Is direct selling your ticket out of the recession?


The media has been abuzz with stories of struggling workers who are finding salvation in the field of multi-level marketing and direct selling.

The Wall Street Journal(subscription required) recently asked whether door to door sales represents a "safety net in the bad economy." Kelly Spors writes that a recent Mary Kay party surprised her: "About half the time was spent trying to convince me and the other attendees to become Mary Kay sales reps. The pitch: The economy is so bad that, even if you have a full-time job, why not keep a side business in case you get laid off?"

It has a certain allure to it: an income opportunity that you can't be laid off from. Find enough people willing to buy, and you'll always have income. In reality, network marketing is often very different. The emphasis on recruiting over product selling can lead to a business model that has more in common with a pyramid scheme than a "home-based business."

So how do you separate the legitimate opportunities from the scams? It's all in the products and, more specifically, the product prices: Some companies provide an opportunity to make money through recruiting, but the best ones also make it possible to earn plenty of money doing nothing but selling.