MYTH: 99.9% of direct sellers lose money; people are afraid to drop out for fear of looking like a failure
FACT: More than half of direct sellers report that their net income from direct selling, after taxes and expenses, is positive.
82% of direct sellers have been with their current direct selling company for one year or more, and 47% for five years or more.
89% of direct sellers rate their personal experience in direct selling as excellent, very good, or good.
84% of direct sellers say that direct selling meets or exceeds their expectations as a good way to supplement their income or as a way to make a little extra money for themselves.
91% of direct sellers say that direct selling meets or exceeds their expectations as a business where the harder they work the more money they can make. (Source: 2002 National Salesforce Survey, Research International, Inc.)
MYTH: Most direct selling companies are pyramid schemes that are doomed to fail.
FACT: There's a big difference between legitimate direct selling companies and pyramid schemes. Pyramid schemes seek to make money from you (and quickly). Legitimate direct selling companies seek to make money with you as you build your business (and theirs) by selling real products and services.In fact, legitimate direct selling companies work hard to protect consumers from pyramid schemes. Before you sign up with a company, investigate carefully. A good way to begin is to ask yourself these three questions:
1. How much are you required to pay to become an independent consultant? If the startup cost is substantial, be careful! The start-up fee in direct selling companies should generally be low and cover the cost of your start-up kit (usually sold at or below company cost) which can include training materials, sample products and other items to get your business going. These companies want to make it easy and inexpensive for you to start selling. Pyramid schemes, on the other hand, make nearly all of their profit on signing up new recruits. Therefore, the cost to become a distributor is usually high.
2. Will the company buy back unsold inventory? If not, beware! Legitimate companies that require inventory purchases will usually "buy back" unsold products if you decide to quit the business. Some state laws and the DSA Code of Ethics require buy-backs for at least 90% of your original cost.
3. Are the company's products sold to consumers? If the answer is no (or not many), stay away! This is a key element. Direct selling (like other methods of retailing) depends on selling to consumers and establishing a market. This requires quality products, competitively priced. Pyramid schemes, on the other hand, are not concerned with sales to end users of the product.
MYTH: Recruiting is the key to success in direct selling; sales to end-users of the products and services are minimal
FACT: There's no doubt - recruiting is an important element of direct selling - just as expansion is important to any business that wants to grow. For direct sellers looking to build a business, recruiting others and mentoring them so they, too, can achieve their goals is important. But, recruiting is not a requirement for individual success in direct selling, and compensation must always based on the sale of products and services - whether your own sales or the sales made by your recruits.
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Direct Selling
