Before you sign up with a direct sales company, consider whether you’ll be profitable.
Direct sales businesses sell everything from cosmetics to gourmet food to children’s toys to jewelry. Generally speaking, the products are high-quality with a great reputation.
Most direct sales run in a multi-level marketing format and promise great rewards to those that sign up to be consultants (or demonstrators or advisers, depending on the company’s lingo): You’ll get discounts on their products, you’ll earn 50 to 30 percent of all the products you sell, you’ll get to work out of your home, you’ll be your own boss, you’ll get a car, vacations, and have unlimited income
The truth is you do get the discounts. You also technically get 50 to 30 percent of your sales (more on that later). Also, you may technically run your own business, but the company you work for is still the boss. They have policies and guidelines and they can terminate you for any violation (but many will give you several warnings before taking such a message – no one likes bad publicity). The other part of the truth, though, is that very few consultants see the free cars, vacations, and unlimited income. For every consultant out there making hundreds of thousands of dollars, there are hundreds of thousands of consultants doing little more than breaking even. More the consultants who enjoy all the perks of a company have also been running their business for years, they have several generations of downlines (people who signed up under them) and most their income is generated from commissions from their downline – not from their own direct sales.
As far as “technically” getting 50 to 30 percent of your sales (the percent varies on the company), you have to subtract everything that your business costs you. Most all companies require that you purchase catalogs, order forms, business cards, folders and more through them. These items can quickly eat up your profits. There are also samples and displays to buy as well as your mileage, phone usage, printer, and more. Running a home business costs money – and there’s a lot of makeup, rubber stamps, and wine to sell to reimburse those costs.
You can get started with most companies for less than a $300 buy-in. For this, you’ll generally get a small display, a package of catalogs and order forms, a few inspirational CDs and DVDs, and a copy of the company’s policies. Some companies also include your website and credit card processing fees. Don’t think you’re ready to go once you receive the “starter kit” – you’ll still need to purchase (at the bare minimum) pens, a good calculator, a filing system, and a cash box (don’t forget to have change on hand). There’s also postage, mileage, and many other small expenses that will creep up on you. In my personal experience, I suggest you double the cost the company advertises – that’s how much it’ll really costs to get your direct sales business off the ground.
Before signing, consider how much money you have on hand, how much time you can dedicate to the business, and how long you can go without turning a profit. Most businesses are not profitable for the first three years. Due to the lower overhead of home-based businesses, it may not take as long to get in the black – but that’s only if you spend wisely. For most, direct sales is not a short-term investment. You get what you put in, if you’re lucky. The most successful consultants treat their home-based business like they would any job outside the home. They’re professionals.
Check out a variety of companies before signing. Most direct sales businesses have competitors – see who has the best deal. Speak with current (and past) consultants and see what they have to say. There are some very unhappy former consultants out there – find out why, but don’t necessary take their word as gospel. Sell products you love. You truly have to believe in your product to sell it well – not to mention, no one wants to feel like they’re ripping people off. Know your products inside and out. People love items that have a variety of uses.
As the old adage goes: If it sounds too good to be true, it probably is. Direct sales is an actual job. If you accept this going in, you’ll likely enjoy it. Despite the reality of the business, doing direct sales can also be a lot of fun. Personally, I’ve met tons of people and gotten to enjoy my company’s products at a discount. I also love the feeling of owning my own business (even with the policies and guidelines).
With direct sales, as with anything, you get what you put into it.
