It’s still a business that’s predominantly run by women for women. But that extra X chromosome is about the only thing that today’s direct salespeople have in common with their 1950s counterparts. The suburban housewives who flogged Tupperware and Mary Kay have now been replaced by doctors, lawyers and business executives who are driving a direct sales boom in Canada.
Last year, direct sales companies in this country sold about $2.2 billion in consumer goods, according to data from the Direct Sellers Association. Over the past 10 years, the sector has seen a slow but steady 20% increase in sales figures. As well, in 2006 there were 41 direct sales companies in the country; today, there are 75. While Mary Kay still has her disciples, the new generation of direct sellers has given rise to an added trendiness — California-based Stella & Dot, for example, can brag that celebrities such as Selena Gomez, Katy Perry, Nina Dobrev and Jennifer Aniston are wearing its designer jewellery. Stella & Dot’s high-quality products and coolness factor are just part of the equation; the compensation — six-figure cash bonuses — attracts a savvier-than-ever sales force. Danielle Redner, the 42-year-old vice-president of training for Stella & Dot, who is based in London, Ontario, says, “You should be able to work 40-hour weeks from home and be paid a comparable salary.”
It’s this mentality, combined with a tough economy, that is powering a resurgence in the popularity of direct sales jobs. “We’ve seen traditional jobs get more difficult, pensions are gone, contract work is more prevalent. [Our company] is so relevant and so on message,” says Janice Gerol, vice-president and general manager of Pampered Chef Canada and Mexico, a supplier of kitchen tools and cookbooks. “My father worked for 45 years for the same company. Those days are slipping by. People aren’t living for a pension and a retirement. They want to work less and have more fun.”
Derek Hassay, a professor of marketing at the University of Calgary, is one of the few academics in North America who specialize in studying direct sales. “Why is this happening? Think about how satisfying the corporate environment is,” says Hassay. “In many professions…you can’t have an eight-hour day and have a career any more. And if you live in Toronto, you’ve got two hours of commuting on either side. Is that fulfilling?”
Direct-sales converts, most of whom dictate their own hours and volume of work, agree. They prefer the autonomy of building up their own clientele; the more ambitious ones assemble a team of salespeople whom they train and manage. In most models, a direct salesperson makes around 20% commission on products they sell themselves, plus an additional cut of 3% to 4% on their team members’ sales. Direct sellers are quick to point out that this arrangement does not equate to a pyramid scheme — overrides (compensation received by a direct seller on the sales made by their team) are paid out by the parent company, not by one direct seller to another. Done right, it is legal and can be quite lucrative. One of Stella & Dot’s direct sellers in Canada earned more than $60,000 in one month alone last year. “These are normal people who have normal lives, and they’re plugging themselves into this ready-made system,” says Danielle Redner. “They see how lucrative it can be, and they want to spread that good fortune around.”