Why Direct Sales Companies Ultimately Profit More Than Their Sellers
It always confounds me when people assume that direct sellers are getting taken advantage of because the company profits more per sale than the individual representative does. Of course the company will profit more when comparing dollars to dollars - they created it! Direct selling, or MLM, companies and their owners have invested substantial time, energy and money into making a brand for themselves. They took something that did not exist and turned it into a profitable business, complete with all the necessary production, shipping and staffing costs.
As an independent seller of their product, you get to jump on board with them after all of that hard work is paying off and reap the benefits, often for less than $100 invested in start-up costs. Those start-up fees provide you with equal or typically, greater value of products and tools than what you paid for in order to kick-start your business.
We see a very similar model used with franchises, yet you would never question why McDonalds is profiting greatly from an individual owner's fast food restaurant when they sign on. This is because we understand the concept of ownership, creative rights and royalty fees. When you create something, it is only fair you profit from its use. Just because McDonalds makes money from every franchise owner does not mean that same owner isn't making their own profit or that McDonalds is taking advantage of them. McDonalds provides them with all the marketing, tools and training needed in order to successfully run that business, but it is up to each individual owner to manage and steward their business well.
As an Independent Scentsy Consultant, I’ll be the first to attest to the hard work that goes into making my business a success. For it to be a career, it demands serious time and commitment. It is not as simple as announcing your arrival and waiting on orders to come in as some think….far from it! However, I always acknowledge that while building and developing my customer relationships and business on my own, I could never do that if it were not for the amazing products, branding and support that my company offers to me. Without them, I would have nothing to sell, or at least nothing worth selling. So, of course they profit from it!
This should not bother you, but rather encourage you, as reputable direct sales companies genuinely want you to succeed and grow your business as large as you can dream. In the end, it was and is their business first and your success guarantees theirs. That, my friends, is what we call a symbiotic relationship, and it is a rare thing in business.