Archives For July 2012

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Let’s debunk the “Pyramid Scheme” Misconception

Consultants, how many times have you heard it? “That’s another one of those pyramid schemes, right?” “That’s just a pyramid scheme!” When you’re excited about your new direct sales business, this kind of talk takes the wind right out of your sails. Husbands: if your wife has recently started in direct sales, you should spend a little time educating yourself about this before you say something hurtful or harmful. You might have said something like this already. It’s time to exorcise those thoughts through the process of education.

Pyramid Schemes

What is a pyramid scheme? Here’s an interesting article discussing them, but basically they are an investment “scheme” where you make your money by recruiting people to “invest” money which is paid to their recruiter. They, in turn, do the same, and that’s how they “get their money back.” The more people they “recruit” the more money they make.  It can’t go on forever. There is no business model to this. It’s just an organized scheme and the earlier you are in the process, the more likely you are to earn something. They’re illegal in most countries. They’re kind of similar to a Ponzi scheme which has made the news recently.

The Direct Sales Business Model

How do pyramid schemes differ from direct sales? There’s a HUGE difference! Direct sales consultants run a business! This is a legitimate business model which has proven itself over time. Much like any “franchise” there is some initial investment to get started. In the case of Thirty-One Gifts, that can be as low as $99. In return for that, they get a product kit (which is worth more than the $99 anyway) and the opportunity to sell the company’s product themselves. They do not make money directly through recruiting others to the company.

The vast majority of consultants, even successful ones, make the majority of their money in direct sales through selling the company’s product to customers and earning a commission from those sales. There is huge benefit in recruiting new members to their team, though they do not make money just from the recruiting process itself. They DO earn commission on the sales of their recruits, however. And they are earning that money by training their recruits on how to run their business productively, keeping them engaged, informing them of news from the company, and many other duties and responsibilities.

The greatest income earners in direct sales are those individuals who develop a large team. In addition to earning a commission from their personal sales (usually 25-30%), they have the opportunity to earn a small percentage on the sales of the people they recruit to their team (usually 5-10%). As their recruits get recruits of their own, they too are part of the team and there’s a small percentage on their sales, too.

In Thirty-One, there are different levels in the company. This is going to be present in every company, probably with different name titles and commission percentages.

• A Consultant is a person who has joined up to sell.

• A Qualified Consultant has had at least $1000 in personal sales volume since signing with the company.

• A Senior Consultant has 2 or more personal recruits who become qualified. They get 2% commission on their recruits’ sales, in addition to 25% on their personal sales.

• A Director has at least 4 personal recruits who become qualified, and their whole team has to have at least $4000 each month. In return for maintaining those qualifications, directors earn 28% on personal sales and get 3% commission on their team’s sales.

• A Senior Director is a Director who has a number of recruits and at least 2 of them become Directors themselves. They have to meet the director’s number above, but also have to have at least $12,000 in total volume in their team and the teams of their Directors. They get 30% on their personal volume, 5% on their team’s sales volume, and 3% on their Directors’ teams’ volume. They also get 2% on any director’s teams that are in their directors’ teams.

Executive Directors have 4 Directors under them and have to have $20,000 in their total downline volume. Their personal commission improves to 32% and their commission on their team sales goes up to 7%.

Senior Executive Directors have 8 Directors under them, $36,000 in total downline sales. They top out at 34% personal commission and 9% commission on their personal team volume.

Question

Consultants: How many times have you heard those questions about the “pyramid scheme?”

Husbands: What do you think about the business model? Is it different than you thought? What level consultant is your wife?

Screwed!: How China, Russia, the EU, and Other Foreign Countries Screw the United States, How Our Own Leaders Help Them Do It . . . and What We Can Do About ItScrewed!: How China, Russia, the EU, and Other Foreign Countries Screw the United States, How Our Own Leaders Help Them Do It . . . and What We Can Do About It by Dick Morris

My rating: 4 of 5 stars

This book was packed with useful information. It covers topics that include Treaties and how they trump U.S. law and potential our nation’s sovereignty, the World Bank and IMF and how they may affect our financial future, our relationship with Pakistan and Afghanistan, Financial aid given by the world bank and by the U.S. and how corrupted it is. Finally he discusses the lobbying trade that so strongly affects our country in ways you probably haven’t realized. It’s pretty damning of our political system and professional politicians, yet receives so little attention.

