A Newbie’s Guide to Choosing The Perfect Direct Sales Company

So, you want to be in direct sales. Your sister-in-law, friend from high school, or a random person on Facebook sent you a message that she thinks you would be great at what she does. You read her message. You accept more information. You bite the bait that most of us bite: the chance to stay home with your kids, pay a few bills, or better yet – win vacations and cars and earn unlimited dollar amounts.

Here’s the thing: It’s actually real. It isn’t too good to be true; people achieve these things in direct sales all the time. However…

not all direct sales companies are the same. If you don’t take the time to find out which one is best for you, you are going to waste your money and end up hating the industry. I’ve tried many of them, and I have learned a lot along the way. Take it from me: You need to do your research. Here is the abridged.

1. Figure out if you will earn what you want in personal sales or by building a team, and ask yourself what you’re actually willing to do.

Yes, the DS system is generally the same: earn money through your own retail sales, and earn money when your team sells. However, that’s where the generalities end. Some DS companies payout heavily for retail sales, some for recruiting others and building a team. And if you’re lucky, some pay out a pretty good commission for both.

What it comes down to is this: What do you want out of the business? Do you need to make your car payment next month? If you do, then you need to discover a company with a lucrative personal retail payout. Example: Company A pays out 40% base commission on your personal sales, which are the sales that you have made on your own. Nothing to do with teams. Company B pays out 15% base commission on your personal sales, and to bump up to 20% or 25% or 30%, you need to “advance rank” which means you need to build a team and bump up “levels.” In other words, the big bucks are in building a team.

The reality here is that if you need to make money to pay a few bills that are a few hundred dollars a month, you need to choose a company with a high commission payout on your efforts. It’s simple: It takes three seconds for someone to purchase a product that they want if you tell a good enough story about it, but you aren’t going to convince people quickly to make any investment and start a business (I don’t care how cheap the investment is). Get out paper. Figure out what you want to make. Does your company make it possible with product sales, or do you need to recruit five people first?

PRO TIP: Individuals with family/friends who want the products and are willing to sign up for a discount is a shortcut to making a heavily recruitment based model work quickly. You aren’t going to convince your friend from grade school, though, to start a business – immediately – after she hasn’t even talked to you for five years.

Here’s the thing: It’s always helpful to build a team, even if it’s a small one. In a company that rewards heavily for personal retail sales, though, you can make a decent amount of money each month without a team.

 

2. Discover what the monthly fees are so you aren’t very, very angry if and when they hit.

Most DS companies have some kind of monthly fee, and some are more expensive than others. None are “wrong,” but you need to figure out what you want to pay for and weigh what you want to make each month against it.

Website fees: Website fees typically range from 10-20 dollars per month. Some companies “give” you a website for free; others charge you even more than that and come in around $25 per month. Look at the quality and figure out what it does for you. Is it worth the money?

“Back office” fees: The back office is your virtual desk, and every DS company has one. Here, you can track orders, customers, personal performance, team performance, and more. Some companies charge a separate fee for the back office; others work it into the website fee (it will be advertised as “website and back office”). Again, some are “free” – but you need to realize that you’re probably making up for the “free” thing elsewhere (such as a monthly minimum product order, etc.).

“Replenishment” fees: I once got involved with a company that insisted you have to purchase at lease $100 worth of stuff per month to earn any commission. Despite if fifty people ordered from you that month, you had to place an order of $100 worth of products to be eligible to receive those commissions.

There are two schools of thought on the replenishment thing, and both make sense. The first is that you should be placing an order like this because if people don’t see you using the products, and if you aren’t sharing your experiences with them on social media, you aren’t really excelling in your business and building a network. The second is that it’s totally useless and a company shouldn’t dictate how much product you need to purchase each month to be successful, regardless of if you are using it for yourself or a giveaway or samples. Again: Neither are wrong, but you have to decide what you’re willing to do and believe and spend.

