Let's Have a Sales Party: A Complete Guide to Success in Party Plan Selling

By Gini Graham Scott

Party plan selling offers a great mix of making money with having fun by selling your products or services at a party. LET'S HAVE A SALES PARTY provides a complete step-by-step guide on how to do it, with tips for both the newcomer and the old-timer who wants to further expand the business. The book includes tips on how to:
choose your product and company, develop your sales pitch, recruit prospects for your party, plan a great party, increase your sales, expand your business by creating a sales organization, and more.

It provides practical information on:
avoiding the mishaps that befall some party plan sellers, creating advertising to help you find hosts and customers for your parties, developing a presentation and a marketing campaign, finding a host, choosing a location, planning the menu, mastering a solid sales pitch, building to a strong close, asking for the sale, taking orders, getting referrals, confirming orders, and managing deliveries.

Additionally, it offers expert tips on how to avoid scams and choose a reputable party plan company, a directory of major party plan companies, and more.

• Language: English
• Publisher: iUniverse
• Release date: Jan 9, 2008
• ISBN: 9781462048403

Gini Graham Scott

Gini Graham Scott, Ph.D., CEO of Changemakers Publishing and Writing, is an internationally known writer, speaker, and workshop leader. She has published over 50 books with major publishers on various topics and has written over 3 dozen children's books. Her published children's books include Katy's Bow, Scratches, The Crazy Critters First Visit, and Where's the Avocado? published by Black Rose Writing. She has published 8 children's books through her company Changemakers Kids and is a member of the Society of Children's Book Writers and Illustrators. She does workshops on self-publishing and creativity. She also helps clients write books as a ghostwriter and self-publish or find publishers and agents. Her websites are www.changemakerspublishgandwriting.com and www.ginigrahamscott.com.

Book preview

Let’s Have a Sales Party

A Complete Guide to Success in Party Plan Selling

Gini Graham Scott, Ph.D.

ASJA Press

New York Lincoln Shanghai

Let’s Have a Sales Party A Complete Guide to Success in Party Plan Selling

Copyright © 2008 by Gini Graham Scott

All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or mechanical, including photocopying, recording, taping or by any information storage retrieval system without the written permission of the publisher except in the case of brief quotations embodied in critical articles and reviews.

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The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

ISBN: 978-0-595-48289-4

ISBN: 978-1-4620-4840-3 (ebook)

Contents

Introduction

What’s Your Part In The Party

Join The Party

What’s The Party Plan Business All About?

Chapter Highlights

What’s A Party Plan?

The $10 Billion Party Business

How It All Began

The Ease Of Getting Started

A Chance For A Ground Floor Opportunity

Recent Trends Today

Summing Up

But Is It Multi-Level Marketing? What’s The Difference?

Chapter Highlights

Where Mlm, Direct Sales, And Pps Meet

How And Why Multi-Level Marketing Works

When Mlm Goes Bad: Pyramid Schemes And Scams

Knowing The Difference: Questions To Ask And Warning Signs

The Ethics And The Law

Summing Up

Picking Your Goals And Your Program

Assessing Your Party Plan Abilities

Chapter Highlights

The Keys To Being A Good Salesperson

The Principles Of Successful Selling

Recognizing Your Strengths And Weaknesses

Are You In It For The Interest Or The Income?

Determining Your Time And Money Goals

Planning Your Party Plan Selling Plan!!!

