In slow economy, they take a direct approach to sales

To start a business, some people turn to companies such as Pampered Chef and Avon

vbridges@newsobserver.comFebruary 4, 2013 

  • Learn more about direct selling Triangle direct sellers are organizing “Which Biz is Your Buzz?” on Feb. 16 from 10 a.m. to 2 p.m. at Woodland Terrace, 300 Kildaire Woods Drive in Cary. The event offers the opportunity for individuals to talk with 19 different direct sales vendors about their products and the companies they represent. A second “Which Biz is Your Buzz?” event is planned for March 16 from 10 a.m. to 2 p.m. at The Havana Grill on 404 W. Chatham St. in Cary.

Jane Currin liked The Pampered Chef’s kitchen products, but wasn’t sure she wanted to sell them.

Maybe in “another season of life,” Currin said.

In 2009, Currin hosted an in-home show for a consultant who sells the company’s kitchen wares. However, Currin declined the invitation to start a Pampered Chef business herself.

She changed her mind five days later after her husband lost his job.

“I called up my consultant friend and said ‘Tell me more,’ ” said Currin, now an independent director with The Pampered Chef.

Currin, who lives in Raleigh, is one of millions of entrepreneurs who have turned to direct sales as a way to start their own business.

About 15.6 million people are involved in direct selling in the U.S., according to the Direct Selling Association. In 2011, U.S. retail direct sales totaled about $29.87 billion, up from $28.56 billion in 2010, according to the association.

Also, more than half of direct sellers report net income. The median income for direct sellers is about $2,400 a year, and most people work less than 10 hours a week on their business, said Amy Robinson, the Direct Selling Association’s chief marketing officer.

The median income for a direct seller working 40 or more hours a week is $34,130, according to the association.

Currin and others who sell everything from kitchen products and skin care to jewelry and energy drinks praised the direct-sales process that makes it easy to build a flexible, at-home small business by selling an established brand with an approachable sales infrastructure.

Working as a contractor

Direct selling is the sale of a consumer product or service marketed through independent representatives who are referred to as titles such as consultants or distributors, according to the Direct Selling Association. Sellers are not employees of the company they sell for, rather they are considered independent contractors who market and sell the products or services of a company.

Direct sellers may direct or work with a team; however, each team member is generally considered an independent contractor – not an employee of a director.

Direct sellers should set goals and create a plan to accomplish them, Robinson said. Some sellers want to earn a full-time income or buy products at a discount, but most want a supplemental income, Robinson said.

Individuals make money by selling products, recruiting, training and motivating others.

Under a single-level compensation plan, which is offered by cosmetics company Mary Kay, distributors’ return is based solely on sales, according to Direct Selling News.

Multi-level plans, used by companies such as Pampered Chef and Amway, offer compensation based on sales and a consultant’s “downline,” a group of people that a consultant brings into the company to generate sales and recruit others.

Some companies, such as Avon, offer single-level and multi-level plans.

Pampered Chef consultants earn a percentage of product sales. A consultant’s cut starts at 20 percent, but increases based on sales and the number of people in their downline, Currin said.

Broadening your circle

Many people start their direct sales businesses by reaching out to friends and family and using those connections to meet new customers.

In 2011, 64.59 percent of direct sales were achieved by selling person-to-person, while about 30.9 percent were attributed to a party or group selling strategy, according to the Direct Selling Association.

Before getting started, newcomers should examine three things about the company that they are considering representing to ensure they are not entering a pyramid scheme, Robinson said.

Make sure the startup costs make sense in relationship to what the company provides. The median cost for a startup kit is $99, Robinson said, but that price varies, depending on the product. Also, individuals should make sure compensation is based on product sales and not solely on bringing others into the company. Finally, potential sellers should make sure that the company has a buy-back policy. The Direct Selling Association requires that its member companies include an option for consultants to sell products and materials purchased in the last year back to the company for at least 90 percent of the original cost.

Selling requires some effort

Direct selling isn’t a get-rich-quick scheme, Robinson and others said. Just as in any other business, success requires commitment and an effective plan to reach customers.

“You need to have a business plan, essentially just like you would if you are going to start a brick-and-mortar business,” Robinson said.

Shaundria Williams of Durham said direct selling isn’t easy.

Williams started selling Avon in 2011 as a way to make spending money, but also wanted to save for her daughter’s college tuition and quit her job.

“I was living the dream of easy money,” said Williams, a human resources manager at UNC-Chapel Hill. She started by spending about $15 on samples. She set up a website through Avon and was connected to a local team leader.

A few months later, however, the new mother was accepted into a master’s program and no longer had time to sell. The venture ended up costing her about $500, Williams said.

The direct sales approach has worked out well for Currin, who started her business by buying a kit and emailing friends and family to explain why she was selling Pampered Chef. She also asked others to consider hosting a show and to introduce her to people she didn’t know.

Currin committed to having two shows per week, completed training, and sought help from a local Pampered Chef director.

After a year, Currin was promoted from consultant to director, a title dependent on the structure and the number of consultants on her team. She has built a customer base of about 1,200 people. In September, Currin took a new job, but she isn’t giving up Pampered Chef. To accommodate the new work schedule and spend more time with her sons, she is cutting back on monthly parties, Currin said.

“It is really the beauty of our business,” Currin said. “You can ramp it up and ramp it down just depending on what life is like.”

Bridges: 919-829-8917

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