With direct sales , the sale of products or services takes place directly from the company to the end consumer without any intermediate trading levels . In contrast, the standing trade sale , in which the power along a chain is sold.
Essence of direct selling
Direct sales, in which a representative of the supplier visits the customer's premises in order to carry out a product presentation there, is mainly used for products or services that require a great deal of explanation or advice, for example technical devices or in the area of Financial services.
There is direct sales both for sales to companies and for sales to private consumers . A practical feature of direct sales for private and commercial customers is the fact that you don't have to leave your place of work or residence to find out more about the product.
Economic importance of direct sales
Direct sales, i.e. the sale of products or services from the company directly to the end user, is a widespread form of sales in all industries. However, only a few companies operate purely as direct sellers; most companies use direct sales in the context of multi-channel systems as a supplementary sales channel to retail. How much sales are generated in direct sales has not yet been clearly ascertained, as the various forms of sales within a company cannot always be clearly delineated.
The numbers of various associations such as B. the World Federation of Direct Selling Associations (WFDSA) or the Federation of European Direct Selling Associations (FEDSA) are only partially meaningful because they do not fully capture the markets they observe or different forms of direct sales, such as network or multi-level marketing, weight differently. In contrast, for the German direct sales market, according to a Federal Association of Direct Sales Germany e. V. and the University of Mannheim on the situation of the direct sales industry in Germany presented statistically reliable figures. Accordingly, direct sales in the consumer goods sector in Germany in 2017 were around 17.62 billion euros.
As the largest and best-known and until 2006 pure direct sales company in the world is the computer manufacturer Dell with an annual turnover of around 57 billion US dollars. The company has also been selling individual models and accessories through retailers since 2007, but by far the largest sales channel remains direct sales.
In the years of intense competition between Dell , which until 2006 sold its entire product range exclusively to end consumers, and HP , which mainly sells its products through specialist retailers, two very different sales philosophies can be identified.
Consumer rights in direct sales
Consumers have a right of withdrawal for goods that they have purchased through direct sales (e.g. at a sales party). The revocation must be declared to the company in writing (e.g. by letter, fax or email) and must be made expressly. A return of the goods without comment is legally not considered a revocation. The consumer does not have to justify his revocation.
The withdrawal period is generally 14 days. The period starts from receipt of the goods. In order to exercise the right of withdrawal, the consumer must send the withdrawal to the entrepreneur within the period. It is not necessary for the entrepreneur to receive the consumer's declaration of cancellation within the 14 days. If the revocation is declared in due time, the consumer must return the goods after 14 days at the latest.
The revocation cancels the purchase. The buyer must return the goods. The entrepreneur has to reimburse the full purchase price. The consumer bears the costs for the return of the goods if the entrepreneur has informed the customer of this obligation to pay the return costs before the conclusion of the contract. In practice, many companies voluntarily assume the return costs of their customers.
There are some exceptions to the right of withdrawal. For example, the purchase of sealed goods that are unsuitable for return for reasons of health protection or hygiene cannot be revoked. According to the current legal situation, this applies, for example, to sex toys purchased through direct sales.
Direct marketing, direct sales, network marketing and multilevel marketing
Direct selling is a broad term that is initially used generally to refer to the distribution of products or services to the end user without a middleman. This distribution can take place “directly” in the true sense, e.g. B. via the Internet (see also direct marketing ), as well as by independent business partners or sales representatives, e.g. B. Tupperware consultants or Vorwerk sellers. Both companies are members of the German Direct Sales Association. Network marketing and multilevel marketing are, in turn, sub-forms of this second form of direct sales. In these companies, the focus is not on selling products to end customers, as is the case with “classic direct sales”, but rather on recruiting new members, on whose sales performance commissions are paid to the recruiter. Network marketing is therefore often referred to as recommendation marketing .
Bundesverband Direktvertrieb Deutschland e. V.
In Germany, the Bundesverband Direktvertrieb Deutschland e. V . based in Berlin as the largest industry association serves the interests of direct sales companies. Founded in 1967 as a working group "Well advised - bought at home", today over 50 companies are among its members. According to the association, the sales volume of the companies represented by the Federal Association of Direct Sales was more than 1.8 billion euros in 2016. The member companies employ around 222,400 independent sales representatives, 72 percent of whom are women. The member companies have imposed certain behavioral standards on themselves in order to improve the public image of direct sales and to protect consumers even better. Among other things, an extended right of withdrawal is stipulated in these behavioral standards, which goes beyond the statutory provisions specified by the BGB. The member companies of the Federal Direct Selling Association grant their customers a right of withdrawal even if the service is provided and paid for immediately upon conclusion of the negotiations and the fee does not exceed 40 euros.
Criticism of direct sales
Direct sales companies in Germany, especially so-called multi-level marketing or network marketing companies, are regularly criticized. The focus here is on the low income of self-employed commercial agents. A study by the University of Nijmegen in 2012 shows that in eight out of ten of the major German companies examined, members earn an average of less than 150 euros in sales commission per month. It is difficult for job seekers to realistically assess the financial possibilities of working in direct sales, since companies like to advertise with high income opportunities, but i. d. Usually do not give any information about the actual average income of their members.
- § 312 b paragraph 1 of the German Civil Code
- Stiftung Warentest : Customer rights at sales parties: This is how it works with Thermomix and Sextoy , test.de from April 3, 2018, accessed on May 18, 2018
- Claudia Groß: Multi-Level-Marketing - Identity and Ideology in Network Marketing . VS-Verlag: Wiesbaden, 2008
- Federal Association of Direct Selling: BDD member companies generated around 1.8 billion euros in 2016. Retrieved February 13, 2018 .
- Claudia Groß: Between plastic bowl and bankruptcy . Financial Times Deutschland, May 3, 2012, p. 24.