How to Pick a Direct Sales Opportunity

In today's economic downturn while retail stores are struggling to stay alive, many direct sales companies are doubling or tripling their business. If you are considering joining the ranks of the over 15 million people in the United States who are independent consultants in direct sales companies, the information in this article may save you time, energy and money.Whatever your reason for considering a direct sales position, you need to know how much money you will net and how much time you will have to invest in order to earn it. It is possible to spend more money with your company than you are netting from sales and commissions. There are hidden costs to being in direct sales that you may discover only over time - unless you know the questions to ask up front, many of which are listed below.Company Reputation:One of the best resources to help with the search for the right company is the website of the Direct Sales Association. This organization represents the top direct sales companies in the United States and has a Code of Ethics to which member companies must adhere. For more information, you might want to search the Internet for the company name and words like "fraud" and "lawsuit." Do you know an independent consultant in this company? What is his/her professional reputation? Is the product high quality, and can you represent it passionately and knowledgeably?Up-Front Costs:Up-front costs include the initial investment (what does it include?), additional samples you are expected to purchase (how often, costs, can you "earn" them?) and sales supplies (how often do new catalogues come out?). They could also include business cards and items to display your wares (clothes racks, jewelry cases, display boxes, etc.) Do you have adequate computing power, including current software, to manage your new business?Hidden Costs:Hidden costs may include administrative fees (what is covered?), credit card processing fees, shipping fees and restocking fees on returns. If the company offers "host" awards for the host/hostess who has an event for you, who pays for the awards (does it come out of your commission)? Does the company provide a personal website and/or e-newsletter, and if so, what do they charge for them?Compensation:What is your initial compensation on sales, and can it increase? How much are you committed to sell to stay "authorized"? Is there a penalty if you miss that quota? What is the average sales of an event/party (what is your take-home)? What is the commission plan for recruiting (how many people, what does it take for them to stay active so you are paid on them, do you have to increase your recruiting to maintain a team commission)? Is there a quota on you or your team to receive commissions? What happens to your status if you miss a certain time period of achieving that quota? Is there a bonus program (is it achievable)?Leadership/Training:What type of training program is available through the company? What is the expectation for a manager or leader for their mentoring/training of the recruits? Are managers/leaders encouraged to continue to sell, or do they "retire" on commission from their recruits? What is their incentive to stay active in sales?The answers to these questions vary significantly across direct sales organizations, and if you don't ask before you invest your time and energy in the company, you may find out several months later that you can't make a decent income because of the hidden costs and penalties. If you can't find the answers to these questions from the company, ask the person who wants to recruit you. If the answers to the above questions are positive, the company won't mind sharing them with you, and if no one is willing to provide straight answers, you know not to invest your time and resources.