On December 20, 2018, President Donald J. Trump signed into law the Agriculture Improvement Act of 2018 Farm Bill that effectively ended the prohibition of industrial hemp.
Now that the hemp industry is legal once again, the industry has literally exploded into a multibillion dollar market.
đ In 2021, annual cannabis sales reached $26.5 billion, and data from New Frontier Data expects cannabis sales in the United States to exceed $57 billion by 2030.
đ Market research firm, the Cowen Group, projects the cannabis industry to skyrocket to $100 billion by 2030 in the United States alone.
đ Studies by Direct Selling News show that direct selling companies lead the global market in sales of CBD products with more than $300 million in annual sales.
As soon as prohibition was ended, many enterprising cannabis entrepreneurs created new startup companies, including direct sales companies.
As a general rule, research is essential to choosing the right direct sales company to partner with. Just as all CBD oil products are not created equal, not all cannabis direct sales companies are created equal. Some are established in the direct sales industry. Others are start ups. Each has its pros and cons.
For the average person looking to cash in on the cannabis wellness revolution, there are many new opportunities for entrepreneurs to make a fortune with the right cannabis direct sales company.
Before you partner with a CBD Oil direct sales company, you should perform due diligence in researching the company before you decide to join as an independent affiliate, distributor, or representative..
Even if you are looking to join a CBD Oil direct sales company to earn a part-time supplemental income, itâs still important to do some research before you join a company and put your reputation on the line promoting their cannabis wellness products.
Whether you are a single mother looking to earn an extra part-time income or if you are a direct sales entrepreneur looking to build a multimillion dollar distribution network with a global team of independent business partners, you should treat the act of choosing the right cannabis wellness direct sales company to partner with as a very serious business decision.
THE BEST WAY TO RESEARCH A CBD OIL DIRECT SALES COMPANY AND ITS OPPORTUNITY
You will need to put in the intensive work necessary to gain the knowledge you need to make a solid decision.
Just because a direct sales opportunity may be free to join or cost less than $500 to get started, doesnât mean you should treat it lightly.
Many inspiring direct sales entrepreneurs have joined a company based on pure emotion. Do not make that mistake yourself.
As a general rule, the best way to determine which CBD Oil direct sales company is the right partner for you is to ask the right questions. Apply common sense and use critical thinking skills to perform due diligence. Building any direct sales business is a serious undertaking. Treat it as such.
If you are a complete beginner without any business experience or education, make sure the company you choose provides training.
Keep in mind, the best direct sales companies provide free training. Most also provide other free or low cost marketing tools and resources to their affiliates, distributors, or representatives.
So again, the best way to gain the necessary knowledge you need is asking questions as you put together a well-written, well-researched and well-prepared business plan.
THE 3 BIGGEST FAILURE CAUSES OF FAILURE IN THE DIRECT SALES INDUSTRY
Building a successful direct sales business is a very serious endeavor. Even for those beginning direct sales entrepreneurs who already have a background in business or sales and marketing, it may be the hardest thing they have ever done in their life.
According to the Small Business Administration (SBA) Office of Advocacy, data from the Bureau of Labor Statistics shows that two-thirds of small businesses fail during the first two years and about half fail at about five years.
Per the Direct Selling Association (DSA), 50% of direct sales entrepreneurs quit during their first year. By five years, a minimum of 90% will give up and quit.
With such high odds of failure, it is very, very important for you to perform the same due diligence in researching a CBD Oil direct sales company as a fast food entrepreneur would before buying a McDonaldâs franchise.
The three biggest causes of failure in the direct sales industry are:
Lack of leads
Many direct sales organizations like insurance or finance companies, for example, have their new recruits make up a âwarm marketâ list of 100 or more people that they know.
While this old school method helps a lot of new entrepreneurs launch their business, the problem is that once the new recruit has talked to everyone on their warm market list there are no more people for them to talk to.
Once their warm market is exhausted, they will need to talk to cold prospects, people that they do not know. Approaching complete strangers is scary as hell for most people because they lack the confidence to do so properly due to a lack of how-to knowledge.
Fortunately, some of the best direct sales companies will often provide lead generation tools and free training to help new affiliates.
Lack of skills training
One of the biggest reasons direct sales entrepreneurs eventually fail is because they do not have the skills necessary to build a successful direct sales distribution network.
Fortunately, all these necessary skills can be learned by anyone who is willing to learn, be coachable, and give it time to master these skills.
Two of the most important fundamental skills are what to say and how to say it. Once these two skills are mastered, a direct sales entrepreneur will never experience a lack of leads again.
Quitting too soon
Most direct sales entrepreneurs will quit before they even get started.
Among the biggest culprits is they get emotionally beat up by the people they approach on their warm market list. This occurs because they are not taught by their direct sales company what to say and how to say it to the people on their warm market list.
