Do You Want to Make it Big in Direct Sales?
What You Should Know Before Joining a Direct Sales Company
Even if commissions earned are high on the products sold, expenses can take a big chunk of your profit. For example, with Mary Kay you earn 50% profit on all of the products you sell. But once you factor in all of your expenses (gas, shipping, samples, catalogs, seminars, retreats, conferences, weekly meetings) your profit will quickly drop to approximately 20% - 25%. There are also companies, like Mary Kay, who like their representatives to carry inventory which is another big expense.
Such a small percentage in direct sales actually earn a lot of money and make a living off of their business without working another job. These direct sales companies will tell you the percentages aren't higher for success because people give up too easily, have poor money management skills and are lazy. But when you think about it, the structure of these marketing plans are set up for failure otherwise everyone who joined would be able to make it to the top.
I had several years experience working in direct sales and I also did it as my full-time job. It is not easy at all. If you want to succeed in a direct sales business, you do have to have some luck on your side. For some people it seems that sales, recruiting and success just come easy. For most of us though it is a constant uphill battle that never ends. In order to make it to the top in any direct sales company, you have to recruit and you can never really stop recruiting. Once you make it to the top, you still need to recruit your downline into higher positions within the company in order to ensure that you will earn more money.
If you are the type of person who can't handle rejection, then direct sales is definitely not for you. You will hear "no" more times than you can count and it can be very frustrating - especially if you depend on your direct sales business for your income. You will also learn quickly in this type of business that people are very unreliable. Most direct sales companies thrive on home parties and you will have many occasions where you go to someone's house for their party they scheduled and no one will be home. This to me was the most frustrating. I made it a point to always tell my hostesses that Mary Kay was my income and I depended on these parties, as it was my job. But some people are rude and just don't care. You can expect that at least 50% - 60% of appointments you schedule will either cancel or postpone.
If you are trying to recruit in order to move up the career path in your direct sales company, you have to realize that you can't make other people work. This is another frustrating aspect. You can motivate and offer incentives until you are blue in the face, but it won't do you any good if your team does not want to work. The only person you can depend on in order to move up is yourself. You have to face the facts that if you want to succeed, you have to do all of the work yourself.
Sales representatives will also promote that you can earn a lot of money with only a minimal time investment. This is another exaggeration. It takes a lot of time to make any business successful. The sales representatives are only taking into consideration the amount of time it takes you to hold a sales party. They forget to mention all of the time it takes leading up to that point. A two-hour sales appointment in reality takes a total of five to six hours that includes phone time, booking the appointment, coaching the hostess, sending postcards and invitations, calling guests, preparing for the party, driving time, set-up time, ordering and delivering product, and the book work involved.
Before joining any direct sales company, make sure you ask a lot of questions and never sign up on the spot. Many of these companies are masters at getting people excited so that they make quick decisions and that is the last thing you want to do. Be prepared and think long and hard before you make any type of commitment or investment.
Published by WD
Love to write and love blogging. View profile
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15 Comments
Post a CommentI loved this article! This is an article that tells you the facts point blank. I have 2 children under the age of 4 and my husband is deployed. I work 45+ hours a week and have been heartbroken twice by two direct sames companies because I was fed all the right lines that made me believe that a 6 figure salary was imminenet. I am very good with people but horrible at recruiting. I wish I would have read this article before I signed those two papers!! I wish more than anything that direct sales could work for me but the author is right- that kind of success only happens to a very select few and that is the way these companies want it!!
On a side note - there is absolutely no reason to have to carry inventory other that your consultant/demo kit.
This article was obviously written by someone who is not willing to put the time or the effort in and is very slanted. When joining a direct sales company, you need to define what YOU want out of it. If you are looking for an extra $200 a month to send little Johnny to hockey, then work 3 or 4 days/month. If you're looking to pay off your credit cards, then work 6-10 days/month. If you are looking to make direct sales your "full-time" job and sole source of income, then work accordingly. The last I checked, the top tiers in any direct sales company work 20-30 hours/week between sales, follow up calls, customer service issues and training. If your recruiter/upline/sponsorer is telling you that you can make $3000/month by working minimal hours you need to find another upline. Would you open a store on a street and expect to only have to have it open for business 3 hours a week yet expect to sell a lot? Be realistic. It's your business and your success is defined by you and no one else.
the rest that was cut off???
...& $10. Who minds coming over to taste-test and grocery shop? We no longer carry inventory. It just get's easier all the time. I work 32 hours as a social worker, teach sunday school, have 2 kids in elem. school and my husband travels about monthly with work. I refuse to give it up because I have so much fun. I learned to be much more outgoing and then when we had a chance to relocate, it was so much easier to make friends because I knew how to get out of my shell. Plus, I am demonstrating business ownership to my family, coaching a team in 5 states and making money. Yes, a challenge at times, but so rewarding!
Sounds like a lot of bad experiences. We were never "home party people" in my family and I feared the Pampered Chef and Mary Kay ladies. When a MK lady talked me into having a "demo" she didn't indicate that she wanted to have other guests there, just that it was okay to do so. I could never ask people to come shop for expensive make up and other stuff. However, I found something that made a lot of sense. Food that cost between $5
#1 You have to be a people person, love talking on the phone, good with money, sales and good with time management
#2 You have to learn that you DO NOT NEED INVENTORY ON HAND. it is highly recommended for a lot of these companies, but is not necessary as some would have you believe. Customers will wait for shipping and you can also suggest that they get on Autoship if the company has it. NEVER outspend yourself for the sake of any company, it's YOUR business, YOU RUN THE SHOW AND YOUR OWN FUNDS. Autoship is also a plus for your team though, so that they can have products on hand, for sampling and personal use.
#3 You have to committ yourself to training and personal development
#4 If your company has a monthly minimum sales requirement for a certain level, maintan that and then get to recruiting!
#5 Learn to recruit and learn all you can because that is where the biggest dollars come in BIG TEAM=DUPLICABLE SYSTEM=BIG SALES VOLUME=BIG COMMISSION CHECKS
I used to sell Tupperware, and I totally agree with your analysis. I really liked and believed in the product, so I felt good about selling it -- but it really does take a lot of time, and although I felt good about selling the product, I stopped feeling good about selling the party idea (host a party and get free stuff! If your friends actually buy anything!) and the "opportunity" (recruitment).
Great info. I tried one but you had to buy "stock" and other expenses pile up as well. Thank you for a great article.
I've met a few success stories, but not many. great article!
I tried a couple of times, but I have neither the patience nor aggression necessary to be a success. Anyway, writing's a lot more fun.