Maybe you're not familiar with the term "direct sales," but chances are, you know someone who does it: the friend who hosts parties where she gives makeovers -- and sells Mary Kay cosmetics. The mom at the playground who pushes Discovery Toys. The neighbor who drops The Pampered Chef catalog in your mailbox.
Actually, if you're like a lot of mothers of young kids, you might have even considered working in direct sales yourself. After all, it seems like a great way to earn money but to still have the flexibility to spend time with your children. (That's probably why more than 70 percent of direct salespeople are women.) And it's a growing field: There are currently 264 businesses in the Washington, D.C.-based Direct Selling Association (DSA), up from 204 in 2001. So there's a good chance you could easily find a company whose products you'd want to hawk.
But before you decide to launch a new career, it's important to think long and hard about this line of work. Experts warn that it's not as easy as it looks: Becoming a successful salesperson takes lots of time and skill -- and there are plenty of pitfalls along the way. There's no guarantee of big bucks, either. "The median income of a salesperson is only between $2,400 and $2,500 a year," says Amy Robinson, a DSA spokesperson. That's because most sellers work only a handful of hours a week to supplement the household income, not to earn a full-time salary. Still, salespeople who put in between 30 and 40 hours a week can earn about $25,000 annually, Robinson says. And it's possible to pull in even more than that over time. "If you're really willing to work at it, you can build up to a great business," says Nicki Keohohou, cofounder of the Direct Selling Women's Alliance, an online education and support group. How do you get started? We've come up with a simple plan to get your direct-sales career off the ground.
Step 1: Pick the right business. With hundreds of companies selling everything from cosmetics and clothing to laundry soap and kitchen knives, it's hard to know what product would be best to sell. Do some research by logging on to the Website of the Direct Selling Association at dsa.org. All member companies adhere to a strict code of ethics, so you'll find only businesses that are on the up-and-up. Experts say it's safer to stick with a well -- established company that has a long history of success than it is to sign up with a brand -- new one. Another good tip: Focus on companies that sell a product you're passionate about and that you would use yourself.
Step 2: Figure out how much money you can earn -- and how you'll be compensated. Once you've narrowed your search to a handful of potentials, go to that company's Website or call them up to investigate exactly how you'll be making your money. "Some firms have single -- level compensation systems, which means you only earn commissions on products you sell," Keohohou explains. But the vast majority of direct-sales companies work on a multilevel system, meaning that you also earn commissions on the sales generated by other sellers whom you recruit (and even on their recruits!). When it's done right, you can earn a bundle.
What's the downside? For some people, it's hard enough to sell products; recruiting other salespeople can be a real drain. Supervising those people takes time and effort too. So try to calculate, as best you can, how much you'd need to sell yourself -- and whether you'd need to sign up other sellers -- to make the amount of money you're aiming for. (Many direct salespeople are content to only earn commissions on what they sell, but if you want to maximize earnings, it's likely you'll need to recruit. But beware of companies that focus more on recruiting than on selling.)
Step 3: Talk to other salespeople. Ask the companies you're considering for names and phone numbers of salespeople in your town, including one or two former sellers. Find out what they think about the business and its products, and whether they'd let you tag along on a sales call. Ask if you can look at their weekly sales record from the past month or so, and ask what percent of their sales are repeat business. "That should tell you a lot about the quality of the merchandise," says Jerry Heffel, president of Southwestern Company, a Nashville-based business that sells reference books and software. Ask for an honest assessment of how much you can expect to make.
Step 4: Investigate the sales approach. Some companies sell one-on-one, while others work with groups of potential customers -- the "party plan" made famous by Tupperware and Mary Kay. Decide which type best suits you. Do you think you'd be able to persuade family, friends, and even strangers to host a gathering where you can pitch your goods? Do you enjoy speaking in front of large groups? Or would it be easier for you to sell to people individually? Whichever approach you choose, it's key that you have a natural "sales" personality -- you need to be outgoing, positive, and persistent.
Step 5: Check out the start-up costs. Some companies require only that you buy a starter kit with products and informational material, which can cost anywhere from $10 to $500. Others, however, expect you to order a certain amount of their products in advance and keep them on hand when you're meeting customers. The advantage is that you may sell more that way because you can give the customer the product right then and there. The drawback is that you also face the risk of getting stuck with merchandise you aren't able to sell. While most companies promise to buy back merchandise within a year as long as it's in sellable condition, not every firm follows that guideline. So read the fine print to make sure the company does, or you could end up losing, not earning, money.
Step 6: Find out about training. Most companies provide some training to new sellers. But you need to make sure it's done well, especially if you don't have much sales experience, advises Barton Weitz, Ph.D., a professor at the University of Florida's college of business, in Gainesville. Look for a company that uses a mixture of manuals, in-person sessions, videos, and Web materials in its training program. In multilevel companies, the training is often done by the person who recruited you, so it's important to ask her exactly what she'll do for you. "The quality of the person who trains you is just as important as the reputation of the company itself," Dr. Weitz says.