This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Party Model Delivers for Some Direct Sellers

CHICAGO ( MainStreet) -- Is it possible to mix business with pleasure? Tupperware (TUP - Get Report) built a multinational company based on that very proposition. By calling their sales events "parties" and distributing their products through pre- Facebook-era social networks, Tupperware pioneered the business model known as direct selling.

Today, when more and more consumer products are bought online or at discount megastores, direct selling may seem like a holdover from the pre-digital past. But some small retail start-ups continue to choose direct selling as their distribution model. And in certain cases, the tough economic times actually helped fuel their growth.
Tupperware built a multinational company based on direct selling. Does it work in an age of digital social media?

For a new business owner, direct selling has clear cost benefits. You don't need to lease retail space or pay employee salaries. Independent sales consultants, who work on commission, market your products through word of mouth, which saves on advertising costs.

But the party model rests on the assumption that consultants will be able to attract potential buyers to their sales events -- buyers who will become so attached to the products that they convince their friends to buy as well. At a time families are worried about unemployment or being underwater on their mortgages, aren't they less likely to show up to a "party" where the central focus is on spending money?

That depends on what's being offered. American consumers are still willing to spend on smaller, "treat" items, especially if they feel their purchase is making a positive difference in someone else's life. Buying a necklace at a jewelry party may be a relatively affordable way to update an outfit, but the purchase can also be a show of support for the sales consultant and her family.

"People like to associate with companies that have a broader mission," says Amy Robinson, senior vice president and chief marketing officers at the Direct Selling Association, which has 200 active members. "Almost all direct sellers started with a single entrepreneur at home, with a very specific reason for why they started. One of the first things you learn in Direct Selling 101 is that people are attracted to that story. You have to give them something to relate to."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
TUP $58.07 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs