Monthly Archives: January 2011

There is a new catalogue. Is there something I should do?

The biggest thing is letting people know that there is a new catalogue.  There are many consultants out there who like to do an open house and allow everyone to check out the product and then book a party from it.  Others turn it into a party and treat it like anything else.

Another thing you can do is mail a new catalogue out to previous hostesses or anyone else that you think would be interested.  You could offer an incentive if they book a party due to the catalogue within a certain amount of time.

Advertise the fact there is a new book.  If you are on Facebook, Twitter or any other types of social media, make sure you announce it.  Do not post the information every day, but maybe once or twice, “hey, there is a new book, visit my site to see our new products” or “have you booked your party yet to get new products for free?” or something else that you feel comfortable with.

People talk about having an open house? What is it? What does it entail?

An open house is when you open your house out for people to come by and check out your product.  That said, you do not have to do it in your home if that is not convenient – you can rent a hotel room, the back room at a restaurant, or anywhere else.  I borrow my father’s house as he has much better parking than I do.  You set up a display of your product and then people browse and put in orders, book parties or even sign up to join your team.

The great thing about an open house is that it can be as simple or as complicated as you want.  I usually advise on keeping it simpler as you want to focus on the product, not on the food or other items in your home.

Joining Direct Sales vs Starting Your Own Business

With direct sales, there are some definitely advantages and disadvantages in comparison to starting from the ground up.

Advantages:

Recognition – This is a big benefit to direct sales in that the company works on recognition so you do not have to work as hard.  People get to know the product even if they have not dealt with you personally.  Think about how many know what Tupperware or Avon is, even if they have not bought the product.

Advertising – Many direct sales companies  help with your advertising in that they run ads in various locations, they create advertising materials for their sales force, and they keep changing things up to assist you.

Product Selection – They allow you to have a variety of product available to your customers without you having to guess as much as to what people want.   You can get product lines that are only 10 products up to lines with hundreds of items.

Tools Provided – Directs sales can be less work than an independent business, in that the Home Office takes care of a lot of details for you.  They do market research, they typically develop websites for you to use, and they create a lot of training materials.  You still have to work hard, but you have tools provided as well.

Disadvantages:

Product Control – You do not control what products are available to your customers, and when the products change.  There may be a product your customers really like, but the company does not find is selling well, and they pull it.

Amount of Work – There is no recognition when it comes to your own business.  You are literally starting from nothing and you have to let people know you exist, that people can buy from you, and what you have.    You will have to create your own website and find your own customers.  You will have to research what people are going to want and how much inventory you will need to carry.

Costs – Starting your own business can be expensive.  Even if all you look at is getting the proper licenses and bringing in inventory to get going, you are looking at several thousand dollars.  Keep in mind when buying through wholesalers; you typically have to buy in multiples, so you may have to buy 3, 6 or 12 of an item at a time.  Not to mention creating a website if you want to sell online and the costs associated with it.

A great idea may be to start with direct sales, get educated, get trained, and then strike out on your own if you still want.

What do I need to do to make money in direct sales?

The short answer, make sales.

To make sales, you can do a variety of things.  You can do home parties, you can do catalogue parties, trade shows and Internet sales.  Each of these will have different results and the results likely will not be consistent.

You can also make money by recruiting people.  They join your team and you make a portion of their sales in commission.  Each company has their own requirements as to what you need to do to get paid though – a certain title, a certain amount in sales, etc.

Isn’t direct sales and a home based business the same thing?

Yes and No.

Home based typically implies a business that is done entirely in the home, and if you are selling product, you would be selling online or as a mail order business.  Any clients would come to your home and you would have an area set aside just to work.  There are many different things you can do from home.

Direct sales means you are selling a product.  While you can do well just by working out of your home and not going elsewhere, to get the best sales you will likely need to do home parties.   Most home based businesses do not have a business model doing home parties, so this is the biggest difference.

Overall, both are a great thing for someone who does not want to go out and get a job where they are out of the home many hours a day.  Which fits better into your life is up to you.

