We have all seen the iconic Avon lady, going from door to door, offering products and income opportunities for women. People who join them are typically interested in selling beauty products, stay at home moms who want to earn a side income or anyone who wants to start an independent business during their free time. This was very popular in the 70’s, but is Avon worth doing in the 21st century moving forward? Let’s see what the future holds for this brand.
- The founder was actually a man by the name of David Hall McConnell, who started the company in 1886 by selling only perfume products.
- Currently, the product division is made up of 71% beauty, 16% fashion and 11% home.
- The company has a global network of 6 million sales representatives (aka Avon consultants) spanning from North America to the Asia Pacific.
- Over the years (131 years to be exact), the brand has been known to empower women to become business owners and financially independent.
- Avon’s philanthropic movement includes campaigning for women’s causes such are breast cancer and domestic violence awareness.
How Does One Get Started
To get started with Avon, you need to sign up under an active sales consultant. After submitting the details, you’ll be contacted via phone call and the upline will verify your membership, go through the business program and advice on which starter kit to choose.
A starter kit contains samples, catalogs and order forms to help you sell the products face-to-face. Alternatively, you can also set up a personal online store via Avon so that potential customers can buy online through you.
As a new consultant, you will be taught on how to earn and create your customer base within 90 days of starting out. Since sales campaigns are launched every 2 weeks, this will give you the opportunity to promote new products to different people.
What’s The Earning Potential Like
For starters, you are entitled to earn 40% on all product sales for every campaign throughout the 90 days (first 3 months).
After that period is over, the regular commission rates will apply as follows;
To increase your earnings subsequently, finding new consultants and growing a business team is necessary. That way, you can profit from recruitment bonuses and team bonuses that will qualify you for more cash incentives, more business tools and free trips.
What I Like About Avon
As far as starting out is concerned, I do like that Avon makes it affordable and easy for most people.
1/ The three starter kits aren’t highly priced and they contain plenty of attractive goodies than what you could bargain for.
- Quick Starter Kit $25 – actual value is over $80
- Advanced Starter Kit $50 – actual value is over $190
- Premium Starter Kit $100 – actual value is over $400
If you picked the Premium kit, you are getting 16 full-size products and over 90 pieces of samples. That is a lot of beauty stuff to distribute and promote to attract new customers.
2/ Since Avon has got their own eCommerce outlet, there’s no need for you to stock any of the inventory. As long as customers use your referral link, you’ll still earn direct commissions whenever they shop through the official website.
3/ Whether it is direct selling or affiliate marketing, most companies in the beauty niche only pay between 5% to 15% in commissions. So it’s very generous of Avon to offer 40% for newbies during their first 3 months. I consider this a good confidence booster to help them see return for their investment in the early stage.
4/ The concept of the 2 weeks campaign is quite refreshing, especially in the beauty niche which is already flooded with a plethora of products. It gives consultants new business ideas to explore and existing customers something interesting to look forward to purchase every month.
However, that is as good as it gets. In order to run a successful business, you need a long term perspective and that’s where the inadequacy of the Avon business model will sabotage your effort.
What I Dislike About The Business Model
(This is going to be a long one so bear with me)
1/ Avon is known to grow its business by doing face-to-face promotion, something that’s common in the direct selling industry (and still is today). They called this the ‘warm market’ and friends and families are usually your targeted customers.
Before the internet boom, approaching this group of people is seen as a natural practice, but nowadays, most people will shy away when you do so. Why? Because modern consumers have more options to choose from and they prefer to do their own research before purchase instead of being pushed to buy something.
In other words, face-to-face selling is losing its popularity.
2/ I assume that Avon is aware of this shift in consumer behaviors because there are signs that they are tapping on the ‘cold market’ a.k.a the online shoppers. However, even when consultants can create their own e-stores, their online presence in general is a weak one.
