In recent weeks I’ve come across number of articles and blog posts claiming that direct sales is recession proof. Some have gone as far as saying that consultants who admit their businesses are struggling are just using the recession as an excuse to give up.

Fact is… the current state of the US economy, the recession, affects your direct sales business. Sugar coating it, ignoring it, or denying it won’t change it.

I don’t think anyone should give up because of the recession, but I believe that it’s important to operate from a position of knowledge and acceptance of the facts. If you don’t recognize how your business is affected, you can’t adjust for it. Now is not the time for business as usual.

Fact is… in order to survive a recession, all businesses need to make some adjustments.

Some who are claiming that direct sales is recession proof are using a video clip from Jim Cramer’s “Mad Money” show as further evidence of that claim. A closer look at the information presented in the video may produce some doubt about whether it’s clear evidence that direct sales consultant businesses are recession proof.

First it’s important to note that the video is from a show that was produced nearly a year ago, in mid-March, 2008. A lot has changed in a year, including the price of the company stocks mentioned in the video.

In the video, Cramer is offering advice and opinions about investing in the company stock. He’s not making any recommendation about becoming an independent sales representative. The information speaks to the likelihood of success of the company, not direct sales consultants.

One of the reasons these featured companies are doing well because they are global companies that, according to Cramer, are “helped by the week dollar” and have “no need to worry about recession or the federal reserve.” They aren’t entirely dependent on the US market and may be better positioned to weather this economic storm. And there is a benefit to consultants of decreased risk that the company will fold. But if as a US consultant you are selling and recruiting in the US only, you aren’t otherwise benefiting from the international market.

Another reason that companies themselves may fair better during a recession is a factor that may also help consultants sustain their income during the recession. Cramer points out that one of the most important factors to a direct sales company’s success is the number of sales reps they have. In a recession more people are trying to supplement family income or replace lost income and therefore consultant signups will increase. So while the company benefits more than the consultant, it is a good time to build your team. But again, it’s necessary to make adjustments because of the economy.

One of the things that worries me is that if consultants are recruiting using the mindset that direct sales is recession proof, they may be misleading prospects. Remember, in order to earn income, consultants have to sell products. If you’re recruiting new team members without teaching them how to sell during a recession, there will be a lot of disappointment in the near future.

If you earn commission on new members’ starter kits and other purchases, particularly if there is a monthly sales quota, you are in a position to benefit further from team building. However, these are short term gains. It’s sales to customers that will benefit the team in the longer term.

Fact is… consumers are spending less. We are cutting back on luxuries and non-essentials. We want to make sure we are getting the best value for our dollar. We’re looking for ways to save money. By understanding these facts, you can identify and focus on marketing products that will sell is this economy. Adjust your marketing and sales methods accordingly and teach you new team members how and what to sell during a recession.

Fact is… If you face the facts and adjust for them, your business can not only survive the recession, but what you do now can help it thrive when the economy stabilizes.

Stay tuned… over the next few days we’ll offer some suggestions for what you can do to help sustain an income from your direct sales business during a recession.

You might also like these posts:

• More Consultants, but Not More Sales
• What To Sell During a Recession
• How to Choose a Direct Sales Company During a Recession