A Home Party Business?

I’m going to answer some commonly asked questions about having a home party business. Then give you 10 steps to get you started on your home party business. But, first let’s take a little stroll down history lane.

In the 1920s a primarily male sales force used home sales parties to introduce aluminum cookware. Then, in the 1940s and '50s, Brownie Wise (single mother and saleswoman) opened the World’s eyes to this way of marketing when she began to promote Earl Tupper's line of burping plastic containers (Tupperware) by way of home parties.

Fast-forward to the 80’s and 90’s when more and more women had their own careers – many people regarded the idea of selling products via home parties as a thing of the past.

Then came the ability to shop on-line. One would think that because of the Internet showcasing products at a home party would definitely become obsolete. However, the reality is that home parties have proven to be viable way to sell products – a way that has shown 18 years of consecutive growth.

In today's high-tech, high-paced life, people welcome coming to someone else’s home to socialize and experience a sense of community. Home parties are often organized around an event like a bridal shower, housewarming, or birthday. Home parties combine socializing with shopping or a hobby and offer extra income for the seller.

I’m often asked several questions when it comes to home party businesses:

What exactly is a home party business? Simply put, it is buying and selling goods from home.

Can someone really make a significant amount of money selling stuff from homes? The answer is “yes.’”

Consider that last year home parties accounted for $8.3 billion in American sales, and “those numbers are growing,” states Amy Robinson, Director of Communications for the Direct Selling Association.

Why is the number of people selling products from homes increasing? There are several reasons:

The high cost sellers have to pay in bringing their product to retail. Robinson adds that, “If you are not advertising your product in the first place, most retailers won't even let you be on their shelves.”

When friends host a party, they are endorsing your products. So, everyone who attends the party is coming as a referral. “Advertising” one’s business by way of an endorsement or referral is inexpensive and happens to be one of the most effective ways to promote a business.

Home parties enable people to taste, feel, or see your product first-hand.

The sky is practically the limit with regards to what you can sell at home parties. For example, people have home party businesses where they are selling organic gardening supplies, scented candles, scrapbook supplies, golf clubs, nutritional supplements, jewelry, cosmetics, environmentally-safe household cleaning products, and even wine.

With the Internet’s increasing popularity, more and more people are starting home party businesses. The Internet has made it easier to promote one’s home party business by word-of-mouth marketing, also known as viral marketing.The Internet has also enabled people to host virtual parties online.

So how does someone start a home part business?

This is a good question. Follow these simple steps.

10 Steps to Starting a Home Party Business:

1. Determine how much time you can contribute to your business on a weekly basis. Be realistic. Choose a home party business that will work with the amount of time you have to commit to it. You want your business to fit within your life-style versus trying to work your life-style around your business. If you chose a business that requires a lot of time that you don’t have, your business will suffer and you will not succeed.

2. Establish how much you can afford to spend to get your business started. If you're buying into a home party business, then take a close look at how much it costs to get started and what you get for your money. Take the time right now to educate yourself on how to avoid scams.

If you need to carry your own inventory, then make sure there is a buyback policy. Companies that are members of the DSA must agree to buy back inventory from consultants within 12 months of the date of purchase, at a minimum of 90 percent of the original net cost. Meaning, if you decide the business is not for you, you should be able to recoup most of the cost you incurred for inventory such that there is minimal risk involved.

Also inquire whether or not there are volume and monthly purchase requirements. Typically there are only such requirements for you to get a higher commission rate. But, if not, you might want to think twice about any company that makes purchase requirements mandatory.

3. Look at how you’re going to make money: If you’re selling your own products, determine the price that you’re going to charge for your product. Base this amount on how much you’re paying for the product and how much you want to be making.

Also, consider what similar products on the market cost. You want to make sure your price is close to what people would pay for a similar products elsewhere – if you charge too much people will balk. If you charge too little you’re selling yourself short.

If you’re selling a company’s products, then take a close look at the commission structure. A range from 5% up to 50% is the norm. That may seem like a sizeable range, but whether it’s a 5% commission or a 50% commission depends upon the company, the product and how much people typically pay for a similar product. Most important, make sure that you are comfortable with the amount of commission you will receive.

