Reader’s Digest’s Ways to Make a Bundle #3: Throw A Party!

Reader’s Digest (eBay) had an article in its May, 2007, issue entitled New Ways to Make a Bundle. I try to supplement my income from my day job in my “spare time” because a good way to save more, and thus get on more financially sound footing, is to earn more. Earning more on a side business is a good move because it diversifies your revenue streams and relieves some of the feelings of being trapped in a job.

The third tip given in the article is to throw a party. The party being thrown is a sales opportunity for a direct selling company such as Stampin' Up! or The Pampered Chef. These companies make their money by enlisting entrepreneurial, outgoing folks to champion their products, enlist their friends to host parties, and enlist others to sell the products. The parties are great opportunities if the products sell themselves. Someone besides the salesperson (usually) will host the party, and thus provide the venue and captive audience, for the salesperson in exchange for some gifts or nice discounts on products.

These opportunities can be good ones if the following are given thought:

• The product must be good and of interest to you, the potential salesperson. Selling junk won't work, just as selling something you're not interested in won't work.
• The company should be relatively new for the best growth potential. Though Avon and Mary Kay are well-established, reputable companies, that's also a drawback if growth is a goal. Turf wars are pretty common as “independent consultants” fight for the same customer base because most areas are saturated. A newer company has fewer consultants, so recruiting is easier and selling is easier, too.
• The minimum product purchase should be reasonable. If you're required to buy $500 worth of product each month from the start, it might be difficult to sell that much, and the company might be skinning you. If there's a minimum, it's more as an encouragement to sell and a deterrent for tire-kickers.
• The compensation plan encourages you to recruit new consultants, but not too much at the expense of selling product. If most of the real money goes to you if you get people to sign up under you then it might smell like a pyramid scheme. There still needs to be a product to sell. Having said that, if there is a good product to sell, then recruiting new salespeople will grow your business as you use those folks as leverage to help you meet volume goals. And, as you help them recruit others, they'll succeed too, and work harder for themselves, and thus for you.
• This is not for the shy. Now, it's possible to do pretty well by stuffing Avon catalogs in mailboxes regularly and consistently, never interacting with the customers until they call in their order and you deliver the order. But it sure helps if you enjoy talking to people and can work the business in the conversation in an unassuming way and in a way that offers a solution rather than sells.

Are any of you into a direct selling business? How is it going for you?