Lessons from 18 months of change.
Over the past 18 months, direct selling has endured one of the most turbulent periods in its modern history. Closures, pivots and private equity shakeups have fueled unease and speculation about decline. Yet the real story is far more nuanced: direct selling isn’t shrinking—it’s evolving.
This distinction matters. If we isolate product sales alone, the trend lines are sobering. But direct selling today is far more than just products. Services—from financial and real estate to digital—have become an integral part of the channel, and their growth reshapes the narrative entirely and offers key insights for product-centric companies as well.
To understand where we are and where we’re going, it helps to take a step back and place today’s challenges in the context of larger macro forces.
The Post-COVID Competitive Landscape
Even before the upheaval ushered in by the pandemic, direct selling product sales had been essentially flat for five years. COVID-19 created a temporary surge—both in sales and distributor activity—but that lift was short-lived. As restrictions eased and subsidies ended in 2021, momentum faded, leaving a lingering slump that many companies are still working to overcome.
At the same time, the competitive landscape has grown fiercer. In the past, direct selling’s primary rivals were traditional retail and early ecommerce. Today, Amazon, Walmart, direct-to-consumer brands, influencers and social commerce platforms have permanently redefined how people buy and sell. Amazon and Walmart alone now account for more than $2 trillion in global annual sales—raising the stakes and the standards for every other channel of distribution.
Consumers demand immediacy, convenience and personalization. They don’t differentiate between channels—they shop across them fluidly. For direct selling, that means we must constantly prove our relevance, and that relevance isn’t found in our compensation plans. It’s found in our value proposition of community, culture and personal connection.
This isn’t a moment to bury our heads in the sand. The industry faces unprecedented challenges. But equally unprecedented opportunities also exist.
Closures and Their Consequences
Material closures have tested the resilience of the channel. Beautycounter’s collapse in April 2024 was the catalyst, a defining event that has echoed throughout the channel for the past year and a half, reshaping conversations about stability, sustainability and the role of compensation models.
Brands including Thirty-One Gifts, Epicure and most recently Ruby Ribbon and Thrive Life—have exited the stage, though from a materiality standpoint, their scale was modest compared to Beautycounter.
Earlier this year, IYOVIA terminated its multi-level operations after the FTC and Nevada Attorney General filed a complaint alleging deceptive earnings claims. The case underscored how regulatory scrutiny can quickly alter the trajectory of companies in the channel.
Although this list of names is concerning, it’s vital to remember that these outcomes represent the exception—not the rule. Focusing on the material events provides a clearer picture without over-emphasizing the impact of smaller shutdowns.
Pivots Still Seeking Traction
As some brands shuttered, others sought reinvention through business model pivots—most notably by replacing traditional compensation structures with affiliate-style models. Prominent pivots include:
- Since being forced into a single-level plan, AdvoCare has endured steady decline. Recently, however, the company has shown early signs of growth through retail, direct-to-consumer and Amazon sales, though it has not yet returned to prior strength.
- Rodan + Fields rolled out an affiliate-style model last summer which left many of its distributors frustrated. For long-time leaders who had built significant organizations, the change meant reduced opportunity with no warning. Many in the field felt abandoned—“left high and dry”—by a shift that devalued their years of work and loyalty.
- Earlier this year, Color Street pivoted to a two-level compensation plan then quietly added two more compensation tiers (3% and 2%) months later—a newsworthy move, though not yet transformative.
- Counter’s relaunch under an affiliate framework this summer left many loyal field leaders disappointed. For those hoping for a meaningful rebuild, the new approach felt underwhelming and failed to reignite enthusiasm in the field.
- Scout & Cellar also pivoted this summer, introducing a new structure with the stated intention of keeping existing sellers engaged. Leadership has emphasized inclusion and retention, but it’s too early to determine whether the new model will deliver sustainable growth.
The throughline is unmistakable: pivots just haven’t delivered material success. To state the obvious, once larger commissions are stripped out, sales decline. To date, no pivot has maintained any level of performance other than AdvoCare. If we’re wrong, please let us know.
Private Equity’s Broken Promises
If pivots have been underwhelming, private equity’s track record has been even worse.
The collapse of Modere earlier this year serves as a case study in how not to steward a direct selling company. The decisions made by Zee Capital and Cerberus on March 14 left thousands of distributors stranded, hundreds of employees without severance and even left executives abroad unable to access company credit cards. The human cost was staggering, and the reputational damage for both firms was well deserved.
Equally telling is the experience of BODi, the only major public company to attempt a compensation pivot. Because their results are public, we can see the impact in black and white. Quarterly revenue fell nearly 50 percent year-over-year following the change, and full-year guidance for 2025 now sits below $240 million, compared to $418 million in 2024—a more than 40 percent annual decline.
