Direct selling, as the name implies is the selling of products directly to consumers in a non-retail setting. The sales happen through the company website, at home or at distribution points.
Direct selling avoids the mediators involved in product distribution, such as the local distribution centre and wholesaler. Instead, the manufactured products go to the direct sales company from the manufacturer, then it either goes directly to the consumer or the distributor/representative. The products sold through direct sales cannot be found in local shops or super markets, hence the only possible method to buy from a direct selling company is through their website or through the distributor.
Direct selling is usually associated with party-plan and network marketing companies. Although these companies use direct sales, they aren’t the only ones; many businesses that sell business-2-business (B2B) use direct selling to target and sell to their end customers. For instance, many companies that sell advertising or office supplies will send their represenatatives directly into the stores that can use their services.
There are mainly 2 types of direct selling.
1. A one-on-one approach, that is a single person is responsible for trading products, for which he earns a commission.
2. Building a team wherein the representative/purchaser invites another person to be part of his team to sell/buy the products. Now, the commission or part of the company profit is earned by both the representatives.
What selling method do direct selling companies follow?
1. The sales person goes door-to-door, and meets the client/consumer individually to impart product knowledge and promote sales.
2. Online, companies sell their products through their website or social media pages.
3. The distributor or representative hosts a party, where in a group of potential customers meet to gather product/company information, also to learn the benefits if they become part of the company as a seller.
Some of the direct selling companies in India are; Amway, Modicare (the first direct-selling company in India), Herbalife, Orifalme, and Vestige to name a few.
Each company has its own loyal customer base.
The direct selling industry in India has registered a compounded annual growth rate (CAGR) of 13%, from Rs. 11,650 Crore in the year 2017-18 to Rs. 19,020 Crore in 2021-22. It is estimated to touch Rs. 64,500 Crore by 2025.
If you are looking for an extra source of income, direct selling industry is thought worthy.