Kids In Biz

Who Says Kids Can't Make Money?

Is a Direct Sales Party Plan Business a Good Choice for a Teen?

by Linda Stacy

Becoming a direct sales consultant is one of the easiest and least expensive ways to start a home business. And with so many choices for kids direct sales companies, it may be a very good option for an entrepreneurial teen.

What is direct sales?

In direct sales, products or services are sold by an independent sales person rather than distributed through retail locations (stores). We are really talking about the party plan companies, where products are sold at home parties and through other direct sales methods including online sales, fundraisers, and craft fairs and flea markets. Direct sales consultants earn a commission forkids direct sales companies each sale to their customers. Commissions are usually calculated as a percentage of the product’s price as set by the company.

Is direct sales right for you?

The big advantage of choosing to become a direct sales consultant is that the company handles many of the more daunting tasks of starting and running a business, while you concentrate on selling. You set your own hours, control your financial investment, and decide which selling and advertising methods to use. The company takes care of inventory, shipping, credit card processing, sales taxes, and developing and printing catalogs, brochures, and other business forms. Many companies also offer an ecommerce website, extensive training and support, bonus and incentive programs, and handle customer support, refunds, and exchanges.

How to select a company

Direct sales no longer just about makeup and food storage parties. There are hundreds of choices including clothing, purses, jewelry, gourmet food, toys and books, crafts, scrapbook supplies, candles, pet products, and wellness products.

Start the selection process by thinking about who you will sell to. Who will be your customers – your target market? If you are going to do most of your selling in person your primary market will most likely be other teens. Think about what you and your friends like to buy and how much money you have to spend.

If you are going to market primarily online, you can expand your target audience a little wider, but you should still stick with selling products you like and use yourself. It’s much easier to sell something you are enthusiastic about and much easier to sell it to people you can relate to.

Some companies sell products designed specifically for teens. Avon’s Mark division and the Mineral Girlz company are two examples of cosmetic companies focusing on the teen market. Other choices that might appeal to the younger market in particular are purses, jewelry, and personalized products. Visit DirectSalesDirectories.com to find information on these and many other direct sales party plan companies.

Other factors to take into consideration when choosing a company:

  • Consider choosing a consumable product (such as makeup) so you’ll have repeat customers. If you sell a product that most people will only buy once or twice you’ll continually have to find new customers.
  • Can you take time off without losing your status? Some companies require a minimum monthly or quarterly sales volume in order to receive commissions. If school gets particularly busy or you have an obligation to a summer job, make sure you won’t lose your status if your sales volume drops for a period of time.
  • Be sure to consider all the ongoing costs of the business. The initial starter kit is usually very affordable, but will you have to replenish samples and buy catalogs and other business tools? Also, if you are going to market online, we recommend setting up your own website (in addition to the one provided by the company) so you will have domain and hosting costs.
  • Compare earnings potential, not just commission percentages. While a 40% sales commission sounds better than a 25% commission, the price of the products makes a big difference. On an average product price of $10, 40% commission is $4. On an average price of $25, 25% commission is $6.25.
  • Most companies also offer incentives for consultants to recruit others to join, so there is a potential to earn additional commissions or bonuses when you build a team.
  • A parent will probably have to join the company along with the teen, so talk to company executives to make sure they’ll support the arrangement. And find out if the consultant agreement and assigned customers can be transferred in case the business is turned over to the teen alone someday.
  • If you intend to market primarily online, you will have the most success with your own online presence (a website, blog, or lead capture page). Many companies provide a replicated consultant website which they want you to use for all of your online efforts. The provided site is great for processing sales, but be sure the company permits the use of your own site for online marketing.

Getting Started

Once you decide on a company you will either choose or be assigned a sponsor – another consultant in the company who will help you learn the business. It can be tricky to select a sponsor. You will probably be encouraged to sign under the first company consultant you contacted, but I suggest talking with at least one other potential sponsor. Find someone that you feel will provide the type of help and support you need. In your first contact with any consultant, explain that you will be interviewing other potential sponsors from their company so she isn’t surprised and overly disappointed if you join under someone else.

After choosing a company and sponsor you will be asked to purchase a starter kit and sign an agreement which spells out each parties rights and responsibilities. In most cases the company requires that you be at least 18 years old to sign up, so a parent or guardian will need to partner with teens in their business.

The starter kit may contain products and samples, catalogs, brochures, order forms, other business forms, and training materials. Be sure you know what you are getting and whether or not the kit contents can be returned for a refund if something happens and you decide not to continue with the business. Starter kits are usually very affordable, companies often offer sign up specials, and some companies have a way for you to earn your kit.

In addition to the consultant agreement, the company will probably also provide you with written policies and procedures that you must follow in order to continue selling their products. Be sure to obtain and understand these policies before signing up to make sure your plans for running your business are in keeping with these policies. For example, some companies restrict online advertising and selling so if you plan on running your business online you will want to avoid those companies that prohibit it.

It’s Fun and Hard Work

Starting your own business is exciting, fun, and rewarding. And it’s more than financial rewards. The interpersonal and entrepreneurial skills, self-confidence, and sense of accomplishment you develop will serve you in all your future endeavors. But don’t forget, even though becoming a direct sales consultant is one of the easiest ways to get started, it takes work and perseverance to become successful.

With the right attitude, the right mentors, and the right products you can do it! Enjoy!

Resources:

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Learn how Linda Stacy helps direct sales consultants generate leads and build their teams online at LindaStacy.com.

Kids direct sales companies not your thing?  Download our ebook, Kids Business Ideas, to get more ideas for beginning your own business.

 

Category: Kid Businesses