As I get ready to divulge this very intimate part of our financial lives, what you are about to read is a story that has not been told to anyone – until now. This is a part of our lives and finances that we have kept silent. However, it is time to share as it is something that played a major role in our financial demise and something that can be a warning for all.
After about ten months of living in our first house and beginning to feel the financial obligations we had committed ourselves to was finally catching up with us. The reality that not only had we gotten ourselves in loads of debt in a short time period, but our monthly bills was exceeding that of our income. We were both working full-time and yet we couldn’t seem to be meet our financial obligations at only 1.5 years into our marriage. We were in trouble and needed to find a solution – and FAST!
That is why, when a co-worker of mine invited me to a direct sales event that I eagerly accepted. I was obviously presented with a money making opportunity. 🙂 I had been a customer and using this company’s products for so long that it seemed to be the perfect fit. As the speaker kept assuring during the event – it was only a “small” investment to get started.
Alex was initially hesitant but quickly warmed up to the idea thinking it could be one of the answers to help us meet our monthly bills. The more I learned about the company however, there was really much more involved in terms of the investment. Although the initial start-up fee was small, it was presented to me a couple of week’s later of the importance of carrying stock on hand which would allow me to make better sales and better customer service. If I wanted to make this opportunity a business I really needed that inventory! It made sense at the time, and so we invested in the top inventory at the time which set us back by $6,000. But this was an investment that would pay itself back very quickly. Right?
First, let me be fully honest that I enjoyed being a sales rep for this direct sales company! They had fun and great parties. The meetings were very motivational and encouraging. But after that $6,000 investment, I just couldn’t stop spending to build my business! I placed orders each month beyond what I was actually selling to keep up my “active” status and beat my monthly goals. I invested in the travel to the out-of-town conferences, the expensive products as gifts/incentives for others, the business supplies (which was a large expense in this company, more than expected!), etc. I think you might be getting the idea. Each month I was actually spending more and more between all of the above factors than I was bringing in which was putting us into more and more debt.
Then the time period came where my upline thought it was time for me to “promote” myself and be able to go to the next level. I mean in fact, I was meeting/beating my monthly goals up to this point (even though I was investing 100% back into the business)…. so why not work just a little more to give myself a promotion? Honestly, I didn’t hesitate in thinking that I could promote myself and wanted to move up the direct sales ladder.
There were two things I was working towards to promote myself: earning a “free” car and being an area director. I worked harder than I ever had investing at least 60-70 hours a week. How did I work that many hours on top of a full time job? I didn’t. I had quit my job knowing this would be the business venture to get us out of all our problems – if only I would fully invest myself into it.
I was selling and recruiting like crazy. It was a several month process and towards the end of each month, to stay qualified for the next level and the free car, we needed to sell (i.e. order from the company) a specified minimum amount. As I would evaluate those last few days of the month and work as hard as I could to meet that goal, I would still find myself a little short of the production needed. This meant that I was again ordering more than I sold, and in some months a lot more than I sold. I justified this investment by saying to myself, “Once I have the car and get to the next level, I will give myself a raise and drive for free. It will pay off!”
Several months later I finally “earned” the free car. This company offered several levels of free cars, and this was the first level car – so the cheapest model. I remember the day I picked up my “FREE” car from the car lot. It was a very exciting day and there were many fellow reps that were there to support me and cheer me on. But the cost I paid for my “free” car had only just begun! This free car had put us several more thousand in debt (first from all the extra money I invested just to get to that point)! But I was going to make it up now that I had that free car. I was still working towards the next level in terms of status, but life was much better now that this free car was in hand!
This is where the rubber meets the road…… I was driving this “free” car. I loved being able to tell others that I had a free car, what fun it was and the fact that I was driving this free car gave the assumption that I was actually making money and a lot of it. At least that is what I assumed when others in this or any other company that offered free cars was making!
