Home Assembly: A Legitimate Business?

Q: To your knowledge, are there any legitimate companies that offer opportunities to assemble products at home?

A: It's easy to make the sweeping statement that home assembly work is in the same league as stuffing envelopes-another scam. However, the fact is, there are some companies that have withstood the test of time in offering ways to earn some money assembling their products at home.

With home assembly, you take a risk because you pay for supplies in advance that you can buy only from the company, gambling that you'll assemble them into products that the company will then buy back from you. Unfortunately, the companies that operate in good faith are the exception and not the rule.

Some time ago, we interviewed a woman by the name of Ruth M. Howard on our radio show. She had written and published a booklet in which she stated that she had tried many companies offering home assembly work and found some actually bought the finished items she produced. In her book, she identified 15 such companies. I checked on these and some other companies to answer your question. Of the 15 companies, five remain in business, a fairly high mortality rate. Four of these five companies had "satisfactory records" with the Better Business Bureau.

Here are several ways to evaluate whether a company is safe to do business with:

• Is the company listed in the telephone directory? You can check this on sites like www.switchboard.com and www.anywho.com. A company that can only be located with a P.O. Box raises doubt.
• Does the company have a retail store? Does it have a Web site? A key to whether a home assembly opportunity is going to work is whether it has retailers, distributors or a customer base for the products its home assemblers produce.
• What do regulatory agencies say about the opportunity? The national Better Business Bureau compiles reports from its local affiliates, enables you to search for a company on its Web site and, if necessary, allows you to file a complaint against a company. The Federal Trade Commission offers similar services and also publishes guidelines on buying a franchise or business opportunity.

Should you find a reputable company, what can you expect to earn? If you work quickly and skillfully, you can earn about the equivalent of the minimum wage. So for 20 hours of work a week, you may produce $400 to $500 a month from a legitimate company. To someone living in a high-cost city, this would have no appeal, but to those living in a low-cost area, able to work only seasonally, home assembly may help them get through the off-season. Also, be aware some assembly work can produce repetitive stress injuries and that some companies have minimum quotas you must meet before receiving payment.

Paul and Sarah Edwards' most recent book is The Entrepreneurial Parent. Send them your start-up questions at www.workingfromhome.com or through us at Entrepreneur.

This story appears in the June 2002 issue of Startups. Subscribe »