Debt incurred from a home-based business?

[nidena]

Were you a consultant for Avon, Pampered Chef, Mary Kay or the like? Did you get sucked into acquiring a bunch of products and inventory that you just couldn't sell? I would encourage you to take a look at the www.pinktruth.com. You're not alone.

[midjd]

If a person can't sell the product it's probably because they didn't work the business

That's the #1 tagline the consultants use to suck in new members (I've spent some time on PT myself ;D)... any business that doesn't track sales its consultants make - only sales TO consultants - is to be suspect.

[mizbear]

I know that one of my friends does a home based party business and she tells prospective consultants - because everything is sent to the customer and you are taxed on inventory- not to go into debt for the business. You only purchase those things that you can afford and will help you sell.

[nidena]

That's awesome that she does that, mizbear. Unfortunately, some of the "upline" in these businesses don't do that. In fact, they do quite the opposite and "gently persuade" them into purchasing a huge quantity of inventory. We're talking thousands of $$ of product right out of the shoot.

[reeneejune]

I did PartyLite for a while, but I lacked the kind of social network you need to do well in that sort of business. I also lacked the "killer instinct" for selling crap to people when they don't really need it. While I agree that there's an immense pressure to recruit, not all direct selling organizations push for consultants to gather inventory. PL, in fact, pretty much discourages consultants from purchasing inventory. Instead they encourage you to purchase small items (like tea lights, for example) to give away during parties, because everyone likes freebies.

The other major element missing from all of these companies is training on HOW to work it like a business. Most of the consultants I knew didn't even have so much as a separate bank account for their business funds.

I got out after only about 3 months, simply because I couldn't get any bookings. In the end I had some really nice home decor items, more candles than I would have used in a lifetime, and good stash of housewarming presents.

[mizbear]

nidena- You're exactly right- a lot of people don't do what my friend does.
reenee- You're right too- A lot of DSO don't tell consultants important things like getting a separate bank account, how much time outside of parties/ bookings you need to spend, etc.

I watched my parents get into Amway when we already had 1 poorly run business (DM ran it like a business and my father ran it like his personal ATM) and we ended up with 6 tons of Amway product and no money.
My exSIL has had 2 failed DS businesses and both have been her fault because she thinks she can sit on her butt and watch the product levitate out the window.

But I have also seen it work. I have a friend who kept her family afloat on her 2nd income from a DS org when her husband lost his job, I know a lady who paid off her credit cards with her DS job, and one of the ladies at the church I went to growing up helped support her family and take care of her grandson by doing DS.

I think it depends on the company and also the person.

[Wisconsin Beth]

I know 2 people that seemed very successful at DS. One was in Avon and one was Pampered Chef.

The Avon was a librarian I used to work with. She left booklets in all 3 breakrooms and encouraged people to take them. Plus she cheerfully took my 1 item orders, once a year. ;D And then one of the aides took the books home to HER mom, who worked for as a nurse in a hospital and the mom took orders for her friends. The librarian shut it down after a couple of years because she was going back to school. And she was trying to find someone to take it over because Avon was NOT happy she was shutting it down. She claimed to be one of their top success stories during the 2-3 years she did it. I didn't see her financials so I can't swear that part is true. But she'd bring a ton of bags/boxes for delivery in on a regular basis. And the people I supervised bought a lot from her.

The PC was interesting. I was something like her 10th party. I'd been to a party, decided I wanted to host one for the cookware as I was in a new appt and had lousy cookware. The consultant at the party I attended pawned me off on Sherry as Sherry lived a few blocks from me and was the newest seller under the original consultant's wing/pyramid. Sherry was in PR so she was extremely outgoing and I think had lots of contacts. I was her first big sale and we bonded. ;D She was starting this a side business to be able to do the SAHM thing. She stuck it out until her 3rd or 4th kid and we lost touch about 5 years ago. But I could call her and say "I need X" and she'd order it and get it to me.

