Jeremy Lieu, managing direct at Lightspeed Venture Partners, wrote a fantastic guest post on TechCrunch about the direct sales model. The article is titled “Is Direct Selling The Next Driver of Startup Commerce Companies?” In the article, Jeremy highlights three reasons why direct sales is being “invigorated” in this new economy. It’s great to see venture firms take notice at the amazing power the industry offers. In January, I wrote about ViSalus’s amazing success. When venture firms like Blythe and Lightyear place successful bets on MLM startups, it’s attracts more capital for the space, which raises the bar for everyone. In Lieu’s article, the three key reasons for the uptick in direct sales are:
First, the sluggish economy. He writes, “In this slow economy, people are more willing to supplement their income (and seek alternative career paths) than they have been over the last few decades. Direct sales is one of the most attractive and accessible ways for people to supplement their income.”
Second, the rise of social media. He writes, “When you add Twitter and Facebook, that is a tremendous reach for an average person. Direct selling is all about selling through your network â friends and friends of friends. The social networks make this whole network far more visible, and accessible, than ever before.”
Third, technology. He writes, “These devices, combined with lightweight SaaS ERP, CRM and SFA software, dramatically improve the productivity of direct sales reps.”
Check out the article here. This is great visibility for the industry. At the end of the article, several direct sales companies were referenced. They all have one thing in common: they were all companies with merchandising cultures i.e. focus on product. The companies referenced were Stella and Dot, Chloe and Isabel, Gigi Hill, Miche Bags, J Hilburn and Thirty One Gifts.