Start a Home Party Business
This traditional business idea is fresh once again as a new generation of sellers open their homes for direct sales.
It's a party at your home--or better yet, at someone else's. Customers socialize, and you make money. Need more convincing?
Home parties now account for roughly 29 percent of the nearly $30 billion in U.S. direct sales, and 13.6 million Americans bought or sold goods from home in 2004. Direct sellers are hawking everything from organic gardening supplies to wine. Some are even hosting virtual parties online. And the numbers are growing, according to Amy Robinson of the Direct Selling Association in Washington, DC. "The majority of companies coming into [the] DSA are party plan companies," she says. "In a lot of cases, they are smaller, newer companies started by entrepreneurs from their basements."
Andrew Shure (below) is one of them. Nationwide, he has 1,300 consultants selling Shure Pets pet products, and he predicts he'll have 2,800 by the end of 2007. "The only requirement at Shure Pets is a passion for pets," says Shure, 43, who launched the Chicago-based business in 2003 and projects sales of $1 million for 2006. Another example is Newburyport, Massachusetts-based Anna William, which lets customers design their own handbags. Kristen Lee, 29, launched the million-dollar company in 2003 with Keek Bielby, 57; Rani Chase, 36; and Erin Hornyak, 33--and already has 125 consultants nationwide.
Be sure to thoroughly research any company you're considering, and make sure you love the products. As Robinson says, "It's no fun to sell something you're not interested in."
Hanging out at a party and selling stuff might sound like easy money. But there's more to it than that:
- If you're buying into one, scrutinize the initial fee. What's included in the startup kit? Amy Robinson of the Direct Selling Association in Washington, DC, advises, "Make sure what you're getting in return for your money is worth it." Look for plenty of samples, training materials and other tools that will help you host a successful party.
- Ask whether there's a buyback policy. Companies that are members of the DSA must agree to buy back inventory from consultants within 12 months of the date of purchase, at a minimum of 90 percent of the original net cost. That way, "if you decide it's not for you, you can recoup most of that money, and there's minimal risk involved," says Robinson.
- Make sure there's a real product being sold. And make sure it's not something that will leave you with a garage full of widgets. If you suspect it's a pyramid scheme--where your time and money is devoted to recruiting and earning money off a downline, and there's no actual product being sold or the product is worthless--keep looking.
- Don't feel pressured. Shady operators might try to convince you to "get in on the ground floor with this new opportunity," notes Robinson. "But a good opportunity will be there tomorrow. You need to take your time and think about it--make sure you're completely comfortable with it."
- Remember, the party is never really over. Hosting a home party isn't just about the party, as fun as that might sound. You need to be willing not only to make the initial sale, but also to follow up, to develop relationships, to be the kind of salesperson who could sell chocolate ice cream to a woman in white gloves--and call her a few weeks later to see if she'd like some more. "This is a relationship business," says Robinson. "It's about service after the sale."
Karen E. Spaeder is a freelance business writer in Southern California.