Tough sell: The threat of e-commerce will stifle industry revenue growth

While intense competition has negatively affected the Direct Selling Companies industry over the five years to 2018, the industry has managed to achieve growth as a result of the strengthening national economy. Increased competition from mass merchandisers, department stores and online retailers has threatened the industry by providing a wider selection of substitute products at low prices in a convenient one-stop location. However, as consumer spending and per capita disposable income have grown during the period, more consumers have had the resources to purchase goods from direct sellers. This resource growth has slightly outweighed the flight of consumers to competitors, boosting revenue...purchase to read more.

Industry Statistics & Market Size
Annual Growth 13-18
Forecast Growth 18-23
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • Despite the appeal of buying goods from knowledgeable direct sellers, consumers will increasingly turn to online competitors
  • Rising competition from external industries has posed a threat to direct sellers’ revenue
  • Improved consumer spending has helped the industry gain ground in recent years
  • Industry Report - Industry Investment Chapter

    The Direct Selling Companies industry exhibits a low level of capital intensity. IBISWorld estimates that for every dollar spent on wages, industry operators will spend $0.05 on capital investment. The industry's low level of capital intensity is partly due to the industry's heavy reliance on human labor rather than computerized systems. Generally, capital expenditure in retail industries includes fixtures and fittings, cash registers, point-of-sale (POS) systems, storage units and other equipment. The implementation of such systems simplifies labor tasks and minimizes the level of human error in processing purchases, which result in better stock control and cost efficiencies. However, most transactions in the industry occur on a small cash basis. The...purchase to read more.

    Additional Insights for the Direct Selling Companies Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Direct Selling Companies Industry 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 External competition for the Direct Selling Companies industry and Per capita disposable income 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?

    Direct selling is the retailing of a product or service from one person to another, away from a fixed retail location. Providers are referred to as independent consultants, distributors or representatives. Sales are usually done via home parties, workplaces, trucks or wagons, street-corner carts or door-to-door. Direct sellers of fuel and food for immediate consumption are excluded from this industry.

    Industry Products
  • Home and family care products
  • Wellness and personal care products
  • Clothing and accessories
  • Leisure and educational products
  • Other products and services
  • Industry Activities
  • Direct selling of home goods
  • Direct selling of coffee-break services
  • Direct selling of cosmetics
  • Direct selling of vitamins and nutritional supplements
  • Direct selling of home delivery newspaper routes
  • Direct selling of party plan merchandisers
  • Direct selling of miscellaneous merchandise
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • External competition for the Direct Selling Companies industry
  • Per capita disposable income
  • Consumer spending
  • National unemployment rate
  • Number of adults aged 20 to 64

  • Current Performance
  • Retail market improves
  • External competition intensifies
  • Direct opportunities
  • Chart: Revenue Growth

  • Industry Outlook
  • Performance driven by macroeconomic factors
  • Threatened by the internet
  • Wavering profitability
  • 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
  • Management of Companies and Enterprises
  • Religious Organizations
  • Civic, Social & Youth Organizations
  • Wedding Services
  • Consumers

  • Key Selling Industries
  • Brand Name Pharmaceutical Manufacturing
  • Cosmetic & Beauty Products Manufacturing
  • Generic Pharmaceutical Manufacturing
  • Soap & Cleaning Compound Manufacturing
  • Wholesale Trade

  • Products & Services
  • Home and family care products
  • Wellness and personal care products
  • Other products and services
  • Leisure and educational products
  • Clothing and accessories
  • Chart: Direct Selling Companies Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Household consumers, person-to-person
  • Household consumers, parties and other
  • Businesses for end use
  • Wholesalers for resale
  • Other business customers
  • Retailers for resale
  • Construction and special trade contractors
  • 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
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Direct Selling Companies Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    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
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Percentage of services conducted online (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Big-Box Retailer
  • A retail store that is differentiated by its sheer size and large range of products, including electronics, household goods and other consumer products.
  • E-Tailer
  • A retailer that primarily sells goods and services via the internet. Many of these companies do not have brick-and-mortar locations.
  • Multilevel Marketing
  • A marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit.
  • What Our Customers Say

    Why buy this report?

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    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

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