Avon is a 130-year old company whose products have been a household staple for generations. Started in 1886 by David McConnell, Avon offers several brand lines of cosmetics and personal care products. It even has a small but growing assortment of men’s personal care products, fragrances, jewelry and watches.
The company operates via a direct sales model, meaning that its goods are not sold through third party retail shops, but rather, through independent contractor distributors (e.g., Avon ladies). Anyone can sign up to become an independent distributor for Avon and earn a commission on their sales for the company. These distributors are simply called Avon representatives.
Avon also awards commissions to those reps who successfully recruit other reps to sell Avon products. Teams that reach set sales goals are rewarded with one-time bonuses; furthermore, individuals who excel at both selling Avon products and recruiting other reps can be additionally rewarded with trips to vacation destinations, TVs and even cars.
How do you get started with Avon?
You can sign up to become an Avon rep by going to the company website and providing your personal information. Then, you are asked to select from one of three start kits ranging from $25-$100.
Once you provide your credit card information and complete your purchase, you are enrolled into the Avon program. While you wait for your starter kit to arrive, you can work on your business by building out your Avon rep web page, which is offered via the company website. Here, you can provide your personal information, pick out which Avon products you wish to feature, and then broadcast your eStore through social media platforms like Facebook or Twitter.
Your Avon starter kit, regardless of size, will include lots of sales collateral such as product catalogs, shopping bags and product samples. The starter kits will also have full size products that can be used at home parties and demonstrations.
For the money, these starter kits are actually a fairly good value. About a year ago, Avon even offered the Quick Starter Kit for free.
How to earn commissions and bonuses with Avon
Once you have your starter kit and eStore, it’s time to start selling product, recruiting other Avon reps, and earning commissions and bonuses. The company’s outlines its basic commission and bonus structure on the following chart. Campaigns, as they are called here, consist of two-week periods during which product sales are generated either online, door-to-door, at trade show booths or home parties. The company pays out 40% in commissions if a given campaign goal is reached. The first campaign, incidentally, pays out 40% in commissions no matter how much product you sell.
So, in the first 14 weeks that you are an Avon rep, you can earn over $1,000 in commissions and bonuses if you reach set sales goals each week and recruit 3 Avon reps.
What happens afterward those 14 weeks are up? While it’s not stated openly on the Avon site, reps are expected to eventually rise to the level of ‘Unit Leader’ by recruiting a downline of at least four reps. Between the five of you, your total campaign sales are expected to be $1,000. So, for every month, you and your team are expected to sell at least $2K worth of product.
In addition to earning 40% in commissions, Unit Leaders also earn 1-5% commissions from their directly sponsored reps (depending on their sales volume) and another 1% commission on second and third level recruits.
Avon pros and cons
As with any business opportunity, there are pros and cons to working with Avon.
Established company and product lines- Avon has been in business for over 100 years and is not about to disappear. It also sells quality products at affordable prices.
Low startup cost- Avon starter kits cost $25-$100, which is not a bad startup price for a business. Those starter kits also include access to a personal website.
Broad market- Avon products are applicable to women, men and kids of almost any age and any financial outlook.
High commissions– Most direct sales companies give their reps 20%-25% in commissions on the sales of their products. Avon gives 40% commissions, which is a fairly high rate in comparison to other companies.
Market saturation- There are too many Avon reps, making it difficult to gain a strong foothold in this already glutted marketplace. Even in a small town of 5,000 individuals, you will find six to eight Avon reps ready to call on you at a moment’s notice once you decide to “shop with a rep” on the Avon website. Unless you have a large family of social network, you will be hard-pressed to sell Avon products to new customers.
Revenue losses- The company as a whole has seen its revenues decrease since 2012 and suspended its dividend in 2016. It also reported that it has not achieved the desired representative growth rate of 1-2%/year. The reasons for these falling numbers are varied, but overall do not provide a picture of a healthy company. Last year, Avon also had to pay a $27 million settlement over its mishandling of some fiduciary matters.
Product sales requirements- From the commission structure showcased on the Avon website, it appears that reps must meet fairly high sales quotas in order to receive their commissions. They also must keep tabs on their downline in order to meet team sales quotas. This means you won’t have much opportunity to take a break- or a vacation for that matter- if you wish to secure your monthly earnings.
Is Avon a worthwhile business opportunity?
Avon offers reasonably priced, good quality products. However, as a viable business opportunity, this company has some nagging deficiencies. To begin with, the company as a whole is losing market share. It’s also seriously glutted with reps. Finally, those reps have to hustle like mad in order to make the required sales so that they can collect their commissions and bonuses.
Have you sold with Avon? Are you an Avon representative? Please let us know about your experiences in the comments below.