Updatd September 5, 2023

You are a new direct sales representative. Congratulations on your new business!

That’s right – you are now a business owner, an entrepreneur.

What you are not: an employee.

What does this mean? It means that YOU are in charge. It also means that YOU are responsible for your business’s success (or failure). ONLY you.

This may sound harsh, but the company you represent owes you nothing – except the commission that you earn for selling their products. Sure, they may offer you all kinds of perks, incentives, even vacations. And that’s all wonderful. But, they don’t have to. They do it to incentivize you to sell more product, so the company (and you) make more profits. It’s a win-win.

Direct sales is not for everyone. But, if you’re motivated, enthusiastic, and hungry, and have a strong work ethic, it could be for you!

If, however, you are the type of person who prefers to be told what to do all day and bolts out the door at five sharp, you may want to look for a regular job.

It’s not a “scheme”

First off, if you’ve signed up with a legitimate direct sales company, please ignore friends, Facebook trolls, and even family who say it’s a pyramid scheme or a Ponzi scheme. Unless the company focuses on only recruiting rather than marketing products, it is neither.

I remember back in the 1970s, some of the people I worked with were very excited about a chain letter that was going around. The letter stated you had to mail $50 in cash to the last person on your list, and send a copy of the letter to 12 of your friends, and in six weeks’ time you’ll receive $20,000 in the mail. That, my friends, is a pyramid scheme. It doesn’t work, and it’s illegal.

Bernie Madoff and Sam Bankman-Fried are classic examples of Ponzi schemes, where scammers take people’s money to pay fake dividends to other earlier investors, skimming some off the top for themselves.

From Wikipedia: “A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.

“While often confused with each other, pyramid schemes and Ponzi schemes are different.^[8] Pyramid schemes are based on network marketing, where each person in the pyramid is tasked with bringing in their own subordinates and in turn profiting from their sales or recruitments. This fails because it essentially requires an infinite number of people to join the company. In a Ponzi scheme, however, participants are promised returns on “investments”, supposedly into stocks or goods, but which are actually paid for by new investors, while a central leading figure takes a portion as profit.”

“It takes money to make money”

You may have heard that old adage from your grandma, but it’s true. Any business requires some capital to get started, as well as to keep it running.

If you’re in direct sales, you don’t have a lot of expenses. Probably your catalogs, your inventory, shipping, and possibly your website (some companies, but not all, charge a monthly fee for your custom website).

Almost every day, I see a representative complaining in a Facebook group about the cost of brochures or shipping. Believe me, you are paying only a small fraction of the actual cost of shipping that box.

For example, my shipment from Avon might be two boxes that weigh about 20 pounds each. I live only three hours from the Zanesville, Ohio, warehouse. When I do an online calculation of UPS charges for that shipment, I would be paying $27.34 for that shipment if I had to pay actual cost. If I lived across the country in California, the same shipment would cost me a whopping $57.24! Yet, the shipping charge for any Avon Representative would be in the range of $8 to $17 depending on dollar amount of the order. Never more than $17. And that would include the entire order, no matter how many boxes there are. So, to the people who are complaining, calm down. You are getting a heck of a deal on shipping.

Low overhead

Now, think about a boutique in your town. The owner of that boutique, let’s call her Bobbie, is a small business owner, just like you. But, she has a lot more overhead expenses than you do, and she has to sell a lot more product just to break even. Things like:

• Rent
• Utilities
• Payroll and payroll taxes, if she has employees
• Inventory purchases
• Shipping
• Display pieces & racks
• Phone and internet
• Security services

So, you see, you really have it good, since your expenses are only inventory, shipping, and business tools! Plus, if you have a dedicated space in your house for your business, you may be able to claim it on your taxes (see a tax professional for information on that).

You’re not tied down

Thinking back to Bobbie the boutique owner, she must be at her store during her open hours, or at least have a trusted keyholder there. She can’t just take off to go shopping, hang out at the pool, or have a two-hour lunch with her friends. But YOU can! Because you work your business around YOUR life – not the other way around.

Of course, remember that what you get out is equal to what you put in – so the more hours you dedicate to growing your business, the more money you’ll make – but it’s up to you to decide how much you want to do.

Your business is open 24/7

If you’re in direct sales, most likely you have a website where your customers can order from you. This means you can earn money even while you’re sleeping or on vacation at the beach! Our friend Bobbie can’t say that, unless she also lists her products online.

Benefits of direct selling

I know, I know. Direct sales and MLMs sometimes get a bad rap. But there are advantages to this type of small business:

• Low overhead
• Make your own hours
• Work as much or as little as you like
• Sell online, in person, or both
• Build relationships with your customers
• If you’re so inclined, build a team for greater income

Questions?

Send me a note, and I’ll do my best to address your concerns and questions!