The Benefits of A Direct Sales Business

I – quite literally – grew up in the direct selling industry.  When I was three, my mom founded Discovery Toys, the direct selling, mlm, education product company.  As a result of my mom’s career, I saw the lives of many, many, many successful direct sellers.  I went on the trips (literally along with hundreds of others) to Mexico, Hawaii, Tahiti, London, Paris, Hong Kong.  I was on the cruises to the Bahamas.  I was on the trips where every guest at the Club Med was a Discovery Toys representative.  I was on the cruises were every passenger aboard was associated with Discovery Toys.  I grew up with a group of children whose parents were able to say to them “because mom [NOTE: Discovery Toys representatives are 99.9% women) chose to work her business every day,  we can afford to send you to any college in the country.”  I spent time with the women who, because they made their business a priority, could afford top-of-the-line in-home care for their aging parents.  I saw parents who could afford (literally) to stay home when their children were sick, or to volunteer to chaperon a field trip.   I saw children grow up with a strong work ethic, and a desire to be passionate about their own careers.  And I saw this not just with people who sold Discovery Toys, but with direct sellers from many other companies.

Here are just some of the pros of being a direct seller:

• You set your own hours
• You are your own boss
• You do not have worry about paying rent on a store, maintaining inventory, developing your own marketing materials.
• You do not need any special education or training
• You have unlimited income potential

Interestingly enough  – the two biggest benefits of being a direct seller, you are your own boss and you set your own hours, can also be the two biggest drawbacks.  I’ll discuss that in my next post.   What do you think are the biggest benefits of being a direct seller?

Is Direct Selling A Pyramid Scheme?

“I thought direct sales was a pyramid scheme!”  “Only the first few people to get in ever make money at this business.”  “No one really succeeds at direct sales.”  Chances are, if you mention the term”direct sales” (or network marketing or multi-level marketing) these are some of the phrases you will hear.  And it’s true, there are a lot of companies out there promising get-rich quick schemes, companies that demand huge investments, companies were only the first few to get in ever really do make the 6 and 7 figure incomes promised.  That being said, there are numerous companies across the globe that offer great product, excellent business opportunities, and a chance to truly be your own boss and determine your own income.  For this next series of postings, I want to provide you with enough information to make your own decision about direct sales.  This post will provide some basic definitions.

Direct Selling: The Direct Selling Association (the most well-known national trade association for direct sales companies) defines direct selling “as the sale of a consumer product or service, person-to-person, away from a fixed retail location.”  In other words, sales people sell direct to the customer without a retail store being involved.

Have you ever been invited to a Pampered Chef, Mary Kay, Tupperware, Southern Living At Home, candle or jewelry party?  If the answer is yes, you are familar with direct sales.  Parties and one-to-one meetings are the primarily how direct sellers market and sell their product.   Prior to the internet, direct sales companies sold their product solely through these channels.  Today, almost all direct sales companies have a website, and the vast majority allow you to purchase items online.

Multi-Level Marketing:Whereas direct sales refers to how products are purchased, multi-level marketing refers to how sales people are paid.   In a single level plan, a sales person makes money on his or her sales alone.  In a multi-level plan, a sales person makes money both on her own sales, and on the sales of the people she brings into the business. 

Pyramid Scheme:In a legitmate direct selling company that follows a multi-level marketing plan, sales people are not paid simply for signing up other sellers.  Instead, sales people are paid on the performance of their team members (the people they brought into the business).  In a pyramid scheme, sellers are paid solely for bringing people into the business.  According to the United States Securities and Exchange Commission,”the fraudsters behind a pyramid scheme may go to great lengths to make the program look like a legitimate multi-level marketing program. But despite their claims to have legitimate products or services to sell, these fraudsters simply use money coming in from new recruits to pay off early stage investors. But eventually the pyramid will collapse. At some point the schemes get too big, the promoter cannot raise enough money from new investors to pay earlier investors, and many people lose their money.”  A surefire sign that a multi-level marketing plan is a pyramid scheme is that you cannot make money on your sales alone – you mustbring people into the business to receive any kind of payment.  Pyramid schemes are fradulent and illegal.  For more information on pyramid schemes and the difference between them and legitimate multi-level marketing companies, I highly recommend the online article What Is A Pyramid Scheme.

The One Person Approach

“I’m reluctant to talk to my friends and family about this product.  Is it okay if I focus on selling it mainly online?”  There is a perception about sales – mainly that it is somehow miraculously easier if it is done in an anonymous fashion and online.  Trust me when I tell you it’s not true.  There is no doubt whatsoever in my mind that ECommerce plays (and will continue to play) a huge role in sales.  However, if ECommerce were the be all and end all of sales, brick and mortar stores would cease to exist.

However, the problem of how to encourage a new team member to approach what are known as “warm leads” (e.g. people well-known to her) can sometimes prove a monumental stumbling block.  My co-worker recently provided me a great solution to this problem – and I am incredibly proud to report that this method is allowing me to work with team members who otherwise would like likely have given up before they ever got started.

Step 1: Ask your team member what product he or she is MOST excited about.  With Petlane, a lot of people tell me it’s the food.  I have also had new team members who have cats who go nuts over the Kitty Chianti, or a dog who has literally chewed through the box to get to the treats inside.  The product picked is not really important.  What is important is that by asking this question, you are taking the focus off the fear (I actually have to tell someone about this business?) and re-focusing the person on excitement and passion.

Step 2: If this was not readily apparent during step 1, ask your team member whyhe or she is really excited about the product.  The responses I get range from “it is really hard to find a quality, well-priced holistic food,” to “my cat has not played with toys in years and I can’t get her out of the Kitty Calisthenics!!!” 

Step 3: Ask your team member to pick one person (just one) that she thinks would be interested in seeing that same product.  If that person (say a good friend) is nearby, ask your team member to pick a day (within the next couple of days) when your team member can bring the product over to her friend.

Step 4: Explain to your team member that all she is going to do is tell her friend she is really excited about a new business she is in and loves the product.  However, she is eager to get some other people’s feedback. She would like to show this particular product to her friend and get her thoughts.

Step 5: Well actually Step 5 is to follow through on steps 1-4.  The purpose of this excercise is not to make a sale, not to sponsor a new team member, not to book a party.  The sole purpose is to get your team member comfortable approaching other people.  Any sales that come are simply an added bonus.