U.S. Direct Selling Association recently shared its “Direct Selling Growth and Outlook Survey” results for 2022. In this article, we will be reviewing the findings, comparing them with the results for 2021 to give an idea on the recent evolution of the U.S. direct sales industry.
Sales and Seller Statistics
In the United States, the direct selling industry generated $40.5 billion in retail sales in 2022. This was $42.7 billion in 2021. The decline from 2021 to 2022 was 5%, after a 6.4% growth in 2020. Last year’s is not a major decline, but we cannot say it is insignificant either.
At this point, we don’t have the world data for 2022. Yet in 2021, the U.S. was the largest direct selling country in the world. The U.S. market’s share in the global sales volume was about 23% in 2021.
The number of direct sellers also decreased, from 7.3 million in 2021 to 6.7 million in 2022. The difference was -8%. There was 5.2% decrease in this figure from 2020 to 2021, too.
There was increase in direct sellers’ average retail sales, though. This was $5,849 in 2021, and it increased to $6,045 in 2022 (+3%).
Direct Seller Characteristics
In 2022, there were 500,000 direct sellers who did direct sales on a full-time basis (30 or more hours per week). And the remaining 6.2 million were part-timers.
While the number of full-timers was the same in 2021, part-timers were 6.8 million, in total. This shows us last year’s loss came from part-timers. This may also explain the above-mentioned average sales increase in 2022.
Gender demographics changed slightly in favor of men in the United States. The percentage of women direct sellers decreased from 76% in 2021 to 75% in 2022.
As far as the ethnicities are concerned, 83% of direct sellers were white/Caucasian (86% in 2021). The second largest group were black/African Americans with 9% share (8% in 2021).
In 2022, those between 35-44 made up the largest age group (26%), followed by the 45-54 group (24%). Thus, 50% of the direct sellers were between the ages 35-44 last year. This was slightly lower in 2021 (49%). And the changes in other age groups were similarly insignificant.
Product Categories
Last year’s winning category was services. The volume generated by services jumped considerably to 30.7% from 26.4%.
The largest product category though, was still wellness and its share in 2022 was 34.7% (down from 36% in 2021).
Home and family care/durables’ share declined in 2022 (16.1% in 2022 versus 17.3% in 2021).
Personal care category lost its volume share noticeably (10.7% in 2022 versus 12.2% in 2021).
Clothing and accessories accounted for roughly 5% of retail sales, and leisure and educational products for 3%. These did not change much from 2021 to 2022.
Sales by States
With $5.3 billion sales in 2022, California generated the largest volume. California’s share in total U.S. sales was 13% in 2022. The sales volume here increased by 6% last year (from $5 billion in 2021).
Texas ranked #2 after California with $4.3 billion sales in 2022. Direct sellers had sold $4.7 billion in 2021 in this state.
Florida was the third largest state, accounting for $2.4 billion in 2022 which did not change from 2021.
California, Texas and Florida are also the most three most populous states in the U.S., and together, they accounted for 30% of the total direct sales in the country.
Commenting on the figures for 2022, U.S. Direct Selling Association’s President and CEO Joseph N. Mariano said, “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. While the overall revenue for the channel declined somewhat last year, it remains higher than the pre-pandemic revenue reported in 2019.”
Click the link to read U.S. DSA’s industry fact sheets.
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Hakki Ozmorali is the Founder of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki Ozmorali is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.
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It’s funny that Joe Mariano and this blog fails to acknowledge that although direct selling shrank slightly in 2022, it actually collapsed relative to U.S. retail sales. It historically found a plateau around 1% of US retail sales, but this past year it plummeted to 0.56%. It’s only going to get worse if you don’t acknowledge the dire straits the MLM market is in.