timmac
DIS Veteran
- Joined
- Jul 18, 2007
- Messages
- 1,872
DXW did Pampered Chef for a while, and though not the consultant, I got roped into helping out with a lot of the work 
Though my opinions are not all rainbows and butterflies, but I'll try to be fair and objective, at least to start, before offering some of my more heated opinions.
A few points I like to offer first. Though the tagline is that it's "your business", in reality, the consultant's existence is only so far as it exists for the good of the mother company. In reality, you have no control over the pricing, the offers, the profit margin, or any of that. You do, however, accept all of the liability for things like bounced checks. If a customer is not satisfied, it's up to you to try to make them happy, much of the time.
It's not fair to call PC a Multi-level marketing (e.g. pyramid) scheme, since, for most, a good portion of the income is in form of direct commissions. However, the people you hear about who make a six figure living off PC alone, who might go by titles as "director" and the like, are few and far between... in their case much of the income rides on the work of those beneath.
In considering the potential profit margin, keep in mind that just the commission check alone is not the end of the story. You'll owe taxes on that (it's a sole proprietorship business, usually, though I'm not a tax expert), first off. Also, you'll be periodically needing to buy supplies, like catalogs, mailings, samples, and so on. On top of that, you'll probably find yourself printing endless quantities of order forms, flyers, and promotional materials... so be sure to consider the cost of that as well. (For full color pages, you're looking at least 10 cents a page to print, and that's conservative) Then gas/travel to various shows. There's a lot of hidden costs that aren't always obvious at first.
Next, consider the amount of time investment that's actually necessary. A typical show may be 3 hours or so, but there's time to drive added onto that, as well as calls before and after, and time handling the back end and processing the orders, time to clean up all of your supplies after using them at a party. In reality, the total time at a party is at most half the total time involved.
Now, not specific to PC, but to all these sorts of party businesses, there's a few thoughts. First, you run the risk of alienating friends and family, since that's where you need to start to build the client base. I don't think it's reasonable to assume that you can work "as much or as little" as you want, because future business is entirely dependent on how many active parties you currently have from which to book new ones. You can't easily ramp the level of business up or down very quickly.
Next, one has to ask themselves why, if this product is so great, is it not sold in a traditional fashion? Though I can't conclusively prove it, I highly suspect the parent company makes a lot more money overall by having all of it's consultants as additional customers (not only buying product, but also the various materials for selling) Also, consider a business that outwardly takes efforts to hire as many sales people as possible, and actively encourages each of them to hire more sales people. Is that possibly a good idea? Ultimately, there's a saturation point, and in most locales, it's already there (for whatever home business it may be) There's simply only so many people in any reasonable radius that are potential customers. And each of them has a very finite amount of discretionary funds for these kind of purchases.
It's been suggested by a few--and indeed is also stated by the company and any senior consultants--that you get out of it what you put in. Though this is certainly true of all things in life, there's no amount of effort that can get blood from a stone, and likewise, there's a pretty definite upper bound on how successful this or any other home based consulting can be. In particular, these things are usually stated as a means of psychological manipulation: none of us wants to think we're a failure, so when we don't meet our sales minimum for a period of time, we buy stuff ourselves to make up the difference, or we go ahead and buy next season's catalogs, even though this season was a wash, because we know we can do better. It's not that we're knee deep in a dead-end opportunity, it's that we didn't work hard enough.
One final thought, I noticed that this thread was originally over three years old, and just recently revived thanks to a necro-post from someone making their first ever post on these boards. That doesn't bode well for sincerity.
Though my opinions are not all rainbows and butterflies, but I'll try to be fair and objective, at least to start, before offering some of my more heated opinions.
A few points I like to offer first. Though the tagline is that it's "your business", in reality, the consultant's existence is only so far as it exists for the good of the mother company. In reality, you have no control over the pricing, the offers, the profit margin, or any of that. You do, however, accept all of the liability for things like bounced checks. If a customer is not satisfied, it's up to you to try to make them happy, much of the time.
It's not fair to call PC a Multi-level marketing (e.g. pyramid) scheme, since, for most, a good portion of the income is in form of direct commissions. However, the people you hear about who make a six figure living off PC alone, who might go by titles as "director" and the like, are few and far between... in their case much of the income rides on the work of those beneath.
In considering the potential profit margin, keep in mind that just the commission check alone is not the end of the story. You'll owe taxes on that (it's a sole proprietorship business, usually, though I'm not a tax expert), first off. Also, you'll be periodically needing to buy supplies, like catalogs, mailings, samples, and so on. On top of that, you'll probably find yourself printing endless quantities of order forms, flyers, and promotional materials... so be sure to consider the cost of that as well. (For full color pages, you're looking at least 10 cents a page to print, and that's conservative) Then gas/travel to various shows. There's a lot of hidden costs that aren't always obvious at first.
Next, consider the amount of time investment that's actually necessary. A typical show may be 3 hours or so, but there's time to drive added onto that, as well as calls before and after, and time handling the back end and processing the orders, time to clean up all of your supplies after using them at a party. In reality, the total time at a party is at most half the total time involved.
Now, not specific to PC, but to all these sorts of party businesses, there's a few thoughts. First, you run the risk of alienating friends and family, since that's where you need to start to build the client base. I don't think it's reasonable to assume that you can work "as much or as little" as you want, because future business is entirely dependent on how many active parties you currently have from which to book new ones. You can't easily ramp the level of business up or down very quickly.
Next, one has to ask themselves why, if this product is so great, is it not sold in a traditional fashion? Though I can't conclusively prove it, I highly suspect the parent company makes a lot more money overall by having all of it's consultants as additional customers (not only buying product, but also the various materials for selling) Also, consider a business that outwardly takes efforts to hire as many sales people as possible, and actively encourages each of them to hire more sales people. Is that possibly a good idea? Ultimately, there's a saturation point, and in most locales, it's already there (for whatever home business it may be) There's simply only so many people in any reasonable radius that are potential customers. And each of them has a very finite amount of discretionary funds for these kind of purchases.
It's been suggested by a few--and indeed is also stated by the company and any senior consultants--that you get out of it what you put in. Though this is certainly true of all things in life, there's no amount of effort that can get blood from a stone, and likewise, there's a pretty definite upper bound on how successful this or any other home based consulting can be. In particular, these things are usually stated as a means of psychological manipulation: none of us wants to think we're a failure, so when we don't meet our sales minimum for a period of time, we buy stuff ourselves to make up the difference, or we go ahead and buy next season's catalogs, even though this season was a wash, because we know we can do better. It's not that we're knee deep in a dead-end opportunity, it's that we didn't work hard enough.
One final thought, I noticed that this thread was originally over three years old, and just recently revived thanks to a necro-post from someone making their first ever post on these boards. That doesn't bode well for sincerity.
