Direct Sales 101

AN INTRODUCTION TO PARTY PLAN COMPANIES AND DIRECT SALES

Home party sales are an excellent way for busy individuals who need an income boost to make money, all without the time commitment and constraints of a typical job.  If you’ve never been involved in the industry before, here’s a look at what’s offered by the majority of direct sales companies, also known as the manufacturers that provide the products being sold.

The Party Plan System

While there are a few deviations, an overwhelming majority of direct sale opportunities use a profit-sharing concept. As a consultant, or independent representative of the company, you will hold parties that focus on selling the brand’s items to the people attending. For each item you sell at your party or event, you will earn a percentage of the sale as income, called a commission. If your chosen company pays 20% commission, for example, you would earn $20 for selling $100 worth of products to a customer.

In addition to this regular sales commission income, you will usually have the opportunity to earn a greater percentage through recruiting other sales people to your team. You will earn money through these “teammates” as they sell the same products you do at parties of their own. You will earn a percentage of their commissions, called downline commission because you are earning more money “down the line” of representatives. If, for example, you recruit your friend Pat to our same example company and she sells that same $100 worth of items, Pat will earn $20 for herself and you will earn a small percentage on top of that $20 for initially recruiting her. You will both make money on that single sale, which is why recruiting a strong team a great option for direct sales representatives.

Tip: The level of downline commission “tiers” offered will vary from company to company. While some brands will only pay a percentage of commissions from direct recruits, others will pay additional commission amounts to the original consultant for recruits of recruits, and so on.

Start Up Kits

When you decide on a company that catches your eye, you will need to purchase a start up kit in order to begin selling. There will usually be at least two “sizes” of kits to choose from in order to match various budgets, a smaller beginner set and a larger deluxe set with more items and materials; some companies have even larger kits available. Regardless of size, kits will typically contain a few best-selling products from the company as well as paper business materials that may include party invitations, flyers, catalogs, order forms or business cards.   The costs for these home party starter kits vary widely depending on the company, but newcomers can expect to budget about $100-$200 for most starter kits.

Tip: Some companies offer starter kit rebate or reimbursement programs for new sellers that achieve high sales goals in the first few weeks of selling; be sure to read up on your brand of choice to find out if this option is available.

Hostess Benefits

While some consultants start out holding their first party in their own home, they will usually branch into holding parties elsewhere, in time. The individuals that allow their home to be used for the purpose of a party are called hostesses, or hosts if they are male. In exchange for providing the setting for a consultant to hold a party, hostess programs reward hostesses with perks such as a percentage of the party’s sales, access to exclusive items and discounts on company products. These perks often increase based on sales level “tiers” achieved during the party, such as $1-$150 worth of sales, $151-$300, and so on. This reward system helps consultants find new locations to hold parties and new groups to sell to, as it offers hostesses an attractive opportunity to make money and earn discounts without needing to become a consultant immediately; Hostesses occasionally transition to sales teams after a successful party in order to increase their earning potential.

Booking Your Party

New sellers are often advised to contact friends and family when it comes time to send their initial invitations out. A good way to boost attendance at your first party is to encourage guests to bring friends of their own, provided they RSVP to give you an accurate head count. Online invitations, or “Evites,” are a great way to keep track of who has responded to your request already. Making social media event groups will help you get your attendees interested and excited about the upcoming party. Many consultants find that posting pictures and talking up key products to introduce them prior to the event helps sales numbers considerably.

Tip: Be sure to check and see if your company has a “digital party” option – this is an online catalog that you can give distant attendees access to while still earning commissions from their purchases.

Working Your Event

Depending on the product line, light refreshments are a thoughtful touch, as are pre-made “goody bags” and door prizes that carry the theme or brand the party is based on. Assemble your order forms, catalogs and products neatly on a visible table before guests arrive, as this will prevent scrambling during the event and keep your focus on explaining product benefits and selling. If you’ve chosen a food or cooking company, be sure to incorporate the products in a way that can be watched by your attendees; you might make a recipe to sample ahead of time while duplicating the steps to show the process during the taste test.

Tip: Use your starter kit contents wisely. Large sample jars should be paired with clean disposable or washable testing materials – Q-tips or small metal spoons, for example – to keep them clean from party to party. Full sized, sealed items can be sold as inventory or used for sampling at your discretion, and smaller samples can be offered as a gift-with-purchase or door prize during your event.

Keeping It Together

A product or party is only as good as the person selling it, so be sure to process your orders and deliver products to your new customers as soon as possible. Once your reputation for reliability gets around, you’ll likely find yourself with invitations from would-be hostesses to book parties in the future. Make use of any business tools that came with your starter kit, such as digital “back office” software, to keep an eye on profits and determine how often you’ll need to book parties to achieve your desired income level. With careful planning, enthusiastic selling and successful parties, you’ll start earning a great income through a proven direct sales structure. Party on!

Further Reading: direct sales companies, party plan companies, direct sales, party plan selling, how to choose a direct sales company