When people hear the words “direct selling” they usually think of “person-to-person” selling. However, in recent years the use of the Internet by direct selling companies for product sales and other business transactions has presented opportunities for rapid expansion into new markets, more efficient product and service distribution, additional ways to communicate with and train distributors as well as the ability to reach a larger number of people. The combination of e-commerce and one-on-one marketing gives direct sales companies the benefit of promoting and selling through e-commerce with the added advantage of personal, face-to-face endorsements of products and services by distributors.
The opportunities created by the Internet also have brought with them certain challenges and issues, such as:
Today, numerous direct sales companies are enrolling individuals as distributors on their Web sites. The procedure typically involves the posting of the distributor agreement and/or the company’s policies and procedures on its Web site for a potential distributor’s review and consent. Since June 30, 2000, when the Electronic Signatures in Global and National Commerce (E-Sign) Act was enacted, the validity of electronic signatures has not been in question. However, it is important that proper procedures are followed in order to ensure the binding nature of the transaction.