Scrolling through social media you notice one of your favorite influencers sharing a new makeup line—it looks interesting and fun. You’ve thought about joining a direct selling company, but you’re not sure what it takes, or the risks, and you want to learn more.
Direct selling is a retail model where representatives (reps) sell products directly to customers. Reps are usually commission-based independent contractors who are encouraged to find new reps from their own networks. If direct selling is interesting to you, exploring the ins and outs of the business will head off any unwanted surprises.
1. Risky Business?
When you join a direct selling company, you’re joining a thriving industry. Direct selling is a legitimate, worldwide channel used by hundreds of reputable companies to distribute products. Like any industry, you’ll find pros, cons, risks, and rewards. The risks are different for everyone depending on temperament, skills, and life situations. Some may include:
Defining your own schedule. If you are more productive with a hard-and-fast work schedule, the flexibility of making and managing your own hours may not be right for you. It takes dedicated time and energy to grow your social and in-person following.
Working in a sales environment. Direct selling is just that—selling. If you don’t enjoy selling or fear rejection, these are skills you will need to develop. An attitude of, “some will, some won’t, so what’s, next,” is your best mindset for success.
Building from the ground up. In addition to selling products, representing a brand comes with the opportunity to bring other people into the business. You find the most success as you build a team to help you market the products to an even wider audience.
Reduce the Risk
Take the first step by interviewing yourself to know if you’re a good fit for the industry. The answers to these questions should all be yes.
- Am I self-motivated?
- Would I describe myself as entrepreneurial?
- Do I enjoy sharing and selling my favorite products?
- Do I like talking to people?
- Can I put myself out there and share my personal experiences?
- Do I want to learn new skills?
Next, network with others who work in sales or direct selling. Ask them what skills they need to succeed. Then, research the industry through the Direct Selling Association (DSA) [Link https://www.dsa.org/].
You’ll also want to sort industry fact from fiction. Direct selling is a business model designed to share and sell tangible products. Pyramid schemes are illegal recruiting models that funnel fees from people on the bottom of the pyramid into “earnings” for those on the top. Some may incorrectly lump these together, and you’ll want to know the difference and be able to explain it to othes.
2. Company Culture
A company may look good on the surface, but peel back the layers and you may have doubts. The product or service may be exciting, but they may pressure you to carry a lot of inventory. Or you may love the commission rate, but find the products are of poor quality. Organizational risks may include:
Thriving in the culture. All direct selling organizations have a culture. For example, some reps may be cheerleaders and encourage you every step of the way. Some may view you as competition and critique your selling strategy. The predominant culture can affect your attitude and possibly your success.
Finding the right training. Training is vital to get your business off the ground. Learning what you can about the company history, products, and market is helpful. Business development and marketing training is essential, whether it’s provided by the company or you find it on your own.
Maintaining your integrity. Finding out something unappealing about your company can be disheartening. Hearing deal-breaking information after you’ve signed paperwork will make it difficult to sell their products and maintain your integrity.
Select a company carefully before you dedicate your time and money to it—you may find that their “opportunity” is an exaggeration.
Reduce the Risk
Make sure the company you choose is a member of the DSA. These companies, like USANA Health Sciences, Inc., adhere to strict ethical standards. Look up a business here [Link: https://www.dsa.org/about/dsadirectory].
Study the company history, mission, vision, and values. Companies that have been in business for a while tend to be more stable. And if the corporate income disclosure statement isn’t publicly available, don’t join the company.
Talk to different reps who won’t benefit by you signing up—they’ll have nothing to lose by talking candidly about their experience.
- What’s the culture like?
- Does it feel like a community or competition?
- How quickly are orders filled?
- Do you get training from the company? What type?
Pour over the description of the opportunity, cost and quotas, commission rates, inventory requirements, incentives, and ranking structure—know what you’re agreeing to.
3. Product Praise
Although selling is ultimately about building relationships and helping people, it’s easier when you support what you sell. You probably won’t fall in love with every product, but you should be enthusiastic about the overall quality and benefits. You may encounter these risks:
Returning product. Return policies vary widely between direct selling companies. The “go-between” person for a dissatisfied customer is you.
Selling at retail price. Customers will either buy products at the retail price or join your team to get a discount. You’ll need to be able to confidently recommend them at full price.
Reduce the Risk
The best way to know if you’ll recommend a product is to buy it. Once you’ve tried some products at retail price, search for product reviews. Figure out how each product appeals to customers or solves a problem. Then, do some market research to see what products are trending and in high demand.
You should feel confident using the products, recommending the quality, and explaining the return policy.
4. Marketing Messages
Marketing strategies are unique to your style and skills. Depending on your experience and preference, you’ll sell in person, online, or both. Expect to make your business a topic of conversation frequently. Regardless of your strategy, talking to others is inevitable, and it can be uncomfortable for both you and the people you talk to. Some elements to navigate include:
Hosting in-person parties. Inviting people into your home or asking customers to host an event may not always feel like a party, but drawing a crowd and asking them to buy products is a great way to get your business going.
Building an online following. Online marketing is more complicated than posting a link on Facebook. It takes strategy and a different set of marketing skills.
Selling in a saturated market. With endless search engine capabilities, customers have infinite choices at their fingertips. Know how to explain what sets your product apart from similar options.
Reduce the Risk
Brush up on your skills. Seek training in sending emails, hosting a party, recording a video, or even speaking at a networking event—practice, practice, practice. Polish your communication, relationship building, and social skills. If your company doesn’t offer training, find it online.
5. Entrepreneurial Energy
Joining a direct selling company means starting a small business. You may receive some business training from your company, but ultimately you shoulder the risk.
Startup costs should be low, but you will invest something—which means financial risk. Other risks of small business ownership may include:
Budgeting your income. Some reps are tempted to put their earnings back into inventory. Weighing the risks and benefits to reinvesting your revenue is a skill you’ll need to make a profit.
Fearing failure. Starting your own business can be scary. If fear holds you back, you won’t have your whole heart in it—and that can be self-sabotage.
Reduce the Risk
Soak up all the free training your company offers, and then seek business management training on your own. Find articles and courses in money management, time management, and customer service skills. You may also benefit from mentors in business, leadership, and motivation.
Embrace the Opportunity
The direct sales retail model is an exciting opportunity—with all the risks that come with it. Carefully research the industry, the products, and how to run a small business, so you’ll be prepared for the commitment. Be realistic about the risks—and once you make the decision to go for it, don’t look back.
REFERENCES
https://theworkathomewife.com/direct-sales/
https://brendaster.com/61-questions-to-ask-before-joining-a-direct-sales-company/
https://www.eaglepublications.com/is-multi-level-marketing-worth-the-risks/
