Direct selling
Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location. Peddling is the oldest form of direct selling.[1] Modern direct selling includes sales made through the party plan, one-on-one demonstrations, and other personal contact arrangements as well as internet sales.[2] A textbook definition is: "The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs."[3][4]
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.[5] 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.[6]
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.[5] 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.[5]
Most direct selling associations around the world 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.
Direct selling consists of two main business models: single-level marketing, in which a direct seller makes money by buying products from a parent organization and selling them directly to customers, and multi-level marketing (also known as network marketing or person-to-person marketing), in which the direct seller makes money from both direct sales to customers and by sponsoring new direct sellers and earning a commission from their efforts.[7]
Largest direct selling companies
According to Direct Selling News, the largest direct selling companies globally, by revenue in 2014,[8] were:
| 2015 Rank | Company Name | 2014 Revenue |
|---|---|---|
| 1 | Amway | US$ 10.80 B |
| 2 | Avon Products | US$ 8.90 B |
| 3 | Herbalife | US$ 5.00 B |
| 4 | Mary Kay | US$ 4.00 B |
| 5 | Vorwerk | US$ 3.90 B |
| 6 | Natura | US$ 3.20 B |
| 7 | Infinitus | US$ 2.64 B |
| 8 | Tupperware | US$ 2.60 B |
| 9 | Nu Skin Enterprises | US$ 2.57 B |
| 10 | JoyMain | US$ 2.0 B |
References
- ↑ "Direct Selling Methods: Single Level & Multilevel Marketing". 26 March 2007.
- ↑ Merrilees, Bill; Miller, Dale (1999). "Direct Selling in the West and East: The Relative Roles of Product and Relationship (Guanxi) Drivers". Journal of Business Research 45 (3): 267–273. doi:10.1016/S0148-2963(97)00238-5.
- ↑ Michael A. Belch George E. Belch Advertising and Promotion: An Integrated Marketing Communications Perspective, 7/e., McGraw-Hill/Irwin, 2006
- ↑ Xardel, Dominique (1993). The Direct Selling Revolution. Understanding the Growth of the Amway Corporation. Blackwell Publishing. pp. 3–4. ISBN 978-0-631-19229-9.
- 1 2 3 WFDSA - What is Direct Selling?
- ↑ DSA - What is Direct Selling
- ↑ Bridge, Rachel; Edwards, Paul; Edwards, Sarah A.; Economy, Peter (2014). Starting a Home Business for Dummies. Wiley. p. 36. ISBN 978-1-118-73757-6. Retrieved 31 December 2015.
- ↑ "2015 DSN Global 100 List". 8 April 2013. Retrieved 30 Dec 2015.