How to Start Your Own Direct Selling Business?
1. One common answer is: Make a good start, not a fast start.
2. If you have zero knowledge about direct selling.
3. Don't try the business; rather start the business.
4. Decide between a traditional, credit-extension business or the MLM (Multi-Level Marketing) model.
5. Choose a stable company.
6. The business without tons of inventory.
7. Most Philippine-made MLM companies are not very popular, because of the pyramiding "virus" in them.
8. Start not just feel the business!
9. Conclusion
The direct selling business model is like a tree that has many branches. Multi-level Marketing, for example, is one of its forks. In the credit extension platform, a right rather than a fast start is always the number one rule. Control your excitement to sell a hundred boxes or units in one day. Remember that non-paying debtors tend to order more products on the first transaction. Secondly, credit extension requires a thorough validation of the name, address, source of income, etc.
If you have a computer system, however, and a crew of trained assistants, then you may start as fast as you can. The idea is just like driving a vehicle. Speed is not a problem if the automobile is under the complete control of the driver. Start fast! Just remember that selling begins with the collection of the concluded transactions and not with the distribution of the products on credit. A sale is not a sale until it is collected.
If you have zero knowledge about direct selling, start as a retailer, then attend all types of training related to your new career.
Most direct sellers of the credit extension model who have tons of money could not easily succeed. The first-hand experience in this trade is necessary. Rely on your research and actual exposure to the business instead of a theory-only guided management.
I learned of a direct selling operation on a national level that was well-oiled with cash. In a range of one to ten, the owner's expertise falls somewhere between level two to three. In short, he was completely dependent on his managers. He failed. The reason was the lack of pressure to collect the accounts receivable. Capital is not a guarantee that one will succeed in this trade. Start as an ordinary retailer or start very slow like a stranger in a new business territory.
I knew of successful direct sellers who were steadily aggressive in the drive to sell and collect. They did the business--and seriously! To try the business is to court a complete disaster. Credit extension is a business of enforcing collection. Your receivables will accumulate over time. To quit after having tried the enterprise is just like throwing your money and effort into a bottomless pit. Your profit is yet future: it is in a folder named "receivables." No turning back--no quitting! Start the business and do it with conviction on the positive side of direct sales.
Planning is the essential thing to do, but not experimenting the market of extending credit. You don't know the recruits of your recruit, but you will treat them equally with the same enthusiasm after the completion of the requirement for the interview and the submission of the Credit Application Form.
As your relationship with your debtor grows, your confidence in releasing your products for a 30 or 60-day loan term also develops. Along the way, the business partnership may get sour when the debtor-partner starts to fail to remit the collection on the due date for the obvious reasons.
Never quit--never try the business. Do it, do it, do it!
If you are naturally gutsy and business-minded, choose the traditional direct-selling model that is not lecture- and research-intensive. A food supplement business, for example, is good for starters who have the passion for health and the alternative medicine. Avon-type of direct selling is best for those who want to sell without so much explaining.
Studies show, however, that MLM is better than the traditional credit-extension type of direct sales. The problem is that most direct sellers don't have either the patience or expertise required in the MLM platform.
I first wrote this article in May 2011. After around six years, I discovered that the Avon-type of business was evolving in the Philippines from a purely leader-based structure to the recruit-all-develop-all concept. To expand the business (as a distributor-type direct seller), you need to organize your productive leaders in the sales organization. Most direct sales companies that a direct seller may partner with (for example Avon, Tupperware Brands, Natasha, Marikina Shoe Exchange (MSE), Personal Collection, etc. -- at least in the Philippines!), however, have shifted away from the so-called Pareto Rule. Today's trend is the application of the principle of "mass recruitment" without giving protection anymore on the individual operations of the leading and more productive direct sellers. The Pareto Principle is no longer employed in full by most companies.
Read: Reversing the Pareto Principle in Direct Selling
Avoid the "binary" type that's not stable, if you want to keep your direct-selling record clean and more respectable. Most binary companies are short-lived, at least in the Philippines. Don't be tainted with such business that is judged a scam in the public eye!
