Let’s face it.
Joining Avon is easy. It doesn’t cost a lot to get started (as of 2018, you can become an Avon Independent Sales Representative for as little $25).
And it seems like a pretty straightforward way to make money working from home.
But a quick search online shows that there are a lot of disillusioned former Avon reps. While everybody’s story is different and there are many reasons why Avon didn’t work out for certain individuals, even a cursory read of the comments reveals that the majority of unsuccessful women and men had this in common…
They didn’t treat Avon like a business.
Don’t get me wrong. There are a lot of Avon reps who simply want to buy Avon products at a discount. So they join up as “personal use” reps and just buy what they want for themselves or as gifts and get that additional baseline discount of 20%. Nothing wrong with that. In fact, I’ve spoken with at least two highly successful Avon representatives who started as personal use reps and had their Avon business grow organically. It can happen!
But for most people, creating a profitable Avon business takes work. If you are not working at it, it’s probably just a hobby for you.
If your plan is for Avon to help support your household, here are 9 ways to make sure your Avon business is not just a hobby
1. Register as a business. Check with your state, city and county (call your local Board of Equalization) to find out what the regulations are in your area. You may want to consider becoming an LLC. Talk with a tax professional experienced with direct sales issues.
2. Open a business checking account. Keep your business income and expenses separate from your personal monies. This will make it clear what your profit (and loss) is each month.
3. Track your expenses. In addition to tracking income, you’ll want a system to keep track of your business expenses, like brochures, business cards, delivery bags, samples and demonstration products. One reason many Avon reps fail to make a profit is that they buy a lot of stuff for themselves. Be sure to note which items are for personal use/gifts and which items are actual demos. Talk with your tax professional about what kinds of things make sense to declare as deductions. There are strict rules about claiming mileage and home office space!
4. Set up an accounting system for your business. Whether you prefer an “old school” ledger where you hand-write entries or you opt for a more sophisticated software program, it’s essential that you have a system to validate your income and expenses every month.
5. Sell to more than just family and your immediate circle of friends. I get it. Selling is scary. It takes a lot to put yourself “out there.” But if you can’t bring yourself to market your business beyond people you know, you’re in danger of being consider just a hobbyist.
6. Sell at a profit. Some people feel guilty charging more than what they paid for an item, especially to family and friends. But if you are selling your Avon products at the price you pay, you are never going to make a profit. It’s also important to charge appropriate sales tax and, if necessary, shipping. Avon charges reps sales tax, so you have already paid that cost. If you do not charge your customer sales tax, you lose money. If you lose money consistently, the IRS will no longer consider you a business.
7. Have an online presence. Set up a website, business email address and social media pages for your business.
8. Keep a schedule. The advantage of working from home is the ability to set your own hours. And Avon has the further advantage that it is the kind ofbusiness that fits your lifestyle — you can hand out brochures wherever you go and gain new customers. BUT, if you don’t set aside time to prepare your brochures with your name and contact information, don’t have a plan on how to follow up, don’t schedule when to place your order and then schedule time to process your orders for delivery, these things won’t get done — and you’ll have some very disappointed customers.
9. Show a profit in at least three of the prior five years. In general, if you haven’t shown a profit in three of five years, the IRS will categorize your business as a hobby.While it’s not necessary to have all these points in place immediately, do consider striving for as many as possible as quickly as you can IF you are serious about making Avon a profitable business. Many of these things can be set up as you go.
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