Firstly, they all look the same and you have very little control over the web designs. Secondly, they are very product-centric and it seems that every page you visit is trying to sell you something – whether you really need it or not. If you are googling for some beauty tips or product review, you’ll never find these personal e-stores on the first page.
Don’t believe me? Here’s an example of such site.
3/ While the starter kits are affordable to invest, refilling the business tools such as brochures is entirely at your own costs. This is in addition to other costs such as paying for fuel to organize home parties or delivering certain products by hand.
In the event that a customer isn’t happy with a particular purchase, you are expected to handle the refund (again, at your own cost) because it is required to honor Avon’s money back guarantee policy. All these frustrating situations could cost you more than anticipated. I mean, why use print brochures in the first place when online catalogs are much easier to deal with, right?
4/ If you remember the chart above, the commission rate is great during the starter program. However, after 90 days, if your sales order is anything less than $49.99, you don’t earn a single cent. This is not a flexible way to make money in the modern days because customer orders can vary every month. Unlike direct selling, affiliate marketing pays for every sale, so even with just one order, you can still get a small commission cut. Isn’t that better than nothing at all?
5/ To make it big in the Avon business, you don’t only need to sell, but also recruit new consultants to increase profit margin. This is probably the biggest resistance in the MLM world – people who buy the products may NOT necessarily want to be part of your team or share your business idea.
Persuading people to do so could trigger a lot of awkwardness which might later cause your social reputation to suffer (speaking from experience here). Whether or not to take the risk is entirely up to you, but don’t say I didn’t warn you.
6/ When you take a closer look at the usage of beauty products, they aren’t really the fastest turnover item in the cabinet. A lipstick, for example, may take up to 6 months to finish the entire tube. Same goes to foundation powders and perfumes. Practically speaking, a woman will replenish their make up kit 2-3 times a year.
Hence, selling products to the same customer every 2 weeks, to meet your sales campaign order, is going to be a difficult thing to do, unless that person wants to own 30 pieces of lipsticks. But who does that anyway?
This means you’ll need to search for new customers (the ‘cold market’) every 2 weeks when you have run out of friends and families to approach. Are you going to sell door-to-door? Do you think they have the time to listen to your promotion pitch?
With people nowadays, I am guessing most likely not. They aren’t called ‘cold’ market for nothing, you know.
7/ Lastly, Avon is one of the many cosmetic companies that sell in China. In case you aren’t aware, one of the prerequisites to enter the market is to run product testing on animals.
Many years ago, the company had vouched to stand up for animal welfare, but according to PETA’s (People for the Ethical Treatment of Animals) recent investigation, evidence are showing that they aren’t entirely animal cruelty-free. Seems to me that Avon doesn’t hold true to their words and that’s not cool.
So, Is Avon Worth Doing?
When I run a business, I like to think not just about profitability, but also sustainability. After reading an article about “Which Billion-Dollar Company Will Be Bankrupt by 2020” (you should read it too), it concerns me that this company is likely heading down hill.
In that research conducted by the University of Vermont, it shows that Avon is experiencing significant losses in net income since 2012. Here’s an excerpt from that paper.
“Today, the average consumer is engulfed in social media and online interactions, people are no longer comfortable buying beauty products from a stranger knocking on their door. Avon’s strategy of continuing to sell products through their direct channel AND IGNORING internet sales until a third straight year of losses is going to end poorly for them.”
If that statement doesn’t ring any red flag to you, I don’t know what else does. Avon’s business model is not going to work for the 21st century. The internet is going to change the way people buy things and integrating online marketing into one’s business idea in the early stage is crucial to stay in the game.
Do you know that for $1/day, you can start a beauty business online promoting any products that you like? You can still earn a flexible income from home minus all the hard-selling and recruiting fuss. To learn more, check out my recommended training platform to find out how to get started.
I hope this Avon review has given you a good deal to think about. Have you been involved in direct selling or thought of joining one before? How have your experience been like? Please share with us in the comment area below.
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