I’ve mentioned before (See this previous article) there have been numerous stories in magazines, newspapers, and on the television talking about how lots of women are flocking to the direct sales companies given the downturn in the economy.
Yesterday, I picked up my newspaper only to find yet another article about companies like Mary Kay and AVON seeing an increase in their sales forces.
Mary Kay rolled out a new ad campaign in March to try to recruit new consultants. According to this latest AP article, Rhonda Shasteen claims that the traffic on the Mary Kay website increased by 108 percent during the month of March.
Every story I’ve read or seen is always the same. So-and-so was laid off and then decided to sign up with XYZ “direct sales” company and at her first party made $2000. Something like that.
And what a great option direct sales is, they point out. An extra fun job where you can make some extra money.
But here’s what I want to know: Who is going to buy all these products? All these women are signing up to peddle these products, to make some extra money in this lackluster economy, but who is going to be their customer? You need CUSTOMERS to make any money selling. As more people sign up to sell these products, there are now even more consultants competing for the same customer.
Another thing these articles never mention: These products aren’t cheap. As people are being more frugal, I doubt that they are inclined to pay $13 for a lipstick or $15 for mascara when they can find comparable or better products at the drugstore or Wal-Mart for half that or less. Besides price, the selection at the stores is phenomenal…and you don’t have to deal with a sales person calling you every other week to try to get you to hold a party or invite you to a “girls’ night out” recruiting event.
What burns me is that these stories never mention the expenses, or if they do, they gloss over them. I’ve never seen any mention of the pressure that Mary Kay recruiters exert on new consultants, trying to convince them to shell out thousands of dollars on initial inventory. Never.
The problem is that the people writing these stories know NOTHING about what they’re writing about. And thus, the picture they paint is distorted and incomplete.