Home Business Opportunity Types

A Home Business Article Contributed by Elizabeth Fox-Wise

Looking for a Home Business Opportunity! but What Type?

The FTC (Federal Trade Commission) describes the most common types of home business opportunity ventures as follows: Distributorship, Rack jobber, Vending machine routes, Dealer, Trademark/product licenses, Network marketing and Cooperatives.

The first step when choosing a home business opportunity is to understand the different types of business and know which one will work best for you.

So What to These Home Business Opportunity Types Mean?

Distributorship refers to an independent agent who enters into an agreement to sell the product of another, but who is not entitled to use the manufacturer's trade name as part of its trade name. Depending on the agreement, the distributor may be limited to selling only that company's products or it may have the freedom to market several different product lines from various companies.

Rack jobber involves the selling of another company's products through a distribution system of racks in an assortment of stores that are serviced by the rack jobber. Typically, the agent or buyer enters into an agreement with the parent company to market their goods through stores by means store racks. The parent company obtains a number of locations in which the racks are placed on a consignment basis. It's up to the agent to maintain the inventory, move the merchandise around to attract the customer, and do the bookkeeping.

Vending machine route is very similar to rack jobbing. The investment is usually greater for this type of home business opportunity venture; however, since the home business operator must buy the machines as well as the merchandise being vended, but here the situation is reversed in terms of the pay procedure. The vending machine operator must pay the location owner a percentage based on sales

All the Home Business Opportunity Types Have Similarities and Differences

In addition to the three types of home business opportunities listed above, there are four other home business opportunity categories you should be aware of. They all have slight similarities and differences.

Dealer is similar to a Distributor but where a distributor will most likely sell to a number of dealers, a dealer will usually sell only to a retailer or the consumer.

Trademark/product licenses. With type of arrangement, the licensee obtains the right to use the seller's trade name as well as specific methods, equipment, technology or products. Use of the trade name is optional however and there is freedom of marketing.

Network marketing is a broad, generic term that covers the entire realm of direct sales and multilevel marketing. A network marketing agent, sells products through his own network of friends, neighbors, co-workers etcetera. In some cases, you may gain additional commissions by recruiting other agents.

Cooperatives. This business opportunity is similar to a licensee arrangement in which an existing business, such as a hotel or hardware store, affiliates with a larger network of similar businesses, often for the primary purpose of marketing, advertising and promoting his business through a common identity.