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Avon Lady ranks boom in downturn
By Juanita Cousins |
June 28, 2009, Sunday
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Print Edition
Print Edition
ARMIES of new Avon ladies, Mary Kay representatives and Tupperware sellers are advancing on living rooms across the United States, their ranks full of professionals forced to take a second job amid the recession.
Becke Alexander, sales manager for New York-based Avon Products, hears each week from laid-off bankers and stay-at-home moms. But she also hears from gainfully employed people worried how long they'll stay that way.
All of them are willing to knock on doors, host parties or do whatever else it takes to sell some makeup. "'I need money.' That's what I've been hearing since about November," Alexander said. "There are no hobby seekers coming here. It's people with a legitimate need."
Job cuts, shrinking bonuses and scaled-back hours have pushed more people than ever to become direct sales representatives, a phenomenon industry experts say they've seen before.
In the 1990-1991 recession, the number of direct sellers increased 8 percent to 5.1 million Americans. In the 2001 recession, the work force increased to 12.2 million.
And while 2008 figures are not yet available, in 2007 an estimated 15 million people nationwide were in direct sales. Some 58 percent of them became representatives as a second job, according to the Direct Selling Association, a trade group that represents 200 US companies.
When money began getting tight in Nicole Robinson's household in Garland, Texas, the full-time pharmaceutical sales representative signed up to host Mary Kay parties and give facials, working just six hours to make about US$600 a week.
"Costs aren't going down and opportunities are tightening up. Raises and bonuses aren't as big. And I didn't want to ever be in a situation where we were in jeopardy," said Robinson, who joined Mary Kay Cosmetics in September.
Business declined at the international cell phone company her husband works for, she said, and they wanted to continue their lifestyle and contribute to their children's college funds.
"We were looking ... to make additional income," she said. "We really didn't want to participate in the recession."
Rhonda Shasteen, chief marketing director for Mary Kay, said the Addison, Texas-based company saw traffic on its Website more than double in March, when the company began airing television ads to attract new sales people.
The sales force grew 22 percent from January to March, compared with the same period last year. The privately owned company wouldn't say whether its profits also increased during that period. Orlando, Florida-based Tupperware Brands said globally it is making more money and has more people selling its products, spokeswoman Nora Alonso said.
Direct sales representatives can earn commissions between 25 to 50 percent of sales. Direct sellers sometimes earn rewards, too, including jewelry, handbags, furniture, appliances, cars and vacations.
There can be expenses, though. It costs about US$10 to get the Avon starter kit of products and brochures and some companies require the sales people to purchase products wholesale and then resell them. Mary Kay consultants purchase mascara for US$7.50 and are advised to sell it for double.
Companies that are members of the Direct Selling Association are required to have buyback programs where they refund at least 90 percent of costs to sales representatives who get stuck with products.
During stronger economies, people usually take on direct sales jobs so they can have money for leisure spending, said Larry Chonko, business ethics professor at The University of Texas at Arlington.
"Times are tough as we know and there is an absolute need for extra income," he said.
Melanie Lyke, 29, of Thompson's Station, Tennessee, began working as an Avon independent sales representative in November to supplement her income after a slowdown in the family's company, which makes training and demo videos for corporations.
"This is a great solution for people in need because I work at my own pace," Lyke said. "All you need is a clear goal and be determined to reach it."
Becke Alexander, sales manager for New York-based Avon Products, hears each week from laid-off bankers and stay-at-home moms. But she also hears from gainfully employed people worried how long they'll stay that way.
All of them are willing to knock on doors, host parties or do whatever else it takes to sell some makeup. "'I need money.' That's what I've been hearing since about November," Alexander said. "There are no hobby seekers coming here. It's people with a legitimate need."
Job cuts, shrinking bonuses and scaled-back hours have pushed more people than ever to become direct sales representatives, a phenomenon industry experts say they've seen before.
In the 1990-1991 recession, the number of direct sellers increased 8 percent to 5.1 million Americans. In the 2001 recession, the work force increased to 12.2 million.
And while 2008 figures are not yet available, in 2007 an estimated 15 million people nationwide were in direct sales. Some 58 percent of them became representatives as a second job, according to the Direct Selling Association, a trade group that represents 200 US companies.
When money began getting tight in Nicole Robinson's household in Garland, Texas, the full-time pharmaceutical sales representative signed up to host Mary Kay parties and give facials, working just six hours to make about US$600 a week.
"Costs aren't going down and opportunities are tightening up. Raises and bonuses aren't as big. And I didn't want to ever be in a situation where we were in jeopardy," said Robinson, who joined Mary Kay Cosmetics in September.
Business declined at the international cell phone company her husband works for, she said, and they wanted to continue their lifestyle and contribute to their children's college funds.
"We were looking ... to make additional income," she said. "We really didn't want to participate in the recession."
Rhonda Shasteen, chief marketing director for Mary Kay, said the Addison, Texas-based company saw traffic on its Website more than double in March, when the company began airing television ads to attract new sales people.
The sales force grew 22 percent from January to March, compared with the same period last year. The privately owned company wouldn't say whether its profits also increased during that period. Orlando, Florida-based Tupperware Brands said globally it is making more money and has more people selling its products, spokeswoman Nora Alonso said.
Direct sales representatives can earn commissions between 25 to 50 percent of sales. Direct sellers sometimes earn rewards, too, including jewelry, handbags, furniture, appliances, cars and vacations.
There can be expenses, though. It costs about US$10 to get the Avon starter kit of products and brochures and some companies require the sales people to purchase products wholesale and then resell them. Mary Kay consultants purchase mascara for US$7.50 and are advised to sell it for double.
Companies that are members of the Direct Selling Association are required to have buyback programs where they refund at least 90 percent of costs to sales representatives who get stuck with products.
During stronger economies, people usually take on direct sales jobs so they can have money for leisure spending, said Larry Chonko, business ethics professor at The University of Texas at Arlington.
"Times are tough as we know and there is an absolute need for extra income," he said.
Melanie Lyke, 29, of Thompson's Station, Tennessee, began working as an Avon independent sales representative in November to supplement her income after a slowdown in the family's company, which makes training and demo videos for corporations.
"This is a great solution for people in need because I work at my own pace," Lyke said. "All you need is a clear goal and be determined to reach it."
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