Direct selling involves making a personal connection with leads and leveraging your network to generate revenue.
Nov 14, 2023
In Death of a Salesman, playwright Arthur Miller captured the passing of an era—an identity, even—with his doomed door-to-door salesman protagonist Willy Loman, whose dwindling sales of an unidentified product eroded his sense of self. But salespeople never died; they just adapted to the changing landscape of direct sales. Curious about selling products directly to customers? Here’s a guide to the basic types of direct sales.
Direct selling is a sales transaction with no intermediary between you and your customer. In this business model, sales do not go through the traditional supply chain from manufacturer to distributor to wholesaler or retailer to customer. In the past, direct sales companies had a limited scope and reach (think Tupperware hosting parties with a living room’s worth of potential buyers). Now, many kinds of companies use the direct sales model, including business-to-business (B2B) companies. Direct sales require networking. Sales take place over the phone or email, cold calling or cold messaging potential customers, or at events or temporary pop-up stores. Sales also occur in homes, offices, or on social media. Sellers can work from almost anywhere and keep flexible hours. That makes direct sales attractive as a new career or side hustle but can also mean long work hours since you’re playing many roles: marketer, distributor, and seller.
Direct sales take place in a non-retail environment. There are three main types of direct salesbusiness models, differing based on your role (seller or recruiter) and your profit model (sales or commissions):
Also known as single-level marketing, these are one-on-one sales, from you to your customer. You’ll buy products directly from a parent company or manufacturer and resell them to your client base, keeping the difference as a profit.
These sales happen during social events or other group gatherings in customers’ homes or businesses. Like single-level sales, the profit you make is the difference between the cost of your inventory and the price received. With this model, there is the potential for recruitment, as guests host parties and other events. In that case, your income would come both from sales and from commissions on the sales of people you recruit.
Here, the focus is less on sales and more on recruiting other salespeople. Your income will come mostly from commissions earned by the sales team you recruit. MLMs are often conflated with pyramid schemes, since they’re similar in structure, but MLMs are legal and they sell a legitimate product, whereas pyramid schemes exclusively generate revenue from new recruits.
Thinking about direct sales as a model for your online brand? There are some benefits and a few potential pitfalls to consider before you launch your own business.
Here are the disadvantages:
When you’re ready to get your direct salesmodel started, here are a few tips to make sure you can be successful from the beginning and have best practices set up for the long run:
When you’re choosing a product type, look at retail areas that already have some other direct sales companies, ensuring your customerbase is comfortable with the process of buying from a direct seller. Research other companies in your retail space, and think about what you can offer that will separate you from the crowd.
What makes your product unique and what makes you unique as a seller? What makes your product special? What’s your personal connection to the product you’re selling?
Think about how your story connects with what you’re selling—how you discovered it, what it means to you personally, and why you’re passionate about sharing it with your customers. One of the benefits of direct sales is an intimate link between a customer and seller. Emphasize this personal connection to show the human side of your brand.
Focus on relationships, not sales. Use social media platforms to spread the word about your brand, incorporating live Facebook Q&A sessions and Instagram Stories. Video works great to engage your target audience and helps with product tutorials and personal engagement.
Consider the 5:3:2 rule: For every 10 social media posts, include five relevant posts from other sources, curate three that speak about your business, and use the last two as personal posts unrelated to the product that give your brand a more human feel.
Monitor and analyze your customerbase. It’s crucial to know your network, keep track of who is buying from you, and continue to hone your marketing based on your findings. Make changes as you go, like A/B testing your email campaigns and changing subject lines, to see what is most effective.
Yes, with careful planning. Profits can fluctuate. Sales might spike during the holidays or other seasons based on what you’re selling.
Direct salesbusinesses sell everything from health and wellness products to home goods. Direct sales has grown into a wide-ranging industry. Some of the largest direct sales companies today include:
It can be, depending on your availability, commitment, and goals. The flexible hours and personal control offered by direct sales businesses can be appealing to self-motivated entrepreneurs, but the time and energy needed to build networks and chase sales can be daunting.
