Neora’s ultimate landmark victory, during which the courts rejected all of the FTC’s claims, is a reminder of the importance of clear legal standards. 

“We hope yesterday’s decision in the Neora case will help provide clarity about the direct selling business model to regulators, consumers, and the public,” said Joseph N. Mariano, DSA President and CEO. “The court cited the company’s robust inventory repurchase agreement and strong compliance efforts that all DSA members abide by. The decision reinforces the importance of these principles as core tenets of consumer protection and Neora’s adherence to them as part of their membership in the association.” 

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“Our annual Legal & Regulatory Seminar showcases the reason that DSA is located in Washington, D.C.,” said Joseph N. Mariano, DSA President & Chief Executive Officer. “Direct selling is engaged in one of the most active regulatory times in our history. This meeting could not have come at a better time to bring together these officials with company General Counsels, compliance professionals, top law firms and industry partners. We look forward to providing continued opportunities as these challenges are navigated over the coming years.” 

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“Each year, DSA provides the opportunity for member company executives and independent direct sellers to meet with their elected officials and share their stories and how what happens in Washington, DC impacts their businesses all over the United States,” said Joseph N. Mariano, DSA President and Chief Executive Officer. “There are no better advocates for the value of direct selling to entrepreneurs in all 50 states than these independent workers.” 

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Two entrepreneurs from Georgia’s 12^th Congressional District, met with Rep. Allen to discuss the flexibility with a direct selling business around and how their involvement in direct selling has provided them with advancements personally and professionally. 

“It was great sitting down with talented businesswomen from Georgia’s 12^th District, as we discussed the importance of flexibility in business and the value of being an independent entrepreneur.,” said Rep. Allen. “The great products they provide and the positive impact they have in our community serve as a model for individuals to start a business and achieve the American Dream. I look forward to working on their behalf in Congress so they can continue to create good-paying jobs and stimulate our local economy.”

“Connecting independent direct sellers with elected officials like Rep. Allen allows these entrepreneurs to share their interests first-hand with those who are making important policy decisions,” shared Joseph N. Mariano, DSA president. “We appreciate Rep. Allen for taking time to help us continue the fifth year of this important series and providing the opportunity to share how entrepreneurship has impacted their lives with thriving businesses.”

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This year, at the DSA Annual Meeting, DSA ENGAGE, the DSA’s Industry Research Committee and Ipsos presented the survey results and provided commentary. I’ll share that collective industry insight here.

The 2022 survey results tell us the following:

• Direct selling retail sales are stable. The channel generated $40.5 billion in retail sales in the U.S. in 2022, a slight decline from 2021.
• The number of direct sellers decreased slightly, with 6.7 million selling on a part-time or full-time basis.
• Demand for direct selling products and services continues to evolve. In 2022, 41 million preferred customers and discount buyers purchased through the channel. (This number excludes those who have not signed an agreement with a direct selling company.)

Topline Results and Demographics

U.S. direct retail sales decreased five percent to $40.5 billion in 2022. Despite the decline, 2022 had the second highest level of U.S. direct retail sales on record. “The drop of five percent is within DSA’s forecast of sales declining four to seven percent in 2022. Direct selling is still a huge industry in the U.S.,” said Monica Wood, Vice President, Global Consumer and Member Insights at Herbalife, and DSA’s Industry Research Committee Chair. “In fact, U.S. direct retail sales were up by 15 percent during 2019-22.”

This five percent decline is not the typical direct selling company experience in 2022. While sales of services increased by 10 percent, other categories fell: [slide 49 – by category]

• Home and Family Care, Home Durables decreased 11%
• Personal Care Products decreased 17%
• Clothing and Accessories decreased 13%
• Leisure and Educational Product decreased 3%

Party Plan/Group Sales represent a longstanding and successful group of direct selling companies with proven products and services. U.S. Party Plan/Group Sales decreased by 19 percent in 2022 but remain above the 2019 pre-pandemic level.

U.S. Preferred Customers dipped seven percent in 2022 to 33.3 million but remain the largest group of customers. “Preferred customer programs have really become popular in direct selling because they are a great option for brand loyalists,” explained Wood.

U.S. Discount Buyers were reduced by 11 percent in 2022 to 7.9 million. “Discount buyers are becoming Preferred Customers to take advantage of those programs’ product discounts and other benefits,” Wood added. “This is not a surprise. We anticipate that this movement between categories will continue.”

In 2022, we saw the number of direct sellers decrease by eight percent in 2022 to 6.7 million.

“Our industry still skews female,” shared Wood. Women make up 75 percent of direct sellers (and discount buyers).

