3 Basic Things you should know before becoming a Direct Seller
Direct selling is a much misunderstood industry. Many people associate direct selling with Multi-Level Marketing (MLM) schemes and scams. Even though the pay structure in direct selling companies may be multi-tiered, it is different from what people associate as a scam.
Direct selling companies offer unique range of products for sale via distributors. Members get a discounted price for purchase and can sell the same at the regular price quoted for non members. The price lists are readily available and customers can make cross reference to check if they are being charged more than is applicable.
Be Realistic and Do Your Math
Before you became a direct seller, you would have been introduced by someone to the scheme of things and how easy it is to make money. Even the business presentations that you attend prior to joining the direct selling company would have given you figures and milestones that will make you a millionaire overnight. However, as a human being of sound mind, you will know that it is not possible. Making money as a direct seller is as much a hard work as it is to build a business from scratch. Therefore, you should not build castles on clouds and hope to make it big overnight without any effort.
That being said, you will need to understand the basic payout structure of the company you are getting involved with. Some companies pay based on a percentage of Business Value (BV) they associate with the products sold while some companies base their pay structure on a percentage of Product Value (PV).
A sample example of the above is as follows:
Suppose the BV of a product that you bought at $90 and are selling at $100 is 80 and you get 20% on BV, you will be actually getting $10 (initial profit) + (80*20%) = $26
The fact to note here is that you will only be getting a percentage of the sale value apart from the initial discount received from your purchase as a member. However, there are companies that provide you retail profit as well.
A sample example of the above is as follows:
Suppose you buy a product at $90 and sell the product at $100 and the company offers you 20% of the retail profit, you will be receiving $10 (initial profit) + (100*20%) = $30.
The main thing to note is that you need to understand the pay structure and what the percentages of payout are based on.
Moreover, some direct selling companies require you to fulfill a certain monthly quota so that you continue to enjoy privileges. Also, some companies require you to purchase business kits and samples before you can become a member. Therefore, it will do you well to read the fine print and ask questions in detail as to what the initial and subsequent investments would be.
Study the Products
Once you are satisfied with the pay structure you need to make sure you understand the product range the company is offering. No matter how much the company is willing to pay, if you are not able to identify or use the use the products yourself you will not find much success as a direct seller. Therefore, it is essential that you find a direct selling venture that suits your needs.
Direct Selling is Hard Work First
A lot of people who venture into direct selling tend to have the notion that it is a cakewalk. Nothing can be far from true. A direct selling opportunity is very much like building a business from scratch. Although you need not engage in research and development or pricing strategies, getting in the groove with things can be straining.
You will need to attend many seminars and classes to understand how to promote the products and how to pitch presentations to people who have the potential to be your down line or partner. Also, you will have to work constantly at finding new customers and building partnerships, just like you would in a normal business.
This is going to be what you do for the next 2-3 years before your business will be ready to be on auto-pilot. By that time you would have many partners working with you and you would earn commissions from their sale. Also, you would have managed to get regular customers as well. Only when you put in the initial hard work of building your business will you be able to relax and still see the money come in.
In summary, direct selling is over rated as a get rich quick scheme. However, nothing can be far from truth. Direct selling is a very lucrative opportunity if you are willing to understand what you are getting into and are willing to dedicate the time and resources needed to make it a success. As such, walk into any direct selling presentation you are invited to with open eyes and ears and ask plenty of questions till you find the right direct selling company.
