Direct Selling is a dynamic, vibrant, rapidly expanding
channel of distribution for marketing products and services
directly to the end users. It involves marketing of
products and services directly to consumers in a person-to-person
manner, away from permanent retail locations.
In other words,
Direct selling can best be described as the marketing
of products and services directly to consumers in
a face to face manner, generally in their homes or
the homes of others, at their workplace and other
places away from permanent retail locations.
It typically
occurs through explanation or personal demonstration
by an independent direct sales person. These sales persons
are commonly referred to as direct sellers or Network
Marketers.
Direct Selling
is the sales industry's umbrella term for personal
sales methods that include Multi Level Marketing (MLM),
Network Marketing, Referral Marketing, Relationship
Marketing and even the Home Based Business.
In fact Direct
Selling goes much beyond marketing of a products or
a service of a particular company to customers. Instead
it requires a person to recruit more people (who would
consume their products for self-use as well as sell
it to others) and to lead them through continuos education,
training and motivation.
Direct Selling
has proven to be a highly successful and effective
method of distributing products and services directly
to consumers over many years, which compensates an
independent distributor through commission.
In Direct Selling
a distributor receives commission on multi levels
i.e. from his direct sales and from the sales generated
by his direct sales called the team sales. The most
successful person in such a business model has several
layers of distributors working below him, each layer
earning money for the layers above.
During the
initial stages of this industry evolution in the beginning
of the 19th century in the USA, almost every business
model offered a compensation program that had multi
levels from where one would receive sales commission
or sales incentives. Hence the industry was initially
referred to as Multi Level Marketing.
Due to American's
craze for shorter versions, MLM, the abbreviation
of Multi Level Marketing became a more popular term.
Unfortunately,
since a series of financial scams, frauds, and Ponzi
schemes devastated the image of the industry during
1920s and 1930s, associating with a MLM company was
becoming a thing of the past.
But as all
things sail through the lean patch, MLM too passed
the test of the time. Sensible entrepreneurs, those,
who had understood the potential of the industry,
were committed to revive it to help it regain its
past glory.
Old wine in
the same bottle though the industry was re-christened
as Network Marketing Industry, which was later upgraded
to Network Distribution.
After the landmark
victory of Amway, the grandfather of Network Marketing,
the industry was referred to as the Direct Selling
industry and many progressive countries went on to
establish National DSAs (Direct Selling Associations)
with self-regulations in order to safeguard and nurture
the industry.
Today, direct
selling industry has evolved and developed into a
wide array of companies, product ranges compensation
plans and cultures.
This unique,
powerful system of free enterprise continues to grow
attracting more and more people towards it. As we
are in the 21st century, direct selling has never
been so well respected, so healthy, so attractive
or so rewarding.
Wall Street
Journal sings of its glory and Fortune 500 companies
are embracing direct selling to sell their products
directly to end users. It is now an industry that
has crossed an annual turnover of 100 Billion US$.
People form independent sales organizations, where
sales people themselves, rather than the company,
hire, train and manage their own sales force.
In essence,
each person has the opportunity to build his or her
own sales organization with the company providing
products and paying handsome commission cheques.
In the United
States of America, which is leading this industry,
one of every three American is believed to purchase
products through independent distributors. Similar
is the case with most of the advanced countries of
Europe and the rest of the world.
It is only
natural that based on these trends and consumer behavior
elsewhere in the world, Indian consumers too are inclined
to follow suit. A burgeoning economy and an even faster
growing middle-class population with an increased
disposable income, the Indian consumer is finally
come of age discerning taste, the demand for quality
and value for money.