Well, many of us debate on the point of difference between Direct Selling and Network Marketing. Both of them have certain pros and cons attached. Mostly, people state that network marketing is a part of the direct selling concept. Here, products or services are offered on a one-on-one basis. They are sold directly by the salesperson to the consumer. However, the two approaches offer very different benefits to the salesperson. Here, is all that you wanted to know about them.
What is Direct Selling?
Direct selling mainly refers to single-level marketing. In single-level marketing- an independent direct seller makes money by buying goods and products from an organization. He sells them directly to customers.
Direct selling incorporates person-to-person selling in locations other than a proper retail establishment. For instance- social media platforms or the home of the salesman.
Types of direct selling
The major types of direct selling incorporate-
- Internet marketing – Here the seller sells products on social media directly to consumers. With this facility, people around the world have the same access as the person across the lane. The Internet has made direct marketing a lot easier ass well as more targeted. Also, it is more flexible, responsive, affordable, and potentially more profitable.
- Face-to-face selling/ Door-to-Door selling– The seller may go from one location to another and sell his products. Contacting potential and convincing skills play a major role. Some examples are- Amway, Mary Kay.
- Direct mail -Direct mail is basically sending information about a special offer, some product or sale announcement, reminder of service, or some other message to a person at a particular street or electronic address (e-mails).
- Telemarketing- This involves contacting people on a list to sell services over the phone. It has extremely grown in popularity. On average, people receive 19 telemarketing calls each year.
- Direct-response advertising– This all about communicating with potential buyers through various platforms including radio, television, magazines, and newspapers.
- Catalogs- Commonly, it involves featuring a variety of products which target the needs of a specific audience. People choose and order from catalogs. Marketers prefer sending catalogs on CDs to customers.
Best Direct Selling Companies
In 1855, James Robinson Graves evolved a business model that employed young men going door to door to sell products. This formed the basis of the company Southwestern. It was the first direct selling company.
Here is a list of top direct selling companies-
- Mary Kay.
These are the eight seven direct selling companies in the world. All of us are well aware of these names. Most of these we have grown up with. Probably we have some of their products in our own kitchens, bathrooms or dressing tables. Furthermore, these companies are present all around the globe and are extremely profitable.
Advantages of Direct Selling
It offers benefits to people who want an opportunity to earn income and establish a business of their own. There are innumerable advantages of direct selling. Here we have mentioned the most alluring ones.
- The best part is that you do not need any education or prior training.
- Unlike other businesses, there are no entry barriers to direct sales.
- Consumers find an alternative to retail stores.
- It is cheap and economic. You just have to buy some products initially and sell them out to consumers. For instance, Avon offers a starting choice of $25, $50 or $100 starter kit.
- Also, it isn’t a full-time job. Neither you have to set a number of hours per week nor devote all of your time.
- The most attractive point is that you can work from home.
Disadvantages of direct selling
- Direct selling at times is relatively expensive in comparison to other forms of marketing.
- Sales calls can be quite time-consuming. As you have to maintain a connection with person to person, it takes quality time.
- Small companies tend to have limited coverage when they sell directly.
- You have to start with people you know. This can be uncomfortable for some.
- It needs patience. There are people who may try for a month and then quit.
What is Network Marketing?
In network marketing or multi-level marketing (MLM) the direct seller can earn money in two ways. From direct sales to customers as well as by sponsoring new direct sellers. Thus earning a commission from their efforts. It is also known as person-to-person marketing.
Benefits and Drawbacks of MLM
- There are attractive incentives and a bonus for those who excel.
- This is less expensive in comparison to the traditional method of advertising like newspapers, television, online medium, etc.
- This marketing further helps individuals to become entrepreneurs. Plus too much investment is not needed.
- It doesn’t require any professional degree.
- You may get in touch with a disreputable MLM company
- Building up a network or downline may be expensive.
- A lot of money may be spent on outside meals, hotel accommodations, etc.,
- Real success in sales may be hard to come.
- Also, most of your contacts may result in rejections. So, you must not take rejection personally.
So, if you decide on actively selling products to people besides your friends, direct sales will prove to be a good business opportunity for you. Its advantages are hard to beat.
However, if you decide on Network marketing, remember that building a downline, takes time. Also, if you are looking for a business that will run a family, this probably isn’t it. Go for the first option in that case.
The choice is yours!