Direct sales: What it is and how to implement it in your business

Direct-to-consumer sales, or simply direct sales, has become a cornerstone for small businesses looking to connect with customers in a more personal and impactful way. It’s especially important considering nearly half of small businesses reported a desire to increase income as their primary goal in 2024. 

By selling directly to consumers, you can reduce overhead costs, expand your reach, and build stronger relationships without intermediaries like wholesalers or retailers. Whether you’re just starting out or looking to scale, understanding the ins and outs of this business model is key to unlocking its full potential.

As you deepen your understanding of direct sales, keep in mind that challenges like building trust and managing logistics are not uncommon, and you can overcome them as many business owners before you have. Let’s explore how to navigate the opportunities and obstacles of direct sales while maximizing your impact in this thriving industry.

What is direct sales?

3 direct sales types + examples

5 direct sales strategies to close a sale

Common challenges in direct sales (and how to overcome them)

Leveraging technology for direct sales

3 tips for finding success with direct sales

Grow your business with confidence

What is direct sales?

Direct selling refers to selling products directly to the consumer in a non-retail environment. In other words, the sales process occurs at home, work, or another non-store location.

Why should my company use direct sales?

You can apply direct sales to any industry, with the most popular niches being wellness, services, and home care. Some of the other benefits include:

• Cuts costs by eliminating intermediaries: As we mentioned, the middlemen involved in production and distribution suck up a chunk of your profit share. With direct sales, you can eliminate a portion or all of this expense. 
• Offers several sales avenues: Direct sales can be made online through a personal website, email, social media, or in person. You aren’t confined to a brick-and-mortar storefront.
• Expands customer reach and retention: With more avenues comes a broader scope of doing business and a potential for more customers. Plus, with the personability that comes with this tactic, you also achieve higher customer retention. 

What's the difference between MLM and direct sales? 

Many businesses have a predisposition toward direct sales and confuse it with multi-level marketing (MLM). MLM is a type of direct sales, but it’s not one we would recommend because it’s been correlated with pyramid schemes.

However, the Federal Trade Commission has been cracking down on certain companies for the misuse of MLM to conduct pyramid schemes. Direct sales, when done correctly, is both a legal and lucrative sales tactic for business owners.

3 direct sales types + examples

You can use three types of direct sales to capture a potential audience:

• Single-level marketing
• Direct-to-consumer marketing
• Multi-level and host/party plan

The main direct sales types we will focus on are single-level marketing and direct-to-consumer marketing, but we will explain the full scope of MLM so you know what to avoid.

Single-level sales

Single-level marketing is a one-on-one sales type that involves a salesperson who sells a product or service for a commission. For example, a dealership owns the cars on the lot and the sales team works as contractors for the dealership. Whenever they sell a car, they earn a commission on the sale. 

Takeaway: Businesses seeking a more aggressive sales approach typically hire a salesperson responsible for promoting their product, guiding customers through a sales funnel, and closing the sale. Otherwise, it’s left up to a more product-led strategy where you rely on product marketing alone to charm the customer into buying. This is more indicative of a direct-to-consumer strategy.

Direct-to-consumer (D2C) sales 

Direct-to-consumer sales use a website, landing page, or social media to sell directly to customers. For example, an online clothing boutique makes sales through the traffic generated by its website. They rely on referrals, customer incentives, and their brand to draw in customers and close the sale. 

Takeaway: Businesses with unique products, brand recognition, and a product-led marketing strategy can find success with D2C marketing. They don’t have sales teams to push products; instead, they offer competitive pricing, incentives, and exclusive product offerings to make a sale.

Multi-level and host/party-plan

Multi-level marketing involves using the tactics of single-level marketing. However, on top of earning a commission, you’re also compensated for recruiting more sales distributors. 

The setting takes place in person, usually at someone's home, where you promote a product through a presentation. Primary compensation comes from recruiting new distributors. To attract them, the host typically offers an additional discount to anyone who signs up as a company distributor.

Takeaway: As discussed previously, MLMs have left a bad impression on many business owners due to the nature and legality of the system. Rest assured: Direct sales using D2C and single-level are both legal and successful sales strategies.

5 direct sales strategies to close a sale

Having a friendly and professional attitude is a great start to being a direct sales superstar. Still, savvy business owners also use effective strategies to get their physical goods into customers' hands. 

Here are five direct selling strategies to help you achieve long-term success:

1. Offer freebies
2. Use email marketing
3. Promote with social media
4. Take advantage of cross-promotion
5. Give extra incentives

1. Offer freebies

Startups and small businesses rarely have the funds to finance large marketing initiatives. Plus, without brand recognition, convincing customers to pay for products they haven’t even heard of can be problematic. Free samples are an effective direct selling strategy because they allow customers to try your product or service before they buy it.

