Direct Selling Consists Of Two Main Business Models:
Single-Level Marketing :
In which a direct seller makes money by buying products from a parent organization and selling them directly to customers, This type of sales is done one-on-one, such as through door-to-door or by doing in-person presentations. Sales can be done online or through catalogs, as well. Income is earned on sales commissions, with possible bonuses.
Multi-Level Marketing :
It Is also known as network marketing or person-to-person marketing, : in which the direct seller may earn money from both direct sales to customers and by sponsoring new direct sellers and potentially earning a commission from their efforts. “Direct selling is a blanket term that encompasses a variety of business forms premised on person-to-person selling in locations other than a retail establishment, such as social media platforms or the home of the salesperson or prospective customer. ” Modern direct selling includes sales made through the party plan, one-on-one demonstrations, and other personal contact arrangements as well as internet sales. Some sources have defined direct selling as: “The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs.”
Don’t confuse direct selling with direct marketing. Direct selling is when individual salespeople reach out to consumers directly, whereas direct marketing is when a company markets directly to the consumer.
Sometimes direct sales is called MLM or network marketing, however, these terms are not interchangeable. While MLM and network marketing are a form of direct sales, not all direct sales systems involve MLM. For example, in single-level marketing the sales representative is only paid commission on the sales he or she personally makes. In this case, there is no recruitment of other sales team members or commissions earned from their sales.
While you can start a home business with a company that uses the direct-sales model, you can also use this method in your made-from-scratch home business.