How to Start a Direct Sales Company

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Mary Kay Cosmetics, Herbalife and Amway are all examples of direct sales companies. The founders of these companies knew there was a need for their products and fulfilled it. Anyone who wants to start their own direct sales company today must have a significant amount of capital on hand, or they need to develop a thorough business plan to get financing from a bank.

Things You'll Need

  • Start-up capital
  • Business plan
  • Manufacturer or wholesaler
  • Digital camera
  • Retail catalog
  • Retail price sheet
  • Retail order form
  • Retail website
  • Sales letter
  • Brochure
  • Wholesale catalog
  • Wholesale price sheet
  • Wholesale order form
  • Self-replicating websites
  • multi-level marketing software

Starting a Direct Sales Company

  • Think of the types of products that you would like to sell. Go online and see if anyone is selling those products via direct sales plans. Study their products, selling methods and compensation plan. Find out if they dropship or mail individual orders to their distributor's customers. Consider becoming a distributor and learning about the direct selling business before venturing off on your own.

  • Determine the products in which you want to start. Search the Internet for wholesalers and distributors for those products. Check the USA Wholesalers And American Suppliers directory for potential wholesalers or manufacturers for said products. Select a wholesaler or manufacturer that provides the lowest unit cost and dropshipping services.

  • Order some sample products from your wholesaler or manufacturer along with catalogs. Determine the retail prices for products, marking them up enough so that they can be sold for a profit to distributors or sub-wholesalers. Create price sheet for the products along with an order form.

  • Decide on potential selling plans for your business, including party plans, Internet or mail order. Hold a party for family and friends to get started. Get referrals at your first party and start increasing your amount of shows. Hold some fundraisers through your church and local schools. Distribute catalogs and order forms at dentist and doctor's offices, auto repair places and other high traffic areas that have waiting rooms.

  • Take pictures of your products and write summaries for each one. Hire someone to design a website for your retail sales. Market your website through search engines such as Google.com, Yahoo.com and Altavista.com.

  • Develop a business plan for your distributors. Set a commission structure that allows distributors to purchase products for 25 percent to 40 percent off the retail price. Build a small percentage in so that you make a percentage off each distributor's sales. Order some multi-level marketing software so you can also develop a multi-level commission structure several levels deep. (See resource 3.)

  • Hire a copywriter to create a sales letter, brochure and wholesale catalog, price list and order form for recruiting potential distributors into your business. Have your website designer develop a special website for recruiting distributors. Inform the website designer that you want that website to be self-replicating for distributors as they join your business.

  • Place classified ads in newspapers, business opportunity magazines and tabloids to recruit distributors for your business. Send a sales letter and brochures to people who respond to your ads. Market your wholesaling website through search engines.

Tips & Warnings

  • It is best to start out selling retail in order to determine which methods work. Later, start focusing on building a distributor network and drop all retail sales, except for the Internet. You will be plenty busy filling orders and mailing out distributor packages. Employ family members as the company grows. Work from home until an office is needed.

References

  • Photo Credit Group of business people working together in the office. image by Andrey Kiselev from Fotolia.com
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