Aug 5, 2009 11:00 pm US/Eastern
Women Try Direct Selling
PHILADELPHIA (CBS 3) ―
In these tough economic times, some people are turning to direct selling, selling makeup, skin care or other products right out of their homes. But is it right for you?
Karen Pressley of Bensalem left corporate life to go to school. She never expected to open a store in her living room.
"This is something I'll do to help supplement the income so everything won't be on my husband," said Pressley.
She sells Arbonne skin care and other products. Arbonne is just one of hundreds of direct selling businesses, selling from home. Sales of everything from jewelry to cosmetics totaled almost $30 billion in 2008.
On its Web site, a Mary Kay ad says, "Sell products that you love, earn extra money, be your own boss."
Companies such as Mary Kay are using the recession to recruit, saying women can earn money selling in their own homes.
When they sell, they get a commission. If they recruit new salespeople onto their team, they'll often earn a slice of those commissions, too.
Direct selling companies say, even in a recession, direct selling has customers.
"A woman may not be able to go out and spend $100 on a new dress or a new leather handbag, but she can certainly afford -- and will spend -- $13 or $14 on a lipstick that will help brighten her day," said Rhonda Shasteen of Mary Kay Cosmetics.
To some people, direct selling isn't all it's cracked up to be. Tracy Coenen used to sell Mary Kay. Now she runs Pink Truth, a Web site critical of Mary Kay.
"The name of the game is recruiting people and getting them to purchase inventory packages upfront that they most likely will not be able to sell, if history is any indicator of that," Coenen said.
Recruits can return unused inventory and (within limits) get most or all of their money back, says Mary Kay. The company says the number of women selling Mary Kay is up 10 percent this year.
Meanwhile, Karen Pressley says selling Arbonne has been great for her.
"Recruiting is key. You have to have a team," Pressley said, "but we have a consumable product. People are buying.
Karen Pressley has risen to area manager and estimates she has made about $4000 in commissions. She hopes it's just the beginning.
The median income for direct selling is about $2400 a year, according to the Direct Selling Association. It says, don't risk your finances to join direct selling, and if you have to buy inventory, don't buy more than you can sell to customers.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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