Summing Up

Choosing The Right Party Plan For You

Chapter Highlights

Finding A Good Fit For You

How Jumping In Quickly Can Work Well

Considering The Big Five To Make Your Choice

Picking Your Product

Picking Your Company

Understanding Your Market

From Part-Time To Full-Time Commitment

Going It Alone

Joining The Team

Shooting For The Stars

Summing Up

Choosing The Right Company

Chapter Highlights

What You Need To Know About The Company

Considering The People You’ll Be Working With

Learning From Friends And Associates

Asking For References

Sorting Out Fact From Fiction

What The Company May Want To Know About You

Putting It All Together—Deciding The Company For You

Summing Up

Setting Your Sales Cap For Success

Deciding On The Right Target Market

Chapter Highlights

It’s All About Market Segments

Deciding On The Right Customer Segment For You

Matching Your Product And Customer

Recognizing Customer’s Wants And Needs

Thinking About The Benefits You Can Offer

Summing Up

Developing Your Sales Pitch

Chapter Highlights

Knowing All About Your Company And Product

Knowing Your Marketing Plan

Getting The Product Literature You Need

Getting The Support You Need From Others

Going To Some Good Parties To Observe

Setting Up A System To Keep Track Of It All

Summing Up

It’s All About Attitude

Chapter Highlights

Why You Need A Positive Success Attitude

The Basic Principles Of Success

The Power Of Persistence And Staying Positive

Ways To Stay Motivated And On Target

Dealing With Disappointments, Rejection, And Anxiety

Acknowledge Your Time Commitment To The Process

Summing Up

Keeping It Organized

Chapter Highlights

Handling The Paperwork

Setting Up A Party Plan Business In Your Home

Keeping It Legal: What Your City And State Need From You

Determining Your Start-Up Costs

Summing Up

Recruiting Prospects For Your Party

Tapping Into Other People’s Networks

Chapter Highlights

Recruiting Hostesses, Organizations, And Community Groups

Knowing When To Back Off And Back Down

Creating A Prospect Leads Sheet To Help You Find Prospects

Teaming Up With Others

Summing Up

Planning Your Promotional Pitch

Chapter Highlights

Spreading The Word

Creating The 30-Second Elevator Pitch

Coming Prepared With The Materials You Need

Using The Phone To Spread The Party Line

Using Written Materials To Spread The Word

Summing Up

Creating An Inexpensive Ad Or Pr Campaign

Chapter Highlights

Creating Your Marketing And Promotional Mix

How And Where To Advertise

Writing And Formatting Your Ads

Getting Pr In The Local Papers

Writing Your Own Series Of Articles Or 

A Column

Using The Right Approach When People Respond

Summing Up

Creating Brochures, Flyers, And Posters

Chapter Highlights

When And Where To Use Brochures, Flyers, And Posters

Spreading The Word In Your

Coming Prepared To Business And Social Groups

Using Festivals, Trade Shows, And Other Events

Creating Your Copy And Layout

Putting It Together Quickly On Your Computer

Putting Your Message On A Website

Summing Up

Putting On A Great Party

Planning Your Party

Chapter Highlights

What Customers Expect At A Party

The Keys For A Great Party

Time For A Try Out

The Importance Of Party Planning

Charts And Worksheets To Help You Plan

Summing Up

Deciding On The Who, When, And Where

Chapter Highlights

Who’s The Host?

When’s It Going To Be?

Where’s It Going To Be?

Having It At A Private Home

Using A Room At A Community Location

Creating A Workplace Party

Making It A Community Event

Summing Up

Putting The Party Together

Chapter Highlights

Creating Timelines And Checklists

Preparing Your Invitations: How, Who, And When

Anticipating The Needs Of Your Guests

Calculating Your Costs And Income

Getting Rsvps To Help You Plan

Adjusting For Last-Minute Add-Ons And Drop-Outs

Summing Up

Using Themes And Games To Make It More Fun

In This Chapter

Deciding What Themes To Use

Using And Building On Company Ideas

A Compendium Of Great Theme Ideas

Put A Seasonal Spin In Your Selling

Using Introductions And Icebreakers To Get Started

How Games Can Contribute To Your Sales Success

Summing Up

Food For Thought

Chapter Highlights

The Value Of Having Food And Beverages

Deciding What To Serve And How Much

From Potlucks To You Do It

Keeping Your Food Costs In Line

Preparing For Diets, Allergies, And Personal Tastes

Clean-Up Time

Summing Up

Time To Sell, Sell, Sell

Chapter Highlights

Preparing The Way For Show And Tell

Time For Show And Tell

Putting Your Products In The Spotlight

Using Demos To Excite, Delight, And Produce Sales

Emphasizing Benefits As You Demonstrate Features

Inviting Questions And Answering Objections

Summing Up

Making The Sale

Chapter Highlights

Wrapping It Up With A Strong Close

Making Sure Everyone Knows The Prices

Recording Orders

Handling The Customer Who Isn’t Ready To Buy

Setting The Stage For Follow-Up

Summing Up

Ending The Party

Chapter Highlights

How And When To Say Your Goodbyes

Leaving Customers With Product And Contact Information

Setting The Stage For Customers To Sell Each Other

Thanking Your Host Or Helpers

Scouting For Future Party Hosts

Getting Testimonials You Can Use

Connecting With Customers Who Might Want To Sell, Too!

