DIRECT SELLING INDUSTRY

What is direct selling?

direct selling is the business model in this industry product is sold directly to the customers. this industry is the only industry which is the commissions are divided to the people they are named as "distributors".it is the business to the customer sale.Like many entrepreneurs, direct sellers embrace the spirit of independence. And like industries that are built to last, direct selling has adapted and endured over the decades by preparing generations of Americans for many of the defining moments that changed the course of our nation’s history. The resilience and independence that have been intrinsic to the business for more than a century are fundamental to who we are and where we are going.

Some of the tasks ahead, such as modernizing descriptions of our opportunity, growing the relationship with the ultimate consumer, and committing to ethical business practices and rigorous self-regulation, we will face together.

Every direct selling company has a hand in building the reputation for our way of doing business. Our companies, united with DSA, are making channel-wide efforts to ensure that our customers, sellers, potential sellers, policymakers, investors, and the public at large understand that—in today’s market, this is Direct Selling.

Direct selling is a go-to-market strategy that is an alternative channel to retail. Individual independent distributors market and sell products and services to consumers in direct selling.?

Some of the world’s most storied companies and recognizable brands market today’s leading-edge products through the direct selling channel – these include jewelry, cookware, nutritionals, cosmetics, housewares, energy, insurance, and much more.

The direct selling channel differs from broader retail in how it gets great products and services into the hands of consumers. It’s an avenue where entrepreneurial-minded Americans can represent the products they love, while they work independently to build a business on their own terms.

Consultants forge strong personal relationships with prospective customers, primarily through face-to-face discussions and demonstrations. In this age of social networking, direct selling is a strategy that many marketers of consumer products find more effective than traditional channels.

Eighty-nine percent of direct sellers decide to work part-time, offering busy parents, caregivers, military spouses, veterans, and others flexibility and work-life balance. As advancements in technology create a new American economy whose foundation is built upon the entrepreneurial spirit and independent work, historically, direct selling has been one of the oldest ways millions of Americans have chosen to work independently—long before the advent of the Internet. Direct selling has a long history of substantially contributing to the economy and supporting the millions of Americans involved

an independent sales force

Direct selling is unique among retail channels in how it markets products and services to customers. Instead of relying on traditional retail outlets or online marketplaces, direct selling companies maintain a salesforce of millions of independent workers.?

Direct selling in the United States achieved record highs in 2020: retail sales reached $40.1 billion, independent sellers numbered 7.7 million, and customers totaled over 41.6 million. Independent work adds value to the economy, society, and for those who choose to pursue it. Real estate, insurance, travel and technology companies, and well-known brands rely on independent workers to deliver products and services to consumers.?

Independent direct selling consultants earn commissions on sales but work for themselves. They set their hours, create their marketing plans, determine their sales team goals and how to mentor those within it, and decide how to best serve their customers.

Millions of independent direct sellers see advantages in working for themselves, especially in having a chance to build and grow their own business and run it how they see fit. The freedom and flexibility to set their own working hours draws all types of people to direct selling, including parents with young children, students, caregivers, retirees, military spouses, and many more.

Startup costs for most direct selling companies are minimal compared with franchises and other small businesses—a few hundred dollars or less. Direct selling doesn’t rely on overhead like real estate, facilities, equipment, or traditional advertising that can add tens or hundreds of thousands of dollars to the expense of running a business.

types of direct selling

At the same time, and even with last year’s success, some names and terms associated with direct selling raise questions about how we fit into the landscape of legitimate business. Renewed growth has brought with it renewed questions, and sometimes skepticism, about our business model.?

Most, if not all, skepticism is unfounded and borne of misunderstanding.?

The terms network marketing, multilevel, and even door-to-door contribute to the misunderstanding that can conjure up a less-than-flattering perception of direct selling. Even as direct selling benefits the country and the economy, the nomenclature and insider terminology associated with the business model can contribute to confusion about who we are and how we operate.?

