Becoming an MLM Rep? 15 Things to Consider Before You Join
Becoming an MLM Rep? 15 Things to Consider Before You Join
Direct Sales companies come in a diverse set of product ranges. Older companies like PartyLite, Watkins, MaryKay and TupperWare have been around for decades. Newer companies like Pajama Parties and Jimmer have been around for only a few years, but are still seeing tremendous growth in their product niche. Some companies are taking a hybrid approach: Avon, the direct sales monolith, now has stores in malls, and upscale mall staple The Body Shop has been building a party plan sales channel, The Body Shop at Home, in the US for just over 5 years. There are direct sales companies for just about every conceivable kind of product being sold in the world.
According to the Direct Selling Association (DSA), direct sales in the US alone tops $32 billion annually. Over one-third of that amount comes from selling clothing, accessories and personal care items like body creams, facial cleansers, perfumes and the like.
Direct Sales targets women primarily, but there are men by the thousands in some direct sales organizations. In fact, according to the DSA, about 15 percent of the direct sales force is men. The good news is, if you’re looking for an opportunity, there are plenty out there. The question is, how do you know what company will work best for you?
Some companies are reputable. They treat both the customer and the sales rep very well. Other companies are not so reputable, either because their customer service is non-existent, or because they are, in fact, fraudulent entities in the first place, charging ten to fifty times the actual value of the business idea, equipment, or whatever it is they are trying to get you to buy.
Before investing in a distributorship with an MLM or any direct sales company, you should investigate everything completely. Here’s a list of considerations and questions you should be asking before investing.
1. Find a company and product that appeals to you. It’s far easier to sell a product you love and use.
2. Become a customer and call customer service. How do they handle their customers? Are the phones answered professionally, courteously? Is your question or problem resolved when you call? Be sure to ask questions about the compensation plan as well. If the home office can’t help you, chances are good your recruiter won’t be any more help, either.
3. Does the company require you to take any steps which are either illegal or even border on illegal, or are otherwise questionable or unwise in your state, county or city? Mailing chain letters, for example, is an illegal activity. Some companies will even encourage you to lie to probably purchasers in order to gain their interest. Any company that suggests deceitful tactics as a way to build your business should not be trusted.
4. Does the company give you an exclusive territory, or supply you with leads for your business? Some do, but most don’t. If this is important to you be sure to ask.
5. Is the business connected in any way with another company handling similar products or services? Hybrid companies are popping up in greater numbers, and sometimes it’s good for business, and sometimes it creates too much competition. If your company is a multi-channel sales company, be sure you understand how it will benefit you.
6. Know the costs of doing business. Additional supplies beyond the starter kit that you should own or will need to replenish your starter kit. Know what the reasonable expectation is for re-investing into your company over the first six months of your new business.
7. Talk to other reps. Attend a training meeting if possible to talk with other consultants in the business – research company complaints online, with the Better Business Bureau and the Direct Selling Association.
8. How many years has the firm offering you the distributorship been in operation? Longevity is one sign of a reputable company, but it may be more difficult to build a sales team in a company that’s “saturated”.
9. Ask about compensation plans, how you will be paid, and the average order size of the company. Then compare those answers to your personal situation to see if this company can provide what you require for an income based on the company’s average numbers.
10. Will the company assist you with: a) training b) public relations/advertising c) Credit? Some companies do not accept credit cards, requiring you to secure your own merchant account. Depending on your credit, this may not be possible.
11. Is the firm adequately financed? Many companies are debt-free, but that doesn’t mean they have enough positive cash flow to stay in business.
12. Does your state have a law regulating direct sales companies, and has the firm complied with that law to your satisfaction?
13. How much capital will you need to purchase the starter kit?
14. Read all of the company promotional material and literature. Don’t just sign your name to an application. Make sure you know what the paperwork says. Read the fine print.
15. Above all, take your time. No “super start-up special” will last forever, and there will always be a similar one in the future. It is far better to miss the special and make the best decision for you and your family, than it is to sign up and wonder what you’ve gotten yourself into.
Investing in a home-based business can give you a measure of security, and in some cases, a full time income from part time work. Being educated and well-armed is the best way to get the best results from starting a new business.
After nearly 10 years in Direct Sales, Lisa Young stopped listening to her up-line and started seeking professional sales and marketing wisdom from the far corners of big business. Today, Lisa offers ready-to-use insights, tips and inspiration to others in the Home Party Plan community looking to run their business like a business and achieve success. Lisa’s free monthly newsletter “PartyOn!” features articles from a business perspective designed to help MLM reps reach their booking, sales and recruiting goals. You can sign up for the newsletter at http://www.HomePartySolution.com