New Direct Sales/Party Plan Candle Business
I am always looking at all of the newer direct sales and party plan businesses that open doors. I like to review compensation plans, products, business models, ect.
A few months ago I came across a company called Scentsy, which is basically a wick-less candle company.
I have got to say their products are very cool! And I see a huge market. They have what they call Scentsy Bars, which are highly scented wax bars that instead of being burned are melted! They also have room sprays and warmers.
I think their Scentsy bars are very unique and personally think the idea of a good smelling candle with no fire is great! Especially for the homes with small children who are amazed by a flame.
Women love candles…well lets say most do. I have said for years candle businesses were a good market becuase candles sell. But I can imagine how many people do not buy candles because of the face candles burn soot and becuase of the fire hazards.
Scentsy has an answer! I just placed an order to try them out. I love a good smelling candle, but I do worry about it catching fire.
I was looking over their business opportunity on their website and gathered this info…..
With Scentsy, you will be an independent business person that has the flexibility to set your own hours, determine the amount of your own commission, and earn fantastic rewards for achievement. You will have the opportunity to earn over 30% on personal sales, and receive leadership bonuses of up to 9% of the entire downline volume of the people you recruit and train to sell Scentsy products.
Now, I am not sure how you determine the amount of your own commission, but I also saw you can make over 30% on personal sales. When I took a look at their compensation plan, I did see that the MAX a rep can make on her own personal sales is 25% unless she sells more than the $375 wholesale mark. If she does more than that she can earn royalties.
They do have bonus commissions available for consultants who meet and maintain the sales requirements for their rank, and are otherwise in compliance with the Independent Consultant Agreement, qualify for commissions and royalties under the Compensation Plan.
After viewing their consultant agreement forms I did find…
- At least 70% of a Consultant’s total monthly Personal Wholesale Volume must be sold to the Consultant’s customers.
- Consultants must develop or service at least five customers every month.
- Scentsy will deduct from all bonus and commission checks a check processing fee of $1.00 per check issued.
- There is a $5.00 processing fee for mail orders.
- There is a minimum party order amount of $150.00 to submit an order by mail.
- In order to qualify for payment of bonuses on sales made in a Consultant’s marketing organization, the Consultant must produce at least 375 in Personal Wholesale Volume each month. Consultants who personally produce less than 375 of Personal Wholesale Volume for any pay period will not receive bonuses for the sales generated through their marketing organization for that pay period.
- In order to be considered “Active”, a Consultant must produce at least 112.50 in Personal Wholesale Volume in a calendar month.
So, in a nut shell here is my opinion. (I am sure I will get some hate mail from their reps)
I think the concept behind the product is great and they have a great looking website.
I think that 20% commission is pretty low. Compared to many other companies who offer a starting commission’s at 30% or higher and a max out commission on personal sales at 45%. 20% just seems low to me. In the direct sales businesses, if you are going to pay a rep 30%, I think she should be paid 30% on every dollar she sells, not just on sales over one level.
They charge a check fee. Yes, it is only $1, but why should a rep pay them to cut a check for money they own the rep? If they have 5000 reps, they profit $5000 each month just for paying their reps monies owed.
They charge $5.00 for mail in orders. WHAT? Unheard of! Why should a rep pay them becuase they do not have a computer to submit orders online? In all the years of dealing with direct sales businesses I have never heard of that!
Again, this is just my opinion on the direct sales program. I would not personally join as a rep. It may be great for others, just not my cup of tea. If I were to go with a company that paid out smaller commissions, I would ONLY do it if I had the opportunity to earn residual income.
Popularity: 28% [?]
December 11th, 2007 at 5:41 pm
Those do sound nifty. I’ll have to check them out because I go through candles like nobodies business. This would prolly be great for me.
December 11th, 2007 at 9:55 pm
After being involved in direct sales for 11 years now, I can not agree more. I have never heard of a consultant paying to mail in orders and have never heard of them having a fee for a check.
I do agree with you about the concept behind the business but the structure does not seem to strong to me.
January 12th, 2008 at 9:53 am
Your thoughts on that $1 fee are on point! Here’s help: If your company has direct deposit, GO for it! That will save the $1 a check charge. In regards to Reps not having a computer: There is no need to OWN one but it DOES help. How can you run a successful business without one? As a Rep in two different companies some years ago guess what I did? I used the local library for all of my computer work and so can YOU! Take care and enjoy those candles-wickless or flame! DHH.
February 21st, 2008 at 4:49 pm
I can see how the fees would come across as a little odd at first. But, as I have found out, 20-30% of something that sells like hot cakes is better than 35-40% of inventory sitting in the basement.
March 11th, 2008 at 7:09 pm
Before I decided to become a Scentsy rep, I paused at some of those same points. Here are a couple things I learned.
The $1 fee is no longer applicable. I don’t know why they did that or why they stopped, but there is no longer a fee charged for consultants to get their checks.
To remain active, consultants must sell $150 PRSV in one month in a three month period. This minimum doesn’t need to be met every month, just one month per quarter. It is very, very easy, even on a bad month, to reach $150.
I’ve never heard that we need to develop or service 5 new customers a month. In fact, I’ve never reported on how many or who my customers are at all.
