What you need to know before you join a direct selling company

I remember when the “lipstick lady” used to come to our house when I was a kid. She and my mother would sit on the couch and Mom would sample makeup. As a little girl who loved playing with makeup, I would sit there like a puppy hoping for scraps from the table.

Occasionally I would score a an itty-bitty lipstick sample. I was a happy pup.

Today, I can still get a sample of lipstick from any number of consultants representing a “direct selling company”.

canstockphoto8266615Direct selling is defined by the Direct Selling Association as “The sale of a consumer product or service, person-to-person, away from a fixed retail location, marketed through independent sales representatives who are sometimes also referred to as consultants, distributors or other titles.”

Direct selling is more popular than ever and attractive to those who want to be in business for themselves without making a large investment.

According to the DSA, the size of the direct selling sales force in the United States increased 5.7 percent to 16.8 million in 2013, a record high. The 2013 estimated retail sales of $32.67 billion for the direct selling channel were up 3.3 percent, from $31.63 billion in 2012.

That’s a lot of lipstick and more!

Direct selling businesses offer everything from makeup and skin care to home decor and cooking equipment to jewelry and gardening supplies.

I recently became a direct seller with a skin care company, but before I jumped in, I performed my due diligence.

If you are considering entering a similar business, consider the following:

Is the company legit? 

Is the company a member of the Direct Selling Association and in good standing? Check with the Better Business Bureau. Talk to other people who are involved with the company about their experience. What kind of outside reviews has the company received?

Google the name of the company you are interested in and then type in the word “media” and do an image search. If there are positive reviews about the company and their products in the media, you will benefit from the buzz.

Do you love the product?

If you love what you’re selling, it doesn’t feel like selling. If you aren’t “into” a product you likely will not have success with it. And discounts on products are among the benefits of becoming a consultant.

How are you expected to sell the product?

Some companies require you to carry inventory and hold parties. Some are more focused on sales via word of mouth and social media. Make sure you’re comfortable with the sales model.

Know the operating costs.

How much will it cost to become a consultant and what will future operating costs be? Will you have to purchase all of your marketing materials and inventory?

How will you make money?

Review the earnings structure of the company. How much will you earn from sales to customers? If you sponsor other consultants, will you earn a percentage of their sales? Some companies offer additional cash incentives and rewards including trips and cars.

What is the earning potential?

Be sure the company provides you with realistic information regarding earnings. Don’t expect instant financial success.

What kind of support will you receive?

Look for a company that provides lots of resources, access to information, training and support.

How many other people are selling the same product in your community?

Some direct selling companies are very popular — others are less known. If people you know are familiar with the products, you won’t need to sell as “hard,” but if there are many consultants in your area, there is more competition.

Direct selling is not for everyone. But it is a great option for many who want to build a business with a low capital investment. Like any business, you have to work at it if you want to be successful. You will only get out of it what you put into it.

But, before you jump in, be sure to do your homework to find the right company for you!

Deb Neuman

About Deb Neuman

Deb thinks Maine is a great place to do business and loves telling the stories of Mainers proving that it can be done! An entrepreneur at heart, she enjoys helping others with the same drive to create and innovate!