Start a Direct Selling Business
- Thursday, August 30, 2012
But as a consultant you may also attempt to recruit other people to become consultants under you, which makes you their manager. When this happens you get a commission on their sales, which is known as multilevel marketing or MLM. If you find 10 people to become part of your team, and each of them sells $600 in products that month, your 10 percent commission on those sales will be $600.
One more thing: Direct-selling companies also offer appealing incentives in the form of bonuses, cash prizes, cars and trips to encourage consultants to sell and recruit more. So you could make even more through incentives.
Party Fact: You can get out if you don’t like it. Before you sign up, consider what will happen if you decide direct selling isn’t for you. At the very least, go with a company that will buy back your unsold inventory. Companies that are members of the DSA (most of the big ones are) are required to buy back unsold marketable products and sales aids (like catalogs and order forms) purchased within the prior 12 months, for at least 90 percent of the price you paid for them. Some companies will refund your startup kit, but don’t expect a refund of the expenses for setting up your home office.
Three Success Stories
“I became a Pampered Chef consultant in 2005 because I needed to pay off our credit-card debt. We were struggling on my husband’s paycheck, and I was desperate to find something that would provide the flexibility I needed to homeschool our four kids (ages 11, 9, 4 and 2 at the time), and work just one night a week.
“I started holding Pampered Chef ‘cooking shows.’ Customers buy kitchen-related products, and I earn commissions of 20 to 27 percent on my sales. I earned back the starter kit cost of $155 at my first show. My income steadily increased as I got the hang of the business. In the first six months I earned enough to completely pay off our credit-card debt.
“While most new consultants can expect to earn around $850 to $1,000 a month if they hold two cooking shows a week, after five years I’m averaging more than $5,000 a month, holding an average of eight shows each month, working about 30 hours a week. The biggest lesson I’ve learned is to never assume anything. I’ve been so surprised by who says yes to purchasing products and hosting shows. If I only approached people I assumed would say yes, I’d miss many opportunities.”
“In 2007, when my homebuilder husband told me that I needed to find a way to help get us through the recession, I knew it couldn’t be a regular 9-to-5 job. I’d been a stay-at-home mom for 12 years and still needed to provide the parental support my kids, ages 8 and 11, were used to. So I joined Silpada Designs, a company that sells sterling silver jewelry, belts and watches.
“In 90 days, hosting three parties a month, I made back my initial investment (a $199 certification fee plus the upfront purchase of jewelry to wear and show), earned $3,500 in free jewelry and made a small profit. Three years later, my business pays the mortgage occasionally and also makes it possible for us to enjoy extras like travel and skiing.
“Most Silpada Consultants, who hold an average of two home parties a week, work 24 to 32 hours a month and earn 30 percent of retail sales. The average take-home pay for one party is $285.
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