July 12, 2007 — -- Direct selling offers millions of people the opportunity to make money on their own time, mainly as a supplement to income. According to the Direct Selling Association, more than 14 million people in the United States are doing it right now.
How it works. Direct selling is person-to-person sales of consumer products or services taking place outside of a traditional retail location. Direct sellers are independent consultants, not employees. Products are sold primarily through parties, hosted in private homes where you gather a bunch of your friends or you get people you know to invite their friends. One-on-one selling is also an option.
Most direct selling companies make it easy for you to sell their products: Every seller gets a Web page on the company's Web site from which to take and process orders, so when your customers want to reorder, they can do it online. Each time you make a sale, you earn a commission. And if you recruit people to become sellers, you'll make a small commission on their sales too.
Is it right for me? For most people direct sales is ideal for supplemental income, not your main source. The median income in direct sales is $2,500 annually, which means 50 percent of the people make more, and half make less. The average seller spends less than 10 hours a week focused on his or her business. Steer clear of any promise of big bucks or fast cash with minimal effort; that doesn't exist in direct sales.
Take your personality into account. If you're very shy and introverted — if you're not outgoing or willing to hustle — then any form of sales probably isn't right for you. Unlike working in a retail store, where customers walk in, with direct sales you're on your own — you must find your customers. So a driven, motivated, friendly person who wouldn't be shy about asking her friends to consider buying her line, and who isn't shy about chatting up strangers, is needed.
What should I sell? Pick a product line that you are personally passionate about. If you can't see yourself using the products or giving the products as gifts, stay away. Here are just a few of the companies that you can sign on with:
The Direct Selling Association (www.dsa.org) offers a list of 200 companies in a wide variety of categories with links to their Web sites. This is also an ideal resource on the industry.
What's in a name? Some people prefer to go with a big name — such as Avon or Mary Kay — simply because everyone knows it, which can be comforting with sales. Others prefer to go with a name you've probably never heard of because that too can be instrumental in generating sales. Only you can decide what's right for you and your potential customer base.
Costs and fine print. Make sure you're being asked to pay a reasonable fee, which should cover product samples, training materials — which often include manuals, videos, access to seminars and more — plus catalogs and order forms.
The median fee for a starter kit is $70, and the retail value of the products often exceeds what you're paying for. Don't be sucked into opportunities that call themselves "direct sales" but require you to pay a fee solely for the privilege of becoming a seller. To pay a fee, you should be getting something tangible in return.
You should also be sure that you're selling directly to the consumer. For example, if you're selling food products, make sure that it's food that will go right into the buyer's mouth. There is no shortage of scams that require you to stock up on inventory and with a false promise of teaching you how to upload it to various distributors. That's not direct sales.
Check the buy-back policy. If you're not satisfied or you discover this isn't right for you, will the company buy back the starter kit? The Direct Sellers Association Code of Ethics requires its 200 member companies to buy back the kit and any product for at least 90 percent of what you paid for it within 12 months of purchase. If the company isn't a member of the DSA, ask directly what the policy is before you make any purchases.
And if I'm still unsure? If you're thinking of signing on with a company, but aren't quite sure yet if this is right for you, contact the company and ask to attend a party in your area. See how potential customers interact with the product. If you can't attend a party, ask to talk to a couple of reps in your area to see how they're doing. Every legitimate company will gladly provide someone to answer your questions, so don't be shy.
Tory Johnson is the workplace contributor on "Good Morning America" and the CEO of Women for Hire. Connect with her directly at www.womenforhire.com.