Even if a newbie makes it through the warm market list, the fear of approaching complete strangers stops many of them in their tracks before they even try.
This fear is magnified when the direct sales company they are affiliated with doesnât provide any cold prospecting tools and accompanying training. Or if the company does provide such tools and training, the tools and training are, frankly, subpar and incompetent.
The following list of questions will provide an excellent start to your research efforts …
DUE DILIGENCE: 25 VERY IMPORTANT RESEARCH QUESTIONS
- How long has the company been in business?
- Is the company a startup or is it an established company expanding into the CBD Oil market?
- Who are the leadership behind the company?
- What type of training is available?
- Does the company provide marketing tools such as websites, contact systems, or specialized apps?
- How do you earn money?
- What type of compensation plan does the company use?
- What are the limits of the compensation plan?
- Does the company have a profit-sharing plan for top distributors?
- Does the company offer great support tools?
- What are the companyâs rules to qualify for commissions?
- What are your upfront and recurring expenses?
- Does it cost anything to join?
- Does the company require auto shipping for distributors and preferred customers?
- Are the companyâs product labels supported by third party lab testing reports?
- Does the company offer a money back guarantee on its products?
- What customer service options do they provide you as a distributor and for your customers?
- How many CBD Oil product lines – e.g., tinctures, skin treatments, gummies, vape – does the company have?
- Is the companyâs CBD Oil products reasonably priced compared to similar products sold in retail stores?
- If the company has just one CBD Oil product, what are the companies future plans for adding new CBD Oil products?
- Does the company provide any perks for top distributors such as a luxury car allowance or all expenses paid all-inclusive exotic vacation?
- Does the company provide health insurance benefits for top distributors?
- Does the company provide weekly webinars and phone meetings?
- Is there any other independent distributors holding traditional meetings in your local area?
- Do online reviews on the company, if you can find any, positive or negative?
RELATED: HOW TO START A CBD OIL BUSINESS
3 RESEARCH HABITS TO FOLLOW
It is important to approach your research with the proper mindset. After all, building a successful direct sales business will require hard work and a serious time commitment.
Hereâs are three tips to help you cultivate a mindset – the mental habits – that will help you sort through the overload of information available online:
ASK THE RIGHT QUESTIONS
When reading an print article or online review, use critical thinking skills and ask questions such as:
- Who is the author?
- Is the author a true journalist or an Internet marketer?
- Does the authorâs content suggest any sort of bias?
- Is the article strictly educational or is it an affiliate review article?
- Does the article provide references and sources? If so, make a list of the references and sources mentioned in the article and dig deeper by researching them.
SORT THROUGH THE HYPE
In a recent study conducted by Direct Selling News (DSN), industry researchers identified 25 direct selling companies in the CBD marketplace. By the time you read this, there will no doubt be more in the marketplace.
Perform a google search for the keyword âcbd oil direct sales companiesâ and you will find no shortage of CBD oil direct companies to choose from.
In the end, to get a true analysis of any direct selling company, no matter what market niche it serves, you will need to sort through a lot of hype.
A lot of the information you will come across will be pure hype, some will be half-truths, and other information will be 100% legit.
BE CAUTIOUSLY AWARE OF ONLINE SCAM REVIEWS
Many of these âIs So & So company a scam?â reviews are from unscrupulous online marketers that prey on failed network marketers.
For most of them, their end goal is to get you to enroll in their âaffiliate educationâ program. Once you enroll in their program, you are constantly bombarded with upsells.
Read these with a judicious mindset.
As a general rule, you would do well to review your answers on your chosen company based on the 25 questions listed above against the information provided by these online scam reviews.
Oftentimes, you will find the author of the scam review has no true knowledge of the company they are reviewing. It is often obvious the author is just reiterating information they found online themselves.
THE FIVE MAJOR ASPECTS OF ANY DIRECT SALES COMPANY
To discover the true nuts and bolts of a CBD Oil direct sales company, or for that matter, any direct sales company, there are five major aspects you need to investigate:
- Company
- Product
- Package/Kit
- Compensation Plan
- Reviews and Testimonials
Letâs explore each category a little further âŚ
Company
When investigating a company, here are some questions you should ask:
Who are the company leaders?
When you choose a direct sales company to partner with, you want to have confidence in the executive leadership behind the company. If it is a startup company, you want the confidence that the CEO and the other corporate executives that make up the senior leadership team have solid experience in each of their respective roles.
Some questions to consider could be:
Has the CEO experience in running a direct sales company before?
Or is the CEO a successful direct sales entrepreneur that has experience in building teams in the field but it is the CEOâs first time at the helm of a direct sales company on the corporate side of the business?
In either case, do you have confidence in the leadership team of the direct sales company you are thinking about partnering with.
How long has the company been in business?
Many network marketing experts and so-called gurus recommend that newbies choose a company that has been in business for a while. They adamantly advise avoiding companies that have been in business for less than five years.
