Direct sales gains luster in dim economy

  • Wendy Mikulka, sells "chloe+isabel" jewelry from her Santa Rosa home.

When Melacha Quirke lost her job as an accountant during the height of the recession, she didn't know what she was going to do.

She had held that job for 15 years. Her husband lost his job around the same time, and they had two young children to support. They also had a monthly mortgage payment, but that ended also when they lost their home to foreclosure.

"It was basically one thing after another," Quirke said. "We were surviving on severance packages, and couldn't keep up with payments."

That's when Quirke remembered Passion Parties. She had attended a few gatherings where women bought bath, body and sensual products. She recalled that the attendees bought a lot. And another mom at her children's school had invited her to become a seller.

"It makes sense for me to be able to do it, because I can work at night when my husband is at home, and during the day I can be at home with my kids," Quirke said.

And so began a new career for Quirke, and millions of other independent retailers who began selling products to their friends at home parties and other venues as traditional employment opportunities eluded them.

Nationwide, an estimated 15.8 million people worked in direct sales in 2010, according to the Direct Selling Association, up from 15 million in 2007. Women dominate the industry, representing 82 percent of the direct sales force nationwide. Many were attracted by the flexible hours, earning potential and the idea that in this job, you can't get laid off.

But in an industry where compensation is based largely on commission, in order to make money, you have to sell. And revenues from direct sales didn't keep pace during the recession. While the sales force grew by 2.4 percent from 2006 to 2010, revenues fell by 1.2 percent, the association said. In 2010, an estimated $28.56 billion was spent on direct sales, a slight uptick since 2009, but not as much as the 2006 peak of $32.18 billion.

Despite the difficulties, just about any product can be bought and sold through direct marketing.

At a Santa Rosa meeting of direct selling women, far more than jewelry and cookware were available. The scent of sweet citrus wafted through the room as Lynn Kwitt, a certified reflexologist who had worked as a social worker for decades, passed around a sample of an "essential oil" that she recommends to relieve colds. Elaine Holtz talked about the difficulties of selling her products, pre-paid legal and identity theft prevention services.

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