What You Need to Know Before Starting a Direct Selling Business

There are a lot of companies that will offer you a commission if you sell their product. Some of these are reputable companies that will support you and enable you to make a living. Some companies might not be so helpful. So, how do you know which company is best for you?
Ask questions.
• What are the start-up costs? Is there a starter kit? If so, what’s in it? What else do you need? Ask your recruiter how much money she had invested in the business before she started to see a profit.
• How much money will you make? Ah, the big question. Be very wary of people who tell you that you will get rich overnight. If it sounds too good to be true, it probably is.
• What percentage is the commission? Will you make 10% of what you sell? Or 30%?
• Is there a quota? Do you need to sell a certain amount of product in order to stay active?
• Will you be responsible for collecting money yourself? This might not seem like a major factor, but it can be. First of all, it’s a lot to keep track of. Second of all, how are your math skills? Third, it’s a responsibility: having the money in your car, in your house, getting it into the right bank account. And what if your customers don’t pay? Will you be stuck with the loss?
• What is the success rate? How many people who start this business do it for a year? How many do it for five years? What is the percentage of consultants who sell this product for their sole source of income?
• Do you need to carry an inventory? Some people will tell you that you can’t sell from any empty basket. This is the 21st century and you can most certainly sell from an empty basket. People do it all the time. If a company tells you that you need to purchase $1000 worth of inventory in order to get started, consider the implications. Do you have the storage space? Will you need to insure it? How will you protect it from the kids, and the dog? Is an inventory really necessary?
• Is training available? What will this training look like? Will it cost you thousands of dollars to go a conference hundreds of miles away? Or is the training free? Will you have a real person available to you? Is training available online? Will you be able to get the help you need?
• Is training mandatory? Are their obligatory weekly or monthly meetings that you need to attend? Do you have to join in on a conference call at a specific time? How will mandatory training fit into your life?
• Does this company have a multi-level marketing plan? Ask the person who is recruiting you, “Do you make money if I sign here?” While this isn’t necessarily a bad thing, and while lots of money can be made in an MLM company, this is something you should know. It can help you analyze your recruiter’s motives. Does he really want to help you? Or does she just want the $50 recruitment bonus?
• What is the ongoing investment? Do you need to buy your own catalogues? Do you need to buy samples or demonstration items? Will you have a website? If so, who will pay for it?
• Will you have to pay for shipping? Shipping costs can be outrageous. Who will pay: your customer, your company, or you?
• Will you have to do parties or shows?
• Is there a dress code? This sounds silly, but you should ask!
If at all possible, ask these questions of someone who has nothing riding on the answers. The person trying to recruit you into a company may have your best interests at heart. Or they might not. Go online and look for forums that discuss the company that interests you. Do a blog search for the real scoop. Ask someone else who is in the business, but has no investment in you.
Here are a few companies broken down for you so you can get a sense of the diversity in these direct sales opportunities. These three companies are reputable, and people have actually made money by selling their products.
Mary Kay:
• $100 start-up fee
• 50% commission
• No quota, but if you do not order a minimum amount of inventory, you do not get the 50% commission
• Consultant collects money and processes all payments
• Inventory is suggested
• Multi-level marketing plan
• Consultants have to buy their own catalogues and samples, and have to pay for their own websites
• Consultant pays for shipping
• Parties and shows
• There is a dress code
Lia Sophia:
• $149 start-up fee
• 30% commission
• Quota
• Consultant collects money and processes all payments
• Inventory is optional
• Multi-level marketing plan
• Consultants have to buy their own catalogues and samples
• Customer pays for shipping
• Parties and shows
• NO dress code
La Bella Baskets:
• NO start-up fee
• 20% – 35% commission
•  Leadership bonuses available
• NO quota
• Company collects money and processes all payments
• NO inventory
• NO multi-level marketing plan
• Consultant pays a fee of under $25.00 each month which covers all expenses
• Customer pays for shipping
• NO parties or shows
• NO dress code
The important thing to remember is to not get distracted by glitz and glam. You are probably not starting your own business so that you can win a free trip to Italy. You are probably starting your own business so that you can work your own hours, be your own boss, and earn an income. Keep your real goals and mind when you are evaluating the companies out there. And remember! Ask questions!
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