The 3 Types of Direct Selling (with pros & cons)

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Direct selling is one of the major ways of doing business often employed by both large and small business owners. Companies that operate this type of model are called direct sales companies.

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Before discussing the various types of direct selling, we must dwell briefly on the meaning of direct selling to have a base knowledge of what this article is all about.

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What Is Direct Selling?

Direct selling can be described in simple terms as the selling of products and services outside the usual retail setting. It could be online, in the home, at a party location, or some other place that is not a store.

This type of selling method gets rid of middlemen such as the wholesalers and gets the products directly to the final consumers. Therefore the whole idea of direct selling is moving more closely to the users of the products and services involved.

Now that you have a brief knowledge of what direct selling is, we can now move further to the types of direct selling available so you can choose the one that best appeals to you.

Different Types Of Direct Selling

The different types and methods of direct sales that are often used are; 

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  1. Single-Level Direct Sales

This is one of the types of direct selling that has to do with one on one selling. It involves direct contact with the users of the product or services.

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How it works;

This type of sales method is done via door-to-door presentation but may also be done online. Selling online occurs when a distributor lists photos of available products on the internet so that potential buyers can make their request and have the goods delivered to them once payment has been made.

The benefit of online sales is that the distributor is able to reach more people easier and faster, which leads to making more sales and an increase in income.

Under the single-level sales arrangement, the sales representatives are rewarded for their personal sales engagement to customers. They get a percentage of their overall sales income as commission when sales targets are met. 

Examples of companies that operate Single-level sales patterns include Tupperware, Avon, Kirby, and Pampered Chef.

Pros

  • Promotes online selling
  • The more you sell, the more you earn

Cons

  • Commission is limited to sales made, so incentives are not paid for recruiting new sales reps.
  1. Multi-Level Marketing

MLM is also referred to as network marketing because it makes use of human networks to sell products and also recruit new individuals.

This is a selling strategy that is employed by several companies in selling their products and services. Under this method, individuals are encouraged to recruit other non-members to become distributors of the organization involved.

How it works;

Individuals are recruited as contractors of the company and are conferred with the responsibility of selling the organization’s product or services and in turn, are paid a commission for sales made.

Asides from the commission on sales made, commissions are also paid when they recruit other individuals into the company and this pattern applies to as many individuals that are boarded. 

This type of direct selling is legal and over time has proven to be very effective in improving the sales and profits of a company.

Pros 

  • Mentorship is promoted
  • Development of communication skills
  • Cost-effective

Cons 

  • No sales support and training
  • Low income
  • It takes time to establish your business
  1. Party-Plan Sales

This is a direct selling method that over the years has won the heart of several sellers. Among the types of direct selling, it is the most popularly used because of the results it yields. 

Although the other methods of direct selling are also used, the party plan sales strategy remains the central focus.

The party plan sale is also known as host sales.

How it works;

The sales representative requests a friend to host a party in their home where other friends would be invited to see the available products and in the process make a purchase of those products.

The host or hostess is given a discount on every product purchased by the guests. 

It may appear as if online selling has taken over any type of sale strategy but the truth remains that party plan sale is far more effective since the potential customers can touch and feel the products before paying, unlike the online sales where only pictures are displayed while customers have no direct contact with the products.

If you can understand the power of party plan sales and employ it, you will experience rapid growth in your sales.

Pros  

  • It’s flexible
  • No inventory
  • Support and training

Cons

  • Limited customer base
  • No business security 

Types Of Direct Selling Companies

Despite the several direct selling companies available to choose from, there are some top picks that I hope you consider first and some of them are listed below.

  1. Color Street 

This is one of the top direct sales companies that deal in stick-on nail polish for the hands and feet. You can earn up to 25 percent on the fully stocked kit that costs $129 only.

  1. Silver Icing 

For women’s modern fashion apparel, Silver icing has been made available to you and it covers women of all sizes and shapes. You can become a part of the sales team for this company and earn nothing less than 20 percent on sales weekly. The starter kit costs $75

  1. Discovery Toys 

Discovery toys offer quality educational materials any parent can desire for their kids. So if you are a parent that wants the best books and toys for children of all ages, discovery toys is the way to go.

You can also be a part of the sales team and earn 34 percent profit on the sale you make. Here, you can join with $79 and you pick $140 in products or other business tools.

  1. Simply Fun

Are you in search of a game collection that can keep a family together? Then try out Simply fun because it has a collection of games that a whole family will be involved in and also enjoy playing together.

It teaches real-world skills and you have the opportunity to sign up as a playologist with as low as $49 and you can start earning up to 26 percent on sales.

  1. Thirty-One 

A popular direct sales company that deals in home organization essentials such as organization caddies and tote bags. A starter kit of between $59 and $179 will fetch you 25 percent on profit. 

  1. Mary Kay 

If you are not conversant with the other direct sales company listed above, you should be familiar with this brand.

For your makeup and skincare, Mary Kay will serve you right. And do you know that with a starter kit of just $30, you can earn up to 50 percent commission on sales.

  1. Touchstone Crystal 

This direct sales company deals in awesome Swarovski jewelry and crystal products for every woman that desires a sparkle in her life. With them, you can enjoy up to 40 percent profit and also make an additional 50 percent discount on products.

Tips To Effective Direct Selling

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It is not enough to know what works, but much more important to know how best to apply what works because it is only then that you can have commensurate results.

So now that you know what direct selling is and the advantages of direct selling, how then should it be applied to yield good results?

Check out the tips to direct selling below;

  • Love Your Product 

It is easier to speak well of a product that you love and not just love but that you’ve also used.

When your potential customers know that you use the product and the effectiveness is evident, this will help to speed up their acceptance of the product and translate into more patronage and sales. 

  • Know Your Audience

Everyone is not your audience and so not everybody will patronize you. Even if your product is water, you cannot have everyone as your customer. This, therefore, implies that it is important that you know your customers and put your effort into addressing them instead of wasting time speaking to everyone. 

Once you can identify your market, you will then work towards ensuring that your products meet up to their expectations.

  • Build Relationships

You are indeed in business to make money but the best way to make this money is by building good relationships with your customers and targeted clients.

Identify the challenges of your customers, make them see that you care and that you are willing to provide a solution. With this, you will easily get their attention and they will end up not just being your customers but will also refer others.

Final Thoughts

Direct selling is a profitable business model that anyone can take advantage of to make more money. It is flexible, easy to start and there is potential for growth.

The different types of direct selling methods discussed above have their respective pros and cons, so choose the one that works best for you and start earning. 

Lily & The FBM Team
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