Direct Selling: Taxes

One of the first questions everyone asks me about direct selling is "do I have to pay taxes?". The short answer is yes. The long answer has to do with talking to your CPA, saving all your receipts, etc. I am the daughter of two CPA's but I am not an actual CPA so please contact your CPA for futher details, but here are a few hints for tax time.

Keep good records. It is a pain to have to go back throughout the year to look at all of your sales to figure out taxes. Start from the beginning with tracking sales. I keep track of everything with a very simple Excel spreadsheet that I created.

Bonuses are taxed. If your company offers bonuses, free products, etc. they will be taxed at the end of the year. They should send you a form with all of these listed but once again, keep good records so you will know what to expect.

Mileage adds up. I keep a mileage book in my car so I can write down everywhere I go relating to my business. The ultimate log is in an Excel file on my computer but this allows me to write it down before I forget. Going to and from meetings, parties, buying supplies, deliveries, etc all count towards your mileage and this can add up quickly so please keep track of it.

Keep receipts. Think of any and every aspect of your business where money comes out of your pocket and keep those reciepts. Here are just a few of those: food (both to demo and food bought at a meeting, etc.), ink, paper, catalogs/flyers, conference fees, etc.

Some people will also be able to deduct items such as computers, cell phone, and a home office. You will need to talk to your CPA to see what you qualify for.

Taxes may seem a little overwhelming at first but if you keep good records, it is not as bad as it seems. Many people find that if they keep track of all expenses, they do not owe or owe very little at the end of the year.

Direct Selling: Getting Started

In case you missed part 1, choosing a company, click here.

Once you pick a company to sell for, you may be a bit overwhelmed. My best advice is to jump in and get your feet wet. The more you sell, the more you will find your style and what works best for you.

I suggest you tell anyone and everyone you know about your new adventure and ask them if they would like to host a party. I sent out one email to my entire address book and booked a few parties off that email fairly quickly. Months later, I booked a few more from that first email. Friends and family knew they wanted to have a party some time but timing was not right when I first told them I was selling Tupperware. You never know when a contact now might turn into an opportunity later.

Another great way to get your feet wet is to host your first party. Invite over a good mix of family and friends and introduce them to your company. You will probably have several book parties from you after seeing the product in action. Also, family and friends are much more forgiving so it is a great way to get practice in. I suggest scheduling this open house soon after you order your kit so that you have a good start on your first month in business.

Make sure not everyone is from the same social circle though when inviting friends. You want to be able to eventually branch out to other people outside of your circle and it will be hard if everyone already knows each other.

Also, once you decide to take the leap of faith, ask another consultant in the area if you can attend one of their parties for training. It helps to see what others are doing. My first party was very similar to the training party I went to but shortly afterward I started finding other ways to make my parties my own. It really helped my nerves though to have an example to follow.

Direct Selling: Pick a Company

The first step on your journey through direct selling is to pick a company. For those of you who read my story last week, you will know that the company picked me. It isn't always that way so here are a few things to think about when deciding which company you want to work for:

A product you like: When you like the product and believe in the company, it truly will not feel like you are working. I'm not a fan of anything related to sales as I greatly dislike being pushy but I've found Tupperware sells itself mostly because I believe in the product. Think about products you like or genres that interest you and go from there.

Competition: I have nothing against Mary Kay (in fact, I own several of their products) but in my area, their sales force seems to be saturated. Keep this in mind as you don't want to be competing with too many of your colleagues. It does help to have some sales force in your area as you learn from each other, but if the market is too saturated, check out another company.

Start up costs: Every company is different as to start up costs so investigate this when looking at a company. With Tupperware, you can start with as little as $79.99. The kit comes with many of the most wanted items too so it is a great value. Some companies require you to keep an inventory and that start up cost can be high so keep that in mind.

Contract details: Explore the fine print and talk to someone who is currently selling for this company to see what it takes to remain a member of the sales force. Some companies have high quotas while others are low. With Tupperware, your only commitment is to hold one party and sell $450, preferrably within the first 30 days. After that, you are free to quit. To remain active, you need to sell $250 every 4 months. That is a pretty low amount compared to some companies.

Discounts: Since you will be selling a product you like, check out what your discount is. You are in this to make money but you will want to buy some of the product for yourself too. Tupperware has a standard discount of 25% with samples being 35%. The best part is this is 25% off sale prices too. Bonuses are also available almost weekly so it is easy to earn free or deeply discounted product. These make great gifts or can add to your start up kit for demonstrating.

Profit Potential: Of course, your first thought on all of this was probably "how much am I going to make". Yes, this is important, but do not pick a company solely on this as there is so much more to the equation than just money. Most direct selling companies pay you a comission of 10-50%. Check out what the average party amount is and how much work is actually involved to get a good look at your profit potential.

Stay tuned as I continue this series in the weeks to come. Again, if you have any questions about direct selling or Tupperware, please leave a comment or email me so I can address them in this series.

Tupperware: My Story

Starting next week, I am going to do a short series on direct selling as a way to earn some extra money. Before I get into the details though, I thought I would share why I chose Tupperware.

I am coming up on my one year anniversary of selling Tupperware - I started on Halloween 2008, but let me back up a few years first. Several months before I became pregnant with my first son, I ran into a Tupperware consultant. I've always appreciated the quality of this company and hadn't been to a party in years so I decided to have one . The consultant knew I liked the product (I'm what we call at Tupperholic) and tried to talk me into selling it then. I thought about it but found out shortly after the party that I was pregnant. I figured that wasn't a great time to start something new though so I moved on. Fast forward to last fall. I'm invited to a Tupperware party and it is with the consultant who held my party three years previous.

She immediately remembered me and started in again about selling it. First of all, I was impressed she remembered me. I did not sign up that night, but the idea kept creeping into the back of my mind. See, we were nearing the one year mark of my husband's job being cut back. I had worked every odd job I could find and was tired of working so hard simply to pay the bills. There was nothing left for just me. I decided to give Tupperware a try but the profits had to be kept for fun money. I could use it for shopping, eating out, entertainment, etc as long as it was something I wanted to do (for me or my family) and not a bill. I treated it like a hobby. I figured there was little to lose because the kit was under $100, included a ton of product that I wanted, and my only commitment was to hold one party.

I'm not pushy and sales are not my strong point but I've found Tupperware sells itself and I think part of that is due to the fact that I love the product. I've had a blast meeting new people and making a little cash at the same time. As many of you know, I lost my part time job at the end of May. At that time, I decided I was doing well enough in Tupperware that I could turn it into my job. I no longer treat this as a hobby, rather a job, but I still keep a small amount of profit for entertainment purposes. I love selling Tupperware much more than sitting at a desk all day and if I put a little effort into it, I can make much more than my day job.

I never set out to find a direct selling company, rather it found me, but I'm glad I made that leap of faith. The funny part about the whole ordeal is that I found out two weeks after I signed up that I was pregnant again. I actually had a party scheduled at my house for the day I had our second child (he was a month early). We laugh that he is a Tupperbaby.

As I mentioned before, direct selling is a great way to make some extra cash for Christmas. If you have any questions about direct selling or Tupperware, please let me know so that I can work them into the series.

How To Earn Extra Income Through Direct Sales Series

I've had several readers ask me questions related to my Tupperware business so I thought I would start a short series on direct sales. Direct sales businesses are a wonderful way to earn some extra income for the upcoming holidays and still allow you to stay home with kids during the day. The series will kick off next week when I share my story and why I chose Tupperware.

In the meantime, if you have any questions you would like addressed regarding direct sales or Tupperware, please leave me a comment or email me and I will do my best to address them.