The industry is also predominately white and Caucasian. However, the share of Hispanics in the salesforce increased slightly in 2022 to 23 percent. By comparison, 18.9 percent of the U.S. population in 2021 was Hispanic (source: U.S. Census Bureau)

The share of the 55+ age group in the salesforce is growing, while the share of the 25-34 age group is
trending downward.

U.S. Macro Trends and Direct Selling Opportunity

“The number of new recruits normalized in Q1 2023,” said Mary Earley, Senior Manager, Global Consumer and Member Insights, Herbalife. Early 2023 results suggest recruitment is likely to remain a challenge this year even while long term prospects for salesforce growth are good. Turnover rate in Q1 2023 was 10.9 percent, another factor contributing to the reduced direct sales workforce.

“However, independent workers are growing and represent an opportunity for direct selling,” Earley added. “There are many people seeking flexible ways to make money outside of a traditional job. The total number of independent workers grew by 57 percent from 2019 to 2022 (from 41.1 million to 64.6 million people).”

There are 40 million gig workers in the U.S. Twenty-four percent of the US workforce does gig work all or part of the time. But only 65 percent are satisfied with what they are earning.

Side hustles, a source of extra income to augment primary income, are increasingly important. An estimated 50 percent of Americans have a side hustle; 28 percent of them believe they will always need one. The average side hustle brings in $810 per month, however 28 percent earn $50 or less each month.

Macro Forces
Ipsos has identified macro forces and key themes that are shaping direct selling in the U.S. and across the world, including:

Life stage evolutions
Many people are rethinking traditional milestones and definitions of success and are marrying later and having smaller families.

Technology
There’s growing concern about the toll of technology on individuals and on society. Artificial Intelligence is headline news. Gen Z is using social media less often. We can all agree that information overload has reduced our collective attention span.

Inflation
Continuing concerns about inflation and rising energy costs impact prices and consumer spending decisions.

Climate Change
Extreme weather events are front-and-center in daily local and global news. Companies must anticipate and plan for disruption and future changes in regulations.

“Society is facing several broad, observable challenges at the same time. There are many interrelated issues at play,” explained Lisa Gudding, Executive Vice President at Ipsos. “Macro forces like inflation and mental health impact society, markets and people and will continue to do so five years from now.”

For example, populations are aging and so are important demographic segments of opportunity for new distributors and consumers. “As companies continue to upgrade and invest in technology, it’s critical that they innovate without alienating their older distributors and customers, ” added Gudding.

Putting 2022 in Perspective

“This distribution channel has meaningful global impact,” says Gordon Hester, General Manager, Sales, USA and Canada, PM-International. “To put things into perspective, direct selling has generated $3.7 trillion in worldwide sales over the past 30 years.” Historically, the U.S. represents 24 percent of the global market and the salesforce.

Overall revenue for the channel remains higher than the pre-pandemic revenue reported in 2019. Looking at 2022 numbers in context is helpful. “We’re in a transitional post-pandemic period,” Hester shared. Average annual sales for 2019-22 were five percent. The cumulative annual growth rate for the past 30 years was 4.03 percent, and the cumulative annual salesforce growth for that period was 3.93 percent. “The industry has been agile and able to succeed for 30 years, regardless of the business, economic, social or political landscape,” he added.

“Reputation does matter,” said Hester. “We need to work together as an industry to promote the ethical practice of direct selling. We need to attract great leadership, and we need to build for our next generation of direct sellers.”
Our members are important to local economies in all 50 states – and worldwide. They are dedicated to philanthropic contributions to communities across the globe. They have demonstrated the resilience of the business model.

Despite general economic uncertainties, direct selling continues to demonstrate its resilience and ability to serve the needs of millions of customers and salespeople. Growth and Outlook 2022 Survey results show that DSA members remained focused on technology innovation, product development, entrepreneurship education and consumer protection.

JOSEPH N. MARIANO is the President of the U.S. Direct Selling Association and the Direct Selling Education Foundation.

The post The State of Direct Selling Insights Into a New Era first appeared on Direct Selling News.

The U.S. Direct Selling Association (DSA) released its Direct Selling Growth and Outlook Survey, revealing 2022 retail sales of $40.5 billion, a slight decline from 2021, and 41 million customers. Direct sellers decreased in number slightly from the previous year to 6.7 million. 

“Direct selling continued to thrive in the U.S. where the focus on technology innovation, product development, entrepreneurship education and consumer protection remained as top agenda items for DSA members,” said Joseph N. Mariano, DSA President and Chief Executive Officer. “While the overall revenue for the channel declined somewhat last year, it remains higher than the pre-pandemic revenue reported in 2019.” 

The post DSA 2022 Growth and Outlook Survey Shows $40.5 Billion in Industry Retail Sales  first appeared on Direct Selling News.

