Starting your own business is no easy task. However, direct sales or party plan companies are a fast and easy way to get up and running. However, there are some things you will want to find out while doing your research so we thought we'd go to the experts to find out exactly what you need to know.
So we picked the brains of the girls from PartyPlanCompanies.com for their top 15 tips for choosing a party plan company. Here's their wisdom:
1. What is your interest in the product line? Scan the catalogue. How many items would you purchase? If you don't like the products, how can you sell them? Your love of the products will show in your demonstrations.
2. What are the average sales at home parties? A lot of companies advertise high commission rates, but if your average sales are low, high commissions mean nothing. You could determine what the national average is, but it will be more relevant to you to find out what the average is in your area.
3. Are the prices competitive? Would you pay the price they are asking for an item? Ask others to look at the catalogue. Would they pay those prices?
4. Do the products appeal to a wide range of people? While it might be great to sell toys or children's books, would that limit your customer base, especially in your area? So think carefully about what are your local demographics and what would appeal to them.
5. Can you understand the compensation plan without someone explaining it? If not, you may want to look elsewhere. Companies often make the payment structure so complicated that you never know if you are being paid correctly. You might also want to check into the management override. This is normally where big complications begin. Remember, you may want to be a manager at some point in the future.
6. What is the cost for becoming a consultant? Often those investigating the company just ask what the kit(s) costs. However, you should be asking about all the other associated costs, such as catalogues, promotional materials, paper supplies, who pays for the hostess incentives and how often there are reoccurring costs.
7. What kind of fees will the company pass on to you? To help you get started here is a partial list of fees which may be charged to you by the company:
a. Credit card fees: For each customer who charges their order, they charge you a percent of the sale.
b. Order processing fee: You will be charged a fee every time you submit a party to the company.
c. Catalogues and paper supplies: catalogues and paper supplies are not free to produce, does the company pass this cost on to you.
d. Inventory: Are you required to keep merchandise on hand to fulfill orders on the spot?
e. Bank fees: Returned cheque fees will apply if you have to collect payment from a customer for a cheque returned to your account. The company will most likely send that fee back to you.
f. Renewal fees: Ask if there is a yearly or monthly fee for keeping your status in the company.
g. Hostess incentive merchandise and discounted items: These types of expenses will most likely come out of your pocket. However, every company has a unique way of dealing with this issue, so be sure and find out exactly who pays for what.
h. How often do new catalogue updates come out and are your required to purchase them each time?
i. As a representative, can you claim a discount on your personal orders? Can you purchase demo items at a discount to add to your demo table?
Those are just a few of the more common fees companies may charge each representative. Always be sure to ask what other costs there will be for you to run your business.
8. What kind of support system do they have? As a new representative, you will need some coaching so that you will be able to learn the ropes quickly and efficiently. Ask if you will have a manager or sponsor nearby to help you out. Also ask if the company has a representative's toll-free number or online real-time chat when you need help. A strong education system can make the world of difference to your selling skills and business building abilities - it is a real investment in you if it's there and you take advantage of it.
9. Does the hostess plan appeal to you (think of yourself as a hostess)? If you don't like it, chances are that you won't book many parties because others won't see great incentives either. Hostess plans should reward their hostesses with a good selection of free and/or discounted product chosen to help you book more parties.
10. How old is the company? The older they are, the more likely they will be around for some years to come. However, just because a company is just starting out does not mean it is a bad choice, it only is a signal that you might want to check them out more carefully before signing up.
11. How many other representatives are in your area? If the market is saturated with this particular company, you might want to check out other companies. Be sure to ask for your local city or region rather than statewide. Often there will be a lot in your state, but few in your region or city.
12. What are the company's special incentives and awards for their representatives? Find out what you have to do to earn them, and how contests are run. They might tell you that you can earn a cruise, but not tell you how. Find out the details. Once you have than information, you can then determine if it is even feasible. Would it be a realistic goal to earn a cruise if you have to do $40,000 in sales in 6 months?
13. What is the time frame for presenting a party, including packing up, set up, demo time, breaking down, packing up breakables, paperwork time, delivery of products, and so forth?
14. How does the company handle refunds? Is it done directly with the customer or are you required to obtain the defective item from the customer and have a new one sent out. Do you have to send back the defective item?
15. How often does the product line change and by how much? Will you be required to update your demo table with new items, and if so, how often?
You should try to get the answers to these questions before you can make a decision that will fit you, you financial expectations and your lifestyle.
If the company refuses to answer any of these question, or skirts around any issue you are asking about, you better think twice about them. You can also research companies via online forums and groups to find out what sort of experiences others have to share - both positive and negative.
The bottom line is this: You are checking out this company to increase your income. Of course, they want to sign you up because they want to make money, too. But if the company is hiding anything addressed above, you very well may not make the income you desire.