Top 6 Reasons Why Direct Selling Businesses Work

A lot of people have been arguing for decades why direct selling businesses cannot or will not work. But the fact remains that it is one of the most prominent types of businesses and it has existed for almost a century. In fact companies like Amway and Tupperware are actually older than Microsoft and Apple. Even after all those nay-sayers running amok, several MLM and direct selling companies are listing growth and profit every year. This made me question the basic premises on which the negative arguments stand.

direct selling busienss owners

Before I delve deeper into the discussion, let’s understand a fact that there are many cheat and fraud MLM and direct selling companies out there. The points I am going to make will help you find the companies which are legitimate and actually make the partners gain profit. A basic observation though. There have been several Ponzi schemes and fraud “chit funds” that have swindled common people out of their heard earned money for centuries. But there seems to be much less awareness about these fraud financial companies than the direct selling businesses.

1) Legitimate Direct Selling Businesses Require Small Fees To Join:

On an average, it does not take more than 30 to 100 USD to join a direct selling business. At least that is what the legitimate ones charge. If a company is asking for more than that, there is a high chance of fraudulent activity. The more money you invest in a business, the harder it is to break even and it is true for all forms of businesses. MLMs that require a small fee to join allows people to recover their amounts fast and easily.

direct selling buisnesses

2) Only 3% People Succeed In Direct Selling Business For A Reason:

It is one of the pet figures of anti-MLM people who use it as a tool to prove that this type of business is not for common people (read honest people). However, this low percentage is there for a reason. Do we know how many shops, restaurants and other businesses open and close each year? The numbers are surely staggering. The best thing about MLM businesses is that anybody can join the business for a small fee without any interviews, exams and such. Hence, a lot of people join these companies out of a whim and then do not follow through. If there were stringent joining procedures in place, the percentage of successful people in MLMs would have been much higher.

3) People Do Not Use Their Common Senses:

I have seen many people buy a huge number of products after joining a direct selling business in the hopes of selling it for profit. But the funny thing is that a business does not run on hope, it runs on calculation. I have seen many people lose large amounts of money by doing this and then blame the business. Well, play it smart and buy only the amount you are sure you can move or buy them when someone places an order.

direct selling

4) Don’t Fall For Fake Promises:

If you are promised that you will make thousands of dollars within just a couple of months of joining the business and roll in money within a year, there is plenty to be suspicious about. If you still decide to join that business and then the business turns out to be a scam, do not go blaming all the direct selling businesses. Only join those which guarantee profit through hard work and dedicated effort and that too in believable amounts.

5) Pyramid Schemes And MLMs Are Not Same:

Pyramid schemes pay you money for presenting the business plan to someone and inspiring him to be a part of the business. Legitimate direct selling business will never offer you money if someone joins the business using your recommendation. Profits in the real ones are always linked to the amount of products you move or amount of business you generate for the company. There are no freebies.

direct selling business growth

6) Make Sure That The Products Are Genuine And Marketable:

If you are approached by two business where one has a “Wonder Disk” that purifies water, increases energy when someone holds it and calms the mind when placed on head and another company that has a “Health Drink” which is bio-organically manufactured and has all the nutrients clearly mentioned on the label, which company do you trust or join? The decision is simple right? Well, the reality is quite different. A lot of people join companies with suspicious products and when they fail, they blame the direct selling business on a whole.

It does not take much money to join a direct selling business or to become successful in it. All it take is to tread a bit carefully and apply some common sense. In a study, almost 90% business owners of legitimate direct selling companies expressed that they were happy with the business model and experience. So next time you come across a negative article about direct selling, use your brain and question the points with an open mind.

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About Soumyajit DasMazumdar

Soumyajit is a software engineer with a flare for writing. He loves to experience new things in life. Gaming, travelling and cooking are his passions. Catch him on Facebook, Twitter or on his Google+ account!

Posted on September 13, 2013, in Business, My Take, Tutorials and tagged , , , , , , , . Bookmark the permalink. 3 Comments.

  1. I have been a part of Amway and from my experience, I can say that some people also fail because of the inefficiency of the folks who have ushered them to join..but that doesn’t make the company business model bad..another person in another group of the company may be hugely successful because of the strong and effective assistance of the folks who brought him to the business. So, if you want to create an opinion about a direct selling company, dont just listen to one failed man..listen to the successful men as well.

    • Absolutely and that should be a lesson for life too. After all, we always look at successful people in our class or job but search for the failures when it comes to business (not only direct selling business). This practice has to stop.

  2. I have to disagree with the writer in regard to the start up cost. I am a Bedroom Kandi Boutique Parties Consultant and the start up cost is $499. I earned $1000 for myself in the first 30 days. I definitely agree with #2..ppl tend to join and let an extra line of income collect dust…nature of the business..what’s nice about DS is that you can pick it up when you’re ready. Some hit the ground running and others use the slow and steady wins the race approach. I agree with #3 and I enjoy the fact that the company I sell for doesn’t require us to carry inventory..we are completely drop ship, I only spend money when actual orders are placed and I take my profit off the top. I have done other DS and ended up stuck with product that went to waste. #4 I completely agree with as well. What you put into your DS business is what you get out. I share my success but always with the fact that I am really passionate and willing to work for it. #5 I agree again…never really cared for that type of business approach…some ppl love it but it’s just not for me. I agree with #6 because I feel with approaching any type of business venture, you should be able to make an informed decision.write down a list of questions and try to get them answered. If all of your questions are favorably answered then that business may be a good fit

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