3 Factors to Consider When Starting a Direct Selling Business

Apr 3, 2023Sheffield Blog

At the foundation of a direct selling company, there are three major necessary components required for it to operate successfully.

  1. Product Demand – The ideal direct selling product must fulfill a need while offering a cost-effective solution. The products should be priced to match its perceived value, making for easy purchase decisions for the buyer. The benefits of the product should be unparalleled and should incite plenty of confidence and satisfaction in the consumer to what to tell others. It’s essential that the sale of the product or service return a short-term income to the distributor, as well as potential for earning long-term residual revenue.
  2. Compensation Plan – It’s usually assumed that the only reason for a company’s compensation plan is to define how commissions and bonuses are earned, however, the direct selling compensation plan is more than that. A properly designed compensation plan should serve as a roadmap to direct new distributors toward well-defined financial goals that result from personal sales activity while also building their sales organization. (The compensation plan should never reward a distributor for simply recruiting, also known as “head hunting.”) The company should offer training programs, offering education and support tools to help distributors meet their goals. 
  3. Corporate Leadership – As leadership goals, so goes the company. The corporate leadership determines the company’s character and personality and is responsible for maintaining this character and personality throughout the entire organization. The leadership should also be competent to deal with explosive growth which every successful direct selling company experiences. Leadership in network marketing is especially critical to the company’s success. The entire sales and marketing momentum will take its shape, substance and values from the company leadership team.

Direct selling has specific critical areas that are different from traditional businesses. It’s important to manage these factors in order for the business to succeed. Of course, hiring a competent network marketing consultant such as the Sheffield Group is incredibly valuable.