Retail companies that sell merchandise door-to-door, from trucks and wagons or from other temporary locations, make up the direct selling industry. Included are individuals who sell products by these methods and are not employees of the organizations they represent, as well as establishments that are retail sales offices from which employees operate to sell merchandise by house-to-house canvassing.
722330 (Mobile Caterers)
454390 (Other Direct Selling Establishments)
Although direct selling has been a staple method of distribution for retailers in the United States since colonial times, the industry has undergone major changes since the 1970s. This industry, which for years included just a few mainstays such as books, household appliances, and cosmetics, now encompasses an enormous variety of products, from household goods to gourmet foods.
For most of its history, the direct selling industry relied on door-to-door sales. Indeed, many organizations built large retail empires based primarily on home sales methods. Avon Products Inc., Tupperware Corp., and AB Electrolux are a few of the organizations traditionally associated with house-to-house canvassing that generated huge profits during the post-World War II economic boom.
Despite past successes, the effectiveness of some forms of direct selling waned in the 1970s and 1980s as new retail channels emerged. As a greater proportion of women entered the work force, salespeople found it increasingly difficult to find prospects at home during the day. Moreover, because two-income families had less time to shop at stores, they began to purchase more goods through direct mail, catalogs, and the Internet. The increased popularity of consumer goods shows, warehouse stores, television shopping networks, and other selling techniques further reduced direct sales to the remaining one-income families. Finally, increased crime rates caused many potential customers to refuse strangers' entry into the home, and some municipalities banned door-to-door sales altogether.
Responding to this trend, in 1992 both Avon and Tupperware started marketing their products for the first time through mail-order catalogs and direct mail. AB Electrolux also shifted its focus from door-to-door sales to catalog showrooms and warehouses in the late 1980s.
In 1996, after 60 years of selling door-to-door, Encyclopedia Britannica Inc. laid off its entire sales force in the United States and Canada. Sales had declined from $650 million in 1990 to $405 million in 1995, mainly due to the advent of CD-ROM encyclopedias. In June 1996, Collier's Encyclopedia followed suit. According to Linda Corman of Sales & Marketing Management, Britannica's decision to eliminate door-to-door selling marked the "end of an era in sales," and noted that it was probably a "harbinger of what lies ahead for the sales profession, as selling and marketing in the information age become more sophisticated, more targeted, and more driven by technology."
The largest growth area in the direct selling industry in the 1980s and 1990s was the direct selling organization (DSO), also known as network or multilevel marketing (MLM). With MLM, one person becomes a product distributor and then makes a commission on the sales made by other distributors he or she signs up. The first network marketing company, founded in the 1940s, was Nutrilite (now part of Amway), a maker of nutritional supplements. By the mid 1990s, almost every kind of product was being sold through DSOs, including cosmetics, art, time management systems, tires, kitchen tools and appliances, lingerie, long-distance phone services, and computers.
Many DSOs use the party plan, in which the seller invites friends to a party where goods are displayed and sold, or else they build sales through networking. In 1996, Christina Gold, Avon's chief for North America, told The New York Times that since 1994 she had expanded her sales force from 45,000 to 445,000. Explaining that more than one-half the company's sales are made or arranged at work, Gold stated that "We train people in how to connect at the office and factory…. It's a hightouch business."
According to the Direct Selling Association, worldwide retail sales in U.S. dollars reached approximately $68 billion in 1995. There were 17 million distributors worldwide, covering at least 44 countries, with the 6.3 million U.S. distributors producing $16.5 billion in sales.
By the late 1990s, there were an estimated 364,800 employees in all non-store retailing industries. Most worked slightly more than 30 hours a week for an average wage of $10.33 per hour.
Direct selling, or doorstep marketing, also was growing overseas by the mid 1990s. In 1995, Brazil became Avon's largest market outside of the United States, with 478,000 sales representatives. Amway, introduced to Brazil in 1991, had increased its number of distributors to 200,000 by 1995. The Direct Selling Association reported that other countries with a strong selling presence included Japan, where sales reached $30.3 billion; Taiwan, with sales of $1.7 billion; and Korea, with sales of $1.3 billion.
Some of the leading direct selling companies by the end of the decade included Amway Corp. ($6 billion); Avon ($5.2 billion); and Nikken ($1 billion).
Anderson, Duncan Maxwell, and Michael Warshaw. "The New Elite." Success, December 1995.
Brooke, James. "Who Braves Piranha Waters? Your Avon Lady!" The New York Times, 7 July 1995.
Bureau of Labor Statistics. Employment Statistics. 2000. Available from http://www.bls.gov .
Corman, Linda. "Closing the Book." Sales & Marketing Management, September 1996.
"Ding Dong." PC Week, 23 September 1996.
"Hoover's Company Capsules." Hoover's Online. 2000. Available from http://hoovers.com .
Myerson, Allen R. "The Death of Some Salesmen." The New York Times, 28 April 1996.
"P.F. Collier to End Door-to-Door Sales of Its Encyclopedias." Wall Street Journal, 24 May 1996.
Roha, Ronaleen R. "Want to Buy a Potato Peeler? Wanna Sell a Bunch of 'Em?" Kiplinger's Personal Finance Magazine, March 1997.
Ward's Business Directory of U. S. Private and Public Companies, Farmington Hills, MI: Gale Group, 1999. and Air-Conditioning; and those that repair and service fuel oil burners are in SIC 7699: Repair Shops and Related Services, Not Elsewhere Classified.