Regardless of whether you know that it’s a direct sale, you’ve probably encountered people who engage in the practice — the door-to-door knife salesperson, a family member who sells cosmetics, or maybe Uncle Rico from Napoleon Dynamite has shown up at your door, offering model ships to help hawk plastic dinnerware?
Either way, direct sales is an immediately personal type of selling that requires an entrepreneurial spirit and initiative. It can be lucrative and rewarding, but there’s a lot to know if you’re considering pursuing it.
Here, I’ll give you perspective on what direct sales is, the different subsections of the concept, and key tips on how to do it right.
Table of Contents
- What is direct sales?
- Direct Sales Examples
- Types of Direct Selling
- How to Succeed in Direct Selling
What is direct sales?
Direct sales is selling a product or service directly to customers without intermediaries, typically outside a retail environment. Sellers interact directly with potential customers to promote and sell, and the approach helps companies have more control over the sales process and build rapport and relationships with their customers.
Direct sales differ from conventional sales as many involve an intermediary or multiple parties involved before a customer buys. For example, in a traditional situation, a wholesaler may sell to a retailer, who then sells a product to an end user. In direct sales, the wholesaler would sell directly to the end user.
Direct Sales Examples
If you’re anything like me, examples are always helpful.
Avon might be the most well-known and recognizable example of direct selling. In the past, it operated through a network of individual representatives responsible for selling directly to consumers and would get paid a commission for each sale. They would travel and make in-person connections that drove sales and also earn a commission for recruiting more direct sales representatives for the company.
Direct sales are also common in real estate in for-sale-by-owner situations. The property owner or developer is responsible for marketing the property, negotiating, and closing the deal themselves without the help of a real estate agent or broker.
Types of Direct Selling
- Direct-to-Consumer (D2C)
- Single-Level Selling
- Party-Plan or Host Selling
- Multi-Level Marketing
1. Direct-to-Consumer (D2C)
In direct-to-consumer sales, a business sells directly to the end user without intermediaries. For example, while eCommerce can venture out of direct sales (think Amazon), a business selling its own products online to the end user could be classified as a direct sales business.
2. Single-Level Selling
Single-level direct sales are performed primarily through one-on-one meetings between salespeople and prospects. This brand of direct sales can be conducted through mediums like in-person pitches, over the phone, via catalogs, or online.
It often has a fairly straightforward commission structure. The companies supporting these kinds of sales generally offer commission for each sale and might have other incentives available for meeting specific goals or quotas.
3. Party-Plan or Host Selling
Party-plan or host selling is generally conducted in a group setting — often through a party or event, dedicated to pitching a specific offering. It usually entails a direct salesperson presenting to prospects in someone's home. This was a popular form of direct selling in the past.
Tupperware is notorious for this brand of direct sales, with a significant portion of its sales coming from "Tupperware Parties" conducted by direct sales reps.
3. Multi-Level Marketing
Multi-level marketing is a mode of direct sales that can encompass aspects of single-level and party-plan sales, but the practice contains a recruitment element not generally associated with the other two.
In MLM, representatives sell products themselves while recruiting and training other representatives. Once the recruited reps start selling products, their recruiters earn a partial commission for their efforts — all on top of the commission those original reps earn through their own sales.
I sometimes conflate MLM operations with illegal pyramid schemes — a model based on recruiting new reps via promising payments solely for their ability to recruit other reps instead of actually selling a product.
99% of multi-level marketing operations are legitimate, though, and are distinguished from pyramid schemes in three ways: the product is legitimate and of high quality, the income reps earn comes from sales and recruitment instead of just recruitment, and recruitment isn’t billed or pushed as the primary focus of the operation.
How to Succeed in Direct Sales
- Understand your product and its value proposition.
- Sincerely believe in your product.
- Understand your company and your role within it.
- Maintain contact with your prospects.
- Keep your eye on the prize and remain consistent.
- Prioritize relationship building.
1. Understand your product and its value proposition.
I know this point is key in any type of sales, but it’s particularly important in direct sales. You’re going to be immediately interfacing with customers, so you probably won’t have a lot of leeway to refer to other materials to help you clear things up or better convey your points.
