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]
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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
- World Federation of Direct Selling Associations
- Direct Selling Association (USA)
- Direct Selling Education Foundation
- Direct Selling 411 - DSA Resource Site
- Official Blog of the DSA
- Direct Selling Association (Malaysia)
- Direct Selling Womens Alliance
Notes
- ^ 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 978-0631192299.
- ^ a b c WFDSA - What is Direct Selling?
- ^ DSA - What is Direct Selling
- ^ Direct Selling by the Numbers - 2007
- ^ The Billion Dollar Club - How the top companies compare]
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