By Dan Mitchell, MLM Blog Correspondent
Here's an excerpt from an article in The Washington Post:
Many recent entrants into the field have turned to direct selling because of a lack of traditional employment opportunities, according to David Koehler, a professor of marketing at the University of Illinois at Chicago.
"People are using this as a revenue stream that normally wouldn't consider this an option," Koehler said. "Because of the recession and lack of traditional opportunities for jobs, you're seeing direct-selling businesses taking off."
Starting a direct-selling business doesn't cost much, and representatives can work part-time, making it attractive to people who otherwise might have looked to now-scarce retail jobs to supplement their income. And the companies don't have to pay for office space, pensions or health benefits for these employees, meaning they're relatively cheap hires.
"The cost to add these additional sales reps is relatively low for both sides," said George Van Horn, a senior analyst at Los Angeles-based research firm IBISWorld.
However, additional sales representatives have not translated into increased revenue for the companies. The Direct Selling Association, a D.C.-based trade group, reported that industry sales were 5.8 percent lower in 2008 than in 2007. Avon said its revenue in North America fell in fiscal 2008, and Tupperware saw sales decline in the second half of last year.
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