According to the Direct Selling Association, approximately 16 million Americans are involved in direct selling, an industry that generates approximately $32 billion in sales in the United States each year. 82% of sellers are happy with their experience and the company they have joined.
Start-up costs for these business opportunities can range from free to several hundred dollars. While a business opportunity may seem attractive without an initial investment, you need to look at the whole picture before investing your time and your customers’ money.
Ask yourself the following questions before signing up.
How long has the company been around?
Some companies have been successfully offering free boutiques for several years. Others have sadly come and gone within six months. With any opportunity there is a risk of company closure, but new companies can carry greater risk than established companies. You don’t want to build your own business, give it 110% of your effort only to find out, through no fault of your own, that you have to start all over again.
What is their customer service rating?
While we previously had to rely on BBB reports and Yelp ratings that may or may not be honest, we can now uncover customer service issues immediately. How? Social media! Anytime you’re considering joining a business opportunity, @mention the company’s Facebook page and Twitter. You’re not just looking for any complaints. This happens with every company. The posts you’re looking for are the ones with no response from the company and issues repeatedly raised by customers. If there are post after post from people saying they paid for products they never received or didn’t get the refund they requested, those are red flags. These problems will also reflect badly on you.
What support do they provide to their mentors?
The biggest advantage of joining a replication business is that you’re not going it alone – usually. A great organization will provide their consultants with a platform to access training, sales resources and support. They may have weekly calls or monthly webinars. Many have now turned to Facebook groups to ask questions and get feedback from the mentoring community. If no support is given or mentioned, this is a big red flag. You shouldn’t be left out in the cold to figure things out on your own.
Are there hidden costs you can’t see?
I cannot stress enough how important it is to read the fine print in your consultant agreement. While it may be free to join, there are definitely other costs involved. Most reputable direct selling companies have activity quotas, meaning you won’t get a commission if you don’t meet a sales minimum within a certain period of time. Some companies have a minimum dollar amount on each order. If you only have one customer order a $23 item but the order is at least $100 you are either chasing the sale or pocketing the remaining $77. You also need to consider website fees. Although most companies now offer referral URLs for online sales it usually costs around $10 per month.
What is the product?
There is a lot of confusion between “party plan” and “network marketing”. Tupperware is a great example of a party planning business. Most of a consultant’s income and focus is selling products to non-consultants. While hiring the occasional team member and stocking his own cupboards with Tupperware at a discount is a convenience, personal expense and recruitment is not at the heart of the business model. Many health and wellness opportunities, on the other hand, focus on monthly autoships and signups The latter more generally offer lower barriers to entry.
And, there can be a huge difference in income between the two! From Silvina Consulting, “Annually, network marketing representatives typically generate $500 to $1000 per head in sales for the company. Party plan representatives on the other hand sell between $5,000 and $15,000 per head per year.” Learn and understand the difference.
If you’re interested in a company but aren’t sure of their industry position, you can always check Direct Selling Association. The organization audits direct sales organizations to ensure they meet ethical standards
Looking for a direct sales opportunity? stop TheBestDirectSalesCompanies.com For in-depth overviews and sponsors ready to help you get started.
No Comments
Leave a comment Cancel