This post may contain affiliate links. For more information please see my full disclosure statement.
I doubt there are very many people out there who haven’t been introduced to a network marketing company at some time in their lives. It seems like every week a new one pops up on Facebook. If you’re interested in making money from home, you’ve probably heard from a friend (or a friend of a friend) that they’ve made a fortune selling _________________ (insert jewelry, candles, makeup, vitamins, sex toys, bags, or fake eyelashes here).
Direct sales companies, also known as network marketing or multi-level marketing companies (MLMs) can be a great way to earn extra money, but they’re not for everyone. The compensation plans can be complex and the products are often more expensive than what you’ll find at Target.
Before you decide to take the plunge into direct sales, you need to sit down, preferably with your partner, and honestly answer some tough questions. I wish I had done this before I joined one. I could have saved myself a lot of time and aggravation, not to mention money.
Assuming you’ve done your research and are certain that the company is an ethical one whose values mirror your own, here are the 6 questions you should ask yourself before joining a direct sales company:
Do you love what they sell? If you don’t love the products, and use them regularly, you’re never going to convince other people to buy them. The best sales technique is to be a product of the product. In other words, if you’re trying to sell fake eyelashes and you walk around with jaw-dropping, head-turning, attention grabbing eyelashes, you’re not going to have to work hard to sell them. But if you don’t use and love the product, sales are going to feel forced. After all, why would I buy your (often more expensive) skin care line when you use Aveeno?
Do you have time? Direct sales takes time. You have to build up your rapport with people and become the person they go to when they need your product. That doesn’t happen overnight. Neither does learning the ins and outs of your company, marketing, attending conferences and product trainings, running booths at local fairs, or hosting parties. On top of the time required, much of this time takes place on nights and weekends. Child care might be needed, and you might miss family time because it overlaps with network marketing time.
Do you have support? Not only do you need to make sure that your partner and family are on board with your plans, you need to make sure that you feel connected to your team. Your team includes the person who brought you into the business and all the people up the chain. Teams can be any size, but in MLM you have to have someone to go to, to help you out, to answer questions, and to be an example. Keep in mind that you don’t have to join the first team you find. If you like the business, but aren’t sure you want to work with a particular person or team, keep looking for one that is a good fit for you.
Do you have to buy anything? Every company is going to have different purchasing requirements, so make sure you know what they are. Also many MLMs use a point system (though it’s usually not called points), requiring you to purchase a certain number of “points” worth of product each period, and you should always ask what that translates to in dollars. Keep in mind that it will take a while to build up a base of customers and be prepared to buy more than you sell, especially at first. I recommend setting a break-even deadline at the outset. If you don’t break even by a certain date, carefully consider if you want to continue.
Do you know people who would buy this product? Think about the people in your circle who may want to buy what you’re selling. Now cut that number in half. Then cut it in half again. Whatever you’re left with is probably the number that will actually make regular purchases. You are most likely going to have to go outside your close friends and acquaintances to find customers. The same goes for people you’d like to recruit to your team, except keep cutting that number in half.
Are you willing to work? People who are successful at direct sales do it by treating their business like a business. They don’t just sit around waiting for people to ask them about what they sell. They actively pursue sales and expansion of their team every day. You have to be willing to try new things and accept new ideas. You have to be willing to step outside your comfort zone. You have to be willing to work.
Direct sales companies put on a good show. They have professionally produced presentations and energetic meetings filled with people who are true believers of what the company can do. They celebrate successes publicly and enthusiastically. They present an atmosphere that is a little bit like a family and a little bit like a cult.
The thing is, they’re not lying. Many people see great success in these companies. They are able to leave their day jobs, retire early, or live a life of luxury. And that’s wonderful for them, but they are often the exception rather than the rule.
Carefully review the company information, including how many people make money. At one large network marketing company only 1% of distributors make any money at all! That may be okay if your primary goal is just to get a discount on your favorite products, but not if you’re trying to replace a full-time income.
Whatever you do, make sure that you make your decision knowing all the facts. Get away from the hype, take your time, and consider your unique situation so you can be confident in whatever you decide to do.