Between 2012 and 2018, the global retail sales of the Direct Selling Industry grew exponentially, resulting in sales of about 192.9 billion U.S. dollars in 2018.
One may ask how this industry has gotten this far, but to understand its success, we must first know its history.
1855 – The First Direct Selling Company was Established
Although Direct Selling was already a concept that was being used in America since the 1700s, where individuals known as Yankee Peddlers would go from town to town and sell a variety of products, it was not until 1855 that The Southwestern Company was established. The company started selling books and Bibles through mail order, and after the Civil War ended, it began selling books door-to-door, turning it into the first and oldest direct-selling company.
1886 – California Perfume Company is Founded
California Perfume Company, whose name changed to Avon in 1939, was founded by David H. McConnell a defender of women who wanted to allow them to gain economic independence as well as control over their lives and the lives of their families, thus making Avon one of the first companies to provide women with the possibility of gaining an income of their own. Avon is also considered the first company to fully implement the reselling and Direct Selling method and is currently ranked second in The DSN’s Global 100 list with a revenue of $5.57 billion U.S dollars in 2018.
1910 – The U.S Direct Selling Association is Formed
California Perfume Co. (Avon) united with nine other companies to create the first association to concentrate on the needs of Direct Sellers, the Agents Credit Association, which is known today as the U.S. Direct Selling Association.
1930s – The Party Plan Sales Model was Created
After Norman Squires invented the Party Plan Model, the industry evolved from solely being a one-to-one model to also being a one-to-many model that allowed consultants to sell to many customers while maintaining the personalization of the one-to-one concept. Thus, allowing individuals to expand their reach to customers.
1951 – Tupperware Enters the World of Direct Selling
Because consumers needed demos to understand how Tupperware containers worked, in 1948, the first Tupperware Home Party was held. In 1951, when the company realized they were selling more of their products through demos and Direct Selling, it decided to leave retail and focus solely on Direct Selling.
1959 – Amway Changes the Game
Founded in 1959, Amway, ranked number one in The DSN’s Global 100 list with a revenue of $8.80 billion U.S. dollars in 2018, introduced a new concept into the Direct Selling Industry, the Multi-Level Compensation structure; a business structure that is used by hundreds of companies to this day.
1978 – World Federation of Direct Selling Associations is Founded
Founded in 1970 by 12 Direct Selling Associations, the WFDSA was set up to address various Direct Selling problems around the world. To solve these problems, DSAs were allowed to share information and strategies as well as allowed to plan standard practices that would guide Direct Sellers in making informed and ethical decisions.
1985 – The First WFDSA World Code of Ethics is Established
In 1985 the foundation of the Direct Selling Industry’s commitment to ethical business practices and consumer protection was founded, bringing to life a document that is regularly enriched to keep up with the demands of the marketplace.
1990s – The Internet is Introduced
By the late 1990s and the start of the 2000s, the commercial use of the internet was in full bloom, and the Direct Selling Industry was taking full advantage of this. With the possibility to create a website and have information on products available to consumers over the web, Direct Selling companies were sure to increase their profits.
2010s – Huge Strides in Tech
With the advancement in Technology and the internet, came the introduction of online Direct Selling, a method that gave companies the opportunity to reach their target market with strategies such as email marketing, digital marketing, and online catalogs. At this time, the world was also being introduced to social media, and although it had not been around for too long, by 2012, “78.6% of salespeople using social media to sell outperformed those who weren’t using social media” (Forbes, 2013). These new marketing strategies allowed companies and consultants to engage with consumers across the globe and pave the way for the upcoming years.
2018 – Social Selling is Introduced
With Social Selling, the use of social media networks to directly interact with a target market, Direct Selling companies were able to expand their reach via social media sites as well as grow their consultant network to include younger generations. As mentioned, the use of social media allowed Direct Selling companies to target younger individuals who were once not attracted to the industry and allowed for a target market expansion.
Alongside Social Selling also came the introduction of E-commerce and influencer marketing, two strategies that broadened the industry’s reach even more and allowed Direct Selling methods to expand from door-to-door and party selling to online selling methods as well.
A lot has changed in the world since 1855, and the start of Direct Selling, and surely a lot more will continue to change as Technology continues to grow and concepts such as artificial intelligence and blockchain evolve and bring about different approaches to the industry.
As times change and consumers lean more towards online shopping, companies are evolving into a business model more attractive to consumers and consultants, take for example: E-commerce with millions of personalized replicated sites managed from the company headquarters with logistics to cover multiple countries. Sounds great, right? The Direct Selling industry has taken big steps creating sustainable, attractive, profitable, Technology supported and social business models that have been up to date with the latest technologies, and will continue to do so. With the adaptation of AI to the shopping processes, with consumer profiling, machine learning, influencer marketing, social selling trained sales forces, content creation, the spread of omnichannel presence, and the person to person selling experience that the industry has mastered in.
The timeline summary by business models:
- 1886 – Direct Selling (reselling)
- 1930 – Party Plan
- 1959 – MLM concept
- 2010 – Online Direct Selling
- 2018 – Social Selling
- 2019 – Social Selling through replicated micro-sites and influencers’ personalized micro-sites
What’s Next in Direct Selling?
Artificial Intelligence powered websites? holographic product demonstrations? Virtual Assistant consultants powered by membership subscriptions? The future of Direct Selling is as bright as the future for Technology, since the industry has always been up to date with the latest tech, it is and will continue transforming user experiences through technology.
The Direct Selling industry is a social industry from its roots and with the evolution to more tech-savvy consumers and consultants it won’t be too long until the Industry represents the best business model for new generations.
We invite you to give us some insight into what you think will be the next big changes in Direct Selling and Social Selling as well as your experience with Technology today.
S4DS in the Direct Selling Industry
We know how important it is to stay on top of all of the latest trends, which is why we created the following to help Direct Selling companies stay up-to-date in Social Selling:
- E-commerce replicated site where your influencers will be able to personalize their replicated site and tailor it to their target market’s needs and wants.
- Virtual office portal where your consultants and influencers can access our CRM service and obtain information such as company created content for their social media and replicated sites.
- Social media integration services, where consultants and influencers can link social media accounts such as Instagram to share updates from their personalized website.
Learn more about how S4DS can help you implement and strengthen your Direct Selling strategy here: