Direct sales and multilevel marketing are very similar in that they are sales techniques that cut out retail and go straight to the consumer. Both of these sales methods can be very effective when they are used correctly. However, there are also some key differences between these two sales methods. Here is a closer look at direct sales and multilevel marketing.
Direct sales is often done for items that have a higher dollar value. The process of direct sales typically involves a company hiring an independent salesman who has a sales territory, and is paid on commission. Independent direct sales people typically to not get paid residual income for re-orders. However, their commissions are often very significant.
Multilevel marketing also involves independent sales people pushing products directly to consumers. However, unlike direct sales, multilevel marketing often involves a vast network of sales people who do not have a defined territory, and who simply try to generate as many sales as possible. Multilevel marketers often do get paid residual income for reorders. Multilevel marketers often sell products that have a lower dollar value, such as vitamins or essential oils.
Choosing between the two
Both of these sales strategies can be helpful for your business and can save you on retail costs. However, you still have to pay the costs of the sales people. So, you should always make sure that these costs are less, and that you can sell more products before you decide to move forward with either strategy.
But, as a general rule of thumb, if your product is of a higher dollar value, then you may want to go with direct sales vs. multilevel marketing. If your product is of a lower dollar value, and if you want it to be sold by a vast network of sales people across many different regions, then multilevel marketing may be the better option for you.
However, regardless of which option you choose, both can cut out the middleman retailers. This can help you get products directly in the hands of consumers at a faster and more efficient rate. If you do not know which option to choose, then you can try them both and see which one works best for your company. If neither option works well, then you can always go back to retail.