Where in the World is Direct Selling?

Is your company in multiple markets? Do you want to be? Direct selling is a worldwide business model. Many direct selling companies do business in multiple countries. If you run an MLM, chances are you’re operating—or want to operate—in more than one country.

When you’re looking to expand internationally, you need to do your homework. Before you move into any country, you need to study that country—study their culture, their sales numbers, their economic realities, and their regulations. Mark Rawlins wrote an in-depth guide on these considerations.

Today let’s take a close look at the latest worldwide network marketing facts and statistics from the World Federation of Direct Selling Associations (WFDSA). The WFDSA represents 63 national direct selling associations and provides a wealth of information about direct selling and multilevel marketing around the world. The most recent worldwide MLM statistics comes from 2017.

Note: All monetary data included throughout this article is adjusted to USD.

Regional network marketing statistics

2017 worldwide industry sales were $189.6 billion—up 1.6% (adjusted to 2017 USD). That sales data breaks down into four regions:

Asia and the Pacific generate most direct sales worldwide, followed by the Americas and Europe.

  • Asia & Pacific $85.4B (46%)
  • Americas $64B (33%)
  • Europe $38.5B (20%)
  • Africa & Middle East $1.8B (1%)

Although Africa and the Middle East (represented in WFDSA data as one region) produced the least sales, they showed the greatest amount of growth in 2016—up 9.9%. Wondering what products sell in these growing markets? Check out this Africa-based MLM, Solar Sister.

Although Africa and the Middle East saw the most growth, other regions grew in 2017 as well. Europe grew 3.5%, and Asia & Pacific grew 1.8%.

On the other hand, the Americas sales numbers decreased but only by 0.1%. I don’t imagine this decline comes as a surprise to many of our readers. It seems like a lot of folks are nervous about the trend and that this is part of the drive toward international business models. But the sales numbers for the Americas are still high. In 2018, Allan Pollard of PayQuicker came on our podcast to argue that the dip is a natural part of the sales channel’s lifecycle—that the US is a maturing market for network marketing and that the business is in an evolutionary step.

Let’s take a minute to talk about distributors.

The total number of distributors increased from 103.3 million to 116.7 million. Proportions of distributors in each region follow the same order as sales numbers (largest to smallest) but they don’t line up in size. Let’s look at a comparison of the two:

In one region, the total sales might be greater and the sales effort each distributor needs to do might also be greater.

Africa and the Middle East offer a standout example of the disparity between sales and distributors. Together these regions produce 1% of worldwide sales, but they are home to 3% of worldwide distributors. It makes sense if you think about it.

I mentioned Solar Sister above. Their business model is selling small, solar electronics to poor consumers in rural Africa. If the product is for poor consumers, the price point is going to be very low. If the average price point is lower than in other regions, it will take a larger number of distributors to make the same amount of sales.

On the other end of the spectrum, the highest sales region, Asia and the Pacific produce 46% of all sales, but 56% of all distributors live there. Again, more distributors producing lower dollar amounts.

In both examples, individual distributors contribute less sales on average than their American and European counterparts.

Let’s look at a visual representation of the sales per distributor for each region:

  • Asia & Pacific: $1,310.31
  • Americas: $1932.43
  • Europe: $2,553.00
  • Africa & Middle East: $519.89

Note that this is a mean, not a median. In other words, it’s very likely that high-end distributors are skewing the numbers. Mean isn’t the most accurate measurement of what the “typical” distributor makes. But it’s a much easier number to come by and it’s still an interesting number to look at.

While Asia and the Pacific are racing ahead in total sales numbers, their sales per distributor are lagging behind the Americas. The Americas, in turn, are behind Europe. Asia’s collective buying power is greater, but on an individual level they have less buying power.

If you take your products from Europe to Asia, you might need to rethink pricing, packaging, or even the product itself to maximize your potential in those markets. In one region, the total sales might be greater and the sales effort each distributor needs to do might also be greater.

And it might go without saying, but if you want to sell in the Middle East and Africa, the most competitive product might be completely different.

By the way, that’s not a caution against entering those markets. You must tailor your strategy but if it makes sense for you to do that, do it! Individuals in Africa and the Middle East might have the least buying power, but the non-monetary benefit of operating there can be substantial. Remember the work that Solar Sister is doing selling low-end solar tech in Africa. Sure, they’re making less per-sale than they would selling high-end solar tech in the US. But that’s not what matters most to their business.

Network marketing statistics by country

Let’s look at how direct sales data breaks down by country. 79% of all direct sales take place in the top 10 countries:

  • United States $34.9B (18%)
  • China $34.3B (18%)
  • Korea $17.2B (9%)
  • Germany $16.7B (9%)
  • Japan $15.3B (8%)
  • Brazil $11.9B (11.9%)
  • Mexico $5.9B (3%)
  • France $5B (3%)
  • Malaysia $4.7B (2%)
  • Taiwan $3.9B (2%)

The United States and China are neck and neck—both generating 18% of worldwide sales. The US still has an edge of about $600M.

