Direct selling (Direct Selling or Direct Sales) means a system of selling through distributors or sales agents who offer goods or services directly to consumers at the consumer's home or workplace, at someone else's home or workplace, or at any other place that is not a regular place of business.
Direct selling is therefore a tactic that targets specific consumer groups, and it suits today's market conditions because it can respond well to customers' needs.
Direct marketing (Direct Marketing) means marketing goods or services by communicating information to offer goods or services directly to consumers who are at a distance, with the aim of getting each consumer to respond and buy the goods or services from the business operator.
Direct marketing is therefore a marketing method that uses various media as the channel to draw consumers' interest in a product or service, without using salespeople (Non-Personal Selling), for example offering goods by mail (T.V.Direct).
Persons involved in selling
Consumer means a person who buys from, or receives services from, an independent distributor, a direct sales agent, a direct selling operator or a direct marketing operator, or a person who is offered or persuaded by an independent distributor, a direct sales agent, a direct selling operator or a direct marketing operator to buy goods or receive services.
Independent distributor means a person who receives the transfer of ownership of goods or services from a direct selling operator and offers those goods or services directly to consumers.
Direct sales agent means a person authorised by a direct selling operator to offer goods or services directly to consumers.
Direct selling operator means the owner of a direct selling business.
Operating a direct selling business
The Direct Selling and Direct Marketing Act sets out the provisions on operating a direct selling business as follows. No person may operate a direct selling business unless registered to do so under the Act. A direct selling operator must run the business in accordance with the compensation plan filed with the registrar, and the compensation plan must have the following characteristics:
1. It must not provide for independent distributors or non-employee direct sales agents to earn their main income from recruiting people or introducing other independent distributors or non-employee direct sales agents to join the direct selling network.
2. The main income of independent distributors or non-employee direct sales agents depends on selling goods or services to consumers, including purchases for their own use or consumption.
3. It must not force independent distributors to buy products.
4. It must not induce independent distributors to buy unreasonably excessive quantities of products.
5. It must show how compensation is calculated in a way that is true or genuinely achievable, and disclosed openly and clearly.
6. Other characteristics as prescribed by the Committee.
In addition, the Act prohibits direct selling operators from charging independent distributors or non-employee direct sales agents membership application fees, training fees, sales promotion material fees or other fees related to joining the direct selling network at rates higher than those announced by the Committee. The contract between an independent distributor and a direct selling operator must be made in writing, with the following details:
1. Clear conditions on the payment of compensation under the compensation plan.
2. Clear conditions on application fees, training fees, sales promotion material fees or other fees.
3. Clear conditions on the direct selling operator buying back products, sales promotion materials, manual kits or business promotion materials from independent distributors, as well as the period within which independent distributors may exercise that right.
Direct selling of goods or services
When offering goods or services directly to consumers, independent distributors must follow the conditions and sales plan set by the direct selling operator. When approaching consumers to offer goods directly at the consumer's home or workplace, at someone else's home or workplace, or at any other place that is not a regular place of business, the independent distributor or direct sales agent must first obtain permission from the consumer or the occupier of that place, and must not act in a way that disturbs or annoys that person. The independent distributor or direct sales agent must also show their national ID card and the independent distributor or direct sales agent ID card issued by the direct selling operator.
Today, the direct selling business in Thailand contributes to prosperity and economic security for individuals, society and the country, especially during economic crises. It has created a large number of independent distributors and sales agents, such as independent distributors of Amway products and Tupperware products, sales agents for Lux electrical appliances, Avon or Mistine cosmetics, and many other goods and services. Direct selling is therefore a form of retail channel that consumers are familiar with in their daily lives.
The Thai Direct Selling Code of Conduct
The Thai Direct Selling Code of Conduct aims to protect and satisfy consumers, promote fair competition within a free market, and raise the image of the direct selling business in the eyes of the general public. It draws its principles and guidelines from the World Direct Selling Code of Conduct, which was established as a norm accepted as the minimum standard for the direct selling associations of countries that are members of the World Federation of Direct Selling Associations. When consumers complain to the Thai Direct Selling Association about inappropriate sales behaviour or services by the association's member companies, the association will consider the matter and find a way to resolve it if the conduct breaches the code. If a member company, after being notified by the association to make corrections, does not comply with the association's code of conduct and regulations, it will be considered for removal from membership of the association.
The World Direct Selling Code of Conduct
The World Direct Selling Code of Conduct, for direct selling associations in various countries to follow:
1. No deceptive sales tactics. Sales agents must not use sales tactics that are misleading, deceptive or unfair.
2. Disclose their true identity. Sales agents must disclose their true identity to interested consumers at the start of the sales presentation without the consumer having to ask, and must state the name of the company they belong to, the products offered and the purpose of the invitation. In group selling, the sales agent must clearly state the purpose of the gathering to the host and the participants.
3. Explanations and demonstrations of the products offered must be complete and accurate, especially regarding the product price, credit price, payment method, product review period, right of return, warranty period, after-sales service and product delivery.
4. Answer consumers' questions. Sales agents must answer every question about the products and the offer accurately, truthfully and in a way that is commonly understood.
5. Provide a written order form to the consumer. When offering goods or services, the sales agent must give the consumer a written order form that clearly states the names of the company and the sales agent, the address, the telephone number and the terms of sale.
6. Make verbal promises only as approved by the company.
7. Check all documents. Direct selling businesses and sales agents must check all documents used in selling, such as order forms, catalogues, product guides, conditions on delivery times, refund requests, etc. All documents must be accurate.
8. Warranties or guarantees by sales agents: the conditions, details and limitations of after-sales service, the name and address of the guarantor, the warranty period and the remedies available to the buyer will be clearly stated in the order form or other accompanying forms, or in the documents supplied with the product.
9. Sales promotion materials, advertising or mailed materials will not contain descriptions, details of features or illustrations of products that are misleading or deceptive, and will state the name and address or telephone number of the business or sales agent.
10. No false claims. Direct selling businesses and sales agents will not make claims or assertions that are unauthorised, untrue, outdated or no longer applicable, unrelated to the products offered, or used in a way that misleads consumers.
11. Refrain from comparisons. Direct selling businesses and sales agents will refrain from comparisons that may mislead and that conflict with the principles of fair competition. Comparisons must be based on facts that can be proven. They will not unfairly disparage any business or product, directly or indirectly, and will not unfairly take advantage of the name or trademark of another company's products or of another company, or of the reputation attached to them.
12. Personal or telephone contact will be made in a reasonable manner and at appropriate times so as not to intrude on other people's privacy. Sales agents will stop a demonstration or sales presentation when the consumer asks.
13. Do not exploit consumers' trust. Direct selling businesses and sales agents will not abuse the trust consumers place in them, will respect consumers' lack of business experience, and will not take advantage of consumers' age, illness, or lack of understanding or language knowledge.
14. Do not persuade consumers to buy goods or services. Direct selling businesses and sales agents will not persuade consumers to buy goods or services by claiming that the consumer will receive a partial or full discount if they can get other consumers to order the same products from the sales agent.
15. Deliver products on time. Direct selling businesses and sales agents must deliver products according to the consumer's order within a reasonable or specified period.
In carrying out a direct selling business, sales agents are also covered by the World Direct Selling Code of Conduct towards sales agents, between sales agents and between member companies, which aims to protect sales agents, promote fair competition within a free market and raise the image of the direct selling business in the eyes of the public.
