Direct selling
Encyclopedia
Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location. Peddling is the oldest form of direct selling. Modern direct selling includes sales made through the party plan
, one-on-one demonstrations, and other personal contact arrangements as well as internet sales. A textbook definition is: "The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs."
Industry representative, the World Federation of Direct Selling Association
s (WFDSA), reports that its 59 regional member associations accounted for more than US$114 Billion in retail sales in 2007, through the activities of more than 62 million independent sales representatives. The United States Direct Selling Association (DSA) reported that in 2000, 55% of adult Americans had at some time purchased goods or services from a direct selling representative and 20% reported that they were currently(6%) or had been in the past(14%) a direct selling representative.
According to the WFDSA, 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. In contrast to franchising, the cost for an individual to start an independent direct selling business is typically very low with little or no required inventory or other cash commitments to begin.
Most direct selling associations, including the Bundesverband Direktvertrieb Deutschland, the direct selling association of Germany
, and the WFDSA and DSA require their members to abide by a code of conduct towards a fair partnership both with customers and salesmen. Most national direct selling associations are represented in the World Federation of Direct Selling Associations (WFDSA).
Direct selling is distinct from direct marketing
because it is about individual sales agents reaching and dealing directly with clients. Direct marketing is about business organizations seeking a relationship with their customers without going through an agent/consultant or retail outlet. Direct selling often, but not always, uses multi-level marketing
(salesperson is paid for selling and for sales made by people he recruits or sponsors) rather than single-level marketing (salesperson is paid only for the sales he makes himself).
, the largest direct selling companies, by revenue in 2010, were -
Party plan
The party plan is a method of marketing products by hosting what is presented as a social event at which products will be offered for sale. It is a form of direct selling...
, one-on-one demonstrations, and other personal contact arrangements as well as internet sales. A textbook definition is: "The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs."
Industry representative, the World Federation of Direct Selling Association
Direct Selling Association
The Direct Selling Association is the name of several similar trade associations in the United States, United Kingdom, Australia, Malaysia, Singapore, and New Zealand that represent direct selling companies, including those that use multi-level marketing compensation plans or party plan product...
s (WFDSA), reports that its 59 regional member associations accounted for more than US$114 Billion in retail sales in 2007, through the activities of more than 62 million independent sales representatives. The United States Direct Selling Association (DSA) reported that in 2000, 55% of adult Americans had at some time purchased goods or services from a direct selling representative and 20% reported that they were currently(6%) or had been in the past(14%) a direct selling representative.
According to the WFDSA, 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. In contrast to franchising, the cost for an individual to start an independent direct selling business is typically very low with little or no required inventory or other cash commitments to begin.
Most direct selling associations, including the Bundesverband Direktvertrieb Deutschland, the direct selling association of Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, and the WFDSA and DSA require their members to abide by a code of conduct towards a fair partnership both with customers and salesmen. Most national direct selling associations are represented in the World Federation of Direct Selling Associations (WFDSA).
Direct selling is distinct from direct marketing
Direct marketing
Direct marketing is a channel-agnostic form of advertising that allows businesses and nonprofits to communicate straight to the customer, with advertising techniques such as mobile messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional...
because it is about individual sales agents reaching and dealing directly with clients. Direct marketing is about business organizations seeking a relationship with their customers without going through an agent/consultant or retail outlet. Direct selling often, but not always, uses multi-level marketing
Multi-level marketing
Multi-level marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation...
(salesperson is paid for selling and for sales made by people he recruits or sponsors) rather than single-level marketing (salesperson is paid only for the sales he makes himself).
Largest direct selling companies
According to Direct Selling NewsDirect Selling News
Direct Selling News is a full-color business magazine that releases 12 issues per year and serves executives in the direct selling industry...
, the largest direct selling companies, by revenue in 2010, were -
| Company Name | Year Founded |
|---|---|
| Avon Products Avon Products Avon Products, Inc. is a US cosmetics, perfume and toy seller with markets in over 140 countries across the world and sales of $9.9 billion worldwide as of 2007.-Business Model:... |
1886 |
| Amway Amway Amway is a direct selling company and manufacturer that uses network marketing to sell a variety of products, primarily in the health, beauty, and home care markets. Amway was founded in 1959 by Jay Van Andel and Richard DeVos... |
1959 |
| Natura Natura Natura is the Brazilian leading manufacturer and marketer of skin care, solar filters, cosmetics, perfume and hair care products.... |
1969 |
| Vorwerk Vorwerk (company) Vorwerk is an international diversified corporate group headquartered in Wuppertal, Germany. The main business is the direct distribution of various products like household appliances , fitted kitchens or cosmetics... |
1883 |
| Herbalife Herbalife Herbalife International is a global nutrition, weight-loss and skin-care company. The company was founded in 1980 and it employs around 4,000 people worldwide. Herbalife reported net sales of USD 2.7 billion in 2010... |
1980 |
| Mary Kay Mary Kay Mary Kay, Inc. is a privately held company that sells skin care and cosmetics products. Mary Kay World Headquarters is located in Addison, Texas, United States, a Dallas suburb. Mary Kay Ash founded Mary Kay Inc. on Friday, September 13, 1963... |
1963 |
| Tupperware Tupperware Tupperware is the name of a home products line that includes preparation, storage, containment, and serving products for the kitchen and home, which were first introduced to the public in 1946.... |
1946 |
| Oriflame Oriflame Oriflame Cosmetics S.A. is a cosmetics group, founded in 1967 in Sweden by the brothers Jonas af Jochnick and Robert af Jochnick. The company sells skin care, cosmetic products and other related products through an independent sales force of over 3 million people.-Brief history:Oriflame was... |
1967 |
| Forever Living Products Forever Living Products Forever Living Products International, Inc. is a Scottsdale, Arizona-based direct selling company that sells aloe vera and bee derived drinks, cosmetics, nutritional supplements, and personal care products in over 145 countries. Forever is the world's largest grower, manufacturer and distributor... |
1978 |
| Nu Skin Enterprises Nu Skin Enterprises Nu Skin Enterprises is an American direct selling company that develops and distributes personal care products and nutritional supplements that are sold under the Nu Skin and Pharmanex brands. Nu Skin was founded in 1984 in Provo, Utah.... |
1984 |