Warning! Before You Start Direct Sales

Direct Sales, Earn money, Save Money
Warning! Before You Start Direct Sales

Lately, I’ve been having a lot of friends that I haven’t seen in years come out of the woodwork, wanting to catch up. Sure, I’ll grab some coffee. Sounds nice until I’m being asked to buy a product before the barista can hand me my coffee.

Direct sales companies are springing up everywhere promising you can make a full-time income selling what they have to offer. There are a lot of multi-level marketing companies selling things like health care products, essential oils, and household items. Can you make a full-time living off of direct sales?

In short, the answer is yes. You can make a lot of money in direct sales if you know what you are doing. Personally, I have known many people that have done well in selling for direct sale companies. I’ve met one couple that currently makes $40,000 a month from their direct sales company.

I would agree that the main avenues of getting rich are investing and selling the right products. However, there is a lot you should consider before jumping in with the direct sales crowd.

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The Problem with Direct Sales

People don’t like direct sales companies

Unfortunately, a lot of individuals associate direct sales companies with pyramid schemes and get rich quick fanatics.

What makes it worse is there are thousands of people who are selling the same thing you’re selling. Some have already approached your potential customer very aggressively, trying to push the product onto them with non-stop calling and not taking no for an answer. Because you are selling the same direct sale product, it has already been blacklisted in the consumer’s mind, regardless of how great it might be.

Your team is also your competitor

Your team is selling the same product you are, in the same town. This means they are also looking for the same people to buy the product. It’s almost like setting up a Burger King right next to a McDonalds, but a portion of McDonald’s profits are going to go to Burger King.

It isn’t your company, even though they might say it’s your business

Ultimately, the direct sales company makes the rules, which means they can control how you run your business. If the company doesn’t like something you did, they can prevent you from ever selling again, even if you’re currently making $40,000 per month.

One direct sales company says that you are not allowed to create independent advertising such as through your local newspaper, online marketing, or television ads. This leaves you only to meet and sell to people face-to-face. If you were truly a wise businessperson, you would be utilizing advertisements to reach as many people as you can because your reach is everything!

The market will get saturated

I once knew a direct sales person who was making $10,000 a month who told me he and his wife were moving because the current market was saturated. In other words, the city had too many people trying to sell the same product, and there was no one left to sell it to, except for maybe one of the few “breadcrumbs” that were left.

In the introduction, I told you one couple was making $40,000 a month through their direct sales company, but they were the first people in the city to sell the product! You could tell the people making $40,000 a month began to get frustrated because their business was not progressing because the market was saturated.

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What to Consider Before Starting Direct Sales

Sell consumables

I would highly recommend that if you are going to start with a direct sales company, you sell a product that has consumables. In other words, sell a product that at the end of each month you need to order more because you ran out. Repeat business is everything if you want to keep your business running.

I know people that have gotten into direct sales companies that sell a one-time commission on big items. You might get $1,000 a sale, but because they only needed the one item, business becomes slow and eventually dies once you’ve talked to everyone that could need it in your area.

Understand the dropout rate

A lot of people drop out of direct sale companies because they don’t see a result when they find out the hard way the market is saturated. What’s worse, a lot of these companies try to convince you to go “all in” and make a large purchase up front as a business investment. This typically means you lose a large chunk of money because you followed the advice of someone who profits off of you going “all in.”

I would recommend reaching the “all in” level through selling the product so you can see if this is something that works for you, sells well, and so you don’t end up being out a large chunk of money if it doesn’t work.

Family will support you too much

Family wants to see you succeed and will purchase your product, even if they can’t afford it because they love you. Direct sales companies rely on you using your close connections to make the deal. The problem is, to build your wealth, you are now taking it away from the rest of your family while shuffling a portion of it to the direct sales company and in return, your family may get something they didn’t want or need.

I would recommend asking your family after you already have a successful business in direct sales going. This way you can make it a no pressure situation for all parties involved. Asking them after you are successful eliminates the chances of taking their money followed by dropping out if it doesn’t end up working.

 

I don’t want to sound too negative about direct sales because I believe they can and have helped a lot of people when jobs aren’t always readily available. As I’ve mentioned, I have known a lot of individuals who have done well in direct sales. However, I do want you to consider the full side of direct sales and make an informed decision. If you decide direct sales is for you, make sure to continuously learn and seek additional training.

What are your opinions on direct sales? Have they helped you? Let me know in the comments below!