Direct Sales Businesses: Direct Sales Businesses Jessica Sage BIS 394 Purpose of the Study: Purpose of the Study The purpose of this study is to gain insight into the benefits of running your own home-based direct sales business and why more people are choosing to pursue this occupational path. This study also intends to examine any long-term benefits that someone can gain from running this type of business and how others can follow in their footsteps. Statement of Problem: Statement of Problem Why has there been a recent increase in the growth of people running home-based direct sales businesses? Also, what kinds of benefits are available to those who run this type of business? Significance of the Study: Significance of the Study This study is significant because of the increased amount of people pursuing running their own home-based direct sales business. You can now purchase a variety of products through these businesses from jewelry through Silpada , Lia Sophia, and Cookie Lee to kitchen and cooking through Pampered Chef and Tastefully Simple to makeup through Avon and Mary Kay. Consumers are able to easily purchase these products in a variety of ways ranging from home parties to online ordering, which has caused great interest in these companies both for purchasing goods and for pursuing sales opportunities. Assumption of the Study: Assumption of the Study The assumption is that there has been an increased amount of people pursuing home-based direct sales businesses due to the fact that these businesses provide them with additional, supplemental income without interfering with their primary career. Since many of these home-based direct sales businesses offer many ways of selling, these people can choose to sell at home parties on the weekends or through online and/or catalog sales at all times without impacting their career. Limitations of the Study: Limitations of the Study Since this course is shorter than an average course there is a limitation on time. In this limited amount of time the researcher may not be able to gain approval and conduct interviews adequately in order to gain successful and representative research. Setting and Population: Setting and Population This study will be conducted in the researchers home using interviews that took place via email. The population is made up of independent contractors who work for direct sales businesses ranging from kitchen products, to candles, to even make up sales. Data Collection: Data Collection In order to provide adequate time for responses to be collected, especially email responses, the data will be collected over a period of 2 ½ weeks. The researcher will primarily use in person interviews as well as email communication for participants who cannot meet in person. The information gathered in the interviews and surveys will then be analyzed by the researcher to determine if any similar statements were made about reasoning’s for pursuing this career field. Information Learned from the Literature Review: Information Learned from the Literature Review The top 20 direct sales companies based on revenue-grossing out of roughly 2,000 total direct sales companies receive and process over 500,000 new applications each month (Day, 2011) 20% of adults in America currently are or have been a representative for a direct-selling company at some point in their life (Duffy, 2005) 90% of people who own their own home-based direct sales businesses do it part time in order to supplement their income (Seale & Fleming, 2011) Information Learned from the Literature Review Cont.: Information Learned from the Literature Review Cont. Direct sales income varies greatly from $1,500-$4,000 a month for many people to $100,000 a year 80% of independent contractors are women (Seale & Fleming, 2011) 22% of independent contractors in direct sales are over 55 years old (Day, 2011) Findings: Findings What Companies Did I Interview Reps From?: What Companies Did I Interview Reps From? Tastefully Simple Cookie Lee Jewelry Pampered Chef Mary Kay Amway Thirty-One Gifts Close to My Heart Lia Sophia Jewelry Why Did People Become Independent Contractors?: Why Did People Become Independent Contractors? Discounts Loved the products but didn’t have a consultant in her state Wanted to be a stay at home mom while bringing in some extra income Signed up to help sister, who was another consultant, out Flexibility in hours No boss to report to Work when you want Lack of jobs in area and long commute Wanted to share a product I love with others Benefits: Benefits Confidence and Public Speaking Skills Extra Income New Friends Discounts Financial Independence Leadership Role Was able to start a non-profit due to experience and time Gives you a girl’s night out every so often Benefits Cont. : Benefits Cont. Earn free trips Excellent tax benefits Use of a company car Disadvantages: Disadvantages Need to be disciplined Easy to get discouraged Have to be good at time management and following up with clients You are responsible for your success and failures You can spend a great deal of time and effort on one event then not make any sales Even if you build up a sales team and business, once you walk away you now have nothing Having to keep yourself motivated Disadvantages Cont.: Disadvantages Cont. Having to deal with unhappy customers from time to time Struggle to find the time to stay on top of it when you have another job Cannot spend the income until you establish inventory which many new people struggle with Do you enjoy working as an independent contractor?: Do you enjoy working as an independent contractor? All 13 Independent Contractors interviewed said they enjoy working in Direct Sales B ecause no one is telling me how to run my business I enjoy being my own boss I was able to take off 2 ½ weeks when son got sick Part-Time or Full-Time: Part-Time or Full-Time 10 Independent Contractors interviewed do it part-time 1 Independent Contractor interviewed does it online part-time 1 Independent Contractor considers it her full-time job although it’s hard to tell how much time I actually spend on it 1 other Independent Contractor considers herself full time by her company standards and estimates she spends 30 hours per week on business Long-Term or Temporary?: Long-Term or Temporary? 10 Independent Contractors interviewed said they consider it long-term As long as I keep selling enough product to remain an active consultant One has already been doing it for 7 years One has worked hard to build a business, my team, and my reputation One Independent Contractor said she will do it as long as I enjoy doing it One Independent Contractor said she will do it as long as I can One Independent Contractor interviewed said it was temporary and is stopping in January due to time conflicts Advice for Others Interested in Direct Sales: Advice for Others Interested in Direct Sales Find something you are passionate about! The harder you work and the more you put into your business, the better you will do Find a network of support in order to make your business more enjoyable and successful Get to know people and build relationship and the sales and contacts and parties will come Be yourself and be enthusiastic about it Choose a company that gives you the highest commission possible and doesn’t have monthly or quarterly quotas that you are required to meet Advice for Others Interested in Direct Sales Cont.: Advice for Others Interested in Direct Sales Cont. Do your research first Work hard. There is no such thing as a get rich quick thing, but if you put in the time, keep yourself motivated, attend your meetings and learn all you can, you can be successful in anything you have a passion for. Find something you love to do and you will never work a day in your life. Learn the tools of your trade and always be growing your business. Find a company whose message you believe in as well as the products Be prepared to devote time to it even if it’s a part time job Sources: Sources Day, Teresa. (2011). Of the people, by the people, for the people. The Ultimate Social Business Model, pp. 24. Duffy, Dennis L. (2005). Direct selling as the next channel. The Journal of Consumer Marketing, 22(1), 43-45. Seale, Barbara & Fleming, John. (2011). The heart of direct selling: the home. The Ultimate Social Business Model, pp. 27-28. Personal Communication, November 29-December 5, 2012.