2014 — Banner Year for Direct Selling

Hybrids:  The Best of Both!

woman_shippingIn its 2015 Growth & Outlook Report, the Direct Selling Association reported that 2014 was a record year for direct sales in the United States.

(source: Direct Selling Association, Direct Selling in 2014: An Overview, http://www.dsa.org/research/industry-statistics).

With $34,500,000,000 in sales (that’s $34.5 BILLION dollars), the direct selling industry had greater sales volume than ever before.  No wonder she’s smiling!

Additionally, while the sales volume increased by 5.5% over 2013, the number of people involved in direct selling increased by 8.3%, from 16.8 million to 18.2 million. Our industry added 1.4 million members!

While the overall percentage of party plan sales in 2014 dipped ever so slightly, from 22.5% in 2013 to 22.4% , the number of people involved in party plan sales increased by over 10%. That’s 400,000 new party plan people!

Check out this infographic from the DSA!

Click On ImageAt Easy Party Plan, we’re seeing more and more companies using a hybrid of party plan and traditional network marketing. By choosing a sales strategy that includes both traditional and party plan selling, companies expand their range of sales methods.

Consultants/distributors can sell directly from their replicated sites, face-to-face and via social media, subscriptions (autoship), AND they can also sell via parties.

Parties drive product sales, as the small group in someone’s home is intimate, and guests are not resistant to “getting soft pitched”. Home parties generally don’t have the hype that gets people excited about signing up and getting rich, but parties drive product sales and referrals to others who want to host parties and/or join.

Many traditional network marketing companies DO sell through parties and other events. Any gathering of friends and acquaintances presents an opportunity to reach a group of people, and many traditional companies encourage home parties. In the home parties, guests can sample the product, learn more about the opportunity, and meet other people who are already involved.

A party plan company does everything that a straight network marketing company does, with a focus on the parties, whether live in someone’s home, or virtually online. Both sales strategies generally include some sort of multi-level commissioning structure.

The software used to manage network marketing and party plan companies is quite complex, performing functions that are far beyond a standard e-commerce system with or without affiliate capabilities.

Party plan software is far more complex than network marketing software.

Party plan software can be used for traditional network marketing, PLUS it has highly specialized functionality for parties (whether online or virtual), shipping, commissioning, host awards, and more. Consultants have a backoffice where they can schedule parties with a specific host at a specific time and place. In some cases, the host has a portal where she/he can invite guests and track confirmations.

Unlike traditional network marketing companies, party plan companies generally provide “rewards” to the host, depending upon the total sales at the party. Many companies also add a host incentive when guests commit to hold a party of their own.

We’ve also seen an increase in the number of party plan companies that have an autoship program for their consumable products. Autoship has been the income driver all along in network marketing, providing ongoing revenue from existing customers, but party plan companies have been slow to adopt this lucrative channel.

UCAN2 Cook!, our own party plan company, was among the first party plan companies to include 2 very important selling elements that are standards in network marketing:

  • Up until the early 2000’s party plan consultants submitted party orders as one, giant bulk order. The company did not have the end-user customer information, and if the consultant left the company, the customers went along, too! We made customer registration an integral part of our program, and our software.
  • Again, up until the early 2000’s, party plan companies did not generally include an autoship program. UCAN2 Cook! had 2 autoship programs.

I expect to see widespread use of a hybrid model, which capitalizes on the strengths of both traditional network marketing and party plan selling:

  • Companies just starting out should really examine both strategies.
  • Companies selling products that aren’t good candidates for subscription or autoship should add something to their stable that fits for a subscription.
  • Companies that rely primarily on face-to-face, large events, and online methods should encourage home parties.

If you own a direct sales company or considering starting either an MLM or party plan, I’m happy to talk about strategy with you.  You can also download our free report on how to start your own party plan company.

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