Thursday, February 24, 2011

Questions for Consideration

Are you or a friend considering direct sales?  When looking for a direct sales company to join, do your homework and ask a lot of questions.  Don't be afraid to compare opportunities, not all companies are created equal.

Or, perhaps you are already in direct sales.  Learning the answers to these important questions could make the difference in growing your team.  Having this information ready when meeting with a prospect will convey professionalism, intelligence, and dependability.  Knowing the value of your company will give you additional faith and enthusiasm for your business.

Questions for Consideration:

  • How many years has the company been in business?  Everyone has to start somewhere but experience gives companies the time to work out the kinks, increasing organization, service, and support.
  • How many independent distributors or consultants do they have? The amount could indicate a wide-open or over saturated market.
  • Are they members of the DSA (Direct Selling Association)?  The DSA holds companies to a high code of ethics and works to protect the individual distributors.

  • Will the product appeal to a broad market?
  • Is the price point affordable for the majority of the population?
  • Ask about the quality and manufacturing of items.
  • Are you required to keep inventory?
  • What is the return or defect rate?
  • Is there a warranty?  Who handles returns?  Are there fees involved?
  • Are you able to purchase products at a discount?  How much and how often?
  • How often does the company release new products and catalogs?  Rotating product keeps customers coming back but having to change your samples or inventory too often can be expensive.
  • Are there customer specials?  These can increase your retail and rekindle a business.  Too many customer discounts can hurt your bottom line since customers may have less incentive to host a party or won't buy without a special.
  • Who delivers the product?

  • What is the initial investment to represent the company?  What supplies, services, and products are included? Is the value for what you are getting worth more than the investment?  You need to spend money to make money but it should be realistic!  Beware of "buyers clubs" -very low initial start up and pushing people to get in for the discount.  This isn't good for your business as it can over saturate the market and keep people from wanting to buy at regular price. 
  • Ask about additional costs: websites, shipping costs, business supplies, etc...

  • What is the company's average home party?
  • What percentage will you earn off the product you sell?  It usually varies from 15-50%.  Does it change based on sales, experience, or growth within your team?
  • Are there minimum sales requirements or quotas? 
  • Do you make a commission off people you bring into the business?  How does their commission system work?
  • How and when are you paid?  Some companies allow you to keep your earnings immediately, others mail you a check.
  • Are there opportunities to earn free product, trips, or other incentives?  Ask about program requirements.  Are they realistic?

Hostess Benefits
  • What will a hostess earn when they host a party or show?  Generally you will find a percentage of free product is given.  There may also be host specials, bonuses, or discounted merchandise opportunities.  Hostess benefits are a major incentive for booking a party or show. 
  • Who pays for free merchandise- the consultant or the corporation? 
  • Is there a minimum sales requirement for the hostess benefits to be afforded?
  • Do the benefits change based on the type of party?

  • How do you get your business started?
  • What kind of training and support will you receive when beginning your business and then further down the road? Local events, conferences, online, DVDs, audio trainings, etc...?

Direct sales companies are a fabulous way to begin an at-home-business.  For many years direct sales had a bad reputation and sometimes family and friends will try to talk you out of joining a company.  Decide what your needs are and establish your goals, then identify whether the company you are looking at will meet those.  Ask questions until you have all the information to make a clear decision. 

The lives of many women and their families have been forever changed by their business, yours can too!