Summing Up

What To Do When The Party’s Over

Evaluating The Event

Chapter Highlights

Do It Now And Three Days Later

Getting Feedback From Others

Doing Your Three Day Review

Learning Lessons For Next Time

Using Company Forms And Guidelines

Summing Up

Following Up After The Event

Chapter Highlights

Who To Thank And How

Staying In Touch And Getting Referrals

Confirming Orders And Delivery Dates

Communicating Delays

Dealing With Repeated Delays

Managing Deliveries

Summing Up

Expanding Your Business

Creating A Sales Organization

Chapter Highlights

Recruiting A Downline

Training And Motivating Your People

Organizing Your Own Sales Meetings

Sales And Planning And Strategy Meetings

Gaining Support From Your Sponsor

Rewarding Your Key Performers

Dealing With Deadwood, Dissension, And Difficult People

Watching Your Business Grow

Chapter Highlights

How Big Do You Want To Be?

Deciding What To Do To Increase Your Growth

Ways To Build Up A Sales Team

Considering The Competition

Balancing Your Business With Other Commitments

Knowing When To Say No To More Growth

Summing Up

Making Changes In Your Party Plan

Chapter Highlights

Changing Companies In Mid-Stream

Can You Represent More Than One Company?

Introduce New Programs Carefully In Your Downline

When Too Much Is Too Much

Taking Time Off And Making A New Entrance

Can You Negotiate Improved Terms And Conditions?

Summing Up

Party Plan Highlights

Chapter Highlights

Putting It All Together

Top Tips To Remember

Top Inspirational Thoughts To Keep You Going

Summing Up

Glossary

Resources And References

Associations

Networking Organizations

Websites

Management Services And Software Programs

Supplies

Shipping Services

Consumer Information And Protection Organizations

Party Planning Books

Multi-Level And Network Marketing Books

Directory Of Major Party Plan Companies

Personal Care Products (Cosmetics, Perfume, Body And Skin Care, Health, Diet, And Nutritional Supplements)

Fashion, Clothing, And Jewelry

Home Care Products (Home Accessories, Decor, Cookware, Tableware, Crystal, China, Candles, Garden Supplies)

Food And Beverages

Toys, Baby Products, Educational Materials

Photos, Cameras, Framing, Art Supplies

Travel

Phone And Internet Services

Business Services

Pets

Books

Adult Toys And Parties

About The Author

Introduction

If you want to have a business that is fun and one you can easily adapt to your lifestyle—whether you want to do it on the side or full time—you’ve come to the right place. Party plan selling is all that and more.

Party plan selling provides an opportunity to meet lots of people and make money by making sales in a friendly, personal way—through a party. Plus you can choose from a wide range of products and services and party plan companies to work with.

You have plenty of choices in how to sell, too, because you can set up your own marketing company or become a distributor or rep for a particular company. You additionally have the option of choosing a single-level company where you only sell direct for that company; or you can find a company with a multi-level sales program, where you build a sales team and get overrides from recruits.

As you’ll discover, party plan selling is a major growth industry, in part because it is so flexible and easily adaptable into anyone’s lifestyle. Plus it’s a good antidote to recent workplace trends, such as downsizing and outsourcing, because you create your own job. It also has great appeal to working moms and homemakers, because it’s a business you can run out of your home. And now you can use the Internet to help you sell.

This book will teach you what you need to know to get started in this business, from how to put on a party to how to make presentations at it to how to sell. It is chock-full of tips and success stories, and includes lots of charts to help you plan out what to do. It includes sections on organizing the business as well, so you can keep track of your leads, sales, and other paperwork.

In short, consider this an everything you’d every want to know about party plan selling, and if you want to know more, you can use the extensive references and resources section in Appendix B, which also includes the names and contact information for major players in the field. It includes the names of more than 100 companies, plus a list of major associations, business-building tools, and books in the field.

So now, come join the party. Put your party hat and thinking cap—maybe put one on top of the other—and dig in and have fun. Here’s to a lot of profitable party plan selling. Have fun. Make money. And enjoy!

What’s Your Part In The Party

Here’s a brief overview of what you’ll learn in different parts of the book.

