What Is a Direct Sales Home Business?

A direct sales home business is a business run out of a person's home that offers sales of products and services directly to consumers. It may be an independent small business or part of a franchise, where the business owner purchases materials from a central company and uses them to establish and grow a business. Initial capital outlays are much lower than with other kinds of businesses, and it is possible to sell a wide variety of products, from cosmetics to ceramics.

In a direct sales home business, the business owner uses the home as a base of operations, often establishing a home office for coordinating business activities. Depending on the kinds of products the business owner sells, it may be necessary to have storage space for goods in an area like a garage or shed. The business owner can meet consumers in the home for sales, in addition to traveling to their homes or businesses with packages to solicit sales.

A common example of a direct sales home business is a franchise where the owner has goods like cosmetics, cooking supplies, and so forth and sets up sales parties. People can come to the home to attend a party, see samples and demonstrations, and place orders. The business owner can also set up parties in the homes of other people who request them, giving their friends and neighbors an opportunity to place orders in a location that may be more convenient for them.

Running a direct sales home business requires an initial investment to get the business going. The cost varies depending on the type of business. For buying into a franchise, for example, the first investment may be high to provide the business owner with a complete package to get started. The business owner may need to comply with local regulations concerning operating and owning businesses and must prepare tax documentation as needed to declare profits and losses from the business and pay taxes on them.

Business owners with an interest in a direct sales home business may have a number of reasons for wanting to operate out of their homes, ranging from needing to raise small children to living in an area where job opportunities outside the home are limited. This type of work requires being able to develop and maintain a customer base, using savvy business tactics to attract potential buyers, and keeping them interested. Some business owners find direct sales challenging, especially if they do not have previous experience in this or related areas.