Direct selling parties
If you've ever hosted or been invited to a Body Shop or Ann Summers party you'll know what it's all about.
Essentially, a consultant comes to your home with samples of the product in question. You, as party host invite your friends, provide drinks and nibbles and let the consultant demonstrate the items being sold, which people can then choose to buy.
Depending on the total value of sales for the evening the host will receive some products free or get a discount on what they buy and the consultant gets a percentage of what is sold in commission.
You can choose the hours you work and how much you put in so it's a great option for anyone needing to top up their income.
Direct selling companies
There are thousands of direct selling companies covering all kinds of different interests. Avon is one of the most well known but there's also; Pampered Chef, Body Shop, Mini IQ books, Oriflame and Kleeneze, as well as baby specific firms such as Bebeco, Mamatoto and Arabella Miller.
The Direct Selling Association is the main trade body for this kind of work and lists all the companies involved along with details about how you can get involved.
The amount of commission you earn depends on the company but it can be anything up to 60% of what you sell. On average it lies around 20% but many companies also offer the chance to train others to sell (you then claim a percentage of what they sell too).
When you start work for a direct sales company, you are essentially starting your own business which makes you self-employed and could have important tax implications on the extra money you earn, irrespective of your day job.
Tax rules state that if you are self-employed you need to register as such. It is the individual’s responsibility to register, and if this is not done within three months of the start date, a £100 penalty can be applied.
Direct sales companies are obliged to hand over information on sellers if asked by HM Revenue & Customs (HMRC), so there is a possibility that the extra income you earn could be investigated at any time.
The Direct Selling Association recommends opening a separate bank account for direct sales income and expenditure, as well as keeping accounts up to date with receipts to avoid any trouble on later on.
Avon is one of the biggest direct selling companies and has a range of popular products ranging from make-up to jewellery. The brand is well known around the world, helped by the celebrity endorsements of Reese Witherspoon and Aleesha Dixon.
To become an Avon Representative there is nothing to pay up front; the £15 worth of brochures is split over your first two orders (so you repay £7.50 each time).
However, the commission structure is tiered based on a minimum order value. If you don’t make any sales over £78, you don’t earn any commission and only the cost of the delivery is covered. You start earning 20% on orders over £78 or 25% on orders over £148.
Training materials are available online and you can also get support from Area Sales Managers or on Avon Connects, the online community of reps.
Certainly not a role for the faint-hearted, direct selling for Ann Summers will be an experience for both you and your party guests! If you think you could sell lingerie and sex toys without so much as a blush, then you could be making money and advancing up the company sales ladder.
The starter kit you get is worth £500 and you will be required to pay £3.50 per week for 32 weeks. After this period, the kit is yours and you pay no further rentals. However, should you manage to sell £1,200 worth of items before then, you will no longer need to make any repayments.
As a new starter you have to have a minimum of six parties confirmed for your first six weeks and if you meet targets you are able to climb the achievement ladder.
As a direct seller your customers are offered a 30% discount on the products (which should make them easier to sell) and you earn 23% of commission on sales pre-discount.
If you've got a child you're bound to already have an Usborne book (or ten) in the house. Ranging from board books for babies all the way up to fiction for teenagers, Usborne produces good quality books, featuring lovely stories and illustrations.
[SPOTLIGHT]The Usborne scheme is one of the cheapest to join. Fill out the forms at the Usborne Books at home site, pay £38 (or £19 with the half price offer on at the moment) and you'll be sent the starter kit, containing £140 worth of books. You then earn 25% on everything you sell through parties, and 20% through school events.
You will need to submit orders worth at least £100 in the first 12 weeks in order to keep the books. After this there is no further financial commitment - so if you wanted to stop selling you could.
Body Shop at home
To join the Body Shop scheme you'll need to buy the "Pamper" kit for £40, which contains various pampering products. You'll learn to use them via online training (with support from local representatives) until you're ready to hold your first party.
You'll have to commit to four parties in the first four weeks, but after that the kit is yours and you can choose how often to work (plus you can choose whether or not to purchase the other kits, skincare and make up). And you'll get 25% commission on everything you sell.
So that's direct selling in a nutshell. Depending on how hard you work you can earn a bit of pin money, or a decent salary - it's up to you.
And as a final point, while most companies that sell in this way are reputable, there are a few less savoury schemes. If you are interested, take note of these words of advice before signing up.
Rules of direct selling
- Make sure the company you sign up to is a member of the Direct Selling Association.
- It is vital to choose a business with a product range you like and that is fairly priced. This way you'll find it easy to get others enthused about it, too. After all, if you wouldn't buy it, how will you convince anyone else to?
- Most reputable companies only ask for a modest investment to get started - beware any schemes that claim you can earn more by investing more money.
- Make sure you sign a proper, written contract that you understand before doing any selling.
- Make sure you keep good records on your income and expenditure for tax purposes.
- Meet your sales leader to see if you gel. You will have a lot of contact with this person so it is important to make sure you can get along.
- Assess whether you have the confidence to do it - sales, and especially direct sales, is a notoriously hard job. You are trying to convince people to part with their money and you could suffer a few knockbacks.
- Think about the longevity of the products you have to sell for the business you sign up with. Once people buy, will they come back? You need repeat customers to keep on earning.
This is a lovemoney.com classic article, updated for 2012