Even though I have been talking a lot about direct selling companies in Asia like Qnet, I realised that I have not talked about the most commonly used direct selling terms related to direct selling network marketing companies. Knowing the meaning of these terms was the biggest issue that I faced when I began my journey with the top direct selling company in India.
Direct sales or Selling
The terms direct sales and selling can be used interchangeably. It basically means a business model where the products are sold to the customer directly by a sales representative of the company instead of in a retail selling outlet.
Most sales in direct selling businesses take place through one-on-one contact or through electronic mediums like phone, internet etc. Most top direct selling companies in Asia follow a multilevel marketing business model where the representatives are compensated in the form of commission for products sold and for recruiting more members into the team.
Multilevel marketing or MLM is a business model where products are sold to customers directly by a sales representative whose salary is based on the commission from selling the product and recruiting new members to the organization.
In Direct selling network marketing companies, sales agents are called distributors. They are tasked with selling the company’s product and they receive a commission for their sales. In the case of Qnet, they are called Independent Representatives or IR.
Downline in a direct selling company are members or recruits that have been recruited by a distributor to sell products under him. In top direct selling companies in India like Qnet, an Independent Representative or IR receives compensation depending on the sales that his or her downline makes as well as the profits for their own sales.
In network marketing, an Upline is a distributor who introduces you to the direct selling company. They are also called sponsors and act as mentors for their recruits.
In single-level marketing, the sales representative is only paid for their personal sales activity. There are no commissions based on getting new recruits to the company and the income is only in the form of commissions and bonuses.
Pyramid schemes are illegal business model where the sole means of bringing in money is by getting new recruits. The money received from these recruits is used to pay existing members. Many of these companies have a joining fee that the new recruit is forced to pay. It is an illegal scam that is often disguised as legitimate direct selling network marketing business.
This is a method of using home parties as a means of introducing your customers to your products and sells them. In these home parties, the Independent Representative makes a sales pitch and allows the guests to check out the products and place orders.
This is the alternative to Party planning style of sales where the Independent Representative makes the sale person-to-person. This can be done in-person or via other mediums like phones.
Knowing these basic terms about direct selling will allow you to quickly grab a foothold in the industry and understand the basics much better.