So you may have noticed that I have been putting the word “free” in quotations. This implies something that I have subtly stated, I had already in some sense invested a significant down-payment in purchasing this car by much of the product that I had bought to meet our production. But as I mentioned, I justified it that I would have this car, and then be able to sell the product later to pay it back.
That is not exactly how the “free” cars work in this company. To keep driving a “free” car, you had to continue to meet that minimum production level. I was pregnant with our first child, and extremely sick from the pregnancy, not to mention exhausted from working so much (you will find out the significance of this pregnancy in another installment of this series). I had envisioned working towards this free car, and then being able to sit back, enjoy the rest of my first pregnancy, and sell the product to pay back my debts on my credit cards to get this “free” car. But what I didn’t clearly realize that I had to continue to meet those requirements each month that I had this car. If I did not meet production, I had to pay the lease for that month.
We were at a point where I tried the first couple of months to work very hard make production minimums again. I thought it would be better to spend the amount in product that could be resold than make that month’s car payment. Come to find out, this car payment for the lowest level of car was $450 a month – a great deal more than we have ever spent on a car payment. My “free” car was all of the sudden not so “free.” By the third month of driving my “free” car, it was becoming extremely taxing on our finances plus very stressful on our marriage as Alex and I were not seeing eye-to-eye because I kept believing the day would come where we would see the return while he saw the continual payments spent each month in addition to all the money we had spent up to that point.
Reality hit me hard when three months into driving this “free” car, I was pulling funds and anything I could out of anywhere to meet production. My mom was a supportive member of my team and she had been doing as much of what she could to also order more and help me meet production. She called on the last day of the third month, when I was out of ideas on where to come up with more money. She said, “Cassie, your father and I were talking and we are willing to go get a loan for me to order more stock, then I will just plan to sell it later and pay it off, but that way you can make your goals.” My heart sank so far into my stomach that I thought it was going to fall out.
I realized at that point that not only did I drag our own already pathetic finances and debt load through the mud some more, but I was dragging others along with me because they believed in “my dream”! I was not being realistic with myself or others around me. I begged her to not order any more product and to not get a loan and I would figure it out on my own.
I hung up that phone feeling so incredibly sick to my stomach and my head was spinning as I was being hit with many thoughts. I had a few good friends, as well as co-workers, and others on my team that I knew I was pressuring so hard to get them to order and pushing them to work harder all for the sake of meeting my production. It took me back two years before when I was a new rep and the co-worker that recruited me called me on her last day of her final month to qualify for her car. I had just invested $6K the month before (which was almost her full production in just my initial order) and just the next month she was in a panic and sheer desperation begging me to order more products otherwise she would not be getting her car. I remember feeling so bad. I recall how torn I was as I had just placed my big order and really had not sold a thing yet. But I also remember not wanting it to be my fault that she did not make it….. so after prodding with Alex and finding an available balance of some sort on any credit card, I did order. I remembered her celebration when she earned her “free” car. It all came back to me during conversation I had with my mom.
I fell to the floor with so many overwhelming feelings and I started bawling! I laid my heart to Alex and how we couldn’t do this anymore. I had to stop buying product just to make production and I had to stop pressuring my team to order. He laid his heart out to me about the concerns he had been harboring about this whole mess and it was one of the first days that we started communicating about our financial despair. Alex had been biting his tongue with the dream I had. He had been desperately waiting for that day.
I decided I had to stop what I was doing and I had sell what I had before I could invest another penny. I was no longer the golden child. I didn’t make production for three months and I had to pay the $450 lease. I didn’t want this “free” car or this burden anymore. If I did not make production, they would pay my $450 lease from my commissions generated from my team. After my commissions from my team were exhausted, the company started sending me bills to pay the left over lease from the past few months. I couldn’t pay it so the company would repossess my “free” car.
