Start a Direct Selling Business
- Thursday, August 30, 2012
Editor's note: This article appeared originally on June 29, 2012 at Debt-Proof Living.
Looking to make a little extra cash while raising a family? Always dreamed of owning your own business? Recently retired and want to add to your nest egg?
If any of these sound like you, the solution could be starting your own direct-selling business - you know - with a company like The Pampered Chef or Silpada Designs, where you sell goods through home parties and one-on-one consultations.
Direct selling has become big business: In 2011, the 15.6 million direct-sales representatives working in the US generated more than $29.8 billion in revenue, an increase of 4.6 percent over 2010, according to the Direct Selling Association (DSA), a national trade group. Given the state of the economy, that is quite amazing.
The pros: You’ll be your own boss, work flexible hours that fit your schedule, meet new people, sell what interests you and make money doing it.
The cons: Despite what recruiters might promise, you probably won’t have customers beating down your door, especially in the beginning. You’ll become familiar with rejection, because not everyone you approach will become a paying customer. And while some direct sellers do indeed earn six-figure incomes, for most sellers the income probably won’t replace a full-time career. The DSA reports that the median income for direct sellers is currently about $2,400 per year.
Given that, supplement is the key word here. If you’re looking to make extra money to augment your income, read on to learn more and get the party started.
Party Fact: Passion sells. Experienced direct-sales consultants will tell you that to be successful, you need to choose a product or service in which you really believe, one you use yourself. When you’re excited about something, that excitement is contagious, which can lead to higher sales.
Party Fact: It doesn’t take as much money as you might think. A startup kit (training materials, samples and actual products) typically costs less than $100. Once you’ve started to set up parties and generate sales, your costs will - depending on the company - probably be limited to replenishing order forms and catalogs and running your home office.
Party Fact: When you think of direct selling, you probably think of home parties or “shows” in which consultants display the products they’re selling at parties they host in their own homes or in rented spaces.
Consultants can also sell their goods one-on-one, meaning they might invite a friend over to look at the products, or set up appointments with just one person at a time. While one-on-one sales do give you time to really focus on one person’s needs, volume is how you’re going to make more money.
Party Fact: You’ve got to get out there. Being a consultant means getting out and selling your wares. You cannot be timid and shy.
If you sell jewelry, for example, you may find that wearing the products wherever you go is the best marketing tool. As people comment, be ready to tell them about the company and suggest that an easy way they can get what you’re wearing for free is by hosting a party. If you sell cookware, be sure to use it when you bring food to the PTA meeting or church potluck. If someone notices it, strike up a conversation and talk about the company.
Party Fact: There are two ways to earn money. Whether it’s jewelry, cookware, kitchen tools, makeup, scrapbook supplies or other direct sales products, you earn a commission on everything you sell. The DSA reports that, on average, a direct seller earns 10 to 50 percent commission, depending on the company. So, let’s say that as you get started, you sell $600 worth of products in a month and your commission is 30 percent. You’ll earn $180 ($600 x 30%).
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