It’s rare for a multilevel marketing company to be so successful that its brand name has entered popular culture, but that’s what makeup and personal care maker Avon has done.
Almost everyone knows an “Avon lady,” thanks to the company’s long history (founded in 1886) and its huge revenue (over ten billion dollars annually).
Have I been involved at all? This explains everything:
Avon ladies have penetrated just about every corner of society, so on the bright side, this means that the products are very well-known, and in many cases, well-received, but on the flip side, this also means it’s going to be really hard to get into the market, and you don’t have the advantage of a new, innovative, or creative product.
Recently, Avon has not been doing as well. As reported by Fortune Magazine, Avon’s revenue in North America dropped in half over a seven-year period from 2007 to 2014. In terms of global interest, search engine traffic rose gradually and steadily from 2004 to 2012, but since then, has seen a mirror-image steady decline.
Currently search volume for Avon is tracking about 25% lower than its peak levels five years ago.
In fact, it got so bad that in 2016, Avon announced it was moving its headquarters to the UK and has essentially shut down its North American commercial operations.
Clearly, if you are in North America, it’s no time to get into the Avon business, but if the products and compensation plan look good, it may yet be worth a look worldwide.
Avon, of course, is famous for its makeup and personal care products, but it offers far more than that. Its product catalogue includes bath and body products, perfumes, jewelry, clothing, and more, in addition to its trademark makeup products. The selection is huge, which might be part of the problem.
For example, just among makeup products for your eyes, there are dozens of different products. The only unifying thing these have in common is that they are a) makeup products for your eyes and b) made by Avon.
With a new generation of customers expecting something beyond a simple brand name guaranteeing the quality and efficacy of a makeup product, Avon’s reputation just isn’t cutting it anymore.
In a strange way the pricing scheme for Avon also betrays trust in the products, but not in the direction you’d expect. If anything, Avon’s products appear too cheap, belying a lack of quality behind them.
For example, Avon’s jewelry category includes metal bracelets for only $8, and watches for only $20. This type of pricing scheme doesn’t match up with the brand’s attempt to cast itself as a storied and elegant retailer of quality goods with the mystique of old-money wisdom.
Online reviews of the company seem to have picked up on this; Avon faces criticism for the perceived low quality of its products, much of which is blamed on the cost of manufacture.
If the company can sell, for example, a facial cleanser gel for only $10 per five ounce tube, how much can you trust the quality of the product? The ingredients must be cheap, or so the logic goes. Maybe they aren’t, but Avon isn’t doing much to fight this perception.
As you might’ve guessed for a company that’s been around since the 19th century, Avon’s compensation plan is a little behind the times. Given that their website remained basically unchanged for about ten years, who knows how many cobwebs are hanging around in the compensation plan?
It’s actually really cheap to start up as an Avon distributor; it only costs a sign-up fee of $15, which nets you a few basic marketing materials.
But to actually start earning any money, you need to have $1,000 in lifetime sales and at least $200 in personal orders, alongside three different direct customers. Now, in addition to your profit from retail discounts, you can start earning commissions on your downline sales.
Unfortunately these commissions are pretty poor. Just 3% and 1% on your first two levels of sales. This does grow, over time, as you rack up more lifetime sales dollars, but it certainly is not a promising place to start.
The average earnings profile for distributors of Avon is better than some MLMs. According to Business for Home, some 36% of Avon distributors make less than $5,000 per year, while another 42% earn between $5,000 and $12,000 per year.
Plenty of multilevel marketing company distributors do worse than this, but the odds are still stacked against you doing well enough to actually support yourself on your Avon business alone.
In summary, Avon does not have a whole lot going its way in the 21st century. Sales are down, the company is shifting away from doing business in North America, and its popularity is trending downwards.
Its products do not have a stellar reputation, and the compensation plan is unimpressive.
Considering all of this, do you really need any more reasons to find something else to do with your time? Avon, though it has a long history, is not the MLM to join right now.
Granted, you don’t stay in business for over a century without being able to reinvent yourself, and it’d be foolish to discount a company that sells over ten billion dollars worldwide every year.
It’s just that if you’re set on MLM, Avon isn’t a terrible choice, but probably not the best, either.
If you’re doing it for the money, there are better ways to kill your day job. You might like our training because it shows you the good life without peddling products to your family and friends.