Direct Selling includes the following methods of selling:

Party Plan

Direct selling companies whose sellers primarily use parties to market and sell their products are called party plan companies. Parties have moved beyond the homes of hosts to include online parties. A unique attribute of party plan companies is the role of the host; their incentive to host a party typically includes free and discounted products.?

One-to-One

Direct selling companies using this model have sellers marketing their products or services through individual, one-to-one demonstrations and other personal contact arrangements. Individuals also employ online platforms to engage in this type of direct selling.?

Door-to-Door

Direct selling companies that have their sellers book appointments or knock on doors to visit their customers in their homes.

Social Selling

With the rise of social media platforms, direct selling companies are empowering their sellers to share their experiences with their products and services to help generate new leads and sales.?

Big Ticket

Direct selling companies that offer products and services valued at more than $500 have been called big-ticket companies. These include home appliances, vacuums, and kitchen products.?

A Model for Self-Regulation

DSA’s self-regulatory program—the Direct Selling Regulatory Council (DSSRC)—was established in 2019 and is operated under the auspices of the Better Business Bureau’s National Programs. Working in tandem with the DSA Code of Ethics, DSSRC helps ensure consumers and salespeople can have the utmost confidence in the direct selling business model.?

DSSRC independently monitors earnings and product claims disseminated by all members of the direct selling community, regardless of a company’s DSA membership status.

DSSRC has performed. The International Council for Advertising Self-Regulation (ICAS) honored the program in June 2021 with the Best Sectoral Initiative Award. The Council gave the honor for the program’s outcomes that met the award’s highest bar of achievement in terms of tangible results and relevance and for how the DSSRC encourages ethical and responsible marketing and advertising practices.

Today, company leaders and senior executives from across the globe are joining forces in an unprecedented effort to reinforce what those of us who participate in direct selling already know. This global channel, whatever its name, is a positive and increasingly important force for individual sellers and consumers everywhere.

“Our products are the foundation of our distributors’ businesses—Herbalife Nutrition consumers love our products. They also love the experience and community that our distributors build around the product. It’s a natural intersection that provides exposure to the business opportunity.” —Randall Popelka, Vice President, Global Government Affairs Herbalife Nutrition

As the retail economy transforms, businesses must do better to understand their ultimate consumer. As direct sellers, we must navigate and foster the relationship between our brands and customers without doing a disservice to those most important relationships with our independent sellers.” —Danny Lee, President & CEO, 4Life Research

“Our language, a true by-product of our history, contributes to the myths and misunderstandings surrounding us. Language that is easy to understand helps all audiences—including regulators who are confused by our terminology—better understand who we are and what we do.” —Mark Statsny, Chief Sales Officer Scentsy

“Compensation plan experts joined DSA at meetings with Federal Trade Commission officials to discuss the finer points of multilevel compensation plans that often leave regulators focused on a plan’s complexities. These officials reason that if they can’t understand the plans, then a typical consumer can’t understand them. And if a typical consumer can’t understand it, the potential exists for abuse and deception.” —Joe Mariano, President and CEO, DSA

“Given today’s highly charged regulatory climate, providing distributors with resources to share accurate product and earnings claims plays a critical part in supporting a culture of compliance within your field. Social media has provided consumers and the press a stronger voice to broadcast their opinions or experiences, which has emphasized the negative impact of misleading statements.“ —Jemima Wechsler, Group Vice President, Compliance, Team Beachbody

conclusion on direct selling

In conclusion, direct selling offers a viable pathway to entrepreneurship for individuals seeking flexibility, personal growth, and income potential. However, it's not without challenges, including income variability, market saturation, and regulatory considerations. Success in direct selling often hinges on perseverance, effective sales skills, and choosing a reputable company with a supportive community. Before embarking on this journey, carefully weigh the pros and cons discussed to determine if direct selling aligns with your career aspirations and lifestyle.Whether you're considering direct selling as a full-time venture or a side hustle, understanding its nuances and potential pitfalls will empower you to make an informed decision about this dynamic industry.

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