Southwestern company; is it a scam?

Factual Questions
1

I am a college student currently enrolled at the University of Arizona and I have recently come upon a summer job opportunity that is being offered by a company called the Southwestern Company. (http://www.southwestern.com/)

I can’t find any negetive press about it on the internet, the only thing I found was an article talking about lucrative summer jobs that “you get what you put into it” (http://www.youngmoney.com/careers/internships_seasonal/030417_04)

I was wondering if anybody on these boards has any experience with this business, where essentially you get relocated across the country to do door to door sales of school textbooks and reference books that are aimed to help students from elementary school to high school. I have been told that if I work hard, I can easily make over $10,000 this summer, some of the top sellers making $25,000 and more. So what is the straight dope on this? Any tips or recommendations? Thanks.

2

Uh, wanna run that one by me again?

The real kicker is this: It’s 2004. You’re considering selling books door-to-door… books that are not even encyclopedias… which nobody with a computer needs anymore anyway.

Do you really think there’s someone who honestly needs a book, that doesn’t know where to find it elsewhere, and is just waiting at home for you to knock?

Do you think there are enough of them to support not just your own lifestyle, but that of everybody else involved in getting that book to their door?

How much do you make per book sold, and how long does it take to sell that one book? How many houses must you visit?

From their website:

Ok… let’s do the math… 2928/113 = 25.91…, so that’s a month of selling EVERY day, minus four sundays presumably.

Does one make $113 per book sold, or is that some sort of ‘average’ based on number of books sold per day?

Let’s, for the moment, assume that this is the profit made from selling one average set of books, for yourself.

There is more profit from this sale being sent to the company you would be representing. Let’s assume they’re being nice, and sharing the total profit with you 50/50.

This means there is about $225 in profit, minimum, on that single sale.

Let’s assume a markup of 100% from the actual cost of production, or that they sell it for twice what it cost to make, and you have a Sticker Price for the set of books of $450.

Note that nowhere on the website is the price of the books mentioned, or even implied… all of this is extrapolated from the amount of profit they claim you can make.

End result: How many doors can you knock on in a day and convince the owners to pay nearly $500 for books?

If you think it’s a lot, take the job. :smiley:

3

Scam! Sounds like the ways used by Amway to lure their prey.

4

Back in my college days, I went to a presentation from Southwestern Company. I noticed one Big Fat Gaping Hole in their presentation.

A key selling point was that at the end of the summer, you get a check for your earnings. If you racked up a score of $10,000 in commissions, then after all your hard work, they cut you a check for $10K right before they send you home.

Here’s the holes in this.

  1. What cash flow will you use to pay your bills during the summer?

  2. There’s no claim of taxes withheld. If you’re going to be their employee, they HAVE to withhold taxes.

  3. And if you’re NOT an employee, then you’re an independent contractor, and their work rules can really screw you over. There’s also questions of liability, medical coverage, and so on.

I didn’t take them up on their offer for these reasons, and a fourth – door-to-door sales are my primary weak point. If it’s a strength of yours, then make sure you get ALL your questions answered in advance, especially about what you’re supposed to live on for the summer.

Also, to add to what Phnord said: ISTR that the presentation discussed 10-hour days, 6 days a week, for 10 weeks. (If you were given different numbers, plug them in here.) What’s the hourly rate? 10610 = 600 hours. $10000 / 600 = $16.67 / hour, gross revenue. If you can get a different job at $15/hr including benefits, you come out ahead with the regular job.

In short: Go in with your eyes open, your questions all addressed (in writing, if necessary), and be prepared to work your tail off. It may be good experience and good money. Your milage will definitely vary.

5

I thought it was a scam too, (and I still think it is a bit). The first thing they do is load you in a van, drop you off in a target area and say. “go find a place to stay for the week!” You don’t make enough to rent a motel room, they don’t feed you. You are on your own for any and all expenses. Plus you buy the books out of your own pocket for sale.

So the roomie and his co-workers knocked on doors everywhere, saying “would you like to buy a book; no? …well… do you have a place me and my buddies can stay at for a week?”
I personally don’t think the money he made was worth the effort…but (here’s the endorsement) he liked it enough that he did it again the next summer…and when he graduated from college…joined the company full time in some other capacity (selling insurance for them, I think)

6

Another bit of math.

Assuming a 6day work week. 75+hrs/6days =12.5+hrs /day.
$113/12.5hr= about $9/hr. (and you have to pay to live on the road)

So if you are looking for a way to make money this summer and are willing to work 75+hrs/week, I’d bet you could find a couple of jobs closer to home and save the travelling expenses.

7

A guy I know from school really loves working there every summer and even made 18K for the whole summer. So yeah if your a great salesmen and very independent like he is it could be very profitable, but you’d have to pay me a lot more than 18K to sell useless encyclopedias door to door.

8

There is a still a market for reference books (even second tier ones) , but it exists mostly in lower and lower middle income households. If you are natural salesperson there are more lucrative ways to be making money than peddling books door to door.

It’s not a scam per say, but it’s not really all that great either. ALL the risk is on the employees, who are independent contractors, and there are fewer things tougher in this world than making door to door cold calls, selling a product that fewer and fewer people really need or want in the CDROM and internet age.

