Cheat Sheet

Direct Selling For Dummies Cheat Sheet

From Direct Selling For Dummies

By Belinda Ellsworth

Direct selling has come a long way from its humble, domestic roots in 1950s Americana. Today’s top independent representatives run highly efficient, modern businesses that often leave more traditional retailers in the dust. There are three main types of direct sales models: Party Plan, Network Marketing, and Hybrid, and each finds its niche in the industry. Being successful means setting and meeting goals. Doing so keeps you on your toes and engaged in your business. Once you get going in your business, there are lots of hard-earned tips and tricks you can apply to really maximize your profit.

The 3 Types of Direct Sales

Direct sales or direct selling refers to the sale of products or services away from a fixed retail location. These products are marketed and sold directly through independent sales representatives, also known as consultants, presenters, distributors, and a variety of other names.

With a starter kit purchase for a small fee, direct sales offers the average person a way to earn income with an established business model and a marketable product line. It works almost like a mini‐franchise but without the initial investment. It is a low‐risk opportunity to earn more money than you could realistically by starting from scratch alone.

There are three types of direct sales models:

  • Party Plan: This model focuses on efficiently selling to groups of people who have been gathered together by a host whom they know personally, either in person or virtually (online). These types of gatherings are typically referred to as parties. These parties are hosted at a customer’s home, and this customer is known as the host. The host traditionally is rewarded with a series of discounted and free products as well as host-exclusive specials. The host invites her friends over as guests to attend the party. The party usually consists of light refreshments, socializing, and a presentation done by the representative.

    The purpose of a home party is to create a fun, relaxing, home shopping experience with friends. This model lends the power of the host’s personal recommendation to the products and facilitates social proof, which means the weight of influence carried by a group of people. Party Plan parties are quite effective in generating sales, attracting recruits, and teaching others how to sell. One clear strength of the Party Plan model is the easy-to-understand emphasis on selling products to customers.

  • Network Marketing: Network Marketing refers to a company structure designed to move consumable products through a network of independent representatives, via both personal use and sales to end consumers. When a Network Marketing company is building its sales force, it is focused on building a network of consumers. The company doesn’t distinguish between those who join as independent representatives to earn money and those who join merely for a discount on their personal products.

    One strength of the Network Marketing model is that companies can grow very large and sell huge amounts of products through a vast network of people who have, in many senses of the word, joined as members. Many members set themselves up for a subscription to receive their products each month — an arrangement often called autoship. These continuous re-orders through a network of people affiliated with the company by choice can lead to consistent sales growth, as long as people in the network continue to see the benefit of the product.

  • Hybrid: As you might guess, hybrid blends the practices of Network Marketing and Party Plan. In Hybrid companies, as with those in the Party Plan model, independent representatives have hosts gather their friends and family to experience a product demonstration, in person or online. But with Hybrid, the emphasis is as much on the business opportunity as it is on sales of the product. The compensation plans tend to borrow traditional elements from both Party Plan and Network Marketing. As in Network Marketing, these products lend themselves well to auto‐ship, the subscription order model where independent representatives and customers get monthly replenishment orders shipped to their homes automatically.

    In Hybrid companies, auto‐ship usually offers a price break for the customer (sometimes referred to as a preferred customer rate). Some programs offer vanishing auto‐ship or free auto‐ship for customers who refer other customers through referral programs. These referral programs can also include free auto‐ship for independent representatives who have a certain number of customers on auto-ship, meaning that the representative’s own monthly consumption of product is covered. These referral programs, which combine the customer‐focused Party Plan outlook with the Network Marketing‐style auto‐ship approach, have been very successful and have led to significant growth for the companies and leaders involved.

Setting Goals to Achieve Success in Direct Selling

In order to build a successful direct selling business, you need to define what success means to you. That means deciding what your vision for your business is and setting the goals you need to get there:

  • Creating your vision: Vision is the big picture of where you see yourself and what motivates you. Keeping your vision front and center can help set you apart — very few people develop a vision. Picture what you really want in life. Make that picture very clear. Don’t just envision more free time and more money. Get into detail. Paint a picture of what you really want the time and money for. Perhaps you would like to buy a new home, become debt‐free, or help your spouse retire. Writing down your vision and placing it prominently on a bulletin board is a good way to keep your vision alive.

  • Setting goals as your milestones to success: Vision and goals both contribute to success, but they are not the same thing. Success is achieving your vision by reaching the goals you set. Goals are the milestones on the way to your success. Goals are a way to break down your vision into manageable steps. Look closely at your vision. What steps, or goals, will it take to get there? For example, if you want to take your loved ones to Disney World, you need to determine how much that trip will cost. Once you know the dollar amount, you can easily plan how you are going to achieve that in commission.

  • Reaching your destination: When you make a decision, the desire builds, you follow through with the details, and you reach your destination. You may need to pull over and get directions (meaning you may need to get help from your upline or an accountability partner), but you don’t ever give up. Success is a journey — a road traveled. You will have speed bumps, roadblocks, and detours along the way. If you don’t know where you’re going, the detours that you come across in life may take you off in different directions. By having the destination in your mind, plus written down and posted around your home or office as reminders, you’ll be able to get through the detours and challenges and still be headed in the direction you want.

