Most direct sales companies do not require the independent consultants to carry any inventory. Most direct sales consultants who carry some inventory will tell you it absolutely helps their business succeed. This article isn’t intended to discuss the merits and pitfalls of carrying inventory, but rather to talk about how to handle and process orders and hostess benefits if you choose to bring cash and carry to a home party.
If you want to purchase some inventory to have on hand at parties, it is imperative that you include all cash and carry sales in the party total so that the hostess still gets credit for those items. This is where some consultants get confused. They are just not certain how to write it up so that it is properly credited.
This example may help:
You’re a consultant who sells widgets. You have a pretty extensive catalog but you like to have an on-hand supply of Widgets B to cash and carry because they’re in high demand and the party guests like to take something home with them.
You’ve already paid for the Widgets B that you bring to the party, along with your catalogs, order forms and display set up.
Customer Laurie wants to order: one Widget A, four Widgets B and two Widgets C. Her order total, before taxes and shipping is $46. You happen to have on-hand two of the four Widget Bs that she wants. She can take those two items home that night, and will receive the remainder of her order when the whole party order arrives in approximately two weeks.
She wants to pay for the whole order by credit card. On the order form, next to the two widgets she is taking home, you somehow annotate that she already has those two items. Perhaps write an “H” for “has” or “home” next to those two widgets. Use whatever system you wish, so long as you are clear.
The hostess party total remains the same whether or not any customers take any items home that night. Your providing cash and carry is just a courtesy and an added perk for the customers. It gets a little tricky when you are back home submitting the entire party order into the computer. It’s tricky because it takes focus and organization; but it is not difficult.
Because you already paid for the cash and carry items, and because the customer paid for her order with a credit card, you will need to use her credit card to replace your cash and carry inventory. You would still charge Customer Laurie’s credit card $46. You could reorder the exact same items she took home, or providing the price remains exactly the same, you could choose to reorder something different for future cash and carry orders.
When the hostess’ entire party order is delivered to you so that you can inspect, bag and tag the items before delivery, omit the two Widget Bs from Customer Laurie’s order bag because she already took those home the night of the party. Instead you’ll put those two Widget Bs into your own personal stash of cash and carry inventory.
There is nothing illegal, immoral or unethical about this practice. The customer authorized you to charge her card for the amount shown on the order form. You’re not using her credit card for a personal purchase. You’re merely replacing the advance product you made available for her to take home.
If this seems too overwhelming and confusing to you, then don’t do it. Above all else the customer’s credit card needs to be charged the correct amount and the hostess needs to receive full credit for all sales at her party – cash and carry or those that were ordered.
Do you have items on hand. If so, which ones sell the most for you?