Does it seem as though everyone is trying to sell you something? There was a time where friends were friends and business associates were just that, but times have changed and as I stroll through my Facebook feed it seems as though everyone I know is trying to sell me something—fabulous lipstick, nutritional shakes, sunscreen that promises not to give me cancer, leggings, the “finest” pewter jewelry—the options are endless and it seems as though everyone is involved.
Buying, selling, and trading goods is a practice as old as time. The very first direct sales probably looked more like a circus, with a gentleman hawking wares in the street to an eager crowd, anxiously looking upon the newest innovation. As innovation began moving faster, and with the population booming, door to door sales became commonplace—bibles, vacuum cleaners and blenders were dragged to your front door for an exhibition. In the 1950s, in-home parties came on the scene and, for the first time, women were put in the forefront. In-home parties allowed women to invite friends and family over for a demonstration and the hostess to make multiple sales at once. Around the same time, David McConnell, of the California Perfume Co., introduced the products that would later become Avon, and direct sales and multi-level marketing was born.
Today, direct sales strategies bring in approximately $36 billion in annual sales and around one third of individuals report purchasing an item via direct sales at least once. What was once considered a painfully misogynistic way for housewives to make extra pocket money has morphed into a way for individuals to earn sustainable salaries. Direct sales are no longer just a side job, with the right people and strategies, individuals can make 6-figure salaries. Isagenix, a popular brand of nutritional supplements and shakes, boasts over 200 sales associates who have earned more than $1 million in the last 15 years. Direct sales opportunities are booming, without an end in sight, largely because they are considered “recession proof;” an individual can’t get laid off from a business they “own.”
In a multi-billion dollar industry, who succeeds and who does not? The most successful direct sales associates use and believe in the products they sell. Avon, for example, makes quality products that not only appeal to a large market but also triggers a feeling of nostalgia—my grandmother began using Avon Skin-So-Soft lotion almost 50 years ago, my mother uses it, and when I smell the delicate fragrance I am taken back and purchase it as well. The ease of selling products like Avon or Isagenix is that they are quality products and the associates don’t feel as though they are lying when they sing praises. Successful associates understand that they are running a business, not hanging with friends.
While direct sales associates may paper their social media with information about their product and use social media to engage their “friends,” their success comes from seeing several degrees beyond the people they know. Every Facebook friend has a network of other potential clients, and the most successful direct sales associates are able to see every one of them as a possible sale. We wouldn’t think twice about the owner of a brick-and-mortar shop developing a website and offering incentives for customers to come in, and the best direct sales associates behave in the same way. They design and share websites (in accordance with their product guidelines), develop activities, and offer promotions because while there might not be an office to get to everyday, the hustle is what makes money. Above all else, success comes to direct sales associates who are committed.
Despite assumptions to the contrary, direct sales businesses have approximately the same failure rate as any in-home business. Just as an individual may eventually stray from selling items on ebay or freelance writing, they may also stray from direct sales. What separates the successful direct sales associates from the less successful is the ability to bounce back from failure and to remain committed to the process, the progress, and the product.
While direct sales initiatives can no-longer be ignored, neither should the fine print. Most sales opportunities require a yearly subscription/start up fee, and the associate earns a commission on every product sold and, in some cases, associates receive a bonus and commission for recruiting additional associates. For the individual committed to direct sales, it may be easy to earn money on top of the annual subscription fee, but sometimes that is more difficult. For example, Scentsy, a popular line of scented oil diffusers, charges a start-up fee of $99 and each associate earns a 20% commission on each product. The most popular products are the scented refills which retail for $6. Each bar nets the associate $1.80. In order to break even, an associate must sell 55 bars of scented oil before they make a profit. Scentsy has a little bit of a cult following, and if a sales associate can tap into that market, there is certainly money to be made, however, for someone new to the product, it can be an uphill battle to turn a profit. Scentsy is, of course, just an example of the inherent difficulty in selling products via direct sales.
If the idea of direct sales appeals to you either to make some side money or as a career change, consider the following:
- Select the product carefully—Choose a product, or product line, that you like and believe in.
- Research the company’s policies—learn what kind of marketing you are able to engage.
- Weigh the start up fees and commission percentage.
- Determine your level of commitment—are you trying to pay for your gym membership or your mortgage?
- Learn about your product—you will be the face of the business for most of your clients. Be prepared to answer questions.
- Hustle—Everyone is a potential sale so develop strategies to tap into a potentially unlimited market.