- Business and Employment
Top 5 Direct Selling Companies in North America
The Direct Selling Association
The, "DSA" is an American trade association of about 200 manufacturers and distributors that sell directly to consumers. Their mission is;
"To protect, serve and promote the effectiveness of member companies and the independent business people they represent. To ensure that the marketing by member companies of products and/or the direct sales opportunity is conducted with the highest level of business ethics and service to consumers."
Most important, I will offer a critique of the, "Top 5 Direct Sellers," as given by the Direct Selling News. I have chosen to offer the Top 5 North American Companies for 2011 but also I must say that these companies still fall within the Top 8 in the World. As of this update, after reviewing the 2012 List, all positions from 2011 to 2012 are maintained.
I hope you find it enlightening.
The Logo above is offered courtesy of the Direct Selling Association (www.dsa.org)
One of the Oldest, One of the Best
Avon supports your efforts with very good quality products at reasonable prices. You acquire as many retail Customers as you can then find a few people to sell as well and you receive a percentage of their sales. The first level is to be paid between 20% and 50% on your own sales. At the Unit Leader level, you must acquire 5 new partners who will also create retail sales. For this, you may see a further 3% to 7%. To achieve Advance Unit Leader, you must acquire 12 second level partners and the return is a further 3% to 8%. The Executive Leader level requires a 20 person team and the return is a further 3% to 12%. The final level is Senior Executive Leader and this offers up to 12% commission on the entire team's sales monthly as well as a car allowance.
NOTE: on any compensation plan, figures can change at the discretion of the Company. But this is where Avon is at the time of writing.
Now, Avon is easy to start up with. The cost is minimal at about $10.00. But here is what they do not talk about;
1) What is it that you are selling? With Avon, it is diverse but the products that may be considered an embellishment or a treat. Most of your Customers are not going to buy from you every month so you are going to need a good sized Customer base of ( my thoughts), 50 or 60 people.
2) Is there enough room for me to work with Avon? The bottom line is, yes. But, even though AVON has been around for 125 years, and has a great product offering, people are still coming and going. This is likely due to its business model. There is no company based plan to help you easily keep in touch with your Customers. And this is definitely a relationship-based business, needing a lot of regular and constant contact with your Customers.
So, look at the offerings as a whole. Each month, you must meet minimum sales. That means that there flyers or catalogues to distribute to your Customers, orders to take and process and pay for and then ship or deliver. You do a lot for what you receive, and you need to do it every month.
The Grand Daddy of Direct Sales
Amway has been around since 1950 and was founded by Jay VanAndel and Rich DeVos. Their first product came out in 1959 and now has 450 products in health and beauty, household cleaners, water purification and many others.
As with Avon, you have to sell every month and reach a minimum. Then, you recruit others to do the same and get them to duplicate what you do. Each level has specific requirements, increasing at each level. For instance, a Platinum Leader has to maintain $30,000 a month in sales for 6 months, beyond that, the Precious stone levels, Emerald, Ruby and Diamond require even higher specifications. The bonus compensation depends on you maintaining the requirements for your level and range from 3% to 25%, depending on your level.
The Start Up kit apparently costs $175.00
To sum up, like Avon, there are products that have to be marketed to your Customer Base on a monthly basis. Orders must be collected which will include online worry free orders, emails / calls to discuss Customer needs and receive their orders. You then must pass the orders up to your Direct Distributor and pay for the order before you receive it. Then, the products must be distributed to your Customers or your team members and get them paid for. This is when you receive your profit.
I did have one commenter advise that a lot is done online now, which is fine. The challenge with this is due to the monumental need to be in contact with the Customer constantly to ensure you are going to get refill orders in a timely fashion, and to maximize Customer retention as well as keep the Customer well informed on new products, including demonstrations.
Again, as with Avon, there is a lot of monthly work to do, even with the time saving addition of online ordering and direct delivery. The products are more diverse than Avon but even duplication of your efforts is going to take time away from promoting what you are doing.
A global nutrition and weight management company
Herbalife was founded in 1980 by Mark Hughes. They sold $3.45 Billion in weight loss management products in 2011.
Though this estimate is approximate, to make a reasonable income, you must work up to selling $4,000 in one month or $5,000 in 2 months to reach a Supervisor level and up to 35% in compensation.
