So we are exploring and researching great ways and options for others to make money on the side and from home. You know we have our list of Over 100 Ways and Counting to Earn Extra Income and want to build the list – but want to include ideas that can realistically make you money, not just add items to fill up a list.
One question that keeps nagging at us is “Are Direct Sales companies and opportunities and good way to make money?”
We freely admit that we don’t have the definitive answer to this! We have had our own experiences with direct sale companies (including being “successful” in one company in particular – see below) but don’t want only our experiences to taint our view of these types of companies.
First, what is a direct sales company?
Well, we turned to Wikipedia for the answer:
Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location. Peddling is the oldest form of direct selling.[1] Modern direct selling includes sales made through the party plan, one-on-one demonstrations, and other personal contact arrangements as well as internet sales.[2] A textbook definition is: “The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs.”
We want to answer many of the questions: What are the benefits? Are they worthy being a part of? Can you really make a living or income as many representatives claim? What are the best companies out there?
We both personally are very frustrated by the world of Direct Sales as there are so many different factors. Some companies are legitimate. Some are seemingly a get rich quick type of scheme. Then there are some where it seems like sales are made based on high-pressure or guilt from a friend or neighbor having a party (c’mon admit it, you cringe when your friend invites you to another of those parties!); when you’re invited by your friend you can’t not buy something as it would be so rude to not help the hostess (again, your friend) earn credit. With all of this, it is hard to wade through all of the red tape and figure this out from an honest money-making perspective!
Now I, Cassie, am coming at this from the view point of two perspectives: 1. Having once been in direct sales with one company and 2. As a customer or invited guest to many home parties of direct sales companies.
Before I share my perspective, I am putting this out there for everyone to gain perspective from more than my own experience! I can’t say that it is fair for me to say whether it works or not from just my one little perspective!
So SPEAK UP and share your thoughts on this topic in the comments below!
First, in our Deep in Debt to Debt Free Series, I shared an installment about my hope of joining a direct sales company to help us get out of financial trouble, only to find ourselves thousands more in debt in the end. We bought into the full inventory – you know the line you’ll only get out of it what you invest into it. It was a lot of work and if I didn’t work the 60-70+ hours a week and engage in high pressure sales, then it didn’t work. It was a bad experience financially, even though being a part of the company was a lot of fun, high energy, social and filled that part of life that many women desire. Alex and I joke that in the end, it was like I paid a lot of money to be in a feel-good social club that had high energy continuously! I am not denying that part of it, but I wonder if they really work from the money making perspective? And yes, I “earned” the car (not to praise myself but to let you know how committed I was to the company) although it cost me a lot in the long run (you’ll have to read the story to find out the details).
I also ask because I found some interesting information on the Direct Sales Association (DSA) website in the FAQ section:
Q. How many Direct Sales companies are there?
A. It is impossible to estimate the number of direct selling companies operating at any given time. This is a result of several factors. First, most states do not require direct selling companies to register as such. Therefore, no exhaustive list exists. Second, as with any business, many direct selling companies do not thrive in the direct selling market and have a relatively short life span. In fact, many companies may even come and go before they could even be “counted.” However, DSA estimates that the sales made by its members account for about 90 percent of all direct sales in the United States.
This answer from the DSA just confirms to us that first there are a huge number of direct sales companies, but even more so just how careful you have to be signing up with one. When they state “many companies may even come and go before they could even be ‘counted’”, it makes us wary of where that “high-cost investment” (that ironically most press so heavily for a successful consultant) goes when they go out of business. One answer for sure is not back into your bank account. This is where we need your help to find those reputable companies that you have been of a part of yourself and also those companies to stay away from!
So that brings me to the next question: I get that being a part of a company for the supplies at cost is a great way to save (sometimes they call them “personal use consultants”). So are all of the requirements for the product discount worth it? Is it really helping your budget or too much of a temptation to buy more than you would normally? This answer could vary, but as a customer, I have run across some companies whose products I really do like, but I find them to be WAY out of my budget. I wish I could get them, but we would probably still be debt if I acted upon my likes while attending a party for a companies products. I just have a hard time reconciling the expense, especially if it is something I don’t need. And if it is something I think I need, nearly every time I have been able to find a much more affordable counterpart – even when compared to the representative’s discount.
So help us out with this – is there something to this? We would love your help in answering these questions.
- Have you had experience making legitimate money with a direct sales company?
- Did you have to go into debt or invest money to get started and how much to be successful?
- How much time did it take you?
- What are the best companies out there for someone to consider being a part of? Alternatively, which are the worst?
And from a customer’s experience
- Do you buy regularly from Direct Sales companies?
- If so, why? Because it was a good value? A good product only found through that company and worth the cost? To help the hostess get to her next level of hostess gifts?
Let’s get this conversation started and SPEAK UP on this topic with open honest discussion. Let’s not make this a taboo subject!
Photo Credit: MLM Files
{ 9 comments… read them below or add one }
From a customer’s perspective….
I’ve been to several vendor shows promoting my website and as a customer I might glance at the direct sales booths but I’m not really interested. I love it when an individual takes a chance and has a unique line or product they truly love and want to sell. I also feel like their is much more pressure to buy products from a direct sales rep rather than a unique business. I think this is mostly for the reason I stated above, direct sales reps are in it for the money, no matter how much they have learned to love the products. Individual businesses owners are in it because they love their products and they want to share them with the world.
Merissa – I think I wholeheartedly agree with you! I love to support and we love to support on our site those small homegrown businesses. You are right when you state the difference between a Direct Sales product and a product that someone has developed and sell. I think these are two entirely different things and I have in fact had my own products I sold as a business (I made and sold baby girl’s headbands and barrettes) that I put time and quality into and had success for the short time I did it.
