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A Quick Guide to Successful and Lawful Door-to-Door Sales

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A Quick Guide to Successful and Lawful Door-to-Door Sales

By Caron_Beesley, Contributor
Published: August 4, 2010 Updated: March 28, 2013

Ever wondered what it takes to operate a door-to-door sales operation? Interested in expanding your existing sales channels to include door-to-door selling?

 

Whether you provide a direct product or service, resell someone els;s product, or operate a franchise- for the right person, selling door-to-door can be a rewarding business opportunity. However, the business of door-to-door sales is notoriously tough and fraught with rejection. It is also one of the few industries where a selle-s regulatory posture and legal status is a top-of-mind consideration for the consumer.

 

Here are a few tips to help you start a lawful door-to-door sales business, and, who knows, set you on the way to becoming the next Avon empire!

 

Research Your Market

 

Whether you are selling a service (such as residential bug control) or a product (such as the latest cleaning miracle), do your research.

 

Who is the competition? What are your differentiators? What demographics and market trends are prevalent, now and in the future, in your target geography? What is the crime rate (obviously you do't want to risk your own person or select a community that is crime prone and therefore highly secured and gated)?

 

Here are several resources that can help you in your initial research:

    Research Your Business Opportunity

     

    If you are reselling a product, entering into a relationship with wholesalers, or becoming a franchisee, yo'll need to learn how these business models work. How can you build trusted relationships with suppliers? What marketing support will they give you? How do you avoid scams?

     

    The following guides provide a primer for start-ups who are entering into business relationships with vendors, suppliers and franchisors.

    Comply with the Laws that Govern Door-to-Door Sales

     

    While you do't need a license or permit to distribute flyers door-to-door, if you engage in any form of in-person solicitation or door-to-door selling, you will need to comply with a raft of regulations. Her's a breakdown of what the law requires:

     

    1) Register your Business - There are several business registration requirements for new business owners that you'll need to adhere to, these 10 Steps to Starting a Business from Business.gov explain how to go about registering a business name, obtaining a tax identification number, and registering for state and local taxes.

     

    2) Obtain a Permit - It is illegal to sell anything door-to-door without a permit. Use this Permit Me tool, developed by Business.gov, to help you identify what licenses or permits you need and how to obtain them. Simply enter your zip code and select General Licensing under Business Type. Be sure to carry and display your permit alongside your professional ID.

     

    3) Selling Fresh Meat or Produce Door-to-Door - If you are selling fresh produce, including meat or fish, your state will also require that you obtain a sanitation or health and safety permit. The USDA has more information on selling meat door-to-door.

     

    4) Communicate and Adhere to the 3-Day Sales Cancelation Rule - The Federal Trade Commission Cooling-Off Rule gives customer three days to cancel purchases of $25 or more that are made in the home or at a location that is not the permanent place of business or local address of the seller. Visit the FTC Web site for more information on how to comply with this rule.

     

    5) Employing Minors - Many door-to-door businesses employ minors simply because they are readily available during peak summer selling season, are eager to work, and accept lower wages. However, many states regulate the employment of minors in door-to-door sales.

     

    Last, but not Least - Be Honest and Open

     

    Door-to-door selling gets a pretty bad rap so it's important to be truthful, courteous, avoid emotional appeals and pushiness, and be sure to back up your claims or pricing with brochures, references , warranties and the like. It's also a good idea to document your distribution practices, and if you sell fresh or frozen produce, ensure that your products are correctly labeled.

     

    Additional Resources

     

    • Home-Based Business - If you operate your core business operations from your home, you can benefit from home-based business tax deductions, but you'll also need to comply with state and local laws regarding business permits, business registration, and so on. This Home-Business Guide from Business.govcan guide you through the process of setting-up and operating a home business within the law.

     

    About the Author:

    Caron Beesley

    Contributor

    Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

    Comments:

    gigavero - thanks for your comment. Check the FTC site for more info on the cancellation rule, it's a little fuzzy but appears to apply from the moment a paid transaction takes place. http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro03.shtm There is also contact information on the site if you have more questions. Alternatively, post your question on the discussion boards here - there are thousands of experts and small business owners online who can probably answer your question. This board is probably a good place to post your comment: http://community2.business.gov/t5/Other-Business-Issues/bd-p/GeneralBusiness Caron
    @Caron - Once again, thanks for this excellent resource! Does anyone know how the 3-Day sales cancellation rule works with a sale which is scheduled out? For example, if I knock doors and close a sale for a new security system and then schedule the installation out several days/weeks, when does that 3-Day return window apply? After the first contact at the door, the scheduled appointment, or after we charge their credit card for an installation?
    gigavero - thanks for your comment. Check the FTC site for more info on the cancellation rule, it's a little fuzzy but appears to apply from the moment a paid transaction takes place. http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro03.shtm There is also contact information on the site if you have more questions. Alternatively, post your question on the discussion boards here - there are thousands of experts and small business owners online who can probably answer your question. This board is probably a good place to post your comment: http://community2.business.gov/t5/Other-Business-Issues/bd-p/GeneralBusiness Caron
    @Caron - Once again, thanks for this excellent resource! Does anyone know how the 3-Day sales cancellation rule works with a sale which is scheduled out? For example, if I knock doors and close a sale for a new security system and then schedule the installation out several days/weeks, when does that 3-Day return window apply? After the first contact at the door, the scheduled appointment, or after we charge their credit card for an installation?

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