Direct selling is a type of marketing that involves selling a product or service directly to the customers in any other location apart from the permanent business location. Direct selling is usually done face to face, although it can also be done using social media. Also referred to as networking, direct selling is based on personal contact with the customer. It works like affiliate marketing, only that direct selling takes a more door-to-door salesman approach. Which is how it was done traditionally.
Direct selling involves getting up close and personal with your client or customer, sometimes demonstrating the uses of your product or service, and even giving them free samples to try out. A good example of a company that uses direct selling is Oriflame.
There are several methods of direct selling, which include:
- Sales at the manufacturer’s head office
- House to house selling: also known as door-to-door selling. This is used usually when introducing a new product on the market.
- Sales by mail order.
- Sales by opening retail shops: this is usually done when the products are perishable, like ice cream. Then the manufacturer could open a retail shop and sell the products to the customers.
- Sales through mechanical devices: this involves the use of vending machines.
Direct selling is making a strong comeback, and it is largely the youths who are involved in this marketing technique, and it is no great wonder why it is so. The entrepreneurial bug has bitten a great number of people, and this has led a lot of people to turn to direct selling as a way to make some money while staying at home and being your own boss. For wholesalers, what does this mean for your businesses?
Manufacturers sell their products to wholesalers, who sell the products to retailers, who finally sell the products to the customers. Direct selling happens when the manufacturer decides to cut out all the middlemen and market straight to the customer.
What Are The Reasons Why Manufacturers Would Turn To Direct Selling?
- The manufacturer is close to most of their customers. In this case, why not just sell to them from the warehouse? There is no need to send the products off to a retailer when the customers are right outside their door.
- The manufacturer may not be satisfied with the retailers. This dissatisfaction could be as a result of many reasons, like bad customer service on the part of the retailer, low profit for the manufacturer, etc.
- The manufacturer may have some products that are perishable, like fruit, or some fashionable items the need to be sold off immediately before they fall out of style or go bad.
Wholesalers can also turn to direct selling for some of these reasons. Just like getting affiliate marketers to promote your product and make sales, you can get sales people to directly sell your products or services to the consumers.
Advantages Of Direct Selling
It is a great option for small manufacturers. They can sell directly to the customers without going through the middle men, and, since they are a small company, they can afford to do so.
Increased sales come with direct selling, because you are getting your revenue straight from the actual consumer, not from any middle people. Manufacturers and wholesalers can increase their sales and their customer bases with direct selling.
Advantages For Those People Who Decide To Be Direct Sellers Themselves
- You are free to work where you want, when you want, and how you want to. Also, you get the products from the companies and market them anyway you want to, because basically, you are your own boss.
- You also get to build teams, and you get commissions based on how much volume your team members get. However, the amount of the commission depends on the company you are selling for
- There is very little to no financial investment. Some companies require you to buy some of the products, some give you the products for a certain starting fee while others can give you products to sell at no cost to you.
- There is no need for employees.
- You do not have to do any inventory or create new content.
- Though you may need strong business builders on your team, you do not need a large number of customers to earn you a healthy and steady business income.
Disadvantages Of Direct Selling
Everything has its downsides: nothing is perfect. With all its good points, direct selling still has its disadvantages, such as:
- Not every product can be sold this way. Manufacturers and wholesalers have to realize that direct selling is limited to certain types of product, such as clothes, shoes, health drinks, supplements, cosmetics, and the like.
- Recruiting and training salespersons may be difficult. Not everyone is meant to be a salesperson.
For The Direct Sellers, The Problems They Could Face
- Direct selling is still sales. Not everyone is meant to work on direct selling.
- You have to make your sales pitch to people you already know, like family, friends, neighbors and colleagues. This could be a very discomfiting situation for some.
- It could be difficult keeping customers or business partners or team members. Some could start out and decide it is not meant for them and back out.
These are the basic things every wholesaler should know about direct selling. While it may be on a fast rise in recent times, it is not in danger of harming your wholesale business yet. There are some products you can’t sell as a direct seller. There are also some products that can only be sold by wholesalers.
Direct selling is a very mobile business, and wholesalers can also get a piece of the action by getting salespersons of their own to employ direct selling to get their products straight to the customers and get feedback from them. It is a great way to test products and services. Also, to gauge how strong the market is for a particular product.
Direct selling is a great way to test products and services and to gauge how strong the market is for a particular product.