How to Choose the Right Direct Sales Company

So, you’re looking to earn some extra cash, and you’ve settled on the direct sales industry. It’s true — you can make this side gig profitable, but it’s crucial that you start by choosing the right company.

There are four key elements in finding the right company to join:

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Choose product you ACTUALLY believe in!

Be sure the quality of the product and its results are things you truly believe in. If you aren’t that into your product, no one else will be either. For example, it isn’t a great idea to sell jewelry if everyone knows you never wear any. It may also be a good idea to do some research about the leadership of this new company — how credible are its founders? Are they leaders you can get behind?

Avoid fakes.

Choose a company with a solid reputation, for your sake and for your customer’s. A solid brand will help you sell your product, but more importantly, it will protect you from being “had.” Watch out for companies that aren’t well established, have excessive buy-in costs, offer no refund options for unsold merchandise, or that focus more on expanding your team than selling your product (those may be pyramid schemes). You may even want to see if the company is listed with the Direct Selling Association, which holds these types of companies accountable to ethical standards. Finally, selling a high quality product will make it easier to keep clients coming back for more.

Avoid overcrowding.

In order to get into many direct sales positions, you may need to join someone else’s “team.” That’s all good and well, but if everyone you know is also joining that “team,” there may not be enough customers to go around. Try to choose a product that isn’t already being heavily sold to the customers you have access to.

Ask questions

Ask questions.

The Federal Trade Commission suggests that you ask your recruiter the following questions before joining a direct sales company. These questions will help you identify false income claims and avoid pyramid schemes:

  • How many people have you recruited?
  • How long have you been in the business?
  • How much time do you usually spend on your business each week?
  • How much money did you make last year — that is, what was your total income (including bonuses) minus your expenses (including taxes)?
  • What were your expenses last year, including money you spent on training, a sales webpage, buying products, etc.?
  • What percentage of your sales were made to distributors?
  • What are your annual sales of the product(s)?
  • What percentage of the money you’ve made — income and bonuses minus your expenses — came from recruiting other distributors and selling them inventory or other items to get started? (If this percentage is super high, it should be a red flag to look for other signs of a pyramid scheme.)

Are you already making waves in the direct sales industry? What do you sell and what are your best tips for being successful?