All of that has the potential to be good, useful reading. The problem is the way it is presented. Although the writing style keeps the book flowing well, it also comes across as very… biased. Maybe “snarky” is the better term for it. The information in this book is the kind of stuff that every American should learn about. It is important. But, much like anything Ann Coulter writes, the way this is written essentially precludes anyone reading this who is not a regular Fox News watcher. Which is sad and disappointing. I’m straight-up libertarian, so I can handle it. But anyone less than a 7 out of 10 on the “conservative” scale is probably going to read this book and refute the data they present just based on the presentation alone (again, just like Coulter). What’s the point in that?

I give this book 4 stars because the information is critical and extremely timely. If you can get through the propaganda, you’ll probably see that too. If you can’t, you’ll probably think the whole thing is just political propaganda and ignore the risks outlined in the book. For me, 3.5 stars is probably closer to reality for this one.

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What’s the first thing you’ll probably hear when you mention your direct sales company to someone else? There’s a good chance it’s going to be something along the lines of: “Oh, that’s one of those ‘pyramid schemes,’ right?”

Hopefully we’ll be able to clear this misconception up a little in this post.

There are two major “types” of direct sales companies, and they have somewhat different “models” of their business, both still based on relationships:

Party Plan Companies

Companies that utilize “parties” as their primary sales platform. Consultants will ask their friends to host a party for them where they can show their goods and give the girls who come an opportunity to shop and mingle. The hostess will invite her other friends and they might even invite their other friends. The party may have a theme, like a martini party, wine tasting, a fiesta, a dinner party, or anything else the hostess thinks up. Those girls get quite creative! Examples of party plan companies are Thirty-One Gifts, Pampered Chef, Tupperware, & Cookie Lee, to name a few. 98% of PP consultants are female.

She earns commission on her personal sales at these parties. The hostess gets special incentives (like exclusive products, free items, etc.) for hosting and inviting her friends. The customers get to shop, interact with each other, and have a good time doing it. Often the consultant will give door prizes as well. If one of the customers has a good time and wants to host a party of her own to get those special rewards, all the better. Even better if she likes the experience enough to sign up as a consultant herself!

As the consultant builds a team, she will earn a small percentage of the sales of the girl on her team as well. She may get 5% on her personal recruits’ sales. She’ll get smaller percentages as the downline gets deeper.

Multi-Level Marketing Companies

These companies are, in a lot of ways, similar to Party Plan Companies. There is still a direct-to-customer sales model where the marketing is done by a “consultant,” “distributor,” “sales rep,” or “independent agent.” The difference is that MLM consultants tend to be more focused on promoting product through briefer interactions and less through “parties.” When given the opportunity, the MLM consultant will tell you about their product & its advantages, give you a card with website information and ask you to check it out when you have time later. They may get your information and follow-up with you as well. So, generally, sales are made on a one-on-one basis. MLM tends to be a male-dominated group. Examples of this group include Amway, Rodan + Fields, Herbalife, & Mary Kay.

MLM reps get a commission on their sales. Often in MLM, there is a focus on turning the customer into a sales representative. Both the original rep and the new rep get benefits from this arrangement (the new rep getting discounted prices on product and the opportunity to earn income, the original rep getting a percentage of sales from the new rep’s personal use and anyone that signs under them). This is where the “Multi-Level” part of the name comes from. Generally, a higher percentage of an MLM company’s customer base become sales reps themselves. They don’t tend to remain simply customers. Much of the earnings incentives for MLM reps are based on developing deep “teams.”

