How the Direct Sales Works

Posted by Shweta Sharma on February 5th, 2020

A direct sale, as the term, nearly explains involves selling directly to the end-user or the consumer. Yet this term can be very confusing and misleading to the person. So here is a quick catch up on what direct selling means and other things like how does it work? Why direct sales or why not? Pros and cons and other related stuff like that.

 Direct sales

Direct sales are when the product or the commodity being directly sold by the manufacturer to the consumer or the end-user (Who is not going to sale it further for a profit) without the involvement of the traditional retail seller.

There any many benefits of direct selling which are as follows

There is no involvement of wholesalers or retailers: All the indirect channels are taken out of the chain. And the wholesalers and retailers margin do not add cost to the product.

Lesser marketing efforts and expenses:

The marketing is targeted to the niche market it cut down the unnecessary broad marketing expenses. The more cost-effective marketing channels like a pamphlet, house parties, direct calling can be used instead of the banners on other media like TV and radio.

First-hand feedback from the consumer:

As the goods are directly reaching the consumer so does the user’s feedback easily make its way to the manufacturer Which further takes out efforts and money traditionally invested in consumer response and feedback survey. The direct feedback being more credible serves better value to the company.

Short sales chain:

The wholesalers and the retailers being taken out of the equation it drastically shortens the distance between the manufacturer and the end-user.

Direct sales can happen anywhere from home, office or online channel as it is independent of any physical retail establishment

And the best part

Cost-benefit is transferred to the end-user: Many benefits like mentioned above, reduces the cost and thus the end-user is charged much lesser than the traditional retail sales.

Broadly there are two types of direct sales. Single-level Direct Sales and Multi-level Marketing (MLM)

Single-level Direct Sale:

Single level direct sales are any sales that involve only the buyer and the seller. This type of sales can be carried out with door to door sales, tele calling, online pamphlets, etc. This is simple direct sales

Multi-level Marketing (MLM):

Multi-level marketing is generally referred to as an MLM. It is direct sales as well as an affiliate marketing tool. Unlike single level sales where the only seller and the buyer are involved, MLM works on many levels. This can form a huge network and hence also called network marketing. In MLM marketing every participant earns a commission on the sales. It gives great scope for individuality and entrepreneurship. DO handle the vast network of the members MLM software are used to provide the efficiency and accuracy required for small business or the multinational ventures involved in MLM

Often people confuse the MLM or the door to door sales with direct sales and use these terms interchangeably. While MLM and door to door sales which come under the single-level direct sales are part do direct sales. Direct sales are a vast concept and can’t be used interchangeably. Direct sales can be claimed to be the oldest form of sale which continuously involved with technology and the time.