With the economy in a not so good place, and families looking for ways to cut expenses and/or add additional income to their homes, many women are taking a look at direct sales businesses.
Direct Sales companies, also known as Party Plan Companies such as Tupperware, Mary Kay, Longaberger and many others have been around for years with women inviting friends into their homes to see and buy products.
Whether you love jewelry, food, home decorating, kids, pets or pottery you can find a direct sales company to fit your interests. There are literally hundreds of direct sales companies (check out the direct selling association website to see just how many, with every imaginable product, that offer the opportunity for anyone to start making money selling their products asap.
Because I have been successful in a direct selling company since 1999 many people have asked me questions regarding the pros and cons and ‘truths’ about making money in this type of business.
Today I thought I would share an honest view of direct sales from my experience as a successful Home and Garden Party designer in case you or someone you know has been looking into this type of income stream.
For starters, although each direct sales company offers different products and has different compensation plans, the principles of the business are basically the same. You will sell a product, generally by showing catalogs and samples, on-line or in-person, and receive a percentage of your sales as a commission. (The average being about 20-25%). You can earn additional money by bringing other salespeople into the company and then you will also receive a commission from their sales too.
The bottom line is that if you can be successful in one party plan company you can probably be successful in any party plan company, and the reverse holds true. There are certain work ethics and skill sets you will have to develop no matter which direct sales company you join.
I’ll answer a few of the most common questions about direct selling in party plan companies.
First, and foremost.
How much money can I make?
Very realistically, anyone with a little time and effort and willingness to learn can make $500 to $1000 a month which can help pay a car or mortgage payment. However, do not think that you will be able to do this by simply putting out a few catalogs or contacting some people on-line. Party plan is a business and you have to really work at it to be successful.
And yes, it is true that you can make a really good income of $80,000 or more in Party plan. I know some of these people, and they are extremely talented, and work very hard networking, selling, and managing their teams. But, truthfully, it is generally extremely difficult to do.
How much time do I have to put into my business to make a certain amount of money?
To make the aforementioned $500 - $1000 a month you would have to put in about 10 -20 hours per week. This number varies week to week depending on whether you have any in-home parties or events scheduled, if you have a lot of phone calls or emails to return or need to spend time doing ordering or training. The good news is that most of this work can be done without ever setting foot out of your home.
How much does it cost to start?
Most companies will have you purchase a kit to start your business. The cost of this kit varies greatly depending on the company. Anywhere from $50 to several hundred dollars. If you keep an eye on a company for a while you will find that many offer special discounted kits or promotions throughout the year, and that would be your best time to join.
What is a Kit?
A kit, in party plan is a sample of some of the company’s products that you will be selling. You will have those products to show as samples and at home parties. You generally get a choice of several kits and sometimes several price ranges depending on your tastes and financial situation.
What do I do as a party plan consultant?
In-home demonstrations are still the primary way to make money in direct sales, although that is changing some in the past several years as companies develop more opportunities through the internet. There are people who are extremely successful just with a website and online parties but it is not that common and it still takes a lot of work.
Fundraisers are another option to make money in most party plan companies. They can offer great additional income, but they take a different marketing approach than with parties.
How do I learn to do a home party?
Most companies now offer extensive on-line video and phone training that will walk you step by step through this process. Companies also offer one day or several day conferences or meetings where they offer extensive training by ‘experts’.
How Do I get Customers?
I’ve found this to be the most crucial and misunderstood part of having a party plan business. Thus, it is the reason that many people fail to succeed.
This is part of the business where you will personally ‘grow’ the most. You may have to overcome shyness, or a fear of approaching people, or a fear of talking on the phone to strangers. You will become confident about standing up and talking in front of people and in selling a product that you believe in.
Simply put, you have your own business.
You have to market and promote your business yourself.
You will have guidance on how to do this from other consultants and through training, but the bottom line is that you have to do marketing for as long as you want to be in business.
Luckily there are many ways to promote your business, and over time you will most likely try all different approaches to see which work best for you.
In the beginning, you will likely start with family, friends and coworkers. The “I’m starting my own business and could you please help me out by having a party for me”, goes a long way…for a while. Eventually, be it 3 months or 6 months or a year, those leads will run out.
So then what?
You can try a passive approach of putting up flyers on local bulletin boards and leaving catalogs at dr. offices and Laundromats. That works sometimes. But to stay in business you’ll also have to occasionally set up at a local craft show or fair or run an ad in local free paper if you want to keep a steady income.
Your business always depends on you actively marketing it. If you let down for 6 months because you feel you have plenty of business your income will let down in a few months too.
The final point I’ll cover deals with
How do I choose a company that is right for me?
Let me start by saying that if you just love love love a certain company or product, then most likely, choose that one. You will have more success selling something you are passionate about then something that doesn’t excite you.
If you aren’t partial to any particular product or company than look at the amount of money you can make based on the companies commission plan. Look at the percentage that you make on your own sales, and then also look at what you would make on anyone that you brought into the business. Even if you do not plan to ‘share the party plan business’ with anyone, sometimes it just happens and it is great income in addition to your sales.
Party Plan companies and direct selling can be a great way to earn some additional income in these difficult times, but remember you have to be ready to put in the time and effort to do so.