In Part 1, Join the Party, you’ll learn whether the party plan business is right for you. It might be if you like putting on parties and selling appeals to you. You’ll discover that the business takes many forms from setting up your own business with a line of products to joining a company as a distributor. Another distinction is between a company where you just sell and a multi-level company—about 80% of the party plan biz—where you additionally recruit other distributors, create a team of sales people working with you, and get commissions on their sales. Unfortunately, MLM is often thought of as a pyramid scheme and some fly-by-night companies do this. But as you’ll learn, MLM done right can be an extremely successful approach to the party plan business.

In Part 2, Picking Your Goals and Your Program, you’ll learn what it takes to be a good salesperson and what type of party plan or company is right for you. As this part describes, one of the keys to being successful in the party plan biz is not just putting on parties, but being good at sales. And even if you have never sold anything before, you could have what it takes if you know the basic steps of selling, use the key motivators to motivate the customer, and are good closing the sale. Then, as described for success, you need to choose the right party plan, which includes assessing your own interests, deciding what types of products you want to represent, and assessing the market for those products in your area. Because you need to not only assess the company but consider the people you will be working with, this section describes how to do this, too.

Part 3, Setting Your Sales Cap for Success, describes how a first step to sales success is understanding who your target market is and how to best reach it. That way you’ll maximize interest in your product or service and thereby increase your sales. Then after you assess the market and determine what your most likely customers need and want, you can develop your sales pitch and direct it toward them. As this part details, part of this process involves learning about your company, product, and marketing plan, and getting the product literature and support you need from others. In addition, you need a positive success attitude to help you stay motivated and deal with the everyday disappointments and challenges you’ll encounter along the way. Plus you have to keep it all organized, which means dealing with paperwork, setting up an office, and keeping your city, state, and federal government happy. This part will help you learn all of that.

Part 4, Recruiting Prospects for Your Party, explains different ways to promote your parties to others. One way is by tapping into other people’s networks and teaming up with others. Also you need to be ready with a promotional pitch you can use, ranging from the 30-second elevator speech to advertising, brochures, and flyers. It’s especially important to be ready, willing, and able to know how to talk about your product or service under different circumstances, as well as have effective written materials to back you up. This part will help you come up with those quick pitches, develop approaches to use on the phone, and put together an inexpensive advertising and PR campaign. It’ll also give you tips on how to create inexpensive brochures, flyers, and other materials, and when and where to use them.

Part 5, Putting On a Great Party, deals with the basic keys to what makes a great party. Then it explains how you need to practice your presentation and do some planning to make sure you have everything together. As you’ll learn, an important part of the process is deciding who the host will be, when and where the party will be, and deciding what type of place you want to use—the host’s home, your own home, a community center, or somewhere else. Then you have to work on putting the party together, including using themes and games to make it more fun, and deciding what kind of food to feature—from just snacks to dinner in some cases. And finally, it’s show-time. Time to strut yourself, show off your product, and make your sales. So if you’re ready to party, you’ll learn what to do here.

In Part 6, What to Do When the Party’s Over; you’ll learn about the importance of evaluation and follow-up after the party. As part of the evaluation, you’ll want to review how things went, get feedback from others, and learn from whatever happened how to do it even better the next time. Then, too, you need to follow-up with thank yous to the appropriate people, get referrals to other potential hosts, and handle deliveries for the products ordered at the party. Plus, sometimes you have to deal with order mix-ups, shipment delays, and the like. This part will help you deal with all these after-party activities and prime you for success in throwing your next party.

In Part 7, Expanding Your Business, you’ll consider what to do next after you’ve started putting on parties and selling successfully. It’ll help you decide where to go from here and if you want to grow. If so, this section will help you think about the best ways to expand your business. If you are in an MLM organization, you’ll want to start building a downline, which includes recruiting distributors, training them, organizing sales meetings, and helping your sales team do well. You’ll also want to think about such things as how big you want to be, what kind of competition you have, and how to balance your business with your personal life. This part will also help you consider what to do if you want to make changes in mid-stream, such as in moving from one company to another, promoting more than one product or service, and negotiating better terms and conditions.

PART I

Join the Party

If you’re thinking about starting a new part-time business and you like putting on parties, then the party plan selling business may be ideal for you. You’ll find it takes many forms from simply setting up your own business featuring a line of products you want to sell to joining a company as a distributor. Another distinction is between a company where you just sell and a multi-level company—about 80% of the party plan biz—where you additionally recruit other distributors and create a team of sales people that work with you, and then you get commissions on their sales. Want to know more? This part will give you the inside scoop about how the party plan business works.

