Direct selling is an effective way to build long-lasting customer relationships and grow a flexible, low-cost business. Independent sales people use direct selling to sell their products and services directly to customers in meeting places such as homes, offices and cafes, instead of in retail outlets.
Direct selling allows you to avoid expensive overheads, reduce advertising costs and run your businesses flexibly. Customers also benefit from the convenience and personal attention they receive from direct salespeople. However, there are disadvantages to direct selling.
Direct salespeople can find it hard to reach new customers and can spend a lot of time on customer interactions to make sales. Without the use of a retail outlet, you also need to carefully consider storage and delivery logistics.
The reputation of direct selling has been harmed in the past by illegal pyramid schemes, so direct selling businesses need to market themselves purposefully and professionally, and be clearly aware of legal selling practices and obligations.
Types of direct selling
Direct selling methods include:
- person-to-person sales — arranging individual appointments with customers to make presentations, demonstrate new products or arrange product tests or fittings
- door-to-door sales — approaching homes and businesses by appointment or unannounced to leave catalogues and offer products or product demonstrations
- in-home presentations — arranging parties and at-home gatherings to present products (often called 'party plan')
- online shopping — using websites and email lists to build customer networks and offer online ordering facilities
- venue sales — setting up booths or kiosks at events to generate new leads and promote and sell products
- network marketing — recruiting other sellers into a network to 'duplicate' your product sales role, earning a percentage of their sales revenue and expanding your product reach.
Tips for direct selling
- Focus on growing relationships first, not sales. Encouraging your customers to give you their time and attention is your first goal. Create a rapport and identify their needs, then you can match your products to those needs. Follow-up on new prospects quickly to build new relationships.
- Know your products and have confidence in their ability to meet your customers' needs. Salespeople who are passionate about their products sell more. Support your passion with a thorough knowledge of your products.
- Keep thorough customer records. A detailed customer database helps build and track your networks, and is an invaluable source of information that can influence sales. Use your database to communicate periodically with your customers and distribute marketing material such as e-newsletters and event or product updates.
- Organise your sales environment. Arrive early at your party or event and carefully plan your product display, presentation space and seating position. Choose a layout that will help your customers maintain eye contact with you rather than each other. Consider ways to remove distractions in the room. For example, ask your host or hostess to close doors that are letting in noise or external activity.
- Build your networks. Your network marketing strategies are central to growing your business. Build strong, mutually beneficial relationships with your direct marketing colleagues. Catch up with, or communicate with, your colleagues regularly to share your selling tips and keep them motivated.
- Polish your sales skills. Your conversation skills, listening skills and well-developed approach to communication will help you build lasting customer relationships and grow a rewarding business.
- Learn about other types of direct marketing.
- Get direct selling advice from Direct Selling Australia.
- Read Sales practices – a guide for businesses and legal practitioners.
- Learn about your price display obligations.
- Find out about privacy legislation for holding personal information.
- Read about protecting privacy and information and how to collect and store customer information.
- Last reviewed: 17 Jul 2017
- Last updated: 27 May 2020
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