Some entrepreneurs consider direct selling to be a good marketing model for their business. It implies selling products directly from the manufacturer to consumer in a non-retail environment. Direct selling allows to avoid several middlemen involved in the distribution of the product by sending goods to one distributor or sales representative who further deals with the customers. The manufacturer can also sell their products personally to the customer. Party-plan and network marketing companies commonly use this model.
There are several ways for businesses to do direct selling. Single-level direct sales imply that the representative goes door-to-door and offers their goods. Party plan is another option that allows representatives to sell to a group of people at a time. Party plan is common for B2B relations. Multilevel marketing is characteristic of network marketing companies that create a hierarchy of representatives.
The system of direct sales perfectly suits those who start a home business. Using social media, entrepreneurs can reach their clients and trade directly without intermediaries. In such case, customers will be compelled by the price lower than average and direct communication with the manufacturer. In fact, direct sales are characteristic of companies that have few competitors in the market. Products that are sold directly do not appear in a broad retail.
Direct sales companies often face difficulties because of their non-conventional marketing scheme. Many multilevel marketing companies are confusingly taken for pyramid schemes that are a criminal offense in many countries. Representatives of direct sales companies are often noticed promising easy money in quite a small business. That is why potential representatives see multilevel marketing companies as a fraud and clients – as unstable businesses.