Direct selling

In direct sales, the sale of products or services directly from companies to consumers without any middleman takes place. Unlike the commercial sale, in which the power is distributed along a chain.

Nature of direct sales

In the course of computerization, the direct sales has changed dramatically and is used in many companies as an additional sales channel, especially in the form of e-commerce or telephone sales.

Direct, in which a representative of the provider its customers on its premises visited, thus allowing for a product presentation is practiced mainly in products or services, in which a high return with or need for counseling, for example, technical equipment or in the area of financial services.

Direct there are both unit sales to companies as well as in sales to private consumers. Convenient for private and commercial clients on direct sales, the fact that you do not leave employment or of residence in order to obtain information about the product.

Economic importance of direct sales

The direct sales, so the product or service sales from the company directly to the consumer, is a widespread form of distribution and is observed in all sectors. However, few companies appear as pure direct seller, whereas most companies use direct sales as part of multi-channel systems as a complementary sales channel for retail. How much revenue is generated in direct sales, is not yet clearly applicable, as they must be in different forms of distribution within a company always clearly identifiable.

The numbers of various organizations such as the World Federation of Direct Selling Associations ( WFDSA ) or the Federation of European Direct Selling Associations ( FEDSA ) are only partly meaningful because they do not fully capture the observed of them markets or different manifestations of direct sales, such as Network or multi -level marketing, different weights. On the other hand are for the German market, according to a direct sales by the Federal Direct Selling Association Germany eV and the forecasters AG conducted study statistically reliable figures before. Accordingly, the direct sales turnover in 2004 was in Germany in the consumer goods sector at around 7.9 billion euros.

As the largest and most well-known and until 2006 pure direct selling companies in the world applies the computer manufacturer Dell Inc. with annual revenues of approximately U.S. $ 57 billion. Since 2007 the company sold individual models and accessories via retail, but by far the largest distribution channel continues to be the direct sales.

In the years to come out very intense competition between Dell, which sold its entire product range to 2006 only directly to consumers, and HP, which sells its products mainly through retailers, two very different sales philosophies can be recognized.

Direct marketing, direct sales and network marketing or multi -level marketing

Direct sales is a broad term which is first generally used in the marketing of products or services to consumers without intermediaries. This distribution can take place both in the strict sense " directly ", for example via the Internet ( see also direct marketing), as well as through independent business partner or sales agents and trade representatives, such as Tupperware consultants or Vorwerk seller. Both companies are members of the Federal Direct Selling Association. Network Marketing and Multi -Level Marketing in turn are sub-forms of this second form of direct selling. Add this company is not like the "classic direct sales " of selling products to the end user in the foreground, but the recruitment of new members on their sales performance commissions to the recruiters are paid. In many cases, therefore, network marketing is also known as referral marketing.

Federal Direct Selling Association Germany eV

In Germany the Federal Direct Selling Association Germany eV represents headquartered in Berlin as the largest industry composite the interests of the direct selling companies. In 1967 " Good advice - bought at home " as a working group established now among 32 companies among its members. The sales volume represented by the Federation direct sales company was reported to the association, in 2010, more than 1.15 billion euros. The member companies employ approximately 143,000 independent sales representatives, of which about 93 percent are women.

The member companies have imposed upon themselves certain standards of behavior in order to improve the image of direct selling to the public. In these standards of conduct, among other things an extended right of withdrawal set, which goes beyond the objectives set by the Civil Code regulations. Thus, the member companies of the Association of Direct Sales vacate their customers then a right of withdrawal if a) have been the hearings, which underpin the conclusion of the contract, led to previous order of the consumer, and b) the performance at the conclusion of the negotiations provided immediately and will be paid and the fee does not exceed 40 euros.

Criticism of the direct sales

Direct sales company in Germany, especially so-called multi -level marketing or network marketing companies are subject to regular criticism. The focus here is the low income of the self-employed commercial agents. Thus, a study at the University of Nijmegen in the year 2012 that earn on average less than 150 euros a month in sales commission eight out of ten of the examined large German companies, members. For job seekers, it is difficult in direct sales to realistically assess the financial ability of an activity, as companies have loved to recruit high-income opportunities, but usually give any information about the actually achieved average income of its members.