I remember the day perfectly, we had actually just had our first baby (I had that car for 6 months) and we had just come home from the hospital the day before in our “free” car. Our pastor came over for a visit, and while he was there…. a big tow truck carried off this beautiful shiny new car. I couldn’t even explain to our pastor what was going on as I was so filled with so much embarrassment and shame.
In the end, I lost my car, my team (as I had to maintain a minimum personal orders to keep my team) and I was stuck with thousands in product and worse – MORE DEBT. I slowly sold most of the product off over the next few years, most of which was sold at my cost to recover my fees and then finally, I sold it for a big loss, but getting something was better than nothing. I couldn’t pay off all of our debts that we had accumulated from this venture. We had to pay this out of our pocket.
This experience was a life long lesson that was well learned. This business cost us thousands in the end, not to mention the many, many hours of work, stress, and the strain on our marriage. Please know that I am in no way saying that direct sales are a bad idea for everyone. In no way am I stating you can’t make any money in them. What I am recommending is that you count the cost and really determine whether you are in a financial situation to turn the opportunity into a business while determining at which point you will cut loose and stop investing foolishly. And the suggestion that as Alex always like to remind me, when it sounds too good to be true – it probably is.
If you’re new to the series or just want to catch up, please check out our whole Deep in Debt to Debt Free series!
- Part I: The Newly Unthrifty Couple
- Turning Our Apartment Into an Unthrifty Home
- It’s A Crystal Affair
- The Show Me Just How Much Debt We Can Get Into State
- The Most Insane Way to Buy a Car
- Our Seven Debtly Sins of Eating Out
- One Year Later and Our First House
- Will This Business Get Us Out of Trouble?
- Why Didn’t This Couple Realize What They Were Doing?
- The Baby that Saved Us Financially
- You Want Us to Eat What?
Sarah
I just wanted to say I’m so sorry, but SO glad you posted this. While there are success stories from direct sales, there are more casualties and hardly anyone talks about it. Good for you for helping others think twice! I have friends who had one good year of making money and are now unemployed and not making anything because their areas are so saturated with reps selling the same thing. I have other friends who never made a dime and invested anywhere from hundreds to thousands, like you. It’s not all it’s cracked up to be. When the smiling rep tells everyone how much she loves working for herself and how she makes “$300 in one night”, she really just needs more people on her team so she can meet her goals. It’s sad all around.
Sarah
I just wanted to say I’m so sorry, but SO glad you posted this. While there are success stories from direct sales, there are more casualties and hardly anyone talks about it. Good for you for helping others think twice! I have friends who had one good year of making money and are now unemployed and not making anything because their areas are so saturated with reps selling the same thing. I have other friends who never made a dime and invested anywhere from hundreds to thousands, like you. It’s not all it’s cracked up to be. When the smiling rep tells everyone how much she loves working for herself and how she makes “$300 in one night”, she really just needs more people on her team so she can meet her goals. It’s sad all around.
April
I really appreciate your honesty. I actually just started with a direct sales company within the past week. I’ll definitely keep in mind your struggles as I work hard to make this business work. I vow not to put myself into debt for this company.
April
I really appreciate your honesty. I actually just started with a direct sales company within the past week. I’ll definitely keep in mind your struggles as I work hard to make this business work. I vow not to put myself into debt for this company.
Jenni
Thank you for sharing your story, Cassie. I’ve been with that same company for 15 years now, and I remember how exciting it was when you got that car … I was thrilled for you! But I also know how hard it is to get that car, and to keep that car.
In my 15 years with them, I’ve mostly just had a handful of regular customers, and mostly use the business so I can get my own product at the 50% discount. I don’t do parties or shows, don’t advertise, etc. I’m happy enough with the status quo.
Took my director a while to figure out I just need to be left alone, and I’ll make my minimum order … or I won’t. I mean really, they give you a full year of no orders before they cut you. But whoooo, those directors get all worked up if you don’t place your orders every three months.
Direct sales can be rewarding, but it is far more work than anybody expects. When people find out what product I sell, they almost always ask, “Do you have ‘the car’??” I tell them, “Nope. There is way too much work involved in getting, and keeping that car.”
