Avon lady calling but is anyone opening up doors to direct-sales reps?
"Wow, those are still around?" I asked myself. Sure enough, Avon sales reps are worldwide, and the company touts the job of selling its cosmetics as an easy, breezy way to do business. You can earn up to 50% commission, work from home and be your own boss. You could even be the next Debbie Davis, an English woman who turned to selling Avon cosmetics five years ago after losing her job and was just crowned Britain's top Avon lady for earning more than half a million dollars (U.S.) a year.
Shira, a stay-at-home mom, needed something to get her out of the house, but more of the recently unemployed are following in her tracks. Unfortunately, more salespeople can also mean a decrease in the sales revenue per person. While the number of direct-sales reps has increased by 47% over the past 10 years, their sales have only increased 21%. And, according to a Los Angeles Times story by Andrea Chang, there are plenty of pitfalls for newcomers to the world of direct sales.
First off, who's buying cosmetics, Tupperware and Herbalife these days in a nasty economy? The easiest way for newbie salespeople to sell is to start off with friends and family, who make "pity purchases." Sure enough, I was e-mailed the Avon catalog by my friend a day later. I'm stocked up on makeup but because Shira was my college roommate and lent me money a few times when I forgot my wallet, I'll buy a lipstick. Yet that won't be enough to help her meet her sales targets.
Sales reps typically have to pay their own start-up costs, which can reach into the hundreds or thousands of dollars. (Avon doesn't list theirs, but Chang cites a Mary Kay Cosmetics rep who had to pay $3,600 for her first batch of products that she was unable to sell.) Then they learn that the only way to earn major money is to become a distributor, meaning getting other sales reps to sell for them and take a percentage off the top. That's how Debbie Davis became the Avon Lady of the U.K. Avon has lots of room to expand in emerging markets like China and Brazil, but for its sales reps in a saturated U.S. market, it's dog eat dog. Maybe my sweet friend Shira can turn into a lean, mean Avon-selling machine? I hope.
Regardless of what industry you pick, you need to make sure you'll be a good salesperson and know what you're getting into before paying any kind of upfront costs. WAHM.com for work-at-home moms has a good Top 10 list of questions to ask yourself whether this is a career for you.
There are success stories, of course. Chang cites a sales rep selling high-end kitchenware who has moved from commission rates of 10% up to 50%. A perfumes sales rep had a perfume party in her home and sold $800 worth in just an hour. And maybe I should not knock Avon or Tupperware so fast. Avon's stock is up around 36% this year and Tupperware is up nearly 70%. Hey, if Wall Street likes them....hmm, wait a minute.
One thing I do know for sure, when it comes to direct sales, sex sells. Earlier this year, I attended a "Passion Party," a kind of Tupperware party for sex toys, on a lark with my friend. I ended up buying a few items (nothing too shocking). The sales rep, the wife of a Navy pilot who needed a career that worked with her multiple moves from naval base to naval base, said she easily racked up $1,000 per party. With her kids back in school, she had decided to scale down her party schedule from four to three a month, but she could easily scale up again after the holidays, just in time for the Valentine Day rush. "This is the ideal job," she said. Ah, if only we could all say that.