What is Direct Selling? Definition and Examples

If you sell your products directly to consumers, bypassing retail stores or distributors, you practice Direct Selling; you are a direct seller.

Instead of selling in a fixed location like a store (shop), direct selling relies on independent sales representative (reps). These reps sell the products through social gatherings, home parties, one-on-one demonstrations, telemarketing, and even door-to-door.

Historically, door-to-door sales have been the most common form of direct selling.

If you sell door-to-door and don’t know the names of the people in each house, you are door-to-door canvassing or cold canvassing. The verb is ‘to canvass.’ We can canvass door-to-door or by phone (telephone canvassing).

Avon, an American company known for its beauty, household, and personal care products, is a good example of a direct selling company. Avon uses sales representatives to sell its products directly to consumers.

Quoted definitions

Snov.io has the following definition of the term:

“Direct selling is the selling of products in a non-retail setting, for example, at home, online, or other venues that are not a store. It eliminates middlemen who are involved in distribution, such as wholesalers and regional distribution centers. Products sold via direct sales are not typically found in traditional retail locations.”

The Federal Trade Commission in the United States says the following about direct selling:

“Direct selling is a blanket term that encompasses a variety of business forms premised on person-to-person selling in locations other than a retail establishment, such as social media platforms or the home of the salesperson or prospective customer.”

A sales rep demonstrating cosmetics at a home party event - image about DIRECT SELLING.
Created by Market Business News using material from OpenAI’s ChatGPT.

The Process of Direct Selling

Direct-selling companies recruit people to act as their sales reps. These reps are typically given training and sales materials to help them promote and sell the products.

The vast majority of sales reps work part-time. This flexible work allows many of them to pursue direct selling as a side hustle or supplementary income.

Most reps do not receive a basic salary; they earn income through commissions on the products they sell.

The sales process often begins with the rep making contact with potential customers.  This may happen through various means, such as personal relationships, referrals, or social media. Some companies give their reps list of leads, that is, the names of people they should contact.

After making contact, the rep presents the product, explains its benefits, and demonstrates how it works or how to use it. It is a personalized approach, which means that the *prospect can ask questions and get a hands-on experience with the product.

* A prospect is somebody who you believe could turn into a paying customer.

Benefits of Direct Selling

  • For the Consumer

One of the main advantages is the personal touch it offers. Consumers can receive personalized advice and recommendations from the sales rep, which can lead to a more satisfying customer experience.

  • For the Sales Representative

If you are looking for a flexible work schedule because of family commitments or you already have a full-time or part-time job, you should consider direct selling. It could be an attractive option.

  • For the Company

Direct selling is a cost-effective way to reach new customers. By using independent reps, your business can save on the costs of maintaining a store and paying retail staff.

With this business model, your company can expand its market reach rapidly, as sales reps can operate up and down the country, and even abroad.

Types of Direct Selling

There are three main types of direct selling models: single-level marketing, multi-level marketing (MLM), and party-plan selling.

  • Single-Level Marketing

In this model, sales reps earn commissions based solely on their own sales. They do not recruit other representatives or earn commissions from the sales of others.

  • Multi-level marketing (MLM)

The sales rep recruits new reps who then sell the products. In this model, reps earn commissions on their own sales and a percentage of the sales made by their recruits. This creates a network or “downline” of sales reps.

  • Party Plan Selling

In this approach, the rep hosts parties or social events where products are demonstrated and sold. The host of the party often receives incentives or discounts based on the sales made during the event.

If you are a party plan seller, you can also host events in other people’s homes.

Challenges of Direct Selling

Sales reps must be self-motivated and able to handle rejection. Many potential customers will have no interest in their products.

As a rep, you may need to invest your own money in product samples or marketing materials – even before you start earning any money.

Many people associate direct selling with high-pressure tactics or pyramid schemes. It is important to remember that reputable direct selling companies like Avon, Amway, and Mary Kay follow strict guidelines and ethical practices.

Some Companies

Below you can find information about 10 reputable direct selling companies, where they are based, when they were founded, and what they sell.

  • Amway
    Founded: 1959
    Based: USA
    Products: Health, beauty, and home care products.
  • Oriflame
    Founded: 1967
    Based: Sweden
    Products: Beauty and personal care products.
  • Avon
    Founded: 1886
    Based: USA
    Products: Beauty and personal care products.
  • Herbalife
    Founded: 1980
    Based: USA
    Products: Nutritional supplements and weight management products.
  • Vorwerk
    Founded: 1883
    Based: Germany
    Products: Home appliances and cosmetics.
  • Mary Kay
    Founded: 1963
    Based: USA
    Products: Skincare and cosmetics.
  • The Simply Group
    Founded: 2000
    Based: UK
    Products: Household essentials and personal care products.
  • Tupperware
    Founded: 1946
    Based: USA
    Products: Kitchen and household products.
  • Nu Skin
    Founded: 1984
    Based: USA
    Products: Anti-aging skincare and nutritional supplements.
  • Primerica
    Founded: 1977
    Based: USA
    Products: Financial services including life insurance and investments.

Conclusion

Direct selling, which has been around for a very long time, is a dynamic and flexible approach to marketing and selling products. It offers opportunities for personal interaction, entrepreneurial growth, flexible working hours, a broad customer reach, and cost savings for businesses.

If you are considering becoming a sales rep or opening a direct selling business, weigh the pros and cons carefully before deciding. You must be self-motivated, persistent, able to handle rejection, and good at communicating and dealing with people.

Video – What is Direct Selling?

This video comes from our sister YouTube channel – Marketing Business Network. It explains what “Direct Selling” is using easy-to-understand language and examples.