Direct selling gives you the chance to run a small business that is set up for you with low start up costs. Antonia Chitty of Family Friendly Working offers some advice on starting a party plan business that is right for you.
If you want to begin your own direct selling business, you will be able to get started with many companies for somewhere between £25 and £50, especially if you watch out for special offers. You shouldn’t have to invest more than £200 in the first week to get started. Here are some tips to help you choose the right opportunity and start earning.
Getting started tips
1. Becoming a rep is a good opportunity if you are looking for work to fit with the family, but enter into it with your eyes open. The clue to success for any direct selling opportunity is in the word ‘selling’. You need to be prepared to twist arms, turn acquaintances into customers, and make the most of every occasion to sell.
2. Watch out for scams. Steer clear of anything where it isn’t obvious what you will sell. If you have to send £10 in response to an ad for homeworking opportunities, you may find they just suggest you place a similar ad and ask people to send money to you. Avoid opportunities that promise large rewards for little effort, or only offer contact through a PO box or mobile number. Read the Office of Fair Trading website for more information on scams to avoid.
3. Becoming a rep requires hard work. Weigh up how much spare time you have, and what part of that you can commit to delivering catalogues and orders, collecting and chasing payment, and promoting and planning parties. Do you want to sell door-to-door, to local groups or at parties? Do you have a car to help your transport large boxes of samples? Some jobs will also require you to deliver customers’ orders. Find out if you will need to store large quantities of stock.
4. Half of all reps sell for less than two years. Only a small percentage finds long term success. Direct selling is usually commission based, so there’s no regular income, and you have to feel confident about getting people to buy.
5. Make sure you are genuinely interested in and like the products. It is hard to sell something you would not use yourself. And think whether what you sell will interest people in your area. Check if you can buy the same thing in your local shops more cheaply. Are customers likely to return to buy their favourite products again and again, or would purchases be a one-off?
6. Look at where your profits will come from. You may make more money from recruiting new reps than selling products. In a survey, reps spent less than half their time selling, nearly one hour in five being on admin, and one in six on recruiting.
7. Some companies allocate you a street, postcode or town. Others may allow any number of reps in each locality. It pays to find how much competition there is. Think about a different company if there are several other reps nearby. The further you travel, the higher your costs, which eats into your profits.
8. Before you commit, meet your local manager. A good manager is there to answer your questions before you join, and support you to meet targets once you have signed up. They get an incentive to support you, such as a small percentage of your sales, so make sure you feel that the manager is offering you the help you need.
9. Check whether the company is a member of the Direct Selling Association before you sign up. This means that each business complies with a code, which demands truthfulness and openness in recruitment advertisements, ensures you pay a reasonable amount to start up, and requires proper training, contracts, cancellation and buyback rights for reps, as well as prompt payment.
10. Read your contract carefully before you make your final decision. It should lay out your cancellation rights, how much notice you have to give if you want to stop selling, and how the company buys back unsold goods, which is required under UK law. The company should have product liability insurance, but check if you are covered by public liability insurance or whether you have to arrange this yourself. You should also be clear what percentage of sales you get. Most companies offer in the region of 15 to 40 per cent. Some offer a higher percentage for bigger orders. Ask how often commission is paid.
Direct selling companies are required by law to remind potential reps, “Do not be misled by claims that high earnings are easily achieved”. Anyone who is making a good income from selling is putting many hours of effort in each month. In a survey the Direct Selling Association found that the average annual sales per seller, across hundreds of direct selling businesses, was £4094. Note that this is sales, not the amount you make for yourself. With commission ranging from 15 to 40 per cent, average reps are making from £600 a year to just over £1600.