MOVE OVER, TUPPERWARE!
Outta the way, Mary Kay.
More women than ever are mixing socializing with shopping as they party their money away on goodies from baskets and jewelry to home decor and sex toys in the comfort of their neighbors' living rooms.
The once-sparse field of hawking products in private homes has exploded in recent years. Dozens upon dozens of newcomers are vying for that precious consumer dollar by hosting festive parties, known as party plans, to market their wares.
A marketing realm once populated by a mere handful of companies now boasts at least 100 businesses.
"The joy of a party plan, done well, is that you can sell things that need explanation," party plan entrepreneur Lane Nemeth explains. "What's the value of a seatbelt for dogs or cups that stack well? You can really talk to people. You can show them what the best of the best is."
Karen Warren was among the thousands of women ÷ and the home party sales force is mostly women ÷ who entered the party plan business last year. The stay-at-home Pleasanton mom saw the method as a fun way to get together with friends and make a few extra bucks in the process.
"My kids are teenagers, but I still want to be around for them," Warren explains of her new part-time career. "I chose to do it for fun, not necessarily for the money. But I have to say, the money is surprisingly good."
Warren was bit by the sales bug after hosting a CAbi party at her home. Frequent home partygoers know that CAbi stands for Carol Anderson by invitation, a line of upscale clothing previously sold only in stores such as Nordstrom and Neiman Marcus.
Warren's neighbor, for whom she hosted that first CAbi party, took in more than $8,500 her first fourmonth season of selling clothes. The neighbor, Warren readily admits, puts a great deal of time and effort into her sales job. But Warren, a self-described "newbie" to the field of party plans, is pleased with her extra income from her relatively minimal efforts.
"With my first paycheck that I got, I bought my husband a barbecue (grill) for Father's Day," she recalls with glee. "That was really exciting for me. I was like, 'Woo-hoo! I bought that with my own money!'"
Nemeth is perhaps the only person in the world who has started two successful party plan companies: Discovery Toys and Petlane pet products.
The Lafayette businesswoman launched her first company in 1978 when her daughter was a baby. The stay-at-home mom saw a need for quality educational toys and believed in-home sales parties were the perfect way to pitch the products.
"Back in the'70s, there were only half a dozen large party plans," she recalls. "I only vaguely knew that Tupperware had home parties."
Nemeth carved out a niche that worked nicely for her and her sales force of largely stay-at-home and working moms. In 1997, she sold Livermore-based Discovery Toys to Avon, which has since sold the toy company.
Her second company, Petlane, was launched early last year. It was among a record number of party plan companies started in 2004, according to the Washington, D.C.-based Direct Selling Association.
About one-third of the 300 direct-sales companies registered with the association are party plans.
"Party plans are hot," says Neil Offen, the association's president and CEO. "The majority of companies that applied (in 2004) for memberships were party planners using a hybrid multi-level compensation program."
In plain English, that means sales people are paid based on how much they sell. They also get a cut of the profit from any other sales people they recruit into the business.
The promise of extra cash is what draws most people into the business, Nemeth says.
"Direct sales is one of the few places where you can really make huge bucks with a relatively small investment," she says. "You can make ridiculous amounts of money without having to invest ridiculous amounts of money."
Nemeth is the first to point out, however, that the money won't come rolling in on its own. Only the most dedicated workers make the big bucks.
"It's the 80-20 theory," she explains. "Twenty percent are very successful. About 50 percent do well. Thirty percent don't do anything. The thing about direct selling is it's entirely up to you. There's nobody there to tell you you're doing a great job."
Start-up fees can range from as low as $300 to be a Petlane sales representative to $1,500
For a fun time...
Party plans rely on the graciousness of hostesses such as Sheryl Thompson, who has hosted at least a half dozen sales parties at her Pleasanton home in the past year.
"It's a good time for my girlfriends to get together," the
social Thompson says. "I only want people to come to have a good time. I don't want them to feel like they have to buy something."
Thompson grew up in a typical suburban home where her mom sold Sarah Coventry Jewelry and Tupperware.
Home sales parties are "kind of a natural part of life," she says. "I set mine up as a party with food, desserts and drinks. I call it shopping in a better environment."
Hostesses typically get a cut of the action, Warren explains.Ê" Warren notes. "A couple of people who booked parties did it because they had something in mind that they wanted. They wanted the discount."
Kayla Mueller got into the party plan business because she had so much fun attending a party. In her case, the items being sold were body lotions, spa treatments.
"We have, you know, things to enhance love lives," Mueller says slyly to preserve the mystique surrounding Passion Parties. "As a mom, our lives can get a little mundane with the day-to-day stuff. We lose touch with our partner. This is some fun stuff that rejuvenates a love life."
The party plan world is one of the few businesses dominated by women, boasts Offen, of the Direct Selling Association. Roughly 80 percent of the nearly 50 million direct-sales representatives worldwide are women.
Half of the women in direct sales work fewer than 10 hours per week, Offen says. Most of them work fewer than five hours per week. Nearly three-fourths are white, but more and more Hispanic and African-American women are joining the ranks.
"Women earn dollar-for-dollar for doing the same work men do in this business," Offen notes. "There's no glass ceiling. You control your own hours. You can be your own boss. It's very flexible. Women like that, especially married women with kids."
Women enjoy party plans as a social outlet, particularly in a society where computers and long commutes leave us more socially isolated than in decades past, Offen says.
Nemeth credits the post-9/11 nesting trend with fueling the explosive growth of in-home sales parties. And as more women choose to stay home with their kids, more are looking for creative outlets and ways to earn extra cash.
"In the old days, these parties used to be really popular," Nemeth says. "For a number of years, the party plan fell into disfavor because women were working full time. They came home at night, and they were tired. I think it's come full circle."
Party plans remained stagnant over the years until recently, when growth figures have exploded. Party plans account for an estimated $9 billion a year in sales, Offen says.
Tupperware alone has more than $1 billion in annual sales worldwide. The Pampered Chef, started in 1980, became so profitable ÷ raking in more than $750 million in annual sales ÷ that billionaire Warren Buffett added the company to his Berkshire Hathaway portfolio in 2002.
Offen firmly believes there is plenty of room for growth in the burgeoning field of in-home party sales. Nemeth, on the front lines of the business for nearly three decades, has a slightly different take on the future of the industry.
"We'll see a shakeout," Nemeth predicts. "The ones that are really right, for whatever reason, will stay around forever. The others will be a flash in the pan. But the party plan is not going anywhere."
Party planning by the numbers
- Party plans account for an estimated $9 billion a year in sales.
- Roughly 80 percent of the nearly 50 million direct-sales representatives worldwide are women.
- Half of the women in direct sales work fewer than 10 hours per week. Most of them work fewer than five hours per week.
- Nearly three-fourths are white, but more and more Hispanic and African-American women are joining the ranks.
- According to the Washington, D.C.-based Direct Selling Association, about one-third of the 300 direct-sales companies registered with the association are party plans.