PREPARING TO START A DIRECT SALES BUSINESS – PART 2

In Preparing to Start a Direct Sales Business we discussed: • What Draw Me to the Idea of Owning My Own Business? • What Are My Interests? • What are My Passions? Now that we’re properly introspected, let’s continue with: WHO’S YOUR TARGET MARKET? To whom do you intend to offer your products/services? Your target market is the group of people you’ll be targeting as customers, team members, and hosts (if you select a party plan company). This could be friends, family, neighbors, people from a particular demographic, people with similar hobbies/interests, busy families, people who live in colder climates. Without first identifying “who”, it’s hard to select “what.” Most people start a direct sales business by sharing their excitement, enthusiasm, and new career with friends and family. We do business with those we know, like, and trust, and hopefully, friends and family know, like, and trust you. They are often the people we’ll ask to help get our new business going. They, in turn, will introduce you to their friends and family, who will introduce you to their friends and family, and so on. That’s the exponential power of direct sales. We sell directly to our customers, who then refer us on to others, who refer us to others. As you hone in on your target market, start to think about the products and services used by them. Ask a few trusted people in your market their opinion of what you’re considering doing. Get feedback BEFORE you sign with a company. You want the products/services you offer to be relevant to your target market and to be something they can share with their friends and family. Consider price point: is the product/service priced too high or too low for my market?; the product offering: is the product/service something my target market needs or holds a perceived need?; market saturation: have my friends and family purchased everything they need from this company? The products/services you represent need to resonate with your target market, or you’re out of business before you start. Here’s an example. Let’s say you love high end sports cars (you’ve identified your interests) and have found a direct sales company that enables customers to build the ultimate custom sports car for $250,000. The company even donates $500 per sale to your favorite charity! How cool is that?!?! If your target market is your friends and neighbors, and most of them have been hit hard by the economy, it might be extremely difficult to get anything but incredulous stares when you offer them the opportunity to trade their upside-down mortgage for a luxury sports car! In this scenario, the product doesn’t resonate with your target market. You would be well advised to either select a different product or target a different audience in an area with more disposable income. Now that you’ve identified your top Internal/Exte al Factors, your Passions, and your Target Market, it’s time to start exploring your company options. DO YOUR DUE DILIGENCE Don’t be impulsive! Do take time to research companies before you sign on the dotted line. The old adage holds true: If it seems too good to be true, it probably is! Remember that nothing is free or easy. You’re exploring work opportunities, WORK being the word of intent here. Companies that promise huge returns on investment, that require you to spend thousands of dollars up front, or that don’t offer products or services for your investment are all big, red flags! Google prospective companies and see what people have to say. Check with the Better Business Bureau (bbb.org) to see if a particular company has any complaints issued against it. Check with the Direct Selling Association (DSA.org) to see if the company you’re exploring has applied for or been approved for membership. The DSA is a national trade association whose mission is to “protect, serve, and promote the effectiveness of member companies . . .” and to help ensure that“. . . the direct sales opportunity is conducted with the highest level of business ethics and service to consumers.” DSA members go through a rigorous application process and are committed to the DSA’s Code of Ethics. DSA membership provides peace of mind by showing which companies have systems and procedures in place to ensure fai ess and have demonstrated a commitment to ethics. Directselling411.com is another valuable resource. You can link to it through the DSA site or go there directly. The site is filled with information on every aspect of direct sales, from the benefits of direct selling to industry regulation to avoiding fraudulent schemes. Talk to people already aligned with companies you’re considering. If you don’t know anyone presently with the company, go to the corporate website and request information about their business opportunity. Those leads are usually either handled by the corporate home office or passed along to a consultant/representative who will then follow up with you. Ask questions. Ask questions. And, finally, ask questions! • How much does it cost to get started?
• What does that cost include?
• What additional items will I need to purchase during my first couple of months, (catalogs, literature, additional products, etc.), and what is the additional cost of these items?
• How do I get paid? That’s really a couple of questions: What is the compensation plan for your company, and when and how will I receive payment from the company?
• How will I be trained?
• Do I get a company website, and what’s the cost of that?
• Does the company send out a monthly newsletter on my behalf, and what’s the cost of that?
• What is the company’s host program (if applicable), and is it company funded?
• Who pays credit card processing fees?
• Are there monthly or quarterly sales requirements? What are they?
• Is there an annual renewal fee, and how much is it?
• What’s your favorite part of this company? • What’s the company’s party average? What’s the party average of the person with whom you’re speaking?
• How often do new catalogs come out? This question tells you a couple of things: how frequently you may need to purchase additional catalogs and literature, and how often you may need to invest in additional products to show customers.
• Am I expected to travel for training? If so, what’s the estimated annual cost to me?
You can never know too much! Defining your interests, your passions, and your reasons for starting a business help you hone in on specific products, services, or companies. Defining your target market and getting feedback from them help you select products or services they can endorse, thus helping you get started in your new business. And, researching the company will save you potential headache and heartache later. This is just a few things that I hope will help, as you prepare to start your Direct Sales Business!