1

What’s the Party Plan Business All About?

CHAPTER HIGHLIGHTS

•   What a party plan is

•   Why to get involved in party plan selling

•   How party plan selling got started

•   How to get started at the ground floor

So you’ve heard about party plan selling and are thinking about joining the business. Well, welcome to the party. This chapter provides you with a brief overview of what party plan selling is all about including the great potential for both income and fun. You learn about the size of this vast industry and how it started. You also find out about how to get started and how easy it is. And finally, you learn about some of the latest trends in the industry today. As you’ll discover, this is a rapidly growing industry—so get ready to join the party and plunge in.

WHAT’S A PARTY PLAN?

Party plan selling is a type of direct selling in which you put on a party to sell a product or service to your customers. These can be various sorts of parties—from informal home parties to catered and formal parties for organizations. And today some party plan people are even putting on online parties, where people join together at a certain time and communicate via online forums, chat rooms, emails, or video feeds. The basic approach is that you have some kind of party and then put on a presentation of your product or service, followed by an opportunity to buy.

The other type of direct selling is person-to-person selling, where you engage in one-on-one sales. Direct selling is sometimes confused with direct marketing, but that involves selling via catalog or other printed offers, traditionally by mail, though now these come via e-mail and fax.

Typically, party plan sellers join a company that sells its products via a party plan, and provide various types of assistance to help its sales people, such as product literature and trainings. And commonly, people join a single company and sell a product line. However, it is also possible to sell multiple lines through two or more companies, though it’s best if the lines are compatible, so you can sell them at the same party to the same type of customers—rather than having to organize separate parties for different products that appeal to different groups.

Although some of these companies have single-level compensation plans, which means everyone is a direct salesperson for the company, the vast major-ity—80%—have multi-level compensation plans, so they are also multi-level marketing or MLM companies. These are companies in which any salesperson can recruit others to sell for the company and then gets an override on their sales.

It is also possible to create your own party plan company, if you make your own products or buy products at wholesale and then give parties to sell the products to customers. Likewise, you could set up your own company to market your own or other people’s services by putting on parties. Then you can set up your own sales network using either a single-level or multi-level compensation plan to sell your own products and services.

Some Basic Terms to Know

Here are some terms you are likely to encounter:

Person-to-person selling is a type of direct selling in which you sell to individuals on a one-to-one basis, usually via face-to-face selling, though remote selling via phone, e-mail, and the Internet, is also possible.

Direct marketing is sales through a catalog or other printed materials, such as postal mailings, and more recently by fax or e-mail, too.

A single-level compensation plan is a company in which all salespeople are directly recruited by the company. They receive compensation for their sales, but they are not able to recruit other salespeople and get overrides or commissions on their sales.

A multi-level compensation plan is a company in which salespeople can recruit other salespeople to sell the company’s products or services and then they can get overrides or commissions on their sales.

THE $10 BILLION PARTY BUSINESS

The party plan business, like the direct-selling industry, is generally huge—more than $10 billion—though it is hard to come up with precise figures, because many people in direct-selling companies put on parties to sell their products even though they aren’t officially considered a party plan company. Additionally, many smaller party plan companies aren’t members of the Direct Selling Association (DSA), though they may be listed on some of the networking sites for party plan companies, such as BetweenMoms.com. Plus if Suzy down the street decides to sell some products at a party which she has bought wholesale from a manufacturer or at a flea market, well then, that’s party plan selling, too.

So a good starting point are the figures provided by the DSA, the largest, most well-known, and most powerful of the organizations representing party plan companies. It currently has approximately 170 members, which use person-to-person or party plan sales strategies or both. About 29% are listed as companies with party plans, compared to 69% with person-to-person plans, though nearly 30% of these companies do both. About 80% have multi-level compensation plans.

How Big?

According to the DSA Web site, approximately 13 million people are involved in direct selling in the United States, and more than 47 million are involved around the world. It is also a growing sales force, which has doubled in 10 years. It was 6.3 million in 1994, 10.3 million in 1999, and zoomed to 13.3 million in 2003. Meanwhile, the volume of sales is up, too, from $16.5 billion in 1994 to $24.5 billion in 1999 to $29.5 billion in 2003. Worldwide, the total is almost three times as great—nearly $85 billion in sales. (About Direct Selling: Frequently Asked Questions and Fact Sheet: 2004 Direct Selling Growth and Outlook Survey, Direct Selling Association website, accessed 2/12/2005.)

