Hostess with the Mostest

Direct sales and home parties a growing trend...
Dolly Penland
Correspondent

Move over, Mary Kay and Mr. Tupper, the direct-selling industry is growing and it's not limited to cosmetics and kitchenwares anymore.

According to an economic impact study conducted by Ernst & Young and released by the Direct Selling Association, the industry accounted for $72 billion of the U.S. economy in 2004.

That $72 billion includes direct, indirect and induced impacts, including $27.8 billion in money earned by more than 13.6 million people in the industry and $6.6 billion in federal, state and local taxes.

Direct selling is the sale of a product or service person-to-person or in a group setting away from a fixed, retail location, usually in a home. The DSA is a national trade association of more than 300 companies including Avon Products Inc., Mary Kay Inc., Tupperware, The Pampered Chef Ltd. and Herbalife International of America Inc., as well as hundreds of smaller businesses that sell items such as clothing, home décor, pet supplies and children's accessories.

According to the DSA, sales increased nearly 80 percent over the past 10 years, from $16.6 billion in 1994 to $29.7 billion in 2004.

St. Johns County resident Kristee Burgess is a senior team mentor and consultant for Minnesota-based Tastefully Simple Inc. The company sells easy-to-prepare gourmet foods, everything from appetizers to desserts, that are either ready to eat or require only one or two ingredients to make.

She became a consultant in 2000 after attending a party. "I went through the downsizing of corporate America, and was laid off twice," she said. Although she had never particularly enjoyed cooking, "I was invited to a party and so I just went; I had an 8-month-old at the time. I thought, 'Wow. I could cook!' "

At the parties, a hostess invites guests and prepares a couple of the meals, while a consultant brings another 10 or so items. The guests are encouraged to sample the food and are given entertaining tips and recipes.

Burgess hosted a party and immediately decided this was the business for her. She now has a team of 218 consultants whom she trains and supports in 15 states. Her team brings in more than $1 million in annual sales.

"I make more than I did in corporate America," Burgess said. "I am at the top level of the company and the range for my level is from $40,000 to $120,000 plus. That's exciting because I work about 15 to 20 hours a week," allowing her to spend more time with her 7- and 11-year-old daughters.

The DSA said more than 73 percent of direct sales are person-to-person, and the rest of the transactions involve a home party or group.

"The economic impact study confirms the ongoing growth of direct selling as a shopping option for millions of American consumers," DSA President and CEO Neil Offen said in a press release. "Consumers enjoy service, selection and social interaction that's hard to match with other shopping experiences."

In the old days of direct sales, people attended parties specifically to buy a product. However, the big trend in the industry now is to teach guests something new.

Denver-based Tomboy Tools Inc. does not have parties, although there is still a hostess. Tomboy Tools consultants conduct workshops that not only showcase the company's line of ergonomically designed tools sized for women, but also teach home improvement techniques and take clients through how-to projects. Some of the workshop topics include tool usage and safety, painting, plumbing repair, drywall repair, woodworking and basic tiling.

Jacksonville resident Kristin Suter became a Tomboy Tools consultant in April 2005. The single mother of a 4-year-old daughter was in the process of renovating her newly purchased home on weekends and at night after coming home from her business, Kristin's Natural Childcare.

"I bought my childhood home, and there was a lot of work to be done," said the self-proclaimed "do-it-herselfer." Suter's biggest project was ripping out the old flooring and laying new tile. "It is hard work" with standard tools. "We're about to tile my mom's house and I can't wait."

Suter said Tomboy is targeting a profitable niche: "The home improvement market where women do the work is about $2 billion in the U.S. alone each year."

Media Resource:
Success Profiles