A few notable startups now rely on the direct sales model, including Stella & Dot and L'Occitane.
Direct sales is a well-known business model in the health/diet, beauty, and housewares spaces. Brands like HerbaLife and Avon have built businesses around distributed or peer-to-peer sales forces who gain commissions from selling the product and recruiting others to do so as well.
A few notable startups now rely on the direct sales model. The newer twist in this model is that companies like Younique and Chloe + Isabel use social media for “virtual” house parties and shows, rather than door-to-door sales. Most, but not all, also offer sellers the chance to build teams and earn a percentage of recruits’ commissions as well. This part of the model has been more controversial, but can accelerate growth.
Examples of the direct sales model include: