Top Reasons Direct Sales Consultants Fail (Part 2)

JasonC —  February 27, 2013 — 3 Comments

Check out Top Reasons Direct Sales Consultants Fail (Part 1) if you haven’t read that already. Today we’ll finish discussing the main reasons why those people in direct sales end up leaving their business.

There’s a widely-spread statistic that says 95% of people who start a direct sales business fail. That’s pretty staggering. 19 out of 20 people who start in direct sales end up quitting. Wow. I’ve also read that the average consultant sticks with a company less than 2 years. Those are pretty sobering, depressing claims. So, why is it that way? I’m not entirely convinced these statistics are true. But if it is, how can we avoid this outcome?

Top Reasons Direct Sales Consultants Fail

1. Lack of Support

2. Lack of Knowledge

3. Running the Business Like a Hobby

4. Bad Product Fit

5. Bad Business Model Fit

6. Life Happens

By no means is this an exhaustive list, but it covers the majority of cases. Yesterday we covered Lack of Support, Lack of Knowledge, and Running the Business Like a Hobby. Today, we’ll finish up with Bad Product Fit, Bad Business Model Fit, and Life Happens.

Rooty path

The path to success (or failure) is often bumpy. Stumbling is part of the process. Just get up, wipe yourself off, and get back to work!

 

Bad Product Fit

Not everybody is meant to sell purses. Or kitchenware. Or cosmetics. A lot of people sign up without thinking “Is this the right company for me?” They get excited about the opportunity and their entrepreneurial spirit gets ignited. That’s great. But then you should think about the product and the company and make sure you have the right one.

Another reason people fall into this trap: they sign up thinking more about the money than about the product fit. There are successful consultant with every direct sales business. Don’t sign up just for the money. You’re much more likely to be successful and make big money if you truly love the product, the people, and the sales model rather than just thinking about the money alone.

Bad Business Model Fit

This relates somewhat to the one above: not all direct sales companies are created equal. You’ll never find in the industry or on the web reports from individual companies that say what their success rates are. Or promises that everyone makes money. Some companies require you to buy expensive business opportunity kits. Others require you to purchase your own inventory and sell it directly. In other words, some companies have more of a chance for the new consultant to actually lose money due to up-front expenses.

That’s not to say people can’t be successful with those direct sales opportunities. The reality is that, again, there are successful (and phenomenally successful) people in every established direct sales company. Some people thrive on managing an inventory. They’re great at knowing which products are going to sell great and which aren’t. Some people love the type of company where you carry absolutely no inventory other than what you choose to show at your home parties, ordering all product directly from the company after receiving payment.

Also, there is the difference between MLM (multi-level-marketing) and Party Plan. These aren’t as different as you might think, because you can run your business however you want. But MLM typically focuses the consultant on simply driving traffic to a website. Party Plan is more directly relational.

So consider the business model before making your decision on which company to sign up for. What suits your personality and abilities best? Ask your consultant about these concepts as well (and ask her to be honest with you!). Like I mentioned above, not all direct sales companies are created equal.

Life Happens

Let’s face it. This can happen to anybody in any industry or job situation. But we can also admit that it’s still often a decision that is made. When you have a 9-5 job in industry or corporate America, if something happens in your life (divorce, kid problems, illness), you’re going to think long and hard before stepping away from your job. Getting those jobs back, especially after leaving, can be difficult or impossible. It’s likely you’ll only make this decision if there is literally no other choice.

With direct sales, though, people quit their businesses for these reasons all the time. There is some element of support problem involved many times. But often it’s just a decision. I’ve heard the phrase “I just don’t want to deal with it right now” many times. Sometimes this is because ladies will have their priorities right. They need to focus on another area of their life and they’ve been thoughtful and prayerful about it and even though they have full support, it is the right decision to step away. Other times, it’s just not right. It’s a mistake.

I think it’s because direct sales is easy to get into that some people have an “easy come, easy go” mentality about it. They can always come back. Come to think of it, this is another good aspect of direct sales businesses. But for most people who make the decision to quit their business, it’s the wrong decision. Good things are worth perseverance. Don’t make it an easy-come, easy go decision.

Question:

What are the main reasons you see people leaving direct sales, and how do you help lower your recruits’ drop-off rate?

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  • Heather

    This is my second time in the direct sales arena. The first time, I really enjoyed the product and thought it was a great fit. I was good at it. However, I was required to carry inventory and/or maintain high quarterly volumes in order to remain a consultant. I did not have a good support system with my family & friends; and this was before the age of facebook and good support with teams there. I was essentially alone with a product/concept I loved, but no one that seemed to share that with me. It became a burden.

    I believe this time will be different as I have that online support system and fabulous product that I can use on a daily basis and have people see as well. I have a different motivation this time as well.

    • http://www.jasonecox.org JasonC

      Good insights about today’s direct sales situation. FB and social media is so powerful in this arena. It helps so much to have that support system. I consider that my primary role in my wife’s business. Getting the right product fit is crucial. I think so many girls miss out on that area for whatever reason.

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