Investing in Direct Selling a Sure Thing!
December 15, 2007 | By Monika Mundell |
Distributors in direct selling companies might be better off making money by investing into the companies shares. A Jefferies & Co. analyst stated on Friday that investing into the direct sales business model might be a better investment since many companies infiltrate new markets.
This allows for the potential growth since those markets are mainly targeted in Asia. Emerging markets such as China, India, Eastern Europe, Indonesia and Russia all promise faster growth since the infrastructure required is lee than say in a modern world country.
Analyst Douglas M. Lane said in a note to investors that growth at the companies "should pick up given the attractiveness of the model in penetrating newer markets that are underdeveloped but have sharply rising disposable incomes."
Despite China’s strict regulations in regards to direct selling they promise future growth. Companies such as Herbalife and Nu Skin Enterprises have been granted licenses to do business in China and should do very well given the amount of potential customers they face.
Douglas M. Lane stated, that "we have heard estimates that direct selling companies doing business in China would make it an approximately $5 billion market, which would make China the sixth-largest direct selling market in the world".
He also gave Nu Skin stock a "Neutral" rating, saying the company may be able to accelerate its growth in the next year due to management changes in Japan and China and a bigger focus on recruitment and retention of distributors.
Lane rated shares of Herbalife a "Buy" and said the company is "poised for continued strong revenue growth."
Given the struggle that most distributors face in direct sales, they might be better of going into the shares business instead.
Monika
Editor of Network Revolution
Tags: direct selling, direct selling shares, investing, mlm, shares
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