As an industry, direct selling is ubiquitous. An estimated 5.3 million people were direct sellers in the United States in 2016. Of those 5.3 million direct sellers, 4.5 million were part-time and 800,000 were full-time. Moreover, in 2016, direct selling generated an estimated US$35.54 billion in retail sales that, in turn, had a US$83.11 billion impact on the United States economy. In a broad sense, direct selling is simultaneously considered to be a distribution channel, an industry, and a business model. Traditional major modes of direct selling include person-to-person and party-plan selling at a home or in the workplace, with online sales now gaining traction in the direct selling marketplace.
Individuals become direct sellers for a multitude of reasons, including a desire to earn a living as a full-time direct seller, to earn supplemental income as a part-time direct seller, or to work at a part-time job to earn extra money to make a special purchase. Consequently, there can be relatively high turnover among direct sellers, especially those whose goal was to earn extra money to make a special purchase. Turnover is an issue in direct selling for several reasons, including the time and resources direct selling companies expend to recruit, train, and support direct sellers as well as the potential loss of customers and revenues when a direct seller exits the industry. As such, being able to predict which direct sellers are likely to leave the industry before considerable company and individual resources are expended would be beneficial to all concerned marketplace constituents.
This research attempted to predict direct seller turnover by analyzing responses to a set of 12 reasons why a national sample of individuals decided to join a direct selling company. This was done by first comparing the number and nature of reasons that subsamples of current and former direct sellers gave for joining a direct selling company. Significant differences were observed between the two direct seller groups for nine of the 12 reasons studied and for the total number of reasons given for joining a direct selling company. This was followed by a binary logistic regression analysis that successfully predicted the work status of 63 percent of the combined sample of current and former direct sellers. Although data for the present research were derived from a relatively large nationwide survey of current and former direct sellers, the study should be viewed as exploratory given the absence of information on the topic and the lack of theoretically based hypotheses.
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Peterson, Robert A.; Albaum, Gerald; and Crittenden, Victoria L., "Predicting Turnover of Direct Sellers" (2018). Association of Marketing Theory and Practice Proceedings 2018. 18.