What It takes to sell Avon, Fuller Brush, Tupperware and more
Historically, a bad economy is good for direct-sales companies, such as Mary Kay, Avon, Fuller Brush, Tupperware, The Pampered Chef and others, that rely on independent, work-from-home salespeople to sell their products and services. In troubled times, more people work for these companies because of job layoffs or because they want to earn extra income.
Our recent economic downturn has been no exception, with many direct-sales companies reporting sharp increases in new recruits, people who are eager to become their own bosses and earn income from both commissions and/or bonuses based on recruiting others into their ranks.
However, although recruiting numbers may be up, the Direct Selling Association (DSA) reports a downturn in overall sales to consumers in recent years — $29 billion in 2008 from a 2006 peak of $32 billion.
Result: A greater number of salespeople competing for a smaller chunk of business.
While making a go at direct selling could be harder than ever, it still is a good opportunity for certain people — could it be for you?
At any given time, some 15 million Americans work in direct sales.
Product sales commissions usually range between 25% and 50% of the retail price. In some companies, you can earn an additional 3% to 5% commission on sales made by others you recruit.
Yet most people who try direct sales soon give up. After expenses — including the cost of buying inventory and transportation to make sales calls — most people wind up earning $10 to $15 an hour, typically working fewer than 20 hours a week. These people earn a median wage of $2,400 annually, according to the DSA.
In rare cases, those who are very good at selling can make $30,000 annually by working a 40-hour week. Only about 10% manage to make direct sales a full-time job.
WHO CAN SUCCEED?
Ultimately, these jobs are all about selling — and you will make real money only if you are an effective salesperson. Companies do not provide a list of potential sales contacts, so most people who succeed in direct sales already have a large social network.
Those who do well also tend to have the “right” personality. If they are not outgoing, they are at least comfortable knocking on doors or calling people they may not know… have a “thick skin” that can handle frequent rejection… and are self-motivated and disciplined.
MAKING IT WORK
Before you choose a direct-selling company to represent, consider the following…
Be product-practical. At the very least, you should choose a well-known, established company that sells products you know about, have a passion for or would personally use. Your passion for, or knowledge of, a specific product will make you a more effective salesperson. To find a potential fit, visit www.directselling411.com, where you can check off your interests and learn about appropriate companies. The best direct-sales products tend to be those that benefit from personal in-home demonstrations.
Examples: Knives (shoppers can’t experiment with them in retail stores)… cosmetics (it’s impractical and can be intimidating to try them out in public)… and water purifiers (in regions where water quality is an issue).
Talk to veterans. Research a company’s reputation with an online search. Look for Web communities of sellers.
You also can check the Better Business Bureau (www.bbb.org) to look for filed complaints.
If you are interested in working for a specific company, ask to be put in touch with several of its longtime direct sellers. New recruits tend to be enthusiastic but lack the experience to be realistic about their success. Speak to people who have had direct-selling experience with that company for years. Ask these veterans about the difficulty finding customers… their opinion of the products… and the company’s payment process. (Direct selling is a cash business, and money should flow back to sellers quickly — or they should be able to keep their share of the receipts.)
Look for DSA membership. Companies that belong to the DSA (www.dsa.org) must subscribe to minimal industry standards. These include a “buyback” policy if you decide to quit the business, which allows you to return unopened and unsold products purchased within the prior 12 months for 90% of the price you paid for them (so you are not stuck paying for inventory you can’t sell). Another industry standard is having payment structures based chiefly on sales to consumers, not from recruiting other sellers (so your main job is not to recruit more members but to sell goods).
Most companies require new recruits to purchase an initial startup kit — typically for $100 or less — that includes a sample inventory of their most sellable products, “how-to” information, and brochures and materials for customers.
Avoid working for any company, including members of the DSA, that charge more than $150 for a startup kit. Good direct-selling companies make money by getting you into a position to sell, not by loading you down with products that sit in your garage.