Direct Sales Grow As Unemployment Increases

Avon, Tupperware, and other direct-sales companies are gaining in popularity, just as they did during the 1990-91 recession. Whether they still have jobs or not, people are looking for ways to earn additional income.

Becke Alexander, sales manager for New York-based Avon Products Inc., hears each week from laid-off bankers and stay-at-home moms, but also 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 peddle 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.”

The question is, are there enough people with disposable income for purses, makeup, and plastic containers out there to sustain all of these new salespeople?

Avon, Mary Kay ranks boom as a second-job option [Bay News 9/AP] (Thanks, The Observer!)

(Photo: jameskm03)

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  1. Blueskylaw says:

    If you get invited to a Tupperware party and go, even though the economy is in the crapper, you might feel embarrased by not buying anything.

    This would almost seem like friends taking advantage of friends.

    (How much Tupperware can one nation support anyway, and why do you need to throw a party to sell it?)

    • Laura Northrup says:

      @Blueskylaw: That’s what has always bothered me about the whole sales party racket.

    • gStein_*|bringing starpipe back|* says:

      @Blueskylaw: tupperware is expensive and breaks easily. Those disposable boxes made by Glad and Ziploc (and the store brands) are cheap and don’t break as easily (i’ve cracked many a tupperware container just by knocking it off the 3-4′ high counter)

      also, if i lose the cheap stuff, it’s less than $1 each (haven’t bought tupperware in a few years, what’s it cost now?)

      • gStein_*|bringing starpipe back|* says:

        @gStein: granted, there’s some tupperware branded stuff that just doesn’t exist in cheap disposables world… like a cake box or a cupcake thingie. butif i need something, i’ll buy it online.

      • Cant_stop_the_rock says:

        @gStein:
        Maybe their stuff has decreased in quality over the years, but my mom has Tupperware that’s about 30 years old now, and it’s as good as new

        • sn1per420 says:

          @Cant_stop_the_rock: Yeah, my mom used to sell tupperware, and over the time she sold it, she used the money she made to buy a ton of tupperware. Our kitchen is still full of 20+ year old Tupperware. The only times we’ve had anything break is if we drop a container that’s been in the freezer, cause frozen tupperware is pretty brittle.

        • Laura Northrup says:

          @Cant_stop_the_rock: I have Tupperware that’s older than I am.

          • SadSam says:

            @Laura Northrup:

            Exactly, people make money off this business because friends and friends of friends feel obligated to buy stuff. I’ve got a Pampered Chef (or whaterver its called) bread loaf pan thingy that I bought 10 years ago that I’ve never used. When I get invites to these parties I just don’t go, I love my friends but I’d rather socialize with them in settings that do not include the hard sell.

            • Starfury says:

              @SadSam:

              My wife bought us a pizza stone from a Pampered Chef party…and it’s been in the cupboard since we bought it. I think we used it one or two times.

              She also bought some knives from them…and they were crap.

    • Eyebrows McGee (now with double the baby!) says:

      @Blueskylaw: “why do you need to throw a party to sell it?”

      Back in the day, it was a useful and successful way to introduce consumers to new and novel products — like plastic-type storage containers. It’s not that different from when State Farm’s insurance salesmen actually WERE random people in your community who were all part-time, so the guy on the factory line next to you might also sell car insurance and home insurance, opening up an entire market that hadn’t necessarily had access to those forms of insurance before. By presenting the product through a friend who has been well-trained on the benefits of it, it’s like a pre-internet version of viral marketing.

      These days, though, it’s just one more damn product party where they’re trying to guilt the hell out of you.

    • subtlefrog says:

      @Blueskylaw: This. I’m happy to be generous with my friends – they’re low on cash, I’ll buy dinner, hell, I’ll even give ‘em a loan (which I’ll even conveniently forget about after some time). Money isn’t something that should come between friendships. So stop putting candle parties into the mix and expecting me to buy shit. I’m not going to. I’d rather just hand my friend the friggin’ money.

  2. ColoradoShark says:

    I hate these things. Tupperware, Pampered Chef, Candle Crap (not real name), etc. Friends guilting friends into buying over priced stuff in the guise of a party.

  3. Eldritch says:

    Someone set up a Tupperware kiosk in my local mall and made a killing over the holidays. Smart idea. Rent a kiosk, get Avon or Tupperware, sell like crazy. No parties involved. I admit, I bought a special banana holder for my boss that she loved (hers always got crushed in her lunch bag) and got my mother a special pasta keeper.

    • Powerlurker says:

      @Eldritch:

      When I was in Austin at the Pecan Street Festival this year, a few of the local Cutco distributors had a both and were demoing and selling knives, they seemed to be doing okay for themselves.

