Tupperware Take Two: The Modern Day Avon Ladies

They call it The Lipstick Effect. It’s that product that sells no matter what, no matter the economy, and usually it’s a beauty product. But, often it’s not just the product, it’s the medium in which it is sold, and in many cases, the best medium is a house party.

Women in direct sales may have Tupperware to thank for this. Tupperware parties run by housewives decades ago translated to Mary Kay and Avon parties years later, but as more women went to college and pursued full-time jobs, direct sales gigs appeared less sexy, but not less popular with moms seeking a flexible part-time gig. Meanwhile, the recession and parenthood in the United States, where both daycare and health insurance is expensive and inflation rises while salaries remain static, had led to a resurgence in direct sales businesses. While such businesses have always been around, from nutrition and beauty, to jewelry, some women are taking on these start-up businesses more seriously, as either a second business, a part-time job for mothers and sometimes, even a full-time job.

According to the Direct Selling Association, the number of sellers in the U.S moved from 15.2 million in 2006, to 15 million in 2007 and up to 15.1 million in 2008. The majority of those selling do it part-time, with just 8.9% selling full-time, and women making up 86.4% of the direct sales workforce. Of all sales, 71.8% are done in the home, and 11.9% are done online. According to sales strategy, 66.3% is executed by person-to-person while 25.7% are done via parties or in group settings. Among the vast array of market sectors, home and family care tops at 25.4%, followed by wellness at 22.7%, and personal care at 21.5%.

Flex-Work For Moms
Deborah Hier, a Massachusetts-based mother and former IT professional, has had a Lia Sophia business for two-and-a-half years. A project manager in IT for 15 years, she started the business after her sister held many Lia Sophia parties. Her sister got into the business after “many hairbrain ideas.” Hier honestly notes that most people that start Lia Sophia will make $2,000 a year and do it for 18 months and then quit. But, for people like Hier, who sign on new advisors and develop a group of advisors to manage and profit from, there is the opportunity to make more than a part-time job.

Hier does about 10 parties a month and notes that Lia Sophia is appealing because the startup fee is $149 plus tax and shipping, for a set of 24 pieces to show. The hostess of each party gets a certain amount of money toward free jewelry and then gets a box with all her attendees’ purchases, to distribute. This makes the work minimal for the seller, whose startup kit comes with catalogues and necessary paperwork. At each party, the seller also earns a certain amount of money to use toward replenishing her collection of show jewelry, which some add to every six months. They pay 30% of the regular price. What this all translates to is no inventory and a low startup.

As with many other models, sufficient effort and a good sales pitch could lead to decent income. This year, Hier, is aiming for a six-figure income, which she notes is rare for women, even in the U.S. in 2010. Citing the Direct Selling Association, Hier notes that only 6% of women in the country make $100,000 or more, and of those, 80% are doing home parties.

Student Jobs
Students have become an ideal group of potential sellers because they have access to a large group of individuals that spend most of their disposable income. In the case of mark, the younger, lower-end brand from Avon, Rachel Martino is one great example of a student direct sales experience. Martino, 19, is a representative at her school, Belmont University. She joined mark because she wanted a flexible job to work around classes.

“I pick my own hours and can work as much as I want or as little as I want. On a great week when I might have an event I could make up to $200-$300 profit in sales,” said Martino. “Other weeks I might not make as much because I put in time planning and getting ready for an event; making fliers, arranging and ordering product. I try to earn enough money each month to buy myself a little indulgence like a great dress or two.”

Mark wouldn’t detail how much sellers buy product for compared to retail pricing, but pricing is quite affordable, ranging from $5 for hair styling products to $18 for a perfume and $20 for a makeup palette. But, sellers learn to understand their difference audiences and how to cater parties to those different demographics.

“You always need to consider your audience first. For example, when I had a mark party with women in their 30’s and 40’s, I wanted things to feel very sophisticated and I stayed away from “younger” products, added Martino. “Women just want to feel beautiful, so for me, giving them a pretty neutral look that really plays up their features works every time.”

Martino notes that meeting new clients is best achieved by showing that the seller herself is also a buyer. “I wear mark everyday and keep magalogs in my purse so when someone asks or compliments something I am wearing…I also love having mark parties in the dorm which are always a huge success. Working with sororities has also been very successful. I work with the sorority’s event coordinator to find the perfect event. My motto is, “every girl needs a little gloss”, and so I try to think of every girl as a potential client.”

The experience seems to have benefited Martino, who notes that in addition to being a bargain shopper, she is already deserving of praise from money guru Suze Orman because at 19, Martino has already started her 401K.

A Second Income
Ada Mejia, a New York native and longtime account executive for Sprint mobile, started Mary Kay as a second income when the recession was in full force and cell phone sales began to drop. Mary Kay also has a host of women selling part-time, both as second jobs and as income for stay-at-home mothers. While some have turned the business into a full-time job, many do it part-time for years because it is flexible, fun and doesn’t require checking in at an office.

To become a consultant, people pay $100 plus tax and shipping and handling. In return, they receive a kit with full-size products to do skincare demonstrations, and motivational CDs that show teach building and consultation skills, as well as information to access to Internet site around the clock, to enable people to train.

As a long-time account executive for Sprint, Mejia already had a sales personality and decided to try Mary Kay part-time when Sprint stores started selling less and her commissions dropped. While carrying inventory isn’t required, she notes that the company encourages it because people are more likely to buy if you have it hand. She aims to do at least three parties a month, defining “a party” as at least four women at a time. One-on-one skincare and makeup consultations are also an option, but people tend to be more receptive to a “party.”

Mary Kay consultants buy products at 50% of retail, so long as they meet a minimum of at least $600 in sales per quarter. Each consultant is encouraged to build a sales team to manage, and asks party attendees if they are interested, and gives the host a gift.

“There’s a lot more people joining since the recession. I didn’t think people would buy but they always want their beauty,” said Mejia. “They at least wear their lipstick and mascara. Some people think it will make them feel better, as long as I put on my face, I’ll be happy, it’ll be OK.”

So is she in it for the long haul? It’s a possibility. Just as Hier thinks it’s a no-brainer, implying, it’s jewelry, what’s bad about it, Mejia echoes a similar sentiment. “It’s fun, it’s easy to do and in the end, it makes people feel good.”

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