Archive for ‘Marketing’

March 12, 2012

Entrepreneurship and Direct Sales

by notmomscleaners

For many people, direct sales is the perfect blend of risk and reward.  Indeed, it provides all the benefits of having your own business with a lot of the support you might be accustomed to in your day job.

For starters, there’s the low entry cost.  From $0 to just a few hundred bucks, there’s a sign-up commitment to fit any budget.  And there are many companies with long track records of success, so the risk of any of the top direct sales companies not being around is about the same as if you hired on as the newest employee at XYZ Corp.

Direct sales is simply a distribution method employed by manufacturers to get their products in the hands of customers.  They can retail products, wholesale products, or sell them directly.  A lot of companies do a little bit of all of it.

Direct sales removes the costs to the manufacturer of storefronts, retail employees, rents, insurance, inventory, etc., and passes on those savings in the form of commissions to its direct sales force.

Because there’s no institutionalized means of hiring sales people, precisely because there are no storefronts or territories per se, they reward their sales people  for “hiring” more sales people by giving them commissions on their sales as well.  This is how expansion takes place in the direct sales environment.

While I’m sure the top executives get paid well, it’s one of the few business categories where the money goes to the people who sell the product and find others to do the same, not the people who manage them or the business.   Even if it’s not in the form of direct commissions, organizations spend a bundle on training and support.  That’s it.  There is nothing sinister, illegal or immoral about direct sales.