    • Anonymous says:

      @Eldritch: “Love” those anecdotal success stories. I hear them from friends and relatives all the time too. Ebay millionaires, house/auto flippers, whatever.

      However, nobody seems to have the actual monetary figure. Little details like gross receipts, expenses, and net profit.

      Even “busy” restaurants go out of business, if the patrons don’t order enough drinks, or expenses like rent, salaries and energy go through the roof.

      Spare us all the “made a killing” stories unless you got an actual peek at their books. Don’t forget, it’s to a business owner’s advantage to tell YOU it’s going great, even when it isn’t.
      Thanks.

  4. scootinger says:

    No matter whether you call it “direct sales” or “multi-level marketing”, these are all pyramid schemes specifically designed to target women. Sad sad sad, and it’s a bit disappointing (but inevitable) to hear about these vultures taking advantage of those in need.

    • Cant_stop_the_rock says:

      @scootinger:
      Who are the vultures? The direct marketing companies are just doing what they’ve always done – giving people a way to make some extra money selling stuff to friends and friends of friends. I wouldn’t call them vultures because more people sign up to sell their stuff in a bad economy.

    • XTC46 says:

      @scootinger: I know more guys who participate in MLM then I do girls…

      Also, not ALL are scams, and you can make legit money doing some things, not ultra mega rich like they sell it, but I have friends who make a decent side income.

    • Powerlurker says:

      @scootinger:

      Not all direct marketing jobs are MLM. For example, scammy as they are, Kirby vacuums and Cutco knives are both direct sales companies that don’t use an MLM structure (you sell on straight commission and have no upline or recruiter you need to pay off). Also, in a number of countries, direct sales is still seen as a reasonably legitimate way to sell goods. Heck, in Japan, up until very recently it was the way that a vast majority of life insurance was sold and was seen as a good way for a housewife to make a few extra bucks by selling policies to friends and family.

      • pop top says:

        @Powerlurker: No, Cutco is a huge scam since everything is so expensive and the workers get paid so very little. I dated someone who did that as a summer job and his boss had a Porsche and told all the new workers they could buy one of them in a year or two with all the money they would be making. Yeah right.

        • kateblack says:

          @squinko: Direct sales are bad business for anyone not interested in being an active sales person. One of my friends was their top seller and made a crapload of money at it.

          I’m a big fan of some of the Cutco products. I use a Wusthoff chef’s knife, but I use Cutco’s steak knives for most minor kitchen tasks. 6 years, still going strong.

          • pop top says:

            @kateblack: Don’t get me wrong, I love my Cutco knives, but they scam teenagers and young adults constantly. Luckily you can buy out of the catalogs now.

            • Powerlurker says:

              @squinko:

              It may be a scam, but it’s not MLM. Cutco distributors earn commissions solely for themselves, they have no “upline”.

              @humphrmi:

              MLM is by definition a pyramid scheme even if it sells legit products. If you’re paid a portion of sales from people you have recruited to work for the company (your downline) and pay a potion of your commission to the people who recruited you and the people who recruited your recruiter (your upline) it’s MLM and a pyramid scheme.

              • amelia35 says:

                @Powerlurker: Pyramid schemes are illegal and compensation comes directly from the act of recruiting or selling sham products, not sales of product to the ultimate consumer of those products in reasonable quantities (I recruit you and get a cut of your “entry fee”). Multilevel marketing is a legal and time-tested method of compensation that is based on the sale of products – generally a sales person will get a percentage of their own sales (25-50%) and they may receive a percentage (say 5% or so) of the sales of those they have recruited and trained. (Note that the upline compensation does not reduce the compensation for the person who actually sold the product.)

    • calquist says:

      @scootinger: I had some friends who sold Avon for a fundraiser to go to London. I don’t think it was a scam at all, they had catalogs that I ordered out of. It’s not like they had to buy 1,000 bottles of nail polish and then sell them off.

    • humphrmi says:

      @scootinger: Not all MLM or direct sales are pyramid schemes. Avon seems happy to let people just sell their stuff, whether it be at parties or door to door or whatever. If they let you sell product and don’t pressure you to recruit, it’s neither MLM (what’s the first “M” stand for?) nor pyramid (there’s product for sale, look up Pyramid Scheme).

  5. unobservant says:

    I like the idea of Avon (as opposed to the others that make you go to their “guilty parties”) because all you need is access to a few employee lounges. Chuck a catalogue on the table and watch the orders roll in.

    It’s been said that, in dire economic times, women buy lipstick. Don’t flame me. I’m no exception.

    • MeanPeopleSuck says:

      @unobservant: Except a new study was released that lipstick sales are down. Sales for eye makeup, on the other hand, have increased. Same theory, different cosmetic.

