Direct Selling

Definition of direct selling by members

This is a method of distribution without the general distribution route of producer→wholesale dealer→retail seller →consumer. Consumers who have used a relevant product admit the excellent quality of the product become a member, not a consumer, and then recommend the product to other consumers. The consumer encouraged to use the product becomes a member again for direct purchase or sale.

어도비 플래시 플레이어 프로그램은 매크로미디어 관련 저작 도구로 만든 파일(*.swf)을 실행할 수 있습니다. 어도비 플래시는 저작환경이며, 플래시 플레이어는 플래시 파일을 돌리는 데 쓰이는 가상 머신입니다. 본 프로그램과 관련한 기타 자세한 사항은 어도비 공식 홈페이지 (http://get.adobe.com/kr/flashplayer/)를 참조해주시기 바랍니다.

Features of direct selling by members

Direct selling by members has a structure of "customer=member" in which a consumer who has used a relevant product becomes a member. A consumer who is encouraged to use the product by the member becomes a member to purchase the product. This process continues to repeat.

This structure implies direct sales with consumers by means of the direct selling by members companies by omitting the distribution step, for example, agencies. The outcome of lower distributors (member) progressively affects higher distributors (member) in terms of compensation payment.

As described above, direct selling by members can build an active personal distribution network because everybody can easily join as a member, and allowance can be paid through encouraging acquaintances to join and purchase the good product.

In general distribution business, margins which occur in each step and repetition of labor cost, storage cost, transportation cost and ad cost contribute to high final consumer prices. However, because the distribution steps of the direct selling by members are relatively simple in comparison with ordinary distribution business, it reduces the costs for sales channels and management, and the reduced cost is paid to members.

The feature of the direct selling by members industry, and foundation with no capital, is a contribution to stable creation of job opportunities. The key sales items include the goods we need for everyday living, and this industry plays a great role in further employing female workers who have a gap in their job career.

While the direct selling industry continues to make an effort of self-regulation for tens of years, the industry has built a robust distribution channel and a consumer protection system to increase employment of young people and to create job opportunities for women. The industry also enhances the added value of Korean economy by supporting the foundation of no-shop business by the baby-boomer generation, developing small and medium-sized enterprises, providing a sales network to them, and exporting the distribution business to other countries.

Future of direct selling by member industry

The direct selling by member industry established and enforced the strategy to respond to consumer’s needs in the rapidly changing distribution environment and changing trends to continue to steadily grow, and is grown an important axis of the distribution industry.

SNS and the developed Internet industry is a key factor in great access to information by consumers to become smart consumers. Smart consumers can easily share product information trough blogs or cafes, and the information from mouth to mouth arouses immediate consumer reaction. More active sales activity through member subscription enable direct selling by member companies with excellent goods to ensure consumer reliability and to become more transparent.

The MACDS will continue to support transparent business activities and strategic growth so that the direct selling by member industry can have a new take-off to contribute to the national economy.