The majority of my experience with direct sales comes from Thirty-One Gifts. Holley has been a consultant with that company for 8 years and I’ve been helping her with her business for about 2 and a half years. She has recently become a consultant for Rodan + Fields as well as she has been using the product for a year and wanted to share it with others. We’re still trying to figure out how to operate in both of these worlds which is easier said than done.

Question:

What direct sales company(-ies) do you have experience with? What do you think are the main differences between the PP and MLM models?

Bonus question: Are these posts too long? I’ve been aiming for 500 words but overshooting it every time.

Are you involved in direct sales? Is your wife?

What would you like to hear about in regards to this topic? What problems have you noticed? Where would you like to see him helping you? For the guys, where have you had success helping your direct sales wife?

While I have an outline of stuff to write about on here, I’d love to hear what the girls and guys out there would like to see covered here.

Just sayin’

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This is another installment in my Direct Sales Husband Series aimed at both the ladies of the direct sales industry and their husbands.

Getting Involved – Getting His Feet Wet

The sad fact is that so many men do not support their wife in their direct sales business. There are tons of misconceptions about the business and I’ve touched on this in Part 1 and Part 2 of this series. But because of all of this, we need to talk a little bit about getting your husband involved in a positive way.

Start from the top

Not every leader is going to be able to do this, but if you already have a husband who is positive about your business, there are at least 2 main ways to get the ball rolling:

Get him in front of your team

Modeling is a powerful tool in business, parenting, and any other leadership position. Once your husband is being supportive behind the scenes, it’s time to get him in front of your team. Are your girls who struggle with unsupportive spouses even going to have a concept that it’s possible without seeing it? I can tell you from personal experience that sust getting him in front of your girls is going to make an impact.

In addition to the behind-the scenes stuff I do for Holley, she likes to get me involved in meetings. In Thirty-One they have Celebrate & Connect meetings every other month. I don’t do a whole lot, mostly stuff that falls into my area of interest like setting up the video on the TV or computer or projector. Sometimes I make playlists and get the music going before the meeting really starts and afterwards when people are just chatting. I’m the official Team Cox photographer and often those pictures end up in the newsletter. It’s just little stuff like that. But in an important way, it shows every girl there what it can look like to have a supportive husband.

Holley travels to one of her director’s C&C meetings a few times a year. She does a lottery to determine which one to attend (her team is spread out across the country). The first time she did this, I was working and couldn’t go. Because I’ve been so involved, the girls were kind of disappointed. They actually LIKE having me there!

Get the guys to network

If you can start getting your husband’s feet wet attending events, then you can start asking your team to bring their husbands as well. Those connections are a great way for the positive, supportive hubbies to meet the other husbands who are either new, or have some degree of skepticism. When he sees another guy who has bought-in, it makes the whole thing more legitimate in his eyes and breaks down those barriers and misconceptions.

Last year was my first trip to Thirty-One National Conference and I met so many girls from Holley’s team. It was a great experience. While there, I also met several other husbands of Thirty-One. Since then there’s even a Facebook group for HOT’s (Husbands Of ThirtyOne). Getting together with other guys who are supportive of their wife’s business has been eye-opening. There are so many ways to help her and these connections are great for finding this out. I highly recommend taking your HOT, or direct sales husband with you to your convention to meet other supportive husbands.

Question:

What is your first step in getting your husband involved with your direct sales business? Are you doing it or are you anxious about it? 

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See Part 2 for ideas on getting Buy-In from your husband for your business.

General Support

The first two parts of this series were directed more for the ladies who have the direct sales business. Of course I hope any guys reading this will go back and read those posts, and the ladies should read these upcoming posts as well. But at this point, I’m going to start getting a little more directed at the guys them

Over time, I’ll be covering many specific ideas on exactly what you can do to help your wife and her business, but today let’s talk in generalities. Honestly, these are probably the most important things you can do that will not only help her business, but will also likely help your relationship. Let’s face it, guys, is there really a time where we don’t need a little (or a lot) of help in that area? For many guys, these are the hardest things to do. But for those guys, you need to understand that these are things your wife needs from you. They will help free her to feel comfortable with doing what she needs to do to make the business successful and stick with it.

