According to the most recent figures from the Direct Selling Education Foundation, more than 15 million people in the US sold more than $30.8 billion in products and services through direct selling in 2007. Nearly one-third of the sales were for personal items such as cosmetics, jewelry, skin care; a quarter of the items sold were for home goods including cleaning products and cookware.
“Many families are able to survive tough economic times by getting involved in direct sales with national companies like Mary Kay, Avon, Pampered Chef or CutCo,” said Alison Southwick, BBB spokesperson. “But direct sales aren’t for everyone and some direct selling opportunities are just pyramid schemes in disguise, so the message is: entrepreneur beware.”
BBB recommends asking the following five questions when deciding whether to start a career in direct sales:
Do you have what it takes to be a good salesman? Some people are born with innate qualities for being a salesperson. They are outgoing, friendly, good public speakers and self-motivated. For those that weren’t born with these traits, they can be worked on and refined; however, direct sales isn’t for the terminally shy or for people who need constant prodding to produce. Before taking the plunge, arrange to shadow a couple of successful direct sellers who can show you what it takes—every day—to be a success.
Is this a product you believe in and can sell? If you are selling a product you believe in, most of the work is already done for you. Excitement over a product or service is infectious and will grab potential customers. If you wouldn’t buy the product yourself, you’re going to have a very hard time selling it.
Do you have the proper resources for direct selling? While startup costs are low for a legitimate direct sales opportunity—around $100 for a startup kit—it helps to have a few basic resources. A car, a computer, a filing cabinet and a dedicated workspace in your home are all helpful in order to hit the ground running.
Can you trust the company? Ask the company plenty of questions and read company literature thoroughly. Familiarize yourself with the official Code of Ethics established by the Direct Selling Association so you can identify any potential violations. Find the time to sit down with actual representatives and customers for their insight on both the company and the products. Take your time in choosing the right opportunity and always vet the company with BBB at www.bbb.org.
Is it just a pyramid scheme? Pyramid schemes will often pretend to be legitimate direct selling opportunities. The biggest red flag for a pyramid scheme is that the money making potential lies predominantly in recruiting other people, like you, to pay to join. The money is then filtered up the pyramid, so it follows that pyramid schemes often require large startup fees.
For more advice on getting into direct sales, visit bbb.org.