Friday, June 8, 2012

5 Questions to Consider Before Starting a Direct Sales Home-based Business

There are hundreds of direct sales, party plan, network marketing companies to choose from - established companies such as Avon, Mary Kay - to ground floor opportunities as Verefina. Where does one begin if you're searching for a direct sales home-based business to start?

Here are 5 questions to ask yourself and consider before starting:

#1 Products and Opportunity

As Robert Kiyosaki, bestselling author of Rich Dad Poor Dad and The Business of the 21st Century says - look for products that people need to use such as consumable products. And a business opportunity that's going to reward you for immediate retail sales and long-term residual income. Highly consumable products offer great potential for repeat orders and residual income.

#2 Product Need 

Do people have a need for your products? Are these products people are already buying elsewhere? Consumable products such as skin care, personal care, candles, food, and nutrition are products people use regularly which offers you the greatest chance for long term success. When people love the products, they'll become loyal, and more likely to become repeat customers.

#3 Business Format

Every company has a business format, a "system" that you'll need to plug in and follow, if you want to achieve success.

For example: party plan, network marketing are both part of the direct sales umbrella, however the party plan business format differs from network marketing in many ways.

A party plan is exactly what it says "party" which means the business format requires you do parties consistently if you want to make a good income. It's important to know the business format before you join because choosing a business format that is not a good fit for you will result in frustration, disappointment, and eventual fall out.

If you're choosing a party plan which is common with jewelry, clothes, home decor, handbags, craft products ... you need to understand that your success requires doing parties consistently and several parties a month. Ask any successful party planner, even the leaders at the top of the company, and they'll tell you they're still partying hard. Of course, if you love to party, then it's the perfect business format for you!

Network marketing on the other hand can be more opportunity-based and the business format relies more on building a "network". That network often involves signing up wholesale shoppers and/or team members.

Direct sales is a combo of the two. My direct sales natural business is a perfect example as it has elements of a party plan meaning that you can do parties if you choose to but it also has a low monthly personal sales volume which is very common in network marketing. This format offers flexibility because you're not dependent on doing parties.

#4 Compensation Plan

It's important to know how you're going to get paid but it's also important not to get hung up on dissecting the comp plan to paralysis. The bottom line is to get yourself into activity and working your business daily and the income will follow.

You need to know the basics of what it takes to be an "active" consultant. What it takes to earn the retail profit. And the monthly volume required to earn from your team members. I have a friend who signed up with a party plan company because she loved the products. She signed up a couple consultants right away but never earned a commission because she didn't realize she needed to sell at least $500 in personal volume to earn from her team. Ask these basic questions FIRST before you sign up with a company.

#5 Business or Hobby?

Plenty of people join direct sales as a hobby, get product discounts, or do an occasional show here and there. But knowing what your financial goals are is important to your success. Some people have a burning desire to make a change. They're looking for a viable plan b and turning to direct sales to create that change.

These people would most likely run their business like a business. Know why you're starting a business, what your dreams and goals are, because these "WHY's" as they say in this business will determine how much effort you're willing to put into your business.


Janette Stoll
Direct-to-company Team Leader
Consultant #965426

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