direct selling

Visualize this scene: I am sitting with my sister at a Tupperware rally (aka, a revival for consumerism). There are streamers, there is glitter all over the berber carpeting, and there are spray-tan women with microphones. As an early-twenty something still in college I don’t quite have my footing in life, nor do I know what I am doing there, but I am wise enough to know that despite what these women are screaming about I am not going to find the answer to life within those burping plastic containers.

How did I get here?

At the end of the rally my sister and I grab our magenta-colored, four-person salad plate sets and quickly leave the scene. I think I made it out of there just in time.

As of 2009, sixteen million people (82.4% are women) have turned to direct selling in order to make side income, and a lucky few have turned this into a career. I had secured my own seller seat at a Tupperware Rally back in 2003 when I made a $75 profit by going door-to-door in Amish country and selling $375 worth of Tupperware to help fund my study abroad trip to Japan. While I sold Tupperware for a quick infusion of cash, I have found that many people go into direct selling business for reasons other than to make money. From talking to several direct sellers in researching for this article, I found that at-home businesses offer social interaction (wine, food, products and an excuse to get a group of women together), can feed an addiction of a certain product/stock up their home at a discount, or even can help you “get out of the house”. In fact, several people that I spoke with actually make plenty of money as a household and could toss their side businesses out if they wanted to.

As a daughter, niece, cousin, sister-in-law, and friend of direct sellers (ranging from Tupperware, Avon, Mary Kay, Partylite, Scentsy, and CAbi consultants), I’d like to offer some advice on how to increase your profits and make money with any of these businesses listed below. If you are not in this to make money, then ignore the following advice:

  • Don’t be your own best customer
  • You can do ‘book’ parties, but according to the Direct Selling Association, 78.0% of sales are made when face-to-face with your clientele; internet sales only make up 7.3% of all direct sales
  • Don’t overinvest in your business in the beginning (do you really need to order another shade of lipstick in order to seal more business?)
  • Keep your inventory as low as possible
  • Progress out of your initial inner circle of friends and family for clients
  • Keep accurate records so that you can see trends in profits and losses (this will be helpful for tax season as well)

Finally, I would like to highlight several of these businesses so that you can compare commissions, startup costs, and average earnings per party to make a more informed decision about which consultant position you may wish to pursue. Please note: while I list the initial startup fees from the company itself, as with any business you will also have other costs such as gas, shipping and handling, marketing, business cards, etc. Also, there are specials going on all the time with these companies, such as Mary Kay’s $50 initial startup kit instead of the normal $100 cost now through the end of April. These are not reflected in the chart below.

Business NameStart Up CostCommission RateAverage Made Per Party
Avon$10.0020-40% (depending on the item)Unknown
Tupperware$79.99-$119.9925%Unknown
Silpada$199.0030%$950
Scentsy$99.00 (plus shipping and tax)20-25% (tiered earnings)$150.00
Mary Kay$10050%Unknown
Pampered Chef$80-$15520-31% (tiered earnings)$450 per show
Partylite$17525%Unknown

 

Have you had experience with direct selling? Are you currently a direct seller? I’d love to hear the pros/cons and all about your experience.

Other Articles You May Enjoy:

The Story of my eBay Debacle – Part I
Part-Time Work at Home Ideas – Are they for You?

I’d like to thank the following people for their contributions to this article: Jen, Helen, Just Heather from Inexpensively, Sustainable PF, Jason from Live Real Now, Penny from the Saved Quarter, and Crystal from Budgeting in the Fun Stuff.

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Amanda L. Grossman is a Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 10 years, her money work helping people with how to save money and how to manage money has been featured in Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here.
13 replies
  1. Cindy
    Cindy says:

    I didn’t realize you did a post on this. Remember my trials: Tupperware, Avon, and Partylite. I have actually been trying to convince Jason to “allow” me to start up with two totally different companies lately. He isn’t on the hook yet……..

    Reply
  2. Ben
    Ben says:

    My wife has some friends just starting out in the direct sales industry, can you point out any mistakes that they should avoid? I know you touched on avoiding high startup costs and buying too much product yourself. Anything else you’ve seen that people do when they’re getting started?

    Reply
    • FruGal
      FruGal says:

      Hello Ben! Thanks for the question. I think the single biggest mistake that direct sellers do is not move out from their inner circle of friends and family, thus slowly losing business until it just dies out all together. Relatives and friends can only buy so much product!

      Reply
  3. Hunter
    Hunter says:

    My Mother in law became a Pampered Chef rep a few years ago. It has given her a very nice income boost. Not only does she earn a commission on sales volume, she has noticed that because she spends more time dedicated to this, she spends less time shopping. Win win.

    Reply
  4. JT McGee
    JT McGee says:

    Direct selling has never been my “thing,” but the more outgoing types it can definitely be a great side income.

    I remember looking through a “Thirty-One” catalog over Christmas when my GF had showed me a few things she liked. There were testimonials and examples in it of women who were bringing down $70-80k a year selling purses in their spare time.

    Of course, their networks were huge, but for $80k a year part-time I think I could learn to love purses. 😛

    Reply
  5. mommymommymommy
    mommymommymommy says:

    I sold Pampered Chef for five years, from 1999-2004. I selected that company because people cook and their line of products was top notch.

    I really loved finding my inner salesperson and was at the top of my cluster sales every month-and I worked full-time and had a young daughter. I earned free vacations, free products and great commissions.

    Is it for everyone? No. I stopped when my twins were two…it was too much with three kids and a husband gone seventy hours a week.

    It doesn’t hurt to try!

    Reply

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