Joining A Direct Sale Company

Definition of Consultant
A Consultant is someone brought in for a limited time to solve one or more specific problems. This can be done under a contract for a specific problem or on a longer term contract for ongoing needs related to a specific problem.

{Examples: Business coaching, mediation support, I do believe an appraiser would too be considered an independent consultant}The term consultant is often used interchangeably with the terms independent contractor, freelancer, and vendor.

An Independent Contractor is a person or a business that follows an independent trade, business, or profession in which they provide goods or services to the public. { Truck driver/owner operators,painters, interior decorators, ect.. are included in this area} The business contracting for their services must have the right to control or direct only the result of the work and not the means and methods of accomplishing the result. In other words, they contract for certain work to be done, but do not tell you when, where or how to do the work.

The term independent contractor is often used interchangeably with the terms vendor, freelancer and consultant.

A Vendor is a seller of products or services. Often in contracting with a business or the government, the supplier is called a vendor. The term vendor is often used interchangably with the terms independent contractor, freelancer, and consultant.

Another way the word Vendor is used is to describe a business being run on a street, such as a newspaper vendor.

Direct Selling, or Direct Marketing as it is sometimes called, simply means grass roots, face-to-face distribution of products. It used often to refer to door-to-door selling. {A section on what to ask Direct Sale Representatives is included in our Wholesale/Dropship print booklet}

Multi-Level Marketing (MLM) opportunities seem to be everywhere you turn these days, not only online, but in every part of your life including school and church, where  entrepreneurs lobby even their bible study groups to buy their product or service. Even police departments have been invaded by MLM schemes. The San Diego police department actually had an illegal pyramid scheme discovered within one of its departments!

Equally prevalent are the misconceptions of what this business is and whether it really is a legitimate business or a scam. Trying to find “truth” in this morass of information is a challenge. The appeal of a business with minimal investment and a support system in place cannot be denied. But is this for real? Let’s take a look.

One of the most confusing aspects of assessing the viability of many of the business “opportunities” being hyped is the variety of terms used to describe them. MLM is also frequently called network marketing, consumer direct marketing, or seller assisted marketing and other terms continue to surface.

Multi-Level Marketing
MLM is essentially any business where payouts occur at two or more levels. For instance, if you make a sale, both you and the person who recruited you will get a portion of the proceeds. This is the most commonly used term partly because its definition fits within the legal restrictions for this type of business.

As you can see, even Direct Sale Companies fall into this area, but have a better image due to proper accreditment. On the downside though, there are many companies that get a bad mark due to unreliable representatives/consulants.

Network Marketing
Network Marketing means that a distributor network is needed to build the business. Usually such businesses are also MLM in nature in that payouts also occur at more than one level. The term Network Marketing is sometimes also incorrectly used to indicate that the business uses a network of product suppliers in order to offer a broader selection of products. Businesses that describe themselves this way are usually trying to differentiate themselves, suggesting that their program is superior to other programs.

Consumer Direct Marketing
Consumer Direct Marketing is a deceptive term that labels the distribution chain as consumers rather than distributors. In such businesses the distributor must also buy the product for their personal use.

I have seen and heard this so much over the past year. I am not MLM but when you sign up you end up finding out, you can not purchase or support another area of a business that is in competition with the said company. And you must buy their products to make sales. Now of course that is not all that bad, if you love the products and are in need of them. But to have to keep up a quota in order to make a living really in the end makes you very little money. You will see as  research MLM..Network Marketing that they are not much differnet that alot of direct sale companies.
Seller Assisted Marketing
Seller Assisted Marketing Plans is a term used by California law to describe a variety of business forms which include MLM. A minimum $500 investment must be involved to qualify as a Seller Assisted Marketing Plan.

Here is some information to help you decide if this is a good path for you.

The Legality of Multilevel Marketing

The Truth Behind the Claims

How to Find a Good Multilevel Marketing Business

Questions to Ask Before Investing

Industry Watchdogs

While no one really makes the millions promised by so many of the scams, many people find a very satisfying career in some of the multi-level marketing ventures. With the right company, you may find like-minded colleagues who are pursuing similar goals. In some ways, it can be the best of all worlds — no boss, but a good social network and a job where hard work pays off. However, don’t leap without looking carefully. There are also deep shoals that can draw you in over your head rapidly. If you tiptoe into the water carefully, checking that you have firm footing all the way, you will find yourself swimming happily into entrepreneurship.
http://www.smallbusinessnotes.com/starting/mlminfo.html

Network marketing, also known as multi-level marketing (mlm), is a type of business in which payouts occur at two or more levels.