You have to know your product front and back to answer any questions or concerns that might arise as they come up. You also have to pinpoint and reliably articulate your product's value proposition. It's easy to drone on about all your product's awesome features — it's harder to translate that information into points detailing concrete benefits.
If you want to thrive in direct selling, it's important to both show and tell. Some questions you can ask yourself as you prepare are:
- How, specifically, will your product improve your prospect's lives?
- What problem will your product address?
- Why is that problem important?
- How will your product address that problem better than comparable offerings from your competitors?
In addition, a majority of B2C (which can direct sales) salespeople say that they sell in person. If this sounds like you, the last thing you want is to show up to an in-person appointment and blank. I’d recommend dedicating yourself to learning the ins and outs of what you’re selling. By building this knowledge, you’re ready to show up and close a deal anywhere, regardless of whether you have talking points in front of you.
2. Sincerely believe in your product.
Direct sales is inherently personal — on multiple levels. It's personal in that you're tasked with directly interacting with customers. It's personal in that you have to get well-acquainted with your product. But most of all, it's personal in that you, as an individual, have a significant stake in the process.
Direct Sales is often characterized by personal initiative and aspiration. You're taking it upon yourself to gather the resources, find the motivation, and develop the skills to sell your offering on your own. It's a lot harder to do all that when you don't care about what you're selling.
I would have trouble selling a product that I didn’t legitimately believe has merit and utility. Prospects are savvy and would likely be able to see right through my personal pitch that isn’t backed up by personal investment. If I use the product I’m selling and genuinely believe my prospects can get a lot out of it, I’ll be in a better position to close a direct sale.
3. Understand your company and your role within it.
The company you're selling for is bound to have its own plans and stipulations. Familiarize yourself with every aspect of the business-end of your business. Know the policies and procedures that dictate what you can and cannot say or do when conducting sales. For instance, your company might not allow you to set up your own independent consultant website or have specific protocols for marketing.
Beyond the nuts and bolts of how your company wants you to operate, you also need to understand what you can expect to receive for your efforts. Take the time to comb through your company's compensation plan. Get a feel for any products that are particularly profitable and, in turn, worth more attention and effort on your part.
If you want to get the most out of a direct-selling gig, you need to understand the nuances and boundaries you're working with. Comb through the fine print to make sure you know how and where to best allocate your effort and what you can expect in return.
4. Maintain contact with your prospects.
Direct sales is inherently personal. It's based on immediate engagements with potential customers. If you want to effectively convey your value proposition as a direct salesperson, your prospects will need a front-row seat, so I'd suggest pinning engagements down by setting appointments.
Having appointments on the books and checking in with prospects to affirm those meetings are still on will always be an asset to any direct selling effort.
Lock down potential customers' time and try to keep a full calendar — no matter how you conduct your presentations. Whether you're reaching customers online, over the phone, or in person, always block out time for your prospects and try to hold them to those arrangements.
And once you've conducted those meetings and nailed your pitch, follow up with your prospects and stay in touch. Getting a "no right now" might not be a "no forever." It might just mean that now isn't the right time. Exceptional service in direct sales means going the extra mile, and you can't go the extra mile if you refuse to "go" at all.
5. Keep your eyes on the prize and remain persistent.
Direct sales isn't a cakewalk. It's a particularly personal brand of sales, so it might be hard not to take rejection particularly personally. But nothing good comes easy, and that's especially true in direct sales.
It's not for the faint of heart and requires tremendous persistence to last and thrive within. It won't always be comfortable, and it won't always be straightforward. But if you keep your head down, consistently learn, and constantly improve, you'll be in the best possible position to get the most out of it.
6. Prioritize relationship building.
The biggest tip I can give direct salespeople is to be an expert at relationship building because nobody will want to buy from you if you’re stiff and unhelpful.
I’d better serve myself in a one-on-one sale by building rapport and engaging in deep conversation with a prospect. I would learn more about them and their pain points, making it easier to tailor my value proposition to their needs.
According to our recent State of Sales Trends Report, the most effective strategies for building rapport when selling are being attentive and engaged, staying positive, and finding common ground — why not try it out?