones, and sell products online 24/7.
- Data about their consumers’ purchases and buying patterns allows direct sellers to offer better, personalized recommendations.
Technology might have transformed the way relationships work, but it hasn’t changed their nature. Direct selling is still a trust-based purchase; distributors continue to build strong relationships with their customers and share their passion for products. It’s still a high-touch business that now happens to be high-tech too.
4. Direct selling enables personalized experiences.
Essential to establishing trust between seller and customer is offering a personalized buying experience. Being a high-touch business, direct sellers can offer one-on-one service and have an opportunity to learn about their customers’ needs, preferences, and goals.
Personalization is key to direct selling business because:
- It captures customers’ interest by presenting information or products that are relevant to them. According to Accenture, 91 percent of consumers are more likely to shop with brands that provide offers and recommendations relevant to them.
- It prioritizes the customer experience. According to a report from Segment, 71 percent of consumers feel frustrated when a shopping experience is impersonal.
- It helps reduce information overload when having too many options might be overwhelming.
There are some industries where consumers get a more significant benefit out of personalization, such as health and wellness. It’s great for an independent representative to know which makeup palette you prefer, but when it comes to nutrition, personalization can help you achieve your desired results.
Personalization comes in many forms: goal setting, recognition and celebration of milestones, motivation, accountability, support, and much more. Combined, these experiences and resources empower customers and can have a transformative effect on their lives.
These trends indicate that the future is bright for the direct selling industry. Companies have been responsive to evolving consumer needs and continue to provide aspiring entrepreneurs an opportunity to earn extra income. The resilience and flexibility of the industry will continue to pave the way for its continual evolution and improvement.
Rob LevyRegional President, The Americas
Rob Levy is regional president of The Americas for Herbalife. In his role, he is responsible for all business, strategic, sales and marketing functions across the region, which includes North America, Central America and South America.