You’ve probably heard of names like these: Avon, Kleeneze, Betterware, Utility Warehouse, Tupperware, Amway, Herbalife, Kirkby Homecare, NYR Organic, Cambridge Weight Plan.
But do you know how these companies work?… And, could they work as a business opportunity for you?
These companies and many others like them use what is known as the direct selling model to sell their goods.
The direct selling model:
Direct selling involves the marketing and selling of products directly to consumers; that is, away from a fixed retail location like a shop or on the Internet.
Initially direct selling mainly involved door to door selling… of the Ding Dong Avon Calling type that become famous during the 60s and 70s. Nowadays it is just as likely to involve demonstrating and selling goods to customers in their own homes, perhaps using party plan, or maybe workplace demonstrations.
Most direct selling companies recruit self-employed business people to become agents, distributors and consultants in their own area. You sell the product to your friends, neighbours and acquaintances and earn a commission on the sales you make.
Many direct selling opportunities have an extra dimension: They allow agents/distributors/consultants to recruit other people beneath them to form a network. Then the recruiting agent also receives a commission on goods sold by all the agents in their network too.
So does direct selling work… and, why do companies use it?
Yes it does, and there are a number of companies using this business model (such as Avon) that have been around for decades. It’s popular because it is a low cost method of getting goods to consumers. It also makes use of personal relationships between agents and customers – customers are more likely to buy from people they know and like in a social situation.
So what do you need to bear in mind before joining a direct selling scheme?
- Some direct selling opportunity packages are sold by very high-pressure marketing methods. They’re often not as easy or as good as they look once you scratch the surface.
- Is the product good, of good quality, and sold to the consumer at a competitive price? Over the years there have been a number of direct selling schemes that have failed because the product isn’t something many people buy – or it is available cheaper in the shops.
- Do you enjoy selling? To make a success of direct selling you need to be passionate about your product, and enjoy meeting people – usually in their own homes – and showing products to them. It’s not for shy, retiring types.
- It’s not easy to find other good salespeople, recruit them into a network and get them to sell for you.
- Some direct selling opportunities operate in a very crowded marketplace. With some packages you’ll find there are lots of agents all competing for a very limited number of customers.
Direct selling can represent a good moneymaking opportunity – but you need to choose your package carefully. And bear in mind that it can take a lot of hard work, dedication (and selling!) to achieve a good level of income from them.