MYTHS ABOUT SOCIAL SELLING, BUSTED! (PART 2)
I’m diving into part 2 of my ‘Myths about social selling, busted!’ series with myth #3, coming at you now. before we start, it goes without saying that all opinions expressed in this blog are my own and are in no way representative of monat global. These are my thoughts, and my words. cool?
Myth 3: The FTC says less than 1% are successful.
This one’s gonna go a little deep and possibly even complicated, but stick with me. I promise there will be some powerful insight into this belief.
You’ve probably heard this before, “99% of people lose money in direct sales.”This statement is touted all over the place with zero context. So, let’s elaborate a little bit.
Success is relative. And it means something different to everyone. Since when did we become the higher power to tell someone else what their version of success should look like?
Here’s some context as it relates to direct sales.
Some people join as a distributor with no intent to sell. This is very true. They join for the discount or to entertain the idea of making it a business and then change their mind. And that’s cool! I have my nursing degree and don’t currently work as a nurse, and people quit jobs and change careers every single day. Does it mean theY failed or failed to make money? THAT THEY Lost money? Not necessarily, it means they chose to quit. But even so, this kind of direct sales distributor falls into the 1% statistic provided by the FTC.
Believe it or not, some people aren’t money motivated. I’ve found this to be hugely true. Not all people are motivated by a paycheck, and I’ve had this conversation with multiple people over the years. Some men and women join for community, service or philanthropy, some extra alone time, the discount, etc. Are they less successful because their focus isn’t on the paycheck? Nope. That wasn’t the reason they chose to join the family. Their version of success was community, and they found it! That’s success.
Some quit too early. As with any career, it takes time to build.Nurses go to college for four years before collecting a paycheck. Surgeons, seven years plus a year of internship. Lawyers, teachers, any job requiring a college degree also requires years of your time before making money. Let’s apply this to direct sales. Can you make money your first day? Yes. Does everyone? No. For some, it takes longer to build. If a person decides to join a direct sales company and quits within a few months (for whatever reason), is that the fault of the company or the person who quit? Same comparison—a nursing student who leaves nursing school before graduation. Is that the fault of the student or the fault of the school? This is what’s frustrating… the FTC will always say that it’s the fault of the company or business model, and I think that’s an unfair assumption. But y’all, life isn’t fair is it? I’ve been partnered with a direct sales company for three years now, and I feel like I’m just getting started. There’s so much room to grow, learn and build. I’m allowing it to take the time it takes because I love it, and I understand that success isn’t linear, and there’s no set time frame. Some people don’t have the same mindset, and they quit when things get hard or they’re too impatient. Marathon, not a sprint.
In terms of Losing money: Okay. This one requires a little research on your part. If you’re thinking about joining a direct sales company or working in social selling (think Instagram influencers, bloggers, affiliates, etc), you have to weigh the initial investment with your monthly overhead and the profit margin. Here are some good tips and things to research:
What’s your initial investment? This varies per company. Starting your own business or franchise that isn’t direct sales or social selling in nature can range anywhere from hundreds of thousands to millions of dollars. Want your own McDonald’s? It’ll cost you a cool 2 mil. Signing up as a direct sales distributor is a much lower initial investment—historically, this works for you but against the company when it comes to the FTC statistics they share. How so? There’s a greater population of people who can afford a $200-$1000 investment as compared to a two million dollar investment, so there are way more people joining as a distributor than starting McDonald’s franchises. You get the idea. The initial investment is low with a direct sales company, and it’s a benefit if you’re smart about what you do going forward.
What are the monthly fees? This varies per company, and if you’re thinking about joining a direct sales company, the best thing to do is ask the person you’ve been speaking with what the fees are and what they entail.
What is the monthly purchase requirement? Again, this varies. Some direct sales companies require a minimum monthly purchase to be paid commissions. The company I’m partnered with does not require this, and that is a huge benefit.
Is the purchase of inventory required? Another important question because it gives you a good indication of monthly overhead.
