What is Direct Selling?

1. What is Direct Selling? Daisy Lam & Eric Sin

2. Contents • Definitions of Direct Selling • Benefits of Direct Selling • 3 Perspectives of Direct Selling • Direct Selling nowadays • Conclusion • Questions

3. Definitions of Direct Selling

4. 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.”

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

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

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

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

9. OPERATIONAL PERSPECTIVE BENEFITS OF DIRECT SELLING

10. 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.

11. 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.

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

13. TACTICAL PERSPECTIVE Type of salesperson used:

14. TACTICAL PERSPECTIVE Location of sales

15. TACTICAL PERSPECTIVE Sales strategy

16. Hours per week

17. Time spent on…..

18. 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.’

19. STRATEGIC PERSPECTIVE Distribution Traditional (fixed location) Retail Channels Producer Wholesaler Retailer Consumer Producer Retailer Consumer

20. STRATEGIC PERSPECTIVE Distribution Direct Selling Channels Producer Independent Contractor Consumer Producer Direct Selling Firm Independent Contractor Consumer

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

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

23. WHAT CAN BE SOLD THROUGH DIRECT SELLING?

24. Products categoriessales per products categories (2003) *source: www.fedsa.be

25. WHO BUYS FROM DIRECT SELLERS?

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

27. Characteristics of direct sellers

28. Age *source: www.dsa.org 2003

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

30. Direct selling nowadays

31. Estimated 2004 U.S. Direct Sales:

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

35. QUESTIONS?