Use Your Direct Sales Business to Make a Profit, Not Give it Away

Direct Sales is a business model for those that work at home or want to supplement their income. One fact that is for sure and is found throughout the industry, is that most people that are in a Direct Sales business are in it for the money, and believe me, there is money to be made in Direct Sales, if it is done correctly.

That is not a profound statement, I know. Anyone is a small business is working it to make money. So why is it that so many Direct Sales business owners struggle to see a profit?

There are a few solid reasons that will kill a business pretty darn quick.
1) Failure to track expenses
2) Failure to track ad placement and where it is working
3) Giving away too much product or worse yet,
4) Giving away discounts or free shipping

The fastest and easiest way to increase and/or keep your profit in any business is to control your expenses. Your expenses are directly correlated to your bottom line. If you normally make 30-40% profit from the sale of an item, but you incur 10-15% in expenses, you have dropped your income substantially.

If you try and increase customer or hostess participation by discounting the price or by giving away free shipping and the like, you are really impacting your bottom line. This money comes right off of your profit and income. You have no way to recoup that money. Use demo items or free goods you earn from your company to encourage participation. These do not impact your bottom line as fast since you can control how much you give to a customer or hostess. And furthermore, these items can be a tax deduction at the end of the year.

Now I am not saying that you should never give a discount, but keep it moderate and maybe only for certain things like a sale once a year or a new customer welcome offer. Keep in mind that any purchases you make in your expense column can be controlled. Set a budget on how much you can afford to spend on your expense items. Monitor your purchases each month to make sure that you are inline. Find other ways to encourage participation in your business that don’t cost you cash.

Always remember you are working your Direct Sales business for profit as well as for fun. Let’s make it profitable fun while we are at it. Step it up to the next level in professionalism and let’s see how much we can earn this year by being in control of our budget and bottom line.

Copyright Chris Carroll All Rights Reserved
Chris Carroll is a sales professional that has made direct sales her business of choice and enjoys sharing with others. You can sign up for tips on managing and increasing your business at her site DirectSalesTalk. You can also find her at her business site ShopOnYourSeat If you would like to use this article for your newsletters or website, all links must be live and clickable.

Controlling Expenses

Expenses are such an important aspect of our business. If you are not careful, you could be spending way more than you make. When we work at home, sometimes it is easy to justify that extra few items we buy for ourselves or the extra gifts that we give out to the hostess or the customer. Discounts can really bite us in a big way.

Tracking your expenses is critical to your bottom line just like any other business. You have to look at everything and see how you can make good desicions about your spending. For instance, if you can get a break on your catalogs buy purchasing in bulk, maybe that is a better way to go.

Every expense is taking away from your profit. If you feel inclined to give someone free shipping because you want the sale, guess what? You paid for that. You better really like her or know that she is a really good customer.

Direct Sellers often feel like they have to compete with the next partier and in order to secure a booking may over do it on gifts or discounts. I have talked about the hostess gift issues before on this post Free or Discount. Remembering that everything comes out of your pocket may help to watch your bottom line. You might as well be writing the customer a check instead of the other way around.

If you don’t have a system in yet, start one today and get control of your income!