Public Perception Of Direct Selling

DIRECT SELLING ASSOCIATION

29 Floral St. London WC2E 9DP

Tel: 020 7497 1234 Fax: 020 7497 3144

E-mail: info@dsa.org.uk

Website: www.dsa.org.uk

The Direct Selling Association Limited.

Registered office as above. Registered in England Number 851537

Member of FEDSA - Federation of European Direct Selling Associations

Member of WFDSA - World Federation of Direct Selling Associations

Direct Selling - briefing on world wide channel of distribution October 2005

The business method

* Direct selling is a channel of retail distribution is which, through personal explanation and

demonstration by direct sellers, orders for goods and services are obtained in face to face

contact with consumers - away from normal retail business premises and normally in the

homes of consumers;

* Direct sellers are predominantly self employed and work part time. They obtain customer

orders, place orders with their company and, a little later, deliver the goods and collect

payment from their customers;

* Although direct selling pre-dates all other distribution channels, it first became the basis

of organised business in the mid-19th century - in the US;

* Although direct selling companies/organisations ( DSOs ) may use a wide range of

marketing methods, the key difference between direct selling and direct marketing is that,

in direct selling, orders are primarily obtained in face to face manner;

* Face to face sales are most commonly made on a person-to-person basis, but the method

also embraces 'party sales', where direct sellers make demonstrations to groups of

consumers in the home of one of them;

* The products sold by DSOs cover a wide range of personal and household goods. With

the exception of fresh foods, large items of furniture and white goods, the range is similar

to that sold through department stores;

* The growing range of direct sold services includes utilities, telecoms and financial

services - where the opportunity for personal explanation has proved to make the direct

selling channel more cost effective than other direct marketing methods;

* Direct selling is uniquely able to create markets for novel and innovative products where

advertising alone is unable to generate demand in supermarkets and other retail outlets.

( historically, the current retail markets for vacuum cleaners, washing machines, plastic

kitchen storage containers and others, were all first created through direct sales );

* Where today's major retail store groups demand substantial advertising commitments by

their suppliers, as a condition for distribution and shelf space, direct selling provides

opportunities for new businesses - particularly in niche markets.

Direct selling - a global business

* DSAs, affiliated to WFDSA, are now established in 60 world wide markets and, in 2004,

accounted for collective sales of US$ 93 billion - 70% of the total direct sales channel;

* Direct selling businesses now operate in 170 world wide markets;

* Over 50% of world wide direct sales are accounted for by multi-national corporations;

* In the US, Western Europe, Japan & Australia, direct selling accounts for 0.70% to 1% of

national Gross Retail Product. In some markets, it is approaching 3% of GRP;

* In terms of direct sales per home per annum, the world's most productive direct selling

markets are Japan and Australia;

DIRECT SELLING ASSOCIATION

29 Floral St. London WC2E 9DP

Tel: 020 7497 1234 Fax: 020 7497 3144

E-mail: info@dsa.org.uk

Website: www.dsa.org.uk

The Direct Selling Association Limited.

Registered office as above. Registered in England Number 851537

Member of FEDSA - Federation of European Direct Selling Associations

Member of WFDSA - World Federation of Direct Selling Associations

* In 2005, as a result of the Gorbachev reforms, the fastest growing world wide direct

selling markets are Russia, Eastern Europe, China and India;

* Although still hampered by Government restrictions ( on multilevel organisation

structures, personal selling methods, the size of sales meetings and on doing private

business across Province borders ) China has huge potential for direct sales;

* Direct selling is particularly effective in markets with undeveloped retailing

infrastructures and in every Western market comprising isolated residential communities;

* All DSAs are required to enforce a WFDSA consumer code giving customers a right to

cancel orders and a level of consumer protection that is at least equal to that provided by

their retail store competitors.

Socio