Traditionally, direct selling has been common with structured sales channels coming in only due to modern day manufacturing, says a press note from Amway.

Amway, a direct marketing player, has invested more than Rs 200 crores in India, and has 135 offices and 55 city warehouses across the country, covering over 4,000 cities and towns through its home delivery network.

Direct selling is based on the concept of person-to-person interaction with and individual’s income dependent directly on sales alone.

New model

It is also a similar to modern day channel sale in which there is a peer-to-peer or institution-to-institution link-up. But there are several misconceptions particularly relating to top leaders of a multilevel marketing structure being rewarded for building memberships, high value commissions or quality, the press note said.

Most well-known direct selling organisations do not charge any fee for joining or sign up. Commissions or incentives are only for actual sales, counters the direct marketing company.

High product pricing is a direct result of cost of manufacturing. Just as a traditional manufacturing and services company pay its agents, distributors and retailers with sales margins and commissions, direct selling has its rewards for meeting or exceeding sales targets. Under the conventional channel sales structure, the company goes through multiple levels to reach the last retailing point.

But in direct sales, the company makes the transaction directly with the retailing point.

The ordered goods can be delivered directly to the consumer –saving on time and money.

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