Attitude

It’s probably a good idea to think a little bit about your personal attitude towards your wife’s business. We need to start with ourself because this needs to be genuine. So if you have any latent/passive attitudes that are negative, that’s the first place to start. If your attitude is bad, that is going to leak out in your words and actions. It’s unavoidable.

Then, if we keep our own attitude positive and healthy about what she is doing, we can get out of our own way and do what we want to do – help and support our wife. This will also get us out of HER way and allow her to use her own skills and instincts to their fullest extent. She’s a lot more likely to be successful if she feels supported.

Emotional Support

Every wife needs emotional support to operate at her highest level. Feeling loved and supported will go a long way towards motivating her indirectly. This is bound to be the effect of maintaining a good attitude about her and her business.

Motivation

Direct motivation is usually appreciated and helpful. It’s especially important when your wife is feeling discouraged. Direct sales can be a tough business. It is based on relationships and depending on hundreds of factors (that, let’s face it guys, about which we have not the slightest clue) there are bound to be ups & downs. Getting parties/sales/recruits can be hard. Moving makes it harder. The economy comes into play.

In my time with Holley, there have been several times that she was on the edge of “giving up.” She’s the 11th consultant to ever sign with Thirty-One and has been doing it 8 years, but she still goes through these times. That’s when it’s important for me to step in and lift her up. To step up my “game” so to speak.

Beware the temptation to become overly aggressive in this area. Too much “motivation” gets viewed as being “pushy” or ”nagging.” She probably hates that feeling as much as you do.

Accountability

Setting goals is an important part of any business or personal achievement. Helping her to remain accountable to the goals she sets herself (in a gentle, positive fashion) will help her achieve her dreams. Again, this is not an area to be pushy, preachy, or nagging. Be careful. Make sure you are doing this in a supportive fashion.

Question:

What are some other ways that guys can, in general, be supportive of their wife’s business? What things do you do that she appreciates along these lines?

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See Part One for a general overview of what’s going on here.

Buy-In

One thing I’ve noticed in my time working with Holley with her Thirty-One business (and now with Rodan + Fields) is that the average direct sales girl does not have a lot of support from her man for her business. This always surprises me, but I see it time and time again.

Things I hear on a regular basis:

  • Guys will belittle the business or business model.
  • They don’t want to help
  • They will be passive when it comes to the business. Maybe even passive-aggressive.
  • Often they’ll use negative words when the topic comes up.
  • They will generally avoid helping in any way, putting pressure on the consultant to do it all on her own.

Now, maybe I shouldn’t be overly surprised about this, but I am. I am surprised because there are so many reasons guys should buy-in to his wife (or future wife) getting involved in direct sales.

Here are my Top 10 Reasons to Support Your Wife’s Direct Sales Business

  1. Supporting her in her business will help your relationship on a global basis.
  2. Extra income is a good thing. And most families are 2 income households anyway.
  3. There really is nearly unlimited earning potential in direct sales. The more support she has, the farther she is likely to go with it.
  4. Direct sales offers so many ways to be successful. Success is contagious, so this is good for the whole family.
  5. You’ll have plenty of opportunity to work together with her. Working together builds her confidence in you and the relationship.
  6. A woman who feels successful and supported is happier than one who doesn’t.
  7. Supporting her in an independent endeavor is a way to give trust. Trust is critical in any relationship. She needs to feel that from you.
  8. She needs to get out there and socialize. Direct sales is a great outlet for that.
  9. Many direct sales companies offer incentive trips. And she can take YOU for free (I’m going to Cancun for the 2nd time thanks to Holley’s business with Thirty-One.
  10. Supporting her business is a way to love her in an effective way.

These are some key reasons for buy-in and honestly, they’ve come right off the top of my head. There are so many more, and some of them have quite a bit of depth to how important they can be. This is going to be a topic of future blog posts as well.

