It's not unusual for direct salespeople to stumble into the business on the way to another job. Few plan on an unsalaried sales career. But there's one thing about direct selling - almost everyone knows someone who's in the business. It's an occupation that's as familiar to us as any other we could mention, but it can seem inaccessible. Often, until people actually sign up to sell (and recruit others), they don't understand how eligible they are or how much fun sales can be.
A sale is the career of the 1980s, as economic futurists see it. About seven out of ten people may be in their own business by the late 1990s. The entrepreneurial spirit is more fervent than ever. Because hours and work schedules are so flexible, more women than ever are joining sales forces to supplement incomes while they raise families. They often discover they possess a talent to sell and sell with brilliance. There are few businesses that can promise anyone, man or woman, with no special education and training that with persistence, energy, and application of goal-setting, he or she can earn over $ 100.000 a year. And because of the many earning possibilities through various systems including reputable "multilevel" payment plans, income can be even greater over the years. Imagine earning a percentage on sales made by those people you recruit and the people they recruit and so on. It's a remarkable opportunity.
Most people already have brushed shoulders with someone in direct sales, perhaps even attended a meeting or invited a salesperson into their homes or participated in home demonstration parties. Direct sales companies shouldn't be strangers to us at all. Stan home and Tupperware made the home party famous, while the names Avon and Fuller Brush Man forever prompt us to hear the sound of a doorbell ringing. Mary Kay's achievers announce their presence in a fleet of pink cars, while Encyclopedia Britannica is synonymous with scholarly authority.
Choosing a direct sales company to work for can be problematic especially for someone who's never sold before. Most people select a company because they like using the products they buy from "distributors" (each company prefers its own term for salesperson) and they agree to be recruited. Others of us may know of a company by reputation, and after investigating them further, discover that the opportunities are compatible with our needs.
The Direct Selling Association, a Washington D.C. based association that sets operating and ethical standards for member companies reported what categories of products were the most popular in terms of the number of sales. The summary for 1984 looked like this:
Products Sold-Domestic Percent of Sales
Cosmetics/Fragrances/Skin care: 35.44%
Decorative accessories: 18.42 %
Nutritional products/Beverages/Food : 12.82%
Home appliances: 9.29%
Other : 1.03%
House/Kitchenware: 0.69 %
Household/Auto care products : 7.31%
Jewelry : 5.19%
Educational publications: 4.76 %
Crafts/Hobbies/Toys: 2.47 %
Home enhancement: 0.00%
Clothing : 0.91 %
Cookware: 0.54 %
Animal care products and foods: 0.26%
Home technology : 0.15 %
Photo album plans : 0.32 %
Shoes : 0.10%
Buying club/Service: 0.27 %
Self-improvement/vocational training programs: 0.03%
Method of Selling Percent of Sales
Individual one-to-one contact: 78.90%
Party plan: 21.10%
("Party plans" involve a sales presentation given by a salesperson to a group of guests who will hopefully buy the product. The party is most typically given by someone asked to "host" it by the salesperson. I'll talk more on party plans later on.)
If we add this all up in product categories, we'd see a trend toward an increase in sales of home and family care products with personal care products second on the list. For 1984 the percentages broke down like this:
Product Categories Percent of Sales
Personal care 33.52%
Home and family care products and services (Such as vacuum cleaners, detergents, etc.) 48.55
Leisure and educational products 8.25
Home enhancement (Such as novelty items, like wall plaques, picture frames, etc.) 2.25
Miscellaneous (includes insurance and buying clubs) 7.43
There are over one hundred companies in the Direct Selling Association, the companies who've met certain standards of integrity in marketing, production, and sales plans. In addition, there are hundreds of others around who aren't affiliated with the Association but who may be legitimate. Perhaps they are too new or it's their personal preference not to join. My belief is that you'll be safer with an affiliated company and you are sure of its being reputable.
How do we choose which company to join? Following is a sampling of what eight companies, selling a diversity of products, have to offer the new recruit. A number of companies feel that they cannot offer information about what the "average earnings" are for their salespeople. For example, believing the figures may be misconstrued as a company promise of income. And, with the different income goals and time devoted by salespersons, "averages" can sometimes be quite misleading. Otherwise, we've tried to be as comprehensive as possible. When information is missing, therefore, it should be taken to mean that the company declined to answer with an exact figure.
Amway
It's one of the world's largest personal selling companies operating in America and about forty other countries. Co-founded in 1959 by Richard DeVos and Jay Van Andel (in the basements of both men's homes), the company has now grown so huge that it supports about seven thousand employees and nearly one million distributorships! Amway researches and manufactures nearly all its own hundreds of products, including the original Liquid Organic Cleaner Concentrate which launched them. The Amway name is in home care, house wares, nutrition and diet, personal care, and commercial life. They've also got a special shopping catalog that offers over four thousand brand name goods, also sold through distributors.
