The Direct Selling umbrella is a large one. Literally thousands of products are sold in this way, health and nutrition, household, jewellery, cosmetics, cookware, financial services, telecommunications and energy, interior décor, advertising, lottery, holidays, food, fashion, books, childrens toys and educational/ personal development to name just a few.
What exactly is it?
Direct selling is a dynamic, vibrant, rapidly expanding channel of distribution for the marketing of products and services directly to consumers. It is estimated that worldwide retail sales accounted for more than US$114 Billion through the activities of more than 62 million independent sales representatives. In Ireland 2009 figures revealed that over 60 million euro in retail sales resulted from the activity if independent “volunteer” sales people.
Direct selling provides important benefits to individuals who desire an opportunity to earn an income and build a business of their own; to consumers who enjoy an alternative to shopping centers, department stores or the like; and to the consumer products market. It offers an alternative to traditional employment for those who desire a flexible income earning opportunity to supplement their household income, or whose responsibilities or circumstances do not allow for regular part-time or full time employment. In many cases, direct selling opportunities develop into a fulfilling career for those who achieve success and choose to pursue their independent direct selling business on a full time basis.
Many business owners get involved to supplement revenues with the sale of complimentary products. Most importantly, this method of distribution could be the low cost solution you need to get your products and services to the market quickly.
Although direct selling companies occasionally use some direct marketing or distance selling techniques and technology to enhance their businesses, the primary difference between the two methods of marketing is the face-to-face, or personal presentation that is always an aspect of the direct selling relationship.
Is it suitable for my business?
The way in which your products can possibly be sold by a volunteer sales force varies and depends on the type of product being offered. Some products lend themselves well to group demonstrations (workplace and home parties) while others are more suited to referral business or door-2-door. The sales channel works well for “complicated” products often left on the shelf through lack of appreciation by potential buyers.
Of critical importance is the “Compensation Plan” the industries terminology for how much and in what way your distributors can earn income and ultimately the driver of sales and the growth of the sales force. Depending on the available give away margin your compensation plan may just offer retail sales/referral commission or you could leverage the recruitment of new distributors by offering team building override commissions down many levels.
The Compensation model, promotional sales tools, distributors sales kits, ordering systems and field support are among the many areas that you need to get right to ensure that your Direct Selling journey does not take you to a mine field. Professional guidance is recommended!
Will my distributors need to invest in product?
The cost for an individual to start an independent direct selling business is typically very low. Usually, a modestly priced sales kit is all that is required for one to get started, and there is little or no required inventory or other cash commitments to begin. This stands in sharp contrast to franchise and other business investment opportunities, which may require substantial expenditures and expose the investor to a significant risk of loss.
Benefits to the consumer
Consumers benefit from direct selling because of the convenience and service it provides, including personal demonstration and explanation of products, home delivery, and generous satisfaction guarantees and supporting local distributors. Moreover, direct selling provides a channel of distribution for companies with innovative or distinctive products not readily available in traditional retail stores, or who cannot afford to compete with the enormous advertising and promotion costs associated with gaining space on retail shelves. Direct selling enhances the retail distribution infrastructure of the economy, and serves consumers with a convenient source of quality products.
An important component of the Direct Selling industry is multilevel marketing. It is also referred to as network marketing, structure marketing or multilevel direct selling, and has proven over many years to be a highly successful and effective method of compensating direct sellers for the marketing and distribution of products and services directly to consumers because it compensates individuals on the sales of others who join the sales channel.
Direct selling should not be confused with terms such as direct marketing or distance selling which may be described as an interactive system of marketing that uses one or more advertising media to effect a measurable response and/or transaction at any location, with this activity stored on a database. Some commonly known types of direct marketing and distance selling techniques are telemarketing, direct mail, and direct response.
When is the last time you saw a packet of biscuits dragging a shopper out of a Supermarket? People move products – not the other way round! Direct Selling simply put, is the movement of products and services by people who like the products to people they meet on a commission basis. There is no such thing as an “ideal” distributor, everyone can do it.
I like to teach people to “tell” rather than “sell” much in the same way that we all naturally recommend things that we like to others…restaurants, cars, hotels, books, cosmetics, perfumes, nutrition, services, phone companies. If all this is starting to make sense then you probably have got the gist of it!
If you think that your business has a product that may be suitable for Direct Selling and would like some professional help in creating a “volunteer” sales force please feel free to contact me.
Janette McNamara – DSAI, has over 30 years experience in Direct Selling and network Marketing, has created successful volunteer sales forces for numerous companies and was a finalist in the National sales & Marketing awards for her innovative marketing ideas.