I’m glad you got out of that particular situation – how stressful! And your story reminds me of how thankful I am to just have a few customers whom I never have to hound … whom never feel pressure from me. Sure, I don’t make any money from it, but I get the product I love at cost. And that makes me happy. 🙂
Jenni
Thank you for sharing your story, Cassie. I’ve been with that same company for 15 years now, and I remember how exciting it was when you got that car … I was thrilled for you! But I also know how hard it is to get that car, and to keep that car.
In my 15 years with them, I’ve mostly just had a handful of regular customers, and mostly use the business so I can get my own product at the 50% discount. I don’t do parties or shows, don’t advertise, etc. I’m happy enough with the status quo.
Took my director a while to figure out I just need to be left alone, and I’ll make my minimum order … or I won’t. I mean really, they give you a full year of no orders before they cut you. But whoooo, those directors get all worked up if you don’t place your orders every three months.
Direct sales can be rewarding, but it is far more work than anybody expects. When people find out what product I sell, they almost always ask, “Do you have ‘the car’??” I tell them, “Nope. There is way too much work involved in getting, and keeping that car.”
I’m glad you got out of that particular situation – how stressful! And your story reminds me of how thankful I am to just have a few customers whom I never have to hound … whom never feel pressure from me. Sure, I don’t make any money from it, but I get the product I love at cost. And that makes me happy. 🙂
Bernadette
Yikes! I’m so sorry this happened to you and your family. I know how it is to get caught up in something you really don’t control…someone else does. Is there anything I can do for you? Do you need any help with bills or groceries? I’d like to help you even if it’s just a little bit.
thriftyal
Hi Bernadette,
First, thank you so much for your concern! Second, this was actually something that occurred several years ago. We are sharing our full story in our Deep in Debt to Debt Free series, hoping that others might either identify with our story or that we would scare others from making our mistakes. 🙂
We are currently out of debt except for our home and have thankfully recovered from this mess. We are very thankful that despite all of our foolishness, the Lord was gracious in providing means for us to get out of debt with our hard work.
Thanks!
Alex and Cassie
Bernadette
Was it MaryKay?
Bernadette
Yikes! I’m so sorry this happened to you and your family. I know how it is to get caught up in something you really don’t control…someone else does. Is there anything I can do for you? Do you need any help with bills or groceries? I’d like to help you even if it’s just a little bit.
thriftyal
Hi Bernadette,
First, thank you so much for your concern! Second, this was actually something that occurred several years ago. We are sharing our full story in our Deep in Debt to Debt Free series, hoping that others might either identify with our story or that we would scare others from making our mistakes. 🙂
We are currently out of debt except for our home and have thankfully recovered from this mess. We are very thankful that despite all of our foolishness, the Lord was gracious in providing means for us to get out of debt with our hard work.
Thanks!
Alex and Cassie
Bernadette
Was it MaryKay?
Tina
Yes of course it was Mary Kay! I am familiar with the company and the way they market their company. I love the skin care products but I no longer have any interest in selling it. It’s too stressful, the market is saturated, and the products are very expensive if you’re just a drugstore girl. I am not bad mouthing the company at all because it is a good company to work for as long as you stay out of debt and do not “stock” the products.
Valerie
I have been involved with so many direct sales companies, and never had success until now. At one point I was purchasing products to sell, and when I had to put my house payment on my credit card I gave it up. I vowed to never do direct sales again, but after some prayer when my husband’s company downsized I was led to another direct sales company. I can truly and honestly say that I AM making money. We were left with a lot of debt when my father in law passed away, and I am so glad that we have been blessed with this direct sales company. My commission every month pays for the majority of our debt. We would have lost everything if it wasn’t for this company, and my hard work. There are success stories out there, and I am one of them. I am so blessed to have found this opportunity.
