style="font-size:15px;"> Social selling can refer to someone who just wants to sell socially to friends and family. But it’s most often used to describe people who sell mainly through social networking. Social selling is the use of social media networks to interact directly with customers, leads, and clients. Platforms like Facebook and Instagram give independent representatives the opportunity to build friendships, be visible, and answer questions.
Social proof is simply the weight of influence carried by a group of people. Social proof can show up in online communities and is visible and at play in social selling. But the prime example of the power of social proof in direct sales is the Party Plan model. Party Plan refers to a direct sales model that is focused on efficiently selling to groups of people who have been gathered together by a host they know personally, either in person or virtually online. (Chapter 2 talks a bit more about the different models of direct selling.) This lends the power of the hosts’ personal recommendation to the products along with harnessing and facilitating social proof. In the party environment, whether during an online party on Facebook or at a traditional in-home party, once one person decides to buy, it increases the likelihood that the rest of the guests in attendance will also make a purchase.
Social selling continues to gain prominence and is beginning to look like the modern way to do business. With your direct sales business, you have that power built right into the distribution model.
Chapter 2
Choosing the Right Direct Sales Company
In This Chapter
▶ Contemplating the benefits of direct selling
▶ Exploring products, profits, and programs
▶ Choosing a start-up company
▶ Debunking the myth of saturation
Being a business owner is something many people dream about – four out of five people say they want to own their own business – yet only about 8 percent ever do. What keeps the other 72 percent from stepping out and becoming entrepreneurs? Most of the time, it’s not even the courage to start or the self-discipline required to succeed that holds people back. In reality, it’s usually the cash outlay for overhead and the length of time before revenue meets and exceeds it that prevents most people from owning their own business.
Depending on which field you’re talking about, starting a traditional small business can cost a lot of money. If you want the ease of a franchise, you may be looking at even more money. Of course, one benefit of a franchise is the system the company has in place to support the entrepreneur. This can include everything from purchasing to marketing and selling. These proven methods of operation help create lasting success for entrepreneurs, and make the return on investment (ROI) more likely and more profitable.
What many people don’t realize is that direct sales is a low-risk way to start their own business. And it offers many of the same benefits as a franchise. Like franchises, direct sales businesses have proven systems for marketing and selling that they share with their independent representatives. They also help take care of inventory, shipping, product development, and so on.
But they also offer something more – or rather, less. Direct sales allows you to get started for minimal costs. In fact, many starter kits for Party Plan businesses will run you less than $200.
The training for representatives is also often low-cost or free. Most direct sales companies provide a simple program that, when followed closely, help you earn commission (which will help you recoup the cost of your kit) and earn additional products to add to your kit within your first three months of business. Most such companies also typically offer free ongoing training in the form of conference calls, webinars, and meetings. And many offer marketing materials such as catalogs, business cards, social media graphics, posters, email campaigns, and so on.
Direct selling around the world
Direct selling is a global business model. That doesn’t mean that every direct sales company operates in every country. It means that the business model operates here in North America, as well as in Central and South America, Europe, Asia, Australia, and Africa. In fact, global estimated retail sales topped US $178 billion in 2013, according to the World Federation of Direct Selling Associations. That was up over 8 percent from 2012. The WFDSA also reported that there are over 96 million independent direct sales representatives worldwide.
The United States is currently the leading market for direct selling, with an estimated $32 billion in retail sales during 2013. Here’s something that may shock you: Direct sales generates about one in every six dollars of retail sales, globally.
The direct sales model is definitely a powerhouse business model, though it differs in some ways from a traditional retail business model. Both models source products or services to sell to consumers. But a traditional retail business hires salespeople, gives them marketing materials, and tells each salesperson when and where to work. Even if the salesperson is on 100 percent commission, the company requires the salesperson to report to work at a specific time, sell a preset amount, and report to a supervisor. These salespeople receive pay increases and promotions based on their supervisors’ decisions.
Direct sales, on the other hand, is very different in terms of flexibility of time and work. When you start a direct sales business, you are in business for yourself. You determine how much you want to work and how much you want to get paid. You are recognized by your efforts when you achieve certain benchmarks in the company, such as achieving a certain level of sales and bringing on a certain number of new team members.
What to Consider When Choosing a Company
Nowadays, an extra stream of income, the lack of job security at a regular job, and the desire for additional tax breaks make a home-based business very appealing. And there are many great companies out there. You may like several of the product lines and could be well suited for any of them. So how do you choose?
Most people select a direct sales company that they’ve already heard about or had some contact with, whether as a customer or host. Another way that people become interested in a certain company is that a friend or family member joins and invites them to learn more about the opportunity.
Belief in your product, programs, and profits is important when deciding whether a company is right for you. You also need to be passionate about what you offer your clients. Many people discover this passion after they’ve sampled a product, become a loyal customer of a company, or hosted a party themselves.
If you are interested in learning more about what companies are available to join, aside from the ones you already know, the Direct Selling Association is a great resource. It offers a list of many different companies, organized by category. Visit www.dsa.org for more information.