 

3. Do simple math.

Perks such as 40% commission sound great. Bonuses for every three ______ you sell sound wonderful. Be learey of these statements, though, and always do some simple math.

If your main product sells for five bucks, is 40% commission really that great? This requires a deeper internal discussion on what you are selling. If you have to sell 600 of these to make 200 dollars, ask yourself if you are actually willing to do that. Similarly, if your main product sells for $200 and the commission base is 25%…yea, you get it, right?

The same goes for factoring in those monthly fees, particularly if there is a replenishment fee. Let’s say you need to sell 500 per month. Be prepared to sell $615 if you’re fronting monthly dollars for a replenishment order of $100 and a website fee of $15.

PRO TIP: A lot of businesses fail because people don’t keep track of their numbers, and before they know it, the numbers have packed up and gone on vacation and you are in the negative. Book keeping is a necessary part of a business whether you enter numbers manually into QuickBooks or reconcile what’s in your back office every month. If you’re not willing to keep simple accounting books, then running any kind of business isn’t for you.

 

4. Get a hold of what the system is and visualize yourself using it. If you feel like you’ll hate it, don’t fool yourself that you just need to “step out of your comfort zone.” There’s a difference between taking a leap and forcing yourself to do something you hate and don’t believe in.

I, with 150% certainty, will proclaim that I am not into the virtual party scene whatsoever. I think virtual parties are nearly dead. People already spend a good majority of their time on social networks. It’s not “special” or a “treat” to sit in a Facebook event for 30 minutes and reload the page over and over to find the latest post that probably resembles a baby shower game you despise. That’s just me. I would be an idiot to sign up for a company that prides itself, and generates earnings, based on virtual parties. You must figure out what it is you like, or at the very least, are willing to do. Here are some typical examples:

Parties, Virtual: You invite your friends to a temporary Facebook group or event and post about products or services. You usually have games and things to entice people to participate, such as “Click ‘GOING’ to this event and receive a special gift from me!” type stuff. I’ve seen parties last anywhere from 30 minutes to ten days depending on what the company touts as the formula for success. You will have to devote scheduled time to this. Using apps like PostMyParty is a great way to send the message that you’re too lazy to post. Either take the initiative to be present or don’t join a virtual party based company.

Parties, In Person: Human interaction is not dead (hard to believe, right?). Companies like Amazon and Jet provide convenience, and that’s absolutely worth something. But nothing can take the place of having a face-to-face conversation. It seems that we have peaked with the convenience thing and that we are somewhat getting back into the swing of human interaction, and that’s why some DS companies have capitalized on the all-familiar “home party” (except now they have fancier names, like “nail bar” and “beauty bar”).

Home parties require your utmost attention and will also fill your schedule. Most women are shocked to discover that home-based party companies require so much scheduled time. You need to pick a day/time. You need to show up. And most importantly, you need to keep going whether the party includes fifty people or simply the party host him/herself. Quitting and walking about because one person seems like a waste of time doesn’t do much for your personal brand, and I can promise you that you will not be recommended.

If you choose to join a home-party based company, ask yourself these questions:

  • Does this fit into my schedule? For example, wine parties are probably better for evening (no one wants to admit they’re day drinkers…), and other types of parties may be better during the day. Which works for me?
  • Will I end up putting money out for a babysitter or childcare? How does that factor into my monthly earning goal and what do I need to alter (if anything)?
  • Am I willing to work on the weekends if necessary?
  • How frustrated will I be if I prep for a party and then someone cancels (IT WILL HAPPEN)?
  • Am I willing to spend money on samples and provide them to others?
  • Am I going to be ok if no one buys anything?

VIP Groups: Some companies suggest that you start a “VIP group” for your loyal customers. Unfortunately, people end up creating these groups and then adding everyone and their mother without their permission. These groups have gotten a bad wrap, and people have a bad taste in their mouth about them even if you go about adding and inviting the right way.

