The Next Trillion-Dollar Business
The direct selling industry is in the right place at the right time to spearhead
distribution of these hot products, says author-analyst Paul Zane Pilzer.
by Debbie Selinsky
Paul Zane Pilzer, an economist whose research and writings often focus on
the health-care industry and on trends in direct selling, is not surprised that
direct sellers and network marketers have positioned themselves to become
the dominant distributors of the wellness and nutritional products and
services that weight-and health-conscious Americans are using in record
numbers.
"It's a natural fit," he says. "The medical community will not be the wellness
product distributor of the future—they're not service-oriented enough. And
we've killed off the educational retailers in this country. That leaves direct
sellers—they're the logical people to distribute wellness products and
services, because they understand customer service and are out there talking
to people every day about what they want and need."
Last year, Americans spent $200 billion on wellness, from fitness clubs to
vitamins, according to Pilzer, who predicts that spending will reach the $1
trillion mark by 2010. This market is especially rich since, unlike one-time or
short-term use products, wellness products and services are purchased
regularly by people who are sold on their benefits and disillusioned by
managed care's stronghold on medical care and insurance coverage.
The long-time direct selling slogan that says the best distributors are those
who are "products of the products" is especially significant in this arena, says
Pilzer, author of the best-selling God Wants You to Be Rich (Simon &
Schuster; 1995). "That's the direct selling industry—getting personal and
telling people how the product has worked for you. Like any good
entrepreneur, most distributors become customers before they go into the
business. This is a huge entrepreneurial opportunity—not unlike the PCs in
1980."
In 2001, more than 50 percent of all U.S. direct selling and multilevel
marketing companies sell nutritional, wellness, or so-called "lifestyle"
products, Pilzer says. "It makes sense, because direct selling's biggest
success is its ability to educate—today people have to be better informed
about health issues, because greater knowledge of products and services
can make a big difference in their lives."
Medical insurance is another arena into which direct sales and network
marketing companies are venturing. The new law allowing self-employed
individuals to take full tax deductions for their health insurance premiums
kicks in this year (60 percent for 2001, 70 percent in 2002, and 100
percent in 2003) and adds fuel to the fire. Pilzer is writing a book about the
wellness revolution and the ways in which people, weary of what he calls
"sickness insurance," are seeking or developing innovative systems of
providing health care for their families.
Pilzer envisions a time, not too far away, when families and individuals
turn to the new breed of wellness distributors for comprehensive information
on available treatments. "Ultimately, the credibility and the power will rest
with the distributor," he says. "It'll be a challenge for individual distributors
because they can't say, ‘I just want to be in business and sell these
products.' It'll be more than that. They'll need to customize information for
individual clients."
SUCCESS Magazine/April 2001