The Top 5 Reasons That Direct Sales Dominates Distributorships

The Boring

By definition, distributorships are by definition “a franchise held by a distributor.”  Let’s take it down one step further and look at the meaning of distributor.  Dictionary.com says that a distributor is “a person, firm, etc., engaged in the general distribution or marketing of some article or class of goods”.  Kinda nice how they define a word by using a variation of the same word.  So to condense these, distributorships are basically a franchise where you sell something.  Now that we have the boring definitions out of the way, let’s have a look at the top 5 reasons that Direct Sales Kills Distributorships (in the traditional sense).

The Cold Hard Truth

1.  How much is a franchise these days anyway?  100k, 200k, or even 1 Million if you like monetizing beef.  Take 1/4 of that 100K you were going to invest and start a direct sales business.  The actual entry cost can be anywhere from 500-3,000 dollars.  Use the extra 22K to get a wicked marketing funnel in place and start returning 1000% on your money in a short period of time.

2.  Now that we own a franchise, we have to hire people to run it to eek out those profits we got sold on by the franchisor.  Raise your hand if you have ever had to deal with minimum wage or a little higher employees.  My hand is not raised because all of my employees were paid well over minimum wage, but even at $15/ hr, they are still a pain in the ASS!

Do you know how many employees I keep running my direct sales business?  None, zero, zilch!  I outsource most of the tedious work to people who are paid by the job and not the hour.  If I don’t like the work, they either redo it to my satisfaction or they don’t get paid.

3.  Let’s say we lucked out and found a few good people to run our business, and we make a profit in year two.  Now, we have to cut a royalty check back to the franchisor because they are awesome.  Bye, Bye 1-5% of my bottom line.  I’m the only one with my hand out looking towards my business (Correction: this should read, Eric’s wife gets all the money) and don’t have to worry about paying anyone except me.

4.  Where is the franchise school?  When you buy a franchise business, you had better have a basic understanding of most of the facets of running a business.  You need to know legal rights, taxes, human resources, payroll, inventory, and I could go on and on.  Sure, part of your initial down stroke on a franchise will include a lot of this info, but you still have to have some basic knowledge to be able to manage and maintain those systems.

Direct selling is one of the most awesome business models in the world, because it is in everyone’s best interest that you do well.  For that reason, there is support coming out of the wazoo for almost any issue you run into.  You don’t know the first thing about internet marketing, who cares, I didn’t either when I got started.  The support system is unreal and meant for you to be successful.

5.  For to many people, buying into a franchise is the same as buying a J-O-B.  They have so much money invested, they think they have to be hands on in all the aspects of their franchise.  They go from working 40 hours a week to 80 for less money.  The stress in their lives goes way up and their lives are controlled by the business.

Excuse my French, but F*%R That!  I don’t want a J-O-B.  I want an business that runs with me or without me so I can go to Vegas, Hawaii, or to the kids school events whenever I want without worrying about anything.

There’s The Good, Bad, And Really Ugly

So, you still want one of those traditional distributorships?  Have fun!  Let me know when you are ready to get out of that mess and get into something that will build your wealth with or without you being their to hold its hand.

Let me know what you think!  For some reason I am hearing the Pink Floyd lyrics “Hey, is there anybody out there”

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