Direct-Selling Featured In The Guardian

 

The Guardian recently featured direct-selling in the following article:

For women in post-war 1950s Britain, invitations to parties at their friends’ houses started to come thick and fast. Tea and cakes were dished out – and so were plastic boxes. The aim of the hostess was to sell an innovative brand that had come over from the US and still survives today – Tupperware.

Fast forward 60 years and ladies (and to a lesser extent, gentlemen) are still being invited to parties with a hidden agenda – but now they can find themselves coming home with anything from a £16 mango wedger (courtesy of Pampered Chef) to a £145 statement necklace (Stella & Dot).

Parties where your host tries to flog you anything from wine to knickers now account for 35% of direct selling – the name given to the practice where someone sells you something outside of a shop environment.

This slice of the market has more than doubled from 14% five years ago, according to new figures from the Direct Selling Association (DSA). “Direct selling parties are social occasions where you can buy in a leisurely manner from a friend rather than a shop you have no connection to,” says Lynda Mills, director of the DSA.

“The increase in the parties has partly been fuelled by the recession, with people taking home something tangible rather than spending money on, say, food and drink.”

They have also boomed as people have sought alternative sources of earnings, either to supplement an existing income or to replace a salary lost through redundancy, for example. Some 68,000 direct sellers (17%) now work full time hours (over 30 hours a week), according to the DSA, up 20,000 from since 2011.

While the DSA would have you believe that direct selling parties are the key to, at worst, a regular income and, at best, a huge fortune, the reality is often different. For nine months Helen Mary, a virtual PA from Brighton, sold for Phoenix Trading – a direct selling company selling greeting cards and stationery.

“At first it was fine,” she says. “I sold to friends and family and managed to persuade them to have a few parties but the amount of effort I had to put in wasn’t equal to the rewards, so I gave it up.”

There are other similar tales on parenting websites Mumsnet and Netmums, though these are rivalled by plenty of posts from sellers explaining how they have made direct sales work.

“I started Usborne books two months ago and have made more than £600 pretty easily by going to toddler groups, a few evening parties and coffee mornings, Christmas fairs at schools, scouts etc,” says one mum. “Also the main bonus is it fits in with being a mum, so I have only had to sort childcare twice as I take my kids along.”

The financial rewards can apparently be substantial, but this is much more so for those who have worked with one company for a long time and have built a network of sales people under them.

As well as making commission from their own sales, a team leader also takes commission from the sales of those that they have recruited.

So how do you make a success of a sales party? While the detailed advice put forward by those who claim to have been successful differs slightly, the mantra repeated by virtually all of them is: “You need to love the products you are trying to sell.”

This wasn’t such a problem for the 1950s housewife who had a relatively easy sell when it came to Tupperware. Selling parties were a new idea and the plastic containers were coveted items.

“My mum did very well in the 60s from Tupperware,” recalls Carol Wootton, an administrator from Hertfordshire. “She used to do at least two parties a week and would have done more if she could drive. Every month I remember her going to the monthly meetings and coming back with a prize for this or that including weekends away and tickets to dinner and dances.”

She adds: “The product was good quality – I still use some of the boxes she had. And for lots of women in the 60s those parties were their social life.”

Now sellers have to choose from literally dozens of different companies including household names, such as Avon and Kleeneze, to the less well-known, including the French clothing designer Captain Tortue and the lingerie outfit Soft Paris.

This diversity has the benefit of choice – you will inevitably find a product range that you like. However, the downside of so many companies operating in the same geographic area is over-saturation. US blogger Stephanie Ann puts this well in an article The Truth About Mary Kay, Stella & Dot, Scentsy, and Other Female-Oriented ‘Home Business’ Schemes. “There is an inherent flaw in the business model that sets women up to fail: they’re coaxed into selling a product with far too much supply, and not nearly enough demand,” she writes.

Ann is referring to the US direct selling market – but with a growth in direct-selling parties in the UK, it seems inevitable this could be a major stumbling block to success.

So how well are sales agents paid? This appears to be a very difficult thing to find out. With a lot of digging it is possible to find out the starting rates of commission; however, companies appear very cagey about revealing a consultant’s typical income. All the DSA will say is that direct selling “offers a flexible earnings opportunity where you are in control of the income you generate”.

The upfront fees and commission structures vary under each brand but are similar. As well as commission, sales agents are typically incentivised by a range of free goodies from whichever brand they are working for.

The country’s biggest direct selling firm Avon, for example, charges its sellers a start-up fee of £16, to be paid when the first order is placed. After that agents take home 25% of sales made.

Jamie Oliver’s direct selling venture Jamie at Home charges £120 for a starter kit, which features products up to the value of £400 for you to use for demonstrations, and commission that starts at 20% on all sales.

Pampered Chef (see below) has a similar start up costs and commission structure, while boutique-style jewellery and accessories company Stella & Dot charges £169 in start-up costs with 25-30% commission on sales. There are also incentives for those who host a party – from free products to a cut of the sales commission. The major downside, of course, is that selling to friends and family is not always appreciated. “At the jewellery party I went to I felt hugely pressured to buy what is essentially costume jewellery for a Tiffany price tag,” said Georgie Green, a PR consultant from London.

A report published earlier this year by market research company showed that the direct selling market grew in value by 2% in 2013, an increase that it attributes to the recession. With the economy improving, it predicts that it will contract by a similar amount in the year ahead but that the parties will continue to do well.

So you may be on someone’s sales list very soon.

BAKING ON THE RISE

Etta Stobs-Stobart has just baked the most delicious lemon shortbread and mini apple crumbles and her guests are salivating for more. She has worked as a Pampered Chef consultant for nine years and says the work has given her a “very nice income”. The company, like many of those generating direct sales business in the UK, started life in the US, where it claims its consultants are carrying out 1m “cooking shows” a year.

Stobs-Stobart does two a week, from which she takes home 25% of the £500 to £600 she says she typically makes each time, and also has 50 consultants working under her. “For me the demonstrations are all about the recipes,” she says. “You want people to buy the products but at no point is it about selling.”

Pampered Chef products are marketed as “high quality kitchen tools” – so are not particularly cheap. Stobs-Stobart has undoubtedly cornered the correct market for the product. She operates from upmarket Harpenden in Hertfordshire but is today introducing her wares in the kitchen of a stunning barn conversion to the well-heeled ladies of Berkhamsted. One guest, Selina, instantly signs up for kitchen knives, a set of mixing bowls and two other items after watching the cooking demonstration.

“I’ve wanted knives for a long time and have looked in John Lewis and so on, but I can never find what I want,” she says. “It’s obviously useful to see the items being used, something you don’t get in a shop.”