How Direct Sales Works
Direct sales (also known as direct selling) is the marketing and selling of products and services directly to consumers. This sales method eliminates the middle-man or retail stores, and is based rather on a face-to-face approach.
Network marketing and multi-level marketing (or MLM) both fall under the umbrella of direct sales. While these two business models share certain characteristics with direct selling, they do have distinct differences.
Direct sales has been around since the very inception of commerce, and is the oldest form of marketing: farmers selling their peaches and fresh cream from wagons on the side of the road, or carpenters hawking their creations at the local country market were of course direct sellers too.
In today’s economy, direct sales accounts for a sizeable percentage of the market. At the time of writing, it is estimated that over 50 million people worldwide are involved in direct sales businesses.
Amongst the big names who either own or manage direct sales companies, Warren Buffet, Donald Trump and Richard Branson all seem to be cashing in. Avon still tops the list, with an estimated turnover of $14 billion dollars.
Direct selling has distinct advantages to both consumer and sales representative. Due to reduced staff, lower shipping costs and no retail overheads, end-users ultimately get a quality product at a reasonable price. Sales consultants have minimal overheads too, generating sales by contacting referrals or by using the party system, whereby a small gathering is held in a private home in order to introduce the product to neighbours and friends.
No wonder this industry is booming: it certainly seems to be a win-win for all concerned.