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October 01, 2011

Cover Story

The Pink Economy


Providing a Lifeline: Direct Selling’s Special Skill

by Barbara Seale

Cover Story

Immigrants who have found courage and confidence in a new country, women facing family financial crises, and even consultants whose businesses have helped them weather natural disasters—these types of reports make so many proud to be part of the direct selling industry.

Graciela Sanchez, Director of Sales and Marketing at Belcorp USA, grew up following one of these storylines. Her mother came to the United States speaking no English, but her success in a direct selling company enabled her to put three children through college, to own and fully pay for two homes, and to support her family exclusively through her direct selling income.

“I’m an advocate for direct selling because this is an opportunity like no other,” Sanchez says. “If you ever talk about the American Dream being possible, it’s definitely possible through direct selling.”

Sanchez has seen versions of her mother’s story repeat themselves for years in the lives of consultants who join Belcorp.

“About 60 percent of our consultant base at Belcorp USA is of Hispanic origin,” she reports. “As I’ve talked with them, they’ve shared some of the challenges that they’ve had in the past—not having enough food, not being able to go to school because they had to work, not being able to have a bed or a decent home. As they’ve come to this country and started to succeed as entrepreneurs, they’ve been able to grow and change their lives.”

Overcoming Obstacles

Joseph Billone, Vice President of Global Direct Selling at Avon, says he has seen examples of independent representatives who have overcome even cultural obstacles to keep their families afloat during difficult circumstances. He recounts the story of a Turkish representative who lost everything she owned when her home was devastated in an earthquake—everything, that is, except her Avon business.

“Turkey is a very male-dominated society, and she had used the business to make extra income for her family,” he explains. “After the earthquake, she redoubled her efforts and put the family back on solid ground so they could rebuild their lives. Now her husband is happy to help her by making meals occasionally when she’s busy. It was such a milestone in her life for her husband to think that what she was doing is valuable.”

At Amway, where the majority of the company’s business is outside North America, executives are very familiar with the cultural and economic limitations its independent business owners (IBOs) face every day. Opportunities for women in India and Thailand, especially in more rural areas, are culturally limited. Most focus their lives on their children and their homes. When they look for ways to develop themselves or contribute financially, direct selling offers them a chance to learn, gain confidence and supplement the family income while they continue their family responsibilities. The same situation exists in other countries, too. So Amway does everything it can to support women as they build their businesses. They offer business and training materials in local languages and establish local facilities everywhere it’s feasible.

“We’re going into countries, setting up a physical presence and creating the kind of community that lets women participate in the business opportunity as well as participate in their families,” explains Yogesh Chavda, Director of Consumer and Marketing Insights at Amway.

But whether their business is in a developing country or in the United States, Amway women make up about 75 percent of the company’s IBOs and 85 percent of overall sales, according to Sandy Spielmaker, Vice President of Sales at Amway U.S. In the United States, recruitment of female IBOs is up 11 percent this year, and the majority of them are Hispanic or Chinese. She says many of them are attracted to being global businesswomen. They have friends and family in markets such as Mexico, India, China or Australia, and they naturally see that those relationships can help them build an international business.

“Free training helps them gain product knowledge, optimize their income and learn how to get advice. It’s all available in multiple languages: Spanish, French, Korean, Mandarin and English,” Spielmaker says. The company also facilitates communities of multicultural women so that new IBOs can meet other women like themselves. “When you’re dealing with multicultural groups and women in general, it’s important that they have a chance to meet other women who look like them, have the same values and come from the same place. It builds confidence, helps them get their network going and provides community support in their business.”

Entrepreneurship Comes Naturally

The low cost to start a direct selling business is a key attraction to the industry, especially for immigrants or women in an economic crisis. Avon representatives can start their business for a minimal investment, and the company lets them place orders and pay for the merchandise after they’ve collected it from their customers. It extends $1 billion in these “micro-loans” every day around the world. And Amway has a 100 percent money-back satisfaction guarantee for both its products and the cost of becoming an IBO.

Both Amway and Belcorp have charitable outreach programs that have altruistic goals but also produce new distributors. Amway’s One by One program provides food, education and healthcare to children around the world. By helping children, Amway sometimes gets to know their parents, who become interested in the business opportunity. Something similar happens at Belcorp. Its Amazing Women program is under way in 14 countries and launched in the United States in July. The program seeks out women with disadvantages and teaches them skills that help them become entrepreneurs. The program doesn’t promote the company’s business opportunity, but participants naturally become interested in the company and consider it an avenue that lets them use their newfound skills and confidence.

Avon’s Billone brings it full circle, reflecting on what direct selling is really all about: “We’ll be there, whether you have a great need to get your family back on its feet or whether you just want to make a little income and feel better about yourself.”