How to Run a Direct Sales Business on a Shoestring Budget Part 1

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If you’ve been reading my blog over any appreciable amount of time, you’ve heard me go on about how important it is to run your direct sales business like an actual business (as opposed to a hobby). Recently I was reading an interesting question on Facebook that went something along these lines (and this is specifically about Thirty-One gifts):

Do you have to invest money into the business (over and above the starter kit) in order to be successful?

The answer is “Yes, and no.” (Of course!) And the question got me thinking about how a direct sales business can be run like a business and with the least (or at least reasonably little) investment from the consultant.

Let me spend a little time explaining what I mean…

Thirty-One Gifts New Consultant Kit

An early Thirty-One new consultant sign-up kit. Oh, how times have changed!

Let me start out by saying not every direct sales company is built the same way when it comes to the business model. Some, like Thirty-One Gifts, Rodan and Fields, and plenty of others introduce you to the company by having you purchase a starter kit. This will include a selection of the company’s most popular items so that you can show your customers what they look and feel like. Some companies have “tiers” of kits with more products or different products. Once you start having parties, you’ll “show” your items and people will order what they like and have them delivered to them. The consultant doesn’t have to actually pay for the product and sell it to customers.

When I first started this article, I thought I’d cover other business models. At this point, I think I’m going to make it more specific to Thirty-One Gifts as that’s my largest experience area. I believe this model will apply to other no-inventory types of direct sales businesses.

A Few Common General Questions:

1. What do you actually need to start up and run your Thirty-One business?

The start up kit is really and truly all you need to get started! You don’t have to buy extra product! This means you really can start and run a real business for literally $99.

2. Do you need to carry some form of inventory to sell to customers directly?

No! Other companies do business that way, but Thirty-One doesn’t (YAY!) You are much better off NOT selling items you have on-hand because then you have to replace them.

3. Do you need lots of office supplies or other items to run your Thirty-One business?

No! You’ll have forms and other starting business supplies in the startup kit. Make use of those, for sure! Other than that, you can print most everything you need on your home printer or just use what you already have laying around the house (envelopes for money, etc.)

I do think it’s a good idea to organize your parties. Simply keep your order forms in one place using folders or envelopes. Keep money and checks used to pay for orders in an envelope. Always keep them in the same place and with the party.

4. Do you need money to make money?

One of the great things about Thirty-One is that you can truly run your business with just the items you get in your kit without having to invest other money to make it run. Some girls will let people place orders without paying first (I call this floating). I do NOT recommend you do this as a practice! Don’t let yourself get in the habit of doing this. I’ve seen it happen dozens of times: girl places order. Consultant enters (and pays for!) order. Girl disappears from face of the planet. Consultant is left holding the bag (literally).

Unless you are a good established friend of the customer, don’t buy their items for them. They should pay before you enter the order.

Make sure you hold up YOUR end of the bargain by entering and delivering the items, in their entirety, as fast as is humanly possible! (The longer your customer has to wait for her products, the less excited she will be about the shopping experience. She’ll be less likely to buy from you in the future, host a party for you, and may never buy another 31 product for that reason.

5. Do you need to host a lot of parties to start making money? Or, on the other end, does it cost more money to have more parties?

Thirty-One gifts pays commissions twice monthly, starting your first month! Starting commissions are 25%, so if you sign up on June 26 and have your first party submitted on June 27, you’ll get paid between the 7th and 10th of July. If you get a party in before the 15th, you’ll get your commission on it around the 25th or so. There is a minimum payment amount of $25 (if you have a retail order of $80, your commission of $20 would roll over to the next paycheck). But with the party average of $500, you’ll be getting a check for $125 even starting out your first month.

Holley Cox recommends booking your first 6 parties before you sign up! (With the goal of holding those parties in your first 6 weeks) What if you do them all in the first month? There is no fee to the consultant for submitting a party. If you host 6 parties in 4 weeks there is no difference to you, the consultant other than the time you spend to do it. If you average $500/party, you’ll be getting a 25% commission on $3000 ($750).

In part 2 of this topic, I’ll cover the 7 Rules For Running Your Direct Sales Business On A Shoestring Budget.

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