What is direct selling?
Direct Selling means the marketing of consumer products/services directly to the consumers generally in their homes or the homes of others, at their workplace and other places away from permanent retail locations, usually through explanation or demonstration of the products by a direct seller.
What products and services are marketed through direct selling?
Virtually every consumer product or service can be purchased through direct selling. People who purchase through direct selling cite product quality, uniqueness and money-back guarantee as the top reasons for shopping through direct selling.
What are the responsibilities of a Direct Seller from a Member company?
As a Direct Seller of a Member company, you are responsible for upholding the Code of Ethics and Conduct. To uphold the standards of business ethics your company has pledged to uphold, which are embodied in theModel Code of Ethics
As a Direct Seller, your responsibilities include the following:
Can Direct Sellers make product and business comparisons between direct selling companies?
Companies and Direct Sellers shall refrain from using comparisons which are likely to mislead and which are incompatible with principles of fair competition. Points of comparison shall not be unfairly selected and shall be based on facts which can be substantiated. Companies and Direct Sellers shall not unfairly denigrate any firm or product directly or by implication. Companies and Direct Sellers shall not take unfair advantage of the goodwill attached to the trade name and symbol of another firm or product.
Where can I obtain the full member list of the IDSA?
To get the full list of the Indian Direct Selling Association member companies, you may go to Our Members Or write to us at firstname.lastname@example.org
How can I find out more about the Code of Ethics and Conduct?
To find out more, you may visit us at link ofCode of Ethics
What qualification does one need for becoming a successful distributor?
Although the direct selling industry does not require any specific qualification, successful direct selling distributors are known to have exceptional:
However, two key factors critical for success are:
Can an individual company in the business of direct selling become a member of the WFDSA?
No. Only the national Direct Selling Association (DSA) of any country can be a member. Today it has DSAs of 58 countries as its members. For more detail, Go to WFDSA History
What are the new trends in the direct selling business?
We see the following new trends:
(a) All member companies are launching new products this year;
(b) All companies are expanding going to have new distribution centres to reach their customers quickly and the focus would be rural India.
Macro trends: Legitimisation, authenticity ,range of products, prevention of fly by night operators, gainful business opportunities for those who choose to sharpen their acumen ,growing support from the Indian and global Industry at large and requisite attention from the policy makers.
READY! SET! & GROW! This is how we see the industry at this point of time.
Your queries are welcome. It just goes to show that the direct selling industry is a force to reckon with and we are proud to have your attention.
How can you differentiate between legitimate & illegitimate direct selling Company?
|S. No||Parameter||Direct Selling Business||Pyramid/Ponzy Schemes|
|1||Basic definition||Marketing of product/services to the consumers generally from home or workplaces through explanation and demonstration by Direct Seller i.e. location away from the permanent retail locations. Can last indefinitely- as long as consumers continue to buy products||Compensation is based on new participants, not on selling products|
|2||Driving objective||High sale of product||Emphasis is on rigorous enrollment of new subscribers/investors with an aim to collect easy money from new subscribers.|
|3||Nature of business opportunities offered||Offers genuine business opportunities as they involve sustainable sales plan of goods||Offers no real business opportunities as these schemes generally do not involve products or involve products which are illusionary or have no established market value|
|4||Cost of entry||No or reasonable entry fee usually for valuable support and starter products||Comparatively high|
|5||Plan/Scheme||Plans are primarily based on the value of the sale of products and recognition of services for the sales support provided by the distributor||Plans are primarily based on money paid new recruits, and not on product sale|
|6||Mandatory enrollment||Enrollment of recruits is not compulsory for doing business as primary objective is sale of products||Enrollment of recruits is compulsory for doing business as commission is based on fee from new recruits or solely from the act of recruitment of members|
|7||Underlying product||Involves marketing of products under established brand names||Either no products are involved, or else the products are a cover and are not really sold to customers|
|8||Buy-back/guarantee of product||Highly competitive buy back guarantee to help ensure protection of Direct Seller and end consumer||Products usually do not have a buy-back policy or it is not followed in practice|
|9||Inventory||Products are supplied to meet demand and Direct Sellers are encouraged to hold minimal inventory and replenish as and when need arises. Further, modern logistics and fulfilment practices often permit ‘just-in-time’ delivery so that distributors do not usually need to keep extensive inventory||In case products are involved, “Front Loading” is encouraged. Therefore, products are thrust upon Direct Sellers, irrespective of their ability to sell the product and the actual market demand. Further, such products usually cannot be returned or resold to the seller. This is also known as ‘Inventory loading’|
|10||Sales training||Rigorous product and sales training is required||There is no emphasis on product or product sales training|
|11||Exit option||Direct Sellers joining the business can exit the business by returning the unsold inventory to the Direct Selling company||Usually, no refund on exit policy exists|
|Return and potential benefits|
|12||Returns vis-à-vis associated risk||Returns are dependent on the time invested and motivation of the Direct Seller which are generated slowly and tend to go up and down over the time depending on product sales. Thus, returns depend on the value of products sold, not on the number of recruits||Returns are primarily consistent and are based on entry fee from new recruits wholly apart from any activity of the participants or products sales. Thus, returns are directly linked to the number of persons recruited to join the scheme. Early entrants make very large returns. Late entrants cannot make any return|
|13||Sales incentive||Sales incentives are primarily delivered from sale of goods and are pain directly by Direct Selling companies through normal banking channels||Incentives are based on recruitment of people rather than on sales. Payments are often made through members, and negligible payouts by promoters|
|Legality of schemes|
|14||Registration/Licenses||These businesses are registered with local regulatory bodies in the countries of existence or obtain licenses under a prevalent law||These schemes are unregistered and not affiliated to any government body having power of legal enforcement|
|15||Adhere to Code of Ethics||Every salesperson has to abide by the Industry Model Code of Ethics e.g. Direct Selling associations, etc.||Generally, no Code of Ethics at all|
|16||Secretive and/or complex strategies||These business have written rules and regulations and give a clear disclosure of the entire marketing strategy right from enrollment to receipt of remuneration/fees||These schemes usually do not have any written document imparting complete information and modalities of the scheme|