Monthly Average Commission of 300,000 KRW for Door-to-Door Salespersons of Cosmetics and Water Purifiers

[Asia Economy Reporter Moon Chaeseok] The commissions of door-to-door salespeople selling cosmetics or water purifiers decreased to an average of 300,000 KRW per month last year.

According to the "2019 Key Information on Sponsorship Door-to-Door Sales Companies" announced by the Korea Fair Trade Commission on the 23rd, the number of sponsorship door-to-door sales companies last year was 2,189, down 465 from the previous year.

Sponsorship door-to-door sales refer to a type of sales that meets the requirements of door-to-door sales and multi-level marketing, but commissions are paid only for the salesperson's own performance and that of the immediately subordinate salespeople.

Sales revenue also declined. Last year's market sales amounted to a total of 3.0568 trillion KRW, down 78.2 billion KRW compared to 2018. Total sales have been negative for three consecutive years from 2017 to last year.

The total sales of the top five headquarters and agencies by sales revenue?Amorepacific, LG Household & Health Care, Coway, Woongjin ThinkBig, and Univera?last year amounted to 2.2624 trillion KRW, also a 4.7% (112.5 billion KRW) decrease from 2018.

The share of these five companies' sales in total sales was 74%, smaller than the previous year's 75.7%.

As of the end of last year, the number of registered sponsorship door-to-door salespeople increased by 12,000 from 2018 to 384,000.

Among the registered salespeople, 229,000 actually received sponsorship commissions, accounting for 59.6% of the total.

The average annual commission received per person among those who received commissions was 3.59 million KRW, down 410,000 KRW from the previous year. Converted to a monthly basis, it decreased by 34,000 KRW from 333,000 KRW in 2018 to 299,000 KRW.

The total amount of sponsorship commissions paid by sponsorship door-to-door sales companies last year was 821.8 billion KRW, down 29 billion KRW from the previous year. The amount paid by the top five companies decreased by 26.5 billion KRW from the previous year to 608.8 billion KRW.

The annual average sponsorship commission paid per person by the top five companies was investigated as follows: Amorepacific 8.3 million KRW (692,000 KRW per month), LG Household & Health Care 7.1 million KRW (592,000 KRW per month), Coway 6.6 million KRW (550,000 KRW per month), Woongjin ThinkBig 11.4 million KRW (950,000 KRW per month), and Univera 1.9 million KRW (158,000 KRW per month).

Ryu Yong-rae, head of the Special Transactions Division at the Fair Trade Commission, said, "This disclosure of information will inform the business activities and performance of individual operators engaged in sponsorship door-to-door sales, supporting rational decision-making by consumers and salespeople and contributing to the establishment of a sound trading order."

Detailed information on individual companies can be found on the Fair Trade Commission's website.