The direct-selling industry has gained wide acceptance, whether you are selling via party plan or person to person, because the majority of American adults (55%) have at some time purchased goods or services from a direct salesperson. And the vast majority of these (77%) have attended a party or in-home demonstration.

Who’s Involved?

So who’s involved in this vast industry? According to the DSA, about 20% of the adult population of the United States have been or are currently involved in direct sales—6% now, and 14% in the past. (About Direct Selling: What Is Direct Selling, Direct Selling Association website, accessed 4/1/2005.)

Mostly it’s a business of women, who are doing this on their own on a part-time basis as independent contractors. Again, to cite DSA, here are some stats as of 2003:

•   About 80% of the salespeople are women.

•   Almost 100% of all direct sales people are in business for themselves as independent contractors.

•   The vast majority of distributors—85%—work less than 30 hours a week.

•   The vast majority of distributors are in business for themselves (90%), with about 10% two-person distributorships (commonly with husband and wife couples).

•   Direct sales people are mostly married—about 76%.

•   The majority of distributors are 35 to 54 (54%), followed by those who are 18 to 34 (23%), and those 55 to 64 (14%). But there are a substantial percentage of old-timers, too—8% are 65 or older.

•   Direct sales people come from all different educational backgrounds—from those who have just attended or graduated high school (24%) to distributors who have attended technical or trade school or some college (32%) to college grads (35%). There are even a sprinkling of distributors who have gone to grad school (8%).

How and Where?

Mostly, direct selling occurs through face-to-face selling in the home—about 62%. Only a small number of sales occur at work (7%), or at another location such as a fair, exhibition, or the salesperson’s office (4%). But now the Internet is growing—with about 11% of the sales, plus the other major source of sales is the phone—16%.

Want to know where most distributors are? If you said the South, you guessed right—about 36% are located there, followed by the West (24%), the Midwest (23%), and trailing far behind—the Northeast (15%).

What Type of Products?

As for the main types of products sold, the big categories are home and family care products, such as cleaning products, cookware, and cutlery (32%); and personal care products, such as cosmetics, jewelry, and skin care products (29%). The other major categories are wellness products (15%), miscellaneous services (15%), and leisure and educational products (8%). Over the years, the sales in these categories have remained at about the same level, with a slight increase of interest in personal care items. (Direct Selling by the Numbers—Calendar Year 2003, Direct Selling Association website, accessed 4/1/2005.)

The Benefits of Party Plan Selling

So why get involved in party plan selling? There are many reasons. Some of the most popular include these:

•   It’s a great way to meet and socialize with others.

•   You can earn an extra income.

•   You are your own boss, which means you can choose when you want to work and and set your own goals and how to achieve them.

•   You can choose your own hours and have a flexible work schedule.

•   It’s an easy way to start and run a business, because you can get started with very little or no capital invested.

•   Your earnings are based on your own efforts.

•   If you represent an established company, you can gain training and support to help you succeed.

•   You can easily get involved, because there are no barriers to entry. There are no age, education, experience, or other requirements to participate.

When the DSA did a survey of why people became a direct sales rep, they found these three main reasons: making additional income (36%), being in business for yourself (31%), and being able to get discount, wholesale, or free products (29%). (Direct Selling by the Numbers—Calendar Year 2003, Direct Selling Association website, accessed 4/1/2005.)

So what’s your reason? If you are like most people, you probably have multiple reasons attracting you—some benefits will be particularly appealing. For example, although some are particularly drawn by the opportunity to earn money and be their own boss, others might find the ability to meet and mix with others particularly appealing. You find more about assessing your own reasons in Chapter 3.

HOW IT ALL BEGAN

To get a better idea of how party plan selling fits into the direct-selling world of companies, it helps to understand a little of the history of direct selling. It’s a tradition with a long and venerable history.

From the Dawn of History

Direct selling goes back to the dawn of human history, when early traders swapped goods between neighboring families and groups of people. People variously walked with goods on their backs, heads or arms; traveled by ox, camel, or horse; put goods in carts and wagons; or set up shop in a temporary market, bazaar, or by the side of the road. Initially, the process occurred through barter, the direct exchange of goods for other goods. One person exchanges goods for other goods; money is not used in the exchange.

