Puff pieces about the opportunities offered by direct selling are everywhere right now, but just how good is the opportunity? The financial results of direct selling companies tell a very different story:
- This morning, Avon Products reported that "First-quarter revenue in North America declined 11% (10% in local currency). . . Although Active Representatives were flat with the prior-year quarter, the company's recruiting efforts gained traction through the quarter leading to 51% growth in Representative additions in March." More recruits chasing fewer sales can only mean one thing: fewer sales per representative.
- Usana Health Sciences, which sells vitamins and other health-related products through a multi-level marketing structure, reported that "During the first quarter of 2009, net sales in North America decreased by 10.2% to $55.9 million, compared with the first quarter of the prior year"
- PinkTruth.com reported that the ranks of Mary Kay distributors fell by 14% in 2008.