Another way for the guys out there to look at it is this… in what way are you helping your relationship by NOT buying in to something (anything) she wants to do that has the potential to be a good thing for your family? If you say negative things about her business, she is likely to take some of that personally. If you resist helping out with the kids or in other ways, how do you think that is going to affect your relationship over time? Does that instill confidence in you for her? Think about it. None of that is a good thing.

If there is just one reason you should support her, it is that to women, support IS love. Giving her your support, time, attention, and help are unmistakable expressions of love to her. It shows her your relationship truly is important to you. Isn’t that how you really feel?

Question:

So, are there any guys reading this who have wives involved with direct sales? I’d love to hear your comments on how supporting her has affected you. Or your stories on how you got her to buy-in. Post to comments, please!

About a year ago, I decided I need to write a book. Now, this is not the first time I’ve considered writing a book, but maybe this was the first time I had a concept for a book that might actually be more helpful than humorous. The topic, you ask?

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Now, here it is, a year later and I hardly have anything more than an outline of some potentially helpful chapters. But I’m also restarting my blog and looking for helpful topics, and talking with my wife about her blog and topics as well.

A little background: My wife, Holley Cox, is a top-level leader with Thirty-One Gifts. She and I have been married a little over two years, but in that time I’ve seen (and helped) tremendous change in her business. She went from a mid-level leader/consultant struggling with whether or not to continue with her business (in addition to her full-time job as a speech therapist in the Hamilton County school system) to a full-time top-level leader. She is self-employed, has flexible hours, gets to go on all those field trips with the kids while they will still let themselves be seen with her in public (sometime after 14 that ends, we’re noticing). And she makes very nearly as much money as I do (and I’m a physician!) Next year she probably will out-earn me, and I’m fully ok with that.

I’ve decided that for the time-being, I’m going to work on a series of blog posts. Hopefully someone will get some benefit from this. There’s even the chance a great many people could. Maybe, once I get these ideas out there it’ll be reasonable to put it together into a book when it’s all said and done.

Introduction

So… why does there need to be a Direct Sales Husband’s Handbook?

When you marry a wonderful woman who is deeply involved in the direct sales industry, you end up seeing a whole different world. Most guys honestly don’t have a clue about the direct sales business model, or anything else about it other than possibly a few companies “Tupperware, Mary Kay, Avon” and maybe the thought that “It’s just a pyramid scheme.”

Guys may think:

  • It’s just a little hobby, like playing golf or baseball is for me.
  • It’s just an excuse for the girls to get together and get away from the house
  • Oh no! Does this mean I’m going to have to watch the kids on my own for 4 hours? No way!
  • What a waste of time. If you want an extra $125 a month, just ask and I’ll give it to you. That’s all that direct-sales stuff can get you.
  • Thirty-One? I’ve never heard of that. Must not be that big of a company.
  • Is there some way to lose money with this? I don’t want you to risk losing money.

Obviously, there’s a million other things guys may think about it, but for the most part, let’s be honest. 9/10 guys, upon hearing their wife/girlfriend is considering selling insert-company-name-here are not going to be excited about the idea. And that’s a shame, because there is absolutely unlimited potential with these companies. Not only that, but just the fact that she is taking the initiative and showing a little entrepreneurial spirit is an incredibly good thing.

This series is going to discuss all sorts of topics from how to get “buy-in” from your husband. Hopefully you can get him to read along and learn some things about how he can help you with your business, maybe even taking it to the next level.

Question:

What do you think about this topic? Are you involved with direct sales directly or through your spouse? What issues have you had with getting help from your man?

One thing is for sure, the more comments and feedback I get, the better the quality this series will contain. Thanks in advance!

The Checklist Manifesto: How to Get Things RightThe Checklist Manifesto: How to Get Things Right by Atul Gawande
My rating: 5 of 5 stars

A little over a year ago I heard about this book at a medical conference I attended where we were discussing the benefits of CPOE (Computerized Patient Order Entry) for hospital patients. Based on the recommendations of others at the conference I went ahead and bought the book and finally got to it a few weeks ago. I highly recommend you read this book.

