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NY Times touts Direct Sales as a Recession Fallback


By Dan Mitchell, MLM Blog Correspondent

Here's an interesting article about Direct Sales growth during a recession.

From NY Times:

Three weeks before her third child was due, Susan Drucker Hunsaker had more than 20 women over to her home in Burlingame, Calif., for conversation and refreshments. She also invited them to look at Stella & Dot costume and semi-precious jewelry, which she had begun selling the week before.

Ms. Hunsaker, a former high school art teacher with a master’s degree in education, sells jewelry because she needs cash, and she needs it quickly. Her husband works on a commission basis in commercial printing sales; his income dropped by half in 2008, and he expects more of the same this year.

“We had already pared down as much as we could,” Ms. Hunsaker said. “I knew as soon as the baby came, I would probably have to go back to work. But with three children under 5, if I went back to teaching I wouldn’t make enough to pay for child care.” In the first two months of this year, she sold $12,000 worth of jewelry at six parties, taking home 30 percent of that as commission.

Ms. Hunsaker is not alone in turning to direct sales to make ends meet. Many direct sales companies report rising numbers of sellers signing up. In February of last year, 24 new sales consultants joined Stella & Dot; this February that number is 160.

The number of new sellers at Lia Sophia, another jewelry company, is up 26 percent from January-February 2008 to 2009; the number of sales consultants at the Cutco Corporation, a manufacturer and direct seller of high-end kitchen cutlery, was up 20 percent this January over last.

The average annual growth in direct sales in nonrecessionary years is 3.3 percent; during the last three recessionary years — 1990, 1991 and 2001 — it was 4.5 percent, said Amy Robinson, spokeswoman for the Direct Selling Association, the industry’s trade group.

Read the whole story…

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