For a direct selling company to survive the competition, the injection of a "little" MLM flavor into the Compensation Plan is the trend. Just like most full-fledged MLM companies, however, the traditional direct sales industry suffers over-payment challenges. What is it?
The MLM model becomes highly popular these days because of the promised leveraged income or income out of other people's efforts. The leveraged earning out of your recruits' production seems to drive most companies in the credit-extension direct selling industry to curve, if not entirely stop, the concept of leveraging. Behind this direction away from MLM lies the problem that is known to many as "overpayment."
The Atomy business model is by far better, in our opinion, among the real MLM companies. For the non-MLM, all five favorite establishments, namely, Avon, Natasha, Marikina Shoe Exchange (MSE), Tupperware Brands and Personal Collection (PC) are trying to offer value to their clients by providing them with opportunities for a fee international travel, attractive incentive programs, and the regular educational meetings. The semi-leveraged income offer (sometimes known as lifetime income!) seems to have been reducing gradually through switching the versions of the compensation plan often without the knowledge and much less, the concurrence of the member-dealers.
We see a constant decline over the years on the semi-leveraged income privilege in the traditional (credit extension) direct selling platform. It may vanish away shortly.
My little thought is for the more intelligent and ambitious young generation to explore a stable company that is true MLM. Around 90 percent of the seasoned direct sellers don't appreciate the MLM model since they prefer a credit-extension type of business.
After googling for more information, the next step is to build your direct selling business. But don't start without doing a little research. Start slow.
If you want a business that's without so much inventory, choose pure MLM (mostly Utah-made (Mormon-owned) companies such as Usana, Kyani, Zija, etc.) Remember that real MLM companies are "punishers" until you meet Atomy of South Korea. You need to wrestle against their extremely company-favored marketing plans. Before joining, answer first the question: "Why, why are you joining?"
I wrote somewhere that I joined with Kyani four years after I was first invited. I decided to quit.
We note Aim Global Inc., UNO (Unlimited Network of Opportunities), and the Classique Herbs Corporation (among others) as local MLM companies that have already passed the 5-year benchmark for a stable company.
Other companies were just simply fly-by-night groups. They are the ones giving notoriety status on the MLM industry, Filipino version.
We find people saying that Forever Living, USANA, DXN, Amway, etc. are top Philippine MLM establishments. These companies, however, are multi-national institutions and not Filipino-established corporations.
Start the business to have a future; don't ever start it just to have a feel of it. Stop observing and start building your own direct-selling business!
Be an employee if your mindset is just to "feel" your direct selling career. If you are gutsy and success-oriented, then start to build the business. We know that success is a formula and it is about your resiliency to keep on keeping on--to turn failure upside down the hard way.
There are many top executives or bank managers who don't know how to start their own business after retiring. The author of the book titled "The Millionaire Next Door," Dr. Thomas J. Stanley, said that the common trait of the real millionaires is the ability to take a risk. Start the business and seize the opportunity.
How to start your own direct selling business? Well, start slow and never quit. Have a first-hand experience of the trade like recruiting people and releasing the products personally. Be a retailer. If you are too rich already and you want to engage in wholesale direct selling immediately, then start with cash (not the credit-extension) type of transactions.
Avoid the new and Filipino-owned MLM establishment unless you know what you are doing.
Join a new company if you want the MLM business model. For the traditional credit-extension direct selling, join with Natasha, MSE, Tupperware Brands, Avon, or Personal Collection. If you want to be a dollar millionaire in five years, build a business through the MLM platform.
The credit-extension type will help you build your house, buy a good car, send your children to private schools, buy few properties, join company-funded international travels--but never expect to become a dollar millionaire unless you invest money somewhere else.
Credit extension business is good if you own the company. As a direct seller, there is no option better than the MLM business structure.
Lastly, build the business and be aggressive in doing so.
Hi there! this is such an informative post. Thank you for sharing. Cheers!
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