How to make money from direct selling
Mention home selling and images of women from the 1960s laden with bundles of make-up and brochures travelling door-to-door, or groups of ladies gathered over cups of tea and Tupperware boxes, spring to mind.
Today, however, this booming industry couldn't be further from where it first began. In the UK alone, more than 400,000 people are employed in direct selling (to give home selling its proper name) and the industry makes around £2 billion each year, according to trade body the Direct Selling Association (DSA).
The biggest direct selling company of them all is Avon, with 6.5 million representatives worldwide. Every second, four Avon lipsticks and two Avon mascaras are sold. The company, now celebrating its 125th birthday, pays its 'representatives' commission of 20% of the value of each product they sell.
Little wonder then that during this time of economic hardship so many people, still mainly women, are embracing direct selling as a way of topping up their monthly income.
And the crème de la crème can make big bucks.
Last summer, the story of Avon's first female millionaire, Debbie Davis, 32, from Sunderland, hit the headlines. Debbie became an Avon lady after being made redundant from a printing factory in 2004. After just a week she had recruited her partner Dave Carter to join her team as a representative and during a three-week selling bonanza they racked up sales of more than £18,800.
They went on to build an 8,000 strong team and earn more than £1.4 million from the company.
Linda Gulliver, 60, from Motherwell in Scotland, has also built up an impressive business. She started selling for Avon in 2005, fitting it in around her day job as a personal assistant. She has since recruited more than 700 representatives and has generated sales of more than £2 million a year.
However, in reality most people don't make enough to live off; 93.5% of direct sellers work part-time. The DSA says the average direct seller can expect to make anything from £50 to £1,000 a month, depending on how much time they put into it. That's nothing to be sniffed at.
Even an extra £50 or £100 a month can make a big difference to a family, especially while household incomes are being eaten away by soaring food costs, rising energy bills and most people's salaries being frozen.
If you are interested in direct selling, you don't just have to sell make-up. There's a huge range of products to choose from that appeal to both sexes - from funky cooking gadgets to the latest gardening tools. There is also a wide range of companies to work for.
David Forbes, 68, was introduced to fitness and nutritional company Herbalife by a friend when he was made redundant. He now works for the company full-time. And Linda Lanson, 52, indulges her passion for jewellery by working for direct selling company Silpada.
How to become a direct seller
Before you start, make sure the company you approach is a member of DSA. This will guarantee you a degree of security, as all of its members have to commit to follow a code of practice approved by the Office of Fair Trading.
This includes having a maximum start-up cost limit of £200 to cover things such as brochures, packaging and any training. However, the average cost is much lower, according to the DSA. Avon's set-up fee is just £15. And importantly, the code also includes a 14-day cooling-off period for both new representatives and customers buying from a direct seller.
Once you've got all the kit, it's up to you to start selling. Lots of sellers start by tapping up friends and family, either by going door-to-door or by throwing a 'party' to showcase the products in hope of getting some orders in.
Sellers place orders on behalf of customers, usually without incurring an upfront cost. Instead, the company will send the products to the seller in the first instance and will then set out a timescale for reimbursement after the products have been delivered to customers and payments collected (typically in cash or by cheque).
Direct sellers can usually pay the companies they represent by phone, cheque or through the Post Office. For every product sold you will earn commission.
For example, Silpada rewards representatives with 30% of the value of each product, while Avon and Herbalife pay 20%. It is often the case that the more you sell, and the more targets you reach, the bigger the rewards (though each company retains discretion to award commission above its standard rate, which is what most sellers receive).
Then there's insurance to consider. For instance, should there be a fire or flood at your home, where you store your stock, the loss of the products might not be covered by some contents policies. It's therefore important to check your insurance arrangements for any restrictions.
Paul Southworth, director general of the DSA, is keen to emphasise that working for a direct selling company can be adapted to suit your lifestyle: "You choose how many hours you put in and these directly relate to how much money you will make."
Knowing your products and not being too pushy is the key to success when it comes to home selling. And being sociable is important too. Linda Lanson says: "I love the fact that I can meet new people and make some fantastic new friendships as well as earning a little extra money."
The period of time you’re allowed, after signing an agreement, to cancel it without incurring a financial penalty. Financial products including banking, credit, insurance, personal pensions and investments are subject to a 14-day cooling-off period (this is 30 days in the case of life insurance and personal pensions). The insurer or broker must refund any money paid by you within 30 days, although it has the right to deduct a reasonable admin charge, and a sum proportionate to the number of days’ cover you had. If you have any related credit agreements, these will also be cancelled.