Direct Sales: How and Why It Could Be Your Best Money Maker

Money MakerI Believe In Opportunity 

Recently, I have witnessed a lot of distrust and dislike for certain side hustles or side gigs, namely with respect to direct sales and MLM companies. I share a different perspective, and I am going to tell you why. I believe direct sales and MLM companies can present one of the best side hustle or side gig for anyone who is interested in building their own business. But, before I do, I want to share a few things that you need to know. 

Background Info You May Not Know

MLM stands for Multi-Level Marketing. Direct Sales and MLM companies have been around for over a hundred years, and started with door to door sales of knives, encyclopedias, and perfumes. This is how Avon started. It was a sales person who performed poorly at selling books, but every house he went to, he received praise for his fragrances and cosmetics that he made at home as a hobby. One of the original side gigs, if you will. He expanded on this side gig as he saw more promise in selling women’s products than the books that he peddled. Today, that company is still in existence, and is still a profitable way to earn money.  

Tupperware, Amway, Thirty-One Gifts, Scentsy, Norwex – these are just a few of the opportunities in direct sales or multi-level marketing.

The Details of the Business (Nitty-Gritties)

Opening shop with a direct sales company is much like opening a micro business of your own. Each company has a “buy-in”: usually it’s a kit of common items that a representative would sell in the normal day-to-day business. Sometimes the company requires a big buy-in, where you get a large kit of goods, and other times you can sign up for free, or a very small cost. Either way, the company doesn’t focus on this buy-in to make money. The range is usually between $10 – $300.00 to sign up. 

 

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I like to compare this concept to franchises. If you wish to operate a franchise, you have to purchase the rights to have that storefront. You pay money for the opportunity to hang out a well-known name, and to represent their goods. Think Subway, McDonalds, Starbucks, etc. All of these places charge for start up, and there is a head company who controls all of the franchises. (Which is why the BigMac is supposed to be the same around the world.)

No Big Bills

The direct sales companies handle promotional advertising and marketing.

This is ideal for a few reasons:

  1. The independent sales rep pays for this from a portion of sales made, and doesn’t have to put out thousands in advertising.
  1. The company can control the quality and quantity of the advertising.
  1. The company has a marketing team of experts who know what works and what doesn’t.
  1. The independent sales rep is not required to test the market, pay for advertising, pay for experts, etc.

Direct Sales Responsibilities 

The biggest responsibility that falls to the rep is to keep herself (or himself) organized; and build a customer base. Keeping customers happy on a service level is within the control of the rep, and the company takes responsibility for the rest. 

How to Make Money in Direct Sales

In most situations, the representative has options on how to make money:

Sales

A representative makes a base commission (or a set value) on the sales. This is no different than a car salesman! As the representative builds her sales levels, she makes a higher commission.

Commissions can be based on the size of the order, the amount of sales over a period of time, or on the items ordered. Each company sets out their own earning structure.

The representative is responsible to obtain sales materials, like catalogues, and any other branded items that she wants to use. While this comes from the representative’s proceeds, it is still a business expense that can be written off at the end of the year. 

Branded items, like pens or car wraps, are not necessary, but are a great way to get the conversation started. I have experienced sales firsthand just by having a magnet on my car stating what company I was representing.

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Teams (like Affiliate Training!)

Some companies offer additional commissions or rewards if you provide support to other representatives.

Much like affiliate marketing and training, you find a product that you support, and the company will pay you to promote the product. If others purchase that product based on your recommendation (or link), you are paid for your services. The company wins with your promotion of their product and you win by being paid.

Building a team with direct sales is the same concept. It’s natural to talk about your business, and to find like-minded individuals who want to sell the same products. By supporting these individuals throughout their growth as a representative, they are more likely to succeed, which makes the company money. In turn, the representative is rewarded by receiving a commission of the team member’s sales. 

The Pyramid Scheme Plan

It’s the model of the “pyramid” that makes people believe there is a hidden and  nefarious intention, but in reality, it’s a smart marketing move. As a head of any company, if I can motivate representatives to take on a team, support them and encourage success, why wouldn’t I pay an extra 2-10% of the sales? That’s worth it! 

Be Passionate

Choosing the right direct sales company is always key. My personal rule of thumb is to choose a company when you are passionate about their products.

Ideally, choose a company that you already use products from. I chose certain companies because I knew I would be buying the products anyways, and saving some money with a seller’s discount just makes good “cents”.  

The success of direct sales is often tied into selling items that people already buy. In the general population, who doesn’t buy soap, gift wrap, clothes, food containers, candles, books… we all buy these items at one time or another.

 

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Misnomers, Myths and Lies

Some misnomers about direct sales companies: 

– The companies encourage representatives to spam products on those around them.  WRONG.

This is very false. Most companies frown on spamming. When you see a representative “spamming” groups online, feeds, fliers, etc., you are seeing someone who is very excited about their products and their business. It’s more of an etiquette issue than anything else, but it’s no different than that vegan over there that tells you she’s a vegan every day. Oh, did you know she’s a vegan? (No disrespect to vegans!)

– You have to sign up your mom, grandma, sister and neighbour, otherwise you will not make any money. WRONG.

Good companies do not force representatives to sign up others. It’s a big responsibility to run a team, and to encourage them to continue. Having your family as representatives for the same company does not fair well: it means everyone is buying at a discount, and everyone is getting the same thing for Christmas, (ha) but really, companies do not force you to do that. Again, it’s the individual representative’s enthusiasm that is usually behind the push. 

– Very little pay for a lot of work. WRONG.

Like any business, side hustle or investment, it’s like pushing a rock up a hill. It’s a lot of work in the beginning, but eventually you will get up the hill. Keep at it. Then, when the rock crests over the hill, you know you’ve made it. It’s still going to be a lot of work to keep up with the rock, but you are finally seeing progress. 

You see, direct sales companies are modeled after bigger companies, and have many of the same traits. There’s payment for a job well done, and freedom to run your business how you see fit. Many people find their direct sales business fits into their life, as opposed to having their life fit around a business. 

Isn’t that the goal? 

When we naturally purchase these items as part of our daily life, it’s not unreasonable to seek out the best value. Prices are competitive everywhere, and depending on the product, they can be as readily available as if you had gone shopping at the store. The difference is customer service. You will never find a Wal-Mart employee who does house calls, or gives you fragrance samples with your purchase. Target doesn’t offer raffles, thank you gifts or camaraderie with the sales person, and you cannot rely that the same sales person will be there next week.  With direct sales, you have one person you are dealing with, and that’s what makes it special.

If you feel inundated with ads on social media, requests to host parties, or the office “pass the book around”, do not feel guilty by saying, “No, thank you.”

However, by buying from direct sales representatives, you might be:
– fundraising for a good cause
– helping a struggling mom fit her side business into her off-hours because she can’t get a second job with her schedule
– assisting a student pay for school
– enjoying a quality product!

Any side gig or hustle requires dedication and hard work, and some of these people work the hardest. I know some that have made a fulltime income from their home business. It’s very possible.

My intention today is to show you that direct sales are not what they used to be. They are simple, flexible, home-based businesses worked by people like us. They are not scams, and no more a risk of being a fly-by-night company than any other opportunity out there.

Watch the video below. Two people from Hamilton, Ontario launched a company selling tea mixes, and they pitched the Dragon’s Den. The investors jumped at the opportunity, and the expansion grew beyond anyone’s expectation. This is an example of a direct sales company. This could be yours.

I look forward to hearing what you think of direct sales companies, and if any of this was new to you, or changed your mind.  You can also follow me on Twitter, Instagram, or join the community page on Facebook.

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