The Fantasy and The Reality of The Direct Sales Home Based Business World
Before you decide starting a home based, direct sales business know what you are signing up for.
Direct Sales Defined
Direct sales is a type of business that takes a retail store out of the picture. Exactly as it sounds, direct sales refers to a person directly selling the product they represent to a customer. The direct seller will choose a supplying business that peaks their interest. Examples of these type of direct sales, home based business suppliers would be LulaRoe, Beachbody, Usborne Books, or Younique.
Once you choose the direct sales company that suits your fancy, there is a small up front investment, usually $100 (but could be much more depending on the company). This investment will supply you with the initial products, paperwork, and advertisements needed to start a successful home based business. The representative is responsible for attracting customers, growing their business, and eventually growing a team (or a downline) of other direct sellers.
Direct Sales Dollars
Income is based on the seller’s ability to meet the suppliers set dollar amount in a certain time frame. Depending on the business, it could be a monthly or a quarterly quota. Representatives can succeed in meeting this quota by booking in home parties, creating online parties through social media, or handing out free samples of their product to attract a buyer.
The real money is made when the representative is able to grow a team of other home based direct sellers. When others join your team, the company you work for will compensate you a specific amount depending on how many representatives work under you. This amount does not come from your recruit’s sales, it comes from the direct sales company.
Direct Sales Delusion
Before I go any further, we need to clear one thing up. A home based, direct sales business is NOT a ‘pyramid scheme’. This is a common misconception regarding this type of business.
A pyramid scheme bases your commission on how many people you recruit to join your team. The money those people invest in joining under you goes to the company, not a physical product. Pyramid schemes require you to buy an abundance of inventory and other products that are unnecessary to sell the product you signed on to sell.
More times than not, when one joins a pyramid scheme, they lose money. Only the people on the top of the pyramid are the ones making money. One more thing, pyramid schemes are illegal.
Direct Sales Design
The two main types of direct sales home based business models are the party plan model and the network model (sometimes referred to as multi-level marketing). Both models sell products for specific direct sales companies, have multi-level compensation plans, and encourage recruiting others to sell and recruit.
In a nutshell, party plan focuses on selling the product first, usually at live or online parties. The chance to join the representative’s team is always presented at the party thereby recruiting others to join you in selling. A party plan model will always have a consultant, a hostess, and guests.
The consultant is responsible for presenting the product at the party, collecting and entering orders, handling money, and also, deal with returns or unsatisfied customers. A few examples of companies that follow the party plan model are Thirty-One Gifts, Usborne books, and Jamberry Nails.
The network model focuses on a one to one relationship between the distributor and the customer. The distributor is encouraged to concentrate on gathering recruits first. This occurs by a distributor reaching out to a potential customer to sample the product they represent.
If the customer enjoys the product, the distributor presents the opportunity to purchase the item either at retail or wholesale cost. If the customer is not interested in selling a product, they are still welcome to purchase the product through the distributors website.
Should the customer enjoy the product and become interested in selling it to others, they will join the distributors team, enjoy the product at wholesale cost, and begin to gather their own recruits. A distributor is not required to enter orders, handle money or unsatisfied customers. This is all done through the company the distributor represents. Some companies who follow the network model are Beachbody, Shaklee, and Juice Plus.
Confessions of A Home Based Business Superstar Wannabe
Now that you have expanded your knowledge of direct sales, it’s time to sit back, relax and enjoy my cautionary tale.
As moms, we all have been invited to at least one direct sales party. Our girlfriend calls us up or sets up a party on social media, and we accept the invite. We look forward to a girls’ night out with delicious snacks, tasty drinks, social time with our friends, and some light shopping on whatever is being sold in our friend’s home.
Some moms are much more level headed than I. You see, the first time I attended a direct sales party, I was hooked. Sure, the products I saw were nice, and they were better quality that what I could find at my thrice weekly Target shopping trips. What lit the stars in my eyes is something called the ‘opportunity’.
This is home based business key speak for signing up on the direct sales business representatives representative’s team. The opportunity is not something that is promised nor a guarantee. But, if I work hard enough and put the time in, I can earn a free trip, earn commission, and be able to take a break from my full time stay at home mommy position.
After talking it over with my (hesitant, yet supportive) husband, we agreed I could dive into the sparkly pool of direct sales. I enjoy makeup and nails, so I joined a year old home based direct sales company called Jamberry Nails. If you are unfamiliar, these are nail stickers that last longer than nail polish. I thought I could definitely sell this stuff. It would basically sell itself.
