How to Set Up a Direct Sales Company

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Set up a direct sales company by considering sales experience, determining how attractive you are as a sales person, thinking about customer base and learning about competition. Determine the cost factor of starting a direct sales company with advice from a marketing and sales management professor in this free video on small business.

Part of the Video Series: Small Business Tips
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Video Transcript

Hi, my name is Mark, and we're going to look at the operation...the setting up of a direct sales company. The first question that comes to my mind, and this is basically: Have you ever sold anything before? Because it's a very competitive market out there, and bearing in mind that the only income you're going to generate is through your sales. You need to consider whether you have enough experience or persistent enough to be successful at this. And of course, how attractive you are as a potential sales agent for the company you want to represent. Again, it might be that you've worked for this organization for many years and you decide that you want to do this for yourself and, therefore, there might not be any issue. It's just that you're working for yourself rather than being a paid employee. So you need to think about these issues. And then you have to say to yourself, "Well, that might not be the case. I just want to work for myself in selling you something, either I'm good at or I'd like to do or I have experience with." Then there's the case of what is it you're going to sell. Is it a product? Is it a service? Is it a national product? Is it a local product? What is it? And do you know where you're going to start -- who your customer potentially...customer base would be? Maybe you already have an existing customer base. There are many questions that go through my mind. The other thing is, of course, is this going to be a sole representation, maybe for a territory or are you just going to be an agent because that will obviously have an effect. If you're the sole representative of company X in territory Y, that might be a very big potential. It might be that you're one of 20 agents. It really depends on what it is you're selling. How competitive are these products or services you're going to sell? Do you feel confident enough and the...obviously, the confidence will reflect your manner and the way you communicate with a potential customer. This makes a big difference. What is it...the cost factor of setting up? Do you need to buy stock? Do you need to set up your own little warehouse? Do you need to buy these products and services beforehand or can you sell them and then deliver them? What is the setup and the cost to you that you need to consider? And of course, if you already have an existing or if you've built up an existing database -- customer base -- and you may be decide you want to take on more products to represent, are you going to sell those products down to the same customer base? Will your credibility be intact by selling other products or services, or do people believe in you enough to believe that you're selling quality or valuable products and services? So what I'd suggest you do is think about all of these things. Practice starting up. But if you...if you know the answer to all of this, then all I can say is good luck.


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