3 Reasons Not to Do a Direct Sale Fundraiser

Why some schools shouldn't let students sell direct to consumers.

Should you take fundraising orders upfront, order your product first, and then sell it? Groups that have experience with both methods can probably already answer this question. However, new sponsors who might be unsure which approach is better for their group probably want more information before deciding.

While plenty of groups prefer to order products first and then sell them, there are probably just as many reasons to choose an order-taker fundraiser instead. It depends on the group. But instead of pointing out the positives of taking orders beforehand, let's discuss why you may not want to choose a direct sale fundraiser. That is, give your students a physical product to sell.

1. Issues with Product Management

Can you imagine starting a candy bar fundraiser with your students only to have a couple of them accidentally leave their boxes in the back seat of their car? Just imagine the profit that just melted away into the sunset. Unfortunately, most school fundraising companies won't replace the damaged product after it's been delivered to the group.

Many sponsors can attest to this following reason firsthand. After ordering the product and distributing it to their students to sell, they end up struggling to collect the money. If you doubt your students can return the money, you may not want to do a direct sale fundraiser.

It's rare, but you may get an occasional parent who will sell the product and then use the money to pay the light bill. This is a painful reminder to those groups who've experienced this firsthand. Even those sponsors who do their due diligence by signing out products using a sales tracking sheet can be out several hundred dollars. Once the product has been issued, you're at the mercy of your sellers until the money has been turned in. It's that simple.

2. Lower Pricing Requires Additional Selling

Some groups will choose a direct sale, like a lollipop fundraiser, because of the lower price, which can help in certain areas. This makes purchasing much easier for almost everyone, including students. On the other hand, think about how many more 50¢ lollipops you'll have to sell compared to a $12 item from a brochure to make the same amount of money.

3. Limitations to Ordering Product Up Front

Another limitation is how you will pay for the product if you don't have any money. After all, this is why you're fundraising in the first place. Most prefer not to front the money with a credit card, especially for larger purchases. Many companies accept purchase orders, but only for public schools. There are definite advantages to taking orders and collecting money before paying the company for the product.

After carefully considering your options, it may come down to a gut decision. Ultimately, your choice will hopefully make you more money once everything is done.

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Author Bio

Clay Boggess has been designing fundraising programs for schools and various nonprofit organizations throughout the US since 1999. He’s helped administrators, teachers, and outside support entities such as PTAs and PTOs raise millions of dollars. Clay is an owner and partner at Big Fundraising Ideas.