  • Staying determined: Success requires determination. Tell yourself that you’re not giving up. And then don’t. When a party cancels, don’t just think, Oh well, I guess I have the night off, and then hang out watching TV. Instead, make some calls and book another party (or two). If you’re short on your sales goals for a trip, don’t hang out watching TV — instead make up the sales with more bookings, one-on-ones, or re-servicing orders.

Making More Money with Your Direct Sales Business

Most people get into direct sales to earn an income, of course. There are many ways in which you can work your business and many different opportunities to generate sales. You can utilize all of the following suggestions or focus on just two or three services:

  • Home parties: When people get to attend a party and interact with other guests, they experience that great energy that comes from having a good time together. The right balance of fun, the excitement of seeing friends make similar purchases, the information provided in the brief presentation, and the added bonus of expert advice all combine to create social proof (the strength of personal recommendations). Social proof can create stronger sales, result in more bookings, and even make recruiting new team members easier.

    Follow the elements of a successful party: Always create desire for the product, hosting a party, and the opportunity. Greet guests as they come in and get them excited for the evening ahead. Do an opening talk where you introduce yourself and plant opportunity and hosting seeds. Present products and you focus on selling their benefits, not the details. Give a booking talk where you make the hosting opportunity sound fun and appealing to other guests. Deliver a recruiting talk where you build the desire for joining the company and earning an income. Always do a full-service checkout where you review their products with them to make sure they aren’t missing anything and offer the hosting and joining opportunities.

  • One-on-one appointments: One‐on‐one selling is an excellent way to gain new clients, party hosts, and recruits. It gives you the opportunity to discover your prospects’ needs and cater your presentation to offer them a specific solution. This personal experience is the perfect situation for relationship‐building, so it also helps set you up for re‐servicing. It’s also an excellent time to sit with someone one-on-one to discuss the business opportunity.

  • Trade shows and vendor events: Trade shows can help you reach out into your community and meet people you may not have met otherwise. Note that smaller, less expensive events tend to provide a bigger return on your investment. Decide on your purpose for that particular event and don’t get distracted by anything else. If your focus is to get bookings, then don’t focus on selling product. Concentrate on engaging people so that you get bookings. If your goal is to earn enough to pay for your booth as you expand your contacts, focus on selling product you have on hand. If your goal is recruiting, make sure all your conversations include the message “I’m looking for people to join me.”

  • Out and about: Meeting new people — or networking — is important because you never know where you will find business. Always be prepared to talk to the people around you. Being prepared means being ready mentally and physically. You want to look professional, have your 30‐second commercial prepared and rehearsed, and be sure your marketing items are on hand. If someone asks you what you do, you want to be able to follow up with marketing materials such as promo cards, catalogs, and business cards.

  • Online: When it comes to doing a great online party, you use exactly the same skills as an in‐home party. The difference is in how you utilize those skills. To succeed with virtual parties, you need to engage guests, make it fun, and show them how your product really answers a need they have. Successful online parties also demonstrate why hosting a party is exciting and rewarding and how becoming a representative meets a need that each guest has. There’s no question that online parties can be a great boost to your business. They allow you to reach people outside your general vicinity and offer the best fit for both you and your hosts. You don’t have to leave your house, you can put the kids in bed, and you can sit down and do your virtual party.

  • Fundraisers: Fundraising is a $19 billion market. The great part of fundraising programs is that people want to support their community. Fundraising can introduce you and your products to an entirely different crowd. Many companies offer a fundraising program that divides your normal profit so that the bulk of it goes to your school or organization or whatever beneficiary you have chosen. Or you can develop your own program. Focus on offering about a dozen top items on a flyer rather than using the entire catalog. Make sure the receipt offers an opt‐out option for future contact and that the products are delivered with your contact information included. People who come from a long‐term corporate background find this model of doing business very successful and appealing.

  • Re-servicing: This is a piece of the business that many people leave out, and that’s a huge amount of cash to leave on the table. Re‐servicing is more than simply posting on Facebook “I’m putting in an order, does anyone want anything?” Re‐servicing is true customer care, meaning it involves contacting customers by phone with a simple, short conversation to ensure that they’re doing well and like the products, and to determine whether they need more or would like to try the monthly special. If your company doesn’t offer a monthly special, create one for just your customers. Or look at each customer’s previous purchases and suggest something tailored just to them. Re‐servicing can turn into an independent stream of income. You can also schedule about 15–20 minutes a day for this task.

  • Personal shopping experience: Consider providing this kind of service as well as selling products. For example, those who sell food‐storage products might tell prospective customers something like, “For a fee, I will come in and organize your pantry.” The customer then pays the fee, and you come in, show them how to organize, and recommend products that should be used — and tell them they can apply their fee as a credit toward their order. Representatives who offer cooking tools can offer to streamline kitchens. Those offering clothing can also offer seasonal wardrobe‐organization services. For many companies, it’s appropriate to offer this service twice a year.

  • Show-on-the-go: Your mini show‐on‐the‐go is an excellent opportunity to sell your product one‐on‐one while you’re out running errands. An afternoon out at the mall can quickly turn into a sale, a booking, or a new recruit for your team. You can quickly create a show‐on‐the‐go kit by putting three catalogs (or mini‐catalogs or product brochures) into a tote bag with five to eight product samples, a host packet, and an opportunity packet.