You may see newspaper ads promoting display rack business
opportunities for the sale of various licensed products such as children's
toys or books or perfume among others. Promoters claim they're affiliated
with well-known companies and that their great products "sell themselves."
Their pitches include some enticing claims: No selling. You can work from
home. For an initial investment of $10,000 or so, they promise you'll hit
"display dirt": retail sales of $40 a day per display with annual profits of
$100,000. All you have to do is restock profitable high-traffic display rack
locations like malls, shopping centers, gift shops, convenience stores,
supermarkets, and chain drug stores.
The fact is that entrepreneurs who invest often are supplied with outdated or
worthless merchandise and unprofitable locations. Many times, the
merchandise has been returned as "unsold" by retail stores. Average daily
earnings are minuscule. Investors in this type of "business" never make
anywhere near the promised earnings. The merchandise is usually sold to
you at full price so there is no room for profit. To make matters worse, most
will never even recover their initial investment. $10,000 down the drain…..
Many times your entire investment will go for "display racks and initial
inventory." Plus, the promoter's sales commissions on your purchase of
products may eat up as much as 40 percent of your investment. Ask the
promoter if you'll be charged wholesale or retail prices for your initial
inventory. If you pay retail, you'll have to mark up the price to make a profit.
That means you probably won't move much inventory. Even if the promoter
agrees to sell you inventory at wholesale prices, you may get out-of-date
merchandise that never sold in the first place. Either way, you lose.
And think about it...this this business was really as profitable as the ad
states, wouldn't the company just put up the display racks themselves? They
wouldn't need your help. Obviously, there is more money to be made in
selling display rack business opportunities.
Related Topics: Business Opportunities, Vending
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