To Profit or Not To Profit

Direct Sales is a business model for those who work at home or want to supplement their income. One fact that is certainly found throughout the industry, is that most people who are in a Direct Sales business are in it for the money.  There is lots of money to be made in Direct Sales, if it is done correctly.

Typically, anyone who owns a small business is working it to make money. So why is it that so many Direct Sales business owners struggle to see a profit?

A few reasons for business failure include, but are not limited to, the following:

1) Failure to track income and expenses
2) Failure to track effective and ineffective advertising
3) Giving away too much product or worse yet,
4) Offering discounts and/or free shipping

The fastest and easiest way to increase and/or keep your profit in any business is to control your expenses. Your expenses are indirectly proportional to your bottom line. If you normally make 30-40% profit from the sale of an item, but you incur 10-15% in expenses, you have dropped your profit substantially.

If you focus on increasing customer or hostess participation by discounting the price or by giving away free shipping, you are dramatically impacting your bottom line. These perks reduce both your income and your profit and you have no way to recoup that money. Use demo items or free goods you earn from your company to encourage participation. These do not impact your bottom line as fast since you can control how much you give to a customer or hostess. Furthermore, these items can be a tax deduction at the end of the year.

It is a nice gesture to give a discount, but keep it moderate and only for certain events like a holiday sale or a new customer welcome offer. Keep in mind that expenses can be controlled by monitoring all purchases.  Set a budget for your expenses and monitor your purchases each month to make sure they are within your budget.  

Remember you are working your Direct Sales business for profit, as well as, for fun. Why not make it "profitable fun" while you're at it?  Step it up to the next level of professionalism and see how much you can earn this year by being in control of your budget and your bottom line.