From the May 2007 issue of Startups

When Tupperware parties first became popular decades ago, not many people could have predicted the longevity of the plastic containers--or the company itself, for that matter. Nor could anyone have predicted the groundswell of interest in today's breed of home parties, in virtually every industry imaginable--from power tools to beauty products to apparel. Home parties now account for about 29 percent of the more than $30 billion in U.S. direct sales, and there are 14.1 million direct-sellers in the U.S. Even big companies like The Body Shop and Crayola are getting in on the action and adding direct-selling arms to their existing operations.

The numbers are only expected to grow, according to Amy Robinson of the Direct Selling Association. "The majority of companies [joining the] DSA are party plan companies," says Robinson. "They are smaller, newer companies started by entrepreneurs from their basements in a lot of cases." These entrepreneurs are passing on their passion for entrepreneurship to people who want to start businesses of their own but don't want to start from scratch. The opportunities are there for the taking if you are prepared to research the one that's right for you--and if you're prepared for the hard work that accompanies any startup.

NOT YOUR MOM'S TUPPERWARE PARTY
Saying that home parties have come a long way since Tupperware is like saying the desert gets a little warm in August. Home parties are hotter than ever, and although the majority of independent reps and their clients are still women, many of today's offerings appeal to men and women alike--particularly modern women, i.e., the ones who like a good handbag but aren't afraid to use power tools.

Janet Rickstrew and her Tomboy Tools co-founders agreed that teaching women how to use the ergonomic hand and power tools Tomboy Tools offers was the best way to go. "We recognized the need for more education [for women who want] to learn to do home improvement projects," says Rickstrew, 44, who started the Denver-based company in 2000 with co-founders Mary Tatum, 42, and Sue Wilson, 54 (Wilson has since left the company). Tomboy Tools, which grew 110 percent in 2006, now has more than 900 consultants in the U.S. and 170 in Canada. The company has also successfully launched a direct-sales program in the United Kingdom.

"A lot of women are intimidated to go into big-box stores," notes Rickstrew. "They think they're asking dumb questions. Women have not been taken seriously in this area. The home party plan is a comfortable environment for women, especially [when they have] another woman show them how to do these projects. It empowers them to try the projects themselves."

Home parties also appeal to men like 58-year-old Steve Weronski, a senior independent garden consultant with organic gardening company The Happy Gardener Inc. Weronski was the first rep to join the Ashland, Virginia-based company in 2004, and he couldn't be happier disseminating his gardening knowledge. "My business runs very informally on going to home demonstrations and showing how to do a container garden, for instance," says the Glen Allen, Virginia, entrepreneur, who initially invested all his income back into the business until profits doubled in the second year as he shared the opportunity with more people. "It's working. What can I say? I'm finding people who are also interested in sharing organics with everybody else."

PASSION FOR SUCCESS
Loving what you do and believing in your product--those are probably the two most crucial elements of success in any home party business. Those two elements fell right into place for John and Melissa Lynch, both 42, when they founded WineShop at Home in San Ramon, California, in 2003. "Success comes from something you're passionate about," says John. "This is not the first company for Melissa and me. We said, 'Next time, we'll do something fun.'"

WineShop at Home developed out of a gift and wine club business that the Lynches started more than 10 years ago, where customers would receive monthly wine orders. "Through the years, we found [that] our best success came from speaking directly to our customers," says John. "The evolution into direct sales was a natural progression." In other words, getting two bottles of wine in a box isn't much fun to someone who wants to enjoy the wine experience. What's much more appealing is tasting and discussing the wines, and then selecting favorites, all in a party setting.

That was a "couple million" bottles of wine ago, according to the Lynches--they now have 1,200 consultants, with another 1,200 expected by the end of 2007. Consultants don't even need to know anything about wine to join the company; in fact, the Lynches find their best consultants are the ones who are average wine consumers because that's precisely their target market. "It's easier to find a nice person and teach them about wine than to get a wine aficionado to be nice," says John, who has seen his company grow 300 percent annually for the past two years. "We try to make wine fun, not intimidating"--not only for customers, but also for consultants. "We're attracting people who would have never been attracted to direct selling," he adds. "Most say they have never done it before, and they love it."

