The Street:
Direct sales or network marketing. This sales strategy was made famous by companies like Tupperware (TUP – Cramer’s Take – Stockpickr – Rating)
and Mary Kay. Since then, many other companies, such as The Pampered
Chef, Creative Memories and Southern Living, have found great success
with this model.A direct sales approach involves employing a large-scale,
commission-based sales force whose members are invested in the success
of your company. Sales agents typically host home parties, during which
they demonstrate products to the target market.Then they start building a network of friends and
acquaintances who host their own home parties — with a new group of
consumers — in return for incentives or free product. These friends
and acquaintances may become direct salespeople for the brand as well.Companies that use this model value a personal approach, which
promotes a stronger connection between the brand and the potential
customer. It’s like combining marketing and sales in one pitch — when
a friend vouches for a product and sings its praises, you’re more
likely to purchase it.In addition, a company can build an
army of salespeople who are passionate about its brand and who are
interested in starting their own businesses and achieving financial
independence.