If you’re going to sign up with a company that heavily harps on the VIP group as the method for success, you need to stay consistent. Consistently invite people and consistently post. Many people give up with the VIP group model because Facebook is oversaturated with groups, and sometimes, people turn off notifications for them immediately. The pro is that you have a virtual storefront that doesn’t compromise your personal page. The con is that very few people see the posts.

Sharing, Personal Pages: Unlike the VIP group, you have a great chance of others seeing your business posts if you make use of your personal page. The downside is that you are turning your personal newsfeed, the one that people visit to see photos of your kids and dogs and wedding and whatever, into your storefront. People don’t always latch on to that.

It’s possible to make it work, but please understand that in order to do this, you have to be skilled at it. You can’t just suddenly become a one-dimensional sales person and start posting ad-like content and expect to go far. Remember that you are using a personal space for professional advancement. Doing so requires that you learn about things like content marketing, attraction marketing, native content, light graphic design, and most importantly – what your audience likes and dislikes. Photos and stories that coincide with your lifestyle and build on what’s actually happening in your life are the ones that get the attention. You must ask yourself if you’re willing to become self-taught in said areas. They are useful regardless of how you’re building your DS business, but moreover if you’re utilizing your personal space to do so.

Live Videos/Tutorials: Ah, Facebook and Instagram Live – the two new kids on the block (FYI: things in technology are only “new” for like, three seconds). Makeup based companies often promote “get ready with me” videos, and health and fitness companies have started promoting live feeds of your workouts. There isn’t much to it, other than you need to keep your promise if you say you’re “going Live” at a certain time…and you need to practice going Live until you don’t seem like the awkward kid at prom anymore. Some pros are that people get what they want: an inside look at your life (we all love to creep), and that people feel like they’re getting the “real you” because it is not scripted (at least it shouldn’t be). The con is that the system is flaky. Many people have their feed cut out or lose sound, etc. Practice first.

Cold Invitations: Yes, these are still apparently a thing, and some companies insist that it’s the way to succeed. This is tough for a lot of people. Keep in mind that this also requires skill, and that how it works in the post-telemarking success era still isn’t 100% figured out. It’s a simple process: Ask people to buy your stuff. Ask people to join you. However, be real with yourself: Do you hang up on telemarketers? Do you ignore messages from people that want to give you more information on a product or opportunity? Do you change channels or fast-forward at the site of a television commercial? Do you skip the ads on YouTube as soon as the ten seconds is up? You not only need to become skilled at messaging, but you need to convince yourself that it’s the way to go and that what you have to present is worth learning about.

The bottom line here is that all of these business building methods require work. If you aren’t willing to work, then you shouldn’t do any of them.

PRO TIP: Your sponsor and upline will tell you that you can “do anything you put your mind to.” This is very true. The issues happen when you’re shaky on something and instead of helping you work through it, you’re told to just “jump in” because there are endless possibilities and that your dreams are stronger than your fears and that millions of women working 70 hours a week with 60 kids and no time became six figure earners so quick. You should absolutely be researching and figuring out if this type of opportunity is for you because if you don’t LIKE what you’re doing, you will find excuses not to do it. 

 

5. Seems like common sense, but figure out if you like what you’re about to sell.

Too many times, I see people dive into something without even knowing if they truly believe in the products. I’ve done it many times. The opportunity just seems so great that you jump into it without really examining if you’re that into the products.

Are you someone who really gets buying makeup from a catalogue? If you prefer a makeup counter (and I do, which is part of the why I failed miserably in makeup companies), it’s going to be hard to promote buying makeup from a catalog.

Are you someone who thinks protein shakes that you buy from a distributor are worth the extra 60% markup above the ones in GNC? Do you believe that a drink is the only solution to a healthy gut, vs. other probiotics that exist for 80% cheaper? Can you fully get on board with paying for home workouts when you can get the entire FitnessBlender library for free on YouTube? To sell it, you have to buy into it yourself.