For Sandy Tuniewicz, mustering passion for her business was easy. Communicating that passion to customers proved more difficult--a situation that she quickly remedied. Tuniewicz, 41, "senior pack leader" with Chicago-based Shure Pets, figured her love of pets would help her sell the company's line of pet products, but it wasn't until she actually began testing out the products that she was able to enthusiastically recommend them to clients. "I examined the kit, but I didn't try my products out right away," says the Seabrook, New Hampshire, entrepreneur, who joined Shure Pets in 2004. "As such, I was not recommending the products as well as I could have [been]."

Tuniewicz advises "getting right in there" so you can genuinely recommend the products you're selling. Now that she's done that, she's got 200 downline members in 30 states and brings in an average of $400 per party, plus a percentage of sales from recruits.

THE RECRUITS

Speaking of downlines, some companies require them, and some do not. If you form a downline, you recruit other consultants into the business and often earn commission on their sales. If you're comfortable with this idea, you will likely do well at recruiting your home party attendees into the business.

Nancy Bogart, who founded her $3 million Nixa, Missouri, bath, body and spa products company, Jordan Essentials, in 2000, has a system in place where new recruits are walked through the first three months of operations. Conference calls, newsletters, a DVD and online support are just a few of the resources offered to consultants. New recruits purchase the $89 starter kit, which includes a sampling of retail products, a personal website and other tools. For orders you place as a result of your parties, "there's no minimum order, and there's no inventory to carry," says Bogart, 38, who has about 1,500 independent reps to date and projects up to 1,000 new consultants by the end of the year. The company's core product, a lotion bar, has been a mainstay for its success, with 600,000 sold in six years.

Before you start recruiting, however, make sure to find out how much training and support you get from any potential business opportunity, both during startup and on an ongoing basis, so you won't be left putting up all the party streamers on your own.

If you'd rather not recruit a downline, find a company that doesn't require one, such as Anna William handbags. "We actually don't have a system like that in place," says Kristen Lee, co-founder and director of consultant operations for Anna William. "There is a referral bonus, but most of our consultants are previous customers--many of them from our retail locations. They're people who say, 'We love this and wish we could do it where we live.'"

Anna William got its start in 2003 with a Newburyport, Massachusetts, retail boutique, where customers design and make their own handbags using materials supplied by the store. "But people wanted the parties to come to them," says Lee, 29. That's when the four co-founders--Lee, plus Keek Bielby, 57; Rani Chace, 36; and Erin Hornyak, 33--decided to branch out into home parties. Anna William still has its retail locations (the first one, plus one they opened six months later in Cambridge, Massachusetts), but the opportunity is quickly garnering attention from women looking to do something creative. The million-dollar company now has more than 100 consultants nationwide, and it donates a portion of sales to select charities.

THE BIG PARTY
One of the secrets that makes the home party method such a hit is that customers get to try before they buy and learn about the product from someone who will explain everything about it. Taking the time to carefully plan your party will pay off not only in terms of the sales you make at the party, but also in the repeat sales and potential new recruits you'll attract.

It makes sense to host a party in your own home to start, but don't neglect friends and acquaintances' homes as potential venues. In this case, Connie Keith recommends first sending a packet of information to the host. "Book your parties three to four weeks in advance," says Keith, 39, who joined The Happy Gardener Inc. in January 2006. "About two weeks out, make sure the host is getting RSVPs, and answer any questions on the company from potential guests."

Confirm a head count a few days prior to the party, and give the host some options on the type of party you want to have. Keith offers anything from simple product demonstrations to more specialized workshops, such as seed starting or flower arranging. "Probably 95 percent of guests want to sit down and do planting and other hands-on work," points out the Omaha, Nebraska, entrepreneur, who sells about $450 to $500 worth of products per party and also earns a percentage of sales from her downline.

This kind of low-pressure interaction with guests is likely to be the most effective. This is why Keith limits her group size. "Ten to 12 is about as big as you want," she says. "Anything smaller, and people tend not to ask a lot of questions; bigger than 12, people get distracted."

Once the demonstration portion is complete, "I make myself available for any questions as people order, but I don't hover," says Keith. Most important, she follows up with guests after the party. Keith keeps a database of customer orders so she can target-market and refill orders.

Perhaps the most satisfying aspect of planning and executing a successful home party is that even when the party is over, it's not really over. And the next one just might be more successful than the previous one. "This is a relationship business," says Robinson. "It's all about service after the sale."

Karen E. Spaeder, former managing editor of Entrepreneur magazine and editor of Entrepreneur.com, is a freelance writer in Southern California specializing in small business and education.