What is Direct Selling?
Direct Selling is a business model wherein the producer of the goods sells them directly to the final consumer. In essence, there is no middlemen or intermediary.
So, in this model, the intermediaries are eliminated from the supply chain, which is involved in the distribution of the product. However, the sale greatly relies upon the explanation and demonstration provided by the independent sales representative or agents (direct sellers) to the consumers. Home delivery of the products is provided to the clients.
Thus, direct selling takes place in three formats:
- Group or party
It is a retail channel that a number of top-notch multinational companies and start-up founders use to sell their goods and services to their customers. The product range includes everything from mixer grinders to vacuum cleaners, cosmetics to bedsheets and many more.
In other words, direct selling is a distribution method in which the direct seller can generate income both from personal sales and from the ongoing sales and consumption by those who are directly or indirectly introduced to the organization.
Table of Contents
- Wrap Up
Methods of Direct Selling
Direct Selling is a mode of sales that involves direct interaction with the client or customer away from the traditional brick-and-mortar store. The alternative term for direct selling is person-to-person retail. the different methods of direct selling are:
Door to Door Salespersons
In this method, the producer employs a sales force who approaches customers at different locations such as residences, offices, coaching classes, schools and colleges, and so forth. Thereafter, these salesmen demonstrate the product, state its features and specifications to take orders from them and deliver the product.
Oftentimes they also provide after-sales services to the customers. Moreover, the customers get the benefit of personal attention from the salespeople.
Example: Eureka Forbes sells water purifiers under the name ‘Aquagaurd’.
Typically large corporations use this method, wherein they open their retail outlets at different locations to increase their reach. Also, the franchising model is used by these corporations to sell their products.
Example: World of Titan, BIBA, Sugar, Domino’s, Zara, Cafe Coffee Day, Sony World, Raymonds, Baskin Robbins, etc.
The producer sends or mails a catalogue of products to a number of selected prospective buyers who are likely to place an order. Alternatively, we call it direct mail selling. It encompasses the preparation of a highly selective mailing list and sending catalogues, letters, folders, videos etc., to numerous prospects.
The customers view them and revert by placing orders either through mail or phone call. The customer can make payment for the goods through a debit card, credit card or cash on delivery. Customers get the products through courier or speed post.
Example: Amway, Vestige, Avon and Oriflame
When the sale of products takes place through the use of machines, it is automatic vending. For this purpose, machines are installed in kiosks at different locations to dispense products. These locations are generally public places like railway stations, shopping centres, bus terminals, etc.
The buyer needs to get the token by making a payment. Thereafter, the customer should insert the token into the automatic vending machines to get that product.
This technique involves heavy advertising on television. Experts perform the demonstration on TV. Further, it is shown multiple times so that the viewer can be able to understand how to operate it. Customers watching those advertisements are likely to build interest if they need that product. A toll-free number and email id are provided through which they can place their orders.
Moreover, a fully automatic answering machine takes the order of the clients or forwards the same to the service operator. For delivering the product, the company uses either a courier service or sends them through the distribution network.
Online Or Internet Marketing
It is not an emerging and popular method of direct selling, but also convenient and hassle-free too. Customers can order products at any time of the day and from any location. Also, customers do not need to talk to any sales representative to get the product. The producer adds all the information regarding the products and their specifications, uses, videos and reviews on the website.
Customers can just surf the internet and update themselves about the positives and negatives of the brand. After getting enough information, they can place their order via their application or website. They can also compare the products with other products prior to making the purchase.
For this, they need to follow these steps:
- Select the products and move them to the cart
- Add location and other details
- Add payment options
- Place their order and
- Get the delivery of the product at their doorstep either through courier or through the company’s delivery network.
Example: Amazon, Nykaa, Myntra, Flipkart, Ajio, etc.
Advantages of Direct Selling
- Employment Generation: It creates job opportunities by creating employment because it is a labour-intensive industry.
- Additional Income: Direct Selling provides additional income opportunities to a large group of people and encourages micro-entrepreneurship.
- Women Empowerment: Direct selling provides self-employment to a wide group of people, of which most are women. Thus it increases women entrepreneurs and the workforce as they can easily give time to their job and household simultaneously.
- Builds trust: It offers customers the opportunity to see, check, and observe the product at their convenience, which ultimately builds trust and reliability.
- Personal contact with prospects: To make sales, the sales representatives visit the homes and offices of the clients, and thus they can develop a good relationship.
- No specific qualification for workers: Entrepreneurial venture open to people from different backgrounds and experiences.
- Flexibility: there is no fixed work timing. People can work at their own leisure due to working hour flexibility.
Direct Selling is a great way to develop a long-lasting relationship with clients and also run a low-cost business. Here, salespeople visit the prospective customers at their residences, offices, and cafes instead of the traditional retail outlets and demonstrate the product to take the order from them.