Several countries outside the top ten grew dramatically in 2017. Indonesia, Kazakhstan, Philippines, United Arab Emirates, Argentina, Romania, Slovenia, Norway, Russia, and Turkey all had double-digit increases in retail sales.

Very few countries saw a substantial decrease. Only the Netherlands and Belgium had double-digit drops in sales.

The WFDSA also shows us the number of distributors in each country. Unlike the regional numbers we looked at above, these numbers don’t track the sales numbers for each of the top 10 countries.

While these ten countries produce nearly 80% of the sales, they comprise less than half of all worldwide distributors. This is a powerful visual representation of an important lesson:

Not all distributors will be able to generate the same sales numbers. And some of that disparity has to do with the practical circumstances surrounding distributor lives.

Again, let’s look at total sales per distributor for each top ten country. (You can of course go through the full data on the WFDSA report to do the same analysis of any country we didn’t look at here.)

German distributors are so far ahead, it seems like an error. (We triple checked our math.) China, France, and Japan also have what I would consider high per-distributor sales.

Another issue you need to look at when expanding into a country is the average income of a person living in that country. There are different kinds of averages that you can look at. Again, median income provides a more accurate picture of the average person’s salary, but up-to-date data on mean income (specifically gross national income per capita) around the globe is easier to come by. Let’s look at those numbers for the top ten countries—excluding Taiwan for which there is no reported GNI.

A few things stand out here.

Income isn’t a strong predictor of whether direct sales will do well in a given country.  From left to right, these countries are graphed from greatest total sales to least sales. Their per capita incomes are all over the place.

That said, all the top ten countries (the ones that reported GNI anyway) have a per capita income greater than $8000 USD. Which makes sense if you think about it. Most (though not all) MLM products are “luxury” goods. They’re typically things consumers want more than they need. In countries where people are struggling to survive, they’re not likely to buy luxury goods.

Income also isn’t a strong predictor of average sales per distributor. The US has the highest per capita income ($58,270), but it’s among the lowest in average sales per distributor ($1,876).

The take away from these numbers seems to be that when you’re deciding if a country would be worth entering, you can’t look at the numbers alone and think you’ve done your homework. You have to learn more about the people you’ll be selling to than their income and buying power. You have to know who they are. In other words, culture—interest in and compatibility with direct selling—accounts for the prevalence of the sales model.

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International Expansion for Network Marketing Companies

These days, a lot of network marketing companies are in a rush to expand internationally. Markets outside the U.S. are gathering steam and technology is making the leap easier and easier.

My first experience working with an MLM company that was going international was nearly thirty years ago. Back in those days, companies were slower to expand overseas. Most companies waited until they were doing $50–60 million dollars a year in business and until they had been in business for several years.

Now, we have clients that have been in business less than a year moving to open two or more international offices almost immediately. In the last three decades, the international landscape has changed dramatically.

The process of opening an international market used to take a year of planning and preparation. Now companies are turning it around in mere months.

Is this a good thing?

I don’t know. But it is a reality.

There’s a wild west mentality about international network marketing—a follow-the-business mindset. Distributors expect you to go where they can sell. It’s their business, and it had better go where they want it to go. Sound familiar?

It’s true, you need happy distributors and—to be happy—your distributors need to sell. But you need to remember you have skin in the game. You also need to remember that what’s best for that one squeaky-wheel distributor might not be best for your entire field.

How do you do what’s best for the most people?

You have to balance the demands of your distributors with the economic, legal, and practical realities specific to opening each market. Don’t get me wrong. There are good things happening in this “wild west.”If opening a market makes sense for your company, do it! But, if you’re rushing in before you’ve done your research and carefully considered all of the issues surrounding a market, you don’t know if what you’re doing makes sense.

Let’s get into some of the issues you’ll face as you expand your company’s reach internationally.

Where are network marketers making sales?

Do the math. Make sure a market will be worth the trouble it takes to break in. Don’t pass up the value of the markets you’re already in to chase after less lucrative markets overseas. If California were a separate country (and sometimes it seems they are), it would be in the top 5 largest economies in the world. If you’re in the US, you’re in California. Are you selling there? Could you sell there?

This is something that a you must keep in mind as you plan to take your company into the international marketplace.

People see that network marketing sales numbers are rising in other parts of the world and they forget the fact that the US is still holding down first place. Instead of listening to the talk, look at the numbers.

According to WFDSA, in 2017, direct sellers’ world retail sales numbers reached over $189.6B (in U.S. dollars). Almost 80% of the revenue came from the top 10 countries in which direct sales take place:

  • United States $34.9B
  • China $34.3B
  • South Korea $17.2B
  • Germany $16.7B
  • Japan $15.3B
  • Brazil $11.9B
  • Mexico $5.9B,
  • France $5B
  • Malaysia $4.7B
  • Taiwan $3.9B

Here’s the deal. You don’t have to avoid smaller markets. You do need to educate yourself as to why some countries do better than others. Many factors influence how well an MLM will perform in a country—laws, technology, distribution systems, and social networks. Do your homework.

