Prof' DerFa Robert Chen

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Definition of Direct Selling

• Prof. Der-Fa Robert Chen
• Direct Selling Research Center
• //www.dsrc.nsysu.edu.tw

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Classification of Marketing Channel

• A. Levels
• 0 levelProducer -gt Consumer
• (General Definition of Direct Sales)
• 1 levelProducer -gt Agent -gt Consumer
• 2 levelsProducer -gt Agent -gt Retailer
• -gt Consumer
• N levelsProducer -gt Agent -gt Whole
• seller -gt -gt Retailer -gt Consumer

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• B. Characteristics
• StoreTraditional Marketplace?Retail
  store?Convenient store ?Supermarket?Hypermarket
• Non-store(Direct Selling?Direct Marketing)
• People selling?Media selling

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General Direct Sales
Producer or importer sells the goods/services
directly to the end-user, e.g., the fisher sells
sea food to consumer, the farmer sells produces
to the consumer, the publisher sells books,
magazines, encyclopedia to the consumer.
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Direct Selling
Producer or importer sell their goods/services
through independent distributors (ID for short)
(who are also the consumers of the goods, not
employees of the company) to the consumer by
face-to-face at non-fixed location.
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Direct Marketing
Producer or importer sell their goods/services
through media to the consumers. Media include
DM, Catalogue, Radio, TV and Internet.
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Direct Selling classes
(1) Uni-level Marketing
ID (also a consumer) sells goods to the consumer
and get compensation from the company according
to the sales volume or value. (About 20 of
direct selling companies employ this scheme.)

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(2)Multi-level Marketing (MLM) Network
Marketing
According to the compensation plan,an ID can sell
the goods to the consumer as well as recruit,
train the consumer to become an id who is called
the down-line of the ID and the ID is called the
up-line.
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The ID could get compensation according to the
number and generations of down-line ids as well
as the sales value of his own and his down-line
ids. (About 80 of direct selling companies
employ this scheme)
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Direct Selling
Direct Sales
Direct Marketing