These numbers confirm what many suspected: pivots have not only failed to stabilize revenue, they have—in every instance—markedly accelerated decline. So, while we can clearly see that simply cutting out commissions won’t increase revenue, the question is whether it can ever stabilize revenue enough to stop the bleeding and hold ground. To date, that answer is no.
More broadly, the pattern is consistent: no amount of financial engineering can replace the core competencies of field engagement, product innovation and customer focus. Too often, private equity has prioritized short-term extraction over long-term sustainability.
The Affiliate Layering Myth
Alongside wholesale pivots, many companies have tried a subtler strategy: layering affiliate models onto traditional compensation plans. The idea was simple—create a front-end “affiliate opportunity” to attract casual product sharers, while maintaining the multi-level structure for career builders. In practice, however, this approach has not delivered meaningful results.
USANA, Nu Skin and 4Life are just some examples. Each has experimented with branding distributors as “affiliates” or offering parallel front-end earning opportunities. Yet despite investment in messaging and program design, results have been negligible. Activity may increase briefly, but there’s been no sustained revenue lift. As one executive put it candidly: “Not one needle was moved.”
The lesson is clear—affiliate layering hasn’t worked. Diluted commissions weaken field energy, while “affiliate-lite” models fail to provide enough upside to attract serious sellers. The result? Muted returns on both sides.
Mannatech took it a step further, launching Trulu, a stand-alone affiliate arm alongside its traditional business. While innovative in theory, it added complexity without measurable impact. Similarly, Young Living introduced Wyld Notes, a single-level affiliate model designed to complement—not replace—its traditional structure. Unlike many affiliate pilots that operate in isolation, Wyld Notes transactions are attributed back into Young Living’s core compensation plan, allowing the program to enhance rather than fragment the existing system. Positioned as a way to re-engage inactive customers, Wyld Notes has made some noticeable inroads in its first six months, with 27 percent of its shoppers representing either brand-new customers or reactivations.
But none of this means that companies should abandon the concept entirely. A better path may be reframing retail commissions—clearly communicating earning potential for those who simply want to share products without building a team. Instead of bolting on “affiliate” language, companies can emphasize the simplicity and customer value already embedded in retailing.
Companies like Live Pure are actively developing ways to appeal to affiliates and influencers while maintaining their traditional compensation structure. The companies striving to bring in affiliates and influencers into the ecosystem of the channel are on the right path, but—as a channel—we are still working on the execution.
Context Matters: Growth Amid the Noise
With so many headlines focused on bankruptcies, pivots and private equity disappointments, it can be easy to believe that the entire channel is in retreat. But perspective is everything. These events, while painful, account for less than 10 percent of the product side of US direct selling.
The broader picture is far more balanced—and in many ways, encouraging. When we surveyed 100 companies generating at least $50 million in annual recurring revenue (ARR) across North America, the results told a different story:
- 50% reported year-over-year growth of at least 2 percent.
- 12.5% were essentially flat.
- 37.5% saw declines.
And within the growth segment, the momentum is meaningful. In fact, 19 companies grew more than 20 percent in the first half of 2025 compared to the same period in 2024. These aren’t marginal gains; they’re the kind of double-digit growth rates that prove the channel can thrive when fundamentals are strong.
Importantly, success is not confined to one stage of maturity. Younger companies are scaling quickly with digitally native strategies. Mature players are stabilizing after years of decline and repositioning for growth. Since 2020, 25 startups have already surpassed $1 million in monthly revenue—a clear sign that innovation and momentum remain strong in the channel.
Yes, challenges remain—declining product sales at some legacy brands, pivots that have fallen flat and heavy-handed private equity strategies have unquestionably created turbulence. But those are not the only stories worth telling.
Direct selling is full of companies that are growing, innovating and building strong cultures despite a noisy environment—particularly in the services sector.
Remember that for every brand making headlines for the wrong reasons, there are others writing the next great chapter of this channel. And that’s why the correct framing is not one of decline but one of evolution and resilience.
Evolving, Not Declining
Eighteen months ago, Beautycounter’s bankruptcy sparked fears of an industry in freefall. Today, after a string of closures, pivots and private equity failures, those fears persist. But zoom out, and the story is much different.
Direct selling remains a $50 billion-plus market in the United States and more than $200 billion globally. Growth is real—companies across every stage of maturity are proving it. Innovation is alive—particularly in technology, personalization and customer engagement. And while product sales have lagged, many service-based companies are thriving.
This channel has weathered storms before. It will again. The leaders who lean into transparency, simplify their models, embrace technology and obsess over their customers will not only survive—they will define the next era of direct selling.
Our best days are not behind us. They are still ahead.
STUART JOHNSON has served the direct selling industry for nearly 40 years. His passion for the channel encompasses a broader commitment to build and connect the direct selling community through exclusive industry events such as Direct Selling University and the DSN Global Celebration. Stuart is arguably the most connected person in direct selling, building and growing a network of executives, thought leaders, strategists and innovators. His advice and counsel are sought after by leaders throughout the channel.
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