“Direct sales is not a business model that can be carried on for a long time.” This is a widely accepted belief that creates hesitation both among investors considering investing in this industry and individuals contemplating starting a direct selling business.
While there are no meaningful statistics proving that direct selling companies have shorter lifespans than, for instance, technology startups, many people still believe and support this narrative.
On the other hand, there are strong examples within the direct sales industry that indicate this claim does not have a solid foundation at all.
Vorwerk
One of these examples is Europe’s largest direct sales company, Vorwerk. This company was founded back in 1883 by Carl Vorwerk as a small carpet factory in Germany that grew quickly. By 1909, Vorwerk had already become a familiar brand beyond its region, and the business was growing rapidly.
In 1929, “Kobold,” Vorwerk’s innovative vacuum cleaner, became something of a small revolution: a handy but very effective appliance. However, customers could not appreciate its advantages merely by seeing it at retail stores. The introduction of direct sales in Germany proved to be a revolutionary idea that saved the day.
Today, the holding company’s office is in Wuppertal, Germany. Vorwerk’s core business includes both the production and sale of household products, namely Thermomix kitchen appliances and Kobold vacuum cleaners. Vorwerk generated consolidated sales of €3.2 billion in 2023 and now operates in over 60 countries.
Avon
Another well-known example is Avon. While selling books door-to-door in the U.S. in the late 1800s, David H. McConnell started carrying free perfumes that he made himself. He used these as “door-openers” to increase sales. Soon, he realized that many of his clients were stay-at-home ladies who were far more interested in perfumes than books. This led him to establish the California Perfume Company (CPC) in 1886, the foundations of today’s Avon.
With all its ups and downs, the evolution of Avon’s business over the last 100+ years has been nothing but admirable. David H. McConnell’s company has grown from a fragrance-selling micro-business to a global beauty corporation and has helped pave the way for individuals to set up their own full-time or part-time businesses.
Amway
Amway was founded in 1959 by two life-long friends, Rich DeVos and Jay Van Andel in their basements. The word “Amway” was an abbreviation for the “American Way”.
They had known each other from high school years when they decided to join forces to set up their
own business. However, Amway was not their first business venture that they started. The two friends went into various businesses: They had a flight school, opened a drive-in restaurant, and bought a sailing vessel to launch a sea-going business.
Amway’s first international expansion was into Canada in 1962 that was followed by many others in time. Amway has been the world’s largest direct sales company since 2012. The company reported $7.7 billion global sales for 2023.
Mary Kay
Mary Kay’s story is also notable. While Mary Kay Ash’s husband was in the army during World War II, she sold books door-to-door. She later joined a company, only to leave in 1962 when a man she had trained was promoted instead of her, with twice her salary. After retiring, her first idea was to write a book to assist women in their male-dominated corporate careers. But this turned into a business plan to set up her own company, Mary Kay Cosmetics, with an initial investment of $5,000. The company started with nine sales consultants in 1963.
Mary Kay shortly became a success in the beauty industry. At the heart of everything was Mary Kay Ash’s enthusiasm. Her business approaches attracted a lot of interest and were admired by many. Mary Kay products are sold in more than 35 markets worldwide by the company’s millions of global independent consultants, with sales of products reaching $3 billion in 2023.
And Others…
There are clearly several prominent players in the industry that have been in business for decades. Regal Ware, for instance, started in 1945. Earl Tupper established Tupperware in 1946. The same year, Saladmaster was also born. Jafra was founded in 1956 and AMC International in 1963. Europe’s cosmetics direct seller Oriflame is turning 58 and Avon’s current owner Natura is celebrating its 56th anniversary this year. Nature’s Sunshine and PartyLite, and have been around since the ’70s. Arbonne, Herbalife, LR Health & Beauty, New Zealand-based New Image, and Nu Skin have all been operational since the ‘80s.
I heard somebody asking, “But what about Tupperware?”. Tupperware is currently not in good shape, for sure. Maybe it will survive, maybe not. However, we should remember that we’re having this conversation 79 years after it started business!
To conclude, these companies that are mentioned here and many others, are still alive and kicking! So, when somebody says direct selling as a business model has a short lifespan by nature, it’s worth remembering these facts.
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Written by Hakki Ozmorali, Founder of WDS Consultancy, a management consulting and online publishing firm in Canada. WDS Consultancy is the publisher of The World of Direct Selling. You can contact Hakki here.
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