Online Test Banks
Score higher
See Online Test Banks
Learning anything is easy
Browse Online Courses
Mobile Apps
Learning on the go
Explore Mobile Apps
Dummies Store
Shop for books and more
Start Shopping

Direct-Selling Businesses

A business based on direct selling, well, sells consumer product or services in a face-to-face manner. Direct-selling businesses have taken the world by storm.

You can find two main types of direct-selling opportunities:

  • Single-level marketing: Single-level marketers make money by buying products from the parent company and selling them directly to their customers.

  • Multi-level marketing: Multi-level marketers make money both by buying products from the parent company and selling them to customers, and by sponsoring new direct sellers.

    Multi-level marketing uses a unique system of selling, in which salespeople take on two key roles:

    • Distributor: As a distributor of a product, your job is to buy product from the parent company and sell it directly to the public. Every time you sell an item, you make a profit.

    • Recruiter: As a recruiter, you sign up other distributors to work for you. Every time your distributor buys an item from the parent company, you receive a percentage of the profit.

    It's against U.S. law for a multi-level marketing organization to only recruit distributors — and collect fees from them — without also selling products. Such an arrangement is called a pyramid scheme, and it is set up specifically to make its creators rich while relieving everyone else of their hard-earned money.

Because startup costs are generally low, you have little financial risk if a direct-selling business fails. Also, your direct-selling parent company generally provides you with sales and promotional materials, as well as bookkeeping, sales tracking, and commission data.

But direct selling has a poor reputation with many people, often making recruiting new distributors (and selling products) a difficult proposition. Few people in direct selling make enough money to make it a full-time profession.

  • Add a Comment
  • Print
  • Share
blog comments powered by Disqus

Inside Sweepstakes

Win $500. Easy.