Before the ancient civilizations arose, this kind of trade went on between families, clans of relatives, tribes, and villages. Then, trade expanded as did the formation of the early civilizations, such as Egypt, Babylonia, and Greece. Merchants traveled by overland caravans or established markets, where customers could meet with the direct sellers before the merchants traveled on to the next village or town. Big fairs were often combined with religious feasts and celebrations. Today direct sellers may hop in a car to travel from house to house and put on gala sales parties with local organizations. But their methods have roots from thousands of years ago.

The Beginning of Direct Sales in America

In the United States, the beginning of direct sales came in the 1600s with the first settlers who traded with the American Indians to survive in a new land. Then, to hop ahead a couple of centuries, in the 1800s, the itinerant salesman went around from town to town on horseback, with a small cart, or in a wagon or carriage taking his goods around the frontier. And as the American people expanded west, the direct traders went with them.

Later, with the Industrial Revolution in the mid-1800s, direct-sales people not only sold their own products, but increasingly represented larger companies and got a commission on sales. They traveled around selling all sorts of everyday products from pots and pans and sewing machines to medical cures and encyclopedias. Even John D. Rockefeller, who became a billionaire, had a father who was a traveling salesman, selling medical remedies on the road. (American Experience: Tupperware, PBS, www.pbs.org/wgbh/amex/tupperwareproducts/peopleevents/e-direct.html, accessed 2/4/05.) And one of the most famous American plays: Death of a Salesman by Arthur Miller was written about a traveling salesman.

The Beginning of Sales Parties and MLM

Until the turn of the century, the direct sales business was largely a one-man show, and salespeople acquired a not so nice reputation of being slick and untrustworthy, particularly when they sold cure-all remedies and assorted knickknacks from their road-weary horse-driven wagons.

But that all began to change in the early 1900s when the direct sales business became more organized and some of the small companies expanded and went national. One of the most well-known of these is the Fuller Brush Company, which offered home cleaning supplies, such as brushes and cleaners, primarily to women customers.

Then in the 1930s, the beginning of party plan selling occurred when one successful Fuller Brush salesman, Frank Stanley Beveridge, started his own cleaning supplies company in western Massachusetts in 1931. He called it Stanley Home Products and at first he followed the tried and true formula of hiring men to go door to door selling to individual housewives. But then he discovered that one of his salesmen was particularly successful by having women volunteer their homes to host parties for their friends. He called it a Stanley Party, and he was able to sell far more than anyone else because instead of just selling one-on-one, he demonstrated his products to a group of women at one time and then took orders. In turn, the hostesses received a complimentary gift for their efforts in inviting their friends and hosting the party—typically a coffee pot, toaster, or other free Stanley product. (American Experience: Tupperware, PBS, www.pbs.org/wgbh/amex/ tupperwareproducts/peopleevents/e-direct.html, accessed 2/4/05.)

Stanley soon took this idea and turned the company into the first party plan company. By 1940, he had phased out having salesmen do door-to-door cold calling, and now all sales were by the party plan method. This change also opened up the direct sales business to women, because the idea of putting on a home party was a natural for housewives, at a time when few women worked. It was a way to earn some extra money on the side for themselves and their families, and they could choose how many hours they wanted to work and when. It was a winning formula that turned Stanley Home Products into a company with $70 million in sales by 1950.

Meanwhile, in the late 1940s, the party plan business took another leap forward with the rise of Tupperware. This occurred when a very successful Stanley Home Products saleswoman, Brownie Wise, who was one of the top unit managers in the Detroit area, was hired as the VP and general manager of Tupperware. She helped turn Tupperware into the leading company in its field, and soon Tupperware parties became a household name. And then other sales leaders, who got their start in Stanley Home Products, spun off their own party plan companies, among them Mary Kay Ash who founded Mary Kay Cosmetics, and Mary Crowley who founded Home Interiors, while some former Tupperware sales leaders launched their own companies, such as Longaberger Party Baskets and Partylite. (American Experience: Tupperware, PBS, www.pbs.org/wgbh/amex/tupper-wareproducts/peopleevents/e-direct.html, accessed 2/4/05.)

From Party Plans to MLM

The 1940s also was the time when direct selling took a new twist with the emergence of the first of the multi-level marketing (MLM) companies, which included Stanley Home Products. The difference between this and other direct sales companies was that now, salespeople not only got a commission on the products they sold directly, but they also got a bonus or override for recruiting other people to sell the products. The commission structure went down more than one level—hence the term multi-level. This approach helped many party plan companies expand even faster than if only the company was recruiting its sales force directory, though many MLM companies emphasized person-to-person selling rather than parties. Some, however, promoted both approaches—and some distributors put on parties of their own.

