Questions to ask When Searching for the Right Direct Selling Company
You love making connections with others and sharing products you’re passionate about. Your entrepreneurial mindset is telling you it’s time to start your own small business. A great way to start selling is by partnering with a direct selling company.
In 2021, over seven million people participated in direct selling in the U.S. When you partner with a direct selling company, you grow your business as an independent contractor and sell products for commission while the company produces, stores, and ships the products. It’s a win-win relationship. But before you join, it’s important to make sure the company matches your values.
Select Your Partner Company
Not all direct selling companies are created equally. When it comes to selecting a business, be picky. Ask these questions to start your research:
Is the company established?
Study the company’s history, mission, vision, and values. Companies that have been in business for a while tend to be more stable. Search for their corporate income disclosure statement. If it isn’t publicly available, don’t join.
And talk to current distributors who will speak candidly about their experience with questions such as:
- What’s the culture like?
- Does it feel like community or competition?
- Do you get training from the company? What type?
If you’re still excited, start researching the company’s reputation.
Does the company put ethics first?
No matter your income goals, select a company with solid ethics. Ensure they’re a member of the Direct Selling Association (DSA), which “promotes, protects, and polices the direct selling industry while helping companies and their sellers be successful.”
The DSA monitors over 200 companies. Many have a proven track record of product quality and integrity—like Mary Kay, USANA Health Sciences, and Tupperware. You can explore some of these reputable companies on their website.
What is the Compensation Plan?
Look for a generous but realistic compensation plan. You may earn money in one of the following ways:
Commission: You’ll receive a percentage of what you sell, whether in person or online.
Team commissions: You’ll earn a percentage of your enrolled team members’ sales, provided you’re an active seller. Team commissions are the fastest way to earn.
Bonuses: You may be eligible for “matching” bonuses based on the growth of your team’s sales or “leadership” bonuses. Top earners are usually eligible for elite bonuses.
Incentives: Contests, incentives, and rewards are incredible motivation for some. You could win exotic trips, valuable prizes, and even extra cash when you meet qualifications.
Are their income claims realistic?
Direct selling offers some great earning opportunities, but “get rich quick” should never be your priority. If something sounds too good to be true, it probably is. The Federal Trade Commission (FTC) strictly regulates income claims—they must be supported by data and included in an income disclosure statement, which should be easy to find online.
How much does it cost to opt-in?
An attractive perk of direct selling is starting a business at a low cost. Your initial investment should be reasonable—you’ll likely pay for a starter kit and may want to invest in additional products. Evaluate each charge and be wary of unexplained fees or inventory requirements. You shouldn’t have to carry a large amount of inventory, if any. Expect a couple other business expenses like setting up a home office.
What does it take to remain an “active” seller?
You’ll likely face minimum purchases or even an annual fee to be considered an “active” seller. Look for these requirements in your sign-up agreement and the compensation plan, and weigh them against your expectations. Are they reasonable? Do you expect to meet them in the given timeframes?
What’s the quality of their products?
Your passion for the products will help you sell to customers. Before you get started, research product reviews and try them yourself to discover their value and if you’ll want to recommend them to others.
Once you’ve tried some products at retail price, determine how each product appeals to customers or solves a problem. Then do some market research to see what products are trending.
You should feel confident using the products, vouching for their quality, and explaining the return policy.
Do they allow product returns?
Return policies vary widely. Because you’re the middle man between a dissatisfied customer and the company, know the return policy terms and conditions. A reputable company also provides a customer service number for customers to call with questions and concerns. Your priority is happy customers, and the company should support that. Returns done well ensure customer loyalty and satisfaction.
Are tools and training provided?
Most direct selling companies offer business and marketing tools, as well as training at no additional cost. Take advantage of these and use them to grow your business.
A personal website—an online shopping experience with your profile displayed where customers can buy product, and you receive the commission. Some companies also offer an app for on-the-go shopping.
Marketing resources—digital marketing resources like advertisements, email templates, and social media posts boost your online presence and send customers to your online store.
Training—learn about the products, responsibilities, and opportunities available to you.
Get to Work
Direct selling is an exciting opportunity. And asking the right questions before you commit to a company is key to your success. Once you’ve asked all the right questions and are confident about the company you want to join, sign up and get to work!