If you’re buying into a home party business, check to see if you will be earning any residual income. Residual income is income you continue to receive based upon your initial effort. For example, will you receive a commission on repeat sales?

Another way to receive residual income is by being compensated for helping others start their own home party business. Here you would also receive a commission for sales that person generates. Make sure you know what that commission percentage is – usually it is anywhere from 3% to as much as 10%.

4. Know your product. It’s hard to sell something about which you don’t know a lot. So, pick a product (or products) you currently use and purchase. Even better, if you’re particularly passionate about something, sell that – you’ll have a lot more fun with your business and your commitment will be stronger.

Also, make sure that you’re selling a real product. Avoid getting involved if there's no actual product being sold or the product is worthless.

Consider how well your product will sell in a home party format. Products that can be touched, sampled, or have features that are easily demonstrated work well.

Know the benefits that your products provide. There is a difference between a feature and a benefit. A feature is a piece of information about your product. A benefit is a result one gets from your product – ideally a result that enhances the person’s life in some way.

For example, your skin care products may have vitamin C and anti-oxidants in them. That’s a feature. The benefit is that your products help reduce and alter the signs of aging, giving your customers a more youthful, healthy look.

So, know your product’s benefits and communicate those to your customers and prospects.

While we’re on the topic of products, the ideal is to be selling products that are consumable. Consumable products are ones in which your customers will use on a regular basis (daily is best). Therefore, with a consumable product, your customers will buy over and over again, creating an ongoing income stream for you.

Note that if you’re selling consumable products that deliver good, reliable results you increase your chances of having repeat customers. Servicing repeat customer is easier and less expensive than finding a new, “replacement” customer.

Also, seriously consider offering a money back guarantee. If you can’t stand behind your products with a guarantee, then keep looking for a product in which you can. Why? Because in today’s world of commerce a 100% satisfaction guarantee puts peoples’ minds at ease when they are buying. It also makes it easier for someone to try something new.

5. Research the company or companies that you're considering. Look at the company’s:

Mission statement – look at the values it expresses

Philosophy

Growth plan

Strategy for attaining that growth

Then make sure that all of these fit with your values and goals.

Take your time. No matter what anyone says, a good opportunity will still be available when you’re ready to get started. Otherwise, it’s not a fit for you and therefore it isn’t a good opportunity – for you.

So, make sure you make an informed decision and one that is right for you.

6. Make sure that you have resources to assist you with your business. All business owners experiences challenges with their businesses. It’s how a business owner deals with those challenges that set those who are successful apart from those who are not.

Surround yourself with resources, such as people who are experienced business owners, perhaps someone who has a successful home party business. Read books and articles about business, and look at all of the information available on this web site. Book mark this web site so you can continue to visit it – we’re always adding new resources to assist home business owners.

7. Start marketing and advertising your home party business. Start with family and friends by asking them to host parties to help you get started. This will introduce you to many other people and potential hosts and hostess.

If you buy into a company, look into what type of sales tools the company offers. You will probably have to pay for these tools, so make sure you know what you’re getting and that it will be an effective way for you to market and sell your products. Typical tools offered by most companies include: a company websites, brochures, audio and videotapes, and online presentations that you can use to promote your products.

8. Focus on developing relationships. You do this by:

Always providing excellent service to your customers.

Whomever you come into contact with, look at it as a networking opportunity for both of you. The person may or may not become one of your customers. Either way, we all have a mental Rolodex of about 250 people that we know. You may be able to tap into that person’s mental Rolodex – but let them tap into yours as well.

Meet new people every week. Determine how many new people you’re going to meet each week. Is it 5, 10, 20? The more new people a week that you meet the greater you increase your chances of reaching your business goals.

Also, come up with a plan of how you’re going to meet new people. I recommend coming up with a plan that is predictive versus random.

9. Know your industry. Make sure you’re aware of the trends associated with your products, your business, and selling products via home parties. So, attend relevant meetings and seminars. Read relevant emails and newsletters. Stay informed.

10. Remember: Treat your Business like a business so that it rewards you like a business. This is a job and takes work. But the end results can bring you the life you’ve always wanted.

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