If i have a direct sales business but made less than $500 in commission so I was not sent a W-2. Do I still need to claim on my taxes?

Yes, if you have a business, you should receive a 1099-Misc reporting non-employee compensation; however if the compensation is less than $600.00, the payer is not required to send you that form. You still need to claim the income. The IRS requires that ALL income be reported. 

I have the same question. How do you report it? As hobby income? As other earned income?

Report commissions as self-employment income.

For entry information, please see the TurboTax Help article How do I report income from self-employment?.