How does direct selling work?

Do you wish to start your business with less overhead costs? You could explore direct selling. You can reach out to your customers without the involvement of any intermediaries.


Let’s understand the process, along with the pros and cons of direct selling, so that you can make an informed decision should you decide to become one.

What is direct selling?


Direct selling is a method of selling goods or services directly to consumers, typically in their homes or through personal contacts. This approach differs from traditional retail sales, in which goods or services are sold through a physical store or online marketplace. 


It is often used by companies that sell consumer goods such as cosmetics, health supplements, and home products, as well as by companies that offer services related to telecommunications, finances and energy. Even lenders, like banks and NBFCs, adopt the methodology when selling loans, credit cards, and other financial products.  

The process of direct selling


There are different approaches when it comes to direct selling. Sometimes they are used in combination as they are not mutually exclusive. Read on to know how:


One-to-one sales


In this method, a seller reaches out to their potential clients directly. The salesperson could conduct meetings with their clients or sell products door-to-door.


Online sales


One of the most loved methods by all companies, online sales entails selling products and services through websites and relevant social media accounts. 


Party-plan sales


This takes place when a salesperson gathers a group of potential customers in a meeting to showcase their products to them. These can take place as a party or as a formal meeting. This method aims to warm up the invitees about the company and its offerings so that they are inclined to buy later.


Multi-level marketing

When it comes to loan distribution, banks and NBFCs typically use a multi-level marketing (MLM) model, in which independent sales representatives or ‘distributors’ sell the company’s products or services. These distributors are also encouraged to recruit other sales representatives, who in turn earn a percentage of the sales made by their recruits. This creates a pyramid-shaped structure, with the company at the top, followed by the top-level distributors, then their recruits, and so on.


Direct selling does not equal direct marketing


In the first case, individuals directly reach out to customers to sell products or services. For instance, a DSA loan agent will connect with people in their network to sell different loan products. Meanwhile, in the second case, a company markets directly to clients using mediums such as emails, outdoor advertising, ads, phone calls, websites, etc. 

Benefits of direct selling


There are a slew of benefits when selling products and services to customers directly. Let us take a look at the essential ones:


Expand their customer base

Direct selling can also be a way for companies to reach new customers and expand their market. By using independent sales representatives, lending institutions can tap into networks of personal contacts and reach consumers who might not otherwise be aware of their products or services. This can help companies to grow their customer base and increase their sales.


Low-cost set-up

Another advantage of direct selling is that it can provide a flexible and low-cost way for individuals to start their own businesses. Direct selling companies typically require minimal startup costs and provide training and support to their sales representatives. This can be a great opportunity for people who want to be their own bosses and work from home, or who want to supplement their income.


Personalized touch

It also allows consumers to receive personalized recommendations and advice, which can be helpful when choosing products or services. One of the key advantages of direct selling is that it allows customers to learn about a product or service in detail before opting for it. This can be particularly beneficial for financial products, as people need more information to make well-informed decisions. For example, in the case of loans, your potential clients would like to know about the features, such as interest rates and repayment tenures.


Some tips to follow

If you want to get into direct selling, you can follow these suggestions:


Build long-lasting relationships first


Focus on building relationships with your clients first to be in the game for a long time. Establish a rapport with your potential clients and understand their pain points to offer the best solution. Remember to follow up on your new prospects.


Grow your customer database


You should maintain a consistent and detailed customer database. Thorough customer records enable you to build and track your clients, communicate periodically with your networks, and distribute marketing materials, such as product updates via email or Whatsapp.


Know what you sell


As a direct seller, you should know the product or service you are selling inside out. When you are confident about what you are selling and in your ability to meet clients’ needs, you can sell more.


Maintain your networks


Your network is your net worth! Learning network marketing strategies is essential as that would expand your direct selling business. You should also have mutually beneficial relationships with your colleagues and learn how to sell effectively.


Be meticulous in your presentation


Make sure to present your products in a very detailed manner. Please be on time, whether meeting your clients online or offline. Lastly, maintain eye contact with them.


Work on your sales skills


Ensure you are developing your sales skills regularly. Your communication and listening skills come handy when building long-lasting relationships and growing a successful business as a direct selling agent (DSA).

Wrapping it up

Direct selling is a method of selling goods or services directly to consumers through personal contacts. It can be an excellent opportunity for companies to reach new customers and for individuals to start their own businesses. If you aspire to be your own boss selling loans and credit cards, you can become a DSA agent with us. Register to begin your journey.