The big difference between the MLM and party plan approach is that although some distributors for MLM companies put on parties, their main focus is on home meetings, personal demonstrations, staging larger business opportunity meetings and rallies, plus sales at local events, such as county fairs, and now the Internet. Although distributors sell a large number of products retail, a major concern is recruiting prospects to become part of a sales network. Then, too, the events put on by MLM distributors in nonparty plan companies are set up and hosted by members of the MLM sales team, rather than by local hosts and hostesses (who are recruited to host the parties and invite their friends, neighbors, and business associates, as in a party plan company).

Two of the biggest MLM companies today got their start in the 1950s—Amway, based in Ada, Michigan, and Shaklee, based in Pleasanton, California. Their genius for marketing and organization-building led to tremendous growth in marketing household and health products respectively. Today, Amway has more than 3 million distributors worldwide in more than 80 countries and territories, with sales of more than $5 billion a year. Shaklee, meanwhile, has divisions in Canada, Japan, Mexico, and Malaysia and has paid out more than $5 billion in commissions since it began operations.

The party plan approach experienced rapid strides in the 1950s, too. Using a slightly different approach that featured party plan demonstrations by a network of well-trained consultants, Mary Kay launched what was to become a multimillion-dollar skin care and cosmetics empire. Today, this empire accounts for nearly $1.8 billion in sales, has nearly 1.3 million independent beauty consultants, in more than 30 countries on five continents. In this kind of sales program, the distributor works with a host or hostess to set up a sales demonstration and party. Although the distributor may hope to interest some customers in becoming distributors and putting on sales parties, too, the focus is initially on retail sales.

For a time there was some question about the legality of the MLM sales plans, and Amway ended up battling the U.S. government for about a decade. But in a 1979 decision, Amway’s multi-level plan got a clean bill of health. Since then, thousands of new MLM companies have emerged, many with party plans. In fact, out of171 membership companies in the DSA that uses person-to-person or party plan selling, about 80 are both party plan and multi-level companies; and the vast majority of all party plan companies—about 80%—have MLM sales plans.

THE EASE OF GETTING STARTED

Today, as when direct selling, party plan selling, and MLM programs first started, the party plan business represents an easy-to-get-into opportunity.

It’s a business anyone of any age or educational background can start without any particular requirements. And there is normally very little investment—just the cost of a sales kit and a few product samples costing less than $100. Then, you can increase your investment as your sales increase should you want to have more product and sales materials on hand.

You can also choose your own hours, so you can readily fit the business into a busy schedule, as well as conduct it from your home—a reason why the vast majority of party plan distributors, such as direct sales reps, are generally doing this on a part-time basis, and the vast majority are also women.

Then, too, it’s an easy business to get started in because you can start with your friends, family members, neighbors, and work associates when you look for volunteers to host a party, and then they recruit most or all of the guests. So all you need to do is show up with your product and sales materials, then demonstrate or sell, while the host runs the party. Of course, to become really successful, you must do more than that to get better and become a true professional in how you put on a party and expand your business. More of that later. But you can start off quite easily with fairly little training and experience; then build from there.

A major caveat to watch out for is getting involved in multiple programs at the same time, so you are not sufficiently focused. Another caution is getting on board because others are doing it without sufficiently investigating the company, particularly it’s management and quality of its product, or making sure there’s a good fit between you and the product. Then, too, don’t quit your day job until you are sure this is going to work financially for you, or you have sufficient reserves to tide you through the start-up phase, since it takes time to make almost any business profitable—commonly 1-2 years.

A CHANCE FOR A GROUND FLOOR OPPORTUNITY

Party plan selling can also offer a ground floor opportunity if you start your own business or join a new party plan company.

If you have a business start-up, you are starting from scratch and can shape the company as you want—except for applicable government regulations—every-thing is up to you. So you choose the product line, the company name, the personality and style of the company, the marketing plan, and so on. In effect, you get to design and build the house.

Alternatively, if you join a new start-up company, it offers great potential if it succeeds. That’s because you are among the first tier of distributors recruited directly by the company, so you have an untapped market for sales—and if it’s an MLM company, you have the first crack at building a sales team. This can result in a