July 17, 2011

UK: Unemployed and over-50s grab financial lifeline offered by direct selling

LONDON, England / The Independent / Money / Spend & Save / July 17, 2011

Companies such as Avon and Betterware are part of a growing industry that can give a much-needed boost to family incomes.

Emma Lunn reports

Allain McLeish, 61, is a direct seller for Pampered Chef.  Andrew Fox

Over-fifties are cashing in on opportunities offered by "direct selling" companies to boost their earnings or supplement their retirement income.

Direct selling is face-to-face selling outside a normal retail environment, either on a one-to-one basis or at specially held parties. Companies such as Betterware, Herbalife and Avon use direct sellers.

It is certainly big business. The industry is worth £2bn annually to the UK economy with more than 400,000 people selling products this way. Direct sellers can often earn more money by recruiting other people to sell products too, and then earning commission on the sales their recruits make.

In most cases getting started requires only a very modest initial investment – usually about £100. Sellers are self-employed and so will need to sort out their own tax and National Insurance payments. Another advantage is that hours are flexible and can generally fit around other jobs or family commitments, which is why traditionally, direct selling has appealed to young working mothers. But increased redundancies and the difficulties older people have finding work means recruits are joining at all times of life.

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Case Study

Allain McLeish, 61, Direct seller for Pampered Chef

Mrs McLeish, from Aberdeenshire, has worked for the kitchen and cookery company for 11 years and is now in charge of a sales team with a turnover of £3.5m a year.

She first got involved in direct selling 13 years ago after she had children. Back then she was nervous about re-entering the workplace. Previously a secretary in the oil industry, her first direct selling job was with Tupperware. After a year and a half, she moved to a similar role at Dorling Kindersley books.

"I earned commission on what my sales people sold as well as what I sold," she says. "I was earning about £1,000 to £2,000 per month which kept us going when my husband then lost his job."

After Dorling Kindersley was sold off. a friend recommended Pampered Chef which sells kitchen equipment such as pots and pans and cooking dishes.

Mrs McLeish says: "Pampered Chef consultants find a host to host a party. The host buys food for about £10 which the Pampered Chef consultant cooks using Pampered Chef equipment. While the food's in the oven people can buy the kitchen goods. The host gets about £100 worth of freebies and the consultant commission on the sales."

Over the past 11 years Mrs McLeish has recruited about 100 people to Pampered Chef and they in turn have recruited about 500 people, giving her a sales force which has a turnover of about £3.5m a year.

She says direct selling has worked wonders for her self-confidence as well as her bank balance. "I've gone from shaking with nerves at my first cooking show to demonstrating cooking equipment in front of 200 people," she says, "Direct selling has enabled us to put our children though university and pay for my daughter's wedding.

"I also became the breadwinner when my husband was made redundant."

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