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Types of Home Based Businesses: Which One Is Right For You?

Written by: Cari Graves

Article Overview: With the ups and downs of the economy the past few years, more people are exploring their entrepreneurial possibilities. With the explosion of the internet, these possibilities have become real, lucrative home business opportunities that can be implemented right from the home office, or even the kitchen table. Home based businesses come in many shapes and sizes and with the advent of the “google” era you can find both legitimate as well as questionable opportunities offered to you online. So which idea might fit your needs? How do you decide?

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Types of Home Based Businesses: Which One Is Right For You?

In order to wrap your head around the various types of businesses, it would be helpful to categorize them in an understandable way. Let’s take a look:

1. Multi-Level Marketing Companies - Characteristically, these companies utilize the MLM method to advertise and market products of all kinds. MLM companies (also known as Network Marketing companies) have pay structures geared to be lucrative when recruiting and keeping a large volume of customers/business owners set up in a hierarchy. The foundational principle of MLM is to sell the product and the business at the same time and share profits between the many layers of the pay structure. Some examples of products sold via MLM are:

- Cosmetics
- Retail jewelry
- Decorative baskets
- Vitamins/Supplements
- Kitchen Utensils/Equipment
- Adult toys
- Personalized print items
- Cleaning supplies, household items

2. Affiliate Marketing Companies - These companies utilize ‘affiliates’ who market their products on their own and earn a commission on every sale they generate. Typically, the buyer never ‘sees’ the affiliate, which doesn’t allow the affiliate marketer to build a relationship with buyer to generate future sales. It is a one shot, one product, one subscription type sale. Affiliate marketing offers selling with no inventory, no customer service necessities and commissions can vary from $.50 a sale to $500 or more. Some examples of products sold by affiliates:

- Software programs
- Online services (web hosting, website creation, etc)
- Educational products
- Training conferences
- General products

3. Direct Sales Companies - Direct selling may be the most simple and direct way products are sold to customers. Home businesses who use the direct sales method typically advertise to and sell directly to the customer, either face to face, via phone or email or by internet selling. No retail locations are required and often direct selling involves working with teams to cooperatively train and support. Direct selling allows business owners to earn and keep profit generated from selling products bought at wholesale, the same structure used by retail storefronts. This structure is often more lucrative because instead of splitting the sale profit with a downline such as in MLM or the manufacturer as in Affiliate selling, you get to keep it. It also means that you don’t have to sell as many items to make a lucrative income. Most direct selling companies handle the inventory, shipping and sales tax for their business owners and provide their product at fair wholesale price. Direct sales companies offer products for sale such as:

- Similar list as for Affiliate marketing.

So, as you start researching the right company and structure to fit your needs, remember that each of these business types have their own weaknesses, but you will find that their strengths really define what they can offer to you as a prospective business owner. It is worth your time to do your research and due diligence. Having a business structure you can buy into is an important cornerstone to your new business’ foundation. Happy Hunting!

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About the Author: Cari Graves
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Cari Graves is an advocate for those looking for home-based business opportunities. She sincerely believes that in this economy and the economy of the future, the best way for people to achieve true freedom from trading time for money, is to become their own boss, to earn the kind of income that can set you free. She is a believer that true freedom is to have the time to spend with family, participate in life enriching personal growth and enjoying life to its fullest on your own terms. Cari is a successful, self-employed online marketer who strives to share her knowledge to help others start their own successful, life-changing home-based businesses. Her hope is that instead of 'living to make ends meet' others can know what it means to live to thrive! www.Live2Thrive.com

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