Non-Store Retailing: Types, Trends & Examples Video

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  • 0:05 Non-Store Retailing Defined
  • 0:53 Kiosks, Carts &…
  • 1:41 Direct Selling &…
  • 3:16 Telemarketing
  • 3:55 Direct Marketing
  • 4:28 E-Tailing
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Lesson Transcript
Instructor: Shawn Grimsley
Most individual consumers purchase products through retailers. Physical 'brick and mortar' stores are not the only type of retailing in the marketplace. In this lesson, you'll learn about retailing beyond traditional retail stores.

Non-Store Retailing Defined

Marcy has developed a line of organic cosmetics that is not only environmentally safe and hypoallergenic, but also free from animal testing. She thinks her product has great potential, but she needs to get it in front of customers. She needs to retail the makeup. Retailing is simply activities related to selling products or services directly to consumers.

Marcy doesn't have the money to open up her own store downtown, and she doesn't want to place her product with big corporate retailers. So she decides to turn to non-store retailing, which is retailing that does not take place in a traditional, physical store like you find in a downtown shopping district or in a shopping mall.

Kiosks, Carts, and Vending Machines

If Marcy wants to be among traditional retail stores without actually having a retail store, she can lease a space in an indoor mall for a kiosk or cart. You've probably seen these small stands in the middle of mall corridors, peddling everything from toys to hats to sunglasses to, yes, even cosmetics.

If Marcy takes this approach, she gains the exposure to consumer traffic in the mall. Of course, another option is a vending machine, which is simply a machine that distributes a product after submitting the required money into it. Soda machines are probably the most common vending machines today. Marcy, however, thinks vending machines are best suited for candy and cola, not lipstick.

Direct Selling and Multi-Level Marketing

Marcy can also employ direct selling, which is in-person selling that does not take place in a retail store. If you've ever had a door-to-door salesperson knock on your door offering to demonstrate the wonders of a vacuum cleaner or offer to you a great deal on roofing, siding, lawn care or paving, then you've been subject to direct selling. The classic 'Tupperware party' is another example of direct sales. A sales rep invites friends, co-workers, and neighbors to the house for drinks, hors d'oeuvres, and a sales presentation. Marcy can hit the pavement to try to sell her makeup, host a makeup party, or hire a sales-force to do it for her.

Marcy could try to structure her sales-force around multi-level marketing, but she needs to be careful if she decides to take this route. Multi-level marketing is a system of compensating your salespeople by not only paying them commission on sales, but also a percentage of the sales generated by the salespeople they recruit into the company.

It's considered a legitimate business practice but is controversial because a similar structure is employed in pyramid schemes. In a pyramid scheme, people are recruited and have to pay people above them. Eventually, there are not enough new recruits to sustain the structure of payments, and the pyramid collapses and the people at the bottom actually lose money. A pyramid scheme is fraudulent and a crime.

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