The success of virtually every long-established DSO is based on marketing products that have a potential use in every home. Generally direct selling is not a good way of introducing specialized products to niche markets. Specialist retail stores or selective direct marketing campaigns using selected mailing lists is a better method of distribution.
Let me illustrate the point.
A few years ago I was approached by the owners of a new small business that had developed a unique range of equine health products; a line of nutritional products for horses that was neither quite appropriate for prescription by vets nor one that those shops that sell riding gear were able to demonstrate or sell selectively.
It was explained to me that ion the Uk there were over 550 000 horses and ove 200 000 private owners of horses with an interest in keeping them healthy and that their product range had a potential Uk sales market of at least !0 million.
The owners had developed a multi-marketing plan and wanted me to check it out in terms of its compliance with the law. In that respect there was no problem.
However, what I was able to explain was the unlikelihood of the market potential being met through any type of DSO-whether it be multi-level or single-level.
Virtually all the sales of any type of DSO are achieved by the part-time sales activites of self-employed direct sellers. The appeal of the business is that even with a small commitment in time it is possible to achieve sales through neighbourhood or other contacts.
An Avon representative or a Betterware distributor is given a geographic territory in which to distribute their catalogues on the clear understanding that every home represents a potential market for at least some items in the catalogue.
They may not make a sale in every home, or on every occasion they call, but the potential is there. In a multi-level sales organization direct sellers do not have territories; They rely instead on a mixture of neighbourhood,social, workplace and other contracts.
Again, if if the products on offer have a mass market appeal they will know that if they talk to everyone they meet in the course of their daily life, about their business and its products, then they are talking to potential customers. Limitin g any sales presentation to those who share any special interest or hobby with a direct seller is too restrictive for a part-time direct selling business to work profitabily.
Reference: Direct Selling: From Door to Door to network Marketing: Richard Berry.