What is Direct Selling?
Direct Selling as the name suggests is a form of marketing where the relationship between the customer & the company takes the forefront. In this setting, the company focuses on eliminating intermediaries & reaching out to their customers in a more “direct” manner. This form could be considered most effective for small to medium businesses as it provides you direct contact with customers without retail intermediaries. This allows the business to understand the customer better.
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That being said, Direct selling can also be used if you’re selling between businesses. The gist of it is that a company that sells directly to the end customer without the interference of retailers, through reps within the company, are said to be engaging in Direct Selling.
It is also important to note that unlike Direct Marketing, where the company directly reaches out to customers through their channels, Direct Selling is where representatives of the company reach out to customers instead. The focus is on person-to-person communication as opposed to corporation-to-consumer communication.
Very often, this form of selling happens in informal settings such as homes, gatherings, parties or events. The consumer gets to converse directly with a representative of the company & can therefore have a more intimate discourse on the products. Direct selling makes the products more personal.
What are the types of Direct Selling
Direct selling at a single level
Single level direct selling is more akin to the concept of direct selling than any others. This is where you directly engage with consumers on a one-on-one basis, going door-to-door, hosting events where you talk to potential consumers & so on. You could also carry out these processes online through meet & greets, landing pages, catalogs or even targeted social campaigns. In this form, each representative or distributor has autonomy in their means of selling and earn based on the sales they bring in. The amount of revenue the company earns, depends on the sales capabilities of each individual.
Host sales can be one of the tactics employed by representatives. But it can also be applied in a company-wide format. In this model, the company and a few of its sales execs host parties or events regularly with segments of their consumers. These events can specifically cater to the chosen section of consumers & focus on their needs. For example, if the products cater to people above the age of 30, you’d host an event that sells “anti-aging” products.
Business To Business Owner Sales
In this model the business sells to self-employed business persons that then sell the product to the end customer. For example, I may sell my brand of clothing to a seller who then sells it to the end customer. I could either sell my entire stock to this intermediate seller or make money off commission based on this person’s sales.
Is it the same as Mutli-Level-Marketing or MLM?
No it is not! MLM may include some of the strategies employed in Direct Selling but it differs quite a bit. In an MLM, your ability to earn depends also on your ability to recruit. You earn through the sales ability of your subordinates. This is not the same as direct selling & the way it works.