Forums: Discussions for entrepreneurs and small business.

I`m looking to possibly expand my business by implementing a Direct Marketing Strategy - similar to "Home Shows" like Creative Memories, Longaberger baskets, etc, where independent "Consultants" go to people`s homes (friends, neighbors, etc) to showcase the products, and the consultants get a percentage of the sales, or free products, etc.  Anyone have any experience with setting this up?  Tips, tricks, tracking software, etc?

Thanks!

There`s no set manual for this although you can get an idea of the basic protocols and ettiquette from looking at existing direct marketing businesses such as Suzanne Somers` brand, Avon, and (unfortunately) Amway/Quixtar.  The reason why there can`t be a set manual is because if you`re talking about going into people`s homes, there are so many geographic, cultural, political, gender, age, and personal variables to take into account.

Just figuring out timing, sales routes, and what samples to bring along require a lot of consideration for the local market, down to each neighborhood.  Using consultants is a big help in this area as they usually "know" the neighborhood and municipality/county they live in.

I would advise instead of a door-to-door strategy that you should arrange a weekly meeting in your or a consultants home where a dozen or so prospective customers can meet.  It shows consideration for the customers because you`re opening up your own home to their needs.  If you`re not comfortable with this, meeting in a club or a restaurant can be just as effective.  Doing this helps you pool multiple opinions on how well your products will do at once as well as help spread word-of-mouth.

Going door-to-door will only label your business as being somewhat intrusive and lump you along with Avon, Amway, and Jehovah`s Witnesses. 

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"Forget inspirational quotes to keep you going. If by doing what you do, you get an hour every day to relax, be with the ones you love in comfort without doing wrong, then it is all worth it." -Anon.

I believe there are consultants out there that helps businesses do this. I bet if you search online you can find someone. Somebody approached me once but I don`t have her contact info any longer.

Great comment David. I would also add that sales are actually easier in some cases when you are speaking to a group. It is possible to speak to a group and play into the group dynamics. For example, the individual may not see much need for your product or service (especially in the comfort of their own home). But in a group people react differently. They tend to follow the pack. That means you can use the energy of delight and acceptance from some people in the group to hook, or catch the individuals sitting on the fence. That’s why you will often find “Start your own business by attending this seminar and earn Millions!” type events happening in banquette style settings. The energy from all helps sell the product or service. We all want to belong to a successful group.

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Vincent Wilcox (a.k.a. KRAKR)
Drummer
My band: Letters Make Words

Go to the direct selling association site and sign up for their free magazine.  There are TONS of resources (ads) in it that can help you find software to set up payments, communications, order tracking, etc. 

At least in the Scrapbook universe, most companies fall flat on their faces within 18 months.  The 18 month mark seems to be the point where sales slow, the buzz of "newness" is off and start-up cash is tapped out.  Many of them suddenly have HUGE shipping issues (translation - they can`t pay their bills anymore and start blaming suppliers for "out of stock" items and suppliers cut them off).  I have watched several of them do that right around month 18 and then struggle with it on and off from then on.  It`s not as easy as it looks because you never know how many people you`ll have from month to month and how much those people will sell each month.  You can guesstimate, but you`ll probably have either too much or too little inventory. 

Good luck with your idea!  It can be done successfully!  Just keep your eyes WIDE OPEN!

~Kim

 

 

Again I like the idea,

and again I seem to be in the minority.

Yes it can be done, businesses have already proven it.

You can find businesses within every industry and with every type of business model that were unsucessful for one reason or another.

If you put together a sound plan it will work, if you don`t  it won`t.  just like every other business model out there. 

If it sounds like I`m bias,  it`s probably because I am,  I intend to use the same format to market/distribute different product lines,  the difference being is that I am not going to rely on that by itself

Mike

Excellent tips, Kim!

Thanks for the feedback.  Does anybody know the type of gross margins that are best to have when offering such Direct sales or Home Shows?  I read somewhere that your retail price should be 5 times the wholesale cost.  That seems huge to me, and I certainly don`t have those types of margins...thoughts?