Due to growing problems in the functioning of the classic distribution system, manufacturers face immense challenges. Therefore, more and more new manufacturers are considering a different way of distribution, i.e. placing products to their customers and many of them are moving through direct sales.
Direct sale represent the sale of products and services directly to customers, face to face. It usually takes place outside of traditional sales outlets, in customer homes, at their random location, in restaurants or in some other locations.
Direct sale often involve a personal explanation or presentation during which the seller provides all necessary information about the product concerned to the party. This gives the party the opportunity to study the product in detail, try it and create your own opinion about it. All products are delivered directly to the consumer.
Although a real expansion occurs in the second half of the 20th century, as more manufacturers try to solve the challenges of classical distribution and reach the customer faster, it can be freely stated that direct selling is the oldest channel of distibution in history, as it is part of the basic human need to exchange goods and communicates.
After the industrial revolution and the beginning of mass production, commercial travelers appear as first direct sales representatives. They visited villages and cities by introducing the population to the world of consumer goods of mass production. Although some of them were common fraudsters, the concept of direct sales expanded and was accepted as an ethically correct business model.
Today, direct sales exist worldwide and are considered a respected way of selling.
The World Federation of Direct Selling Associations (WFDSA – World Federation of Direct Selling Associations) is a non-profit, non-governmental organization that globally represents the direct sales industry. It was founded in 1978 and it is made up of more than 60 national and one regional direct sales associations (Federation of European Direct Selling Associations)
WFDSA has developed a world code of conduct for direct sales companies and all national direct sales associations (DSAs) have to approve and implement it in their national codes. All direct sales companies must confirm that they comply with these codes, which is a condition for membership in a national association.
The DSA principle of business, among other things, stipulates that as a customer you can expect from the seller the following:
– To present yourself, explain why he approached you and what products to sell
– Respect your privacy by inviting you in a reasonable way and in a reasonable time
– To complete the presentation at your request quickly
– To provide you with a written data account and contact the company and seller information in a language you understand
– Provide accurate and precise information about the price and characteristics of products or services, as well as the terms of payment, the deadline for reflection and terms of product return
– To provide a full description of the warranty
– Offer you a specific, reasonable deadline for thinking and canceling the order
– Provide you with promotional materials containing the address and phone number of the company
– To keep your personal information
On the other hand, as a seller, you can expect from a company that is a DSA member:
– To provide you with precise information about the company’s compensation plan, products and sales methods
– Give you a written description of the relationship between you and the company
– To refrain from any unlawful or unethical recruitment and excessive pricing or entry fees
– Do not demand that you buy excessive amounts of products, just because of a commission
– To ensure that advertising materials are in line with the company’s policy and have a reasonable price
– To demand that you adhere to the ethical codex
– To keep your personal information
– To support all real and potential sales and claims on the basis of the facts recorded
– To encourage you to buy only goods that you can sell within a reasonable period of time
– To buy off-the-shelf products and sales aids you bought in the last 12 months at a minimum price of 90% compared to the selling price, if you decide to – leave the job
Also, the DSA Principle of Commitment obliges the member companies to conduct their activities in a spirit of fair market competition towards other members, as well as not to unfairly erase the products or sales plan of another company.
It is estimated that in 2010 direct sales generated a turnover of more than $ 114 billion through activities of 87 million independent sales representatives.