Choosing a Direct Sales Company - by Wendy Leal

Joining a direct sales company is one of the most popular and most profitable ways to start your own business.  You are able to work around your schedule, your child's schedule if you are a parent and even your work schedule. 

There are many different direct sales, home party plan companies available today.  You can sell all types of products from candles to beef jerky and make a good living through home parties, catalog parties and even by selling products online.

But what company do you choose?  Here are some tips to finding the perfect company for you:

What do YOU enjoy?

When thinking about joining a direct sales company you should consider your lifestyle.  What do you enjoy?  What are your natural talents?  Do you like to be creative?  Do you love to decorate?  Are you a great cook or would you like to be?  Are you health conscious?  Are you into fashion?  Do you love jewelry?  Finding a company that will fit with what you like to do will make it more fun for you and easier to sell the product.

Do YOU Like the product?

You need to sell a product that you can be proud of.  When you are excited about a product then it will show.  Having honest enthusiasm for a product will bring you more sales and make it easier on you to explain the benefits because it will come naturally to you.

Is the Product Consumable?

Selling a product that needs to be replaced on a regular basis is a very good idea because it can bring you re-peat sales.  Items like candles, cosmetics, skin care, food items, etc. are all consumable. 

Is the Product in Demand?

Who uses or needs this product?  Is there something special about it?  Is it well known?  These things should be considered.  I nobody uses the product on a regular basis then maybe you should think about something else.

How Do You Want to Sell the Product?

How do you see yourself selling this product?  Would you like to sell it on line only?  At home shows?  Through catalog parties?  On auction sites like ebay?  You need to find out the different ways that the company allows the product to be sold. 

Some direct sales companies like The Pampered Chef, will allow you to purchase an online store but they do not allow advertising of any kind online.  If you are interested in selling online you need to be sure about any stipulations before joining.

What are the Start Up Costs?

Most direct sales companies require you to purchase a kit when joining.  This usually consists of a sampling of products from their line and also business materials. 

Some companies will also charge a fee to have a company website if you are interested in selling products online.

You need to consider what the costs are to start the business and how much money you will need to earn to recoup the costs of your starter kit. 

For instance, if you purchased a candle kit that was $200.00 and you made a 20% commission on all sales, then you would need to sell $1,000.00 worth of candles just to break even.  Anything after that would be a profit.

How Much Money are YOU Making?

Undoubtedly one of the most important factors to consider before joining a direct sales or home party plan business is the commission that you make on your sales.  At first you may think that is a pretty cut and dry subject but in fact there is a little more to think about. 

Before I became a Tupperware Director I was a demonstrator for a couple of different candle companies in the past until I started selling another candle brand.  I was making anywhere from a 15% to 20% commission on my sales.  It wasn't until I joined the other company that it became very clear to me how much money I was missing. 

For instance, one 16oz candle from another company that I sold for cost $16.95.  I earned a 20% commission on that sale so I made a $3.39 commission on that sale.  Well with my new candle company, I sold a 16oz jar candle for $18.95.  I purchased the candle at wholesale for $9.50 each so that left me with a $9.45 profit.  BIG difference there don't you think!  It definitely pays to do the math!

Is the Company Reputable?

Has this company been around a while?  Is it a member of the Better Business Bureau?  Can you contact the company owners or someone in the company that can assist you when needed?  These are important factors when joining a direct sales company.  I have seen a few companies start up, collect money and orders and then they are gone, leaving the consultants and customers stranded.

Can You Earn Residual Income?

There seems to be some confusion on what residual income means.  Residual income is not a pyramid scam.  Residual income is a multi-level marketing strategy where you join a company under another consultant or distributor and they are paid a percentage of the sales that you generate.  Some people think that the money is coming out of your sales.  This is NOT TRUE!  You still make the same and it has nothing to do with you.

Many companies have a residual income plan in place to reward those that wish to build a team by sponsoring other people into the company.  I suggest finding a company that pays a good residual income.  It means more money for you when you find people that are interested in doing what you do.

What are the Minimums?

To remain an active sales force member, some companies will have minimums in place.  For instance, Tupperware has a minimum of $250 in sales in a 4 month period of time.  If you do not generate at least $250 in sales in 4 months then you will become inactive but your account will not be closed. 

Another thing to consider is the minimums required to earn a residual income.  Some companies will only pay you the percentage of your down lines sales if you have a certain amount of sales during that month, that quarter or whatever time frame the company gives you.  Tupperware consultants are required to sell at least $500.00 a month to earn the residual income from their down line that month.

What About Inventory?

Does the company you are considering joining require you to keep an inventory or can all of the products be ordered through the company?  If you do not have money to invest in inventory or the space to store the inventory, then you need to find a company that does not require you to keep an inventory.

Direct Shipping or Delivering?

When researching a company it is important to find out how orders are placed and how products will be delivered to the customer.  Some companies will ship the products directly to the customer while others require the products be shipped to you or the host and then they are distributed to the customer by you or the host.  Of course this all depends on how you wish to sell the products.

What about Miscellaneous Fees?

As a business owner you will likely need business cards, catalogs or brochures, a website, a way to process credit cards, insurance if you are doing home shows, etc. 

Most direct sales companies provide all of these items for a fee.  If you are interested in selling products through home parties or catalog parties it is a good idea to find out how much the catalogs or brochures cost.  How often does the catalog change?  How much is it to be able to sell online with your company sponsored website?  Does the company process the credit cards or do you have to pay a fee?  All of these things can add up.

Do You Need a Sellers Permit or a Business License?

Many direct sales companies do not require you to have a sellers permit or a business license to do home shows or to sell the products online.  Most companies will 1099 you.

If you are interested in selling products at a fair or a booth then you may need one.  If you are purchasing products at wholesale and then selling them at retail then chances are you will need a sellers permit.  Contact the company or your tax board and ask about this.

What Support is Available?

Support from the company or your up line can be crucial to success in any business opportunity that you pursue, especially if you have not been in a network marketing company before.  You will want to choose a sponsor and company that is available to answer your questions and address your concerns. 

With the use of the internet, email, chat rooms, instant messengers and conference calls, it is easier than ever to be successful at your business.  Most companies have one or more of these training capabilities in place so you can learn more about the business and learn how to sell the products.

Do keep in mind that support from the company and your sponsor is important but it is UP TO YOU to decide your success.  Others cannot do it for you, they can only guide you.

So What Company Should You Join?

You can start your journey to finding the right direct sales company by visiting our company directory on http://www.hostapartyonline.com.  The companies featured there have consultants waiting to answer your questions.

About the Author

Wendy Leal is the owner of http://www.hostapartyonline.com A direct sales, party plan and small business resource website. 

This article may be distributed freely provided the article remains in tact and the "About the Author" section is included with the article.  All hyperlinks are to be clickable if distributed online.

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