But, let's look at this and all other weight management companies out there. Herbalife, Visalus and all the others are competing in one very focused field, weight loss and an even smaller field, weight management, those looking to increase weight and / or muscle mass. There are also a few personal care products. You need to know going in that you are the most successful when you lose all of your Customers. You have a very finite product offering and will have to market and find new Customers all of the time. And, if you have a single Customer who fails using your products, it is very hard to assuage the situation to a positive result.
Entry costs range from $75.00 to about $135.00. However, like most of the Amway offerings, pricing of products are quite high, regardless of the, "concentrated saves," argument.
Mary Kay and Avon, of course are head to head for the cosmetic dollar. Entry cost is $100 but, you have to place a $200 wholesale product order every three months. If you do not do that, you lose your license. So, Mary Kay = you better be very sure of your Customer Base before signing up.
As with Avon and Amway, they do recommend that you "stock" some products. So, even though the entry is minimal, keeping an inventory can be a mental challenge. "I have all this product sitting in my basement / garage / bedroom / spare room / car trunk (not recommended), and it is not being sold / disappearing like I want it to. You are, as I mentioned, going to have to do a lot of upfront marketing to ensure that you have a good Customer base who are going to generate minimal monthly sales.
Again, as with Avon, Amway, Herbalife and Mary Kay, there is a lot of work that has to be put into achieving your sales goals every month. And you have to depend on everyone else in your Team doing the same and staying motivated. Now, where am I going with this? Keep the faith. We still have one more Top Company to review and I will then reveal all.
Products for Every Household
Tupperware has been around in the 1950s. They started the Home Presentation Party. You can start with them for $79.99 for a Business Kit or $119.99 for an Executive Business Kit. They offer three basic compensation levels as an Associate, Manager or Director. However, to maintain Associate level, you must achieve a sales total of $250 in the first four months. See what you need to see here? You need to be pre-committed in most Direct selling companies and have an equally committed Customer base before you sign up. If you enter into a venture without this placed first, you are committing yourself and some of your resources to potential failure.
To be a Manager, your Sales Team needs to show a monthly volume of $2000 and have a personal volume of $500, oh, and sign up three associates. Are you seeing what I am seeing? Compared to the other Companies, these sales volumes are quite a bit lower. But, your compensation will be lower as well. To get to Director, your Team Sales volume needs to be $10,000 per month or more.
Products are relegated to plastic food preparation and storage products.
New Concepts in Direct Marketing
Something New That Allows You to Focus on Growth
Well, we have looked at the five top direct selling companies in North America for 2011. All have product offerings that have got them to the, "Top 5." But will their 50's style marketing keep them there as time goes on? My thoughts tell me that they will either morph to other marketing concepts or die.
So, what alternatives are out there now?
There is one Company that I have personal experience with that I can recommend. However, upfront, I cannot display the company name without jeopardizing my own position with the Company. Having said that, I can talk to individuals. I can share all the information with you, personally, just not in any broadcasted manner.
But hey, don't stop reading. I will not leave you cold on this.
Our Company is presently in 23 countries around the world and 60 new countries are scheduled to come on board in the next few years. So, what "opens" a new country? This Company deals in telecommunications, energy and security. In short, think of just about everything that you write a cheque for every month, we have it covered.
In addition to having our own Internet Service in high speed and cable up to 16 mbps, we also run our own telephone company in both analog and digital modes. To offer cell phones and internet keys, electricity, gas, water heater rentals, security and home automation, we have been asked by huge corporations to represent them. This makes placing their products / services very easy.
Ok, are you ready for the real kicker? As you are placing these products / services, your Customer pays their bills every month. This means that as long as they are using these services, you get paid, every month. You only had to find that Customer once and now, you can spend your time in making further sales and adding new Customers. So, anytime you want a raise, put in the time to add some Customers and that raise is yours.
Would you get that from your Boss?
The only requirement that is important is to keep within the "relationship marketing" paradigm. You need to "know" your Customer. The best business is still done face to face though online sales are improving. There is a very good and important reason for this. Some of our Suppliers have very low Customer retention rates, as low as 45%. Our retention rate is 94%. You can see why they and many more in the future will want us to work with them.
For those interested in looking more seriously and learning about our Company, please contact me through my Profile or contact me here;
- Contact Me Here (Use Contact Seller link below the Big Yellow Button)
Let's take this, one step at a time.