At the same time, it certainly isn’t a bad thing to do something for the money, we’re trying to help others figure that out with this post. If a company offers a great product and is offering a good service and using a Direct Sales outlet, I don’t think that is a bad thing – we’re just trying to figure out if they work. The idea of being in business for yourself and your own products is far more legitimate and much sweeter success in the end. But it could be a lot more commitment and investment too.
1 – Yes
2 – As a Soylicious consultant, I paid 99 cents to join and pay $4.99 to stay active each month. As a Lady Liberty Designs consultant, I joined this month so sign up was free.
3 – I post some things up every day to promote the sites that take a few hours each day.
4. Best = Soylicious, Lady Liberty Designs
Worst = It Works or any other program you have to pay to get a giant kit up front.
1. Yup. I am an Independent Product Consultant with doTERRA, a company that primarily sells high quality essential oils for health and wellness. This is my first experience with direct sales. In the past, I have avoided all MLMs like the plague. I only started selling doTERRA because people were asking me how to purchase. The money is legitimate: the compensation plan is very fair and the company pays weekly.
2. I did not go into debt at all. doTERRA requires you to carry no inventory. I am, however, required to spend roughly $100 a month on product to earn commission. I love the products (we take the food-based supplements as well) and spending $100 a month is not a problem. These are products that we would buy regardless. In addition, I am making well over $100 a month at this point.
3. I’ve been actively selling doTERRA for four months. I work a few hours monthly.
4. Look for companies with a good reputation, no start-up fees and a generous compensation plan. Look for a company that has been around for a while but is still expanding; you don’t want a company that has already flooded the market. Look for a company that sells consumable products (supplements, make-up) that will bring regular orders and loyalty. Look for a company whose products have value, products that people really want. Look for a company whose products you genuinely love and believe in.
For me, doTERRA met all of these requirements. As a result, my business has been steadily growing. I am passionate about natural health and love helping people discover natural remedies that are safe and effective. It’s my passion and, thus, I absolutely love my work.
#3 should read “a few hours daily.” By the way, with this post, I’m sure you know that you are opening yourself up to innocent solicitations from every MLM rep on the planet.
Have you had experience making legitimate money with a direct sales company? Yes, I have been making money consistently every month since 2008.
Did you have to go into debt or invest money to get started and how much to be successful? No, you only have to have a40.00 per month auto-ship and you do not have to buy inventory. This is a customer based business not distributor. You will make money even if all of your distributors quit.
How much time did it take you? I made money right away because with this company you are able to purchase customers if you choose and you will get the commission from these customers when they order for life. If you want to make more money just buy more customers. Follow up with them, build a relationship and they will order. Basically, they will order because the products are very excellent.
What are the best companies out there for someone to consider being a part of? The one I am involved is in Trivita. It is a Christian debt free company and you have several ways of making money. You can recruits others, sell the product, or just buy customers and receive the commission rights for life.
Also, it doesn’t cost anything to join. You can join as an affiliate and see if you like the products. If you do, there are lots of ways to make an income with this company’s help.
Alternatively, which are the worst? The worst companies are the ones that expect you to buy tons of inventory that you will never be able to use.
1. Yes, but not on a monthly basis.
2. Because they offer items I cannot get anywhere else, or because I prefer the convenience of ordering through a friend to shopping somewhere else for what I need.
There are some companies that have gotten me to research certain things more, only to end up buying my product elsewhere. There are other companies that have won my business by offering the best product at the best price.
I cannot offer the perspective of what it’s like to work for these companies, but I think that both Stampin’ Up and Partylite offer high quality products that are worth the money. Now, both companies also sell some things that I think are quite over priced, that other companies do better, etc. But overall they both have a secure niche.
In these economic times, however, when everyone is tightening their belts, is NOT a time to join up with a company hoping to make money, IMO. If it’s a company you already purchase from and you are trying to cut costs my joining, then that would make sense, but sales is a tough market right now, and I think that those who are desperately trying to make a few extra bucks might do well to look elsewhere. I know that my own purchases from such companies has been greatly reduced the last couple years.
I like to buy do terra oils from my friend. I’ve seen it to be particularly helpful with diaper rash (lavender) and they have a website to tell you how to use them so udont need to buy the book. My friend let me use samples before I purchased and seeing it work for my family convinced me to buy them.
I was a Mary Kay consultant and hated it. I bought after pressure from family and spent all my graduation gift money on inventory hoping to get a great return only to find that I wasn’t selling enough to maintain the strict quarterly inventory requirements. I basically wasted $2,000 because the product didn’t “sell itself” as promised, even in the good economics at the time. The person I signed up under filed bankruptcy.
Have you had experience making legitimate money with a direct sales company?
I work with Dove Chocolate Discoveries, and I have made legitimate money. For awhile my hours were cut at my daytime job and DCD helped me to get by during those months.
Did you have to go into debt or invest money to get started and how much to be successful?
I paid almost $200 for the initial kit, but I made that back within two home parties. Since then, the kit has gone down go $115. I spend about $50/month on supplies. And now and then I order business cards and promotional merchandise, but always through vistaprint because they usually have good deals, especially if you’re a repeat customer.
How much time did it take you?
I devote an hour or two a day to my business.
What are the best companies out there for someone to consider being a part of?
I like Dove Chocolate Discoveries because I enjoy desserts and dessert making, and it’s something that I can get excited about. It’s also a relatively new company – we just celebrated 5 years – so there aren’t many Chocolatiers around.
Alternatively, which are the worst?
I enjoy DCD because there are no quotas or minimum monthly sales, so if I want to take some time off, I don’t have to worry about losing my status. Plus I only buy supplies for my parties, I don’t have to have inventory on hand. I don’t think I could work for a company that required minimum sales or lots of on-hand inventory.
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