Direct Selling: Definition, Types, Strengths, & Weaknesses

What Is Direct Selling?

Direct selling is the process of selling goods directly without an intermediary. This means that there is no product distribution process during the transaction so that consumers directly get the goods they buy from the manufacturer. 

The objective of selling your product directly is to increase sales. This buying and selling process has proven effective when the economy is affected by a pandemic. 

Moreover, selling products directly to consumers through the direct sales method is an effective strategy to find out the needs of consumers so that you can attract customers by providing their needs.

Types of Direct Selling

In general, there are 3 types of direct selling that you can apply to your business, such as single-level direct sales, multi-level sales, and party plan selling. The explanation of the types of direct sales methods is as follows.

1. Single-Level Direct Sales

The first type of this selling directly method is single-level direct sales, which is usually done by producers face-to-face with consumers.

If it is conducted offline, the producer will sell through a door-to-door approach. Then, the sales team that works to market the product will get a commission from the sales results. 

On the other hand, if it is online, producers can sell their products digitally. 

Additionally, one of the direct selling examples is advertising agency employees who get paid for marketing their services. 

2. Multi-Level Sales

The next type is multi-level sales, where the sales team not only focuses on selling goods but also gathers new salespeople. 

This type is also often referred to as Multi-level Marketing or MLM. Unlike one-level direct sales which directly earns commissions from sales results, MLM will provide commissions from the results of sales made by recruited salespeople. 

3. Party Plan Sales

The last type is party plan selling which is done when there are many audiences gathered at one event. 

Before companies choose to use this strategy, they will choose an event that is likely to be attended by many people, such as a social event, to offer their products or services. 

Benefits of Direct Selling

Since direct sales are often done face-to-face, this method is beneficial for businesses from several aspects. The benefits of this direct sales method are as follows. 
 

1. Knowing Consumer Needs

The first benefit of selling directly is that you can find out the needs of consumers because you interact directly with customers. 

You can find out their interests and needs for a product or service so that you can provide it in the future. 

2. Reduce Marketing Costs

The second benefit is that you can reduce marketing costs because you directly meet and sell products to target consumers so you don't need to spend more on promotions and advertisements on many platforms.

3. Increases Customer Loyalty

Then, selling your products directly is a sales method that can increase consumer loyalty to your business. This is because you continue to meet with consumers to sell products or offer services.

As time goes by and your business gets better, consumers will put their trust in your business and continue to make transactions with your company.

4. Immediate Feedback

Feedback from consumers is important for business development. By selling directly, you can get feedback from customers easily when meeting in a buying and selling transaction.

5. Reduce Store Maintenance Costs

By meeting customers directly, you can reduce store maintenance costs and allocate costs for other developments.

Direct Selling Tips

Selling your products directly is a sales strategy that can be customized to your business. However, you need to know the right strategy to sell products directly and make significant profits. 

Here are some tips on how to sell your products directly that you can apply to your business. 

1. Have Complete Customer Data

The first tip is to have detailed customer data. This will help you build relationships with customers and make it easier for the sales team to communicate with clients.

2. Prioritize Relationships with Customers

Then, you also need to prioritize good relationships with customers. This means that you need to listen to their complaints, feedback, or needs, and then consider various strategies to provide solutions to these complaints.

3. Fully Understand Products and Services

The next direct sales strategy is to understand the products and services you offer to customers. 

By having a thorough knowledge of your products and services, you can easily fulfill your customers' needs, explain your products in detail, and influence their purchasing decisions. 

4. Consistent Follow-Up

Just as important as the strategies above, following up with customers is also crucial for your business.

When you follow up with your clients, you can grow your business based on customer feedback and communication.

Strengths and Weaknesses of Direct Selling

If you already understand the direct selling strategies that need to be done, paying attention to the advantages and disadvantages of this sales method is equally important so that you can plan your business properly. 

The strengths and weaknesses of direct sales are as follows.

The Weaknesses of the Direct Sales Method

• The sales team must have good marketing skills. 
• Does not support business growth.
• Difficult to work with distributors and sales. 
• Focuses too much on finding new clients rather than selling products. 

The Strengths of the Direct Sales Method

• Easier to get feedback from customers.
• Can maintain good relationships with customers. 
• The company can achieve higher profit margins. 
• The company can sell products according to customer needs.
• Can reach a wider target market that is difficult to reach with distributors.