A dynamic alternative: Direct sellers surviving in tough economy

Monday, October 27, 2008

When former MGM Grand casino manager Carol Nunnery moved from Las Vegas to Cape Girardeau in 2003, she had planned to stay at home with her two sons.

But her plans changed after one telephone conversation with a Pampered Chef representative.

"Since I wanted to be a stay-at-home mom, I thought it would be a good idea to order a catalog from the company so I can learn how to cook better," Nunnery said. "But when I talked with someone from the company, they suggested I start my own Pampered Chef business. So while I was wanting a catalog, I got a business."

During her first eight months in business, Nunnery sold about $1,500 worth of products monthly to clients at in-home demonstrations. That number then expanded to $4,000 a month.

Today, Nunnery and her team of 45 consultants in a six-state region average $20,000 in sales a month total. She expects them to reach the $250,000 mark by the end of the year.

More than 15 million people in the United States are involved in direct selling, which accounted for $30.08 billion in sales during 2007, according to research from the Direct Selling Association. Those numbers are down from 2006 figures by about $1.3 billion in sales and 200,000 salespeople, a decline of 4.3 percent and 1.3 percent, respectively.

Nearly 88 percent of those products, which include cosmetics, jewelry, lingerie, kitchen cookware, vitamins, and toys and videos are sold by women.

Even with the decrease in sales and associates, the association contends the direct-selling industry is strong.

"The direct-selling channel remains strong, and we expect the numbers to climb again once the broader economy begins to recover," said Neil Offen, the association's president and chief executive officer. "Most importantly, direct selling continues to offer millions of Americans an excellent source of supplemental income, which is particularly important in a questionable economy."

Nunnery agrees that the direct-selling business will grow despite the economy.

"We eliminate the middle-man by providing the products to the consumer without them having to go through a retail location," Nunnery said. "That concept is what makes direct selling unique."

Sikeston, Mo., resident Gloria Jackson, a Mary Kay cosmetics sales director of about 70 consultants in a five-state region, said direct selling is recession-proof because makeup will always be a needed item for women.

"Even during the Depression, women bought makeup because it makes them feel better," Jackson said. "They may not be able to buy a dress during hard times but they can buy at least some lipstick."

Lois Long, an independent adviser with lia sophia jewelry, added that the industry will survive even in tough economic times because people will always need to purchase gifts for friends, loved ones and co-workers.

"If things continue to get tougher, this option stands out even more as a viable and really dynamic alternative for folks who need to earn money, either part time or full time," Long said. "Yet it also fits perfectly into an improved economy. I can only imagine that the industry will continue to thrive.

"Moms can stay at home with their children and still bring a little extra income to the family," she continued. "Or someone with some enthusiasm and determination can build a six-figure business out of it. That's what makes it work; it can be whatever you need it to be."

Long first became interested in lia sophia after attending a show at a friend's home in January. She said free jewelry and extra money earned from in-home demonstrations enticed her to become a representative.

Since then, she has juggled her full-time job as communications director at Eden Theological Seminary in Webster Groves, Mo., with her second job as a jewelry consultant at her home in Southeast Missouri. She works at the seminary two days a week and spends the rest of her workweek in Cape Girardeau.

Long said juggling both jobs is manageable and she would encourage others to follow suit if their employer allows.

"Honestly, I don't see how I'd manage any other kind of second job," Long said.

As for the earning potential, all direct sellers interviewed agreed that the sky's the limit.

"There's no ceiling on what a seller can earn," Nunnery said. "My job is to motivate people to sell and in return they can a nice reward."



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