Direct Selling: Understanding, type, advantages, shortcomings and tips

      Comments Off on Direct Selling: Understanding, type, advantages, shortcomings and tips

Direct Selling: Understanding, type, advantages, shortcomings and tips

Direct Selling Understanding type advantages shortcomings and tips

Direct Selling or direct sales can be an effective way to build flexible and low-cost businesses. This method allows you to reduce advertising costs, avoid overhead costs, and build a durable customer relationship.

This method refers to the sale of products or services away from fixed retail locations. These products are marketed and sold directly through independent sales representatives also known as consultants, presenter, distributors, and various other names.

Want to know Direct Selling in more depth? Read on this article until it’s finished:

What is Direct Selling?

Direct Selling or direct sales are product sales in non-retail settings, for example, at home, online, or other places that are not stores.

It removes intermediaries involved in distribution, such as wholesalers and regional distribution centers. Conversely, the product is sent directly from the manufacturer to the sales company, then to representatives or distributors, and finally to consumers.

Products sold through direct sales are usually not found in traditional retail locations. This means finding a distributor or representative is the only way to buy it.

Direct sales are usually commonly associated with network marketing business. But they are not the only ones who use direct sales.

Many B2B companies use direct sales to target and sell to their final customers. For example, many businesses that sell office equipment will send their representatives directly to stores that can use their services.

It is important to note that Direct Selling is not the same as direct marketing. In the case of sales first, individual distributors or representatives reaches customers directly. While in direct marketing cases, the company markets directly to the client.

Type of Direct Selling

Sometimes, this direct sales method is used in combination. They are not exclusive to each other, the type of direct marketing is as follows:

Direct Selling One Level or Single-Level Direct Sales

This type of direct sale is usually done face-to-face, for example through a door-to-door or one-on-one presentation.

Still, this can also be done online. As a result, Wiraniaga obtained their income from the sale of commissions and occasional bonuses from the company where their products were obtained. They do not recruit other sales force to receive more income.

Organize sales events or party plants

This type of sale occurs in group settings. The main method for producing sales prospects is to hold social events and offer products for sale.

The seller then uses a party sales plan model as a business source in the future by asking customers whether they also want to have a sales party like that.

Imagine Yana’s company often holds a social event to sell goods and find recruitment members when they don’t sell privately.

Tiered marketing (MLM)

If you are a multi-level business seller, your main focus is to recruit members, not the product itself. What makes MLM different from other types of direct sales is that the income obtained through it is based on the sales and sales commission conducted by other business partners recruited into the company.

MLM is popular with people who want to work from home, but they can risk to participate because the costs in advance are large and strong, the quota that is difficult to fulfill, and payment depends on someone’s recruits.

Most MLM is generally not seen as a good thing. Examples of direct sales companies are Scentsy, Mary Kay, Lularoe, Arbonne, and many others. They also use a party plan model, but to recruit new sales force while selling products.

Advantly Direct Selling

1. More profit margins

The first and foremost benefits are high profit margins for parent companies and sellers. Many entrepreneurs adopt this method to get high profits.

Small entrepreneurs usually have limited funds when starting their business. Therefore, they save the cost of mediators and thus increase their profit margins.

2. There are no store maintenance costs

This happens in a non-retail environment. This means that a seller is not required to establish a shop business to sell his merchandise.

The store is an expensive obligation for the seller. He is required to rent or buy a place to set up his retail store, pay property taxes, keeping stocks full, employing salespeople and people to maintain shops, and other small expenses.

See also  Definition of supply and functions for business progress

All of these costs are paid from profits obtained from sales. Sellers can avoid all these costs with direct sales and can increase their profit margins. In addition, when the seller sold in the store, he was required to buy goods from the manufacturer in number.

The money will disappear if the product sales are not as expected. In fact, sellers can buy a limited amount and can sell more after selling previous stocks.

3. Private contact with customers

The seller has direct contact with its customers. There are various benefits directly related to customers. You can learn about customer needs and can create business opportunities and can provide services to them according to their needs.

For example, fixed customers you can order the products they need or can provide your reference to their friends and family. In this way, you can develop business easily.

4. There are no advertising and marketing fees

The purpose of advertising and marketing is to make people aware of the existence of products and make people know about product quality. The company spends tens of millions of rupiah for advertising and marketing products.

Advertising and marketing costs are part of the variable cost of production. Advertising and marketing costs are obtained from profits obtained by selling products. As a result, the margin of the seller’s profit is reduced.

In such cases, sellers meet customers individually and tell them about products and give them material that contains information about the product. Therefore, advertising and marketing costs are removed, and sellers can save millions of rupiah.

