Is Avon a pyramid scheme
Direct sales: Tupperware and Vorwerk are running out of sellers
Leona Lewis opted for the fruity variant. For blood orange and cassis, wild plum and vanilla; with cedarwood and white musk. The perfume of the British pop star is said to smell “exotic and mystical” through the ingredients. At least that's what it says in the catalog of the cosmetics specialist LR Health & Beauty Systems, which sells the product. The customers seem to like the fragrance: just six months after the start of sales, sales of the Leona Lewis perfume are already over one million euros. The 24-year-old supposedly put the composition together herself, albeit under the expert guidance of trained perfumers. To do this, she traveled to Ahlen in Westphalia, to the headquarters of LR.
According to the company, the stars are there: the top models Heidi Klum and Marcus Schenkenberg, actress Iris Berben, singer Sarah Connor, plus Boris Becker and Michael Schumacher or the four leading actresses from the US television series “Desperate Housewives ". They are all said to have sniffed for hours in Ahlen to tune their own scents. The result cannot be bought in any store, but only on the sofa at home. Because LR is one of the leading direct sales companies in Germany. Independent sales representatives carry the products with the celebrity names from door to door in order to bring perfumes, skin creams, hair care and make-up or aloe vera tinctures and dietary supplements to men or women.
German consumers seem to value the home visits. Because despite the sometimes bad push image of direct sales, according to a Prognos study, German citizens buy around eight billion euros at their own front door every year. In addition to cosmetics, household appliances and cleaning agents, jewelry and erotic items are in demand, but also financial services and contracts for electricity, gas or telephone connections. There are now around 200 companies on the market. "And a handful are added every year," reports Wolfgang Bohle, President of the German Direct Sales Association (BDD). The respective companies send their representatives across the country or let them organize sales shows. These include, for example, the legendary Tupperware parties and, more recently, lingerie evenings.
The front door representative business model is not new. “Direct sales are one of the oldest forms of trading ever,” says Bohle. The distribution channel is particularly suitable for products that require explanation and require intensive advice. "There is hardly a better sales argument than the self-test at home," says the spokesman for vacuum cleaner manufacturer Vorwerk, Michael Weber. In addition, face-to-face conversations at home are the best answer to the human coldness that can often be felt in retail.
Vorwerk is one of the really big names in the world of direct sales. The global turnover of the company, which is over 125 years old, now adds up to almost 2.5 billion euros. The representatives in Germany generate almost 300 million of this - with the Thermomix kitchen machine, the Kobold vacuum cleaner and the Jafra cosmetics brand. In its own estimation, Vorwerk has not yet exhausted its potential. In order to increase the sales figures in this country strongly, the Wuppertal doesn't have enough staff on the street. “We are short of 3,000 to 4,000 employees in sales,” complains Peter Oberegger, personally liable partner and managing director at Vorwerk.
The sales representative problem is not only plaguing Vorwerk. According to Wolfgang Bohle, the 39 members of his association alone lack more than 50,000 employees for service in the customer's living room. The association covers a wide range of companies: in addition to Vorwerk, it includes the cooking pot manufacturer AMC and the cosmetics company Avon, as well as the plastic can dealer Tupperware, the electricity providers LichtBlick and Yello Strom and Deutsche Telekom. All of them are plagued by the lack of sales talent, which Bohle believes is due, among other things, to the rapidly increasing number of marginal employment. For many people they are obviously an attractive alternative to living as a self-employed representative.
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