Prof. Der-Fa Robert Chen Direct Selling Research Center Definition of Direct Selling Prof. Der-Fa Robert Chen Direct Selling Research Center //www.dsrc.nsysu.edu.tw

Classification of Marketing Channel A. Levels: 0 level：Producer -> Consumer (General Definition of Direct Sales） 1 level：Producer -> Agent -> Consumer 2 levels：Producer -> Agent -> Retailer -> Consumer N levels：Producer -> Agent -> Whole seller ->… -> Retailer -> Consumer

B. Characteristics Store：Traditional Marketplace、Retail store、Convenient store 、Supermarket、Hypermarket Non-store（Direct Selling、Direct Marketing）: People selling、Media selling

General Direct Sales： Producer or importer sells the goods/services directly to the end-user, e.g., the fisher sells sea food to consumer, the farmer sells produces to the consumer, the publisher sells books, magazines, encyclopedia to the consumer.

Direct Selling： Producer or importer sell their goods/services through independent distributors (ID for short) (who are also the consumers of the goods, not employees of the company) to the consumer by face-to-face at non-fixed location.

Direct Marketing： Media include DM, Catalogue, Radio, TV and Internet. Producer or importer sell their goods/services through media to the consumers. Media include DM, Catalogue, Radio, TV and Internet.

Direct Selling classes： (1) Uni-level Marketing: ID (also a consumer) sells goods to the consumer and get compensation from the company according to the sales volume or value. (About 20% of direct selling companies employ this scheme.)

(2）Multi-level Marketing (MLM) Network Marketing： According to the compensation plan,an ID can sell the goods to the consumer as well as recruit, train the consumer to become an id who is called the down-line of the ID and the ID is called the up-line.

The ID could get compensation according to the number and generations of down-line ids as well as the sales value of his own and his down-line ids. （About 80％ of direct selling companies employ this scheme）

DM、Catalogue Uni-level MLM Direct Sales Marketing Direct Selling Radio、TV Internet Direct Marketing