12:09am

Thu February 3, 2011
Your Money

From Jobless To Home-Based Business: A Tough Sell

Millions of Americans have lost their jobs in the past three years, and some of them are looking to replace the lost income with home-based businesses. Think Tupperware, Avon and Pampered Chef. But making real money is real work.

When Cindy Tisdale was laid off from her job as a transaction tax analyst, she started looking for new work right away.

But, she says, "The niche that I'm in, in tax law, is so small that there's hardly any positions anywhere."

Then a former co-worker, who also lost her job, started selling jewelry for Silpada Designs. It's a direct-sales company, where reps hold jewelry parties. Tisdale thought it sounded like a pretty good deal.

"I did like, and I love, tax law, which sounds really nerdy, you know — because my degree is in accounting and statistics. But I'm just like, you know what? Maybe this is a midlife crisis, I don't know, but, time to change. I want to do something that's fun."

So on a recent Saturday night, she brought a bunch of catalogs and jewelry samples to a friend's house for a small party. There were wine and cheese and shopping — Tisdale displayed rings, necklaces, bracelets.

She is still searching for a full-time job, but Tisdale is hoping she'll be so successful selling jewelry she won't really need one.

"A lot of my faith and hope is on this right now, at this point. I feel like I can do this. I know I can do this — this is my dream, to work for myself. This is what it is. I want to work for myself."

There are a lot of newly minted sales people out there, just like Cindy Tisdale.

Silpada CEO Jerry Kelly says his company's sales force has grown by 7,000 since the start of the recession, and many of the new reps were looking to replace lost income.

"When you have car payments, when you have mortgage payments, those payments don't wait until you have another job," he says. "And the best part about this is, you can't be fired."

Silpada says its representatives make an average of $285 per party.

But with any of these direct-selling or home-based businesses, it's difficult to replace a full-time income, says Neil Offen, president and CEO of the Direct Selling Association, a national trade group.

"Anyone who says it's easy is lying," he says. "It could be fun, and it could seem easy — but it's not."

Of the more than 16 million people in direct sales in the U.S., he says, only about 8 percent do it full time. Half of that group is making at least $50,000 a year. And fewer than 1 percent of direct-sales representatives earn $100,000 or more.

"To make six figures, or even the $50,000 level — come on, it's going to be hard work, very hard work," Offen says.

In other words, this isn't a get-rich-quick situation. Gabrielle Schwartz ran up against that reality when she joined a company that sells green home products.

"I've failed at just getting people to reply on e-mail or phone," she says. "Or I've met strangers that said they would do appointments — and then they cancel when you confirm."

Schwartz lost her job at a St. Louis marketing firm more than two years ago, when the company downsized. She initially thought this home-based business would be able to replace her old job.

Now, she's just hoping that someday it might be a source of vacation money. Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.