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Think Before You Spend

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Cost Benefit Analysis.   Wow those three words sure sound b.o.r.i.n.g. don’t they? Especially if you have a direct sales business and you’re just so excited about sharing your fabulous products with others. Phooey, who wants to be bothered with something as dull sounding as cost benefit analysis? Whoa now – if you’re interested in turning a profit with your exciting direct selling business you may want to pause a couple minutes just to see what I’m talking about. (Really, what else are you in such a hurry to do that you can’t just skim the rest of this riveting article?)

First of all, what am I even talking about? A Cost Benefit Analysis (CBA) is a systematic process for calculating and comparing benefits and costs of a project or decision. CBA has two purposes: 1. To determine if it is a sound investment/decision, and 2. To provide a basis for comparing alternatives. It involves comparing the total expected cost of each option against the total expected benefits, to see whether the benefits outweigh the costs, and by how much.

Huh?

All that means is before you spend money in your business, make sure there’s a high likelihood it will be worthwhile.

  • Before you invest hundreds of dollars to participate in a vendor event, determine how much product you’d need to sell just to break even; and factor in all your other expenses (travel, lodging, meals, marketing collateral, display items, etc.) when you’re doing the math. [Read more…] about Think Before You Spend

Short Term Pain for Long Term Gain

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Many, many years ago I attended an exercise class with eccentric, fitness guru, Richard Simmons. He bellowed, “It took you more than 10 m&ms to get those thighs; it’s going to take you more than 10 leg lifts to get rid of them!” Interestingly that statement has never left me because it is so relevant to many areas in life. It can even pertain to a direct sales business.

To review: a direct sales business is comprised of a two-tiered compensation model. Part of the sales consultant’s income is derived from personal retail sales and the other portion of the pay comes from team building by helping others. The compensation is such that for optimum benefits and highest income potential, you need to do both – sell personally and help others. One cannot stand on its own – at least not for very long and not for very far.

Which brings me to my subject: Short Term Pain for Long Term Gain. Let’s do the math. We can use Scentsy as an example, though the math will be similar with many direct selling companies. Personal retail sales commissions are paid at a rate of 20-30%. Team building bonuses are an additional 2-9%. At first glance you would think that the real money is in personal sales. If you sell $2000 and earn 30%, that’s $600 in your pocket, right? Yes it certainly is. What if you sold $4000? That’s $1200. Receiving a $1200 check for the month sure would help with family expenses, wouldn’t it?

Consider the concept of working smarter, not harder. How much do you think you’d need to work to sell $4000 in one month? If you take an average party of $500 in sales, you’d need to do eight parties for that month. If you figure an average party takes four hours – that includes preparation, host coaching, set up, presentation, order taking, closing out the party, inventorying, bagging and tagging orders and delivery. So you’d need to work 32 hours to earn that $1200. That’s still $37.50 per hour – nothing to sneeze at. [Read more…] about Short Term Pain for Long Term Gain

Direct Sales Lessons Learned from the Secretariat Movie

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The Secretariat is a movie based on the true story about the life of a thoroughbred race horse Secretariat, winner of the Triple Crown in 1973.  Diane Lane portrays Secretariat’s owner, Penny Chenery, and John Malkovich plays the trainer, Lucien Laurin. The movie has been out since 2010, but thanks to DVDs, I just watched it this week. In addition to being a movie about a horse, there are so many nuggets of wisdom in this movie. Nuggets as it relates to direct sales lessons, specifically lessons for direct sales leaders/managers/directors.

Taken from an online review of the movie: “The theme of “girl power” is played up in this movie. Penny finds herself a woman taking on a male-dominated world, having to stare down everybody from the loud-mouthed owner of Secretariat’s rival Sham who dismiss her as “just a housewife”, boorish hecklers in the stands at the races, pushy reporters who questioned her horse’s ability, Ogden Phipps, the richest man in America, and closer to home, her unsupportive husband who pressured her to sell her father’s money-losing farm and horses rather than complete the mission of owning the first Triple Crown winner in 25 years. In the classic “underdog” storyline, she stands up to them all and wins.”

If you haven’t seen this movie, I give it a two-thumbs-up and it is definitely worth the rental. I found it at my local library; perhaps it’s available at Netflix or Redbox too.

