DIRECT SELLING BLOG

Defining a Blue Ocean for Direct Selling

To develop a successful direct selling model it is essential to identify certain characteristics, in this first article we mentioned the following 5:

 

  • Geography
  • Categories
  • Product
  • Value proposition
  • Consumer

 

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​GEOGRAPHY

 

  • After selecting the countries. It is necessary to select which regions of the country you want to reach
  • There is a growing market in emerging countries



CATEGORIES

 

  • Product categories: Which one or which are viable to select (You can use as a guide the tables of categories mentioned previously in our article Direct Selling in Numbers
  • Accessories and clothing category are high in some latin american countries and growing fast in other markets
  • Cosmetics and personal care are still a very good source of income in the Direct Selling industry.
  • Lack of loyalty from direct selling companies, they can not connect their story  enough to maintain their sales force



​PRODUCT

 

  • What products could be more successful in these markets? They fulfill the fundamental aspects? Fundamental Aspects

 

The fundamental aspects must be fulfilled:

 

    Product:

     

    • Differentiated Product
    • Consultative sale
    • Margin
    • Re-purchase

     

    Compensation plan

       

    • Intermediation margin
    • Commissions
    • Offers
    • Awards
    • Incentives
    • Emotional elements

     

    Efficiency

       

    • Order to Cash
    • Cash to Deliver
    • Support

     

    Note Support: "In the world, the largest direct selling companies are dedicated to cosmetics and household items, although other products such as functional foods and nutritional supplements have achieved successful sales through this system.

     

    The first condition for a product to work well in direct selling is that it has a recurring consumption. According to Santiago Salazar, president in Colombia of the Swedish company Oriflame, which sells cosmetic products, "products where purchases only occur after long periods of time are not common in this channel." Cosmetics and nutritional products are good examples of products they are bought frequently and generate a captive consumer base for the future, which also speak well of their experience and attract new customers, "he says."

     

    (Dinero, s.f.)



    VALUE PROPOSITION

    Essential questions:

     

    • What is my DNA?
    • What is my competence: Direct - Indirect
    • What is the differentiator of my product?
    • Operation Size
    • Future plan
    • Challenges and Threats

     

    added value

     

    "It is essential, in addition, to have a differentiated product offer. The brands and characteristics of the offer in a direct selling catalog must be different to those that consumers can find in traditional channels. They can not be very cheap or generic. Finally, innovation and the development of new products play a fundamental role. "You have to bring news every 21 days to consumers, catalogs must be renewed," says Mauricio Restrepo, Natura manager. "Natura launches around 235 new products a year, 0.6 products per day, the level of innovation is very high, but you also have to discontinue products gradually, otherwise the catalogs become like the yellow pages," adds Restrepo. Belcorp, on the other hand, produces around 750 new products per year for its three brands: L'Ebel, Esika and Cyzone. "

    (Dinero, s.f.)

     

    CONSUMER

    Consumer Omni-Channel

    The roads to captivate people in Direct Selling must be multiple, orders must be managed through both digital and face-to-face means: the company's website, replicated websites of the consultants, through an exclusive call center enabled for orders and / or directly through the consultants.

    ​Consumer Profile

    • "Direct sellings customers are found in most social class levels of  the countries.

     

    • The representatives have different ages, different schools, men and women, the segment is increasingly broad.

     

    • In Latin American countries, direct selling have entered a phase of extraordinary boom in recent years. In fact, according to ACNielsen measurements, direct sales reach 63% of Colombian households with their products.

     

    • Companies must develop a strategy in which they can have products aimed at different targets in order to increase their participation and stop pulling from one side to the other market shares and avoid falling into the red sea (unwanted) of direct selling.



    Bibliography:

     

    Dinero. (s.f.). Dinero.com. Gotten from: https://www.dinero.com/caratula/edicion-impresa/articulo/la-fuerza-redes/49645


             
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