Benefits of Direct Sales Company v. Traditional Business

Benefits to a direct sales company? But aren’t they all scams?

*Disclaimer-I am not a professional in these areas this is my experience*

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I know that’s what many people think about them, and I get it. Being in one of those companies I can tell you I’ve felt the same way a time or two.

But it’s not! It’s a business like any other. Trust me, if there is something to be thought about, I’ve thought about it.

The biggest difference in my opinion is the low-cost to entry and maintain.

But you have to order x-amount every so many months!

Yea…but you don’t have like any overhead.

But you have to maintain this status!

Kind of, sometimes, not really. Yes, if you want to continue selling there will be minimum orders usually but if you choose to close your business it’s usually not a big deal.

I was a Food and Beverage Manager of a hotel for over two years. And I’ll be the first to tell you that I knew NOTHING about what I had to do. I became the supervisor of the coffee shop, when I thought it would be of the restaurant. No big deal, right?

WRONG. It’s the same idea but not. The restaurant made complete sense to me, I’d spent nearly a decade in the industry at that point. I knew what it took to maintain. Cleaning schedules, soda syrups, straws, plates, the food, etc. You have to pay the employees, yourself, buy the supplies and stay within budget.

Except I knew nothing about the coffee shop. I didn’t know how much the coffee cost. I didn’t know that they sent new cups, signs, and etc. quarterly. Personally, I didn’t know how to accommodate those costs into my budget, because I didn’t know they existed until they started happening.

That’s how a lot of people feel at first but it’s one of the benefits of a direct sales company.

It is your business. Of course, there are some ‘overheads’ as well as there are some unavoidable expenses but it’s all on you.

For instance, in the coffee shop that I managed, I couldn’t choose what cups we put out, how we put them out, what coffee we sold, what we paid the employees, and so on. My food costs that were supposed to be under 30% were usually hovering close to 50%.

What does that mean? That meant that I was spending SO much of my budget on food (and wasting a bunch of it) because I had little choice in what we sold, when we sold it, and how. Sure, I could discount things, but no one bought certain things at my location because it wasn’t that type of place! This meant that I had little money left over in my budget for things like raises for my employees, replacing old equipment, or updating uniforms, and the like. Trust me, that’s a huge benefit of a direct sales company.

What does that mean for direct sales? That means that in an average business your paying for your…

  • Payroll Company
  • Payroll
  • Lights
  • Sewer
  • Water
  • Gas/Heat/Air
  • Licenses
  • Uniforms
  • Food
  • Drinks
  • Computers
  • Internet
  • Business cards
  • Advertising
  • Ink/Paper/etc.

And so much more!!!

Unfortunately, there were times we would just stay closed when staff called out because it cost more to open than to just stay closed.

The costs for a direct sales company…

  • Products-yes sometimes there is a minimum to maintain status
  • Postage-shipping (usually a tax write-off)
  • Samples (usually a tax write-off)
  • Business cards/other advertising (usually a tax write-off)
  • Ink/paper (usually a tax write-off)
  • Gas (usually a tax write-off)
  • Wear and tear on your car (usually a tax write-off)

So, for all of the things you do pay for, a lot of it can be considered a tax write-off because they are business expenses. But again, it is your business.

Meaning, do you want or need business cards? That’s up to you. What products are you going to order? It makes sense to buy the seasonal things that the company is currently recommending, sure, but it’s up to you. If you want to close your business, just stop buying things.

With a regular business it can be difficult even to close. With the coffee shop I managed we did end up closing and changing the name and direction of the coffee shop altogether.

We had to sell off what we could, return what we had to, buy new items to replace what we had to return, paint, tile, get a new sign, and more. All of which cost money.

A lot of those expenses could not be avoided in the business that we were in. There are the same unavoidable expenses in direct sales as well but you at least have a little more freedom.

Freedom is the name of the game for being a business owner anyway. Everyone wants to be able to decide when they wake up, get dressed and how they work everyday. For blogging, I don’t have to get out of pajamas, and the same can be true for my direct sales company as well. That is partially why I chose them as the business ventures for me.

So now, what about you? If you’ve ever considered blogging check out why I did.

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