What is direct selling?

Direct selling is to sell products and services directly to consumers, and it is a dynamic, dynamic and rapidly expanding sales channel.

The best definition of direct selling is to sell products and services directly to consumers in a face-to-face manner, usually in the home, workplace or other places different from permanent retail stores of consumers or others. Direct selling is usually explained or demonstrated by independent direct sellers; These salespeople are often called direct sellers.

The advantages of direct selling lie in its independent tradition, its service to consumers and its commitment to the growth of entrepreneurs in the free market system. Direct selling provides people with another source of income, and they can join the industry regardless of gender, age, education and experience. It is worth noting that most direct sellers in the world are women, and most of them are engaged in direct selling in a part-time way. Only a few direct sellers are employees of the company that sells products.

Independent direct sellers sell products and services on behalf of themselves or their affiliated direct selling companies through personal sales relationships. In some areas, they are generally called independent underwriters, that is, these independent salespeople are not employees of companies that sell products, but independent industrialists who run their own businesses. These independent direct sellers have the opportunity to profit from their business, and they must also bear the risks brought by their business.

Direct sellers sell a wide range of products, including: cosmetics, personal care products; Laundry and personal cleaning products; Vacuum cleaner, household appliances; Household goods; Household cleaning products; Food and nutritional supplements; Toys, books, educational supplies; Clothes, jewelry, fashion accessories, etc.

Generally speaking, these products are sold in the form of group (reunion) or individual (one-on-one) explanation. The way of reunion is that the host invites a group of guests to their home or other places, and then the direct seller explains the products in front of this group of people. Other direct sellers will choose a convenient time for consumers to visit their homes in person, so that consumers can listen to product descriptions and demonstrations in a comfortable environment.

No matter for individuals who are eager to make money and set up their own businesses, for consumers who like to shop outside shopping centers and department stores, or for the consumer goods market, direct selling has provided great benefits. For those who want to make money from flexible income to supplement their family income, or those who can't have part-time or full-time jobs due to responsibilities or environmental relations, direct selling provides opportunities other than traditional jobs. There are also many people who choose to devote themselves to independent direct selling full-time because of their success and satisfaction in the direct selling industry.

The cost of running a personal direct selling business is usually very low. Generally speaking, as long as you buy an affordable business start-up information package, you can take the first step, and you hardly need any inventory or other cash investment. Unlike joining a chain store or making other commercial investments, you usually need to invest a lot of money, and investors must bear huge loss risks.

The convenience and services provided by direct selling have benefited consumers, including people demonstrating and explaining products in person, delivering goods to your door, and providing product satisfaction guarantee. In addition, direct selling also provides another sales channel for companies that have innovative or special products that traditional retailers don't have, or put these products on the shelves of retail stores because they can't afford huge advertising and promotion expenses. Direct selling strengthens the retail channel structure in the economic system and provides consumers with a convenient source of high-quality products.

2) The definition of multi-level direct selling

(1) Definition:

Multi level marketing system is a very important marketing method in the direct selling industry, which is also called "network marketing", "structural marketing" or "multi-level direct selling". This system has been running for many years, and it has been proved to be a successful and effective way to sell products and services directly to consumers, and make independent salespeople or distributors profit.

(2) The best definition of multi-level direct selling is direct selling bonus system. There are two basic ways for direct sellers to get bonuses:

First, direct sellers can get retail dividends by selling products and services to consumers;

Second, they can earn commissions from direct offline sales or purchases, and they can also earn commissions from the total sales of organizations directly offline. Therefore, multi-level direct selling provides opportunities for direct sellers to start their own businesses, not only selling products and services to consumers, but also developing and training offline institutions to engage in direct selling.

(3) Legal multi-level direct selling has four easily recognizable features:

The joining cost of multi-level direct selling companies is usually extremely low. Generally speaking, participants only need to purchase one business kit, sales aid or demonstration kit. Direct selling companies usually provide information to new entrants in a non-profit way. New entrants can enjoy a period of hesitation, during which they can reconsider their decision. If they decide to quit, they can ask for a refund of the membership fee.

A. Grade direct selling companies strongly oppose hoarding too many products. Direct sellers can return unused and saleable products to the company and get a refund of not less than 90% of the direct selling price.

B. The focus of hierarchical direct selling companies is to sell products to consumers. They are famous for their excellent product quality, so they are widely respected. At the same time, they provide consumers with satisfaction guarantee or hesitation. Dissatisfied consumers can return the products to the company and get a reasonable refund or replace other products.

C. hierarchical direct selling companies will avoid exaggerating the income of direct sellers. Any explanation related to income must be based on facts.

3) Definition of MLM (Editor's Note: MLM is a common mouse meeting):

(1) Definition:

Pyramid selling is a scam. Its structure is: a so-called "investment" or "transaction" method promotion organization, which uses geometric series to earn the fees paid by new members who join these methods, thus making profits and getting rich. Many related fraud methods discovered by judicial units in various countries have various names, such as "chain letter", "snowball", "chain selling", "money game", "recommendation selling" and "investment lottery".