I was fortunate to sign up under a very experienced direct sales consultant. She showed me the ropes and taught me the lingo. The sign up cost was relatively low, and I would quickly earn back my investment.
After a few months of applying what I learned, I achieved a higher rank in the company. I grew a team of quite a few women, earned some nice commission checks, and I was having fun. I hosted parties in my own home, travelled to other women’s homes to peddle my product, and I even set up a booth at our county fair to expand my sales base. I felt as my dreams of direct sales superstardom were coming true!
But wait. Remember when I said I was a full time stay at home momma? I was also a homeschooling momma—a full time job in and of itself. I was becoming increasingly focused on growing a team, earning a paycheck, and achieving higher titles, rather than focusing on my main priority: my husband and children.
My husband was picking up the slack I was left behind. After working 8-10 hours at his full time job, he would come straight home to feed our children and put them to bed, while I would run out the door with party supplies to present at another party. My kids watched more television and ate more boxes of mac and cheese. I told myself that I was more than just some housewife who cooked, cleaned, wiped snotty noses, and changed dirty diapers.
The “hobby” I thought I had signed up for was quickly turning into a full time job. Sure, I could have left it as a hobby and met the minimum requirement to stay on as an active consultant. This is what my husband and I initially agreed upon, but I felt so good being able to contribute financially to our family.
I knew I was good at direct sales. I was outgoing, friendly, and knowledgeable about what I was selling. More importantly, and probably THE most important aspect of becoming involved in any home based direct sales business, is I believed in what I was selling. I was passionate about the product. This passion is what separates those who succeed and those who fail.
After 6 months of being a consultant, I started feeling the pressure to maintain a team and meet a monthly quota. I was becoming anxious and irritable. My house was developing cobwebs because time I would normally have spent cleaning, was now spent entering orders and booking parties. I was feeling incredibly overwhelmed. I told my husband I wanted to stop selling Jamberry. I was unable to burn the candle on both ends. I couldn’t be the direct sales diva I knew I could be, while striving to be the wife and mom that I wanted to be.
One would assume that I had learned the truth about the time and commitment involved in realistically achieving success in a home based direct sales business. A few months later, I attended a Thirty One Gifts party, and I got the sales itch.
“Seriously? Not again.” This was the response I received from my husband after I returned home from the party. We had discussed the lessons we both had learned about the time, hard work, and commitment that was involved in actually succeeding and growing in a home based direct sales business. “This is different.” I explained. “I love the bags and organizational products they sell. I basically am joining to just get the start up kit and the discount” (also known as a “kit-napper”). The next evening, I signed on as a Thirty-One Gifts consultant.
Considering my prior experience with Jamberry Nails, I knew things with this company would be different. Thirty-One had been around for a number of years, so I was one of thousands of women who carried one of their unique personalized bags. I wasn't joining a brand new home based direct sales business. If I was going to grow a downline and earn a significant paycheck, I needed to set myself apart from the thousands of other women striving for the same goal.
I half-heartedly sold Thirty-One for a little under two years. I was able to maintain the required quota to stay on as an “active consultant” but my drive just wasn't there. I eventually was downgraded to--gasp--inactive. A label no committed direct sales girl wants to have attached to their name. Honestly, at that point, I didn't care. I had a closet full of different sized bags, and a bank account that remained the same. I just wanted out.
I signed on to a couple other companies, one was a network model nutrition based company and another was a party plan model that sold beauty supplies. I joined these two companies with the realistic expectation that I didn’t have the time, patience, energy, or desire to do any more than kit-nap the two start up kits.
I closed all doors to the various home based businesses opportunities in 2014. My three-year experiment swimming in the direct sales world had finally dried up. I still support my fellow direct sales girlfriends. Some have joined multiple companies and enjoy the discounts that being a representative provide. Others have stayed on with one business and are now making 5-6 figure salaries selling their product.
I will leave my faithful readers with one final thought. Direct sales can meet many needs a mom has from wanting an extra $70 per month or longing for some girl time while helping others browse through the catalog they provide.
If you choose to involve yourself in a company, remember your reason for joining. Make sure it’s something you are passionate about. Don’t annoy your friends and family or blast your social media page constantly with requests for party hosts.
Finally, direct sales dreams do come true. I’m friends with two very successful girls from each home based direct sales models. Erin Carey and Jessica Scott work their tails off, love the women who work for them in their downline, and have the skills necessary to achieve high status in their respective companies. If direct sales success is your dream, be prepared to work hard for the dream to become your reality.