Direct selling is a business model that stands out for the simplicity and proximity between the seller and the end consumer. Unlike traditional sales channels, such as physical stores and e-commerce, direct selling happens directly between the company and the customer, with no intermediaries. This model has gained increasing relevance in both global and national markets, offering opportunities for both large companies and small entrepreneurs.

In this article, we will explore in detail what direct selling is, its main modalities—single-level and multi-level—and how the concept of influence-based selling can be a powerful tool to generate results in this business model.

What is Direct Selling?

Direct selling is a system in which products or services are marketed directly to the end consumer, bypassing intermediaries or traditional sales points. Sellers, often referred to as consultants or representatives, act independently, selling products within their social circle, both in person and online.

This business model is widely used in various sectors such as cosmetics, health and wellness, home goods, and more. Direct selling offers flexibility for sellers, who can adjust their routines and strategies according to market demands and customer needs, while also providing a personalized shopping experience.

Advantages of Direct Selling:

1. Proximity to the customer: Direct selling allows the seller to create a close relationship with the consumer, better understanding their needs and offering personalized service.

2. Flexibility for the seller: Sellers have the freedom to set their own schedules and sales strategies, adapting to their own needs and market trends.

3. Low entry cost: Unlike opening a physical store, direct selling requires much lower initial investment, making it an excellent option for those looking to start a business.

Differences Between Single-Level and Multi-Level

Within direct selling, there are different structuring methods. The two main ones are the single-level and multi-level models. Although both are based on personal, direct sales, they differ significantly in terms of compensation structure and sales network expansion.

Single-Level Direct Selling

In the single-level direct selling model, the seller earns commissions only based on their personal sales. The focus is on the individual’s ability to sell the company’s products or services, with no direct incentive to recruit new sellers.

In this format, the seller acts as a consultant or representative for the brand, earning a fixed commission for each sale. It’s a simple, straightforward model with an exclusive focus on sales performance.

Advantages of Single-Level:

1. Simple structure: The absence of a recruitment network makes the system easier to manage.

2. Focus on personal sales: Since the focus is on individual sales, this model may appeal to those who prefer working independently.

Disadvantages of Single-Level:

1. Income limitation: Earnings are limited to personal sales volume, with no opportunity for additional income through building a sales team.

2. Slower growth: The seller relies solely on their own effort to increase income, which can limit business growth.

Multi-Level Direct Selling (Multi-Level Marketing)

The multi-level marketing (MLM) or multi-level direct selling model introduces a more complex commission system. In this model, in addition to commissions on personal sales, the seller has the opportunity to recruit new sellers (also known as downlines) and earn commissions on the sales made by these recruits.

The goal of MLM is to create a network of sellers, where each person not only sells products but also recruits new team members. Thus, the larger the sales network, the greater the earning potential, as the team leader receives a percentage of the sales made by everyone in their network.

Advantages of Multi-Level:

1. Scalable income potential: By recruiting new sellers and building a downline, the seller can significantly multiply their earnings.

2. Rapid growth: With a strong, active team, results can grow exponentially.

3. Incentives for leadership: MLM encourages the development of leadership skills and team management.

Disadvantages of Multi-Level:

1. Complexity: The commission system can be difficult to understand and manage for beginners.

2. Questionable reputation: Unfortunately, MLM is often confused with pyramid schemes, which can cause distrust among some consumers and potential sellers. However, it’s important to note that legitimate MLM involves the sale of real products, unlike pyramids.

How Personal Influence Can Drive Sales

One of the main advantages of direct selling is the opportunity to use personal influence as a powerful tool to drive sales. This applies to both single-level and multi-level models, as success in either depends largely on the seller’s ability to create personal connections and establish trust.

What is Influence-Based Selling?

In the context of direct selling, influence-based selling refers to the seller’s ability to leverage their personal network of contacts, friends, family, and acquaintances to market products or services. This doesn’t necessarily mean using social media influencers, but rather the natural influence that anyone can have within their social circle.

Strategies to Use Personal Influence in Direct Selling

1. Building relationships: The first step in using influence in direct selling is developing strong, authentic relationships. When the seller genuinely cares about the customer’s needs, they build a trust-based relationship that facilitates sales.

2. Sincere recommendations: Direct sales thrive on word-of-mouth recommendations. A satisfied customer is the best salesperson a company can have, as they will spontaneously share their experience with others. Encouraging recommendations is a powerful way to expand the customer network.

3. Personal credibility: The seller must work to build their own credibility. This means demonstrating product knowledge, being honest in interactions, and ensuring that promises are kept.

4. Using personal social media: Although influence-based selling doesn’t necessarily rely on major digital influencers, using personal social media accounts can be an excellent way to reach more people. Informal posts and product testimonials create curiosity and interest among followers.

5. Offering value to the customer: Sellers who use their influence should focus on delivering value. This can be done by providing useful tips, showing how the product can solve a specific problem, and offering personalized service.

Advantages of Influence-Based Selling

1. Zero marketing cost: Influence-based selling allows the seller to promote products without the need to invest in expensive advertising campaigns, using only their own network of contacts.

2. Higher conversion rate: When sales are based on a trust-based relationship, the likelihood of conversion increases significantly.

3. More loyal customers: Customers who buy through personal recommendations tend to be more loyal and more likely to make repeat purchases in the future.

Conclusion

Direct selling is a highly flexible and accessible business model that can be structured either in a single-level or multi-level format. Both systems have their advantages and challenges, but success in either depends largely on the seller’s ability to build solid relationships and use their personal influence to drive sales.

In today’s landscape, where personal contact and trust are more important than ever, influence-based selling emerges as an indispensable strategic tool. By applying these practices, both novice and experienced sellers can boost their sales and build a successful business, whether individually or by leading teams.