Direct sales businesses are a pillar within many Mom communities.
Have you been approached by a close friend with an irresistible opportunity to join her company with the promise of making life changing income or finding a new community? Or are you a ride-or-die customer that is ready to stop paying your consultant’s commission and instead transition to being your own consultant?
If you are considering joining a direct sales (DS), Network Marketing (NWM) or Multi-level Marketing (MLM) company, it is important that you start your new business venture with eyes wide-open and with realistic exceptions. You can have a successful business if you do your research and have the grit to be consistent, even when business is slow. The following article outlines the top 5 things you should know about DS / NWM / MLM BEFORE you start.
The following information is not professional business advice and is based on my personal experience with network marketing companies and their consultants. Your experiences may be different.
#1 – Direct Sales (DS), Network Marketing (NWM) and Multi-Level Marketing (MLM) are “mostly” the same thing.
The direct sale of products to consumers has been around for millennia and is not a new concept. Before the advent of big box stores like Target or Walmart, products were primarily sold directly to the consumer through a salesperson associated with a company. Direct sales is a legitimate marketing structure that sells products direct to the consumer without the overhead of a retail store. Direct sales consultants primarily make their commission on the sale of the products that they represent.
A variation of Direct Sales includes Network Marketing (NWM) or Multi-Level Marketing (MLM). These marketing structures use the principles of Direct Sales, but add additional levels of commission based on recruitment. Consultants are encouraged to recruit new members and grow their team, and in return receive additional commissions based on their team sales. Products are still sold direct to the consumer through a consultant, but consultants are able to earn additional commissions associated with team building and team goals.
#2 – Research the company that you are considering joining.
Not all DS / NWM / MLM companies are the same. Before you commit to spending time and money joining a company as a consultant, make sure that you research the business, history, mission, products, marketing and compensation plan of the company you are considering. You should treat your future DS / NWM / MLM company in the same way that you would consider any other employer. You want to make sure that the company you are partnering with shares the same values as you do. After building your client base, it’s much more difficult to switch companies if you discover that the company does not align with your personal values. It’s best to figure that out before you start!
#3 – Compensation plans vary with each company.
Every company has a different compensation plan that is dependent on a variety of factors including personal sales, group sales, quotas and recruitment goals. There is normally a monthly or quarterly sales requirement that must be met to remain an active consultant or retain your promotion level. Compensation plans normally include promotions or advancements based on sales and recruitment. The more product that you sell and the more members on your team, the more commission you can earn. Before choosing a DS / NMW / MLM company, make sure to ask about the compensation plan to determine if it is something that is realistic for your situation. You may be interested in joining for the discount only, and that’s ok too!
#4 – A long-term sustainable DS / NWM / MLM business requires recruitment.
As previously mentioned, recruitment is an essential element of most DS / NMW / MLM compensation plans. If you want to have a successful business that provides life-changing income for your family, then you have to embrace the practice of team recruitment. Leading and training down line consultants is the reason why additional leadership compensation is built into a company’s compensation plan. Growing your team is the fastest way to create a sustainable passive income that does not rely solely on your personal sales.
#5 – DS / NWM / MLM companies require work!
If you were told by a DS / NWM / MLM consultant that it is easy and you will see immediate life-changing income, then you were told wrong! Successful DS / NWM / MLM consultants WORK HARD! They are consistently providing customer support, finding new leads, contacting potential customers, putting together company events, building and running Facebook parties, participating in Vender events, sending out samples, etc.
Most of the consultants that you know that are making sustainable income have been doing it for years! They started out as a very small business and have worked hard to grow their customer base and team. If your goal is to build a successful DS / NWM / MLM business that provides income to replace a traditional paycheck, it takes time and energy. You can build an income producing DS / NWM / MLM business, but expect to work 20 – 40 hours per week, if not more. You have to look at consulting as a small business and put the effort in that any small business requires.
