Is direct selling your ticket out of the recession?


The New York Timesreports that interest in the direct selling business is booming: "In February of last year, 24 new sales consultants joined Stella & Dot; this February that number is 160. The number of new sellers at Lia Sophia, another jewelry company, is up 26% from January-February 2008 to 2009; the number of sales consultants at the Cutco Corporation, a manufacturer and direct seller of high-end kitchen cutlery, was up 20% this January over last."

It's easy to understand why. With unemployment soaring and portfolios in the toilet, people are looking for extra sources of cash. And because direct sales companies generally pay entirely on commission, you will always be able to find a job in these industries. Whether you can make any money is a different question, but it does at least offer a chance to get out there and try to kill your dinner instead of heading to the soup kitchen.

There are a few things to keep in mind: To avoid pyramid-like multi-level marketing schemes, try to find a company where the emphasis is on the retailing of product to end users rather than on the recruitment of additional people who are looking to make money.

Also, try to find a company that offers a product that is recession resistant: Most products offered by direct selling companies are highly discretionary. If you're in an area that's been hit hard by tough times, consumer demand for products like costume jewelry and high-end cutlery might be too weak to make it a viable business.

One idea: With more people cutting back on maid services and spending more time in their homes without spending lavishly on remodeling projects, the well-respected Fuller Brush Company might be a good option.