The Benefits of Starting a Business with Direct Sales Companies
written by: Lucinda Watrous•edited by: Jean Scheid•updated: 6/6/2010
For those considering starting a business with a direct sales company, taking time to evaluate the benefits and effectiveness of a direct selling business will greatly impact the decision you make about going into business for yourself. Read this article to find out more.
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There are many different benefits associated with starting a business with direct sales companies. Depending on the reason behind starting the business and the particular direct sales company you choose, the benefits for you may be greater or lesser when compared to others who started their own businesses with the same company. Let's take a look at some of the most popular benefits associated with the effectiveness of a direct selling business.
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You're the Boss
While you may have specific quotas or other requirements to meet in order to maintain an active status with the company you're involved with, generally speaking you are free to set your own schedule and determine how much or how little you want to work. Direct sales companies will provide guidelines and suggestions, but as long as you meet their minimum requirements--be it by the month or by the quarter--you are free to conduct your business as you wish. You'll sign an agreement which dictates what you need to do, and what you cannot do--usually requiring you to represent yourself as an Independent Consultant so as not to be confused with a direct employee of the company. Check with the specific company you are interested in for detailed information on these requirements so you can be sure they fit with you the way you need them to.
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Most direct sales companies do not require you to keep an inventory of your own, meaning you can take orders and turn them in as you wish, passing the packing and shipping tasks to the direct sales company warehouse. It will be your responsibility to collect payment and forward it to the company and check your orders for accuracy prior to turning them in. Usually, you don't have to handle deliveries either, because customers will be able to choose to have products delivered to the party host, or directly to their homes. This is a great cost saver, because you're not spending money on inventory you may or may not sell. This is what plays a major role in the effectiveness of a direct selling business, because you're not losing money by carrying additional product.
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Little Maintenance Costs
Most direct sales companies provide you with marketing materials such as business cards, catalogs, flyer's, and promotional items at a reduced cost compared to generating them on your own. You'll only need to order these items as you need them, and you control how much of anything you order at once. Keeping costs low is an important part of success for any any business. This ensures you don't order more catalogs than you'll need and are able to keep a larger portion of your commission in your pocket as profit. The initial investment kit for many business includes business materials for a certain number of parties or shows so you'll be set until the business takes off and you have money to put back into the business.
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Part of the effectiveness of direct selling business lies in the incentives they offer to consultants to grow their business. For instance, Pampered Chef offers new consultants a free product after submitting 4 shows in their first 90 days, in addition to a kit enhancement month in the 4th month (and annually for existing consultants) where they offer product at 40% off. There are monthly specials to keep consultants motivated, too. Though they will vary from company to company, there's always something to reward consultants for their hard work.
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Considering the benefits and effectiveness of a direct selling business is a good way to gauge whether or not starting this kind of business is right for you. This article details seven of the top benefits associated with direct sales to help you decide.
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When consultants share the business opportunity with others and get them involved, they have the chance to move up the ranks. As people advance, requirements, pay and incentives change, but always do so in a way to keep the consultants happy and working on their businesses. Check with the specific direct selling business you're interested in to find out more about their advancement opportunities. The concept of Multi-Level Marketing is very important to understand to succeed here.
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Time to Socialize
Many direct selling businesses are targeted toward women despite the fact that men can be just as successful with them. Many women get involved with them as a way to bring in extra income while staying home with their children, and therefore, value being able to get out of the house and away from the kids to socialize with hosts and guests at their parties. This may not be a benefit for all consultants in all direct selling businesses, but for many, it plays a large role in the decision to get involved.
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With many direct selling businesses, consultants are placed with the person who brought them into the business and other team members where they can can go to get help with nearly any aspect of their business. There are usually meetings where people can get together and share stories of success and ways to increase business activity. People who start a direct sales business are never alone because the company wants to help everyone succeed.
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These are very basic benefits contributing to the effectiveness of direct selling businesses, and each company will likely have other specific benefits which cause a person to choose them over another option. If you decide to invest in a direct sales business, you will be able to find other benefits based on your reasons for joining the company and be able to use these benefits to turn your direct selling business to success. Don't forget about business planning, because you'll still need to plan even though it's an existing company--it's a new business for you.