Home Parties, Direct Sales, and Formulating a Plan for Success

Have you ever been to a demonstration for some new cookware? Makeup?
Scrapbook supplies? How about candles, jewelry, books, or purses?
Home parties are a fun way to hang out with friends and shop in a relaxed environment. Maybe you are thinking about signing up to sell something too, but you are not sure what you will sell or with which company.

There are many different companies offering direct sales opportunities, say personal financial planning experts at the Pennsylvania Institute of Certified Public Accountants. With a little research and enthusiasm, you can hop on the direct selling bandwagon and start hosting home parties of your own.

What Is Direct Selling?

The Direct Selling Association (DSA) defines direct selling as the sale of a consumer product or service, person-to-person, away from a fixed retail location, and marketed through independent sales representatives, sometimes referred to as consultants. There’s no doubt that direct selling represents big business: 74 percent of U.S. adults say they have purchased products from a direct seller.

Joining the Ranks

At the end of direct sales parties, hosting consultants often ask party-goers if they’d like to host a party or become a consultant themselves. Before you to take the plunge, do your homework to ensure you’re making a smart financial decision. Here are some top tips to get started:

• Decisions, decisions. Your first step is to find a company with a product or service that appeals to you. You may choose the same product your hostess has chosen, or something else. Make sure it’s something you love and are excited about.

• Do your research. Start with your chosen company’s website, but don’t base your decision on their marketing pitch alone. Contact consumer watchdogs, such as the Better Business Bureau or other state consumer protection agencies, to see if any complaints have been filed.

• Dig deeper. Talk to others who sell the products and ask about their experiences.
Snoop around online. In this age of social media, you’ll find plenty of people with comments. Do keep the reputation of your sources in mind.

• The devil is in the details. Before you sign on the dotted line, obtain and review any documents you’ll be expected to sign. Understand what you’re committing to.

• Crunch the numbers. Know and understand your financial obligations. What are the start-up costs? Legitimate direct sales companies typically have modest start-up fees to help you get going. Be wary if there is a large initial investment. Are you required to purchase inventory? What happens to the inventory if you leave the business?
The DSA has a strict code of ethics that addresses this issue, and many others, to protect you.

• Understand the compensation plan. How will you make money through this venture?
Is it based on what you sell? That’s an important distinction, according to the DSA.
Good products, marketing, and sales skills should get you where you want to go. If your success relies on recruiting others into the business, you should be wary.

• Create a business plan. If you’re going to invest your time and money, make the most of the opportunity and take it seriously. Create a business plan that sets goals and objectives. One goal, for example, could be to earn enough money to pay for your child’s college education. Perhaps the plan to accomplish this would include hosting a certain number of home parties a month, attending local chamber of commerce events, having a booth at a home show, or setting up a table at a street fair. The more specific, the better.

Party On

Most companies provide all sorts of marketing support to help you grow your business.
From business cards, to ready-made websites, to social media tips, to corporate meetings, legitimate companies provide you with the resources to help you succeed. If you’re ready to host your first party, invite your friends, whip up some appetizers, pop the cork on a great bottle of wine and get ready to show off your new business. Offer samples, let people get to know your product, have a giveaway, demonstrate what you know and love about what you’re selling. Have fun, but be informative.

Working to Achieve Your Goals

Direct sales companies can offer legitimate business opportunities. By doing your research and creating a business plan, you can find a company that contributes to your financial goals.

For more personal financial planning advice, speak with your financial planner. To find a CPA in Pennsylvania by location or area of expertise, visit www.IneedaCPA.org.


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