What is the monthly overhead? This varies for everyone, not per company but per person. Not everyone spends their money the same. My monthly overhead is lower than with my photography business because photography is a very expensive business to run. The only necessary expenses I’ve found to be associated with direct sales is what I already own and pay for (internet, phone bill). Anything else I purchase is by choice, not requirement by the company.
Now that you’ve asked those questions, here are things I’ll tell you require a little more investigation and may be a red flag for you:
Are you required to make a monthly purchase to be paid? Some direct sales companies require this. The one I’m partnered with does not. You as a distributor are not required to make any personal purchases to be paid out commissions and bonuses. This increases your potential for profit.
Am I required to carry inventory? I personally wouldn’t want the responsibility of carrying inventory for a direct sales company…or any company, honestly! This is why I don’t own an online boutique. The company I’m partnered with requires absolutely zero inventory. The company is US based and US made, debt free, own their own R&D and distribution center and ship to five (and counting!) different countries. I am required to carry no stock, hold no inventory, and have no requirement to ship anything anywhere. The reason this is such a benefit is because it keeps my overhead expenses low and my profit margin high. This increases your potential for profit.
Okay, back to the focus of “The FTC says only 1% of people are successful.”
Tell me—what’s your version of success? Is it linear? Do you equate success to a paycheck only? This “myth” may be a “warning” listed on their website and the number one argument anti-MLM posts on Reddit will tell you, but I call it busted. It’s one sided and without context, and I will continue to shout that from the rooftops, even if I wasn’t involved in a direct sales company.
Now, here’s something I will share about the company I work for specifically. These numbers here ARE allowed to be shared per the FTC income disclosure statement*:
The initial investment to start is $199-$799, and this includes full sized product. The average earned income from a distributor building a business (not including those that are “inactive” or not working at building a business- I call those “discounters”) ranges from $2,071 per year to $1,026,853 per year.
The highest grossed earnings from the first promotional rank in the company for 2019 was $11,946.
The highest grossed earnings for the top of the compensation plan in 2019 was $2,344,416.
*These results are not typical. Monat makes no guarantee that you will achieve similar results. Your results will depend on your hard work and effort. In 2018 the average annual earnings of all active US Monat market partners was USD $1,453.
Now. If a majority of distributors sign up with no perceived intent to sell (considered inactive for that calendar year), does that mean that those working and earning anywhere from four to seven figures a year doesn’t matter?? Absolutely not.
Does it mean that those who joined with no perceived intent to make money (instead, their goals and definition of “success” were different), does that mean their own version of success that can’t be wrapped up in a FTC chart doesn’t matter? Absolutely not.
I’m going to wrap this up with one final thought.
the next time a friend shares her new job with you, I hope you congratulate her. consider asking her:
“Do you feel successful?”
“Are you happy?”
“Are you fulfilled?”
“Have you found your people, your community?”
“What’s your favorite thing about your job?”
“Has this company given you what you’d hoped?”
We deserve to own our individual definition of success, and it shouldn’t be defined by the FTC. If I never made another dime, I’d still keep showing up to this job every single day because it’s given me more than I’d ever be able to give back—and no, I’m not talking about a paycheck.
The FTC requires this disclaimer: These figures are not guarantees or projections of your actual earnings or profits. The above figures include only bonuses, commissions or other remuneration paid to Market Partners by MONAT Global. They DO NOT take into consideration any expenses incurred by Market Partners in operating their businesses or profits or losses when products are resold by Market Partners. Expenses incurred in operating an independent MONAT Global business may include, but are not limited to, the purchase of a starter kit, payment of renewal fees, purchases of product samples or inventory, shipping costs, transportation costs, training and educational expenses, and travel expenses. In some cases, these costs and expenses may exceed the amounts earned by Market Partners from MONAT Global. MONAT Global makes no guarantee of financial success and you may lose money. Success with MONAT Global results only from successful sales efforts, which require hard work, diligence, skill, persistence, competence, and leadership. Your success will depend upon how well you exercise these qualities.