5. Personalized approaches for each customer

Sellers meet customers individually. Therefore, they have the opportunity to carry out personalized sales promotions for their customers. Personalized sales approach has several benefits.

For example, you know that certain customers are sensitive to prices and buy products only with discounts or offers, then you will notify the customer first as soon as there is a discount on the product. In this way, you can convince them to buy large amounts of products.

This is not possible in other sales mode. In other sales methods, one sales technique is used to sell products to everyone.

6. The customer’s reaction will be visible

A seller meets his customers directly to sell products to them. The benefits of meeting directly with customers are you can see their reactions on their faces and change your sales promotion based on their reaction.

On the other hand, in retail stores or online shopping sellers do not see customer reactions and thus cannot suggest an agreement immediately to convince customers.

7. Product demonstration

Another important benefit of other types of sales is that you can provide a demonstration of your product to customers. You win your customer’s trust by giving them a demonstration because they can see what they can check for what they put their money.

Product demonstrations reduce the possibility of complaints after sales because people will buy your product only if they are satisfied with the demonstration of your product. In this way, you can protect your company’s image.

8. Feedback directly from the customer

That means selling products to your customers. When you meet your customers in a non-retail environment, you have the opportunity to have conversations with them other than just selling.

In this way, you can build a healthy relationship with them where they will feel comfortable to provide honest input about your product.

Getting honest feedback directly from customers is much better than getting feedback from the mediator. You can use this information to improve the quality of your product and maintain customer satisfaction.

9. Customer satisfaction

The last benefit is that you can make your customers satisfied. Most customers feel annoyed when they are not given the right attention in the store, and they have to spend hours looking for products in the store.

Some customers have time constraints to go shopping. In this way, you can approach the new market segment. Therefore, it is not wrong if it is said that customer satisfaction is an additional advantage.

See also  Google Shopping - Definition, How to Use, and Strategy

Lack of Direct Selling

1. It’s hard to reach a wide audience

As we mentioned before, it means approaching every customer individually by going from door to door or holding a party plan house. Therefore, it is difficult for someone to reach out a vast audience.

You can cover people who leave the most cities, and will challenge for you to entertain all customers at the same time.

2. Affecting personal life

This requires too much time from the seller. When you have invested your money, you want to make sure you don’t lose your money. Therefore, you will be less on vacation like everyone else in this business.

You even need to work on your weekend because this is the only one when people are free and can come to your business meeting or can sit with you and listen to you patiently when you go to their home to sell your product.

Even though you will get a big profit, but be prepared to compromise with your personal life.

3. Rejection

At present, when there are so many ways to buy goods, people become a little skeptical about buying from someone who comes to their door. Very few people still choose to buy from online sellers. Therefore, you enter the direct sales business to be ready to face many rejections. Moreover, there is a negative image of the seller directly on the market.

For example, people try to avoid meeting them even accidentally because they think they will be forced to buy their products. Therefore, there may be some events when you feel like to give up.

4. Risk of failure

Like all other businesses, there will always be a risk of failure. Therefore, never risk all your wealth. Take small steps and see if your business is successful or not and develop your business day after day.

Tips for Doing Direct Selling Effective

If you want to jump in Direct Selling, here are some recommendations for tips that you can follow:

Focus on building relationships first, not selling. Your first priority must make your clients give their attention and time. Establish relationships and determine the points and their needs so you can offer a solution. Always follow up on new prospects quickly to build new relationships.

Save consistent and detailed customer records. A comprehensive customer database allows building and tracking your network, communicating regularly with clients, and distributes different marketing materials, such as product updates or email bulletins.

Be passionate and knowledgeable about your product. Sellers who have trust in their products and their ability to meet the needs of clients sell more.

Wake up and maintain your network. Your network marketing strategy must be the core of your direct sales business. It is very important to have mutually beneficial relationships with your colleagues, communicate with them, and learn tips on selling them.

Set your sales environment. Every important detail, so plan the presentation room and display your product as a whole, and make sure you come early. Maintain eye contact with your customers and consider how to eliminate all possible disturbances in the room.

Improve your sales skills. Conversation and listening skills You can help you build customer relations that are durable and grow a successful business.

Conclusion

That is the complete discussion of Direct Selling and its advantages and disadvantages. However, being a direct seller will need hard work, network, and desire for what you do, plus research on whatever product you are trying to sell.

In order for your business to grow and increase the number of customers you don’t forget to advertise through the Froggy Ads service, you can start by advertising your product, so that later you can increase visitors on your online business portal. FROGGY ADS is an online advertising service that can help you control all your product campaigns. Helps you target the targeting target you want and give you many choices to market your product.