We see MLM companies opening offices in 10, 20, even 50 different countries. This is a very expensive way to do business. Each different country has different laws. The labeling requirements for products are different. You have to deal with each country’s equivalent of the Food and Drug Administration (or whichever organization regulates your product). That’s a lot of work and its only part of what goes in to opening an office in a new country.

You might be thinking, you’ve gotta spend money to make money. Well sure, but you can also spend a lot of money without getting any return. Remember, almost all the direct sales business in the world is conducted in 10 countries. Be choosy! Don’t set up base in every country possible—set up in the countries that show true promise for your company.

What legal issues will you face in new markets?

When you open multiple international offices you create new legal issues for yourself. Although there are some ways to get around labeling and product approval laws, you still need to plan for different legal environments and regulations in each country.

For example, the “Not for Resale” business model allows people in other countries to buy product directly from a U.S. based company, as long as they don’t resell the product to people in that country. The company ships directly to them and thus bypasses the labeling, import, and product approval laws. But this strategy isn’t legal in all countries.

China restricts network marketing commissions to a single level. Multi-level marketing is unlawful in China. And, on-the-ground direct sellers in China can only sell certain types of products. But China’s economic power has been growing steadily. And as I already mentioned, their network marketing sales are second only to the United States. Some MLM companies work around the restrictions on direct sales by selling to Chinese consumers through cross-border ecommerce. Of course, this method doesn’t allow distributors to build lucrative downlines on the mainland.

Although changes have been (and are being) made, Korea strictly regulates the total percentage a company may pay out in commissions; a company cannot pay more than 38% of the wholesale price paid. This is a vigorously enforced law. So any company that enters the Korean Market that pays more than 38% must change their commission plan to meet this requirement.

How average income impacts your company’s viability

In different marketplaces, the way direct sellers do business is very, very different. One of the biggest reasons for that difference is the income of the average customer.

Let’s look at the top two countries in the list above: The United States and China. The per capita income of the United States is around $60,000 per year. In China, it’s less than $9,000 (USD). (Of course, you’ll have to adapt to more than the average income, if you want to sell in China.) In some countries popular among direct selling companies—like Peru, Thailand, and Columbia—the average per capita income is closer to $6,000 per year.

You must adapt your business model with this in mind. You might have to change the product, it’s price point, or (if it’s a consumable good) the size of its packaging. On the other hand, your product might not be viable at all—even if adapted—in a low-income country. You might also have to change your distribution method.

Income differences can be especially problematic for the commission plan. A plan that works well in the U.S. won’t work well in Argentina (per capita income: approximately $13,000). And it may not work at all in Peru. Why? The qualifications for personal volume, group volume, and organizational volume are all designed around the consumer buying patterns of a country with an income of $60,000.

If you try to use a commission plan with roughly the same qualifications in Peru and the United States, your Peruvian distributors must sell to ten times the number of customers just to meet the qualifications!

But there’s more to meeting the needs of distributors who are living on $6,000 a year. The basic needs of these distributors are totally different from those of distributors in the U.S. Here, the distributor may be in the business to make some extra money each month—”mad money” that is outside of their family budget. On the other end, a distributor may be in the business to make a living and replace their entire yearly income! These are meaningful differences. If you’re not taking them into account, you’re not doing right by your field.

Forget worldwide commissions—think worldwide downline

In the last 15 years, the standard in the industry has been for companies and distributors to push for seamless, worldwide commission plans. Companies bragged about their worldwide plans, and distributors demanded them.

Hopefully, I’ve dispelled the idea that one compensation plan could serve the needs of every market in the world. The same commission plan will not work everywhere. Instead of a seamless commission plan, I’d argue that the real goal for companies should be a seamless worldwide downline. What do I mean by that?

With a worldwide downline, your distributors can sponsor new recruits anywhere that the company is doing business. You then pay commissions based on the commission plan of the country in which the sale was made, rather than where the commission recipient lives. So, Charlie lives in the United States, but he goes overseas to build a new team in Malaysia.  Here’s his organization:

For the volume generate by Charlie’s U.S. team, you’ll calculate his commissions using the rules of the U.S. compensation plan. For volume generated by his Malaysian team, you’ll calculate commissions using the Malaysian compensation plan.

This allows a company to make changes in the commission plan for each country’s specific needs, but still allows the distributors to sponsor whomever they want.

By the way, the adaptations you make to your commission can be small. Your new plan can stay as close to the original plan as is reasonable given the new market. In most companies, the different commission plans will still be recognizable from country to country. The different permutations of your plan will most likely be based on the same general ideas.


Making the transition takes patience and maturity and a good hard look at the issues that will come up in each country. I’ve detailed what some of those issues are. But it is a big and ever-changing world. I can’t warn you about every problem you’ll run into. My hope is to put you on course to ask the right questions and commit to finding the answers. Best of luck as you expand your company into international markets!

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