Direct sales has been an industry of innovators creating innovative products and distributing them using innovative methods. Direct sales companies have not just kept up with the times, they have lead them.
Cosmetic companies in direct sales have introduced hypo-allergenic cosmetics, cosmetics without free radicals, and many other innovations. BeautiControl International has been a leader in research and development in this field. Neways introduced thigh cream. Forever Living introduced aloe vera and is still the world’s largest aloe vera producer.
Prepaid telephone cards were first introduced into the United States by direct sale companies. Direct sales companies have played a pinnacle role in the deregulation of telephone service in the United States. Amway has brought hundreds of thousands of customers to MCI. Network 2000 can be credited with about one third of Sprint’s customers in their first years. Excel, a direct sales company, is now the fourth largest residential provider. Magic number, the virtual office and many other communication services have been introduced through direct sales.
The Internet has been around for a while. Yet direct sellers, especially those with multi-level and network marketing compensation plans have become one of the leading industries in its commercial use of the Internet. Direct sales companies and their distributors aggressively use the Internet for marketing. Direct sellers are using the Internet to market their products and their opportunities. They are using the Internet as a management and communication tool. They are also selling various Internet services.
However, the field where the direct sales industry has been the most innovative has been with nutritional products. It has also been said that most money made in direct sales ( 80 percent, by some unverified accounts) has been in companies offering “lotions and potions.” Perhaps there is a causal relationship between these two facts.
Some of the innovations or products introduced or popularized by direct sales are: pycnogenol, phytochemicals, diet patches, nicotine patches, antioxidants, melatonin, chromium, wild yam, Tahitian Noni, shark cartilage, white willow bark, St. John’s Wort, ginseng, homeopathic, herbal remedies, tea tree oil, etc.
Shortening the chain
It is no secret that the rate of change in innovation has increased greatly in just the last few years. For some technological innovations this increased rate of innovation has increased the desirability of using the direct sales distribution chain. Since many of these innovations only have a product life cycle of six months to two years, the normal retail chains are too long and cumbersome to bring such products to market. The cost to mass advertise can not be recovered in short product life cycles. The products or services would be obsolete by the time the consumer is made aware of them through the normal retail distribution chain.
Direct sales is much better suited to bring products with a short product life to the marketplace. The personal sales approach in direct sales is an excellent method for introducing innovative products which require explanation or education. The exponential growth in the sales force can bring products to the market place faster and less expensive than mass advertising. However short product life cycles also mean that the company that would like to introduce such high-tech products must have a strong R&D program to be able to constantly replace old products with the new products, if the company is going to be successful long term.
However, it is not just high-tech products and services that have shorter direct sales product lives. Some nutritional products such a melatonin or fen fen find themselves quickly facing FDA restrictions. Many other nutritional products are finding retail competition coming faster than ever before. Many of the products listed above are already being offered on the shelves of Wal Mart or many other retail outlets. One a Day brand vitamins are advertising its herbal formulations on television. They may not be as high quality as offered through direct sales, but they are often cheaper. This has created pressure on some direct sales companies offering nutritional products to lower their markups. Prepaid phone cards can now be found in many gas stations or other outlets. Many of the specialized phone services introduce by direct sales companies are now being offered by common carriers.
Direct sales still survives
Does this mean the end of direct sales? Of course not!! Over 125 years of direct selling has proven that this industry is better than any other in adapting and surviving in the face of adversity. Secondly, direct sales have not only survived because of innovative products but because it is one of the few industries that have offered personal sales assistance by personal sales representatives, it is better suited to introduce innovative products. In addition, the direct sales income opportunity offers a low-cost business opportunity, which is desired by many entrepreneurs today. There is a future for direct sales and there will be direct sales in the future.
What must be recognized by direct sales companies today is the increased need to innovative. Direct sales distributors should ask their company leaders what they are doing to find new products and services. Does your direct sales company have a R&D department? Are they in constant search for new products and services? Companies without their own R&D departments should work closely with companies like Sheffield Resource Network who specializes in finding new products for companies and companies for new products. Direct sales companies should be introducing at least one new product or service every six months. The Internet’s ability to disburse information may even increase that rate.
Products – proven and protected
However the direct sales company should not be introducing new products or services recklessly. Proper testing and research must be done. This is especially true for nutritional companies under the new FDA laws. Direct sales companies should take the time to protect their investments with patents and trademarks where possible. Direct selling distributors must become wiser in their selection in the direct sales opportunity. They need to select companies with the foresight to do the R&D, testing and obtaining patent protection. Many direct sales companies are already doing this.
Immunotec has a new patent product that has even been approved for Medicare payments. Eventus has a patent for the ingredients in its Vera Flex, which not only stops bone loss but helps build bone. Matol Botanical has introduced a new product, Biomune OSF Plus™, which has a patented proprietary process. In fact, many other good direct sales companies, such as VIVA America, have their own R&D departments and patented products. Direct sales companies are already adjusting. Those direct sale companies who innovate will survive; those companies who don’t will die