| Direct Selling is a retail channel
for the distribution of goods and services. At a basic level it may be
defined as marketing and selling products, direct to consumers away from
a fixed retail location. Sales are typically made through party plan, one
to one demonstrations, and other personal contact arrangements. A text
book definition is: "The direct personal presentation, demonstration, and
sale of products and services to consumers, usually in their homes or at
their jobs."
Industry representative, the World Federation
of Direct Selling Associations (WFDSA), reports that its 59 regional member
associations accounted for more than US$114 Billion in retail sales in
2007, through the activities of more than 62 million independent sales
representatives.
According to the WFDSA, consumers benefit
from direct selling because of the convenience and service it provides,
including personal demonstration and explanation of products, home delivery,
and generous satisfaction guarantees. In contrast to franchising, the cost
for an individual to start an independent direct selling business is typically
very low with little or no required inventory or other cash commitments
to begin.
The United States Direct Selling Association
(DSA) reported that in 2000, 55% of adult Americans had at some time purchased
goods or services from a direct selling representative and 20% reported
that they were currently(6%) or had been in the past(14%) a direct selling
representative.
Most direct selling associations, including
the Bundesverband Direktvertrieb Deutschland, the direct selling association
of Germany, and the WFDSA and DSA require their members to abide by a code
of conduct towards a fair partnership both with customers and salesmen.
Most national direct selling associations are represented in the World
Federation of Direct Selling Associations (WFDSA).
Direct Selling is distinct from Direct
Marketing because it is about individual sales agents reaching and dealing
directly with clients. Direct Marketing is about business organizations
seeking a relationship with their customers without going through an agent/consultant
or retail outlet.
By far the majority of Direct Selling
companies use a multi-level compensation plan, where the agent is paid
not only for their own sales but also a percentage of the sales of other
representatives they introduce into the organization and help train.
Some of the world's largest direct selling
companies include Avon Products, Amway, NuSkin and Tupperware. |
