What you need to know before buying in to direct sales

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Thinking about selling jewelry, shakes, skin care products, cookware or anything else from home? You aren't alone. Direct sales has come a long way from the days of the “Tupperware mom” and there is plenty to learn before diving in.

Direct Sales Kirsten WKirsten Nilsen started selling Isagenix after the product improved her health. Colette Polignone’s path to direct sales started because she couldn’t keep her mouth shut.

A licensed psychologist and mother of two kids from Catonsville, Polignone began using Young Living Essential Oils for health reasons. She was so pleased with the results, she talked about the products to anyone who would listen. Selling and teaching classes for the company was the next logical step.

“It gives me an outlet where I can care for others without having a private practice,” Polignone says. Plus, she's earning a bit of extra money. “I’m making way beyond what I expected I would.”

Direct selling — selling a product without a fixed retail location — is booming across the country. Estimated retail sales for direct selling went from $28.56 billion in 2010 to $36.12 billion in 2015, and those selling in the U.S. jumped from 15.8 million to more than 20 million during the same period, according to the Direct Selling Association (DSA), a national trade association for direct selling companies.

“Direct selling is just another way of getting great products into the hands of consumers,” says Paul Skowronek, senior vice president for public affairs at DSA. He adds that the flexibility and face-to-face interaction of direct selling are big draws for people to get involved.

More than 75 percent of U.S.-based direct sellers are women, according to DSA’s research. Many moms go into the business because it's a flexible way to bolster household income, sources agree.

For those considering direct sales, there can be benefits — but there also can be disadvantages. Here’s what you need to know before picking a product and diving into direct sales.

What it takes

In the early 1990s, Andrea Daniels of Hughesville was a stay-at-home mom when she started selling Longaberger home decor products to supplement her family's single income. For eight years, she built a thriving business while raising her daughter and without paying for daycare.

“My husband had her when I went out in the evenings or afternoons to do shows, and when she went to school, I was able to get her on and off the bus,” Daniels says.

Flexible hours, however, doesn't mean reduced time.No matter what you’re selling, running a direct selling business takes time. It's not a way to get rich quick, Daniels says. She's seen many sellers fizzle out because of this misconception.

“Sometimes you don't see results as quickly as you would like, but you have to trust in the process and your efforts,” she says. “If you keep doing the basics of the business and do them consistently, they will pay off in the long run.”

Mary Beth Cudd, of California, a high school teacher and mom of two, began selling Jamberry nail wraps thinking it would make a good summer job. She soon learned, however, that the summer-only approach wouldn't work.

“You really have to be consistent in order to see results,” she says. “I thought I could spend time on it whenever I wanted, but you need to have more time in order to gain momentum.”

Rather than give it up, however, Cudd now spends two hours a week on her business during the school year and 10 hours a week in the summer.

How to pick a company

Those in the business agree that the best way to be successful in direct sales is to choose a product or company you like or are passionate about.

Kirsten Nilsen, a mom and adjunct English professor from Catonsville, began selling Isagenix wellness products after trying them herself and seeing positive effects on her health. By simply sharing her story with friends, she’s finding people who want to try the product. She's learning that it doesn't take a pushy personality to make sales if it's a product you believe in.

Daniels, who stopped selling Longaberger in 2008, has ventured back into part-time direct sales to cover college expenses for her now-grown daughter. This time, an interest in learning more about wine led her to become a consultant for Wine Shop at Home doing in-home wine tastings. She also chose the company because it had little overhead.

“There’s much less stuff to haul to the car, and I wanted something light and easy,” Daniels says. “Wine Shop at Home ships everything to the [tasting party] host, and I just bring a bag of order forms and maybe extra glasses.”

It's also important to research the sales requirements of a company before signing on. Cudd was interested in two companies, but ultimately chose to sell for Jamberry because it had less demanding sales requirements — a minimum of $600 in sales a year as opposed to $150 a month, she says.

“The sales requirements at [the other company] were more demanding than I felt I could keep up with,” she explains. “I [also] felt like I would need a lot of inventory and didn’t want to make that much of an investment in money and space to store product.”

Before deciding on a company, Skowronek recommends checking the DSA website to see if the company is a member. DSA member companies must agree to a code of ethics, which covers everything from backing up claims about their products with reliable evidence, to providing information to sellers on the company’s compensation plans and sales methods, and clearly defining its buyback policy on products or sales kits that a seller is required to purchase. Skowronek points out that the code applies not just to member companies, but the sellers as well.

“There’s financial protection that greatly minimizes the risk,” he says.

Carlene Cassidy, professor of business management and entrepreneurship at Anne Arundel Community College and chair of the college’s Entrepreneurial Studies Institute, spent a year undercover as a Pampered Chef consultant so she could better understand direct selling. She has since developed a curriculum for consumers who want to know more about direct sales before becoming sellers themselves.

In her research, Cassidy verified that direct selling is a legitimate distribution channel. “[These companies] really do have solidly researched products,” she says.

She stressed the importance of researching the company. Most companies have low overhead, but some require investing in inventory that may have a short shelf life.

“In these cases, you either have to sell the product or you are stuck with it,” she says.

If you don't know anyone selling the product you have chosen, that could signify a red flag, Skowronek says. “If you’re working with a startup that hasn’t been in business for very long, you could be putting yourself at risk,” he says.

Click next below for the pros and cons of direct sales.

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