A Brief History of the Direct Sales Model

By Belinda Ellsworth

Nearly every culture shares a heritage of direct selling. What they sold direct to consumers varies from era to era, continent to continent, and community to community, but around the globe, as far back as history is recorded, individuals have sold goods to their neighbors and countrymen. These networks of commerce were direct-selling distribution channels, much like the direct sales companies of today.

Traveling salesmen

Salesmen, hawking their wares, would gather in the center of the village or town, and the community would come to listen to the presentations and then purchase the items they needed. Some would work only in their own town, whereas others traveled from town to town, seeking new markets and new customers.

The archetype of a traveling salesman is universal. When people need something and it is brought to them, they purchase. In essence, that is the long tradition that modern direct sales is built on.

Later, as the practice evolved to match the changes in the ways communities and families lived, door-to-door selling developed. With home parties showing up on the scene in the 1950s, the image of the traveling salesman was expanded to include another image: the career woman venturing out to build a different kind of career for herself (with Mary Kay or Avon) and the stay-at-home mother (with Tupperware) earning income either for her own fun, for extras, or to supplement the family budget.

These days with the Internet and smartphones, the demographics of who is earning money with direct sales has shifted again. The common denominators are a desire on the part of individuals for more income on their own terms, for more flexibility, and to promote products and/or a business opportunity they feel passionate about.

The Internet age

Just as direct-to-consumer salesmen adapted over the years to the changes in communities, direct sellers are a resilient bunch. Over the years, the methods of sales have evolved to reflect the trends of the time, as well as demographic shifts.

From the door-to-door sales practices of companies like Fuller Brush and Avon, which enabled people to shop from home, to the emergence of home parties, which allowed guests to socialize while shopping and catered to a burgeoning population of women eager to get out of the house and earn their own money, one thing is clear: As the times change, the methods of commerce do, too.

Nowadays, the home party is going strong due to its effectiveness, but people can also work their businesses completely online. Many representatives can operate successful businesses and build networks and connections through the Internet and their social media channels.

Besides making it so much easier to place orders, ship direct to the customers, run sales reports, and track your income with company-hosted software, the digital age has opened up new horizons for staying connected, creating buzz, and sharing valuable information. There has never been a more exciting or more efficient time to be involved in direct selling.

New technologies, mobile apps, and social media channels are constantly emerging and are changing the way we grow our brands. Social networks, especially Facebook, Instagram, and Pinterest, are changing the way we socialize, buy, sell, make money, do business, bank, and do all kinds of other stuff.

So, if the business landscape is changing, you have to change. It’s as simple as that. Social media is becoming an integral part of the direct sales industry, even down to the way you communicate with your company’s corporate office, teams, and customers.

The emergence of social selling

Much like Groupon, LivingSocial, Uber, Fabletics, Airbnb, and a number of other e-commerce ventures, direct sales is a form of referral marketing. The difference is a lot of these high-tech companies are new to the game in comparison to direct selling, which has been relying on referral marketing for decades. Over the past several years, a new term has been circulating: social selling.

Social selling can refer to someone who just wants to sell socially to friends and family. But it’s most often used to describe people who sell mainly through social networking. Social selling is the use of social media networks to interact directly with customers, leads, and clients. Platforms like Facebook and Instagram give independent representatives the opportunity to build friendships, be visible, and answer questions.

Social proof is simply the weight of influence carried by a group of people. Social proof can show up in online communities and is visible and at play in social selling. But the prime example of the power of social proof in direct sales is the Party Plan model. Party Plan refers to a direct sales model that is focused on efficiently selling to groups of people who have been gathered together by a host they know personally, either in person or virtually online. This lends the power of the hosts’ personal recommendation to the products along with harnessing and facilitating social proof. In the party environment, whether during an online party on Facebook or at a traditional in-home party, once one person decides to buy, it increases the likelihood that the rest of the guests in attendance will also make a purchase.

Social selling continues to gain prominence and is beginning to look like the modern way to do business. With your direct sales business, you have that power built right into the distribution model.