Direct sellers stand to benefit in a recession, says trade association
Data from the DSA covering the last twenty years show that companies selling through this channel tend to do particularly well in troubled times, explained vice president of communication and media relations Amy Robinson.
From 1987 to 2007 the DSA looked at direct sales in comparison to GDP. Within this 20 year period there were three years, 1990, 1991 and 2001, with at least one recessionary month, she explained.
“In a non recessionary year a one percent increase in GDP is on average accompanied by slightly more than a one percent increase in direct sales. In recessionary years, however, we can see upwards of 5 percent growth in direct sales,” Robinson told CosmeticsDesign.com.
Number of sales reps grows
A number of reasons can explain these positive results, including recruitment gains and the often low price points of goods in the channel, she said.
In a recession, recruitment for sales representatives can become easier as many individuals are keen to supplement the family income.
Indeed, US-based cosmetics company Avon has recently stepped up its recruitment campaigns, with its US website promising that Avon can be the answer when you want to ‘take control of your finances and make more money in 2009’.
A television campaign has been launched in the UK featuring five real life sales representatives discussing what there is to gain from working for the cosmetics company.
The ‘Avon ladies’ highlight the low start up fees, flexible working hours, and the resilience of the business to tough times and viewers are invited to join the ‘five million women behind the company for women’.
Consumers still buy even in recession
However, even if sales forces grow in size, consumers must still purchase items if sales figures are to go up.
Robinson explains that the products found in the direct selling channel are often more insulated than others during troubled times.
Low price points mean that consumers are unlikely to feel forced to give up these products, which may also represent small pick-me-ups when larger purchases are impossible.