Scentsy is not overpriced. The warmers and scents are great quality and inexpensive, compared to what I’ve found in the stores. I have seen cheaper warmers, but the quality was poor compared to Scentsy. I’ve seen comparable warmers in quality and they were more expensive. I have not yet found warmers and wax bars that were better quality than Scentsy products. I wouldn’t want Scentsy to raise their prices to pay a higher commission. Everyday people buy Scentsy because it’s a great product at a great price. Many direct sales products cost too much and are harder to sell to most people.
Scentsy is a new company and there are frustrations that come with growing, but I’ve been happy with my experiences, so far.
March 11th, 2008 at 8:37 pm
Miriam »
Oh I can imagine the market is huge! Like I said I think the products are great! I guess the comment above is true though, it is better to make 20% and sell allot than to make 45% and not sell at all.
I am sure as Scentsy grows there will be many changes to the comp plan as well!
April 8th, 2008 at 5:14 pm
Three words…. 10 percent shipping. I was with a competing candle company before I joined Scentsy last year. Our shipping is MUCH cheaper than theirs was. No matter if you buy a $3 car candle or a $25 warmer or more, you only pay 10% of your order total for shipping.
The commission rate is fair. 25% is more than some other companies’ reps are guaranteed to make. One of the oldest direct sales companies in the country only offers a 20% base commission and you have to sell over $100 EVERY 2 WEEKS to make more than that. So, to sell $150 a month (minimum to be paid) is not that hard compared to $100+ every 2 weeks. You don’t have to sell $150 monthly, but it’s very simple to do.
As has been said before, changes are bound to happen, but it’s a great company as is!
April 21st, 2008 at 9:00 pm
Those commission prices are very low personally I feel NO CANDLE company is better than Enchanting Scents Designs and I am not just saying that because I am the owner I make my candles myself and I use nothing but the best and I know if you check it out for yourself you will always come back.I am not just about the products I also believe in having happy reps and I listen to what ever they have to say.So if you are looking for a direct sales candle company check out Enchanting Scents Designs
Gail
May 23rd, 2008 at 1:11 pm
Just a follow up to say Scentsy is growing by leaps and bounds. I think the quality, affordability, and leadership is simply amazing.
The previous poster was correct that we aren’t required to service at least 5 customers a month.
A minimum party order is $150, but you can submit individual orders as well. And, orders submitted as parties include free shipping to customers. Affordable shipping is a big plus with Scentsy.
I agree that the prices of the products need to remain affordable. Our pricing is one of our greatest benefits and I would rather see the prices reasonable rather than overpricing items to raise my commission percentage.
You do have to maintain a certain amount of sales in order to benefit from the sales of your team.
Scentsy is doing so well. If you haven’t looked lately, take another look. Here is a link to an article in Direct Selling News
http://www.directsellingnews.com/article_app.php?articleid=286
I’m very pleased with the success!
May 23rd, 2008 at 5:51 pm
Loretta »
I have to disagree with you on the customers. Here is the information directly from the consultant agreement.
SECTION 6 — SALES REQUIREMENTS
6.1 — Product Sales
The Scentsy Compensation Plan is based upon the sale of Scentsy products to end consumers. Consultants must fulfill personal and Downline Organization retail sales requirements (as well as meet other responsibilities set forth in the Agreement) to be eligible for bonuses, commissions and advancement to higher levels of achievement. The following sales requirements must be satisfied for Consultants to be eligible for commissions:
a) Consultants must satisfy the Personal Wholesale Volume and Group Wholesale Volume requirements associated with their ranks as specified in the Scentsy Compensation Plan. “Personal Wholesale Volume” is made up of sales made to the Consultant and to the Consultant’s retail customers. “Group Wholesale Volume” shall include the total Personal Wholesale Volume of all Consultants in her marketing organization plus the Consultant’s Personal Wholesale Volume.
b) At least 70% of a Consultant’s total monthly Personal Wholesale Volume must be sold to the Consultant’s customers. By reordering, a Consultant certifies that she has complied with this policy.
c) Consultants must develop or service at least five customers every month.
As you can see that term C clearly states Consultants must develop or service at least five customers every month.
Now if the company chooses to follow their own rules, I do not know. But I do know what it says on the agreement that every rep must agree too.
June 12th, 2008 at 10:22 am
I recently joined Scentsy and I absolutely love it! I was in sales with Combined Life and HATED it. I made a lot more commission on selling insurance (200%) BUT WHEN I sold…however, with Scentsy, there literally hasn’t been a single person I’ve showed this to that hasn’t bought, so I’m happy to be here! This is great for fundraisers too! Check out my site at http://www.scentsy.com/rep
I’d like to see a higher percent too, hopefully in the future. I love the kid-friendliness of Scentsy and the scents are to die for!
June 28th, 2008 at 12:58 pm
I looked into Scentsy too; however, I found a larger product line that includes a great commission with Gold Canyon Candles (www.mygc.com/roxanne). Gold Canyon has “scent pods” which are reasonably priced and have a strong lasting scent. The commission starts at 25% and the company offers the opportunity at certain time to earn your kit for FREE!
The consultant doesn’t pay to send the orders and there is no mimimum order (only an amount to qualify as a “party” order). If you’ve not heard of Gold Canyon and want to try a sample, please contact me and I’ll mail you a free catalog and tealight to try.