Sales Report

Loving the Business

It was after falling in love with the decorative baskets from The Longaberger Company that Lisa Lashley decided to become a consultant. She started collecting the baskets from home shows she attended in 1995 and took the leap into her own business in 1998.

All the research Lashley did on the company, and her years of being a satisfied customer, helped her make the decision. Today, she recruits and trains consultants working under her supervision to grow her Salisbury, Maryland, business--in addition to working full time as a social worker for the state of Maryland. Lashley, 44, says the fun, warm atmosphere of selling Longaberger baskets and home decor is a pleasant contrast to the gravity of her day job.

Her biggest challenge, though, is expanding her client base and introducing Longaberger to more people. How does she prevent negative impressions about direct selling? "I try to head that off before really getting started--to share information and to establish [good] customer service," she says. "To really ease someone's mind by not being a pushy salesperson, you establish a rapport and trust with your customers." The focus on customer service has helped Lashley and her consultants grow the business to $100,000 in projected sales for 2004.

Though sales estimates range widely within the industry--because of varying products and work scenarios (being part or full time, or managing consultants and receiving a portion of their sales)--Offen notes that the average annual sales figure falls at about $13,000. But he says that figure encompasses the highest earners with large full-time businesses and a bevy of consultants as well as people who only do it for a few months out of the year to earn extra holiday cash. Be wary of inflated earnings claims from direct-selling companies, though, says Offen. Be sure that the company and consultants are upfront about how long it took them to reach a certain selling point.

Reaching on of the highest levels in Mary Kay Cosmetics took Lise Clark of Greenwood Village, Colorado, nearly 20 years. She started her business in 1984, when she was 26. Initially, she only planned to sell Mary Kay products over the holidays; but as she started to sell, she saw her income outstripping what she would earn working several jobs at once. She soon went into the business full time and, today, expects her area unit sales to hit nearly $2 million by the end of 2004.

Organizing the needs of her business is her biggest challenge, says Clark. "You have to set yourself up to have a checklist of what you're doing. If you have to [take] a 'power hour' to make calls, [then do it]," she says. Today, she coaches the sales directors who work under her (who are all over the country) via phone, e-mail and conference calls.

Despite any negative associations consumers might have with direct selling, the entrepreneurs we've spoken to attest that the industry is alive and well. Find the right company with a great product or service and the highest ethical standards, and this could be just the opportunity you're looking for.

Truth or Dare

Get the facts before deciding if your direct-sales opportunity is legitimate.

According to Neil H. Offen, president of the Direct Selling Association (DSA), there are a few questions you can ask to find out whether a company is shady or just plain wrong for you.

  • Is the money you're going to make primarily from recruiting or from selling the product? Recruiting is generally a part of direct selling; but your primary income as a beginning consultant should come from sales of the product or service. If the company is only discussing recruiting--or discussing it over everything else--be suspicious.
  • Do you risk financial loss by being involved with the company? "Almost all direct-selling companies require minimal starting costs," says Offen. "It's usually $500 maximum." Watch for schemes where people make money solely (or primarily) from selling startup kits.
  • Would you buy the company's product if you weren't involved with the company? If you don't see a compelling reason to be a customer (a superior-quality product, good customer service, a good price, etc.), you probably don't want to sell the product, either.
  • Does it sound too good to be true? As with any business opportunity, be wary of get-rich-quick schemes, such as promises that you'll make millions of dollars in six months. Investigate the company literature, reputation, consultants and customers before you get involved with any opportunity.
  • Is the company a member of the DSA? The DSA has a one-year application process for new direct-selling companies as well as ongoing regulations for all members to ensure good business practices. Check out the DSA website for more industry information.
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This article was originally published in the July 2004 print edition of Entrepreneur with the headline: Sales Report.

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