General guidelines:
Initial fee: Sales and product kit. $82: distributorship renewal fee: $15 annually
Average earnings: Not available
Price range for merchandise: Thousands of items range from $3.00 up to $4,000 (for a solar disc)
Assigned territories: None
Type of plan: One-on-one or small groups
Training program: Yes; there's also additional training for a fee of $25 for eight hours of instruction
Sales meetings: Depends on sponsor but recommended on a weekly basis
Payment format: Commissions
Bonuses or incentives: Yes
Discovery Toys
Nine years ago, Lane Nemeth, a thirty-year-old mother of a baby girl and director of a California day-care center, borrowed $50,000 and began a toy business in her garage that mushroomed into a $40-million success story! Every Discovery Toy is designed to develop a child's physical or intellectual ability-"Child's play is really child's work, and it's up to the parent to provide the right tools." This guiding philosophy has motivated 12.000 consultants to work with this innovative company and they are projecting a need for about 100,000 more consultants to join them. The product line changes about twice a year and consultants are briefed on new products through training sessions.
General guidelines:
Initial fee: Kit: two models available with continuing and new products at either $ 115 or S190
Average earnings: Not available
Price range for merchandise: 75 percent of toys are under $10;
Highest price: $29.98
Assigned territories: None
Type of plan: Party plan with at home demonstrations
Training: Encouraged to be trained by manager
Sales meetings: Yes
Quotas: lf remain active, there's a minimum sales requirement of about $20 per month
Payment format: Multilevel marketing Bonuses or incentives: Cars, trips, cash awards
Doncaster
This North Carolina-based company was founded fifty-two years ago by the Tanner family with the idea of marketing designer clothes for women "who never have to enter an apparel store to dress well." Customers view each Doncaster collection and select styles, then order them custom-cut in colors and fabric of their choice, Doncaster hand-finishes the details. Their lines are meant to carry over year to year-investment dressing" to the trade-and sell for considerably less than or at prices comparable to well-known designers. The "fashion consultant" (their term for salesperson) is an independent contractor who can purchase Doncaster wardrobes at substantial savings besides earning on a commission basis.
General guidelines:
Initial fee: None. Doncaster gives a consultant six months to "get on her feet." offering a sample book that's available for one week. Since they show a "fall/winter" line and a "spring/ summer" line, the second season the salesperson is with the company, there's a minimum charge of $22.
Average earnings: Not available
Price range for merchandise: Depends on style and fabric.
$50-$ 100 is average for pants: wool suits (semi-custom made).
$500; $250 for a skirt. $125 for blouses; $175 for a "TV additions" line dress.
Assigned territories: Yes
Type of plan: Recommended private appointments for not more than two people
Training: Yes, by manager
Payment formal: Basic commissions, then greater bonus payments over a certain level of sales Bonuses or incentives: Yes
Encyclopedia Britannica
The first three-volume set was published in 1768 and from this simple beginning, Britannica reigns as the oldest continuously published reference work in the English language. Dedicated to the premise that education and knowledge are fundamental to improving the condition of mankind, the company has hired scholars and authorities over the centuries to contribute to its pages, including Albert Einstein, George Bernard Shaw and Lyndon Johnson. The 30-volume set probably in every American library and in millions of homes has its own folklore-George Washington paid $6 for a pirated version after failing in an attempt to win a set in a lottery and Prince Aly Khan bought a set in the most expensive binding. International editions include a 28-volume edition in Japanese and a 22-volume edition in Italian; there's also a 12-voIume children's Britannica and many other foreign language versions. The books are sold by representatives but the company has increased its exposure by selling in large shopping malls and theme parks.
General guidelines:
Initial fee: None. There's a condensed one-volume sample version at no cost.
Average earnings: "Fluctuates"
Price range for merchandise: Initial set is approximately $1,249. The Heirloom set, $1,499.
Fancy bindings and limited editions priced higher.
Assigned territories: Yes. Sales force works within assigned districts.
Type of plan: Person-to-person in home and retail outlets
Training: Trained by people at the district level.
Sales meetings: Yes.
Payment format: Commission Bonuses or incentives: Yes
The Fuller Brush Company
The only direct sales company that can boast two feature films with its name in the title [The Fuller Brush Man with Red Skelton and The Fuller Brush Woman with Lucille Ball), this eighty-year-old company is one of the first to come to mind when thinking door-to-door sales. At one time Fuller Brush hired men only, but now about 80 percent of the sales force is women. And though door-to-door is still a popular method of sales, many salespeople organizing home shows instead. The original line of twelve household brushes, designed and made by Alfred C. Fuller, founder of the company, has grown to include homecare products, industrial chemical cleaners, brushes, and soaps. About sixty or so products are added each year with quarterly catalogs covering the range of wares.
