Avon lady calling but is anyone opening up doors to direct-sales reps?
Filed under: Entrepreneurship, Career
Looking for work, any kind of work? Have you considered direct sales? My friend Shira did. I got a Facebook announcement from her over the weekend: "I've decided to become an Avon Lady!""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.
Reader Comments (Page 1 of 1)
10-29-2009 @ 8:51AM
omgavon said...
Let me help you with your article to get some of the facts straight. As a new Avon representative (less than 5 months), and as a previous seller of Pampered Chef, I am qualified.
The startup cost for Avon is only $10. With that, the new Rep receives samples, books, and an unlimited amount of online training that is frankly, priceless. New Reps who don't take advantage of the training are shooting themselves in the foot.
Secondly, new Reps should think of themselves as business owners. Avon doesn't cut you a check directly. You sell products and you earn a percentage based on the amount that you sell. Avon is the world's largest microlender, sending billions of dollars of products to representatives without cost, and giving those reps two weeks to collect payment from their customers and sending Avon their share. The Reps pocket the rest.
Is there money in Avon? The question is really, "Are you a Salesman?" Yes, some people do not treat Avon as their own business and only pass out a few books to friends. These Reps still earn their personal products at a discount, although they are not bringing in a lot of pocket change. Then, there are Reps like me who not only love the product, but treat this as a second job where I'm the CEO, CFO and entire sales staff.
In the past 5 months I've sold over $11,000 worth of product which enters me into Avon's "President Club", giving me certain sales perks. My commission has been enough to pay for my brand new 2010 Kia Soul that I drive daily, put gas in the tank, pay for insurance, and take me and friends out to some mighty nice dinners.
People interested interested in asking me questions or becoming a Rep are welcome to contact me at omgavon@gmail.com.
Oh, and did I mention that I'm a 45-year old man with a full time career on the side?
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10-29-2009 @ 12:04PM
Amy Robinson said...
I applaud the author for trying to look at both sides of this issue. Unfortunately the reference she chose in the article by Andrea Chang fails to mention the reason why the number of salespeople has increased faster than sales. Over the past 10 years the number of part-time sales reps has increased dramatically (from about 79% to more than 90%) as more people are looking for supplemental income. When you work part-time (typically less than 10 hours each week) you aren't making the same level of sales as someone working 40+ hours per week - but that doesn't mean they are less successful, they just have different goals. When you have all of the facts, you can see that while the raw numbers show less sales per seller, in reality there are more sellers reaching their goals because over time people have become less focused on replacing a full-time income and more focused on making up for a "traditional" income that falls short.
The author's assertions about start-up costs were also not on target and I'm glad the previous commentor mentioned Avon's $10 start up kit. The median cost for a start up kit is $99 and that includes everything you need to get started selling. THe value of the product samples included in the kit usually far exceeds the cost and you don't need to invest in inventory or expensive office equipment. Very few companies require inventory purchases and if the company is a member of the Direct Selling Association, those costs are covered under the 90% buyback policy which states that all marketable inventory and sales aids purchased in the past year must be repurchased by the company at no less than 90% of the purchase price in a person decides to leave the business. In other words, you shouldn't risk financial loss by trying out direct selling.
Market saturation is also a myth. Some people will say "it's like having a Wal-mart on every street corner" but the comparison is ridiculous. There is no comparison between a big-box retailer and someone working less than 10 hours a week selling a specific set of products to those she may come across in her daily life. That doesn't mean she's limited to her family and friends, but she's also not out there competing for foot traffic and placing million of dollars in advertising. Direct selling is a word of mouth business and there are plenty of customers out there for everyone.
For more information on direct selling, including a list of direct selling myths debunked, visit www.directselling411.com.
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10-30-2009 @ 12:11AM
Gloria Lewis said...
Not sure where Ms. Chang got her facts but Mary Kay does not require anyone to purchase $3600 in products to get started.
The starter kit is only $100. With the starter kit you get over $320 in full size retail products, plus numerous sales aids, samples and training materials. If you choose to get inventory, you are only required to purchase $200 wholesale.
For more info, visit http://www.marykay.com/glewis35/sellmarykay/default.aspx
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11-13-2009 @ 11:42PM
Former AVON Rep said...
YOU CLAIMED: "In the past 5 months I've sold over $11,000 worth of product which enters me into Avon's "President Club", giving me certain sales perks. My commission has been enough to pay for my brand new 2010 Kia Soul that I drive daily, put gas in the tank, pay for insurance, and take me and friends out to some mighty nice dinners."
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The dishonesty of AVON reps is bothersome. If you've sold $11K in products, your MAXIMUM commission would be $5,500 ASSUMING 100% of the products purchased were cosmetics or eligible for full commission. A lot of AVONs products only allow the rep to earn 20% profit. Anyhow....your maximum commission would have been $5,500 MINUS all of your expenses...the average AVON customer spends just $150yr on AVON(according to AVON the average customer orders 6x/yr@$25/order.) So you would have to have to have a TON of customers. Books, samples, gas,bags, website fee, order fees, advertising etc would have cost you about $2-3K...so your actual profit would be more around $2-3,000.
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