You probably have a friend or relative who posts about their products on social media profiles. Maybe they're selling makeup or jewelry or some sort of diet supplement. It sounds wonderful - having your own business and setting your own hours. But can you make your whole income from direct sales?
Can you even count on a direct sales position as a stable income? The short answer is that it depends on you.
Direct sales is exactly that - selling a product person-to-person, rather than through a brick and mortar store. Home parties are still a popular way to facilitate home sales. But with the immense power of the internet, many direct sales consultants also use websites and social media to host virtual parties or sell their product individually. There are different types of direct sales companies and many of them are multilevel marketing. What this means is that you earn a commission from the products you sell but you can also earn from the people you recruit under you. Many companies offer training to help get you started and a good deal of support.
The first thing you'll want to know is how much money you can earn. This will largely depend on the type of product you're selling, the amount of hours you devote to your business, and, for lack of a better way to say it, how good you are at selling. If you're great with people, have a large network of friends and associates, and don't mind selling your products to people you know (and those you don't), you can do really well with direct sales. If you're not good with those things or feel funny about asking friends to buy your products, it might be more difficult for you to succeed. The median income for direct sales was quoted as $2,400 per year by Forbes in 2011. While that's a far cry from the pie in the sky income some of the people selling these products might talk about, that figure is representative of the large number of direct sellers who work part time at their business. In essence, it is possible to make far more by selling a product you truly believe in, if you're creative and work more hours on your business than the average direct seller.
Doing something you believe in. Direct selling really only works well for people who believe in the product. Often direct sellers get into the business because they were introduced to the product and really liked it. So selling the product can be as rewarding as it is to recommend a great find to a friend. Owning your own business. One great benefit to direct selling is that it gives you the opportunity to own your own business without the overhead. Setting your own hours. For those who have full time jobs, families, and other obligations, direct selling offers you the opportunity to earn extra income on your own schedule.
As you might assume by the median income, direct selling isn't going to earn you six figures in no time flat. While it can earn you an extra income or even a full time career, it's not going to be a great fit for every person. Here are some possible drawbacks you should consider:
Taxes. Most regular employees receive a W2 and have their taxes taken directly out of their check which makes filing your yearly taxes fairly straightforward. For direct sellers, you'll likely receive a 1099, which means no state or federal taxes are withheld. Depending on how much you earn, this will often mean paying taxes at the end of the year or even arranging to pay your taxes quarterly to make it easier to afford.
Less Stable Income. Direct sales don't include a set paycheck. And you might easily put in hours of work with no pay.
Sustainability. Many direct sales consultants start by selling to friends and family. That's a finite number of people. If you can't expand your network of customers, you may have a problem sustaining the business in the long term.
The truth is that you're the only one who can answer this question. It's certainly worth the risk if you find a product you like, the initial costs are low, and the company is reputable. Ask a lot of questions before investing. Make sure that you know how much product you'll need to sell in order to recoup your original investment. If you have a vast network of real life and online friends who would also love the product, it might be an ideal way to build your own business without a lot of capital up front.
Article Sources:forbes.com, directsalesaid.com