Direct selling as a business model gives people a chance to retail products and earn incentives which are based on the turnover achieved in a particular tenure. Direct sales is usually preferred by companies whose products need to be demonstrated to the consumer. These products have certain unique features that distinguish them from other similar category products, which makes them more attractive option than the others.
These products are retailed by network distributors only and not available in the local markets. Majority of the products are first tried and tested by the network distributors themselves. The direct selling companies conduct product trainings for its network distributors to highlight the uniqueness of its products, instructions for use, cost per use, advantages over other similar products in the market, etc. The distributors then share the product with friends, relatives and acquaintances. Therefore, successful direct selling companies understand the need for their network distributors to have confidence in the products and embolden them by offering satisfaction guarantee on their product range.
During personalised interactions with prospective customers there are more chances of educating them about other available products in the convenience of their homes in the language they understand and addressing the queries they may have thereby increasing the chances of up-selling.
The Achilles heel of direct sales is the loss of network distributors who give up after finding a few customers who like the products but never reorder due to the ordeal of finding a new distributor. For consumers, the exercise of finding a company associate in a particular area is a hassle.
For years, direct selling companies have tried to get their network distributors to maintain records and follow up with customers of distributors who drop out. Seven years ago, research showed that 6 out of 10 customers are lost due to this - the problem of finding a new distributor. But the internet can solve this issue if the company embraces it and shares the funds with the distributor organisation. Indeed it may be a way to improve recruiting and renewal of distributorships, stability and sales growth.
To become and remain effective, direct selling companies must match their great strength in developing relationships with new technologies. This combination will enhance the personal connections so critical to satisfaction, recruitment and retention of both the consumer and the seller.
The importance of ethics in the selling relationship, relative to a presentation of the business model and/or the product or service, has been a longstanding focus of the industry and may well become one of its most important and valued competitive advantages. A good web presence adds to the credibility of the company and products the distributor represents, assisting recruitment of customers and distributors.
If customers and distributors can find correct and detailed information about the product on the internet, then they need not learn every aspect of the product, company, compensation plan etc all at once. The brand is therefore promoted consistently and not misrepresented, whether due to ignorance or on purpose.
The internet also helps the company maintain regular, immediate and cost-effective communication with all the parties for product updates as well as train, inform, motivate and recognise the hundreds and thousands of distributors. In Australia, in the 70s and 80s companies would send out a magazine and wait six weeks for the response to, say, a new product launch. Therefore, internet is a wonderful support system for the direct selling company and lightens the distributors' logistical burden, leaving them with more time to invest in their business and family. E-commerce portals should seriously consider direct selling to approach majority of our population with limited or no access to the internet.