Before the get-rich-quick hype of eBay, there was the get-rich-quick hype of direct selling programs like Avon and Amway. But like selling on eBay, it's hard to become a millionaire selling makeup and cleaning supplies to your neighbors. According to Amway, the average salesperson earns $115 a month selling Amway products [source: Amway]. Of course, like any other kind of selling, the amount of time and energy you put in is going to affect your sales.
Direct sellers use individual salespeople to sell their products instead of using traditional retail. To join Amway, you sign up with one of the company's salespeople (or "independent business owners"). That person then provides you with catalogs and samples. As you make sales, you purchase products at wholesale from your sponsor, and keep the difference between the wholesale and the resale price as profit. You can also earn bonuses and higher sales commissions as you sell more.
Direct selling may sound like a pyramid scheme, an illegal sales operation that makes more money from the wholesale purchases of its so-called "sellers" than it does from actually selling products to customers.
But in 1979, the Federal Trade Commission decided that Amway's business model is legitimate because it doesn't require recruits to pay large up-front membership fees or make large wholesale purchases before being admitted into the program. So if you decide to become a direct seller, only sign up with programs that don't require exorbitant startup fees.
Finance Planning Tips
Here are some tips to help you with generating income and planning for the future.
Presented by United Way of Greater Atlanta Powered by SunTrust Foundation