Person-to-person selling: Company and manufacturers’ representatives (independent contractors) sell services and products directly to people at home, office or workplace, on a one-to-one basis.
Party-Plan or Group Presentations: A system by which sales are made to individuals who are part of a group. The sales person invites a “hostess” to hold a “party” for eight to ten prospective customers, usually at home, but it can also be at an office or workplace. The emphasis of the party is to have an enjoyable time, products are attractively displayed whilst the independent contractor talks about the various products and allows the audience to “feel” products (touch, smell, taste, etc depending on the product being demonstrated).
Major Advantage: Direct-selling companies do away with wholesalers, retailers and other middlemen in the supply chain, thereby reducing their distribution and advertising costs.
Major challenge: Since there is minimal use of advertising and large dependence on `word of mouth’ publicity, there is a lack of awareness about the company and its products among the target audience.