Transcript Definition of Direct Selling

Definition
of
Direct Selling
Prof. Der-Fa Robert Chen
Direct Selling Research Center
//www.dsrc.nsysu.edu.tw
Classification of
Marketing Channel
A. Levels:




0 level：Producer -> Consumer
(General Definition of Direct Sales）
1 level：Producer -> Agent -> Consumer
2 levels：Producer -> Agent -> Retailer
-> Consumer
N levels：Producer -> Agent -> Whole
seller ->… -> Retailer -> Consumer
B. Characteristics


Store：Traditional Marketplace、
Retail store、Convenient store 、
Supermarket、Hypermarket
Non-store（Direct Selling、Direct
Marketing）:
People selling、Media selling
General Direct Sales：
Producer or importer sells the
goods/services directly to the
end-user, e.g., the fisher
sells sea food to consumer,
the farmer sells produces to
the consumer, the publisher
sells books, magazines,
encyclopedia to the consumer.
Direct Selling：
Producer or importer sell
their goods/services through
independent distributors (ID
for short) (who are also the
consumers of the goods, not
employees of the company) to
the consumer by face-to-face
at non-fixed location.
Direct Marketing：
Producer or importer sell their
goods/services through media to
the consumers.
Media include DM, Catalogue,
Radio, TV and Internet.
Direct Selling classes：
(1) Uni-level Marketing:
ID (also a consumer) sells goods to
the consumer and get compensation
from the company according to the
sales volume or value.
(About 20% of direct selling
companies employ this scheme.)
(2）Multi-level Marketing (MLM)
Network Marketing：
According to the compensation
plan,an ID can sell the goods to
the consumer as well as recruit,
train the consumer to become an id
who is called the down-line of the
ID and the ID is called the up-line.
The ID could get compensation
according to the number and
generations of down-line ids as
well as the sales value of his
own and his down-line ids.
（About 80％ of direct selling
companies employ this scheme）
Uni-level
Direct
Selling
MLM
Direct
Sales
DM、Catalogue
Direct
Marketing
Radio、TV
Internet