Direct selling is the marketing and direct sale of a product to a customer at home, at work, or in other non-store locations. In this system, the distribution of the product does not require the presence of multiple intermediaries, such as a regional distribution center or wholesale. Instead, the product is shipped directly from the production site to direct sales companies, distributors, resellers or customers. Products sold this way are often not found in retail stores. In other words, buying such products is only possible by searching for distributors or resellers. In this article, we are going to explain the concept and types of direct selling and review the points that direct selling applicants should know before entering this job.
Direct selling is usually associated with both network marketing and sales hosting. This method can also be used in businesses based on the 2B2B sales model (business to business) and is used in targeting and selling to the end customer. For example, the representatives of many businesses selling advertising or office supplies are usually sent to stores that can use these services. But be careful not to confuse direct selling with direct marketing. Direct selling is a way in which the seller communicates directly with customers. This seller does not have a fixed location to sell his products. Direct marketing is done for potential customers without the intervention of distributors or other intermediaries.
Types of direct sales
There are many ways for business owners to offer their product or service to customers through direct sales.
1. One-level direct sales
One-level direct sales take place individually, for example, house-to-house or face-to-face introduction of the product. This type of sale is also possible through the Internet and catalogs. In general, the income of single-level direct sellers is obtained only through the sales commission.
2. Hosting (meeting plan)
This type of sale takes place in a collective environment. Usually the distributor or sales representative introduces the desired product or service to the guests in his own house or other place. Sometimes companies sell their product or service to people from a particular business. For example, a real estate software sales representative can sell certain software to a group of real estate brokers. In this method, revenue is generated through the sales commission or sometimes through the commission to introduce new representatives to the company.
3. Multilevel marketing
Sales in multilevel marketing take place in a variety of ways, including introducing a product individually or collectively. This type of sale can also be done through online stores and catalogs. Multilevel marketing revenue is generated from sales commissions as well as other sales commissions made by other business partners nominated by the distributor. That is, the distributor introduces a new representative for direct sales to the company, and for each sale that this new representative has, the person introducing the commission will receive a commission.
Direct selling is sometimes referred to as multilevel marketing or network marketing. Multilevel marketing and network marketing are all types of direct sales, but note that not all direct sales systems include multilevel marketing. For example, the sales representative’s income in the one-tier marketing method is only through the sales commission of products that he has personally sold.
Direct sales in home businesses
You can start your own home-based business by working with direct selling companies. You could also start your own home-based business tomorrow with very little start up cost. For example, if you are able to provide social media management services, you can contact the companies you anticipate purchasing your services directly. This method can be applied to almost all 2 B2B products or services and even in the sale of B2C (business to consumer) models. For example, if you have invented a new device, you can sell your product directly in the form of individual or group introductions to customers who you may be interested in buying.
Are direct selling companies legal and scalable?
Direct sales, especially multilevel marketing and network marketing, are not very popular. The first blow to the credibility of this method of sale was related to the story of the American company Amway, which was said to be a pyramid scheme. Umayyad was eventually acquitted of the pyramid scheme, but the blow to direct sales credit could not be offset. Another thing that has discredited direct sales is that sales representatives sometimes exaggerate or exaggerate the introduction of a company’s product or service. This is why many direct selling companies emphasize hiring agents who are honest and hardworking. Some companies are so sensitive about this issue that they do not even allow their representatives to use the company name in their advertisements.
A guide to getting started in direct selling
Those who want to experience direct selling, first of all, need to know what their purpose is. To find out if this job is right for you, you must first weigh your personal and financial goals. Make sure your goals are realistic, as it may take years for you to achieve a high level of sales success. If you have decided to experience this job, follow the steps below:
1. Identify your favorite product or service
Direct selling companies offer a wide variety of products or services, from health and beauty products to clothing and kitchen appliances. Most people have a laid back attitude when it comes to painting a picture about themselves. So look for the product or service that you are interested in. If you do not sincerely believe in the efficiency and usefulness of what you are selling, you can hardly sell that product or service to people or introduce other representatives to the company.
2. Selecting a company to provide a product or service
Choose a company that has your favorite product or service. Visit the website of the selected company. If possible, sign up and attend one of their product or service shows. If you make the right choice about the product or service and the company offering you, your chances of success will increase.
3. Investigate any negative information about the selected company
Research the background of your chosen company and the opinions of their customers. See if you can find any complaints against this company. If you have a complaint, try to understand what its nature and content is and how the company has handled the challenge. Also see what others think of the company. You can even talk to your former or current sales representatives about their experience in the job. Of course, by searching online you can also find a lot of information that may have a negative aspect.
4. Research on the activities and work history of the selected company
Carefully read the activities and work history of your chosen company. For example, see when the business of this company started. Research the number of distributors, the average distributors’ income, and the distribution rate of distributors. Read the company’s product brochure, as well as information about marketing tools and contracts signed with distributors. It is also recommended that you read the company’s financial statements for the past five years, if you can.
5. Ask all your questions about the company
During the negotiation, be sure to ask any questions you have to make sure of the company’s policies and procedures. If you are going to be introduced as a sales representative by someone else, that person should be able to answer your questions. If necessary, you can contact the company’s headquarters. Any reputable company will be happy to answer your questions.
6. Research on the policy of reclaiming unsold products
You need to know if the company is willing to take back the unsold products from you, especially if you decide to leave your job one day. A 90% return on unsold healthy products will be of great benefit to you. Also inquire about opportunities that allow you to shop in large volumes so that you can use these opportunities to increase your points or receive special discounts.
7. Awareness of the company’s revenue generation plan
Each company’s revenue generation plan is different. So make sure you understand your chosen company’s revenue plan. Just like any other retail method, you are going to create a sales market and sell products or services that are high quality and competitively priced and sold in reasonable quantities. Remember that your income should not be limited to the commission resulting from the introduction of new distributors. With all of this in mind, work as a sales representative for a company only if you are confident in your choice.