What I learned from them,
1. If you're going to be successful at Direct Selling, you need to be fairly outgoing and have contacts and/or a large pool of people interested in your product.
2. You need to be willing to donate stuff to church auctions or whatever to get your name out there.
3. Figure out a magnet with clips to advertise/give to people. As long as they don't have stainless steel fridges, it will get used and be visible.
4. Take small orders with the same enthusiasm as big orders. Sherry knew that I'd only host a party every 3 years or so (and have about $400-$600 in sales), but that in between I'd call with small orders. Or my friends/family would ask me to find them something. Or I'd know someone who wanted to do a party but didn't have a consultant on tap.

ETA - I love my Pampered Chef. If I was going to sell anything, it'd be that.

[mourningcloak]

Wisconsin Beth you are so right with your tips. It can be done and it can be done well. But it really truly depends on the tactics used. My sister loves her Pampered Chef business but there is no need to carry an inventory, whereas with my Mary Kay business I was repeatedly told not carry stock would lose customers. Now I have stock I can't sell because the colors or formulas changed every other season and no customers left because they didn't like anything I had in stock! My director was adamant about being extremely aggressive and keeping inventory, both of which I was utterly uncomfortable with. But something like Avon where everyone knows you have to wait to get what you order seems to work well for people willing to work for money.
For some these businesses work great. For some it doesn't. Gotta find what works for you both in and outside the home!

[Wisconsin Beth]

TT, they are. Sherry knew I loved my PC and tried to recruit me a few times. I'm not outgoing enough to do it, although I have my moments.

Oh, here's another tip I remembered this morning. Find other people who sell other stuff and do an open house thing a couple times a year. A different friend who did Mary Kay did this. The kitchen was PC, the dining room was some jewelry thing, the den was Mary Kay and the living room was Southern Living/decorating stuff. All the consultants sent out flyers to their customer list with a list of who was there, directions and times. It was a great chance for cross selling/getting new clients. They timed it for Christmas shopping and then again in Spring. I know I left with some Mary Kay stuff most trips (I think she cleared out older stock this way) and usually an order for either PC or the decorating stuff.

[Deleted]

I friend of mine was stuck with about $5k worth of inventory for one of the MLM companies after he couldn't sell it and decided to get out of the business.

[mizbear]

Beth- Great idea- We have friends who do all different types of DS and we would all have a blast doing that. I say "we"- me and all my 50 different personalities.

[Wisconsin Beth]

I have no idea how sales went on those open houses. I loved the one before Christmas because I could usually find a present or two there.

And I think someone told me that most of the DS companies forbid that kind of thing. Screw that, you do what works for your business. If they don't like your sales, what are they going to do, take away your license?

[mizbear]

The thing is- when there is a charity or something like that, every DS org in the area is there. That would look totally bad to tell them that can't be there because company XYZ is there.

[Wisconsin Beth]

No, I meant the open house thing, not charitable stuff.

[mizbear]

Beth- What I meant was a lot of charities do open houses. Sorry. Wrangling a hyperactive 10 yo today.

[Wisconsin Beth]

Aug 1, 2011 10:23:34 GMT -5 mizbear said:

Beth- What I meant was a lot of charities do open houses. Sorry. Wrangling a hyperactive 10 yo today.

Sounds like fun. I had one of those on Sat. She helped me scrape the front door trim until she escaped. lol.

Oh, this was a private open house thing. They'd use 1 person's house and each seller got 1 room. All the consultants would send out flyers to their customers.

[mizbear]

Gotcha. I can understand not wanting your consultant selling say Pampered Chef and Tastefully Simple, or Avon and Mary Kay, but really- if you think about it- what is the difference between having an open house featuring different consultants with different products and someone selling several different DS products. You know the real go-getters are going to go after products that don't restrict you from selling other non-competing products.

One thing I noticed in my friend's sale's group (I've been to a few meetings with her to see if I was interested) is that with her company, they are very focused on providing tools and support to the consultants and bumping up their self-esteem. I have done sales before and have NEVER seen that. Maybe it's because there are mostly women, maybe it's because they know that you can't sell if you don't feel good about yourself or the product- but there is none of the carp I experienced in my first 2 sales jobs (after which I said I would never work sales again).

