Friday, February 7, 2014

Sales Quotas Good for Consultants in Direct Sales/Party Plan Business?

Are sales quotas good for consultants in direct selling/party plan business? We know with nearly all network marketing companies there are monthly auto-ship requirements to be an active distributor and/or be eligible for the compensation benefits. But with direct sales/party plan, that's not always the case. There are lots of companies that have no monthly sales quotas. This is good and bad.

The good part is that it allows flexibility- someone can be a business builder or join to get the product discount with no pressure to hit monthly sales requirements. The bad part is that you, as a consultant, may be working hard to sponsor people and could end up with a team of too many "shoppers".  But is that a bad for your business? Well ... no but if your goal is to earn a team commission you're going to need a lot of shoppers to hit the monthly team sales to earn a commission.

But there are two ways to look at this ...

First, I talk to a lot of people that love not having a monthly sales quota and quite honestly, that is one of the main reasons why I have built a large team in a short amount of time. Direct sales/network marketing is a numbers business because most people sign up and do very little, if anything at all. So, the upside of having the flexibility of zero monthly sales quota is that you're likely to sponsor more people.

But the downside is that they may not do much in the long term other than buying products for themselves. It's too easy not to do anything when there's nothing required of you.

For people that are serious business builders, I think having some quota is good for your business as well as for the company. But how much is the right amount that makes it achievable for consultants to recruit new people as well as for them to upkeep without losing interest or frustration because they're not able to maintain their business?

With some companies, requirements are as low as only $100 retail sales for the entire year to be considered an "active" consultant. For a consumable company that's hardly considered a requirement. This is good for people who aren't interested in building a business and are signing up for the discount but this isn't necessarily profitable for the team builder because you need a lot of wholesale shoppers to earn a decent team commission.

I believe sales quotas are good for consultants if it's an achievable volume such as $25 or $50 a month or $200 every 6 months for consumable products. It has be reasonable so a consultant isn't stocking up with a garage full of products in order to maintain her business. The requirement should be realistic so someone can replenish either for personal use or by selling the products, even on an occasional basis. In other words, sales quotas are designed for business builders as well as for shoppers, part-time, or occasional consultants.

Would love to hear the pros and cons.


Verefina #1 Team Leader

1 comment:

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