A continued growth trend was shown in reports of June 2020 Transformation capital in the direct selling channel.
50 leading direct selling companies have continued to indicate strong sequential sales growth across most of the channel, according to the Dallas-based investment banking and business development firm.
Stuart Johnson, CEO of Transformation Capital said that it is the fourth month in a row with similar growth rates results in which they believe past is a point of pleasant anomaly and they are an indication of trend and potential inflection point within the industry.
Since a traditional fact that attributes to June being a historically slow month for direct selling industry is kids being out of school and summer vacations. But this year, 12 respondent companies reported a record monthly revenue during the period whereas 70% of respondents report a sequential increase in revenue as compared to May 2020.
In June, 12 companies reported record revenue for June, 70% companies reported more growth in June over May, 28% remained flat or declined, 30% sbowed single-digit growth and 42% grew by double digits or more. These results follow the strong results of respondent’s growth over 72% in May over April, April 80% and March 80%.
Key Takeaways:
In history, June’s growth figures would be the inverse of today’s scenario i.e, 30% growth over 70% decline. The majority of the companies that would grow would be because of a specific catalyst, such as product launch, event or continuation of an explosive growth curve.
Johnson said, “While the number of companies reporting high percentages of growth (10% or more) month-over-month declined, the same number grew during the same time period. This growth was achieved on a higher prior month revenue base and during the historically slow month of June, leading us to find the results all the more impressive.”
Company acquisition and recruiting statistics are trending higher and surpassing comparable periods from one year ago. According to the report of respondents, Q2 2020 revenue exceeded that of Q1 and many have exceeded first half of 2019 revenue in first half of 2020.
Looking Forward:
With a shift in traditional working to work from home in every social and professional mainstream, resulting in a prolonged period of relatively high unemployment which cannot be ignored as significant tailwind for the channel.
A record revenue is projected to be reached by 8-12 legacy companies as a witness of the situation.
“We believe it to be a reasonable and safe prediction that the current environment is not changing anytime soon,” as said by Johnson. “We have no reason to expect anything other than a continuation of the general trends we are currently experiencing in the near term and, potentially, the mid-to-longer term.”