About the Author:
Atul Gawande is a surgeon who both maintains a private practice and consults for the World Health Organization (WHO) regarding worldwide health issues. He has written several other books, and based on this one, I’ll definitely be getting his others to read in the near future.

Basic Premise:
Gawande was presented with a statistical problem (epidemic) by the WHO – the rate of surgery and surgical complications is exploding in the world. That issue raises the question of what can be done to improve outcomes, not just in economically advanced countries but also in third world sites where surgery is still being performed at accelerating rates. While expensive solutions may be an option for developed nations, that isn’t likely to be an option for those developing countries.

Dr. Gawande opens with a look into several medical cases as examples of the complexity of the medical decision-making process. These are, by the way, fascinating cases. He shows some failures and incredible successes. What makes the difference in these outcomes? He then takes the reader on a journey in which he looks for answers in different industries that could apply to the medical problem he is confronting. He looks at the construction industry, where incredibly complicated buildings are constructed in clockwork fashion taking into account thousands of natural variables. Those guys end up being able to do that with an incredibly small failure rate. Of course, when a building fails, it is likely to lead to many deaths. The same is true for medical cases. He discovers the value of a checklist in the construction world, but decides the type of checklist they use isn’t really practical in medicine because while construction occurs over months to years, medical decisions must be made in seconds.

He then moves on to the airline industry, which is fascinating. This is a much more accurate fit with the medical problem and he finds again that checklists are in place in that industry leading to their very low rate of failure. Again he covers several interesting cases and how the implementation of checklists saved lives. Then he looks at the financial trading industry and how checklists have potential impact for that industry, but they fail to benefit from it due to the culture of the industry.

Finally, he gives some personal anecdotes as he implements a checklist in his own O.R. With success the outcome, of course.

Despite the setting of the book in the context of a medical issue, this book probably should be required reading for anyone who makes important decisions. The whole theme of the book, really, is that implementing checklists which ensure critical elements of any “process” aren’t missed can and probably will result in improved outcomes. It’s true in the construction and airline industry. There is evidence that it works even for institutional traders, if they’d use it, and the same is true for surgeons. How likely is it that your particular industry could do better with a checklist? I would suggest very likely. The Checklist Manifesto really raises a lot of questions about where can I benefit from developing checklists for my work as a hospitalist. There may even be room for a second book discussing how an organization should go about developing a checklist, although he does describe the process his team used. Consider the same for your own situation.

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Platform: Get Noticed in a Noisy World by Michael Hyatt
My rating: 5 of 5 stars

Michael Hyatt’s Platform is, in short, a book about getting your online presence in line, and why you should care to do that.

Many people, myself included, maintain an online presence including active Facebook posting, Twitter, websites or blogs, activity on other sites of various interests, etc. In this age of information and the internet, people depend more and more on these activities not only for social interaction, but for personal recommendations of products, books, and pretty much anything else you can imagine. Less and less are we being influenced by traditional media advertising and at the same time, we are being swamped with information from every direction in all of our online activities.

This excellent and short (~250 pages) book doesn’t talk in generalities like other books before it have done. It has short, direct chapters that serve in some cases to show you why you should care about a particular tool. In other cases they are essentially a “To-Do List” of how to get the most out of social media and your online presence.

Many chapters cover how to increase your social influence, how to get more out of Twitter. Why you should consider starting or maintaining your Blog and how to go about doing that. There are a number of chapters that cover what NOT to do as well as many people don’t realize that side of things. The author, Michael Hyatt maintains a blog at Michaelhyatt.com where he covers all sorts of topics. Since reading this book (which I discovered through the EntreLeadership podcast) I’ve been visiting that blog and find that it has been a great resource for me already.

I read a lot of non-fiction and personal enrichment books and it’s rare to find one packed as densely with useful information as Platform. If you are a professional of any sort, you should read this book.

Clicking on the image of the book above or here: Platform: Get Noticed in a Noisy World is a sponsored link through Amazon.com.

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