For more than 100 years, direct selling has positioned itself as one of the best ways to reach consumers with an impeccable shopping experience and enough trust to maximize conversions using relationships with representatives to maintain trust. Direct selling is to date, one of the most popular and successful sales models in the world.
By leveraging technology, the direct selling channel has evolved and adapted to changing consumer behaviors and has provided entrepreneurial opportunities and economic growth outside of traditional channels for almost anyone.
Due to its natural flexibility and low initial investment requirements, it is an ideal option for developing independent business networks based on personal relationships, one-to-one sales, product demonstrations, and direct sales through digital channels.
Especially in Latin America, the model has continued to strengthen over the decades, even reaching high growth levels in recent years, with a sustained annual growth rate of 3.8% in the last three years, compared to a discouraging outlook for most industries after an economically challenging couple of years.
Direct selling can be done by using many different sales models, and understanding which one is best for your business and how to manage it may be challenging.
S4DS’s Direct Selling Software adapts to serve all direct selling models and meets the needs of your organization in the search for sales process optimization and digital transformation. We have worked with the world’s leading companies on each of them, offering a multi-country, multi-language, and multi-currency platform.
In this article, we’ll briefly explain the main direct-selling models S4DS’s Solution covers and their differences to help you identify the one that best suits your business.
Flat Direct Selling / Catalog Sales
This business model consists of a single level that involves a traditional sales force, representatives, consultants, or advisors, who are responsible for distributing the product through their personal networks. They sell the product themselves and place the order to be distributed by the company.
In general, businesses that choose this direct sales model have a zone leader who directs groups of sales representatives to achieve their goals and keep the numbers growing. Thus, a company representative ensures goal attainment through the use of a compensation plan to improve the consultant’s experience as well as the end customer’s.
Flat Direct selling can be done by marketing products through a printed or digital catalog that is given to the representatives to be distributed among their personal networks. Likewise, this model may benefit from using S4DS’s virtual offices and replicated websites to complete sales through digital channels using the sellers’ own replicated portals with automatic commission calculation.
The binary direct selling model is one of the most used in Latin America due to its simplicity in motivating people to participate in the business. It consists of a network that is structured in two independent sections in which the business is developed.
Some of the main characteristics that set it apart are that:
- It is based on the strength of the network and the business over the products. Therefore, it is very useful for companies with a reduced portfolio
- The concept is easy to sell and understand: it requires a significant initial investment of effort and then keeps running using the network’s own strength
- Payment is made on the weaker leg of the network (which has two legs) or based on a balance
- Each distributor can only have two people affiliated at their direct level
- Each member is responsible for recruiting and sponsoring two other people to join the business and so on
With S4DS software, it is possible to automate the calculation of commissions for this model using a rule engine that also determines bonuses for goals and awards, among others.
Learn how you can automate these five business processes today and focus on motivating your sales force to generate more results!
The unilevel model is one where the sales force distributes de products to their own network of acquaintances by using recommendations and face-to-face marketing.
The main goal of this model is to develop the business by building marketing networks on a unilevel structure with multiple depth levels. Meanwhile keeping the sales of the products up and growing to generate revenue. Compensation plans for unilevel model then, are often based on commission payout by personal sales level but also according to the whole personal network’s effort.
Due to its important size, this sort of model can benefit from Corporate Learning Management Systems or LMS that enable the business to empower representatives and train the networks to achieve better results. With S4DS’s customizable LMS you may train consultants in:
- Direct Selling and Digital Selling Techniques
- Understanding and maximizing your company’s compensation plan
- Using digital tools and S4DS’s Platform to leverage Social Selling Skills
- Leadership and teamwork techniques to boost the potential of their networks
Direct Selling with Social Selling
Social Selling is based on the creation of valuable relationships, mainly by using social media channels as a tool to drive sales. Beyond just sharing or promoting the product, this model aims to create trustworthy relationships on Social Media channels by sharing valuable content on the products, a certain lifestyle associated with it, and the brand’s values.
The ultimate purpose is to drive conversions, yet the purchase is often finished on channels outside the social media such as e-commerce and replicated websites that enables an automatic mapping of the customer’s source.
In this model, which is amongst the most popular nowadays and with the highest growth potential rates especially for Latin America, the social sellers interact in social media with their audiences to share content and URLs with actionable CTAs that take them to replicated websites to finish the purchase while the commission is immediately assigned and calculated for their efforts using automatization tools such as S4DS’s Software for Direct Selling.
Affiliate Marketing is a model in which people may enroll as independent vendors of a product or service in the name of a company at a very low rate or no cost at all. Generally, this model is very similar to the traditional direct selling model, yet the main difference is in the channel for sales. Affiliate Marketing usually leverages replicated sites and other independent digital channels for affiliates to distribute amongst their network of influence and drive sales.
This business model leverages micro-influencers to make the most of the conversion and grow the reach of the product with the geographical and cultural flexibility that is natural to have independent digital sales channels assigned to people all over the world. Ultimately, what drives the decision to finish the purchase, is mainly the confidence and influence generated by the seller on the customer. This is backed up by the quality of the product.
Direct Selling businesses may leverage an Affiliate Marketing model to make the most out of their business by supplying representatives with unique tools such as S4DS’s replicated and influencer websites to boost their results.
Experience the power of technology to take your business to the next level and adapt to your model needs by scheduling a free demo today!