Consider Direct Sales When Reinventing Your Business Model

We all have been exposed to direct sales presentations at some point or another–Tupperware and Avon come to mind–and we understand the impact and potential for success it has, especially in the “party” mode. Anyone that agrees to come to a party, whether it be for jewelry, cosmetics, food items or kitchen gadgets, clothes, health aids, etc., will likely buy something, as the decision to attend is also a decision to buy. Virtually 100% of attendees at a sales and demonstration party purchase something. That’s a phenomenal closing rate.

Many significant corporations are now using this direct sales approach, raising an army of salespeople who use their homes to sell products to their friends and family in a friendly, positive environment. The insurance industry uses this method extensively. The results? Huge sales increases for the business and penetration of a particular market area with very low costs and very high returns. The salesperson makes a nice profit with the costs being so low and markups high because of the obvious elimination of the retail and distributor markup. The company not only effectively penetrates a market but can support huge profits.

This approach has worked very well for many products and business models and is still gaining in popularity today. It is an attractive model in a down economy as it creates opportunity for those out of work or needing additional revenue and is a way to build a huge sales force quickly and efficiently, and very profitably as well. Success can be generated without the need for a huge advertising budget or many levels of markup. It works especially well with items that demonstrate effectively. Perfumes are a perfect example–hard to describe but one sniff and you get it. Likewise for jewelry that practically sells itself when seen.

The party model that was pioneered by Tupperware helped them convey the difficult concept of how to “burp” a container to make it seal airtight, a hard concept to advertise and explain but a very easy one to demonstrate. The parties worked extremely well; one demonstration could result in every party-goer “getting it” and buying it.

Evaluate your product and consider direct sales as an option. It may be the perfect way for you to reinvent yourself and improve distribution while increasing profits and revenue.