However, the problem with that advice is that every company that is big today started as a startup. Many aspiring direct sales entrepreneurs choose to take a leap of faith by partnering with a startup company and have been rewarded handsomely with financial success and a lifestyle beyond their dreams.
Does the company drop ship products for you?
With todayâs modern technology, the best direct sales companies will fulfill orders and ship product orders for their affiliates, distributors, or representatives. It is no longer necessary to order hundreds to thousands of inventory to store in your garage or storage unit.
The only time you may want to stock on inventory is if your company offers product samples at wholesale cost. But even with product samples, some companies will ship them out too.
Does the company provide customer service?
Most direct sales companies will handle customer service issues related to products and other
Product
Here are a few questions you should explore regarding a companyâs CBD and hemp products:
Are the products made in the USA?
The United States has some of the best hemp in the world because of strict government regulations regarding the cultivation of hemp. In addition, the United States has some of the best soil for hemp cultivation in the world too. Not to mention, the United States is home to some of the greatest kick ass farmers in the history of agriculture.
Are the products processed in an FDA-approved facility?
Currently, CBD and hemp products in the marketplace are considered food supplements and are not approved by the Food and Drug Administration (FDA).
However, reputable hemp companies process and manufacture their products in FDA-approved facilities. This means they must follow strict protocols for the safety of the employees and to ensure that the end products are not contaminated.
Is animal testing used?
Most companies today have a ban on animal testing in the research and development of their products.
Is there a money back guarantee?
Reputable direct sales companies offer at least a 30 day money back guarantee. Some companies offer a 60 day guarantee. A few may even offer a 90 day money back guarantee.
Is there an autoship option?
Most companies recommend a monthly autoship for their leaders and loyal customers. For business builders, companies usually have a minimum monthly purchase amount, such as $50, to qualify for receiving commissions. For loyal customers, an auto ship option ensures they can receive their favorite product or products every month without disruption.
Are the products tested by third party labs? If so, can you access the results?
Reputable companies will most likely have a QR code on the labeling of their products that you can scan with your phone and get access to third party lab reports. If not, you should at a minimum be able to review third party lab results for any particular product batch on their website.
My recommendation is that you do not buy any CBD or hemp products until you have confidence they are third party tested. If a company refuses to provide third party lab reports, it is advisable to not do business with that company.
Package/Kit
In the direct sales industry, many companies offer a selection of enrollment packages or kits that include a different assortment of the companyâs most popular products.
Usually, these packages can range from $99 to $299 to $599 or $999 or more. It depends on the particular direct sales company.
These enrollment packages/kits are very valuable. They allow a new direct sales entrepreneur to use the products for themselves. After all, it only makes sense that you are familiar with the effects of the products.
To be successful, you need to be a âproduct of the productâ. The only way to know your product is to use it yourself.
In addition to your personal supply to use for yourself, enrollment packages/kits may contain sample sizes of the most popular products that you can share with your warm market list or cold market prospects.
Product sampling campaigns are one of the most proven methods of building a distribution network in the quickest time possible.
So if the direct sales company you are researching offers a sampling program, you may have a competitive market advantage.
Now, a word for direct sales companies that offer free enrollment and donât offer any initial enrollment packages or kits. Without question, these companies will end up promoting âbusiness builderâ packages that cost hundreds of dollars, if not thousands.
Just beware that because a cbd oil direct sales company says it is âfree to joinâ, it doesnât mean you are going to have to invest some capital to build your direct sales business. You will definitely have to invest some money. It is no different than any other business model. Some amount of capital is required. Period.
Fortunately, the direct sales business model offers an opportunity for the average person to start a business for less than $1000 with the potential to make more income than a McDonaldâs franchisee or other traditional business owner.
Compensation plan
How do you make money with this company?
There are several types of compensation plans. A lot are unilevel or binary or a hybrid of both. Compensation plans can be difficult to explain. Some have heavy pay on the front end while others pay more on the backend.
Fortunately, the best companies will have in-depth videos or detailed literature that explain how their compensation plans pay out. Be sure you understand the compensation plan.
Reviews and Testimonials
If a company has been around for a while, it should have many reviews and testimonials available online.
However, there is one caveat: as mentioned earlier in this post, beware of online scam reviews.
Online scam reviews often do a Pros and Cons comparison between a direct sales company and an affiliate product that they are promoting.
Usually their product involves an affiliate education program where you learn traditional affiliate marketing. While the education is usually very good, a lot of what they charge you for is available online for free.
Plus, they will upsell you like crazy on high ticket products such as keyword research tools, lead generation systems, automated tools, and many other expensive tools and resources that can be found available elsewhere for free or at low cost.
If the company that you are examining is a startup or hasnât been in the marketplace for long, you may not find any reviews and testimonials online just yet. And thatâs fine. You can make an educated decision with just the four aspects: company, product, compensation plan, and package/kit.