As already mentioned that direct sales is a very popular business opportunity with people looking for lots of time and flexible business. Some of the best-known companies in America including Avon, Mary Kay cosmetics and Tupperware fall under the category of direct selling business opportunities.
Whether direct selling, you will usually allow us to build a business on your own. There is very little interference from the parent company except that there may be infrequent reminders or e-mails to encourage you to sell more.
Direct selling business opportunities mostly offer low upfront investment opportunities which require the purchase of a product sample kit. You make money now for the selling this for the client to your family, friends and personal contacts.
However, in order to succeed, you need to expand your customer base to people other than who you know personally. Most of the direct selling programs also ask the participants to recruit other sales representatives under them. These constitute representatives and downline and their sales generate a commission for those above them.
However, you should know that a direct sales business opportunity that compensates participants primarily for recruiting others rather than for selling the company’s products can be considered an illegal pyramid scheme. These flourished a few years back and were basically judged to be scams by the Federal Trade Commission because there was no real business involved. The only money that people were earning was when they recruited other people under them and then those people repeated the process. There was not much sale of products involved just one person paying the one above them to join. It was the same cycle which was basically a scam because it was not the business.
Direct selling programs are usually exempt from business opportunity regulations and are not defined as franchisees under state and federal franchise laws. For this reason they enjoy it a certain degree of freedom from any regulation and sanctions. It is important you do your own investigation before you invest money in any direct selling business opportunity. For more information you can check out the direct selling Association’s website.
- Relatively cheap to buy in.
- Many big names like Amway, Avon,Tupperware.
- Good for people wanting to work independently and part time of full time.
- Sell product line to direct contacts as well as through marketing.
- Recruiting other sales reps in downline.
- The potential of income should me more from selling products rather than downline recruitment. If not, could be illegal pyramid scheme.
- Exempt from business opportunity regulation.
- Not defined under franchise laws.
- Do your research.