Introduction to What is Direct Selling
Today we will discuss what is Direct selling? Direct selling is one of the primary forms of doing business. This method is used by both small businessmen as well as big enterprises. Many companies use this method along with other methods of selling to reach different segments of the population.
what is direct selling:
Direct selling is selling products directly to consumers in a non-retail environment. Rather than this, sales occur at home, at work, online selling, or in other non-store locations.
A type of sales that creates direct contact between a seller and consumer without involving any third party. In direct selling, the seller buys a product from the company and sells it to the consumer directly or a seller produces goods and sells them to the consumer without any middle man. Direct selling is popular in the B2B sector, where sellers communicate with the clients personally. In 2019, direct sales alone improved the world economy with $193 billion in total sales.
Another thing that makes direct sales unique is it takes place in a non-retail environment. A non-retail environment like home, public place, online, etc. In direct selling, both the parent company and seller earn more profit as there are no middlemen. It is the essential and primary method of selling as used by many companies. This article will help you to learn types of direct selling and their advantages and disadvantages.
Types of direct selling
You must be wondering why direct selling is so popular in different parts of the world?
Party plan sale
This takes place in a group. Generally, a distributor or a sales representative invites his customers to his house or a decided place. In a party plan sale, you address everyone and give details about your product to the group then give them a demonstration of the product, hand out material related to products, and receive orders. This is a neat way of doing business. This method is successful as you sell many units of your product at a time.
Single level sale
In this method, you contact people individually. An example is door-to-door selling, selling through catalogs, and selling through the in-person presentation. You approach each customer with a personalized direct sales approach.
Multi-level direct sales
In multi-level direct sales, sales representatives are hired to sell their products or sometimes multilevel direct sales are conducted through business partners. Sometimes these sales take place online through product catalogs or selling through networking mediums.
Advantages of Direct Selling
1. More profit margin
For both parent companies and sellers, this is a highly profitable form of selling. This method is adopted by many entrepreneurs to earn high profits. small entrepreneurs don’t have many funds when they start the business. Therefore, they save the cost of mediators and earn a high margin.
2. No Expense on store maintenance
The seller is not required to set up a business store to sell the goods as it takes place in a non-rental environment. A store is an expensive liability for the seller. For that, he is required to rent a place, pay tax, keep full stock, hire a salesperson and people to maintain the store, and lots of other expenses.
All of these expenses are done by the profit earned. A seller can save all of the cost spent on this by direct selling and can increase profit margin. If the seller will sell from the store, then he has to buy goods from the manufacturer and that too in huge quantity and his money will be at risk. From home the seller needs to buy small and can sell more after selling previous stock.
3. Personal contact with the customer
There are various benefits to having direct contact with the seller. You can understand the need of the customer and can provide services to them as per their requirements. Likewise, you can create business opportunities.
For example, your customer can place an order for the products that they need. like this, your business can expand very easily.
4. No advertising and marketing expenses
The purpose of marketing is to make people aware of the existence of the product and make people aware of the quality of the product. Many companies spend lots of money on advertising and branding. The expense of advertising depends on part of the variable of production. The cost of marketing is later earned by the profit earned by the product. As a result, the profit margin reduces. The seller meets the customer individually and tells them about the product., and hand them the product details. In such a case the cost of advertising and marketing reduces and the seller can save a lot of money.
5. Personalized approach for each customer
The seller meets the customer individually. Because the seller has the opportunity to pitch a personalized sales pitch to the customer which has several benefits. For example, if you have a customer who only buys products in the sale or offers so you have a chance to call the customer to tell them about the offer. In this way, you can convince them to buy in bulk. This is not possible in other modes of selling.
6.Visible customer reaction
The seller meets the customer and sells the products. The benefit of selling the product face-to-face is you can see the reaction on the face and likewise modify the sales pitch based on reactions. in online selling, it is not possible to see the reactions and is unable to suggest a deal to the customer.
7. Product demonstration
Product demonstration reduces the chances of complaints after the sales because people will buy the product only if they are satisfied with the demo.
8. Feedback directly from customers
Getting feedback directly from the customer is far better than getting it from the middlemen. You can use this information to improve the quality of the product to keep your customers satisfied.
Most of the customers are annoyed when they don’t get proper attention in stores and look for the products and spend so many hours. In this, you can keep customers satisfied.
Like every coin has two sides direct selling also has some disadvantages which I am going to discuss bellow
So, you can decide whether you want to go with direct selling or not
1. Difficult to reach a wide audience
As I mentioned before going door-to-door, approaching individually, arranging house parties. Therefore, it is difficult to reach a wide audience. You can cover not more than one town and it will be challenging for you to convince the customers at the same time.
2.Affects personal life
If you have invested your money you don’t want to lose. You require so much time. Therefore, you can’t take vacations like others. You have to work on weekends because people are free on weekends only. Then can come to your business meetings and listen to you only on weekends and when you go to their place to sell products. You have to compromise your life for business.
Nowadays when there are so many ways of buying people are not easily convinced to buy from persons coming to their doors. There are very less people who prefer to buy from online stores. So be ready to face rejections. There is also a negative image of direct sellers in the market.
4. Risk of Failure
Like other businesses you too have a risk of failure. So, never put your all money to risk. Take small steps and see whether your business works or not and likewise expand it.
How to push direct sales
You require a lot of patience and hard work to get successful and direct selling is not a business everyone can do. I will give you some tips for that.
- Learn about your product and company
- Set your sales goal
- Plan your week and day
- Make an appointment in advance
- Organize your customer’s deals
- Follow up
- Increase your network
- Don’t be pushy
- Brush your skills
My last direct selling tip is always keeping a positive attitude.