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Fair ~ River stage: 35.94 Falling Saturday, November 7, 2009 |
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Is Direct Selling For You?
Posted Thursday, July 9, 2009, at 10:21 AM<< Previous | Read comments | Respond | Email link | Next >>
I do not question the credibility of Mary Kay or Avon, but I challenge you to think about what you are getting into before you sign up with any direct sales company. Hopefully, these thoughts will help.
Don't swallow all of the promises. If anyone tells you that you can make a six figure salary by working only a few hours a week, they are lying to you. If it was true, everyone would be doing it. Great salaries take great dedication and much hard work. Don't believe that anyone can be a great salesperson. With lots of training and practice, some people can develop sales skills, but very few can simply purchase a product line and suddenly become a successful sales person.
Understand how multilevel marketing (MLM) works. Whatever the product line, the top money makers are those who succeed at recruiting others and motivating their recruits to recruit others. The real business is recruiting, training and motivating. If you think you would be good at this, consider it. But, because of the pressure to constantly be recruiting, there is a temptation to say that the business doesn't really require any selling or much of your time. Again, this is simply not true. You might be able to make a decent income by simply selling the product but the odds are against you. According to the Direct Selling Association, the median income for a direct salesperson is $2,400 per year, with only 10% of sellers doing so as a full time job. And fewer than 1 percent of all MLM salespeople ever recapture their original investments.
Be cautious about internet solicitations promising riches by starting your own internet sales business. If fortunes could be made magically by entering a few keystrokes, why do these companies need you?
Am I saying never to start your own business? Of course not. I am saying if something sounds too good to be true it probably is. The perfect fit for you, whether it is cleaning houses or marketing your grandmother's cheesecake recipe, is whatever you are passionate about and good at. Comments Showing comments in chronological order [Show most recent comments first] |
As a Personal Finance Coach, Joe's passion is helping others achieve their finacial goals. This "hands on" experience supplies an abundance of real life issues for Joe to write about. You can expect his blogs to be full of common sense counsel on money and life. Joe, a Dave Ramsey Certified Counselor, operates Plemon Financial Coaching. You can learn more about Joe at www.plemoncoaching.com.
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Another downside of MLMs is the relationships with friends and relatives that are destroyed by attempting to drag them into the schemes. Either they get fed up with hearing salespitches and avoid the person or worse yet they actually buy in and then can blame any lose of investment on the person that introduced them to the business. Harnessing social & family networks into marketing & sales networks can occasionally be profitable but usually at the expense of burning a lot of bridges in the process.
Personally I've seen that my relatives who got further into an MLM than just hosting a rare Tupperware/Pampered Chef/etc party are the same relatives that nobody ever talks to anymore.
I have been doing taxes since 1990, and I have never did one single tax return of anyone selling MK or Avon or anything like that where the person actually made a profit. Not one time have I ever seen a profit reported.
You're right on all points, Joe (of course) ...
Good point, Nil ... Have a couple of friends whom I sometimes find myself almost just 'tolerating' due to their individual 'businesses' of selling.
Never made any money when I tried selling Avon ... back in the days when we actually went door-to-door. Did make some money selling Coventry Jewelry (at home parties), but that was only after I became an Area Manager. Hated both of those jobs ...
I was thinking about becoming an Avon rep for some extra cash, but after reading your article I'm not sure it would even be worth my while.
My wife and I did a MLM deal back in the early 90's shortly after becoming married. Though we where niave, we figured out that real money was made on books, tapes, functions and not the products themselves. We drew a line in the sand and never looked back.
Nil is right on. We unfortuntatly burned many bridges that are not repairable. When we left we left behind many what I called "friends" but found out real quick they where just friends on the surface. The only time I hear from these "friend" is when they are in some latest hottest new deal coming to town. It is very sad.
One of the most enjoyable aspects of no longer being involved in MLM is the fact that if I am talking to someone in line at walmart it is because I want to. Not because I am trying to get their name and phone number so I can contact them about a great program.
To this day I meet people out and about and they have no clue about me and then approach me with a "have you ever looked to diversive your income". I smile and say what multilevel program are you with. Their expression on their face is priceless.
The products may be good, but if you really want to make money develope a plan around an idea you have and pursue it.