Nine women entrepreneurs from the district representing five direct selling companies shared how the flexibility of working a direct selling business has allowed them to succeed both personally and professionally amid busy schedules. Rep. Hern shared his own experience in direct selling, saying he understood “how the industry creates and nurtures the spirit of entrepreneurship” and how direct selling can make a positive impact on individuals, families and communities. 

“Connecting independent contractors with elected officials like Rep. Hern allows these women business owners to share their interests first-hand with those who are making important policy decisions that impact their businesses,” said Joseph N. Mariano, DSA President. “We appreciate Rep. Hern and SeneGence for taking time to help us kick off the fifth year of this important series and providing the opportunity for sharing how entrepreneurship has impacted their lives with thriving businesses.” 

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“Overlapping rulemakings are untenable for the millions of direct selling micro-entrepreneurs in the United States,” said DSA President Joseph N. Mariano. “Over a decade ago, when the FTC considered broadly sweeping direct sellers into the Business Opportunity Rule, over 17,000 direct sellers wrote the commission and said the proposed rule would be bad for their small businesses. Those concerns remain the same over a decade later. The requirements under the current rule remain burdensome or superfluous with the rise of technology and the internet. In fact, direct sellers have instituted new industry-wide measures to provide even more confidence to customers and salespeople based on the suggestions of senior FTC officials.”

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Category award winners included: 

• Best on Facebook—SeneGence International  
• Best on Instagram—USANA Health Sciences, Inc. 
• Best Supplier on Social—AUXANO 
• Best Digital Catalog—The Avon Company 
• Most Innovative—Rodan + Fields 
• Philanthropic—USANA Health Sciences, Inc. 
• Best Mobile App—Nu Skin Enterprises   
• Best Social Buzz—Arbonne International, LLC 
• Best Recruiting Campaign—Rodan + Fields  

“Direct selling has experienced an evolutionary change as the digital landscape continues to affect consumers,” said DSA Chief Executive Officer Joseph N. Mariano. “DSA members are at the forefront of creating transformational ecommerce experiences. It’s my pleasure to recognize the DSA member companies that are driving growth and recognition for the industry through innovative digital marketing programs and campaigns.” 

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On behalf of the entire DSA team, I would like to especially thank Strategic Planning Committee Chair Chris Stubbs, Senior Vice President, Global Sales & Operations, Nu Skin Enterprises, for leading this effort. I also want to thank Cindy Monroe, Founder, Thirty-One Gifts, Asma Ishaq, CEO, Modere USA, Inc., and Mark Stastny, Chief Marketing Officer, Scentsy, Inc., for their leadership and partnership.

This strategic plan was unanimously approved on June 4, 2022 at the DSA Board of Directors annual meeting in Boca Raton. DSA, together with some of the channel’s leading thinkers, envision a future in which robust commercial, community, environmental and regulatory partnerships contribute to a healthy, vibrant and sustainable future for member companies.

Although the activities of the Association have supported and contributed to the growth of our business model, significant challenges and opportunities remain and are growing for direct sellers in a changing marketplace and regulatory environment.

Still, as a non-profit self-regulatory entity representing the interests of the entire business model and all of our member companies, the Association is well positioned to assist its members. Driving the plan are four key value propositions that DSA delivers to member companies:

• Stimulating vibrant commercial growth by positioning the channel to appeal to a younger salesforce and company audience, educating members on what is next for our digital transformation, convening discussions on the evolution of compensation plans and working to attract top talent with a broad range of life perspectives and diverse, cultural experience.
• Ensuring a supportive regulatory environment by advocating before the Federal Trade Commission, Department of Labor and elected officials while fighting to preserve the ability of independent contractors to build their businesses on their own terms.
• Continuing the Association’s efforts to build broader awareness of the direct selling channel’s self-regulatory entity, the Direct Selling Self-Regulatory Council (DSSRC), while actively developing strategies for the next generation of self-regulation.
• Expanding the direct selling community and its collaboration with a range of technology media influencers by cultivating new relationships and partnerships that will help the channel grow.

DSA members are invited to visit the Membership tab on DSA.org to view the strategic plan in greater depth. On behalf of the entire DSA staff, Executive Committee and Board of Directors, I encourage executives from every DSA member company to engage in making this vision for direct sellers a reality.

Contact me at joseph.mariano@dsa.org—I’d be delighted to share the spark so that you may help shape what the channel is to become.

JOSEPH N. MARIANO is the President of the U.S. Direct Selling Association and the Direct Selling Education Foundation.

From the October 2022 issue of Direct Selling News magazine.

The post DSA Message: Five Years-A Vision for Our Channel first appeared on Direct Selling News.