Who's at the door? A rush of cosmetic and cookware sellers
Mary Kay has a 22 percent increase in independent salespeople as taking up direct sales — such as of makeup and tupperware — becomes a popular option in the recession to earn new income.
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"I signed up with Avon ... to have my own money," says the now former receptionist at a printing company. "I wanted to meet more people and get out."
So she’s loading up her 30-foot trailer with lip gloss samples and eye shadow palettes to criss-cross the country in search of customers.
The surge in interest is a boon to Avon. March saw a surge in people signing up as representatives, meaning that by the end of the month the company had nearly 680,000 – the largest number ever recorded – says Linsday Blaker, public relations manager for Avon Products.
The lipstick factor – the typical rise in lipstick sales in tough economic times – may also be spurring sales for Mary Kay Inc. The Addison, Texas, cosmetics company, saw a 22 percent rise in the ranks of its independent consultants in the first quarter of 2009 compared with a year ago, according to company spokeswoman Kathrina McAfee. In March, the company launched a TV ad to lure new consultants and saw a 58 percent rise in its Web traffic, she adds.
This isn’t the first time that Mary Kay (whose representatives began selling in the 1960s and Avon (1886) have seen their ranks swell during a recession. According to the latest figures available, direct sales employed an estimated 15 million Americans in 2007. Of those, 58 percent took on sales as a second job, according to Amy Robinson, spokesperson for the Direct Selling Association, a trade group which represents 200 US companies.
When Tammy Jonsson was laid off as a project administrator at an Idaho construction firm in April, she signed up with Mary Kay the next day. Though Mrs. Jonsson found a new job as a medical secretary last week, she is devoting 10 to 15 hours weekly to her cosmetic sales to save for her son’s and daughter's college education.
"It's lucrative," she says. "I could go and work at a local fast food restaurant and make $6.55 an hour.” But she estimates she can earn up to 10 times as much per hour selling cosmetics.
"I didn't go to college and get a degree,” says Jonsson, who hopes to become a full-time Mary Kay consultant and eventually a director. “To have this opportunity of unlimited income and movement in the company – to climb up that ladder – is a wonderful thing for me."
Although cosmetics represent the biggest slice of direct sales – about a third of total revenues – cookware sales are right behind, with a quarter of total sales in 2007, according to the Direct Selling Association.
Fran Fischer of Roanoke, Texas, started selling kitchen tools for The Pampered Chef in the 1990s, hosting around 900 shows over eight years. She switched careers and got her real estate license eight years ago. When the Texas’ housing market began to crumble and her hours and salary were cut in March, Mrs. Fisher turned to The Pampered Chef once again to supplement her income. Already, Fischer says her summer is booked with cooking demonstrations, and though her work hours have picked up again, she plans to sell Pampered Chef products on the side.
"Everybody needs a plan 'B'", she says. "I'm still going to do this alongside [my day job] because you just don't know the future. It was a wake-up call."
The Pampered Chef, which employs 60,000 consultants globally, has seen its recruiting numbers rise 6 percent in the first quarter of 2009 compared with a year ago, says Rochelle Mangold, a spokesperson for the Addison, Ill., company.
Signing up to sell products does come with a few expenses. An Avon starter kit costs $10, while Mary Kay consultants pay a one-time fee of $100 and must purchase individual products to resell. To host cookware shows, Pampered Chef consultants spend $155 for a starter kit.
But the costs seem to pay off. "In my first cooking show, I made my money back," says Fischer, who earned around $900 in the first month from selling the Pampered Chef cookware.