If you want to spread your entrepreneurial wings but have little or no business experience, don’t have a product or service to offer or are simply looking for a proven system for success, direct selling might be the ideal opportunity.
For more than 100 years, direct selling companies have offered independent representatives the ability to purchase products at wholesale prices and earn a profit by selling them at retail prices. Most direct selling companies also allow representatives to earn commissions for introducing new sales reps to the business. This business model relies on independent contractors, rather than traditional advertising, to spread the word about a company’s products or services. The word-of-mouth marketing approach works for several reasons: Consumers appreciate the personal service, the convenience of shopping from home, and the comfort of buying from those they know and trust.
Jim Cramer, host of CNBC’s Mad Money, is bullish on direct selling, especially during a slowing economy. “Direct selling is a great model…with high gross margins, low capital intensity, lots of free cash flow,” he said on a recent show. “It’s a fragmented industry with gigantic room for growth. The top 15 players only account for about half the market.”
Amy M. Robinson, Direct Selling Association Vice President of Communications and Media Relations, points out that, while many people seek additional income during lean economic times, “in all honesty, direct selling is hot because it’s a fun, convenient way to shop that people enjoy. So, poor economic times or not, people fi nd direct selling to be appealing. Great products, personal service and income potential are elements of direct selling that make it a strong economic contender at all times.”
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