PRO TIP: Facts and figures about something don’t matter much to you or your customers or your team members. What matters is your belief of the products. People believe others who appear genuine, regardless of the science and/or technology that might be behind the product or service. If you believe it, that will permeate. If you don’t, drop it – because people will be able to tell that you don’t believe in it.

 

5. What is in the starter kit actually matters, and the contents should coincide with what the company expects you to do to be successful. 

I have seen “starter kits” that come with a few brochures and one sample to hand out. I have also seen starter kits that come with enough material to host your first five in-home parties or put enough wraps on your nails for the next twelve years. Pay attention to what is in starter kits, and ask yourself these questions:

  • Will I actually use what’s in this kit for myself and others?
  • Is there enough in this kit to actually get a business off the ground, or am I left having to make additional purchases to get what I need?
  • What’s missing from the kit that I feel is absolutely integral to this business?
  • Is there a startup fee and a kit fee, or is there simply a kit fee?
  • Do I actually like what’s in it?

Nothing is worse than getting a box full of junk that can’t get you started as promised.

 

6. Team culture matters, and there’s no way around that.

It took me a while to figure this one out, but the culture of a team matters as does your sponsor. You either gel with someone/people or you do not. We’ve had jobs where we can’t stand who we work with, and we have had jobs where the people are simply unforgettable because we enjoyed them so much. No, DS is not a typical job – it is a business, but your relationships with these people on your team matter and can help you be more successful.

I have been on teams with people I have and have not connected with. I’ve felt like nothing but a number, and other times, I’ve felt like an integral part of the team’s success. I’ve always considered myself independent and somewhat of a loner, but I will tell you firsthand, you’ll want to feel like a part of your team regardless of your four letter personality type or what a BuzzFeed quiz told you is the environment in which you thrive. Find a team that you can connect with.

 

7. Figure out the likelihood of repeat customers.

Look, when it comes down to it, I only need so much Pampered Chef stoneware. At the end of the day, I only need so many pairs of $5 earrings. I cannot build an addition onto my house for all my LulaRoe or Tupperware. These are just a few examples of companies that many not generate as many repeat customers as you imagined.

To generate repeat customers on a monthly or bi-monthly or whatever basis, you must be behind a product that is consumable. People use a tube of mascara. People drink a thirty day supply of a protein shake. People run out of shampoo and conditioner. If you want a higher return on repeat customers, look for a company that generates at least a few consumable products.

My mother has had her Pampered Chef pizza stone for twenty years and it has yet to fall apart, crack, or not work as expected. Amazing quality, and I recommend Pampered Chef stoneware all the time. However, she has not had to buy another pizza stone since I was 11. I’m 31. Let that sink in.

It doesn’t mean that a business like Pampered Chef isn’t doable. It means that you need to work harder to find new leads to generate income, maybe harder than you would if you marketed a consumable product.

PROTIP: There are downsides to both. Consumables generate more repeat customers, but there is a submarket of people who refuse to even try a sample because they will “like it” and “don’t want to spend that every month.” Harping on great, long-lasting quality surrounding non-consumables is wonderful, but be prepared for “one and done” customers. 

 

BONUS: A FEW DIRECT SALES PROVERBS

If you’re not willing to make even a small investment, business – including direct sales – isn’t your thang. 

“Get rich quick” is the real pyramid scheme. Either be willing to work, or don’t get involved in direct sales because your income is a result of the work you put in.

Those who are teachable will succeed. Those who know everything already will fail in this market.

Excuses are the bane of success in direct sales. 

Authenticity will give you more success than you can even keep up with. Painting yourself as someone you not will get you nowhere.

Be your own leader. It’s what will attract other people to join forces with you.

“Fake it till you make it” is just something that people with a used car sales mentality made up to coax you to join them. Run. 

 

I hope this helps out anyone who is thinking of getting involved more in Direct Sales. Want to chat more? Send me an email: courtneypoullas@gmail.com or find me on Instagram and DM me there!

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