What is Direct Selling and How does it Work?
Frequently Asked Questions about Direct Selling

Author: Franchise Finder

Are you’re looking for a work-from-home business opportunity? Direct selling may be just the ticket. Read on to find out more about what direct selling is, and how it works…

What is direct selling?

The Avon Company – one of the world’s largest direct selling companies – defines direct selling as a type of sales channel, where products are marketed directly to customers, by direct selling agents, eliminating the need for middlemen, such as wholesalers, advertisers and retailers.

What are the benefits of direct selling?

Becoming a direct selling agent has some attractive pluses:

• You can earn extra income, if you already have a day job, or turn it into a full-time business
• Direct selling businesses generally have low start-up costs
• Direct selling is flexible – how much you work, when, and where, is up to you
• Unlike establishing your own start-up, you will get support and training from your direct selling company • Direct selling offers you the opportunity to work independently
• Direct selling is a good option for those who’re looking for work-from-home business opportunities.

What is the difference between direct selling and direct marketing?

Explains the Direct Selling Association of America, direct selling is selling a product or service, in either a person-to-person or party plan method, while, direct marketing, is catalogue and telephone sales.

What are the types of direct selling?

According to the Direct Selling Association of South Africa (DSASA) , there are different direct selling systems, which differ in the way they are administered, as well as how they reward their agents. The direct selling industry encompasses:

• Classical Direct Selling – the direct selling agent sells products to their own customer base, earning rebates on the products they sell, while aiming to grow their client base.
• Multi-Level Marketing (MLM), or Network Marketing – direct sellers are product users, who sell these same products to a client base, and then recruit and train these product users to become sellers themselves. These product users then do the same, creating a down line.
• Referral Marketing – is where individual direct sellers refer other direct sellers to a multilevel organisation, for the purpose of providing products and services.

How does direct selling work?

Says the DSASA, direct selling involves the following two basic methods:

• Person-to-person selling – is where the direct seller sells directly to another person, in the workplace or home, away from a retail location.
• Party plan or group presentations – the direct seller asks a host or hostess to organise a party, at which the direct seller makes a product presentation to a group of people, and has products on display and for sale. The host or hostess is usually rewarded with a gift.

Once you’ve decided on which direct selling companies interest you, advises the DSASA, contact them and organise an introductory talk. After deciding to join, you are usually required to invest in a start-up kit (usually consisting of training and advertising materials and products), go through some training, and then you’re good to go.

Is direct selling regulated?

The new Consumer Protection Act No. 68 of 2008 strongly regulates the manner in which direct selling agents promote and sell their goods to customers, and those interested in direct selling business opportunities should familiarise themselves with this legislation, particularly the clauses relating to the so-called Consumer Protection Act ‘Cooling-off Period’ and referral selling. . In addition, it’s wise to look for direct selling companies which belong to the DSASA, a self-regulating association of direct selling companies.
[For more information on the Consumer Protection Act, please see The Consumer Protection Act Series]

Is direct selling for me?

Good direct selling agents are hard-working, dedicated, committed and energetic. Rewards are usually proportionate to the amount of time and energy an agent invests in their direct selling business opportunity. Being able to build relationships with people is also a key factor in being successful. It helps to have an interest in, or passion, for the particular products which you are promoting and selling.

*Franchise Finder thanks the Direct Selling Association of South Africa for their kind assistance in compiling this article.

Author: Franchise Finder, Online Directory of Franchises and Business Opportunities in South Africa