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You are here: Home / Enrollment Options and Starter Kits / Should You Discount Your Starter Kits?

Should You Discount Your Starter Kits?

May 3, 2019 By admin Leave a Comment

Some companies choose to put their starter kits on sale from time to time, hoping that the substantially reduced price will motivate prospective representatives to enroll during a starter kit sale.

Unfortunately, starter kit sales do more harm than good.

 

Here’s Why

  • Many people who purchase starter kits on sale join for product discounts only.  If a company doesn’t want people to join just for product discounts, this is a problem.
  • The career productivity of people who purchase starter kits on sale is less than those who pay regular price.
  • The bigger problem with putting starter kits on sale is what happens when the sale is over. Recruiting plummets for one or more months. Reps who sponsor may come to believe they should recruit only during starter kit sales.

Like the cars for clunkers program, what appears at first to be a good idea is actually a bad one.  I don’t recommend that starter kits are ever put on sale.

Starter Kits: Content And Pricing

Starter kits are important.  A starter kit should not be just a box of stuff you are sending to new representatives.  What you put in them, how much you charge, and how they look when they are opened, matters.

Kit Options

Before we discuss what should go into a starter kit and how you should charge for a kit, let’s talk strategy.

You can choose to offer only one starter kit, or provide choices by offering optional higher-priced kits.  If you decide to offer choices, don’t offer too many because too many choices make it difficult for people to make a choice.  We suggest a maximum of 3 starter kit options.

Business Opportunities

In 23 states, business opportunities are strictly regulated.  To avoid being subject to business opportunity regulations, price your least expensive starter kit below the lowest threshold dollar amount for states which is $200.

Also, be sure to be mindful of the states which include required payments over one’s first six months as subject to the threshold.  The price of your least expensive starter kit plus all required payments for the first six months should total less than $200.

Contents

The primary purpose of a starter kit is to get your reps off to a good start.  Starter kits usually include training materials, sales aids, and product samples.

Think about what your reps absolutely need to have to be successful, and be sure to include these items in your basic starter kit.  Anything that isn’t essential, but would be nice to have, can be included in your higher-priced kit options.

If yours is a party plan company, we recommend that you include enough supplies and product samples to conduct at least 3 home parties.

The most important item in your starter kit is clear instructions on what tasks new reps should do first and when they should be done.  Don’t assume they know what to do after they open the box.  They don’t know unless you tell them.

Some companies decide not to ship a starter kit to their new representatives.  Instead, their kits are “virtual” which means you can read all the training materials online, and print off forms and brochures from the website.

If the product or service you are selling can’t be delivered in a box, this may be the reason you are thinking about not shipping a kit. However, this is not a reason not to ship a kit.  You can still include training materials and sales aids in your kit.

Consider this… The more you communicate with your reps, the more engaged and invested they will be in your income opportunity.  If you choose not to ship a kit, you will lose the opportunity to communicate with your newest reps in this tangible manner.

Pricing

It is recommended that you price your required starter kit just above your cost.  This will be important if you choose to join the Direct Selling Association as their Code of Ethics for all members includes a provision that starter kits are sold “at cost.”  For this calculation, the cost of your starter kit can include warehousing space and labor for kit assembly and shipping.

Set the prices of your required starter kit with consideration for the appropriate barrier to entry for your income opportunity.  Most direct selling companies generally charge between $0 and $200 for the required starter kit or enrollment fee.

We don’t recommend charging $0, because while it will be very easy to recruit when it costs nothing, people who pay nothing generally do nothing.  It’s important to have “skin in the game.”

The Alternative

Instead of putting your starter kits on sale, add an additional item free during those months when you would otherwise put your kits on sale.  To prevent your reps from having a dependency on starter kit promotions to motivate recruiting, we recommend no more than two such starter kit promotions per year.

Conclusion

Treat your starter kits with the same care as your primary products.  We say starter kits are your secondary products.  Product development applies to starter kits, too.

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Have you considered the power of just one new great idea?  One idea that you don’t know just yet can make all the difference to your company.

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Just A Few Attendee Comments

  1. “The price of this event is a bargain.  I have paid thousands of dollars more to attend conferences that were less informative, less instructive, and less friendly.”
  2. “I went to another company’s conference last spring.  I learned more in the first two hours of this conference than I learned in two days with the other one.  The content shared was detailed and specific.”
  3. “We have been in business for a few years.  This conference is a must not just for startups.  The quality and knowledge of this conference’s speakers are simply amazing.  It blew my expectations!”
  4. “The information presented at DS Edge was worth 10 times what I paid to attend.”
  5. “I came to this conference two years later than I should have.  Had I come two years earlier, I would have saved over $100,000 AND two years.”

More Attendee Comments

Discover what others have told us about their Direct Selling Edge experience, here!

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Filed Under: Enrollment Options and Starter Kits Tagged With: discounted, on sale, starter kits

About Jay Leisner

P15Jay Leisner, the President of Sylvina Consulting, is a top compensation plan and direct selling expert, a trusted adviser to new and established network marketing and party plan companies. For more than 30 years, Jay has enjoyed assessing and improving party plan and network marketing companies across the globe.

Direct Selling Startup GuideJay Leisner and Victoria Dohr authored the top-rated book for new and young network marketing and party plan companies, "Start Here: The Guide to Building and Growing Your Direct Selling Company".

Available in English and Spanish. This startup guide contains 250 pages of wisdom that will guide you through the right steps to start and continue on your journey to build a successful direct selling company.

You will save thousands of dollars and hundreds of hours of your time using the information you will read in our book.

Direct Selling Edge ConferenceSylvina Consulting and Thompson Burton sponsor the pure education "Direct Selling Edge Conference Webinar" for new and young direct selling companies. The wisest direct selling executives never stop being students. They seek out opportunities to learn more. They understand that the long-term success of their companies depends on how much they know, so they make efforts to keep learning.

Broadcast live and with recordings included for later viewing, this powerful webinar will give you buckets of wisdom and guidance to help you on your journey.

In 1986, Jay began his career in direct selling by working for a major direct selling software provider. First as a software developer and later as a project leader and a business analyst, Jay worked closely with new and established network marketing and party direct selling companies to provide them with software solutions to meet their unique requirements.

Jay contributed in many ways to the success of large implementation projects for many companies. Jay also worked with dozens of smaller companies to assist each of them in various capacities to provide them with the systems they needed to help their businesses to grow faster.

Along the way while working with them, he learned the secrets of successful direct selling companies and the challenges faced by them. In true entrepreneurial spirit, Jay’s decision in 1999 to start Sylvina Consulting as a direct selling consulting company was driven by what he saw was a need for answers, advice, and solutions.

In 2004, 2006, 2009, 2014, and 2018, Jay gave presentations on compensation plans, recognition, and field leadership development at conferences held by the US Direct Selling Association.

He traveled to South Africa in 2015, 2016, and 2017 to conduct workshops on compensation plan design and recognition programs for member companies of the South African Direct Selling Association.

In 2017, Jay spoke at the Canadian Direct Sellers Association Meeting on the importance of recognition.

More than just a compensation plan expert, Jay is exceptionally skilled at advising new and established companies on business strategies. Before offering advice or solutions, he asks important questions to understand each client’s specific concerns and goals.

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