Direct-sales businesses boom as economy tightens

ALEXIA FODERE/ FOR THE MIAMI HERALD

Carmen Rojas, who hosted a Passion Party at her home, shows an octopus toy used to give massages.


* Is direct sales for you?


It's Saturday night and a dozen women are in Carmen Rojas' living room, passing around edible lotions, flavored body powders and adult toys. For Rojas of Miami, this night is about more than getting these women to buy her products.

By the party's end, Rojas' guests have spent more than $300, and she will pocket 40 percent of the sales. More importantly, she has ensured future income by inspiring at least one to host a party.

Direct selling has become a money-making option more people are considering to cover rising gas costs, be their own bosses and better balance the responsibilities of career and family. There are tons of direct sales companies to choose from such as kitchenware, fashion, jewelry, tools, cosmetics. The goal with direct selling is to ramp up your earnings by recruiting enough people under your network so that your income benefits from their sales, too.

More than 15 million people worked as direct sales consultants in 2007, generating more than $30 billion in sales, according to the Direct Selling Association, which insists: ``We're in the middle of a boom in home-based businesses.''

''There are so many more reasons today that people are going into direct sales,'' says Amy Robinson, spokeswoman for the Direct Selling Association. They are looking for income while searching for permanent jobs, their salaries no longer cover costs, or they might be stay-at-home parents who view it as a flexible way to supplement household income, she says.

Just three months ago, Rojas was working in a bank. After her position was eliminated, she figured she would give direct selling a try adding, ``I never really liked the 9 to 5 thing.''

Direct sales, also know as network, multilevel or referral marketing compensates those who use and enthusiastically recommend their products or services. The ease of entry makes it accessible for people of all walks of life with a gamut of motivations.

In the past few months, I have been approached about a half dozen times by mom friends and acquaintances about direct selling opportunities. A single mom friend who owns a food business and does direct sales on the side, wants me to consider a new multi-level online shopping portal. ''I'm not telling you to leave your regular job,'' she insists. ``But it's a great way to earn extra income.''

A word of caution: you must be comfortable pitching products to family and friends and recruiting others as hosts and consultants; you will need to work hard to earn money (these are not get-rich-quick businesses); you must be prepared to pay start-up costs and you will not get benefits such as health insurance.

Of course, unlimited earning potential and working on your own schedule attracts many direct sellers, particularly in today's economic environment. Only 10 percent of people who work as consultants do it full time. Most work less than 10 hours a week and earn a median income of $2,400 a year: ''there's the flexibility people are looking for,'' Robinson says.

Bonnie Ross, a stay-at-home mother for eight years, wanted to find a job that would bring her family some income but still allow her to be there for homework, play dates and dinner. About 10 months ago, she fell in love with sterling jewelry and signed up to sell Silpada Designs. ``Silver catches people's attention . . . it jiggles and shines so it's like I'm a walking advertisement.''

Ross laid out an $1,750 in start-up costs. She now manages four women and earns commission off her own sales and theirs. She says it took about eight parties to recoup her initial outlay and she now earns anywhere from $200 to $600 a week hosting parties on nights and weekends. Ross' advice: Set goals. Hers is to double her business next month.

Others find direct selling works with their lifestyle.

Marcell Buckner, 62, started selling Pharmanex, skincare and anti-aging products, four years ago. He put in about 10-hours a week while running two businesses -- an insurance agency and as a third-party administrator. Now, he is counting on income from direct sales to take him into a ``new era of life.''

He now hopes to sell his businesses and devote his full attention to selling the products, working on his own schedule during his senior years. ``This is the right thing for me at the right time. I am looking to transition.''

One veteran direct seller cautions anyone considering direct sales to ease into it as a full-time job.

Eighteen years ago, Paula Ehrlich began selling Nu Skin products on her lunch hour. Four years later, she and her husband Morton quit their corporate jobs to sell the products and grow the business full time. The Miami couple now manages more than 20,000 sales consultants in 40 countries. They encourage everyone they recruit to think hard about why they want to be in the business and whether they can handle rejection. ''Not everyone is successful,'' Paula acknowledges. ``Don't sell anything you don't believe in.''