Direct selling is a model that many companies use to sell their products. It involves paying your salespeople a commission on the sales they make. This business model works well for the distributing company because it doesn’t have to pay for salaries up front. Direct selling also works well for the salespeople in that they don’t need to buy any merchandise.

However, it is also one of the most misunderstood business structures out there.

Let’s go over some of the common misconceptions about direct selling.

Myth 1: Direct Sellers Lose More Money Than They Make

Direct selling is not a losing proposition. According to the FTC, roughly 5 percent of the people in the United States are involved in direct selling to some extent. All of these people would not be involved in a losing proposition. The reality is that more than half of direct sellers have positive income after accounting for their regular business expenses and almost just as many direct sellers reach that mark in their first years. Continue reading →