Can you earn things such as car or house?

Every company is different in regards to what incentives they offer, so you do need to look into the specifics for your company.

Generally a trip is one of the easier incentives to earn, but you will still need to do a significant amount of selling and recuiting to earn it, most likely.  If you are just a hobbiest putting through a thousand bucks every few months, you will not qualify.  If you are working your business full time, putting through a few thousand every month, and recruiting and qualifying people, then you should have no problem.

Cars and houses are larger prizes, and again, you will have to do more work to get these.  See how many in your company are actually earning them, and that will give you an idea how hard they can be to get.  From what I have heard, you are given an allowance to put towards the car or house of your choosing.   If you earn a car, you might get $400 a month from your company towards it, and chances are you have to keep your business at a certain level to keep it.  This would be same with the house reward, you would get a certain amount per month to put towards it, and you would have to maintain to keep the reward.

These rewards are definitely attainable, but you must be willing to work hard for them.  Good luck and bon voyage!

Why email is important in direct sales (and truly, any business)

These days, more and more people are on the Internet and are looking to do as much as they can through it.  As a result, people are getting more comfortable with sending an email when they are looking for something or are interested in something.  Due to the Internet moving quickly, they also expect an email back within a reasonable time frame or else they will move on to someone or somewhere else for what they are looking for.

This is no different from your business and whatever you are selling.  If you were looking for something, contacted someone, and you didn’t’ hear back for a week, chances are you would be frustrated and would have looked for someone else, depending on your urgency for the product.

Therefore, I recommend that you check your email at a minimum once a day.  Sometimes this is not possible as life can throw you for a loop and you won’t be able to, but for the most part, you should be doing this so you do not pass up business.

Do I need a consultant website?

This can be a tricky question to answer.  Overall, the answer would be yes, as you can direct customers who cannot attend a party to your site to browse your products and contact you to place an order.  But, if money is tight and you really have to weigh penny you spend with the benefit you are going to get, the answer is maybe.

One thing to consider is how people are going to find your website.  Of course they can go to it directly if they know where to find it, but what if they don’t?  If someone goes to your company’s website, can they search for you?   If someone goes to the corporate site, can you get referrals for sales, parties, recruits?  With some companies, as long as you are willing to pay for a website, you are searchable.  With other companies, you can only be found if you do a certain amount of sales or have made it to a certain leadership level.  If your company has these restrictions, it may make the difference whether it is worth the money at the moment.

Once your finances improve, it may be worthwhile to invest in the website if you decide that you cannot afford it at this time.

Did you do well at your party?

If you need to know the exact amount you made, the best thing you can do is enter the order into the system and see what the results are.  You cannot just use your commission chart as that does not take into account giveaways, supplies, discounts or anything else that may have affected the price.

Start by adding up all your orders – Grand total

A dollar sign in the clouds

Input your order into the computer

Take Grand Total Orders minus Total to buy product – This is your gross profit

From the gross profit, deduct the following:

Hostess gift if you give one – at your cost

Any incentives you pay for – at your cost

You will now have your net profit.

If you really want to get down to the nitty gritty, you can deduct the cost of the catalogues that didn’t come home with you, the order forms, etc, but as those are a write off, I wouldn’t bother.

It is a good idea to do this once in a while to see how things are going, especially if you are giving out quite a few discounts or other incentives.

Do I need a different bank account and credit card?

From a tracking and accounting perspective, it is much easier to have a separate credit card and bank account for your business.  Depending on your bank, you can get a debit card that acts the same as a credit card if you prefer not to have a charge card.

While you can use your personal card for your business, you can run into issues with credit limits or knowing what expenses are personal and which are for the business.  For instance, you may go to Walmart and buy envelopes and apples, but you cannot claim both of those for your business, unless you are in the food industry.  But assuming you aren’t, you should purchase the envelopes separate from the apples.

If you ever have the government come out and audit your business and your books, this will make your life a lot easier.