Sudbury women turn to direct sales for extra cash in bad economy
Whether it's candles, cosmetics, or cooking supplies, some people are giving direct sales a try
When 20-year-old Kayla Solomon isn't working full time at Tim Hortons and raising her toddler, she's selling Scentsy products, a direct sales company that specializes in scented wax.
"I know a lot of people that make thousands of dollars. People have quit their full-time jobs to make this their full-time job," Solomon said. "A woman I know made about $20,000."
Solomon said she's seeing more people getting into direct sales to supplement their incomes in the current economy.
"A lot of people can't actually find jobs right now and it's a really stressful time. But I think people look to direct sales for a quick buck, to get them out of a tough spot," she said.
A woman I know made about $20,000- Kayla Solomon
This weekend, people peddling everything from nail polish to tea will descend on the Moose Lodge in Sudbury for a spring showcase.
People like Solomon are called "independent consultants," people who sign up to sell a certain product. In turn, the consultant makes a commission and other incentives the more they can sell. They also usually make commission for signing up other consultants.
'Clear connection' to struggling economy
Jean-Charles Cachon, a Laurentian University business professor, said there is a clear connection between the bad economy and the increase in direct sales.
"It's a model that started in the US around the 1930s during the crisis at that point. People were trying to find some form of self employment," Cachon said.
"It was a bit too risky and too expensive to start opening a store, or investing large amounts of money when there was a problem finding financing."
Direct sales also provide a safety net in case someone can't get shifts at work or lose their job, according to Cachon.
The average Canadian is working about 32 to 34 hours a week right now, Cachon said. So that leaves plenty of time for them to find ways to make extra money.
Watch the contract, business professor warns
Solomon admits there is a significant drop out rate. She said she knows people who have gone into debt because they ended up with too much product they can't sell.
Cachon said people should read the fine print before signing up, as many companies require you buy a minimum amount of product to get started and to keep selling.
"If there is a contract involved and you are obliged to buy a certain level of supply on a regular basis, that's where it can become a problem," he said,
Cachon said one should research the product and company to make sure it's something that is high quality and that people will want, and consider consulting with a lawyer beforehand.
More women moving to direct sales
CBC News spoke to three different women about why they chose to get into direct sales.
- Works full time at Tim Hortons, mother of toddler
- Sells: Scentsy, air freshener and wickless candle line
- Reason for direct sales: Building business skills for a future career
"You never know what the future holds. And I think this is going to be very productive for me. And it's going to help me in a lot of ways. Because I had a lot of bad social anxiety and stuff like that. So [direct sales] helped me break out of my shell and be able to just talk to random people. I thought it was pretty great."
- Teaches at community college, mother of two grown children
- Sells: Arbonne cosmetics and skincare
- Reason for direct sales: Planning for future retirement
"When I got thinking about my long-term plans and my retirement goals I figured that it actually made a lot of sense to build this in alongside my life. By the time I do retire I'll have a part time business that's replaced my full time income. I have a lot of female friends that are into it because of the lifestyle perspective. More women are staying home and working this as a home-based business….working it around child schedules and family life."
- Fulltime student, works part-time at an electronics store, mother of two kids
- Sells: Pampered Chef, high end kitchen supplies
- Reason for direct sales: A bit of extra cash
"I think people want to know they'll be able to pay for an extra dance lesson or pay for their car payments. You can only make a certain amount working at your job. I would say the prices of things have gone up. And people are still making the same amount of money. In the summer when I have more time I can do a lot more shows. I may earn on average say $800 a month."