Earnings from direct selling are from a distributor’s sales and sales by others the distributor brings to the business. Direct selling can be very rewarding but it takes time and effort to establish a successful business. be wary of “get rich quick” claims and assurances of easy money and passive income.
There is some cost in starting a direct selling business but it is usually small and subsidised to attract people to the industry. Pyramid schemes typically profit from upfront payments for the right to distribute products and recruit others into the scheme. Beware of substantial startup costs and financial incentives for progressing in the scheme.
Direct selling uses innovative multilevel reward structures to encourage and compensate distributor productivity. Be certain you understand the rewards on offer and they only come from selling products. If the commission structure is complicated or difficult to understand there may be a reason for this, so be careful.
Distributors and consumers use the direct selling channel to acquire products for consumption. Be wary of schemes if there is little or no supply of products to consumers. Also be very wary of schemes that encourage distributors to make large inventory purchases.
Recruiting and retaining distributors is important for a successful direct selling business. But success comes primarily from product quality, sales and service. Recruiting new distributors is secondary. Be careful of schemes that focus on recruiting, not selling products.
Reputable direct selling companies will buy-back unsold and marketable inventory at either the purchase or a discounted price. This is a requirement of DSA membership. Be wary of schemes that encourage large inventory purchases without this guarantee.