don’t be surprised if you run into sales resistance.
Those are the key elements of direct sales, a time-tested system that
involves ringing doorbells, picking up the phone or conducting in-home
parties.
Although it has created billions of dollars in wealth for those selling
everything from Tastefully Simple foods to Mary Kay cosmetics to Pampered Chef
kitchen items, many who enter into such sales programs emerge disappointed.
Experts warn that you must be careful.
For one thing, companies that tout direct-sales schemes may want money from
you upfront, perhaps hundreds of dollars.
Their pitch: You will be a self-employed sales “associate.” But it may mean
having to invest hard-earned cash in the program or pay for expensive training
sessions. Some are thinly disguised frauds.
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And as many “associates” discover, unless you are extremely persistent, you
will find yourself among the millions of drop-outs who have tried this route
to success but gave up.
One typical pitch from a direct-sales company says “this is a chance to go
in business for yourself. Choose your future.”
To get started, it asks you to invest $170 for a “starter kit,” which
includes products, catalogs, a small display to set up on a table and some
training materials. Some companies may want you to sell vacuum cleaners,
detergents, shoe polish, diet pills or health remedies.
Donna Cuthbert said she considered going into direct sales five years ago,
when she was working in a downtown office for Ameritech.
Because she had a daughter, 7, and a son, 5, she was looking for a way to
spend more time at home.
“I was holding parties in my home for other direct sales people and I
decided I could do it, too,” said Cuthbert, 41, who lives in New Lenox.
She said it cost her about $100 to sign up to sell Tastefully Simple, and
finds that food items, including sauces, seasonings and dessert items, are a
great way to take part in direct sales.
“The nice thing is that people use up the food and come back to you and
reorder,” she said.
In a typical month, she will hold three to five shows. She takes in between
$500 and $1,000 at each event, she said, and keeps 25 percent. Sales are
biggest during the holidays.
What’s more, “Tastefully Simple also provides incentives to those who keep
selling,” Cuthbert said. “So I won a trip to Disney World.”
Typically, to set up bookings for home parties, it is necessary to offer a
free product or discount for the person who will act as a host.
If the party is successful, it is not impossible to take in $1,000 in an
evening. But then, not every in-home session proves to be a big score.
Eventually, many direct-sales associates decide that they have hit up
enough friends, and that setting up more parties is proving impossible.
According to Cuthbert, “I make it a point not to impose on relatives or
friends. And we do couples’ shows, so not all are limited to women.”
If she takes part in an outdoor festival or fair, she may pay $35 or more
for a table. But she finds such events are profitable. In recent months she
has taken part in fairs in Peotone and Mokena.
According to Ollie Merriman, who has sold Mary Kay Cosmetics for the last
23 years, sales prospects are easily found over the phone.
“On a recent evening, I made 38 phone calls, and I got 10 contacts,” said
Merriman, who lives in Northbrook.
Her technique often involves offering women a cosmetics make-over, and to
meet with them one-on-one. Or she has a gathering with two or three.
“People like to meet privately to talk about their skin and makeup,” she
said.
Merriman says she has won two diamond rings for her sales success with Mary
Kay, while selling the products enables her to set her own schedule. She also
has recruited several other women into the program, providing some added sales
commissions.
The secret to having a successful at-home show is to have “some simple
snacks and drinks — nothing over the top,” says Lisa Simpson, 37, who has
been selling Lia Sophia jewelry items for the last six months.
A typical show, with seven to 10 guests, lasts two hours, including a
30-minute presentation. The party is likely to take in between $600 and
$1,000.
Simpson, the mother of two sons, 1 and 4, and works full-time, and says
many of those who sell jewelry “do it for some fun money. It’s a little
something extra.” She typically nets 30 percent of an evening’s sales, while
the hostess is given deep discounts on several jewelry items.
A resident of southwest suburban Manhattan, Simpson says Lia Sophia jewelry
is aimed at young professionals, “women who dress up for work every day.”
Getting started cost her $149, for a kit that includes about 25 items of
jewelry, as well as a training DVD, catalogs and other materials.
Locally, the best-known name in direct sales is Pampered Chef. The company,
based in Addison, has hundreds of millions of dollars in sales. Party guests,
under the encouragement of “kitchen consultants,” select from more than 300
kitchen tools, everything from quick-peeling, professional-grade paring knives
to stoneware baking sheets.
Direct sales programs are great for people “who want to be in control of
their work schedules and income,” said Jean Jonas, senior vice president of
sales for Pampered Chef .
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She said consultants include “stay-at-home moms, college students in need
of part-time income and former executives.”
The company’s sales techniques so impressed billionaire investor Warren
Buffett that he bought the operation in 2002. He added it to the long list of
names that comprise his huge holding company, Berkshire-Hathaway.
Because of the resistance of American consumers to door-to-door sales
techniques or in-home parties, many of the biggest direct sales firms have
moved their ideas overseas.
For instance, Mary Kay Cosmetics now has more than 350,000 Chinese women
who are selling American-style beauty products, including cleansers and facial
whitening masks.
The Mary Kay sales books have been translated into Chinese, and sales
associates the company’s traditional songs, such as “That Mary Kay
Enthusiasm,” in Mandarin.
A few top-selling Chinese sales representatives are even driving the
traditional Mary Kay sales icon, a pink Cadillac.
One problem for those thinking of direct sales: certain operations may be
scams, selling fake knock-offs of expensive items, such as brand-name
handbags, shoes, eyeglasses, jewelry or other luxury goods.
If you are thinking of entering direct sales, it usually is smart to stick
to companies that are tried-and-true. Avoid fraudsters.
A group called the Direct Selling Association tries to separate the sheep
from the goats. You can check out its Web site, dsa.org, to research which
firms are reputable.