Why are we working and Why do we leave and Join another Company?
Simple answer is because we want to be able to sustain our livelihood and provide for our family.
The only issue here is we are not always in a position to hold on to it as circumstances may change unfavourably, not necessary from the company we work in, but our own state of health, the economy, etc.
So if you think from a company standpoint, it needed to have healthy cashflow, and invest to grow that cashflow so that the company can pay staff and the running cost of the business. The right people need to be employed, and they need to be trained, developed and be motivated to do well and grow in their career. Employees need to earn their rights to remain employed by their performance and there is always a termination clause that both can exercise. The company will need some base amount to stay operational else it will have to let go of people and / or sell off its assets, etc. So if it grows its business, it also builds higher opportunities to stay afloat and continue its business.
Direct selling business is similar to what a company wants but with more accountability given each one participating in it. Like any company, all Direct selling businesses have their strengths and areas to improve. What differentiates one from another is the product they have and the criteria to remain in the business, and whether the business can be passed on to the next generation. To be a direct seller, one needs to start with believing that the product is good for self and others. That will be the driving motivation to continue to consume and to sell to others. The direct seller can do all by himself/herself but that will be tedious. A better model is to recruit the consumer themselves and together sell the products to others who will be possible sellers too. Hence like a root structure forming and growing deeper and firming up the business.
Following up from my last article, you will find that I now manage to have my horse with its head. I can relate better as a potential leader in a direct selling structure. I can experience deeper and more meaningful value in it. For instance, the one who introduces me to the business is considered my Upline and the one whom I introduce becomes my Downline. It is no different from an organization hierarchy, except, in Direct selling business, the motivation by each person is higher because everyone becomes an entrepreneur, each owning how his business will grow. The Upline will be very interested to see the Downline become successful, and hence will train, develop and offer support much more than what an organization typically should do. So then as one spreads the goodness of the products to consumers, they in turn can become sellers. This consumer/seller growth will then multiply and sustain the business and with an effective compensation structure, based on a percentage of the sales volume, it will then drive everyone to do better and the business keeps growing. This business can also be transferred to the next generation to take over. Hence I get more excited about exploring this so that I can also eventually pass on the business to my daughter and so forth.
Will spare you the details but just to summarize the concept that most Direct Selling has:
- Compliance to the Multi-level Marketing and Pyramid Selling (Prohibition) Act is a must. (https://www.mti.gov.sg/Legislation/Legislation/Multi-level-Marketing-and-Pyramid-Selling)
- There are many successful Direct selling companies that I have enjoyed their products, such as Tupperware, Nu skin, Atomy, etc). The products may not suit all and hence one cannot be dependent on testimonials of people alone. So it will be good to find out more about it, may want to test a small sample before committing to buying more.
- While some provide attractive compensation scheme, my motivation to go into this business will be on the goodness that the product can bring to myself and others, and the compensation will then be as a reward on the sales’ performance.
- Because you benefited from the product, you want others to benefit as well, hence you start to build your consumers. Likewise, they in turn share to others and become ‘seller’ to others. You learn about the product because you enjoy the product and you want to introduce to others. Assuming everyone does that as well, you form a root structure, and the next one also forms its root structure.
- So if each individual buys the product, a percentage of it becomes a compensation reward to the person who introduces the product. So your main investment will be the items you buy for consumption. The benefits are better lifestyle and opportunities for good returns from an individual as well as collective sales growth in your root structure.
- So if you have many layers formed, there will be a cascading of rewards build up and hence the more layers formed, the higher the rewards earned.
- As each will continue consuming the product, this reward will continue. It stops if no one consumes, just like any business. If the customer stops taking orders from you, you lose your revenue.
- Also, as you form many layers, you also build your rank/position and earn higher percentages of the sales.
There are many great companies that do direct selling and I am exploring a German company of 28 years, ranked ten in the top 100 Direct Sales companies worldwide in 2021, with strategic collaboration with Luxembourg Institute of Science (LIST) since 2016. The company also has its products certified by TÜV SÜD ELAB and is committed to changing people’s lives for the better. Of course, as in any company (or even Political parties), you get good reviews as well as bad reviews, therefore will encourage you to read any article with a discerning mind.
Hope this helps you build an interest in direct selling as a passive income, and for some, they may prefer it as their main source of income.