  6. ArcanaJ says:

    Gods, I tried working for Tupperware years ago. It was Hell. Perky, grinning, sunshiny HELL.

  7. wvFrugan says:

    I HATE these threads @ MLM & “party” things, it causes me to have Amway flashbacks from childhood (oh, and surprise surprise, my father is a Christian minister!). Can you say SA8, LOC, DishDrops, Queen cutlery & cookware, Spray & Shine, SeeSpray, and whatever they called that dark green gell shampoo (like Prell) and that yellow rock hard bar soap (like that Phels-Naptha laundry bar stuff), etc. ?

    • pecan 3.14159265 says:

      @wvFrugan: I’ve known plenty of people who do this – and they’re as non Christian as can be, so what’s your point?

      • Eyebrows McGee (now with double the baby!) says:

        @pecan 3.14159265: Amway has long leveraged church networks and particularly fundamentalist Christian groups as a way to advance their MLM-ish schemes, and because church members are often fairly credulous (at least at first) when their pastors or church leaders want to sell them something.

        Those “Prosperity Gospel” people were an absolute gift to Amway, and Amway exploited it to the hilt.

  8. Anonymous says:

    My mom sells (more “sold” than sells now) avon. It started out at an “okay” level – you don’t make much money, but she thought it was fun.

    Things started going seriously downhill with the company pretty quickly. They ended up sending her the merchandise (which customers had already paid for) weeks, sometimes months late. Sometimes they’d claim it wasn’t available at all. This happened to lots and lots of others selling it as well.

    She ended up effectively giving up because they bungled everything so badly. I’m 99% sure she took a loss on it overall. I personally don’t care about their products one way or another, but I will say that they are a terrible company based on the way they treat their employees/salespeople.

  9. Mykie Gunderson says:

    I’m going to remember each and every one of you naysayers when your kids are selling cookie dough and giftwrap for their schools.

    No, Johnny, you can’t have a bike.

  10. Nick Vannello says:

    I’m one of those people who just became an “Avon Lady.” I’ve been using their products for over 30 years and have always been happy with their skincare products — especially the newest merchandise.

    I used to sell Pampered Chef and was damn good at it, but how much kitchen stuff does one person need? Avon lets me sell quality products at a reasonable price.

    The Avon Lady is a Man, baby…

    • HogwartsAlum says:

      @Nick Vannello:

      Awesome.

      I love Avon products, but someone I know who was selling it said it just took too much time for her to do it. Now I don’t have an Avon lady anymore. Also, I can’t buy stuff every WEEK. Maybe every month, or every two weeks.

      That seems to be a problem. It starts out great, then they get sick of it or don’t have time and quit. Then I’m out my Avon lady. And they don’t come to your house anymore.

  11. Mark says:

    There are plenty of MLM/DirectSales companies out there that are not scams.

    This is a clear case of how the misdeeds of a few companies have tarnished the reputation of an industry.

  12. BennyMigrationWitness_GitEmSteveDave says:

    Hrmmmmm. Perhaps I should grow the beard a little more, dye it, then put on a blue shirt.

    Hi, GitEmSteveDave here for ::Insert Product Here::, the fast, simple, and easy way to ::Describe What Product Does::! No more ::Insert Disgusting Activity:: or ::Insert Other Activity::

  13. jasonone says:

    I am convinced with the quality of tupperware products and Avon is famous for most of the ladies out there because of its effectiveness. No wonder why these direct-sales companies thrive in the rising or downturn of the economy.

    A friend of mine informed me that she was able to buy bulk favors for her wedding from her direct-sales earnings. You see, never underestimate the help that these companies can give to its members.

  14. Rectilinear Propagation says:

    So, I know this is off topic and everything but:

    Why is the picture a photo of a fancy car? No Avon or Tupperware in the Consumerist Flickr pool?

  15. Anonymous says:

    I work full-time, but I used to sell Avon as a part-time income/hobby on the side. Eventually, I took another part-time job in retail and gave up the Avon as a regular sales rep. I still get my products at the rep price though and only buy for myself and my immediate family. I could make more money in one night at my part-time retail job than I could an entire campaign of Avon. I also made President’s Club the last year I was actively selling (and that was working a full-time AND part-time retail job combined). However, there is a lot of leg work involved with Avon and when I was actively selling gas prices were a LOT cheaper than they are now. Many can’t afford to deliver the products and use up a tank of gas in the process. I still like and use Avon products & think it’s worth it if you want to make a little extra and like meeting people. However, it is not a regular income for most people unless you work at it a lot harder than most people are willing to do. I see it as more of a “hobby” or way to pay for your own products than anything else.