Regardless of if you know the definition of direct sales, you've probably encountered some people who engage in the practice — the door-to-door knife salesperson, the neighbor on your block who hosts parties to sell cosmetics, or Uncle Rico from Napoleon Dynamite, offering model ships to help hawk plastic dinnerware.
Direct sales is an immediately personal, unique brand of selling that requires an entrepreneurial spirit and considerable initiative. The practice can be lucrative and rewarding, but there's a lot to know and look out if you're considering pursuing it.
Let's get some more perspective on what direct sales is, the different subsections of the concept, and some key tips on how to do it right.
What is direct sales?
Direct sales is a process where salespeople sell directly to customers without any kind of intermediary. The concept differs from traditional retail — where sales are conducted online or through a physical storefront — and is generally conducted by directly interfacing with customers in unconventional settings.
Conventional sales practices are often tempered by and run through a variety of intermediaries. Those can include entities related to product distribution — including wholesalers or distribution centers.
In direct sales, manufacturers forego those channels in favor of directly distributing products to direct sales companies. Those companies then pass those products along to their distributors or reps — who personally sell them to customers.
Direct sales products are often unique and generally unavailable in conventional retail outlets. There's no unilateral standard for what direct sales looks like, but it generally takes on one of three primary forms.
Types of Direct Selling
Party-Plan or Host Selling
1. Single-Level Selling
Single-level direct sales are direct sales 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 individual sale and might have other incentives available for meeting specific goals or quotas.
2. 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 conducting a presentation in front of a group of prospects in someone's home.
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.
MLM operations are often conflated with illegal pyramid schemes — a model based on recruiting new reps via promising payments solely for their ability to recruit other reps as opposed to actually selling a product.
Three main factors distinguish a legitimate multi-level marketing operation from a pyramid scheme. First, the product the operation revolves around must be legitimate and of high quality. Second, the income reps earn has to be from sales of the product or service — not just recruitment. Third, recruitment can't be billed or pushed as the primary focus of the operation.
How to Succeed in Direct Selling
Understand your product and its value proposition.
Sincerely believe in your product.
Understand your company and role within it.
Maintain contact with your prospects.
Keep your eyes on the prize and remain persistent.
1. Understand your product and its value proposition.
This point is key in any type of sales, but it's particularly pertinent when selling directly. As a direct salesperson, you're going to be immediately interfacing with customers. You probably won't have any 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.
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?
It's easy to drone on about all the awesome features your product has — 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.
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.
Only sell a product you legitimately believe has merit and utility. Prospects are savvy and can often see through a personal pitch that's not backed by personal investment. If you use the product you're selling and sincerely believe your prospects can get a lot out of it, you'll put yourself in the best position to engage in effective direct sales.
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.That's why it's important to pin those 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.
Originally published Jul 20, 2020 8:00:00 AM, updated July 20 2020