Many legislatures all over the world explicitly prohibit pyramid schemes. The wording of relevant laws, regulations, rules, bills and decrees. It may be different, but they all contain the following important core concepts: MLM is an organizational structure in which new entrants (new downline) pay (entrance fee) to obtain future profits (money or special interests), but its profit opportunities mainly depend on the entrants (as well as former or later entrants) introducing more people to join the organization.

Therefore, the effective reward method of this organization comes from adding new members (new offline) and their investment, not from selling and distributing real goods to people who actually use or consume them. It does not actually buy or sell real products or services, but is basically an internal redistribution phenomenon in which wealth flows from the new offline to the founders of the organization. This framework can not play a legitimate business mechanism; The only "transaction" it makes is actually the structural rights and interests of the new downline and the redistribution (or so-called investment) of the membership fee of the new downline.

MLM does not seek sustainable business in business, because they basically assume that a steady stream of new people will come in, and they will all be willing to pay the entrance fee, and then become rich because the new people who join later do the same thing as them. However, because only a limited number of new people can be recruited, the chances of new people joining later are less and less than those introduced. Therefore, such organizations are often short-lived, and those who join in the end have no chance to recover their membership fees, let alone profit from this structure.

Because of the lack of tangible products, early pyramid schemes can be recognized at any time or prohibited by law. However, later fraudulent organizations argued that they really engaged in multi-level direct selling and did "sell" goods and services in an attempt to deceive the public and avoid litigation. Of course, multi-level direct selling is a recognized sales method, and it is a way for direct sellers to sell products to consumers (including those who join this sales method) through independent distribution networks to make profits.

If we carefully examine the so-called "products" of pyramid schemes, we will often find that they have no real market value. This is because those products are usually just "gimmicks", such as such-and-such certificates, false training programs or magazine subscription methods, illusory discounts, or "magic" remedies that are overpriced and extremely ineffective, and so on. Newcomers are often forced to "invest" in buying these products in large quantities, but there is no real possibility of selling these products to real consumers (or returning them for repayment). However, the money they invested became the rich income of those who lured them to join.

(2) The following elements can clearly distinguish the difference between legal direct selling and illegal pyramid selling:

A. A legitimate direct selling company will provide a real business opportunity on the basis of selling quality products to consumers. Traditionally, they will provide consumers with satisfaction guarantee or cancellation right; Dissatisfied consumers can return and buy other products, or get a refund. Pyramid sales rule has no commercially feasible product sales basis.

B legitimate direct selling companies strongly discourage the accumulation of excessive products and provide participants with the opportunity to quit the direct selling plan. If you want to quit, you can return the unused products that can still be sold to the company and get a refund of not less than 90% of the direct selling price. On the contrary, pyramid schemes often encourage or even require participants to buy a large number of goods for accumulation and cannot be returned; Disappointed entrants can only withdraw from the plan with goods that cannot be sold or returned.

C legal direct selling opportunities only need the lowest start-up cost and little or no inventory investment risk. If the new direct seller decides not to pursue profit opportunities, the admission fee can still be refunded no matter how much. On the contrary, pyramid schemes often need to pay high admission fees and high or large inventory "investment", neither of which can be refunded. This is because the operators of MLM organizations make profits by attracting new people to join the club.

The sales and marketing plan of D.Kex's direct selling company is based on the fact that direct selling personnel are increasingly recognized and rewarded for expanding the customer base of the company's products. The development and stability of direct selling personnel's business depends on whether customers are satisfied and whether the company rewards direct selling personnel fairly. On the contrary, pyramid schemes use "get rich quick" as bait to lure participants to buy the most profitable or leader positions. There are no actual long-term business opportunities within the legal framework of pyramid schemes.

(3) the status of the world direct selling alliance

The World Direct Selling Alliance strongly opposes fraudulent pyramid schemes and supports the enactment of laws consistent with the contract law of world direct sellers to ban them. In order to achieve this goal, the World Direct Selling Alliance is willing to cooperate with government managers and legislators to help formulate appropriate laws and regulations, so as to clearly distinguish pyramid schemes from legitimate direct selling business, ban pyramid schemes and protect consumers in direct selling business.

World Federation of Direct Selling Associations

Founded in 1978, the World Federation of Direct Selling Associations is an association composed of national direct selling associations, representing the global direct selling industry. The responsibility of the World Federation of Direct Selling Associations is to represent the rights and interests of global direct selling companies, to seek, collect and exchange information on international regulations, legislation and other important issues of common concern by pooling the experiences and resources of all parties, and to encourage industry executives to keep close contact. The Federation will also organize and assist the National Direct Selling Association to establish direct selling industry links and help the members of the National Association to establish and abide by business ethics.