Thank you for posting your story. My daughter got caught up with the same company you did, and she is now trying to pay off her $6,000 in debt from inventory purchases. I talked her into joining my direct sales team, and this business is actually paying off her debt. People need to be more thoughtful of others situations, and not feed off of them for their own satisfaction and benefit. That is one great thing about my company. My success is not based on my downline.
I’m so glad that you were able to recover from your overwhelming debt.
Valerie
I have been involved with so many direct sales companies, and never had success until now. At one point I was purchasing products to sell, and when I had to put my house payment on my credit card I gave it up. I vowed to never do direct sales again, but after some prayer when my husband’s company downsized I was led to another direct sales company. I can truly and honestly say that I AM making money. We were left with a lot of debt when my father in law passed away, and I am so glad that we have been blessed with this direct sales company. My commission every month pays for the majority of our debt. We would have lost everything if it wasn’t for this company, and my hard work. There are success stories out there, and I am one of them. I am so blessed to have found this opportunity.
Thank you for posting your story. My daughter got caught up with the same company you did, and she is now trying to pay off her $6,000 in debt from inventory purchases. I talked her into joining my direct sales team, and this business is actually paying off her debt. People need to be more thoughtful of others situations, and not feed off of them for their own satisfaction and benefit. That is one great thing about my company. My success is not based on my downline.
I’m so glad that you were able to recover from your overwhelming debt.
Tina
Hi Valerie would you mind sharing what company you’re with? I am currently looking for a legitimate way to may money without harassing, stalking, doing hard sell, or purchase huge inventories.
Elaine Daly
Hi,
I’m so sorry for you but I’m so glad I read this because I had considered doing the same thing. At my slave wage job I go out of town alot and we car pool. My car is usually left in the lot of a well known truck stop or at othe locations with lots of traffic passing by. I was not sure if I would do it or not and didn’t have time to research it yet. After reading this I don’t see this happening.
I am happy with my http://do.jerkydirect.com business for now.
Elaine Daly
Hi,
I’m so sorry for you but I’m so glad I read this because I had considered doing the same thing. At my slave wage job I go out of town alot and we car pool. My car is usually left in the lot of a well known truck stop or at othe locations with lots of traffic passing by. I was not sure if I would do it or not and didn’t have time to research it yet. After reading this I don’t see this happening.
I am happy with my http://do.jerkydirect.com business for now.
Kelly
The crisis caused by the COVID-19 pandemic has forced businesses to look for any information that would help them get out of their predicament. As a result, there is an increased demand for alternative data this year. Use the free open source Power BI dashboard template https://www.akveo.com/templates/insights-delivery-dashboard to manage delivery.
Ann
Management processes should be regular, continuous, and implemented on a daily, ongoing basis. Automation of business processes with the help of the implementation of the system https://www.airslate.com/academy/business-process-analyst will allow you to regularly improve the work of departments quickly and painlessly
Veronika
Any business requires investment and your time. But the more high-quality and up-to-date product you offer, the faster your business will turn a profit. According to this principle, supplement manufacturers use the perfect White Label supplement manufacturer recipe to reach a new level
Adam
Every website requires purposeful work to promote it and increase the conversion rate. Internet marketing is an activity aimed at implementing this promotion, amount of website traffic generated from Facebook. This activity has several significant advantages that distinguish it from classical marketing
charlescolin
Management practices should be consistent, continuing, and carried out on a daily basis. The adoption of the system allows for the automation of corporate processes. https://mmcgbl.com/react-native-development/
Juan Mark
It’s hard to do since we’re continually flooded with advertisements for goods and services we don’t need. iCreativeSOL that allow business services.
Isabel Gibson
This is important for every business and for my Simple project it is also very important.
Thank you for the interesting article
Daniel
Management procedures must to be regular, ongoing, and executed every day. Corporate process automation is made possible by the system’s adoption. https://www.krishangtechnolab.com/react-native-development-services/