I have leased short term space to these marketing operations (ie knife sets, alarms, vacuum cleaners etc) for their local training facilities, and IMO, some (not all) of the people that get roped into doing this are often living on the edge and look kind of desperate, and quite frankly are not the kind of people I’d really want to sharing living quarters with over a summer.

9

Good golly. SW is the same company I ‘worked for’ briefly many years ago as a student.

I looked at their website, and what they state is true, sort of.

What they don’t say and was true then and probably true today, is that about half the students will quit the first week. And the high income SW mentions is truly the exception, going door to door selling books takes a very unusual type of person.

As I recall, one day I knocked on over 110 doors and didn’t even get into one home.

10

“The first thing they do is load you in a van, drop you off in a target area and say. “go find a place to stay for the week!” You don’t make enough to rent a motel room, they don’t feed you. You are on your own for any and all expenses. Plus you buy the books out of your own pocket for sale.”

All of this that which you have stated is false, as far as I have been told. They don’t load you into a van, but the sellers drive across country with the group, splitting the gas money between you. There is incentive to be a driver, since if you have a car you get to use the miles driven as part of a tax deduction, since you are technically a small business owner. They don’t just drop you off, but you get assigned a host family to stay with for the summer. You stay with one of your coworkers with this host family, and staying there is relatively cheap, since the family also has their child across the country working in the same way that you are. True, the company doesn’t feed you, but your host family generally does. So as far as I understand it, the expenses you need to pay for - the trip across the country and food. As far as the books themselves go, you purchase them with a line of credit, then at the end of the summer, the books that you don’t sell you get to sell back to the company at full retail price, so you lose nothing.

" “would you like to buy a book; no? …well… do you have a place me and my buddies can stay at for a week?”

They give you free sales training, a 5 day strenuous seminar in Nashville where you learn the approach that you will take with customers.

“1. What cash flow will you use to pay your bills during the summer?”

From each sale that you make, you get half the money (78.00 for each set that you sell), up front and this goes into your Southwestern account, and this is the money that you live on for the summer.

So that is just some of the information I have been told. What comforts me is that the recruiter who is actively trying to get me to do this has nothing to gain from this unless I do well. They make a percentage of what I sell. That is where their income comes from, along with the books that they themselves sell. It benefits them to work with me to make me a good salesperson. It does not benefit them to ditch me once we are out there. That would make no sense. Anyway, any additional insight would be extremely helpful, preferably from people who are familiar with the program. Thank you.

11

Well, it looks to me like the recruiter has given you all the information you need to make your decision…regardless of what others have said here. I think you should go for it. Let us know how it turns out. Good luck!

12

I did this when I was in college (at UT - Austin, which always has a very large contingent).

All of their dealers are college students. Pretty damn hard working college students.

It’s not for everyone. Yes, you are cold calling 6 days a week from 8-8 or 10. Yes, it’s door-to-door. Yes, if there isn’t a host family for you to stay with (like my second summer in Champaign/Urbana) you will go door-to-door asking for a place to live for the summer. I actually did that and ended up staying - with the other two gals assigned to my area - with a very nice older couple. (I know it sounds weird. But you’d be amazed at what people will do for you if you just ask.)

I didn’t come out of it with a lot of money, neccessarily, although I know a lot of kids who did. But it was still one of the best things I ever did. After knocking on doors all summer, I learned how to talk to anyone, learned self-confidence, learned a lot about America, and that people truly are generally good and shockingly generous.

I also had an outstanding farmer’s tan.

And you’re right that it is in your manager’s and the company’s best interest to take care of you. You’re out selling by yourself, that’s true, but you have weekly meetings and lots of support.

Bookmen and bookwomen are some of the best people I’ve ever met.

But it is hard. Did I say that already?

13

If you’re staying with a host family whose child is elsewhere doing the same job, why wouldn’t that kid just work from home all summer?

14

Unsolicited cold calling whether in person or on the phone is really rude. This job is little different from telemarketing.

15

From the SouthWestern site

[sub]bolding mine[/sub]

Re Milage As Tax Deduction

I am not an accountant, attorney, employeion e of the IRS, or the owner of a small business. But I suspect the IRS will only allow the deduction if you supply the proper forms proving that you own a small business. Obtaining these forms will likely involve fees

All things considered, it seems to me that an individual with the necessary drive and charisma to do well at this could make substantially more money in another job.

16

To be successful at this, it’s not just drive and charisma, you must have the ability to accept or ignore a lot of rejection.

If you’ve never gone thru having doors slammed in your face or “no” over and over again, it’s difficult to imagine how one feels. Having an outgoing personality is helpful, but being able to handle rejection/disappointment is necessary.

17

I’m not sure what the reasoning is, but based on my experiences I have some educated guesses:

[ul]
[li]They want you to be working. Being able to go home in the middle of the day to take a nap isn’t conducive![/li][li]It’s a type of marketing ploy. When you’re working in Mentor, OH, you have a better chance of folks taking a moment to listen to you if you say you’re from a Southern University. There’s the curiousity factor.[/li][/ul]