What to look for in a company if you are considering direct selling:
- Getting started should not require a significant upfront investment. While you may need to purchase a starter kit or training materials, the cost should not put you in financial jeopardy.
- You should have the option to sell back unsold products if you quit. Businesses belonging to the Direct Selling Association are required to "buy back" unsold merchandise you bought in the previous year at 90% of what you paid.
- You should make money from your sales to consumers. Recruiting other sellers should not be the only basis."
- The product or service should be something you would use even if you were not selling it. Source: Direct Selling Association
Compensation systems vary, but representatives primarily earn money from commissions on product sales or by purchasing the products wholesale and selling them at retail prices, says the Direct Selling Association.
While representatives may also earn a small commission on the sales from representatives they've recruited, legitimate businesses do not use recruitment alone as a basis for compensation, the association says.
Direct selling is a fluid industry, with only 10% of representatives working "full time," or at least 30 hours a week.
But some who work in or watch the industry believe the severity of this recession may cause more sellers to stick with it, even when the economy rebounds, at least as a way to supplement their income.
"I truly believe this has readjusted people's thinking," says Kathy Coover, executive vice president and co-founder of Isagenix. "With this economy, people can't take their jobs for granted anymore. They have to have another alternative … so if something does happen, this is their safety valve."
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