Direct selling and the big impact it has on the Utah economy
Aug 17, 2022, 5:30 PM | Updated: 8:01 pm
(Dimitrios Kambouris/Getty Images for Mercedes-Benz)
Big businesses like DoTERRA and Nu Skin share more in common with a door-to-door salesman than you may think. They both follow a direct selling business model, and they are popular. These companies made up more than 71% of Utah’s exports in 2020.
Over the decades, Utah has developed into a hub for direct sales. Dr. Levi Pace, a senior research economist from the Ken C. Gardner Policy Institute at the University of Utah, spoke with KSL about its prominence in the state.
“One thing I didn’t realize was the extent to which this industry brings in revenue from other states and from customers globally,” said Pace.
According to his findings in a study titled, An Economic Analysis of Utah’s Direct Selling Industry, 10 direct selling companies combined for $6.3 billion in international sales.
Direct sales have proved to be lucrative, but what are they?
Person-to-person selling, fueled by personal networks
Pace said that direct selling includes companies that have a person-to-person selling business model. Fueled by making contacts with their personal networks, he explained that not every internet retail company is a direct sales model.
“Direct selling often involves a lot of in-house manufacturing as well. So ordering and ingredients, but also preparing things,” said Pace.
According to a paper published by Pace, the direct selling industry employed 17,487 Utahns. It has also indirectly supported 20,751 jobs through industrial activity. These are highly skilled jobs that pay above average said Pace
“So we’re in the neighborhood of $63-64,000 for an average wage at these jobs,” said Pace.
He also said that these jobs are not exclusive to the big name companies and that the fact that Utah is in a unique position by housing these companies.
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