General guidelines:
Initial fee: It will cost either $29 or $45 for one sample kit including a catalog and brochure and merchandise: the $45 kit has the "first line of merchandise."
Average earnings: The Company estimates $8 an hour on the average.
$12-$ 15 for someone more motivated.
Bonus rewards from referrals can also be earned.
Price range for merchandise: $2-$35 with the average $6-$ 10
Assigned territories: Yes
Type of plan: Door-to-door with optional home shows
Training: The Company recommends training, done by the field manager who recruited the salesperson
Sales meetings: Once every four weeks
Quotas: None
Payment format: Commissions; salary and bonuses for managers who work at company offices
Bonuses or incentives: Gifts, bonds, cash, trips, depending on level of achievement
Jafra Cosmetics, Inc.
Janice Eldredge Day and her husband Frank Day combined their names and talents a bit over thirty years ago to found one of the more successful, personally run direct sales companies in America. The Gillette Company is now its "parent" but Jafra continues to maintain the unique and separate identity that is its trademark. From Jafra's modest beginnings in Malibu, California, the Days built an organization that now offers its special entrepreneurial opportunity to women in eighteen countries. The Days' original premise for Jafra was to provide high-quality products and low-key sales programs that emphasize company supportiveness. Over the years, the Jafra philosophy has changed the lives of thousands of women who discovered a career through "party plan" sales. Jafra's original line of skin care products and fragrances have expanded to include nail care.
General guidelines:
Initial fee: For $95. Consultants purchase a demonstration case which includes essential products and sales aids for initial classes.
Average earnings: Depends on the consultant's sales
Price range for merchandise: $4.50 to $35
Assigned territories: No
Type of plan: In-home skin care and nail care classes
Training: The Company provides training aids and encourages training through managers and class observation. In 1987, Jafra launched the Jafra Training Institute, an on-going personal program to develop leadership and management skills.
Sales meetings: Weekly, whenever possible.
Quotas: To maintain wholesale privileges, consultants must place an order every sixty days.
Payment format: Consultant and managers are independent contractors who order directly from the company. Managers are also paid on commissions.
Bonuses or incentives: Gifts, cash, trips, cars-depending on the level of achievement.
Mary Kay Cosmetics, Inc.
The first products were packaged in blue, but no one remembers pink symbolizes the Mary Kay Company and all its spectacular opportunities for women and men. Mary Kay Ash founded her company in 1963 after a long career in sales. She wanted to create an organization that allowed women achievement and generously rewarded them for work well done, a company run on her moral beliefs in God, family and the golden rule. The first storefront in a Dallas office building sold wigs and her special skin care line. It was begun with her son. Richard Rogers, a marketing genius and now chairman of the company. Mary Kay Cosmetics has grown rapidly from its original $5,000 investment and about 10 consultants to about 150,000 consultants and directors in 1987. The Mary Kay items of skin care and "glamour" (cosmetics) number about forty, allowing each consultant to easily stock the entire line.
Mary Kay has added a "Color Awareness" program, which helps customers coordinate makeup with wardrobe as well as a nail-care line.
General guidelines:
Initial Fee: $85 demonstration case Average earnings: $10-S50 an hour. (Top level national sales directors can earn from $50.00O-$40O.0O0 a year.)
Price range for merchandise: $5-$25 per item, around $20 for fragrances
Assigned territories: None
Type of plan: "Party." with recommendation of no more than six women per "skin care class" (Mary Kay's term for party), or by private appointment
Training program: Free weekly training for beginners, ongoing local and national seminars
Sales meetings: Suggested for every Monday
Quotas: Must order $ 180 wholesale every five months to remain "active"
Payment formal: Resale profits up to 50% (the difference between
Wholesale and retail): override commissions on salesperson's "active" recruit’s sales of 4-12%; additional commissions as salesperson progresses upward.
Bonuses or incentives: Cash, jewelry, cars, trips, furs, depending on achievement.
The Shaklee Corporation
Dr. Forrest C. Shaklee and his sons Forrest Jr. and Raleigh built their company with a commitment to the golden rule and excellence in the field of nutritional products. Shaklee is now one of the new direct sales companies who have gone public and is listed on the New York Stock Exchange. Shaklee products - manufactured with the motto "products in harmony with nature and good health"-include a skin care and cosmetics line, multivitamins, a "slim line" nutritional supplement and many personal care and household items including shampoo, cleaners, toothpaste and hand creams. The company has incentive plans for winning cars, trips and extra earnings. Shaklee (along with Mary Kay Amway and others) has gone international with distributors in Japan, Germany, the United Kingdom, and Australia.
General guidelines:
Initial fee: $ 15 for a distributor kit which includes a business sales manual and product information.
