Direct selling: Difference between revisions

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'''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."<ref>Michael A. Belch George E. Belch ''Advertising and Promotion: An Integrated Marketing Communications Perspective'', 7/e., McGraw-Hill/Irwin, 2006</ref><ref name="Xardel">{{cite book |last= Xardel |first= Dominique |authorlink= Dominique Xardel|title= The Direct Selling Revolution. Understanding the Growth of the Amway Corporation |publisher= [[Blackwell Publishing]] |year= 1993 |isbn= 978-0631192299|pages=3-4 }}</ref>
'''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."<ref>Michael A. Belch George E. Belch ''Advertising and Promotion: An Integrated Marketing Communications Perspective'', 7/e., McGraw-Hill/Irwin, 2006</ref><ref name="Xardel">{{cite book |last= Xardel |first= Dominique |authorlink= Dominique Xardel|title= The Direct Selling Revolution. Understanding the Growth of the Amway Corporation |publisher= [[Blackwell Publishing]] |year= 1993 |isbn= 978-0631192299|pages=3-4 }}</ref>


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.<ref name="WDFSA">[http://www.wfdsa.org/about_dir_sell/index.cfm?fa=whatisds WFDSA - What is Direct Selling?]</ref>
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.<ref name="WDFSA">[http://www.wfdsa.org/about_dir_sell/index.cfm?fa=whatisds WFDSA - What is Direct Selling?]</ref>
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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).
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.
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 marketing|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.<ref>[http://www.dsa.org/pubs/numbers/#COMPSTRUC Direct Selling by the Numbers - 2007]</ref>
By far the majority of direct selling companies use a [[multi-level marketing|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.<ref>[http://www.dsa.org/pubs/numbers/#COMPSTRUC Direct Selling by the Numbers - 2007]</ref>


==Largest Direct Selling Companies==
==Largest direct selling companies==
According to [[Direct Selling News]], the largest direct selling companies, by revenue in 2008<ref>[http://eu.directsellingnews.com/index.php/site/comments/the_billion_dollar_club_how_the_top_companies_compare/ The Billion Dollar Club - How the top companies compare]]</ref>, were -
According to [[Direct Selling News]], the largest direct selling companies, by revenue in 2008<ref>[http://eu.directsellingnews.com/index.php/site/comments/the_billion_dollar_club_how_the_top_companies_compare/ The Billion Dollar Club - How the top companies compare]]</ref>, were -
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==See also==
==See also==
* [[Sales enablement]]
* [[Sales enablement]]

==External links==
==External links==


Revision as of 04:37, 7 October 2009

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."[1][2]

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.[3]

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.[3] 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. [3]

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.[4]

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.[5]

Largest direct selling companies

According to Direct Selling News, the largest direct selling companies, by revenue in 2008[6], were -

Company Name Year Founded 2008 Revenues (USD)
Avon Products, Inc. 1886 10.9 billion
Amway Corporation 1959 8.2 billion
Vorwerk & Co. KG 1883 3.15 billion
Herbalife Ltd. 1980 2.4 billion
Mary Kay Inc. 1963 2.4 billion
Primerica Financial Services Inc. 1977 2.3 billion
Tupperware Brands Corp. 1951 2.21 billion
Forever Living Products Intl. Inc. 1978 2.1 billion
Oriflame Cosmetics 1967 1.68 billion
Natura Cosmeticos SA 1969 1.52 billion
Nu Skin Enterprises Inc. 1984 1.23 billion

See also

External links

Notes

  1. ^ Michael A. Belch George E. Belch Advertising and Promotion: An Integrated Marketing Communications Perspective, 7/e., McGraw-Hill/Irwin, 2006
  2. ^ Xardel, Dominique (1993). The Direct Selling Revolution. Understanding the Growth of the Amway Corporation. Blackwell Publishing. pp. 3–4. ISBN 978-0631192299.
  3. ^ a b c WFDSA - What is Direct Selling?
  4. ^ DSA - What is Direct Selling
  5. ^ Direct Selling by the Numbers - 2007
  6. ^ The Billion Dollar Club - How the top companies compare]
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