Are You Making Money in Your Direct Sales Business?

Are you making money in your direct sales or network marketing business?

Really, truly turning a profit?

Sure, you can point to that party you did last night, or those sales you made last weekend, and show the commission you earned as a result of those sales.

But have you considered what it cost you to make those sales? The postage, the business supplies, the product samples you purchased, etc?

A lot of times detractors to our industry say that direct sellers that make very little. But why do some people make only a little? It’s usually one of two things:

  1. They’re not putting in the time.
  2. They’re spending more than they’re making.

If you want to make money in your direct sales or network marketing business, you have to be a good money manager. Just like any other small business, you have to track your income and compare it to your expenses. That will help you make better decisions, and make more income.

For example, if you track, you may notice that you’re spending a lot of your income on product samples and business supplies. By taking a moment to be aware of this, you might decide to host a party yourself to earn free product credit for samples. You might decide to put in a few more hours this month so you hit the level at which you get a credit from your company for business supplies. Those two small decisions might make a big difference in the income you earn that month.

Here’s another example: You’re making some commission on the sales of your team. Yet you’re spending a lot more on gifts and other bells and whistles to motivate them. By realizing this, you might decide to put into place a coaching system, weekly call, or other incentive to encourage greater productivity in your team.

You must get a handle on how much you’re spending, in order to know how much you’re earning. And if it isn’t much, you need to make the changes that will allow you to earn more.

You can’t just guess at how much you’re making. If you’re truly in business, get out a spreadsheet and start tracking. It will help you make better decisions, and make your business more profitable.

How do you keep track of what you earn? Would love to read your thoughts in the comments below.

5 Responses to Are You Making Money in Your Direct Sales Business?
  1. Dawn DeRossett
    December 26, 2013 | 9:09 pm

    You have got to keep track of everything or you will not know how much you are making. You CAN make money in direct sales if you work hard and stay focused. I began working for Origami Owl at the end of August and was a Team Leader in less than 2 months. My first week of December my check was over $1000…That WAS NOT what I actually made…I would still need to take out expenses…but I am doing pretty good considering! 🙂 Thanks for this post!

  2. Michelle Archer
    April 23, 2011 | 8:14 am

    Great topic! You absolutely have to reign in spending! Unit meetings, contests and gifts can get the better of you if you are not careful. I also find that sometimes consultants do not really track what they are making. The last business I was a field consultation for used a wholesale system. So a consultant would stock product. I found time and time again that they would sell a product and SPEND all of the cash instead of holding have back for restocking! Then when it came time to replenish their stock, they had no money. They would inevitably tell their husband that they had to place an order out of the joint account . All the hubbys see is money leaving their account. They don’t see the $40 in gas, the lunch money for school, the new shoes….. I always try and impress upon consultants “Don’t embezzle from yourself”!
    Michelle Archer recently posted..Time Management

  3. Linda Rekart
    April 23, 2011 | 7:35 am

    Gtreat Post!!! I was not keeping track of my expenses and I got myself into a financial bind. Also, I found that the MLM company has a terminatiion clause in their comp plan so I am quitting. Would love to hear your reviews of comp plans!!!

  4. NooraK
    April 22, 2011 | 1:55 pm

    I’ve had a separate account for my business from the start. My commissions are deposited in there, and anything for my business is spent from there. If there is no money in that account to spend on supplies, then I’m not getting supplies. That means I do have to plan ahead, but it also means I won’t spend more than I’ve earned.

  5. Jay
    April 22, 2011 | 11:22 am

    Because I own a couple regular business ventures I know that it takes some expense early on to turn a later profit. I spent over $7000.00 in a previous MLM to earn less than $500.00 in commissions. It took the better part of the year to know that was going nowhere! I quit that one the first year when they reduced the comp plan.

    In my current business I spent a lot on tools giving them to downline but this was expensive to do when they would not even use them. I was giving $60 to $100.00 in tools 4 Levels deep to get people a head start but no longer have to do this
    because our company made up a booklet with everything we need that can be purchased cheaply in bulk reducing our costs to about $10.00 then they give one of these books in the startup welcome kit to pass on. This cut my cost significantly! If that new person signs up another person as a paid member They have 1 to give and I will give them another if they sign up a second person! Our increased comp plan makes this easier to do.

    I have a full showcase devoted to motivational materials and resell this at cost to those interested in self help and motivation. It took me some time to learn that most will not utilize free materials.

    This year due to several changes I should earn a lot more! My new CPA used to work as an IRS auditor and knows the rules! He works for ME and that is a very important consideration as opposed to an untrained backroom tax person in what is legit and what is foolhardy! I have friends getting bad advice from cheap tax help that is not only dangerous but sometimes costly.

    Thanks again for the great posts!
    J.

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