When you’re eager to start earning extra money, it’s tempting to jump at the first side hustle opportunity that comes your way. However, side hustles are not all equal. Where there are plenty of wonderful and lucrative options, some side hustles are worth avoiding, particularly in the beginning.
Why? They can demoralize and discourage you. Cost you money and time. And leave you skeptical and soured to the real opportunities that are out there.
Side Hustles Worth Avoiding
What makes side hustles worth avoiding?
- High start-up costs.
- Extensive unpaid work
- Significant risks to you or your assets
- Earnings fall substantially below minimum wage
Here are some examples of side hustles worth avoiding — and some better alternatives.
Network Marketing
Multi-Level Marketing companies convince you that you’ll be able to make a small fortune selling the company’s products to your friends. Better yet, if you enlist your friends to join your team, you’ll get a cut of all the money they earn too. Or so they tell you.
But, according to the Federal Trade Commission, you have a better chance of making money betting on Roulette than you do making money with MLM. Part of the problem is that before you can sell products with multi-level marketing, you have to buy the products. So, the company’s sales are often primarily to its sales representatives.
Other disturbing facts about those MLM companies your friends are trying to convince you to join? About half of the sales representatives for MLM companies drop out within a year, according to Fundera. And only 25% ever turn a profit. However, the typical participant spends $1,000 or more buying products and marketing them.
Better alternative: If you don’t mind in-person marketing, you should check out Field Day and Oppizi. Both offer in-person marketing gigs that pay between $23 and $35 per hour. And you don’t need to buy anything.
Contract customer service gigs
Looking for remote work? You’re sure to see plenty of come-ons from companies offering customer service jobs. These jobs involve answering customer questions and sometimes providing product support. And, if you work directly for the company that needs customer service representatives, the jobs can be attractive because they offer flexible hours and are usually done from home.
But “customer service marketplaces” (like those reviewed on SideHusl.com) are not as attractive. Why? Most require you to spend days “training” without pay. And they don’t pay you for every hour you work even after that.
LiveOps, for instance, commonly requires freelance customer service representatives to undergo weeks of unpaid training to get a gig. Then, the gigs pay between 25 and 45 cents per “engaged minute.”
What’s an engaged minute? Just the time you’re physically answering a call. Even though you need to be available to answer calls for your entire shift, you only paid for the minutes when you’re on the phone. So, if the shift is four hours, but you only answer two hours worth of calls, you’re paid for just half your shift.
Likewise, Pleio only pays representatives for “completed calls.” That means the consumer you’re calling needs to sit through your entire pitch or you don’t get a dime.
WorkingSolutions, one of the better customer service marketplaces, says it sometimes engages in the same practices as LiveOps, but it depends on the contract. So read that contract carefully.
Better alternative: A site called FlexJobs can help you find companies hiring customer service representatives as employees. That means the company pays you for training and every hour you work. FlexJobs is a membership site, but the membership is a modest $60 annually, and refundable if you’re not satisfied.
Taking Surveys
Outside of Nigerian Prince emails, nothing is as widely promoted as a get-rich-quick scheme as taking surveys. But reality is that surveys will not make you rich — far from it. And, if you make money at all, it certainly won’t be quick.
Survey companies, such as Swagbucks, SurveyJunkie, Qmee and others, will pay you to take surveys. (And to play games on your phone and to watch advertisements.) But, they don’t pay much. Usually, the pay amounts to a few bucks an hour, if you’re diligent.
Better alternative: Participating in focus groups, on the other hand, can be highly lucrative, paying $50 to $120 an hour. Some companies that offer in-person and online focus group work include WinnWinn Research, Respondent, RarePatientVoice, and UserInterviews.
Dropshipping
People talk about dropshipping like it’s an express lane to wealth. But, in reality, it’s a small business that requires business acumen and capital — in other words, your money.
What is dropshipping? It involves starting your own e-commerce store to resell products manufactured and shipped by others. Advocates say dropshipping is easy, since you don’t make or ship the products. But you have to build your online store, choose the products to sell, price them attractively (but still high enough to deliver a profit after your expenses) and market your store and products, usually through paid advertisements on Instagram, Facebook and TikTok.
In an instructional video on The EComZone, dropshippers are encouraged to invest at least $1,000 upfront to set up the store, buy sample products (for quality control) and buy advertisements. Notably, too, you must know what the manufacturer’s policies are regarding returns and items damaged in shipping. Why? Your store’s reputation and viability hinges on how well the manufacturer performs. If your manufacturing partner sends out damaged goods and won’t take them back, your store goes down the tubes.
Choosing the products to sell can also be tricky. The bottom line: Unless you’re business savvy and prepared to put a substantial amount of your own money at risk, this is among the side hustles worth avoiding.
Better alternative: Print-on-demand, where you provide images and/or copy to sites like Society6 and FineArtAmerica and let them sell the products and simply pay you a royalty on each sale. You don’t have to buy advertisements or inventory. You simply provide your art — and, maybe, hawk your brand on your own social media accounts. To be sure, successful POD artists don’t make as much as successful dropshippers. But they also take far less risk.
Renting Assets with Inadequate Safeguards
Among the side hustles most worth avoiding are online platforms that promise big money for renting your assets without taking precautions to protect your assets. Thus, every rental puts your rented car, camera or other property at risk.
Among the riskiest of these is a platform called HyreCar, which promises to rent out your spare car to Uber and Lyft drivers. The site offers insurance, but the list of things that are excluded are long. Many car owners say they lost their vehicles renting through this platform.
HyreCar is missing other owner safeguards as well. This leaves car owners on the hook when a renter gets tickets or fails to pay tolls. Owners say the site does little to mitigate these risks.
Better alternative: A site called Turo will help you rent your car to tourists. Tourists are not only easier on your car than people who drive for a living, the site’s insurance is good. And renters get back-charged if they get a ticket or fail to pay a toll.
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