Whether you are currently a direct sales leader or you are in the process of becoming one, consider the summary above.   Even without seeing the movie, can you identify somewhat with a girl-power theme in a male-dominated world? Sure a majority of independent direct sales consultants are females, but consider the senior ranks of managing and leading a large organization. You’re essentially CEO of your direct sales business, responsible for most facets of your business – marketing, sales, human resources, accounting, operations, logistics, transportation, etc. [Read more…] about Direct Sales Lessons Learned from the Secretariat Movie

No Two Directors Leaders Managers are the Same

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It seems a blinding glimpse of the obvious to say that no two people are alike. Yet it never ceases to amaze me how much we compare ourselves to others; some try so hard to be like everyone else; and in the realm of direct sales, some consultants get upset and sometimes down right rude, because their leader, manager, director is not like some of the other ones they’ve heard about.

I was thinking about this last night. The autumn leaves have just barely given notice that they’re above to change into beautiful colors and then fall.   So the fact that I am talking about snowflakes on 13 September is pushing it a bit, though I know of no better analogy.

No two snowflakes are the same. Each has its own unique story and formulation and no two will ever be exactly the same. Sure many have some similar traits and similarities, but you’ll never find two alike, so don’t waste your energy looking for that sameness.

So why is it really an issue for some direct selling consultants that their director isn’t like so-and-so’s director. They get together at meetings, conventions, trainings, etc. and hear from each other how their director does this or that or that he/she doesn’t do this or that, and the consultants feel cheated or upset that “˜they signed up on the wrong team’.

That’s just stinkin’ thinkin’. Be aware that I am not referring to the leaders who don’t deserve the title, the ones who don’t lead by example and have no semblance of leadership qualities. That is an entirely different conversation and best held for a different post. Rather I am merely referring to difference in style and preference.

Some managers are very creative and enjoy constantly creating new flyers, trainings, webinars, trinkets, gifts, packaging, and other do-dads. Some consultants love that about their director. Other consultants consider it needless fuu-fuu.   Is it wrong or bad? No, it’s just different.

Other directors are very businesslike and treat their direct sales team more like they’re are running a corporation with shareholders and employees. There isn’t any fuu-fuu, in fact it seems all business all the time. Is that style wrong for a direct sales team? No, it’s just different. Some consultants thrive in that environment and others would rather have a root canal than be on a team like that. [Read more…] about No Two Directors Leaders Managers are the Same

Don’t Judge a Company By a Consultant

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If you run into a whackadoodle consultant don’t assume the whole company is like that.

I admit it. I’ve been guilty of not heeding my own above advice.   A couple years ago while I was a vendor at a local school craft show, another vendor from another company practically assaulted me, slapped some lotion underneath my eyes and proclaimed, “Here, this will help with your wrinkles!”

Ok, a couple things wrong with that. Number one; don’t touch me unless I’ve given permission or act like I’m up for unsolicited fondling.   Number two; I could have been highly allergic to whatever magic lotion you were applying near my eyesballs; and number three, I’ve been told more than a few times that I already look much younger than approaching half a century, so insulting me by pointing out almost non-existent wrinkles is not going to get you sale. Whackjob.

So how do you think I felt about this particular company she represented from that point forward? Exactly. Any time I would see a consultant or booth for that company I put my Kevlar on, looked at my shoes and retreated in the opposite direction whenever the possibility existed for a repeat performance. Did the company teach all their consultants that little sales technique? Or did I just happen to be accosted by some rogue nutcase?

Oh I’m not naïve enough to think these unique creatures don’t exist in every direct sales company; I’m sure my own company, correction, I know within my own company there are some humdingers with whom I definitely do not want to be associated. I go out of my way to make sure any potential customer, recruit or host knows “˜we’re not all like that’.   Which brings me to the whole point of this post:

We’re not all like that.

If you find a great consultant who is responsive, knowledgeable and truly a delight to do business with, hang onto her/him, because we’re not like that (though I humbly say I am!) Likewise, if you had the distinct pleasure of interacting with one of the bad apples, give us another try, because we’re not all like that. [Read more…] about Don’t Judge a Company By a Consultant