To decide if network marketing is right for you:

Decide what type of product you would be interested in selling
Identify network marketing businesses that might be of interest.
Eliminate any that have not been in business at least three years.
Eliminate any that are not publicly traded.
Give the business strong consideration if it is part of the Direct Selling Association.
Investigate your state laws on network marketing.
Try a variety of potential products you might choose.
Find out as much as possible about the product and its retail potential.
Ask what type of bonus or commission plan the company offers.
Learn what other benefits such as health insurance may be available through the business.
Talk with as many people as possible about the product, customers as well as sales people.
Research the potential market for this product.
Set up a personal financial plan with goals, checkpoints and how you will decide to quit if this doesn’t work for you.
Choose which company you want to work with and sign on.
Tips:

The internet has become a major source of network marketing spam. Do not join the crowd!
Networking marketing means making sales. Be certain sales is something you want to do.
Don’t believe everything you hear. If it sounds too good to be true, it is.
In network marketing, if you make a sale, both you and the person above you in the organization will get a portion of the proceeds.
http://www.smallbusinessnotes.com/starting/mlm/htnetmkt.html

Consumer Direct Marketing is Network Marketing in which the distribution chain is referred to as consumers rather than distributors. In such businesses the distributor must also buy the product for their personal use.

Related Terms:

Multi-Level Marketing
Network Marketing
Pyramid Scheme

Related Information:

Multilevel Marketing (MLM)
How to Decide If Network Marketing Is Right For You Business Opportunity Scams

Related Books:

Inside Network Marketing
Network Marketing for Dummies
More Books about Multilevel Marketing
http://www.smallbusinessnotes.com/glossary/defcondirectmktg.html

It’s not so hard to see why consumers would be drawn to ads for business opportunities that trumpet “be your own boss,” “set your own hours,” “work from home,” and “earn money quickly.” But the Federal Trade Commission (FTC) says that business opportunity promotions like these often are scams that take consumers’ money and fail to deliver on the promises.

Before investing in any business opportunity, the FTC suggests that consumers:

Look at the ad carefully. If it claims buyers can earn a certain income, it also must give the number and percentage of previous purchasers who achieved the earnings. If an earnings claim is there – but the additional information isn’t – the business opportunity seller is probably violating the law.

Get earnings claims in writing. If the business opportunity costs $500 or more, then the promoter must back up the earnings claim in a written document. It should include the earnings claim, as well as the number and percentage of recent clients who have earned at least as much as the promoter suggested. If it’s a work-at-home or other business opportunity that involves an investment of under $500, ask the promoter to put the earnings information in writing.

If the business opportunity is a franchise, study the disclosure document. Look for a statement about previous purchasers. If the document says there are no previous purchasers but the seller offers a list of references, be careful: the references probably are fake.

Interview each previous purchaser in person, preferably where their business operates. The FTC requires business opportunity promoters to give potential purchasers the names, addresses and phone numbers of at least 10 previous purchasers who live the closest to the potential purchaser. Interviewing previous purchasers helps reduce the risk of being misled by phony references.

Contact the attorney general’s office, state or county consumer protection agency and Better Business Bureau both where the business opportunity promoter is based and where you live to find out whether there is any record of unresolved complaints.

If the business opportunity involves selling products from well-known companies, call the legal department of the company whose merchandise would be promoted. Find out whether the business opportunity and its promoter are affiliated with the company. Ask whether the company has ever threatened trademark action against the promoter.

Consult an attorney, accountant or other business advisor before you make the deal.

Take your time. Promoters of fraudulent business opportunities often use high-pressure sales tactics. But, if the business opportunity is legitimate, it’ll still be around when you’re ready to decide.

http://www.smallbusinessnotes.com/starting/scams.html

 Family-Run Small Business Resources-
There are a variety of small business resources available that have been developed specifically to help families start and operate small businesses. Family business is defined here as businesses who are operated by families or persons in significant personal relationships. Following are some resources available for families who run or want to run a small business

http://www.smallbusinessnotes.com/interests/familybusiness.html

Home-based businesses can either be independent businesses or telecommuting arrangements where individuals work for a major corporation from their home. Telecommuters, by virtue of the fact that they are employees, have a different set of issues than home business owners in terms of income and expenses. However, in terms of time management and office space, they have much in common. Both face similar advantages and disadvantages in working out of their home.

http://www.smallbusinessnotes.com/interests/homebusiness.html

http://www.smallbusinessnotes.com/interests/women.html

Young Entrepreneurs
http://www.smallbusinessnotes.com/interests/youngentrep.html
There are a variety of small business resources available that have been developed specifically to help younger people who start and operate small businesses. Young entrepreneurs are defined here as persons who start a business before they are 25 years of age. Following are some resources available for young people who own or want to own a small business.

This information has been provided by:
Small Business Notes
http://www.smallbusinessnotes.com
 

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