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15 Tips to help you choose the right direct sales company

by Yvette Rooney

So you want your own business and you want to get into a party plan biz. Great. Direct sales or party plans are a great way to make a part or full time income. Like any business it will take hard work, devotion and time to get your business up and rolling.

I want to help you avoid the mistakes that many have done when signing up with a direct sales/party plan business. I will list 15 of the most important things you should look for when doing your search.

The first thing you should look for is your interest in the product. Do you just love the stuff? Go through the catalog. Can you find many items that you would want yourself? This is important because if you don’t feel good about the products, then there will be no way that you can feel good selling it. The love you have for the products you sell will be reflected in your demonstrations.

Do the products appeal to a wide array of people? It’s great to sell a specific type of product i.e. toys, cosmetics etc. but that would mean that your customer base is limited which can make booking parties harder.

Are the prices competitive? Would you pay the price they are asking for an item? Ask others to look at the catalog. Would they pay those prices?

Is the compensation plan easy to understand? When looking thru the structure of the commission rate can you understand what you will make, or do you need a math degree to figure it out? If you can't easily understand what you will make then you need to really think about this company. Many times companies make their payment structure so complicated that many consultants don’t even know if there are being paid correctly. Also look into the management override. This is usually where the complications come in. Even if you don't think you want to be a manager now you may want to in the future.

What is the average party sales? Very Very Very important! I can't stress this enough. Many companies will boost high commission rates but if your avg. party sales are low then those high commissions mean nothing. Try to find out what the national avg. is but also find the avg. of the nearest local rep or manager. Some product lines are better supported in certain areas than others. Of course there will be parties that are lower or higher than this avg. but if you get a general idea this will help you know what you can expect.

What does it cost to become a consultant? Many people just ask what does the kit cost? Kits will range in price from company to company but you should also be asking about other cost i.e.: catalogs and paper supplies, promotional material etc. The following is a list of fees charged by some companies. Credit card fees: Every tine a customer charges their order, they will charge you a percent of the sale. Order processing fee: You will pay a fee every time you submit a party to the company. Catalogs and paper supplies: Catalogs and paper supplies cost money and this cost will be past on to you. Inventory: You may have to carry merchandise with you to fulfill orders on the spot. Bank fees: These fees apply when you have to collect payment from the guest yourself. If a customers check is returned your bank will charge you a fee. Renewal fees: This fee is usually paid once a year on your anniversary date. Hostess free merchandise and discount items: These cost will come out of your pocket. Every company has their own way of dealing with this so make sure to find out exactly how it works. These are just some of the more common fees that I have seen companies charge. Always ask if there are any other cost to run your business.

What kind of support system do they have? When you are first starting out in a company you need help. This help should come from your manager or sponsor. It is unfortunate that many companies will just send you a kit and you may never hear from them again. If your manager/sponsor was not available at the moment, would you be able to pick up the phone and call the company for help? Is it a toll free number?

Do you believe in the hostess plan? This is the heart and soul of your business. If you don’t believe that you can get a lot of free and discounted merchandise, then it may be difficult to book parties. A hostess plan that rewards hostess with a generous amount of free and discounted merchandise will help you book more parties. How long has the company been around? The longer a company has been around they more likely they will stick around. Just because a company is new does not mean that it is a bad choice, it just means that you may need to be a bit more careful before signing up. More and more party plans are starting up and shutting down just as quick. You don’t want to end up stuck with a company that can’t hold it’s own.

Is the company represented in your area? Find out how many reps are within your area. If there are too many, then you might want and go with another company because you will have a hard time booking parties. When you ask the company for this information ask for your local county rather than state. There may be a ton of people in the state but no one in your particular county.

Are there special incentives, awards etc.? It’s nice to get rewarded for your efforts. Ask what do you need to do to get those rewards. How are contest run? A company will tell you that you can earn a trip, cruise etc. but you need to know how to do that. Ask them what sales level would I have to reach to qualify for this reward. Always ask for the details. Are these realistic goals to you. If you needed $40,000 in sales to get that trip how many parties would you need to do in a month? Ask them to break it down for you.

How long does an average party take? When asking this question you should get all the details from setting up, doing the demo, breaking down, doing the paperwork delivery of products etc. Your business involves more than just doing the demo. It takes time to set up and pack up. This needs to be considered when figuring out what you would make. If you are demonstrating items that are breakable than these items will need extra care in packing up which will take more time.

Who handles refunds? Will the company handle refunds directly with the customer or do you have to get the item from the customer than have a new one sent and send the other one back?

Do they give you a discount on personal orders? At some point you will want to add to your display. Can you get these at a reduced price. Do they take personal orders?

How many times a year is a catalog published? Are there monthly supplements that you are required to have. How often do they change there product line. If a company comes out with new stuff every month it may be hard to keep your display current.

I find that these are some of the most important things to look for. There may be more things that you think of that are specific to you. What you want is to be able to get all the answers to these questions. If the company hesitates in telling you anything than I would put a red flag on that company. The truth in the matter is this. The reason you are looking into this business is because you want to make money. The company wants to sign you up because they want to make money. If the company has anything to hide than you may have trouble making money.

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Yvette Rooney is a stay at home mom and manager for Linen World Home Parties. You can visit her personal site at www.hvlinenworld.com. Besides information about the Linen World plan, her website has articles, downloads and information to help you in building your business.

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