What is Direct Selling? Daisy Lam & Eric Sin

Contents Definitions of Direct Selling Definitions of Direct Selling Benefits of Direct Selling 3 Perspectives of Direct Selling Direct Selling nowadays Direct Selling nowadays Conclusion Conclusion Questions Questions

Definitions of Direct Selling

FEDSA FEDSA : (old 1996) “The marketing of consumer goods and services directly to consumers in their homes by way of explanation and/or demonstration through a sales person. The location can also be a friend’s home, the workplace of the customer during breaks or other places away from shops.” (2006) “Direct selling is the marketing of consumer goods and services directly to consumers on a person-to-person basis, generally in their homes or the homes of others, at their workplace and other places away from permanent retail locations.”

DSA: “Direct selling is the sale of a consumer product or service,person- to-person, away from a fixed retail location.”

A full understanding of direct selling requires that it be viewed from three perspectives. Operational, Tactical and Strategic

OPERATIONAL PERSPECTIVE ‘Direct selling is a relatively straightforward personal selling activity’ 2 major elements: Face-to-face selling; Away from a fixed retail location.

Direct selling is not….. selling by: Internet Telephone Mail(order) OPERATIONAL PERSPECTIVE

BENEFITS OF DIRECT SELLING OPERATIONAL PERSPECTIVE

Benefits for the consumers Opportunity to try and test the products; He/she can express their needs more clear; Demonstration and consultation in a friendly environment; Direct contact with the seller; Guarantee and after sales service; Flexible buying hours. OPERATIONAL PERSPECTIVE

Benefits for the direct sellers Convenient flexible earning opportunities; Flexible work schedules; Possibility to ‘own’ a business; No formal qualifications required; Training and support from companies; Social contact and personal recognition. OPERATIONAL PERSPECTIVE

TACTICAL PERSPECTIVE ‘ Direct selling can be considered a way of organizing sales activities and the selling function.’

TACTICAL PERSPECTIVE Type of salesperson used:

Location of sales TACTICAL PERSPECTIVE

Sales strategy TACTICAL PERSPECTIVE

Hours per week

Time spent on…..

STRATEGIC PERSPECTIVE ‘Direct selling can be viewed as a channel or mode of distribution, a means of gaining access to a market, or a way of doing business.’

Distribution STRATEGIC PERSPECTIVE ProducerWholesalerRetailerConsumer Traditional (fixed location) Retail Channels ProducerConsumer Retailer

Distribution STRATEGIC PERSPECTIVE ProducerIndependent ContractorConsumer Direct Selling Channels ProducerConsumer Direct Selling Firm Independent Contractor

Direct selling is especially effective for products with a high personal selling elasticity

DS as a way of doing business “invisible” Not spend much money Little start-up capital

WHAT CAN BE SOLD THROUGH DIRECT SELLING?

Products categories sales per products categories (2003) * source:

WHO BUYS FROM DIRECT SELLERS?

Direct selling customers are compare to non-customers : More likely to be female; Younger; Posses more education; Higher income; Less talkative; Sensitive; Sociable; Religious.

Characteristics of direct sellers

Age * source: www.dsa.org

Characteristics of direct sellers: Outgoing Aggressive Enthusiastic Venturesome To be a successful selling agent: Good communicator; Highly motivated; Persistence; Initiatives.

Direct selling nowadays

Estimated 2004 U.S. Direct Sales:

Conclusion Going well with direct selling Customer need to be convinced More research required

QUESTIONS?