Jan 18, 2007

Apples to Apples: ScrapBiz and Direct Sales Companies

The challenge with helping people understand ScrapBiz is that most people are trying to compare it to a direct sales organization that they are probably also looking at and can't quite wrap their minds around the differences between ScrapBiz and a DS company.

Let me try to put it in the simplest of terms to make it as close to "apples to apples" as I can get it. It should be noted that ScrapBiz is NOT for hobbyist but for those truly wanting to start a retail business. It is illegal to buy wholesale for personal use (although it's okay to sell yourself items at times as long as it's done according to the law).
  • You join ScrapBiz
  • You get your business license
  • you set up an account with Distributor A, Distributor B or Distributor C to order products
  • you add smaller companies with low or zero minimums as desired
  • you order AT WILL (when you need products) - there are no quarterly quotas. That means you can have slow months and not have to buy products to keep your account open.
  • You make 40-50% or more on everything you sell assuming you sell it at the full retail price

Verses a Direct Sales Company

  • You join the DS company
  • You may or may not be required to have a business license
  • You place orders ONLY with the Direct Sales company
  • You must order a minimum amount per quarter to keep your business
  • You make 20-30% on your personal sales

Now, let's compare the three MAIN distributors that ScrapBiz has relationships with vs your direct sales company. Let's think of a direct sales company as merely a distributor to make this as clear as possible. A distributor carries THOUSANDS of scrapbook products from many different lines (whereas the Direct sales Company will only carry dozens of products). You can get everything from Bazzill to Basic Grey from a distributor. However, each distributor may carry slightly different lines so you need to (like selecting a direct sales company) select the one that carries the most desireable stuff for your business.

Placing orders:

  • Distributor A: They require a $75 minimum order each time you order. You CAN order less, however, you will pay a small $5 charge for the convenience. And, Dist. A offers ScrapBiz members and additional discount off their cardstock, card and envelope line. Depending on where you are located with relation to them, you can get shipping discounts or free shipping with a larger minimum order.
  • Distributor B: They have a $100 minimum opening order with a $50 minimum reorder. Their discount is often based on volume. The more you buy of a product, the larger the discount. Their smallest discount is about 40% off of retail. They don't offer any shipping discounts and have less variety than the other two.
  • Distributor C: They require a $250 minimum opening order but have no minimum on subsequent orders. They require a deposit for your account but you will get it back if you spend $1200 with them within 365 days of your first order. Believe me, that's not hard to do! That's only $100 each month on average. If you aren't doing at least that, you aren't really serious about your business! They offer free shipping once your order reaches $150. Their product offereings will blow your mind and they continually add the latest and greatest.

Think of these three distributors as three different direct sales companies that you get to chose from. The great part (and something you DON'T get with a direct sales company) is that if you want to switch who you are ordering from, you are free to do so. You can even set up accounts with all three if you want to. You will have THREE LARGE distributors to choose products from. Not to mention all the smaller companies we have relationships with. The hardest thing members face is choosing! Many of them overbuy in their excitement.

Along with your choice of who you want to order from, you also get unbelievable support and the experience of some of the best business owners in the scrapbook world. If you want to start vending at shows, we have a member who does the CK circuit every year and will be happy to offer you tips. If you want to start a kit club, we have several members successfully running them already who will offer you advice. If you want to start teaching, we have members who will help you out with that. If you need a website, we have a web mistress who can offer you a fantastic website at a great price. Anything you want for your business can be found at ScrapBiz. It's like being able to customize your new home to your specifications rather than buying the "standard" model.

Hopefully this gives you something you can wrap your mind around. Because we are the ONLY group in this industry doing this kind of thing, we can be hard to understand. I hope I was able to clear up some things for you.


Christy * 1 Creative Bug * said...

Well Said Kim! I love making such great money and ordering products my customers want!

Sandra @ The Memory Workshop said...

I've been thinking about what you said about DS companies being distributors. And this is where the DS Co fails miserably...a *real* retail scrapbook store (or any retail store for that matter) could not survive with just ONE distributor or ONE product line. Yet DS consultants are prepared to build a business around ONE manufacturer. Even IF the whole *downline* structure weren't extremely flawed, the limited product line makes it hard to keep repeat customers interested. Some companies only refresh their catalogs twice a year!

Kim Guymon said...

Yes, Sandra - very true. If your die-hard customers buy everything they want from you out of your catalog, then they won't be back again until your next catalog comes out. That forces you to keep expanding your customer base, which is hard. As opposed to YOUR customers who can't wait to see what you have that's new because you have the flexibility to bring in a constant stream of new products.

DS companies really are like a small distributor. If our distributors didn't pick up new products more than twice a year, we'd move on and found one that did.

Amber Bigelow said...

Scrapbiz is the best scrapbooking business support system I could have ever imagined. Whatever scrapbooking business you choose, there is someone at Scrapbiz with experience to share. It's the only place I know of where two competitors can chat about how to grow their businesses and their customer base without one negative feeling between the two. We're all working towards one goal of creating successful scrapbooking businesses.