In Part 1 of “8 Things to Consider Before Working for A Multi-Level Marketing/Direct Sales Company” I discussed 4 questions to ask/information you should research before joining a MLM/Direct Sales Company.
- Can you make money working in MLM/Direct Sales?
- How much do you love the product?
- How much do you like your up line/leadership?
- Do you have the time, the drive, and are OK with being pushy sometimes?
Below are the next 4 questions to ask/information to research when looking into working for a MLM/Direct Sales Company. Let’s talk about money!
How much are startup costs and what do you receive? The whole reason why you are either think about joining a MLM/Direct Sales Company or currently work for one is the money. Different MLM/Direct Sales Companies do their startup costs differently. Some allow you to host your own party and use your host credit to purchase your starter kit, and some offer discounted starter kits to try to get you going faster. If you do not have a lot of cash to pay start-up cost’s look for a company that gives you the option to host a party to get your kit for free. These kits should come with everything thing you need to start your business off on the right foot. (Product and business tools.) Before signing up with a MLM/Direct Sales Company I would first look into what you will receive in your kit to make sure you will not need to pay extra money for business tools you will need. Beware of Companies that ask/require a big chunk of money from you for you to start your Direct Sales business.
What is the Sales Commission structure? Commission structures vary across different MLM/Direct Sales Companies. When looking into which company you want to work for make sure to check out their commission structure. Will you be making 20% commission to start, and then will it bump up once you sponsor other individuals and grow your team, or will you make a certain commission based on sales goals? (Example: Sell $1,000.00 at 20% commission, and then any sales after that you make 25% commission.) Make sure you are OK with the commission structure before you sign up.
How much are ongoing costs? Depending on what kind of MLM/Direct Sales Company you decide to work for the products you will be selling may change often throughout the year, you might have website hosting costs, costs to go to conference, cost for cash and carry products, and others. (Business cards, sign’s, etc.) These are costs you will need to factor in when deciding what MLM/Direct Sales Company you would like to work for. Again, MLM/Direct Sales Companies try somewhat to make it easy for you when it comes to some of your business tools. They might have monthly sales goal rewards which could be some of the next catalogs products for you to add to your kit, or discounted conference registration. There is a catch though. If you do not meet these sales goals then you do not receive the product, and you will have to purchase it. Also, you have to pay for your website and conference registration/costs. (Hotel/Transportation to/from conference) There is the thought that if you are working your business correctly and making money these costs are not huge since you can also write them off on your taxes. This is true, but if you are just starting or having a hard time selling these costs stack up and tax time is only once a year. Most individuals who are in MLM/Direct Sales are working to make extra money because they need it, and may not have the available funds for all these costs.
Are there sales/sponsoring goals you have to meet to stay active, keep your team, and receive perks? Some MLM/Direct Sales Companies require you to sell, or sponsor other individuals, to a certain minimum amount for you to be considered an “active” consultant, keep your title, team, and for you to receive perks. If you do not meet these sales/sponsor minimums you can be placed in an “inactive” status, drop down in commission, and lose any consultants who are a part of your team. Again, this is how MLM/Direct Sales Companies operate, and how they make money. Sponsoring is big, and most times is what will help you make a bigger commission, get more free product and business tools, and qualify you to go on their free trips. (For example: Say you are a regional leader, and to stay a regional leader you need to maintain a structure of 5 leaders under you, and then each leader has 3 consultants under them. If 1 of your leaders cannot maintain their own structure and they lose their leader status, then you need to sponsor another leader to maintain your structure and to not be demoted. Also, If you want to go on the yearly free consultant trip you need to sell a certain amount and sponsor a certain number of new consultants who also meet a certain sales amount.) So, research the sales/sponsoring requirements to make sure they look reasonable and attainable to you.
Whew! I know there are a lot of things to consider when joining a MLM/Direct Sales Company, but asking as many questions as you can will help you to make the best choice for you.
**These are just some of the questions or information you should gather or ask yourself before you start your journey into MLM/Direct Sales. I hope I have not offended anyone who is currently in MLM/Direct Sales. Again, I myself have been in Direct Sales for several years and the above is what I wish I had asked or known before I started. The above is not meant to scare anyone way from starting their own Direct Sales business. It is just to make sure you are making as much of an informed decision as you can. There is money to be made in MLM/Direct Sales, but it just might not be a fit for everyone and that’s OK. Have experience in MLM/Direct Sales? I would love to hear your experiences and thoughts.