What Your Distributors Won’t Tell You (Direct Sales Industry Insights)


For the past few months, we’ve talked to distributors, hostesses and distributors from a variety of direct selling companies.

We asked them serious questions – questions they wouldn’t feel comfortable telling you at corporate. Because of the depth and breadth of this feedback, we’re dividing it into a series of articles. Here’s the first part, the money side of a distributor’s business.

“Stop The Madness With
The Compensation Plan”

“Too complex to understand”
“Hard to reach basic ranks”
“Company always wins”

We know that every compensation plan is unique but there were similar comments between all distributors – they all want simplicity and fairness.

A direct sales compensation plan should be easy to explain to new distributors and prospects. “If you do this, then you make that”.

Distributors don’t want to get cold feet when a prospect asks them;

“How do you generate income with this opportunity?
Can you explain the 21 different bonus types the company pays?
Specifically, how does this bonus work?”

A few distributors were upset because they loved their company and products, however, they felt some of the compensation plan promotions only benefited the company.

Of course, changing a compensation plan is hard because it involves investing your money and your time. Here are a few solutions to improve your team morale when talking about the plan.

Possible Solutions

Solution #1 Redesign the marketing materials

Believe it or not, sometimes a compensation plan is not complex, but instead explained in a complex manner.

-Have your marketing team create a new, simple design for the compensation plan overview.

– Make it visual! If you need more than 2 pages to explain your compensation plan, you are over complicating it.

– Create an easy to follow diagram on how to qualify for commissions. For example; You need ‘x’ amount of points and ‘x’ amount of distributors active in order for you to qualify for the first three commission bonuses.

– Make a live checklist.

For example: On the left side you show all the facts (current volume, newly sponsored distributors, etc.) on the right side, show the qualifications needed to advance to the next rank in the compensation plan. This way they know exactly what they need to do to advance.

Solution #2 Provide scripts to distributors

Most new distributors don’t know how to handle objections, but if you provide a script with basic responses, you will be surprised with the results. If you already have the scripts in a 100-page manual, remove it, and see solution #1.

You can provide scripts about:
– How to respond when they ask about generating income.
– How to respond when they ask about generating a retail commission.
– Etc.

Solution #3 Automated Education

Create an email sequence or an ongoing training where you explain the compensation plan in small, bite-sized chunks.

For example:
Day 1: Generating Fast Start Bonus
Day 2: Your team structure
Day 3: Ready for residual income

Are You Still Mailing Checks?

“I need my money faster”
“I want to reinvest my earnings but my check is not here”
“45 days to send me a check?”

This is not the case with all companies; however, we talked to distributors that were frustrated because their companies were mailing checks instead of using direct deposit.

We all know the good feeling of getting a physical check and depositing it into our account. But, we also know that the feeling of getting an email notification that our commission has been instantly deposited into our e-wallet account is even better. Every distributor we talked to prefers direct deposit to a mailed check.

A check can get lost. Then the distributor has to contact the accounting department, request a new check, wait 30-45 days to protect the company, and wait another 5-7 days for the check to arrive in the mail. This is a hassle some distributors simply won’t be willing to endure.

Possible Solutions

Solution #1 Implement a new payment distribution method

There are companies like hyperWALLET (www.hyperwallet.com), that can help you pay your distributors fast and reduce all the high costs and hassles involved in sending physical checks.

Solution #2 Explain The Payment Process

If you decide to keep mailing checks, create a guideline for distributors to know, when they are getting paid, what happens if a check gets lost and make sure to add your contact information with instructions in case a check goes missing.

Collecting their commission should never be a hassle for you distributors.

[To Be Continue…]