What is Direct Sales

Direct sales. These two words seem so innocuous, but they pack a large punch when it comes to describing the definition. If asked, many people involved in direct sales have different definitions of the term and the function of direct sales. So, what is Direct Sales? What does it mean and what is its function?

Direct Sales is the act of selling products away from a retail location, a storefront. So basically it is selling products one on one to people from your home. This could involve door to door selling or presenting and selling at a consumer's home. It often involves selling online as well as offline. The definition is wide open for a reason.

Methods of Direct Sales

There are various methods that direct sales companies and their sales representatives employ to sell products and services to consumers but there are three predominant methods used by majority of representatives in the industry:

  • Person-to-Person

    Person-to-person selling is perhaps the most widely used method in direct sales. This method of selling also involves various strategies but essentially involve interacting directly to a customer for the purpose of pitching in products and services and selling them. These can be in the form of door-to-door selling, telemarketing, catalogue distribution, and other such individual marketing efforts. Most independent sales consultants initially start by selling products and services to friends and family and expand their network of customers from there. It is not advisable to just sell to family and friends, as while it is a convenient and viable option initially, one cannot achieve one's financial goals by only selling within one’s comfort zone. There are many ways by which you can build a network and it all starts with getting the message across to consumers.

  • Party Plan

    Party-plan as a marketing strategy has significantly increased in popularity after Tupperware parties proved to be a resounding success within the direct selling community. Party-plan marketing is convenient and a lot more fun than person-to-person selling and it allows sales representatives to promote their products and services to groups of people rather than individually, as the latter can be pretty tedious. A good number of direct sales companies in the industry employ party-plan marketing and most of them have setup hostess rewards programs patterned after that of Tupperware's compensation plan for hostesses. Majority of direct sellers that employ this type of method are women, though there are some direct sales companies that cater specifically to men and have established a party-plan system that would appeal to the male population of direct sellers.

  • Online Selling

    The Internet has allowed for direct selling to be done online. Most direct sales companies today offer website hosting and support to consultants to allow them to feature their products and services online. Even with the absence of free hosting from the company, it is very easy to create a website and have it available online for a relatively affordable price. A great number of sales procured from direct selling comes online, though some consumers still prefer to order over the phone, a lot have found great convenience in ordering products and services online. This method, while much more impersonal than face-to-face marketing and selling, allows both sales representatives and consumers to save time and effort.

Direct Sales is an evolving definition. It is one that changes as the business of direct sales changes. Selling one on one is a basic function of direct sales as is selling to a group of people in some one's home; otherwise known as the party plan. The use of a generic meeting area is also encouraged.

Another popular method to meet with others that may be interested in your products is through a video sales promotion that is accessed through a sales website online. Similarly used are conference calls or online conference chats.

The profession of direct sales is definitely a growing profession. The market and economy effects the growth in a direct way. As more and more people look to make additional money, millions turn to selling products as a way to increase their cash flow.

The amount of businesses coming into the marketplace with new products to sell is staggering. Just about any profession is represented in some type of direct sales marketing business. The direct sales industry also has a profound impact on the economy as a whole, generating billions of dollars in sales each year. Potential representatives looking for a way to earn that extra paycheck have a large field of products and stable companies to choose from now.

In addition to selling products and earning a commission for that, representatives of direct sales companies also may earn money by referring others to the company that they are working with. This is referred to as multi-level marketing due to the many levels on which the consultant can be paid. By adding members to their "team" and mentoring the new representatives or consultants, additional income can be earned. The larger a team grows and the more products that they sell as a whole, the more income, potentially, can be made.

Direct Sales Modes of Compensation

There are two types of compensation formats used in direct sales, these are:

  • Multi-level

    While not all direct sales companies employ a multi-level marketing framework for compensation, a good number of companies these days prefer this method because of the profit potential for independent sales consultants. Under this mode of compensation, direct sales representatives are compensated for their personal sales as well as for their recruits' or downline representatives' commissionable sales. Though there are different levels, a lot of companies allow consultants to earn a portion of sales from up to three generations of downlines. This encourages representatives to build teams and work in groups rather than individually and offers new consultants a strong support system. Aside from monthly commissionable sales, sales representatives are also given an upfront commission for recruiting new members to the company. While often criticized because this type of compensation strategy has given way for scammers to operate under pyramid schemes, multi-level marketing can still be very profitable if employed by legitimate direct sales companies.

  • Single level

    Single level marketing compensates direct sales representatives solely for their personal sales. Consultants receive a commission from their monthly personal sales volume though some companies offer upfront commissions for every sale made by a consultant. Commission rates can range from 20% to 50%, depending on the company's compensation plan.

This has become an attractive benefit to the direct sales profession. By having income coming in from two different aspects of your business, it will solidify your business and its stability.  It also means that you will be more than likely to stay with your company instead of changing for greener pastures.

Direct selling has always been an attractive venture for many people primarily because of the high potential for profit without the demanding working hours of a full-time job or running an independent business. While majority of direct sales representatives only work part-time, direct selling still proves to be a viable and profitable venture for those who want to work full-time.

As you can see direct sales means so much more that what those two little words imply. When considering a direct sales company for your profession, your sales and earnings potential are much greater than in years past. All that is required of you is time and commitment to make it a success.

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