One of the reasons I have been successful with my direct sales business all these years is because I run my business like a business. I consider profit margins. I look at getting the best return on my investment and I consider all actions I do to determine if it is in the best interest of my business.
My degree is in business administration, so perhaps that’s why I look at my direct sales business with a different set of eyes than many independent consultants who aren’t able to see they’re losing money. If I started a business (joined a direct sales company, aka Business in a Box) I’m doing so to earn a profit. Otherwise it is just an expensive or fun hobby.
With that above preface let’s have a family roundtable meeting about Swap Groups. For those unfamiliar with what I’m referring – it’s typically on online group, generally on Facebook, where various direct sales independent consultants get together to help each other by being forced to buy from each other. The rules can vary but the concept is similar in each group. Unless it’s a cookie swap or Christmas ornament swap I am against direct sales swap groups and here’s why:
Five Reasons Not to Join a Swap Group
- On average you’ll commit to spending $25 per month buying product from the featured business on that given month. The $25 minimum turns into more like $35 minimum after you pay shipping and taxes. Do the math $35 x 12 month = $420 a year!
- You’ll likely have to buy from companies that represent products you have little to no interest. As an example, no offense to the jewelry consultants, but I am not a jewelry person. I rarely wear jewelry and the few pieces I have are special pieces that have special meanings. Sure I could get something to give as a gift, but I believe jewelry is a personal item. I don’t want to receive jewelry as a gift unless it’s from my significant other. Then perhaps the featured business the next month is clothing. Again, same same. I’m particular what duds I wear and we all know sizes vary from brand to brand. Also if it’s an online group, I want to see, feel, and try on clothes. Now I have spent a minimum of $70 in two months to get a shirt and a necklace I don’t want.
- But, but, when it’s my turn, they’ll buy from me! True, but then the dozen or so consultants in the group will all be forced to spend $25 retail (which remember is at least $35 to them) on my candles. I’m sure there are some who feel about candles the way I do about jewelry or clothes. I don’t want customers who are forced to buy something. I want customers who want to buy something, who may be repeat customers and who may even want to host a party or enroll as a consultant.
- Another math problem for you: If there are 12 people spending retail value of $25 each (assuming they all keep their commitment and make the purchase) how much will your party retail total be? ($300 yay, that’s right!) On average consultants earn 25% (some less, some more but for the sake of illustration 25% is a good figure). So the consultant will earn 25% of $300, which is how much? That’s right, it’s $75! So you spend $420 a year on stuff you don’t want or need and in return you’ll earn $75 commissions.
- More math – if you spend $420 for the year and in return earn $75 in commissions how much money did you lose? That’s right! You only lost $345 to be part of this great swap group to help your business.
There is a Way Swap Groups Can be Beneficial
If you really, really want to be involved with helping other direct sales consultants and spreading the word about your own business, there is a way that may help.
- Minimum for each participant to spend is $20 per month.
- Many companies are represented – the more the better, only one representative per company.
- A file/list of companies with the consultant’s website is available for all swap group members to research and shop.
- Each month on the 15th, the list gets posted (June 15th the list will go up for shopping to begin July 15). Members publicly comment to sign up for which company they want to commit to shop from in the coming month. Only one member may shop from a particular company that month. If the company you wanted to pick is already picked, then pick another, odds are great with so many companies represented you’ll find another favorite.
- In theory you as the consultant will only get a $20 sale for the month from the swap group member, possibly more, but the swap group is not intended to give you an entire party volume. That’s okay though because we’re not supposed to be working our businesses on autopilot with customers who are forced to buy. Instead by just getting one new sale, it is still supporting each other and it opens up exposure to others who may not be familiar with you or the company or products.
- If someone wants to leave the group or get out of her agreement, it should understood that she will find a replacement, unless the group admin has a waiting list of others who want to take the spot should that company open up.
- Within the group spamming should be limited. Meaning: don’t use that FB group to frequently spam the members with posts about your company or specials. That should be a given but you’d be surprised how frequently this happens on a regular basis. Self-promotion posts could be allowed on a specific time frame. Only on the first three days of the month, or only on the first and 15th or only on Fridays, or whatever time frame is decided; all others will be deleted.
- There could be either open time frame for participants to give kudos to the company, product or consultants who they purchased from that month. Those type posts could be permitted any time, saying something such as “I bought an XYZ from Jane Doe of www.herwebsite.com. She was a joy to work with, it arrived within 10 days and I love this [product] because it yada yada yada.” Third party testimonies are always better than self-promotion and then the consultant could use the testimonial on her own website should she choose.
If you’re considering joining a swap group or are currently a member of one, and you’re working your direct sales business with the intent of earning money, reevaluate if it’s the right place for you. If not, graciously bow out and find a better way to invest your time and money.
Here’s to success!