You can use free samples to:

• Introduce your product to new audiences who are unfamiliar with your brand.
• Create loyalty with existing customers and develop relationships.
• Expand prospective customers’ knowledge about the products you provide.
• Establish repeat customers to generate more sales of new products.

2. Use email marketing

Email marketing is an excellent sales channel for building trust and nurturing your leads. Although email marketing offers several benefits, including greater reach and affordability, you should be aware of the best practices when employing this marketing method.

• Avoid automated programs: Automated programs can come off as insincere and look like you’re only interested in selling a specific product line, rather than creating a connection or solving a problem for the consumer. 
• Keep your email pitches short and to the point: Include your offer in the subject line. Limit your first message to a few sentences where you can encourage the recipient to contact you by phone or respond directly to your email.
• Don't give it all away at once: Building an email list is hard enough, but you also want to keep your audience coming back for more. Plan a series of emails where you do a big reveal at the end. Or offer incentives to keep them interested. 

3. Promote with social media

Social media has become an effective marketing and sales tool for businesses looking to engage in direct sales. With social media, you can expand to a greater market. Social media can help you:

• Create business pages
• High-quality posts and photos
• Give business updates
• Collect feedback from customers

But most importantly, you can build a community. 

4. Take advantage of cross-promotion

Cross-promotion can be achieved in two ways: by promoting one product with another or through a strategic partnership. 

Cross-promotion: Promote one product by using another

Rather than spending heavily on advertising for both products, you can create strategic cross-promotions to help you cut down on your marketing budget, like bundled offerings or offering an accessory or product at a discounted price with the purchase of another product. With the right cross-promotional marketing, you can attract more customers with less effort. 

Cross promotion: Strategic partnerships

Cross-promotion can pay off exponentially with strategic partnerships, such as joint media appearances and guest hosting a podcast. You can successfully expand through each other’s customer bases. 

Cross-promotion is also a great way to cut marketing costs because you can split the costs between partners. As part of your overall direct sales strategy, don’t just build relationships with customers. Strive to build relationships with other sellers in the community, too.

5. Give extra incentives

To succeed in direct sales, businesses must find ways to attract and retain customers.

One of the most effective ways of building a loyal customer base is by offering extra incentives. Extras can include discounts like:

• Buy-one-get-one-free or half-off offers
• Value-added services like providing free gift wrapping

Also, consider sponsorships like sponsoring a local youth sports team or charitable contributions like volunteering at events that relate to your business. These activities can boost brand awareness.

Common challenges in direct sales (and how to overcome them) 

Direct sales can be a rewarding way to grow your business, but it’s not without its hurdles. From earning trust to managing logistics, small business owners often face obstacles that can make or break their success. 

Let’s dive into two major challenges and how you can tackle them head-on.

Building trust and credibility

One of the biggest hurdles in direct sales is overcoming skepticism. Many people associate the industry with pushy tactics or outdated practices, which can make it tough to build trust. The good news is you can position your business as a credible and trustworthy option by being transparent and customer-focused.

Here are two of the most common ways to build credibility:

• Communicate with transparency: Clearly communicate what you offer, how much it costs, and how your business operates. Whether you're explaining product benefits or detailing your compensation plan for sales reps, transparency leaves no room for doubt or confusion, which helps to dispel negative perceptions from the start.
• Leverage social proof: Use glowing reviews, testimonials, and success stories from satisfied customers to show—not just tell—how your products or services deliver value. When potential buyers see real-life examples of others benefiting from what you offer, it builds confidence and encourages them to take the next step.

Managing inventory and logistics

Running a smooth operation in direct sales means keeping a close eye on inventory and logistics. Overstocking can tie up your cash flow, while stockouts can frustrate customers and damage your reputation. To avoid these pitfalls, you need systems that help you stay organized and efficient.

Here are a few ways to streamline your operations:

• Optimize inventory management: Implement systems that help you balance your stock, so you're not tying up cash flow with overstock or frustrating customers with stockouts.
• Streamline shipping and packaging: Ensure your packaging and shipping processes are both quick and cost-effective. Speed and accuracy matter—customers expect their orders to arrive on time, every time.
• Create a straightforward returns process: Even without a physical storefront, you can create hassle-free procedures for customers to return items. Prioritizing fast delivery and easy returns isn't just about convenience; it's about building a positive experience that keeps customers coming back.

Legal and regulatory compliance

Staying on the right side of the law is essential in direct sales. Specific regulations govern this industry, and failing to comply can lead to costly fines, lawsuits, or reputational damage. The good news is that understanding and adhering to these rules isn’t as daunting as it might seem; with a little effort, you can keep your business running smoothly and legally.

