by Wahidabi Sulaiman

Created on: December 07, 2011

Direct selling is a much misunderstood industry. Many people associate direct selling with Multi-Level Marketing (MLM) schemes and scams. Even though the pay structure in direct selling companies may be multi-tiered, it is different from what people associate as a scam.

Direct selling companies offer unique range of products for sale via distributors. Members get a discounted price for purchase and can sell the same at the regular price quoted for non members. The price lists are readily available and customers can make cross reference to check if they are being charged more than is applicable.

Be Realistic and Do Your Math

Before you became a direct seller, you would have been introduced by someone to the scheme of things and how easy it is to make money. Even the business presentations that you attend prior to joining the direct selling company would have given you figures and milestones that will make you a millionaire overnight. However, as a human being of sound mind, you will know that it is not possible. Making money as a direct seller is as much a hard work as it is to build a business from scratch. Therefore, you should not build castles on clouds and hope to make it big overnight without any effort.

That being said, you will need to understand the basic payout structure of the company you are getting involved with. Some companies pay based on a percentage of Business Value (BV) they associate with the products sold while some companies base their pay structure on a percentage of Product Value (PV).

A sample example of the above is as follows:

Suppose the BV of a product that you bought at $90 and are selling at $100 is 80 and you get 20% on BV, you will be actually getting $10 (initial profit) + (80*20%) = $26

The fact to note here is that you will only be getting a percentage of the sale value apart from the initial discount received from your purchase as a member. However, there are companies that provide you retail profit as well.

A sample example of the above is as follows:

Suppose you buy a product at $90 and sell the product at $100 and the company offers you 20% of the retail profit, you will be receiving $10 (initial profit) + (100*20%) = $30.

The main thing to note is that you need to understand the pay structure and what the percentages of payout are based on.

Moreover, some direct selling companies require you to fulfill a certain monthly quota so that you continue to enjoy privileges. Also, some companies require you to purchase business

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