Big companies like doTERRA and Nu Skin have more in common with door-to-door salespeople than you might think. Both are popular direct sales business models. These companies accounted for over 71% of Utah’s exports in 2020.
Over the decades, Utah has developed as a center for direct sales. Levi Pace, Ph.D., senior research his economist at the Ken C. Gardner Institute for Policy Studies at the University of Utah, spoke about KSL and its prominence within the state.
“What I didn’t realize is how much revenue this industry makes from customers in other states and around the world,” says Pace.
According to his findings in a study entitled “Economic Analysis of Utah’s Direct Selling Industry,” 10 direct selling companies achieved combined global sales of $6.3 billion.
Direct selling has proven to be advantageous, but what is it?
Person-to-person sales utilizing personal networks
Direct selling includes companies with a person-to-person business model, Pace said. Empowered by contact with personal networks, he explained that not all internet retailers are direct sales models.
“Direct sales often involve a lot of in-house manufacturing, so we can prepare things as well as order and materials,” Pace said.
According to a paper published by Pace, the direct selling industry employs 17,487 Utahans. Indirectly through his industrial activities, he also supported 20,751 jobs. These are highly skilled jobs that pay above average wages.
“So the average wage for these jobs is about $63 to $64,000,” says Pace.
He also noted the fact that these jobs are not just for big names, and that Utah is in a unique position to host these companies.