What is Direct Selling?
Introduction
Direct selling is a dynamic, vibrant, rapidly expanding channel of distribution for the marketing of products and services directly to consumers. The purpose of this paper is to describe direct selling and the benefits that it brings to the marketplace.
Founded in 1978, the WFDSA is a non-governmental, voluntary organization representing the direct selling industry globally as a federation of national Direct Selling Associations (DSAs). There are presently over 57 national DSAs represented in its membership, and in 2007 it is estimated that worldwide retail sales by its members accounted for more than US$109 Billion through the activities of more than 58 million independent sales representatives.
The World Federation and its national DSAs have always understood the necessity for ethical conduct in the marketplace and as such the WFDSA has developed a World Codes of Conduct for Direct Selling which all national DSAs have approved and implemented in their national codes. All direct selling companies agree to be bound by these codes as a condition of membership in a national DSA.
What is Direct Selling? (Page 3)
Direct selling provides important benefits to individuals who desire an opportunity to earn an income and build a business of their own; to consumers who enjoy an alternative to shopping centers, department stores or the like; and to the consumer products market. It offers an alternative to traditional employment for those who desire a flexible income earning opportunity to supplement their household income, or whose responsibilities or circumstances do not allow for regular part-time or full time employment. In many cases, direct selling opportunities develop into a fulfilling career for those who achieve success and choose to pursue their independent direct selling business on a full time basis.
The cost for an individual to start an independent direct selling business is typically very low. Usually, a modestly priced sales kit is all that is required for one to get started, and there is little or no required inventory or other cash commitments to begin. This stands in sharp contrast to franchise and other business investment opportunities which may require substantial expenditures and expose the investor to a significant risk of loss.
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. Moreover, direct selling provides a channel of distribution for companies with innovative or distinctive products not readily available in traditional retail stores, or who cannot afford to compete with the enormous advertising and promotion costs associated with gaining space on retail shelves. Direct selling enhances the retail distribution infrastructure of the economy, and serves consumers with a convenient source of quality products.
An important component of the Direct Selling industry is multilevel marketing. It is also referred to as network marketing, structure marketing or multilevel direct selling, and has proven over many years to be a highly successful and effective method of compensating direct sellers for the marketing and distribution of products and services directly to consumers.
Direct selling should not be confused with terms such as direct marketing or distance selling which may be described as an interactive system of marketing that uses one or more advertising media to effect a measurable response and/or transaction at any location, with this activity stored on a database. Some commonly known types of direct marketing and distance selling techniques are telemarketing, direct mail, and direct response.
Although direct selling organizations occasionally use some direct marketing or distance selling techniques and technology to enhance their businesses, the primary difference between the two methods of marketing is the face to face, or personal presentation that is always an aspect of the direct selling relationship.
Choosing an Opportunity in Direct Selling
Identify a company and product that appeal to you
Contact our member Direct Selling Associations (DSAs) for more information or look in your local phonebook.
Take your time deciding
Does "getting in on the ground floor" mean that everyone joining after you will be less satisfied or happy? A legitimate opportunity won't disappear overnight. Think long-term.
Ask questions
About the company, its leadership, the products or services, start-up fees, realistic costs of doing business, average earnings of distributors, return policies, and anything else you're concerned about.
Get copies of all company literature
And read it!
Consult with others who have had experiences with the company and its products
Check to see if the products or services are actually being sold to consumers.
Investigate and verify all information
Do not assume that "official looking" documents are accurate or complete or even produced by the company, as opposed to the person trying to recruit you.
Need help evaluating a company?
Contact our list of DSAs members, the Better Business Bureau or the government consumer affairs office.
The cornerstone of the WFDSA's commitment to ethical business practices and consumer service is its World Codes of Conduct. Every national DSA pledges that it will require each member as a condition to admission and continuing membership in the DSA to comply with the WFDSA World Codes of Conduct for Direct Selling with regard to direct selling activities both inside and outside of its home country, unless those activities are under the jurisdiction of Codes of Conduct of another country's DSA to which the member also belongs.
Benefits of Direct Selling
Research shows some of the most popular reasons people choose direct selling are:
- Direct selling is a good way to meet and socialize with people.
- Direct selling offers flexible work schedules.
- Direct selling is a good way to earn extra income.
- Direct selling is a good way to own a business.
- Earnings are in proportion to efforts.
Anyone can do it.
There are no required levels of education, experience, financial resources or physical condition.
People of all ages and from all backgrounds have succeeded in direct selling.
Direct sellers are independent contractors. You're your own boss, which means you can:
- Work part-time or full-time - you choose when and how much you want to work.
- Set your own goals and determine yourself how to reach them.
- Earn in proportion to your own efforts. The level of success you can achieve is limited only by your willingness to work hard.
- Own a business of your own with very little or no capital investment.
Receive training and support from an established company.
Avoiding Illegitimate Schemes
Don't make a costly mistake!
Thousands of people have lost a substantial amount of money by participating in pyramid schemes. Many of the victims knew they were gambling (although they didn't know the odds were rigged against them). Many others, however, thought they were paying for help in starting a small business of their own. These people were fooled by pyramid schemes disguised to look like legitimate businesses.
The purpose of this article is to help you avoid falling victim to pyramid schemes, whether simple or disguised. Simple pyramid schemes are similar to chain letters, while disguised pyramids are like wolves in sheep's clothing, hiding their true nature in order to fool potential investors and evade law enforcers.
