The Pros and Cons of Party Plan Businesses

Many people, moms especially, are looking for a way to earn extra income from home. One of the most popular ways to do so for many women is Party Plan businesses. Direct sales and Party Plan companies have been around for decades, and the industry and opportunities have only continued to grow over the years.

However, for a mom looking to work from home, it is important to be aware of the pros and cons of Party Plan businesses. While it is a very popular method to earn extra income, this business model also have some drawbacks for the woman who wants to support her family financially.

The Pros and Cons of Party Plan Businesses

  1. Most Party Plan companies are made up of great people.
  2. Party Plan companies typically attract really great people, and they tend to have a very family-oriented atmosphere. They also create a team environment which provides women with a great support system for their business.

    With these companies, there are stay-at-home moms as well as women with backgrounds in teaching, business, finance, and everything in between. These women are usually looking to support their family financially while also having fun.  

    They want to enjoy life with their family while also pursuing a career of some kind. Party Plan businesses seem like the perfect fit for many of these women.

  3. Party Plan businesses often have great product lines.
  4. Another positive is that these businesses often have really wonderful products. Whether it’s skin care and cosmetics, kitchen supplies, purses, clothing, spa products, or jewelry–the product lines are usually high quality. In addition, they are often products that many women want to purchase for themselves, even if they might be outside of their normal budget.

  5. Many Party Plan businesses provide great recognition and rewards for their consultants.
  6. Many of our Life on Your Own Terms team members have come from Party Plan companies where they received a lot of recognition and rewards. This can involve on-stage recognition, along with many trips and prizes.

    These rewards and recognition are very encouraging to women and moms, who may be overlooked in their roles of wife and mom. Party Plan companies understand the importance of recognizing women for their efforts and their results.

  7. Party Plan businesses are a lot of work, often without the paycheck you need.
  8. While it is wonderful to receive recognition and rewards in a Party Plan business, what many women really need is a paycheck–a steady, consistent income that their family can rely upon. But often, that paycheck just isn’t there. Some of the top producers in these companies are working extremely hard, but not receiving a paycheck that reflects the level of work they are performing.

    Ironically enough, the trips and prizes, while fun to receive, can be a detriment.  You must pay tax on those prizes.  So in addition to an unsteady income that accompanies Party Plan businesses, a top producer may pay a lot of tax and have very little cash to show for it.

    The Pros and Cons of Party Plan Businesses

    Our team has worked with countless women who have had this experience in their Party Plan business–tons of work involving carrying inventory, continually booking parties and shows, but a paycheck that can vary drastically from month to month.

    Not only that, but there are additional costs to having a Party Plan business including hostess gifts, gift bags, meeting expenses, catalogs, and constantly keeping up with the latest products.

  9. People are “partied out”.
  10. Our culture is constantly changing, and one of the changes more recently is that people are often hesitant to host or attend a party. There are many challenges to hosting a party, including making sure you’ve invited enough people, having the house ready for a large group, providing food, and so on. And as an attendee, people often feel obligated to make a purchase–even if it’s not an item they actually need at the time.

  11. Party Plan businesses are heavily focused on recruiting.
  12. Lastly, one of the cons of Party Plan businesses is that these businesses are almost exclusively focused on recruiting. Yes, you can make a commission off the products you sell.

    But the profits of those sales are limited.  So, in order to bring in more income, there is large emphasis to recruit and build a team.  These team members then need to buy inventory and products to have on hand, which you are compensated for.

    However, those products often do not end up with an end consumer. They may be sitting in someone’s garage or storage room–not actually being purchased by someone who will be using them.  So often, your ‘bigger paycheck’ is built on the credit card debt that your consultant can’t pay off.  It can become a vicious cycle.

    This focus on recruiting means that there is less emphasis on creating a solid customer base and more emphasis on creating a huge team. Of course, having a large team can mean a nice income–but that can crumble very quickly when there is not a customer base to hold up the team’s inventory purchases.

    Unfortunately, this business model is not beneficial for someone looking to build a long-term residual income.

Those are just a few of the pros and cons of Party Plan businesses. And of course, experiences within these companies can vary widely.

To hear one of our team member’s personal experience of working with a Party Plan business, check out the video below.

Life on Your Own Terms - Come Peek Behind the Curtain

As you can see, there are both positives and negatives to working with a Party Plan company. These businesses often provide a great foundation and an understanding of how to build a team and a business. What they may not always provide is the steady, reliable income a family needs.

If you are looking for a fun hobby or a side business, joining a Party Plan business might be the right fit for you. But if you are seeking a solid income that will last a lifetime, then you may want to consider partnering with our team as part of Life on Your Own Terms. Click here to learn more.