Is Your Direct Sales Company Stable or At-Risk?

Let’s explore different signs to help you “read the tea leaves” of whether your company is stable, or at-risk of a future announcement that may affect your income, and what you can do about it.

Signs of Positive Change

1. Your Company is investing in new technology and executive leadership. This is often a good sign, as it indicates a capital investment into the company.

This could include new back office systems, selling systems, or mobile app rollout.

2. Your Company invests in field training that aligns with market trends. In 2020 and 2021, this includes shifting to online sales delivery, focusing on online parties, and encouraging consultants to adopt new social marketing strategies to stay competitive in the new online landscape where consumers are shopping primarily online.

3. Your Company announces major partnerships or collaborations with established brands. This is a great sign of company stability, as paying for licensing and brand agreements will typically require a multi-year investment, and any brand would do substantial due diligence before making such a collaboration with a direct sales company.

Signs of Risk

1. Your Company changes to an affiliate-only model. This is a hard shift for direct sales consultants. While an affiliate-only model works well in the e-commerce space, direct sellers aren’t typically affiliates. Meaning, they don’t often have strong social audiences or funnels, and without proper transition training, many companies who shifted to affiliate-only eventually struggled or closed.

2. Your Company eliminates their convention or incentive trip, OR few people have earned an incentive trip. This is a major warning sign, and should be an alarm bell to all consultants as it’s typically indicative of lack of cash flow to cover the trip for all earners.

3. Your Company is delayed in paying commissions. Likely a cash flow issue, regardless of what excuses they share.

4. Aging companies, fields, and lack of sponsoring growth. If your company has had a long tenure and consultants have had primarily in-person businesses, the pivot online can be difficult. This is both because learning the social marketing aspects are new and challenging, but also because consultants who have had primarily in-person businesses through parties and events don’t likely have strong or large social followings. If the company isn’t focused on either training the current field, or bringing in new social sellers that are focused in the online space, this is a sign that the company simply won’t be sustainable in the new market landscape.

Are you having any issues or challenges with your direct sales company?