New Skills and Training
As well as the many training programs and professional development events your company will likely provide, there will be printed materials to address common questions and concerns. It’s important to understand that direct sellers must present complete and accurate information or risk legal ramifications, particularly in selling behaviour and when making statements about a company’s products, services and earning potential.
Take Your Time to Decide
Choosing the right direct selling organisation is an important decision. It’s great to be enthusiastic about getting involved—this energy will drive your success in the industry—but it’s crucial that you take time to feel totally comfortable with your decision. If one organisation doesn’t seem like the right fit, explore others. Don’t rush into anything and don’t be pressured by time-sensitive offers. Legitimate opportunities won’t disappear overnight.
New Friendships
While direct selling offers great opportunities for entrepreneurs to shine, each individual business is still part of a larger whole. Office politics has no place in direct selling; there is no glass ceiling and almost endless opportunity for people to climb the ladder of success. It is common for sales representatives to support one another and develop long lasting friendships, sparked from a shared interest, mission and lifestyle.
Recognition and Achievement
Direct selling organisations are quick to recognise the achievements of their team; the industry is built on and fuelled by rewarding success. Milestones both big and small are celebrated. Experience shows that for your hard work, you can receive rewards ranging from lapel pins and flowers. to jewellery, cars, incentive trips and dream holidays.
Identify a Company or Product that Appeals
Experience suggests that to be successful in direct selling you need to choose a product or service you really love. Sales representatives who love their products are customer magnets, attracting others with their enthusiasm and commitment. When choosing an organisation, it’s also important to know if they belong to the DSA. It’s your added assurance of a commitment to ethical business practice and consumer protection. Read more about the benefits of being with a member.
Consult Others with Experience
Use all the resources at your disposal—including personal referrals and online technology—to find out what others have to say about the organisation. It can be a difficult process to separate the reputable information from negativity and vitriol, especially in online media, so it’s important to consider all material in context.
Ask the Right Questions
Before committing to an organisation, it is important to know
What Start-Up Investment is Required?
One of the best things about direct selling is the low entry cost; it is often less than $100 for your initial demonstration kit. The start-up cost is usually a small proportion of the actual cost of the kit, which makes it easy and inexpensive for new salespeople to join. Beware any organisation that has a high start-up cost; it may be a pyramid scheme and not a legitimate direct selling opportunity at all. Click here for more information on pyramid schemes.
Can I Return Unsold Stock?
A legitimate direct selling company will have reasonable provisions for the return of unsold inventory and will discourage their salespeople from holding stock. A condition of DSA membership is that direct selling organisations have a buy-back policy; usually specifying that if a salesperson leaves the business, the organisation will buy back unsold marketable products purchased in the 12 months prior at 90 percent of cost.
Think carefully about opportunities that require the purchase of large amounts of unreturnable inventory as a condition of entry. This is referred to as “front end loading”. Reputable direct selling organisations do not have these requirements.
Are The Company's Products Sold To Consumers?
Legitimate direct selling businesses offer income from sales, not recruitment. Direct selling, like other retail channels, depends on selling quality products at competitive prices. Be wary of businesses that claim you can get rich solely through recruiting new people into a business.
What Training Does The Company Offer?
A quality direct selling organisation will train its salespeople and help you get started.
What Is The Compensation or Reward Structure?
It is vital you fully understand the bonuses, profits, commissions and other financial responsibilities of your preferred company. It may take a relatively short amount of time to begin earning supplemental income, but be aware it may be a while before you rely solely on this new income stream or achieve the high-profile rewards. In direct selling, financial success is driven by effort and activity.
Ignore promises of extraordinarily high earnings or guaranteed profits. It’s important to remember that, as in any business, financial success requires time and effort.
What Are The Organisation's Guarantees, Warranties and Return Policies?
Take time to fully understand your company’s product guarantees, warranties and return policies; more importantly, make sure you feel comfortable that they are fair and reasonable.
What Happens if You Decide To Leave The Organisation?
There should not be any penalties if you leave the direct selling organisation. The DSA Code of Practice requires that members allow salespeople leaving them to return marketable products on reasonable commercial terms.
Is The Organisation a Member of DSA?
See the list of members
Identify Fraud and Illegal Pyramid Schemes
Unfortunately, some people try to use the direct selling method to engage in unethical and illegal activity. There are several warning signs to look out for:
- The company is not a member of the DSA
- Pressure to sign a contract quickly
- Pressure to pay a large sum of money before sales claims can be investigated or legal advice obtained
- Promises of extraordinarily high or guaranteed profits
- Claims that profits can be achieved easily
- A required initial fee which greatly exceeds the fair market value of any products, kits or training
- A large fee payable before you receive anything in return
- Salesperson who is evasive about or unwilling to provide disclosure documents
The most typical fraudulent schemes are:
Pyramid Schemes
In a pyramid scheme, large numbers of people at the bottom of the pyramid pay money to a few people at the top. Each new participant pays for the chance to advance up the pyramid; in reality, each new level has less chance of recruiting others and a greater chance of losing money. For more detailed information and to watch our explainer video, click here
Ponzi Schemes
Ponzi schemes, named after Italian immigrant Charles Ponzi, who defrauded thousands in the early 1900s, offer abnormally high short-term returns to entice new investors.
Several characteristics distinguish Ponzi schemes from pyramid schemes. Ponzi schemes:
- Centre around a person who acts as a “hub”, interacting with all new participants directly
- Often attract well-to-do investors on the claim of a revolutionary investment approach, insider connections, etc.