Is direct selling right for you?

You’ve been to the parties, you’ve heard the sales pitches, you’ve bought the exclusive products and now you’re wondering: Could I do this too?

Many people are turning to direct sales — that is, selling a product or service person-to-person outside of a retail location — to earn some extra cash or launch their own business. There are many advantages, like flexible working hours, working from home and being your own boss while having the structure and support of a larger company. These days, there are opportunities to sell just about anything from vitamins to telecommunications and hobby supplies to gourmet foods.

However, direct sales opportunities aren’t easy money makers — they require time and effort, not to mention some serious salesmanship. If you’re thinking of giving it a try, here are some questions to consider.

How to tell if a direct sales opportunity is right for you

Are you a good salesperson? Be honest: not everyone has the personality, experience and skills to bring in the cash (at least at first). Good salespeople are self-motivated, outgoing, quick-thinking and strong public speakers. They know how to market products to their audience and they have some business savvy. If you’re looking to advance, be willing to hone these skills. Experts recommend shadowing other salespeople to pick up some pointers.

What are your goals? There are a variety of direct selling opportunities out there from occasional work — like selling at parties a couple of times a month — to working your way up the ranks. Consider: are you looking to earn some extra spending money, enjoy the discounts or eventually build the business into a full time job? Is this something you want to do for a few months or several years? How much time and energy are you willing to commit? There are no right or wrong answers — it’s all a matter of fit.

Do you have the means to do the job? The position may require you to store inventory in your home, transport goods and handle shipping. Being physically able to lift and carry items as well as standing on your feet for long periods of time may be required. In addition, you may need reliable transportation, a cell phone, home office space and some computer know-how to support your endeavours.

Would you use the product? If you’re excited about the product or service, your customers will be too — but it’s much harder to sell something you can’t get behind. Customers will also appreciate those insider tips you can share as someone who enjoys the products — like your favourite recipes, make-up tricks or other tips that will add value.

Can you trust the company? We all know there are plenty of scams out there. If you’re venturing outside reputable, well-known companies like Tupperware or Avon, make sure to do your research first. Read as much as you can about the company, and consult independent sources like the Better Business Bureau. Find out if their products have a good reputation and see how they handle complaints.

Also, be on the lookout for pyramid schemes. A classic sign is that your earnings mainly come from the pricy membership fees paid by the people you recruit rather than your performance.

Is the company reputable and ethical? How can you tell? Both the U.S. and Canadian Direct Selling Associations have Code of Ethics for companies and sellers. (You can read them here and here.) You can also visit individual company websites to find out about their social and environmental responsibility policies. You can also get some inside information by asking for references and talking to current employees.

Not sure where to start? You can find a list of accredited companies from the Direct Selling Association’s Member Directory (for Canada) and Direct Selling 411’s Direct Selling Member Organization Search (International).

Does the business rely on selling to people you know? Selling to your friends, family and coworkers will only get you so far, and could even strain relationships. Find out what opportunities there are to reach a wider audience, like a website for your business or networking opportunities.

Recruiting is often a part of the deal: you’re encouraged or expected to bring in new salespeople and you receive a cut of their sales too.

How are you compensated — and how much? Direct sales offer a commission rather than a salary, but each company has its own way of doing things. For instance, you may be paid a higher commission once your sales exceed a given target or receive a bonus for bringing a certain number of recruits. You’ll also want to know when and how you’ll be paid.

Don’t be afraid to dig a little deeper. What are their sales typically like? How much can you expect to earn, and how soon will your income increase?

What are your costs? Yes, it’s possible to lose money if you’re not careful. Some companies require you to pay a membership fee upfront or on an annual basis. Others may require you to purchase inventory which you may not be able to sell or return. Read the company information very carefully — including the fine print — before making any commitments. Be cautious: paying upfront for membership fees, inventory and training materials are sometimes signs of a scam.

What support does the company offer? Good companies want you to succeed and may offer support like training sessions, professional development, online support tools, networking events, advertising and website hosting. Find out what information and samples they provide for new products, and how you can stay in touch with the latest news and offerings.

What does the company expect from you? Some companies have higher expectations than others. For instance, you may have to meet certain sales targets or hold a certain number of sales parties in a given time frame. You might also be expected to handle some of the marketing and advertising, and travel to attend training sessions and conventions.

What are the tax implications? You might not earn as much as you think after the government takes its cut. If you’re retired, the additional income could even affect your pension. On the bright side, you may be able to claim some of your business expenses like transportation or home office space. You may need to consult an expert, but knowing the financial workings of owning your own business can save you some hassle and allow you to budget for taxes.

So is directing selling the way to go? No one can answer that question for you. Think about your skills and experience and carefully evaluate opportunities. The job may take a lot of work, but finding a good fit is a good place to start.

Need more information? Try these resources:
The Better Business Bureau

Direct Sales Association (U.S)
Direct Sales Association (Canada)
Direct Selling 411
Direct Selling Education Foundation

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