Disclaimer: this post is not about whether or not direct selling companies are scams or a pyramid scheme. This post is for people who are considering entering into a contract with a company but want to weigh the options first. Any rude or negative comments will be deleted.
I think it’s safe to say that direct sales are on the rise. Almost everyone has their hand in one company (or two). I mean, that’s really easy to do when there are so many to pick from nowadays. There’s cosmetics, purses, clothes, toiletry/bath products, sex toys, candles, kitchen gadgets, nail care, essential oils, health, jewelry, etc. The list goes on and on. Literally. According to MLM.com, there are over 600 direct sales businesses.
However, that being said, not all companies are created equal. There’s a lot to take into consideration when it comes deciding which one you want to represent. Luckily, I’m amazing (and a painfully detail oriented person) and am going to help you wade through a couple points.
Find a Product You Love
First and foremost, you want to keep this at the forefront of your mind. You will not move product if you don’t believe in it. I cannot stress this enough! Find something you are passionate about. I’ve been into makeup most of my life, so it makes sense that I joined a cosmetic company.
Start Up Costs
Most companies have very reasonable start up costs – that is the point, after all, that any Joe Schmoe off the street can start a business for themselves. But while the cost may be low, what are you getting for that price? Are you getting all the materials and products you need to start making money? Does that start up fee also include access to their resources? What other additional (but optional) costs are there that you may want to invest in? Such as a website, appropriate attire, etc.
Take a peek at the full compensation plan. I would even suggest comparing it to other companies that carry similar products. What is your starting commission? What do you have to do to reach the next commission level? Where are the commissions coming from? The company or from the pocket of the representatives?
Does the company offer decent team building commissions? I know there’s plenty of companies out there that don’t offer great team building commissions, and some people like that. They feel like it takes the pressure off of them to “recruit” people. However, the point of team building is to work smarter, not harder. Team building is about changing lives and getting paid more to do so. The direct selling giants out there making astronomical monthly incomes do so due to team building.
When looking at the compensation plan, you should also look at what it takes to remain in active status with the company. Do you have to sell so much per month? Per quarter? Per year? And what happens when you become inactive? How difficult is it to get active again? How long do you have to be inactive before your contract is officially terminated?
Similarly, how are you paid? How often are commission checks issued? How long does it take for you to get the money from your sales? When you win a prize, is there an option to take a check instead? Are you often paid in free product instead of with cash?
Buy Back Program
If you’re considering a company where carrying inventory is an option, looking at their buy back program is a must! If you decide this company isn’t for you, will the company buy back any of your unused inventory? If so, at what percent?
Values/Vision/Integrity of the Company
I strongly suggest checking out the values of the company as well. What do they stand for? What charities or foundations have they started? Or what charities do they donate to? What causes are they willing to stake the name of their company on?
Something else that should be taken into consideration is the vision of the company. What is the company striving to do with their product? Obviously they are in business to make money, but what about their vision for their representatives? What are some of the companies short- and long-term goals?
On a related note, look at the integrity of the company. When something goes wrong, how do they handle it? Do they expect their sales force to muddle through on their own? Or do they offer some sort of apology or gift to make up for it?
Prices of Products
The price point of the company’s products is crucial. Generally speaking, products from direct selling businesses are going to be more expensive because the company and the sales force both need to profit. However, there is an industry standard out there, and if the products are too overpriced, that will greatly diminish your target market. On the other hand, if the products are more affordable, then you have to move more of it if you have higher goals for the month.
For example, the highest skin care set we have is $205 retail and our lowest priced item is our single eye shadows for $8. If my sales goal is $1200, I would have to move a lot more eye shadows than skin care sets. Do you follow me? I would only have to sell six skin care sets as opposed to 150 eye shadows. So if most of the products being offered in their line are lower priced, then you have to move a lot more product in order to make more money.
With all that being said, I would say that the most important thing to consider is the very first point I made – your excitement about the products and the company itself. Excitement is contagious, and if people can tell you’re passionate about it, some will catch the fever too.
Over all, the point of this post is to help people match up with an opportunity they love and can be successful at. I wholeheartedly believe in the opportunities these network marketing businesses offer, but I also think that sometimes it just isn’t a good match. It’s no fault to the person or the company – it was simply bad luck.
Question of the Day:
Have you ever considered joining a direct sales company? If so, which one?
If you are part of a direct sales company, which one and why do you love it?
Check out my other posts about direct sales!