Hard sell: Limited discretionary income growth has reduced industry revenue

Direct selling companies, also known as multi-level marketing companies, distribute a range of products and services to final consumers through independent sales representatives. Sales representatives are usually independent contractors that retain a portion of revenue from the goods and services they sell, rather than receiving a wage. To attract and retain sales representatives, direct selling companies typically provide earning opportunities and new products at discounted prices.The industry has faced strong external competition from traditional bricks-and-mortar retailers and pure-play online retailers over the past five years. Consumers are increasingly searching online stores and retail auction sites for products, due to their extensive ranges, low prices and convenience...read more.

Industry Statistics & Market Size
Revenue
$2bn
Annual Growth 14-19
-3.0%
Forecast Growth 19-24
Profit
Employment
4,779
Businesses
132
Market Share of Companies

Industry Threats & Opportunities

  • Direct selling companies are struggling to compete with traditional retailers and online retailers
  • Employment and wages have declined as fewer people have been required to train a smaller sales force
  • Direct selling companies will face increasing competition from pure-play online retailers
  • Industry Report - Industry Investment Chapter

    The industry is characterised as having a low capital intensity level. For every dollar expected to be spent on labour in 2018-19, a projected $0.04 is allocated to capital expenditure. Direct selling companies rely heavily on labour for daily operations, as they require personnel for product demonstrations, and independent sales personnel recruitment and training. While traditional retail industries maintain fixtures, fittings and technological equipment such as point-of-sale systems and computer scanning registers, industry operators have adopted less technological changes given the small-establishment nature of direct selling...purchase to read more.

    Additional Insights for the Direct Selling Companies Industry

    IBISWorld has determined the most important Key Success Factors for the Direct Selling Companies are:

  • Receiving the benefit of word-of-mouth recommendations
  • Access to niche markets
  • Ensuring pricing policy is appropriate
  • IBISWorld analysts also discuss how external factors such as Consumer sentiment index and Demand from online shopping in the Direct Selling Companies industry impact industry performance..

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    What's in this report

    What is the Direct Selling Companies Industry?

    Industry firms sell products to consumers through independent salespeople without using fixed retail locations. Independent salespeople sell directly to consumers through person-to-person presentations, party-plan demonstrations and other methods. The industry excludes online sales that do not go through independent sales representatives.

    Industry Products
  • Cosmetics and personal-care products
  • Wellness products
  • Home care and household goods
  • Clothing and accessories
  • Books, toys, stationery and audiovisual products
  • Food and beverages
  • Other consumer products and services
  • Industry Activities
  • Direct selling of cosmetics and personal-care products
  • Direct selling of wellness products
  • Direct selling of home care and household goods
  • Direct selling of clothing and accessories
  • Direct selling of books, toys, stationery and audiovisual products
  • Direct selling of food and beverages
  • Direct selling of other consumer products and services
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Consumer sentiment index
  • Demand from online shopping
  • National unemployment rate
  • Real household discretionary income

  • Current Performance
  • Industry structure
  • Digital shift
  • External competition
  • Chart: Revenue Growth

  • Industry Outlook
  • Online onslaught
  • Traditional retail
  • Industry structure
  • Table: Direct Selling Companies Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Direct Selling Companies Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Cosmetics, Perfume and Toiletries Manufacturing
  • Plastic Pipe and Plastic Packaging Material Manufacturing
  • Soap and Cleaning Compound Manufacturing
  • Wholesale Trade

  • Products & Services
  • Wellness products
  • Home care and household goods
  • Cosmetics and personal-care products
  • Other consumer products and services
  • Books, toys, stationery and audiovisual products
  • Clothing and accessories
  • Food and beverages
  • Chart: Direct Selling Companies Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • People aged 35 to 54
  • People aged 15 to 34
  • People aged 55 and over
  • Chart: Major Market Segmentation for the Direct Selling Companies Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Direct Selling Companies

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Direct Selling Companies Industry

  • Industry Globalization
    Magnet Investments Pty Limited,
  • Table: Magnet Investments Pty Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Direct Selling Companies Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Direct Selling Companies Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Bricks-And-Mortar
  • A retailer that has a physical presence and storefront location.
  • Ecommerce
  • Transactions made via the internet.
  • Wellness Products
  • Includes nutritional and health supplements, vitamins, and weight loss and management products.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Direct Selling Companies market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Direct Selling Companies:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Direct Selling Companies market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Direct Selling Companies, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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