Know Your Business

Usually we speak about these matters to those who are new to direct sales or are looking to possibly get in to direct sales, however, having spoken with quite a few different reps recently; we’ve found that even those who have been involved with direct sales for many years still don’t know the definitions of different terms used. This of course could be for a myriad of reasons such as maybe one particular term doesn’t affect your company, you never asked and your sponsor never mentioned, or you just never knew. Even if a particular term does not affect your company, you could very well be asked by a prospect and you’ll want to know so you can answer this question quickly and easily without a hitch. An even worse case scenario would be that you weren’t aware of a particular rule/regulation and you’ve been going against your company's regulations all along. Not following a company’s regulations could easily be call for dismissal from your company. Remember, not knowing is not an excuse. The following is a list of frequently asked questions/terms and definitions to help you. If you find a question that you can’t answer … find out!

Distributor Kit – Also commonly referred to as a start up kit, rep kit, etc. these are usually a compilation of products, business supplies, brochures etc. These are sometimes offered for new consultants only but are also offered to any consultant. These are usually discounted through a bulk package rather than buying each item individually.

Tax Requirements – Make sure you know what your company’s tax requirements are. It’s also a good idea to do some research online about other states' requirements also. If you do a lot of recruiting online, you’re very likely to have a downline of members all over the country. No one expects you to become a tax pro but, it never hurts to be able to share links with your potential recruits about their particular state so they can do the research themselves. This question is ranked high in the top questions asked.

Sales Quota – Some companies require their representatives to sell/buy a certain amount of merchandise in a certain amount of time. These usually range from monthly, quarterly or yearly. If a consultant does not meet the required quota, some companies will remove that consultant.

Customer Service - Be sure you know exactly how various order problems are handled. Who does the consultant contact and how in this unfortunate event?

Drop Ship – Dropshipping is when a consultant places an order with their company and the company automatically ships the product directly to the customer.

Commission Structure – This is another high-ranked question. Of course everyone wants to know what they’re going to make. Make sure that you clearly understand the commission structure so you can explain it to your potential recruit.

Territory Restrictions – Some companies have territory restrictions, meaning that you may only be able to sell in a certain area. Often this is set up according to towns, counties and sometimes even states.

Hostess Credits/Gifts – These are items or prizes that hostesses can earn/win for holding their parties. What are these prizes/gifts and who is responsible for paying for them?

Inactive Fees – These are fees that might be incurred if a consultant were to go inactive and decided to re-join.

Bonuses – Some companies like to offer added incentives/bonuses to their consultants for maybe when they reach a certain number in sales or reach a certain level with their downline.

Downline – These are the people that you “sponsor” or those who join the company “under you”. These are also known as team members.

Fundraising Opportunities – Many direct sales companies have a separate plan set up especially for organizations, teams etc. so they can earn money for their organization.

Buy Back Policy – Often companies will buy back any unused merchandise that consultants have not been able to sell. As required by the Direct Selling Association, most companies will buy back the unused merchandise at up to 90% of the cost.

Non-Compete Clause – Many direct sales companies have a non-compete clause in place meaning that consultants may not sell for a competing company while representing their own. There are even some that will not allow reps to sell for any other company – competing or not.

Return Policy – Make sure you’re well aware of your company’s return policy.

Advertising Regulations – Some companies will not allow their representatives to advertise online. Some will not allow consultants to mention the company's name or even certain brand names in any advertising.

There are a lot of different rules/regulations that pertain to advertising. Make sure you’re following them.

-----------------
Anita DeFrank & Kara Kelso, authors of Direct Sales Success, specialize in coaching direct sales representatives to reach their goal of becoming successful in their field. Visit http://www.DirectSalesHelpers.com for free weekly tips.