What you need to know before buying in to direct sales

Article Index

The pros of direct sales

Direct sales can bolster a family's income while exploring a personal interest and enjoying social engagements.

Polignone's family has been able to take more trips, thanks to her direct selling income. Nilsen decided to delve into Isagenix sales to help pay down some debt and pay for a trip to France.

“The truth about any entrepreneurial endeavor is that if you set it up right, you're going to reap the rewards,” Cassidy says. “[Direct selling is] an opportunity to get started with very low buy-in.”

Aside from the extra income, Daniels found it was “a sanity break with adults in the evening” when her kids were young. Now her wine business is helping her combat empty nest syndrome and supplement the income from her full-time job. Plus she enjoys building her business.

Direct sales also allows you to run your business wherever you are, which works well for people who move frequently such as military families, Cassidy says. Such a business also helps you meet new people in a new community, she points out.

There is also the satisfaction of introducing others to the products you love and the impact of that on your life. It's definitely had that positive effect on Polignone.

“My husband says I am so happy and healthy, and my language is more positive,” she says.

Daniels agrees. “It's all about the basics: loving the product, sharing the love for the product, finding other people who love the product,” she says.

What to be aware of

Those in direct sales stress, however, that if you want to make money, it's going to take time.
“You have to give it all you’ve got. You can’t just dabble,” Daniels says.

Sellers also have to consider their sales tactics if they are heavily reliant on social media to pitch their products. Multiple sales pitches on Facebook can result in losing or being blocked by friends. Daniels recommends setting up a Facebook business page or private group just for those interested in the product. She advises, also, to only cross promote on your own page occasionally.

Lastly, there’s always the concern of pyramid schemes — which are illegal in all 50 states. Cassidy was leery of this when she began her research into direct sales, but soon learned that in most cases, direct sales don't cross the line. Almost all direct sales companies have a tiered approach, Cassidy explains. You start as a salesperson and earn a certain percentage. Often, the more you sell, the higher the percentage you earn. Many sellers (though not all) then recruit new sellers, serve as their managers and earn a percentage of their profits. This is a legitimate structure and one used by most commission-based companies, she says.

Problems arise, however, if the person recruiting isn't actually providing anything to the sellers.

“They are only giving access to a product but not providing any support, training or resources,” Cassidy says. “They are just taking a percentage without doing anything.”

Most direct sales companies are reputable though there are a few bad apples, she says.

“In most direct selling organizations, the team leaders are doing a lot of work to train and manage the team.”

What to know before you commit

Questions to ask a potential company:

  • What’s the company’s buyback policy on products purchased but not sold?
  • What’s the minimum sales quota required in a 12-month period?
  • Can you train online?
  • Are you required to attend any conferences or special events?
  • How is the sales team structured?
  • Are you required to recruit others to sell?

Questions to ask yourself before diving in:

  • Can you afford the starter kit and/or any required training?
  • Do you have blocks of time to devote to setting up parties, finding customers or keeping up with the latest news from the company?
  • Will your partner or other family member be able to take care of the kids while you are selling or will you need a sitter?
  • How do you feel about standing up in front of a group and selling a product?
  • How do you feel about networking and asking others — especially your friends — for referrals?

If you want to learn more about direct sales, Anne Arundel Community College will offer an informational workshop March 1 from 3-6 p.m. For more information, visit www.aacc.edu/esi or call the business department at 410-777-2161.

By Corinne Litchfield
Betsy Stein contributed to this article

© 2018 Chesapeake Family Life. All Rights Reserved.