Direct-Selling Industry Enjoys More Sales with Extra Salespeople as More People Look for Ways to Earn Extra Income during the Recession, They Are Joining Companies That Sell Products Door-to-Door or through Home Parties

By Jae-Bok Young, writer of the Christian Science Monitor | The Christian Science Monitor, July 1, 1991 | Go to article overview

Direct-Selling Industry Enjoys More Sales with Extra Salespeople as More People Look for Ways to Earn Extra Income during the Recession, They Are Joining Companies That Sell Products Door-to-Door or through Home Parties


Jae-Bok Young, writer of the Christian Science Monitor, The Christian Science Monitor


LOIS BALLARD of Ogema, Minn., found she couldn't make a living as a dairy farmer. So five years ago she joined Watkins, a direct-selling business, and began peddling a diverse line of products ranging from spices to health-care products to barbecue sauce.

"We've just sold our dairy cows off the farm to work for Watkins's business. We made more money in Watkins than we did in milking cows," says Mrs. Ballard in a telephone interview.

Using the sales method made famous by Tupperware parties, Ballard gathers a dozen or so people into a home, provides refreshments, and introduces them to Watkins products. Sales at a typical gathering average $150 to $200, she says. With a 53 percent markup on her sales, she made $15,000 on a part-time basis last year.

Ballard is one of a growing number of Americans involved in direct selling, in which the individual seller acts as the intermediary between wholesaler and consumer, thus avoiding many of the overhead costs associated with a retail operation. Growing ranks

The industry sales force has risen from 3.9 million in 1988 to 4.2 million last year, according to Neil Offen, president of the Direct Selling Association (DSA).

Hard economic times have contributed to this growth, as more people try direct-selling as a way to earn extra income, Mr. Offen says.

But he cautions that the direct-selling industry is not recession-proof. In the 1974-75 and the 1981-82 recession, the industry was adversely affected and sales were flat.

Since 1987, however, the industry has grown 10 percent annually, Offen says. Industry sales reached $12 billion in 1990, versus $9.7 billion in 1988.

William Nicholson, chief operating officer of Amway Corporation, credits the growth in part to corporate layoffs in 1985-86. Amway, one of the nation's biggest direct-selling companies, had $2.2 billion in sales last year, he says.

Ronald Curhan, professor of marketing at Boston University, says he is not convinced that sales of the direct-selling industry are up. He notes that it is hard to verify sales figures of direct-selling companies, since most of them are privately held and do not issue quarterly reports.

Mr. Curhan says door-to-door selling has become more difficult because people won't open doors to strangers for security reasons.

"Fuller Brush men who knock on the door and sell you brushes - that might still work in Japan today but it doesn't work in the United States today."

In Japan, automobile salesmen come to customers' homes, Curhan says.

Some Watkins dealers sell door-to-door, but Ballard says that is not her favorite way of selling. She prefers to make a telephone appointment before visiting a customer's home.

Ballard seeks new customers through her friends and family members, and through word of mouth. …

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