Average earnings: The company estimates that by putting in 10-15 hours a week, a distributor can earn a bonus of $460 a month.
Price range for merchandise: $1.95-S20.00 (Some products can be purchased in bulk sizes for more than $20.)
Assigned territories: None.
Type of plan: Most sell person to person, but the company doesn't object to distributors hosting small meetings at their option.
Training: Training encouraged for programs in business management, nutrition, diet management, color evaluation (for cosmetics), and skin care.
Programs vary and can be conducted by professional makeup artists, by home office personnel, or field people trained by the company using corporate materials.
Sales meetings: Encouraged but not mandatory.
Quotas: 10 remain active, distributors are asked to buy $50 worth of products in one of every three months.
Payment format: Multilevel marketing.
Bonuses or incentives: Luxury international trips, cars, and other prizes for achievement.
Three of the categories we need to examine with a bit of scrutiny are average earnings, assigned territories, and payment format. Average earnings will probably fluctuate because it is the scope of your sales territory, if any. The marketing plan of the company and the time and effort devoted that truly determine what you can earn.
A policy of assigning territories where you can or cannot sell will, I think, eventually restrict your earning power. When the market you can tap is literally worldwide as with companies offering reassigned territories, it's a good idea to go with them and connect with as many people as you can. I've traveled this country and Canada to recruit people and I know my business would not have been as strong if I'd been limited to say one corner of Minnesota.
There are a few other advantages to reassigned territories that experienced direct sales people learn to appreciate. If a salesperson (or his/her spouse) must relocate for a job, the move does not have to affect the salesperson's income. He (or she) can still sell to the same retail customers, still recruit people out of the old location and they can now pick up more income by selling and recruiting from a new home base. You can see how assigned territories might limit salespeople. If you move out of the territory, you may sacrifice your business. Once in a new area, you'd have to start all over!
Many direct selling companies with unassigned territories now have "adoption" systems. The newly relocated salesperson is "adopted" right into a new fold. She can attend a local sales director's meetings and be introduced to the area and get some valuable information and orientation to start her off again. Fuller Brush, Doncaster, and Encyclopedia Britannica pay a commission on sales and reward salespeople for referrals. But you do not earn any additional or ongoing percentages for sales made by anyone you've recruited.
Discovery Toys, Amway, Shaklee and Mary Kay do reward salespeople for sales made by others recruited into the business and each has a different payment scale. The scale varies in percentages of commissions from company to company, but is based on essentially the same theory.
Because marketing plans including "multilevel" marketing for a number of well-known companies are complex and need a few diagrams to be explained clearly. I've gone into a longer discussion of it later in the next chapter. Basically, though this marketing structure involves a unique payment system that's based on one or more levels of salespeople. The amount of money someone can earn is determined this way .The salesperson makes profits from her own retail sales business and to it she adds commission dollars on sales made by the people she sponsors into the company (recruits) and depending on the company, her recruits' recruits. In most of those commissions depend on the recruited person's becoming an active seller of the company's products. There is no payment for the act of recruiting itself, to discourage "headhunting."
There is actually no absolute across-the-board definition ' of multilevel marketing’ that every company using this payment system abides by. However, it is of utmost importance that you understand the distinguishing points from company to company when you sign with one. In the Mary Kay Company, for example, every beauty consultant when recruited pays wholesale prices to the company only for products she sells at retail cost. So while Mary Kay has no levels of wholesalers where recruits buy products from the person who sponsored them rather than directly from the company, such others as Amway and Shaklee do.
Numerous companies sell their products through "party" plans, though they may have originally established their products by selling them on a one-to-one basis. Party plans are a popular pastime in some communities, especially where there are many young mothers, retirees, women wanting to get back into the business world, literally a few hours at a time. Party plans work like this: A salesperson contacts a friend or a friend of a friend and asks her to host a party. The hostess is given a list of basic rules: Parties must start on time, the room should be neat and well-lighted and any limitations such as the number of guests so each woman can get the personal service and attention of the salesperson. Finally, the hostess is told how long the party will last and asked to set things up so no children, dogs, or spouses wander in.
The sociability of the party plans adds to the pleasure of buying and selling, plus the hostess of a party may get a small percentage of the evening's sales. Usually, the hostess doesn't have to join the company to get that percentage, although a good salesperson might try to recruit her! Of course, there's a bit of work to planning a party and it's the salesperson's responsibility to coach the hostess to get the most out of an evening.
Other companies who favor the tradition of home parties are Sarah Coventry (jewelry). Natural Impressions (a new company specializing in electroplated jewelry made with real leaves, shells, and twigs). Home Interiors and Gifts (a Dallas-based company specializing in home accessories), and Princess House (another company specializing in decorative home accessories and crystal.
