Tuesday, July 7, 2015

Can You Make "Real Money" With Direct Sales?

I was just reading yet another article on a military family website that asked the question, "So you've been to a home party and you wonder: Is anyone really making any money at this?" And then they go on to say, yes, but not much, cite a few companies who "encourage" large investments in inventory (usually more than $1000), and then say, "This is no way to get rich quick."

AH-HA. You are expecting to get rich quick. That's not the same as building a successful and profitable business!

Because I have built a direct sales business that became my full time job, and I am really nosy about other people's direct sales businesses (just saw a new one today for temporary tattoos - whaaat?), people always ask me about companies they are thinking of joining. I'm happy to answer any questions about any business, because I know that the very first step to success is to sell a product you love and can really stand behind! Is that always going to be bath products and candles with jewelry inside? No, it is not.

Here are the things that I always discuss with people when they are evaluating an opportunity:

1. Is the person trying to recruit you making income claims? Many companies expressly forbid this, because it sets unreasonable expectations for someone just starting out. If that sponsor is like me, they have spent years working their business as a full time job, and that's why they make $X per month. Beware the "Six Figure Income"! As Kelly Paull from Directly Successful put it, "Six figure earners don't have the need to tell you they earn six figures." MOST people who are looking into direct sales have a career already, and they just want to make enough to pay for a child's dance lessons, a car payment, or a family vacation. When these articles say,  "Yes, but not much," they are talking about this average level of income that enriches your life. Not millions of dollars.

2. This one is for your skeptical husband:  The vast majority of direct sales companies that you have heard of involve selling products. If you sell the products, you will make money. That's not a pyramid scheme. The confusion results from the fact that these legit direct sales companies that sell products ALSO encourage team building or recruiting, and pay commission on your "downline". This is not required but is offered as an additional way to build your business IF you are interested in training other consultants.  You should be sure that you are signing up with someone who is successful and will provide guidance, not just someone looking to sit back and earn off their downline without giving you their time in return.

3. Are you required (or "encouraged") to invest in a lot of inventory, sign up for automatic shipments, or required to meet a monthly minimum to stay active? Note that none of these things indicate that a company is not legitimate. It just means it might not be a good fit for your lifestyle. It's true that you can't sell from an empty storefront, so if you want to do home parties and vendor events, then yes, you should buy inventory to show your potential customers. If I just wanted to run an online business (using social media), though, I would look for a company with no minimums or or automatic shipments.

4. Are your customers automatically connected to you? I think this is one of the most important questions for getting involved in direct sales in 2015. It is harder and harder to get people together for home parties these days, and your customers want to be able to shop online. At minimum, you should have a site where they can do that (and hopefully share that link with others), and you should also expect that once you have brought them to the company, they will be your customer forever without taking additional steps, such as needing to find your link every time.

5. If you have already signed up for a company and feel like it's not working, have you given it a reasonable amount of time and do you feel like the above points have been addressed in a way that fits your lifestyle? Think of it this way: If you opened a boutique store, would you expect it to be profitable in 2 months, or would you still expect to be reinvesting your profits into the business at that point?

Direct sales gets a lot of its bad reputation from people who start and quit repeatedly without doing their research first! What other questions do you think people should ask about a business before they get started?

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