Pyramid Schemes, Scams, Direct Sales And More!

“Are Selling Products A Legit Income??”

I have to say this is one of the most popular questions I get emailed. But the truth is, even I wondered this same thing before getting involved in this business. A few years back, I was approached to join a company, and my instant thought was Pyramid Scheme and scam!! It’s sad that I thought that way, but many people do as unless you are in this business or well educated about it, you just know what you hear. Many of these companies we think are scams, are actually backed by the Better Business Bureau and have been around for many years!!! So today I am going to cover a few of these popular questions, along with how to know if something is legit and the truth about Pyramids.

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Is it Legit?!?!
Direct Sales Companies are VERY legit. They are large companies that chose to pay independent contractors to advertise them instead of using TV adds, Billboards, etc. They are actually helping our economy by putting the money in your pockets vs some very large CEO of a TV station. To find out if a company is legit, you can google them or see if they are registered with the Direct Selling Association. You can also read the reviews about the company online, but remember to only take so much away from those. Job’s are like food, each person has a different preference and different experience so expect to see both good and bad reviews.12004772_995077193889412_9133849978607155890_n
How these companies work, is you advertise their products for them and in return they pay you a commission. Each company has a different pay scale, but in my experience the average is between 10-40%. Finding out what they pay is very important before you begin! Direct Sales companies are very smart, they know people are going to share a product they love, and they encourage that sharing by paying you for it. What better advertisement is their than a happy customer?? I would believe my friends love of a product a lot more than I would a celebrity on TV.
The companies usually require a start up fee, and this is what scares most people. They see that fee and instantly think it’s a scam and they are being robbed. But the truth is, MOST jobs have a start up cost such as background check, uniform, training, etc. With direct sales companies, you want to make sure your cost comes with something!!!!! It should include samples for you, catalogs, brochures, products, a website, product discounts, training, etc. The average cost of a start up kit is around $100 and most have ways for you to make that right back by selling the products in your kit. If the cost is very high, with no products for you, think twice before joining and look more into the company!!! Start up costs are also a tax write off!!! It’s a business investment and you get it back at tax time. The IRS knows direct sales companies are a legit way to make an income.

 

Pyramid Schemes
Pyramid schemes are when one person is on top and makes a lot of money and the people on bottom don’t make hardly anything even though they are doing all the work. These are out there and you want to be careful, but most times they don’t sell any products, more work on just recruiting other people to join. Here are a few signs a company is a Pyramid Scheme and you want to run for the hills.
According to the Direct Selling Association, here is what you should watch for in Pyramid Schemes:
1) Promising lots of money for no work
2) Teaching people to recruit and not sell a product
3) Very large start up costs
4) Not having a product that they sell
5) Having a few people who make a lot of money on top, and a lot of people on the bottom making very little money
For more signs on what might be a pyramid scam, visit the Direct Selling Associations Website
http://www.dsa.org/docs/default-source/direct-selling-facts/legitimatecompanies.pdf?sfvrsn=2

 

 

Pyramid VS. Direct Sales10573_348288578631716_299887124_n
Now to some people, the direct sales business mirrors a pyramid, but the honest truth is in MOST jobs you do have some people higher up. For example, in the school system you have a Principal on top, then teachers, then par pros, then students. In most direct sales companies, you have someone who has been in the company for awhile on top, then your sponsor, then yourself. The people on the top do usually get paid off your income, but to do so they have to keep themselves active AND they have to help their team members. They get paid for having a team and teaching other people to be successful, just like managers do. Just because some people make more on your team in direct sales, does not mean it’s a Pyramid.

As you can see, direct sales are a great and very real way for people to earn an income. In fact, direct sales companies have been around since the 1920’s! They do get a bad reputation though because of the way some people teach their teams to market. If you do it the right way, you can be very successful, make a great income, and have fun all at the same time!!! My #1 tip to be successful is find a product you love and use, and share it, never sell!!!

 

 

 

 

 

Learn more about Direct Sales Companies at http://www.dsa.org/ and http://www.directselling411.com/
Make sure to also check out our Work From Home Directory for a list of legit Direct Sales Companies

Dana

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