Direct Sales – Good Way to Make Extra Money or Fast Way to Lose Friends?
June 12, 2008
Want to make extra money while working from home? You could join the thousands of other independent consultants, distributors or representatives that work in the direct sales industry and sell products or services directly to customers. The products are sold mainly via in-home product demonstrations, parties, and one-on-one selling.
- Good way to meet and socialize with people.
- Offers flexible work schedules.
- Good way to earn extra income.
- Good way to own a business.
- Earnings are in proportion to efforts.
Direct Sales is Everywhere
Chances are you’ve either been approached by or have purchased something from one of these independent consultants. A study referenced by the Direct Selling Association estimates that 55 percent of American adults reported having, at some time, purchased goods or services from a direct selling representative. If you have a friend that sells Mary Kay or Pampered Chef then you know what I’m talking about.
Good for Corporations
The reason direct sales is so popular has to do not only with the benefits to the people selling it but also the benefits to the companies that make the products or services. The sales model allows these companies a low risk, low cost method of expanding their sales force throughout the country.
It’s low risk to the company because the sales reps typically aren’t paid anything unless they make sales. The company doesn’t have to risk a bunch of money hiring a sales force, they pay out a commission only after they’ve already made money via a sale.
A direct sales model is low cost not only because companies don’t have pay salaries but also because they don’t have to offer benefits to the independent consultants.
Selling to Your Friends
So direct sales is good for businesses and good for sales reps, what’s the downside? (I’ve never been a direct sales consultant so forgive me if I state things incorrectly but this is my understanding). People who get started in direct sales are coached to sell the product or service to their most accessible market, their family or friends.
With products like Mary Kay you start off by having a party at your house where you invite your friends, give them free samples, and ask them to host future parties at their homes and invite other friends. Eventually through word of mouth and the network approach of selling to a friend of a friend you build up a customer base.
Effects on Relationships?
Although direct sales has proven to be an effective selling approach, I wonder if it could also prove to be damaging to relationships. I would imagine that not everyone will enjoy being sold to by their friends, some people may even be offended or feel “used” when asked to come to “sales party”.
There’s probably another group of people that will go along with it but inwardly feel uncomfortable. They’ll buy from you not because they want what you’re selling but because they feel like they should. Although they won’t say anything, the value of your friendship may decrease in their mind as they see themselves as just a sales opportunity for you.
The Real Story
As I said earlier, I’ve never been a direct sales rep so I don’t know what really goes on between friends when selling is introduced into the relationship. What are your thoughts and experiences with direct sales? Do you like buying products from your friends instead of the store? Do you enjoy attending or hosting sales parties? Have you ever lost a friend or damaged a relationship because of it?
All posts by Ben Edwards