The Promise: Claiming to help sellers achieve the financial success of their dreams, popular home-based selling programs like Avon, Pampered Chef, Cutco, and Tupperware invite participants to sell the company's wares directly from their homes to friends, coworkers and acquaintances. Besides extra cash, companies tout flexible schedules (individuals can set their own hours), flashy prizes for top sellers, and opportunities for upward mobility (consultants can grow their businesses beyond their living rooms by creating personal websites, orchestrating product parties to increase sales, even setting up kiosks in local malls) as top benefits.
The Reality: Established, well-known home-based selling companies are legitimate, but succeeding isn't as simple as it seems. In order to achieve even moderate financial success, you'll really need to put yourself out there, establishing a set of regular clients or gaining access to a steady pool of fresh customers who are ready to buy exclusively from you each month. Under regular circumstances these situations aren't easy to achieve, but given the current economy it can be especially challenging. To turn a real profit, you won't just be able to rely on the kindness of family and friends.
Shy individuals should think twice. Successful consultants need to be extroverted or possess a thick skin, since many positions literally require individuals to become door-to-door salesmen -- at at least deal with regular rejection. This can be a difficult or frightening for lower-key individuals who don't like to sell in person. If you're a social butterfly who doesn't mind mingling with strangers, you may have the right personality.
How do direct-selling programs work?
All home-based selling programs require some kind of setup fee -- as little as $10 and up to $100 for most companies. In exchange, you should receive a kit with marketing ideas, sales tips, coaching literature and often, product samples. Then it's up to you to start promoting the products and taking orders.
For instance, at Avon, one reputable program, consultants strive to get as many orders from customers as they can. Orders are then communicated to the company and mailed to the seller. Consumers then pay consultants for the items upon delivery and sellers receive a commission as their salary. It's up to you to deal with canceled orders, or customers who don't pay up. You'll either need to return the items to the company, or buy them yourself, hoping to sell them to someone else.
And contrary to the glossy program brochures, program salaries often aren't substantial. To get the real scoop, I spoke to Amy Robinson, vice president of communications for the Direct Selling Association, a national trade association of the leading firms that manufacture and distribute goods and services sold directly to consumers. "The median income for active home based sellers is currently $3,500 a year," she said. "So, these programs aren't get-rich situations. Instead, most people who participate are looking to pad an already steady income -- looking for a couple hundred extra dollars to pay their bills." Typical time commitments also aren't hefty. "Eight-five percent of direct sellers work less than 10 hours a week," said Robinson.
That's not to say more elaborate experiences don't exist for the right people. "At Avon, we really strive to reward ambition," explains Lindsay Blaker, public relations manager for Avon. "Representatives can receive anywhere from 20 to 50 percent of their purchases -- the more items they sell, the higher the percentage they get." Other incentives are also often in place to promote sales and the spirit of competition. For instance, Avon currently offers all-expense-paid, lavish trips to their top sellers. "Last year, it was the Bahamas, this year it's the Dominican Republic," says Blaker.
Other well known programs work in a similar way, whether it's selling baskets (The Longabarger Company), scrapbooking supplies (Stampin' Up), vacuums (TriStar, Kirby), or cosmetics (Avon, Mary Kay and more).
Before you jump in...
The Bottom Line: While it's not as simple as it seems, it's certainly possible for the right people to make extra money with home-based selling -- the key is to find a reputable program and a product you can feel good about selling. Do a little detective work beforehand to prevent future problems. "Call the DSA to see if the company is an official member -- a good thing since we ask all of our participants to follow a stringent code of ethics," explains Robinson. Consumers can also contact the Better Business Bureau, the Federal Trade Commission or their state's Attorney General's office to check for recent complaints. See something fishy? "Do yourself a favor and steer clear," suggests Robinson.