[nidena]

Jul 29, 2011 13:58:49 GMT -5 @toughtimes said:

These things are pretty close to being pyramid schemes. There are a lot of important, emergency meetings for brain-washing and lots of wasted cash.

They are totally pyramid schemes! Read more on pinktruth.com.

[mizbear]

I don't approve of the actions of some people involved in these businesses- but not all of them are self-centered scheming B****es.

I hope that's not what you all think of me.

[973beachbum]

When my daughter was little I sold Discovery Toys. I started because I loved the toys. The only "inventory" I ever had was the new line of toys that they sell to consultants so they can show them when they are selling them or at parties. I think, don't quote me on this, but they had 2 packages we could buy. One was a sampling for like $200 and the other was the full line and it was like $1000.

Truthfully we did have meetings maybe once a month. It was normally at the mgr's house though and didn't cost anything. It was really more like a get together really.

Personally I never got the big line. I normally sold enough product that I actually got reimbursed for the sales line product anyway but it was just too much money for me and I didn't want to have to carry it all around anyway. I also used to sell the products from it if people wanted. There were a few things that I loved and wanted for my daughter but the rest I would sell if I had the chance in a heartbeat.

My 8 year old plays with some of the stuff that I got from selling it 15 years ago and they have always been the kids favorites.

[mizbear]

The one my friend does encourages you to NOT keep a lot of inventory. You pay less than $200 for your starter case- there are 5 choices right now- one of which is a specialty kit for just fundraising. You have the opportunity to earn your starter money back (plus) as a money through a 3-step starter program. Also, they have times when the starter kits go on sale. You have to pay tax on that inventory at the end of the year and they have new versions of certain things come out or certain collections that end. With what she does, everything ships to the customer, so she doesn't have to do deliveries or anything. But she does have to be good with people.
That said, DSA is not for everyone- I am still scarred from vacuum cleaners and my parents doing Amway even though I adore the company my friend works for. If it would make me money instead of just get me free stuff (plus I would need a house instead of an apartment) I would turn into a professional hostess and just have the parties. SHe and I haven' figured that one out yet. But we're working on it.

[mourningcloak]

Sept 5, 2011 20:02:25 GMT -5 mizbear said:

I don't approve of the actions of some people involved in these businesses- but not all of them are self-centered scheming B****es.

I hope that's not what you all think of me.

\\


Absolutely not Mizbear! I think a few people posting here have just gotten burned badly, and recently, so the emotions are causing overstatements. It takes a lot to run your own business no matter what kind of business it is. There are both those that are schemers and those that act ethically. I think there are just more schemers out there, unfortunately, which gives everyone a bad taste.

[mizbear]

Snerd- I believe so, but not so much in the way that they existed before.
I agree that some people take direct sales waaay too far. I know someone right now who does just that. One thing that sends me running the opposite direction is when they say- "sign up for X this month and it's only Y after this month!" Um- yeah...whatever...you can cancel if not satisfied in 30 days, but it takes 4-6 weeks for delivery???

[Sam_2.0]

I always thought it would be great to have a business called "Home Party" - have a nice house and serve appetizers & drinks, and set up several of these vendors to come through. Then people could schedule parties that don't have to be at their own houses I know that I HATE getting asked to host these things. Then for a bridal shower or something, your bride could be the "host" and get the special extra gifts, and people could order things off her list (would work great for PC, tupperware, and the home decor parties).

For awhile I had my own home-business going. I would do coupon classes in people's homes. People paid for the classes, but they got products & coupons from it. It worked out well and I made some $$, but didn't think about the sustainability factor. Once I ran through the people I knew, it was a lot harder to book parties (that, and I was not really actively seeking them out. That would have helped I think ).

Right now I have a friend on FB selling Wildtree products. I almost un-friended her completely because of it, but I just hid her instead (the drama from un-friending was not worth it).

[nidena]

Amway is still around. However, unlike in the past, you don't have to find a consultant (or whatever they are) to make a purchase. You can just buy directly from their site. That's how I buy their SA8 deterg.

[mizbear]

I knew Amway had made some changes a few years back, but I wasn't sure how many or how serious.