Direct Selling in Retail
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. Modern direct selling is done through personal presentation and includes sales made through the party plan, one-on-one demonstrations, and other personal contact arrangements as well as internet sales.
The World Federation of Direct Selling Associations (WFDSA) reports that its 59 regional member associations accounted for more than U.S. $114 billion in retail sales in 2007 through the activities of more than 62 million independent sales representatives. The United States Direct Selling Association (DSA) reported that in 2000, 55 percent of adult Americans had at some point purchased goods or services from a direct selling representative, and 20 percent reported that they were currently (6 percent) direct selling representatives or had been in the past (14 percent).
According to the WFDSA, consumers benefit from direct selling because of the convenience and service it provides, including personal demonstrations and explanations 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 in the beginning.
Most direct selling associations, including the Bundesverband Direktvertrieb Deutschland (the direct selling association of Germany), the WFDSA, and the DSA, require their members to abide by a code of conduct ensuring 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 frequently uses multi-level marketing rather than single-level marketing. In multi-level marketing, the salesperson is paid both for selling and for the sales made by the people he or she recruits or sponsors. In single-level marketing, the salesperson is paid only for the sales he or she makes individually.
Largest Direct Selling Companies
According to Direct Selling News, the largest direct selling companies by 'revenue in 2011' were:
- Avon Products, founded 1886, U.S. $ 11.3 billion
- Amway, founded 1959, U.S. $ 10.9 billion
- Herbalife, founded 1980, U.S. $ 3.5 billion
- Natura, founded 1969, U.S. $ 3.01 billion
- Vorwerk, founded 1883, U.S. $ 3.0 billion
- Mary Kay, founded 1963, U.S. $ 2.9 billion
- Tupperware, founded 1946, U.S. $ 2.6 billion
- Oriflame, founded 1967, U.S. $ 2.1 billion
- Nu Skin Enterprises, founded 1984, U.S. $ 1.7 billion
- Belcorp, founded 1967, U.S. $ 1.6 billion
Direct Selling
A peddler in Vietnam