Here are a few ways to keep your business running smoothly and legally:

• Research legal requirements: Start by researching the legal requirements that apply to your business. These can vary by location, industry, and the nature of your products or services. From local permits to national consumer protection laws, make sure you're fully informed about what's expected of you.
• Conduct business with integrity: Beyond just following the law, you should also avoid practices that could harm your customers or put you at risk of legal trouble. Prioritizing transparency and fairness in all your dealings not only keeps you compliant but also builds trust with your audience.
• Consult legal professionals: When in doubt, don't hesitate to consult with legal professionals. Proactively addressing potential issues before they arise is always smarter—and cheaper—than dealing with the fallout later.

By staying compliant and ethical, you protect your business while fostering a reputation of reliability and trustworthiness.

Leveraging technology for direct sales

Today’s technological changes have brought both challenges and opportunities to direct sales, but the right tools can streamline your operations and help you reach more customers than ever before. Let’s explore how you can use technology to take your direct sales business to the next level. 

Customer relationship management (CRM) tools

A CRM system is like having a personal assistant for your customer interactions in one place. It provides a centralized platform to store and organize information about your customers, making it easier to stay on top of your relationships. With a CRM, you can track everything from contact details to purchasing habits, helping you identify loyal customers and spot opportunities for upselling or cross-selling.

One of the biggest advantages of a CRM is its ability to document every interaction. Whether it’s an email, phone call, or meeting notes, having a comprehensive history allows you to tailor your messaging and provide a more personalized experience. This not only strengthens your relationships but also ensures no important detail slips through the cracks. 

E-commerce platforms and online stores

For direct sales businesses, an e-commerce platform is a powerful alternative to a physical storefront. These platforms allow you to host an online shop where customers can browse your entire product range—complete with descriptions, images, and pricing—all in one accessible digital format.

Beyond just displaying products, e-commerce platforms make it easy to process transactions securely using a variety of payment methods. They also come equipped with tools to manage orders, track fulfillment, and update customers on their purchase status. 

Plus, the data these platforms provide—like website traffic and conversion rates—can give you valuable insights into customer behavior, helping you refine your sales strategy and boost performance.

By embracing e-commerce, you open the door to reaching customers far beyond your local area. And with the right systems in place, you can ensure a seamless shopping experience that keeps buyers happy and engaged.

Social selling and community-building tools

Social media doesn’t have to only be for scrolling; when used correctly, it’s a powerful way to grow your direct sales business. Platforms like Facebook, Instagram, and LinkedIn offer boundless opportunities to connect with potential customers and build meaningful relationships.

The key to success on social media is consistency. Regularly engaging with your audience helps foster a sense of connection and loyalty to your brand. Share content that adds value, whether it’s tips, behind-the-scenes looks, or customer testimonials. Respond to comments and messages promptly to show you’re listening and care about their input.

Building a community around your brand takes time, but the payoff is worth it. When customers feel like they’re part of something bigger, they’re more likely to stick around and spread the word to others. Social selling isn’t just about making sales—it’s about creating a network of advocates who believe in what you do.

By combining CRM tools, e-commerce platforms, and social media strategies, you’ll have everything you need to thrive in the world of direct sales.

3 tips for finding success with direct sales

Deploy these tips throughout the different strategies you try to make your pitches more effortless and increase customer retention. 

1. Understand your product

Selling a product that’s yours is arguably the easiest to pitch, simply because you know everything there is to know about it. But if you’re employing a sales team to pitch and sell your product, they’ll need an in-depth understanding. 

Here are the questions you need to pose to each sales member to prepare them for their pitch:

• Do you believe in the product? A fake-it-till-you-make-it strategy only goes so far. Having a strong belief that the product is actually worth its hype is important.
• How is it made? Knowing at least the high-level points of production shows potential customers you know your product on a better level. 
• What pain points does it relieve for your customer? This is your biggest sales point. Customers want to know that you can solve their problems.
• How is it better than the competition? Focus on price, accessories, and quality when making a comparison to your competitors.  

2. Maintain personability

Customers are people, and no one likes feeling like a number on a page. Customers want you to earn their trust and, in turn, their business. Know who your customers are and ask questions to understand what they’re looking for. Remember these tips for maintaining personability:

• Personalize the experience: Learn who they are and what they’re looking for.
• Have a sales pitch ready: Know your strengths and be able to communicate them in a concise sales pitch.
• Maintain contact with prospects: Follow up to thank them for their time and keep the conversation going.

3. Collect customer information

Collect customer feedback and information for marketing purposes. If they’ve bought from you once, they’re known as a warm lead and can be ripe for buying again in the future. Here’s what you’ll want to collect:

• Name
• Address
• What they purchased
• Customer survey

Also, remember to ask for referrals—people are more likely to buy a product based on their friend's recommendation.

Grow your business with confidence

Direct selling has seen a renaissance in recent years, with an ever-increasing focus on providing valuable content, products, and services to consumers. If you take the proper steps, you can work to build a trustworthy and successful business.

From building trust with customers to leveraging technology like accounting software, small business owners have countless opportunities to streamline operations and boost their bottom line. By addressing challenges head-on and staying compliant, you’ll set your business up for long-term growth.