Direct Selling Products

Which products are suitable for direct sales/MLM

Are you wondering, like many others, whether you can market your product through direct sales?

This article will help you to get some initial clarity for your considerations. If you can answer the following points clearly, then direct sales is a possible attractive option and we will be happy to help you with the detailed examination with our many years of expertise and our tried and tested methodology. In a positive case, we can then verify in the next step in the form of small manageable pilots whether the theory also proves itself in practice and can be scaled and economically represented on the basis of the KPIs achieved. In this way, you can easily test this attractive and modern distribution option without burning a lot of money.

Exkurs tip: It is also very important to dovetail intelligently with other sales channels, regardless of whether they already exist or are to be set up in parallel. To do this, you have to define a focus channel in advance, whichever one it is, and then the other channels will contribute to it.

In this article, direct sales specifically means:

The direct sale of a physical product via a sales agent/consultant/agent/representative. This is independent of whether the activity is carried out in a permanent position or as a freelance commercial agent or as a freelance commercial agent in a secondary profession. The latter has some special features that reduce the cost risk for the company in case of separation.

The brokerage/sales can be real or virtual in the demonstration formats 1:1 or as a party. These can be distributed in the classic direct sales system, e.g. Vorwerk, Tupperware, or in the network/MLM, e.g. PM International, LR, Avon, AMWAY.

In direct sales, two questions must always be answered in a crystal-clear and distinct manner:

1.) Why should someone buy the product

2.) Why should I work for this direct selling company

The Checklist

Checklist with basic requirements as to whether a product is basically suitable for direct sales:

There must be a fundamental need – latent or acute – for this product. In other words, the product must solve a problem for the customer.
The myth that you can sell anything at any price in direct sales must finally be put to rest with the establishment of the internet and the penetration of the smartphone!
Ideally, the product needs to be experienced and not just explained and demonstrated. These two requirements can be solved much more easily, conveniently and customer-friendly today with anonymous videos and explanations. The advisor would not deliver any real added value through his personal advice and thus argue against b).
Example from the past for need for experience: The special driving experience of an eBike test drive, the cooking experience with Thermomix, the fat- and water-free cooking experience with AMC.
The product must be of above-average quality or absolutely reliable. On the one hand, this is important for the consultant so that he can sell it with a clear conscience and generate recommendations from satisfied customers (question b)).
The product or offer bundle must be unique and not available in other channels in which the counsellor does not participate (question b). The advisor would immediately stop doing the work and the client would buy elsewhere and he would not get any money for his effort as a result.
If there are comparable competitors, the counsellor must be able to offer the best price/performance ratio to his clients.
Important note: Offering a pseudo-service or pseudo-offer that brings no real added value to the client just to justify differentiation no longer works (question b)! The counsellor might be able to sell one or the other, but he would have difficulties getting referrals and would lose his good reputation. This would make him insecure and thus lead to increased turnover.
Successful direct sales products live from their authentic story and emotion. A product can be sold all the more easily and thus all the more successfully in direct sales if the advisor can “sell a real story” (question b).
The product must have a sufficient margin. At least 45%-47% distribution costs (commission, training, client and advisor incentives, …) of the net sales price must be included. Again, the point is that the times are over when I can successfully sell at overpriced prices or justify a higher price with pseudo added values.

These points are all also crucial to generate many satisfied clients. Because these generate corresponding referrals/new customers, which in turn lowers the sales costs. Even if I outsource lead generation to the consultant, I have to price the effort in the form of commission. The lower the commission and the easier it is for the consultant to sell, the lower my sales costs. Also because, in addition to a lower commission, I can reduce my advisor acquisition, training, motivation and education costs and increase the necessary management margin.

Conversely, the more difficult a product is to sell, the narrower the management has to be, i.e. the smaller the management margins and thus the costs for management are spread over fewer heads or turnover and therefore make the system more expensive.

As you can see, direct selling is a special form of distribution that requires very special know-how. If the topic has now made you even more curious, then get in touch with us. We will be happy to provide you with our expertise in an initial discussion free of charge and look forward to answering these key questions together with you.

Which products are suitable for direct sales/MLM

In this article, direct sales specifically means:

The Checklist

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